Bank Alfalah Final Report 2008

Preface
The internship is an essential part of BBA degree program because

through this, training students come to know the real difference between
theory and practice and they introduced to the outside business world. I
have done my internship in Bank Alfalah Limited, Main Boulevard Gulberg
Branch. The internship provided me great opportunity to equip myself
with knowledge, techniques, application and tools used in an organization.
I have tried to choose suitable words to lighter the subject of this

report. Because words are, the symbols used to express ideas. There are
the tools of affective writing. There importance lies in the power, when
they have suitably chosen and arranged to convey and through to other in
language, that is the understandable clearly and understood readily.
I have tried my best to make the style of this report as good, as

possible, because style in writing as in other walks of life, is a quietly
peculiar to the individual, as not to people write alike. Background,
training, experience and the way a person thinks determine it. The source
of information for the preparation of report includes the written notes
extracts from banking literature and verbal discussion with bank officials.
I hope this report will help in understanding various aspects and

features of Bank Alfalah Ltd. and will be equally important for business
student.
Amjad Ali
BBA (evening) 2005-30
INSTITUTE OF BUSINESS ADMINISTRATION, PU, LHR

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Acknowledgement
All praise and gratitude due to ALMIGHTY ALLAH who created man in His
own image and enjoyed upon him to travel on the earth and enter into a
profound and analytical study of Universe for spiritual appreciation of
ALLAH’S unity and His attribute as well as for harnessing the material
manifestation of the world to the mankind’s profitable utilization. In the
first place, therefore, we express our utmost thanks to ALLAH. At the next
stage I offer my gratitude to our Apostle and prospector Prophet
Muhammad (P.B.U.H) for his golden saying “Gain knowledge even if you
have to travel to China”.
Very special thanks to all staff members at Bank Alfalah Limited and
Agha Ali Akbar (Branch Manager), Mr.Subhan (Operational Manager),Ch
Irfan Aslam(relationship manager) who gave me enormous support during
my stay at the bank. They gave me their precious time and briefed me
personally during the entire period of stay.
I shall fail my duty if I did not say thanks to all the teachers of
Institute of Business Administration University of The Punjab who always
remained with us at every step and gave us a lot of moral strength. Lastly
I want to chronicle my thanks to Labiba Sheikh for being so cooperative,
accommodating and compassionate, who provided me with her kind
guidance whenever I felt difficulty and to Mian Farhan, who made me
capable of making financial analysis of financial statement of this
organization.
Amjad Ali
BBA (E) 2005-30

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Dedication
This work out is dedicated to my loving

parents and strenuous teachers. Without their
knowledge, wisdom, and guidance, I would not
have the goals I have to strive and be the best to
reach my dreams!

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Executive summary
The purpose of study was to gain practical knowledge and to aware with
organizational environment. In this report the Bank Alfalfa’s history,
mission, vision and services as well as management is mentioned. After
this the analysis of financial statements is conducted which shows where
the Banks is standing.
Bank Alfalah Limited was incorporated on June 21, 1997 as a public

limited company under the companies’ ordinance 1984, charged with the
strength of the Abu Dhabi based group, under the leadership of highness
Sheikh Nahayan Mubarak Al-Nahayan, Minister of Education, Government
of Abu Dhabi and a prominent member of Royal family.
Working in bank was a great learning exposure for me. When I conduct
financial and trend analysis of Bank Alfalah I found that its financial
position is improving year by year. Comparative study with other banks
shows that it is somewhat better them other banks. I concluded that BAL
is performing very well.
In my report I have discusses the introduction, goals and objectives vision,

corporate profile branch network of the bank. The financial analysis is
showing favorable banking ratio evidencing a promising prospects for the
bank. SWOT Analysis and PEST analysis is also showing favorable
conditions for bank’s survival and growth. I also discuss the marketing
strategies, competitive advantages and business process analysis of Bank
Alfalah. The need is to realize the banks growth potential and drive it in
the right direction using the right strategy.
In the business process analysis detail procedurals has been discussed

regarding different departments and products. I have also mentioned my

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duties, accomplishments and knowledge, which I have, gain during
internship.
Table of Contents
Table of Contents..............................................................................................................................................................5
Introduction to Banking?...................................................................................................................................................8
Banking industry in Pakistan......................................................................................................................................11
HISTORICAL OVERVIEW OF BANK ALFALAH.....................................................................................................................15
Status and nature of business....................................................................................................................................19
Vision and Mission Statement.........................................................................................................................................21
Vision.........................................................................................................................................................................21
Mission.......................................................................................................................................................................22
CREDIT RATING......................................................................................................................................................25
STRATEGIC FOCUS.................................................................................................................................................26
MANAGEMENT SYSTEM...................................................................................................................................................27
.............................................................................................................................................................................28
Board Advisory committee.........................................................................................................................................29
Branch Level Designation...........................................................................................................................................30
Managerial policies.....................................................................................................................................................31
Management styles....................................................................................................................................................34
PRODUCTS & SERVICES..................................................................................................................................................36
Current account.........................................................................................................................................................36
Saving account ..........................................................................................................................................................38
Alfalah Hilal Card .......................................................................................................................................................46
Money Gram ..............................................................................................................................................................50
Alfalah Credit Card ....................................................................................................................................................51
Home Finances...........................................................................................................................................................55
Alfalah Car Financing..................................................................................................................................................58
FINANCIAL SERVICES..................................................................................................................................................61
1. Trade finance.....................................................................................................................................................61
2. Structured Finance.............................................................................................................................................62
Small and Medium enterprises...............................................................................................................................64
Schedule of Product and Financial services ...............................................................................................................65
PROMOTION................................................................................................................................................................74
FINANCIAL ANALYSIS.......................................................................................................................................................76
PROFITABILITY RATIOS...........................................................................................................................................80
PORTFOLIO MANAGEMENT RATIO..........................................................................................................................87
FIM (FINANCE AGAINST IMPORTED MERCHANSE)..........................................................................................................116

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Bank retains physical possession of goods...................................................................................................................116
FTR (FINANCE AGAINST TRUST RECEIPT)......................................................................................................................116
Bank does not retain physical possession of goods. Goods are released to the customer on a trust receipt document
prior to the payment of bill...........................................................................................................................................116
FIM/FTR.........................................................................................................................................................................116
Documentation.............................................................................................................................................................116
Request letter duly signed by the customer.............................................................................................................116
Demand promissory note.........................................................................................................................................116
Letter of offer...........................................................................................................................................................116
Letter of pledge (in case of FIM)...............................................................................................................................116
Trust receipt (in case of FTR)....................................................................................................................................116
Mark-up agreement IB6A..........................................................................................................................................116
Letter of arrangement..............................................................................................................................................116
Letter of disbursement.............................................................................................................................................116
Letter of installment.................................................................................................................................................116
Letter of authority to debit mark-up.........................................................................................................................116
Documentation for any additional security...............................................................................................................117
Approval.......................................................................................................................................................................117
Can only be granted against approved facility.........................................................................................................117
Under any specific approval of appropriate credit authority.....................................................................................117
Allowed only against L/Cs established by the branch. (Exceptions to be approved by the appropriate credit
authority).................................................................................................................................................................117
Duration........................................................................................................................................................................117
Normally allowed for fixed periods of time...............................................................................................................117
In local currency.......................................................................................................................................................117
Mark-up payable in arrears on due date...................................................................................................................117
Amount to be financed..................................................................................................................................................117
Partial amount of the bill..........................................................................................................................................117
Exact amount of the bill...........................................................................................................................................117
Exact amount required to retire the bill....................................................................................................................117
Bill amount plus duties and sales tax (for exceptional cases after approval)...........................................................117
Caution!........................................................................................................................................................................118
In case import duty, sales tax etc. are also to be financed in addition to bill amount, separate Dr. entries from the
same FIM A/C should be passed for adjustment of bill amount and import duty/sales tax.......................................118
Mark-up on PAD should be adjusted from a separate FIM A/C..................................................................................118
Make sure that Mark-up on mark-up is not charged.................................................................................................118
Margin on L/C................................................................................................................................................................118
Any margin held against L/C should be utilized in partial repayment of the Finance................................................118
If the bill represents only a partial drawing of the credit amount, the amount of margin to be applied must be in
direct proportion as the bill amount is to the credit amount....................................................................................118
Clearance of goods.......................................................................................................................................................119
Dr. Customer A/C for all costs incurred in clearance & storage................................................................................119
Clearance & storage through approved clearing agent & Macadam........................................................................119
Storage & insurance.....................................................................................................................................................119

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Goods to be insured & stored in bank’s name..........................................................................................................119
Partial deliveries against partial repayment of finance.............................................................................................119
Deliveries against D/Os issued by the respective branch.........................................................................................119
Recording......................................................................................................................................................................119
A separate account # allocated to every FIM or FTR sanctioned..............................................................................119
FIM/FTR accounts are linked to customer’s current account.....................................................................................119
FIMs & FTRs granted will reflect in the GL accounts FINANCE AGAINST IMPORTED MERCHANDISE & FINANCEAGAINST
TRUST RECIEPT.........................................................................................................................................................119
Details such as limit, expiry date, M-up rate & security entered into the computer for calculation of M-up.............119
Details entered into FIM/FTR register.......................................................................................................................120
Statement of O/S facility generated on monthly basis to mark overdues.................................................................120
Fortnightly review of overdues by Manager Credits.................................................................................................120
Mark-up.........................................................................................................................................................................120
At the end of each month, m-up accrued on the outstanding finance will be calculated..........................................120
Accounting entries...................................................................................................................................................120
SWOT Analysis.........................................................................................................................................................120
Account opening department ..................................................................................................................................124
Types of Deposit Facility......................................................................................................................................125
Procedure to Open An Account ...........................................................................................................................125
Individual / Joint Account...............................................................................................................................................126
Issuance of Chequebook......................................................................................................................................132
How to close an account......................................................................................................................................134
Clearing department................................................................................................................................................135
MODES OF TRANSFERING FUNDS IN REMITTANCES.............................................................................................136
CLEARING.............................................................................................................................................................143
Credit department....................................................................................................................................................151
Letter of credit (L/C).............................................................................................................................................154
Letter of guarantee (L/G).....................................................................................................................................154
Finance against imported merchandise (F I M) ...................................................................................................155
Finance against trust receipt (F A T R) ................................................................................................................155
Accounts department...............................................................................................................................................156
Budgeting............................................................................................................................................................157
Reporting.............................................................................................................................................................158
CAR FINANCING........................................................................................................................................................161
CONCLUSIONS & RECOMMENDATION ON ANALYSIS......................................................................................................168
Annexure.............................................................................................................................................................171
Employees in various sections.............................................................................................................................171

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Introduction to Banking?
A bank is an institution for the custody, loan or exchange of money for

sanctioning credit, for transferring funds by domestic foreign bills of
exchange. Currency moves into and out of circulation through a pipeline.
ACCORDING TO BANKING COMPANIES’ ORDINANCE 1962:
“Banking means the accepting, for the purpose of lending, or investment,

of deposits of money from the public, repayable on demand or otherwise,
and withdraw able by cheque, draft, order or otherwise.”

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Banking Functions
PRIMARY FUNCTION:
o Accepting deposit
o Lending
SECONDARY FUNCTION:
o Agency function
o Conducting FE transactions
GENERAL FUNCTION:
o Letter of guarantees/letter of credit
o Travelers’ cheque
o Lockers
o Remittances
o Credit & debit card
o ATMs
o Utility bills
o Payment of salaries
o Advisor to customer
o Safe custody
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Banking industry in Pakistan
Nationalization of banks in the seventies was a major upset to domestic

banking industry of the country, which changed the whole complexion of
the banking industry.
With irrational decision at the top all, the commercial banks were made
subservient to the political leadership and the bureaucracy. Specialized
banking institutions were already working in the public sector.
The new accountability paradigm changed the business ethics in the

banking industry, and with this change started the disaster.
Nationalization of banking industry was accompanied by violent changes
in the external value of rupee.
The commercial banks thus lost their assets management equilibrium,

initiative and growth momentum. They ceased to be a business concern
and became big bureaucracies.
This was accompanied by indiscreet loaning under political pressure.

They suffered from three terminal diseases: non-performing loans; higher
intermediation cost; and loss of initiative and entrepreneurship. The rise
to Labor Unions and Officers Associations made life tough and working
conditions ugly to honest, dedicated and industrious workers in the
realms of domestic banking industry.
The era of nineties was the climax of privatization, deregulation and

restructuring in the domestic banking industry and financial institutions.

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The Muslim Commercial Bank was the first bank to privatize. Followed by
Allied Bank limited, United Bank Limited and now the Habib Bank Limited
has been privatized.
One thing good for that particular period was the recruitment of fresh
officers in the domestic banking industry through well-organized policies
of Banking Council. With the decay of Banking Council, there was flood of
insincere, nonprofessional, incompetent candidates directly appointed/
recruited in all the domestic banks of the country.
BANKS PUBLIC SECTOR COMMERCIAL
o National Bank of Pakistan ( NBP)
o First Women Bank Limited (FWB)
o The Bank of Khyber (KB)
o The Bank of Punjab (BOP)
The government of Pakistan permitted small private sector banks to

operate, which indulged in doubtful policies to promote business. The
public sector banking, which constituted the backbone, thus continued to
suffer because of their approach, size and carried over liabilities. Mehran
Bank is the prime example of that kind of lax banking in the country,
which ultimately merged into National bank of Pakistan i.e. last resort of
domestic banking industry.

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LOCAL PRIVATE BANKS
o Askari Commercial Bank Limited

o Bank Al-Falah Limited
o Bank Al Habib Limited
o Bolan Bank Limited
o Faysal Bank Limited
o Metropolitan Bank Limited
o Platinum Commercial Bank Ltd
o Saudi Pak Commercial Bank Ltd
o NIB Bank
o Soneri Bank Limited
o Muslim Commercial Bank Limited
o Allied Bank of Pakistan
o Mashreq Bank
o Silk Bank
In the meanwhile, western banks started entering into the business.

They, with the support of ruling elite, concentrated on the big business,
leaving the routine business to the local banks. This reduced the
profitability of the local banks.

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FOREIGN BANKS
o RBS
o Al Baraka Islamic Bank
o American Express
o The Bank of Tokyo Mitsubishi
o CITI Bank
o Credit Agricole Indo Suez
o Deutsche Bank
o Doha Bank
o Emirates Bank
o Habib Bank A. G. Zurich
o Hong Kong Shangai Banking Corporation
o Mashreq Bank PJSC
o Oman Bank

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o Rupali Bank
o Standard Chartered Bank
o Barclay Bank
o JS Bank
SPECIALIZED BANKS
o Zari Tarqiati Bank Ltd.
o Industrial Development Bank of Pakistan
o Punjab Provincial Cooperative Bank Limited
HISTORICAL OVERVIEW OF BANK ALFALAH
Bank Alfalah Limited was being formed after going through different
changes. At first, the Bank Alfalah Limited was working with the name of
Bank of Credit and Commerce International (BCCI). BCCI was
incorporated in Luxembourg on September 21, 1972. At that time, its
paid up capital was US $ 2.50 million.
By early 1973, BCCI has established its first four branches in

Luxembourg, UAE and UK. With the passage of time the branch network
of Bank Alfalah Limited was expand rapidly in different region of the world
i.e. Far East, Middle East, Africa, Europe and Western and Latin America.
Its founders were an influential and professional team possessing an
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intimate knowledge of East Asian and Middle Eastern countries,
particularly those with oil resources and expertise for sophisticated
operation of three most important elements in the early formation of
organization, e.g.
Investors from the oil producing countries of Middle East. A business

connection in the expanded markets. A well developed and fully equipped
management structure.
MAJOR FUNCTIONS OF BCCI
BCCI performed the following international function along with the

domestic commercial banking and International banking services to meet
the needs of individual.
o An intermediary bank between importer and exporter.

o Advanced loans for the persons involved in foreign trade.
o Advanced computer system to facilitate the clients.
o Provisioning of effective services of foreign trade.
o Bills for collection, inward and outward both clean and
documentary are attached by BCCI, which provide fast and efficient
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remittances operations from many third world countries to
multinational corporations.
BRANCHES OF BCCI IN PAKISTAN
There were three branches of BCCI in Pakistan. These were
o Karachi
o Lahore
o Rawalpindi
The Lahore branch was opened on 15 December 1978. This branch was
opened at that time when some other international banks like Citi Bank,
Bank of America, and American Express etc. were already working.
However, within a few years this branch crossed mostly all the other
banks in case of deposits, advances, imports and exports dealings,
guarantees, traveler’s cheque sales etc.
LIQIUDATION OF BCCI
BCCI was liquidated on July 5, 1991.At that time BCCI was opening in
almost 69 countries in the world. When financial authorities launched a
coordinated swoop in what was alleged to be the biggest international
fund in history.
INCORPORATION OF HABIB CREDIT AND EXCHANGE BANK (HCEB)

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In July 1991, the branches of BCCI in Pakistan at that time took over by
ministry of finance and SBP. All three branches were emerged in HBL
after valuation of its assets for 15 million dollars. It worked with Habib
Bank Ltd. For around about 10 months from 14 March 1992 to 31 October
1992.
PRIVATIZATION OF HABIB CREDIT AND EXCHANGE BANK
HCEB was privatized on July 7, 1997. Management was taken over by Abu
Dubai based Alnahan consortium. This consortium consists of foreign
investors of UAE and highly professional Pakistani bankers. Mr. Sheikh
Pervaiz and Mr. Omer Khan represent this consortium in Pakistan. The
bank was sold for Rs.39 per share for buying 70% shares. The
government decides to sell 10% shares to employees and rest of the
shares was privatized by stock exchange.
EMERGANCE OF BANK ALFALAH LTD.
Following the privatization in July 7, 1997 Habib Credit and Exchange

Bank assumed a new identity of Bank Alfalah on February 25, 1998. Bank
is committed to develop products that give more value to its customers.
With its deposits already soaring by more than 40% after privatization,
Bank Alfalah has embarked upon expansion program to ensure physical
presence in all cities of Pakistan. With a team of talented, service
dedicated professional bankers, Bank Alfalah commits all its energies,
resources and time to cater to all banking and financial needs.

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Status and nature of business
Bank Alfalah Limited was incorporated on June 21, 1997 as a public

limited company under the Companies Ordinance 1984. Its banking
operations commenced from November 1, 1997. The bank is engaged in
commercial banking and related services as defined in the Banking
Company’s ordinance, 1962. The Bank is currently operating through 282
branches in 82 cities, with the registered office at B.A.Building,
I.I.Chundrigar, Karachi. Since its inception, as the new identity of
H.C.E.B after the privatization in 1997, the management of the bank has
implemented strategies and policies to carve a distinct position for the
bank in the market place. Strengthened with the banking of the Abu
Dhabi Group and driven by the strategic goals set out by its board of
management, the Bank has invested in revolutionary technology to have
an extensive range of products and services. This facilitates our
commitment to a culture of innovation and seeks out synergies with
clients and service providers to ensure uninterrupted services to its
customers. They perceive the requirements of customers and match them
with quality products and service solutions. During the past five years,
they have emerged as one of the foremost financial institution in the
region endeavoring to meet the needs of tomorrow today
Since the inception of Bank Alfalah, by the grace of the Almighty, They
have moved rapidly in expanding their branch network and deposit base,
along with making profitable advances and increasing the range of
products and services. They have made a break-through in providing
premier services at an affordable cost to our customers. Keeping in view
valued clients and the need for constant and effective communication of
information, As They pursues the path of excellence, and customer
satisfaction remains their priority. It is only when we know our customers
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better, can we deliver a higher quality of services, thereby adding synergy
to 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 bank are stakeholders.
MANAGEMENT SYSTEM
It is fortunate for Bank Alfalah Limited that the leaders e.g. the top
management is very much qualified and has the ability to lead in a good
and effective manner. In Bank Alfalah Limited, all kinds of policies and
strategies are formulated and worked out by the board of directors and
the executive committee. The leadership style at Bank Alfalah can rightly
be mentioned as the customer oriented. Some individual persons have
some leadership traits in their personality. The top management should
have a contact with such persons, as it will help them in achieving their
objectives.
Branch network of alfalah
The Bank is fully aware that the branch network has direct implications on
the services that it provides to its customers. They offer services through
a network of 282 branches and 320 state of the art ATM machines.
• Conventional Branches 226

• Islamic Banking Branches 048
• Overseas Branches 008
• ATM Machines 320

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Following are the cities in which Bank Alfalfa’s branches are located:
Ahmadpur Abbott Abad Toba Tek Singh

Arifwala Attock Wah Cantt
Bahawalpur Dera Ismail Khan Daharki
Burewala Hangu Ghotki
Chakwal Kohat Hyderabad
Chichawatni Mardan Karachi
Chiniot Mingora Mirpurkhas
Daska Peshawar Nawabshah
Dera Ghazi Khan Gawadar Sialkot
Faisalabad Quetta Sukkur
Gujranwala Jhelum
Gujarat Kasur
Hafiz Abad Kharian
Islamabad Lahore
Jhang Lalamosa
RahimYar Khan Mandi Bahaudin
Rawalpindi Mian Chunnu
Sadiqabad Multan
Sargodha Okara
Sheikhupura Pakpattan
Vision and Mission Statement
Vision
To be the premier
organization
operating locally

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& internationality that provides the complete range of financial
services to all segments under one roof.
Mission
To develop & deliver the most innovative products, manage

customer experience, deliver quality services that contributes to
brand strength, establishes a competitive advantage and
enhances profitability, thus providing value to the stakeholders
of the bank.

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The Abu Dhabi Group (ADG), comprising some of the prominent members
of UAE’s ruling family, leading executives of UAE and their associates,
owns the majority shareholding in BAL since its privatization in 1997. The
bank is listed on the Karachi and Lahore Stock Exchange. The bank has a
leading position in consumer, trade finance and working capital finance.
Seven members BoD comprise four members from ADG and three other
professionals including the CEO. The chairperson of the board, H.E.
Sheikh Hamdan Bin Mubarak Al Nahayan, is Federal Minister of Public
Works, United Arab Emirates. The current CEO, an MBA with above three
decades banking experience, joined BAL in 2001 and elevated to the
current position in mid 2007. BAL, with a domestic network of 223, has
operations in Bangladesh (five branches) and Afghanistan (two branches),
and is on the lookout for further regional expansion. The bank also
entered into communication sector and other dimensions of financial
services – brokerage, asset management, and insurance – through its
subsidiaries and associates, which are in their gestation phase and would
require sometime before emerging as material contributors to BAL’s
revenue stream.
From the very outset, Bank Alfalah Limited has concentrated on

excellence and precision in banking practice and has consequently been
redefining industry standards. The bank’s core strengths stem from its
corporate philosophy, which stresses the higher level of security,
reliability and value for its client’s money. The Pakistani banking industry
has undergone substantive reformation in the last decade. It is now
characterized by increased growth and greater efficiencies, a focus on
market consolidation and international integration arising from increased
foreign investment. Thus Bank Alfalah Limited operates as a progressive
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and adaptive organization maintaining dynamism and flexibility in all
facets of its operations.
As its inception in 1997, Bank Alfalah Limited faced still competition from
established banking giants. However, through mature focus, hard work
and dedication Bank Alfalah has carved on enduring niche for itself and
serves as a benchmark for financial institutions. This is a momentous
achievement given the fact that Bank Alfalah Limited started out as a
fledgling with only three branch offices burdened with a host of problems.
Today it has a network of 282 branches across Pakistan, facilitating
access to high quality banking service for all.
Reinforced with invaluable practical experience often spanning many

nations, sound technical and professional skills, its human resource
strives for perfection in service to delight clients and surpass
expectations. Bank Alfalah realizes the potential that the synergy of the
well-trained, satisfied and secure workforce offers. Consequently, the
institution has adopted a holistic approach to nurture its human resource
where from initial recruitment to throughout their careers; employee
interests are kept paramount, focusing on congruency between
organizational and personal goals.
Bank Alfalah Limited is highly cognizant of its obligation to the society in

which it operates. Consequently as a caring corporate citizen the bank
remains at the forefront in the promotion of health, education and sports
through contributions, endorsements and sponsorships. Recently Bank
Alfalah Limited has renovated the Shaahdin Manzil in Pakistan’s cultural
capital of Lahore.

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This building, which is capital of Pakistan’s culture and historical heritage,
has been restored to its original grandeur for prosperity. It now serves as
Bank Alfalah Limited’s financial centre in Lahore.
CREDIT RATING
PACRA, 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 timely repayment in the short term,
respectively. The ratings of first, 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).

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STRATEGIC FOCUS
Bank Alfalah continually reviews its offshore banking operations with a
view to further mobilize its organizational strategy of enhancing
excellence in banking. Encouraged by the unprecedented success of Bank
Alfalah Limited in Pakistan, the bank recently acquired operations of
Shamil Bank in Bangladesh. In addition, Alfalah have moved forward
applications for branch presence in neighboring SAARC countries.
Presently Alfalah has established its branch in Afganistan.The
telecommunication industry in Pakistan is developing at a fast pace. As a
versatile organization, Bank Alfalah too acquired a 26% stake in the
Warid Telecom. This state of the art telecommunications firm is expected
to emerge as one of the key players in the communication industry.
FUTURE OUTLOOK
The future augurs well for the local banking industry as key
macroeconomic fundamentals stabilize and improve further. The bank will
continue to invest further in bank innovations which includes Islamic
banking, leasing, SME, home loans and other areas of product
development to provide higher levels of service and value to our clients.
Amidst these encouraging developments, Bank Alfalah Limited will
continue to embark on its strategy of network enhancement and deposit
mobilization.

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MANAGEMENT SYSTEM
Chairman’s review
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.
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This is yet another channel of communication for the delivery of quality
products and services that enhance value to our stakeholders.
Board of directors
HIS Excellence Sheikh Hamdan

Bin Mubarak Al Nahayan
Chairman
Ikram Ul Majeed
Sirajuddin Aziz
Sehgal DIRECTOR
Director & CEO
Mr.Abdullaha khalil Al
Mr.Nadeem Iqbal Mutwa (Director)
Sheikh (Director)
(Director)

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Mr.KhalidMana Saeed Mr. Abdullah Nasser
Al Otaiba DIRECTOR Hawalileel Al-Mansoori
(Director)
Board Advisory committee
Mr.KhalidMana Saeed Al Otaiba DIRECTOR
Mr.Abdullaha khalil Al Mutwa (Director)
Bashir A Tahir
Ganpat singhvi
Central Management Committee
Sirajuddin Aziz (Chairman)
Parvez a Shahid (co-chairman)
Shakil Sadiq
Bakhtiar Khawaja
Mohammad yousuf
Adil Rashid
Ijaz Farooq
Arfa Waheed Malik

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Nadeem Ul haq
Branch Level Designation
BRANCH MANAGER
OPERATIONAL CREDIT CD In- IT

MANAGER MANAGER
A/O Officer SME Officer Cash
Clearing
Agri. Finance Cash
Remittances
Auto Finance
Accounts

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Managerial policies
Managerial policies include all those policies which are adopted by the
bank in performing all it internal activities as well as external operations.
Different policies are required in order to introduce innovation and ensure
maximum operational efficiency at minimum cost.
POLICY FORMULATION PROCESS
Any policy that is being suggested is to be approved by the beard of

directors. Before this, the management of the bank takes up the affairs
that are to be discussed in the board meeting and the agenda is prepared.
Circular is sent to the persons who have to attend the meeting. And the
policies and issues are discussed for possible approval or rejection in the
meeting. BANK ALFALAH has its policy making function centralized to the
upper management. The upper management after making the policies
communicates them to the respective departments and branches. The
meetings for policy making are held as and when required. Lower
management loses not take part in policy formulation but can give
suggestions.
The policies of Bank Alfalah are as follows:
• Financial policies
• Procurement policies
• Marketing policies
• Promotional policies
• lending policies

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• Personal policies
FINANCIAL POLICIES
The financial policies of any bank are the most important policies through
which the whole banking activity is conducted. These policies are
primarily conducted on:
o Source of funds
o Use of funds
PROCUREMENT POLICIES
Procurement policies are more concerned with manufacturing

organizations. In bank industry that is service industry procurement
means the procurement of funds from various sources such as deposits. It
involves attracting and holding the funds of the depositors.
MARKETING POLICIES
Marketing policies are also one of the most important policies because
they are related to the growth of the organization. Marketing for a bank
would mean:

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1. Creation of new product and services.
2. The bank marketing must be consumer oriented.
PROMOTIONAL POLICIES
Public relation and advertising has assumed a great importance in the

modern banking business. As far as promotional activities are concerned,
the main objective of the bank is to inform the existing clients and other
people about its new products or change in the existing services. ACBL
establishes its purpose through:
• Direct contact with customers.

• Relation with business organizations.
• Community relations.
LENDING POLICIES
Every bank has its own lending policies except for those, which are
common for all the banks, i.e. the policies, which are imposed on all the
commercial banks by the SBP, are known as prudential regulations. The
lending policies of Alfalah are as follows:
1. The bank only invests in those sound and viable projects,

which have good rate of return.
2. Bank prefers to advance loan to their account holders.
3. Loan is given to reliable person only.
4. No political loan is sanctioned by bank.
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5. Any account holder can apply for running finance or demand
finance. The manger appraises the past record of account holder
and his credit worthiness. If he finds any thing wrong he can
refuse to sanction the amount.
6. The bank while taking security prefers govt. Securities to
shares.
7. It also advances working capital loans.
PERSONAL POLICIES
Good personal policies motivate the employees towards hardworking.
Following are the main personal policies of Alfalah:
• Selection of employees on merit
• Selection of capable employees.
• Attractive salary package for motivation of employees.
• To train and develop the future management of the bank.
• Every employee must have certain set of clearly defined
duties
• Effective communication at al levels of the organization.
Management styles
To avoid risks in a bank and for security measures banks adopt

Autocratic style. The leadership style in most of the departments of
bank is AUTOCRATIC.

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The features are discussed as under:
• The managers are very directive and allow no participation

from the lower side.
• The managers tend to give individual attention when praising
and criticizing but try to be friendly or impersonal rather openly
hostile.
• Managers try to be objective in giving praise or criticizing.
IMPACT ON MORALE OF EMPLOYEES

Administrative style has a strong impact on the moral of employees.
• Most of the work in bank is monotonous and need special
attention. Specialized employees work in different departments.
• Employees are rotated on different seats after one or two
years. It affects the employee’s performance. Sometimes they
perform better on another seat.
• Very strict behavior is adopted by managers to control the
work and to run the working smoothly. It has strong impact on
morale of employees as they become reluctant to work.
• Employees become fed up with the routine and find difficult to
face the burden.

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PRODUCTS & SERVICES
Current account
Every bank maintains the current account with its customers;

“A current account is running account which is continuously
In operation by the customer on all working days of the bank”.
The customer withdraws money from current account without prior notice
to the bank. In short, in current account, the banker incurs an obligation
to honors all the cheques drawn by the customer so long as there is
enough money to credit of the client.
Interest on current account
The banks don’t usually pay any interest on current account in local as
well as foreign currency. The amount can be withdrawn at any time, so
the bank can’t comply these funds due to fear of withdrawal.
Who are interested in opening current account?
The current account is operated by traders, business companies,

institutions, public bodies, industrialists who
o Wish to have working capital in their custody

o Like to receive and make payments through cheques
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o Are interested in keeping their money liquid and safe
o Utilize the agency services of the bank frequently
Advantages of having current account
The customer gets the following advantages on behalf of current account;
o The bank collects properly endorsed cheques on behalf of current

account holders
o The bank may allow the facility of overdraft on prior arrangements

to the trustworthy customers.
o Loans and advances may be sanctioned to the creditworthy clients

with ease.
o On line facility alternative of cash transaction is also provided to

customers having min. balance of Rs.500, 000/- in their current
account.
Initial deposit
The minimum initial deposit for current account in local currency in Rs.
1000/-. Where as for maintain current account min Rs. 10000 is must;
otherwise the bank will deduct Rs.50/month for not maintaining account
properly. Initial deposit in foreign currency current account is US$ or UK
pound 100.
Summing up, the current account doesn’t earn but serves the cause of
industry trade and commerce.

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Saving account
Saving deposit account is an ideal account for those who have money to
save but cannot profitably invest it anywhere else, as amount is too
small.
Saving deposit is an important source of fund for commercial banks. It is
opened to encourage thrift among the persons of small means. Saving
account is opened both in local and foreign currency.
The bank can safely invest the deposits of saving account, as it knows
that only the customer withdraws a small percentage of this account.
Interest on saving account

On Pak. Rs. Account the bank usually pays interest according to
prescribed rates by the central bank. This amount is credited to the
customer’s account after every 6 months. The rate doesn’t remain the
same but fluctuates due to many reasons e.g. conditions of the bank,
bank’s total deposit’s position, inflationary and deflationary powers in the
economy etc.
Some features of this account are as:
o Profit & Loss Sharing Saving Bank Account.

o Minimum account opening requirement of Rs. 5,000 only.
o No restriction on number of withdrawals and number of deposits.
o Profit on saving accounts is credited to the customer account on
half-yearly basis.

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o Debit card can be used to withdraw cash and make purchases at
thousands of outlets across Pakistan which provides access to funds
24 hours a day.
ROYAL PROFIT:
o Minimum Deposit requirement of Rs. 5,000 only.
o Higher returns on higher balances.
o No restriction on number of withdrawals and on number of
deposits.
o Profit is credited to the customer account on monthly basis
BASIC BANKING ACCOUNT:
o Initial deposit for account opening is Rs. 1,000 with no minimum
balance requirement.
o Non interest bearing checking account.
o Maximum 3 deposits & 3 withdrawals through cheques are allowed.
o Debit card can be used to withdraw cash and make purchases at
thousands of outlets across Pakistan which provides access to
funds 24 hours a day.
o No restriction on ATM withdrawal.

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ALFALAH KIFAYAT:
Any Pakistani resident over the age of 18 can open this account. This
account is for individual/joint customers only. Other customers like
companies, corporate etc are not eligible for opening of this account.
o Minimum balance requirement for opening this account is Rs.

10,000/- with a maximum of Rs.1, 000,000/-
o Three debit transactions are allowed in a month either
through cheques or Debit Card/POS machine.
o There is no restriction on deposit transactions.
o The bank will issue the first cheques book of 25 leaves and a
Debit card free of cost.
o Profit will be calculated on monthly minimum balance basis
and will be credited in the account on quarterly basis. No profit shall be
payable for a particular month, if the minimum balance for any particular
day of said month falls below the amount of Rs. 10,000/-.
o Online facility available for this account. (Subject to fulfillment
of all related requirements)

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o All service charges are as per the prevailing ‘Schedule of
Charges’
o Only one account per customer will be allowed across all
branches of Bank Alfalah.
Alfalah Mahana Amdan:
Alfalah Mahana Amdan is a 3 year TDR with expected rate of profit of

10.5% p.a. This term deposit will provide an opportunity to
individual/joint customers to enjoy higher returns that will automatically
be credited to his/her current/PLS/RP/BBA account on 1st working day of
each month.
This facility is not available for business and corporate customers.
Basic features are as
o Minimum placement limit is Rs. 50,000/- and maximum

placement limit is Rs.15,000,000/-
o Expected Rate of profit is 10.50% Per annum (as per PLS
governing rules)
o Profit will be automatically credited on the 1st working day of
each month into customers Current/PLS/RP/BBA account
o Free Personal Accident Insurance coverage up to the deposit
amount or Rs. 1,500,000/- whichever is lower.

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o Customer can avail financing facility up to 90% of the
deposit(as per banks policy)
o Any Pakistani resident over the age of 18 can open this
account
o Alfalah Mahana Amdan term deposit can be maintained only
at any one BAL branch with a maximum cap of Rs. 15 Million. An
undertaking shall be obtained from the customer certifying that
he/she is not availing Alfalah Mahana Amdan Term Deposit
Receipt facility from any other BAL branch.(included in AOF)
o Alfalah Mahana Amdan TDR will be issued for three years
tenure with auto renewal facility of principal amount i.e. the
facility will be renewed automatically on maturity (i.e. 3 years)
o Alfalah Mahana Amdan TDR will be subject to Zakat,
Withholding Tax as well as any other applicable taxes
Alfalah Education
Alfalah Education is a Term Deposit product with No Additional Cost (NAC)

education insurance cover for account holders with school going children.
Alfalah Education Account , beside offering competitive return on TERM
DEPOSIT , offers tuition fee reimbursement of children for 15 years of
schooling or up to their 20th birthday, in the unfortunate event of the
death (either through accident, illness or natural causes) of the main
breadwinner (account holder) parent.
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Alfalah Education offers a competitive return on term deposit and
secondly, it creates a contingency provision for our school going youth’s
education in the hapless event of the death of any major breadwinner.
The product seems rewarding in the current scenario of increasing
number of children of school going age and the general public interest in
quality education of their off springs.
Features
o Deposits can be placed in multiple of 100,000 units with

maximum 3 units allowed per depositor, i.e. a maximum deposit
per customer of Rs. 300,000 across all BAL branches.
o All 3 units can be purchased for 1 child or each for up to 3
children.
o No evidence of insurability (medical examination/health
decoration) is required.
o Maximum entry point age is 55 years (renewable up to 64th
birthday)
o Benefit payment increases with age/class of the child.
o The product will be offered as a 1 year term deposit at up to 7
% profit to be paid at maturity
o Premium cost for each deposit unit of Rs. 100,000 would be Rs.
85 per month and borne by the bank.
o Regular Zakat and WHT would apply on the deposit.
o Monthly payments set forth will be paid directly to the
mother/guardian, regardless of the actual school fee.
o In case of joint account holders, only main breadwinner account
holder would be covered under the policy.
o Premium will be paid to ALICO by BAL on monthly basis.

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Benefit Schedule
Benefit Payable: for 15 years or up to the child age 20

Monthly Premium: Rs. 85
Deposit: Rs. 100,000
Child Benefit Payable Monthly

Age* for no. of years Payment (Rs.)
5 15 2600
6 14 2800
7 13 3000
8 12 3200
9 11 3300
10 10 3600
11 9 3900
12 8 4300
13 7 4800
14 6 5400
15 5 6300
16 4 7600
17 3 10000
18 2 14600
19 1 28300
* Child age at the time of Breadwinner’s death.

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LOCKERS:
Bank Alfalah provides safe deposit locker facility to its customers for safe
keeping of their valuables like documents, securities and jewellery etc.
Important features of lockers facility are as follows:

o Various sizes to choose from small, medium & large.
o Annual locker rent ranges from Rs.1,000/- to Rs.3,500/-
o Locker rent is waived for customers maintaining a minimum
deposit of Rs.2 million in current account or above US $25,000/-
in a current account or US $50,000/- in a savings account.
Locker Rates
The annual license fees of the following sizes of lockers will be as follows:
Locker Size Charges

Small Rs.1000/-
Medium Rs.1500/-
Large Rs.3000/-
Special Rs.3500/-
Key Deposit: Rs.1000/- (Refundable)
The license fees lockers will be payable in advance every year and no part
of the same shall be refundable in any circumstances.

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Alfalah Hilal Card
It gives an unlimited access to current/savings account with a simple

swipe, at millions of retail shops and ATMs, worldwide. It is easy to
operate and it can be used where visa is accepted, locally and
internationally. No more hassle of remembering PIN and no need to go to
the ATM for cash withdrawal, one swipe and the transaction is complete.
Alfalah Hilal Card is a debit card that gives access to bank account of
customers. Alfalah Hilal Card allows customers to purchase goods at
merchant establishments across Pakistan & abroad and also give the
freedom to withdraw cash from any VISA/ Electron/PLUS ATMs in Pakistan
and abroad, from all Local Bank Alfalah and 1 Link ATMs. In our endeavor
to provide you versatile banking options to fulfill your financial needs,
Bank Alfalah Limited presents the Alfalah HilalCard, a Debit Card, which
gives you unlimited access to your current / savings account with a simple
swipe at millions of retail shops and ATMs worldwide. The Alfalah
HilalCard comes with a host of conveniences and benefits combined with
the wide reach of Visa Network, enabling it to be accepted at more than 1
million ATMs and 13 million retail outlets around the world, making it the
most acceptable Debit Card available in Pakistan.
Feature of Alfalah Hilal card
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The Alfalah HilalCard can be used electronically at any retail outlet or ATM
that accepts VISA cards and displays these logos:
Personal Identification Number (PIN):

Debit cards that are currently available in Pakistan require the card
member to enter the PIN number in order to complete a transaction. The
Alfalah HilalCard is a "One-Swipe Card" and does not require you to
remember any PIN in order to execute retail transactions. The PIN which
will be delivered to you for Visa Electron will be required for ATM based
transactions only.
Special POS Machines:

In order to use other debit cards currently in the market you would need
to find outlets that carry special POS machines where these cards can be
used. Alfalah HilalCard is accepted at all outlets displaying the
VISA/Electron logo worldwide and having self-printing POS terminals.
To be used not to be used
For Alfalah HilalCard for Alfalah HilalCard
Global Acceptability:
The Alfalah HilalCard is globally accepted welcomed at all locations
displaying the VISA/ ELECTRON/PLUS logos with self-printing POS

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terminals. Your card is accepted at nearly 13 million physical locations in
more than 130 countries round the globe with above 14,000 major
establishments in Pakistan.
With your Alfalah HilalCard, you can pay for shopping, meals, travel,
entertainment, holiday, petrol and much more. Also it gives you access to
ready cash through your PIN (Personal Identification Number) at more
than 1 million ATMs to withdraw any amount up to your available bank
account balance. This premier card service is a convenient point-of-sale
alternative for ATM cardholders who do not qualify for Visa credit
purchasing power. Through Alfalah HilalCard, you can access your Bank
Alfalfa’s account from anywhere in the world.
24-Hour Customer Service

Our 24-Hours Customer Service is there to help you with your requests.
Our well-trained and qualified Customer Service team will assist you in:
o Answering your queries
o Registering and resolving your complaints
o Reporting a lost/ stolen card
o Activating your Card
No Minimum Income Requirement:
Unlike other Cards, the Alfalah HilalCard is easy to obtain. There is no

preset income requirement to enjoy the benefits of this fast, convenient

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and safe. All you need to do is open and maintain an account with any of
the branches of Bank Alfalah Limited.
Simplicity:
Charge goods and services to your Alfalah HilalCard at all point-of-sale

terminals with self-printing ability displaying VISA / Electron sign in
Pakistan and abroad.
Promptness:
Using Alfalah HilalCard at ATMs and / or shops requires less time than
queuing in the Bank and writing out checks.
Immediate Payment:
With Alfalah HilalCard you pay your bills immediately unlike when you use
a Credit Card and get the bill later. The amount is directly debited from
your designated Current/Savings account.

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Money Gram
Bank Alfalah limited, in collaboration with Money Gram, offers

remittance service to Pakistan. Money Gram is person to person money
transfer service that allows consumers to receive money in just a few
minutes.
Secure and reliable:
An extensive network of quality agents, linked by computer, will transfer

your money safely and ensure that it is handled with care and without
delay. Thousands of people already use the MoneyGram service all over
the world. It is trusted for its reliability and security.
Convenient and fast:
MoneyGram is available in over 154 countries and in more than 40,000

locations worldwide. With MoneyGram your money is transferred
immediately and usually arrives at the receiving end within 10 minutes
while other services can take days or weeks. There are no complicated
procedures and you do not need a bank account or a credit card. What’s
more, the receiver is handed the cash immediately.
Free message service (for senders):
There is also an added personal touch-you can receive a 10 word

message from the sender with every transaction at no extra cost.

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Alfalah Credit Card
Your Bank Alfalah Credit Card is your partner everywhere and is globally
accepted and welcomed at locations displaying the VISA logo. It is
accepted at nearly 27 million locations in more than 150 countries around
the globe and over 22,000 Bank Alfalfa’s establishments in Pakistan.
Alfalah VISA lets you pay for shopping, travel, entertainment, meals and
much more. Card members are facilitated through a number of
promotions from time to time. In addition, there are a number of strategic
business partnerships with leading local and international brands for
purchase of home appliances at exciting Step-BY-Step (SBS) monthly
installment plan with free home delivery at lowest interest rates. Salient
features are:
o No Joining / Annual / Renewal fee

o Electricity, Sui Gas, PTCL and Warid bills payment through 24
hour Call Center and Auto Debit instructions
o SMS for card usage, mini statement, payment receipt
confirmation, etc.
o Cash withdrawal at all 1LINK ATMs
o Special offer on Warid post paid connections

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Types of Cards
Classic Blue & Classic
It is the first card of its type in Pakistan for professionals who do not
qualify for other credit cards. With the minimum requirement of a
graduation degree customers have been provided a chance to have credit
cards at the start of their careers. Its range of credit is up to 25,000/- &
in simple classic it is 100,000/-.
Student cards
Bank Alfalah has recently launched its student credit cards to the
customers with 14 years of education and currently enrolled in a
professional college. For the first time in Pakistan, Bank Alfalah introduces
a credit card for Students.
This card is for customers if they are enrolled in a professional university

(as per Bank Alfalfa’s approved list) with 15 years of schooling
experience.
Now people can pay your fee, buy books with Alfalah VISA. Not only this
but they will also earn reward points and can redeem them for a TV,
Mobile Phone, and CD player & DVDs etc.

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Women Exclusive
This card has basically designed for household and workingwomen for
purchasing household goods for themselves or their family.
Now for the first time in Pakistan, Bank Alfalah has introduced a credit
card exclusively for women. This card has its unique features, which have
been tailor-made for the women in Pakistan. Its limit is up to 150,000/-.
Liability
The liability of this card depends on what basis this card has been applied
for:
If the female is applying on her own income basis, she herself will be
liable to pay for the amount spent through the card(s).
If the female is a house wife and does not have any direct income source,
she can apply for the card through the person responsible for the
household (i.e. husband, parent, bother or sister) who will sign an
undertaking to be responsible for the amount spent through all the
card(s) issued under this scheme.

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Visa Mini Card
Easily attachable to customer’s key chain, mobile phone or any other

household device. Visa Mini is a practical and convenient part of everyday
life - whether they go for shopping, dine out, buy grocery, want to go for
holidays or feel like buying something of interest while we are out just for
a jog!
Customers can take it anywhere they like with no hassle as it has a

perforated hole in the bottom left corner making it attachable to key
chain, mobile phone or other day-to-day carry along device.
o 43% smaller than the regular sized credit card with the same
features and the benefits
o Accepted at over 13 million merchants worldwide and around
7000 establishments in Pakistan (used on electronic POS terminals
only).
o Has the same security feature as the regular sized Alfalah
VISA credit card.
Gold & Silver
A perfect card combination for all segments of salaried &

professional individuals. Its credit limit is up to 100,000/-.

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Titanium
Titanium MasterCard is your partner everywhere and is

globally accepted and welcomed at locations displaying the MasterCard
logo. Its credit limit is up to 350,000/-.
Platinum card
It is accepted at nearly 27 million locations in more than

150 countries around the globe and at over 22,000 establishments in
Pakistan. Its credit limit is up to one million.
Home Finances
BAL has priced Home Finance Plans with a

wide variety of rate options to suit pocket,
and budget. These rates will indicate just
how competitive they are! So whether
people are buying their first home, moving
to a new property, or looking to switch
from current lender, with Bank Alfalah it’s
easy to make mortgage arrangements that
are really right for people.
1) Buy home
2) Renovate home
3) Build home
4) Make an easy transfer

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I. Buy home
BAL provides customers up to 70% of the purchase price of the property

(whichever is less), so that they can realize dream of people and enter
the reality of owning a home!
II. Renovate home
If people already own a home, but need extra space for a growing family.
They can simply apply for financing of up to Rs. 3.50 million or 40% of
the surveyed value of home and get the extra space!
III. Build home
People have a plot and need finance to construct a home, which excites
everyone in family! No problem. BAL will provide 70% of the estimated
value of constructed property to enable people to say good-bye to rent
forever! Even if they don't have a plot, BAL will provide them up to 60%
of the value of the plot that they have selected to purchase!
IV. Make an easy transfer
Does customer’s existing installment on a home finance leave them with

nothing to spend? They need not worry any more because BAL has
genuinely low rates and payment options that could leave more funds
with them each month. Transfer up to 100 % of the existing finance.
The Eligibility Criteria

People may apply for Bank Alfalah Home Finance,

56
o If they are a Pakistani National.
o If they age is between 23 and 65 years.
o If they are in continuous employment in a permanent position
for the last 2 years or more.
OR
o If they have existing 3 years (or more) of business or

professional experience.
o If their gross annual income is Rs: 240,000/ — or more [their

spouse’s income (up-to 50%) can also be combined
o If they require a financing requirement starting from at least

Rs: 500,000/
o If they have been a Bank Alfalah borrower for past one year
with clean payment record.
People may apply for Bank Alfalfa’s Home Finance for minimum period of
3 years and a maximum period of 20 years.

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Alfalah Car Financing
o Quickest processing.
o No hidden charges.
o Minimum down payment.
o Complete repayment at any point of time.
o Balance transfer facility {BTF} for existing as well as new
clients from other Banks.
o Tenure period ranging from 1 to 5 years.
o Financing of all brand new locally assembled vehicles and
used cars.
o Financing limit ranging between Rs. 200,000/- to Rs. 2000,
000/- for brand new cars.
Corporate & Individual Car Leasing
BAL’s recently introduced car leasing facility for individuals and corporate
sector has set new dimensions for the product. Now you are provided with
the option of either to get the vehicle leased or financed.
Insurance
Renowned and reliable Insurance companies are offering the competitive

rates of insurance. Pay year insurance premium in advance {at the time

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of down payment} and the remaining in the subsequent equal monthly
installment.
How Much Extra Money Being Paid? {Mark-Up}
Financing Product 1Yr 2Yr 3Yr 4Yr 5Yr
Car Loan for Brand New Vehicles 17.00%. 17.50% 18.00% 18.50% 18.50%
Car Loan for Brand New Imported

19.00% 19.00% 19.00% 19.00% 19.00%
Vehicles
Car Loan for New Commercial

20.00% 20.00% 20.00% 20.00% 20.00%
Vehicles
Car Loan for Used Vehicles (Local

21.00% 21.00% 21.00% 21.00% 21.00%
Assembled Only)
Car Loan for Internal / External

19.00% 19.00% 19.00% 19.00% 19.00%
BTF (Local Assembled)

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Repayments
Easily affordable installments on monthly basis in the form of post-dated

cheques will set you free of depositing your rental cheques every month.
Security
Hypothecation of vehicle is in the name of Bank Alfalah Limited.
You Can Act As a Co-Borrower
Acting as a co-borrower will enable your family members {spouse,

children- 18 year and above} to avail the financing facility and get the car
registered in their names as well.
Yes you can get a car loan form Bank Alfalah to purchase a brand new car
if you are:
o Pakistani National Identity Card holder.
o 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).
o Salaried, businessman or self employed.

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FINANCIAL SERVICES
1. Trade finance
Inspired by a challenging spirit and an unyielding desire to create a sound

and reliable networking of correspondent relationships, the bank has
placed great emphasis towards it growth. Accomplishing something for
the first time requires a special focus. It demands foreseeing possibilities.
To do so, BAL successfully surmounted problems and difficulties arising
out of issues relating to weak economic conditions of the economy and a
continuous deteriorating status of country risk.
The incertitude and skepticism of the international banking community

towards financial institutions from emerging markets remained intact. BAL
persistence during the past four years allowed us to make significant
inroads into the arena of correspondent banking. Large international
banks, after critically evaluating us, agreed to enter into relationship.
During 2002 they added 81 banks to their network of correspondents,
bringing the total number over 170. Of these relationships, there are now
several banks that rank amongst, the top financial institutions in the
world. Geographical coverage of BAL now extends to over 100 countries,
which is adequately compatible with trade flows.
Bank’s correspondents, during the year extended unqualified support,

which enabled it to undertake a healthy quantum of foreign trade

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business. There are many challenges ahead for the bank, in the coming
year, bank will not only continue to review its efforts on existing
correspondents to make the relationship more beneficial, but will also add
more correspondents to establish a comprehensive international
networking to facilitate its customer’s transaction as well as the Bank’s
proprietary needs.
They have provided against the list of correspondents their world and
country ranking. These ranking have been taken from The Bankers
Almanac – July 2001 issue.
BAL would like to emphasize that correspondent arrangements do not

necessarily imply the existence of account relationship. BAL is in the
process of rationalizing current nostro account relationships. They shall
continue to open new accounts in various currencies based on trade flows
and business requirements.
2. Structured Finance
Established in 1998 in order to provide innovative investment banking
services to valued clients.
A team of hand picked professionals, dedicated to syndicated loans and

structured products. The team’s expertise is well known in the
marketplace with its capability to assist public & private sector entities,
major financial institutions, multinational corporations, domestic &

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international institutional investors in innovative financing including
underwriting & private placements.
The scope of SFU’s activities also encompasses advisory assignments,

such as privatization, Mergers & Acquisitions (M&as), domestic listings,
IPO’s and restructuring.
During the past few years, SFU has been successful in sourcing and
participating in a number of prestigious transactions involving large
amounts.
Some of the value added services offered by SFU include the

following:
• Loan syndication
• Public floatation of Term Finance Certificates (TFCs) and

equity
• Private placement of Term Finance Certificates (TFCs) and

equity underwriting
• Guarantee syndications
• Financial restructuring
• Mergers & Acquisitions (M&As)
• Fostering joint ventures
• Privatization – Sale side and buyers side advisory
• Structuring new financial instruments

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In the future, SFU is envisaged to supplement the enhanced profile and
profitability of Bank Alfalah Limited through its value added services,
through both asset building and income generating aspects.
Small and Medium enterprises
Small and Medium Enterprise (SME) means an entity, ideally not a public
limited company, which does not employ more than 250 persons (if it is
manufacturing / service concern) and 50 persons (if it is trading concern)
and also fulfills the following criteria of either ‘a’ and ‘c’ or ‘b’ and ‘c’ as
relevant:
• A trading / service concern with total assets at cost excluding

land and building up to Rs 50 million.
• A manufacturing concern with total assets at cost excluding

land and building up to Rs 100 million.
• Any concern (trading, service or manufacturing) with net

sales not exceeding Rs 300 million as per latest financial
statements.
An Individual, if he or she meets the above criteria, can also be

categorized as an SME.

64
Realizing its corporate social responsibility and carrying forward the image
of "The Caring Bank", Bank Alfalah started a separate department at the
Head Office level in early 2004. The SME Department was established
with a mandate to foster SME finance at BAL, explore opportunities for
developing structured product programs for SMEs, introduce the concept
of Dedicated SME officers and finding market based solutions to fill the
financing gap to this important and under-served business segment.
Bank Alfalah believes in innovation, simplification of procedures, and

reduction in turnaround time and customer friendly service. To accomplish
this resolve, the SME Department is supported by 86 dedicated officers in
57 branches of the bank who are nurturing valuable relationships in the
SME sector.
ALFALAH KAROBAR FINANCE
Bank Alfalfa’s first SME product Alfalah Karobar Finance is a running

finance facility based on projected cash flows. Under AKF, we offer
working capital finance (Rs.0.5 million to Rs. 10 million) to SMEs at highly
competitive rates. We have a team of professional credit officers who
provide expert financial advice along with customized packages to a
diverse range of business clientele. The product is available to SMEs
through our 86 branches in 38 cities.
Schedule of Product and Financial services
Every bank charge some amount to its customers in exchange of services

and value that it offers to its customers. Bank Alfalfa’s charges are

65
nominal and are extremely competitive when compared to market
standards. Some of the charges are described below:
• Issuance of new cheque book is for Rs. 5 per leaf.
• Statement of accounts is provided to customer @ Rs. 50 per

statement.
• If the balance of any account is below than the minimum

balance requirement then Rs. 50 per month will be deducted from
the account.
• Cheque returned is charged for Rs.350 per cheque.
• Stop payment of any cheque is for Rs. 200 per cheque.
Following are the other charges related to bank:
REMITTANCE
Pay order Against debit to account Rs. 50
Plus 16% excise charges
Issuance of Draft, TT’s Rs. 50-1500
SAFE DEPOSIT LOCKERS

Small Rs. 1000 Per annum
Medium Rs. 1500 Per annum
Large 1 Rs. 2500 Per annum
Large 2 Rs. 3000 Per annum
Extra Large Rs. 3500 Per annum

66
Online Facility Charges
If the average balance of account holder in the previous month is more
than one lack then online facility is totally free, otherwise the following
charges will be applicable:
• For any transaction Rs.110 will be charged on current account,

• And rupees 200 charges on saving account.
Consumer Financing Charges
Home Loan
Alfalah Home Finance

Processing Fee
a) Up to Rs. 1.0 Million Rs. 5000

b) More than 1.0 Million to Rs.
2.5 Million Rs. 10000
c) More than 2.5 Million to Rs.

Rs. 12500
5.0 Million
d) More than 5.0 Million to Rs.
Rs. 15000
50.00 Million
e) More than 20 Million Rs. 20000
ALFALAH CAR FINANCING

Processing Fee Rs. 4000

67
Registration charges Rs. 2000
Cheque returned or rejected Rs. 500
Penalty for late premium Rs. 200
Financing Product 1Yr 2Yr 3Yr 4Yr 5Yr
Car Loan for Brand New Vehicles 17.00%. 17.50% 18.00% 18.50% 18.50%
Car Loan for Brand New Imported

19.00% 19.00% 19.00% 19.00% 19.00%
Vehicles
Car Loan for New Commercial

20.00% 20.00% 20.00% 20.00% 20.00%
Vehicles
Car Loan for Used Vehicles (Local

21.00% 21.00% 21.00% 21.00% 21.00%
Assembled Only)
Car Loan for Internal / External

19.00% 19.00% 19.00% 19.00% 19.00%
BTF (Local Assembled)

68
Credit Cards
The following Schedule of Charges is associated with Alfalah Credit Card.
Schedule of Charges
Service Fee 3.00% per month (APR 36%) on

cash advance.
3.00% per month (APR 36%) on

retail transactions.
1.75% per month (APR 21%) on SBS

transactions.
1.50% per month (APR 18%) on BTF

transactions.
Late Fee Rs. 600/- or 10% of minimum

amount, whichever is higher.
Cash Payment Processing fee Rs. 100/- per transaction.
Merchant Discount Charges
Up to 5% of transaction amount.
VISA Mini Card Supplementary Fee Rs. 500/-
Cash Advance Fee/Call & Pay Fee Rs. 500/- or 3% of cash advance
Acquiring Bank Charges 1% of cash advance amount.
Cheque / Cash Pickup Fee Rs. 200/- (available in cities having

Bank Alfalah branches).
Over Limit Fee Rs. 600/- or 2% of Over Limit

69
Voucher Retrieval Fee Local: Rs. 350/- and
International: Rs. 800/-
Card Replacement/Upgrade Fee Local: Rs. 500/-
Cheque Return Charges/ Rejected Rs. 800/-

Auto Pay Service Fee
Duplicate Statement Charges Rs. 200/- (whenever 1 month old).
Step By Step Processing Charges 2% of transaction amount.
Step By Step Premature Settlement 5% on balance amount or Rs.

Charges 1,000/-, whichever is higher
Credit Cover Premium 0.50% of outstanding amount.
Utility Bill Payment Charges Rs. 25/- per transaction.
VISA Platinum Priority – Annual Fee US $4.71 per annum
VISA Platinum Priority – Airport Up to US $28.25 per visit.

Lounge Visit fee
SMS Alert Fee Rs. 25/- per month
Mobile Banking Fee Rs. 5/- per transaction
Merchant Cash Advance Incentive Rs. 25/- per transaction
ALFALAH KAROBAR FINANCE

Processing Fee Rs. 2000
Document charges Actual cost of revenue and special

adhesive stamps
Legal Charges Actual charges of the lawyers
Property valuation charges Actual charges of the valuators
Business and financial appraisal Rs. 4000

charges

70
Place
The Bank is fully aware that the branch network has direct implications on
the services that it provides to its customers. They offer services through
a network of 282 branches and 320 state of the art ATM machines.
• Conventional Branches 226

• Islamic Banking Branches 048
• Overseas Branches 008

71
• ATM Machines 320
Following are the cities in which Bank Alfalfa’s branches are located:

72
73
Ahmadpur Abbott Abad Toba Tek Singh
Arifwala Attock Wah Cantt
Bahawalpur Dera Ismail Khan Daharki
Burewala Hangu Ghotki
Chakwal Kohat Hyderabad
Chichawatni Mardan Karachi
Chiniot Mingora Mirpurkhas
Daska Peshawar Nawabshah
Dera Ghazi Khan Gawadar Sialkot
Faisalabad Quetta Sukkur
Gujranwala Jhelum
Gujarat Kasur
Hafiz Abad Kharian
Islamabad Lahore
Jhang Lalamosa
RahimYar Khan Mandi Bahaudin
Rawalpindi Mian Chunnu
Sadiqabad Multan
Sargodha Okara
Sheikhupura Pakpattan
PROMOTION
One of the most important element of marketing mix of services is

promotion which is consist of personal selling, advertising, public
relations, and selling promotional tools.
PERSONAL SELLING
Due to the characteristics of banking services, personal selling is the way

that Bank Alfalah prefers in expanding selling and use of them.

74
Personal selling occurs in two ways.
First occurs in a way that customer and banker perform interaction face to
face at branch office. In this case, whole personnel, bank employees,
chief and office manager, takes part in selling.
Second occurs in a way that customer representatives go to customers’

place. Customer representatives are specialist in banks’ services to be
offered and they shape the relationship between bank and customer.
ADVERTISING
Bank Alfalah has too many goals which it wants to achieve. Those goals
are for accomplishing the objectives as follows in a way that Bank Alfalah
develops advertising campaigns and use media.
• Conceive customers to examine all services that Bank offers

• Increase use of services
• Create well fit image about Bank Alfalah and services
• Change customers’ attitudes
• Introduce services of Bank Alfalah
• Support personal selling
• Emphasize well service
Advertising media and channels that Bank Alfalah prefers are newspaper,
magazine, radio, direct posting and outdoor ads and TV commercials. In
the selection of media, target market is determined and the media that
reach this target easily and cheaply must be preferred.

75
Newspaper
Bank Alfalah advertises its products also through newspapers, signboards

and banners. Also the customers are given brochures, which contain
detailed material about the products and services, offered by BAL. In fact,
the application forms of Retail Banking Products.
PUBLIC RELATIONS
Public relations in banking should provide;
1. Establishing most effective communication system
2. Creating sympathy about relationship between bank and customer
3. Giving broadest information about activities of bank.
CONTRIBUTION IN SOCIAL EVENTS
As a committed corporate citizen, Bank Alfalah contributes to different

areas of the social sector in various ways which help improve the quality
of life in our country.
FINANCIAL ANALYSIS
Particulars of Balance Sheet Actual Figures in ('000')

2007 2008
Cash and Balances with treasury banks 29,436,378 32,687,335
Balance with other banks 18,380,738 21,581,043

76
Landings to financial institution 3,452,059 3,315,500
Investments 88,491,564 75,973,238
Advances 171,198,992 192,671,169
Operating Fixed assets 11,922,324 13,773,293
Other assets 6,013,097 8,989,186
Total Assets 328,895,152 348,990,764
Liabilities
Bills payable 4,138,243 3,452,031

Borrowings 21,230,697 13,690,222
Deposits and other accounts 273,173,841 300,732,858
Sub-ordianted loans 3,220,858 2,571,169
Liabilities against assets subject to lease 0 0
Deferred tax liabilities 1,379,809 208,465
Other liabilities 9,531,860 11,291,280
Total liabilities 312,675,308 331,946,025
Net Assets 16,219,844 17,044,739
Represented by
Share capital 6,500,000 7,995,000

Reserves 2,414,833 3,166,056
unappropriated profits 4,851,840 3,447,467
13,766,673 14,608,523
Surplus on revaluation of assets 2,453,171 2,436,216
16,219,844 17,044,739
(Rs in ‘000’)
Income statement particulars 2007 2008

Markup/return/interest earned 25783871 31046583
Markup/return/interest expensed 16620963 20331194
Net markup interest income 9162908 10715389
Provision against non-performing loans 2370867 2035997
Provision for diminution in value of investment 0000000 1479062
77
Bad-debts written off directly 5844 28298
Net interest income after provisions 6786197 7172032
Non markup/ interest income
Fee, commission and brokerage income 2429599 2539321
Dividend income 64722 300943
Income from dealing in foreign currencies 474510 914845
Gain on sale of securities 2059793 424220

Unrealized loss on revaluation 21530 181571
Other income 1031372 1247669
Total Interest Income 6038466 5245427
12824663 12417459
Non Markup/ Interest Expense
Administrative expenses 8272587 10471339
Provisions against off-balance sheet obligation 6,959 28582
other charges 9565 122758
Total Non mark-up Expense 8289111 10622739
Profit before Tax 4535552 1794720
Profit after tax 3130229 1301301
Earning per share 3.92 1.63
Current Ratio (Rs in ‘000’)
Current Assets
Current Ratio ═
Current Liabilities
Years Current Assets Current Liabilities Current Ratio
2008 326288285 317864111 1.026 time

current ratio
2007 310959731 298542781 1.041592 Times
1.034 1.0415
2006 259549500 250994656 1.034084 Times
1.026
1
Commentary
0. 9

78
0. 8
2006 2007 2008
The current ratio is a measure whether or not a firm has enough
resources to pay its debts over the next 12 months. Acceptable Current
ratios vary from industry to industry. For banks in Pakistan 2:1 is ideal
one. Bank alfalah is facing difficulty in maintaining its ratio. In 2008 bank
has to attract more deposits, so current liabilities increased much
proportion to current assets. However bank has enough strength to pay
off its short run liabilities.
Advance to Deposits
Loan To Deposit (%) ═ Advance
Deposits
(Rs in ‘000’)
Loans to deposits
Years Loans Deposits Ratio
2008 192671169 300732858 64.06
2007 171198992 273173841 62.67035
2006 149999325 239509391 62.62774

2006 2007 2008
65
Commentary 63 .5
64.06
62.6277 62.6703
62
It is the most important ratio for a
60 .5
bank as all the bank profits are 59
major based on loans and deposits. 57 .5
56
Because on the deposits they have 54 .5
INSTITUTE OF BUSINESS ADMINISTRATION, PU, LHR 53
51 .5 79
50
2006 2007 2008
to pay and on loans they earn and the difference is the profit of the bank.
The higher the ratio, the more is relying on borrowed which are generally
more costly than most of deposits. As bank alfalah has increasing trend in
this ratio, it shows a healthy sign. It means bank is trying more to
generate advances which ultimate result is increase in bank income.
PROFITABILITY RATIOS
Operating Expense Ratio (Rs in ‘000’)
═ Non markup expense × 100

Operating Expense Ratio Gross Income
Years Non markup Gross Operating Expense

expense Income Ratio in %
2008 10622739 12417459 85.54
2007 8289111 12824663 64.63414
2006 5918051 8483996 69.75547
Commentary The
operating expense ratio
Operating Expense Ratio is
usually viewed as a 90 85.54
measurement of management 80
69.76
70 64.63
Efficiency. This is because 60
management usually has 50
40
greater control over operating
30
Expenses than they do over 20
revenues. As of 2008 Bank has 10
0
very high operating expense 2006 2007 2008
ratio. This was not due to poor

management. This year bank has lower income due to provision for
80
diminution in value of investment and bad debts written of directly.
Previous year bank earned of Rs.2, 059 million as compared to this year
of only 424 million. Provisions against off balance sheet items also
increased the administrative expenses. So all these factors pull this ratio
up.
Admin Expenses to Total Deposits
Admin expenses to total ═ Expense on deposits * %

deposits Total deposits
(Rs in ‘000’)
Expense on Total Admin Expense to

Years deposits deposits Total Deposits
2008 10471399 300732858 3.48235
2007 8272587 273173841 3.028323
2006 5874745 239509391 2.452824
Admin cost to deposit

Commentary
3.48235
For banks, this ratio must be less 3. 5
3.028323
3
than 3%. Alfalah has lowest
2.452824
2. 5
admin cost in 2006.but latter it is
2
showing
1. 5
Increasing trend, which is not 1
good sign for bank. Depression in 0. 5

0
financial system forced banking 2006 2007 2008
system to attract more deposit at

higher costs. Bank has to increase Minimum wage rate to meet
government regulations, depreciation and amortization costs also
81
increased. So overall position lead the management to increase these
costs.
Return on Equity
Return On Equity ═ Net Profit × 100
Shareholder's Equity
(Rs in ‘000’)
Return On Equity
Years Net Profit Shareholder's Equity in %
2008 1301301 17044739 7.6346
2007 3130229 16219844 19.2987
2006 1762691 12241945 14.3987
Commentary
Return on equity
Return on equity revels how
20 19.2987
much profit a company earned
in comparison to the 15 14.3987 14.3987
shareholder equity found in

10
balance sheet. Return on equity
of Alfalah is showing a changing 5
situation on all given years. In 0

2006 2007 2008
year 2006, the return on equity
of Alfalah is 14.39%, in year
2007 it is 19.298%. And in year 2008 it again goes to 7.6345% although
net profit increase but the shareholders equity is also increase so this
increase shows that bank is not utilizing its funds properly. This year bank

82
has to face additional costs as well as less income due to economic
slowdown. As compared to industry, this year ratio is also sufficient.
Non Interest Income to Total Assets
Non interest income to ═ Non interest income

total assets Total Assets
(Rs in ‘000’)
Non Interest Non interest income

Years Total Assets
Income to total assets in %
2008 5245427 348990764 1.503
2007 6038466 328895152 1.8360
2006 3224639 275685541 1.1697
Commentary
This ratio shows how much you Non intrest incom to total asset
are earning on the total assets 2

1.836
1.8
through non-mark up income.
1.6 1.503
This ratio is increasing in the year 1.4
1.2 1.1697
2006 and 2007 and showing a 1
0.8
vital change in the year 2008.
0.6
This ratio reveals that bank 0.4
0.2
assets has increased but decrease 0
2006 2007 2008
in non interest income due to
Unrealized loss on revaluation of
investment classified as held for trading disturb for this year over all non
markup income is increasing for the Bank.

83
Risk Assets Turnover
Risk Asset Turnover ═ Net interest income 100
Risk Assets (Advances)
(Rs in ‘000’)
Risk Assets
Net mark-up /
Turnover in %
Years interest income Advances
2008 10715389 192671169 5.5615
2007 9162908 171198992 5.3522
2006 5958584 149999325 3.9724
Commentary
Risk Asse t turnover
This ratio is good when it is more. It
6
shows how much you are earning on 5.3522 5.5615
5
your risk assets. But this ratio for
3.9724
4
Alfalah is showing an increasing trend
3
in current fiscal year. Advances to
agriculture sector and sme sectors 2
have increased. This causes to 1
increase higher interest income for 0

2006 2007 2008
bank. Due to inflationary trend
interest income is also high. So this ratio is in favor of bank.

84
CAPITAL ADEQUACY RATIOS
═ Capital
CAPITAL ADEQUACY RATIOS
Risk weighted assets
Year 2006 2007 2008
CAR (%) 9.48 9.85 8.03
Commentary
Capital Adequacy Ratio
Capital adequacy ratios are a
measure of the amount of a bank's 10 9.48
9.85
9
capital expressed as a percentage of 8.03
8
its risk weighted credit exposures. 7
6
5
Capital Adequacy ratio also 4
represents how much interest the 3
2
sponsors have in the affaires of the 1
0
company. In Pakistan, regulatory 2006 2007 2008
requirement for CAR is not less than
8% of total risk weighted assets. As the data represent there is a
decrease in car for bank alfalah in 2008.Considering this the bank the
bank has announced right issue of 399750,000 shares at par i.e. Rs.10/-
per share to raise Rs 3,997.5 millions of additional share capital and
proceeds are expected to be received soon thereby ensuring Compliance
with the prescribed minimum CAR requirement. In view of
aforementioned, the state bank of Pakistan has granted an extension to
85
the group in meeting minimum capital requirement up till March 31,
2009.
Debt Equity Ratio
Debt Equity Ratio ═ Total Debts
Shareholder's Equity
(Rs in ‘000’)
Shareholder's
Debt Equity Ratio
Years Total Debts Equity
2008 331,946,025 17044739 19.4749 times
2007 312675308 16219844 19.27733 Times
2006 263443596 12241945 21.51975 Times
Commentary Debit Equity Ratio
Debt equity ratio shows a relationship 21.57

21
19.27 19.48
of shareholder equity and total debts 18
of a company. It is a relationship of 15
12
internal and external equity of a
9
company. Debt equity ratio of Alfalah
6
is showing decreasing trend. It means
3
that Alfalah is trying to rely on its own 0
2006 2007 2008
resources and increasing its Capital by
issuing shares.

86
PORTFOLIO MANAGEMENT RATIO
Advances to Total Assets

Advances To Total ═ Advances
Assets Total Assets
(Rs in ‘000’)
Total Advances To Total

Years Advances Assets Assets
2008 192671169 348990764 .5520 times
2007 171198992 328895152 0.520528 Times
2006 149999325 275685541 0.544096 Times

0.55
INTERPRETATION
This ratio shows percentage of

0.55
advances over total assets. This ratio

0.54
for bank is showing a decreasing trend

in 2006 but remains almost same in
0.54
next two years two years. It means in 2006 2007 2008
1rupee assets about 52 paisa are

advances.
Break up Value
87
Break up Value ═ Net worth
Total number of share
(Rs in ‘000’)
Total number Break up Value

Years Net worth of shares
2008 17044739,000 799500000 21.32 Rs
2007 16219844,000 650000,000 24.95 Rs
Lending Rates
Lending Rates ═ Mark up/return/interest earned
Advances+ investment+ lending to financial institutions
(Rs in ‘000’)
Lending
Mark Advances+ investment+
Rates
up/return/interest lending to financial (%)
Years earned institutions
2007 25,783871000 263142615000 10%
2008 31046583,000 271959897 15%
Borrowing rates

88
Borrowing Rates ═ Mark up/return/interest expensed
Deposit + Borrowings
(Rs in ‘000’)
Borrowi
Mark up/return/interest ng rates
Years expensed Deposit + Borrowing (%)
2007 16620963000 294,403,538 5.645%
2008 20331194000 314428280 6.47%
Cost of funds
Cost of funds (%) ═ Borrowing rates+ admin cost
(Rs in ‘000’)
Cost of
Borrowing funds
Years rates (%) Admin cost (%) (%)
2007 5.645 3.03 8.675%
2008 6.47 3.48 9.95%
Spread

89
Spread (%) ═ Lending rate - cost of funds
(Rs in ‘000’)
Spread
(%)
Years Lending rate (%) Cost of funds (%)
2007 10 8.675 1.325
2008 14.65 9.95 4.70
Infection ratio
Infection ratio ═ Non performing loan
Gross advances
(Rs in ‘000’)
Non performing
Infection ratio
Years loan Gross advances
2007 4705085 175678810 2.68 %
2008 8934273 198811852 4.49 %
Provision to non performing loan

90
Provision to non ═ Non performing loan
performing loan
Gross advances
(Rs in ‘000’)
Non performing
ratio
Years provision loan
2007 4479818 4705085 95.21 %
2008 6140683 8934273 68.73 %
Earning per share
Earning per share ═ Profit after taxation
Weighted average number of

share
(Rs in ‘000’)
Profit after Weighted average Earning per

share
Years taxation number of share
2007 3130229 799500 3.92 Rs
2008 1301301 799500 1.63 Rs
Actual Figures in ('000') in %

2007 2008 Increase/dec 2008

91
rease
Markup/return/interest earned 25783871 31046583 5262712 20
Markup/return/interest expensed 16620963 20331194 3710282 22
Net markup interest income 9162908 10715389 1552481 17
Provision against non-performing
loans 2370867 2035997 334870 14
Provision for diminution in value of
investment 0000000 1479062 1479062 *
Bad-debts written off directly 5844 28298 22454 384
Net interest income after
provisions 6786197 7172032 385835 5.69
Fee, commission and brokerage
income 2429599 2539321 109722 4.52
Dividend income 64722 300943 236221 365

Income from dealing in foreign
currencies 474510 914845 93
Gain on sale of securities 2059793 424220 1635573 79
Unrealized loss on revaluation 21530 181571 160041 743
Other income 1031372 1247669 216297 20.97
Total Interest Income 6038466 5245427
12824663 12417459
Administrative expenses 8272587 10471339 2198812 26.58
Provisions against off-balance sheet
obligation 6,959 28582 21623 310
other charges 9565 122758 113193 1183
Total Non mark-up Expense 8289111 10622739 2333628 28
Profit before Tax 4535552 1794720 2740832 60
Profit after tax 3130229 1301301 1828928 58
Earning per share 3.92 1.63
Commentary
Markup/return/interest earned
This head is increased if the bank’s investments, lending to financial

institutions, and advances increased.
If lending rates are increased then this head is also increased.

92
If Mix of both i.e. portfolio as well as rate increase. Then this head is also
increased.
This year bank loans and advances to customer and financial institutions
have increased significantly. Also due to increase in lending rates that
increased up to 15% as compared to 10% in previsions year play great
role in increasing this head.
Markup/return/interest expensed
If deposits, borrowing from financial institutions, subordinated loans

increased, and rate of interest on deposits increased then this factor is
increased. Deposits are liability for banks and rate given to customer is
expense, now if expense is increased with the increase in deposit it is not
–ive sign because public has confidence on the bank.
If borrowings from other institutions decrease it is +ive, because your

deposit also fulfills banks requirement.
This year bank alfalah enjoyed 3 billion increases in deposits but 100%
increase in lending from other institutions shows that bank’s requirements
are not fulfilling through its deposit base. This year bank has to issue
term finance certificate of Rs. 9.1 millions. These factors show that
management should start deposit marketing next year.
Net markup interest income
This year net income is increased by 17% as compared to 22% increase

in expenses
But income base is higher than expense base. So it is positive sign for
bank.

93
Provision against non-performing loans
This year bank has decreased the provision by 14% .as the
loans/advances portfolio has increased so bank should have increased
provision but the bank did opposite.
Based on the SBP recent circular on FSV bank Alfalah has taken the
benefit of the same by decreasing the provision requirement of by
622.245M and resultant increase in the profit before provisions and
taxations. So decrease in provisions this year is not a –ive sign for bank.
Provision for dimidiation in value of investment
This year the bank has charged full impairment on equity securities of
amounting to Rs.1439 M as per international accounting standards. It
means the company has wrongly made investment in less profitable
securities.
Bad-debts written off directly
In financial accounting and finance, bad debt is the portion of receivables

that can no longer be collected, typically from accounts receivable or
loans. Bad debt in accounting is considered an expense.
This year this head is increased by384%.it shows that management is not
receiving proper collateral against loans or recovery process or loan
monitoring system is very week, this situation is posing a negative sign
for bank performance.
Fee, commission and brokerage income
Bank receives fees when acts as principal agent relationship, or providing

any other facility such as locker facility, and receives commission, when

94
acting as guarantor for letter of credit or performance bond or bid bond
guarantee.
This year this head is increased by 4.52%.This is very good increment as

compared to industry. It means bank non fund based business volume is
increased .it is benefited for bank because there are no fund involvement
in this activity.
Dividend income
If this head is increased, it means the bank has invested for the purpose
of Holding. If investment increased dividend income is also increased. Till
31 December 2009 bank enjoyed a huge increase of 365% in dividend
income. Instead of gross investments decreased by 14% but bank
investments in Associates and held to maturity securities are more than
previous. That is why bank enjoyed 236 million increases in this head.
Income from dealing in foreign currencies
93% increase in this head shows that bank has got more maturity in
dealing in foreign currency. It also shows that Treasury department of
bank is working well.
Gain on sale of securities

95
This year gain on sale of securities is decreased by 79%.As market was in
depression so gain was impossible this year. It also posing threat that
bank might replace its high price portfolio with low price portfolio.
Unrealized loss on revaluation classified as held for

trading
These are the investments, which are either acquired for generating a
profit from short term fluctuations in market prices, interest rate
movement, and dealer’s margin or are securities included in portfolio in
which a pattern of short term profit taking exist.
At the year ended 31 December 2009, bank bared a huge loss of 743%.
As our stock exchange crashed in 2008, so this loss was suffered by
whole industry.
Other income
Net profit on sale of equipment and property and income from postage
telex service charges has increased this year. So this year bank get 216
millions more under the head other income than year ended 2007.
Administrative Expense
This year administrative expenses of the bank has increased by 27%.But
this is not a negative sign because increase in expenses shows that
number of Branches has increased, salaries have also increased also bank
have to hire new staff to operate new branches. So increase in expenses
under this head means a growth for banking business.
Provisions against off balance sheet items

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Obligations that are contingent liabilities of a bank, and thus do not
appear on its balance sheet. In general, off-balance sheet items include
the following: direct credit substitutes in which a bank substitutes its own
credit for a third party, including standby letters of credit; irrevocable
letters of credit that guarantee repayment of commercial paper or tax-
exempt securities; risk participations in bankers' acceptances; sale and
repurchase agreements; and asset sales with recourse against the seller;
interest rate swaps; interest rate options and currency options, and so on.
The risk weights for off-balance sheet items are as follows:
100% risk weight: standby letters of credit, risk participations, asset sales
with recourse, risk participations in bankers' acceptances.
50% risk weight: unused portions of loan or lease commitments with

original maturities of more than one year; Revolving Underwriting
Agreements, Note Issuance Facilities.
20% risk weight: short-term commercial letters of credit and

documentary letters of credit collateralized by the underlying shipments.
These provisions are increased by 310%.The rapid change in Dollar-rupee

exchange rates and increased in bank’s secondary business drag up this
head. However it is not bad for the bank.
Other charges
This head is increased by 1183%.during year ended bank alfalah have to

bear penalties from state bank of Pakistan amounting Rs.16137000
which were only Rs.9565 during preceding year. The other reason for
increment in this head is starting a new fund for bank employee
amounting Rs.106 million. But this is not a bad sign for the bank, because
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bank considers its employee as an asset. The starting of worker welfare
fund will result in employee efficiency and effectiveness. Also the
provision for worker welfare fund has been made consequent to the
amendment made in finance act 2008.as a result of this amendment this
levy has now become applicable to the bank.
Profit before Taxation
This year the profit before taxation decreased by 60%.which is Rs.2.74

billion decrease .such huge difference is due to increase in non mark-up
interest expenses, which were 2.3 billions more this year. So profit before
taxation restricted up to 1.794 billion as compared to previous year profit
of rs.4.535 billion.
Profit after taxation
This year bank has deferred its major portion of taxes that is why bank
paid only 493 million this year as compared to 1.405 billion previous year.
So profit after taxation is not much affected. It showed 58% decrease in
profit. Common Size Analysis of Balance Sheet

98
Common Size Analysis of Balance Sheet
Actual Figures in ('000') in %
2007 2008 2007 2008

Cash and Balances with
treasury banks 29,436,378 32,687,335 8.95 9.37
Balance with other banks 18,380,738 21,581,043 5.59 6.18
Landings to financial institution 3,452,059 3,315,500 1.05 0.95
Investments 88,491,564 75,973,238 26.91 21.77
Advances 171,198,992 192,671,169 52.05 55.20
Operating Fixed assets 11,922,324 13,773,293 3.62 3.95
Other assets 6,013,097 8,989,186 1.83 2.58
Total Assets 328,895,152 348,990,764 100 100
Liabilities
Bills payable 4,138,243 3,452,031 1.25 0.99
Borrowings 21,230,697 13,690,222 6.46 3.92
Deposits and other accounts 273,173,841 300,732,858 83.06 86.17
Sub-ordianted loans 3,220,858 2,571,169 0.98 0.74
Deferred tax liabilities 1,379,809 208,465 0.42 .060
Other liabilities 9,531,860 11,291,280 2.90 3.24
Total liabilities 312,675,308 331,946,025 95.07 95.12
Net Assets 16,219,844 17,044,739 4.93 4.88
Represented by
Share capital 6,500,000 7,995,000 1.98 2.29
Reserves 2,414,833 3,166,056 0.73 0.91
unappropriated profits 4,851,840 3,447,467 1.48 0.99
13,766,673 14,608,523 4.19 4.18
Surplus on revaluation of assets 2,453,171 2,436,216 0.75 0.70
16,219,844 17,044,739 4.93 4.88

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Common Size Analysis of Income Statement
Actual Figures in
('000') in %
2007 2008 2007 2008
25,783,87
Markup/return/interest earned 1 31,046,583 100 100
16,620,96
Markup/return/interest expensed 3 20,331,194 64.46 65.49
Net markup interest income 9,162,908 10,715,389 35.54 34.51
Provision against non-performing
loans -2,370,867 -2,035,997 -9.20 -6.56
Provision for diminution in value of
investment * -1,479,062 ** ***
Bad-debts written off directly -5,844 -28,298 -0.023 -0.09

Net interest income after provisions 6,786,197 7,172,032 26.32 23.10
Fee, commission 2,429,599 2,539,321 9.42 8.18
Dividend income 64,722 300,943 0.25 0.97
Income from dealing in foreign
currency 474,510 914,845 1.84 2.95
Gain on sale of securities 2,053,192 424,220 7.96 1.37
Unrealized loss on revaluation -14,929 -181,571 -0.058 -0.58
Other income 1,031,372 1,247,669 4.0001 4.02
Total Interest Income 6,038,466 5,245,427 23.42 16.90
12,824,66
3 12,417,459 49.74 40
Administrative expenses 8,272,587 10,471,339 32.08 33.73
Provisions against off-balance sheet
obligation 6,959 28,582 0.027 0.092
other charges 9,565 122,758 0.037 0.40
Total Non mark-up Expense 8,289,111 10,622,739 32.15 34.21
Profit before Tax 4,535,552 1,794,720 17.59 5.78
Taxation 1,405,323 493,419 4.77 1.59
Profit after tax 3130229 1,301,301 12.14 4.19

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International trade
International trade is exchange of capital, goods, and services across international borders or
territories.
Importance of Foreign Trade
• No country can be self sufficiency

• Demand of goods not produced in the country
• Cost of production can vary from country to country
• Capital Investment
• Balance of trade
• Balance of payments
• Peace & prosperity
Difference between international and domestic trade.
• Currencies More than two types of Currencies are involved in

international trade.
• Geographical distance: international trade is across borders,
geographical Boundaries, where as domestic trade is within borders of
the country
• Trade restrictions: Trade quotas, Tariff ,import export restrictions
are involved in international trade-in Domestic trade such restriction are
not applicable
• Heavy documentation: international trade comprises of L/C,
Insurance documents, B/L, Airway bill and involve Different Banks along
with foreign exchange rates etc, Where as Domestic trade comprises of
only few receipts and one or two banks involvement.
• Risk in transit; international trade is done over long distances
through Ships. Aeroplane etc, so goods may be lost, destroyed during
the transit.
• Custom formalities

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• Legal systems.
Advantages of Int’l Trade
International trade offers benefits for three parties:
• The two trading countries

• The exporter &
• The importer
Advantages for trading countries
• Resources of the world are better utilized.

• Consumers have a vast range of goods available to them.
• Countries can take benefit of specialization (Comparative
Advantage)
Advantages for exporters
• Wider markets available

• Economies of scale
• Can get a better price
Advantages for importer
• Wider choice of goods

• Better quality of goods
• Better margin on sale

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International Trade Mechanism
International trade is a complex procedure of importing and exporting of

goods that involve several steps as explained below.
1. Information, advertisement
International trade starts when a seller of goods (exporter) send

particular of his goods to the importer.
2. Enquiry
If information, advertisement and description is sought to the importer he

may started an enquiry about exporter creditworthiness, order fulfillment
capacity etc.

103
3. Quotation, invoices
In the step a formal agreement is done between importer and exporter,
this agreement is evidenced by PROFORMA INVOICE. Performa invoice
contains the weight of goods or number of goods, per unit price,
description of goods, Total price, Performa invoice number, Exporter

104
name and signature along with date and currency. Following is a sample
of pro forma invoice
4. Contract, order
After receiving pro forma invoice agreement take the form of contract,
importer sends an order to the exporter for goods. In this contract, full
documentation for goods is agreed. L/C is opened by importer in favour of
exporter.
5. Shipment
After manufacturing the goods, exporter sends them to importer either
through ship or through aero plan or through Railway, truck etc.
6. Documents/Draft.
Exporter sends the documents (B/L, Airway bill, Mate receipt, Truck
Receipt etc) to importer or importer bank. A draft is drawn on importer.
Importer gives his acceptance to receive the documents.
7. Payment
Exporter receives the Payment after putting the draft to his bank.

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Trade Procedure at bank Alfalah
Bank alfalah is growing its trade business through strong correspondence

banking services irrespective of weak economic condition. At alfalah, both
imports and export dealings are done by Experts. The methods and
techniques used by the bank for imports and exports are explained below.
Imports Procedure
When a customer approaches to the bank to imports its required goods

bank, open an L/C on behalf of the Client.
Introduction: What is a Letter of Credit?
• A Letter of Credit is a written undertaking by the Importer’s

bank, known as the Issuing Bank, on behalf of its customer, the
Importer (Applicant), promising to effect payment in favour of the
Exporter (Beneficiary) up to a stated sum of money, within a
prescribed time limit and against stipulated documents.
• A key principle underlying Letters of Credit is that banks deal
only in documents and not in goods. The decision to pay under a
Letter of Credit will be based entirely on whether the documents
presented to the bank appear on their face to be in accordance
with the terms and conditions of the Letter of Credit. It would be
prohibitive for the banks to physically check whether all
merchandise has been shipped exactly as per each letter of
Credit.
• The International Chamber of Commerce (ICC) publishes
internationally agreed-upon rules, definitions and practices
governing Letters of Credit, called “Uniform Customs and Practice

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for Documentary Credits” (UCP). The last revision of these rules
was effective Jan. 1, 1994 and is referred to as the UCP 600.
Types of Letter of Credit
• Letters of Credit are either Revocable or Irrevocable:
o A Revocable Letter of Credit can be revoked without the

consent of the Exporter, meaning that it may be canceled or
changed up to the time the documents are presented.
Revocable Letters of Credit are very rarely used.
o An Irrevocable Letter of Credit cannot be canceled or
amended without the consent of all parties including the
Exporter. Unless otherwise stipulated, all Letters of Credit are
irrevocable.
• Letters of Credit may be settled either by sight or by acceptance:
o If payment is to be made at the time that documents are

presented, this is referred to as a sight Letter of Credit.
o If payment is to be made at a future fixed time from the
presentation of documents, this is referred to as a term
Letter of Credit

107
4
Advice /Confirmation of
the Letter of Credit.
Exporter/
Beneficiary
Advising/ Confirming
Bank
Contract Issuance
Negotiation of L/C Request to advice
& possibly
s confirm the Letter
of Credit
3
Importer applies
for letter of credit
2 Issuing Bank
Importer/Applican
t
Note: For the purpose of this session, the Advising Bank is

Also acting as the Confirming Bank. However, the roles of
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Advising and confirming the Letter of Credit may be
performed
Bank require following documents to open a L/C.
1. L/C credit Approval
• It is issued by Credit department of the bank after

scrutinizing the following information.
• If the Client is has a registered Business.
• Have NTN Number Issued by the tax department
• Have valid imports license issued by Pakistan chamber
of Commerce.
• Credit worthiness of the client
2. L/c opening Form
Client has to fulfill L/C opening request. By fulfilling this importer is

engaged in an agreement with the bank for import of goods.
3. Proforma invoice
It is an evidence of agreement between importer and exporter before

L/C opening request. Performa invoice contains the weight of goods or
number of goods, per unit price, description of goods, Total price,
Performa invoice number, Exporter name and signature along with
date and currency
4. Insurance Policy

109
What goods are to be imported, they must be insured by the importer
110% of the import Items.
5. Import form
Four copies are filled, one is retained by the bank itself, two copies are
sent to the state bank of Pakistan, and one is returned to the importer.
After these requirements are fulfilled Issuing bank open the L/C. This
L/C contains the following Information.
Fields of L/C.
• Documentary credit number CSLC:7233/090028

• Date of issue
• Applicable Rules
• Date and place of Expiry
• Applicant
• Applicant bank
• Beneficiary name and address
• Advising Bank
• Currency code and amount
• Maximum Credit amount
• Partial shipment/Transshipment
• Port of Loading
• Port of Destination
• Latest date of shipment
• Description of goods and Services
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• Document Required
o Exchange Certificate
o B/L or air way Bill etc
o Shipment Advise
o Certificate of origin
o Packing list
o Commercial advice
o Shipping Company certificate regarding ISM code
o Vessel classification
o E-form
o Goods Declaration
o Harmony system code
• Additional Conditions
o Certificate of Analysis
o Shelf life
• Charges
• Periods for presentation
• Conformation
Classification of Imports.
Before establishing any letter of credit/registering contracts, Bank takes

all precautions to ensure that the goods to be imported under it are
clearly classifiable under the Import Trade Control Schedules.
Terms of Imports

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Imports can be made on FOB (free on Board) basis, CFR (cost and
Freight) liner terms basis or CFR free out basis. However, prior permission
of the State Bank shall be obtained for import of sugar and food grains
(cereals) on CFR free out basis. Imports Can made on CPT Basis (when
goods are imported through air way).
Advising Bank
This bank is in Exporter Country, it is also called exporter’s bank. Issuing

Bank sent the L/C to advising Bank. Its obligation is to check the
Authenticity of L/C and then advise this to Exporter. Exporter must collect
the document within 15 days from advising bank.
As soon as exporter receives documentary credit, he manufactured the

goods according to specification of L/C. then exporter shipped the goods
at shipping date as per L/C and complete the following documents
Exchange Certificate B/L or air way Bill etc, Shipment Advise, Certificate
of origin, Packing list, Commercial advice, Shipping Company certificate
regarding ISM code, Vessel classification, E-form, Goods Declaration,
Harmony system code.
Flow of Goods
GOODS
Exporter/ Importer/Applican
Beneficiary t
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Nominating bank
Exporter sends back the documents to the issuing bank through this
bank. This may be the advising bank or any other bank in exporter
country.
Scrutiny of documents
As soon as the documents are received by issuing bank, issuing bank

scrutinize them. If these documents are clean then issuing bank will make
the payment, if discrepancies are found then
1. Issuing bank will inform the importer and if importer accept

such documents, and then Issuing bank will Charge US $35 to
3
exporter and make the payment to exporter.
2. If importer does not accept such documents, with in 5
working days Documents will be dispatched to the Nominating
Documen
bank and issuing 2
bank will charge US $35 after discrepancies are
ts
Exporter/
removed and Payment is made to the exporter.
Beneficiary
4
S
Ume
Do
GOODS

113
Importer/Applica
nt
Lodgment of Documents
After clearance of documents bank make the payment to nominating bank and if
importer not reaches the bank within 3 working days then issuing bank issue a
forced loan in favour of importer which is called PAD LODGMENT and bank will
charge 55 paisa per Rs.1000/=
If importer is not in position to make full payment, he can avail two types of
facilities for Retirement of Documents

114
3
Documents
Exporter/
Beneficiary
2 Advising/ Confirming
Bank
Documents
4
5
GOODS
Documen 7
ts
Importer/Appl
Issuing Bank
icant 6

115
FIM (FINANCE AGAINST IMPORTED MERCHANSE)
Bank retains physical possession of goods
FTR (FINANCE AGAINST TRUST RECEIPT)
Bank does not retain physical possession of goods. Goods are released to
the customer on a trust receipt document prior to the payment of bill.
FIM/FTR
Documentation
Request letter duly signed by the customer
Demand promissory note
Letter of offer
Letter of pledge (in case of FIM)
Trust receipt (in case of FTR)
Mark-up agreement IB6A
Letter of arrangement
Letter of disbursement
Letter of installment
Letter of authority to debit mark-up

116
Documentation for any additional security
Approval
Can only be granted against approved facility
Under any specific approval of appropriate credit

authority
Allowed only against L/Cs established by the branch.

(Exceptions to be approved by the appropriate credit
authority)
Duration
Normally allowed for fixed periods of time
In local currency
Mark-up payable in arrears on due date
Amount to be financed
Partial amount of the bill
Exact amount of the bill
Exact amount required to retire the bill
Bill amount plus duties and sales tax (for exceptional

cases after approval)
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Caution!
In case import duty, sales tax etc. are also to be

financed in addition to bill amount, separate Dr.
entries from the same FIM A/C should be passed for
adjustment of bill amount and import duty/sales tax
Mark-up on PAD should be adjusted from a separate FIM

A/C
Make sure that Mark-up on mark-up is not charged
Margin on L/C
Any margin held against L/C should be utilized in partial

repayment of the Finance
If the bill represents only a partial drawing of the credit

amount, the amount of margin to be applied must be
in direct proportion as the bill amount is to the credit
amount.

118
Clearance of goods
Dr. Customer A/C for all costs incurred in clearance &

storage
Clearance & storage through approved clearing agent &

Macadam
Storage & insurance
Goods to be insured & stored in bank’s name
Partial deliveries against partial repayment of finance
Deliveries against D/Os issued by the respective branch
Recording
A separate account # allocated to every FIM or FTR

sanctioned
FIM/FTR accounts are linked to customer’s current

account.
FIMs & FTRs granted will reflect in the GL accounts

FINANCE AGAINST IMPORTED MERCHANDISE &
FINANCEAGAINST TRUST RECIEPT
Details such as limit, expiry date, M-up rate & security

entered into the computer for calculation of M-up
119
Details entered into FIM/FTR register
Statement of O/S facility generated on monthly basis to

mark overdues
Fortnightly review of overdues by Manager Credits
Mark-up
At the end of each month, m-up accrued on the

outstanding finance will be calculated
Accounting entries
SWOT Analysis
Strengths
Bank Alfalah Limited is considered to be a very successful bank in the

financial circles. A bank is placed where the customer can safely keep
their money as long as they want. Some of the major strengths of the
bank:
• Comprehensive and diversified product portfolio of the bank

• Bad debt rate is low
• Excellent credit rating of the bank Alfalah
• Bank is financially strong and has a huge deposit reserve

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• Bank Alfalah has a wide network of branches at the ideal locations,
catering the financial needs of its clients.
• Foreign Trade is the focus of bank. It has become an ideal bank for
the importers and exporters.
• Bank has Wide National Branch Network
• Goodwill and trust of the Bank Alfalah
• Bank is in its growing stages so there is good financial position.
• Professional and Committed workforce
• Lowest markup is charged
• On-line banking facility is provided
• Bank follows customer relationship marketing concept.
• It caters to all segments of class
• Its client lists include some of the most prominent individuals and
companies from both public and private sector.
Weaknesses
Bank Alfalah has also some weaknesses. But their number is much less
than the strengths of the bank. Following factors need attention of the
management.
• Bank Alfalah Limited does not possess foreign network

• Lack of advertisement through electronic media.
• There is no job rotation so skill set of employees is not up to
mark as
• Foreign banks still are a little more prestigious
• Most of the employees are overloaded with work. There is
uneven distribution of work and promotions are not very timely.

121
• It is slow in the introduction of new services.
• Few branches has ATM facility
• Account is opened in few currencies.
Opportunities
Bank Alfalah has grown up its business with a very high pace and it has
tremendous popularity, even with in a very short span of time. There are
many opportunities for the bank and by availing that it can stand amongst
the top foreign banks.
• Introduction of innovative products

• Growth in deposits
• Growth in textile sector
• Tide down of money
• Expansion in branch network
• Bank Alfalah can fully avail the facilities of E-banking.
• Extension of International network of the branches
• Growing market
Threats
• Political instability
• Increase in competition with other banks
• Revolving policies of State Bank Of Pakistan
• Terrorist image of the country
• Uncertain economic condition
• Slow product development process
• Change in Govt. policies
• Internal audit system is not encouraging

122
123
Account opening department
Customer is a person who has some sort of account, either deposit or

current or some similar relation. A person becomes a customer the
moment the bank receives the money or cheques and agrees to open an
account.
It is contractual agreement between bank and customer after which both

concerned parties indulge in a mutually beneficial business relationship.
"Deposits are the blood of a Bank"
Acceptance of deposits is the real source of income of a bank. Deposits

department is the backbone of corporate banking. Deposit is often used to
describe the money, which customers of all kinds leave with the banks.
Deposits account can be defined as an account, which is opened to earn

interest.
The term deposit is highly misleading. It is not something deposited for

safekeeping, like currency in a safe deposit box. Bank deposits are not
like that. When one brings currency to a bank for "Deposit”, the bank
does not put the currency in a vault. It may put a small fraction of the
currency in the vault as "Reserves" but it will lend most of deposits to
some one else or buy an investment.
The entire banking system is based upon borrowing. Like all banks,
deposit department has acknowledged its worth as the most important.
Almost all the operations generate from the deposit department and with
due course of time reflect back to the deposit department.
124
In order to attract funds, bank has introduced various types of deposits
schemes that may suit the needs and tastes of a large body of depositors.
Types of Deposit Facility

Deposits are broadly classified into the following categories.
• Current Account
• Savings Account
• Term/Fixed deposit
• Royal Profit
Procedure to Open An Account

During my stay at Gulberg Branch of BAL, I worked and observed that
when a customer wants to open an account, the bank officer gives
application form to him. All information, which are necessary to be known
by the bank, are requirements of the application form. Following persons
can open an account:
• Sole proprietors
• Private accounts (individual a/c's)
• Joint account
• Limited Company
• Partnership company
• Trust and Association
Following information is required:
• Name
• Address
• Telephone no.
• Currency of account
125
• Nature of Business
• Residential status
• Special instruction regarding the account
• Signature of the applicant
Documents to be attached
Documents required to be attached are different for different categories.
First part of application form is compulsory for every applicant to fill. In

this part, special information about different categories & documents
required to submit with it is provided.
These different categories & list of required documents is given below:
Individual / Joint Account
• Account Opening Form duly completed and signed by the

customer(s).
• Title of Account must be same as on name CNIC.
• Photocopy of CNIC/Valid Passport, which MUST be original
seen with complete signature not by an INITIAL.
• Employer’s letter/ID Card in case of SALARY PERSON.
• Business Card in case of BUSINESSMAN & NATURE OF
BUSINESS IN AOF (OCCUPATION & PEROFESSION).
• Indemnity in case of Signature other than CNIC
• Indemnity for NADRA CNIC verification.
• Introduction (From existing BAL Client)
Sole Proprietor Account

126
• Covering letter (Letter-Head) requesting for opening of an account
with BAL, Gulberg Branch, Lahore.
• Account Opening Form duly completed (Corporate Section also to
be filled), signed and stamped by the customer.
• Photocopy of CNIC/Valid Passport which MUST be original seen with
complete signature.
• Sole Proprietorship Declaration on the bank’s prescribed format
required on the Letterhead.
• Photocopy of NTN Certificate/Assessment Order, which MUST be
original seen with complete signature.
• Vernacular Form on Stamp Paper of Rs.100/- in case of customer’s
signature is other than English.
• Title must be same as on AOF ,Letter Head & Company
Stamp(Spell)
• Stamp must contain the word Proprietor
• Indemnity for NADRA CNIC verification.
Partnership Account
• Covering letter (Letter-Head) requesting for opening of an

account with BAL, Gulberg Branch, Lahore.
• Account Opening Form duly completed (Corporate Section
also to be filled), signed and stamped by the all partners.
• Photocopy of CNIC/Valid Passport of all partners which MUST
be original seen with complete signature.
• Partnership Deed duly NOTARIZED and signed by all
partners, which MUST be original seen with complete signature.

127
• Partnership Mandate (Letter-Head) with clear Instructions
signed and stamped by all partners that also to be WITNESSED
(as per Bank format).
• Photocopy of NTN Certificate/Assessment Order which MUST
• Photocopy of Registration Certificate (Form-C) which MUST
• Title must be same as on AOF ,Letter Head & Company
Stamp(Spell)
• Stamp must contain the word Partner
• Indemnity for NADRA CNIC verification of all Partners.
Private/Public Limited Company Account
• Covering letter (Letterhead) requesting for opening of an account

with BAL, Gulberg Branch, and Lahore.
be filled), signed and stamped by the Authorized Signatories.
• Authorization from all directors for NADRA CNIC verification.
• Specimen Signature Card (In Duplicate) Signed & Stamped by the
Authorized Signatories Only.
• Photocopy of CNIC/Valid Passport of all Directors duly attested by
the Company Secretary / CEO.
• Board Resolution attested by the Company Secretary / Chief
Executive Officer (CEO) resolving to open an account with BAL,
Gulberg Branch, Lahore, along with the signing instructions of the
authorized signatories to operate the account. This resolution must
bear the Company Embossing Seal, which must be signed by two
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Directors as per the clause of Memorandum & Article of
Association.
• List of Directors.
• Photocopy of NTN Certificate/Assessment Order duly attested by the
Company Secretary / CEO.
• Memorandum & Article of Association duly attested on all pages by
• Certificate of Incorporation duly attested by the Company Secretary
/ CEO.
• Latest copy of Form-29 duly certified by the SECP and attested by
• Certificate of Commencement of Business (in case of Public Limited
Company).
Trust, NGO, Society
• Covering letter (Letterhead) requesting for opening of an account

with BAL, Gulberg Branch, Lahore.
• Photocopy of CNIC/Valid Passport of all Trustees duly attested by
• Resolution of the governing body of the customer for opening the
account and authorizing the said persons for operating the account
and attested copy of NIC of the authorized operators of the
account.
• The Company Embossing Seal, which must be signed by two
Directors as per the clause of By Laws.
• List of Trustees.
• Trust Deed.
129
• Registration Certificate duly attested by the Company Secretary /
CEO.
• Indemnity for NADRA CNIC verification of all Trustees.
• An undertaking signed by all the authorized persons on behalf of
the institution mentioning that when any change takes place in the
persons authorized to operate the account, BAL will be informed
immediately
Foreign Company Accounts:-
• Power of Attorney (P/A) for opening of an account with BAL,

Gulberg Branch, Lahore.
• Authorization from all directors for NADRA CNIC verification.
• Specimen Signature Card (In Duplicate) Signed & Stamped by the
Authorized Signatories Only.
• Photocopy of CNIC/Valid Passport of all Directors duly attested by
• List of Directors.
• Memorandum & Article of Association duly attested on all pages by
• Latest copy of Form-29 duly certified by the SECP and attested by
• Certificate from the Company Secretary, Duly authorized by the
Board that the entity started its business form certain date and
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that certificate of commencement of business is not issued in that
country.
General Observations:
• Personal Information must be same, as on CNIC no abbreviation will

be used (only if on CNIC).
• In case of cutting over writing must be signed by authorized
signatories.
• Online Indemnity in case of Online Account.
• NOTARIZED Vernacular Form on Stamp Paper of Rs.100/- in case of
customer’s signature is other than English / Thumb Impression.
• In case of CNIC doesn’t contain a photo graph, a copy of CNIC and
two photographs duly attested by any Gazette Officer / Nazim
along with undertaking/confirmation in writing to the effect that
he/she doesn’t have any other documents bearing their
photograph.
• QA-22 incase Foreign National Opening PKR Account.
• If business Account we suggest you to bring company stamp at the
time of Account Opening.
• Specific Business is to be mentioned in occupation/profession
column (if Business Man)
Note: - All relevant documents must be signed by all

Partners/Directors (online request etc).

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Issuance of Chequebook
Now customer has opened an account with the bank, so he is provided

with chequebook for withdrawals of account. However, the first cheques-
book is given to the customer only when all the required documents are
checked. A cheques-book contains, ten twenty-five, fifty or hundred
leaves. The cheques-book also carries a requisition slip for the issuance of
the new cheques-book. This slip is duly filled and signed by the customer.
The bank verifies the signature of the customer, new cheques-book is
issued to the customer, and serial number of the cheque is duly entered
in the book of the bank. Along with the signature, person should also
write his full name & address.
Bank debits the client's account for excise duty of Rs.5.00/- per cheque
and keeps the chequebook ready for the customer, as on his/her advice.
The officer keeps and maintains the chequebook record.

Chequebook inventory and cheque -books issued are recorded in a
separate file. When the chequebook is issued, it is recorded in the
chequebook issuance file.

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My Responsibilities as an officer in this regard were that:
• Receive duly signed cheques-book requisition slip from

customer.
• Verify customer’s sign and stamped.
• Enter this request in the list that has to be sent to the head
office at the day end.
• With in two days, head office responds to the request and
send the required cheque books
• When the customers come, he can get the chequebook by
signing the Checkbook receiving slip.
The Requisites of a Cheque
There is no prescribed form of words or design of a cheque, but I have

learned that in order to fulfill the requirements the cheque must have the
following:
• It must be in writing.
• It must contain an order to pay and addressed a specified
bank.
• The maker must sign the order.
• The order must direct to pay on demand.
• The sum ordered to be paid must be certain.
• The payment should be ordered to be paid to a certain person
or to his order or the bearer.
Loose Cheque:
I did not observe any practice of loose cheques in bank but I have learned
the concept of loose cheques, which is following as:

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It is necessary for issuing loose cheque that person should be customer of
the bank. So if any customer forgets or leaves his cheque book at his
home which is for away from the bank or there may be any other case,
the customer applies with the bank for the issuance of loose cheque by
the bank as he does not has his cheque book with him and the money is
urgently required, then this cheque is called as loose cheque. Bank keeps
a chequebook labeled as loose and issues loose cheque from this loose
chequebook. The cheque is issued on a written requisition by the
customer on which the name and address of the customer, his account
number is mentioned. His signature is verified with signatures on the
signatory card that was held by the bank at the time of opening of
account. After the verification of signatures, a loose cheque is issued to
the customer.
Stop Payment Instruction
If customer wants to stop his/her payment of cheque in case of stolen the

cheques then the procedure will be done in following way. In my whole
tenor of internship, I observed only one stop payment which process is
follows as
• Receive written instruction from customer for stop payment of

cheque.
• Verified customer sign on letter and affix sign verified stamp.
• Inputted stop instruction in system in customer’s account.
How to close an account
The customer can close the account. I have received only one application
to close an account by customer. In this regard, the customer has

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submitted an application for closing the account. Then the account was
closed out and his balance was paid to him after deducting the Closing
charges i.e. Rs.200 plus 16 % excise duty and the application was filed in
Account closing file. Chequebook was returned back to bank and the
officer cancelled the remaining cheques in cheques-book
In short the steps are:
• Receive request for account closure from customer, either by

mail.
• Ensure that all account holders have signed account closure
request.
• In case of corporate account, obtain necessary resolution.
• In case of joint account, ensure all partners sign on letter.
• Verify customer sign and stamp
Clearing department
Transferring of funds from person to person, and from place to place,

constitute the concept of a remittance. Remittance is very important
service provided by banks to customer as well as non-customer. It is not
a free service, hence is a continuous source of income for the bank.

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PARTIES TO A REMITTANCE
1) REMITTER
One who make a remittance. He comes to the issuing or originating

branch, ask for a remittance to be made, and deposits the money to be
remitted. The bank charges him for the remittance. He may or not be the
bank’s customer.
2) REMITEE
Also sometimes called the beneficiary, or the payee. The person to whom
the remittance is made. The one who receives the payment.
3) ISSUING BANK
The bank that affect the remittances, through the Demand Drafts,
Telegraphic Transfer, or Mail Transfer.
4) PAYING BANK
Also known as the drawee branch. The branch on whom the instrument is
drawn. It has to make the payment. (Usually located in a different city or
country)
MODES OF TRANSFERING FUNDS IN REMITTANCES
1. Demand Draft
2. Telegraphic transfer
3. Pay Orders
4. Rupee Traveler Cheques
5. Mail Transfer

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During my stay at BAL I have learned about first four modes of
remittances.
Demand Draft
DD (Demand Draft) is a cheques issued by the bank drawn on the same

bank’s outstation branch. The bank charge nominal commission on
issuance of demand draft. If lost the holder must in personal request the
bank in writing for the duplicate. The bank if satisfied can issue a
duplicate demand draft after getting the indemnity.
Process For Outward Demand Draft Through Cash
When DD is made at customers request on cash the process goes as

under:
• First customer comes to bank and fills the DD application form.

• Designated officer verifies the signature and particulars of Application.
• Designated officer then fills in the charges/commission on application
form.
• Customer then deposits the money and gets the application stamped
and signed by the cashier.
• Cashier then make the entry and credits the Transit account in GL.
• Cashier sends the application back to designated officer who makes
the DD by debiting Transit.
• After Preparing DD two-attorney holder signs it.
• Three copies of DD are prepared
• Original goes to customer
• Office copy retains with designated officer for reconciliation.
• One copy sent as an advice to drawee bank.

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Process For Outward Demand Draft Through Account
• When an account holder of Bank through his cheque makes DD then

first customer comes to bank and fills the DD application form. A
cheque is also required of the minimum amount of the DD.
• Designated officer verifies the signature and particulars of Application
and verifies its validity with the cheque.
form.
• Designated officer after verification on particular of cheque such as
balance, signature, date, figure in words and digits etc. debits
customer and credits the transit account.
• In next step officer debits the transit and makes DD.
• After Preparing DD two-attorney holder signs it.
• Three copies of DD are prepared
• Original goes to customer
• Office copy retains with designated officer fro reconciliation.
• One copy sent as an advice to drawee bank.
Process For Inward Demand Draft
When some other bank draws DD or branch on our branch process goes
as under. First the Branch receives the Advice from the issuing branch by
courier.
Following particular are verified.
• Name
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• Date
• Attorney Holders Signature
• Amount in words and figures
• Cutting etc.
• The designate officer after verification enters the particulars in DD
register and makes the entry in system by giving credit to DD payable.
• In next part the officer through clearing receives the original
instrument or non-account holder physically presents the instrument.
• Officer again verifies the particulars and if the DD is received through
clearing then designated officer enters it in DD register and gives
credit to customer by debiting DD payable.
• If the customer needs the amount in cash then it is verified that the
instrument bears the NIC no of the beneficiary on it
• The instrument is marked as PAID and amount is transferred in the
account of the customer.
Telegraphic Transformation
TT stands for telegraphic transfer and MT stands for Mail transfer. In BAL
I observed that the TT is normally faxed to the other branch and then the
original copy is sent by mail.
Process For Outward Tele Transfer
When TT is made at customers request on cash the process goes as

under:
• First customer comes to bank and fills the TT application form.

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• Designated officer verifies the signature and particulars of Application.
form.
• Customer then deposits the money (if TT is made against cash) or
gives a cheque (if it is made from his account when the customer is an
account holder of bank) and gets the application stamped and signed.
• Cashier/Officer then makes the entry and credits the Transit account in
GL and. (At this step cashier debits cash and officer debits customer
account against cheque.)
• Officer then make the entry in TT issued register and assign a TT No.
that must be next to the last TT drawn on the branch. TT must be
entered in register as Credit or Pay. (A TT will be prepared as Credit
when it is to be credited to an account holders account maintained in
the bank at which TT is drawn or another bank through clearing, on
the other hand when customer did not have account in the bank TT is
drawn as Pay. Now TT is not credited in customer account, as he does
not have an account but it is paid cash to him after prior verification of
his name and NIC no. This is written on TT made as Pay).
• Then officer prepares TT through inter branch credit advice. (IBCA).
Simultaneously officer makes entry in system by debiting Transit A/c
(credited by cashier/officer at the time of receiving cash/cheques.
• After Preparing TT two-attorney holder signs it.
• Four copies of IBCA are prepared.
• Original copy and responding copy along with a Telex Message goes to
the branch at which TT is drawn by mail (also called Mail Transfer/MT)
or by telegraphic transformation (Fax).
• M.O. copy retains with designated officer for reconciliation.
• Office copy is attached with the voucher where H.O. is credited after
debiting Transit.

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Process Of Inward Tele Transfer
When some other bank draws TT or branch on our branch process goes as
under. First the designate officer receives the tested telex (TT).
Following particular are verified.
• Date
• Beneficiaries name and NIC (if any)
• Remitting Bank or Branch
• Disposal instruction (Credit or Pay)
• TT No (Which should be next to the last one received).
• Attorney Holders Signature
• Amount in words and figures
• Cutting etc.
• The designated officer after verification enters the particulars in TT
Payable register and makes the entry in system by giving credit to TT
payable.
• Now if inward TT is drawn as Advice & Credit the TT payable is debited
and Credit is transferred to customer account.
• On the other hand, if inward TT is drawn as Advice & Pay then TT
payable is debited and credit is transferred to H.O. when customer
whose name and NIC no. is on the TT arrives at counter to receive
cash. The copy of NIC is kept as record.
• In case if inward TT is drawn on other bank a TTR is prepared for
onward transfer.

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PAY ORDER
Payment order is meant for bank’s own payments but in practice these
are also issued to our customer for making payments. A pay order is
written authorization for payment, made in a receipt form issued and
payable by the bank, to the person named and addressed therein on his
giving a proper discharge thereon. It is issued by and drawn upon and
payable by the same branch of the bank. It is neither transferable nor
negotiable and as such it is payable to the payee named therein.
Pay order cannot be issued to a minor. Sometime banks don’t want to

give its deposits to customer. So in that case pay order is given to that
customer and he can use it for making payments. When customer wants
to cash the pay order then the amount of the pay order will be debited
from the bank. If pay order is submit to other bank like mcb, abl then the
process of clearing will be adopted.
RUPEE TAVELER CHEQUE
BAL always provides to its customer’s different type of services which are
safe and quality oriented. RTC is very popular among the people of the
country. The bank provides RTC in the following categories.
• 1,000
• 5,000
• 10,000
Purchases of RTC

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The person who wants to purchase RTC is required to fill a form. The form
contains name, address, amount or denomination and other necessary
information. The purchaser deposits the amount in the bank and gets a
voucher from the cashier. And then RTC is provided to the purchaser.
Before handing over to the purchaser, signature is taken from him on the
RTC and on the copy of form. BAL rupee traveler’s Cheques are
acceptable in all the branches of BAL in Pakistan.
Features
Following are some features of RTC.
• It is acceptable in all the branches of BAL in Pakistan.

• In case of loss the purchaser inform the BAL in 24 hours. Then there is
no way of loss of purchaser and his amount is safe.
• Easily Available at all the branches of BAL, acceptable by major
businesses of Pakistan.
CLEARING
Clearing is the system by which banks exchange cheques and other

negotiable instrument, drawn on each other, within the specified area,
and secure payment for their clients through clearing house specified time
by book entries i.e., State Bank of Pakistan..
Nearly all the banks provide a wide variety of services to their depositors.
One valuable service provided is that of clearing. Clearing department
also plays an important role in performing the activities of the bank.
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The basic function of clearing department is to provide services to
customers in collection of their cheques of other banks, whether they are
in city or outside the city. The customer can get the money in his account
at Bank Alfalah Limited from the cheques drawn on another bank. The
bank accepts the cheque in the clearing department & later on collects
these cheques from the bank on which it is drawn through the clearing
house
Every bank acts in two ways such as:
1) Paying Bank (The bank, which pays the cheques of his customers,
presented by other banks.)
2) Collecting Bank (The bank, which collects the fate of cheques on the
behalf of customers, presented by other banks.)
Different modes of transferring the money are follows as
• Transfer
• Clearing
• Collection
Transfer
A method which means simply we transfer amount from one account to

another account is called transfer.

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Clearing
A system through which funds are transferred from one bank to another
bank within one (area specified by the SBP) clearing house. It may be
within city or outside the city. A process by which cheque is exchanged
between the collecting bank and paying bank and the ensuring financial
settlement is called clearing.
Clearing-house: Clearing house is a place where representative of the

member bank meet at given timings every day, to exchange cheques and
other instruments drawn on each other. Representative of the banks take
all the cheques and the instruments such as PO, DD etc drawn on banks
in the city, to the clearing house and bring back cheques and other
instruments drawn on our bank which are payable by us.
Classification of clearing
1) Outward clearing
2) Inward clearing
O/C Procedure
I have done following process in O/C
• Receive cheque on the counter and scrutinize it on the

following lines
• Cheque is drawn on a bank that is a member of clearing-
house
• It is deposited in an account that is being maintained in the
branch

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• It is in order as to the name of payee, date, amount in words
and figure and correctly endorsed where required.
• Check the pay-in slip and counter foils are correctly filled in.
• Put the banks special crossing stamp & clearing stamp of the
next day.
• Detach cheque from pay-in slip
• Sort out cheque bank wise and branch wise.
• Input in system for each bank
• Prepare clearing schedule
• Attach the cheques with clearing schedule
• Handover the instruments to NIFT
• Realization entries, if the branch is online then the fate of
your collection automatically transferred. If branch is not online
then the entry will be
Dr Account with main branch
Cr Branch accounts
In case of return, we will have to mark reversal of entry. In case of online

branch, the entry must pass because system will give credit to the
account and your return will be settled.
Stamps
• Special Crossing
• Clearing stamp of next working day.
• A/C payee’s only
• Payee endorsement confirmed

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Outward Return
Cheque returned will be treated as inward cheque. In the case of cheque

is returned because of wrong presentation e.g., clearing stamp not affixed
or wrong discharge given on the cheque etc. it should be relodged in the
next day clearing after rectification of the mistake.
If cheque is returned for any other reason then
• Enter the cheque in cheque return register, mentioning the

reason as appearing on the cheque return memo received from
the paying bank
• Advice the customer about fate
• Return the cheque to the customer after getting sign on
register
• Collect the cheque return charges
Inward clearing procedure
• Receive instrument payable by us in inward clearing

• Time is the essence of clearing, if not returned unpaid then it
is presumed to be paid
• Check the total number of instrument matches with the
clearing schedule and get signature on it.
• Scrutinize the cheque on following lines
• Signature verification
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• Proper presentation
• The cheque is in order as to the name, date, amount in the
words and figure
• Cheque is not damaged or torn nor post dated or stale,
alteration, correction and cutting have been authenticated with
full signature of the customer.
• Display customer account on the screen and observe
• Sufficient balance
• Stop payment instruction
• Cheque is from a series of cheques that has been issued to
that particular customer.
Inward return
Return may be of any reason. For example
• Clearing stamp not affixed

• Defect in cheques i.e., post dated cheque
• Insufficient balance
• Once the decision is made to return the cheque so deliver to
NIFT.
Collection
Clearing department deals with money transfer form on place to another.

It uses various instruments for remittance purposes. These instruments
are:
1) OBC

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2) IBC
OBC:
Outward Bill for collection, the cheques drawn on the bank that are out of
city. These cheques are not collected through NIFT. The banks clear these
by sending them to the relevant branch through mail. This service
includes all activities involved in collecting their claims on customers of
the other branches of same bank or of the other banks, located outside
the clearinghouse area.
Procedure
Receive instrument, this instrument
• It is in the name of the account holding customer

• Must not be post dated or stale
• Must have same amount in words and figure
• Affix special crossing stamp on the face of instrument
• Affix OBC stamp on the instrument, and on pay-in slip
• Entry in OBC register
• Write OBC# on the instrument
• Prepare outward bill for collection schedule
Role of Schedule
It is pre-printed covering letter of collecting/paying bank
• OBC #
• Cheque #
• Name and location of drawee bank
• Amount
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OBC Realization
• Enter realization particular in the OBC register

• If paid IBCA received from our collecting branch
• Deduct commission and courier charges.
II. IBC
The cheques drawn on the bank when comes from outstation, it is called
inward bills for collection. Cheques are entered in inward bills for
collection register. The date, signature, crossing etc. is checked and if all
things are in order, the amount is realized to the relevant bank. This
cheques should have the stamp by the branch i.e. our branch
endorsement is confirmed
Procedure
Receive instrument through mail and scrutinize the instrument
• Must be drawn on a customer’s account
• Must not be mutilated
• Must not bear unauthenticated corrections
• Must not be post dated or stale
• Must bear regular endorsements, if any
• Must have the same amount in words and figure
• Entry in IBC register

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Credit department
The principal responsibility of credit marketing is to attract good

customers to avail credit facility from Bank Alfalah limited. The people
who constitute the credit-marketing segment of the credits department
are termed as the credit officers. Credit Officers are supposed to be really
good at assessing and determining the financial soundness of a company
or an individual.
Credit administration
The major responsibility of the people working in the credit administration

is to issue Guarantees, monitor the periodic disbursement of Pledged
Commodities, and perform the job of providing finance against Imported
Merchandise and finance against Trust Receipt.
Types of Borrowers
Before a bank starts lending, it has to classify its target customers in to

groups of similar ones in order to simplify the provision of credit to them.
Bank Alfalah Limited has divided its clients into the following heads
• Individuals
• Existing account holders
• Staff members
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• Close relatives of staff members
• Employees of other banks
• Joint accounts
• Business entities
• Sole proprietorship
• Partnership
• Limited/liability company
• Joint venture
• Group accounts
• Others
• Clubs and associations
• Federal, provincial and local government bodies
• Traders
• Contractors / construction companies
• Transport, storage and warehousing
• Property dealers
• Manufactures
Kinds of Credit – General Overview
Bankers do not decide about the time span for which the amount is going
to outstand. The time span is related to the purpose for which the loan is
taken for. The three basic kinds of credit have been transformed in to
various credit facilities/products by banks. These are;
Short term credit
Short-term credit is that type of credit that is to be repaid with in a time

span of one year. Short-term credit requirement is usually seasonal in
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nature. There are four predominant purposes for which short term credit
is availed. These purposes are:-
Creation of current assets
Meeting of working capital requirement
Purchase of raw material
Repayment of current liabilities
Short-term credit secured by 100% cash margin is considered to be the

ideal way to extend this type of credit.
Medium term credit
In this age of contemporary banking, it is really very difficult to separate

medium term credit from long term credit when we talk with respect to
the view point of the purposes these two credits fulfill. Medium term
credit is a credit facility that is usually extended for a time span of some
where between one to three years. Business concerns normally utilize this
type of credit for the purposes of purchase of furniture, fixtures, and
small-scale machinery.
Long term credit
Long-term credit, theoretically speaking, is a type of credit that is

extended for a relatively long time (which may extend to ten years), but
practically speaking long-term credit facility is extended for a time span of
not more than five years. The purposes for which long-term credit is
availed are-
Capital Expenditure / Expansion of plant

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Balancing, Modernization, and Replacement (BMR)
Purchase of Fixed Assets
Kinds of Credit Offered By Bank Alfalah Limited
Letter of credit (L/C)
Letter of credit is a short-term non-fund based finance facility. LC is a

bank’s written undertaking given to the exporter for payment of a certain
sum of money on behalf of the importer, provided the exporter tenders to
the bank, or its overseas agents, the specified documents within a
specified period in accordance with the terms of the undertaking.
Letter of guarantee (L/G)
Apart from letter of credit Bank Alfalah Limited also extends another non-
fund based credit facility for its customers i.e. Letter of Guarantee or
more commonly known as Guarantees. The basic difference between a
letter of credit and a letter of guarantee is that in case of L/G, the liability
has to be retired four or five days before the actual date of maturity, but
in case of L/C the customer can retire his liability after maturity after
paying some amount as interest.

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Finance against imported merchandise (F I M)
In case of finance against imported merchandise, the importer gives the

imported goods into the effective pledge of the bank and avails the credit
facility against the pledged goods. There is a slight technical difference
between ‘pledge’ and ‘effective pledge’. In case of pledge the imported
goods come under the banks ownership when they reach the desired go
down that is under the supervision of the Macadam’s, appointed by the
bank. But on the other hand in case of ‘effective pledge’ the goods are
under the ownership of the bank even when they are being transported
from the port to the go down. So, in case of effective pledge the bank
must make sure that the goods are comprehensively insured.
Finance against trust receipt (F A T R)
The mechanism with which Finance against Trust Receipt works, is
identical to that of Hypothecation. The logical rationale behind FATR is
that all the imported goods cannot, by nature, be given to the effective
pledge of the bank; imported goods could be of perishable nature or they
could be of central importance for the operations of the business concern.
In such a case the goods are hypothecated and finance is extended.
Credit Proposal
In order to avail any of the credit facilities a proposal (case) has to be
approved by the Branch Credit Committee and then subsequently by the

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Credit Division at the Head Office. The credit proposal can be categorized
in to two types
Credit Line Proposal (C L P)
A credit line proposal is made for those clients whose credit limit has been
approved by the banks’ credit department.
One Time Transaction (O T T)
An OTT is prepared for a client who has no approved credit limit, but the
bank is doing business with that client on a one-time basis.
Accounts department
It is probably the only department in the entire bank where there is

almost no direct customer dealing. Two types of accounts are there which
are as follows:
Inter-Branch Accounts
Like other banks, Bank Alfalah Limited has a network of branches all over
the country. These branches in different cities are interlinked with each
other through their correspondent accounts in other branches. So, all
payments from one branch to another branch (in the same city or
another) are made by debiting and crediting these inter-branch accounts.
The accounts department deals with various routine activities for the
bank. The main activities performed by it are
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• Budgeting
• Reporting
• Maintenance & depreciation of fixed assets
• Miscellaneous functions
Budgeting
Accounts department of bank, for a year makes budget of branch. Fiscal

year of bank starts from January 01 and ends on December 31. The
accounts department starts preparing budget from October for the next
year.
Procedure:
The budget is based on forecasting through past performance
First, the bank reviews what are its sources of funds and where it can
utilize these funds?
The main sources of the bank are deposits, borrowing from other banks,
borrowing from SBP, bank’s paid-up capital, its reserve fund, profit
generated by the bank.
The budget is submitted to the head office for recommendation and

modification.

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Monthly budget meeting is held by branch managers to analyze the
monthly performance. Budget and actual performances are employed and
variance is computed for analysis.
Reporting
The accounts department, in the form of reports, clubs the details of

various departments together. Each and every minute detail is provided in
weekly, monthly and annual reports. The reports are submitted to head
office, SBP and to the government.
The accounts department prepares many reports, of which the most

common are
• Statement Of Affairs
• Daily activity reporting
• Income & Expenditure
• Foreign Currency Report
• Currency Wise Deposits Report
Maintaining Of Fixed Assets & Their Depreciation
Accounts department maintains the record of all the assets and charges
depreciation on them. The bank normally uses the straight-line method to
compute the depreciation.
The accounts department prepares asset purchase report and asset sale
report after every 6 months that helps in changing the depreciation. It is
calculated on monthly basis and charged yearly. Bank not only
depreciates the existing assets but also the assets transferred in and
transferred out.

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Miscellaneous Functions
The accounts department also performs some other miscellaneous

functions like
• Closing Entries
• Reconciliation statements
• The bank prepares reconciliation statement with head office
and SBP.
Head Office
Reconciliation with head office is done in reconciliation department. The

branches send their reports to the head office. They check the posting of
all the entries if outstanding, which has not been posted by branch or
head office. The reconciliation is carried out in the head office and
accounts department handles quarries.
State Bank of Pakistan
The SBP keeps the record of every scheduled bank. The bank statements
and statements of SBP are reconciled on daily basis. Reconciliation is
basically setting of outstanding entries. The reconciliation statement
contains two sides. One contains entries originated from bank but not
responded by SBP and on the other side entries originated by SBP but not
responded by bank.
Closing Entries
Accounts department also passes the closing entries on monthly, 6

monthly and yearly bases to calculate the profit and analyze the overall
performance for a certain period.

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Statements
The predominant functions performed by the accounts department can be

categorized into two broad categories.
• Daily Activity Checking

• Report Generation
Daily Activity Checking
All the operations performed in various departments of branch are

computerized. The functions are performed through the customized
software of the bank called Bank Smart. In order to facilitate double-
checking of all the transactions done, every concerned official also passes
vouchers. At the day end all the vouchers passed by various officers
working in different departments are given to Accounts Department.
Furthermore the I.T. department also prepares a report which constitutes
of the computer print outs of all the transactions / entries which have
been fed into the computer system of the branch that day.
Report Generation
The exact number of reports generated by the accounts department on a

daily, weekly, monthly, bi-yearly and yearly basis is somewhere in the
bracket of 500. It is neither necessary nor possible to get acquainted by
all of these reports in a short period of time.
Some of the common reports are
• Daily Advance And Deposit Position

• Daily Exchange Position
• Daily Fund Management
160
• Closing Reports
• Monthly Assets & Liabilities
• Monthly Budget Review Report
• Monthly Monitory Statement
• Monthly Performance Review Report
CAR FINANCING
Sound marketing skills are required to actually attract the walk-in

customer to select Alfalah Car Finance; still stronger skills are needed to
scan the incoming customer for validity and long-term liquidity. This is
because the client has to pay only 10 % of the actual price of the car
(minimum) where as the bank has to put in the rest 90 %. The rate of
mark up charged by Bank Alfalah for the car Finance is 17.5%. Another
thing to note here is that Bank Alfalah Limited finances not only brand-
new cars but also the second hand cars whose mark up will be 19.5%.

161
The procedure followed to finance a car is briefly discussed in the
following lines:
Step 1: The Client Submits Application and Required Documents
The very first thing the client has to do is, he has to give an application
requesting the bank for financing of a car. Along with the application the
client is suppose to attach some documents which are
• Copy of N.I.C
• N.T.N
• Copy of Utility Bill(s)
• Bank Statement for last six months (from the date of
application)
• Signature Verification Form
• Proof of Proprietorship/Partnership
The application form along with the personal data also contains the home
address, the address of the place of business (if the client is an
executive), and two references. These three things are of immense
significance for the verification officers. Moreover, in the application form
the client has to mention how much down payment he is going to make.
It is a policy matter of Bank Alfalah that the minimum percentage of down
payment is 10 % i.e. the client must at least pay 10 % of the sale price
as the down payment. If a client feels like paying a higher percentage as
down payment than there is no higher limit; he can pay as much he
wants to, provided that after he pays his down payment the amount to be
financed by the bank does not go below Rs.200,000 and above 2 million.

162
The down payment apart from 10% (minimum) of sale price also
includes;
Processing charges
Advance first month’s installment (this is not included if the client opts for
deferred installment) First year’s insurance premium.
Registration charges
Step 2: Verification Process by the Verification Officers
This step embodies immense significance as the results of this very step
reveal whether the client is genuine and trustworthy and whether all the
details provided by him are true or not. What the verification officers do is
that they first visit the house of the client and certify that the client has
provided the bank with the correct residential address. Then they inquire
about the conduct, character, behavior, occupation, and other activities of
the client from at least two of his/her neighbors. After being satisfied the
verification, officers visit the place of business (if the client is a
businessperson). There they first make sure that the said business
actually exists and the factory/organization/company actually is situated
at the said place.
Then the verification officers either visit or call any one or both of the
references given by the client in the application form. When all aspects of
the verification process are complete then what the verification officers do
is that they prepare four reports namely
• Business office verification report

• Residence verification report
• Reference verification report
163
• Telephone verification report
These reports are than filed in the proposal file and these constitute an
integral part of the proposal.
Step 3: Preparation of the Proposal File
Once the customer’s credibility is verified then the file is prepared for
acceptance/approval by the branch Credit Committee. This preparation
calls for attachment of certain documents apart from those that were
provided by the client along with the application. These documents are
• Borrower’s Basic Fact Sheet

• The Proposal Sheet
• A Check List
• Credit Information Bureau Report
• Verification Reports
• Printed Statement of Customer Inquiry Generated by the
System
Step 4: Execution of Legal Documents
After the approval stage, the client is called to the branch and the process
of legal documentation is under taken. For this purpose the operations
personnel gets the signatures of the client on all the legal documents
including the offer letter, which is of prime importance. The list of legal
documents the client has to sign is as follows;

164
The account opening form as a result of which the client could give the
post-dated cheques for payment of installments.
The letter in which the client acknowledges the Finance Limit that has
been provided to him by the bank
• The agreement for financing the motor vehicle on Murabaha

Basis
• The schedule to Murabaha agreement
• Letter of hypothecation of motor vehicle
• Irrecoverable power of attorney
• Letter of authorization to take possession of motor vehicle
• Bill of exchange without recourse to the drawer
• Delivery acceptance form
• Transfer letter
• Promissory note
• Letter of hypothecation of movables
Apart from these legal documents one of the most important documents
is the offer letter. The offer letter basically consists of a brief description
of the following;
• Amount Of Finance Facility

• Mode Of Financing
• Period Of Finance Facility
• Purchase Price Payable
• Rate of mark up
• Payment Schedule Of Purchase Price
• Insurance Premium
• Prepayment

165
• Documentation
• Down Payment
• Administration Fee / Processing Fee
• Availability
• Cancellation
• Purchase Of Motor Vehicle
• Disbursement Of Purchase Price
Step 5: Receipt of Down Payment and Post Dated Cheques
When all the legal documents are properly signed then the customer is
asked that his share of financing (the down payment) is required. The
down payment apart from 10% of the sale price also includes the
processing charges, the registration fee, the insurance premium of first
year, and advance first month’s installment. The customer comes to the
bank deposits this amount and also gives the bank post dated cheques,
duly signed. These cheques are of the amount of installment due to the
customer on monthly basis.
Step 6: Getting the Car Insured
Now comes the step to insure the car for which the financing is done. The
bank has to get the car insured, as it is a part of the car financing
agreement that the car has to be fully insured. What the bank does is that
it issues a letter addressing the insurance company specifying all the
details of the car to be insured and also communicates this to the
insurance company as to which show room the insurance inspector will
have to go to locate the said car. The inspector goes to that particular
show room and, after duly inspecting the car makes an inspection report.
The preparation of inspection report serves as an informal guarantee of
the preparation of the insurance policy. After two or three days of the
166
preparation of the inspection report the representative of the insurance
company comes and hands over the insurance policy to the bank. This
insurance policy is in the name of the respective client, but care of Bank
Alfalah Limited Liberty Branch is vividly marked.
Step 7: Establishment of Delivery Order and Demand Draft (In The

Name Of the Manufacturer)
When bank has got physical possession of the insurance policy the car
dealer is suppose to send the bank a quotation of the car being sold, on
his official letter head. On the basis of that quotation the delivery order is
being made, which contains the instructions for the dealer that now he,
should hand over that car to the customer. The bank will not pay to the
dealer the bank would make a Demand Draft in the name of the
manufacturer and hand it over to the dealer and the dealer would give it
to the manufacturer.
Step 8: Getting the Vehicle Registered
When the manufacturer gets the payment against the demand draft then
he sends the Invoice to the bank. This invoice contains all the details of
the vehicle namely; price, customer name, bank name, color of the
vehicle, mode of payment etc. If the car is completely ready for the
delivery this invoice will also contain the engine number and the chassis
number, but if the car is not ready for delivery, i.e. it is in the booking
process then the invoice will not contain these two items. The bank gets
the vehicle registered with the help of its private agents based on this
invoice.

167
CONCLUSIONS & RECOMMENDATION ON ANALYSIS
The bank maintained its position as the fifth largest bank of Pakistan in
terms of total assets. BAL’s advances witnessed sizeable growth (around
14%) funded by healthy deposit mobilization. The growth was above the
industry, further strengthening BAL’s system share. However, the bank’s
share in the industry’s deposit base experienced a marginal squeeze,
attributable to its cautious approach towards deposit mobilization to
achieve a favorable deposit mix for augmenting spreads. In addition, BAL
continued expanding its consumer base with main focus on credit cards,
followed by mortgage business. Bank Alfalah Limited is a well-known and
successful financial institution in the banking sector, it is said, nothing is
perfect in the world, and there is always space for deficiencies.
• Although the bank has a vast network of nationwide branches

but it should spread its branch network throughout the world
especially in the countries involved in international trade with
Pakistan.
• In order to compete with the other banks. ATM services
should be excellent as we can see the growing competition among
the banks.
• The bank should acquire the services of the highly qualified
people accompanied by lucrative incentives to promote its status
as desirable in the next millennium.
• In order to market its products it should accentuate to give
advertisements on both print and electronic media.
• The quality of human resource lies at the center of every
organization’s success and no doubt, Bank Alfalah Limited is fully
aware of the importance of a satisfied and well-trained work force
that gives completive advantage but the problem, which I have
168
observed, is that employees of Gulberg Branch do not have
enough knowledge about their products. Therefore, the policy of
the bank should be to continually encourage its employees for
their knowledge enhancement about their products. The state of
the art training and development center at Bank Alfalah should
arrange workshops and seminars for employees at every level to
empower them professionally.
• Bank Alfalah Limited operates as progressive and adaptive
organization maintaining dynamism and flexibility in all facets of
its operations but in this era of stiff competition it should consider
to launch new products to attract the customers.
Their aim should remain to provide customers with value pricing and to
ensure that quality of their portfolio is never compromised despite market
pressures.
Going forward, the bank intends to maintain the growth trend. While
preserving diversification in the credit portfolio, the management intends
to deploy additional funds in risk free avenues including direct/indirect
sovereign lending. Growth in consumer financing is expected to be fuelled
mainly by the credit card business. Meanwhile, BAL plans to add 49 new
branches to its network in the near-term with primary focus to build low
cost deposit base. Though BAL’s profitability is likely to improve, it is
expected to remain under pressure on account of rapid network
expansion. Meanwhile, the bank, in addition to exploring prospects of
entry into other regional countries, intends to fortify its existing overseas
operations with expansion in branch network and deployment of complete
suite of all financial products.

169
BAL is undergoing a revamping of its organizational structure with an aim
to improving the efficiency of decision making at all levels and enhancing
the quality and timeliness of its services. Besides, instilling a risk
conscious culture is also a key objective. BAL’s Risk Management Division
(RMD) has developed Credit Initiation and Internal Rating System (CIIRS)
in accordance with Basel II for generating obligor internal ratings. CIIRS
provides technological platform for assessing credit worthiness of new and
existing customers and enables structured analysis of customer data for
decision-making. The system is currently in validation phase. Moreover,
the bank is implementing Economic Capital Framework (ECF) across the
bank, which is expected to enable BAL to quantify and attribute cost to
various material risks besides facilitating in calculating the risk-adjusted
profitability of each business line.
BAL, with its relatively low advances-to-deposit ratio, maintains a sizeable

investment portfolio at end-07: PKR 85bln of which the major portion is
represented by Market Treasury bills (c. 80%). BAL’s exposure to the
interest rate risk remains limited. BAL’s equity portfolio is around PKR
6bln, with larger proportion being represented by strategic investments.
To improve the timeliness of its activities and the quality of services and
to support risk management, the bank is in the process of installing a new
comprehensive core banking software (Temenos T24). Although there
have been delays in the implementation process, the system is expected
to be fully operational across the branch network by end-09. BAL has one
of the lowest equity-to-assets ratios amongst peers. To support its growth
initiatives, the bank is contemplating to either have a right issue in 3Q08
or raise capital through IPO.

170
Annexure
Employees in various sections
Gulberg branch is the second biggest branch in Punjab, A lot of Employee

working in this branch. The name, designations and job assignments of all
those employees are as under with whom I worked.
GENERAL BANKING
Name: Agha Ali Akbar
Designation: Branch manager of Royal Banking
Qualifications: MBIT
Assignments:
o Team leader
o Attorneys Holder
o Supervision
o To acquire maximum deposits

171
Experience: 5 years
Name: Ch Imran Aslam
Designation: Corporate Head
Qualifications: MBA
Assignments:
o Supervision
o Online posting
o Attorneys
o Holder
Experience: 5 years
Operation Department
Name: Mr Subhan
Designation: Operational Manager
Qualifications: MBA
Assignments:

172
o Online posting
o Signature Verification
o Administrator of various tasks
o Attorney Holder
Experience: 10 years
Name: Azeem Khan
Designation: Operating Officer
Qualifications: M.com
Assignments:
o Supervision
o Attorney holder
Experience: 10 years
Name: Mr Asif
Designation: Local Remittance Officer
Qualifications: MBA
Assignments:
o Operating Pay Order and DD

o Receiving Pay Order And DD

173
FOREIGN REMITANCE DEPARTMENT
Name: Mr Husnain
Designation: Incharge Foreign Exchange
Qualifications: MBA
Assignments: Supervision of all the matters related to Foreign

remittance
Experience: 3 years
TRADE DEPARTMENT
Name: Muhammad Ali
Designation: Trade Manager
Qualifications: MBA
Assignments:
o Supervision
o Attorney holder
Experience: 10 year
Name: Mr Safdar
Designation: Import Officer
Qualifications: MBA

174
Assignments:
Operating All the Import Procedure
Experience: 6 years
I.T Department
Name: Mr Murtaza
Designation: System Administrator
Qualifications: MCS
Assignments:
o Supervision of IT infrastructure
o Maintenance of systems
Experience: 6 years
CASH DEPARTMENT
Name: Fahad Ahmad
Designation: Incharge cash Department
Qualifications: M.Com
Assignments:
o Supervision
o Attorney holder
175
Experience: 3 year
Name: Babar Riaz
Designation: Cash Officer
Qualifications: B.A
Assignments:
o Dealing in securities
o Cash handling
o Cash sorting
Experience: 3 years
SME DEPARTMENT
Name: Imran Choudhary
Designation: Manager of SME
Qualifications: MBA
Assignments:
o Supervision
o Attorney holder
Experience: 4 years
176
ACCOUNT OPENING DEPARTMENT
Name: Mr Khalid
Designation: Account Opening Officer
Qualifications: MBA
Assignments: Dealing all the matters related to account opening.
Experience: 3 year
ACCOUNTS DEPARTMENT:
Name: Salman Haider
Designation: Account Officer
Qualifications: M.COM
Assignments:
o pervision
o Attorney holder
Experience: 6 years
CREDITS DEPARTMENT
Name: Rizwan Ahmed
Designation: Credits Incharge
Qualifications: MBA
177
Assignments: Supervision
Experience: 6 years
Name: Ch Irfan Aslam
Designation: relationship Manager
Qualifications: MBA
Assignments: Dealing with royal customer
Experience: 3 years
Consumer banking department
Name: Ali Raza
Designation: Manager of consumer banking
Qualifications: MBA
Assignments:
o Attorney holder
o supervision
Experience: 10 Years
Name: Zunaira Naeem

178
Designation: CRO
Qualifications: MBA
Assignments:
o Providing information about account opening
o Solve the problems of customers
Experience; one year

179
180

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Bank Alfalah Final Report 2008

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Preface

The internship is an essential part of BBA degree program because

I have tried to choose suitable words to lighter the subject of this

I have tried my best to make the style of this report as good, as

I hope this report will help in understanding various aspects and

BBA (evening) 2005-30

INSTITUTE OF BUSINESS ADMINISTRATION, PU, LHR

BBA (E) 2005-30

This work out is dedicated to my loving

INSTITUTE OF BUSINESS ADMINISTRATION, PU, LHR

Bank Alfalah Limited was incorporated on June 21, 1997 as a public

In my report I have discusses the introduction, goals and objectives vision,

In the business process analysis detail procedurals has been discussed

INSTITUTE OF BUSINESS ADMINISTRATION, PU, LHR

Banking industry in Pakistan......................................................................................................................................11

HISTORICAL OVERVIEW OF BANK ALFALAH.....................................................................................................................15

Status and nature of business....................................................................................................................................19

Vision and Mission Statement.........................................................................................................................................21

Board Advisory committee.........................................................................................................................................29

Branch Level Designation...........................................................................................................................................30

PRODUCTS & SERVICES..................................................................................................................................................36

Saving account ..........................................................................................................................................................38

Alfalah Hilal Card .......................................................................................................................................................46

Money Gram ..............................................................................................................................................................50

Alfalah Credit Card ....................................................................................................................................................51

Alfalah Car Financing..................................................................................................................................................58

Small and Medium enterprises...............................................................................................................................64

Schedule of Product and Financial services ...............................................................................................................65

PORTFOLIO MANAGEMENT RATIO..........................................................................................................................87

FIM (FINANCE AGAINST IMPORTED MERCHANSE)..........................................................................................................116

INSTITUTE OF BUSINESS ADMINISTRATION, PU, LHR

FTR (FINANCE AGAINST TRUST RECEIPT)......................................................................................................................116

Request letter duly signed by the customer.............................................................................................................116

Demand promissory note.........................................................................................................................................116

Letter of pledge (in case of FIM)...............................................................................................................................116

Trust receipt (in case of FTR)....................................................................................................................................116

Mark-up agreement IB6A..........................................................................................................................................116

Letter of authority to debit mark-up.........................................................................................................................116

Documentation for any additional security...............................................................................................................117

Can only be granted against approved facility.........................................................................................................117

Under any specific approval of appropriate credit authority.....................................................................................117

Normally allowed for fixed periods of time...............................................................................................................117

Mark-up payable in arrears on due date...................................................................................................................117

Partial amount of the bill..........................................................................................................................................117

Exact amount of the bill...........................................................................................................................................117

Exact amount required to retire the bill....................................................................................................................117

Mark-up on PAD should be adjusted from a separate FIM A/C..................................................................................118

Make sure that Mark-up on mark-up is not charged.................................................................................................118

Clearance & storage through approved clearing agent & Macadam........................................................................119

Storage & insurance.....................................................................................................................................................119

INSTITUTE OF BUSINESS ADMINISTRATION, PU, LHR

Partial deliveries against partial repayment of finance.............................................................................................119

Deliveries against D/Os issued by the respective branch.........................................................................................119

A separate account # allocated to every FIM or FTR sanctioned..............................................................................119

FIM/FTR accounts are linked to customer’s current account.....................................................................................119

Details entered into FIM/FTR register.......................................................................................................................120

Statement of O/S facility generated on monthly basis to mark overdues.................................................................120

Fortnightly review of overdues by Manager Credits.................................................................................................120

Account opening department ..................................................................................................................................124

Types of Deposit Facility......................................................................................................................................125

Procedure to Open An Account ...........................................................................................................................125

Individual / Joint Account...............................................................................................................................................126

How to close an account......................................................................................................................................134