a) Everyday Accounts opening of new customers b) Dealing with Remittances. c) Making vouchers and balance sheets on daily basis. d) Re-opening dormant accounts and contacting customers. e) Managing the problems and queries of everyday customers as a Customer Relationship Officer. f) Dealing with Credits, Clearings and Collections
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Bank Alfalah Limited
Table of Contents
Executive summary………………………………………………….04
1. Introduction……………………………………………………….051.1. Company background (history)…………………………..061.2. Objective…………………………………………………..071.3. Organizational structure…………………………………..081.4. product/services offers……………………………………10
2. Learning & experience…………………………………………….152.1. Internship duration & rationale for selection……………...162.2. Details of training department wise/task performed……..17
Bank Alfalah Limited as its name suggests is a banking organization that provides banking services to the customer and slogan of Bank Alfalah Limited is “The Caring Bank”.Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced since November 1st, 1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through various branches in Pakistan, Bahrain, Bangladesh & Afghanistan, with the registered office at B.A.Building, I.I.Chundrigar road, Karachi.Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place.Strengthened with the banking of the Abu Dhabi Group and driven by the
strategic goals set out by its board of management, the Bank has invested in
revolutionary technology to have an extensive range of products and services.
This facilitates our commitment to a culture of innovation and seeks out
synergies with clients and service providers to ensure uninterrupted services
to its customers. It perceives the requirements of the customers and match
them with quality products and service solutions. During the past five years, it
has emerged as one of the foremost financial institution in the region
endeavoring to meet the needs of tomorrow today. The said group has
invested in Pakistan industry and Abu Dubai group is represented by the
following groups in Pakistan:
FA10-MBA-130 Page 2
Bank Alfalah Limited
2.2 Vision
To be the premier organization operating locally & internationality that
provides the complete range of financial services to all segments under one
roof.
2.3 Mission
To develop & deliver the most innovative products, manage customer
experience, deliver quality services that contributes to brand strength,
establishes a competitive advantage and enhances profitability, thus providing
value to the stakeholders of the bank.
Goals & Objectives:
In Bank Alfalah limited, while certain initiatives are nearing completion, new
initiatives have been launched thus depicting BAL’s continuous desire to
improve the ways of doing business. The most prominent being the
information technology initiative which is aimed to improve quality offerings.
BAL is fully aware of the developments taking place in the world, as well as
the changes occurring in the economic and social condition within the country.
The bank is determined to meet new challenges by redefining its goals and
strategy as well as by the adjustment of its operational policies.
The bank planning to institute major improvements, especially in customer
service launch innovative products to ensure that the bank continues to play a
dynamic role in the development of the country.
2.7 Branches of Bank Alfalah Limited
The Bank is fully aware that the branch network has direct implications on the
services that it provides to its customers. We offer services through a network
of 386 branches and 350 state of the art ATMs.
FA10-MBA-130 Page 3
Bank Alfalah Limited
Conventional braches
Islamic banking braches
Overseas branches
ATM machines
Products & Services offer:
Bank Alfalah limited is offering different types of products and services to fulfill
the needs of different segments of their target market. Operations with
products & services can be described by the following chart.
FA10-MBA-130 Page 4
Operations and Products
General Banking Financial Services
Treasury & Intl. Islamic Banking
Deposit Accounts
Landing and Deposit Rates
Lockers
Remittance
Hilal/Debit Cards
Consumer Finance
Structured Finance
Trade Finance
Lease Finance
SME
Agriculture Finance
Credit Cards
Home loans
Auto/Vehicles loans
Prepaid Cards
Debit Card
Money Market
Forex Market
Correspondent Banking
Nestro Account
Home Remittance
Money Gram
Personal Banking
Corporate Banking
Consumer Banking
Bank Alfalah Limited
Figure 2.
2.8 Organizational Structure:
Bank Alfalah is managed by board of directors who are commanded by
chairman. Afterward, CEO and COO controlled bank operations through
group heads and general mangers of different division. BAL organizational
structure could be described by following chart.
FA10-MBA-130 Page 5
Chairman
Board of Directors
Chief Executive Officer
Chief Operating Officer
Group Heads Chief Compliance Officer
Credit
Islamic Banking
Retail & Middle Market, North
Retail & Middle Market, South
Corporate & Investment Banking
Consumer Finance
Audit and Inspection
Technology & Operations
Chief Financial Officer
Operations
Learning
GM (HR & QA)
GM (Strategic Planning)
GM (Legal & Company Secretary)
GM (Risk Management)
GM (Information Technology)
Retail & Middle Market, Central GM (Establishment & Administration)
Bank Alfalah Limited
Jhelum Branch
Bank Alfalah Limited I-8 Branch has been established in I-8 Markaz,
Islamabad. It is one the most profitable bank in Islamabad. It was incorporated
on 16th September 2002 and currently located at 67- Kazim Kamal road,
Jhelum Cantt.
Branch Code 0070
Area Office: The Mall Rawalpindi
Area Manager: Talib Rizvi
Branch Manager: Mr. Raja Muhammad Bilal
Manager Operations: Mr. Muhammad Imran Khan
Manager Credits: Mr. Ali Arslan
Contact Number: 0544-610162, 0544-610020
FA10-MBA-130 Page 6
Bank Alfalah Limited
2.12 SWOT ANALYSIS
SWOT analysis describe the strengths, weakness, opportunities, and threats
of any organization. In SWOT analysis the strength and weakness is related
to the internal environment of the company and the opportunity and threads
are influenced by external environment of the company like industry.
Exploiting an organizations opportunities and strength
Neutralizing it threats
Avoiding or correcting its weakness
SWOT analysis is the key step in design better business strategy in the light
of organization mission, vision, goals & objectives. Managers assess internal
strengths distinctive competencies and weakness and external opportunities
and threats. The goal is to then develop good strategies and exploit
opportunities and strengths neutralize threats and avoid weaknesses. Here I
have applied this very useful technique to identify the strengths, weaknesses,
opportunities and threats of Bank Alfalah.
2.12.1 Strengths of Bank Alfalah Limited
Bank Alfalah Limited has certain strengths which are different from the other
Banks.
1. BAL is the first Muslim Bank of the World
BAL is the first Muslim Bank of the world, which is owned and managed by
its own employees. This is the biggest strength of the Bank. A feeling of
ownership is present in every employee, which not only helps in increasing
the productivity of employees but also creates sincerity with the Bank in
them.
2. High Motivation of Employees
FA10-MBA-130 Page 7
Bank Alfalah Limited
Strength is the high motivation of employees to their work because they
know that what so ever they do, it will be in their own benefit. They know
that the profit, which they will earn, will be distributed among all the
employees. So they work with high motivation and concentration.
3. Good salary package
Salaries are very reasonable, so the employees are not financially
disturbed and they devote their selves fully to their work.
4. Huge network of branches
They have wide area network in all over the Pakistan, so that they cover a
lot of portion of cash transactions and make customer satisfied.
5. Customer Oriented Bank
The Bank has very strict rules and regulations about the customer’s
complaints. The customers are treated as very special persons in the
Bank.
6. Strong Financial Position
As we can see in the financial statements of the bank, the financial
position of the organization is very sound and its profitability is increasing.
The Earning per share has been increased on a rate of about 50%, which
is a very positive sign.
7. Highly Qualified Employees
The bank has highly qualified and skilled workforce and it has succeeded
to attract the best banking professionals from across the country due to its
growing pace and sound reputation.
8. Conducive Environment
The management of the bank is very much concerned with the
development and improvement of the working environment. The bank has
state of the art and purpose built branches where all the modern
technologies are provided to get the efficiency of the workforce and the
customer satisfaction.
FA10-MBA-130 Page 8
Bank Alfalah Limited
9. Govt. Support and Encouragement
As the owners of the bank belong to UAE and the type of their investment in
Pakistan is a foreign investment, the govt. is fully supporting the bank
management due to its policy to maximize the foreign investment in the
country, to get the economic prosperity.
10. Fastest Growing Financial Institution
Due to its successful business policies and the strong financial position the
bank has achieved the reputation of fastest growing financial institution in the
country. It has greatly increased the customer’s confidence in the bank.
11. Huge Expansion Plan
Due to its strong financial position the bank has undergone a huge expansion
plan to compete with the existing banks all over the country and with the
passage of time the branch network is expanding at a very good pace.
12. Young and Energetic Workforce
As the bank is a newer one in the country, the bank has an advantage over its
competitors because the majority of its workforce is young and not very much
over aged. Thus the bank is getting maximum output from its young and
energetic workforce by spending comparatively less on their remunerations.
13. Islamic Banking Division
The bank is one of the pioneers of the commercial banks who have started
the Islamic Banking along with their conventional banking. The bank has a
separate network of its Islamic Banking Division which has many branches
across the country and this network is also expanding at a very good pace.
2.12.2 Weaknesses of Bank Alfalah Limited
1. Lack of Entertainment Facilities
No entertainment facilities are available in the Bank when customer goes to
the Bank and wait for a longer time. These facilities can be the newspaper,
magazines, etc.
FA10-MBA-130 Page 9
Bank Alfalah Limited
2. Advertisement Is Not So Attractive
Advertisement of BAL is not such goods as of other banks.
3. Outlets are Unattractive
Outlook of the some BAL branches is not attractive to the people.
4. All Branches Are Not Fully Centralized
As compare to other private commercial banks the limited branches of BAL
are computerized and centralized.
5. Inexperienced Workforce
As the majority of the workforce consists of young professional, they lack in
their experience. And sometimes lack of experience becomes a hurdle while
serving to the customers. It is the point where they feel difficulty while
competing the other bank, which have a very experienced workforce.
6. Over Work Load On Employees
It was observed in the branch that as compared to huge business the bank is
dealing in, the no. of employees is lesser and thus there is an increased
workload on the employees. Due to this the efficiency of the employees is
reduced.
7. Employees Are Not Very Much Motivated
As discussed before, the workload is high and the employees, especially the
credit department, have to do late sittings to complete their tasks. On the
other hand the bank has revised its salary increments policy to decrease the
increment rate, as a result a decreased motivation level of employees is
observed.
8. Lack Of Self Marketing Department
FA10-MBA-130 Page 10
Bank Alfalah Limited
In today’s fast growing world, media is an important source for marketing your
products. BAL lacks a self marketing department for advertising its new
product benefits to customers on a large scale.
2.12.3 Opportunities for Bank Alfalah Limited
1. Financial Sector Reforms
The policies of the new government to uplift the economy and pursue financial
sector reforms are expected to yield positive results in the banking industry of
the country. The BAL is very well praised to avail promising opportunities.
2. Attraction for Small Borrowers
As a result of the different steps taken by the Government regarding the
betterment of the economy, small borrowers are attracted to get the financing
and start small businesses. So, the BAL has an opportunity to attract the
customers by giving them attractive schemes.
3. Remittances From Abroad
They have wide area network in all over the Pakistan, if BAL can make it
possible the fast delivery of fund from abroad through online banking, it can
cover the major market of Pakistan which still is capturing by ‘Hundi’.
4. Rapidly Growing Economy
At present the Pakistan’s Economy is growing on a very fast pace. The rapid
growth of economy has resulted in the increase in the growth rate of all
economic sectors especially in the banking sector which is growing at a
fastest speed than ever and in future the growth is expected to increase even
a higher rate.
5. Increased Interest Rates
FA10-MBA-130 Page 11
Bank Alfalah Limited
The SBP has revised the interest policy and the interest rates have been
linked with the KIBOR rates. Due to which the banks interest rate has been
substantially increased which will greatly increase the banks’ profitability.
6. Mega Projects Financing
As the increase in overall business activity in the country, the investors are
launching various types of Mega Projects especially in housing and textile the
bank has a great opportunity to finance these projects at very profitable term.
7. Huge Demand for Consumer Financing
The increase in per capita income and overall economy has resulted into a
great demand for the consumer financing especially for home finance and car
financing and it is said that this trend will increase more in future. The bank
can earn a lot by focusing on its consumer financing sections.
8. Growing Trend of Islamic Banking
There is a very good growth trend in the Islamic banking in the country and in
the world as well. BAL has the advantage of having full-fledged Islamic
Banking network and the growth in this particular field can be very fruitful for
the bank.
9. Spending Practices of Mass
As the Pakistani’s are known for their extravagant practices, and to fulfill their
funds requirements they don’t hesitate from getting loans from banks. Thus
there is a very good scope for the bank to run successful business in such
circumstances.
2.12.4 Threats for Bank Alfalah Limited
1. Political Influence
First threat is that of political influence. Three boards of directors are of
government. So that they can influence on the decisions of the BAL.
FA10-MBA-130 Page 12
Bank Alfalah Limited
2. The Continuous Downfall in the Economy
The biggest threat in the banking sector is the continuous downfall of the
country economy since the last few years. If this downfall remains for more
few years then it may be the great hindrance in achieving the Bank’s
objectives.
3. Uncertainty of Economy
Although the economy is growing at a good pace, but there are many
factors which results in the uncertain position of the economy. Such as
political uncertainty, increase in poverty etc. As a result there are
permanent threats of future risks and losses for the bank.
4. High Rate of Inflation
The inflation rate of the country has gone above the 10%. This can result into
an unfavorable situation for the bank. And especially when the ownership of
the bank is UAE based, the net spread for them can substantially decrease.
5. Trend of Mergers
There is a trend of mergers among the banks to become prominent in the
market and to get the maximum market share. This trend can result into the
union of some leading banks which can give tough time to the bank and it will
become difficult for the bank to compete with them.
6. Privatization of Banks
Due to its privatization policy, the govt. is privatizing the state owned banks.
The change in management may result in the increase in the efficiency and
productivity of the banks. Thus it can become a threat for the bank.
7. Risk of Defaults
As discussed earlier that there is a trend of launching mega projects in the
country. And every one is involved in this trend without taking any measure for
FA10-MBA-130 Page 13
Bank Alfalah Limited
the successfulness of these projects. This can result into the failure of this
project which can make it difficult for the banks to recover their funds from
these defaulters.
8. New Private Banks are being Opened
New Privates Bank coped with emerging new Technology of IT.
2.19.1 Branch Organization Structure
FA10-MBA-130 Page 14
MANAGER OPERATIONS
HUB BRANCH MANAGER
Bank Alfalah Limited
Chapter 03
LEARNING AS A STUDENT INTERN
FA10-MBA-130 Page 15
CREDIT DEPARTMENT REMITTANCES
OPERATIONS(CLEARING)
CONSUMER DEPARTMENT
CASH DEPARTMENT
CREDIT OFFICER TELLER
OFFICER OPERATIONS
OFFICER OPERATIONS
Bank Alfalah Limited
3 INTERNSHIP EXPERIENCE:
I have done internship at the Bank Alfalah limited Main Branch Jhelum. My
internship was for the short span of time i.e. six weeks (July 04, 2011 To
August 13, 2011). The tasks performed in the bank are as under:
Names of Departments Where I Got Training
During my stay at Bank Alfalah main branch I worked in the following
departments:
Operations (clearing)
Customer Services
Account opening
Accounts
Car finance
Credits
Their details are as follows:
3.1 INTERNSHIP EXPERIENCE
FA10-MBA-130 Page 16
Bank Alfalah Limited
3.1.1 Clearing department
It is one of the most important department for
any Bank that not only pays but also collects
cheques from the customers .In BAL main
branch this department is run by Miss Anum
Asif, who performs her duties with more
concentration and devotion as a minor mistake
can cause a big loss to the bank .All the work is
performed through a “clearing house”
3.1.1.1 Clearing House
A place where all the reprensentives of all banks of a city get together to
settle the arrangements of cheque receipts and payments. The advantages of
clearing house are manifold. It prevents the cost and waste involved in
collection each and every cheque and claim which a banker holds against
another across the counter with all the danger of loss in the transit incumbent
upon it.
But now the task is performed by NIFT. (National Institutional Facilitation
Technologies). NIFT is a joint venture between a consortium of six major
banks and private sector. It is responsible for the establishment and
management of automated clearinghouse facilities in Pakistan. NIFT is
proactively involved in the modernization of payment systems in Pakistan.
NIFT offers three types of services namely;
Local Clearing
Same Day Clearing
Intercity Clearing
There are two types of clearing i.e.
FA10-MBA-130 Page 17
Bank Alfalah Limited
Inward Clearing
Outward Clearing
Many types of clearing stamps are used in the clearing department. Each
stamp has its own significance. Mostly four clearing stamps are used. These
are:
The Clearing Stamp
Stamp For Special Crossing
Stamp For Payee’s Account Credited
Stamp For Endorsement
NIFT delivers Local Inward Cheques early in the morning usually within half
an hour after opening of bank. After receiving the mail, the next step is to post
them and debit the customer’s account. These are actually the cheques of the
same cheque book that was issued by our branch. After it the clearing
process starts.
The process in which reserves or funds are transferred among banks to settle
the accounts of cheques written on one account and deposited into another is
called clearing process. Cheque clearing is the heart and sole of daily banking
activity and the final step in the use of chequeable deposits as the medium of
exchange for conducting transactions in the economy.
NIFT also delivers local as well as intercity cheques for clearing process. The
above mentioned same process is repeated after receiving NIFT inward
intercity cheques. After posting these cheques, Signature Verified stamp is
used to verify the customer’s signature.
3.1.1.2 Inward Return
If all formal requirement of the instruments(cheques, demand draft etc.) are
fulfilled then bank debit the customer account in case of inward clearing but if
anything is missing or not according to the prescribed procedures, the bank
may return the instrument. This is known as Inward Return. There are number
of reason for inward return e.g.
Insufficient Funds
Signature Differ
Post Dated Cheque
FA10-MBA-130 Page 18
Bank Alfalah Limited
Amount In Words And In Figure Differs
Incorrect Date of Clearing Stamp etc.
3.1.1.3 Inward Bills for Collection
IBC means Inward Bills for Collection. IBC comes into existence due to OBC
means Outward Bills for Collection.
3.1.1.4 Outward Clearing
In outward clearing we collect cheques from the customers and fill the cheque
deposit slips. Then we handover the customer copy of the slip to the
customer. If we receive cheque through mail then in such cases we destroy
customer copy. Our outward clearing contains instruments that can be cleared
via any of the following mode:
Local Clearing
Same Day Clearing
Intercity Clearing
Outward bills for collection
In outward clearing we deliver instruments (e.g. cheques, demand drafts etc.)
through NIFT to the other banks after doing proper stamping on these
instruments. Most commonly used stamps are the following:
The Clearing Stamp
Stamp For Special Crossing
Stamp For Payee’s Account Credited
Stamp For Endorsement
As NIFT is responsible for the establishment and management of automated
clearinghouse facilities in Pakistan. NIFT offers three types of services
namely;
Local Clearing
Same Day Clearing
Intercity Clearing
We use Local Clearing if the instrument is of the same city or specific area
e.g. since our branch is in Jhelum so the area that comes under Local
Clearance is:
Jhelum
FA10-MBA-130 Page 19
Bank Alfalah Limited
Dina
Saraialamgir
Mandibahuddin Etc.
We use instrument of other banks in local clearing if a bank offers online
clearing such as NIB, Silk bank, Standard Chartered, Faysal Bank etc.
Same Day Clearing can be entertained only by those branches that are
member are same day clearing service.
And in the last Intercity Clearing is the most attractive offer of the NIFT. We
use intercity clearing service if the instrument is of outside the city and the
respective bank does not offer online clearing e.g. HBL, MCB, and NBP etc.
If cheque is clear then we take charges from customer account and recover
Federal Excise Duty as well. If the cheque is not cleared for any reason then
we mark it as return before the day end.
3.1.1.5 Outward Return
In outward return the cheque is returned because of wrong presentation e.g.
clearing stamp not affixed or wrong discharge given on the cheque etc. If the
cheque is retuned for any other reason, then we inform the customer and
deduct the cheque return charges. Most commonly reasons associated with
outward return are as:
Insufficient Funds
Signature Differ
Post Dated Cheque
Mutilation not confirmed
Affects not cleared.
Amount In Words And In Figure Differs
Incorrect Date of Clearing Stamp etc.
As there are two types of Bills for Collection i.e.
IBC (Inward Bills For Collection)
OBC (Outward Bills For Collection)
We use OBC if the following conditions fulfill:
The payee branch is not member of NIFT intercity service
When there is heavy amount of instrument and bank wants to generate
income
FA10-MBA-130 Page 20
Bank Alfalah Limited
It should be remembered that bank sends bills for collection solely at:
Risk and cost of beneficiaries
Are not liable if bills is dishonored
But are liable to either return the Dishonored Bills to the beneficiaries
or pay them the proceeds.
3.1.1.6 Functions of Clearing Department
To transfer, deliver, collect, clear the cheques received from customers
of the branch.
After clearance of cheques post that amount in to the customer’s
account.
Arranges the payment of cheques: arrange the payment of cheque drawn on
the branch and given for collection to any other branch of Alfalah or any other
members or sub members of the local clearing house.
Cheques drawn on collecting bank branch. It is sorted A/C wise,
particulars, dates, and amount. Balance, check signatures, verified &
passed on counter for posting in relevant A/C.
Cheques drawn on other banks. Crossed check by banks crossing
stamps are sorted & dealt with through useful crossing process
Cheques drawn on collecting bank branches in the towns. As soon as
cheque received, these are crossed with bank crossing stamp, sorted
out branch wise & sent to concerned branch.
Clearing of securities
Clearing of dividends
Clearing of payments
Process of depositing and clearing cheques: When a customer comes
and want to deposit the cheque a pay in slip is filled for him consist of
all relevant information about account title, account number, amount of
cheque, signatures of customer etc. The smaller portion of the pay in
slip is handed over to the Depositor and the portion becomes the
regular portion of a credit voucher.
FA10-MBA-130 Page 21
Bank Alfalah Limited
3.1.2 Customer services
Reception is one the place in bank where one can deal directly with
customers. I spent the almost one week on reception under the supervision
Sir Mujeeb on the reception. Sir Mujeeb is incharge of reception and DBMS
(data base management system).during my stay this position, I learnt how to
fill the different slips, mostly they were cash deposit slips, online slips, slips for
credit card payments and for cheque deposit etc. Each type of slips has its
own core requirements.
I was also assigned the task of receiving mails and record them into the mail
receiving register. As our Jhelum branch is a liability branch (a liability branch
is one whose liability side of the balance sheet is heavy, because it mainly
depend on receiving deposits, as a lot of customers relatives lives in foreign
countries and they remit money from abroad) so lot of customers came for
cash deposit.
Apart from reception I was assigned a job which is computer oriented. In this
job I have to scan daily vouchers of the bank (which include both cash as well
as transfer vouchers).After scanning these vouchers, account number and slip
number are given as input to the computer so that computer sorts them out.
Reception is a place where sometimes lot of customers came immediately
and sometime we remained free. So I learnt how to deal with customers
during busy hours.
3.1.3 Account Opening
3.1.3.1 Account Opening
Account opening is the most important department of any Bank .It plays an
important part in overall banking; it is the fundamental department for any
bank that reflects the competence of any bank. Here in Account Opening
Department I also spent one week under supervision of Miss Maria Pervaiz,
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Bank Alfalah Limited
she is CRO (Customer Relation Officer) and her co-worker Miss Hira
Shahid.Firstly Miss Maria told me types of accounts that are opened in Bank
Alfalah. These are as follows:
Current Account, Saving Account, Royal Profit, And Alfalah Kamyab Karobar.
All these accounts have different amount to open up each type of account and
each account has different level of minimum balance to maintain such
accounts.
First of all I learnt how to fill up AOF (Account Opening Form). I filled up some
AOF and listen to the customers. Every customer brought some new problem
and Miss gave them suitable suggestions. This was very useful for me. in
account opening department duties and responsibilities of the officers were as
follows:
To activate dormant account
To deliver ATM Card to customers
To issue new cheque books
To receive orders for new cheque books
To prepare daily AML (Anti-Money Laundering) report
To prepare daily KYC(Know Your Customer) report
3.1.3.2 Why accounts get Dormanted?
If a customer does not withdraw cash from his/her account through cheque,
ATM Card or any other way means if there is no debit transaction for period of
over 6 months, his/her account get dormanted.
3.13.3 AML (Anti-Money Laundering) Report
It is a system generated report. Anti-money laundering (AML) software is a
type of computer program used by financial institutions to analyze customer
data and detect suspicious transactions. Customers having transaction of
Rs.1000000/- or above either debit or credit, are considered in this report,
because at any time SBP can ask the BANKS that from where your customer
has arranged this huge money or where he disposed off such money.
3.1.3.4 KYC (Know Your Customer)
FA10-MBA-130 Page 23
Bank Alfalah Limited
KYC (Know Your Customer).Up to great extent it is similar to AML report,
besides other things like personal information e.g. source of earning etc. are
determined in KYC.
3.1.3.5 Purpose of Account Opening
The main purpose behind account opening for a bank is to increase the
deposits of a branch .The more the deposits a bank gets, the more it has the
opportunity to invest its money in long term and short term investments .So
every bank tries to maximize its deposits
3.1.3.6 Documents Required
The following documents are submitted:
Account opening form: (provided by bank) includes the
information about: type of account, nature of account, currency,
client number, ownership. interest details, postal address,
personal account ( saving / joint ) , personal information ,
business account , details of other banking relationships ,
account opening instructions ,smart card information , next of kin
,two signatures of customers are required .
Customer CNIC copy( provided by customer )
NIC authorization form ---by bank NADRA authorized
Business proof or photo copy of passport --- if you are salaried
person then provide salaried slip ,appointment latter ,dealership,
certificate form ,letter pad, visiting card
Signature card
Check book issuance slip
ATM issuance form ( optional )
Letter of thanks ( by bank) ---- delivered to customer’s home
address along with bank stamp ,thanking him for opening
account in branch
KYC ( know your customer) form ( by bank ) ---consist of
information about risk rating sheet , related to individuals in
Pakistan , FAQs , account type ,status , personal information ,
purpose of account .
FA10-MBA-130 Page 24
Bank Alfalah Limited
3.1.3.7 TYPES OF ACCOUNTS
BAL offers the following type of accounts to its customers:
Current Account
PLS Savings
Royal Profit
Basic Banking
Alfalah Mahana Aamdan
Alfalah Kamyab Karobar
Term Deposit
3.1.3.8 Customer Service Office
In Bank Alfalah the functions of CRO are also performed by the account
opening department and it is controlled by Miss Maria & Miss Hira .Who also
performs the duties of CRO.
3.1.3.9 Responsibilities of CRO
The CRO of the main branch of Bank Alfalah Performs the following duties:
Filling of account opening form
Different amendments in accounts
Balance checking
Issuance of bank statements
Filling of deposit slip
Cheque filling
Issuing / reissuing of ATM card
Attending of customer calls
Locker
Cheque Books
3.1.4 Remittance and Foreign Remittance
Remittance is the transfer of funds from one
account to another .In Bank Alfalah this
department is controlled by Sir. Adeel who
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performs his duties with attention, hard work
and full devotion.
3.1.4.1 Functions Performed By Remittance Department
Remittance department of BAL branch performs the following functions:
3.1.4.1.1 Pay Order
A banker’s cheque (Pay Order) is another payment instrument which is used
by the banks to settle payment obligations on behalf of their customers. This
instrument is guaranteed by the bank for its full value and is similar to a
demand draft. In practice, these instruments are payable at the branch of
issue and are used for payment within the local clearing jurisdiction.
3.1.4.1.2 Demand Draft
A demand draft is a pre paid negotiable instrument, wherein the drawee bank
undertakes to make payment in full when the instrument is presented by the
payee for payment. The demand draft is made payable at a specified branch
of a bank at a specified centre. In order to obtain payment, the beneficiary has
to either present the instrument directly to the branch concerned or have it
collected by his bank through the clearing mechanism.
3.1.4.1.3 Clearance of DD
An officer must write his P.A No. while putting his signature on DD/ pay order.
When DD is made, an advice of the same DD is sent to the branch at which
DD is drawn, after receiving the advice the drawee branch credit the customer
account on presentation of original DD. The drawee branch matches the
signature and P.A No. by comparing it with the book in which specimen of
signature along with their attorney number is given book.
3.1.4.2 Foreign Remittance
Foreign remittance from abroad come in our bank through money gram. In
money gram customers come with some reference code along with their
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original CNIC. After the screening of all the facts, the process of posting
begins which completes after the signature of a senior officer operation. So in
this way the process completes, and then customer can withdraw his cash
from the counter. Miss also told me about demand draft and pay orders. DD is
made when payment is to be made to a person who is outside the city, while
pay order are made for payment within the city.
3.1.5 Credit / Advances
Credit / advance department is the most
important department of BAL as is also an
important source of earnings for the bank in the
form of interest income. Credit department
deals with providing different types of loans to
the customers and business entities. By
providing loan the bank requires some security
or mortgage after assessing the
creditworthiness of a customer. The loan can
only be granted if the customer fulfills all the
bank requirements. There are mainly three types
of loans:
Personal loans
Loans to SME’s
Agricultural loans
The five Principals of Credit are used for ascertaining the financial position of
a person/entity .These is called the 5 C’s Of Credit
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3.1.5.1 The Five C's of Credit
Their details are as follows:
Money lenders are always looking for the best clients to lend their money to.
But what sorts of things do they look for in a company? This is where the 5
C's of Credit comes in - character, capacity, capital, conditions, and collateral.
Character
The character is the client's reputation and reliability.
Capacity
Is your company able to repay the amount borrowed? Your company's cash
flow will be reviewed, and how you intend to repay the loan is established.
Payment history and records on other credit relations will be looked at and
considered. These include both personal and commercial.
Capital
how much money have you invested into your business? The amount of your
own money put into the company portrays a message of confidence and trust.
Conditions
How well is your business currently faring? What will the loan be used for? Is
it for equipment, expansion, or just for financial security? Things such as the
economy, competition, and customer base are noted.
Collateral
If for some reason you cannot provide repayment, collateral will be a
secondary source of repayment. Collateral can include things such as
inventory, equipment, real estate, stocks, accounts receivable, etc. Usually a
signed contract is needed as a guarantee. All these are ascertained before
giving loan to any party.
3.1.5.2 Procedure for Loan
First of all an offer is made to customer. If customer gives acceptance then
BBF (Borrower Basic Facts) sheet is maintained. After obtaining all the
required data, CLP (Credit Line Proposal) is made. These loans are disbursed
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against some security. After fulfilling all the requirements, the case is then
forwarded to the Area Office for final approval. In addition to the primary
security collateral security is also pledged. A Collateral Security is defined as’
When the Lender feels, the security provided by the Borrower is not sufficient
or it may be difficult to recover the dues smoothly, the Lender may ask for
additional security to be provided by the Borrower himself or other on behalf
of the Borrower. In case if any dispute or failure to discharge the loan by the
Borrower, the collateral securities will come in hand to service and recover the
loan/debt.
Personal Loan
Personal loan can be enjoyed by offering Fixed Deposit or Defense Saving
Certificate as security. The bank pledge these security and give credit to the
customer account up to 90% of the market value of such security.
Agricultural Loan
These loans are given against cultivated land.
Loan to SME
Loan to SME is the most complicated task as it requires lot of documentation
and to update stock report, and ratio analysis of the borrower’s business
income statement and balance sheet etc.
3.1.6 Car Finance
Mr. Rashid Zubair is Credit Officer. He deals in Car Financing and Corporate
Finance. The procedure of leasing a car is similar to that of advances. Here
the concept of 5 C’s also applied.
Car finance is a simple Hire Purchase Agreement. It contains the complete
schedule of payments to be made by customer of car leasing. These
installments include the Principal Amount and the Amount of Mark Up and
Registration Charges etc. to be paid by customer. Bank Alfalah usually offers
two standard plans for car leasing; i.e.
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3 year plan
5 year plan
However the customers may ask for customized plan.
The customers have to pay minimum 20% down payment and rest in
installments with mark up.
3.1.6.1 Procedure of Car Finance
Since it is a type of loan so the same criteria is used to test the credibility of
customers i.e. 5 C’s.
After the accomplishment of this basic information about customer, the case is
referred to Area Office, then if the Area Office givers Approval then legal
documents are prepared by the respective officer. The purpose of maintaining
these legal documents is that if the customers at any time intentionally or
unintentionally do not pay installments in time, the bank can enforce the
customer by law and can repossess the asset.
Mr. Fawad who also deals in car leasing told me some issues pertaining to
the clearance of the Car Leasing Process. After the clearance of all the
installments, mark up and late payment charges, penalty if any etc. then NOC
is issued from Lahore branch and it is to be delivered to customer. Having
received the NOC the customer become the real owner of the car and after
this bank has no more right to repossess the car. So in this way the whole
process of car leasing takes place.
3.2 LEARNING AS A STUDENT INTERN
3.2.1 Duties and Accomplishment:
My duties at the bank were of different types. I was rotated in different
departments in different weeks, so that I could get the exposure of
different tasks in a bank. But my duties were always supervised by the
employees of BAL so that I do not make any major mistake, as I was an
internee and didn’t go through the training of three months, as all the
employees of BAL get before joining the bank. But still I had to deal with
all the matters of the bank under their supervision. My duties are
mentioned as follows.
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Customer Services
Account opening
Car finance
Operations (clearing)
Accounts
Credits
3.2.2 New Knowledge Acquired
It was really a great experience for me to work in the practical scenario
because before this internship training I was not aware at all that how the
work is actually done in the organizations. The bank in which I have done
internship is basically a consumer bank providing facilities of consumer and
business loans. They are not dealing with imports and exports. The working
environment of bank was very friendly and cooperative all the seniors really
helped me whenever I asked about anything. In the beginning I assigned the
job of filling different types of slips which include slips for cash deposit,
cheque deposit, slips for online transfer of money, credit card payment slips
etc. In addition to this I learnt the process of granting loan to the customer
which really requires huge documentation and procedure of car financing. The
most important of all is clearance of cheques; I leant about different types of
cheques and stamps. Every stamp has a unique purpose. I also learnt how to
open an account and the requirement of opening an account along with other
things such as KYC Report and AML Report.
3.2.3 How Experience Impacts My Career
By doing internship for six weeks in Bank Alfalah limited I have gained a
lot of practical experience of doing work, which was really different from
the experience of student life. By doing internship I really gained the
knowledge of banking sector, which I didn’t found so easy, I have learnt
the meaning of responsibility, time management, and professionalism.
Because of this experience now I can decide well that should I opt to join
banking field or should go for another one.
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The real thing which I gained by doing this internship was the confidence
and knowledge, the confidence and knowledge which we gain from our
student life is far more different from this one, because whenever I used
to talk or deal with those bankers who are in banking sector from more
than a decade they used to give me a lot of knowledge to deal with daily
routine matters of banking sector.
Whenever I used to interact with such highly professional bankers, I used
to hesitate in the beginning but with the passage of time I also gained that
much confidence and a little knowledge that I could interact with them
more sense ably.
In the beginning really it was very difficult for me to interact and work with
such formal people in such a formal environment but as I said that I really
leant to work with them and talk to them with the passage of time and now
I think I will not find any difficulty in at least understanding the
environment of organizations and offices when I will start my job in nearby
future. I also feel that I have also understood the basic culture and
environment of professional life which is very important to understand for
doing any kind of job.
Now I really feel that the knowledge which I got by working n BAL for six
weeks will be really helpful to me in future, as I have got the experience of
General banking during my student life in my vacations from university.
This experience will also help me in getting a good job in near future
because now at least I have some experience of work.
3.2.4 Problems Encountered
During my internship at Bank Alfalah I faced some problems. First of all in the
beginning the bank staff did not trust in me, because I was a stranger for
them. Every bank has its own secrets so they do not allow internes to see
highly confidential documents. Secondly some of their valuable customers
used to make feel internees and some junior staff that you are just internes
and bank staff so they did not respect us. Thirdly some of the bank officers
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used to give internees the work of office boys instead of giving some technical
work related to our studies.
Chapter 4
FINDINGS, RECOMMENDATIONS AND CONCLUSION
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4 FINDINGS, RECOMMENDATIONS AND CONCLUSION
In the current scenario of globalization, perfect competition in banking sector
and slump in the word’s economy, when we study the performance of BAL, it
is considered that on the whole the bank is contributing a lot towards the
industrial development and capital formation in the country. All these reflect
the great and valuable efforts on the part of executive command of the bank.
But as it is said that nothing is perfect in this world, this might true in the case
of BAL too.
So far as my own observations are concerned, I have concluded major
drawbacks in the inner current banking system. In addition to that I have also
learnt some disciplinary wrong practices; I discuss these one by one.
4.1 Findings
1. No proper guidance
There are so many customers both literate and illiterate who even do not
know to fill cheque, pay in slips, application forms, etc. They fritter a lot of
precious time of the bank staff.
2. Lengthy Procedure
The book keeping system and filing system of the bank is so lengthy, ring and
time consuming that its output is adversely affected. There is an element of
sluggishness associated with it too.
3. No Equality in Attitude
The behavior of almost all the bankers with all of their customers is not the
same; they pay more attention and good services to some of the customers
and neglect a major portion of them. Some of the customers approach to the
bank officials and get their work done before others. It is definitely not good
practice.
4. Favoritism
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No doubt that bank enhances credit and finance facilities to persons and
parties seeking such financial assistance for the establishment of industries or
trading units, or for enhancement, of already existing projects. But the bank
provides who may also ensure the prepayment of amount advanced by
providing securities arrangements to comer the risk of non-repayment.
Exactly, the bank should do so because later on when the question of
repayment of debt arise the condition of being financially sound providing
securities only can satisfy this question.
Sometimes, some person or group of persons chalk out a very useful, sound
and successful plan goes to the bank and request to advance them credit
facility but are not financially being sound and having no arrangement of
securities. So the bank rejects application of such people. In this way, such
talented persons of country discouraged. This happens usually due to
favoritism, nepotism and red–tapism.
4.2 Recommendations
1. Effective Advertisement
The bank really lacks a sound advertisement, which could attract more and
more people, and should not rest upon existing customers. The bank should
launch luring advertising campaigns throughout the year to promote habit of
saving in the people and to attract and sustain new deposits.
2. Proper Planning
Bank should make a plan to accelerate its recover efforts on war footing and
re-organize the recovery function on global basis. In addition to this, bank
should tighten up control on expenditures, curtail extra lavishness and costs.
Risky schemes should avoid in which return is uncertain. Right people for
right job must be appointed.
3. Division of Labor
If bank wants to get specialized in every walk of banking field then there must
be division of labor to eliminate extra and un-necessary burden on the
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employee of the bank. Working conditions must be improved resulting in
enhancement of efficiency of employee.
4. Check On Expenditures
Un-necessary and non-productive expenditures must be controlled and cut-
down. Lavishness and extra-ordinary protocol for the entertainment of
executives should be curtailed and abolished.
5. Proper Guidance
Bank should adopt such an induction plan that when a customer opens his
account with the bank he should be supplied with a booklet written in simple
language which enables him to know the procedure of filling the cheques, pay
in-slips, etc. It will save a lot of the bank‘s staff precious time during the
conduct of banking business and also ease the customers.
6. Recruitment Procedure
There should be an open invitation to competitive and qualified professional
degree holders and young energetic blood purely on merit basis to get the
efficient and hardworking employee. Political pressures, influential
approaches should be accommodated.
7. Qualitative Advancing /Financing
The bank should avoid as much as possible to give loans to the politicians,
ministers and corrupt people or groups because recovery of loan is almost
impossible for them. The honest and deserving industrialist will always repay
the loan before time to maintain his reputation and credit standing in the eyes
of bank.
8. Job Rotation
Most of the bank employees are sticking to one seat only, with the result that
they become master of one particular job and loose their grip on other
banking operations. In my opinion all the employees should have regular job
experience through job rotation. The promotion policy should be adjusted.
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4.3 Conclusion
Bank Alfalah limited, no doubt, doing well in the field of banking and it is
aimed to provide better services to its customers. It is specially performing its
activities in the customer advances. It has a lot of potential to progress in
future. The bank can do the good job of opening branches in the rural areas
that will not only boost saving but also help the people to raise their standard
of living through these savings. The staff in the bank is found to be very
cooperative towards subordinates. I wish that the bank may progress by leaps
and bound, and keep on providing internship to students with the same
dedication. This internship will help me a lot for my future career plan as I got
a lot of experience and knowledge in the relevant field.
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Bibliography
http://www.bankalfalah.com
Interviews with Bank Staff, particularly with Ms.Anum Asif (Officer