Bank Alfalah LTD.

TABLE OF CONTNTS
TABLE OF CONTNTS.................................................................................................... 1 Evolution of Banking................................................................................................7 Early Growth............................................................................................................ 8 Development of Modern Banking.............................................................................9 Banking in Pakistan..................................................................................................9 The Vision.................................................................................................................16 The Mission............................................................................................................... 17 The Philosophy .........................................................................................................18 Karachi ..................................................................................................................... 21 Lahore ...................................................................................................................... 22 Rawalpindi ............................................................................................................... 22 Peshawar.................................................................................................................. 23 Multan....................................................................................................................... 23 Other Branches......................................................................................................... 23 Salient Features........................................................................................................ 27 Eligibility Criteria.......................................................................................................28 Daily Product Basis................................................................................................... 34 ................................................................................................................................34 Average Month Balance............................................................................................34 Minimum Month Balance...........................................................................................34 Saving A/C (05 Days _ Minimum Monthly Balance)....................................................35 Cheque Book Issuance..............................................................................................41 Procedure................................................................................................................. 41 Receiving Inward Cheques........................................................................................42 Procedure for Issuing DD...........................................................................................49 Procedure for Demand Draft Payable........................................................................49 Inward Bills for Collection..........................................................................................51 Bills for Collection In 2007.........................................................................................51

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1. Credit Principles....................................................................................................52 2. Credit Portfolio...................................................................................................... 52 3. Credit Approval..................................................................................................... 53 4. Credit Administration............................................................................................53 5. Credit Monitoring.................................................................................................. 53 Advances.................................................................................................................. 53 Funded Facilities....................................................................................................... 54 Pre-Shipment............................................................................................................ 54 Post Shipment........................................................................................................ 54 Non Funded Facilities............................................................................................. 55 L/C Is Of Two Types:..................................................................................................55 Credit Cards.............................................................................................................. 55 Exporter....................................................................................................................56 Documents to Be Attached For Exports.....................................................................56 Form E.................................................................................................................... 57 Transport Document (Bill Of Lading, Airway Bill).......................................................57 E-Form Certification.................................................................................................. 57 Form of Authorized Dealers Certificate.....................................................................58 Certificate of Origin...................................................................................................58 Covering Schedule.................................................................................................... 58 Beneficiary Certificate...............................................................................................58 E-FORM..................................................................................................................... 59 E-Form Has Four Copies:...........................................................................................59 Payment from Importer Bank....................................................................................59 SWIFT....................................................................................................................... 59 Bill Of Lading............................................................................................................. 59 Bank Keep In Record.................................................................................................60 Imports..................................................................................................................... 60 Necessary Requirement............................................................................................60 Documents for Import...............................................................................................61

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Executive Summary
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The banking structure in Pakistan comprises of the following types, State Bank of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks, specialized credit institutions. The state bank of Pakistan is the Central bank of the country and was established on July 01, 1948. The network of bank branches now covers a very large segment of national economy. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit. To open an account the customer has to meet the general banking manager with an introducer. The procedure begins with the punching of account opening form to the customer file i.e. customers master file. Before closing any account, bank send letter to the account hold for informing him that his account is going to be closed. There is need an approval form higher authority to close any account. Current deposits are those which are payable to bank whenever demanded by the customer. Bank does not pay any profit on current deposits. The following are the financial products/services of PLS Account, Saving Account, Term deposit and Foreign currency accounts. In remittance department like any other BANK AL-FALAH also have instruments for transferring of money, Telegraphic Transfer, Mail Transfer. In cash department both deposits and withdrawals go side by side. This department works under the CD In charge and deals with cash deposits and payments. This department maintains the following sheets, books, and ledger of account cash received voucher sheet. Cash paid voucher sheet, Paying-in-slip, Cheque Book, Cash balance book. The clearing in Karachi at BANK AL-FALAH or other banks is being done through NIFT (National Institute of Facilitation Technology). Bank provides this facility to the people who need advance money to meet their requirement. Party dealing with other banks financial condition of borrower business and as a first step credit proposal is being made. BANK AL-FALAH provides advances, which are two types. Secured Advances, Unsecured Advances. BANK AL-FALAH usually classified advances in to following types Commercial Advances, Corporate/SMEs Advances, Agricultural Advances. Commercial

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Advances are of following types Demand Finance, Cash Finance, Export Refinance Part I (Pre Shipment) & others. Banks Agriculture division deals with the agriculture advances. Bank provides the Agriculture Advances in order to enhance and support the agriculture sector of the country. Farm Credit & Non Farm Credit. In foreign exchange, BANK AL-FALAH is dealing Foreign Currency Accounts, Foreign Remittances, and Foreign Bills for Collection, Imports & Exports Foreign currency accounts & the foreign currency department deals with the following types of accounts, Current account, Saving bank account, Term deposit. Foreign accounts are convertible on floating rate available to the bank. Letter Of Credit facility is being provided by BANK ALFALAH in foreign exchange.

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what is BANK?
According to Dr. Hart Banker or bank is a person or company carrying on business of receiving money and collecting drafts for the customers subject to the obligation of honouring cheques drawn upon them from time to time by

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customers to the extends of the amounts available on their currents accounts In the words of G W Gilbert A banker is a dealer in capital or more properly a dealer in money. He is an intermediate party between the borrower and lender. He borrows one party and lends to the another

Evolution of Banking

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It has not so far been decided as to how the word Bank originated. The explanation of this origin is attributed to the fact that the Jews in Lombardy transacted the business of money exchange on branches in the market place and when the business failed, the people destroyed the Bank. Incidentally, the word bankrupt is said to have been evolved from this practice. The opponents of this opinion argue that it was so, then how is that the Italian money changers were never called Banchierei in the Middle Ages Other authorities hold the opinion that the word Bank is derived from the German word back which means joined stock fund. Then Back was Italianize into Bank.

Early Growth
Banking in fact is as primitive as human society for ever since man came to realize the importance of money as a medium of exchange. Perhaps it was the Babylonians who developed banking system as early as 2000 B.C. It is evident that the Temples of Babylon were used as Banks because of the prevalent respect and confidence in the clergy. King Hamurabi (1728 1686 B.C), the founder of the Babylonian empire, drew up accede where in he laid down standard rules of procedure for banking operations by temples and great landlords. He got his code inscribed on the block of diorite about 8 feet tall, containing about 150 paragraphs which deals with nearly all aspects of loans, interest, pledges, guarantees, natural accidents, loss, theft etc. Later on Sumerians, Babylonians, Hittites and Assyrians standardized the values of the goods in silver, copper and bronze. It is not certain as to who invented money but history recess that king of Lydia castled electrum ingots of identical shapes and of uniform weights with a triple emblem engraved on it as an official guarantee of value in 687 B.C. In 1401 a German public bank was framed comprising the operations of discounting and transferring of money. By the 16th century, some more public banks were formed in Venice, Milan, Amsterdam, Hamburg and Nuremburg. In order to streamline Banking organizations and techniques, conferences were held in Nuremburg from 1548 to 1551

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and it was agreed that the commercial interest of the time needed a bank with facilities of growth and transfer but it should not be a bank run by private individuals. Ultimately in 1587, a State Bank under the name of banco DI rialto was formed in Genoa. Later the bank of Amsterdam was also formed in 1609. This Bank had a guarantee by the State and rendered valuable services to the Netherlands traders up to the year 1795. Similarly in 1690, the Bank of Hamburg came into existence in Hamburg with the business of accepting deposits of fine silver or of foreign money and to run accounts on these deposits. This Bank rendered great service to the merchants as well as countries it dealt with until 1873, when it was merged with the Reich bank. By the year 1700, the bank of England was not only issuing notes but also conducting accounts for customers. Its directors were conducting the business like that of limited companies. The bank had the monopoly of issuing banking notes. Upto 1813 or there about in England, the main profit of bank was derived from the circulation of notes.

Development of Modern Banking

In 1918 came into being eleven clearing banks of today. The effect of this historical development of banking in England has been fairly wide. First, emergence of a small number of large banks with wide network of branches. Second, increase in the popularity of bank accounts and a large-scale use of cheques. In 1946, the labor government nationalized the bank of England and transferred the existing stock to the nominee of British treasury. In 1955, the British Banks made a departure from traditional banking by undertaking hire-purchase finance for companies buying industrial plants and machinery and took interest on hire-purchase finance.

Banking in Pakistan
At the time of independence, there were 631 offices of scheduled banks in Pakistan, of which 487 were located in West Pakistan alone. As a new country without resources it was very difficult for

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Pakistan to run its own banking system immediately. Therefore, the expert committee recommended that the Reserve Bank of India should continue to function in Pakistan until 30 th September 1948, so that problems of time and demand liability, coinage currencies, exchange etc. be settled between India and Pakistan. The non-Muslims started transferring their funds and accounts to India. By the end of June 1948 the number of officers of scheduled banks in Pakistan declined from 631 to 225. There were 19 foreign banks with the status of small branch offices that were engaged solely in export of crop from Pakistan, while there were only two Pakistani institutions, Habib Bank of Pakistan and the Australasia Bank. The customers of the bank are not satisfied with the uncertain condition of banking. Similarly the Reserve Bank of India was not in the favour of Govt. of Pakistan. The Govt. of Pakistan decided to establish a full-fledge central bank. Consequently the Governor-general of Pakistan Quaid-E-Azam inaugurated the State Bank of Pakistan on July 1, 1948. Thus a landmark was made in the history of banking when the state bank of Pakistan assumed full control of banking and currency in Pakistan. The banking structure in Pakistan comprises of the following types. 1) State Bank of Pakistan. 2) Commercial Bank of Pakistan. 3) Saving banks. 4) Co-operative banks 5) Specialized credit institutions.

Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all over the country and in some foreign countries through a network of branches. All these commercial banks were nationalized in January 1, 1974, and were recognized and merged into the following five banks: 1) National Bank of Pakistan 2) Muslim commercial bank limited

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3) Habib Bank Limited 4) United Bank Limited 5) Allied Bank of Pakistan

The state bank of Pakistan is the Central bank of the country and was established on July 1, 1948. The separation of East Pakistan and its repercussion in the form of economic depression has caused a lot of difficulties to the banking system in Pakistan. The network of bank branches now covers a very large segment of national economy. The numbers of branches have increased appreciably and there is now on branch of bank for every 3000 heads of population approximately. There is done reasonable growth in deposits from the establishment of Pakistan. Besides this growth, specialized credit and financial institutions have also developed over the years. The Government of Pakistan in the late 90s introducing the need for the privatization of state owned banks and companies. The private sector has accepted the challenge and most of the banks are privatized today. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit.

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Introduction to Bank Alfalah Ltd.

Bank of Credit & Commerce International (BCCI) was a Pakistan based bank, established by Mr. Agha Hassan Abdi from UBL, in association with U.A.E and Europe. BCCI has its branches in 74 different countries of the world. It had its 3 branches in Pakistan. In 1991, the BCCI was banned, when was accused by European countries that the bank was involved in some illegal operations with Gulf countries. The major reason behind European accusation was that BCCI was of Islamic mode. Therefore, the bank was closed due to international pressure. Then, its 3 Pakistani branches were taken over by the Government of Pakistan, which were named as Habib Credit and Exchange Bank (HCEB) and these were working as subsidiary of Habib Bank Limited. Following the privatization in July 1997, Habib credit and Exchange Band assumed the new identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based bank as the family of Sheikh Nahayan Mubarik Al-Nahayan purchased 70% of its shares and 30% shares remained with Habib Bank on behalf of Government of Pakistan. Charged with the strength of Abu Dhabi consortium, and under the leadership of His Highness Sheikh Nahayan Mubarik Al-Nahayan, Minister of Higher Education and Scientific Research, Government of Abu Dhabi, and a prominent member of Royal Family, the bank is energized with the vision, envisaging the development of various sectors in Pakistan.

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Since the inception of Bank Alfalah, by the grace of the Almighty, we have moved rapidly in expanding our branch network and deposit base, along with making profitable advances and increasing the range of products and services. We have made a break-through in providing premier services at an affordable cost to our customers. Keeping in view our valued clients and the need for constant and effective communication of information, we have designed this website to be as user-friendly as possible. As we pursue the path of excellence, customer satisfaction remains our priority. It is only when we know our customers better, can we deliver a higher quality of services, thereby adding synergy to our existing management expertise, financial strength and profitability. This is yet another channel of communication for the delivery of quality products and services that enhance value to our stakeholders.

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Thank You for Visiting Our Site. H.E.Sheikh Hamdan Bin Mubarak Al Nahayan

Management
Sirag-u-din Aziz
Chief Executive officer

Mr. Parvez A. Shahid Executive Incharge

Strategic Planning & Global Marketing

Mr. Asad Jamil Executive Incharge

IT Division

Mr. Bakhtiar Khawaja Executive Incharge

Human Resources Division

Mr. Shakeel Sadiq Executive Incharge

Corporate Banking & Home Finance.

Mr. Mohammad Yousuf Executive Incharge

Credit Division

Mr.Mahmood Ashraf Executive Incharge

Credit Monitoring Division

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Bank Alfalah LTD.

Mr. Hamid Ashraf Mr. Ather Shehab Executive Incharge

Establishment & Administratration

Executive Incharge
Legal Affairs Division.

Mr. Zahid Ali H. Jamall Mr. Shahid M. Murtaza Executive Incharge

Business Development Division S.A.M./ Car Finance/ Leasing

Executive Incharge
Finance Division

Mr. Mohammad Iqbal Saifee Executive Incharge

Audit & Inspection Division

Mr. Ijaz Farooq Executive Incharge

Islamic Banking Division

Mr. Adil Rashid Executive Incharge

Cards Division

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The Vision
Our vision is to be a leading financial institution, with a niche in areas where we have a competitive advantage with complete banking solutions. Our focus is on improving performance in each of our businesses to achieve consistent and superior returns for our highly valued clients and stakeholders.

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The Mission
Our mission is to maintain a competitive edge in quality banking, customer service and profit performance. Our activities are geared towards making Bank Alfalah a responsible corporate citizen. The emphasis on Quality & Innovation will remain our key mission statement. We will continue to strengthen our position as the leading provider of quality financial services in Pakistan.

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The Philosophy
Excellence in service Quality performance Product innovations

Bank Alfalahs Slogan

Lets Look Ahead Towards A Brighter Future Together.

Bank Believes

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Every door leads to our customers. The legacy of leadership stands as our guiding light. 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 the ability to measure it. Every drop counts.

Present Status:
Despite adverse economic conditions of country, the year 2000 was a milestone for the bank, both in terms of growth and profitability. The banks pretax profit for the year grew by 12.96% to Pak Rupees 20.48 billion, an increase of 29.50 %, with a balance sheet footing of Pak Rupees 27.57 billion compared to previous years figure of Pak Rupees 21.02 billion. After doing successful business in year 2000 to 2011, Bank Alfalah is now looking forward positively towards the future and its management is confident to build on the gains realized during 2012. Currently bank is emphasizing on expanding its operations to meet clients needs and for this purpose management has plans to add more branches to existing network in the coming years. Bank has already started its working to go internationally and its future target markets include UAE, Bahrain, Bangladesh and Sri Lanka. Technological developments are opening up new vistas of solutions for distributing traditional financial products. Concurrently, rapid change in customer preferences has resulted in a major shift from manual to automated services. Information Technology today, is all pervading in the corporate world. Bank Alfalah made heavy investments towards enhancing its capabilities in the

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area of automation and information technology. Information Technology department of bank has successfully developed an advanced computer program named BANK SMART. Another success of bank is in the area of foreign trade. Bank has developed excellent business and correspondent relations with renowned banks of the world whose support in terms of lines of credit has enabled it to handle ever-growing trade volumes. From above stated facts it is very clear that bank has made remarkable achievements within a short period of time despite being in the nascent stage. With its key indicators of progress already soaring to new heights, the bank is committed to put all its energies, resources and time to bring higher value and satisfaction of its customers, employees and shareholders.

Competitors
Despite notable economic uncertainties, the financial strength of Bank Alfalah Limited has greatly enhanced during the previous years. The successful expansion program proved their capability and commitment in comparison with the competition in the financial sector. The Banking structure in Pakistan comprises of: Central Bank Commercial Banks Investment Banks Development finance Institutions (DFIs) Specialized Banks Foreign Banks Bank Alfalah is a private commercial bank so the major competitors of Bank Alfalah are the following: Muslim Commercial Bank

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Standard chartered Soneri Bank Ltd Prime Commercial bank The bank of Punjab Bank Al-Habib Ltd ABL Faysal Bank Ltd NIB

Arif Habib Rupali Bank Ltd.

Branch Network
Bank Alfalah has its 383 branches including 73 Islamic banking branches in Pakistan. Detail is as under: Karachi

Main branch, B.A. Building, I.I. Chandigarh Road

Cloth market branch Karachi Stock Exchange Branch Clifton branch Shahrah-e-Faisal Branch P.E.C.H.S Branch Timber Market Branch

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Defense Housing Authority Branch

Gulshan-e-Iqbal Branch Jodia Bazar branch Korangi industrial area branch M.A. Jinah Road Branch North Napier Road Branch S.I.T.E Branch Paper market branch North Karachi branch

Lahore Gulberg branch Defense branch Circular road branch Township branch LDA Plaza branch Badami bagh branch Allama Iqbal Town Branch Shah Alam Market Branch Rawalpindi Mall road branch Satellite town branch

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Peshawar Peshawar Branch Peshawar City Branch Multan Main Branch Abdali Road Hussain Agahi Branch Vehari Road Brach Chowk Shaheedan Branch Other Branches Other branches are in: Hyderabad Sukhar Rahim Yar Khan Sialkot Islamabad Jhelum Quetta Mingora, Swat Mian Channu Faisalabad Gujranwala

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Sargodha Bahawalpur Dera Ghazi Khan Gujrat Sahiwal Sadiqabad branch Mardan

THE BOARD
The list of Board of Directors of Bank Alfalah Limited is as under:

H.E.Sheikh Hamdan Bin Mubarak Al Nahayan Mr. Abdullah Khalil Al-Mutawa. Mr. Omar Z. Al-Askari. Mr. Naeem Iqbal Sheikh. Mr. Ikram-ul-Majeed Sehgal. Mr. Muhammad Saleem Akhtar.

Organizational Charts

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Features
Bank Alfalah Limited is well established bank. It has some special features with the help of those it is growing rapidly.

Good Work Environment As the work environment plays a great role in this competition age, so the bank has good work environment. All the people work with cooperation; managers are so kind that each problem can be discussed with them.

Efficiency Employees at Bank Al-Falah are quite efficient. As Hussain Agahi branch is a new one, its employees have to bring their bank among the list of good banks. Therefore, they work more than their working hours and it is all according to their will. It also shows their loyalty, commitment to organization. Customer Services All the customers are entertained individually. Same kind of behavior and attention is given to all the customers. Suggestions Asked From Customers Getting ideas for improvement from customer side is a new idea and that is working very well in Bank Alfalah Ltd. All the customers are asked to fill a suggestion form and the standards of the bank are improved through them.

Employee Benefits Employees are given the benefits like bonus, gratuity funds, loans, increments, house rent, medical and conveyance.

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Computerized Working Environment In bank, all the work is done on computers. All the entries are made in computer. Balance are fed into the computer. This increases efficiency of the bank. All the branches are centrally controlled through LAN settings. It helps them to co-ordinate more easily for making efficient and fastest consumer services.

Finance Policy Bank Alfalah finance on short term basis only against current assets to its customers in both corporate and consumer sectors. They dont invest too much in fixed assets. Maximum credit for short term is Rs. 50 Millions for one party, they dont go beyond five years financing.

Alfalah Car Its a scheme that enables one to own his desired car at easily affordable and flexible installments with a minimum down payment and insurance.

Salient Features Lowest Financing cost available in the market Tenure of 1 to 5 years as per individual requirement Quickest processing Minimum processing charges: Rs. 4500 payable once Down Payment requirement of 15% Repayment through monthly installments

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Lowest Insurance rates available from banks approved insurance companies

Eligibility Criteria All Businessmen, Corporate Employees, and other salaried or self-employed professionals having net take home income in excess of three times the monthly installment.

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Account Opening Department

Borrowing funds from different sources has become an essential feature of todays 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 their own capital. Banks borrowing is mostly in the form of deposits. These deposits are lent out to different parties such deposit creation is done through open an account in the bank. The Bank does not make payment of a cheques bearing a six-month or older date. If an account is not operated in six months, it is called Dormant Account.

Types of Account
Current Account. Saving Account.

Joint Account
Proprietorship Account Partnership Account Private Limited Account

Procedure of opening Account

The procedure of opening the account is as given under: 1. Account Opening Form: First of all, the customer fills the account opening form (AOF). Filling of account opening form includes type of account, currency of account, name, and address, signature of customer

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and signature of introducer and attach a photocopy of national identity card. He also signs an undertaking that he will follow the rules and regulations of the bank. 2. Introduction: The signature and account number of the account holder introducing the account to the new person is obtained on the account opening form. 3. Specimen Signature Card: The signature of the client is obtained on a specimen signature card (S.S Card). The card is obtained with two signatures from the customer. Every time a cheque is received for payment from the client, the signature on the cheque is verified by comparing it with S.S Card. 4. Requisition slip A requisition slip for Cheque book is also given to the customer. The customer fills it and gives it to the account opening Officer. 5. Know Your Customer Form Every account holder fills this form. The basic purpose of this form is to get some basic information about the customers business and source of incomes. 6. Account Number: When all the formalities are completed, an account number is allotted to the customer and all the information is entered into the computer and register. Then that account number is written on S.S Card and account opening form.

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7. Depositing of amount in account: The client deposit cash in the account. For this purpose cash pay-in-slip is used. The minimum initial deposit is fixed for each account according to the nature of account. For example for PLS / saving account the minimum requirement is Rs.5,000 only.

8. Issuance of a Cheques Book:

After opening an account with the bank, the account holder makes a request in the name of the bank for the issuance of a Cheque book. Such a request is known as Requisition Slip. BAL issues Cheque books from 25 leaves to 100 leaves. When he used this book completely then he can apply for another known as subsequent Cheque Book. This process takes a day because the Cheque books come from the Karachi head office.

9. Entry of Cheques Book:

Before issuance of a Cheque book the bank stamp every leaf with the account number of the customer, enter it in the cheque book register and computer and issues the cheque book to the customer after his signature on the register.

Filing of AOF: Account opening forms are basic documents of the contract therefore these are filed in numerical order and kept for reference.

10. Letter of Thanks:

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A letter of thanks is prepared. One letter is for the customer and one for the introducer. One copy is send to the customer and the other copy is kept in the record along with other documents.

Amendments/Changes in Accounts:
BAL provides the facility of amendments in accounts, whenever required by the customers. Account holder gives an application along with necessary documents to the bank. Then the amendments are made in the account of the depositor. These amendments can be made by filling certain application forms. These forms are as follows: Change of Address Form To change the address of the account holder Change of signature form To change the signatures of the customer. Liability / Inquiry Form This form is used if some person has acquired loan from the bank and he wants to close his current account, then he fills this form and this form is send to credit department. When the credit department declares him free from any debt obligations then his account is closed.

Vernacular Form

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This form is used when some person wants to sign in any language other than English.

Mandate To The Third Party To Operate The Account

This form is used to enable any third party to operate the account.

Closing of Accounts
The procedure of closing of account is as follows.

First of all the customer gives the request to close the account. His signatures are verified. He withdraws all his money from his account but in case of current account Rs. 150 is
deducted as a charge of closing the account.

A liability form is send to the credit department if he has taken a loan from the bank. If
he is cleared from all the liabilities then further proceeds are taken.

Permission is granted by the authorized person (the manager). Account is closed in the computer system. His specimen signature card is attached with the account opening form and marked
closed.

Current Account
There is no interest on these accounts. It is only for transaction purposes. They paid on demand. Where a banker accepts, paying all checks drawn against him to extend of the balance in the accounts. As there is no profit paid on this account, it is also called checking account because cheque can be drawn on it. Current account is mostly opened for business. The minimum balance requirement for opening the current account is Rs. 10,000.

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Saving Account
The purpose of this account is to introduce the habit of saving individuals in the neighborhood. The profit on saving accounts is paid on the basis of profit and loss sharing basis. The minimum balance requirement for opening the account is Rs.10,000.

Term Deposit
A term deposit is a deposit that is made of a certain period of time. At the end of specific period the customer is allowed to with draw the principal amount. The rate of return of this account varies from 5 % to 13 %. The term deposit account varies from one month to 5 years and the minimum balance requirement is Rs. 100,000.

Profit Calculation Methods

Daily Product Basis Deposited Amount Rate of return. 365 (No. of days in a year) Average Month Balance.

Sum of daily end Balance Rate of return No. of days in month

MINIMUM MONTH BALANCE Any minimum balance during the month is taken for calculating profit

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Saving A/C (05 Days _ Minimum Monthly Balance). Minimum Balance of first 5 days is compared to the minimum balance of the minimum balance of remaining 25 days. Less balance is calculated for profit. The amount of profit is given to deposits in three ways:

Cash payment (only in case of term Deposits). Or as per customer requirement.

By sending bank draft to depositors home address or officers or whichever is

specified as mailing address. The depositors account is credited at maturity.

Account Opening Procedure

For opening of an account, there are different types of account holders are required for all these types. The operation/procedure requirement that is needed for Individual Account differs greatly from the Joint Accounts proprietorship A/C, Partnership A/C, Private Limited Company A/C and Public Limited Company A/C.

Individuals Account
When a single man or woman opens an account in his or her own name and has the right to operate, it is called individual A/C.

Documentation Copy of National Identity Card. Proof of Income

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Operations

Proper Identification (Introduction).

The person place in the type of account and type of operation required in the

account opening form. He/she fills in part 1 of the form, a fix his/her either two of four similar signature

( or thumb expression in the signature space ) and get it introduced and signed by a person who already has an account with the bank and write his account number in the specific rows in a specific space. The person fills his or her father, mother, husband/wife or any other relatives

name, his/her address, phone number, his or her sign to certify this requirement. This requirement is needed because in his/her absence bank can have correspondence with a specific person. The person deposits the initial amount for opening account onto the cash counter.

The person put his signature on form on two places in authorized Signature and fills in the Title of Account space by writing his name. If the person put his signature in Urdu or any other language other than English, he signed a Vernacular Form. If the person has changed its signature then he must have to sign the signature

change undertaking.

The next step is entering in compute r because the centralized account opening

structure and generation of account number.

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Joint Account
When two or more persons neither partners nor, trustees, open an account in their name is joint account. Documentation

Copy of N.I.C card. Income proof of both Identification (Introduction).

Operations The person checks the type of account and type of operation required in the respective box on the form. The person fills the Part-1 and Part-II Signature of box or all persons are obtained on the formed in the area specified for

signature. jointly. In the title of account space names of all persons maintained. Account holders specified in the form that they will operate the form singly or

Proprietorship Account
When the owner of the firm operates singly, account is opened in his firm name.

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Documentation Copy of N.I.C. Status of the firm. Copy of Sole Proprietorship Declaration. NTN certificate Proof of Business

Operations All operation remains the same, except that the firm name is written in title of account area and Signature of the proprietor in the specified area.

Partnership Account
The account is opened in the firm name and all partners designate one or two persons to act behalf of the partnership firm all acts of the firm jointly and severely.

Documentation Copy of N.I.C of all partners. Status of the firm ( In case of registered firm ). The attested copy of Partnership Deed (in case of registered firm ). Operation of the A/C (as per deed). Partnership mandate Letter showing the authority of one or more partners to act on. Form C for the registered firms

Operations

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All other requirements are same except that all partners dully sign the form, cards are signed by all of those partners who will act on behalf of the firm. Operating instruction is very important for the described case that who will be operating the account.

Private Limited Company Account

Documentation N.I.C of all partners. Certificate of incorporation Certificate of commencement of business Articles and Memorandum of association. List of directors. Corporate mandate duly signed by the directors Copy of NTN certificate Form (A) showing the changes in share capital and share holders Account opening Request on letter head of the organization Resolution of Board of directors Power of attorney if any. Certificate of Incorporation Form 29 (B) (Lasted Copy). Companys letter head Embossed seal

Company secretary will certify all these copies.

Operations

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Bank Alfalah LTD.

The person authorized in the resolution of the board of directors put their signature

on the S.S Card. Next of Kin requirement is not need in a case of Private Limited Company. Other

procedure is same. After completing each and every formalities are signed by all partners who will act

on behalf of the firm.

Pubic Limited Company Account

Documentation Copy of N.I.C of all partners. Articles and Memorandum of association. List of directors. Resolution of Board of Directors. Certificate of commencement of Business.

Operations

Operation is same as Private Limited Company

Responsibilities Of Account Opening Department

Documentation Intact. Proper Introduction. Cheque Book Issuance Receiving Inward cheques Account Closing

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Every Day Posting

Account Closing
When a customer wants to close his account because of any reason, he has to give a hand written application to the head of the Operations Department to close his account, plus remaining leaves of the Cheque Book. The Operations Manager first verifies the signatures of account holder, and then closing is done from the registers on the computer where the account was opened. In the file of account holder, his account opening form is also crossed. For this closing, a fee of Rs. 150 is charged in Bank Alfalah.

Cheque Book Issuance

When the account is opened, then, the customer is given a Cheque book to sign upon and en cash money. It is preceded as under.

Procedure
All the account opening formalities must be completed before, issuance of Cheque book. Particulars of the Cheque Book requisition should be completed containing title of account, account number, type of currency, number of leave and signature of the customer. Signature of, the customer are verified on the requisition. If customer is unable to collect his Cheque Book, then he can give authority to the 'third person to collect his Cheque book' on his behalf by signing on the back of .the requisition. In such case, the particulars of the third person are required like name of the person, NIC number and signature of that person on requisition and Cheque Book issuance register.

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Cheque Book is taken out from the safe/locker. It is assured that series of the Cheque Book is in order. Particulars are entered in the Cheque book issuance register. Account number is stamped on every leaf of the Cheque book and those leaves are counted. Name of the account holder is written on the cover of the Cheque book and requisition on the Cheque Book for further issuance is properly filled stamped and signed by officer of the bank. Cheque Book is delivered to the customer and his signature is taken on the cheque book issuance register, cheque serial number is entered in the system (Bank Excel). Stock of Cheque books are balanced at the end of each day and kept under safe custody. Cheque book is charged according to the leaves of the Cheque book as per 5 Rupess per cheque

Bank Alfalah Issues the Following Cheque books. 25 leaves 50 leaves 100 leaves Receiving Inward Cheques
Another responsibility &function of Account Opening Department is to receive Inward cheques for collection of other banks. These cheques are sent to clearing official who clears these cheques at SBP from other banks.

Every Day Posting

At the end of each day, Posting of cheque books is performed. The account opening department makes credit vouchers of excise duty and provincial tax on cheque book leaves, and posts it in the company.

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Cash Department
Mr. Kamran helped me in learning about Cash Department. Cash Department performs two main functions and other subsidiary functions: Cash Deposits Cash Payments Online Cash Receipts & Payments

Cash Deposits Cash receiving officer receives cash along with pay-in slip from the customer. He checks if the deposit slip is properly filled up containing title of account, account number, date and amount

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in word and figures. He also verifies signature. Detail on both counter file and cash receipt voucher should be the same. Cash is received by the cash receiving officer, twice counted and matched with the deposit slip. The cash details are written on the back of the deposit slip and are also entered in cash receiving register. Cash received stamp is affixed on the face of the deposit slip along with the signature of the cash receiving officer. Deposit slip and cash receiving register is given to the officer in cash department. Again proper scrutiny is made by the officer cash department both on cash receipt and cash receiving register. Officer cash department signs both the deposit slip and register; Deposit slip is credited and posted in the concerned account in the system. Counter folio is given to the depositor as receipt. One consolidated cash debit voucher is posted in the system to balance the cash.

Payment of Cheques The process for payment of cheques for local and foreign currency is same. First the customer presents the Cheque or holder to branch and the particulars of cheques are properly filled in. Signature of the holder is taken on the back of the cheques. Cheque handed over to the officer cash department for scrutiny where officer checks the date, amount in words and amount in figures, payee's name crossing if any, account number, cheque serial number, any material alterations, endorsements and signature of the customer. Account is debited and then the officer cancels cheque. It is posted in the system and posting stamp and number is affixed on it. Cheque is handed over to the cash payment officer for payment. One more signature on the back of the cheque is taken from the holder to match with the first one, and then cash is paid to the payee. Cash detail is written on the back of the cheque. Cash paid stamp is affixed on the face of the cheque. Entry is passed in the cash payment register.

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If the payment is of Rs. 50000 the cashier can make it on its own. If the amount is greater than Rs. 50000 the cashier and cash deposit Incharge will verify the check and will sing it. Then the payment will be made. Otherwise the payment will not be made.

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Clearing Department
In clearing, Mr. Taimoor proved so helpful. The clearing process majority involves receiving the cheques and making payments. This process can be inward or outward.

Clearing Process (Inward/Outward) Here the local Cheques are received that are drawn on BAF. All the cheques are received on one counter along with the paying slips duly filled in properly containing particulars of cheques and account harder. Counter folio of paying slip is handed over to the customer by putting stamp for #cheque received for collection for Bank Alfalah' on it duly signed by officer. These Cheques are scrutinized and cheques for local clearing are separated from OBC. These are then entered in clearing register and cheques for collection, are entered in OBC register and handed over the Bills Department for collection. Clearing officer checks and verifies title of all the cheques deposited by the customers to confirm the good title of the cheques. Cheques are scrutinized properly and paying slips are separated from cheques. Special crossing, endorsement and clearing stamps are affixed on the cheques. Cheques of each bank are sorted and arranged branch wise. All the cheques are then entered into the clearing system of the bank. Print out of the clearing is taken and details are attached with the cheques of each bank. Details of these banks are then entered into the clearing schedule containing number of cheques presented and their total amount against the name of each bank. Then total number of cheques presented to all banks and their total amount is written on the foot of that schedule, which is tallied with the clearing register. Next morning, these cheques are delivered to the respective banks through NIFT in clearing house of State Bank of Pakistan between 9:00 to 9:30AM. In the same manner, other banks present their clearing drawn on Bank Alfalah. Total number of cheques and their amount delivered to other banks and received from them are written on the Clearing House schedule branch for their payment. After proper scrutiny of cheques, verification of signatures and

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confirmation of balance in the account, the Officer Cash Department pays these cheques by canceling and posting them in the system. If any cheque is not passed due to insufficient balance or any other reason, Officer clearing Department returns the same cheque by attaching a cheque return memo containing reason for return. This cheque is entered into the cheque returned register and bank charges are deducted according to the schedule of charges. Second clearing is called at 2:30PM to check the fate of the cheques presented to other banks in the morning. If any cheque is to return, that is delivered to the same bank in second clearing. In the same manner, if any cheque presented by Bank Alfalah in first clearing is returned, they receive it and once again give schedule of clearing figure to the Officer Clearing House SBP containing number of cheques and their amount delivered and received unpaid.

Remittances Department

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The need of remittances is commonly felt in todays business. The main function of remittance department in a bank is the transfer of funds. Miss. Maliha in Bank Alfalah is the officer for Remittances Department. In remittances, following banking instruments are used: Pay order Demand draft

Online transfer
Call deposit receipts Traveling cheque The procedure for dealing with all these under local as well as foreign currency in BAF is as under.

Pay Order A pay order is a written order issued by a bank, drawn upon & payable by itself, to pay a specified sum of money to or to the order of a specified person. Procedure for Pay Order Application form is given to the customer to fill. Two signatures are taken on the form one for request and other for receiving the instrument. All the particulars of application form are checked and bank commission charges and withholding tax is written on the top of the application form. If the customer is maintaining his account with the branch, he can give cheque for total amount of instrument plus bank charges. Cheque and application from is then given to the officer Cash Department for the payment of cheque. After proper scrutiny, Officer Cash Department posts the cheque and signs the application form in token of payment received. If the customer wants to pay cash, then cash is deposited by the customer along with the bank charges and withholding tax.

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Application form is then given to the Remittances Incharge for issuance of instrument. He enters all the particulars of the application form in the system and computer gives an Auto Control Number to the instrument. Printout is taken on the block of payment Order. Two authorized officers of the branch then sign it. Instrument is then protect graphed, and given to the customer. When instrument is presented for payment, it is posted in the system and canceled by the Remittances Incharge after proper scrutiny. Demand Draft A Demand Draft (DD) is an instrument, which is drawn by one bank upon another bank for a specific sum of money payable on demand. It is made by the bank, given to the purchaser against cash or cheque.

Parties Involved In DD: Purchaser Issuing Branch Drawee Branch Payee

Procedure for Issuing DD Issuance procedure of Demand Draft is same as of pay Order. Procedure for Demand Draft Payable When DD advice is received, signatures of both signatory on the DD are verified. All the particulars of the DD payable are entered in the system. Prints out of vouchers (DD payable) are taken. When instrument is presented for payment, signatures of the attorneys are verified on DD and after proper scrutiny; it is posted in the system and canceled by the Remittances Incharge.

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Online Transfer Sometimes, when the remittance is urgently required by the remitter, online Transfer is made. Collection All the cheques under collection are called cheques under Collection in Bank Alfalah Limited. There are two types of bills for collection: Outward Bills for Collection Inward Bills for collection

Outwards Bills for Collection Al the cheques are received on one counter along with the paying slips duly filled in properly containing particulars of cheques and account holder. Counter folio of paying slip is handed over to the customer by putting stamp for cheque received for collection for Bank Alfalah on it duly signed by officer. These cheques are scrutinized and cheques for local clearing are separated from OBCs. Cheques for local clearing are entered in Clearing Register, whereas cheques for collection are entered in OBC register and handed over to the Bills Department for collection. OBC number is allotted to the cheque from OBC register. Special crossing and bank endorsement stamps are affixed on the cheque. OBC schedule is attached with the cheque and dispatched to the main branch of that city for collection. If they do not have any branch in that city, then cheque will be sent to the Collecting Agent of Bank Alfalah for that city, and if they do not have any collecting agent even, then cheque can be sent directly to the drawing branch. Instructions are given on the OBC schedule for the payment of that cheque. Contra-liability vouchers are also posted in the system. When OBC is realized, collection bank pays the amount through IBCA if it is the same bank or

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through DD if it is another bank. If DD is received against OBC, it is presented in the clearing for collection. If IBCA is received from the branch for the payment of OBC, certain vouchers are posted in the system.

Inward Bills for Collection If any other bank sends a cheque of Bank Alfalah Limited, it is Inward Bill for Collection. Bank Alfalah remits money after checking the balance of the customer account. The process of collection starts when the cheques of Bank Alfalah Ltd are received from other banks. Then these cheques are sent to the Head Office Karachi, which sends the cheques to SBP for clearing and get the confirmation of cheque and credit advice. Main activity of clearing is performed by Head Office, which contacts other banks through SBP.

Bills for Collection In 2007 Payable in Pakistan Payable outside Pakistan Total Rs. 22,092,000 Rs. 1,964,738,000 Rs. 1,986,830,000

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Credit and Advance Department

Credit and Advances Department deals with the provision of loans (credit facility) to the customers. At BAF, credit is given on the basis of a policy made by Board of Directors and is called Credit Policy. This policy statement sets out the underlying principles from which the BOD will determine the commercial credit activity of Bank Alfalah Ltd. The committee to approve direct and review commercial lending of Bank and to ensure that credit policies are adhered to and the credit operation is conducted in an efficient and effective manner. Purpose of this policy is to set out the credit policies for the boar, which will be implemented by the Credit Committee. The policies are described under the following readings: Credit principles Portfolio limits Approval Administration Monitoring and review

1. Credit Principles It includes principles to be adopted for lending authority, approval, monitoring and control on a basis consistent with Bank Alfalah Ltd. The operational objectives and business strategies regarding objectives, structure, performance and administration are also included. 2. Credit Portfolio These are the guidelines set down by Credit Committee regarding: Total facilities

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Term facilities

3. Credit Approval When the terms and conditions are set and both parties are agreed, the Credit committee makes approval for the credit.

4. Credit Administration The credit application when handed over to Credit Administration, then they critically examine securities given by client to bank against credit facilities. Credit Administration keeps liaison with lawyers, surveyors, valuators and other corporate bodies. 5. Credit Monitoring The client can present his own account insurance policy as security for credit. When he presents his own account as security, his account is blocked for the same amount, which the bank is granting him. When the facility is adjusted at that time, the blocking is released from the account. Clients can also use third partys account for getting credit. Shares can also be kept as security in this case these are verified and duly signed. These are kept separate to avoid theft. The company whose shares are used is informed that its shares are in the custody of the bank. Advances Following facilities in Advances Department are provided by bank: Funded facilities

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Non-funded facilities

Funded Facilities These are the facilities in which funds like cash fund are included. Pre-Shipment It provides to prepare consignment. Maximum tenor is about 150 days. Profit may be 16% per annum. consignment. Post Shipment During export process, funds are required for preparation of next consignment that is provided by post-shipment facility. Maximum tenure is 150 days. Profit rate is about 15% per annum. The repayment is generally from sale proceeds. This is for preparation of

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Non Funded Facilities These facilities are on: Letter of Credit Letter of Guarantee

L/C Is Of Two Types: Credit Cards Bank Alfalah has credit card facility named as Alfalah Hilal cards. Sight L/C for 90 days Usance L/C for 120 days

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Foreign Exchange Department

Foreign Exchanged Department deals within exports and imports. Mr. Adeel at BAF supervises it. The bank acts as exporter as well as importer bank for different parties who are in the business of export and import. Exporter When the bank becomes the exporter bank for a party then the market stability, reputation, financial position of the exporter is first of all checked. Documents to Be Attached For Exports Invoice Bill of lading Packing list

(a) Total quantity

(b) Net weight/carton

(c) Gross weight/carton (d) Total net weight/carton (e) Total gross weight
Bill of exchange (original or draft) E-form: Initial document on which total export proceeding is based. In this form, Letter of credit: It is written agreement between importer and exporter. Beneficiary certificate DHL certificate (TCS certificate)

all the conditions are given, which are necessary for exports.

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Form E

Form M Certificate of Origin (Form A)

Government has provided facility to exporter in taking E-Form from any bank and he can present it to any bank for negotiation. Export Proceed Realization Certificate SBP gives rebate to exporter against export after realization. It is paid according to commodity wise and bill wise. Claim period: 1 year. Transport Document (Bill Of Lading, Airway Bill) When insurance is done by importer, C&F (cost and freight) usually used. FOB cost (free on board) CIF (cost insurance and freight) when insurance is done by exporter, CIF is used. Tenor (At sight) immediate payment by importer after receiving product. Partial shipment: Product is sent partially. Transshipment: Product is sent via any country

E-Form Certification When export is done on C&F basis, so bank issues E-form certification to exporter and he submits it to the custom officer along with E-form certification to certify E-form.

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Form of Authorized Dealers Certificate State Bank permits exporter to issue Bill of Lading in the favor of E-form bank. But if requirement of L/C is to issue Bill of Lading in favor of company then shipping company issues bill of lading in favor of Exporter Company. Authorized Dealer Certificate is filled for this purpose. Certificate of Origin This certificate shows that goods are from Pakistan. Covering Schedule If in covering schedule, it is given that please remit proceed to our Karachi Office A/C no. 5740734881 with ABN (Amro Bank New York), USA for onward credit to BAF Islamabad. Beneficiary Certificate If L/C requires some information as proof of anything from exporter then exporter has to present beneficiary certificate for that proof.

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E-FORM E-Form Has Four Copies: One for custom officer One for exporter Triplicate copy for SBP Duplicate copy for bank

Bank reporting or duplicate and triplicate is done by bank. Custom Officer (date is given on the foot of form) should clear product. Payment from Importer Bank It is the choice of importer to open L/C from any bank and the bank from which L/C is opened can also refer to some other bank for payment. So bill of exchange is sent to refer bank and other documents are sent to L/C opening bank. SWIFT It is network among all banks. No other institute can get involved in it. Bill Of Lading Certificate from shipping company for loading documents. If requirement of L/C is to issue Bill of Lading in favor of L/C opening bank, then authorized dealer certificate will be provided by bank in favor of L/C opening bank.

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Bank Keep In Record Covering schedule Invoice Packing list AWB Certificate of Origin E-form

Normally bank keeps photocopy of all documents in record. Negotiable documents (original documents).

Imports L/C is opened by the importer. There are two types of L/C. Revocable Irrevocable.

Necessary Requirement If place of issue and port of loading is different on Bill of Lading, then along with the stamp of shipment on board, vessel name and port of shipment is written. 1) 2) 3) 4) 5) Issue date of Bill of Lading shipment on board. There should not be cutting on bill of lading without authentication. Bill of lading should show capacity of agent. If bill of lading can be taken by the agent of Importer Company, then his name should be mentioned on bill of lading. Original GSP should be presented. If TT reimbursement is not acceptable, it means bill of lading is necessary.

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When documents are received for export, do enter into lodgment register. Documents for Import Performa Invoice signed by importer Category passbook copy attested by any bank L/C opening application filled in by the customer Import registration with export Promotion Bureau Annexure Verification of signature by S. S. Card L/C issued on basis of L/C application form. Insurance if covered by buyer. Insurance cover note. Insurance policy.

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Accounts Department
Most important department of bank as it is concerned with: Revenue Expenses Assets Liabilities

These are the pillars of any business. This department is supervised by Mr. Israr Ahmed is in this department, all the vouchers that are posted during one day are sent to the Account Department next day. department. These vouchers are already posted to computer by the concerned So computer also sends a report to the Accounts Department. The accounts

Department have 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 of BM, stationery charges, medical allowance, etc. are all paid by this department. Daily Customer Movement List All the changes that are made in accounts of customer are shown in the daily customer movement list. By using this list, people of Accounts Department can prepare the vouchers. Following activities are performed by Account Department: Voucher preparation Preparation of daily, weekly, monthly, and annual statement. Budgeting and fixed assets Employers benefit

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Expenditure approval.

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SWOT Analysis
Strengths

Bank has a belief in customer service Backed by strong Abu Dhabi Consortium Customer give suggestion for the improvement of bank and these suggestions are

listened carefully.

Manager & EVP has good coordination with staff members.

Environment is friendly. Products are excellent Expansion is consistent Modernized banking (online + Internet) Fully computerized, each department has to own PC.

Weaknesses: Mixed Culture

New Setup
Staff is lesser. Electronic funds transfer is only available from Alfalah to Alfalah only

Opportunities: Information Technology. Internet and mobile banking Establishing Foreign Branches Local Setup Expand

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Threats:

Competition by the settled bank like MCB and others There is a possibility that in future the customers are too many to be handled by the
so small number of the employees.

Governmental policies may pose unpleasant role

Global issues like America Iran war and terrorism

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Ratio Analysis
Earning asset to total assets earning assets/total assets

2008 2009

218,958,188/275,685,541 203,330,758/248,313,793

= =

79.42% 81.88%

Earning assets to total assets tell us about the efficiency of the management of the bank that how efficiently the assets are used to get the return. Earning assets includes loans, investment securities and money market instruments. Here the ratio is declining a little bit as compared to the last year but if we see at the situation of the total assets they are increasing as compared to the last year. This shows that bank Alfalah is going to expand its business more as a lot of new branches are being opened this year.

Return on earning assets: net income/total earning ass

2008 2009

2,565,945/218,958,188 2,563,290/203,330,758

= =

1.17% 1.26%

Return on earning assets can help us about the measurement of profitability. Better ratio shows the efficient utilization of the earning assets by the bank management to earn profit. If we compare this year ratio with the previous year we can see that it is declining. This shows the bank is investing more on fixed assets rather than on earning assets this shows that bank may undergo an expansion plan.

Loan loss coverage ratio: Pretax income /provision for loan loss

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2008 2009

2,565,945/697,690 2,563,290/402,298

= =

3.67 6.31

The ratio describes the safety measure that the bank has adopted for the losses. The decrease is caused by the low provision for the loan losses.

Equity capital to total asset: Average Equity/average total assets

2008 2009

12,241,945/275,685,541 7,464,126/248,313,793

= =

4.44% 1.79%

There is another name of this ratio it is also called fund to total asset ratio. This provides the owner a cushion against the risk of using Debt and leverages. The higher ratio the more cushion is there and vice versa. Here we can see that the ratio has increased a lot as compared to the last year which shows a lot of improvement in the shares that are floating in the market.

ROA Net income/total assets 2008 2009 0.67% 0.84%

Through that ratio we measure the ability of the bank to utilize its assets to create profit by comparing profits with the assets that are generating them. The bank ratio has decreased a lot more than the previous years. The reason behind this is inefficient use of the assets to produce profits.

ROE Net income/total equity

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Bank Alfalah LTD.

2008 2009

0.67% 0.84%

Return on equity shows that what will be return for the share holders. As we can see that the ratio has decreased. This may be due to that the profit is reinvested and the bank is following the expansion phase.

Profit Before tax ratio PBT/Gross markup of income

2008 2009

2,565,945/5,958,584 2,563,290/5,041,819

= =

43.06% 58.84%

For banking sector profit before taxation ratio is very important because large number of taxes are deducted from the income. Here we can see that the profit before taxation has decreased a lot more.

Earning Per Share

2008 2009

3.86 Rupees 3.92 Rupees

This ratio is more important for the stock holders and management too. This ratio tells that how much rupees you can earn against one share that you have. This ratio has slightly decreased. But can be said as a sustained value as compared to the initial years of the bank.

Book Value per share SHE/ Outstanding Shares

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2008 2009

12,241,945/500,000 7,464,126/300,000

= =

24.48 24.88

This ratio tells us the original value of the shares outstanding in the books of accounts. Book value is almost same as in the last years that show the sustained growth in the market.

Recommendations
Finally, there are some suggestions for Bank Alfalah Limited. These suggestions are based on experience with the bank.

This is a routine practice that in order to give personalized services to the customer, bank staff
tries to fill all the columns of AOF with their own handwriting, which is wrong. AOF must be

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filled in by the customers. Bankers should avoid filling in the AOF because it can create problem if the address, title of account or any other information provided by the customer has not been written properly. Customer may be affected or he may claim that this information was not provided by him, but if AOF is filled by the customer then banker cannot be held responsible for any incorrect information provided by the customer.

Under no circumstances cheque book should be given to the customer if the account
formalities are incomplete.

There are two officers involved in cash deposit process, which is time consuming. Cashier
should be given certain powers to receive cash to provide prompt services.

Similarly, there are two officers involved in cheque payment process, which is time
consuming. Cashier should be given certain powers to pay cheques up to Rs. 50,000/- to provide prompt services. Cheques, which are drawn on Bank Alfalah Branch and returned unpaid in clearing, are not reflected in the Statement of Account of the customers. These cheques must be reflected in the accounts so that credibility of the customers may be assessed.

Audit should be held internally. Rather there should be an Audit Department in the branch to
make audit on daily basis. This can become as helpful as different banks are having this department of their own.

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Marketing Practices Adopted By Bank

Nowadays marketing of products is of prime importance for any organization. In this dynamic environment, every organization has its own Marketing Department, which is responsible for creating the demand of its goods and services. Nowadays banks also have their marketing departments, which are responsible for creating demand of their products, i.e., their deposit schemes and increasing the deposit of the bank. Bank Alfalah has its own full marketing Department at the Head Office, Karachi. This department prepares different deposit schemes for its customers, time to time, in order to increase the business of the bank. At branch level, the Operations Department follows marketing practices. At each branch of bank, officers are available to provide marketing activities of their products. They make customer calls and personally visit the potential customer to convince them to invest. They make phone calls to customers and inform them about their schemes, profit rates.

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Conclusion
BANK ALFALAH under the leadership of Sheikh Nahayan Mabarak Al-Nahayan has made significant in building of strengthening both the corporate and retail banking sectors in Pakistan. The Bank attained Number two (2) position in terms of its Balance Sheet size amongst the private banks in Pakistan in 2000. BANK ALFALAH views specialization and service excellence as the cornerstone of its strategy. The people of bank innovation, creativity, reliability, customized services and their execution are the key ingredients for their future growth. Based on this approach, their Treasury Division and the Structured Finance Unit have been geared to provide specialized services to the Corporate customers. Revenues from these activities have started yielding dividends and they expect significant growth in these areas in the coming years. While building on their in-depth familiarity with their customers needs and anticipated developments in the banking industry, the Retail and Corporate areas of their operations will continue to provide a strong and stable base to the business of the Bank. They are aware that they have stepped into the 21st century and they must meet its challenges by acquiring the highest levels of Technology. They will thus be accelerating their enable them distribute their products and services through most efficient and high-tech means. They say that they will invest in the modern tools and substantial allocation of resources will be made to achieve this objective during the current year. Their programme to launch real time on line Banking Services and introduction of ATMs at strategic locations have been firmed up and it will be fully operational during the year 2001.

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Bank Alfalah LTD.

Their focus would be to constantly seek out growth opportunities through increased quality assets and by offering a wider range of products and services to their esteemed customers. There are significant growth opportunities for BANK ALFALAH and they are confident in their ability to grasp them. They are committed to enhancing the shareholders value and look forward with greater optimism to a prosperous future for BANK ALFALAH Based on the profit of Rs.354 million, the Board has proposed that a cash dividend at a rate of Rs. 2.00 per share i.e. 20% of share capital be distributed among the shareholders.

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