Bank Islami Final Report Edited

ACKNOWLEDGEMENT
For the completion of our report I am indebted to plenty of people for their very sincere
cooperation that they extended to me at various stages. First and foremost problem that every
student faces is the selection of a Report. I am very thankful to my supervisor Mr. Mr. Asad
Shahjan for helping me out in time of confusion. During our course and the execution of my
report, I had a real chance to learn from his vast experience and immense knowledge.
I am very thankful to staff members of Bank Islami Branch Mansehra that they guided and
provided me valuable information regarding my report especially Mr. Shafqat Hussain
(operational manager).
Finally I am thankful to the most merciful and Almighty Allah who gives me the strength that
I fulfill my task efficiently.
1
EXECUTIVE SUMMARY
A good banking system plays important role in development of country’s economy. The aim
of this report is to show knowledge and observation of study during my six weeks internship.
During internship I came to know about procedures and activities of banking.
Bank Islami Pakistan limited is publically listed company was established on October 18, 2004
in Pakistan.
The report is divided into different chapters that cover all aspects of Islamic banking sector.
The first chapter describes purpose and background of study.
Second chapter shows the department’s products and value added services offered by BIPL.
Third chapter is about activities performed and learnt by internee during period of internship.
Fourth chapter is about financial analysis of different statements of BIPL and their comparison
with another Islami bank i.e. Meezan bank limited.
Fifth chapter is about SWOT analysis of BIPL and its cornparison with MBL.
Last chapter consist of weaknesses and recommendations which is necessary for bank to being
change in order to satisfy their customers.
BIPL is one of the few banks in Pakistan which has authentic deposits franchise, and offering
both wholesale and retail banking products and services through its wide network.
2
LIST OF ACRONYMS
BIPL Bank Islami Pakistan Limited

SBP State Bank of Pakistan
IPO Initial Public Offering
ATM Automated Teller Machine
DD Demand Draft
PO Pay Order
CDR Call Deposit Receipt
RTC Rupees Traveler Cheque
NIFT National Institution al Facilitation Technology
NTN National Tax Number
CNIC Computerized National Identity Card
IBCA Inter Branch Credit Advice
SWOT Strength, Weaknesses, Opportunities, Threats
WTC World Trade Center
MBL Meezan Bank Limited
3
Table of Contents
Chapter No. Contents Page No.

Chapter No. 1 Introduction of Study
1.1 Background of Study
1.2 Purpose of Study
1.3 Research Methodology
1.4 Scheme of Study
Chapter No. 2 Introduction to Banking
2.1 Banking in Pakistan
2.2 Overview of Organization
2.2 a Bank Islami Idea
2.2 b Accreditation by Sate Bank of Pakistan
2.2 c IPO of Bank Islami
2.2 d Network expression
2.3 Nature of Organization
2.3 a Deposited Franchise
2.3 b Technology Infrastructure
2.3 c Management Team
2.4 Business Volume
2.5 Financial High Lights at Glance
2.6 Share Holding Structure
2.7 Future Prospects of Organization
2.7 a Vision Statement
2.7 b Mission Statement
2.7 c Objectives
2.7 d Strategic Planning
4
Chapter No. 3 Product services and Departments
3.1 Introduction
3.2 Departments
3.2.1.1 Nature of the Deposits
3. 2.1.2 Procedures for account opening
3.2.1.3 Remittances Management
3.2.1.4 Cash Management
3.2.2 Credit Department
3.2.2.1 Musharakah Financing
3.2.2.2 Mudarabah Financing
3.2.2.3 Working Capital Finance
3.2.3 Consumer banking
3.2.3
Online Banking
3.2.3.1 Inter Bank Transfer Fund

3.2.3.2 ATM or Debit Card
Chapter No. 4 Analysis
4.1 Financial Analysis of BIPL through
statements
4.2 Ratio Analysis
Chapter No. 5 SWOT Analysis
5.1 SWOT Analysis of BIPL
5.2 Comparison of SWOT Analysis of
BIPL with MBL and Albaraka Bank
5.2.1 SWOT analysis of MBL
5.2.2 SWOT Analysis of Albaraka Bank
5.3 Comparison
Chapter No. 6 Findings and Recommendations
6.1 Weaknesses of Organization
6.2 Recommendations
References
5
Annexure
Chapter No. 1
INTRODUCTION TO STUDY
1.1 Background of study
Bank Islami was established on October 18, 2004 in Pakistan and is the second full-fledge
Islamic commercial bank in Pakistan and expanding its branches throughout the country and
also offering different products to customers.
1.2 Purpose of studies:
• The purpose of study is to get information about structure and functioning of

department of BankIslami limited Pakistan
• To analyze, intercept and evaluate the financial data of BIL and comparing these data
or information with current financial practice.
• To analyze the operations done in each department of BIL and work there practically.
• To evaluate financial performance of BIL and compare it with other Islami Banks.
• To improve the interpersonal communication skills.
1.3 Research Methodology
In this study data is collected through primary as well as secondary sources but mostly
information is based on my personal observations which help me to collect the data about this
6
specific branch.
Primary sources:
• Discussion with customer manager and interview taken from staff numbers.
• Personal observation.
Secondary sources:
Most of the useful information was obtained from already available manuals, journals, website
of organization, annual reports, of BIL etc. information regarding bank policies, procedures
and rules can be obtained from bank’s records and documents.
1.4 Scheme of study:
The report is divided into five chapters
• 1st chapter is about introduction of study, which includes its background, purpose
research methodology, introduction to BankIslami including its nature, performance,
business volume, objectives and strategies.
• 2nd chapter is about departments of bank including account opening department, cash
department, remittance department, cleaning department.
• 3rd chapter is about activities performed by interne.
• 4th chapter is about SWOT and financial analysis of bank and comparison with other
banks and also including ratio analysis.
• 5th chapter is about shortfalls of organization and recommendations.
7
Chapter NO.2
Introduction to banking
Banks are very useful for utilization of country’s resources and for growth of economy. Banks
help in capital information by deposit surplus from public and advance these surplus in form
of loans to businessman and industrialists, agriculturists under different scheme.
There are different views about origin of word banking. Some says it deceived from an Italian
word “banque” means bench. According to other view it derived from German work “bane”
means a joint stock firm.
According to Growther, there are three ancestor of banker i.e.
The Mechanls the gold smith, money lenders.
In short bank is a financial institution at lower rate of interest and give at higher rate of interest
to those who need them.
Banking in Pakistan
Banking is one of the fastest growing industries in all over the world. Banks play important
role in economic development of country.
Pakistan Banks Association established in 1953, its main objective is to co-ordinate the efforts
of banking industry. At the time of partition, Pakistan was in difficult situation to run its own
banking system with out resources. Therefore it was recommended that reserve bank of India
have continue to wok in Pakistan until 30th September 1948. Before establishment of SSBP all
banking activities were conducted by reserve bank of India. By 1970, Pakistan started
8
flourishing in banking sector. Now all banks follow and are working under banking ordinance
1962 and controlled by SB and now there are three types of banks sewing in Pakistan i.e.
Government banks, Private banks and Foreign banks.
OERVIEW OF THE ORGANIZATION
Bank Islami-The Idea:-
The idea of BankIslami was conceptualized by Jahangir Siddiqui & Company Limited and
DCD Group in late 2003. The idea was formulized by Mr. Hassan A. Bilgrami, appointed as
Adviser to the sponsors on March 16, 2004. A detailed business plan was then prepared and a
formal application was submitted to the State Bank of Pakistan on May 26, 2004. On September
26, 2005, Dubai Bank joined the Sponsors and became one of the founding shareholders of
BankIslami by investing 18.75% in the total Capital.
Accreditation by State Bank of Pakistan:
The State Bank of Pakistan issued a No Objection Certificate on August 19, 2004 and
BankIslami Pakistan Limited, the second full-fledge Islamic Commercial Bank in Pakistan,
was established on October 18, 2004 in Pakistan.
BankIslami Pakistan Limited was the first Bank to receive the Islamic Banking license under
the Islamic Banking policy of 2003 on March 31, 2005. The Bank focus on Wealth
Management as the core area of business in addition to Shariah compliant Retail Banking
products, Proprietary and Third party products, and integrated financial planning services.
Initial Public Offering of BankIslami:
9
BankIslami Pakistan Limited made a public offering of Rs. 400 Million, at par, from 6th to 8th
March. The Initial public offering (IPO) of BankIslami received great response from the
general public as the applications received were 9 times higher than offered, fetching nearly
Rs. 3.5 Billion, against the demand of Rs. 400 Million.
Network Expansion:
BankIslami started its operations on 7th April 2006 with its first branch in SITE, Karachi. The
Bank had 10 branches, nine in Karachi and one in Quetta by the end of 2006. By the end of
year 2007, its branch network grew to 36 branches in 23 cities. In 2008, the Bank opened 66
new branches nationwide which expanded its network to 102 branches in 49 cites. This gives
BankIslami the distinction of having the fastest expanding network in Pakistan.
NATURE OF THE ORGANIZATION
BankIslami Pakistan Limited is the 2nd largest Islamic Bank in Pakistan. It offers both
wholesale and retail banking products and services through its distribution network.
Deposit Franchise
BIPL is one of the few banks in Pakistan which has a genuine deposits franchise. Instead of
targeting large, rate sensitive accounts, BIPL as strategy focused on retail customers who are
stable, less rate sensitive and loyal. Current and Saving Accounts recorded impressive growth.
Even growth in Fixed Deposits was propelled by our five and ten depository products which
now accounts for 21% of the deposit base.
10
Technology Infrastructure
BIPL technology infra-structure was further strengthened during the year with full deployment
of state of art shariah complaint core banking system, iMAL. BIPL is the largest user of Linux
in Pakistan which has helped to have a stable, cost effective platform compared to their peers.
BIPL market share in ATM transactions has improved to 11 th position amongst 1-LINK
members
Management Team
Most of the BIPL's senior management team has had work experience at global banks and have
strong execution track record.
BUSINESS VOLUME
(Rs. in 000)
2007 2008 2009 2010
Deposits 9,934,282 12,477,955 27,987,378 3,81,98,320
Advances 3,962,867 6,527,531 13,282,152 1,66,70,125
Investments 3,864,027 5,019,525 681,3191 1,37,32,132
Total Assets 1,447,473 19,088,600 34,286,771 4,50,35,703
Shareholders 3,844,726 5,191,821 4,740,293 47,66,386

Equity
11
2007 2008 2009 2010
Loss After (37,023) (52,930) (478,939) (46,550)

Tax
Financial Highlights at a glance

Profit and loss account
Rupees in million
2010 2009 2008 2007
Return Earned 3,806.20 2,177.14 1,464.84 599.64
Profit paid 2,057.53 1,222.17 729.53 303.84
Net spread 1,748.67 954.97 735.32 295.79
12
2010 2009 2008 2007
Fee, Commission, 148.10 315.91 141.39 71.46

Brokerage & Exchange
Income from core 1,896.77 1,270.88 876.71 367.25

banking
Provisions 7.42 (111.20) (130.56) (28.37)
Other income 59.01 26.78 54.75 68.83
Operating Expenditure (1,918.66) (1,766.12) 1033.90 510.59
Profit/ Loss before tax 44.54 (579.66) 233.00 102.89
Taxation 2.01 89.83 177.55 64.29
Profit/ loss after tax 46.55 (489.82) 55.45 (38.60)
Balance sheet
2010 2009 2008 2007
Assets 45,036 34,272 19,085 14,446
Financing 16,670 10,457 6,343 3,931
Deposits 38,198 27,987 12,478 9,934
Share Capital 5,280 5,280 5,280 3,200
Shareholder fund 4,766 4,725 5,188 3,843
Number of staff 1,347 1,471 1,188 563s
Number of branches 102 102 102 36
13
Total Deposits
RS in million
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2008 2009 2010
Total Assests
RS in million
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2008 2009 2010
14
Total Financing
RS in million
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2008 2009 2010
Branck Network
RS in million
120
100
80
60
40
20
0
2008 2009 2010
SHARE HOLDING STRUCTURE
Sponsors:
Bank Islami is a joint venture among three shareholders namely, DCD Group, Dubai Bank
& Jahangir Siddique & Co. Ltd.
15
SHARE HOLDERS RS IN MILLION %
Dubai bank PJSC 1,310.53 24.82
Jahangir Siddique & Co Limited 1,112.56 21.07
DCD Group 1,028.48 19.47
M.Hssan A Bilgrami 5.81 0.11
Chief Justice ® Mahboob Ahmed 1.31 0.02
General Public 1,821.00 34.49
TOTAL 5,280 100
Reference: BIPL annual report 2009
16
Future Prospects of the Organization
Values Statement
BankIslami is strongly committed towards its core values of:
• Product authenticity
• Customer focus
• Meritocracy
• Integrity
• Team work
• Humility
• Innovation
17
Vision Statement
“The Vision of BankIslami is to be recognized as the leading Authentic Islamic Bank”
Mission Statement
The Mission of BankIslami is to create value for our stakeholders by offering Authentic, Sharia
Compliant and Technologically advanced product and services. We differentiate ourselves
through:
⚫ Authenticity
⚫ Innovation
⚫ Understanding our Client's need
⚫ Commitment to excellence, and
⚫ Fast, efficient and seamless delivery of solution. As a growing institution, the
foundation for our performance lies on our human capital and BankIslami remains
committed to becoming an employer of choice, attracting, nurturing and developing
talent in a transparent and performance driven culture.
Objective:
• To achieve sustained growth and profitability in all areas of business. To build and
sustain a high performance culture, with a continuous improvement focus.
• To develop a customer service oriented culture with special emphasis on customer care
18
and convenience.
• To effectively manage and mitigate all kinds of risks inherent in the banking business.
• To maximize use of technology to ensure cost effective operations, efficient
management information system, enhanced delivery capability and high service
standards.
• To manage the bank portfolio of the business to achieve strong and sustainable
shareholders return and to continuously build share holders value.
• To explore new avenue for growth and profitability.
Strategic Planning:
• To comprehensive plan for future to ensure sustained growth and profitability.
• To facilitate alignment of the vision, mission, corporate and with the business goals.
• To provide strategic initiatives and solutions for projects, products, policies and
procedures.
• To provide strategic solutions to mitigate weak areas and to counter threats to profits.
• To identify strategic initiatives and opportunities for profits.
• To create and leverage strategic assets and capabilities for competitive advantage.
• Future prospectus is to improve risk management, which considered being one of the
essentials for sustainable success in the business. Based on the risk management
guidelines issued by state bank of Pakistan; a risk management strategy has been
developed for accessing and mitigate / controlling risk.
19
Chapter No. 3
20
PRODUCT, SERVICES & DEPARTMENT
3.1 Introduction
BankIslami Mansehra branch is newly opened branch in Mansehra city; also bankIslami history
is not too much old. It’s all about to 5 to 6 year old. The organization of BankIslami Mansehra
branch is a complete banking system but it is covering modern technologies like ATM. This
banking system is collection of interrelated departments that works together to achieve the
objectives of the organization. BankIslami is a hierarchical system in that it includes other sub
departments and these are integrated to work together.
In the internship of six weeks I worked in different departments to see how the practical work
is done and compared it with the theories I studied during my bachelor courses. Each
department has its own importance and value to the organization. But the basic thing was that
departments have to integrate to improve the performance.
3.2 DEPARTMENTS:
BankIslami Mansehra branches divided into different departments.
• Credit Department
• Operations Department
• Consumer Banking.
a) Credit Department
The main purpose of this department is to extend loans to its clients for the productive purpose.
Credit Department is also called Corporate Banking Group.
Bank is offering different type of financing in her branches. This type of financing are based
upon Islamic mode of financing. Just like MUSKUN home financing, Islami Auto Ijara-new
vehicle and same with imported vehicles.
b) Operations Department:
Operations department of the BankIslami is responsible for the overall operations of the bank,
Customer Services Department, Remittance Department, Clearing Department, Accounts
Department, etc. all come under it.
21
c) Consumer Banking
Consumer banking is the Marketing Department of the BankIslami. At BankIslami, consumers
are treated very well. They are of the opinion that customers must be satisfied with the services
provided by the Bank. All of the Branches try to make sure that customers are satisfied with
the services being provided by the Bank.
3.2.1 Operations Department:

BankIslami accounts are same as other commercial banks accounts but in some accounts they
can offer Islamic mode transactions. Accounts are given below.
3.2.1.1 Nature of the deposits

Bank deposits can be broadly classified as
• Islami current Accounts
• Islami foreign current Account
• Islami Bachat account
• Islami Mahana Munafa Account
• Islami Amadni Certificate
a) Islami current Accounts

With Islami Current Account, you can have complete peace of mind that your funds are safe
and utilized in Halal avenues only. Islami Current Account is ideal for customers who have
frequent transaction needs and require unlimited access to their account to meet their personal
or business expenses. Also, customer has access to entire online network of for convenience of
instant and secure intercity transactions. So enjoy full control over your funds in a Shariah
compliant manner.
• A minimum balance of Rs. 1,000/- only to open the account
• Joint Account facility up to four joint account holders
• Access to the entire online branch network
• Free unlimited online intercity transactions
• Free 1 Card, BankIslami's ATM & Debit card
• Access to all ATMs linked to MNET and 1 Link throughout Pakistan
• Interbank Funds transfer facility through ATM
22
• Facility of making instant payments at Orix terminals for grocery, fuel ,dining and other
purchases
• Free Internet Banking service
• Free Account statement facility
• Hold mail and Stop payment facility
b) Islami foreign current Account

BankIslami Islami Foreign Currency account is ideal for businesses and individuals who would
like to diversify their investment in different currencies to ensure security against currency
fluctuations or want to keep foreign currency account to meet their business needs. Also,
customer can have easy access to foreign currency with no hassles of foreign exchange
conversion when you have to travel abroad or remit funds abroad to meet education, leisure or
business needs.
• Safe Deposit Lockers
• Hold Mail & Stop payment facility
• A minimum balance of USD 100/-or equivalent in GBP or EURO to open the account
• Available in USD, GBP & EURO
c) Islami Bachat Account

Islami Bachat account is of bundle of benefits. It helps customer to keep up with tradition of
savings with the convenience and safety of a professional and understanding bank. Also,
customer can earn highly attractive profits on customer savings with the flexibility of making
as many transactions on customer account as you want. Islami Bachat Account is ideal for
customers who need to draw money for monthly expenses but would also like to earn on your
hard earned savings. Corporate Employers can also avail this account to provide convenience,
flexibility and halal profits to their employees by opening their salary accounts with us.
• Monthly profit/loss payment on daily product basis
• Differential and specific pool allocation possible for large deposit holders
• Profit announcement at the end of every month
• A minimum balance of Rs. 5,000/- only to open the account
23
• Access to the entire on line network of 102 Branches in 49 Cities
• Unlimited over the counter deposits and withdrawals, free of charge
• No restrictions on intercity transactions
• Free 1 Card, BankIslami's ATM & Debit card
• Access to all ATMS linked to MNET and 1 Link throughout Pakistan
• Facility of making instant payments at Orix terminals for grocery, fuel ,dining and other
purchases
d) Islami Mahana Munafa Account

Long term investments yield high returns but delayed profit payment. With our Islami Mahana
Munafa Account you don't compromise on any. Now you can enjoy the freedom of halal
monthly gains for a prosperous present while building your wealth for a secure future. Also,
Islami Mahana Munafa Account will provide you with security, convenience and flexibility of
investment tenure to suit your needs.
• Free Internet Banking Service
• Hold Mail & Stop payment facility
• Safe Deposit Lockers
• 100% interest free
• Available in Pak Rupees
• Tenure of investment are 1, 2, 3, 5 & 10 years
• Minimum amount of investment is Rs. 10,000/- only
• Profit/loss payment on monthly basis until the maturity date
• Payment of amount of investment on the maturity date
• Profit announcement at the beginning of every month
• Free facility of transfer of profit and invested funds in nominated Islami Current or
Islami Bachat Account
• Monthly profit/loss payment on daily product basis
• Free Six monthly Account Statement facility
24
e) Islami Amadni Certificate
Why take interest when you can earn Halal profit on your investment. With Islami Amadni
Certificate customer hard earned investment works harder to yield high expected profits so you
can build your wealth for a prosperous future. You get the best of both worlds in a safe, secure
and flexible package to perfectly meet your needs.
If you are a salaried individual, a businessperson or a corporate entity with some long term
investment funds to spare, our Islami Amadni certificate is an ideal solution for you. With our
Islami Amadni Certificate, the higher your investment the higher will be your return and that
too in a Shariah compliant manner. Also, you have the flexibility to choose amongst various
investment tenures to suit your personal or business needs.
Islami Amadni Certificate offers you the following key salient features:
• Available in Pak Rupees
• Investment can be done for 1, 3, 6, 12, 24, 36 or 60 months
• Minimum amount of investment is Rs. 10,000/- only
• Payment of profit/loss and amount of investment on the maturity date
• Quarterly profit payment for investment of 12 months and above
• Profit announcement at the end of every month
• Free facility of transfer of profit and invested funds in nominated Islami Current or
Islami Bachat Account
• Free Internet Banking service having free Term deposit enquiry facility
• Facility of premature encashment available. In such a case, the corresponding period
weight age would apply, unless stated otherwise
3.2.1.2Procedures for account opening

In order to operate an account with the bank, a customer has to open an account. In large
branches Grade 1, II or III officers is made responsible for opening new accounts. However in
small branches, the manager himself fulfills all the formalities for opening new accounts. It is
necessary because in case of fraud unintended overdraft, or negligence, the bank will have a
source to trace out the customer. Such source is established by asking the customer to bring an
25
existing customer of the bank that will introduce him to the bank. In order to protect against
losses resulting from fraud or unintended overdraft the account opening activity has been
formalized through certain steps. These steps include
• Formal Application: Customers are required to fill in the prescribed account opening
form, which the bank provides to the customers free of cost. In this basic information
about himself is provided by the customer like his name, address, occupation and nature
if account he wants to operate.
• Obtaining introduction: Introductory references are quid pro quo for opening the
account. For this it is necessary that an existing customer verify the authenticity of the
facts provided in the account opening form.
• Specimen Signature: The customer gives the banker a specimen signature generally
taken on a card specially designed for this purpose. Name of the customer and account
number are entered on it. This specimen signature is used later on by the bank to verify
the signature on cherubs drawn on the bank by comparing these signatures on the card
and the other on the cheques.
• Minimum Initial Deposits: The customer has to make a certain minimum deposits to
open an account. However, later on customer can withdrawn part of this amount but
must maintain minimum deposits to avoid closure of the account or service charges.
• Operating the Account: When the account is opened banker customer relationship is
established. The customer in order to be able to operate the account is given the
following documents:
• Pay-In-Slip Book: This book is issued to the customer containing slips upon which
money is deposited. Each slip contains blank spaces for amount, account number, date,
depositor signature and name of the account holder.
• Cheque Book: The customer to withdraw the money from the bank uses Chequebook.
Chequebook consists of 10, 25, 100 leaves. When new cheque book is required by the
customer he has to fill in the cheque book” requisition slip” with two signature on it
and give it to the concerned officer who on verification of the signature will issue new
cheque book.
• Qualification of the Customer: The relation of the banker and the customer is purely
a contractual one. Therefore any person who is capable of entering into a contract
26
according to the Section 11 of the contract Act 1872 can be a customer. However the
following qualifications are necessary for a person to become a customer.
• He must be of the age of majority
• He must be of sound mind
• He must not be disqualified under any law.
3.2.1.3 Remittances Management

One of the important functions of a bank is to transfer funds for customers from one location
to another. Remittances department deals with the transfer of money for customer from one
bank to another or from one branch to another.
3.2.1.4 Cash Management

Cash department basically handles cash receipts and cash payments. The procedure for which
is given below
a) Receipts
Cash department receives money from customers for crediting it to their respected accounts for
which then used for paying their bills or remitting to their creditors and suppliers as the case
may be. When depositing cash the client fills the prescribed form of pay and slips wherein he
provides basic information like the amount to be deposited, date, account nature and number
etc. then he hands over the form and paying slip along with the money to the cashier to the
counter. The cashier signs and stamps the form or paying slips and returns one copy of the
same to the depositors. After the hours, all pay and slips to the computer section, which credits
the same, their respective accounts.
b) Payments
When bank receives money from customers, it undertakes to repay the same upon demand. The
money can be withdrawn through cheques, drafts or pay orders. However before making
payments, bank satisfies itself that the instrument is valid and there is sufficient balance in the
customer account to support the payment. For making payments the procedure followed.
Cheque is first presented to token clerk. Token clerk notes down date, amount on the cheque,
and account number in token register, assign token number to cheque on the back of it gives
token to the customer and then forwards the cheque to an officer to the check the signature and
27
verify it with signature on specimen card which the customer signed at the time of opening the
account. The cheque is then forwarded to the computer department for verification of the
balance. The cheque is then forwarded to the cashier who makes payment to person who
presents the token.
The process may differ from what mentioned above depending the nature of cheque.
A cheque is defined as written order of a depositor to pay to or to order of a designated party
or bearer, a specified sum of money on demand.
3.2.2 Credit Department

BankIslami offer different mode of financing according to Islamic mode. There are main two
types of Financing modes in bankislami Mudarabah and Musharakah. Other modes of
financing are divided in two categories Short term financing and long term financing.
3.2.2.1 Musharakah Financing

In Musharakah, a joint enterprise is formed for conducting some business in which all partners
share the profit according to a mutually agreed pre-determined ratio, whereas, the loss is shared
in the ratio of capital investment. From Shariah perspective, Musharakah is one of the preferred
modes of financing.
The scope of Musharakah is broad. Musharakah can be applied to fulfill project financing needs
as well as working capital financing needs of Corporate Clients. Since Musharakah transactions
are based on pure profit and loss sharing arrangement, therefore, the risks associated with such
transactions are greater as compared to other financing modes. Due to this reason, Musharakah
transactions are executed subject to satisfactory review of feasibility of the proposed
transaction/project.
3.2.2.2 Mudarabah Financing

Mudarabah is a kind of partnership where one partner gives money to another for investing in
a commercial enterprise. The investment comes from the first partner who is called 'Rabb-ul-
Maal' while the management of the business is an exclusive responsibility of the other, who is
called 'Mudarib'. The profits generated are shared according to a mutually agreed pre-
determined ratio, whereas, loss is borne by Rabb-ul-Maal unless the loss is due to negligence
of Mudarib.
28
3.2.2.3 Working Capital Finance (shot term financing)
At BankIsami, we understand that your business needs constant access to low cost and flexible
financing, in order to meet day-to-day funding needs. Our teams of experienced Relationship
Managers with wide sector experience offer you effective cash flow management by way of
financing arrangements suitably structured to your needs and your risk profile.
Cash is the lifeline of your business. Let your business have a blooming & prosperous life with
our Working capital finance facility. To fulfill your working-capital financing requirements,
BankIslami offers a wide range of products as follows:
a) Murabahah Financing:
Murabahah is a type of sale in which the seller discloses the cost of goods and profit to the
buyer. Through this short-term financing mode, BankIslami can finance the asset purchase
requirement' of the Corporate Customers.
The Customer, intending to utilize the Murabahah facility, identifies the commodities ('assets')
it needs to purchase through Murabahah facility. BankIslami purchases the assets from Supplier
and then sells the same to the Corporate Customer against an agreed price (including disclosed
profit portion) on deferred payment basis.
b) Istisna Financing:
Istisna is a contract of sale of specified items to be manufactured/constructed, with an
obligation on the part of the manufacturer/seller to deliver them to the buyer upon completion.
Istisna can be used for made-to-order commodities where the buyer (BankIslami) would order
a specific good with some specifications to be manufactured by the Corporate Client in a
particular period of time and deliver to BankIslami after completion.
c) Salam Financing:
Salam is a sale, whereby, the seller undertakes to supply some specific commodity to the buyer
at a future date in exchange for an advanced price fully paid on the spot. As a matter of
principle, the sale of a commodity which is not in the possession of the seller is unlawful. Thus,
the practice of Salam is legalized as an exception and is allowed under certain term and
condition. Salam is allowed for commodities only which are homogeneous and fungible in
nature i.e. every unit of the commodity should be identical and substitutable in nature e.g.
29
sugar, rice, wheat etc. Therefore, Salam is an ideal mode for financing for agricultural concerns.
Salam financing can also fulfill all working capital requirements of manufacturers/traders
dealing in homogeneous commodities.
3.2.2.4 Project Financing (medium and long term)

BankIslami offers medium and long-term financing facilities for infrastructure, BMR and
industrial projects in all sectors directly or on syndication basis.
a) Ijarah:
Ijarah is a contract, whereby, BankIslami will lease out an asset to the Corporate Client and
receive periodical rentals from the Client for the use of that asset. The asset will remain in the
ownership of the Bank throughout the term of Ijarah. At the end of the Ijarah term, the asset
can be purchased by the Client at an agreed price.
Ijarah is mainly used for long and medium term fixed asset financing for infrastructure, BMR
and industrial projects.
b) Diminishing Musharakah:
The product of Diminishing Musharakah is offered on the basis of 'Shirkat-ul-Milk'. Shirkat-
ul-Milk means partnership of persons in an undivided property. Process of Diminishing
Musharakah financing involves BankIslami taking share in the ownership of a specific asset
along with the Corporate Client and then gradual purchase of the Client of BankIslami's
ownership share in the asset throughout the term of Diminishing Musharakah. At the end of
the Diminishing Musharakah term, Client becomes the sole owner of the asset. Diminishing
Musharakah is mainly used for long and medium term fixed asset financing for infrastructure,
BMR and industrial projects. Diminishing Musharakah is also an ideal mode for Real Estate
Financing.
3.2.3 Consumer banking

Same as other BankIslami offers same services as online banking, Transfer funds, Lookers
facilities, ATM card facilities.
3.2.3.1 Online Banking

BankIslami's has a wide network of 102 Branches in 49 Cities all of which provide Online
30
Banking services. Online Banking means that all our 102 Branches in 49 Cities are connected
with each other so that you can instantly access your account and make transactions in any
BankIslami Branch. The following are the key benefits that you will get out of using our online
branch network:
• Cash Deposit for immediate credit to a remote branch.
• Remote Cheque Encashment from any online branch.
• Instant Funds Transfer between any 2 online branches.
• Balance Enquiry and Statement of Account from any Online branch
3.2.3.2 Inter Bank Transfer Fund

Do you want to provide ease and convenience to your friends, family, colleagues and business
associates. With our Interbank funds transfer (IBFT) facility you can easily transfer funds in
their accounts via your ATM. Now, when dealing with you they can ensure hassle free funds
transfer in their accounts. No nuisance of waiting for Cheque clearance or going to the branch
to deposit Cash or Cheque.
IBFT facility enables you to send and receive funds Online from and to any Account holder of
1Link IBFT participating member Banks. Following are the key benefits that you will get out
of using our IBFT facility:
3.2.3.3 ATM or Debit Card

It is a Shariah compliant ATM/Debit card, all in one, which acts as a complete replacement for
cash. Now you have the freedom to access your Bank account 24 hours a day to make instant
and cashless payments at a multitude of shops, outlets and restaurants in addition to its use on
our ATM network.
ATM Card:
You can withdraw cash anytime and anywhere from around 2,500 ATMs countrywide linked
to both the M-Net and 1-Link switches.
Debit Card:
You can buy grocery, fill fuel, dine-out and make purchases at over 3,600 retail outlets linked
to the Orix Network countrywide.
31
Chapter NO 4
ANALYSIS
4.1 Financial Analyses of BIPL
BALANCE SHEET
AS AT 31ST DECEMBER
(Rupees in 000)
ASSETS 2010 2009 2008 2007 2006
Cash and Balances with treasury banks 3.035.148 4,217,515 2,175,413 1,433,166 338,222
Balances with other banks 569.622 2,059,550 2,207,490 2,577,491 790,709
Due from Financial institutions 4.513.132 4,018,813 40,351 625,037 412,131
Investments 13.732.132 6,813,191 5,019,525 3,864,027 493,008
32
Financing 16.670.125 13,282,152 6,527,531 3,962,867 959,133
Operating fixed assets 2.066.680 2,395,304 1,910,648 1,093,324 441,428
Deferred tax assets 402.183 347,016 265,257 90,418 27,130
Other assets 4.046.681 1,153,230 942,385 801,143 562,913
Total Assets 45.035.703 34,286,771 19,088,600 14,447,473 4,024,674
LIABILITIES
Bills payable 563,020 485,608 353,646 84,998 23,830
Due to financial institutions 353,000 156,160 245,939 70,000 50,000
Deposits and other accounts 38,198,320 27,987,378 12,477,955 9,934,282 1,778,008
Sub-ordinate loan - - - - -
Liabilities against assets subject to finance - - - - -

lease
Deferred tax liabilities - - - - -
Other liabilities 1,154,977 917,332 819,239 513,467 169,949
Total of Liabilities 40,269,317 29,546,478 13,896,779 10,602,747 2,021,787
NET ASSETS 4,766,386 4,740,293 5,191,821 3,844,726 2,002.887
REPRESENTED BY
Share capital 5279,679 5,279,679 5,279,679 3,200,000 2,000,000
Reserves 9,310 - -
Accumulated loss (554,985) (577246) (98,307) (45,377) (8,354)
4,734,004 4,702,433 5,181,372 3,154,623 1,991,646
Advance against future issues of share capital - 681,409 -
Surplus on revaluation of assets-net of 32,382 37,860 10,449 8,694 11,241

deferred tax
4,766,386 4,740,293 5,191,821 3,844,726 2,002,887
PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 31ST DECEMBER
(Rupees in 000)
33
2010 2009 2008 2007 2006
Profit / return on financing, investments and 3,806,209 2,193,891 1,468,688 602,060 100,00
placements earned 8
Return on deposits and other dues expensed 2,057,533 1,222,169 729,528 303,842 18,665
Net spread earned 1,748,676 971,722 739,160 298,218 81,343
Provision against non-performing financings - net (7,424) (89,780) (130,556) (28,372) (1,001)
Provision for diminution in the value of investments - (15,000) -
Provision against sukuk murabaha - (6,418) -
Bad debts written off directly -
(7,724) (111,198) (130,556) (28,372) (1,001)
Net spread after provisions 1,756,100 860,524 608,604 269,846 80,342
OTHER INCOME
Fee, commission and brokerage income 87,821 37,854 112,117 61,207 3,430
Dividend income 1 - 1,741 23,150 13,569
Income from dealing in foreign currencies 60,276 278,054 29,273 10,248 740
Gains on sale of securities - 2,356 31,273 41,922 24,179
Unrealized Gain / (loss) on revaluation of investments - (926)

classified as held for trading
Other income 59,006 24,423 21,735 37,54 3,555
Total other income 207,104 342,687 196,139 140,281 44,547
1,963,204 1,203,211 804,743 410,127 124,88

9
OTHER EXPENSES
Administrative expenses 1,895,476 1,755,503 1,028,232 507,252 145,52

6
Other provisions / write offs 11,528 -
Other charges 11,657 10,617 5,663 3,338 13,762
Total other expenses 1,918,661 1,766,120 1,033,895 510,590 159,28

8
34
2010 2009 2008 2007 2006
44,543 (562,909) (229,152) (100,463) (34,39

9)
Extra ordinary / unusual items
LOSS BEFORE TAXATION 44,543 (562,909) (229,152) (100,463) (34,39

9)
42,268
Taxation -Current - (12,549) (87) (4,004) (1,021)
-Prior years (4,276)
-Deferred 2,007 96,519 176,309 67,444 27,332
46,550 83,970 176,222 63,440 26,311
LOSS AFTER TAXATION (592,225) (478,939) (52,930) (37,023) (8,088)
Accumulated loss brought forward (9,310) (98,307) (45,377) (8,354) (4,529)
Accumulated loss carried forward (554,985) (577,246) (98,307) (45,377) (12,61

7)
Horizontal Analysis
Cash and Cash Balances

Cash and cash balances are increasing every year.
Balances with other banks:

Balances are increased in 2006 and 2007 and decreased in 2009 and 2010. It is due to advances
and investments. These two years BIPL used these funds in investments and advances rather
than keeping balances with other banks.
Investment:
BIPL investment are increased years by years for last five years . The reason is fewer funds are
used in investment in fully paid up shares of listed companies and unlisted terms finance
certificates.
35
Advances:
In BIPL there was increase in advances year by year.
Operating fixed assets:

Operating fixed assets are increased through out years
Other assets:
Ratio of the other assets is also showing the trend towards increase for last five years data.
Liabilities:
Bills payable:
In BIPL five years comparison of bills payable shows that in the year 2004 to 2007 ratios are
slightly increase but in year 2008 & 2009 it increased quickly.
➢ Other liabilities:
➢ It also shows the increase
➢ Share Capital:
➢ In BIPL share capital increased in 2004 but remains the same in 2008 to 2010.
Horizontal Analysis of the profit and loss account
Markup/return/interest expense
There is an increase in 2007 to 2010 in the markup/return/interest expense because return on

deposits are increased due to increase in rate on deposits and increase the amount of fixed
deposits.
Administrative Expense
36
The administrative expenses are increasing every year because of expansion of the branch
network.
4.2` Ratio Analysis
Liquidity Ratios:
Liquidity represents the ability of a bank to efficiently and economically accommodate deposits
withdrawal as well as fund increase in assets.
1-Current Ratio:
The current ratio measures the number of the firms current assets cover its current liabilities.
Current ratio = Current assets / Current Liabilities
2006
Current Assets 2,103,975
Current liabilities 243,779
Current Ratio 863.07%
2007
Current liabilities 668,465
2008
37
Current liabilities 1,418,824
Current Ratio 37818%
2009
2010
Current Assets 1,21,64,583
Analysis of Current ratios of BIPL
Current ratio shows a firm's ability to cover its current liabilities with its current assets. If value
of current ratio is grater then one it means that firm can pay all its current liabilities from its
current assets but if value of current ratio is less then one it means that firm is unable to pay its
currents liabilities from its current assets. For last five years current ratio in BIPL are strong.
2-Working Capital Ratio
Working capital is the difference between current assets and current liabilities.
Working capital is used to check liquidity of the organization.
Working Capital = Current Asset- Current Liabilities

2006
38
Current Liabilities 243,779
Working Capital 1,860,196
2007
Current Liabilities 668,465
2008
Current Liabilities 1,418,824
2009
Current Liabilities 1,559,100
2010
Current Assets 1, 21, 64,583
Current Liabilities 20, 70,997
Working Capital 1, 00, 93,586
Analysis of Working Capital
Working capital is better in 2010 which means that assets are utilized more efficiently in 2010
as compared to other years.
Cash Ratio
39
Cash and cash equivalent are the most liquid assets. It is used check the liquidity of the
organization.
2006
Cash Equivalent 1,128,931
Total Assets 4,024,674
Cash Ratio 28.05
2007

Cash Ratio 27.76
2008
Cash Equivalent 4, 383,,058
Cash Ratio 22.96
2009

Cash Ratio 18.31
2010
Cash Equivalent 36, 06,011
Cash Ratio 08.007
40
Analysis of cash ratio of BIPL
Higher cash ratio also shows the higher rate of satisfaction like other liquidity ratios. Cash ratio
is more important liquidity ratio. In 2005 cash ratio was 6.51%, it increased quickly in 2006 to
28.05%, but it shows declining trend in 2007 to 2009. In 2010 it decreases dramatically to
8.007 %.
Leverage Ratios
Leverage ratios of a firm show the extent to which a firm finances its operation from the outside
sources and money. The leverage can be determined from analysis of owner equity in business,
total liabilities, current and long-term liabilities. Long-term assets and total assets of the
business.
Debt to Total Assets Ratios
Its shows that how much assets have been financed by liabilities.
Debt Ratio
Debt Ratio = Total Debt / Total Assets
2006
Total Debts 2,021,787
Debt Ratio 50.23
2007
41
Debt Ratio 73.39
2008
Debt Ratio 72.80
2009

Debt Ratio 84.45
2010
Debt Ratio 89.41
Analysis of leverage ratio
Financial leverage is the extent to which a firm is financed with debt. In BIPL, 2010 is heavily
financed because debt was the major source of financing in 2010.
Debt to Equity Ratio:
Debt equity is calculated by dividing total liabilities of the bank by the tall owner equity.
Debt to Equity Ratio = Total debt / shareholders equity or Debt ratio / 1- Debt ratio
42
2006
Share holder equity 2,000,000
Debt to equity Ratio 1.01
2007
2008
2009
2010
43
Analysis of the Debt to equity ratio
Greater the debt greater risk for the firms shareholders. In 2006 risk for the shareholders was
very low as compared to the other years decrease debt to equity ratio was very small on the
contrast risk was very high in 2010 because of heavy financing.
Equity multiplier
Owner equity to fixed assets ratio
“Owner equity to fixed assets ratio” shows that how much money does owner in relation to
fixed assets invest. If the owner equity is greater then the fixed assets, it means that owner
finances a part of current assets. When owner equity is less than fixed assets it means that
creditor's obligations have been used to finance a part of fixed assets.
Total owner equity divided by fixed assets
Equity Multiplier = Total assets / shareholders equity
2006

Share Holder Equity 2,000,000
Equity Multiplier 2.01
2007
44
2008
2009
2010
Total Assets 4, 50, 35,703
Share Holder Equity 52, 79,679

Analysis of the equity multiplier
In BIPL it is a better in 2010 it means that bank has about 8.53 in total assets of 100 of equity.
Coverage Analysis
Coverage ratios analysis the ability of a firm to cover or service its financial obligations.
Gross Spread Ratio:
This ratio shows the firms overall effectiveness of operation. Gross profit divided by net sales.
45
2006
Net Markup / Interest income 81,343
Interest earned 100,008
Gross spread ratio 81.34
2007
Interest earned 602,060
2008
Interest earned 1,468,688
2009

Interest earned 2,193,891
2010
Net Markup / Interest income 17, 48,676
Interest earned 38, 06,209
46
Analysis of gross spread ratio
It is measure of the efficiency of the firm's operation. Gross spread ratio of BIPL is high in
2005 as compared to the other years. Only because of low expenses during the year.
Investment to Total assets Ratio
Investment / Total assets
2006
Investment 493,008
Ratio 12.25
2007
Investment 3,864,027
Ratio 26.75
2008
Ratio 26.30
2009
47
Ratio 19.87
2010
Investment 1, 37, 32,132
Ratio 30.49
Advances to Total Assets Ratio
Advances/ Total Assets
2006
Advances 959,133
Ratio 23.83
2007
Advances 3,962,867

Ratio 27.43
2008
Advances 6,527,531

Ratio 34.20
48
2009
Advances 13,282,152
Ratio 38.74
2010
Advances 1, 66, 70,125

Ratio 37.01
In 2010 advances to total asset ratio of BIPL decreases to 37.01.
Operating Expense Ratio
Non Markup Expense / Gross Income
2006
Non Markup Expense 159,288
Gross Income 124,889
Ratio 127.54%
2007
Non Markup Expense 510,590
Ratio 124.50%
2008
49
Non Markup Expense 1,033,895
Ratio 128.48%
2009
Non Markup Expense 1,766,120
Gross Income 1,203,211
Ratio 146.78%
2010
Non Markup Expense 19, 18,661
Gross Income 19, 63,204

Ratio 97.73%
Cost to Sales Ratio
The ratio is obtained by dividing cost of sales by net sales. The following are the cost of sales
of BIPL over five years of operations.
Markup expense divided by markup earned.
2006
Markup Expense 18,665
Markup Earned 100,008
Cost to sales ratio 18.66
2007
50
Markup Earned 602,060
2008
Markup Earned 1,468,688
2009
Markup Expense 1,222,169
Markup Earned 2,193,891

2010
Markup Expense 20, 57,533
Markup Earned 38, 06,209
51
Chapter NO 5
SWOT ANALYSIS
5.1 SWOT Analysis of BIPL
Due to globalization and management studies now organizations cannot survive until they
compete with their surroundings and then internationally. SWOT analysis is the kind of tool
which is used to analyze the organization’s performance in relation to its internal and external
environment strength; weakness, opportunities and threats face by BIPL are as follow.
Strengths
52
• It has a competitive advantage of doing less marketing as compassed to conventional
banking and as a result better cost control.
• For speculative motive less money is used due to which there is reduction in volatility
in investment and chances of investment failure.
• It is feasible location wise and geographically
• To attract new customers and retain potential customers by beginning innovative

products and service like BIPL offers e-banking, phone banking etc.
• As bank made on name of Islam in Pakistan so, it have advantage of religious position
in a country.
• Saving can be mobilized and increasing deposits of banks using as charities and zakat
fund schemes etc.
Weaknesses
• To complete with conventional banks a lot of capital is required and large amount of
recourses have to maintain to meet any loss situation in Islamic finance modes of
investment.
• To do job efficiently and serve Islamic financial services, training is required for
improving skills of management and staff.
• Staff of BIPL is less experienced and young
• Work I more than the employee's working houses
• Main weakness o BIPL is lack of specialization i.e. employees are rotated from one job
to another job of totally different characteristic
Opportunities
53
• Due to Islamic banking new markets have emerged like Islami mortgage, Islamic
insurance and other investment projects etc
• BIPL offers value added services and products to customers
Threats
• Market demand is less as compared to conventional interest based banking.

• After 9/11 attacks on WTC environment of Islamic banking in west has declined.
• For implementation of Islamic banking a lot of legislation is required especially in non-
Muslim countries.
• Increasing competition in Islamic banking sector
• Poor economic condition of country.
5.2 COMPARISON OF SWOT ANALYSIS OF BIPL WITH MBL & AL-
BARAKA BANK
5.2.1 SWOT ANALYSIS OF MEEZAN BANK:
Strengths
• Continued to expand its branch net work.

• It is the strength of Meezan bank that I provides healthy and fair working environment.
54
• Shareholding is very strong.
• Full fledged Islamic bank
• Highly invested in technology.
Weaknesses
• Charges are very high for different activities as compared to competitors.

• Low promotion and advertisement of produce and services.
• Restricted shariah based policies.
• Few services are offered by Meezan bank as compared to competitors.
• There is no credit card facility
• No long term relations maintain with customers.
Opportunities
• Increasing demand of Islamic financial products and services.

• Market share in creases through branch expression through out the country.
• Due to Islamic banks (Meezan) people are moving from conventional banking to
Islamic banking.
Threats
• Charges in govt policies

• Political instability
• High interest rate change by SBP
• Due to changes in foreign exchange rates value of financial instruments fluctuates
• Entry of new competitors.
55
5.2.2 SWOT Analysis of al-Baraka bank strength:
• Commitment to Islamic shariah

• Staff are qualified and experience in field of management and banking
• Relationship of manager with staff and staff with customers is quite good.
• High job satisfaction
• Environment is friendly and co-operative
• Senior management is competent.
Weaknesses
• Centralized decision making which results loss of confidence among employees and
mgt.
• Lack of marketing effort
• Less internal recruitment for new posts.
• Lack of training at all levels
• Lengthy process of recruitment.
Opportunities
• Better Management
• Location of branch is very suitable place
• Proper utilization of internal expertise being major change in organization
Threats
• Increasing competition in both domestic and foreign market.

• Good job opportunities offer outside attract our current employees.
• Other organizations are using better HR Technique.
56
5. 3 Comparison
• Meezan bank has 204 branches through out the country while BIPL has 102 branches
so; Meezan bank has strength of increasing market share in country through expending
its branch net work.
• Meezan bank provides training facility to their staff members as compared to BIPL.
• Location wise BIPL is better that Meezan bank.
• Work is over loaded to employees in BIPL as compared to Meezan Bank.
• Services and financial instruments offered by Meezan bank are charged highly as
compared to its competitor BIPL.
• As compared to other conventional banks BIPL,MBL and Albaraka bank are not
following marketing strategies like advertisement.
• Few services are offered by Albaraka bank than BIPL and MBL.
• Process of recruitment is lengthy in Albaraka and MBL than in BIPL.
Chapter NO 6
FINDINGS AND RECOMMENDATIONS
6.1 SHORT FALL / WEAKNESSES OF ORGANIZATION
57
According to my observation, it is pointed out that there are some short comings in BankIslami
Mansehra.
Low Job Satisfaction:
It is becoming clear that the true lasting competitive advantage comes through human resources
and how they are managed. BIPL is not focusing on this critical issue as the job satisfaction
level of the employees working at BIPL, was quite low.
Lack of Specialization:
The employees are constantly rotated from one job to another job of the totally different
characteristic in and they do not have know-how of the working in other unrelated departments.
But I think this is not a very good tactics used by the management. Otherwise the situation
might be like this “ Jack of all and master none'.
Centralization:
There is a high degree of centralization in the bank. Almost all the decision-making is in the
hands of the upper management. But centralization is effective up to a certain level otherwise
it becomes inefficient and at times costly too. I personally observed that delay occurred in the
operations of the employees only due to the fact that they had not got any instructions from the
head office.
Lack of Training Facilities:
Presently there is no specific training program arranged for the new recruiters. They have to
learn based on their observations and also their mistakes. It takes a bit time for the fresh one to
learn the banking the result is huge amount of blunders, mistakes etc. resulting in monetary and
non-monetary losses for the bank. There is pressure not only on the new learner but also on the
58
person placed upon with this responsibility.
Less Experienced Staff:
The no. of experienced and well trained staff is very low. Majority of the staff working in the
bank branches is quite young and inexperienced. If the bank failed to bring down its high
employees turnover, then it would be lacking the most important resources of an organization
i.e. the experienced staff.
Customers unawareness about charges
Mostly customers are unaware about charges for DD, TT, PO etc. so manager should tell them
charges before giving form, through which wastage of time minimize.
Overburdened work
Employees are overburdened, so they have to stay at branch till late at night. Due to high work
load efficiency of employees are effected.
Lack of appreciation
Sometimes bank ignored the good performance of employees. If hard work of employees are
not appreciated, then they become dishearten and losses his interest in work.
RECOMMENDATIONS
⚫ It was an interested experience to do internship in BankIslami Pakistan Limited. The staff
59
was very cooperative and due to their help I learned big deal about modern banking.
⚫ I suggest that such an internship program highly integrative for the students of commerce
education so that the students should be inquired with the knowledge of practice world .I do
summarize that it would be a great help to me in selection of job or future field of work.
⚫ Here I am putting some suggestions, which will enable the bank to compete with other banks
more effectively & efficiently.
⚫ It is observed that the employees were overburdened so they have to stay at branch till late
at night. In this way their efficiency is affected and hiring more employees can reduce their
work.
⚫ The employees should be assigned jobs for specific period and than they should rotated to
other department so that they gain knowledge/ experience of other jobs.
⚫ BankIslami should properly advertise and Communicate to public about the services
provided by it, so that more customers will be attracted.
⚫ The bank’s management should give more incentives and pay scale of officers should be
revised & improved.
⚫ System and operations should be more defined and organized.
⚫ Administration drawbacks should be improved by the strict control of general issues.
⚫ Expenditures must be control, which are very high.
⚫ BankIslami has not strong position in market. So BankIslami should do heavy advertisement
both electronically and print media to create public awareness.
⚫ Branch manager should also arrange training programmers for existing employees to
improve their performance.
⚫ Proper distribution of work should follow to run the organization in smooth way.
⚫ There should be a complaint box in bank for hearing complaints of customers because most
of the people feel hesitation to go to manager for complaint.
⚫ IT department should be establishing in order to maintain connection with other banks.
REFERENCES
Annual Report
BIPL's Annual Report 2010

60
Staff of BIPL Mansehra Branch
WEBSITE:
www.bankislami.com.pk
61
Annexure-I
MANAGEMENT OF THE BRANCH
DESIGNATION NO OF EMPLOYEES
Branch Manager 01
Operation Manger 01
Officer Level I 02
Officer Level II 01
Officer Level IV 02
Cashier 01
Service quality Officer 01
Telephone Operator 01
Gunman 02
Peons 03
Annexure-II
62
MANAGEMENT OF THE BANKISLAMI- (In Alphabetical order)
Mr. Adnan Hamid Head, Administration & General Services
Mr. Arsalan Vohra Head, Risk Management
Mr. Asad Alim Head, Information System
Mr. Khawaja Ehrar ul Hassan Head, Compliance
Mr. Faisal Shekh Head, Product Development
Mr. Farooq Anwar Head, Operations
Mr. Hassan A. Bilgrami Chief Executive Officer
Mr. Muhammad Furqan Head, Credit Administration
Mr. Muhammad Imran Head, Consumer & Retail Banking
Mr. Muhammad Shoaib Khan Head, Treasury & Financial Institutions
Mr. Rehan Shuja Zaidi Head, Internal Audit
Mr. Shamshad Ahmed Head, Trade Finance
Ms. Sheba Matin Khan Head, Human Resources
Mr. Syed Akhtar Ausaf Head, Credit
Mr. Syed Mujtaba H. Kazmi Head, Corporate Finance
Mr. Syed Shah Sajid Hussain Head, Finance
Annexure -III
63
MANAGEMENT HIERARCHY
Chairman
Board of
Directors
Chief
Executive
Head of
Departments
Regional
Managers
Area Area
Operations Managers
Annexure IV
64
PROVINCE WISE BREAK UP OF BRANCHES
SIND PUNJAB BALOCHISTAN NWFP ISLAMABAD AJK TOTAL
37 37 13 8 5 2 102
Annexure
Management of the branch
Designation Name
Branch Manager Mr. Zulfiqar Ali
Operation Manager Mr. Shafqat Hussain
Customer Service Executive (Account Mr. Sarmad Imtiaz
Opening)
Customer Service Officer (Clearing and Mr. Yasir Ali
Remitance)
Customer Service Officer Cash Mr. Mazher Lodhi
65

Bank Islami Final Report Edited

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Bank Islami Final Report Edited

Uploaded by

Copyright:

Available Formats

ACKNOWLEDGEMENT

BIPL Bank Islami Pakistan Limited

Chapter No. Contents Page No.

3.2.3.1 Inter Bank Transfer Fund

1.1 Background of study

1.2 Purpose of studies:

• The purpose of study is to get information about structure and functioning of

1.3 Research Methodology

1.4 Scheme of study:

The report is divided into five chapters

OERVIEW OF THE ORGANIZATION

Bank Islami-The Idea:-

Accreditation by State Bank of Pakistan:

Initial Public Offering of BankIslami:

NATURE OF THE ORGANIZATION

now accounts for 21% of the deposit base.

strong execution track record.

2007 2008 2009 2010

Deposits 9,934,282 12,477,955 27,987,378 3,81,98,320

Advances 3,962,867 6,527,531 13,282,152 1,66,70,125

Investments 3,864,027 5,019,525 681,3191 1,37,32,132

Total Assets 1,447,473 19,088,600 34,286,771 4,50,35,703

Shareholders 3,844,726 5,191,821 4,740,293 47,66,386

Loss After (37,023) (52,930) (478,939) (46,550)

Financial Highlights at a glance

2010 2009 2008 2007

Return Earned 3,806.20 2,177.14 1,464.84 599.64

Profit paid 2,057.53 1,222.17 729.53 303.84

Net spread 1,748.67 954.97 735.32 295.79

Fee, Commission, 148.10 315.91 141.39 71.46

Income from core 1,896.77 1,270.88 876.71 367.25

Provisions 7.42 (111.20) (130.56) (28.37)

Other income 59.01 26.78 54.75 68.83

Operating Expenditure (1,918.66) (1,766.12) 1033.90 510.59

Profit/ Loss before tax 44.54 (579.66) 233.00 102.89

Taxation 2.01 89.83 177.55 64.29

Profit/ loss after tax 46.55 (489.82) 55.45 (38.60)

2010 2009 2008 2007

Assets 45,036 34,272 19,085 14,446

Financing 16,670 10,457 6,343 3,931

Deposits 38,198 27,987 12,478 9,934

Share Capital 5,280 5,280 5,280 3,200

Shareholder fund 4,766 4,725 5,188 3,843

Number of staff 1,347 1,471 1,188 563s

Number of branches 102 102 102 36

SHARE HOLDING STRUCTURE

& Jahangir Siddique & Co. Ltd.

Dubai bank PJSC 1,310.53 24.82

Jahangir Siddique & Co Limited 1,112.56 21.07

DCD Group 1,028.48 19.47

M.Hssan A Bilgrami 5.81 0.11

Chief Justice ® Mahboob Ahmed 1.31 0.02

General Public 1,821.00 34.49

TOTAL 5,280 100

Reference: BIPL annual report 2009

BankIslami is strongly committed towards its core values of:

“The Vision of BankIslami is to be recognized as the leading Authentic Islamic Bank”

Compliant and Technologically advanced product and services. We differentiate ourselves

⚫ Understanding our Client's need

⚫ Commitment to excellence, and

⚫ Fast, efficient and seamless delivery of solution. As a growing institution, the

committed to becoming an employer of choice, attracting, nurturing and developing

talent in a transparent and performance driven culture.