Internship Report Bank Islamic

Dedication
To my dearest parents, my family,

friends and respected teachers who motivated,
supported and encouraged me in every aspect of my life.
Abstract
Internship training for the students of Business Administration is a complimentary portion of the
education, where students are put at various organizations of their respective specialization; to
see and apply their theoretical knowledge what they have studied during their academic program
at the institute.
BankIslami is one of those organizations where student can achieve his/her academic and
professional knowledge productively.
I was put in the BankIslami Jhelum Branch to complete financial system was studied i.e. cash
balances, advances, loans ,turnover, chronological development and growth ,its relative study
and financial ratios were thoroughly studied.
As BankIslami is newly opened Islamic bank in the market where it is facing a tough
competition from other public sector and private banks therefore financial SWOT analysis was
also made however focus of the study has been on the analysis of financial ratios.
Table of Content
Acknowledgements
Abbreviations
Executive summary
CHAPTER 1 Page No.

Introduction to the Report
1.1 Back ground of studies 12
1.2 Purpose of the studies 12
1.3 Research Metholodagy 12
1.3.1 Primary data 13
1.3.2 Secondary data 13
1.4 Scope of studies 13
1.5 Merits of the study 13
1.6 Limitation of the study 13
1.7 Scheme of study 14
Chapter # 2
Introduction to Banking & BankIslami:
2.1 Back Ground Introduction 16
2.1.1 Banking Industry in Pakistan 16
2.1.2 Growth of Pakistan’s Banking Industry 17
2.1.3 Banking Law in Pakistan 17
2.1.4 State Bank of Pakistan (Central Bank) 18
2.2 Banks in Pakistan 18
2.2.1 Government banks 18
2.2.2 Private Banks 18
2.2.3 Foreign Banks 19
2.3 Introduction to the BankIslami 20
2.3.1 What is BankIslami? 20
2.3.2 Competition Situation 20
2.3.3 BankIslami Idea 20
2.3.4 History BankIslami 21
2.3.5 Accreditation by State Bank of Pakistan 23
2.3.6 Initial Public Offering of BankIslami 23
2.3.7 Network Expansion
2.4 Vision 24
2.5 Mission 24
2.6 Core Values 24
Chapter #3
Product, Services & departments
3.1 Introduction 28
3.2 Departments 30
3.2.1 Operations Department: 30
3.2.1.1 Nature of the deposits 30
3.2.1.2 Kinds of Accounts 34
3.2.1.3Procedures for account opening 35
3.2.2 Remittances Department 37
3.2.3 Cash Department 38
3.2.3.1 Kinds of cheques 39
3.2.4 Credit Department 40
3.2.4.1 Musharakah Financing 40
3.2.4.2 Mudarabah Financing 40
3.2.4.3 Working Capital Finance 40
3.2.4.4 Project Financing 42
3.2.5 Consumer banking 42
3.2.5.1 Online Banking 42
3.2.5.2 Inter Bank Transfer Fund 43
3.2.5.3 ATM or Debit Card 43
3.2.5.4 Biometric ATM 43
3.2.5.5 Lockers 44
Chapter #4
Analysis
4.1 Financial information: 46
4.2 Analysis of the Report 47

4.2.1 Financial Statement Analysis 47
4.2.1.1 Common Size Analysis 47
4.2.1.1.1 Vertical Analysis of Balance Sheet 50
4.2.1.1.2 Vertical Analysis of Income Statement 52
4.2.1.1.3 Horizontal Analysis of Balance Sheet 52
4.2.1.1.4 Horizontal Analysis of Income Statement 53
4.3 Financial Ratio Analysis 54

4.3.1 Profitability Ratio 54
4.3.1.1 Gross Profit Margin 54
4.3.1.2 Net Profit Margin 55
4.3.1.3 Return on Assets 55
4.3.1.4 Return on Equity 55
4.3.1.5 Earning per Share 55
4.3.1.6 Operating cost to income ratio 56
4.3.4.7 Debit to Equity Ratio 56
4.3.4.8 Debit Ratio 56
4.4.2 Efficiency Ratio 57

4.4.2.1 Interest income per employee 57
4.4.2.2 Profit per employee 57
4.4.2.3 Business per employee 57
4.4.2.4 Business per branch 57
4.4.2.5 Employee per branch 58
4.4.3.6 Total Advances to total Deposit Ratio 58
4.4.3.7 Total advances to total Assets 58
4.4.3.8 Fixed Assets to Total Assets 58
4.4 SWOT Analysis 59

4.4.1 Strength 69
4.4.2 Weaknesses 60
4.4.3 Opportunity 61
4.4.4 Threat 62
Chapter # 5
5.1 CONCLUSION 63
5.2 RECOMMENDATION 64
References 66
LIST OF TABLES
Table 4.1 Financial information 45
Table 4.2 Profit &loss Account 45
Table 4.3 Financing 46
Table 4.4 Common Size Vertical Analysis of Balance Sheet 50
Table 4.5 Common Size Vertical Analysis of Income Statement 51
Table 4.6 Common Size Horizontal Analysis of Balance Sheet 52
Table 4.7 Common Size Horizontal Analysis of Income Statement 53
Figure 2.1 Organizational Structure 27
Figure 3.1 Bankislami Branch Organizational Chart 28
Acknowledgement
First of all I am very thankful to my Almighty Allah who gave me courage and patience to
complete this task.
I would like to express my profound gratitude, most sincere appreciation and special thanks to
my supervisor Mr. Zafar Iqbal for his fabulous suggestion, valuable advice and continuous
encouragement through the completion of report.
I highly appreciate the help and cooperation of the Mr. Muhammad Fasyal Manager of
BankIslami Jhelum Branch. I am also thankful to the Staff members of BankIslami, Jhelum
Branch for their continuous help and guidance during my internship with them.
I must thank to all my friends and teachers who did extend their valuable support and priceless
suggestions during working on report.
Finally I wish my deepest appreciation to my respectable parents and family members who are
the strength of my life, who have motivated me in all phases of life, for their long loving support,
their patience, their understanding and their prayers.
Abbreviations
A&IG : Audit & Inspection Group
ATM : Automated Teller Machine
DD : Demand Draft
EVP : Executive Vice president
F.I : Financial Institute
GOP : Government Of Pakistan
I.T : Information Technology
IBR : Inter Branch Reconciliation
J/V : Joint Venture
MT : Mail transfer
NBP : National Bank of Pakistan
NCB : National Commercial Bank
NIT : National Investment Trust
ROA : Return On Assets
ROE: Return On Equity
SAM : Special Assets Management
SBP : State Bank of Pakistan
SEVP : Senior Executive Vice president
SWOT : Strength Weakness Opportunity threat
TT : Telegraphic Transfer
USA : United States of America
WTO : World Trade Organization

Executive Summary
Banking has always been the main field of interest for most of the students of business
administration. It is also an academic requirement to undergo internship therefore the main
purpose behind this report is partial fulfillment of requirements, for the degree of MBA. The
objective is that report encompasses the experience of the internee, his/her learning, and analysis
in light of which recommendations are made. In the first chapter introduction to the report,
background of study, scope of the study and merits of the study are given.
The second chapter is about introduction to the organization, its historical background, how it
came into being, what the major reasons behind it were and what areas of banking it covers.
Corporate profile of the bank consisting of Board of Directors, audit committee legal advisors.
The organizational structure of BankIslami, its core values, financial highlights all are provided
in this chapter.
The third chapter is the major portion of the report. The areas covered in financial management
are applied to overview the working of BankIslami Jhelum Branch. In this chapter internee
discussed the departments in the branch and their functions, types and nature of account and
procedures used to open accounts etc.
What procedures are used to receipt and pay the cash, what kinds of cheques are used by the
customers to draw money? Then in advances department the types of advances given to different
types of customer are discussed. And then finally the clearing procedure is discussed in this
chapter.
The fourth chapter of the report covers the analysis of report and the findings that were seen.
Financial statement analysis and SWOT analysis of the organization was done as it acts as a mirror
for the management to know the financial condition, strengths and weaknesses so that it can take
appropriate corrective actions. The management should know the weak areas and should develop
elaborate plans for capitalizing on the available opportunities.
The end of the report is about recommendations and conclusion.
Chapter # 1
Introduction to study:
1.1 Back ground of studies
As part of the course out line of MBA (Master Business Administration) of the students
are required to under go 8 weeks of internship with an organization. The internship is to serve the
purpose of acquainting the students with the practice of knowledge of the discipline of business
administration. This report is about Bank Islami. Bank Islami was established in 2004 and since
then, it has expended its network, becoming the Islamic Bank of the country. It offers different
products of services to its customers.
1.2 Purpose of the studies

The main of the study in hand is together relevant information to compile internship
report on BankIslami
1. To observe, analyze and interpret the relevant data competently and in a useful
manner.
2. To work practically in an organization.
3. To develop interpersonal communication.
4. This report is an essential and academic requirement for the fulfillment of the
degree.
5. To what extent the practical things differ from the theory.
6. To analyze the activities preformed by the bank during the internship,
1.3 Research Methodology

The report is based on my two months internship program in Bank Islami, jhelum branch.
The methodology reported for collection of data is primary as well as secondary data. The
biggest source of information is my personal observation while working with staff and having
discussion with them. Formally arranged interviews and discussions also helped me in this
regards.
1.3.1 Primary data:
• Personal observation
• Interviews of staff
• Staff at night position in bank
• Staff at circle office.
1.3.2 Secondary data:
• Manuals
• Journals
• Magazine
• Annual reports
1.4 Scope of studies

As an internee in Bank Islami the main focus of my study research was on general
banking procedures in one of the branches of Bank Islami. These operations include remittances,
deposits, and to small extent foreign exchange and advances.
Similarly different aspects of overall of Bank islami are also covered in this report.
1.5 Merits of the study

This report proves beneficial to all the finance students because it almost contain all the
information about the finance department of BankIslami. So one can easily understand to what
extent the theory is different from practical implications.
1.6 Limitation of the study

The report does not contain all the facts and figures about the area under study due to certain
limitations. Most of the data related to financial practices is confidential. And that’s why access
to that information was a difficult task. Another factor is the time limitations. As the internship is
of six weeks that’s why haven’t so much time to study all aspects and details. Despite of these
the report encompasses all the information required.
This report so doesn’t include detailed descriptions of the BankIslami as a whole but its financial
issues, policies and branch of BankIslami in Jhelum is new established.
1.7 Scheme of study
The report is divided in to 6 chapters. Chapter 1 headed the introduction study, which
include Background of study, purpose of study, scope of study, methodology of study.
2nd chapter head the Introduction of Bank, which include, evaluation of Banking Origin of
Banking, banking in developing countries, development of Banking in Pakistan. History of Bank
Islami, contribution to National development, role in both Private and Public sector and its
growth up 2000.
Chapter-3 is headed by “DEPARTMENTATION” which includes the Deposit department,

cash department, remittances department, clearing accounts department, advances department
and Foreign exchange department.
Chapter 4 is headed by ‘Financial analysis’ which include Ratio Analysis and also SWOT
Analysis.
Chapter 5 consists of Critical Analysis, conclusion and recommendation.
Chapter # 2
Introduction to Banking & BankIslami:
2.1 Introduction
Banks play very important role in the economic life of the nation. The growth of the economy is
closely related to the soundness of its banking system. Although banks create no new wealth but
they borrow, exchange and consume wealth. In this way, they become very effective partners in
the process of economic development. Modern banks are very useful for the utilization of the
resources of the country.
The basic role of the banks is to encourage the habit of savings among the people and to mobilize
these savings for the investment purpose. Banks deposit surplus from the public and then
advance these surplus in the form of loans to the industrialists, agriculturists, businessmen and
unemployed people under different schemes so that they set up their own business. Thus banks
help in capital formation.
If there are no banks, then there would be concentration of wealth in few hands and the great
portion of capital of the country would remain idle. In the fewer developing countries rate of
saving is very low and due to this, rate of investment and rate of economic growth remains very
much low. We can take bank just like a heart in the economic structure and the capital provided
by it is like blood in it. As long as the blood is in circulation, the organs will remain sound and
healthy. If the blood were not provided to any organ then that organ would become useless. So if
the finance is not provided to agriculture sector or to industrial sector, it will be destroyed.
Loan facility provided by the bank works as an incentive to the producer to increase production.
Banks provide transfer of payment facility, which is cheaper, quicker, and safe. Many difficulties
in the international payment have been overcome and volume of transactions has been increased.
These facilities are very much helpful for the development of trade and commerce.
2.1.1 Banking Industry in Pakistan

Banking is one of the fastest growing industries but it is one of the most sensitive businesses all
over the world. Banks play very important role in the economy of a country and Pakistan is no
exemption. Banks are custodian to the assets of the general masses. In our lifetime, we use plenty
of banking products that were previously not available to the ordinary person. Most of us have
credit cards, loans, and we have the insurances. This has banking a much more competitive
Industry, and we have the right to expand great services for our custom.
The banking sector plays a significant role in a contemporary world of the money and economy.
It influences and facilitates many different but integrated economies activities like mobilization,
poverty elimination, production and distribution of public finance. If it is purchasing a car or
building a home; banks are always play there are serve better. It is play ground or any
educational or healthy societal activity the money of banks nurtures them. In an industrial project
or agricultural development of the country the sponsor-ship of banks is very much involved.
Banks play very important role in the overall economic development of the country.
Pakistan Banks Association (PBA) represents the Pakistan Banking Industry. Established in
1953, its main objectives are to coordinate the efforts of the banking industry, and to share
common vision of progress and development with its members.
Pakistan has a well-developed banking system, which consists of a wide variety of institution
ranging from central bank to commercial banks and to specialized agencies to cater for special
requirement of specific sectors. The country started without any worthwhile banking network in
1947 but witnessed phenomenal growth in the first two decades. By 1970, it acquired a
flourishing banking sector.
2.1.2 Growth of Pakistan’s Banking Industry

Pakistan is a developing country and in the recent year the banking industry in Pakistan has been
transformed from state owned sector to vibrant sector industry. Banking industry has not only
gained strength from positive interplay of economic and political factors also become an engine
of growth for economy.
Growth of SME’s in Pakistan is increasing at very rapid pace. SME’s constitute 90% of business
in Pakistan. SME’s represents a significant component of Pakistan’s economy in term of value
addition, employment generation and poverty reduction activities.
The money supply during July- April 22, 2006 of the current fiscal year expanded by Rs.294.9
billion as against of Rs.332.4 billion in the same period of the last year. The credit to the private
sector increased substantially; it grew by 20.2 % (Rs.345.1 billion) during July-April 22, 2006
compared with the growth of 28% or Rs.357.4 billion. In the current fiscal year, currency in
circulation increased by 13.6% against last year of 17%. Strong demand of Treasury bills that are
offered Rs1058 billion and accepted Rs.688.8 billion. Performance of Domestic as well a foreign
bank is increasing as compared to previous years. Domestic banks are 7301 and Foreign Banks
are 105 Banks in year 2005. Strong monitoring and credit control measures has been made by
SBP.
There are weak Functional strategies within and among financial institutes, like co-ordination,
communication. There is a lack of system to solve the banking crises. The challenge facing the
financial sector is transforming the existing interest based system into Riba free system. The
Supreme Court of Pakistan has given its verdict and also set the deadline, June 30, 2001, for
completing the transformation according to Islamic Conjunction (Shariah). In 2007 economic
recession allover world affects all business sectors including banking sector. Therefore growth of
banking sector slow due to economic recession and challenges like terrorism as compared to past
years
2.1.3 Banking Law in Pakistan

All banks are following a certain law, and they are working under the Banking ordinance 1962
and controlled by State Bank of Pakistan. The ordinance named as “the banking companies
ordinance, 1962” ordinance LVII of 1962(7 th June, 1962). This ordinance was designed to
consolidate and amend the law relating to banking companies.
2.1.4 State Bank of Pakistan (Central Bank)

The guiding principal of State Bank which is the central bank of Pakistan is that, it acts only in
the public interest and for welfare of the community as a whole and without regards to profits a
primary consideration.
As all the banks are following the defined set of rules and procedures (SOPS) standard operating
procedures, same as Bankislami limited is also doing so while dealing with accounts, cash,
remittance, clearing, finance, auto loans etc. as if any one doesn’t follow the rules hen future of
the bank can be in wild darkness.
2.2 Banks in Pakistan

There are three types of banks, serving in Pakistan as;
• Government banks
• Private banks, and
• Foreign banks
2.2.1 Government banks
The period of 1990s took a revolution in the sectors of privatization, deregulation and
restructuring in the domestic banking industry and financial institutions. The Muslims
Commercial Bank was the first bank to privatize. One good thing for the particular period was
the recruitment of the fresh officers in the domestic banking industry through well- organized
policies of the Banking Council. Government banks include;
• NATIONAL BANK OF PAKISTAN(NBP)
• FIRST WOMEN BANK LIMITED(FWB)
• THE BANK OF PUNJAB(BOP)
• THE BANK OF KHYBER (KM)
2.2.2 Private Banks
The Government of Pakistan permitted small private sector banks to operate, which indulged in
doubtful policies to promote business. These banks include;
• ALLIED BANK
• PICIC COMMERIAL BANK LIMITED
• MUSLIM COMMERIAL BANK LIMITED
• UNITED BANK LIMITED

• BANK AL-FALAH LIMITED
• UNION BANK LIMITED
• ASKARI COMMERIAL BANK LIMITED
• MY BANK LIMITED
• SAUDI PAK BANK COMMERIAL LIMITED
• SAUDI PAK BANK COMMERIAL LIMITED
• BANK AL HABIB LIMITED
• PRIME COMMERIAL BANK LIMITED
• FAYSAL BANK LIMITED, etc
2.2.3 Foreign Banks
Due to the policies by Pakistani Government, many foreign banks are getting influenced and
started entering into the business in Pakistan, as the economic condition and SOPS by bank and
Pak government are favorable for new entrants but this has reduced the profitability of the local
banks. Foreign banks include;
• CITI BANK
• STARDARD CHARTED BANK
• ABN AMRO BANK
• HONG KONG SHANGHI BANKING CORPORATION (HSBC)
• DUBAI ISLAMIC BANK
• NIB BANK, etc
All the foreign banks of the country are busy to invest heavily in the field technology and e-
commerce in order to overcome branch limitation. All the domestic and foreign banks vigorously
institutionalizes consumer financing in the country and earned handsome profits.
2.3 Introduction to the BankIslami
2.3.1 What is BankIslami?

Islamic banking has been defined as banking in consonance with the ethos and value system of
Islam and governed, in addition to the conventional good governance and risk management rules,
by the principles laid down by Islamic Shariah. Interest free banking is a narrow concept
denoting a number of banking instruments or operations, which avoid interest. Islamic banking,
the more general term is expected not only to avoid interest based transactions, prohibited in the
Islamic Shariah, but also to avoid unethical practices and participate actively in achieving the
goals and objectives of an Islamic economy.
2.3.2 Competition Situation

BankIslami is the Joint venture project of 3 groups with 18.75% equity each, namely Jahangir
Siddiqui & Co. Pakistan, DCD Group UK, & Dubai Bank. Irrespective of stiff competition in the
market the Bank has successfully managed to grow over 400% during last one year and all set to
be a 100 Online Branch Network by the year end 2008.
The same was achieved by the existing largest player in the Islamic Banking Industry Meezan
Bank in 6 years time at December 2007. BankIslami has become a hallmark of innovation and
bringing new products and services in the market and by introducing the Bio-Metric ATM
facility it became the first bank of the region to offer such services and till date no bank has been
able to replicate this service.
2.3.3 BankIslami Idea

The epochal idea of BankIslami was conceptualized by Jahangir Siddiqui & Company Limited
and DCD Group in late 2003. Mr. Hasan A. Bilgrami was appointed as Adviser to the sponsors
on March 16, 2004 to formalize the idea. He presented the concept paper of BankIslami to
sponsors on March 24, 2004. A detailed business plan was then prepared and a formal
application was submitted to the State Bank of Pakistan on May 26, 2004. On September 26,
2005, Dubai Bank joined the Sponsors and became one of the founding shareholders of
BankIslami by investing 18.75% in the total Capital.
2.3.4 History BankIslami

Steps for Islamization of banking and financial system of Pakistan were started in 1977-78.
Pakistan was among the three countries in the world that had been trying to implement interest
free banking at comprehensive/national level. But as it was a mammoth task, the switchover plan
was implemented in phases. The Islamization measures included the elimination of interest from
the operations of specialized financial institutions including HBFC, ICP and NIT in July 1979
and that of the commercial banks during January 1981 to June 1985. The legal framework of
Pakistan's financial and corporate system was amended on June 26, 1980 to permit issuance of a
new interest-free instrument of corporate financing named Participation Term Certificate (PTC).
An Ordinance was promulgated to allow the establishment of Mudaraba companies and flotation
of Mudaraba certificates for raising risk based capital. Amendments were also made in the
Banking Companies Ordinance, 1962 (The BCO, 1962) and related laws to include provision of
bank finance through PLS, mark-up in prices, leasing and hire purchase.
Separate Interest-free counters started operating in all the nationalized commercial banks, and
one foreign bank (Bank of Oman) on January 1, 1981 to mobilize deposits on profit and loss
sharing basis. Regarding investment of these funds, bankers were instructed to provide financial
accommodation for Government commodity operations on the basis of sale on deferred payment
with a mark-up on purchase price. Export bills were to be accommodated on exchange rate
differential basis. In March, 1981 financing of import and inland bills and that of the then Rice
Export Corporation of Pakistan, Cotton Export Corporation and the Trading Corporation of
Pakistan were shifted to mark-up basis. Simultaneously, necessary amendments were made in the
related laws permitting the State Bank to provide finance against Participation Term Certificates
and also extend advances against promissory notes supported by PTCs and Mudaraba
Certificates. From July 1, 1982 banks were allowed to provide finance for meeting the working
capital needs of trade and industry on a selective basis under the technique of Musharaka.
As from April 1, 1985 all finances to all entities including individuals began to be made in one of
the specified interest-free modes. From July 1, 1985, all commercial banking in Pak Rupees was
made interest-free. From that date, no bank in Pakistan was allowed to accept any interest-
bearing deposits and all existing deposits in a bank were treated to be on the basis of profit and
loss sharing. Deposits in current accounts continued to be accepted but no interest or share in
profit or loss was allowed to these accounts. However, foreign currency deposits in Pakistan and
on-lending of foreign loans continued as before. The State Bank of Pakistan had specified 12
modes of non-interest financing classified in three broad categories. However, in any particular
case, the mode of financing to be adopted was left to the mutual option of the banks and their
clients.
The procedure adopted by banks in Pakistan since July 1 1985, based largely on ‘mark-up’
technique with or without ‘buy-back arrangement’, was, however, declared un-Islamic by the
Federal Shariat Court (FSC) in November 1991. However, appeals were made in the Shariat
Appellate Bench (SAB) of the Supreme Court of Pakistan. The SAB delivered its judgment on
December 23, 1999 rejecting the appeals and directing that laws involving interest would cease
to have effect finally by June 30, 2001. In the judgment, the Court concluded that the present
financial system had to be subjected to radical changes to bring it into conformity with the
Shariah. It also directed the Government to set up, within specified time frame, a Commission
for Transformation of the financial system and two Task Forces to plan and implement the
process of the transformation.
The Commission for Transformation of Financial System (CTFS) was constituted in January
2000 in the State Bank of Pakistan under the Chairmanship of Mr. I.A. Hanfi, a former Governor
State Bank of Pakistan. A Task Force was set up in the Ministry of Finance to suggest the ways
to eliminate interest from Government financial transactions. Another Task Force was set up in
the Ministry of Law to suggest amendments in legal framework to implement the Court’s
Judgment. The CTFS constituted a Committee for Development of Financial Instruments and
Standardized Documents in the State Bank to prepare model agreements and financial
instruments for new system.
Accordingly, the State Bank issued detailed criteria in December 2001 for establishment of full-
fledged Islamic commercial banks in the private sector. Al Meezan Investment Bank received the
first Islamic commercial banking license from SBP in January 2002 and the Meezan Bank
Limited (MBL) commenced full-fledged commercial banking operation from March 20, 2002.
Further, all formalities relating to the acquisition of Societe Generale, Pakistan by the MBL were
completed, and by June, 2002 it had a network of 5 branches all over the country, three in
Karachi, one in Islamabad and one in Lahore. The MBL now maintains a long term rating of A+
and short term rating of A1+, assessed by JCR VIS Credit Rating Co Ltd, signifying a consistent
satisfactory performance.
The Government as also the State Bank is mainly concerned with stability and efficiency of the
banking system and safeguarding the interests, particularly, of small depositors. With this
concern in mind it has been decided to operate Islamic banking side by side with traditional
banking.
2.3.5 Accreditation by State Bank of Pakistan

The State Bank of Pakistan issued a No Objection Certificate in no time on August 19, 2004 and
BankIslami Pakistan Limited, the second full-fledge Islamic Commercial Bank in Pakistan, was
incorporated on October 18, 2004 in Pakistan.
BankIslami Pakistan Limited was the first Bank to receive the Islamic Banking license under the
Islamic Banking policy of 2003 on March 31, 2005. The Bank envisioned focusing primarily on
Wealth Management as the core area of business in addition to Shariah compliant Retail Banking
products, Proprietary and Third party products.
2.3.6 Initial Public Offering of BankIslami

BankIslami Pakistan Limited made a public offering of Rs. 400 Million, at par, from 6th to 8th
March. This was the first primary issue by a Bank in over a decade in Pakistan. The Initial public
offering (IPO) of BankIslami received overwhelming response from the general public as the
applications received were 9 times higher than offered, fetching nearly Rs. 3.5 Billion, against
the demand of Rs. 400 Million.
2.3.7 Network Expansion

The State Bank of Pakistan declared BankIslami Pakistan Limited as a Scheduled Bank with
effect from March 17, 2006. BankIslami started its Banking operations on 7th April 2006 with its
first branch in SITE, Karachi. By the end of 2006, the Bank had 10 branches, nine in Karachi and
one in Quetta. The Bank further concentrated in building a nationwide network and by the end of
year 2007, its branch network grew to 36 branches in 23 cities. In 2008, the Bank opened 66 new
branches nationwide which expanded its network to 102 branches in 49 cites. This gives
BankIslami the distinction of having the fastest expanding network in Pakistan as well as
offering the widest network by any Islamic Bank in Pakistan.
2.4 Vision:
The Vision of BankIslami is to be recognized as the leading Authentic Islamic Bank.
2.5 Mission:
The Mission of BankIslami is to create value for our stakeholders by offering Authentic, Shariah
Compliant and technologically advanced product and services. We differentiate ourselves
through:
• Authenticity
• Innovation
• Understanding our client's needs
• Commitment to excellence, and
• Fast, efficient and seamless delivery of solution. As a growing institution, the foundation
for our performance lies on our human capital and BankIslami remains committed to
becoming an employer of choice, attracting, nurturing and developing talent in a
transparent and performance driven culture.
2.6 Core Values:
BankIslami is strongly committed towards its core values of:
• Product authenticity
• Customer focus
• Meritocracy
• Integrity
• Team work
]2.7 Structure of BankIslami:
Board of Directors
Chief Justice (Retd.) Mahboob Ahmed Chairman
Mr. Ahmed Goolam Mahomed Randeree
Mr. Ahmed Mohammed EI Shall
Mr. Ali Raza Siddiqui
Mr. Hasan A. Bilgrami Chief Executive Officer
Mr. Mohamed Amiri*
Mr. Shabir Ahmed Randeree
Sharia'h Supervisory Board
Justice (Retd.) Muhammad Taqi Usmani Chairman
Professor Dr. Fazlur Rahman Member
Mufti Irshad Ahmad Aijaz Member & Sharia'h Adviser
Audit Committee
Mr. Ahmed Mohammed EI Shall Chairman
Mr. Ali Raza Siddiqui Member
Mr. Shabir Ahmed Randeree Member
Executive Committee
Chief Justice (Retd.) Mahboob Ahmed Chairman
Mr. Ahmed Goolam Mahomed Randeree Member
Mr. Ahmed Mohammed EI Shall Member
Mr. Hasan A. Bilgrami Member
Human Resource & Compensation Committee
Mr. Ali Raza Siddiqui Chairman
Mr. Ahmed Goolam Mahomed Randeree Member
Mr. Ahmed Mohammed EI Shall Member
Mr. Hasan A. Bilgrami Member
Chapter #3
PRODUCT, SERVICES & DEPARTMENT
3.1 Introduction
BankIslami Jhelum branch is newly opened branch in jhelum city, also bankIslami history is not
to much old. It’s all about to 5 to 6 year old. The organization of BankIslami Jhelum branch is a
complete banking system but it is covering modern technologies like ATM. This banking system
is collection of interrelated departments that works together to achieve the objectives of the
organization. BankIslami is a hierarchical system in that it includes other sub departments and
these are integrated to work together.
In the internship of six weeks the internee worked in different departments to see how the
practical work is done and compared it with the theories she studied during her bachelor courses.
Each department has its own importance and value to the organization. But the basic thing was
that departments have to integrate to improve the performance.
Figure 3.1 BANKISLAMI BRANCH ORGANIZATIONAL CHART

Clearing Department
Remittances Department
Operations Manager
Account Opening
Department
Cash
Department
Bills
Department
Manager
Coordination
3.2 DEPARTMENTS:
BankIslami Jhelum branches divided into different departments.
• Credit Department
• Operations Department
• Consumer Banking.
a) Credit Department
The main purpose of this department is to extend loans to its clients for the productive purpose.
Credit Department is also called Corporate Banking Group.
Bank can offer different type of financing in there branches. This type of financing are based
upon Islamic mode of financing. Just like MUSKUN home financing, Islami Auto Ijara-new
vehicle and same with imported vehicles.
b) Operations Department:
Operations department of the BankIslami is responsible for the overall operations of the bank,
Customer Services Department, Remittance Department, Clearing Department, Accounts
Department, etc. all come under it.
c) Consumer Banking
Consumer banking is the Marketing Department of the BankIslami. At BankIslami, consumers
are treated very well. They are of the opinion that customers must be satisfied with the services
provided by the Bank. All of the Branches try to make sure that customers are satisfied with the
services being provided by the Bank.
3.2.1 Operations Department:

BankIslami accounts are same as other commercial banks accounts but in some accounts they
can offer Islamic mode transactions. Accounts are given below.
3.2.1.1 Nature of the deposits

Bank deposits can be broadly classified as
• Islami current Accounts
• Islami foreign current Account
• Islami Bachat account
• Islami Mahana Munafa Account
• Islami Amadni Certificate
a) Islami current Accounts

With our Islami Current Account, you can have complete peace of mind that your funds are safe
and utilized in Halal avenues only. Islami Current Account is ideal for customers who have
frequent transaction needs and require unlimited access to their account to meet their personal or
business expenses. Also, you have access to our entire online network of for convenience of
instant and secure intercity transactions. So enjoy full control over your funds in a Shariah
compliant manner.
• A minimum balance of Rs. 1,000/- only to open the account
• Joint Account facility up to four joint account holders
• Access to the entire online branch network
• Free unlimited online intercity transactions
• Free 1 Card, BankIslami's ATM & Debit card
• Access to all ATMs linked to MNET and 1 Link throughout Pakistan
• InterBank Funds transfer facility through ATM
• Facility of making instant payments at Orix terminals for grocery, fuel ,dining and other
purchases
• Free Internet Banking service
• Free Account statement facility
• Hold mail and Stop payment facility
b) Islami foreign current Account

BankIslami Islami Foreign Currency account is ideal for businesses and individuals who would
like to diversify their investment in different currencies to ensure security against currency
fluctuations or want to keep foreign currency account to meet their business needs. Also, you can
have easy access to foreign currency with no hassles of foreign exchange conversion when you
have to travel abroad or remit funds abroad to meet education, leisure or business needs.
• Safe Deposit Lockers
• Hold Mail & Stop payment facility
• A minimum balance of USD 100/-or equivalent in GBP or EURO to open the account
• Available in USD, GBP & EURO
c) Islami Bachat Account

Our Islami Bachat account is a bundle of benefits. It helps you keep up with your tradition of
savings with the convenience and safety of a professional and understanding bank. Also,
you earn highly attractive profits on your savings with the flexibility of making as many
transactions on your account as you want. Islami Bachat Account is ideal for customers who
need to draw money for monthly expenses but would also like to earn on your hard earned
savings. Corporate Employers can also avail this account to provide convenience, flexibility and
halal profits to their employees by opening their salary accounts with us.
• Monthly profit/loss payment on daily product basis
• Differential and specific pool allocation possible for large deposit holders
• Profit announcement at the end of every month
• A minimum balance of Rs. 5,000/- only to open the account
• Access to the entire on line network of 102 Branches in 49 Cities
• Unlimited over the counter deposits and withdrawals, free of charge
• No restrictions on intercity transactions
• Free 1 Card, BankIslami's ATM & Debit card
• Access to all ATMS linked to MNET and 1 Link throughout Pakistan
• Facility of making instant payments at Orix terminals for grocery, fuel ,dining and other
purchases
d) Islami Mahana Munafa Account

Long term investments yield high returns but delayed profit payment. With our Islami Mahana
Munafa Account you don't compromise on any. Now you can enjoy the freedom of halal
monthly gains for a prosperous present while building your wealth for a secure future. Also,
Islami Mahana Munafa Account will provide you with security, convenience and flexibility of
investment tenure to suit your needs.
• Free Internet Banking Service
• Hold Mail & Stop payment facility
• Safe Deposit Lockers
• 100% interest free
• Available in Pak Rupees
• Tenure of investment are 1, 2, 3, 5 & 10 years
• Minimum amount of investment is Rs. 10,000/- only
• Profit/loss payment on monthly basis until the maturity date
• Payment of amount of investment on the maturity date
• Profit announcement at the begining of every month
• Free facility of transfer of profit and invested funds in nominated Islami Current or Islami
Bachat Account
• Monthly profit/loss payment on daily product basis
• Free Six monthly Account Statement facility
e) Islami Amadni Certificate

Why take interest when you can earn Halal profit on your investment. With Islami Amadni
Certificate your hard earned investment works harder to yield high expected profits so you can
build your wealth for a prosperous future. You get the best of both worlds in a safe, secure and
flexible package to perfectly meet your needs.
If you are a salaried individual, a businessperson or a corporate entity with some long term
investment funds to spare, our Islami Amadni certificate is an ideal solution for you. With our
Islami Amadni Certificate, the higher your investment the higher will be your return and that too
in a Shariah compliant manner. Also, you have the flexibility to choose amongst various
investment tenures to suit your personal or business needs.
Islami Amadni Certificate offers you the following key salient features:
• Available in Pak Rupees
• Investment can be done for 1, 3, 6, 12, 24, 36 or 60 months
• Minimum amount of investment is Rs. 10,000/- only
• Payment of profit/loss and amount of investment on the maturity date
• Quarterly profit payment for investment of 12 months and above
• Profit announcement at the end of every month
• Free facility of transfer of profit and invested funds in nominated Islami Current or Islami
Bachat Account
• Free Internet Banking service having free Term deposit enquiry facility
• Facility of premature encashment available. In such a case, the corresponding period
weightage would apply, unless stated otherwise
3.2.1.2 Kinds of Accounts
Accounts can be classified in the following types
• Individual accounts
• Joint accounts
• Partnership accounts
• Minor accounts
a) Individual Accounts
Individual accounts are the account, which is opened and operated by a single person. Before
opening the account bank sees proper identity and introduction of the individual. Individual’s
instructions are strictly observed in operation of the account.
b) Joint Account
Two or more persons who are neither partners nor trustees can open this type of account. At the
time of opening account specials instructions are taken by the account holders that who is going
to operate the account they are asked whether it will be operated singly or jointly and to whom
the balance will be transferred at the death of an account holder on the basis of either or survival.
If the joint account holder wishes to delegate their authority to operate on the account to an
outside party all the joint parties should sign this authority.
c) Partnership Account
Partnership accounts are opened in the name of the business e.g. M/S ABC Electronics etc. for
opening of this account a partnership deed NIC required. Bank staff acquires special instructions
by all partners for the operation of the account. Partnership account can only be opened in the
form of a current account
d) Minor Account
The contract act 1872 has disqualified a minor from entering into a contract except the one for
his necessities. According to Pakistan Law a person is regarded as a minor until he has attained
the age of 18 years. However under section 3 of majority act 1875 if a competent court of law
appoints a guardian of his person or property before his 18 years the majority extends to the age
of 21 years. Bankers in Pakistan have allowed the opening of minors account only with the idea
of inculcating in them the habit of saving. So guardian requests in the name of the minor for
opening of an account. There are other accounts, which are called specialized accounts. These
are given below.
• Joint stock account
• Accounts of clubs, societies and associations
• Agent accounts
• Executors and administrators accounts
• Pak rupee non-resident account
3.2.1.3Procedures for account opening

In order to operate an account with the bank, a customer has to open an account. In large
branches Grade 1, II or III officers is made responsible for opening new accounts. However in
small branches, the manager himself fulfills all the formalities for opening new accounts. It is
necessary because in case of fraud unintended overdraft, or negligence, the bank will have a
source to trace out the customer. Such source is established by asking the customer to bring an
existing customer of the bank that will introduce him to the bank. In order to protect against
losses resulting from fraud or unintended overdraft the account opening activity has been
formalized through certain steps. These steps include
• Formal Application: Customers are required to fill in the prescribed account opening
form, which the bank provides to the customers free of cost. In this basic information
about himself is provided by the customer like his name, address, occupation and nature
if account he wants to operate.
• Obtaining introduction: Introductory references are quid pro quo for opening the
account. For this it is necessary that an existing customer verify the authenticity of the
facts provided in the account opening form.
• Specimen Signature: The customer gives the banker a specimen signature generally
taken on a card specially designed for this purpose. Name of the customer and account
number are entered on it. This specimen signature is used later on by the bank to verify
the signature on cheques drawn on the bank by comparing these signatures on the card
and the other on the cheques.
• Minimum Initial Deposits: The customer has to make a certain minimum deposits to
open an account. However, later on customer can withdrawn part of this amount but must
maintain minimum deposits to avoid closure of the account or service charges.
• Operating the Account: When the account is opened banker customer relationship is
established. The customer in order to be able to operate the account is given the following
documents:
• Pay-In-Slip Book: This book is issued to the customer containing slips upon which
money is deposited. Each slip contains blank spaces for amount, account number, date,
depositor signature and name of the account holder.
• Cheque Book: The customer to withdraw the money from the bank uses Chequebook.
Chequebook consists of 10, 25, 100 leaves. When new cheque book is required by the
customer he has to fill in the cheque book” requisition slip” with two signature on it and
give it to the concerned officer who on verification of the signature will issue new cheque
book.
• Qualification of the Customer: The relation of the banker and the customer is purely a
contractual one. Therefore any person who is capable of entering into a contract
according to the Section 11 of the contract Act 1872 can be a customer. However the
following qualifications are necessary for a person to become a customer.
• He must be of the age of majority
• He must be of sound mind
• He must not be disqualified under any law.
3.2.2 Remittances Department

One of the important functions of a bank is to transfer funds for customers from one location to
another. Remittances department deals with the transfer of money for customer from one bank to
another or from one branch to another. Instrument used by the BankIslami for remittances
includes:
• Telegraphic transfer
• Demand draft
• Mail transfer
• Pay order
a) Telegraphic Transfer
Telegraphic transfer is one of the quickest modes of transferring funds. It is an electronic system
of transferring funds that is why it is used by most of the businesses for the purpose of
transferring funds.
b) Demand Draft
A draft is just like an order cheque. A draft is drawn by one branch of a bank upon the other
branch of the same bank. The late down procedure is that the sender has to fill the beneficiary
name, account number and his name in the form. After the deposit DD is given to the customer
and transaction is registered in the issuing register and an advice is sent to the branch to which
the DD is sent. It is common mode of fund transfer. It is different from telegraphic transfer and in
sense that funds are not immediately to the collecting branch and the receipt of the branch. The
collecting branch will credit the account of the beneficiary at the receipt of advice from the
paying branch. Demand draft can be open, which can be cashed at cash counter after properly
identifying the true beneficiary, or crossed which can only be cashed by crediting is to the
account of the beneficiary.
c) Mail Transfer
Mail transfer (MT) is same as Demand Draft, but the characteristic which makes it different
from Demand Draft that in case of demand draft bank physically hands the DD to the customer
and upon presenting the draft the amount can be withdrawn. But as regards the mail transfer one
branch sends instruction to the other branch ordering it to the credit the amount to the account of
the person in whose favor the amount is deposited.
d) Pay Order
Pay order is the most convenient, simple and secure way of transfer money. It is just like demand
draft except that pay order is made for local order of money where as demand draft is meant for
remittances of funds from one city to other.
3.2.3 Cash Department

Cash department basically handles cash receipts and cash payments. The procedure for which is
given below
a) Receipts
Cash department receives money from customers for crediting it to their respected accounts for
which then used for paying their bills or remitting to their creditors and suppliers as the case may
be. When depositing cash the client fills the prescribed form of pay and slips where in he
provides basic information like the amount to be deposited, date, account nature and number etc.
then he hands over the form and paying slip along with the money to the cashier to the counter.
The cashier signs and stamps the form or paying slips and returns one copy of the same to the
depositors. After the hours, all pay and slips to the computer section, which credits the same,
their respective accounts.
b) Payments
When bank receives money from customers, it undertakes to repay the same upon demand. The
money can be withdrawn through cheques, drafts or pay orders. However before making
payments, bank satisfies itself that the instrument is valid and there is sufficient balance in the
customer account to support the payment. For making payments the procedure followed.
Cheque is first presented to token clerk. Token clerk notes down date, amount on the cheque, and
account number in token register, assign token number to cheque on the back of it gives token to
the customer and then forwards the cheque to an officer to the check the signature and verify it
with signature on specimen card which the customer signed at the time of opening the account.
The cheque is then forwarded to the computer department for verification of the balance. The
cheque is then forwarded to the cashier who makes payment to person who presents the token.
The process may differ from what mentioned above depending the nature of cheque.
A cheque is defined as written order of a depositor to pay to or to order of a designated party or
bearer, a specified sum of money on demand.
3.2.3.1 Kinds of cheques

Basically there are three types of cheques. They are as follows.
• Bearer cheque: It is en cashable at the counter. Payments of the cheque can be made to
any people who present it to the bank.
• Order cheque: It is also en cash able on the counter. But its holder must satisfied the
banker that he/she is true holder and entitled to collect the payment of the cheque for this
he/she has to prove his/her identity through an existing account holder of the bank.
• Crossed cheque: It is not en cash able on the counter. It can only be credited to the
payees account. If there are two persons having accounts at the same bank and one of
account holder issues cross cheque in favor of the other then the cheque will be credited
to the account of the person to whom the cheque was issued at debited from the account
of the person who had issued the cheque.
3.2.4 Credit Department

BankIslami offer different mode of financing according to Islamic mode. There are main to types
of Financing modes in bankislami Mudarabah and Musharakah. Other modes of financing are
divided in to categories Short term financing and long term financing.
3.2.4.1 Musharakah Financing

In Musharakah, a joint enterprise is formed for conducting some business in which all partners
share the profit according to a mutually agreed pre-determined ratio, whereas, the loss is shared
in the ratio of capital investment. From Shariah perspective, Musharakah is one of the preferred
modes of financing.
The scope of Musharakah is broad. Musharakah can be applied to fulfill project financing needs
as well as working capital financing needs of Corporate Clients. Since Musharakah transactions
are based on pure profit and loss sharing arrangement, therefore, the risks associated with such
transactions are greater as compared to other financing modes. Due to this reason, Musharakah
transactions are executed subject to satisfactory review of feasibility of the proposed
transaction/project.
3.2.4.2 Mudarabah Financing
Mudarabah is a kind of partnership where one partner gives money to another for investing in a
commercial enterprise. The investment comes from the first partner who is called 'Rabb-ul-Maal'
while the management of the business is an exclusive responsibility of the other, who is called
'Mudarib'. The profits generated are shared according to a mutually agreed pre-determined ratio,
whereas, loss is borne by Rabb-ul-Maal unless the loss is due to negligence of Mudarib.
3.2.4.3 Working Capital Finance (shot term financing)

At BankIsami, we understand that your business needs constant access to low cost and flexible
financing, in order to meet day-to-day funding needs. Our teams of experienced Relationship
Managers with wide sector experience offer you effective cash flow management by way of
financing arrangements suitably structured to your needs and your risk profile.
Cash is the lifeline of your business. Let your business have a blooming & prosperous life with
our Working capital finance facility. To fulfill your working-capital financing requirements,
BankIslami offers a wide range of products as follows:
a) Murabahah Financing:
Murabahah is a type of sale in which the seller discloses the cost of goods and profit to the buyer.
Through this short-term financing mode, BankIslami can finance the asset purchase requirement'
of the Corporate Customers.
The Customer, intending to utilize the Murabahah facility, identifies the commodities ('assets') it
needs to purchase through Murabahah facility. BankIslami purchases the assets from Supplier
and then sells the same to the Corporate Customer against an agreed price (including disclosed
profit portion) on deferred payment basis.
b) Istisna Financing:
Istisna is a contract of sale of specified items to be manufactured/constructed, with an obligation
on the part of the manufacturer/seller to deliver them to the buyer upon completion.
Istisna can be used for made-to-order commodities where the buyer (BankIslami) would order a
specific good with some specifications to be manufactured by the Corporate Client in a particular
period of time and deliver to BankIslami after completion.
c) Salam Financing:
Salam is a sale, whereby, the seller undertakes to supply some specific commodity to the buyer at
a future date in exchange for an advanced price fully paid on the spot. As a matter of principle,
the sale of a commodity which is not in the possession of the seller is unlawful. Thus, the
practice of Salam is legalized as an exception and is allowed under certain term and condition.
Salam is allowed for commodities only which are homogeneous and fungible in nature i.e. every
unit of the commodity should be identical and substitutable in nature e.g. sugar, rice, wheat etc.
Therefore, Salam is an ideal mode for financing for agricultural concerns. Salam financing can
also fulfill all working capital requirements of manufacturers/traders dealing in homogeneous
commodities.
3.2.4.4 Project Financing (medium and long term)

BankIslami offers medium and long-term financing facilities for infrastructure, BMR and
industrial projects in all sectors directly or on syndication basis.
a) Ijarah:
Ijarah is a contract, whereby, BankIslami will lease out an asset to the Corporate Client and
receive periodical rentals from the Client for the use of that asset. The asset will remain in the
ownership of the Bank throughout the term of Ijarah. At the end of the Ijarah term, the asset can
be purchased by the Client at an agreed price.
Ijarah is mainly used for long and medium term fixed asset financing for infrastructure, BMR
and industrial projects.
b) Diminishing Musharakah:
The product of Diminishing Musharakah is offered on the basis of 'Shirkat-ul-Milk'. Shirkat-ul-
Milk means partnership of persons in an undivided property. Process of Diminishing
Musharakah financing involves BankIslami taking share in the ownership of a specific asset
along with the Corporate Client and then gradual purchase of the Client of BankIslami's
ownership share in the asset through out the term of Diminishing Musharakah. At the end of the
Diminishing Musharakah term, Client becomes the sole owner of the asset. Diminishing
Musharakah is mainly used for long and medium term fixed asset financing for infrastructure,
BMR and industrial projects. Diminishing Musharakah is also an ideal mode for Real Estate
Financing.
3.2.5 Consumer banking

Same as other BankIslami offers Same services as online banking, Transfer funds, Lookers
facilities, ATM card facilities.
3.2.5.1 Online Banking

BankIslami's has a wide network of 102 Branches in 49 Cities all of which provide Online
Banking services. Online Banking means that all our 102 Branches in 49 Cities are connected
with each other so that you can instantly access your account and make transactions in any
BankIslami Branch. The following are the key benefits that you will get out of using our Online
branch network:
• Cash Deposit for immediate credit to a remote branch.
• Remote Cheque Encashment from any Online branch.
• Instant Funds Transfer between any 2 Online branches.
• Balance Enquiry and Statement of Account from any Online branch
3.2.5.2 Inter Bank Transfer Fund

Do you want to provide ease and convenience to your friends, family, colleagues and business
associates. With our Interbank funds transfer (IBFT) facility you can easily transfer funds in their
accounts via your ATM. Now, when dealing with you they can ensure hasslefree funds transfer in
their accounts. No nuisance of waiting for Cheque clearance or going to the branch to deposit
Cash or Cheque.
IBFT facility enables you to send and receive funds Online from and to any Account holder of
1Link IBFT participating member Banks. Following are the key benefits that you will get out of
using our IBFT facility:
3.2.5.3 ATM or Debit Card

is a Shariah compliant ATM/Debit card, all in one, which acts as a complete replacement for
cash. Now you have the freedom to access your Bank account 24 hours a day to make instant and
cashless payments at a multitude of shops, outlets and restaurants in addition to its use on our
ATM network.
ATM Card:
You can withdraw cash anytime and anywhere from around 2,500 ATMs countrywide linked to
both the M-Net and 1-Link switches.
Debit Card:
You can buy grocery, fill fuel, dine-out and make purchases at over 3,600 retail outlets linked to
the Orix Network countrywide.
3.2.5.4 Biometric ATM

Enjoy secure and safe ATM transactions with BankIslami’s Biometric ATM based on
BankIslami’s One Card, which provides maximum security since it uses the most authentic way
to verify your identity. How? Apart from a pin-code, you can also use your finger or thumb
impression for identification purposes. After all, your fingerprints are yours and they cannot be
copied. Amazing! Isn't it?
Built with the state-of-the-art technology, these ATMs are the first of its kind in Pakistan.
Insert your One Card in the Biometric ATM machine
Place your Right/Left thumb impression on the space provided at the right side of the machine.
• Select the type of account from which you want to withdraw funds
• Select the amount to withdraw
• Take your Cash
• Take your Receipt
3.2.5.5 Lockers
Let us make this world safer and secure for you and your family. Our Safe Deposit Locker
facility enables you to store your valuables in strong heat resistant steel lockers with 24 hour
security. Be it jewellery, passports, share certificates or title deeds, you can rest assured that your
valuables are not prone to loss, fire or theft. You can also nominate/authorize your dear and loved
ones to operate the Locker. Now you can live a carefree & stress free life while we take care of
your valuables while retaining your privacy.
Following are the key benifits that you will get out of using safe deposit locker facility
• Protection against weather conditions & power failures with smoke-sensor's, backed by
fire fighting equipment and 24 hour manned security.
• A Locker custodian to offer friendly and personalized assistance.
• Maximum of four (4) deposit operators per Locker.
• Safety of your valuables from loss, fire and theft.
• Unlimited free visits to your Locker.
Chapter #4
Analysis
4.1 Financial information:

The financial information of the BankIslami is summarized as under:
Table 4.1 Financial information

FINANCIAL HIGLIGHTS 2008 2007
Rs.(Million) Rs.(Million)
Total Deposits 12,478 9,934
Total Assets 19,089 14,447
Total financing-net 6,528 3,963
Total Investment 5,020 3,864
Shareholder's Equity 5,192 3,845
Branches 102(units) 36(units)
Employees 1,188(units) 563(units)
Table 4.2 Profit &loss Account

PROFIT/LOSS ACCOUNT 2008 2007
Rs.Million Rs.Million
Return Earned 1468.69 602.06
Profit Paid 729.53 303.84
Net Spread 739.16 298.22
Fee, Exchange income 141.39 71.46
Core Banking income 880.55 369.68
Provision -130.56 -28.37
Other income 54.75 68.82
Operating Expenditure -1033.9 -510.59
Profit/loss before tax -229.15 -100.46
Taxation 176.22 63.44
Loss after tax -52.93 -37.02
Table 4.3 Financing made by bank

FINANCINGS 2008 2007
Rs.'000 Rs.'000
Financing in pakistan
-Murabaha 2363736 581505
-Istin'a 184797 31886
-Diminishing Mushraka-Housing 682141 179213
-Diminishing Mushraka-other 1457729 1576705
-Againt Bills-Murabaha 3576 6158
-salam - 105000
-Musawamah 3387 66362
-Financing to employees 200664 112592
4896030 2659421
Net investment in Ijarah financing 1791430 1332819
Financing- gross 6687460 3992240
Provision for non performing financing
-specific -141687 -20285
-General -18242 -9088
Financing- Net 6527531 3962867
4.3 Analysis of the Report

4.3.1 Financial Statement Analysis
Financial statement analysis are the principal means of reporting the financial condition and
result of operations of an organization, or in other words we can that financial analysis are
carried out for the purpose of identifying the financial strengths and weaknesses of an
organization by properly establishing relationships between the balance sheet and the income
statement items. This analysis helps various parties in decision making who are interested in the
activities of business. To improve the quality of decision making, proper analysis of these
statements helps a lot. The firm itself and the outsider providers of capital, creditors and
investors all undertake financial statement analysis. The type of analysis varies according to the
specific interests of the party involved.
The financial data of BankIslami is analyzed in the following two ways:
• Common Size Analysis.
• Ratio Analysis.
Common Size analysis and ratio analysis are used to measure firm’s performance over time and
while making comparisons with different balance sheet and income statement items. In the
common size analysis we use the balance sheet and income statement and measure their
performance as compared to other years and in the same year, by generating a percentage
increase or decline.
4.3.2 Common Size Analysis
An analysis of percentage financial statements where total assets divide all balance sheet items
and all income statement items are divided by net sales or revenues is called common size
analysis. Common size analysis can give analyst valuable insight into changes that have occurred
in a firm’s financial condition and performance. As common size analysis gives us relative
percentage of an item with respect to total, so the growth or decline in various items of balance
sheet and income statement can not be detected from common size percentages.
It further consists of
• Vertical Analysis
• Horizontal Analysis
a) Vertical analysis
Vertical analysis compares each amount with a base amount selected from the same year. Simply,
we compare the items of balance sheet or income statement vertically by taking one item as
100%
b) Horizontal analysis
Horizontal analysis compares each amount with a base amount for a selected base year or we
take each item of base year as 100% and compare with other items.
The internee has limited her analysis to vertical analysis only.
Table 4.4 COMMON SIZE (VERTICAL) ANALYSIS OF BALANCE SHEET

ASSETS 2007 2008
Cash and Balance with treasury bank 9.91% 11.39%
Balance with other banks 17.80% 11.56%
Lending to Financial Institutions 4.32% 0.20%
Investments 26.77% 26.29%
Advances 27.42% 34.19%
Operating fixed assets 7.56% 10.00%
Deferred tax assets 0.62% 1.30%
Other Assets 5.54% 4.93%
Total Assets 100% 100%
LIABILITIES
Bills payments 0.58% 1.85%
Borrowings 0.48% 1.28%
Deposits and other accounts 68.76% 65.37%
Sub-Coordinated Lone - -
Other liabilities 3.55% 4.29%
Deferred tax liabilities - -
Total liabilities 73.39% 72.80%
SHAREHOLDERS EQUITY
Share capital 22.15% 27.66%
Reserves - -
ACCUMLATED LOSS -0.31% -0.51%
Total equity 21.83% 27.14%
Total liabilities and Total equity 100.00% 100.00%
4.3.2.1 Vertical Analysis of Balance Sheet
Vertical analysis shows the proportionate percentage of different items of the balance sheet with
respect to Total Assets. The vertical analysis of Bankislami shows that there are different
proportions of different assets and liabilities over the time period. This is due to many reasons.
First of all the assets have changed and increased over the time period. The change in assets
affects the over all vertical analysis as the change is analyzed with respect to assets. The major
components in the balance sheet of banks are deposits, advances and investment, as the major
expense and income occurred due to these respectively. So looking closely to these items
advances increased from 2007 to 2008. On other hand the investment remains same in both
years. Bankers are left with only option of investing in short-term investments, to increase their
profit margin. Investments, as being a non-interest source of income are more promising than
advances that are becoming less profitable due to declining interest rates. Bankers prefer to give
advances when the interest rate was high but then prefer to invest in non interest income in 2007
when the income from investment was higher than the interest rate. Now our discussion comes to
deposits. Deposits also increase in year 2008. Now coming to other important items i.e. cash in
hand and balance with other banks. These items show the liquidity of the organization and
meeting short term liabilities. The cash in hand is increasing from 2007 to 2008, but the balance
with other bank is decreasing. Thus showing that now the bank is more liquid, and liquidity is
inversely proportion to profit. The cash in hand should be invested in short term investments, so
that the organization can earn profit on idle money. Now coming to the share holder’s equity, the
equity has been increased from 22% to 27% of total asset over the time period. This shows that
either people are interested to invest in the BankIslami, or reserves has increased or valuation of
assets is the cause behind this increase.
Table 4.5 COMMON SIZE (VERTICAL) ANALYSIS OF INCOME STATEMENT

2007 2008
Markup Revenue 100% 100%
Markup Expense 50.3% 49.65%
Gross Profit 49.5% 50.34%
Provision for Advances 4.6% 8.85%
Provision for Investments - -
Bad debts written off - -
4.6% 8.85%
Net Markup Income 44.68% 41.41%
NON-MARKUP INCOME
Fee and Commission 10.13% 7.6%
Dividend Income 3.8% 1.9%
Exchange income 1.66% 2.1%
Other income 1.4% 1.4%
Total non-markup income 27.88% 41.88%
Total Income 68.10% 54.76%
NON-MARKUP EXPENSE
Admin Expenses 84.21% 70.02%
Other provisions - -
Other charges 0.48% 0.3%
Total non-markup expense 84.71% 70.36%
lOSS Before Tax -16.61% -15.59%

LOSS After Tax -6.14% -3.54%
4.3.2.2 Vertical Analysis of Income Statement
The Vertical analysis of Income statement of BankIslami as given in the above table is showing a
percentage change with respect to the sales or markup income. There is a consistent decreasing
trend in the bank’s gross profit. The main reason behind this is that the bank has not controlled its
markup expenses in relation to total markup revenue. In simple words we can say that this
inclining trend in the markup expenses resulting in the decreased gross profits. This can be
because of decreasing interest rate on advances or increasing interest rates on deposits to
encourage savings. Markup expenses are actually cost of sale in case of a bank. Furthermore this
decreasing trend in gross profit shows the inefficiency of the bank’s management in controlling
markup expenses. So this decreasing trend of gross profit is a negative or unhealthy sign and the
bank’s management should consider it and take some actions to improve its position.
Table 4.6 COMMON SIZE (HORIZANTAL) ANALYSIS OF INCOME STATEMENT

2006 2007 2008
Markup Revenue 100% 502% 1369%
Markup Expense 100% 1527.87% 3808.53%
Gross Profit 100% 267.90% 812.35%
Provision for Advances 100% 2734.67% 12943.56%
Provision for Investments - - -
Bad debts written off - - -
100% 2734.37% 12942.56%
Net Markup Income 100% 235.87% 657.52%
NON-MARKUP INCOME
Fee and Commission 100% 1684.46% 3168.72%
Dividend Income 100% 70.61% -87.17%
Exchange income 100% 1284.86% 3855.81%
Other income 100% 163.39% 29.17%
Total non-markup income 100% 214.91% 345.45%
Total Income 100% 228.39% 548.39%
NON-MARKUP EXPENSE
Admin Expenses 100% 248.56% 606.56%
Other provisions - - -
Other charges 100% -75.74% -58.85%
Total non-markup expense 100% 220.55% 549.07%

lOSS Before Tax 100% 192.05% 566.16%
LOSS After Tax 100% 343.18% 533.59%
4.3.2.3 Horizontal Analysis of Income Statement

Horizontal analysis of income statement shows three year in which year 2006 is as base year and
value of year 2007 and 2008 will be calculated on the bases of year 2006. we see too much
difference between the values that is because of big difference between the values in these years
and bank are at the begging stage .
Table 4.7 COMMON SIZE (HORIZANTAL) ANALYSIS OF BALANCE SHEET

ASSETS 2006 2007 2008
Cash and Balance with treasury bank 100.00% 223.96% 143.49%
Balance with other banks 100.00% 126.20% 79.37%
Lending to Financial Institutions 100.00% -49.70% -190.29%
Investments 100.00% 583.77% 818.05%
Advances 100.00% 213.14% 580.60%
Operating fixed assets 100.00% 47.85% 233.11%
DEFERRED TAX ASSETS 100.00% 133.33% 781.48%
OTHER ASSETS 100.00% -48.53% -33.62%
Total Assets 100.00% 159% 274%
LIABILITIES
Bills payments 100.00% 165.22% 234.78%
Borrowings 100.00% -60.00% 290.00%
Deposits and other accounts 100.00% 358.72% 701.74%
SUB-ORDINATED LOAN - - -
Other liabilities 100.00% 103.55% 284.62%
Deferred tax liabilities - - -
Total liabilities 100.00% 324.59% 487.58%
SHAREHOLDERS EQUITY
Share capital 100.00% -40.00% 63.95%
Reserves - - -
ACCUMLATED LOSS 100.00% 362.50% 976.77%
Total equity 100.00% -42.41% -115.81%
Total liabilities and Total equity 100.00% -8.01% -70.04%
4.3.2.4 Horizontal Analysis of Balance Sheet
There are too much difference between these ratios are due to bank was in initial stages. It a 5 th
annual report of bankislami and values in year 2006 is too much low as compare to the year 2007
and 2008. That creates big difference in the values.
4.4 Financial Ratio Analysis

Ratio means “one number expressed in terms of another “. Ratio is a statistical yardstick by
means of which relationship between two or more various figures can be compared and
measured. The ratio analysis can be done under
4.4.1 PROFITABILITY RATIO
Under this heading, two commonly used ratios are gross profit margin and net profit margin
ratios. These are now discussed in detail.
4.4.1.1 Gross Profit Margin
Gross Profit is the difference between revenues and cost of goods sold. Gross profit is critical
because it represent the amount of money remaining to pay operating expenses, financing costs,
and taxes and to pay for profit. Gross profit margin is the amount of each sale rupee left over
after paying cost of goods or services sold. It is calculated as follows:
Gross Profit Margin = Gross Profit / Sales x 100

For 2007 298218/602060*100= 49.53 %
For 2008 739160 / 1468688* 100 = 50.32 %
It is obvious from the values of Gross Profit Margin that the trend is increasing in year 2008. The
reason for this increasing in sales with respect to markup. Sales can be affected by number of
reasons, the increase in interest rates due to inflation; competitors have captured more market
share or inefficient management. This increasing trend is good for any organization because the
net profit will not affected much.
4.4.1.2 Net Profit Margin
The BankIslami measures the loss that is available from each rupee of sales after all expenses
have been pad, including cost of sales, selling, general, and administrative expenses;
depreciation; interest; and taxes. The ratio is calculated as follows:
Net Profit Margin = Net Loss after Taxes / Sales x 100

For 2007 -37023/602060*100= -6.14%
For 2008 -52930/ 1468688* 100 = -3.60%
4.4.1.3 Return on Assets
The ROA ratio provides a standard for evaluating how efficiently financial management employs
the average dollar invested in the firm’s assets, whether the dollar came from investors or
creditors.
Return on Assets = Net Loss/ Total Assets x 100

For 2007 -37023/14447473*100=-0.025 %
For 2008 -52930/ 19088600* 100 =-0.027 %
The return on investment values of BankIslami shows negative sign. That means Bank is going
into loss. When bank is going in loss how we get return on assets from that loss.
4.4.1.4 Return on Equity
It is another measure of overall performance of a company. Return on equity (ROE) shows the
company’s residual profits as a proportion of the book value of common stockholder’s equity.
Return on Equity = Net Loss after Tax / Common Stockholder’s equity x 100
For 2007 -37023 / 3200000*100= -1.157%
For 2008 -52930 /5279679 *100=-1.0025 %
The ROE of BankIslami showing Bank are going in loss, so shareholder equity also bear loss
from net loss.
4.4.1.5 Earning Per Share
=Net Income/No. of Shares Outstanding

For 2007 -37023 / 81954118 *100= -0.0452%
For 2008 -52930 / 116337654 *100= -0.0455%
4.4.1.6 Operating Cost to income ratio
This ratio can be measured by dividing non interest cost with income earned during that period
of time.
= Non-interest cost/ income
For 2007 140281/410127=0.342
For 2008 196139/804743=0.2437
4.4.1.7 Debit to Equity Ratio
The debt to equity (debt or financial leverage) ratio indicates the extent to which the business
relies on debt financing. A high financial leverage or debt to equity ratio indicates possible
difficulty in paying interest and principal while obtaining more funding. In debt equity ratio, the
total debt is compared with the shareholder’s equity; the lower the ratio the better the company’s
solvency, the higher ratio is a risk to a present or future creditor.
Debt to Equity Ratio = Total Debt/ Owner’s equity

For 2007 987904 /3200000 *100= 30.872%
For 2008 6567882 /5279679 *100= 124.399%
The debt to equity ratio has increased from 30.8% to 124.399%. The ratios are very high in both
the cases but in the case of banks, the portion of debt is much higher than the equity as most of
business of bank survives on external funds. But as we can see that the debt to equity ratio has
increased this is not a good sign for any organization, but this increase is not due to increase in
equity but due to decrease in debt.
4.4.1.8 Debit Ratio
= total Liabilities /Total Assets

For 2007 3844726 / 14447473 *100= 26.61%
For 2008 5191821 / 19088600 *100= 27.19%
The debt ratio measures the proportion of total assets financed by the company’s credit. The
higher this ratio the greater is the amount of other people money being used in an attempt to
generate profits. So bank is using a great deal of people money to generate profits.
4.4.2 Efficiency Ratio
4.4.2.1 Interest income per employee

This ratio shows how an employee earns from interest income. In this we divided Interest income
with the number of employees with in the banks. In these calculation amount in million.
For 2007 6020.06/563=10.69

For 2008 1468.69/1188=1.83
4.4.2.2 Profits per employee
We can calculated profit per employee by dividing total profit with number of employees. But in
case of bankislami in both years bank are going in loss so the ratio is in negative.
For 2007 -100.46/563= -0.1784
For 2008 -229.15/1188= -0.1928
4.4.2.3 Business per employee

This ratio shows hoe much an employee can get business from market. It can be calculated by
dividing total profit after taxation. But in case of bankislami it will in negative because bank is in
loss.
For 2007 -37.02/563= -0.065

For 2008 -52.93/1188= -0.0445
4.4.2.4 Business per branch

In this ratio we can calculated hoe much a branch can get business from market or how much a
branch share in profit, it will be an average. It can be calculated by dividing profit after taxation
with the number of branches that bank have. But in case of bankislami ratio will be in negative
because bank is in loss in both year.
For 2007 -7.02/36= -0.02
For 2008 -2.93/102= -0.518
4.4.2.5 Employees per branch

Employee per branch shows hoe much an average of employees are there in the bank branches. It
can be calculated by dividing number of employees with number of branches.
For 2007 563/36 =15.63
For 2008 1188/102=11.64
4.4.2.6 Total Advances to Total Deposit Ratio
=Total Advances/ Total Deposits*100

For 2007 3,963/ 9,934 *100= 39.89%
For 2008 6,528 / 12,478 *100= 52.31%
This ratio tells us how much of the bank has advanced. This ratio is not very much favorable for
the bank.
4.4.2.7 Total Advances to Total Assets
=Total Advances/ Total Assets*100

For 2007 3,963 /14,447*100= 27.43%
For 2008 6,528 / 19,089 *100= 34.19%
This ratio shows the advances which the bank makes as the percentage of its total assets. If the
advances are increasing then the total assets then it is favorable for the bank. Because there are
ore advances, there is more income of the bank and respectively more profit. This ratio is
showing decreasing trend.
4.4.2.8 Fixed Assets to Total Assets
=Fixed Assets /Total Assets*100

For 2007 11093 / 14447 *100= 76.78%
For 2008 1910 / 19088 *100= 100%
In the bank fixed assts are comprised of equipment, furniture and buildings. These assets have
great importance or the bank in order to maintain the working conditions up to the mark. This
ratio is satisfactory for the bank.
4.5 SWOT Analysis

In past the organizations were limited to their own performance and outputs, they only consider
what they get and what they lose, with the emergence of management studies and globalization
now the organization cannot survive until they competes with their surroundings and then
internationally. World has set some standards for organizations so each and every organization
have to look what is happening around?
Today’s organizations are perplexed with the phenomena of intense competition. It has become
imperative for them to be taking guard for their survival. So in search for excellence it is the
critical self-appraisal which is attached so much importance. Even in mundane affairs of life,
introspection is necessary even at the individual level. Every sagacious person examines his
conduct critically in relation to his environment. And then pauses, looks, transform and conform
to what is required. If he doesn’t he is lacking sagacity and world tells him emphatically. When
we come towards organization then it is the question of its very survival. It is a practice, which is
indispensable for future growth. There are many techniques to analyze the organizations
performance i.e. input/ output analysis, pest analysis, SWOT analysis etc. SWOT analysis is kind
of tool that is used to analyze an organization’s performance in relation to its environment
external or internal opportunities and threats.
Strategy analysis and selection of the best alternative is of critical importance and prime
responsibility for any organization’s management. Management has to go through extensive
internal and external analysis to determine their organization’s performance in relation to their
mission and objectives.
The SWOT analysis of BankIslami is as follows.
4.5.1 Strengths
• Advantages of religious proposition in a country made on name of Islam i.e. Pakistan.
• Competitive advantage: Less marketing is required than conventional banking and better
cost control as a result.
• Morale and commitment to serve is higher among bankers and staff due to religious
value.
• Huge amount of savings can be mobilized and thus boosting the deposit base of banks
using charities and Zakat fund schemes, etc.
• Less use of money for speculative purposes thus chances of investment failure and much
volatility in investment is reduced.
• Innovative aspect is also found in it, using phone banking, e- banking, etc. a blend of
tradition and modern life can be easily served to customers.
• Location wise & geographically, it is feasible and operational all across the country, as
Pakistan is 98% Muslim population country scattered in all nooks of national territory.
• Quality of services will not less than conventional banking services so a competitor to
established banking (interest based) in same market.
4.5.2 Weaknesses
• Lack of standardization across the Muftis /scholars of the country and among the scholars
and bankers.
• Disadvantage of proposition is that there would be a hesitant and new thing not fully
accepted / suited to World Bank, ADB, and other multinational donor agencies to invest
through banking sector in country.
• A lot of capital is needed to boost it in front of conventional banking, and also huge
reserves have to be maintained, to meet any loss sharing situation in Islamic finance
modes of investment.
• Time/season factor becomes a major problem in case of Islamic banks, as people would
like to shift their money from zakat deductible accounts or they wish to pay their zakat
from “Halal” funds during Ramadan or on Eid festivals, etc. creating short term liquidity
problems for the banks.
• There are differences in theory and practice of Islamic banking in Pakistan to some extent
creating an inherent weakness.
• Management and staff need further training to serve Islamic financial services and
relevant experience as well to done their job efficiently.
• Value chain management will become a major hurdle to Islamic Halal funds of Islamic
banks, as it will need Islamic money and call money markets, investment opportunities
with pure halal businesses, Islamic equity market (instead of stock market), etc.
4.5.3 Opportunities
• More opportunities now lie in Islamic banking as it has been accepted by BASEL, WB,
ADB, international agencies, multinational corporations, non Muslim governments, etc.
with creation of big sukuk and Islamic deposit base in Gulf and Malaysian regions.
• Traditional interest based banking will have to defend through heavy marketing and
advertising in Muslim countries which off course reduce their profitability.
• Islamic banking is a complete solution to economic and to some extent social needs of
Muslims from House building to education in addition to conventional help in commerce,
business and industry.
• Modern Islamic banking emerged in late 20th century with more or less advent of internet
and information age, thus it is naturally blended with tools of internet, and computer
based banking, and will witness a sharper growth than traditional banking growth of last
500 years.
• New markets have been emerged with growth of Islamic banking as well: Islamic
mortgage, Islamic insurance, new investment projects etc.
• In non-Muslim countries, like France where Muslim are in minority (around 10%) of
population, Islamic banking will enjoy the benefit of niche marketing and if properly
targeted will obtain better results.
4.5.4 Threats
• A lot of legislation is required for Islamic banking world wide and especially in non-
Muslim countries; even in Pakistan some legal loopholes are present in its proper
implementation.
• Comprehensive Islamic economic and banking models have yet to develop or they are
not in their maturity stage to provide a blueprint of economic development and
prosperity.
• IT developments and Research in latest Banking are in non-Muslim countries where

conventional interest based banking have a very strong position thus Islamic banking will
enjoy latest tools of IT, but lesser than conventional banking.
• Environment for Islamic banking in west has been declined after 9/11 attacks on WTC,
New York and later Prophet Mohammad (P.B.U.H.) protests in Muslim world, widening
the gaps between the western investors and Islamic banking markets.
• Market demand is good but very less as compared to conventional interest based banking
through out the world, i.e. beyond some countries.
• Sustainable financial backing by large multinational firms, investment banks, and World
major economic powers is lacking.
Chapter # 5
5.1 CONCLUSION
BankIslami Pakistan Limited is an Islamic bank in Pakistan. The mission of bankislami is to
introduce Islamic banking in Pakistan and globally. They can worked under leadership of Dubai
Islamic Bank and Janjuar Saddqui & co. an audited firm in Pakistan.
This internship experience has been very much informative for me as it helped me in numerous
ways like in learning new things and ideas about official environment and now I have the
knowledge and experience of working in office environment I have realized my abilities and
expertise of working in that kind of environment. Internship is a supervised pre-professional
career related experience paid or unpaid, part or full time, with measurable learning objectives
and formal evaluation. And it is requirement for MBA degree.
• The branch manager is usually given very little regarding sanction of advances and over
draft whereas the responsibilities are numerous.
• The branch is newly opened in jhelum city, also bankislami is not to much old. Its all
about 5 to 6 year old bank.
• I can study and make analysis on year 2007 annual report of bankIslami. Its fifth annual
report of that bank but till yet bank is going in loss. There may be a different reasons
behind that bank is newly be opened and they can offer Islamic mode of financing.
• The branch yet not stared financing, that problem same as different cities with bankislami
branches.
• The mobilization of deposits is mainly considered as the responsibility of the branch
manager but the rest of the staff is usually least interested
• The bank has been applying he modern concepts of management and marketing at both
micro levels. The interior and exteriors of the branch have been changed but the staff of
the branch has been found less motivated towards the organizational objectives.
• The decision making is still centralized as the middle and low level management is not
taken into confidence.
• The promotional policy of the bank was observed as without any specific direction.
Though the bank has defined its mission and vision but no specific plan has been
designed so far.
• The bank staff has been found as less satisfied with bank policies and the recent
retrenchment in the bank has created unrest and panic.
• Most of the employees working in this branch are not much familiar with computer. They
just know how to use their part of software if any problem comes in the computer they
can’t fix it.
• The relationship between the employees of the branch is not that good because of which
the whole environment of the branch becomes less favorable for work.
• Miss utilization of office utilities, especially the telephone.
5.2 RECOMMENDATION
• The branch manager should arrange a training program for its existing employees to help
them perform their duties more effectively.
• The branch manage can start financing in there branch with there existence capital.
• There should be a proper platform provided to its employees from where they can help
the management in achieving its objectives.
• The branch should try to enter into the market of Islamic banking it would increase its
competitive edge over the other branches in the secretariat.
• The bank should appoint customers relation officer where the volume of work is too high.
This will give an impression to client for personal Banking. This will help in improving
the image of the bank and hence will attract more clients.
• An Automated Teller Machine should be placed in the branch because during my

internship I found many customers complaining for the ATM machine.
• The departments of this branch should be increased because its customers have to go to
other branches of BankIslami in order to get the services which they need.
• BankIslami is not very well known bank in the market. Their market standing is not as
strong as there competitors. For this BankIslami should opt for heavy advertisement both
electronically and on print media to create public awareness. This product Business
Power is suffering because of this reason as well.
• The bank must ensure the participation of the staff in all promotional activities of the
bank to this end the bank must adhere to the policy of fringe benefits rapid promotion of
capable management and official. The old age benefit of the bank employee must be
increased to motivate fee staff.
References
Book & Web References
• Islamic and finance bulletin (oct-Dec 2008) issue by Islamic banking department
SBP.
• Islamic and finance bulletin (july-Sep. 2008) issue by Islamic banking
department SBP.
• Muhammad Taqui Qusmani (Islamic Finance)
• www.bankislami.com.pk
• www.islamicfinder.org
• www.dubaibank.ae
• www.albalagh.net/Islamic_economics/
• http://www.islamicfinancenews.com/
• www.sbp.org.pk
• http://www.sbp.org.pk/ibd/bulletin/Bulletin.asp

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Dedication

To my dearest parents, my family,

CHAPTER 1 Page No.

4.2 Analysis of the Report 47

4.3 Financial Ratio Analysis 54

4.4.2 Efficiency Ratio 57

4.4 SWOT Analysis 59

Figure 2.1 Organizational Structure 27

Figure 3.1 Bankislami Branch Organizational Chart 28

ATM : Automated Teller Machine

EVP : Executive Vice president

F.I : Financial Institute

GOP : Government Of Pakistan

I.T : Information Technology

IBR : Inter Branch Reconciliation

J/V : Joint Venture

NBP : National Bank of Pakistan

NCB : National Commercial Bank

NIT : National Investment Trust

ROA : Return On Assets

ROE: Return On Equity

SAM : Special Assets Management

SBP : State Bank of Pakistan

SEVP : Senior Executive Vice president

SWOT : Strength Weakness Opportunity threat

USA : United States of America

WTO : World Trade Organization

The end of the report is about recommendations and conclusion.

1.2 Purpose of the studies

2. To work practically in an organization.

3. To develop interpersonal communication.

1.3 Research Methodology

• Staff at night position in bank

• Staff at circle office.

1.3.2 Secondary data:

1.4 Scope of studies

1.5 Merits of the study

1.6 Limitation of the study

Chapter-3 is headed by “DEPARTMENTATION” which includes the Deposit department,

Chapter 5 consists of Critical Analysis, conclusion and recommendation.

2.1.1 Banking Industry in Pakistan

2.1.2 Growth of Pakistan’s Banking Industry

2.1.3 Banking Law in Pakistan

2.1.4 State Bank of Pakistan (Central Bank)

2.2 Banks in Pakistan

• UNITED BANK LIMITED

2.3 Introduction to the BankIslami

2.3.1 What is BankIslami?

2.3.2 Competition Situation

2.3.3 BankIslami Idea

2.3.4 History BankIslami

2.3.5 Accreditation by State Bank of Pakistan

2.3.6 Initial Public Offering of BankIslami

2.3.7 Network Expansion

Figure 3.1 BANKISLAMI BRANCH ORGANIZATIONAL CHART

3.2.1 Operations Department:

3.2.1.1 Nature of the deposits

a) Islami current Accounts

b) Islami foreign current Account

c) Islami Bachat Account

d) Islami Mahana Munafa Account

e) Islami Amadni Certificate