Mbff13 m 018

Internship Report Bank Alfalah Limited
INTERNSHIP REPORT
ON
BANK ALFALAH LIMITED
SUBMITTED BY:
TAHIR LATIF SHEIKH
MBFF13M018
MBA 3.5, (Finance)
Session: 2013-2017
UNIVERSITY OF SARGODHA
DEPARTMENTOF BUSINESS ADMINISTRATION

Contents
Executive summary...........................................................................................3
Organization history and introduction .............................................................4
Vision Statement of Bank Alfalah.....................................................................6
Mission statement ............................................................................................6
Values.............................................................................................................6
Objectives .......................................................................................................6
Products and services of Bank Alfalah ..............................................................7
Financial performance of Bank Alfalah............................................................8
Branch profile where I worked.........................................................................9
Branch Hierarchy.............................................................................................9
Overview of different departments and working as internee..........................12
Account opening department ..........................................................................12
Remittance Department..................................................................................16
Clearing department.......................................................................................17
Cash department ............................................................................................19
Learning during internship.............................................................................21
Application of class room learning in Bank Alfalah Limited..........................22
Recommendations...........................................................................................23

Executive summary
In Masters of Business Administration, Internship Program is an important part to
give students an opportunity to have experience of practical field. The purpose of
this program is to acquaint the students with practical applications of theoretical
concepts taught to them during conduct of their MBA program. It equips us with
the necessary knowledge, skills and values of business culture which helps us to
perform professionally as we get first step in our practical life.
I was lucky enough to avail this chance of doing an internship at Bank Alfalah Ltd
Eid Gah road Branch. This duration of internship was 2 months. During the
training I was introduced to the functioning of different departments operating in
the branch. This report discusses the overview of my internship organization. It
illustrates the history of Bank Alfalah, detailed information about the bank's
accounts, clearing department, remittances etc. It contains the information that I
was able to gather and understand regarding the activities of the bank.
I have discussed all the departments and learning that I have got there. During this
internship I got a chance to get an idea about the practical working of different
departments. In account opening department I have learnt about the different types
of accounts as well as account opening procedure. In clearing department I got the
knowledge about different types of clearing. In remittance department I learned
about different types of remittance.
I apply the class room learning in bank which shows the application of bookish
concept in practical work. I have also identified the problems that are faced by the
branch. Then I have given some suggestion and recommendations to improve the
overall working of the bank. This report is prepared in simple and understandable
format so, that ordinary person can also take benefit from this report. This report
will provide a better and brief learning about Bank Alfalah Limited.

Organization history and introduction
Bank Alfalah Limited is a private bank in Pakistan owned by the Abu Dhabi
Group. Bank Alfalah was incorporated on June 21, 1997 as a public limited
company under the Companies Ordinance 1984. Its banking operations
commenced from November 1, 1997. The bank is engaged in commercial banking
and related services as defined in the Banking companies ordinance, 1962. Bank
Alfalah is the 5th largest bank of Pakistan
The roots of the bank go back to the Bank of Credit and Commerce International
(BCCI), which was closed down due to various allegations. The Pakistan
operations of BCCI were taken over by State Bank of Pakistan and nationalized to
safeguard the consumer interests, under a new identity of HCEB or 'Habib Credit
and Exchange Bank'. In 1997, the bank was privatized and taken over by 'Abu
Dhabi Group' of UAE, with a new identity of 'Bank Alfalah Limited'. The
management of the bank had implemented strategies and policies so the bank
would become a major player in the market. With a partnership with the Abu
Dhabi Group the position of the bank became stronger which allowed the bank to
invest more in technology to increase its range of products and services
Bank Alfalah conducts business through a network of more than 650 branches
across 200 cities in Pakistan with international presence in Afghanistan,
Bangladesh and Bahrain and the representative offices in UAE.
The management of the bank is committed to strengthen its bond of trust with its
customers and provide them with uninterrupted services. The management of the
bank strives to serve its customers with the products and services according to their
requirements. Bank Alfalah Limited provides a winning combination of products
and services to its prime customers. It is one of the country’s leading banks in
private sector, which ensures complete security, and reliability in all-financial

transactions. The bank is serving the people at high level of standard by going
according to the wishes of the customers
There is an interesting attribute of bank Alfalah which is its Islamic banking
branches throughout the country. Thus in addition to that conventional banking
practices it offers Islamic banking branches to its customers. Hence Bank Alfalah
has two types of branches in Pakistan.
1- Conventional Banking Branches
2- Islamic Branches
Bank Alfalah Limited
Type Private
Industry Banking Capital market
Founded June 21, 1997 Karachi
Headquarters Principal Office, Karachi Pakistan
Key people H.H. Sheikh Hamdan Bin Mubarak Al Nahayan
(Chairman)
Products Loans, credit cards, Savings, Consumer Banking etc.

Vision Statement of Bank Alfalah
“To inspire and empower people to do things differently, and shape their own path
in life and business”.
Mission statement
We look at the market with fresh eyes to find new opportunities, seek new ways of
enabling our customers to succeed and advance the world of finance
Values
 We always put the customer and their needs front and Centre.
 We do all we can to understand and anticipate what will help our customers
find their own way and achieve their ambitions.
 We do things differently, challenging the status quo to find new and better
ways to move ourselves and our customers forward.
 We always act with integrity and transparency in everything we do. It is the
cornerstone of our business and brand.
Objectives
 To please customers by fulfilling the financial needs as best as possible,
Bank Alfalah Limited believes in placing the client at the center of business
and all of the products and services. For this the management has adopted
the strategy of “Caring for you… Our Customers”
Revenue PKR 70.299 billion (2015)
Net income PKR7.523 billion (2015)
Number of employees 7,915 (2015)
Website www.bankalfalah.com

 To create an efficient system of banking in Pakistan
 To get maximum share of the market
 To price the products optimally
 To expand more the network of branches in several other cities of Pakistan
as well as in the other countries of the world.
 To reinforce a corporate culture that fosters learning, creativity and
flexibility
 Delivering every service and product under one roof.
Products and services of Bank Alfalah
Bank provides Financial Services to customers, corporations, institutions and
government through broad spectrum of product and services ,including corporate
and investment banking, consumer banking and credit, securities brokerage
commercial ,SME, agri-finances, Islamic and asset financing.
Credit ratings
PACRA, a premier rating agency of the country, has rated the Bank ‘AA’ (double
A) Entity Rating for the Long-term and A1+ (A one plus) for the Short-term, and
the Outlook for the Bank as per the latest rating report has been improved to
Positive from Stable previously. These ratings denote a very low expectation of
credit risk, strong capacity for timely payment of financial commitments in the
long term and the highest capacity for timely repayment in the short term,
respectively. The unsecured subordinated debt (Term Finance Certificates) of the
Bank has been awarded a credit rating of AA- (double A minus).

Financial performance of Bank Alfalah
The Bank’s Balance Sheet indicated a growth of 21 percent, with total assets
reported at Rs. 902,608 million at year end 2015. The Bank’s profit before taxation
for the year increased by 48 percent to Rs. 12,604 million as compared to Rs. 8,514
million last year. The Bank has solidified its position by actively building a
portfolio of high yielding assets, as is evident from the growth in the balance sheet,
while maintaining core deposits and careful monitoring of its borrowing position.
Basic earnings per share were reported at Rs. 4.73. The Bank managed to increase
its deposit base by 6 percent to Rs. 640,189 million. Net Advances have grown by

13 percent to Rs. 327,298 million at 31 December 2015 as compared to Rs.
290,597 million recorded at last year end. At the year end, our Gross advances to
deposits ratio stands at 54 percent. Net Investments level has increased by 22
percent to Rs. 397,097 million.
Branch profile where I worked
Branch name: Bank Alfalah Limited
Branch address: Eid Gah road Sargodha
Branch code: 0327
Branch division: conventional banking
No of employees: 11
Telephone number: 048-3710270-71
Branch Hierarchy
Branch
Manager
m
Counter
service officer
TellerAccount
opening officer
Operational
manager
Document
management
specialist
Business
development
officer

Branch manager
 A branch manager is an executive who oversees a division or office of a
large business or organization, operating locally or with a particular
function.
 The Branch Manager is responsible for the administration and efficient daily
operation of a full service branch office, including operations, lending,
product sales, customer service, and security and safety in accordance with
the Bank's objectives
Operational manager
 A person in charge of the planning and execution of the routine functions
and activities of an organization.
 The Operations Manager oversees all data processing activities supporting
the deposit servicing and lending functions of a bank.
 The Operations Manager has responsibility for assuring that branch office
computer systems are running smoothly and that customers receive proper
credit for deposits to a checking or savings account.
Counter service officer
 The Customer Service officer is a first point of contact for customers.
 The primary role of a Counter Service Officer within the team is to respond
to a variety of customer requests and inquiries via the telephone or in person
over the counter.
Teller
 An employee who handles the financial transactions of a bank. In most
situations, a cashier works directly at a cash register, ringing up the
customer's purchases and collecting their payment.

 The first duty of cashier is to greet the customers entering into organization
 Receive payment by cash, cheques, credit card etc.
Account opening officer
 An employee who is responsible for opening new accounts.
 He also ensures the security and confidentiality of new accounts
 He must be familiar with different types of accounts, fee structures,
customer benefits, interest rates on savings etc.
Business development officer
 An employee whose responsibility is to identify and build a rapport with
potential clients.
 He is responsible for developing the banking business for the
particular bank he is employed by.
 He is responsible for producing growth in income by selling business
products and services, and development of relationships with referral
sources.
Document management specialist
 DMS is responsible for control, security, accessibility, and timeliness of
organizational documents which allows organizations to capture, store,
retrieve, share, and destroy electronic records and documents.
 They manage a variety of documents and perform a variety of tasks,
including document organization, storage, providing access and creating
templates.

Overview of different departments and working
as internee
I worked in different departments during this two month period of internship. I was
not given access to the cash department but I was taught about the working of cash
department that’s why I included the functioning of cash department.
I worked in general banking departments given below:
 Account opening department
 Cash department
 Remittance department
 Clearing department
Account opening department
There is a contractual relationship between “a Bank” and “a Client” and opening of
an account with the bank is the first step of this contract. BAL chooses its clients
very carefully as it believes that good clientele is at the heart of good business.
Before opening an account the bank make an inquiry about customer’s identity,
address and source of his income etc. This process is called “know your
customers” also known as “customers due diligence”. Enhanced due diligence
(Edd) is the next step of this process which includes an ongoing verification and
updating customers records if necessary.
Procedure of Account Opening
For opening all types of account the procedure is given below:
 Copyof CNIC as well as Sourceof income (pay slip, business proof) should
be obtained for customers due diligence (kyc)
 Filling of account opening form
 Two signature specimen card (SSC).

 One cheque book requisition form.
 One form signed by the customer that his or her sign is other than English.
 If customer’s signature is different from that of CNIC then one form is
signed for undertaking that his or her sign is different from CNIC.
 One ssc is send to the head office. And one is scanned by the branch when
customer sign on any document then first of all it is verified by the branch.
Complete form is send to the head office if there is any mistake the head office
show discrepancy in through mail. The bank Alfalah has centralized system. That’s
why it is also shown to the area manager and also to the branch manager. If all the
documents are correct then firstly the letter of thanks is send at customer’s address
and then after the six days the cheque book is received by the branch and the
customer come with the letter of thanks and take his or her check book. The bank
takes sign at the first page of check for record.
Verification of Documents and Issuance of Account Number
The documents provided by the account opener are verified by the department
head. In Bank Alfalah this verification is done by the cash and deposit department
head. The signatures are also verified and a signature card is maintained for the
purpose of future verification if required. The account is then entered into the
bank's system and processed for getting the account number and the customer
number.
Issuance of Cheque Book
After opening of account a letter of thanks is sent by head office at customer’s
address. This letter of thanks customer brings at bank and hand over to account
opening in charge and cheque book is issued to customer.

Recording of Alterations and Additions
In case of any alteration the account opening officer is required to update the
customer’s account. The updating is required in the following cases
 Change of address
 Addition of signatories and attorneys
 Change in signatures
 Changes in any required documents
Account Closing
It is the second function of this department. For closing an account the customer is
required to
 Submit a signed account closure request
 Surrender the cheque book with the bank
The account opening officer gets an annexure (given on next page) approved by all
the departments and then closes the account. This is a sort of clearance from all the
departments. The cheque book is then destroyed. Account closed log file is printed
in order to complete the process of closing an account. In the end the account
opening form is filed in the closed accounts file.
Types of accounts
Branch offers the following accounts to their customers.
Simple current account
 Minimum monthly balance requirement of Rs. 5,000 only
 Account opening requirement of Rs. 1,000
 First Cheque book free
 No restriction on number of monthly deposit or withdrawal transactions

 Easy access to funds through cheque book and VISA Debit/ATM Card that
can be used globally at over 30 million outlets and at more than 2 million
ATMs.
 Free within city online banking across Bank Alfalah branch
Alfalah kamyab karobar account
Maintain Rs. 25,000 monthly average balance and avail:
 Free Cheque Books
 Free Pay Orders and Demand Drafts
 Free SMS on every transaction
 Free (Issuance & Annual Fee) Alfalah Debit Card (Visa) accepted at over 30
million outlets and 2 million ATMs worldwide
 Free online transaction (including funds transfer, cash withdrawals &
deposits) within Bank Alfalah branches nationwide
 Free cash withdrawals from any Bank Alfalah ATM
Saving account
 Open with an initial deposit of Rs 100 only
 No monthly minimum balance requirement
 Profit is calculated on the average balance
 Profit is paid semi-annually
 No restriction on number of monthly deposit or withdrawal transactions
Term deposit account
 Fixed deposit product in PKR Currency
 No minimum amount of placement
 Amount can be placed for 1 month, 3 months, 6 months, 1 year, 2 years, 3
years, 4 years and 5 years.

 Options of profit payment at maturity, monthly, quarterly, semi-annually and
annually
Remittance Department
Remittance means the transfer of funds form one account to another or one city to
other city. Instruments which are used for transfer of money are
 Demand Draft
 Pay order
These are also called banker’s cheques or bank draft and cannot be bounced.
A banker's cheque is a cheque provided to a customer of a bank or acquired from a
bank for remittance purposes.
A normal cheque represents an instruction to transfer a sum of money from the
drawer's account to the payee's account. However, it is impossible to predict when
the cheque will be deposited after it is drawn. Because the funds represented by a
cheque are not transferred until the cheque is deposited and cleared, it is possible
the drawer's account may not have sufficient funds to honor the cheque when the
transfer finally occurs. This dishonored or 'bounced' cheque is now worthless and
the payee receives no money, which is why cheques are less secure than cash.
By contrast, when an individual requests a banker's draft they must immediately
transfer the amount of the draft from their own account to the bank's account.
Because the funds of a banker's draft have already been transferred they are proven
to be available, the draft will be honored
Demand Draft
It’s a negotiable instrument. DD is used to transfer money by an individual from
one city to another person in a different city. A draft is a Cheque drawn by a bank
on its own branch or any other branch of another bank at a different place
requesting it to pay on demand a specified amount of money which is already

received to the person named on it.DD cannot be issued within the same city. DD
(Demand Draft) open on customer demand, when someone wants to pay another
person out of city but there must be Bank Alfalah Branch where DD can be drawn.
Branch is liable to pay where it is drawn.
Pay order
Pay order is an instrument used to make payment within the same city. A person
may want to submit a pay order when he or she wants to pay someone or a
company without the use of a personal check. A pay order is sometimes more
reliable than a personal check because it is nearly always negotiable by the payer,
the third party and the bank. It is used for local transfer of money from one person
to another person. Pay order are more liquid as compared to cheques because
cheques may be dishonored while PO can’t be. General concept about Pay order is
that it is used when pay within the city. It is crossed by default. It’s non-negotiable
instrument.
Clearing department
In clearing the customer who is maintaining the account in Bank Alfalah can
present the cheque of any other bank like the customer presenting the cheques of
MCB Satellite town branch. So instead of going to the MCB satellite town branch
the customer presents it to the Bank Alfalah , CSO put the stamps on the cheque
enter it into the record put the scroll number then send it into the clearing, then this
cheque goes to the MCB, if all obligations are fulfilled like balance, signature all
are clear then MCB clear the cheque and send through the clearing to Bank Alfalah
where staff gives the credit to the customer and if cheque is returned because of
any reason like signatures are not correct or if there is no balance then customer is
charged Rs 200.

The procedure of clearing is facilitated by NIFT (national institution of facilitation
technologies). Clearing procedure require 1 day for completion.
NIFT: It is an institute which performs activities for clearing and collections. This
is institute created by the government. The branch of NIFT is situating at high
street Sahiwal. All the external functions of clearing are carried by NIFT (National
Institute of Facilitation Technology) while the internal operations are performed by
clearing department. NIFT is providing tremendous facilitation having error rate of
0.3%. It is just like any courier service which takes the cheques of other banks and
delivers the cheques of that branch to it.
Types of Clearing
There are four types of clearing:-
a. Inward Clearing
b. Outward Clearing
c. Intercity Clearing
d. Same Day Clearing
Inward Clearing
Inward clearing means cheques received by the bank from other banks. For
example Cheques and other negotiable instruments which are drawn on bank
Alfalah, sent by other banks, constitute the inward clearing of Bank Alfalah. After
having all the necessary stamps and dates of cheques confirmed, the concerned
drawer’s accounts are debited in Bank Alfalah limited.
Outward Clearing
Outward clearing means the cheques sent for collection .When cheques and other
negotiable instruments drawn upon other banks like UBL Bank, MCB, or ABL are
presented in Bank Alfalah to deposit them in the respective payee’s accounts, these
instruments are lodged in outward clearing of Bank Alfalah.

Consideration for inward and outward clearing process
Following things must be checked for inward clearing and must be ensured to
prevent return during outward clearing process:
 The name of the branch appears on its face where it is drawn.
 Amount in words and figures should not differ.
 Signature of the drawer appears on the face of the instrument.
 Instrument is not mutilated.
 There should be no material alteration, if so, it should be properly
authenticated.
 If order instrument suitably endorsed and the last endorsee’s
account being credited.
Intercity clearing
Intercity clearing includes those cheques that are drawn on the bank Alfalah
branches from different cities of the country. Inward clearing that is outside the
city is called intercity inward clearing. Outward clearing that is outside the city is
called intercity outward clearing.
Same day clearing
Clearing of cheques which occurs in one day is called same day clearing.
Presentation and clearing of cheques is carried out in the same day. But there is a
condition under which a customer can use the facility of same day clearing and that
is, cheque should be more than Rs.100,000 otherwise a person can’t use the facility
of same day clearing.
Cash department
Cash department of work operated under operations department. This department
is given the complete responsibility of cash. It is also responsible for the book

keeping of these transactions and the safe custody of cash. All counters are dealing
at the same time in deposits, withdraw and online transaction processes.
This department performs the main function.
 Cash receipts
 Cash payments
Cash Receipts
In cash department, depositors use deposit slip for depositing the
amount into their accounts. The officer checks if the deposit slip is properly filled
up containing title of account, A/C number date and amount in words and figures.
Cash is received by cash receiving officer, twice counted and matched with the
deposit slip. The cash details are written on the deposit slip and are also entered in
computer software called “Temenos”.
Cash received stamp is affixed on the face of the deposit slip along with the
signature of the cash receiving officer. Deposit slip is forward to the officer in the
cash department. Again proper scrutiny is made by the officer cash department
both on cash receipt and Temenos software. Officer cash department sign the
deposit slip and finally approved the transaction on Temenos. Deposit slip is
credited and posted in the concerned accounted in the system.
Cash Payments of Cheque
All three counters deal with cash payments. The process for payment of cheques
local and foreign currency is same. First the cheque is presented by the customer or
holder to cash payment officer. He confirms that it is drawn on the same branch
and the particulars of cheque are properly filled in. Two signatures of the holder
are taken on the back of the cheque. Officer checks the date, amount in words and
amount in figures, payee’s name, crossing if any, account number, cheque serial
number, any material alterations / endorsements and signature of the customer.

Account is debited in Temenos and then cheque is cancelled by the officer. It is
posted in the system and posting stamp and number is affixed on it. At the end
officer hands over cash to client.
Learning during internship
In this section I am going to summarize the learning during the period of
internship.
Account opening department: I have learnt about the working of different
department. I have learnt the account opening procedure. I have known the purpose
of customers due diligence. I got knowledge about types of accounts, benefits of
each of these accounts and the balance requirement for each type of account.
Branch offers different types of accounts to its customers.
Remittance department: I have learnt the functions of remittance department,
need for remittance and different types of remittances, pay order and demand draft
etc. I was taught the difference between pay order and demand draft. I have also
known that banker’s cheques are different from normal cheques. These are safer
than normal cheques and are used for legal payment such as payment of property.
Clearing Department: I learnt the working of clearing department. When cheques
of different banks are presented in bank Alfalah then clearing department performs
the internal functions of clearing. Different stamps (clearing stamp, special
crossing, payee account credited) are posted on the cheque which is to be sent for
clearing. I got knowledge about different types of clearing such as inward clearing,
outward clearing, intercity clearing and same day clearing.
Cash Department: I was taught the functions of cash department. Cash
department performs the function of cash receipt and payment of cheques. I filled
the cash and cheque depositslips which are used for depositing cash and cheques. I

filled online cash and cheque transfer slips which are used when amount is to be
sent from one account to other account.
I have also seen the application of bookish concepts in bank Alfalah, detail of
which is given below.
Application of class room learning in Bank
Alfalah Limited
I have done the two months internship in BAL branch at Eid Gah road during this
period I have learned many new things and also seen the applicability of the
bookish concept and terminology in the bank. I have seen how the class room
learning can be applied to the particle work.
 Business communication helps in dealing with the customers to satisfy them
and heading their complaints.
 Psychology helps to understand the mentality and the behavior of the
customers.
 Sociology also helps to create the affliction with the customers.
 Subject of management help me to learn about the culture of the bank
management style and decision making rules.
 Subject of money and banking helps me to learn a lot of things about the
bank such as types of cheques, bouncing of cheques, types of customer and
form of money.
 Economics helps me to learn about the interest rate and government
regulations about the banks.
 Subject of organizational behavior helps to see the organizational ethics and
how to behave with the employees and customers in ethical manner.

Recommendations
During my internship I found some of the faults and lack of some of the
facilities in bank’s operations. Here are some of the suggestions which I
recommend to the Bank Alfalah.
 The advertising of bank and bank’s products is not so much good and
exposed to people. So, Bank should hire some of the skilled marketers who
can design creative and attractive advertisements and advertising campaigns
by using all possible Medias to make every person aware of the bank’s
updates about old and new products and services.
 Training sessions of bank employees of all over the country are conducted
by bank at Head Office Karachi which is very expensive for the bank to bear
the accommodation and meal charges of the employees. So bank should
expand and establish some more training centers in other cities of the
country in order to reduce these expenses.
 The top management should immediately start thinking in terms of rotating
the employees in various departments, as this transforms work force into
human capital, if a particular individual keeps on employing hisher efforts
in one sphere of banking it would not only create a sense of monotony, but
also not help improving the skills of Bank Alfalah Limited employees
 Bank should go for external recruitment. Bank should give chance to fresh
applicants so that they come up with new ideas and trainings.
 Foreign branch network should be increased in order to capture profits from
all over the world.
 Recruitments should be strictly on merit basis and induction should be after
proper and extensive training. Old and lazy staff should be replaced by
young, qualified and energetic staff.

 The bank Alfalah has centralized system. Decision making should not be
centralized but the low level employees should also take part in the decisions
so that they also feel the proper members of the branch.
 Bank should give some more incentive to its employees in order to remove
the conflict between lower and higher officers and should try to improve the
working condition of the bank.
 Employees should not be overloaded with work, this helps in relaxation of
employees and will increase job satisfaction of employees which is in best
interest of the bank
 Schedule should be arranged for the internees in whom they know about
their working and the requirement.
 Installation of good quality air conditioner.

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