Internship Report On Bank Al-falah

INTERNSHIP REPORT ON

BANK AL-FALAH LIMITED

BY

AAMNA MUKHTAR F06B020 INSTITUTE OF BUSINESS & INFORMATION TECHNOLOGY

UNIVERSITY OF THE PUNJAB SEPTEMBER 28, 2009 The Caring Bank F06B020

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CHAPTER 1 BANK AL-FALAH LIMITED

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1.1 EMERGENCE OF BANKING The word “Bank” is derived from “Bancus” or “Banque”. History of banking is traced to 2000 B.C in Greece. Priest and Goldsmiths acted as financial agents by keeping money and valuables of people in temples in strong safes. Thus, the first stage in the development of modern banking was accepting of deposits of cash from those who had surplus money with them. The Goldsmiths issued receipts for the money deposited with them, which began to pass from hand to hand in settlement of transaction as people had confidence in the integrity and solvency of Goldsmiths. The receipts were drawn on a way that it entitled the holder to claim that specified amount of money from goldsmiths. These receipts were the earlier bank notes. Thus the second stage in the development of banking was the issues of bank notes. The Goldsmiths discovered all the people who had deposited money did not come to withdraw their finds in cash, only a few people presented the receipts for encashment during a given period of time and they also found that most of the money deposited with them was lying idle. They also found they were being constantly requested for loan on good security. They thus thought it profitable to lend at least some of the money with them to needy persons. This proved profitable for them. Instead of charging interest from deposits, they began to give them interest on money deposited with them. This was the third stage in the development of banking. Through experience, banks came to know that they could keep a small proportion of total deposits for meeting demands of customers for cash and could easily lend the rest. They allowed deposits to draw over and above than the money standing to their credit. They thus allowed the overdraft facility to their The Caring Bank F06B020

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deposits and this was the fourth stage in the development of banking. Every bank issued receipts and most allowed 2 overdraft facilities and this caused too much confusion the systems. In order to earn profits, banks did not keep adequate reserves to meet demands of customers for cash. This failure on the part of bankers to return money caused widespread distress among people. In order to create confidence among the people, steps were taken to regulate the banking. A conference was held in Nuremberg in 1548 where it was decided that a bank should be set up by the state, which would streamline the banking organization and technique. The first central bank was thus formed in Geneva in 1694. The responsibility of issuing notes is now entrusted to a central bank in each country. With passage of time, activities of commercial bank increased. They dealt with large number of issues such as obtaining funds, advancing loans to business, farmers, households, making investment in stocks, discounting bills of exchange etc. commercial banks are now multiservice organizations and play a very important role in financial markets.

1.2 OVERVIEW OF FINANCIAL SECTOR IN PAKISTAN The history of banking system in Pakistan dates back to independence of Pakistan in August 1947 when various banks transferred their Head Quarters and funds to areas likely to fall in India. This trend emerged due to dominant role of Hindus in pre-partitioned Indian banking system.

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According to various books there were 3496 branches of Indian scheduled banks in the undivided sub-continent as on 1st March 1947 out of which only 487 branches were located in areas presently constituting Pakistan. However the number of scheduled banks drastically declined to 195 from 487 immediately after partition. At the time of partition there were only two banks having the honor to be first commercial bank of Pakistan namely Habib Bank Ltd., which was set up in 1941 with its Head Office in India and the Australasia Bank Ltd., which was established in 1944 with its Head Office in Pakistan. By following the partition, an expert committee was set up and this committee recommended that the Reserve Bank of India being the Central Bank of the undivided India should continue to function as Central Bank of Pakistan and the Indian currency notes would continue to be legal tender in Pakistan till 30th September 1948. Subsequently it was decided to have separate Central Banks and the State Bank of Pakistan was set up and started functioning from 1st July 1948. Thus the history of banking system in Pakistan started with the establishment of the State Bank of Pakistan which was inaugurated by Quaid-e-Azam Mohammad Ali Jinah on 1st July, 1948. Consequently three banks were established which include Muslim Commercial Bank Ltd. formed in September 1948. Bank of Bahawalpur in October 1948 and National Bank of Pakistan in 1949. Habib Bank also transferred its Head Office from Bombay to Karachi due to partition in August 1947 and it was assisted by the State Bank to finance domestic trade of the country.

1.3 BANK AL-FALAH LIMITED The Caring Bank F06B020

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Bank Al-Falah Limited was incorporated on June 21st, 1997 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 1st, 1997. Bank Al-Falah Limited started its life as “Pakistan Operation” of BCCI. A multi-national conglomerate based in Luxembourg and Grand Cayman. BCCI was the 7th largest bank in the world. The estimated assets of BCCI were 20 billion dollars. The operations of the Bank were in 70 different countries of the World. In July 1991, the Bank of England and International Liquidators accused BCCI of being involved in money laundering to the tune of 1.54 billion dollars. Upon closing down of BCCI, in 1992 the operations of BCCI in Pakistan were acquired by Habib Bank Ltd, and were run as a wholly owned subsidiary by the name of Habib Credit & Exchange Bank (HCEB). HCEB was later acquired (through the process of privatization) by the Abu Dubai Group, in 1997 and its 70% ownership was transferred to Abu Dubai Group. The agreement was signed on July 7, 1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962.

1.4 BANK AL-FALAH TODAY The strength and stand of Abu Dhabi Group, principal owners of BAL, have helped Bank Al-Falah Limited launch high quality consumer and corporate banking operations in Pakistan. Bank Al-Falah Limited have embarked upon a rapid expansion program to make sure that the services reach more and more people, BAL is headed towards an optimum sized network reaching major urban centers in Pakistan. The Bank is well positioned and geographically poised, to cater for increased business demands, from its existing and potential clientele. The Caring Bank F06B020

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The bank is not only making its contribution in accelerating Pakistan’s economy. There are 282 Branches of Bank Al-Falah Limited in 75 different cities of Pakistan, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. With the implementation of the office automation and communication system BAL will be poised to compete with the best in quality and speed of customer services. Charged with the strength of the Abu Dhabi based consortium, and under the leadership of Highness Sheikh Nahayan Mabarak AlNahayan, Minister of Education, Government of Abu Dhabi, and a prominent member of Royal Family – the bank is energized with the vision, envisaging the development of consumer sector in Pakistan. Bank Al-Falah has emerged as one of the leading commercial banks in the financial sector of Pakistan. Bank has made significant contribution in building and strengthening both the corporate and retail banking in Pakistan. Prioritizing its product portfolio in line with consumer needs and wants, the bank is committed to develop products that give more value to its customer – be it a simple bank account or complex financing of a major project.

Designing

product

portfolio

in

response

to

customer’s

preferences, bank’s products like Royal Profit, Royal Patriot and Royal Custodial are prime examples of quality and innovation – providing timely banking opportunities to its customers. To continuously offer courteous, professional and advanced banking solutions, bank’s team has recently been rejuvenated by going through training programs with a focus on Information Technology. With a team of talented, service-dedicated professional bankers, Bank Al-Falah

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commits all its energies, resources and time to cater to all banking and financial needs of customers.

1.5 VISION VISION

ocally and internationally that provided the complete range o

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1.6 MISSION

MISSION

r quality service that contributes to brand strength, establishes a co

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1.7 CORPORATE INFORMATION 1.7.1 BOARD OF DIRECTORS

H.E. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman

Mr. Abdulla Nasser Hawalileel Al-Mansoori Director

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Mr. Abdull Khalil Al Mutawa Director

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Mr.Khalid Mana Saeed Al Otaiba Director

Mr. Ikram UlMajeed Sehgal Director

Mr. Nadeem Iqbal Sheikh Director

Mr. Sirajuddin Aziz Director & CEO

1.7.2 MANAGEMENT  

 

       

Mr. Sirajuddin Aziz Mr. Parvez A. Shahid Management Mr. Shakil Sadiq Mr. Arfa Waheed Malik Investment Mr. Ijaz Farooq Mr. Adil Rashid Mr. Nadeem Ul Haq Mr. Mohammad Yousuf Collections Mr. Bakhtiar Khawaja Development Mr. A. Wahid Dada Banking Mr. Hamid Ashraf Mr. Zahid Ali H. Jamall

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Chief Executive Officer Co-Chairman Central Committee Chief Operating Officer Group Head Corporate & Banking Group Head Islamic Banking Group Head Consumer Finance Group Head Operations Group Head Credit & Group HeadTraining & Group Head Commercial General Manager Legal Affairs Chief Financial Officer Page 11

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Mr. Mohammad Iqbal Saifee Group Head Audit & Inspection  Mr. Talib Rizvi Group HeadPriority Banking & Wealth Management  Mr. Tariq Mir General Manager International Business  Mr. Ather Shehab Executive InchargeEstablishment & Administration  Mr. Mahmood Ashraf General ManagerCredit Monitoring  Mr. Falak Sher Chief Compliance Officer  Mr. Imtiaz Ahmad Sheikh General Manager Information Technology  Mr. M. Mudassar Aqil General ManagerHuman Resource & Quality Assurance  Mr. Haroon Khalid General Manager Risk Management 

1.7.3 BOARD ADVISORY COMMITTEE    

Mr. Mr. Mr. Mr.

Omer Z. Al Askari Abdullah K. Al Mutawa Ganpat Singhvi basher A. Tahir

1.7.4 AUDITORS  A.F. Ferguson & Company Chartered Accountants

1.7.5 ORGANIZATIONAL CHART

President (CEO) Senior Executive Vice President Executive Vice President The Caring Bank F06B020

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Senior Vice President Vice President Assistant Vice President Officers Grade I, II, III Clerical Staff

Non-Clerical

Staff

Cashier

Typist

Clerks &

Guards

Messengers Assistants

1.7.6 BANK AL-FALAH’S SLOGAN The Caring Bank

1.7.7 BANK BELIEVES  Every door leads to our customers  The legacy of leadership stands as our guiding light The Caring Bank F06B020

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 The strength of chain relies on the strength of each link  A keen ear is a key to understanding. Achievement is nothing without target  Time is our most valuable asset  Performance is nothing without ability to measure it  Every drop counts

1.7.8 GOALS & OBJECTIVES Objectives can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. Objectives are essential for organizational success because they state direction; aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a basis for effective planning, organizing, motivating, and controlling activities. Bank Al-Falah Limited objectives are as follows:➢ To create maximum economic value for share holders through a

constant relationship focuses on financial services. ➢ Leveraging BAL Investments in the IT field. ➢ Ongoing assessment of opportunities for customers, leading to

the constant development of new products and services. ➢ To promote industrial, agricultural and socio economic processes

through the active participation of private and public sector in the country.

1.7.9 STRATEGIES Bank Al-Falah has formulated certain sets of strategies to enable it to achieve its goals and objectives. These strategies are mentioned below: The Caring Bank F06B020

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1. In order to achieve its goals of creating a sound base and

presence of efficient modern banking system, Bank Al-Falah has started operation of Automated Teller Machines in all the major areas like Karachi, Lahore, Islamabad and other cities of Pakistan. 2. Bank Al-Falah is committed to building long-lasting relationships

through an assertion to service excellence and providing innovative products to meet the changing needs of our valued customers. Although still in its infancy, compared to the exalted banking standards, Bank Al-Falah, backed by a strong Abu Dhabi Group and inspired by the vision of its Board and Management, has built up a strong customer base. The Bank provides a full range of banking services to corporate clients, while applying leading technologies. Today the Bank is well-positioned to provide appropriate banking services to customers. 3. The main focus is building relationships and being known by the way they do business. Management recognizes that a banking relationship

requires

compatibility,

communication,

and

cooperation and that each customer deserves nothing less than full attention and available resources to meet their financial objectives. 4. Core value and corporate culture is based on the belief that

superior personalized service is the most important product. Bank is in the process of getting to know customers by name and understand their business and personal financial needs. This oneon-one, personalized service quality has served as Bank AlFalah's unique signature since inception and continues to separate it from other financial institutions. The Caring Bank F06B020

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5. The Bank Al-Falah team comprises of some of the most highly

skilled and professional financial experts in banking industry. Managers,

lenders

and

trust

advisors

offer

the

unique

perspective of knowing and understanding in the local economy. The Management focuses its attention on making informed and feasible economic decisions, bringing better returns and more profitability for investors and customers. 6. Keeping in view the unrest among the Islamic Community on the

Interest Bearing Banking the Al-Falah is in the process of target marketing and gives its full attention to this segment of a large population over the world. 7. To acquire the reputation and status of bank which operates on

international standard, Al-Falah Bank was to get the credit rating of Pakistan Credit Rating Agency, which gave it the AA- and A1+ in the long term and short term respectively.

1.7.10 SHARE CAPITAL 

The authorized capital of bank Al-Falah is Rs.1000 Million. (100,000,000)

 The paid up capital is Rs.600 Million (600,000,000)  Ordinary share of Rs.10 each issued for cash

1.8 BAL CREDIT RATING PACRA (Pakistan Credit Rating Agency), a premier rating agency of the country, has rated the bank ‘AA’ (double A), Entity Rating for long term and A1+ (A one plus) for the short term. These ratings denote a very low expectation of credit risk, strong capacity for timely payment of financial commitments in the long term and by highest capacity for The Caring Bank F06B020

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timely repayment in the short term, respectively. The ratings of first and second and third unsecured listed and subordinated TFC issues of PKR 650 million, PKR 1,250 million and Rs.1,325 million have been maintained at AA- (Double A minus).

1.9 BANK AL-FALAH BRANCH NETWORK Since the privatization in 1997, Bank Al-Falah Limited has remained consistent in its mission to excel in providing innovative products and services to its customers. As a result of that, the yare 2003 has been most favorable for bank in spite of varying market conditions. The Bank is fully aware that the branch network has direct implications on the service that it provides to its customers. In the year 2003, nine (9) commercial banking branches and five (5) Islamic banking branches were added to the Bank. In 2004, Al-Falah network extend the courage to 72 branches in 30 cities nationwide. Currently Bank AlFalah has 282 Branches in 75 different cities. Bank Al-Falah is confident that a well-integrated branch network, offers greater potential for serving a larger client base through high value products.

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1.10 PRODUCT & SERVICES With the mission to provide all-encompassing banking services to the customers, Bank Al-Falah has a uniquely defined menu of financial products. Currently it is one of the most comprehensive portfolios of personalized financial solutions that are custom-tailored to serve the requirements not only of conventional customers but also fulfill the needs of the corporate sector:

 Car Financing  Rupee Travellers Cheques  Online Banking  Credit Cards  ATMs  Home Financing  Islamic Banking  Corporate and Structured Financing

1.10.1 CAR FINANCING Car Financing is one of the major renowned product of Bank AlFalah and can be utilized in terms of Financing of Used Vehicles, Loan against Car, Balance Transfer Facility, Refinancing The Caring Bank F06B020

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Facility (only for Al-Falah Customers) and it is characterized in terms of: ✔ Lowest Mark up ✔ Lower Insurance ✔ Quick Processing ✔ Lower Down Payment

1.10.2 HOME FINANCING Major Financing

features are

of

Bank

Lowest

Alfalh

Mark-up,

Home Quick

Processing, Multiple Repayment Options and Free Valuation. It has been bifurcated in terms of

“Home

Buyer,

Home

Construct,

Home

Improver, Home Balance Transfer Facility”. ✔ Financing Limit

:

uptoRs.

:

upto 20Years

10,000,000/✔ Tenure

✔ Equity Participation

:

30% Borrower / 70% Bank

1.10.3 RUPEE TRAVELERS CHEQUES Rupee Travelers Cheques are as good as cash and are accepted at the major shops, travel agents, hotels business establishments and all over the country and abroad. This service is being offered to facilitate instant fund availability to travelers and business people who used to carry a large sum of money with them.

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1.10.4 CREDITS CARDS Bank Al-Falah Visa Card is everywhere and globally acce

pted and welcomed at

locations displaying the VISA logo. It is accepted at nearly 30 million merchants and 870,000 ATMs in more than 150 countries

around

the

globe

and

over

10,000 establishments in Pakistan. AlFalah VISA pays for shopping, travel, entertainment, meals and much more.There are 3 major types of AlFalah credit cards.

1.10.4.1 AL-FALAH PLATINUM It is accepted at nearly 29 million locations in more than 150 countries around the globe and at over 27,000 establishments in Pakistan

1.10.4.2 TITANIUM CARD Titanium MasterCard is your partner everywhere and is globally accepted and welcomed at locations displaying the MasterCard logo.

1.10.4.3 GOLD & SILVER CARD A perfect card combination for all segments of salaried & professional individuals.

1.10.5 DEBIT CARDS The Caring Bank F06B020

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Bank Al-Falah Limited presents Al-Falah HilalCard, the first Visa Electron International Debit Card which gives an unlimited access to current / savings account with a simple swipe, at millions of retail shops and ATMs, worldwide. The Al-Falah Hilal Card comes with a host of conveniences and benefits combined with the wide reach of Visa Network enabling it to be accepted at more than 840,000 ATMs and 13 million retail outlets around the world, making it the most acceptable Debit Card available in Pakistan.

1.10.6 ON LINE BANKING To provide enhanced and value added products customer

bank

additional

is

constantly

facilities.

Bank

striving provide

to

for fully

automated on-line telephone banking facilities

to

its customers enabling them to carry out banking transactions like balance

inquiries,

statement

requests,

product

information

and

exchange rate.

1.10.7 AUTOMATED TELLER MACHINE (ATM) The bank offers 24 hours self service banking facilities to it customers on country wide basis through deployment of Automated Teller Machine. This system allows the banking facilities such as cash withdrawls, cash deposits, funds transfer, balance inquiries, account statements. All ATMs are linked through a state-of-the-art Satellite Based Communication System which offers 24 hours real time service.

1.10.8 ISLAMIC BANKING

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A separate division is a recently initiated, which operates as separate branch. It offers Shariah Compliant products through a network of five branches, which will increase to 50 by the year 2007. Islamic Banking has launched following products. a) Al-Falah Masharaka Homes

b) Murabaha Finance c) Aflalah Car Ijarah

1.10.9

CORPORATE

AND

STRUCTURED

FINANCING The portfolio concentrates on all aspects of conventional banking as well as the financial needs of corporate sector including dynamic and high value product. ✔ Loaning against securities

✔ Letter of Credit ✔ Letter of Guarantee ✔ Demand Finance ✔ Cash Finance

DEPARTMENTS WORKED DURING INTERNSHIP With an intention of grooming the best executives of the future, the Institute of Business & Information Technology

has organized a

comprehensive internship-training program. All of us were placed in leading organizations of business arena to gain first hand knowledge

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and insight into their management and working. So, when I was given the chance of selecting an organization, I opted for Bank Al-Falah. Getting a chance of working in Bank Al-Falah proved to be very beneficial for me. I think that I gained comprehensive insight into the working of a bank. But nothing could have been possible without the co-operation and guidance of the officers of BAL. I did my internship at Bank Al-Falah Limited Liberty Market Branch, for a total duration of six weeks. It is relatively a small branch with a limited number of departments. Total number of employees in this branch is sixteen.The Branch is running smoothly under the leadership of Mrs. Aasma Mushtaq, who is the branch manager of Bank Al-Falah Liberty Market Branch. The departments that I worked during this time are as follows:

Departments

Duration

Accounts Opening

2 weeks

Operations

2 weeks

Car Financing

1 week

Accounts

1 week

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CHAPTER 2 ACCOUNT OPENING DPARTMENT WEEK 1

&

2

2.1 ABOUT THE MANAGER Faisal Shahzad The Caring Bank F06B020

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Incharge Account Opening Bank AL-FALAH limited In account opening department I was under supervision of Mr. Faisal Shahzad, incharge of this department. He was very co-operative person .His management style is of collaborative type. He offers a helping hand to all his subordinates and other department fellows. He deals and resolves conflicts with an effective way of communication and negotiation. There is a great deal of value placed on openness and directness. Mr. Faisal has a great ability to effectively negotiate and use persuasion when necessary to ensure the smooth working of his department and success of the organization.

2.2

MAJOR

DEPOSIT

ACCOUNT

PRODUCTS Borrowing funds from different sources has become an essential feature of today’s business enterprises. But in the case of bank borrowing funds from outside parties is more vital because the borrowed capital of a bank is much greater than their own capital. Bank borrowing is mostly in form of deposits. These deposits are lent out to different parties such deposit creation is done through open an account in the bank.

2.2.1 CURRENT ACCOUNT Current Accounts are non interest bearing accounts that have a minimum account opening requirement of Rs 10,000. No zakat is deducted on the accounts balance. Furthermore all current account The Caring Bank F06B020

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holders receive a Hilal debit card and there are no restriction on the number of withdraws or deposits made to and from the account.

2.2.2 PROFIT& LOSS SAVING ACCOUNT Profit& Loss saving accounts can be opened with a minimum balance requirement of Rs 5,000 and profit is credited on a half yearly basis. There are no restrictions on the number of deposits and withdrawal made to and from the account and all account holders receive a Hilal debit card as well. Profit and loss saving account cannot be opened by a business corporation, however can be jointly opened by individuals. Profits are paid at 2% on all account balances.

2.2.3 BASIC BANKING ACCOUNT (BBA) Basic Banking Account was introduced by banks on an order by the State Bank of Pakistan and is current in nature. There is no minimum balance requirement for BBA, however initial deposit must be Rs 1000. Maximum two withdrawals and deposits are allowed by cheque, while there is no restriction on ATM withdrawals.

2.2.4 ROYAL PROFIT ACCOUNT Royal profit accounts are opened with a minimum balance requirement of Rs 50,000. The basic aim of this account is that the higher the balance the higher the return, as profit is credited on a monthly basis. The profit paid to account holders is as follows: Amount

Profit pa.

From Rs.50,000 to 999,999

2.50%

From Rs.1,000,000 to 4,999,999

3.50%

Rs.5,000,000 and above

Negotiable

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Source: Bank Al-Falah Liberty Market

2.2.4 KIFAYAT ACCOUNT Kifayat account is another saving account product that can be opened with a minimum balance requirement of Rs 10,000, with a maximum limit of Rs 1 million. Profit is calculated on a monthly basis, while it is credited on quarterly basis. Bank Al-Falah pays 7% pa interest on Kifayat Account.

2.2.5 MAHANA AMDAN ACCOUNT Mahana Amdan account is Term Deposit Receipt (TDR) for three years that can be opened with a minimum balance requirement of Rs 100,000, with a maximum limit of Rs 15 million. Profits are paid at 10% pa, credited on a monthly basis. Other features of this account include free personal accident insurance and automatic renewal for another 3 years, after the expiry of original period.

2.2.6 AL-FALAH EDUCATION Al-Falah education is a one year TDR that can be purchased by people having school going children’s. A person can purchase a unit for Rs 100.000, with a maximum of 3 years. This TDR pays 7%, paid at maturity and gives an additional advantage of giving monthly school fee of the children’s if the breadwinner of the family dies.

2.2.7 AL-FALAH KAMYAB KAROBAR Bank Al-Falah presents Al-Falah Kamyab Karobar (KK) - a structured, branded, tier-based current account that caters to your banking needs & aspirations. This product will provide you the opportunity to enjoy free services alongside state of the art banking facilities, linked directly The Caring Bank F06B020

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to the deposit balances in your KK account. Al-Falah KK Account can be opened with minimum deposit requirement of Rs 25,000, while the degree of free services will be dependent on the minimum thresholds of respective tier.Its will give you the power to choose from different tiers and avail banking facility from any of the AlFalah branches – PAN Pakistan. KK Accounts have strategically been tailored into 3 different tiers, allowing you to choose the allotted free service to your benefit. The three tiers are as following: a. Silver b. Gold c. Platinum The unique tier based structure ensures that you can avail smooth & cost efficient facilities based on your current level of deposits i.e. Higher the deposit, higher the number of free services. Some of the Salient features include (tier-based): •

Free Online Transactions

•

Free SMS Debit Alert (Subject to availability)

•

Free PO/DD

•

Free Accidental Cover( Valid for up to two People)

•

Free cash deposit across Pakistan

•

Gold VISA debit/ATM Card with every account

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2.2.8

FOREIGN

CURRECY

ACCOUNTS/DEPOSITS Residents and non-residents Pakistanis’ as well as foreigners can open foreign currency accounts. Foreign currency accounts can be opened as saving as well as current accounts. This account is maintained and opened subjected to local laws and regulations in force from time to time, including Foreign Exchange control Regulations and directives of state bank of Pakistan. Profit or loss on foreign currency accounts will be paid on half yearly basis and on the term deposit it will be paid on maturity, as prescribed by the State Bank of Pakistan from time to time. No interest will be paid on FC accounts. Withdrawals shall be subjected to the availability of particular foreign currency with the bank and the prevailing directives of the state bank of Pakistan. The bank may decline to accept the foreign currency notes for deposit in foreign currency account. The foreign currency deposit will be automatically renewed upon the expiry of maturity date at the prevailing rates as prescribed by the bank for that period, unless the bank receives a written request from the customer three days before expiry date that he does not wish to renew the account.

2.2.9 JOINT ACCOUNT If the account is opened by two or more people, the balance to the credit shall belong to both of them jointly, or to the survivor (surviving depositor), only when it is clearly written in the instructions” EITHER OR SURVIVOR”. When the account is operated by a single operator, the bank shall honor and pay to the debit of joint account all cheques, drafts and orders signed by the single authorized signatory. If the bank prior to acting the instructions received from authorized signatory The Caring Bank F06B020

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receives a contradictory statement /order from other signatory, the bank may refuse to act on either of them and insist upon instructions of all the joint account holders.

2.2.10 MINORS ACCOUNT In case of an account opened by a minor, bank is entitled to act upon the instructions received by the guardians. Bank will continue to follow the instructions irrespective of the instructions provided by the guardian unless or until the guardians or appropriate authority gives written instructions.

2.2.11 SAFE DEPOSIT LOCKERS Bank Al-Falah also provides safe deposit locker facilities to its customers for safe keeping of their valuables like documents, securities and jewelry etc. Important features of locker facility are as follows: •

Various sizes to choose from small, medium, large and extra large.

•

Annual locker rent ranges from Rs.1, 000/- to Rs.4, 000/-

Locker rent is waived for customers maintaining a deposit of Rs.2 million or above in a current account or US $25,000/- in a current account or US $50,000/-in a saving account or at managers discretion considering the overall relationship of the valued customer.

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2.3

INTERNAL

CODES

FOR

BAL

ACCOUNTS Some of the major account opened at Bank Al-Falah Liberty Market and their internal codes are as follows: Account Type

Code

Current Account

010*****

Profit& Loss Account

020*****

BBA Account

0189****

Royal Profits

029*****

Current Account USD

018*****

Source: Bank Al-Falah Liberty Market

2.4

ACCOUNT

OPENING

REQUIREMENTS 2.4.1 PERSONAL (INDIVIDUAL OR JOINT) ACCOUNT  Account opening forms dually signed /completed(by all parties in case of joint accounts)  Copy of NADRA issued CNIN or passport.  Introduction of BAL account holder.  Vernacular form if Signature in URDU.  Two photograph with thumb impression in case of illiterate customers. The Caring Bank F06B020

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2.4.2 SOLE PROPRIETORSHIP ACCOUNT  Account opening forms dually signed /completed and stamped.  Copy of CNIC.  Sole proprietor’s declaration on BAL format required on letter head

2.4.3 PARTNERSHIP ACCOUNT  Account opening forms dually signed/completed and stamped.  Copy of CNIC of all the partners.  Partnership deed dully verified by notary public and signed by all the partners.  Form–C in case of registered partnership. (Form –C contain the

all information about the year when the firm is registered)  Introduction.

2.4.4 LIMITED COMPANY ACCOUNT  Account opening forms dually signed /completed and stamp.  Copy of CNIC of the entire end.  Board Resolution attested by company secretary resolving to open an account in BAL liberty market along with the signing instruction of the  Authorized signatories to operate the account. This resolution must bear Company Seal which must be signed by the two directors (as per the clause in MOA).  Memorandum and Article of Association. (It belongs to the internal & external dealing by firms. In include the information The Caring Bank F06B020

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regarding capital, paid in capital, shares of firm, who operate this account etc)

2.4.5 TRUST/ ASSOCIATION/ CLUB/ NGO ACCOUNT  Certified of trust deed.  Certified Copy of by Laws.  List of trustees duly certified.  Certificate of registration.  NICs of all the trustees.  Resolution attested by company secretary resolving to open an

account in BAL, liberty market branch along with the signing instructions of Authorized signatories to operate account. 

This resolution must bear Trust Rubber Stamp, which must be signed by the trust Secretary. .

2.5

MAJOR WORK DONE BY ACCOUNT

OPENING DEPARTMENT This is the first department and is directly interactive with the customers so the main activity in this department is to handle with customer’s requirements, making their needs fulfilled and make them feel comfortable in the branch and to let then feel that “They Really Do Care”. The personnel employed in this department really full fills all the required ingredients for the respective designated posts.

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The bank does not make payment of a cheque bearing a six month or older date if an account is not operated in six months, it is called Dormant Account. Major duties of Account Opening Officer include: 

Opening new account



Maintaining old accounts



Issuance of cheque books



Processing and issuing ATM / Debit / Hilal Cards.



Withdrawals



Hold mail facility



Stop payments



Bank statements and bank balance

2.5.1 OPENING NEW ACCOUNT First of all when a new customer walks into the bank and wants to open an account, he/she is asked to fill a Bank Al-Falah account opening form, which contains all the required information that must be taken by the customer for his/her respective details and later on to provide the security of their accounts. There are few essential documents like •

SSC (Specimen signatures cards)

•

Sign verification

•

New sign (if account’s sign differs from CNIC account)

There are lists of documents which are required for opening a new form that is attached later on with the report. When the report is completed it is then sent to BAL Head Office Karachi, which is confirmed from there and if there is any document missing in the form, The Caring Bank F06B020

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it is asked by the concerning branch to provide, but one thing to mention clearly here that the account is opened (account number is allotted) instantly to the customer within 4-5 minutes and the customer can use his/her account instantly, which is really a big advantage for the customers.

2.5.2 MAINTAINING OLD ACCOUNTS This includes continuous updating of the previous customer’s accounts including

change

in

any

of

their

personal/business/

employment/studies/signature details they are continuously monitored and updated by the department heads and assisting personnel. If there is any request is received from the customer to update his/her account then it is carried out instantly without any wastage of time which is again a big plus point and a solid proof for the dynamism of the bank.

2.5.3 ISSUANCE OF THE CHEQUE BOOK When a new account is opened, the customer receives a “Letter of Thanks” from the Head Office Karachi. This is the confirmation and proof that the customer is holding an account in the BAL. When this letter is showed in the account opening department they confirm the letter and then sends request for the cheque to Head Office Karachi. The cheque book is received by the respective branch with in 1-2 days outmost. When the customer comes in to collect the cheque book he signs a letter that he/she has received the cheque book at the Mentioned date. If the customer is old and needs a new cheque book the process is almost the same. One thing is important to mention here is that when the cheque book is received by the bank and the customer doesn’t comes to receive the The Caring Bank F06B020

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book within 90 DAYS or the account of the customer is closed due to any reason the cheque book is destroyed under the supervision of concerning authorities.

2.5.4 ATM / DEBIT CARDS In the terminology of the BAL debit or ATM cards are known as Hillal Cards. The process for the Hillal cards is very simple. When you are filling the form for opening an account then there is a leaflet which is actually the application for the Hillal card. You just have to enter your CNIC, name, Address and initialize it and you receive the card at your door step.

2.5.5 WITHDRAWALS Withdrawals from the account shall be made only by using cheque books supplied by the bank at the request of the customer or by using ATM cards (if allowed)The bank reserves the right to withdraw the cheque book facility without notice if in the opinion of the bank the account is not being maintained or operated in accordance with terms and conditions or for any other reason The customer shall exercise care when drawing cheques and agree that cheque will not be drawn in a manner which may enable a cheque to be altered in a manner which is not readily detectable. The customer shall ensure safekeeping of the cheque book and shall not allow access the cheque book to any unauthorized person. In case of loss or theft of the cheque book or any cheque leaf, the customer shall promptly notify the bank in writing, if The Caring Bank F06B020

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fails to give such notice to the bank, the customer shall himself be solely responsible for any loss arising out of any fraudulent use of lost or stolen cheque book /cheque leaf.

2.5.6 STATEMENT OF ACCOUNT The bank shall quarterly or at such other interval as it may deem fit sent to the customer statement of account and the customer shall check the entries made there in. In case of any discrepancy or error in the statement of account the customer shall notify he bank with in 14 days of receipt of statement of account, failing which the customer shall have no right to contest the correctness of any entries made there in. The bank shall ensure that debit and credit entries are correctly recorded in the account, but in case of any mistake or error, the bank shall have the right to rectify the mistake or error by making the correct adjusting entries with out notice and recover any amount wrongly paid or credited. The bank shall not be liable for any loss or damage due to such errors/mistake.

2.5.7 HOLD MAIL FACILITY Upon written request of the customer, the bank may in its sole discretion provides a (hold mail facility) where by the bank shall retain for periodic collection by the customer, or his duly authorized agent, all communications and statements of the account relating to the customers account. The customer hereby waives his rights to question any detail appearing in the hold mail communication or statement of account irrespective of their actual receipt.The customer accepts all risks and responsibilities in this regard.

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2.5.8 STOP PAYMENT If a customer looses their cheque book, then that customer will have to come to the bank and firstly report the loss and then stop payment, by telling the series of cheque he has lost. By stopping payment, the customer is guaranteed that no illegal payment is made from their account. The process for stopping payment, after the customer tells that he has lost is cheque book is that he fills a ‘Form B’, which is same as a cheque book requisition form and an indemnity form, stating no responsibility on behalf of the bank if any illegal payment is made before the time of announcing a cheque book lost. As part of my internship, I was to assist a customer towards the whole process of stopping payment.

2.5.9 BANK STATEMENT AND BANK BALANCE A bank statement tells the whole activity of a bank account over a period of time. Customers often come and want their bank statements and have to fill a form, relating to the time period for which the bank statement is needed. As part of my internship, I was to assist the customer to fill the ‘Bank Statement Form’ and produce the statement through the banks software and print it as well. Often customers want to know their accounts balance over the phone and thus I had to tell them their account balances using the banks information system ‘Bank Smart’.

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2.6 CONCLUSION During my 2 week stay in Bank Al-Falah, I experienced the environmental and cultural gloom of corporate world of Pakistan. I was quite able to understand the operations. I experienced that the

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communication is the key weapon of any manager that could lead him to resolve/explore any conflict / situation with great ease. I learned the process of opening and closing of different types of account, dormant accounts, issuance of cheque book, customer dealing, balance statement. In this department, I learned how to operate bank smart. I helped my supervisor in collection of zakat declaration forms from customers which were needed in the process of zakat deduction.

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CHAPTER 3 OPERATIONS DPARTMENT WEEK 3

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3.1

ABOUT THE MANAGER

Hussnain Shah Operations Officer Bank AL-FALAH limited Mr. hussnain Shah is one of those managers who are not strictly a follower of the syndrome of high status. He is the incharge of clearing and remittances department of BAL who compliments and connects with others on a human level through inspires great loyalty towards himself by employees. He deals and resolves conflicts with an effective way of communication and negotiation. Intution is his hallmark. He with keen insight is often able to sense what others are thinking and feeling; consequently, they are able to respond perfectly to another through his deeper understanding. He is an excellent manager who lives from a knowledge base, without having a draw attention to it. Flexibility and versatility are valuable qualities of Mr. Hussnain Shah. Beneath the flexibility and versatility he has ability to be composed and never over-reacted with everyone around.

3.2 MAJOR WORK DONE BY OPERATIONS DEPARTMENT The operations department is responsible for three major activities: •

Clearing

•

Transfers

•

Remittances

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•

Cash Transfers

In large branches of Bank Al-Falah, all these jobs are done by different departments, but as Bank Al-Falah Liberty Market is a small branch, all these jobs are done by one department, known as operations. Operations department is sometimes also known as the Transact department.

3.2.1 CLEARING The clearing department is responsible for the clearing of all cheques that the bank receives daily and the different types of clearing cheques that come in the bank are: •

Inward Clearing

•

Outward Clearing

•

Online Clearing

•

Outward Bills for Collection

3.2.1.1 INWARD CLEARING Inward clearing takes place when a Bank Al-Falah Liberty Market account holder drew’s a cheque in favor of a Non- Bank Al-Falah account holder. The process for inward clearing is as follows: 1. Cheques are received by the operations department from NIFT 2. The bank officer verifies all particulars from the instruments and the system for sufficient balance etc. If any fault is found, then the officer will mark the cheques as a return, stating the reasons with them. 3. If no fault is found, then the officer will post these cheques in the system by debiting the customer account. 4. The particular of the returned cheques are entered in the ‘O/W return of inward clearing’ register and returned to NIFT. The Caring Bank F06B020

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3.2.1.2 OUTWARD CLEARING Cheques drawn by Non-Bank Al-Falah customers in favor of Bank AlFalah Liberty Market customer and deposited at Liberty Market Branch are known as outward clearing cheques. The process for outward clearing is as follows: 1. Cheques are received by the operations department of Bank Al-

Falah Liberty Market 2. The customer in favor of whom the cheque is drawn is credited 3. Clearing stamps are affixed on the cFheque and sent to the

other bank via NIFT. If any cheque returns the next days as a returned, the posted entries are reversed and the cheque is returned to the customer who presented it and is recorded in the cheque return register.

3.2.1.3 ONLINE CLEARING Online clearing takes place when a cheque is drawn by a Non-Bank AlFalah customer in favor of a Bank Al-Falah customer but is deposited at Bank Al-Falah Liberty Market. The person, who had drawn this cheque, however should have an account in the Islamabad/Rawalpindi area. The process for online clearing is as follows: 1. The cheque is sent as an outward clearing via NIFT 2. When the cheque is cleared, it is credited to the Bank Al-Falah

account via the online transfer software.

3.2.1.4 OUTWARD BILLS FOR COLLECTION (OBC) There are some cheques that are drawn by a Non Bank Al-Falah Account that is outside the twin city area in favor of Bank Al-Falah Liberty Market account holders and thus are treated as OBC’s. The process for clearing of the OBC’s is as follows: The Caring Bank F06B020

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•

Cheques received by Bank Al-Falah Liberty Market

•

The officer affixes the OBC stamp on the cheques and writes its individual number from the OBC register.

•

Entries of all OBC cheques are written in an OBC register.

•

An OBC letter is printed, which shows the cheque numbers, the branch drawn on and amount.

•

Original Cheques are attached to these letter and sent to the main Bank Al-Falah branch in that area by courier

•

When that area branch clears the amount from the Non-Bank AlFalah branch, it sends an Inter Branch Credit Advice (IBCA) to Bank Al-Falah Liberty Market

and the officer at the branch

credits the customer account with that amount

3.2.2 TRANSFERS Transfers are conducted by Bank Al-Falah Liberty Market Branch, using its software ‘Bank Smart’. There are two types of transfers: 1. Internal Transfers 2. Online Transfers

3.2.2.1 INTERNAL TRANSFERS Internal transfers take place when a Bank Al-Falah Liberty Market account holder draws a cheque in favor of another Bank Al-Falah Liberty Market account holder. The process for internal transfer is as follows: 1. Officer of the bank receives the cheque and determine if the cheque is an internal transfer by looking at the branch code, if they are same then it is an internal transfer

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2. The officer will post entries by credit the account in favor of whom the cheque was drawn and debit the account that drew it in the banks software. 3. The cheque will be sent for supervision to the operations manager for authentication of the entries 4. When supervised, the cheque will be affixed with the official stamps and kept with the bank.

3.2.2.2 ONLINE TRANSFERS All those transfers that take place when a Bank Al-Falah account holder draws a cheque in favor of a Bank Al-Falah Liberty Market account holders are known as online transfers. The process for online transfer is as follows: 1. The bank officer collects the cheque from the depositors. 2. Verify’s if the accounts are online and need to be transferred online 3. Posts entries by debiting the account of the cheque, while crediting the account on the slip attached with the cheque. 4. Sends the cheque for supervision to the operations manager 5. When supervised, the cheque will be affixed with the official stamps and kept with the bank.

3.2.3 REMITTANCES There are two main types of instruments that are used to transfer money, which are as follows: •

Pay order: Used to transfer money within the city

•

Demand Draft: Used to transfer money outside the city

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3.2.3.1 PAY ORDER Pay orders are made to transfer money within the city and this is a safe way to transfer money as the person who makes the transfer through pay order pays in advance. The procedure that is carried out in transferring money through pay order is as follows: Procedure for Transferring Money through Pay Order The customer will come to the bank and fill in the pay order application, giving in the details to which account the money is being transferred, the amount etc and attach a cheque to pay for the pay order. Pay orders can also be made through cash but mainly it is made through cheque. The officer checks all the details in the application, makes out the charges for the transfer that the customer will pay and then make the pay order for the customer and pass the following entry: Customer A/c Pay order payable When the customer in favor of whom the pay order was made gives the pay order to his branch, the entries passed are: Pay order payable Customer A/c

3.2.3.2 DEMAND DRAFT Demand Draft is another way in which customers can transfer money outside the city. There are two types of situations for transfer of money through demand drafts: 3.2.3.2.1 OUTWARD DD’S When a customer comes to Bank Al-Falah to make a DD to transfer money outside the city is known as outward DD. The customer will fill

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the details in a DD application form, and will attach a cheque or pay cash as he wish. Then the officer will check all the details and make a demand draft for the customer and pass the following entries: For Cheque

For Cash

Customer A/C

Sundry A/c

Head Office

Head Office

3.2.3.2.2 INWARD DD’S This is the procedure adopted when the issuing branch sends copy of the instrument as an advice. When the bank receives the advice, the officer will pass the following entries: Head Office A/c DD Payable A/c When the customer comes with the DD to get his payment, the following entries are passed: DD Payable A/c Cash If that customer is a Bank Al-Falah account holder then the following entries are passed: DD Payable A/c Customer Account

3.2.3.3 FOREIGN REMITTANCES Another type of remittances is foreign exchange transfer from another country to a Bank Al-Falah account in Pakistan, through SWIFT. Bank The Caring Bank F06B020

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Al-Falah for foreign exchange transfers takes the help of Citi Bank for routing. Procedure for Foreign Transfers The customer will come to Citibank to transfer money to Pakistan. The entries passed will be: Customer A/c Citibank A/c Citibank will then transfer that money to Bank Al-Falah Karachi. The entries are: Citibank A/c Bank Al-Falah Nostro A/c (khi)

Later Bank Al-Falah will transfer the Nostro A/c money into the demand account. Nostro A/c Bank Al-Falah Demand A/c Now when the customer will come to take his money, the following entries will be made: Demand A/c Customer A/c

3.2.4 CASH TRANSFERS The cash transfers in the transact department are responsible with the cash deposits and withdraws made by Bank Al-Falah Liberty Market account holders. There are two types of cash withdraws and deposits. The first is when a Bank Al-Falah Liberty Market account holder either deposits or withdraws cash, while the second one is when a Bank Al-

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Falah account holder, with an online account can withdraw or deposit money to his account from the Liberty Market branch.

3.3

CONCLUSION

My third and fourth week was full of learning and understanding of the functions and operations of the clearing department. I got familiar with the process of clearing and its types i.e. inward clearing, outward clearing and intercity, IBC and OBC. I learned about different types of crossing on cheques and about demand drafts, pay orders and telegraphic transfers. As part of my internship, I was responsible to collect cheques from the customers that they deposited, put the official stamps on the different kinds of cheques, register the return cheques in a register and make OBC schedules. The Caring Bank F06B020

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CHAPTER 4 CAR FINANCE DPARTMENT WEEK 5

4.1 ABOUT THE MANAGER Kashif Rana

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Manager Car Finance Bank AL-FALAH limited In car finance department I was under supervision of Mr. Kashif Rana, manager of this department. Flexibility and versatility are valuable qualities of Mr. Kashif Rana. Beneath the flexibility and versatility he has ability to b composed and never over-reacted with everyone around. Versatility implies an openness, this openness allows him to quickly change on time when necessary. Flexibility and versatility are path ways to speedy responsiveness of Mr. Kashif. He is a kind manager who is full of enthusiasm, with a bounce in their step, with a can-do attitude. He is well committed to his goals and expresses this commitment through optimism. He has a very clear vision about his department’s goals and has the ability to articulate it in accordance to the organization’s goal and vision.Small actions lead to big picture; he is skillful at doing both: thinking big while also paying attention to details.

4.2 AL-FALAH CAR FINANCE Car financing has become one of the most selling financial products of almost all banks. People prefer getting their cars financed rather than paying upfront because it is convenient and lessens the burden of paying a huge sum of money upfront. Bank Al-Falah offers you the most convenient and affordable loans in Pakistan. Whether its funds for a home renovation or purchase of your first car. Al-Falah car financing is specially designed for you with easy, affordable and flexible installments. There is a special software for leasing or financing your car, that gets all your information required and makes a computer The Caring Bank F06B020

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generated plan for our your car that suits your choice and your best fits your financial position. Some of the features of Bank Al-Falah Car Financing are: •

Tenure of 1-5 years

•

Minimum down payment- starting from 10% of car value

•

5 % extra at time of pre-mature payment.

•

Insurance facility from three different insurance companies

•

Tracking devices with all Suzuki Mehran and all Toyota Models

•

Fixed mark up rates

•

Co borrowers facility

The mark up rates for all locally build new cars is a follows: Financing Product Car

Loan

for

Brand

1Yr New

Vehicles

2Yr

3Yr

4Yr

5Yr

14.00% 14.50% 15.00% 15.50% 15.50%

Source: Bank Al-Falah Website

4.2.1 BENEFITS AND FEATURES  No hidden charges  Minimum down payment  Complete repayment at any point of time  Balance transfer facility [BTF] for existing as well as new clients from other banks.  Tenor period ranging from 1 to 7 years.  Financing of all brand new locally assembled vehicles.  Financing limit ranging between Rs.200, 000/- to Rs. 4,000,000.

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4.2.2

CORPORATE

&

INDIVIDUAL

CAR

LEASING BAL’s recently introduced car leasing facility for individuals and corporate sector has set now dimensions for the product. Now you are provide with the option of either to get the vehicle leased or financed.

4.2.3 INSURANCE Renowned

and

reliable

insurance

companies

are

offering

the

competitive rates of insurance. Pay year insurance premium in advance (at the time of down payment) and remaining in the subsequent equal monthly installment. Rates are varied for different insurance companies: Al-Falah refers to various companies; Following are the most commonly used insurance companies which are offered by the BAL. NAME

OF RATE

COMPANY

•

OF

INSURANCES

Adam Jee Insurance

4.5 %

EFU

5.5 %

Atlas Insurance

3.9 %

Various car types are insured at a different rate, but for cars above 2,000 cc trackers are used for which extra insurance are provided.

•

There is a new policy that Suzuki Mehran must are issued only with tracker and the insurance + Tracker rate of 5.5 % P.A.

•

It is meant for increased safety.

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4.2.4 MARK UP Offering lowest rate of markup of 13.5%, (per annum), BAL has captivated a major market share and so is the plan for future. This markup is only for the customers who want to get its car financed or leased for One year only, as the duration of financing increases, the markup increases as well, for the car leased for 7 years (Suzuki Liana) the markup is 16 % P.A. Bank AlPak Suzuki Cars All other local assembled Cars Imported Cars

11.9 % 12.9 % 12.9 %

Falah's mark-up rates are as follows:

4.2.5 REPAYMENT Easily affordable installments on monthly basis in the form of postdated cheques will set you free of depositing your rental cheques every month. BAL is offering a very comfortable and affordable repayment plans that can be customized with the requirement of every customer’s need. For example is a customer can not pay heavy installments then the there can be a easy installment plan with high down payment, so that the customer doesn’t can easily pay back the loan. Another facility BAL is giving is that, you can pay back the entire

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loan (But not before 1 year after disbursement) at any time with the Plenty of just 5 % of the total amount outstanding.

4.2.6 SECURITY Hypothecation of vehicle in the name of the Bank Al-Falah Limited. When the car is delivered to the customer, on the registration book, BAL marks a lien and this entitles the bank to use his all rights incase of nonpayment of loans. Customer has already signed in the legal documents regarding hypothecation, so bank can take all the legal actions. Secondly, the duplicate key of the car is in custody of the bank, and if in any case of taking the vehicle back, bank has all the rights to use the duplicate key. When the loan is paid up, it’s the responsibility of the bank to return back the Original Papers of the car and the duplicate key.

4.2.7 CO-BORROWER Acting as a co borrower, will enables your family members (spouse, children -18 years and above) to avail the financing facility and can get the car registered in their names as well. This is another a vital facility which is being provided by the bank to entitle is customers a more comfortable business with the bank. CO-borrower is a very important concept and has vital significant like and the most important is that if a person is not eligible to get a car by its own, he/she can contact any person (usually close relative) on his/her documents and statement, and most importantly the name on the Registration book is of that coborrower.

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4.3 REQUIRED DOCUMENTS FOR CAR LOAN There are some essential documents required by the BAL according to the polices of the SBP. The file of the customer contains all the following documents, and if all the documents are enough in convincing the authorities that the customer is not going to default and will repay the loan without delay then the case is approved and loan is disbursed.

4.3.1 FOR BUSINESSMEN  Copy of NIC  NTN  Bank statement last 6 months  2 photograph (Supplementary)  Proprietorship certificate (Supplementary)

4.3.2 FOR SALARIED PERSON  Copy of NIC  2 photographs bank statement last 6 months  Salary certificate (3-months)  NTN Utility Bills(PTCL)

4.3.3 FOR PARTNERSHIP FIRMS  Partnership Deeds  Copy of NTN The Caring Bank F06B020

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 Form –C or firm Regulations certificate  Balance sheet  Copy of NIC’s of all partners  Copy of Utility bills(PTCL)  Partnership declaration form  Income Statement

4.3.4 FOR SOLE PROPRIETORSHIP  Copy of NTN  Balance sheet  Copy of NIC  Copy of Utility bill  Bank Declaration form.

4.4 ELIGIBILITY Yes now people get a car loan from Bank Al-Falah to purchase a brand new car if we are: ➢ Pakistan National Identity Card holder ➢ Over 20 years of age (maximum 60 years in case of salaried and 62 in case of a business person at the time of maturity of the loan) ➢ Salaried , Business man of self employed

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4.5 SPECIAL FEATURES  The car is the security, which will be hypothecated in favor of the Bank and the lien will be marked with register.  You have the option to repay the loan at any time during the tenure of the loan.  You will repay the loan by making easy monthly installments to

Bank Al-Falah in the form of post dated cheque.  Bank Al-Falah has made arrangements with the top insurance

companies who are offerings special lowest rates for Bank AlFalah clients. (First year’s insurance has to be made in advance and the remaining years in equal monthly installments)  You have to pay a one-time fee of Rs. 3000/- being amount of processing and documentation charges and the first year’s insurance premium.  Initial down payment that the client has to make is 20% of the value of the car.  The loan can be availed from 1 year to 5 years with early adjustments facility at any time before the maturity.  The minimum amount of loan facility that the client can have is Rs.200, 000/- and maximum amount is Rs. 4,000,000/-.  Client

can

apply

for

all

brand

new

Pakistani

assembled

manufactured cars(Unregistered)  You can get a car loan from Bank Al-Falah to purchase a Brand

new car if you are ○ Pakistan National Identity Card Holder

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○ Over 20 years of age (maximum 60 years in case of salaried and 62 in case of a business person at the time of maturity of the loan) ○ Salaried, Business man of self employed.  You can include your spouse, children (18 years and above) or

parents as

co – applicants for the car loan and the car can be

registered in their names.

4.6 PROCEDURE FOR CAR FINANCING The procedure for car financing starts when a customer comes and asks for a plan for a specified car. When he receives this plan, he will fill an application form for a car financing, stating the car he wants to finance, its color, personal details and two references. They also pay a processing fee which is non refundable. The bank then conducts a verification of the two references, which for Bank Al-Falah Liberty Market is conducted in Rawalpindi. A ‘Verisys’ is also conducted on the applicants CNIC and a Customer Credit Information Report is taken from the CIB. After the verification process is completed, a Credit Line Proposal (CLP) is generated by Bank Al-Falah Liberty Market, to be sent to the Area Office for a final approval with all other documents as well. The final authority of passing the application remains with the Area Office. After the Area Office approves the application, the customer will make the down payment, give the bank post dated cheques and sign a legal document with the bank. When this process is complete, a quotation is sent to the car dealer for the specified car, insurance documents are sent to the specified The Caring Bank F06B020

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insurer. Later on the car is registered with the Excise and Taxation Officer and is given a number. When all this process is complete, the key to the car is handed over to the customer with all documents relating to the car. When the tenure for the car financing is completed, the bank issues a NOC to the customer. As part of my internship I had to complete the final legal document signed by the customer, by writing in detail about the car, the financing period and witnesses pertaining to the agreement etc.

4.7 CONCLUSION This department keeps an all in all fascination for me. It is totally a different category from other departments of those I got experience. In The Caring Bank F06B020

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this department I got the opportunity to make practice of some most important topics of finance that I have learned in my university and to exercise those concepts in real corporate world like amortization table, determination of interest rate etc.

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CHAPTER 5 ACCOUNTS DPARTMENT WEEK 6

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5.1 ABOUT THE MANAGER Hamid Siddique Incharge Accounts Department Bank AL-FALAH limited Hamid Siddique, the incharge of accounts department is a nice person. He is very much supportive and obliging to his subordinates. During my entire stay I observed that he is a kind manager who believes in self empowerment of the employees. The culture I observed in this department was very friendly;

where all the employees were

performance oriented and were highly focused towards the end results. He is in a habit of resolving conflicts, if any, with effective communicating skills. He always for the ways to solve client’s problems and deals with inter-department with a win approach. His attitude and management style is not of commanding type, but of collaboration and co-operation

5.2 ACCOUNTS Most important department of the bank is concerned with  Revenues  Expenses  Assets  Liabilities These are the pillars of business.

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The accounts department is supervised by Mr. Hamid Siddique and assisted by Mr. Majid Malik and Mr. Hafiz Naveed. In this department, all the vouchers are posted during one day are sent to Accounts department next day. These vouchers are already posted to computer by the concerned department. The accounts department has to tell that all the vouchers are posted under the right head. Amount, date, stamps, signatures all the requirements for cheques and vouchers are fully checked. If any kind of renovation or construction or rebuilding is done, all is paid from the Accounts department. Like petrol for the car, stationary charges, medical allowances, etc are all paid by this department

5.3 MAJOR ACTIVATES Accounts department is totally a backend department and is not linked to customers at all. All the day’s transactions inside, outside the branch and for other banks are handled with this department. This is one of the most sensitive departments because the customers account are credited and debited solely by this department so there is a very strict check and balance system for this department and each transaction is monitored and rechecked at least twice and supervised even by Manager Operations if amounts are high. Major activities in accounts department are  Maintaining accounts of customers  Monitoring & posting daily activities and transactions The major activates are to update customer’s account continuously and on daily basis. Because more of less each and every account is been credited or debited by some amount so the purpose of this The Caring Bank F06B020

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department is to make sure that the right person’s account is credited and debited.

5.3.1 MAINTAINING ACCOUNT OF CUSTOMERS Once the account is created by the Account Opening Department it is not duty of accounts department to continuously monitor each and every account on daily basis. They monitor which account is performing well and which is not? Which account and which customer needs special care and special services? There are special accounts associated with credits and loans they are monitored specially.

5.3.2

MONITORING

&

POSTING

DAILY

ACTIVITIES & TRANSACTIONS Monitoring daily activities include each and every transaction from all customers’

accounts

including,

ATM

transaction,

International

remittance, local remittance, inward and outward transactions etc. The responsibilities in the accounts department are to debit and credit each and every transaction, monitor it, supervise it and special transactions which require supervision by higher authorities should be supervised.

5.4 FUNCTIONS 5.4.1 REPORTS The Caring Bank F06B020

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It generates reports like Statement of Account Activity (a report on the activity of all accounts at Bank Al-falah Liberty Market), Statement of Affairs (a report on the assets and liabilities of Bank Al-falah Liberty Market), Statement of Foreign Exchange (a report on the foreign exchange currencies at the bank) and Statement of Profit & Loss (a report on the income and expenditures of Bank Al-falah Liberty Market). These reports can be generated at daily, weekly, monthly, quarterly or yearly basis as required by the bank.

5.4.2 INCOME AND EXPENSE The department also needs to calculate the revenues and expenses, control expenditure and forecast profits every month.

5.4.3 BUDGET Formulation of yearly budgets & targets in consultation with the branch manager is also done by the accounts department.

5.4.4 STORAGE OF RECORDS Accounts Department also has the duty to store vouchers and system generated reports.

5.4.5 PAYMENTS The accounts department is responsible to pay vendors on behalf of the bank with authorization from the branch manager. It also has to amortize large payments and calculate depreciation of branch assets.

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5.4.6 ACTIVITY CHECKING In the accounts department, I had to do daily activity checking and there are four stages in which activity checking takes place: 1. Collecting vouchers, cheques etc from all departments 2. Sorting Vouchers 3. Checking Activity 4. Packing

5.4.6.1 COLLECTING VOUCHERS The first stage of activity checking is collecting all vouchers, cheques, DD’s, pay order, pay slips etc from all departments of the bank. Mainly vouchers come from the operations department. After collecting these vouchers etc from the departments, we need to check if all stamps are stamped on these vouchers etc.

5.4.6.2 SORTING VOUCHERS After all vouchers are collected, they need to be sorted into eight categories: 1. Customer Debit: Includes debit vouchers and cheques 2. Customer Credit: Includes credit vouchers and credit slips 3. Income: Income vouchers 4. Expenditure: Expenses vouchers and payment vouchers 5. Others: Includes vouchers about excise duty, FED, teller, ATM, payables etc 6. Online: Contain online vouchers and online credit slips etc 7. Head Office (H.O): Includes HO vouchers and IBCA, DD advices

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8. Bills Payable General (BPG): Includes vouchers and

DD, Pay

orders, Pay slips etc

5.4.6.3 CHECKING ACTIVITY After sorting takes place, daily activity is checked using the statement of account activity, which contains all daily activity of the accounts in the bank. Activity checking is done by seeing if the values and account numbers in the sorted vouchers match that of the activity and whether or not there is any missing activity that is not in the vouchers.

5.4.6.4 PACKING After the activity is checked, all sorted vouchers are counted, both debit and credit and then packed by totaling the vouchers.

5.5

CONCLUSION

During my sixth week of internship I learned the process of checking, maintaining, and record keeping of accounts i.e. all operation of the branch, income from operations and expenses and reporting to the area office about all the operations.

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CHAPTER 6 SWOT ANALYSIS

6.1 STRENGTHS Bank Al-Falah is considered to be a very sound bank in the financial circles. A bank, where the customers can safely keep their money as long as they want. I am pointing some of the major strengths of the bank

6.1.1 COMPASSIONATE CUSTOMER SERVICE The Caring Bank F06B020

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The officers of BAL are considered as one of the most able professionals in the banking world (some belong to BCCI). However, they have added some local flavor in accordance with their targeted segmented. Especially, in Circular Road Branch, I observed that they interact with their clients as if they are their personal friends and discuss about their problems as their own.

6.1.2 GOODWILL & TRUST As a result of the compassionate and personalized services of the officers, the clients’ perception for BAL is very high. They have trust and feel themselves to be secure while banking with BAL.

6.1.3 LOCATION Bank Al-Falah has opened all its branches at commercial areas so that the customers or clients face no problems in reaching to the bank. For example, Circular Road branch for being situated in business and commercial hub of Lahore has second largest volume in trade finance.

6.1.4 FOREIGN TRADE BUSINESS The bank is focusing on Trade Financing; it attaches great significance to the development and maintenance of healthy correspondent relationships with other banks and financial institutions. Towards this pursuit, BAL has developed excellent business relations with foreign banks, whose support in terms of lines of credit extended to the bank, has enabled it to handle the ever-growing trade volumes. During year 2000, the bank handled foreign trade business in excess of PKR 30.6 billion, representing an increase of 92% over the previous year.

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6.1.5 WIDE BRANCH NETWORK Bank Al-Falah’s objective has been to expand its branch network to meet clients’ needs. It is heartening to note that in just three years, which is considered the infancy stage in the industry, the bank has increased the branch network from 3 to 23. And, due to the growing business requirements, there are 10 proposed branches in different cities. The expansion program is strategically important to increase customer base and to approach different customer segments.

6.1.6 THE COMPUTERIZED SYSTEM BAL has got a reliable and easy to use internal computer system. Every information regarding the transactions in customers’ deposits has been computerized. Currently, bankexel is being practiced for this purpose but very soon, a new program named ‘banksmart’ will start functioning (it has started functioning in Clifton branch).

6.2 WEAKNESSES Perfection is only the claim of Allah Almighty. No other being living or dead can say this for itself. Similarly, Bank Al-Falah also has some shortcomings that need to be mentioned: The Caring Bank F06B020

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6.2.1 ADVERTISEMENT BAL has formulized a lot of products and services for its customers, even more than other commercial banks, but any advertisement on electronic media has not been seen. Since, BAL’s major competitor Union Bank Limited has started large media campaign, so keeping in view these threats, Bank Al-Falah should emphasize more on its advertisement.

6.2 2 PROBLEMS OF EMPLOYEES I observed during my internship that some of the employees were burdened with over work. So I think that the work should be distributed according to their post and capabilities.

6.3 OPPORTUNITIES Bank Al-Falah has grown up its business with a very high pace and it has got tremendous popularity, even with in a very short span of time.

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There are many opportunities for the bank and by availing that it can stand amongst the top foreign banks.

6.3.1 INFORMATION TECHNOLOGY All the opportunities of the 21st century are to be availed in the information technology. Information technology is the future. Therefore BAL should emphasize much on IT, especially the E Banking. Bank can design a universal account like other foreign banks, to enhance online facilities.

6.3.2 EXTENSION OF BRANCH NETWORK Bank Al-Falah’s growing business requires an extensive branch network. There are great opportunities for BAL for the expansion of its business.

6.3.3 GROWTH IN DEPOSITS BAL has introduced a number of financial schemes including special royal accounts. These accounts have their unique features (discussed earlier). During the last three years, BAL’s deposits have been increasing @ 30%, which is a very healthy sign. Therefore, with the commencement of new schemes there can even be a greater increase in its deposits.

6.4 THREATS The Caring Bank F06B020

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6.4.1 ECONOMIC CONDITIONS Despite the difficult circumstances that confronted the banking sector in particular and the country in general, Bank Al-Falah has been still highly profitable. But, the facts can’t be denied and there might be an adverse impact of such situation.

6.4.2 COMPETITORS Bank Al-Falah is facing a strong competition by its major competitors; Union Bank and Askari Commercial Bank. Business of these banks is also growing with very high pace. The SWOT analysis of the bank signifies that its strengths overcome its weaknesses and its opportunities are more than its threats. This is a positive sign for any organization.

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CHAPTER 7 SUMMARY

7.1 SUMMARY The Caring Bank F06B020

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With the development of economies and globalization, exposure to corporate world and its culture is becoming a necessary and valueable experience for college graduates entering the job market. Experience after BBIT brings a significant edge to individuals like me when seeking career employment. Successful completion of internship further develops character; gain an increased awareness of skills, attributes, personel qualities ad values. The banking industry is also reaping the fruits of this economic boom by growing rapidly over the past few years. There are a number of mergers happening in the economy with foreign investments coming into the banking sector. It has been thirteen years since the establishment of Bank Al-Falah, and since its establishment it has aimed to become the leading bank of Pakistan by that provides outstanding services to its customers. The bank has seen phenomenal growth in the past few years by opening more branches in the country, increasing the deposit base, while also increasing the assets and profits of the bank. The services that Bank Al-Falah provides have a great market penetration not only because of their features but also the profit and markup rates that they charge. Also the products that Bank Al-Falah provides cater to sector of the economy. The six week experience, as an internee in this organization was very useful. It gave me an opportunity to apply my theoretical knowledge to practical field. It was absolutely an interesting and edifying experience. My foremost objective of this internship project was to apply classroom theory to real work situations, and to gain a richer understanding about them that made me learn more about my chosen field. The Caring Bank F06B020

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During my first 2 week’s stay in Bank Al-Falah, I experienced the environmental and cultural gloom of corporate world of Pakistan. I was quite able to understand the operations. I experienced that the communication is the key weapon of any manager that could lead him to resolve/explore any conflict / situation with great ease. After 2 weeks I joined operations department, where I got familiar with the process of clearing and its types i.e. inward clearing, outward clearing and intercity, IBC and OBC. I learned about different types of crossing on cheques and about demand drafts, pay orders and telegraphic transfers. As part of my internship, I was responsible to collect cheques from the customers that they deposited, put the official stamps on the different kinds of cheques, register the return cheques in a register and make OBC schedules. Car finance department keeps an all in all fascination for me. It is totally a different category from other departments of those I got experience. In this department I got the opportunity to make practice of some most important topics of finance that I have learned in my university and to exercise those concepts in real corporate world like amortization table, determination of interest rate etc. In my last week of internship I was in accounts department where I learned the process of checking, maintaining, and record keeping of accounts i.e. all operation of the branch, income from operations and expenses and reporting to the area office about all the operations. The working in this department is quite boring like checking accounts on daily basis is a very hectic job. While doing my internship, I realized that this field has more opportunity for career growth. There are loads of advantages The Caring Bank F06B020

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connected with this field. One of the foremost advantages is opening up your mind. Starting the day with reading newspaper is like religion for all managers. Every moment, information plays an important role. Indeed, information is a religion for financial organizations. The top management of the bank is always developing strategies that cope with unexpected challenges to deliver products and services more efficiently. An internship is an excellent way to determine if the industry and the profession is the best career option to pursue. I believe an internship program is not only valuable for a fresh graduate, but also for the employers and IBIT itself. For employers, it not only helps to establish a pool of potential employees who have demonstrated their abilities, but also benefits from introduction of fresh and new ideas. On the other side, for IBIT, student feedback can bring a valuable and effective curriculum improvement according to the needs of the ever changing environment. It also reinforces positive relationships with the business community, increases rapport with community interest, and encourages community support for university programs. In last I would like to share some of my good experiences and learning that I got familiar with during my stay in Bank Al-Falah. I could say that I found the key to success in corporate world after having my stay in that meadow for six weeks. Firstly, I think, honesty is one of the primary qualities a man should have to be successful. Because in corporate world, if you are honest, people trust you, they trust you with their money.

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Second would be hard work, there is no substitute for it. You just have to toil in there and the results come. I have always been a firm believer in hard work. If hard work doesn’t pay off in six months, it does in nine, if it doesn’t pay off in nine, then it pays off in a year, but you just have to keep toiling away. Third is self motivation. I think many other people rely on others to get motivated; you need to just go out there on your own and do your best.

CHAPTER 8 RECOMMENDATIONS The Caring Bank F06B020

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8.1 RECOMMENDATIONS TO BAL I spent six weeks of my internship in BAL Liberty Market , Lahore. During these six weeks, I felt myself to be a part of BAL. Even, this was my first experience of working in a banking organization, but I learned a lot from this experience. Based on my experience & observation regarding the operations and policies of Bank Al-Falah, I have tried to stipulate some recommendations for further improvement.

8.1.1 TECHNOLOGICAL ADVANCEMENTS Bank Al-Falah should develop a modern connectivity architecture to effectively maintain an online connection of the branch with other branches and also the ATM link, which may include using modern technologies like fiber cables, routers etc. Also backup links should also be developed, Also a proper IT department should be established in all branches, with professional having the knowledge to maintain a secured connection The Caring Bank F06B020

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with other banks. Also scheduled backups of data should be done with in the bank.

8.1.2 WORKSHOPS AND COUNSELING Work shop programs should be conducted in every city, rather than just two centers, for all Bank Al-Falah employees. These workshops should relate to all aspects of banking and may also be conducted with other banks as a joint program. Also as parts of the human resource training, counseling programs should be started for junior executives or new entrants into the bank, introducing them to their prospects in this industry. The lower staff employed at Bank Al-Falah should also be given a chance to succeed in life by training them in different simple jobs at the bank, which my include sorting of cheques, phone banking etc.

8.1.3 INCENTIVES Incentive schemes should be developed for the employees that can help motivate them, which might include: •

Personal loans and car financing facilities for all ranks of employees.

•

Scholarship programs for all employees.

•

Introducing employee awards at branch and regional levels.

•

Job rotation programs to enhance the skills of employees.

8.1.4

PRIORITY

BANKING

AND

BUSINESS

DEVELOPMENT DEPARTMENT The Caring Bank F06B020

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There is no priority banking department at Bank Al-Falah, like that of other bank. A priority banking department should be developed so as to give even more exclusive and customized services to high end customers with large deposit accounts. Also Business Development Department should be developed in all branches, so that they can actively find prospect customers to take up products from Bank AlFalah.

8.1.5 INNOVATIVE PRODUCTS New and innovative products should be introduced by Bank Al-Falah, like other bank such as Citibank and Standard Chartered Bank develops for their customer. For this purpose, special teams should be developed that include professional from all departments of the banks to come with ideas. This process will increase the number of ideas generated and even produce innovative products for the bank that might give them the edge.

8.1.6 MARKETING BAL has formulized a lot of products and services for its customers, even more than other commercial banks, but any advertisement on electronic media has not been seen.So, I think that there should be a proper marketing department and advertisement expenditures of the bank should also be increased to improve its visibility and to publicize its financial schemes.

8.1.7 PLACEMENTS OF EMPLOYEES There are some departments in the bank that do not have enough employees, while some have more than needed. All this creates The Caring Bank F06B020

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inefficiencies and so the operations manager should look at the department of the branch and see where inefficiencies lie, in consultation of with the heads of the departments and hire individuals where there are less employees or rotate employees from other departments.

8.1.8 AMENITIES IN BRANCH There should be a prayer room developed in all branches as many employees want to pray, but do not have the proper place to do it. Also work like sorting, which takes up a lot of space should be done in a separate place and amenities like television and internet connection should be placed in the common room, so as to give employees a relaxing environment when they have a break.

8.2 RECOMMENDATIONS TO INSTITUTE OF

BUSINESS

AND

INFORMATION

TECHNOLOGY Institute of business and information technology is undoubtedly a firstrate school in its field. Its MBIT & BBIT program are meticulously designed to meet competitive international standards of modern world. The course has optimal blend of IT tolls and management as science.

8.2.1 INTERNSHIP DURATION The Caring Bank F06B020

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Once the foundation has been set at university, it is necessary to have an experience of an internship to strike all the different things learned. Presently, a minimum requirement of 6 week is not sufficient for a promising graduate to really mingle in the shade of corporate world. Graduates can not truly avail the novel benefit of the immense opportunity of internship to learn in such a short span of time i.e. 6 weeks only. So I advocate that internship program must b of a minimum duration of 3 months so that our youth could find a genuine path of its career development.

8.2.2 SEMINARS There should be proper arrangement through which the students of senior batches who have passed out should come and meet with junior students. In this way the students who are still studying will have the knowledge of jobs. Their exposure to the real business world will be broadened. Their contacts will be increased and when they would need guidance they can get it from their own seniors. Seminars should b held in which the business representatives should visit our institution. In this way, the faculty as well as the students will know that what is required in the business world now-a-days. One need to b equipped with if one wants to get better job. Moreover, the business organizations will also know the caliber of our students. They should know that what subjects are taught to us and what is the value of our degree.

8.2.3 TEACHER’S EVALUATION

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The teacher’s evaluation should be taken seriously. The students fill what they want from a teacher but it is rarely taken into notice. It is a perfect tool to cater to the students needs if properly used.

8.2.4 ADVANCED COURSES In my view, the courses presently taught are not quite enough to fulfill the continually changing needs of the business world. IBIT must consider other advanced courses for auxiliary improvement of its curriculum, like course Entrepreneurship. In today’s world, organizations are now not bound to the borders only. With the increase in the business of organizations and their business approach, it provides with new prospects and unlocks the doors of employments. So there is a need to give exposure of the course International Finance to our BBIT students.

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