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Nehl abbasi internship report 2012


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a) Everyday Accounts opening of new customers
b) Dealing with Remittances.
c) Making vouchers and balance sheets on daily basis.
d) Re-opening dormant accounts and contacting customers.
e) Managing the problems and queries of everyday customers as a Customer Relationship Officer.
f) Dealing with Credits, Clearings and Collections

Published in: Business, Economy & Finance
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Nehl abbasi internship report 2012

  1. 1. Bank Alfalah Limited Table of Contents Executive summary………………………………………………….04 1. Introduction……………………………………………………….05 1.1. Company background (history)…………………………..06 1.2. Objective…………………………………………………..07 1.3. Organizational structure…………………………………..08 1.4. product/services offers……………………………………10 1.4.1. product/services details (A) ……………………..11 1.4.2. product/service details (B)………………………12 1.4.2. product/service details (C)………………………14 2. Learning & experience…………………………………………….15 2.1. Internship duration & rationale for selection……………...16 2.2. Details of training department wise/task performed……..17 2.2.1. Task performed (a)………………………………17 2.2.2 Task performed (b)……………………………….22 2.2.3 Task performed ©………………………………...26 2.3. SWOT Analysis of organization………………………….27 2.4. Recommendations………………………………………....29 Conclusion……………………………………………………………...30 References……………………………………………………………..31 Appendix………………………………………………………………32 Acknowledgements…………………………………………………...33 Personal resume ………………………………..34 INTRODUCTION FA10-MBA-130 Page 1
  2. 2. Bank Alfalah Limited BANK ALFALAH LIMITED (BAL) Brief History: Bank Alfalah Limited as its name suggests is a banking organization that provides banking services to the customer and slogan of Bank Alfalah Limited is “The Caring Bank”. Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced since November 1st, 1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through various branches in Pakistan, Bahrain, Bangladesh & Afghanistan, with the registered office at B.A.Building, I.I.Chundrigar road, Karachi. Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place. Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank has invested in revolutionary technology to have an extensive range of products and services. This facilitates our commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. It perceives the requirements of the customers and match them with quality products and service solutions. During the past five years, it has emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today. The said group has invested in Pakistan industry and Abu Dubai group is represented by the following groups in Pakistan: FA10-MBA-130 Page 2
  3. 3. Bank Alfalah Limited 2.2 Vision To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof. 2.3 Mission To develop & deliver the most innovative products, manage customer experience, deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank. Goals & Objectives: In Bank Alfalah limited, while certain initiatives are nearing completion, new initiatives have been launched thus depicting BAL’s continuous desire to improve the ways of doing business. The most prominent being the information technology initiative which is aimed to improve quality offerings. BAL is fully aware of the developments taking place in the world, as well as the changes occurring in the economic and social condition within the country. The bank is determined to meet new challenges by redefining its goals and strategy as well as by the adjustment of its operational policies. The bank planning to institute major improvements, especially in customer service launch innovative products to ensure that the bank continues to play a dynamic role in the development of the country. 2.7 Branches of Bank Alfalah Limited The Bank is fully aware that the branch network has direct implications on the services that it provides to its customers. We offer services through a network of 386 branches and 350 state of the art ATMs. FA10-MBA-130 Page 3
  4. 4. Bank Alfalah Limited  Conventional braches  Islamic banking braches  Overseas branches  ATM machines Products & Services offer: Bank Alfalah limited is offering different types of products and services to fulfill the needs of different segments of their target market. Operations with products & services can be described by the following chart. Operations and Products General Banking Financial Services Consumer Finance Treasury & Intl. Islamic Banking Deposit Accounts Credit Cards Money Market Landing and Deposit Rates Home loans Forex Market Lockers Auto/Vehicles loans Correspondent Banking Remittance Prepaid Cards Nestro Account Hilal/Debit Cards Debit Card Home Remittance Structured Finance Money Gram Trade Finance Personal Banking Lease Finance Corporate Banking SME Consumer Banking Agriculture Finance FA10-MBA-130 Page 4
  5. 5. Bank Alfalah Limited Figure 2. 2.8 Organizational Structure: Bank Alfalah is managed by board of directors who are commanded by chairman. Afterward, CEO and COO controlled bank operations through group heads and general mangers of different division. BAL organizational structure could be described by following chart. Chairman Board of Directors Chief Executive Officer Chief Operating Officer Group Heads Chief Compliance Officer Credit Chief Financial Officer Islamic Banking GM (HR & QA) Retail & Middle Market, Central GM (Establishment & Administration) Retail & Middle Market, North GM (Strategic Planning) Retail & Middle Market, South GM (Legal & Company Secretary) Corporate & Investment Banking GM (Risk Management) Consumer Finance GM (Information Technology) Audit and Inspection Technology & Operations Operations FA10-MBA-130 Learning Page 5
  6. 6. Bank Alfalah Limited Jhelum Branch Bank Alfalah Limited I-8 Branch has been established in I-8 Markaz, Islamabad. It is one the most profitable bank in Islamabad. It was incorporated on 16th September 2002 and currently located at 67- Kazim Kamal road, Jhelum Cantt.  Branch Code 0070  Area Office: The Mall Rawalpindi  Area Manager: Talib Rizvi  Branch Manager: Mr. Raja Muhammad Bilal  Manager Operations: Mr. Muhammad Imran Khan  Manager Credits: Mr. Ali Arslan  Contact Number: 0544-610162, 0544-610020 FA10-MBA-130 Page 6
  7. 7. Bank Alfalah Limited 2.12 SWOT ANALYSIS SWOT analysis describe the strengths, weakness, opportunities, and threats of any organization. In SWOT analysis the strength and weakness is related to the internal environment of the company and the opportunity and threads are influenced by external environment of the company like industry.  Exploiting an organizations opportunities and strength  Neutralizing it threats  Avoiding or correcting its weakness SWOT analysis is the key step in design better business strategy in the light of organization mission, vision, goals & objectives. Managers assess internal strengths distinctive competencies and weakness and external opportunities and threats. The goal is to then develop good strategies and exploit opportunities and strengths neutralize threats and avoid weaknesses. Here I have applied this very useful technique to identify the strengths, weaknesses, opportunities and threats of Bank Alfalah. 2.12.1 Strengths of Bank Alfalah Limited Bank Alfalah Limited has certain strengths which are different from the other Banks. 1. BAL is the first Muslim Bank of the World BAL is the first Muslim Bank of the world, which is owned and managed by its own employees. This is the biggest strength of the Bank. A feeling of ownership is present in every employee, which not only helps in increasing the productivity of employees but also creates sincerity with the Bank in them. 2. High Motivation of Employees FA10-MBA-130 Page 7
  8. 8. Bank Alfalah Limited Strength is the high motivation of employees to their work because they know that what so ever they do, it will be in their own benefit. They know that the profit, which they will earn, will be distributed among all the employees. So they work with high motivation and concentration. 3. Good salary package Salaries are very reasonable, so the employees are not financially disturbed and they devote their selves fully to their work. 4. Huge network of branches They have wide area network in all over the Pakistan, so that they cover a lot of portion of cash transactions and make customer satisfied. 5. Customer Oriented Bank The Bank has very strict rules and regulations about the customer’s complaints. The customers are treated as very special persons in the Bank. 6. Strong Financial Position As we can see in the financial statements of the bank, the financial position of the organization is very sound and its profitability is increasing. The Earning per share has been increased on a rate of about 50%, which is a very positive sign. 7. Highly Qualified Employees The bank has highly qualified and skilled workforce and it has succeeded to attract the best banking professionals from across the country due to its growing pace and sound reputation. 8. Conducive Environment The management of the bank is very much concerned with the development and improvement of the working environment. The bank has state of the art and purpose built branches where all the modern technologies are provided to get the efficiency of the workforce and the customer satisfaction. FA10-MBA-130 Page 8
  9. 9. Bank Alfalah Limited 9. Govt. Support and Encouragement As the owners of the bank belong to UAE and the type of their investment in Pakistan is a foreign investment, the govt. is fully supporting the bank management due to its policy to maximize the foreign investment in the country, to get the economic prosperity. 10. Fastest Growing Financial Institution Due to its successful business policies and the strong financial position the bank has achieved the reputation of fastest growing financial institution in the country. It has greatly increased the customer’s confidence in the bank. 11. Huge Expansion Plan Due to its strong financial position the bank has undergone a huge expansion plan to compete with the existing banks all over the country and with the passage of time the branch network is expanding at a very good pace. 12. Young and Energetic Workforce As the bank is a newer one in the country, the bank has an advantage over its competitors because the majority of its workforce is young and not very much over aged. Thus the bank is getting maximum output from its young and energetic workforce by spending comparatively less on their remunerations. 13. Islamic Banking Division The bank is one of the pioneers of the commercial banks who have started the Islamic Banking along with their conventional banking. The bank has a separate network of its Islamic Banking Division which has many branches across the country and this network is also expanding at a very good pace. 2.12.2 Weaknesses of Bank Alfalah Limited 1. Lack of Entertainment Facilities No entertainment facilities are available in the Bank when customer goes to the Bank and wait for a longer time. These facilities can be the newspaper, magazines, etc. FA10-MBA-130 Page 9
  10. 10. Bank Alfalah Limited 2. Advertisement Is Not So Attractive Advertisement of BAL is not such goods as of other banks. 3. Outlets are Unattractive Outlook of the some BAL branches is not attractive to the people. 4. All Branches Are Not Fully Centralized As compare to other private commercial banks the limited branches of BAL are computerized and centralized. 5. Inexperienced Workforce As the majority of the workforce consists of young professional, they lack in their experience. And sometimes lack of experience becomes a hurdle while serving to the customers. It is the point where they feel difficulty while competing the other bank, which have a very experienced workforce. 6. Over Work Load On Employees It was observed in the branch that as compared to huge business the bank is dealing in, the no. of employees is lesser and thus there is an increased workload on the employees. Due to this the efficiency of the employees is reduced. 7. Employees Are Not Very Much Motivated As discussed before, the workload is high and the employees, especially the credit department, have to do late sittings to complete their tasks. On the other hand the bank has revised its salary increments policy to decrease the increment rate, as a result a decreased motivation level of employees is observed. 8. Lack Of Self Marketing Department FA10-MBA-130 Page 10
  11. 11. Bank Alfalah Limited In today’s fast growing world, media is an important source for marketing your products. BAL lacks a self marketing department for advertising its new product benefits to customers on a large scale. 2.12.3 Opportunities for Bank Alfalah Limited 1. Financial Sector Reforms The policies of the new government to uplift the economy and pursue financial sector reforms are expected to yield positive results in the banking industry of the country. The BAL is very well praised to avail promising opportunities. 2. Attraction for Small Borrowers As a result of the different steps taken by the Government regarding the betterment of the economy, small borrowers are attracted to get the financing and start small businesses. So, the BAL has an opportunity to attract the customers by giving them attractive schemes. 3. Remittances From Abroad They have wide area network in all over the Pakistan, if BAL can make it possible the fast delivery of fund from abroad through online banking, it can cover the major market of Pakistan which still is capturing by ‘Hundi’. 4. Rapidly Growing Economy At present the Pakistan’s Economy is growing on a very fast pace. The rapid growth of economy has resulted in the increase in the growth rate of all economic sectors especially in the banking sector which is growing at a fastest speed than ever and in future the growth is expected to increase even a higher rate. 5. Increased Interest Rates FA10-MBA-130 Page 11
  12. 12. Bank Alfalah Limited The SBP has revised the interest policy and the interest rates have been linked with the KIBOR rates. Due to which the banks interest rate has been substantially increased which will greatly increase the banks’ profitability. 6. Mega Projects Financing As the increase in overall business activity in the country, the investors are launching various types of Mega Projects especially in housing and textile the bank has a great opportunity to finance these projects at very profitable term. 7. Huge Demand for Consumer Financing The increase in per capita income and overall economy has resulted into a great demand for the consumer financing especially for home finance and car financing and it is said that this trend will increase more in future. The bank can earn a lot by focusing on its consumer financing sections. 8. Growing Trend of Islamic Banking There is a very good growth trend in the Islamic banking in the country and in the world as well. BAL has the advantage of having full-fledged Islamic Banking network and the growth in this particular field can be very fruitful for the bank. 9. Spending Practices of Mass As the Pakistani’s are known for their extravagant practices, and to fulfill their funds requirements they don’t hesitate from getting loans from banks. Thus there is a very good scope for the bank to run successful business in such circumstances. 2.12.4 Threats for Bank Alfalah Limited 1. Political Influence First threat is that of political influence. Three boards of directors are of government. So that they can influence on the decisions of the BAL. FA10-MBA-130 Page 12
  13. 13. Bank Alfalah Limited 2. The Continuous Downfall in the Economy The biggest threat in the banking sector is the continuous downfall of the country economy since the last few years. If this downfall remains for more few years then it may be the great hindrance in achieving the Bank’s objectives. 3. Uncertainty of Economy Although the economy is growing at a good pace, but there are many factors which results in the uncertain position of the economy. Such as political uncertainty, increase in poverty etc. As a result there are permanent threats of future risks and losses for the bank. 4. High Rate of Inflation The inflation rate of the country has gone above the 10%. This can result into an unfavorable situation for the bank. And especially when the ownership of the bank is UAE based, the net spread for them can substantially decrease. 5. Trend of Mergers There is a trend of mergers among the banks to become prominent in the market and to get the maximum market share. This trend can result into the union of some leading banks which can give tough time to the bank and it will become difficult for the bank to compete with them. 6. Privatization of Banks Due to its privatization policy, the govt. is privatizing the state owned banks. The change in management may result in the increase in the efficiency and productivity of the banks. Thus it can become a threat for the bank. 7. Risk of Defaults As discussed earlier that there is a trend of launching mega projects in the country. And every one is involved in this trend without taking any measure for FA10-MBA-130 Page 13
  14. 14. Bank Alfalah Limited the successfulness of these projects. This can result into the failure of this project which can make it difficult for the banks to recover their funds from these defaulters. 8. New Private Banks are being Opened New Privates Bank coped with emerging new Technology of IT. 2.19.1 Branch Organization Structure HUB BRANCH MANAGER MANAGER OPERATIONS FA10-MBA-130 Page 14
  16. 16. Bank Alfalah Limited 3 INTERNSHIP EXPERIENCE: I have done internship at the Bank Alfalah limited Main Branch Jhelum. My internship was for the short span of time i.e. six weeks (July 04, 2011 To August 13, 2011). The tasks performed in the bank are as under: Names of Departments Where I Got Training During my stay at Bank Alfalah main branch I worked in the following departments:  Operations (clearing)  Customer Services  Account opening  Accounts  Car finance  Credits Their details are as follows: 3.1 INTERNSHIP EXPERIENCE FA10-MBA-130 Page 16
  17. 17. Bank Alfalah Limited 3.1.1 Clearing department It is one of the most important department for any Bank that not only pays but also collects cheques from the customers .In BAL main branch this department is run by Miss Anum Asif, who performs her duties with more concentration and devotion as a minor mistake can cause a big loss to the bank .All the work is performed through a “clearing house” Clearing House A place where all the reprensentives of all banks of a city get together to settle the arrangements of cheque receipts and payments. The advantages of clearing house are manifold. It prevents the cost and waste involved in collection each and every cheque and claim which a banker holds against another across the counter with all the danger of loss in the transit incumbent upon it. But now the task is performed by NIFT. (National Institutional Facilitation Technologies). NIFT is a joint venture between a consortium of six major banks and private sector. It is responsible for the establishment and management of automated clearinghouse facilities in Pakistan. NIFT is proactively involved in the modernization of payment systems in Pakistan. NIFT offers three types of services namely;  Local Clearing  Same Day Clearing  Intercity Clearing There are two types of clearing i.e.  Inward Clearing  Outward Clearing Many types of clearing stamps are used in the clearing department. Each stamp has its own significance. Mostly four clearing stamps are used. These are:  The Clearing Stamp FA10-MBA-130 Page 17
  18. 18. Bank Alfalah Limited  Stamp For Special Crossing  Stamp For Payee’s Account Credited  Stamp For Endorsement NIFT delivers Local Inward Cheques early in the morning usually within half an hour after opening of bank. After receiving the mail, the next step is to post them and debit the customer’s account. These are actually the cheques of the same cheque book that was issued by our branch. After it the clearing process starts. The process in which reserves or funds are transferred among banks to settle the accounts of cheques written on one account and deposited into another is called clearing process. Cheque clearing is the heart and sole of daily banking activity and the final step in the use of chequeable deposits as the medium of exchange for conducting transactions in the economy. NIFT also delivers local as well as intercity cheques for clearing process. The above mentioned same process is repeated after receiving NIFT inward intercity cheques. After posting these cheques, Signature Verified stamp is used to verify the customer’s signature. Inward Return If all formal requirement of the instruments(cheques, demand draft etc.) are fulfilled then bank debit the customer account in case of inward clearing but if anything is missing or not according to the prescribed procedures, the bank may return the instrument. This is known as Inward Return. There are number of reason for inward return e.g.  Insufficient Funds  Signature Differ  Post Dated Cheque  Amount In Words And In Figure Differs  Incorrect Date of Clearing Stamp etc. Inward Bills for Collection FA10-MBA-130 Page 18
  19. 19. Bank Alfalah Limited IBC means Inward Bills for Collection. IBC comes into existence due to OBC means Outward Bills for Collection. Outward Clearing In outward clearing we collect cheques from the customers and fill the cheque deposit slips. Then we handover the customer copy of the slip to the customer. If we receive cheque through mail then in such cases we destroy customer copy. Our outward clearing contains instruments that can be cleared via any of the following mode:  Local Clearing  Same Day Clearing  Intercity Clearing  Outward bills for collection In outward clearing we deliver instruments (e.g. cheques, demand drafts etc.) through NIFT to the other banks after doing proper stamping on these instruments. Most commonly used stamps are the following:  The Clearing Stamp  Stamp For Special Crossing  Stamp For Payee’s Account Credited  Stamp For Endorsement As NIFT is responsible for the establishment and management of automated clearinghouse facilities in Pakistan. NIFT offers three types of services namely;  Local Clearing  Same Day Clearing  Intercity Clearing We use Local Clearing if the instrument is of the same city or specific area e.g. since our branch is in Jhelum so the area that comes under Local Clearance is:  Jhelum  Dina  Saraialamgir  Mandibahuddin Etc. FA10-MBA-130 Page 19
  20. 20. Bank Alfalah Limited We use instrument of other banks in local clearing if a bank offers online clearing such as NIB, Silk bank, Standard Chartered, Faysal Bank etc. Same Day Clearing can be entertained only by those branches that are member are same day clearing service. And in the last Intercity Clearing is the most attractive offer of the NIFT. We use intercity clearing service if the instrument is of outside the city and the respective bank does not offer online clearing e.g. HBL, MCB, and NBP etc. If cheque is clear then we take charges from customer account and recover Federal Excise Duty as well. If the cheque is not cleared for any reason then we mark it as return before the day end. Outward Return In outward return the cheque is returned because of wrong presentation e.g. clearing stamp not affixed or wrong discharge given on the cheque etc. If the cheque is retuned for any other reason, then we inform the customer and deduct the cheque return charges. Most commonly reasons associated with outward return are as:  Insufficient Funds  Signature Differ  Post Dated Cheque  Mutilation not confirmed  Affects not cleared.  Amount In Words And In Figure Differs  Incorrect Date of Clearing Stamp etc. As there are two types of Bills for Collection i.e.  IBC (Inward Bills For Collection)  OBC (Outward Bills For Collection) We use OBC if the following conditions fulfill:  The payee branch is not member of NIFT intercity service  When there is heavy amount of instrument and bank wants to generate income It should be remembered that bank sends bills for collection solely at:  Risk and cost of beneficiaries FA10-MBA-130 Page 20
  21. 21. Bank Alfalah Limited  Are not liable if bills is dishonored  But are liable to either return the Dishonored Bills to the beneficiaries or pay them the proceeds. Functions of Clearing Department  To transfer, deliver, collect, clear the cheques received from customers of the branch.  After clearance of cheques post that amount in to the customer’s account.  Arranges the payment of cheques: arrange the payment of cheque drawn on the branch and given for collection to any other branch of Alfalah or any other members or sub members of the local clearing house.  Cheques drawn on collecting bank branch. It is sorted A/C wise, particulars, dates, and amount. Balance, check signatures, verified & passed on counter for posting in relevant A/C.  Cheques drawn on other banks. Crossed check by banks crossing stamps are sorted & dealt with through useful crossing process  Cheques drawn on collecting bank branches in the towns. As soon as cheque received, these are crossed with bank crossing stamp, sorted out branch wise & sent to concerned branch.  Clearing of securities  Clearing of dividends  Clearing of payments  Process of depositing and clearing cheques: When a customer comes and want to deposit the cheque a pay in slip is filled for him consist of all relevant information about account title, account number, amount of cheque, signatures of customer etc. The smaller portion of the pay in slip is handed over to the Depositor and the portion becomes the regular portion of a credit voucher. 3.1.2 Customer services FA10-MBA-130 Page 21
  22. 22. Bank Alfalah Limited Reception is one the place in bank where one can deal directly with customers. I spent the almost one week on reception under the supervision Sir Mujeeb on the reception. Sir Mujeeb is incharge of reception and DBMS (data base management system).during my stay this position, I learnt how to fill the different slips, mostly they were cash deposit slips, online slips, slips for credit card payments and for cheque deposit etc. Each type of slips has its own core requirements. I was also assigned the task of receiving mails and record them into the mail receiving register. As our Jhelum branch is a liability branch (a liability branch is one whose liability side of the balance sheet is heavy, because it mainly depend on receiving deposits, as a lot of customers relatives lives in foreign countries and they remit money from abroad) so lot of customers came for cash deposit. Apart from reception I was assigned a job which is computer oriented. In this job I have to scan daily vouchers of the bank (which include both cash as well as transfer vouchers).After scanning these vouchers, account number and slip number are given as input to the computer so that computer sorts them out. Reception is a place where sometimes lot of customers came immediately and sometime we remained free. So I learnt how to deal with customers during busy hours. 3.1.3 Account Opening Account Opening Account opening is the most important department of any Bank .It plays an important part in overall banking; it is the fundamental department for any bank that reflects the competence of any bank. Here in Account Opening Department I also spent one week under supervision of Miss Maria Pervaiz, she is CRO (Customer Relation Officer) and her co-worker Miss Hira Shahid.Firstly Miss Maria told me types of accounts that are opened in Bank Alfalah. These are as follows: FA10-MBA-130 Page 22
  23. 23. Bank Alfalah Limited Current Account, Saving Account, Royal Profit, And Alfalah Kamyab Karobar. All these accounts have different amount to open up each type of account and each account has different level of minimum balance to maintain such accounts. First of all I learnt how to fill up AOF (Account Opening Form). I filled up some AOF and listen to the customers. Every customer brought some new problem and Miss gave them suitable suggestions. This was very useful for me. in account opening department duties and responsibilities of the officers were as follows:  To activate dormant account  To deliver ATM Card to customers  To issue new cheque books  To receive orders for new cheque books  To prepare daily AML (Anti-Money Laundering) report  To prepare daily KYC(Know Your Customer) report Why accounts get Dormanted? If a customer does not withdraw cash from his/her account through cheque, ATM Card or any other way means if there is no debit transaction for period of over 6 months, his/her account get dormanted. 3.13.3 AML (Anti-Money Laundering) Report It is a system generated report. Anti-money laundering (AML) software is a type of computer program used by financial institutions to analyze customer data and detect suspicious transactions. Customers having transaction of Rs.1000000/- or above either debit or credit, are considered in this report, because at any time SBP can ask the BANKS that from where your customer has arranged this huge money or where he disposed off such money. KYC (Know Your Customer) KYC (Know Your Customer).Up to great extent it is similar to AML report, besides other things like personal information e.g. source of earning etc. are determined in KYC. FA10-MBA-130 Page 23
  24. 24. Bank Alfalah Limited Purpose of Account Opening The main purpose behind account opening for a bank is to increase the deposits of a branch .The more the deposits a bank gets, the more it has the opportunity to invest its money in long term and short term investments .So every bank tries to maximize its deposits Documents Required The following documents are submitted:  Account opening form: (provided by bank) includes the information about: type of account, nature of account, currency, client number, ownership. interest details, postal address, personal account ( saving / joint ) , personal information , business account , details of other banking relationships , account opening instructions ,smart card information , next of kin ,two signatures of customers are required .  Customer CNIC copy( provided by customer )  NIC authorization form ---by bank NADRA authorized  Business proof or photo copy of passport --- if you are salaried person then provide salaried slip ,appointment latter ,dealership, certificate form ,letter pad, visiting card  Signature card  Check book issuance slip  ATM issuance form ( optional )  Letter of thanks ( by bank) ---- delivered to customer’s home address along with bank stamp ,thanking him for opening account in branch  KYC ( know your customer) form ( by bank ) ---consist of information about risk rating sheet , related to individuals in Pakistan , FAQs , account type ,status , personal information , purpose of account . TYPES OF ACCOUNTS BAL offers the following type of accounts to its customers: FA10-MBA-130 Page 24
  25. 25. Bank Alfalah Limited  Current Account  PLS Savings  Royal Profit  Basic Banking  Alfalah Mahana Aamdan  Alfalah Kamyab Karobar  Term Deposit Customer Service Office In Bank Alfalah the functions of CRO are also performed by the account opening department and it is controlled by Miss Maria & Miss Hira .Who also performs the duties of CRO. Responsibilities of CRO The CRO of the main branch of Bank Alfalah Performs the following duties:  Filling of account opening form  Different amendments in accounts  Balance checking  Issuance of bank statements  Filling of deposit slip  Cheque filling  Issuing / reissuing of ATM card  Attending of customer calls  Locker  Cheque Books 3.1.4 Remittance and Foreign Remittance Remittance is the transfer of funds from one account to another .In Bank Alfalah this department is controlled by Sir. Adeel who performs his duties with attention, hard work and full devotion. Functions Performed By Remittance Department FA10-MBA-130 Page 25
  26. 26. Bank Alfalah Limited Remittance department of BAL branch performs the following functions: Pay Order A banker’s cheque (Pay Order) is another payment instrument which is used by the banks to settle payment obligations on behalf of their customers. This instrument is guaranteed by the bank for its full value and is similar to a demand draft. In practice, these instruments are payable at the branch of issue and are used for payment within the local clearing jurisdiction. Demand Draft A demand draft is a pre paid negotiable instrument, wherein the drawee bank undertakes to make payment in full when the instrument is presented by the payee for payment. The demand draft is made payable at a specified branch of a bank at a specified centre. In order to obtain payment, the beneficiary has to either present the instrument directly to the branch concerned or have it collected by his bank through the clearing mechanism. Clearance of DD An officer must write his P.A No. while putting his signature on DD/ pay order. When DD is made, an advice of the same DD is sent to the branch at which DD is drawn, after receiving the advice the drawee branch credit the customer account on presentation of original DD. The drawee branch matches the signature and P.A No. by comparing it with the book in which specimen of signature along with their attorney number is given book. Foreign Remittance Foreign remittance from abroad come in our bank through money gram. In money gram customers come with some reference code along with their original CNIC. After the screening of all the facts, the process of posting begins which completes after the signature of a senior officer operation. So in this way the process completes, and then customer can withdraw his cash from the counter. Miss also told me about demand draft and pay orders. DD is made when payment is to be made to a person who is outside the city, while pay order are made for payment within the city. FA10-MBA-130 Page 26
  27. 27. Bank Alfalah Limited 3.1.5 Credit / Advances Credit / advance department is the most important department of BAL as is also an important source of earnings for the bank in the form of interest income. Credit department deals with providing different types of loans to the customers and business entities. By providing loan the bank requires some security or mortgage after assessing the creditworthiness of a customer. The loan can only be granted if the customer fulfills all the bank requirements. There are mainly three types of loans:  Personal loans  Loans to SME’s  Agricultural loans The five Principals of Credit are used for ascertaining the financial position of a person/entity .These is called the 5 C’s Of Credit The Five C's of Credit Their details are as follows: Money lenders are always looking for the best clients to lend their money to. But what sorts of things do they look for in a company? This is where the 5 C's of Credit comes in - character, capacity, capital, conditions, and collateral. Character The character is the client's reputation and reliability. Capacity Is your company able to repay the amount borrowed? Your company's cash flow will be reviewed, and how you intend to repay the loan is established. Payment history and records on other credit relations will be looked at and considered. These include both personal and commercial. Capital how much money have you invested into your business? The amount of your FA10-MBA-130 Page 27
  28. 28. Bank Alfalah Limited own money put into the company portrays a message of confidence and trust. Conditions How well is your business currently faring? What will the loan be used for? Is it for equipment, expansion, or just for financial security? Things such as the economy, competition, and customer base are noted. Collateral If for some reason you cannot provide repayment, collateral will be a secondary source of repayment. Collateral can include things such as inventory, equipment, real estate, stocks, accounts receivable, etc. Usually a signed contract is needed as a guarantee. All these are ascertained before giving loan to any party. Procedure for Loan First of all an offer is made to customer. If customer gives acceptance then BBF (Borrower Basic Facts) sheet is maintained. After obtaining all the required data, CLP (Credit Line Proposal) is made. These loans are disbursed against some security. After fulfilling all the requirements, the case is then forwarded to the Area Office for final approval. In addition to the primary security collateral security is also pledged. A Collateral Security is defined as’ When the Lender feels, the security provided by the Borrower is not sufficient or it may be difficult to recover the dues smoothly, the Lender may ask for additional security to be provided by the Borrower himself or other on behalf of the Borrower. In case if any dispute or failure to discharge the loan by the Borrower, the collateral securities will come in hand to service and recover the loan/debt.  Personal Loan Personal loan can be enjoyed by offering Fixed Deposit or Defense Saving Certificate as security. The bank pledge these security and give credit to the customer account up to 90% of the market value of such security.  Agricultural Loan These loans are given against cultivated land. FA10-MBA-130 Page 28
  29. 29. Bank Alfalah Limited  Loan to SME Loan to SME is the most complicated task as it requires lot of documentation and to update stock report, and ratio analysis of the borrower’s business income statement and balance sheet etc. 3.1.6 Car Finance Mr. Rashid Zubair is Credit Officer. He deals in Car Financing and Corporate Finance. The procedure of leasing a car is similar to that of advances. Here the concept of 5 C’s also applied. Car finance is a simple Hire Purchase Agreement. It contains the complete schedule of payments to be made by customer of car leasing. These installments include the Principal Amount and the Amount of Mark Up and Registration Charges etc. to be paid by customer. Bank Alfalah usually offers two standard plans for car leasing; i.e.  3 year plan  5 year plan However the customers may ask for customized plan. The customers have to pay minimum 20% down payment and rest in installments with mark up. Procedure of Car Finance Since it is a type of loan so the same criteria is used to test the credibility of customers i.e. 5 C’s. After the accomplishment of this basic information about customer, the case is referred to Area Office, then if the Area Office givers Approval then legal documents are prepared by the respective officer. The purpose of maintaining these legal documents is that if the customers at any time intentionally or unintentionally do not pay installments in time, the bank can enforce the customer by law and can repossess the asset. Mr. Fawad who also deals in car leasing told me some issues pertaining to the clearance of the Car Leasing Process. After the clearance of all the FA10-MBA-130 Page 29
  30. 30. Bank Alfalah Limited installments, mark up and late payment charges, penalty if any etc. then NOC is issued from Lahore branch and it is to be delivered to customer. Having received the NOC the customer become the real owner of the car and after this bank has no more right to repossess the car. So in this way the whole process of car leasing takes place. 3.2 LEARNING AS A STUDENT INTERN 3.2.1 Duties and Accomplishment: My duties at the bank were of different types. I was rotated in different departments in different weeks, so that I could get the exposure of different tasks in a bank. But my duties were always supervised by the employees of BAL so that I do not make any major mistake, as I was an internee and didn’t go through the training of three months, as all the employees of BAL get before joining the bank. But still I had to deal with all the matters of the bank under their supervision. My duties are mentioned as follows.  Customer Services  Account opening  Car finance  Operations (clearing)  Accounts  Credits 3.2.2 New Knowledge Acquired It was really a great experience for me to work in the practical scenario because before this internship training I was not aware at all that how the work is actually done in the organizations. The bank in which I have done internship is basically a consumer bank providing facilities of consumer and business loans. They are not dealing with imports and exports. The working environment of bank was very friendly and cooperative all the seniors really helped me whenever I asked about anything. In the beginning I assigned the job of filling different types of slips which include slips for cash deposit, FA10-MBA-130 Page 30
  31. 31. Bank Alfalah Limited cheque deposit, slips for online transfer of money, credit card payment slips etc. In addition to this I learnt the process of granting loan to the customer which really requires huge documentation and procedure of car financing. The most important of all is clearance of cheques; I leant about different types of cheques and stamps. Every stamp has a unique purpose. I also learnt how to open an account and the requirement of opening an account along with other things such as KYC Report and AML Report. 3.2.3 How Experience Impacts My Career By doing internship for six weeks in Bank Alfalah limited I have gained a lot of practical experience of doing work, which was really different from the experience of student life. By doing internship I really gained the knowledge of banking sector, which I didn’t found so easy, I have learnt the meaning of responsibility, time management, and professionalism. Because of this experience now I can decide well that should I opt to join banking field or should go for another one. The real thing which I gained by doing this internship was the confidence and knowledge, the confidence and knowledge which we gain from our student life is far more different from this one, because whenever I used to talk or deal with those bankers who are in banking sector from more than a decade they used to give me a lot of knowledge to deal with daily routine matters of banking sector. Whenever I used to interact with such highly professional bankers, I used to hesitate in the beginning but with the passage of time I also gained that much confidence and a little knowledge that I could interact with them more sense ably. In the beginning really it was very difficult for me to interact and work with such formal people in such a formal environment but as I said that I really leant to work with them and talk to them with the passage of time and now I think I will not find any difficulty in at least understanding the environment of organizations and offices when I will start my job in nearby future. I also feel that I have also understood the basic culture and FA10-MBA-130 Page 31
  32. 32. Bank Alfalah Limited environment of professional life which is very important to understand for doing any kind of job. Now I really feel that the knowledge which I got by working n BAL for six weeks will be really helpful to me in future, as I have got the experience of General banking during my student life in my vacations from university. This experience will also help me in getting a good job in near future because now at least I have some experience of work. 3.2.4 Problems Encountered During my internship at Bank Alfalah I faced some problems. First of all in the beginning the bank staff did not trust in me, because I was a stranger for them. Every bank has its own secrets so they do not allow internes to see highly confidential documents. Secondly some of their valuable customers used to make feel internees and some junior staff that you are just internes and bank staff so they did not respect us. Thirdly some of the bank officers used to give internees the work of office boys instead of giving some technical work related to our studies. Chapter 4 FINDINGS, RECOMMENDATIONS AND CONCLUSION FA10-MBA-130 Page 32
  33. 33. Bank Alfalah Limited 4 FINDINGS, RECOMMENDATIONS AND CONCLUSION In the current scenario of globalization, perfect competition in banking sector and slump in the word’s economy, when we study the performance of BAL, it is considered that on the whole the bank is contributing a lot towards the industrial development and capital formation in the country. All these reflect the great and valuable efforts on the part of executive command of the bank. But as it is said that nothing is perfect in this world, this might true in the case of BAL too. So far as my own observations are concerned, I have concluded major drawbacks in the inner current banking system. In addition to that I have also learnt some disciplinary wrong practices; I discuss these one by one. 4.1 1. Findings No proper guidance FA10-MBA-130 Page 33
  34. 34. Bank Alfalah Limited There are so many customers both literate and illiterate who even do not know to fill cheque, pay in slips, application forms, etc. They fritter a lot of precious time of the bank staff. 2. Lengthy Procedure The book keeping system and filing system of the bank is so lengthy, ring and time consuming that its output is adversely affected. There is an element of sluggishness associated with it too. 3. No Equality in Attitude The behavior of almost all the bankers with all of their customers is not the same; they pay more attention and good services to some of the customers and neglect a major portion of them. Some of the customers approach to the bank officials and get their work done before others. It is definitely not good practice. 4. Favoritism No doubt that bank enhances credit and finance facilities to persons and parties seeking such financial assistance for the establishment of industries or trading units, or for enhancement, of already existing projects. But the bank provides who may also ensure the prepayment of amount advanced by providing securities arrangements to comer the risk of non-repayment. Exactly, the bank should do so because later on when the question of repayment of debt arise the condition of being financially sound providing securities only can satisfy this question. Sometimes, some person or group of persons chalk out a very useful, sound and successful plan goes to the bank and request to advance them credit facility but are not financially being sound and having no arrangement of securities. So the bank rejects application of such people. In this way, such talented persons of country discouraged. This happens usually due to favoritism, nepotism and red–tapism. 4.2 1. Recommendations Effective Advertisement FA10-MBA-130 Page 34
  35. 35. Bank Alfalah Limited The bank really lacks a sound advertisement, which could attract more and more people, and should not rest upon existing customers. The bank should launch luring advertising campaigns throughout the year to promote habit of saving in the people and to attract and sustain new deposits. 2. Proper Planning Bank should make a plan to accelerate its recover efforts on war footing and re-organize the recovery function on global basis. In addition to this, bank should tighten up control on expenditures, curtail extra lavishness and costs. Risky schemes should avoid in which return is uncertain. Right people for right job must be appointed. 3. Division of Labor If bank wants to get specialized in every walk of banking field then there must be division of labor to eliminate extra and un-necessary burden on the employee of the bank. Working conditions must be improved resulting in enhancement of efficiency of employee. 4. Check On Expenditures Un-necessary and non-productive expenditures must be controlled and cutdown. Lavishness and extra-ordinary protocol for the entertainment of executives should be curtailed and abolished. 5. Proper Guidance Bank should adopt such an induction plan that when a customer opens his account with the bank he should be supplied with a booklet written in simple language which enables him to know the procedure of filling the cheques, pay in-slips, etc. It will save a lot of the bank‘s staff precious time during the conduct of banking business and also ease the customers. 6. Recruitment Procedure There should be an open invitation to competitive and qualified professional degree holders and young energetic blood purely on merit basis to get the efficient and hardworking employee. Political pressures, influential approaches should be accommodated. 7. Qualitative Advancing /Financing FA10-MBA-130 Page 35
  36. 36. Bank Alfalah Limited The bank should avoid as much as possible to give loans to the politicians, ministers and corrupt people or groups because recovery of loan is almost impossible for them. The honest and deserving industrialist will always repay the loan before time to maintain his reputation and credit standing in the eyes of bank. 8. Job Rotation Most of the bank employees are sticking to one seat only, with the result that they become master of one particular job and loose their grip on other banking operations. In my opinion all the employees should have regular job experience through job rotation. The promotion policy should be adjusted. 4.3 Conclusion Bank Alfalah limited, no doubt, doing well in the field of banking and it is aimed to provide better services to its customers. It is specially performing its activities in the customer advances. It has a lot of potential to progress in future. The bank can do the good job of opening branches in the rural areas that will not only boost saving but also help the people to raise their standard of living through these savings. The staff in the bank is found to be very cooperative towards subordinates. I wish that the bank may progress by leaps and bound, and keep on providing internship to students with the same dedication. This internship will help me a lot for my future career plan as I got a lot of experience and knowledge in the relevant field. FA10-MBA-130 Page 36
  37. 37. Bank Alfalah Limited Bibliography   Interviews with Bank Staff, particularly with Ms.Anum Asif (Officer Operations) and Mr.Adil Shazad (Credit Officer).  Annual Report of Bank Alfalah 2010  Bank Alfalah Limited Notes      qid=20100309102056AAB7ZQk   FA10-MBA-130 Page 37