Final Report by Ali Sher 2018-Ag-3423

DECLARATION
An internship report submitted to department of IBMS, in partial fulfillment of the

requirement for M.COM.
DEDICATIONS
To my parents whose unconditional love & support helped me in making this report.
To my teachers for their corporation and assistance.
To my siblings for their gentle encouragement & valuable support.
Institute of Business Management Sciences, UAF Page 1 of 124

ACKNOWLEDGEMENT
All praise and gratitude due to ALLAH ALMIGHTY who created man in His own
image and enjoyed upon him to travel on the earth and enter into a profound and
analytical study of Universe for spiritual appreciation of ALLAH’S unity and His
attribute as well as for harnessing the material manifestation of the world to the
mankind’s profitable utilization. In the first place, therefore we express our utmost
thanks to ALLAH.
At the next stage I offer our gratitude to our Apostle and prospector Prophet
Muhammad (P.B.U.H) for his golden saying “Gain knowledge be in China”.
Among my contemporary benefactors I express my sincere gratitude to Mr. Irfan Qazi,

(manager of Allied PMC Branch) who provided me with the opportunity to work in
Bank Alfalah as an internee who has persistently rendered his erudite guidance and
professional assistance in compiling this report.
In the end I would like to thank all the staff members of BAL, who cooperated with me
in every department. They have provided with me in every department. They have
provided me with valuable information which helped me a lot in completion of this
report. It was relatively a new phenomenon for me, but I am quite sure that I have
learned a lot from this internship.
Thank you all

PREFACE
The pre-requisite of internship program is to make the students of M.Com, aware of the
practical expertise and to acquaint them with the real management process.
With an intention of grooming the best executives of the future, IBMS has organized a
comprehensive internship-training program. All of us were placed in leading
organizations of business arena to gain first hand knowledge and insight into their
management and working. So, when I was given the chance of selecting an
organization, I opted for Bank Alfalah.
Getting a chance of working in Bank Alfalah proved to be very beneficial for me. I
think that I gained comprehensive insight into the working of a bank. But nothing could
have been possible without the co-operation and guidance of the officers of BAL.
After the completion of internship program, internship report has been prepared just in
accordance with the practical exposure. In preparing this report, I have put all of my
best efforts and tried my level best to give maximum knowledge. Despite all of my
coherent efforts, I do believe that there will always be a room for improvement in the
efforts of learner like me.
Ali Shaer
M.Com Final semester
(2018-2020)

HISTORICAL BACKGROUND
Allied Bank Limited is not as old a bank that it should have such significant history.
But there are certain events in the past, which make the history worth mentioning. The
history of Allied Bank Limited dates back to September 21, 1972, when Bank of Credit
and Commerce International (BCCI) were incorporated in Luxemburg. “From Bank of
Credit and Commerce International to bank Of Crooks And criminals International”.
BCCI's conception, growth, collapse, and criminality are inextricably linked with the
personality of its founder, Agha Hassan Abedi, who in turn was a product of the
unique conditions of Muslim India in the final period of British rule prior to partition,
and the first years after partition. These were years of fundamental change in the
region, involving the creation of an entire new ruling class in both Hindu and Muslim
India to replace the departing British Foreign Service. While the period created special
opportunities for a newly emerging professional class in countries, Abedi and many of
the others who later became prominent in Pakistani Banking made up a special class.
The Habibs ran the bank like a family business. All decisions were centralized with
family members and working hours were long and hard. Agha Hassan Abedi rose very
rapidly but soon found the atmosphere to be too restrictive for the great number of ideas
welling up inside him. In 1958, he left Habib Bank and was able to get together
Investors to form a new bank to be known as United Bank.
Within ten years, United Bank became the second largest bank in Pakistan and all that
Mr. Abedi envisioned, relating to the facilities, the staff, and relating to the high quality
of appearance of the offices, and to the modern outlook of the Bank, had been achieved.

Internal BCCI documents make clear Abedi's ability to motivate his employees to work
exceptionally hard. Additionally, the Bank had opened branches overseas in quite a few
countries including the Middle East. The Bank was already poised to become the
largest bank in Pakistan but political conditions were making it apparent to Mr. Abedi
that Pakistan could probably not form the basis for an operation of the size which he
and his team were capable of.
By the early 1970's, there was an ongoing tension between Abedi's ambition to move
beyond Pakistan, and that of the Pakistani government to keep Pakistani institutions
generally and Abedi's bank specifically under its control. From the time he took power,
Pakistani Prime Minister Zulfiqar Ali Bhutto, typifying the socialist cast of much of the
former colonial world in this period, was threatening to nationalize the banks, as he
already had nationalized other sectors. Accordingly, Abedi began moving forward with
the initial steps to form BCCI as a Pakistani-managed bank outside of Pakistan. When
Bhutto in turn learned about Abedi's attempt to circumvent his new socialist order, he
not only went ahead with plans for nationalizing the United Bank, but promptly placed
Abedi under house arrest.
While under house arrest, Abedi further developed his scheme for his new institution.
Unlike United Bank, it would operate in a manner to defy the ability of the Pakistani
government, or any other, to impede any objective it might seek. It would be the first
international, and indeed, trans-national bank, and something more: a charity, a
foundation, a shipping empire, an insurer, a brokerage firm, a commodities exchange, a
publishing house, a world-class hospital for the rich, a real estate empire, an employee
cooperative, an Islamic investment bank, and a Third World powerhouse.
The most critical of these five elements was the relationship between BCCI and Abu
Dhabi. Abu Dhabi is the largest and wealthiest member of the United Arab Emirates, an
oil-rich federation of sheikhdoms with a combined population of about 1.5 million,
bordering Saudi Arabia and Oman, with one of the world's highest standards of living

as a result of oil wealth. As early as 1967 Abedi's high net worth customers included
the ruler of Abu Dhabi, Sheikh Zayed bin Sultan Al Nahayan, and his family. By 1967,
what had begun with Abedi handling the Sheikh's falconry and bustard-hunting trips in
Pakistan, and the finances of Pakistani workers in Abu Dhabi, wound up with Abedi
running the Sheikh's financial life. As far as Pakistani bankers observing the
relationship were concerned, Abedi coordinated everything for Sheikh Zayed, from the
building of the Sheikh's palaces in Pakistan, the furnishing of his villas in Morocco and
Spain, his medical appointments, to the digging of wells for his homes in the desert.
Throughout the first critical decade of BCCI's eighteen year existence, as much as 50%
of BCCI's overall assets were from Abu Dhabi and the Al Nayhan family, who were
earning about $750 million a year in oil revenues in the early 1970's, an amount that
rose to nearly $10 billion a year by the end of the decade. Until the formation of a
separate affiliate, the Bank of Credit and Commerce Emirates (BCCE), BCCI
functioned as the official bank for the Gulf emirates, and handled a substantial portion
of Abu Dhabi's oil revenues.
Throughout the 1970's, BCCI expanded rapidly, with Abedi adding new corporate
members to the BCCI family by the month. Initially, BCCI was incorporated in one
location only, Luxembourg. Two years later, a holding company was created, BCCI
Holdings, with the bank underneath it BCC S.A., split into two parts, BCCI S.A., with
head offices in Luxembourg, and BCCI Overseas, with head offices in Grand Cayman.
Luxembourg was used mostly for BCCI's European and Middle East locations, and the
Grand Caymans mostly for Third World Countries. The following profile of the first
five-years of BCCI's performance demonstrates this fact:

YEAR NUMBER NUMBER ASSETS GROWTH
OF OF
BRANCHES COUNTRIES
1973 19 5 $ 200 m -
1974 27 7 $ 610 m 204 %
1975 64 13 $ 1.2 B 98 %
1976 108 21 $ 1.6 B 37 %
1977 146 43 $ 2.2 B 33 %
Adding to the inherent problem of investigating the largest case of organized crime in
history, spanning over some 72 nations, has been the destruction of documents at BCCI
and its affiliates by shredding and arson; document backdating and falsification; the
removal of most key documents from London to Abu Dhabi in 1990; the refusal of
authorities in the United Kingdom and in the Grand Caymans to share information with
investigators as a consequence of their interpretation of local bank confidentiality and
privacy laws; the inability to question Abedi due to his stroke, the inability to question
BCCI's other key officials due to their incarceration and segregation in Abu Dhabi by
Abu Dhabi bureaucracy since July 5, 1991, and BCCI's haphazard method of record-
keeping.
FROM BCCI TO ALLIED BANK LIMITED THE

LONG JOURNEY
Article I. Liquidation of BCCI
BCCI was liquidated on July 5, 1991. At that time BCCI was opening in almost 69
countries in the world. When financial authorities launched a coordinated swoop in
what was alleged to be the biggest international fund in history.

Article II. Incorporation of Habib Credit and Exchange
Bank (H.C.E.B)
In July 1991, the branches of BCCI in Pakistan at that time were taken over by The
Ministry Of Finance and SBP. All three branches were emerged in Habib Bank Limited
after valuation of its assets for 15 million dollars. It worked with Habib Bank Limited
for around about 10 months from 14 March 1992 to 31st October 1992.
Article III. Privatization of Habib Credit and Exchange

Bank
H.C.E.B was privatized on July 7, 1997. Management was taken over by Abu Dubai
based Al-Nahyan consortium. This consortium consists of foreign investors of UAE
and highly professional Pakistani bankers. Mr. Pervaiz Sheikh and Mr. Omer Khan
represent this consortium in Pakistan. The bank was sold for Rs. 39 per share for
buying 70% shares. The government decided to sell 10% shares to employees and rest
of the shares was privatized through the stock exchange.
Article IV. Emergence of Allied Bank Limited

Following the privatization in July 1997, Habib Credit & Exchange Bank assumed the
new identity of Allied Bank Limited on February 25, 1998. And with this a challenge
was launched, the challenge to transform this bank into a highly professional, most
efficient & service oriented institution.
Charged with the strength of the Abu Dhabi based consortium, and under the leadership
of His Highness Sheikh Nahayan Mabarak Al-Nahayan, Minister of Education,
Government of Abu Dhabi, and a prominent member of Royal Family – the bank is
energized with the vision, envisaging the development of consumer sector in Pakistan.
Bank Alfalah has emerged as one of the leading commercial banks in the financial
sector of Pakistan. This bank has made significant contributions in building and
strengthening both the corporate and retail banking in Pakistan.

To make banking solutions become accessible to more and more people, Allied Bank
Limited has embarked upon a rapid expansion program, aiming to provide a networking
that makes its services available to any of its customers in all the major urban centers of
Pakistan.
PRESENT STATUS OF BANK

ALFALAH
Allied Bank Limited was incorporated on June 21, 1997 as a Public Limited Company
under the Companies Ordinance 1984. Its banking operations
commenced from November 1, 1997. The bank is engaged in commercial banking
and related services as defined in the Banking Companies’ Ordinance, 1962.
For the last 8 years it has been successful in providing commercial banking facilities to
its customers and has developed a good reputation among Pakistan banks.
Quality services are provided as its backed by an Abu Dhabi based Group and driven
by the strategic goals set out by its board of management, the Bank has invested
in innovative technology to keep pace with growing market and needs of customers.
Allied Bank Limited is one of the largest private Banks in Pakistan with a network of
over 700 branches in more than 200 cities across Pakistan with an international
presence in Bangladesh, Afghanistan, Bahrain and UAE. In the coming years, the bank
plans to open a number of new branches to ensure that its customers get the benefit in
the form of extended branch network and comprehensive products and services.
Strategies and goals of Allied Bank Limited have enabled it to continue its upward
climb in pursuit of excellence. Strengthened by the backing of the Abu Dhabi Group
and driven by strategic goals set out by its Board and management, Bank Alfalah

Limited increasingly inspires trust and confidence of all its clients and number of
clients is increasingly significantly.
The bank aims to further enhance performance standards through implementation of

innovations in both products as well as customer care, by discovering newer avenues of
client benefit. These achievements have been preceded by concerted efforts to provide
highest levels of service and value to its customers. This customer-focused strategy has
enabled Allied Bank Limited to evolve as a single source financial service provider of
corporate and retail banking services and regarded highly by its customers.
Over the years, the management has succeeded in establishing an ideological base for
the employees to build the bank upon customer loyalty, service with dedication and
development of a wide range of products for the customers to choose from.
Foreign Trade is another success of bank and has developed excellent business and
correspondent relations with well renowned banks of the world whose support in terms
of lines of credit has enabled it to handle ever-growing trade volumes and diversified
needs of customers.
FINANCIAL HIGHLIGHTS:
The current year's Profit before Provision and Taxation of the bank stood at Rs.2,026
million as compared to Rs.3,593 million for last year which included a one time gain
on sale of PIBs amounting to Rs.2,191 million. The deposits grew by 69% to Rs.129
billion as against Rs.76.7 billion as on 31 Dec 2018.Foreign trade figures stood at
Rs.78.47 billion for imports and Rs.57.32 billion for exports reflecting
increases of 68% and 29% respectively. The Loans and Advances figure stood at
Rs.90.29 billion recording an increase of 79%. These figures reflect on the improving
market image of Bank Alfalah as a formidable financial institution.

(Rs in ' 000)
FY 2017 FY 2018 FY 2019
Deposits 51685 76698 129715
Advances 28319 49216 88931
Imports 33879 46807 78472
Exports 33057 44273 57317
Profit before tax 895 3506 1654
COMPREHENSIVE & DIVERSIFIED PRODUCT

PORTFOLIO
Bank Alfalah has a unique defined menu of financial products. They design their
product portfolio in response to customer’s preferences; their products like Royal
Profit, Royal personal finance, Alfalah Home loans are prime examples of quality
innovation, providing timely banking opportunities to customers.
 Car Financing
 Rupee Traveler Cheques
 Online Banking
 ATMs
 Credit Cards
 Home Financing
BANK ALFALAH BRANCH NETWORK

Conventional Branches
Islamic Banking Branches
Overseas Branches

INTRODUCTION OF AIT BRANCH
The Allama Iqbal Town Branch is strategically located at the intersection of three big
towns of the city. It is located adjacent to Pakhay wala moar, which forms the junction
of Allama Iqbal Town, Awan town and Wahdat colony. It has ample of parking space
and due to the attention and interest of the branch manager, Mr. Irfan Qazi, the exterior
of the branch has been delightfully decorated.
At the time of my internship, the branch was just three years old and therefore had a
small number of staff members. It has a total of 31 employees, ranging from the Bank
Manager to the Tellers. Other than these officers, there were about eight workers

ranging from the Security Guard to the Cleaning Boys to the Incharge of the kitchen
etc.
The main reason of the bank’s existence is the acceptance of people’s money to keep
safe until they need it back and extending money on interest to those who need it for
investment purposes. The growing needs of people near the branch are the major reason
for its increasing profits.
The branch is going well for credits and operations but foreign trade load is much less
as compared to other branches because it’s a new branch and foreign trade business is
more risky and people prefer experienced branches for this.
OBJECTIVES
Bank Alfalah believes in the phrase “customer comes first”. BAL’s objective is
to please their customers by fulfilling the financial needs as best as possible.
They believe in placing the client at the center of business and all of the
products and services.
Service excellence is one of the objectives of Bank Alfalah.
Alfalah strives continually on the development of new areas of activities to

distinguish itself in the market place along with traditional banking activities of
resource mobilization and credit disbursement.
Bank focus is on Foreign Trade as primary niche of business.
Alfalah’s objective is the complete automation and computerization of all of its

banking activities.

Alfalah Training and Development program of its employees is aimed at
developing skills of its employees. It makes positive contribution to the service
culture of the banking system as a whole.
They are committed to put all their energies, resources and time to bring higher
value and satisfaction to their customers, employees and shareholders.
The introduction and development of innovative financial instrument will

another major objective of Allied Bank Limited.
THE VISION

THE MISSION
MANAGEMENT STRUCTURE
Bank Alfalah is proud of its Human Resource, as almost all the employees have been
hand picked by the management. However, in this section, I would discuss those people
who are responsible for hiring such a bright staff and establishing such a magnificent
bank. They are the higher management of Allied Bank Limited.
THE CHAIRMAN (OUTGOING)

H. H. Sheikh Nahayan Mabarak Al-Nahayan
H. H. Sheikh Nahayan Mabarak Al-Nahayan is an important and prominent member of

the ruling family of Abu Dhabi. After the culmination of his studies at Oxford, he
returned to shoulder important responsibilities in the state administration. In 1988, he
was appointed the President of the higher colleges of Technology comprising of eight
colleges throughout the UAE – a responsibility he fulfilled with distinction. In 1990, he
was appointed Minister of Higher Education and Scientific Research. Presently he also
holds the presidency of the Society of the Natural History and National Heritage. In
1992, he became the Chairman of the Union National Bank and has since remained
involved in strategic management of the institution.
THE CHAIRMAN (NEW)
H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan
ORGANIZATION PROFILE
Name of the organization: Allied Bank Limited
Chairman: H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan
BOARD OF DIRECTORS
Mr. Mohammad Saleem Akhtar Chief Executive Officer
Mr. Abdulla Naseer Hawalileel Al Mansoori Director
Mr. Abdulla Khalil Al Mutawa Director
Mr.Ikram-ul-Majeed Sehgal Director
Mr.Khalid Mana Saeed Al Otaiba Director
Mr. Nadeem Iqbal Sheikh Director
BOARD ADVISORY COMMITTREE
Mr. Abdulla KhalilAl Mutawa Director

Mr. Khalid Mana Saeed Al Otaiba Director
Mr. Bashir A. Tahir Member
Mr. Ganpat Singhvi Member
Mr. M. Iftikhar Shabbir Secretary
COMPANY SECRETARY
Mr. Hamid Ashraf
CHIEF FINANCIAL OFFICER

Mr. Zahid Ali H. Jamall
AUDITORS
Taseer Hadi Khalid and company
Chartered Accountants
REGISTERED/ HEAD OFFICE

B A Building,
I. I. Chundrigar Road,
P. O. Box 6773,
Karachi.
WEBSITE
www.bankalfalah.com
TOP MANAGEMENT HIERARCHY

ORGANGRAM OF BAL AIT BRANCH

Chief Manager
Irfan A.Qazi
Operation manager
Credit Manager Sohail Yar Khan
Tariq Iqbal
Cash Deptt.
Trade Finance ShahidSalee
Leasing Home finance Zahid Rasool
AzhurShahid Ahsan Saleem
mSaleem
Officer
Munawar
Cooperate CreditCard
Finance Adeel
Mustansar
Hamad(C)
) Officer
Accounts Sheraz
A/C
opening SalmanRauf
Car Finance Ms.Neelam
Peter John
Zain-ul-
saleheen
Activity Officer
Kashif Gillani Clearing Luqman
Officer Ms.Sadaf
Teller
Muzaffar
IT incharge
Telephone operator
Mr.Haris
Ms. Humaira
Remittance
Ms.Farah

NAMES AND DESIGNATIONS OF
OFFICERS
BANK ALFALAH PMC BRANCH FAISALABAD
Name Designations Qualification

Mr. Irfan A. Qazi Branch Manager MBA, MA Eco. , IBP
Tariq Iqbal Credit Manager MBA, IBP
Sohail Yar Khan Operations Manager BA
Shahid saleem CD Incharge BA
Zahid Rasool Trade inance incharge MBA
Peter john Car finance Incharge BCS
Azhur Shahid Leasing Incharge MA Econ.
Ahsan Saleem Home finance MBA
Neelum Qamar Incharge MBA
account opening
Sadaf Batool Clearing incharge MBE
Farah Munir Remmitance Incharge BA
Farooq durrani Account opening officer BCS hons
Mustansr Hammad Incharge ctedits Mcom
Luqman Sarwar Activity Incharge LLB
Kashif Gillani Car Finance Officer MBA
Attika Yousaf Asstt.foreign Trade MBA
Raja Yasir BDO MBA
Muazzam Khan BDO MBA
Nasir Nawaz A/C opening Officer BA
PRODUCTS & SERVICES

BAL offers highly prioritized and specifically tailored products and services designed
to suit the needs and preferences of their highly valued customers. For becoming a
highly effective financial supermarket, Bank Alfalah provides a complete range of

products to its corporate clients, commercial enterprises and to the consumers. Alfalah
offers syndicated loans and structured financial products to the large corporate clients.
True to its strategy of becoming a highly effective financial supermarket, Allied Bank
Limited provides a complete range of products to its customers; the corporate clients,
commercial enterprises and the small consumers. At Allied Bank Limited, the primary
commitment is to understand and support its client’s business objectives and financial
needs. All this is ensured through constant R & D focus and training & development of
staff. Allied Bank Limited provides a wide range of products/ services to its customers,
which can be compared with any foreign, or national bank in terms of quality and
reliability.
The products and services Allied Bank Limited is presently offering come under four
main heads i.e. Corporate Banking, Consumer Banking, Consumer Finance and
Electronic Banking. The various items that fall under these four heads can be
summarized
CONSUMER BANKING
 Current account.
 Foreign Currency Account.
 PLS account.
 Royal Profit Account.
 Rupees Travelers Cheques.
CORPORATE BANKING
 Current accounts
 Foreign currency accounts
 Clearing

 Funds transfer
 Trade services
 Overdraft facilities
CONSUMER FINANCING
 Car financing
 Alfalah credit cards
 Housing finance
ELECTRONIC BANKING
 ATM
 Online Banking
 Phone Banking
 E-Banking
STRUCTURE OF VARIOUS
DEPARTMENTS
1. ACCOUNTS DEPARTMENT
MANAGER ACCOUNTS
Officer (1) Officer (2) Officer (3) Officer (4)
BRIEF DESCRIPTION
OFFICER (1)
Is principally engaged in following three types of functions:
 Daily funds management
 Various type of reporting
 Monitoring of new and old foreign currency forward contracts with SBP.
OFFICER (2)
Is responsible for daily activity checking.
OFFICER (3)
Is responsible for making daily weekly and monthly reporting to different types of
Bank’s operation.

OFFICER (4)
Is responsible for applying test keys for security of foreign remittances.
CREDIT DEPARTMENT
MANAGER
CREDIT MARKETING CREDIT ADMIN
Office In
Credit Officer (1) Credit Officer (2) charge
Officer (1) Officer (2)

Credit Officer (3) Credit Officer (4)
Credit Officer (5)
BRIEF DESCRIPTION
Credit Marketing
 In credit marketing there are five officers who work jointly and are responsible
for;
 Marketing activities.

 Making credit proposals to send to head office for sanctioning.
Credit Admin
In credit admin there are two officers one of them is responsible for scrutiny of loans,
which are to be dispersed, and other one is monitoring of repayments schedules as
monitoring accruals of markup etc.
TRADE FINANCE
HEAD OF DEPTT.
EXPORT IMPORTS
E-Form Collection LC Opening LC Return

Checking Officer Officer Officer
Export
Refinance Negotiation
Officer
Scrutiny &
Lodgment of
Documents

BRIEF DESCRIPTION
Imports section
In imports section there are two Officers one of them is responsible for LC opening and
other is for LC return
Exports section
In exports there are six officers as follows
 First one is responsible for E-form certification and LC advising
 Second Is responsible for realization of exports
 Third Is responsible for collection of document under/without LC
 Fourth Is responsible for exports refinance
 Fifth Is responsible for scrutiny of lodgment of negotiable documents
 Sixth Is responsible for realization of negotiable document
FUNCTIONS OF BANK
The basic function which bank alfalah performs and product it a
Offers are as follow;
ACCEPTING DEPOSIT
The first important function of bank is to accept deposits from those who can save but
can not make profitable use of their savings themselves. In order to attract the saving
from different persons and institutions, the bank maintain the following three types of
accounts

1. Current Account
The businesses and traders usually maintain their funds in current account. current
account is one where money is constantly being drawn out and put in .since the money
withdraw able at any time by the customer, therefore ,the bank do not pay interest on
current account.
Deduction of Zakat is also not applicable on current account. Current account holders
receive a cheque book and regular statements containing details of money paid in and
paid out.
2. PLS/Saving Account
The aim of this account is to encourage and mobilize saving of the people. Saving
account is generally opened by the person or small income and for salary purpose. The
bank pays interest on this type of deposits.
3. Royal Profit
In this account the bank pay interest on daily basis which is 1.5% every day. It is a form
of saving account but mostly use for business purposes. Deduction of zakat if allowable
on it.
4. Fixed Deposit

These deposits are kept with the bank for a specified period of time. The rates of
interest on fixed deposits are fairly high. The longer the period of deposit, the higher
the rate of interest.
DEPARTMENTS DETAIL
ACCOUNT OPENING DEPARTMENT

The primary function of a commercial bank is to receive deposits and advance loans.
Deposits are the lifeblood of a bank. These are also the main source of bank’s funds.
WORKING OF DEPOSIT DEPARTMENT
The deposit department deals with the following functions;

1. Opening of new accounts
2. Issuance of cheque books
3. Miscellaneous function
(a) ACCOUNT OPENING
The bank open the account of its customers which includes

 An individual
 A firm
 Company
 Corporation or association
ACCOUNT OPENING PROCEDURE

In order to open the account with the Allied Bank Limited a proper method is followed
for this purpose. For account opening a proper method is followed mainly in following
steps;
 First of all a customer must have his original identity card (in case of residents
customer) and original passport (in case of nonresidents customers).
 The client is provided with a set of forms containing account opening form, SS
card and requisition slip to be filled.
 The forms are properly verified.
 Then the customer is allocated an account no.
 In order to operate the account a cheque book is issued to the customer.
Now we discuss the particulars of these forms one by one.
1. Account opening form

This form contains the following details;
 Currency in which client wants to open account (e.g. local or foreign).

 Types of account (saving or current or royal profit account).
 Title of account (name of account holder) and his address.
 Nature of account (single or joint), in case of joint accounts the required details
of joint account holder.
 Name & address of nominee/next of kin (the person who is legally entitled to
receive the balance in case of death of account holder).
 Type of organization, if any (partnership, sole proprietorship,
club/society/association, or company that may be either limited, or, public, or
private etc.
 Details of other accounts, if any.

 Undertaking to be filled by the client to abide by the terms and conditions of
bank.
 A mandate to be filled by the joint account holders.
 A list of required documents for limited co., partnership or society is given at
the end.
2. Specimen Signature Card (SS card)
Along with the account opening form, specimen signature card is to be filled
Requiring the following details;
 Type of account (saving/current/royal profit)

 Telephone number
 Nature of account
 Operating instructions (in case of joint account)
 Specimen signatures
3. Requisition slip
This slip is filled for getting cheque book issues.
ISSUANCE OF NEW CHEQUE BOOK
After an account holder uses his cheque book completely, he can apply for another. The
procedure is as follows;
 He takes the requisition from the old cheque book and submits to the bank after
filling it.
 The officer will match the signature in the bank’s record.

 If the sign matches, the cheque books according to the account type are issued,
as separate cheque books are maintained for different accounts.
 After issuing the entry is made in the register as well as in the computer.
MISCELLANEOUS FUNCTIONS
The deposit department deals with several other miscellaneous functions such as;
 Closing of account
 Amendments in the account
 Letter of thanks
Article V. Closing of account
For closure of account, the customer has to request the bank by written application. He
surrenders the remaining cheque book to the bank. He has to submit Rs.200 if he is
closed within 6 months from opening.
Article VI. Amendments in account
If the customer wants to make change in the address or any details or change authority
for account operating, he has to fill a letter for that he changes or fill the mandate with
the bank.

Article VII. Letter of thanks
At the end of the day, the letter of thanks is issued to the new account openers and also
to the introducers.
TYPES OF ACCOUNT
BAL opens the following accounts;
 Current account (both in foreign and local currency)

 Saving account (both in foreign and local currency)
 Royal profit account (in pak. Rs.)
CURRENT ACCOUNT
Every bank maintains the current account with its customers;

“A current account is running account which is continuously in operation by the
customer on all working days of the bank”.
In this account one can easily withdraw the money as bank only keeps the deposit and
does not give the profit/interest on the deposits. No withholding tax is charged on
current account, no zakat is deducted from this account. BAL opens current account in
both foreign and local currencies. Customer opens an account from Rs.25, 000.

The customer withdraws money from current account without prior notice to the bank.
In short, in current account, the banker incurs an obligation to honors all the cheques
drawn by the customer so long as there is enough money to credit of the client.
Interest on current account
The banks don’t usually pay any interest on current account in local as well as foreign
currency. The amount can be withdrawn at any time, so the bank can’t comply these
funds due to fear of withdrawal.
Who are interested in opening current account?
The current account is operated by traders, business companies, institutions, public

bodies, industrialists who
 Wish to have working capital in their custody

 Like to receive and make payments through cheques
 Are interested in keeping their money liquid and safe
 Utilize the agency services of the bank frequently
Advantages of having current account
The customer gets the following advantages on behalf of current account;
 The bank collects properly endorsed cheques on behalf of current account

holders
 The bank may allow the facility of overdraft on prior arrangements to the
trustworthy customers.
 Loans and advances may be sanctioned to the creditworthy clients with ease.

 On line facility alternative of cash transaction is also provided to customers
having min. balance of Rs.500, 000/- in their current account.
SAVING ACCOUNT
BAL provides the facility of saving account in both foreign and local currencies. These
deposits are an important source of funds for the bank. Customers earn profit of 0.5%
on minimum monthly balance. Customer can open an account with minimum RS 50000
deposit. Saving account is opened both in local and foreign currency.
Withdrawal of amount
The depositors are normally allowed to draw a limited amount of money only twice a
week. If a customer wants to withdraw a large sum of money, he then has to give a
prior notice of 7 to 15 days in writing to the bank. The bank can safely invest the
deposits of saving account, as it knows that only the customer withdraws a small
percentage of this account.
ROYAL PROFIT ACCOUNT
This account is profit bearing current account. It has the characteristics of both PLS and
current account. Royal profit account is just like the saving account with the following
major differences;
 The royal profit account is opened only in local currency.

 Minimum balance for opening royal profit account is Rs.50,000
Rate of profit is higher.
 Zakat and with holding tax is deducted from this account. Customer earns an
interest from 1.0% to 2.0% on royal profit account.

WORK FLOW CHART- ACCOUNT OPENING
1 2
Account opening form (AOF) Scrutiny of AOF, and documents
received from the customer, along ensuring proper completeness in all
with all relevant documents respects
4 3
AOF returned to the customer, to Are AOF and documents completes
be completed and resubmitted in all respect?
5
1. Verification of identity
2. Obtaining proper
identification
3. Verification of introducer’s
signature from the record.
4. Obtaining approval of the
officer.

6
Account opening officer enters the
AOF details in the computer and the
register.
8
1. Customer is given account 7
number & advised to 1. Letter of thanks sent to the
deposit the initial amount account opener.
in the account. 2. Letter of thanks sent to the
2. Cheque book requisition introducer.
slip is forwarded to the 3. SS Card serially filed in the
officer for issuance of SS Card file.
cheque book to the 4. AOF& related documents
customer. filed in the relevant file
folders.
CLEARING DEPARTMENT
FUNCTION OF CLEARING DEPARTMENT
The major functions of clearing department are to receive the cheques, which are drawn
on some other bank. The customers can get many cheques in his account at BAL from
the cheques drawn on other banks. The bank accepts these cheques and collects the
amount from other bank. Bank charges some commission of these facilities. This
department is controlled by the operation Manager or the Head of the department.
TYPES OF CLEARING
 Inward clearing
 Outward clearing

Inward Clearing
Receiving of the cheques from the other braches of Allied Bank Limited with in the city
is called inward clearing. These cheques are paid by or drawn up by bank which gets
the inward clearing instrument.
Outward Clearing
Receiving of cheques from the other banks within the city is called outward clearing.
NIFT
NIFT stands for National Institutional Facilitation Technologies. It is subsidiary of

SBP. Clearing house of SBP has a tiresome part of its work to a private institution
named NIFT. NIFT collects cheques, demand drafts, pay orders, Travelers Cheques etc.
From all the branches of different banks within city through its carriers and send those
to the branches on which these are drawn for clearing.
After the branches approve the instruments drawn on them, NIFT prepares a sheet for
each branch showing the number for instruments and amount in its favour and drawn
on it and send it to each branch. a similar sheet for each bank is also sent to clearing
house of SBP where accounts of banks are settled in the same manner.
The instruments are collected from the client. Following things are
checked.
 Cheque date (a cheque is valid for six months, for example 1 a cheque is dated
01.01.05 it will be valid till 30.06.05 and it should not be post dated).
 Title
 Amount in figures and words should be same.
 There should be no cutting and overwriting on the cheque.
 Deposit should also match with the cheque.
Stamping Procedure
In stamping procedure, the Pay-in-slip counters foil the following three stamps are
used; If the cheques are for the same bank, and drawer and the payee both have the
accoumt in the same bank stamp is used, and this stamp indicates the transfer of
cheques from one account to another account. This cheque is directly moves towards
posting in computer terminal where the computer operator debit one account and credit
the account of another party. This stamp is known as the Transfer stamp.
If the cheques are received from other bank and drawer's account is not in the bank then
cheque received stamp is used. This cheque is represented in the clearing house. Date is
also mentioned on the stamp. If the cheques are from out of the city then it is send for
the collection.
Stamping on Cheques
After receiving the cheque and issuance of the counter foil to the client, stamping
process starts on the cheques, the following stamps can be used;
The name and branch mane of the bank stamp is used on the front side of the cheques.
This stamp is used on all types of cheques. This stamp is known as crossing stamp.
The second stamp used is the clearing stamp on front side of the cheques. It also
indicates the presenting date of the cheques.

If the cheques is dishonored and deposited again for clearing, the clearing stamp is used
again with new date of presenting. So the clearing stamp is necessary wherever the
cheques are presented for clearing.
The third necessary stamp which is the endorsement indicates the paying bank to
"payees account credited". It is the confirmation of outward clearing.
The whole clearing process required about 2 days, after 2 days the customers' account is
credited and the customer can make the transactions.
COLLECTION (OBC AND IBC)
In collection the bank undertakes to collect the proceeds of outstation cheques for their
customers from drawee banks. This is a facility given to the customer.
Internally in banks following two processes of clearing are done;
1. OBC (outward Bills for Collection)
2. IBC (Inward Bills for Collection)
1. OBC
OBC stands for outward bills for collection. In outward collection bank receives the
cheques from customers. At this time the banker passes an entry in books in which
customers' liability is debited and banker's liability is credited. This entry is reversed on
realization. After realization bank gives credit to customers account.
Procedure
In this case, bank sends the cheque to its branches in other city or bank has not its own
branch in a city then it will send it to the bank on which it is drawn. First of all OBC

number from the bank register is given to the cheques. Then OBC forwarding schedule
is made. Original copy is attached with the cheque and send to the bank on which it is
drawn, and the copy is attached with the deposit slip for record purposes. Commission
is charged on OBC which is 0.15% of the principal amount of the cheque but if the
amount of the cheque is less than RS 31,000 then minimum RS.50 is charged. This rate
is for the cheques where the bank has its own branch otherwise minimum amount of
commission is RS 300. The postage charges are flat and those are RS 150.
2. IBC
IBC stands for inward bills for collection. Bank receives the cheque drawn on it from
banks in the other cities. Bank gives debit to the party who issued the cheque and send
credit advice to the branch sending the cheques.
Procedure
The procedure of IBC is this that first of all inter branch credit advice is mad. On which
the bank gives the IBC number. Then the head office voucher will be credited and CLG
Vouchers will be debited. After that it is filled in the register for record and also posting
is made in the computer as well.
CASH DEPARTMENT
The department is responsible for the handling of cash deposits and encashment of
cheques issued by the depositors.
Receipt of Cash

In receipt section deposits are received in form of cash. The depositor use pay-in-slip
for depositing the amount. There are two different types of slips for both saving and
current account.
The client gives all the detail regarding date, account number title of account, amounts
in words and figure. The pay-in-slip is stamped, cash is received and counter foil is
given to the depositor. The adjacent credit voucher is used for recording and posting
purposes.
In case the client is depositing money in his/her account through a cheque of another
bank and then the cheque is lodged in clearing.
Cheque Encashment Section
The process of cheque encashment is done with the help of following procedure;
 Receiving of cheques
 Verification of signature
 Computer Terminal process
 Payment of cash
Receiving of Cheques
The cash is paid against the cheque of the client. The following things have to be
checked by the cashier before the encashment of cheque.
Signature verification

After receiving cheque, officer verifies signature of the account holder and signature on
the cheque. This signature is feeded in the computer so they are checked from the
computer.
Computer Terminal Process
The cheque is received in computer terminal, where the computer operator checks the
balance of the account holder that whether there is enough balance in the account or
not. after considering these points the computer operator posts the cheque in account
holder ledger and after cancellation of the cheque returned it back to the cashier.
Payment of cash
After the cancellation of the cheque the cashier enters the cheque in the "cash Paid
Register" and pay against the second signature of the receiver on the back of the
cheque.
Remittance Department
Remittence is mode of transfer of funds from one city to another city or within the city.
For this purpose, most commonly used instruments are
1. Demand Draft
2. Pay Order

3. Telex Transfer
4. Online Transaction
DEMAND DRAFT
A demand draft is an instrument in writing drawn by one branch of a bank on another
branch of the same bank for a certain sum of money; payable on demand to the order of
the payee mention therein the draft.
ISSUANCE OF DEMAND DRAFT

The customer makes a request to the banker for a demand draft. The banker gives
him/her an application form to fill and ask him to deposit the amount for which he
needs draft. The client mentioned the name of payee in the favor of which it is to be
paid, the name of branch on which it is drawn and amount of draft on the form and puts
his signature on it. Afterwards, he deposits the amount in cash with the bank. In case he
is Account Holder of the same bank, he can give cheques instead of cash upon which
the banker transfers the amount from his account. When all these formalities are
fulfilled, banker issues him a demand draft. Bank takes charges for demand draft that
are in different banks according to their schedules of charges.
Internal Process
After issuing demand draft, bank sends a credit advice to the bank on which it is drawn.
Drawee bank after receiving credit advice gives credit to DD payable Account. When
DD is presented on the cash counter, bank pays cash against it after checking N.I.C of
payee and debits DD payable account .If DD is crossed amount is transferred into
payees account. Posting is also made in the computer terminals for the purpose of
record of the bank.
Issuance of Duplicate DD
Bank can issue duplicate of demand draft on client request after taking charges. The
charges are RS. 100.
Cancellation of DD
In case, client wants to cancel the draft he has to make an application with his
signature. Bank checks the signature. Amount of draft is returned to client after
deducting cancellation charges. The cancellation charges are Rs.100.
PAY ORDER
A pay order is an instrument in writing issued by bank for a certain sum of money
payable on demand to the order of the payee mention within the city, where as pay slip
is used for bank's internal use. In pay order
 Paying Bank
 Issuing Bank is same
Issuance of Pay order

The client makes a request to the maker for issuance of a pay order. The banker gives
him an application form to fill and ask him to deposit the amount for which for which
he requires the pay order. The client deposits the amount in cash with bank. If he is
account holder of the same bank, he can give cheque upon which amount is transferred
from his account. After the fulfillment of this entire requirement banker issue the pay
order to the customer. Bank takes charges for issuance of pay order which varies from
bank to bank.
Internal Procedure
After issuing pay order, banker gives credit sundry creditors account. Posting is made
in the computer terminal. When pay order is presented on cash counter bank makes

payment against it after checking N.I.C of payee and sundry creditors account is
debited. If it is crossed, the amount is transferred into the payees account.
Cancellation and Duplicate issue

The procedure for cancellation and duplicate issue of pay order is same as that of
demand draft and the charges are also same.
Accounting Procedure
When a Pay Order is issued, cash department debits cash account & Pay Order issued
account is credited as:
Account Titles Debit Credit

Cash Deposits
PO Issued
Commission on Remittances
Tax on PO & DD
When Pay Order is received in inward clearing
Account Titles Debit Credit

PO Issued
Cash Deposits
ONLINE TRANSACTION
For branch-to-branch transfer of funds on the same day, previously TT was used. But
now banks have adopted a new system known as Online Transfer.
In online transaction cheques of different branches can be paid, for instance if a client
has taken online Transaction facility and presents Islamabad's cheque to bank Alfalah

Lahore, he/she can have payment from Lahore. If the cheque has been cleared from
Islamabad Bank Alfalah, a copy of cheque is made and is faxed to appropriate branch;
the branch then checks the client's balance, date of cheque and signature of client. If the
cheque is given clearance from the respective branch then payment is made to client,
the branch is then debited and the branch that has made payment is credited.
CREDIT DEPARTMENT
Introduction
The credit department plays a key role in a bank it earns considerate income in form of
mark up on its advances.
Sections
The credit department has been sub-divided into two sections
1. Credit Marketing
2. Credit administration & Monitoring
1. CREDIT MARKETING
The main function of this department is to market a customer for the bank.
Credit Policy of the Bank
The credit policy of any banking institution is the combination of certain globally and
locally accepted time standards and other dynamic factors dictated by realities in ever-
challenging market and industry.
“The extension of a credit facility should add value to the bank’s assets” should be
borne by the bankers. For this purpose the bank takes special care for judging the

1. Ability to repay
2. Willingness to pay
1. Ability to pay
The ability of a client to repay can be judged by the financial statements of the
customer’s company. To avoid the danger of fake statements the SBP has put on some
regulations on all the banks, which are called as prudential regulations. Every financial
institution is bound to follow these rules in advancing loans, e.g. all the credit
institutions is bound to lend the customers having current ratio of their assets equal to
minimum 1:1.
2. Willingness to repay
The willingness to repay can be determined by verbal discussion with him or CIB
(credit information bureau) report.
TYPES OF BORROWER
Individuals
 Existing account holders
 Staff members
 Relatives of staff members
 Employees of other banks
 Joint account

Business entities
 Sole proprietorship
 Partnership
 Limited companies
 Joint ventures
 Group accounts
Other Accounts
 Traders
 Club/associations
 Federal, provincial, local government bodies
 Manufactures
Steps Taken in Advancing Loans
The following are the steps taken in advancing loans to its borrowers;
 When customer is marketed, the officer takes a sort of interview from its
prospective customer.
 The request is written form is received and a visit report is prepared.
 If viable, the request is given to the credit officer.
 Then the bank request is given to the credit officer.
 Then the bank requests the SBP to provide him the CIB report of the customer.
 If irregularity occurs the proposal is returned to the customer for

regularization/rectification, and if not then CLP (credit line proposal) is
prepared.

FACILITIES PROVIDED BY THE BANK
The credit marketing provides the customer only with non-funded facilities, i.e. Letter
of Guarantee.
Guarantee
A guarantee may be defined as;
“An undertaking given by a person to be answerable for the debt, default or miscarriage
of another person”.
Advances against guarantee
Guarantee as a security for advances arises only when the borrower is not able to satisfy
the bank for his credit worthiness. The banker will ask for guarantee only if
acceptable collateral securities are provided to him.
Parties of a guarantee
Are as follows
I. Guarantor
The person who gives the guarantee.
II. Creditor
The person to whom the guarantee is given.
III. Principal debtor
The person for whom the guarantee is given.
TYPES OF GUARANTEE
 Performance bond
When the contact is on performance basis.

 Bid Bond
When the applicant is bidding for a contract. In this case.2% of the amount of
bid has to be substituted to the bank.
 Retention Money Guarantee
In which certain %age of money is withheld pending for satisfactory
performance.
 Advance Payment Guarantee

In which, the applicant assures the beneficiary for an advance payment up to
signing a deal.
Procedure For Issuing Letter Of Guarantee

 The letter of guarantee is opened on request of customer, who is a current
account holder of the bank.
 In letter of guarantee all the relevant details are mentioned.
 A customer guarantee is taken from the customer authorizing the bank to

sell out the securities held with the bank in case of default.
 The bank requires a letter of Lien, pledge and authority for shares, stocks
and securities in case the security is deposited is other than margin (cash).
 The guarantee is issued in the name of creditor on a stamp paper after all the
legal documentation showing the date of issue, expiry amount, reference of
the contract between debtor & creditor.

Commission of the Bank
The bank charges commission at a fixed rate i.e. . 0.5% per quarter on the amount of
guarantee.
Expiry of Letter of Guarantee

When the period for which the letter of guarantee was issued expires, the customer
brings the letter of guarantee back to the bank. The bank cancels the letter of guarantee
by drawing two lines across the face of it.
Credit Administration & Monitoring

The credit administration & monitoring department performs many functions. Some of
them are
a) Perfection of securities
b) Perfection of legal documentation
c) Management information system (MIS)

d) On going monitoring of account
e) Facilities provided by the bank
(a) Perfection of securities

The main function of this department is the security consideration.
Security

“A security is an interest or right in property given to the creditor to convert it into
cash, in case debtor fails to meet the principal amount & interest on the loan”.
Modes of Securing Advances
 Hypothecation
 Pledge
 Mortgage
1. HYPOTHECATION
It may be defined as
“A legal transaction whereby goods may be made available as security for a debt
without transferring property or possession to the lender (bank).”
The advancing against goods without taking their possession is very risky for bank on
two grounds;
 As the goods are in the custody of the customer (owner), the borrower may take
out the goods without informing the bank.
 Secondly, the bank does not have legal claim as it does not have a valid charge
over the goods.
Therefore the bank takes special care in this case.
Rights of the Bank
The bank can exercise the following rights in case of hypothecation;

 The bank has the right to inspect the god owns. It can also demand periodic
report of the stock.

 The hypothecation goods are to be issued by customer. In case the are not
insured the bank has right to get them insured and recover those charges from
the borrower.
 In case, the bank finds the contract is being violated, it has the right to obtain
stop orders from appropriate authority.
2. PLEDGE
It can be defined as:
“A pledge is a contract whereby a good is deposited with the lender as security for
repayment of the loan”.
Transferring the goods from owner’s go downs may make the delivery of goods or keys
of owner’s go downs are handed over to the bank or his appointed Muccaddam.
(Muccaddam is the organization providing the facility of agents on behalf of banks. The
appointed Macadam must be on the list of approved Macadam’s).
Rights of the Bank
The bank can exercise the following rights in case of pledge;

 The bank can retain the goods pledge not only for payment but also for the
interest and other charges incurred by bank.
 In case of default of customer the bank can dispose of the goods after giving
proper notice to the borrower.
 The bank has the right of full value of goods till such time; the entire debt is not
discharged.

3. MORTGAGE
It‘s means;
“A mortgage is the transfer of interest in a specific immovable property for the purpose
of securing money advanced by the way of loan, an existing of future debt”.
Condition
The main condition for mortgage is that only the immovable property can be secured.
The lending of money on real estate (immovable property) is not very popular with
most of the commercial banks. However in the last few decades the loans on real estate
are growing.
Difficulties faced by the bank in case of mortgage
The bank has to lock their funds in the loans having long-term maturity. The loans on
real estate lack liquidity. In case of their default, there are no organized markets where
that property and amount recovered to pay off the loan. Since other for unpopularity are
as under;
 Legal hindrances
 Heavy expenses of legal mortgage
 Lack of liquidity
 Difficulty in valuation
 Delay in recovery of loans
 Finding of tenants and their repairs costs

Preliminary inquires for advances against mortgage
To secure its position, the bank takes into account the following inquires in case of real
estate;
 Proper valuation of real estate

 Inquiry about title to property
 Preparation of title deed

 Search for prior charges
(b) Perfection of legal documentation
In this department the documentation is checked and analyzed, whether all the terms
and conditions are as per the contract between the customer and bank and no clause of
contract causes may harm to bank’s interest.
(c) Management Information system
The basic purpose of this department is

1. Reporting to state bank of Pakistan about various details of bank’s advance
position that helps in preparing the ultimate CIB report.
2. Reporting to government about total financing of bank for various purposes.
3. Reporting to head office on daily, weekly and monthly basis about
 Credit position of each and every customer
 Total financing of the bank in the cotton & textile sectors etc.

(D) Ongoing Monitoring of Customer’s Account
It is the inspection of customer’s account and monitoring securities from time to time
e.g.
 Go downs inspection in case of pledges
 Analyzing client’s report about hypothecated goods
 Project examination for which the guarantee has been taken
 Interim review.
ACCOUNTS DEPARTMENT
INTRODUCTION
The accounts department deals with various routine activities for the bank. The main
activities performed by it are
1. Budgeting
2. Reporting
3. Maintenance & depreciation of fixed assets
4. Miscellaneous function
1. BUDGETING
Accounts department of a bank, for a year makes budget of every branch. Fiscal year of
bank starts from January and ends on December. The accounts department starts
preparing budget from October the next year.
Procedure
The budget is based on forecasting through past performance.

 First of all, the bank reviews what are its sources of funds and where it can
utilize these funds?
 The main sources of the bank are deposits, securities issued by the bank,
borrowing from other banks, borrowing from SBP, bank’s paid-up capital, its
reserve fund, profit generated by the bank.
 The bank may employ these funds in lending to others at a high rate of mark-up.
Investment in securities, placement in inter-bank markets etc.
 It also takes into account the income from other sources, cost of funds,
administrative expenses, and utilities expenses.
 Then the budget is submitted to the head office for recommendation and
modification.
 Monthly budget meeting is held by branch managers to analyze the monthly

performance. Budget and actual performances are employed and variance is
computed for analysis.
 Variance can be negative or positive. Variance does not mean that it will have
positive effect on the overall profitability e.g. positive increase in deposits is not
always coupled with positive increase in advances.
 The management will then drive the reasons for the variance and take remedial
measures to achieve the targets.

2. REPORTING
The accounts department is in the form of reports clubs and details of various
departments together. Each and every minute detail is provided in weekly, monthly and
annual reports. The reports are submitted to head office, SBP and to the government.
Kinds of Reports
 Following reports are prepared by the accounts department on daily basis.
 Statement of affairs
 Income & expenditure
 New FCY report
 Royal profit report
 Outstand receipt report
Following are the reports that are prepared on the basis of reports granted from
mainframe. These are very important for proper analysis and feedback.
1) Daily advance and deposit position
 Daily exchange position

 Daily fund management
2) Closing Reports
 Monthly assets & liabilities

 Monthly budget review report
 Monthly monitory statement
 Monthly performance review report
 Schedule of maturity distribution

3. Maintaining of Fixed Assets And There Discription
Accounts department maintains the record of all the assets and charges depreciation on
them. The bank normally uses the straight-line method to compute the depreciation.
Department prepares asset purchase report and asset sale report after every 6 months
that helps in changing the depreciation. It is calculated on monthly basis and charged
yearly. Bank not only depreciates the existing assets but also the assets but also the
assets transferred in and transferred out.
4. Miscellaneous Functions
The accounts department also performs some other miscellaneous functions:

a. Daily activity checking
b. Reconciliation statements
c. Test keys
d. Closing entries
e. Foreign exchange forward transaction
a) Daily Activity Checking
The accounts department the vouchers with daily activity report generated by the
computer. The vouchers are then sorted out into bundles according to their categories
and comparing with the activity report checks the posting of transaction.
b) Reconciliation statements
The bank prepares reconciliation statement with head office and SBP.

c) Test Keys
Test keys are used to authenticate and secure the transaction. These keys are used for
both inward and outward transactions. In local transfer double coding is used while in
foreign transaction single coding is used.
Each bank to arrive at the code uses separate test keys. Four things must be carefully
checked because code is based these four items;
 Branch name
 Date
 Currency
 Amount
The basic purpose of test is to secure the transaction.
d) Closing Entries
Accounts department also passes the closing entries on monthly, 6 monthly and yearly
bases to calculate the profit and analyze the overall performance for a certain period.
e) Foreign Exchange Forward Transaction
In the past, the banks has to keep their foreign exchange with SBP on the agreement
that SBP will purchase the foreign exchange on book rate and charge a fee for covering
the risk. This whole transaction was known as foreign transaction. Now this facility is
not available.

To bank on new accounts, but they can avail it by renewing their limit on old accounts
with SBP.
Bank carries out this transaction through Treasury has two options:
 They can invest foreign exchange in the international market but they will have
to pay high-risk fee.
 They can also deposit with SBP that will offer 3.15% on these new foreign
currency accounts. The bank offers 2.25% to its customers; net saving by the
ban is almost 0.9%.
But it is up to treasury where to invest foreign exchange.
Summarizing up
We can say that the accounts department holds a sort of internal check on the branch
relating to its income and expenditures.
TRADE FINANCE
TRADE
Trade deals with entry/departure of goods into/from one country to another country
International trade basically is a consequence of an agreement between buyer and a
seller separated by geographical boundaries.
To ensure secured transfer of goods to the right buyer and a right seller, the services at
the financial institutions are of great importance. In this relation the banks have proved
to be not merely dealers but also the leaders. Summing up, the banks are the nerve
center of all the economic activities including international trade.
SECTIONS OF TRADE DEPARTMENT

This department deals in trade financing. It has further two departments:
1. Import section
2. Export section
IMPORT SECTION
Introduction
In the common words import means bringing of commodities into a country from
outside by sea or air.
Requirements to be fulfilled
When a person wants to import, he must have to register his name, his company name.
The EPB makes a registration with an application. There are two requirements that he
has to fulfill;
 Importer must have a current account in that bank.

 He should be the member of chamber of commerce.
Letter of Credit
It is a conditional bank undertaking of payment. It is defined as;
“An L/C is a commitment on the part of buyer’s bank to pay or accept draft drawn upon
it provided draft doesn’t exceed a specified amount.”
Types Of Letter Of Credit
There are various types of L/C’s used in trade. The main kinds are as follows;
1- Revocable Letter of Credit

It is the one, which can be cancelled or modified by the issuing bank at any time
without any notification to the seller. Since it offers little security to the seller, it is
hardly used in foreign trade by the exporter.
2-Irrevocable Letter of Credit

It is the L/C that can be amended or cancelled only with the agreement of issuing
bank, confirming bank and seller. This L/C gives more security to exporter as
compared to revocable L/C.
3-Confirmed Letter of Credit

The letter of credit is that which has the protection of credit standing of importer as
well as exporter’s bank. The exporter’s bank that confirms the Letter of credit takes
the liability of paying agents, in case of issuing ban fails to make payment to the
exporter.
Parties of Letter of Credit

It has following parties:
 Importer (buyer)
 Opening bank (bank that issues L/C)
 Exporter
 Negotiating bank (who makes the payment)
CONDITION FOR OPENING LETTER OF CREDIT

The bank will open Letter of Credit only if importer has an import license. Import
license in Pakistan is issued on the following basis;
 C&F (Cost and Freight)
Insurance of shipment is borne by importer, while exporter pays the freight under
this condition.
 CIF (cost insurance and freight)
Exporter has to pay both insurance and freight under this condition, but not
applicable in Pakistan.
 CIF & C.I
When goods are shipped on CIF and C.I (commission and interest) basis, it means
the price quoted includes cost, freight, insurance, commission and interest.
 FOB (Freight on Board)
When freight of goods shipped, is not realized in advance by shipping company, it

is then to be paid by the importer on delivery of goods at the port of destination.
PROCEDURE FOR OPENING LETTER OF CREDIT

Buyer and seller enter into a sale contract providing for payment through Letter of
credit. The importer will request his own bank or some other bank that deals in
foreign trade transactions to issue a Letter of Credit in favor of exporter. The
issuing bank asks for another bank to advice for confirms the letter of credit

(advising bank is the bank that takes reasonable care to check the apparent
authenticity of the credit that it advises).
When seller receives the Letter of credit and it satisfies with its terms and
conditions, it is the position to dispatch the goods. After making the shipment the
seller sends the documents evidencing the shipment to bank where credit is
available.
The bank checks them against the Letter of Credit. If documents are as per Letter of
Credit, the bank will pay. The bank will send the documents to issuing bank.
Issuing bank will check the documents and if they are as per the requirement of
Letter of Credit, it will affect payment. Issuing bank after it is satisfied will send the
documents to the importer upon terms agreed between buyer and issuing bank.
Buyer takes the transport documents to the transporter of goods to have delivery of
shipment.
DOCUMENTS REQUIRED BY L/C

It includes;
1. Transport documents
 Bill Of Ladding (incase of sea)
 Airway Bill (incase of air transport)
2. Insurance documents (issued by insurance co.)

3. Commercial invoice (description of goods)
4. Other documents
 Certificate of origin

 Packing list
 Bills of exchange
MODES OF PAYMENT
The payment of goods may be in the following ways;
1. Sight/CAD
The Letter of credit in which the payment is received within two weeks from dispatch
of documents.
2. Usance
The payment is made after a specified number of days after the presentation of required
documents by beneficiary.
3. Short-term finances
 FIM (finance against importer merchandize)

 FATR (finance against trust receipt)
EXPORT SECTION
Introduction
Export plays the major role in the economic development of the country; it is the one of
the major sources of earning foreign exchange without additional burden of the
economy.

“Exports mean export of all eligible commodities through authorized banking channels
admissible under exchange control regulation”.
Section
Export department has three branches;
(a) Collection-registration
(b) Negotiation
(c) Export refinance
(a) Export Registration Procedure

The exporter must have export license and a current account with bank. When party has
registered then either he enters into a contract with reporter or receives L/C. then he
prepares goods and ship them, but before shipment and after contract he comes to bank
and gets 4 copies of E-form against invoice fills out and takes them to custom
department after getting certified by the bank, where the E-forms are verified
documents required for exports:
 E-form (duplicate & triplicate)

 Request letter by party
 Insurance certificate
 Invoices
 Packing lists
 Bills of exchange
 Bills of lading or air way bills
 Certificate of origin
E-form
E-form is the first and foremost requirement of export. It confirms that exporter is
known to bank. It is a form whereby a exporter a declaration about;
 Full details of receipt quantity and value of goods
 Term of sale
 CAD
 L/C
 CIF (cost insurance & freight)
 C&F (cost & freight)
 DA basis (documents against acceptance)

 Trust receipt
 Name & address of importer and exporter

 Modes of transport & transport documents
 Destination
Copies of E-form
E-form consists of 4 copies;
1-orignal copy is for custom authority (sent to SBP at time of shipment)

2-duplicate copy is for bank’s record
3-triplicate is sent by bank to SBP at time of realization
4-quardruplicate is for exporter’s (client) on record
Issuance of E-form
E-form is issued to exporter after receiving the documents bank attaches recovering
letter with them that contains the instructions for payments and documents are sent to
foreign banks. All payments are received through telex then client’s account is credited.

Triplicate copy of E-form is completed and attached, bank charges are filled on it and
documents are submitted to SBP and thus export file is close.
(b) Negotiation
Negotiation means discounting of a foreign bill of exchange. Bank provides another
facility by providing finance in the form of negotiation of a bill. The bank purchases the
bill and provides funds to party against;
Process
The exporter receives his L/C form importer through advising bank. Then he ships the
goods and comes to bank for negotiation i.e. he sells the documents to bank and gets
Payment after complete checking of documents. Now bank is responsible for further
process. The bank receives the payment and the file is closed.
But if client does not negotiate the document and gets a loan against the documents
then he will be responsible till the amount realized at maturity. The bank receives mark-
up on the loan.
Scrutiny of documents
The most importer job is to scrutinize the documents whether they are according to the
requirements of Letter of Credit or not.
Cases of Negotiation
The bank negotiates in 3 cases;
1. If the bank is satisfied with documents, it makes payments on the spot.

2. When exporter has sent documents for collection and bank receives acceptance
through telex it will pay.

3. Without getting acceptance the bank may negotiate depending on the will of the
customer.
4. In case the bank is not satisfied it takes an Identity from client.
Discounting the Bill

Exporter has to meet various payments & expenses, so in order to meet the customer’s
needs; the exporter avails this facility and discounts the bill. After discounting the bill
Amount is credited to customer’s a/c, the discounted amount is expense of party and on
the other side, income of the bank documents required for negotiation. Only those
documents are required that are backed by Letter of Credit because only in this case
bank is secured for receiving the payment.
Uniform customs and practice for documentary credits 1993 revision, ICC publication
no.500 shall apply to all documentary credits.
If documents are correct, payments made to party the foreign currency a/c amount is
converted into Pak. Rupees, on the OD buying rate. In case of usance bill the foreign
currency is converted into Pakistani rupees at relevant export buying rates.
In case of both sight & usance when their proceeds are credited to bank’s abroad a/c, in
books of branches the conversion is made at T.T documentary buying rates. It yields
the bank considerate exchange earning.
Discrepancies in the documents

After checking the documents discrepancies are pointed out, the exporter takes them
back & removes them. Then again presents documents for negotiation. If documents
with discrepancies are sent to foreign banks, it informs the importer if importer accepts

the documents with error then importers bank is authorize to deduct the discrepancy fee
under foreign bank charges. Normally discrepancies are of nature as follows;
 Late submission of documents

 Late shipment
 L/C expired
 Invoice mistakes
 L/C overdrawn
 Name and addresses of exporter are not as per L/C
(c)Export Refinance
State bank of Pakistan introduced this scheme this year 1975 to facilitate and encourage
Pakistani export. The salient features of export finance scheme envisages the provision
of financing facility to exporter by schedule banks types of export refinance.
(a) Part I
(b) Part II
(a) Part I
There are two types of part I
1. FAPC (pre shipment)
2. FAFB (post shipment)
FAPC (pre shipment)

It is financing against patching list. The purpose of this financing is to provide funds to
exporter to produce or purchase goods for export. The loan has to be repaid by exporter
within 180 days. If exporter does not pay, the bank repays it to SBP. The facility is also
called percipient. The following documents are required;
 D.P note (demand promissory paper)
 Annexure ‘A’ (on stamp paper)

 Contract of sales
 E.C form (prepared by exporter for details of contract)
 D.E form
 Undertaking
FAFB (post shipment)

If is financed against foreign bills and also known as post shipment finance. This
facility is achieved after exporter shops the goods and sends shipping documents in
Collection. The rest of the condition remains same as under FAPC. The documents
required are;
 Original contract
 Annexure ‘A’
 Invoices
 Airway Bill
 EC form
When payment is received, we adjust our loan a/c with the balance. Then amount is
paid to SBP accompanied with a covering schedule.
Part II
This type of financing is against last performance of the exporter. Their performance is
checked by EE statement, which is issued annually. This statement is prepared by the
exporter and submitted to SBP by its bank for verification. Exporter can have finance
up to the half amount (50%) of previous year export. The mark-up is charged for the
period between which exporter has used the facility and not for the whole limit.
Mark-Up Calculation
M.U= (Total amount of loan x mark-up %age) x Days

Summing up, trade & finance department is one of the most important department of
the bank, as it determines the
 Fluctuation in foreign currency’s rates

 Balance of trade
 Methods of exchange Control
HOME FINANCE DEPARTMENT
Home finance scheme as launched BAL during last quarter of 2018. This product has
received overwhelming from the customers due to its lowest mark-up and high quality
services provided by bank. Home finance Department started its operation in
September 12, 2018.
Major Purposes of Home Finance

Bank provides the loan for three major purposes:
 Purchase
 Construction

 Renovation
Processing Of Loan
Customer who wants a loan for any of the mentioned purposes should fulfill certain
requirements;
 Monthly income should be at least Rs. 18000 per month.
 He should do 30% of financing from his own sources and 70% of financing is
done by the bank.
 Bank statement of last six months.

 If he is salaried person, employment verification form should be provided.
 If a person is a business man he should verify his income from Credit
Information Bureau.
 Maximum limit of the loan is calculated 36 times of the person’s monthly
salary.
CREDIT CARDS DEPARTMENT

Bank Alfalah visa cards introduced in 2017. During the fierce competition in the
market today, the Alfalah Visa Credit card has captured a significant make share. It is
accepted at nearly 30 million merchants and 870,000 ATMs in more than 150 countries
around the globe and over 10,000 establishments in Pakistan.
Alfalah VISA helps to pay for shopping, travel, entertainment, meals and much more.
Card members are facilitated through a number of promotions from time to time like
Matchless Discounts (discounts at nationwide merchants’ outlets, making each
shopping spree an exciting one), Dine’a’ Discount (the best discounts at a wide range of
selective restaurants) , Fortunes Rewards Program (exchange of fortune points against
an array of attractive products and services), etc. In addition, there are a number of
Strategic business partnerships with leading local and international brands for purchase
of home appliances at exciting Step-BY-Step (SBS) monthly installment plan with free
home delivery at lowest interest rates.
Features
 No Joining Fee
 No Annual/Renewal Fee
 Lowest Markup
 Auto Debit Card
 Global Acceptability
 Cash Withdrawal
 Revolving Credit
 Free Supplementary Cards
 24-Hours phone Banking Service.
 Zero Loss Liability.
 All Billing in Pak Rupees.
 Comprehensive Travel Protection .

CATEGORIES OF ALFALAH VISA CREDIT CARD
Alfalah gold card
(Is impressive combination of higher spending limits and superior card services)
Alfalah classic cards
(An extremely appealing product with features not available on any other credit card in
Pakistan)
Alfalah blue card

(This card is specially for Graduates or the persons who has just started his career)
Women exclusive
(For the first time in Pakistan, BAL has introduced a credit card exclusively for women.
this card has its unique features which have been tailor-madefor the women in Pakistan)
Visa Mini card (43% smaller)
(Forget your wallet and chill out with Alfalah Visa Mini)
Auto Debit Card
(This is especially designed for the BAL account holder, giving option of making
minimum or full payment through BAL saving and current PKR account specified on
Alfalah Visa monthly statement)

 Young Professional card
 Student card
 Scholarship card
Supplementary Cards
All Bank Alfalah basic card members can apply for supplementary cards in separate
categories like;
 Daughter’s card (children who are above 13 years of age)
 Son’s card
 House staff card(for the cook and driver etc )
CAR FINANCE
Car finance is not a new product in a consumer market but has rather gained popularity
because of growing inflation and increase in price of motor vehicle .Alfalah Car is a
consumer-financing scheme that enables a customer to own his desired car at easily
affordable and flexible installments with minimum down payment and insurance. All
businessmen, corporate employees, Salaried and self-employed professionals having
net take home income in excess of three times the monthly installment are eligible to
take the advantage of this scheme.

Benefits
It offers easily affordable and flexible installments.

It can be adjusted at any time during the tenure.
It has the benefit of quick processing.
It requires minimum down payment.
It requires minimum insurance.
All brand new cars are available.
Requirements
The applicant must be a Pakistani NIC holder.
He/She must be over 20 years of age. (Maximum 60 years in case of salaried

and 62 years in case of a business person at the time of maturity of the loan.)
The applicant must be either salaried, businessman of self-employed.
Family Members: the applicant can include his spouse, children (18 years and
above) or parents as co-applicants for the car loan and the car can be registered
in their names.
Documents Required
 Two passport size photographs

 Copy of NIC
 Bank Statement for the last six months.
 Salary Certificate (in English) specifying the name, date of joining, designation
and salary details (for salaried individual)
 Business proof (for a business person)
 Current utility bill of your residence in Pakistan.

 Copy of the National ID Card of the co-borrower (if the Car is to be in the name
of the co-borrower).
ELECTRONIC BANKING
ATM
Allied Bank Limited presents the Alfalah HilalCard, the first Visa Electron
International Debit Card which gives an unlimited access to current / savings account
with a simple swipe, at millions of retail shops and ATMs, worldwide. The Alfalah
Hilal Card comes with a host of conveniences and benefits combined with the wide
reach of Visa Network enabling it to be accepted at more than 840,000 ATMs and 13

million retail outlets around the world, making it the most acceptable Debit Card
available in Pakistan.
What's more, it is easy to operate and can be used on any electronic self-printing POS
machine where VISA is accepted, locally and internationally. No more hassle of
remembering your PIN for retail transactions and no need to go to the ATM for cash
withdrawal, one swipe and your transaction is complete.
Online Banking
BAL is one of the few banks in Pakistan that offers On-line Banking facilities.
Customers have the convenience of walking into the nearest branch of Bank Alfalah in
any of the cities of Pakistan and operate their accounts. Bank Alfalah provides on-line
services to its customers. At present, this service facilitates the customers to deposit and
Transfer their amounts from one branch to another of BAL. It is being planned to
launch a universal account to update this facility and make it more extensive
INTERNSHIP ACTIVITIES
This chapter is based on my observation and experience during my internship in Allied

Bank Limited, PMC branch, Faisalabad.
ACTIVITIES IN ACCOUNT OPENING

DEPARTMENT
I worked in Account opening section for 1 week under the assistance of Miss Neelam
and Mr. Farooq Durrani (Account opening officers). They were friendly and open

minded persons they gave me sufficient information about the functioning of their
department. It was very beneficial to start the internship with Account opening because
it will helpful in understanding the types of Accounts and how to give information to
the client. It also helps a lot in building the confidence, because direct interaction with
customers is done here. I learned following things in customer relationship department.
Opening an Account
 Interviewing the customers.

 Attending walk in customers and their telephonic queries.
 Tell the customers the requirements and necessary information to the client as
needed for Account Opening.
 Giving form of PLS or Current Account to the client and give him instruction in
filling the form.
 Filling out the Account opening form.
 Checking the documents required which are to be attached with that form.
 Getting the forms approved by manager.
 Scanning of Specimen Signature card (S.S Card).

 Giving S.S Card to cash department incharge.
 Giving approved forms to office boy for final posting.
 Analyzing the different profit rates the bank offers on different accounts.
 To take the signatures of the introducer in Account opening form.
 Ask the customer for initial deposit.
 Making an entry in account opening register.
 Filling of cheque requisition form.
 Letter of thanks to the customer and introducer.
 Posting the account into data base “Bank Smart”.
Issuance of Cheque Book

 To take the requisition from the client and verify the signatures.
 To prepare cheque book and observe the procedure of how the entry is made in
the data base.
Closing An Account
 Analyzing the Account closing procedure.

 To take the application of account closing from the client.
ACTIVITIES IN CLEARING DEPARTMENT

I worked in clearing department for 3 days under the guidance of Miss Sadaf Batool. I
found her very cooperative and polite person. She gave me proper guidance about the
complex process of clearing. Working in clearing department is very knowledgeable
and beneficial. I have learnt a lot from this department.
Verification of Instruments
 Verify the cheques number.

 Tally the amounts in words and signature.
 Title of instruments.
 Check whether it is post dated or not.
To Make Outward Clearing

 Apply the stamps on clearing cheques such as transfer, cross cheque and payees
account credit stamp.
 To separate the pay slip from all the instruments.
 Checking the balance of clients on the database.

 Analyzing the debit and credit entries made in voucher.
 Checking the vouchers of all the cheques cleared cheque no, amount, account
title from the deposit slips.
To make the OBC Realization and IBDT

 Analyzing the process of OBC outward bills for collection and inward bills for
collection.
 Make the OBC realization, IBDT and send it to the area office through fax.
 Informed the customer about their returned cheques and take the charges.
ACTIVITIES IN REMITTANCE DEPARTMENT:

I worked in remittance department under of Miss Farah Munir, for 1 week. She is very
knowledgeable woman, who explained each and everything to me from the scratch. i
have learnt a lot from this department about the general banking and about the
instruments of the bank.
 Analyzing the process of issuance of demand draft, pay order and Telex
transfer.
 Checking of the online balance of the customer.
 Print out the pay order in computer.
To issue pay order

 Make debit and credit entry on database regarding the issuance of pay order and
demand draft.

 Making the pay slip report.
 Learned about the difference between the pay order and demand draft.
To issue Demand draft

 Observed the process of issuance of the demand draft
 Analyzing the debit and credit transaction of demand draft made on computer.
 Observed the process of cancellation of DD.
 Entry of credit card bills on computer
 Learned about the making of online scroll sheet.
 Making an entry about demand drafts in register.
ACTIVITIES IN Trade Finance Department

Import Department
In import department I learnt about:
 Issuance of import registration certificate
 Parties of L/C
 Letter of credit opening procedure
 Types of L/c
 Import license (registration of import in EPB)
 Import bill
 Checking an scrutinizing of documents
 Mode of payment
Export Department

There are three sections in export department namely documentation collection and
refinance section in documentation and collection section. Here I learnt about:
 Procedure of registration as an exporter

 Documents needed for export
 Form “E”
 Checking of documents
 Exchange control regulation
 How to make foreign documents bills for collection
 How to make export payment realization certificate
 How to fill covering letter
 Mode of payment
Export Refinance
In this department I learnt about:
 Different kinds of refinance scheme
 Procedure of getting the facility
 Documents required for the avail the facility
 Different fines from SBP
 Mark up calculation
ACTIVITIES IN HOME FINANCE

DEPARTMENT:
I have worked in home finance department under the guidance of Mr.Ahsan Saleem
Relationship officer. He is very devoted to his work. He is directly involved in
customer dealing. He is very lively and always deals the customer whole-heartedly. He
has given me very valuable and beneficial information.

 Personalized services to the valued customers.
 Provision of information to client about home finance.
 Customer dealing and marketing the potential customers.
 Analyzing the overall process of home finance.
 Checking the documents required for home finance
 Making the inter office Memo.
 Calculation of the monthly installments.
 Preparation of the mortgage protection plan.
 Making the calculation of customer’s maximum limit for loan he can apply.
 Informing the customers about the approval or non approval of the loan.
 Analyzing the repayment procedure of home loan.
 Making offer letter.
 Learn about the installment posting.
 To prepare the IBC's for realization of cheques
 Checking the documents of safe out register.
ACTIVITIES IN CREDIT DEPARTMENT

Lastly I was moved on to the credit Department. Mr. Mustansar Hamamad Bhatti in
charge of credits welcomed me in his department. In credit i worked for last 7 days of

my internship. One major difference that i observed in credit department and other
department was the difference in the nature of work. After working in credit
department, i realized the importance of lending operations for a bank. It is the most
important department in the bank which generates revenue for the bank.
 Analyzing the process of credit proposals of new and existing clients.

 Learn about the process through which financial analysis of client is made.
 Making of credit line proposal.
 Learn about different types of financing the department do.
BALANCE SHEET
AS AT 31ST DECEMBER
(Rupees in 000)
2017 2018 2019

ASSETS:
Cash and Balances with 4540486 8423399 19708518
treasury Banks
Balances with other Banks 232728 626917 3183957
Lending’s to financial 4634398 7437733 ---------
institutions
Investments 24470314 28903596 35503196
Advances 28319401 49216120 88931400
Other assets 1208930 1553108 3226959
Operating fixed assets 1760774 2791626 4280504
Deferred Tax assets --------- -------- ---------
Total Assets 65167031 98952499 154834534
LIABILITIES
Bills payable 758961 1208671 2233671
Borrowings from financial 6037576 13127754 12723830
institutions
Deposits and Other accounts 51684984 76698322 129714891
Subordinated Loans 650000 649740 1899480
Liabilities against assets subject -------- -------- --------

to finance lease
Other liabilities 1196342 2186754 2725344
Deferred Tax liabilities 1186501 323010 275834
Total Liabilities 61514364 94194251 149573050
Net Assets 3652667 4758248 5261484
Represented By:
Share Capital 1000000 2000000 2500000
Reserves 365727 790374 1008772
Unappropriated Profit 250050 963042 860300
Total Equity 1615777 3753416 4369072
PROFIT AND LOSS ACCOUNT

AS AT 31ST DECEMBER
(Rupees in 000)
2017 2018 2019

Markup/ return/interest earned 4551329 4033380 5620203
Markup/return/ interest expensed 3112313 2028577 2434459
Net markup/interest income 1439016 2019803 3185744
Provision against non-performing loans and 53619 87091 370208
advances-net
Provision for diminution in the value of ------- ------- 2165
investments
Bad debts written off directly 1447 418 351
55066 87509 372724
Net markup/interest income after provisions 1383950 1917294 2813020
NON MARK-UP/INTEREST INCOME
Fee, commission and brokerage income 316368 399383 675868
Dividend income 62077 112017 52539
Income from dealing in foreign currencies 95165 106848 218820
Other income 220973 2773503 572822
Total non mark-up/interest income 694583 3391751 1520199
2078533 5309045 4333069
NON MARK-UP/ INTEREST EXPENSES
Administrative expenses 1182887 1799490 2677635
Other provisions/ write off -------- 2000 ---------

Other charges 993 1875 1700
Total non- markup/ interest expenses 1183880 1803365 2679335
894653 3505680 1653734
Extraordinary /unusual items -------- -------- --------
PROFIT BEFORE TAXATION 894653 3505680 1653734
Taxation
For the year –Current 407752 1364723 586159
-Deferred 6271 13671 3663
For prior year –Current 15200 22887 30000
-Deferred 62693 8507 9249
448974 1382446 561745
PROFIT AFTER TAXATION 445679 2123234 1091989
HORIZONTAL ANALYSIS
An analysis of percentage financial statements where all balance sheet or income

statement figures for a base year equal 100% and subsequent financial statement items
are expressed as percentages of their values in the base year. It is also called Index
Analysis.
BALANCE SHEET
AS AT 31ST DECEMBER (%ages)
2017 2018 2019

Assets
Cash and Balances with treasury banks 100% 185.5% 434.06%
Balances with other Banks 100% 269.4% 1368.10%
Lending’s to financial
institutions 100% 160.5% 0.00%
Investments 100% 118.1% 145.09%
Advances 100% 173.8% 314.03%
Other Assets 100% 128.5% 266.93%
Operating Fixed Assets 100% 158.5% 243.10%
Deferred Tax
assets 0%
Total Assets 100% 151.8% 237.60%
Liabilities
Bills Payable 100% 159.3% 294.31%
Borrowing from financial Institutions 100% 217.4% 210.74%

Deposits and Other
Accounts 100% 148.4% 250.97%
Subordinated
Loans 100% 100.0% 292.23%
Liabilities against assets subject to finance lease
Other Liabilities 100% 182.8% 227.81%
Deferred Tax liabilities 100% 27.2% 23.25%
Total Liabilities 100% 153.1% 243.15%
Net Assets 100% 130.3% 144.04%

Represented By
Share Capital 100% 200.0% 250.00%
Reserves 100% 216.1% 275.83%
Unappropriated Profit 100% 385.1% 344.05%
Total Equity 100% 232.3% 270.40%
INTERPRETATION
Horizontal analysis is done using fixed base method. In this analysis, values of the year
2017 are taken as base.
Formula
= Current Year x100
Base year
ASSETS
Cash and Balances with treasury banks
Under this head, bank has to maintain with State Bank Of Pakistan as cash reserve
requirement and a portion of deposits to meet the demand of customers. In 2018 this
head showed an increase of 185.5% that is because of the increase current account with
Bank Alfalah Limit and then further increase of 434.6% due to same reason.

Balance with other banks
The cash, which the bank keeps in other banks in order to maintain liquidity position,
come under this head. In 2018 balance with other banks has increased to 269.4% that
shows more liquidity as compared to 2017 and in 2019 there is drastic increase as
compared to 2017.
Lending to Financial Institutions
The amount, which the bank invests in financial institution come under this head of
assets. This is a safe source to earn profit. In 2018 this investment was increased to
160.5% as compared to 2017 but in 2019 bank did not make loans to financial
institution.
Investments
Under this head bank invest in some securities. For the last few years it is observed that
interest on securities is higher than the interest received from public. In 2018
investments were increased to 118.1% as compared to 2017 and then again increased to
145.09% in 2019 due to best rate of interest on securities.
Advances
The Advances are the amount lending to general public. The basic function of a bank is
to accept deposits and lend to general public. In 2018 advances were increased to
173.0% and in 2019 increased to 314.03% as compared to 2017 because the function of
a bank is to make advances so BAL’s advances increased because of increased
deposits.

Operating fixed assets
The amount to purchase fixed assets for the business comes under this head. In 2018
operating fixed assets were increased to 158.5% as compared to 2017 and in 2019 they
were increased to 243.10% due to expansion of branches network.
LIABILITIES
Borrowing from financial institutions
If bank can lend to financial institution then it can borrow from them as well that is
liability. In 2018 this liability was increased to 217.4% and in 2019 increased to
210.74% as compared to 2017 in order to meet liquidity needs.
Deposits and Other Accounts
This is another main function of bank to accept deposits but these have to give back to
customers. In 2018 the deposits of Bank Alfalah were increased to 148.4% and in 2019
these were increased to 250.97% shows that more and more people are interested to
deposit their money with Bank Alfalah.
Capital Fund
There was an increase in total capital fund to 232.3%in 2018 and 270.40% in 2019 as
compared to 2017.

FOR THE YEAR ENDED 31ST DECEMBER
(Percentages)
2017 2018 2019

Mark-up/return/interest earned 100% 88.62% 123.48%
Mark-up/return/interest
expensed 100% 65.18% 78.22%
Net mark-up/interest income 100% 139.32% 221.38%
Provision against non-performing loans and

advances-net 100% 162.43% 690.44%
Provision for the diminution in the value of
investments
Bad debts written off directly 100% 28.89% 24.26%
100% 158.92% 676.87%
Net mark-up/ interest income after
provisions 100% 138.54% 203.26%
NON MARK-UP /INTEREST
INCOME
Fee, Commission and brokerage income 100% 126.24% 213.63%
Dividend income 100% 180.45% 84.64%
Income from dealing in Foreign currency 100% 112.28% 229.94%
Other income 100% 1255.13% 259.23%
Total Non mark-up/ Interest 100% 488.31% 218.84%

income
100% 255.42% 208.47%
NON MARK-UP/ INTEREST
EXPENSES
Administrative expenses 100% 152.13% 226.36%
Other Provisions/Write Offs 0%
Other charges 100% 188.82% 171.20%
Total non mark-up/ Interest
expenses 100% 152.33% 226.32%
100% 391.85% 184.85%
Extraordinary / Unusual items 0%
Profit before taxation 100% 391.85% 184.85%

Taxation –Current 100% 334.69% 143.75%
For the year-Deferred 100% 218.00% 58.41%
For the year-Current 100% -150.57% 197.37%
For Prior year -Deferred 100% 13.57% 14.75%
100% 307.91% 125.12%
Profit after taxation 100% 476.40% 245.02%
INTERPRETATION
Net Mark up Interest Income (After Provision)
It is the main income of the bank. In 2018 net mark up interest was increased to
138.54% and in 2019 increase to 203.26% as compared to 2017 which shows that BAL
is utilizing its deposits properly and the performance of the bank to meet interest
expense and the provisions against non-performance loans, diminution in the value of
investments and other bad debts. From its income from advances is improving day by
day.
Total Non Mark up Income

The income, which the bank earns from other than interest like dividend, fee and
commission etc, come under the head –non mark-up income. In 2018 total non mark-up
income of BAL increased to 488.31% and in 2019 it increased to 218.84% as compared
to 2017.

Total Non Mark up Interest Expenses
The expenses other than interest come under non mark-up expenses like administrative
expenses and other charges etc. Total non mark-up expenses of BAL also increased
with the increase in total non mark-up income. In 2018 total non mark-up expenses
increased to 152.33% and 226.33% in 2019 as compared to 2017. But this increase is
less than the increase in total non mark-up income that shows the bank’s efficiency to
control its expenses.
Profit before taxation

In 2018, Profit before tax was increased to 391.85% and in 2019 it was increased to
184.85% as compared to 2017. In 2018 the increase in profit before tax was more as
Compare to year 2019. It shows that the profitability in 2018 was better than 1n 2019
the main reason is the less investment in securities.
Profit after taxation
The net profit of BAL was increased to 476.40% in 2018 and 245.02% in 2019 as
compared to 2017.
VERTICAL ANALYSIS
Vertical analysis helps us to show the actual increase or decrease in various items of
Profit and Loss Statement with regard to a specific base as Markup Interest Earned and
for balance sheet items Total Assets are taken as base. This analysis is also called
Common- size Analysis.
BALANCE SHEET

AS AT 31ST DECEMBER
2017 2018 2019

ASSETS
Cash and balances with treasury banks 6.967% 8.51% 12.73%
Balances with other banks 0.357% 0.63% 2.06%
Landings to financial institutions 7.112% 7.52% 0%
Investments 37.55% 29.21% 22.93%
Advances 43.46% 49.74% 57.44%
Other assets 1.86% 1.570% 2.084%
Operating fixed assets 2.70% 2.82% 2.765%
Deferred tax asset 0 0% 0%
Total Assets 100% 100% 100%
LIABILITIES
Bills payable 1.16% 1.22% 1.443%
Borrowing from financial institutions 9.26% 13.27% 8.218%
Deposits and other accounts 79.31% 77.51% 83.78%
Subordinated loans 0.997% 0.66% 1.227%
Liabilities against assets subject to finance lease 0 0% 0%
Other liabilities 1.84% 2.21% 1.760%
Deferred tax liabilities 1.82% 0.33% 0.178%
Total liabilities 94.39% 95.19% 96.60%
Net Assets 5.61% 4.81% 3.40%

Represented by
Share Capital 1.53% 2.02% 1.61%
Reserves 0.56% 0.80% 0.65%
Inappropriate profit 0.38% 0.97% 0.56%
Total equity 2.48% 3.79% 2.82%
INTERPRETATION
Vertical analysis of the balance sheet shows the percentage increase and decrease in
various items in terms of total assets. The above analysis is done by taking total assets
as base and considered this figure equal to 100%.
ASSETS
Cash and Balance with treasury Bank
In 2017 Cash and balance with treasury banks to total assets is 6.967% and there was
continues increase in next two years that shows the bank has excess cash after meeting
the operating requirements.
Balances with other Banks

Balance with other bank to total assts was 0.357% in 2017 and there is also an
increasing trend in 2018 and 2019.
Lending’s to financial Institutions
In 2017 landings to financial institutions to total assets was 7.112% but decreased in
2018 and in 2019 the bank did not give loan to financial institution.
Investments
The investments to total assets were 37.55% and reduced in 2018 but there was a minor
decrease in 2019.
Advances
The percentage of advances to total assets was 43.46% in 2017 and increased in next
two years
Operating fixed Assets

The percentage of operating fixed assets to total assets was 2.70% in 2017 than it was
increased in 2018 but decreased in 2019.
LIABILITIES
Borrowings from financial institution

In the year 2017, the percentage of borrowing from financial institutions to total assets
was 9.26% then it was increased to13.27% in 2018 but decreased to 8.21% in 2019.
The reason of the decrease in the percentage in 2019 in mainly due to the expensiveness
of this mode of finances so this decease is a healthy sign for the bank.
Deposits
In 2017 the percentage of deposits to total assets is 79.31% then it decreased in 2018
but increased in 2019. The increase in percentage in 2019 is mainly due to Islamic
division and the expansion of branch network.
Total equity
The percentage of total equity to total assets is 2.48% in 2017 but it was increased in
2018 and then decreased in 2019.

FOR THE YEAR ENDED 31ST DECEMBER
2017 2018 2019

Mark-up/return/interest earned 100% 100% 100%
Mark-up/return/interest
earned expensed 68.38% 50.29% 43.32%
Net mark-up/interest income 31.62% 49.71% 56.68%
Provision against non-performing
loans and advances-net -1.178% -2.159% -6.587%
Provision for the diminution in -
the value of investments 0% 0% 0.0385%
-
Bad debts written off directly -0.032% -0.010% 0.0062%
-1.210% -2.17% -6.632%
Net mark-up/ interest income after provisions 30.41% 47.54% 50.05%

NON MARK-UP /INTEREST INCOME
Fee, Commission and brokerage income 6.95% 9.90% 12.026%
Dividend income 1.36% 2.78% 0.935%
Income from dealing in Foreign currency 2.091% 2.65% 3.893%
Other income 4.855% 68.76% 10.192%
Total Non mark-up/ Interest income 15.26% 84.09% 27.046%
45.669% 131.63% 77.098%
NON MARK-UP/ INTEREST EXPENSES
Administrative expenses 26% 44.61% 47.64%
Other Provisions/Write Offs 0% 0.050% 0%
Other charges 0.0218% 0.046% 0.03%
Total non mark-up/ Interest expenses 26.012% 44.71% 47.67%
19.66% 86.92% 29.42%
Extraordinary / Unusal items 0% 0% 0%
Profit before taxation 19.66% 86.92% 29.42%

Txaxation -Current 8.96% 33.84% 10.43%
For the year -Deferred -0.138% -0.34% -0.065%
For the year -Current -0.334% 0.567% -0.53%
For Prior year –Deferred 1.377% 0.21% 0.165%
9.86% 34.28% 9.995%
Profit after taxation 9.792% 52.64% 19.43%
ITERPRETATION
Net mark-up Income
In 2017 the percentage of net mark-up income to mark-up income was 30.41% while in
2018 it is increased to 47.54% and in 2019 it reached to 50.05% that shows better
performance in utilization of deposits.
Total non-mark up income
In 2017 the total non-mark up income to mark up income was 15.26% that was
increased to 84.09% in 2018 and again increased to 27.046% in 2019.this is again due
to good performance of the management.
Total non-mark up expenses

In 2017 Total non-mark up expenses to mark up income was 26.012% that was
increased to 44.71% in 2018 and again increased to 47.67% that shows the expenses
were also increased in 2018 but there was minor increase in 2019 that is better situation
in order to control the cost of the services.
Profit before taxation
In 2017 profit before taxation to mark up income was 19.66% and increased to 86.92%
in 2018 but decreased to 29.42% in 2019.this trend shows that year 2018 was best year
in the last three years from profits point of view that is mainly due to decrease in the
amount of dividend in 2019.
Profit after taxation

RATIO
RATIO
ANALYSIS
In 2017 profit after taxation to mark up income was 9.792% then it was increased to
ANALYSIS
52.64% in 2018 but decreased to 19.43% in 2019 that shows strong profitability in
PROFITABILITY
2018 but weak profitability position in 2019. RATIOS
RATIO ANALYSIS
LIQUIDITY RATIOS
COVERAGE RATIO
Ratio means “one number expressed in term of another a ratio is statistical yardstick by
mean of which relationship between two or various figures can be compared or
ACTIVITY RATIOS
measured. The ratio analysis can be done under,
SPECIAL BANK
RATIOS
GEARING RATIOS

1. PROFITABILITY RATIOS
“Profitability reflects not only the quantity and trend in earning but also the factors
that may affect the sustainability or quality of earnings.”
Following profitability ratios have been calculated
I. Net Profit Ratio

II. Profit before Tax Ratio
III. Return on equity
IV. Return on total assets
V. Return on fixed assets
VI. Operating Expense Ratio
VII. Administrative Expense Ratio
I. NET PROFIT RATIO
Net Profit after tax x 100

Markup /Interest earned
Data Values 2017 2018 2019

Net profit after Tax 445679 2123234 1091989
Markup/ Interest earned 4551329 4033380 5620203
Ans 9.79% 52.64% 19.43%
INTERPRETATION
Net profit ratio indicates that in mark up interest what the rate of net profit is. In 2017 it
was increased to 9.79% and increased to 52.64% in 2018 but decreased to 19.43% in
2019 so the year 2018 was best year from profitability point of view in these years.
II. PROFIT BEFORE TAX RATIO
Profit before tax x 100

Gross Markup Income
Data Values 2017 2018 2019

Profit Before Tax 1653734 3505680 894653
Gross Mark-up Income 5620203 4033380 4551329
Ans 29.42% 86.92% 19.66%
INTERPRETATION
This ratio shows that profit before tax rate to mark up interest/return. In 2017 this ratio
was 29.42% and then it increased to 86.92% but decreased to 19.66%. This decreased is
mainly due to the increase in administrative expenses and decrease in dividend income.
III. RETURN ON EQUITY

Net profit after tax x 100
Capital fund
Capital fund = Share Capital + Reserves + Unappropriated Profit
Data Values 2017 2018 2019

Net Profit After Tax 445679 2123234 1091989
Capital Fund 1615777 3753416 4369072
Ans 27.58% 56.57% 24.99%
INTERPRETATION
This ratio shows that what the ratio of profit is after tax to capital funds. In 2017 this
ratio was 27.58% and it increased to 56.57% in 2018 that was a very good sign
especially for shareholders but it was decreased to 24.99% in 2019. This decrease is
due to the decrease in profit after tax.
Iv.RETURN ON ASSETS
Total assets
Data Values 2017 2018 2019

Total Assets 65167031 98952499 154834534
Ans 0.68% 2.15% 0.71%
INTERPRETATION
This ratio indicates the profitability of the bank based on total assets; it means that what
is the ratio of net profit after tax to total assets. In 2017 it was 0.68% and then increased

to 2.15% in 2018 but decreased to 0.71% in 2019.this decrease shows the bank’s
inefficiency to generate net profit as compared to last year.
v. RETURN ON FIXED ASSETS

Fixed Assets
Data Values 2017 2018 2019

Fixed Assets 1760774 2791626 4280504
Ans 25.31% 76.06% 25.51%
INTERPRETATION
The ratio increases from 25.31% in 2017 to 76.06% in 2018 which is a tremendous
increase in Bank Alfalah Ltd return on fixed assets. But it reduces to 25.51% in 2019.
This decrease shows the bank’s inefficiency to generate return on fixed assets as
compared to last year.
VI. OPERATING EXPENSE RATIO
Non Mark Expense X 100

Gross Income
Gross income = Net interest income + Non markup income
Data Values 2017 2018 2019

Non Markup Expense 1183880 1803365 2679335
Gross Income 2078533 5309045 4333069
Ans 56.96% 33.97% 61.83%

INTERPRETATION
This ratio shows that in gross income what is the ratio of operating expenses are (non
markup expenses). In 2017 this ratio was 56.96% but decreased to 33.97% in 2018 and
Then increased to 61.83%. This increase is mainly because of increase in non-markup

expenses.
VII. ADMINISTRATIVE EXPENSE RATIO

Administrative expenses X 100
Total deposit
Data Values 2017 2018 2019

Administrative Expenses 1182887 1799490 2677635
Total Deposits 51684984 76698322 129714891
Ans 2.29% 2.35% 2.06%
INTERPRETATION
This ratio indicates the rate of administrative expenses to total deposit. In 2017 it was
2.29% and in the next year it was increased to 2.35% but the increase was nominal then
in 2019 it was decreased to 2.06% and this decrease is mainly due to the increase in to
total deposits in 2019.
2. LIQUIDITY RATIOS

Liquidity represents the ability of a bank to efficiently and economically accommodate
deposits withdrawal as well as fund increase in assets. A bank has a liquidity potential
when it has the ability to obtain sufficient funds in a timely manner at a reasonable cost.
Illiquidity is a primary factor leading to a bank’s failure whereas high liquidity helps
otherwise weak institutions to remain funded during the period of difficulty.
“Liquidity reflects the adequacy of the institution’s current and prospective

sources of liquidity and funds management practices.”
I. Current ratio
II. Quick Asset to Deposit ratio
III. Interest coverage ratio
IV. Liquid assets to total assets
I. CURRENT RATIO
Current Assets
Current Liabilities
Data Values 2017 2018 2019

Current Assts 49324181 71311930 101182146
Current Liabilities 18439685 37492575 59539860
Ans 2.67 1.90 1.70
CALCULATION FOR ASSETS & LIABILITIES
Current Assets 2017 2018 2019

Total Assets 65167031 98952499 154834534
Fixed Assets 1760774 2791626 4280504

Long term advances 4263623 11147536 31208249
Long term investments 9818453 13701407 18163635
Current Assets 49324181 71311930 101182146
Current Liabilities
Long Term liabilities 43074679 56701676 90033190
Current liabilities 18439685 37492575 59539860
INTERPRETATION
This ratio shows that whether the current assets of the bank are Sufficient to meet the
current liabilities or not. In 2017 it was 2.67 that show high liquidity because this ratio
is above standard that is 2. In 2018, 1.90 and again decreased to 1.70 in 2019.
Current Ratio
3.00 2002
2.50
2003
2.00 2004
ratio values
2002
1.50 2003
1.00 2004
0.50
0.00
years
II. QUICK ASSET TO DEPOSIT RATIO
Quick assets x 100

Deposits

Data Values 2017 2018 2019
Quick Assets 22524073 25602596 20448936
Deposits 51684984 76698322 129714891
Ans 43.6% 33.4% 15.8%
CALCULATION FOR QUICK ASSET
Quick Assets 2017 2018 2019

Current assets 49324181 71311930 101182146
Less Short term advances 26800108 45709334 80733210
Ans. 22524073 25602596 20448936
INTERPRETATION
This ratio shows that how much quick assets are available to meet the demand of the
accountholders. This ratio was 43.6% in 2017 and decreased to 33.4% and 15.8% in
2018 and 2019 respectively. It shows that in 2018 and 2019 the immediate liquidity
position of the bank was comparatively weak.
III. INTEREST COVERAGE RATIO
Earning before interest and tax

Financial charges
Data Values 2017 2018 2019

EBIT 11228378 12959455 9252878
Markup/ Interest Expense 3112313 2028577 2434459
Ans (In Times) 3.61 6.39 3.80

INTERPRETATION
This ratio shows that whether the bank is in a position to meet its financial expenses. In
2017 if financial expenses was 1 time then profit before tax was 3.61 that showed good
position of bank to meet its financial expenses. It was increased to 6.39 that showed
strong position in 2018. In 2019 it was decreased to 3.80.
IV. LIQUID ASSET TO TOTAL ASSET
Quick assets
Total assets
Data Values 2017 2018 2019

Quick Assets 22524073 25602596 20448936
Total Assets 65167031 98952499 154834534
Ans 0.35 0.26 0.13
INTERPRETATION
This ratio implies the ratio of quick assets out of total assets that is the share in total
assets. In 2017 it was 0.35 times that shows if the total assets equal to 1 time then out of
this the share of liquid assets is 0.35 times and it was 0.26 and 0.13 times in 2018 and
2019 respectively. The share of liquid assets in total assets was higher in 2017.

3. COVERAGE RATIO
DEBT RATIO
Debt Ratio = Total liabilities x100

Total assets
Data Values 2017 2018 2019

Total Assets 65167031 98952499 154834534
Ans 94.39% 95.19% 96.6%
INTERPRETATION
The debt ratio measures the proportion of total assets financed by the company’s
creditors. The higher is the ratio, the greater is the amount of other people’s money
being used in an attempt to generate profit. So bank is using a great deal of people’s
money to generate profit.
4. ACTIVITY RATIOS
I. Fixed asset turnover ratio
II. Total asset turnover ratio
I. FIXED ASSET TURNOVER RATIO
Interest/markup/ return earned

Fixed Assets

Data Values 2017 2018 2019
Markup/ Interest 4551329 4033380 5620203
Fixed Assets 1760774 2791626 4280504
Ans 2.58 1.445 1.313
INTERPRETATION
Fixed asset turnover indicates the efficiency with which the company uses its assets to
generate sales. Generally, the higher a company’s fixed asset turnover, the more
efficiently its assets have been used. This ratio determines the return on investment on
fixed assets. This ratio is showing a decrease from 2.58 in 2017 to 1.44 in 2018 and
then 1.313 in 2019 which is not satisfactory for Bank Alfalah Ltd.
II. TOTAL ASSET TURNOVER RATIO
Interest/markup/ return earned

Total Assets
Data Values 2017 2018 2019

Markup/ Interest 4551329 4033380 5620203
Total Assets 65167031 98952499 154834534
Ans 0.070 0.041 0.036
INTERPRETATION

This ratio shows the overall efficiency of the bank in utilizing its assets to earn mark up
return. In 2017 it was 0.070% and in 2018 it was decreased to 0.041 and again
decreased to 0.036% in 2019.
5. SPECIAL BANK RATIOS

I. Total advances to total Assets
II. Fixed assets to total assets
I. TOTAL ADVANCES TO TOTAL ASSETS
Total advances x 100

Total Assets
Data Values 2017 2018 2019

Total Advances 28319401 49216120 88931400
Total Assets 65167031 98952499 154834534
Ans 43.46% 49.74% 57.44%
INTERPRETATION
This ratio shows the advances, which the bank makes as the percentage of its total
assets. If the advances of the banks increasing within increase in the total assets it is
favorable for the bank business. Because there are more advances, there is more income
of the bank and respectively more profit. Total advances to total assets variation is
showing increasing trend in the last year’s whish shows that the management of the
bank is increasing the portion of its advances then compare to increase in the total
assets which is favorable.

III. FIXED ASSETS TO TOTAL ASSETS
Fixed Assets x 100

Total assets
Data Values 2017 2018 2019

Fixed Assets 1760774 2791626 4280504
Total Assets 65167031 98952499 154834534
Ans 2.70% 2.82% 2.76%
INTERPRETATION
In the bank, another financial institution, fixed assets are comprised of equipment,
furniture and building. These assets have great importance in banks in order to maintain
the working condition that up to that mark.
Fixed assets and total assets ratio is decreasing in the 2019 as compare to last year’s
ratio therefore, this ratio is not satisfactory.
6. GEARING RATIOS
These ratios measure the extent to which bank’s resources have been geared by debt i.e.
financed by debt in relation to share holder’s equity.
I. Debt To equity Ratio
II. Debt To Total Asset Ratio
I. DEBT TO EQUITY RATIO

Long term debt
Shareholders founds
Data Values 2017 2018 2019

Long term Debt 43074679 56701676 90033190
Equity (Shareholder's funds) 1615777 3753416 4369072
Ans. 26.66 15.11 20.61
INTERPRETATION
This ratio shows that what is the ratio of long-term debt to equity is. In 2017 debt ratio
was 26.66 then it was decreased to 15.11 in 2018 and again increased to 20.61.
II. DEBT TO TOTAL ASSET RATIO
Total Debt x 100

Total Assets
Data Values 2017 2018 2019

Total debt 61514364 94194251 149573050
Total assets 65167031 98952499 154834534
Ans. 94.39% 95.19% 96.60%
INTERPRETATION
This ratio shows that how much portion of total assets is financed by debt. In 2017 it
was 94.39% then it increased to 95.19%in 2018 and increased to 96.60% in 2019.

SWOT ANALYSIS
SWOT Analysis is the combination of
 Strengths
 Weaknesses
 Opportunities
 Threats.
Actually it is an analysis which gives the overall picture of an organization status and at the
same time tells about the opportunities and threats by which an organization can improve
its condition.
Such an analysis is very important for the management in retaining the strengths,
overcoming the weaknesses, capitalizing over the emerging market opportunities and
craving ways to successfully tackle with the threats and ultimately converting them in the
strengths for the organization.
Allied Bank Limited is one of the most flourishing commercial banks at present in
Pakistan. The organization is in the process of building itself into a force to consider. The
bank is doing all sorts of new things in order to accumulate a set of distinctive
competencies that could later on be transformed into a competitive advantage of
considerable value. In this process of developing, striving, facing minor set backs and
striving with even more zeal, the bank enjoys some strengths, needs to improve upon some
weaknesses, can exploit some opportunities and is hampered by few threats.
This SWOT analysis of Allied Bank Limited takes into consideration the external as
well as the internal environmental structure of the bank.
STRENGTH

Bank Alfalah is considered to be a very successful bank in the financial circles. A bank
is place where the customers can safely keep their money as long as they want. Some of
the major strengths of the bank:
Goodwill and trust
Lowest markup
On-Line banking
Comprehensive and diversified product portfolio
Bad debt rate is low
Excellent credit rating
Phenomenal Growth
Highly Professional and trained employees
Crucial Location Of Branches
Bank is financially strong and has a huge deposit reserve
Bank Alfalah has a wide network of branches at the ideal locations, catering the
financial needs of its clients.
Foreign Trade is the focus of bank. It has become an ideal bank for the
importers and exporters.
WEAKNESSES
Bank Alfalah also has some weaknesses. But their number is much less than the
strengths of the bank. Following factors need attention of the management.
Lack of advertisement through electronic media

Lack of innovative marketing.
Less Efficient Computer And I.T. System
Skill Set of Employees is not upto mark as there is no job rotation.
Foreign Banks still are a little more prestigious
Allied Bank Limited does not possess foreign network

Most of the employees are overloaded with work. There is uneven distribution
of work and promotions are not very timely
It is slow in the introduction of new services
Few branches has ATM facility
Employees feel over burdened
It has only one oversea branch although it does a lot of foreign trade business.
OPPORTUNITIES
Bank Alfalah has grown up its business with a very high pace and it has got tremendous
popularity, even with in a very short span of time. There are many opportunities for the
bank and by availing that it can stand amongst the top foreign banks.
Extension of International network.

Capitalizing on IT
Introduction of innovative products.
Adopt E-banking
Growth in deposits
Growth in textile sector
Tide down of money
Expansion in branch network
THREATS
Political Instability
Increase in Competition with other banks
Revolving policies of state bank of Pakistan
Terrorist image of the country
Uncertain economic condition
Slow product development process
Change in govt. policies.

Internal audit system is not encouraging.
This is the SWOT Analysis of Allied Bank Limited. Besides of this, there are some
weaknesses which are only related to my bank. Small Branch means covering a small
area.
IT is not working properly.

Favoritism
Car finance dept is in the basement with risky stairs.
Non availability of lockers
One personnel is dealing the Trade finance.
No job rotation.
PROBLEMS
I did my internship in Allied Bank Limited PMC branch, Faisalabad. I have analyzed
some problems in the bank.
 Over burden of employees, one person is doing a work of three persons.

 Lack of experienced staff
 staff strength is low
 Branch is not having the enough facilities, it has a very congested space.
 Political environment.
 Professional jealousy among the employees.
 Employees are not getting benefits as compared to their work.


RECOMMENDATIONS
I spent eight weeks of my internship in BAL Allama Iqbal Town Branch , Lahore.
During these weeks, I felt myself to be a part of BAL. Even, this was my first
experience of working in a banking organization. Before this I know a little about the
banks, its working system and environment, so I learned a lot from this experience.
Based on my experience & observation regarding the operations and policies of Bank
Alfalah, there are some recommendations which include short term as well as long term
issues for the improvement.
There is no efficient method introduced by BAL for his assessment of

performance of employees. Promotions are completely relying on higher
management like managers est.’s there can be some sort of favoritism. So to
avoid all this, there should be a proper method to judge the employees.
Allied Bank Limited needs to use more marketing channels to make the public
aware of its products and services. In the age of competition Allied Bank
Limited has to realize the importance of marketing.
Allied Bank Limited should continue to expand its business, by increasing its
deposit portfolio through aggressive market penetration strategies.
Allied Bank Limited should immediately improve its Information Technology

System. The soft wares currently in use should be made error free, online
banking should be launched as soon as possible, as it is the need of the hour, in
my branch of Allama Iqbal Town all system got online during my first week of

internship but till now there are a lot of branches where working is not on online
basis.
There is no rotation of employees within departments and cross departments. so

the top management should immediately start thinking in terms of rotating the
employees in various departments, as this transforms work force into human
capital.
Management should distribute work equally among different employees. Some

of the employees are overburdened while some sections are overstaffed.
Allied Bank Limited needs to improve its website. More information relating to
financial performance of the bank should be available on the website.
Allied Bank Limited should evolve a very serious management policy to attract
multi national corporations as its clients. This action, if actualized, would not
only prove to be highly profit generating, but it would also contribute a lot
towards Bank Alfalah’s image building.
The number of women hired by Allied Bank Limited is very less. Allied Bank
Limited should employ more women. Moreover it should also recruit women
for working in “Credits”.
One of the most pressing needs of the time is to advertise Allied Bank Limited
in the electronic media. BAL has not, till date, employed advertisement in
electronic media as a full fledge marketing tool. I think it is high time that BAL
does this.

Allied Bank Limited should evolve a very serious management policy to attract
multinational corporations as its clients. This action, if actualized, would not
only prove to be highly profit generating, but it would also contribute a lot
towards BAL’s image building.
Presently, like most of the commercial banks working in Pakistan, a high

percentage of Bank Alfalah’s credit client hail from two or three industrial
sectors. In the near future the management of Allied Bank Limited should try
its level best to diversify as regards the mix of its advances; reason being over
reliability on one sector of the economy could hurt the financial soundness of the
bank if any adverse change in the external environment takes place.
One major draw back of BAL is the bank has stopped the consumer banking.
Now they are doing financing lease only. The bank should start consumer
banking again. They are not doing operating lease due to the depreciation value
but its not a good step.

CONCLUSION
The two months spent at Allied Bank Limited, Allama Iqbal Town branch were, no doubt a
source of great learning for me about a lot of things particularly working in bank’s
atmosphere and system of bank. Its my quite first experience to do work practically in some
organization. This practical training program did not only help me acquire loads of
knowledge about the predominant functions performed by banking companies, but also
imparted a lot of training as regards the set of behavioral traits which distinguish a particular
person from the rest of the lot in a professional environment.
During my internship I concluded that currently bank Alfalah has a high market share
and is not facing any type if risk.
Due to highly trained professionals it is used to make progress leaps and bound.
The main objective of bank is to build strong relationship with the customers and
make them believe that bank Alfalah is right for them by providing effective and
efficient services.
It has also created a strong goodwill and trust in the market.
At this point it is significant to write a word of gratitude for the institute, which
makes it sure, that all the students get an exposure to practical life in relatively well-
reputed organizations
I must underscore the fact that writing this internship report was an evenly
memorable experience as actually doing the internship. I honestly tried my level
best to come up with an original piece of writing that could serve as a vivid proof of

the fact that students at IBMS, University of Agriculture Faisalabad, are certainly
doing the internship.

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DECLARATION

An internship report submitted to department of IBMS, in partial fulfillment of the

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Among my contemporary benefactors I express my sincere gratitude to Mr. Irfan Qazi,

Thank you all

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FROM BCCI TO ALLIED BANK LIMITED THE

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Article III. Privatization of Habib Credit and Exchange

Article IV. Emergence of Allied Bank Limited

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PRESENT STATUS OF BANK

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The bank aims to further enhance performance standards through implementation of

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COMPREHENSIVE & DIVERSIFIED PRODUCT

BANK ALFALAH BRANCH NETWORK

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Service excellence is one of the objectives of Bank Alfalah.

Alfalah strives continually on the development of new areas of activities to

Bank focus is on Foreign Trade as primary niche of business.

Alfalah’s objective is the complete automation and computerization of all of its

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The introduction and development of innovative financial instrument will

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THE CHAIRMAN (OUTGOING)

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H. H. Sheikh Nahayan Mabarak Al-Nahayan is an important and prominent member of

THE CHAIRMAN (NEW)

H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan

Name of the organization: Allied Bank Limited

Chairman: H. E. Sheikh Hamdan Bin Mabarak Al-Nahayan

BOARD ADVISORY COMMITTREE

Mr. Abdulla KhalilAl Mutawa Director

CHIEF FINANCIAL OFFICER

REGISTERED/ HEAD OFFICE

TOP MANAGEMENT HIERARCHY

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Name Designations Qualification

PRODUCTS & SERVICES

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Officer (1) Officer (2) Officer (3) Officer (4)

Is responsible for daily activity checking.

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CREDIT MARKETING CREDIT ADMIN

Officer (1) Officer (2)

Credit Officer (5)

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E-Form Collection LC Opening LC Return

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ACCOUNT OPENING DEPARTMENT

WORKING OF DEPOSIT DEPARTMENT