ABL Toseef Word 2003

Internship Report on ABL Limited
The Allied Bank
Internship Report
(2011) Master of Business Administration Muhammad Toseef Rizwan SP10-MBA-025 FINANCE 0332-5445784 0346-7925510 toseefrizwan@yahoo.com
COMSATS Institute of Information Technology (WAH Cantt
New bus stands near Pakistan state oil patrol pamp branch kabirwala (0201) 065-2411536-326 Supervisor by Bank Sayed Ali Husnain Shah 065-2411536-325 Starting Date of internship: 01-07-201 Ending Date of internship: 13-08-2011 Report Date: 26-12-2011 Department of Management Sciences 1
The Allied Bank
Evaluation
Muhammad Toseef Rizwan Completed Internship at ABL new bus stands near PSO patrol pump (0201) Internship Report submitted for the final Evaluation in Partial Fulfillment of the requirement for the Degree of Master in Business Administration It is certified that, the Internship report and the work contained in it conforms to all the standards set by the Institute for the evaluation of any such work.
1. 2. 3. 4.
Department of Management Sciences
The Allied Bank
Dedication
I would like to dedicate This internship report To my honorable teachers And my special regards to my most respectful affectionate Loving parents who always prayed my success and betterment.
ACKNOWLEDGEMENT
In the name of ALMIGHTY ALLAH, the most Gracious, Merciful and Compassionate, the creator of the universe, who enabled us to complete this internship, report work successfully. I would also like to thank Branch Manager of branch and branch staff helping and guiding me throughout my learning period. I am thankful specially my parents who help me in every step. Last but not least I would love to thank all my friends for their undying support, help and for being there whenever I need them.
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PREFACE
In order to be able to cope with the changing environment it is necessary to have some practical experience. As the students of Business Administration we have to pass through a series of various managerial techniques. During this practical course we are provided with an opportunity to learn that how the theoretical knowledge can be implemented in practical grounds. I was selected to do my internship in Allied bank limited Branch Kabirwala. I worked there for six weeks & it gave me a greater practical knowledge about the operations of a bank. In the following pages I have narrated my experience, observations & all the working activities which I observed during my six week internship at ALLIED BANK LIMITED BRANCH KABIRWALA.
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TABLE OF CONTENTS
Topic
Acknowledgement EXECUTIVE SUMMAR INTRODUCTION TO STUDY
Introduction Scope of the study Methodology of the study
Page No. 3 7 8
8 9 9
IMPORTANCE OF BANKING
Introduction Definition of the Bank Major Function of The commercial Bank Accepting Deposit Making Loans and Advances Over Draft Facility Transfer of Money Investment Role of Commercial Bank Capital Formation Investment in new Enterprises Creator and Distributor of Money Balance Development Helping in Monetary Policy 9
9
9 9 11 11 12 12 12 12 13 13 13 13 14
HISTORICAL BACKGROUND
Origin of Banking Historical Background of Banking in Pakistan Brief History of allied Bank limited Vision Statement Mission Statement Core Values Organization Objectives
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14 14 16 17 17 17 18
ORGANIZATIONAL STRUCTURE
General Outlook Organization Hierarchy Functional of Hierarchy Board of Director Management Team Department of Management Sciences
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18 20 21 22 23 5
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Domestic Network
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DEPOSITS DEPARTMENTS
Introduction Types of allied Bank Account PLS Account Current Account Allied Business Account Allied Basic Banking Account Allied E-Severs Account Foreign Currency Deposits Monthly Profit plus Account Allied Advance Profit Scheme Behtar Munafa Account Behtar Munafa Term Deposit Allied Bichat Scheme Rewarding Term Deposit Account Allied Rising Star Account Opening Procedure
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28 28 29 29 30 30 31 32 32 33 34 36 336 38 39 40
REMITTANCES /CLEARING DEPARTMENT

Introduction Mail Transfer Telegraph Transfer Demand Draft Demand Draft Payment Pay Order Rupee Travellers Cheques
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40 41 41 41 42 43 43
ADVANCES/FINANCES DEPARTMENT
Introduction Types of Credit Running Finance Cash Finance Demand Finance Agriculture Finance House Building Finance Types of Advances by Allied Bank Limited Procedure For Applying Loan
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43 44 44 44 45 45 45 45 46
FOREIGN EXCHANGE DEPARTMENT

Introduction Foreign Currency Account Saving Deposit Department of Management Sciences
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47 48 48 6
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Fixed Deposit Current Deposit Travelers Cheques Sales and Purchase of the Foreign Currency Letter of Credit
48 49 49 49 50
MY LEARNING EXPERIENCE FINANCIAL ANALYSIS

Introduction Financial Statements Balance Sheet Statement Profit and Loss Account Statement Analysis of the Financial Statement Index or Horizontal Analysis Index Analysis of Balance Sheet Index Analysis of Profit and Loss Account Common Size or Vertical Analysis Vertical Analysis of Balance Sheet Vertical Analysis of Profit and Loss Account Ratio Analysis
51 53
53 53 54 55 56 58 58 60 61 61 63 64
SWOT ANALYSIS
Strength Weakness Opportunities Threats
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80 81 82 83
FINDINGS & RECOMMENDATION

Findings Recommendation Conclusion
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84 87 89
ACTION PLAN
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EXECUTIVE SUMMARY
This document provided details of my achievements in term of practical implementation and understanding of working environment in banks. I had started my internship from Allied Bank Limited kabirwala Branch. From 1st July to 13th august. During the internship I have learnt basic banking work and a lot of practical work which I had not acknowledged before. I worked in different departments and learnt basic operations of the departments that departments are. Account opening department, Clearing department, Remittance department Calling and sorting department etc. I have spent most of my time in Account opening department and hence I learnt what professional attitude to adopt while dealing with external as well as internal customers. I have filled out the different vouchers and slips such as Current Account slip, PLS Saving Account deposit slip, clearing vouchers; online inter branch transaction slip etc. And this document provided aspect of Allied bank limited and one of its branch kabirwala Base. This report is composed of the ABL History, ABL introduction, organizational structure, finance structure, its different Analysis such as critical analysis and SWOT analysis. . Through analysis I found some problems that exist in ABL. At the end I gave some suggestion to improve organization structure and solve these problems.
INTRODUCTION TO STUDY
This is an introductory chapter, which describes the background, purpose, scope, methodology of the report.
INTRODUCTION TO STUDY
Purpose of Study Department of Management Sciences 8
The Allied Bank
The purpose of the report is to review and analyze the functions performed by ABL. Also to get training in real life situations, applying management knowledge in practice, improving personal skills i.e. human relations, working with people and interviewing people. To write an analytical report on the systems and procedures followed by the organization. Scope of Work This report is concerned with the performance of branch namely, ABL kabirwala Branch. The report brings to light the various functions at the branches however the financial analysis is based on the national operations of the bank. All the branches perform banking services for its customers such as remittances, deposits, advances, foreign exchange etc. The report also covers the credit process including credit procedure and problems relating to the credit. Methodology of Report The methodology for the collection of information and data is based on the two primary modes of data. Primary Data: i. Personal Observation in case where compilation of the data related to 2010 was required which was only possible through personal observation. Secondary Data: i. ii. iii. iv. Web sites. Annual Reports. Bank Manual. News Papers.
IMPORTANCE OF BANKING
This chapter encompasses the major functions of commercial banks and the role of commercial banks in the economic development of Pakistan. Department of Management Sciences 9
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INTRODUCTION
It has not so far been decided as to how the word Bank originated. Some authors opine that this word is derived from the words Bancus or Banque which means a bench. The explanation of this origin is attributed to the fact that the Jews in Lombardy transacted the business of money exchange on benches in the market place. Incidentally the word Bankrupt is said to have been evolved from this practice. The opponents of this opinion argue that if it was so, then how it that the Italian money changers were never is called Banchierei in the Middle Ages Other authorities are of the opinion that the word Bank is derived from the Geneva word Back, which means joint stock fund. Later on, when the Germans occupied major part of Italy, the word Bank was italicized into Bank.
MODRN DEFINITION OF BANKS

Banks are the companies which transact the business of banking. The companies operate in accordance with the provisions of the Banking companies ordinance, 1962 section 5(b), which states that Banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheques, drafts, and order or otherwise.
MAJOR FUNCTIONS OF THE COMMERCIAL BANKS

The following functions are the major functions of the commercial banks: Accepting deposits Making Loans and advance Overdraft Facility Discounting of Bill 10
The Allied Bank
A)
Cheap Medium of Exchange Transfer of Money Investment ACCEPTING DEPOSIT
The primary function of Allied Bank is to accept and receive surplus money from the people, which they willingly deposit with the Bank. Like all other banks, Allied Bank also tries hard to attract as much deposits of the people as it can. It is therefore it offers different types of deposit schemes to its clients, which includes the following types. i) Current Deposits:
Current deposits are those deposits on which bank offers no interest but it allows the account holders to withdraw their money at any time they want without giving any prior notice to the bank. This type of account is often maintained by the business community, which requires large sums of money very often for their business transaction. ii) Profit And Loss Sharing Account (Saving):
Saving deposit or PLS are those accounts on which bank offers a lower rate of interest and on such deposits; the bank pays very low interest to its customers. After the Islamization of the banking system in the country it has been given the name of PLS saving account. The Bank undertakes to repay deposits on demand up to a certain limit. iii) Fixed Deposits:
Fixed deposits are those, which can be withdrawn only after the maturity of the account. In this type of deposits the Bank allows high rates of interest depending on the time period of deposits. The shorter the period of deposits, the less will be the interest and vice versa.
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B)
MAKING LOANS AND ADVANCES
The second major functions of commercial Banks are to make loans and advance to the businessman, traders, exporters, etc. These loans are made against document of title to goods, marketable securities, personal security of the borrowers etc. C) OVERDRAFT FACILITY
It also provides the overdraft facility to its clients. The credit which a bank wants to issue, it is deposited in the account of a debtor in this regard sometimes limit is fixed by the bank for customer up to that particular limit one person can draw an amount, up to that limit. D) DISCOUNTING OF BILLS
Commercial banks also discount the bills and facilities the business for example one businessman purchase anything from other person and promise to pay after one month. The seller will write a bill the buyer and there will be an order that after one month the buyer will pay an amount to the seller. Buyer will sign on the bill in other words if seller is in needs of money he will take it to the bank and will receive the money by discount the bills. E) CHEAP MEDIUM OF EXCHANGE
By using cheques and drafts bank provides cheap medium of exchange. F) TRANSFAR OF MONEY
The commercial bank is very helpful in transferring the money from one place to another by issuing the drafts, payment orders, call deposit, SDRs and through online system which is the quickest mode for transfer of money. I) INVESTMENT
Bank also makes an investment in different companies and industries. Department of Management Sciences 12
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ROLE OF COMMERCIAL BANK

Role of Commercial Banks in the Economic Development of Pakistan. Without developed banking system the economy of a country cannot flourish easily and strongly. It will never reach its destination. As the commercial banks plays a very important role in the economic development of any country, which we can discuss as under. a) CAPITAL FORMATION
As we know that development without capital is impossible. So capital is basic requirement of country. In this regard bank plays as active role. The bank stimulates savings and mobilizes the resources for further investment in various sectors. b) INVESTMENT IN NEW ENTREPRESIS
The commercial banks provide capital to the new entrepreneur to take risk and invest in new enterprises. The commercial banks thus help in increasing the production capacity of the economy. c) CRREATOR AND DISTRIBUTOR OF MONEY
Commercial bank is creator and distributor of money. The bank purchases securities and others and allow money for the various productive sources. d) BALANCED DEVELOPMENT
Commercial banks play active role in balanced development in different regions of the country. They help in transferring the funds to develop to less developed area. The less developed area thus get adequate fund for development. e) DEVELOPMENT OF AGRICULTURE AND INDUSTRIES
Commercial banks particularly in developing countries are providing short, medium and long terms loans for the development of area. SBP allocates annual mandatory credit targets for agriculture Department of Management Sciences 13
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sector. ABL tries its best to achieve these mandatory targets, thus attributing much more towards the development of economy. f) HELP IN MONETORY POLICY
The control of credit and regulative by the central bank of a country is only possible and effective with co-operation of the banking system in the country. ABL plays its role in this regard.
HISTORICAL BACKGROUND
ORIGIN OF BANKING
.In the middle of 12th century banks were established at Venice and Genoa. Again in 14th century, money lenders in Florence were found. They received money as deposits and also landed money. Generally the word Bank originated in Italy. In the middle of 12th century there was a great financial crisis in Italy due to the war. To meet the war expenses the Government of the period imposed a forced subscribed loan on citizens of the country at the interest of 5% per annum. Such loans were known as Compare Mintuo etc. The development of banking can be divided into various stages. Some are also of the opinion that the word Bank has been derived from the Italian word Banco which means a bench. The Jew money lenders in Italy used to transact their business settings on benches at different market places, if one of them failed to meet his obligations, his Blanco or bench would be broken by the angry creditors. The word bankrupt seems to have evolved from such broken Bancs. Since the banking system originated from money lending business, it is rightly argued that the word bank originated from the word Banco. The 1st stage in development of banking was accepting of deposits of cash from people. The 2nd stage included issuance of bank notes by gold smiths for the money deposited with them. Department of Management Sciences 14
The Allied Bank
The 3rd stage the lenders started to enjoy charging interests. The 4th stage allowed the depositors overdraft facilities.
HISTORICAL BACKGROUND OF BANKING IN PAKISTAN

The banking system of a country refers to the working process followed by the banking institution. It is defined through a relationship between the apex bank (central bank) and the other banks operating in the country. It embodies the principles and practices relating to the banking transactions prevalent in the country. In Pakistan, there is a central banking system controlled by the state bank of Pakistan which is the central bank. Because the state bank has the monopoly of money supply and is the custodian of foreign exchange resources, it also controls and deregulates the monetary system, so as to stabilize the economy of the state. In the way the central bank (SBP) corrects and controls the activities of other banks operating in the economy .It guides the other commercial banks through the monetary measurements which are very useful for the economic development of our country. Unfortunately the historical background of the banking system in Pakistan was not good and sound. At the time of independence (1947) majority of the offices and staff working in the banks were non-Muslim who migrated to India and they created a serious hiatus which could not be covered due to the lack and absence of professional individuals in the local population. At the time of partition there were 631 offices of schedule banks (having a paid up capital of Rs 5 lac or more). West Pakistan contained 487 and East Pakistan 144 such offices. As a result of transfer of head offices of schedule banks to India by non-Muslim in July, 1948, the number of bank offices was reduce to 81 in west Pakistan and 114 in East Pakistan causing an overall reduction from 631 to 195. There were only two Pakistani banks namely Habib bank Ltd and the Australia bank with their head offices in Pakistan.
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The Allied Bank
However, the challenge was successfully met and the central bank of the country (SBP) was established on July, 1948. The bank took immediate steps necessary for establishing a national banking system in the country. It recommended to the Govt. to establish a new bank, as an agent of the state bank as well as a speared head of its credit policy. The suggestion was accepted by the Govt. and national bank of Pakistan came into existence in November 1949. This bank also helped ABL to expand its organization. From here onward a rapid development took place in the banking system of country. Currency note of the value of Rs 5, Rs 10, Rs 50, and Rs 100 were issued by the state bank for the 1st time in October 1948 and by August 1949, all currency notes issued by Reserve bank of India were with drawn and replace by Pakistani currency. Under the bank nationalization Act of 1974 the commercial banks were nationalized in January 1974. The Nationalized bank includes Habib Bank, United Bank, Allied Bank, Muslim Commercial Bank and National Bank. Beside these nationalized commercial banks (NCBS) and other commercial bank in the private sector, there are certain foreign banks operating in Pakistan like City Bank, ANZ grind lays Bank, Bank Almashriq, Bank of Uman, Bank Alfalah, Meezan Bank, Faisal Bank etc. These foreign banks are under the administrative control of state bank being the central bank of the country.
BRIEF HISTORY OF ALLIED BANK LIMITED

Commercial banks are playing vital role in the development activities covering all spheres of economy of the country. But at the independence, Pakistan had only 755 branches of commercial banks which were further reduced to 195 as a number of branches of different banks shifted to India or U.K at the time of independence there were two main banks of Muslim community i.e. Habib bank limited and Australasia bank limited remained with Pakistan and took over the task of development of banking in Pakistan.
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Australasia bank limited was the first Muslim bank which was established on the soil of Pakistan on December 3rd, 1942. ABL contributing its role in the growth and structure of banking system in Pakistan. Under the Banks (Nationalization) Act 1974, all commercial bank were nationalized. Due to it three regional Banks namely Sarhad bank, Pak bank and Lahore Commercial bank were merged into Australasia bank with effect from July 1st 1974, and were renamed as Allied bank of Pakistan Limited. On September 12, 1991 Allied bank became the worlds first bank to be owned and managed by its employees. In August 2004, because of capital reconstruction, the Banks ownership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.
VISION STATEMENT
To become a dynamic and efficient bank providing integrated solutions in order to be the first choice bank for the customers.
MISSION STATEMENT
To provide value added services to our customers. To provide high tech innovative solutions to meet customers' requirements. To create sustainable value through growth, efficiency and diversity for all stakeholders. To provide a challenging work environment and reward dedicated team members according to their abilities and performance.
To play a proactive role in contributing towards the society.
CORE VALUES
Integrity Excellence in Service
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High Performance Innovation and Growth
ORGANIZATIONAL OBJACTIVES
Objectives are the ends towards which activity is aimed. These are the result to be achieved. As a commercial bank the primary objectives is to earn profit and maximize it as far as possible. As a commercial business the Allied Bank Ltd. has the following main objectives.
To take measure to promote business in the country. To procure self-employment schemes to the people. To supply or provide employment opportunities to the people. To earn profit for the bank itself and for its shareholders. To help in the development and industrialization of the country.
ORGANIZATIONAL STRUCTURE
GENERAL
General Outlook
OUTLOOK
Organizing is a process of breaking down the overall tasks of the enterprise into individual assignments / activities and then getting them put together in units or departments or groups along with the delegation of authority to a manager/ Head of a unit / departments / group. Organizational structure implies a formalized intentional structure of roles and position. This is not the end in itself, rather a means with which to help achieve certain objectives. A well developed and properly coordinated structure is an extremely important requirement for the successful Department of Management Sciences 18
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operation of any organization. It provides the basic framework within which functions and procedures are performed. Organizational structure is the formal hierarchy for management, decision making, establishing accountability, reporting & control. The structure defines line of authority and is based on the functions of the organization and its business, segmented in to departments but interlinked according to the nature of activities performed. There are four main types of organizational structures. Vertical organization Flat organization Matrix organization Hybrid organization
Vertical structure is a management structure characterized by an overall narrow span & relatively more hierarchal levels 1.It is also called top to bottom structure .On the other hand, flat structure is a management structure characterized by an overall broad span of control and relatively few hierarchal levels. The flat level is horizontally dispersed and is a new type of structure. Matrix Structure is an organizational structure that assigns specialists from different functional departments to work on one or more projects being led by project managers. Hybrid structure is a blend of two or more different types of organization design. A hybrid organization is formed that has different levels of the organizational design. The organization chart is represented in the form of an organizational chart, arranged. The chart provides the picture of the operating structure and the decision of labor.
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ORGANIZATION HIERAREHY
The organization hierarchy represents the different positions and designations in the hierarchy of the ABL. However, this is not the reporting hierarchy but merely represents the positions and grades on the basis of seniority and grades.
President
Senior Vice President
Vice President Executive Vice President Senior Executive Vice President [rosodmemtPresident Regional Head Managerxecutive Vice President Branch Manager Department of Management Sciences
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FUNCTIONAL HIERARCHY
The functional hierarchy represents the reporting order in the hierarchy of ABL. The hierarchy has president and directors at top management level and officers Grade I, II and Grade III at the lower level management of ABL. The middle level management consists of regional general Manager and Regional Controller of Operations. These positions are not fixed. Any person in the hierarchy above the branch manager can be appointed as RGM and controller operations.
President and CEO Board of Director Head of Departments
Regional General Manager
Controllers of Operation Branch Manager
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Office G-I, II and other lower Staff
BOARD OF DIRECTORS
Pervaiz Iqbal Butt (Director)
Mohammad Waseem Mukhtar (Director)
Farrakh Qayyum (Director)
Sheikh Mukhtar Ahmed (Director)
Abdul Aziz Khan (Director)
Tasneem M. Noorani (Director)
Sheikh Jalees Ahmed (Director)
Nazrat Bashir (Director)
Mohammad Aftab Manzoor\ (CEO)
Mubashir A. Akhtar (Director)
Mohammad Naeem Mukhtar (Chairman) Department of Management Sciences
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The Allied Bank
MANAGEMENT TEAM:
Asim Tufail (Group Chief, Consumer & Personal Banking)
Fareed Vardag (Chief Risk Officer)
Iqbal Zaidi (Group Chief, Compliance)
Mohammad Abbas Sheikh (Group Chief, Special Assets Management)
Mohammad Aftab Manzoor (Chief Executive Officer)
Muhammad Jawaid Iqbal (Group Chief, Coprate & Investment Banking)
Muhammad Yaseen (Group Chief, Treasury)
Mujahid Ali (Group Chief, Information Technology)
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The Allied Bank
Shafique Ahmed Uqaili (Group Chief, Human Resources)
Syed Shahid Raza (Head, Business Transformation Team)
Tahir Hassan Qureshi (Chief Financial Officer)
Tariq Mehmood (Group Chief, Operations)
Waheed ur Rehman (Company Secretary)
Zia Ijaz (Group Chief, Commercial & Retail Banking)
Head Office/Registered Office 8-Kashmir/Egerton Road, Lahore. Ph: 92-42-111 110 110 Central Office Khyaban-e-iqbal,main Clifton road bath island Karachi pakistan.ph:92-21-111 110 110
DOMESTIC NETWORK
Allied bank has a domestic network of 830 branches and 580 ATMs have been installed to provide instant banking facility round the clock. Through these Machines ABL offers its customers most wanted banking facilities like account balance enquiry, account mini statement, fund transfer not only to other ABL branch but also to account of other Bank, request for new cheque book and Department of Management Sciences 24
The Allied Bank
depositing of utility bills. Besides 4 branches in the United Kingdom about 60 domestic branches of the bank spread all over the country are authorized to deal in foreign exchange. There is a network of 59 foreign correspondents of the banks all over the world. In the domestic field operations ABL has established its presence all over the country. Its field operation is one of the most extensive among the leading banks in Pakistan.
Total customers Employees Total branches Total ATMs Regional Head Quarters
4,605,000 6,747 830 580 28
Administratively the bank has been mainly divided in four groups, namely North, South, Central-1 and Central-2. Further there are 28 Regional Head Quarters being the down line controlling offices. For the internal control over this administrative and operational setup in the shape of branches and Department of Management Sciences 25
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various controlling offices, there are regional audit offices which scrutinize the affairs of branches and controlling offices.
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The details of these regions are given below Regions Abbottabad Region Bahawalpur Faisalabad Gujranwala Hyderabad Islamabad Karachi Lahore Mardan Mirpur (AJK) Multan ISLAMABAD Quetta Sargodha Sialkot Sukkar Email coablatd@brain.net.pk ro_bahawalpur@ikr.abl.com.pk ablcircle@fds.comsats.net.pk ro_gujranwala@lhr.abl.com.pk ro_hyderabad@abl.com.pk ro_Islamabad@isb.abl.com.pk ro_karachi@abl.com.pk ro_lahore@lhr.abl.com.pk allieds@brain.net.pk ro_Mirpurak@isb.abl.com.pk ro_multani@lhr.abl.com.pk ro_peshwar@isb.abl.com.pk ro_quetta@abl.com.pk ro_surgodha@lhr.abl.com.pk ro_sialkot@lhr.abl.com.pk ro_sukkir@abl.com.pk
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DEPOSIT DEPARTMENT
This chapter includes the deposits department and its various types. Also present is information about accounts cheques. INTRODUCTION Deposits are the backbone of any financial institution. Deposits are used mainly for lending onward at higher rate than the rate on which they are acquired. Hence, a bank must have a dependable deposit base to ensure its sound operations. Deposit transactions essentially give rise to a unique relationship which stems from the establishment of trust and commitment between the banker and the customer. By accepting the deposit, the bank automatically enters into a binding contract to act as a trustee, taking due care of the customers interest. It is thus, of utmost importance that operational procedures are well defined and elaborated, and correctly applied so as to avoid any operational error which may lead to any false commitment and misunderstanding between the parties to the transaction. The fund is deposited with commercial bank are classified under four main heads:
TYPES OF ALLIED BANK ACCOUNT
PLS Account Current Account Allied Business Account Allied Basic Banking Account Allied E-Savers Account Foreign Currency Deposits 29
The Allied Bank
Monthly Profit Plus Allied Advance Profit scheme Behtar Munafa Account Behtar Munafa Term Deposit Allied Bachat Scheme Rewarding Term Deposit Rewarding Profit Account Allied Rising Star
PLS ACCOUNT
Allied Bank offers the PLS Savings Account facility to its customers with the following attractive features. Attractive return of up to 5.00% per annum Free Cash Deposit / Withdrawal / account to account transfer within city. Free Online Transactions, DD/TT/PO for depositors maintaining an average monthly balance of Rs. 2.500 (M) & above Free issuance of cheque book at the time of account opening
CURRENT ACCOUNT
Allied Bank offers the Current Account facility to its customers with the following attractive features.
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Allied Bank offers the Current Account facility for individuals as well as for institutions and commercial customers.
There are free Online Transactions, DD/TT/PO for depositors maintaining an average monthly balance of Rs. 0.5 (M) & above.
Free issuance of cheque book at the time of account opening. Free Cash Deposit / Withdrawal / account to account transfer within city.
ALLIED BUSINESS ACCOUNT

Enjoy unlimited freedom and convenience with numerous free services all with Allied Business Account. Now with your current account you can make unlimited transactions via 830 online Allied Bank branches. On maintaining a daily minimum balance of just Rs. 50,000, you can enjoy the following services FREE of charge:
FREE Pay Orders FREE Demand Drafts FREE Deposit FREE Withdrawals FREE Funds Transfer FREE Telephonic Transfer FREE Internet Banking No Cheque return charges FREE Nationwide Real-time Online Banking
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ALLIED BASIC BANKING ACCOUNT

In order to provide basic banking facilities to its lower-middle class customers, Allied Bank has introduced the Allied Basic Banking Account (ABBA). Following are the main attractive features of the (ABBA). Account can be opened with an initial deposit of Rs 1,000/= It is a non-remunerative account with a no minimum balance requirement. The Statement of Account is issued on a yearly basis. The account will be closed automatically if the balance remains zero for one year No service charges on the account for a maximum of 2-withdrawals and 2-deposits during a calendar month. Additional transactions will be subject to a service charge as per the Banks Schedule of Charges for every withdrawal/deposit. Unlimited withdrawals from ATMs
ALLIED E-SAVERS ACCOUNT

Saving has never been so flexible! The Allied e-Savers Account is a unique savings plan where you can earn returns as high as 7.5% with the convenience of 4 withdrawals a month!
ALLIED E-SAVERS
Slabs Rs. 400,00 up to Rs.1500,000 Rs.300,001 up to Rs.400,000 Rs.200,001 up to rs.300,000 Up to Rs.200,000 Salient Features: Department of Management Sciences 32 Profit rate 7.50% 6.00% 5.00% 5.00%
The Allied Bank
Investment: Rs. 10,000 to Rs. 500,000. Profit: payable on Half Yearly basis. Expected Profit Rate: Up to 7.50% p.a. Eligibility: Individuals.
Additional Benefits: 24 hours phone banking service. Free Internet Banking facility SMS transaction alerts Allied Cash+Shop Visa Debit Card for cash withdrawals through any ATM including our largest network of ATMs across Pakistan and for debit transactions at various retail outlets First free cheque book - A/c Payee only
FOREIGN CURRENCY DEPOSIT

Allied Bank offers the facility of opening Current, Savings and Term deposit Accounts. Foreign Currency accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated branches.
MONTHLY PROFIT PLUS

Saving has now become all the more appealing with our Monthly Profit plus Scheme, which provides you monthly profits on investments. The scheme is designed for a period of 1 Year with the following profit rates: Tenure Profit Rate Department of Management Sciences 1 Year 11.00% p.a. 33
The Allied Bank
Profit Payment
Rs.917 * per month
*- Approximate monthly returns calculated on the investment of Rs.100, 000 * Withholding tax, Zakat or other Government Levies are applicable separately Salient Features: Account Type: Term Deposit Term Period: 1 year Profit: Payable on monthly basis Minimum Deposit Amount: Rs.25, 000 Eligibility: Individuals & Institutions (other than financial institutions)
Additional Benefits: Chequing Account for monthly profit credit 24 hour phone banking service Free internet banking facility SMS transaction alerts Allied Cash + Shop Visa Debit Card
ALLIED ADVANCE PROFIT SHEME

In keeping with our objective to bring you new and innovative services and banking products, we now introduce Allied Advance Profit Scheme that gives the entire profit upfront. Department of Management Sciences 34
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Product Specifications:
Minimum Investment Amount Rs.25, 000
Investment Terms: 18 months Auto roll-over (optional)
Profit Payment: Profit of Rs.14, 000* will be immediately credited in the customers current accounts.*on an investment of Rs.100, 000 Tax/Zakat will be applicable as per rules Additional Features & Benefits Current account for regular banking needs Allied Cash+Shop Visa Debit Card financing facility of up to 80% on investment Free internet banking facility 24-hour phone banking service
BEHTAR MUNAFA ACCOUNT

A profit bearing Chequing account with attractive rate of return, paid on monthly basis. Rate of Profit:
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BEHTAR MUNAFA ACCOUNT Up to Rs.5,000,000 Rs.5,000,001 to Rs.25,000,000 Salient Features: Account Type: Chequing Account Rs.100,000,001 to Rs.250,000,000 Rs.250,000,001 to Rs.500,000,000 Rs.500,000,001 & above Rs.25,000,001 to Rs.50,000,000 Rs.50,000,001 to Rs.100,000,000
RATE
5.00% 6.00% 7.00% 7.50% 8.00% 8.50% 9.00%
Profit:
Payable on monthly basis Highest Profit: Up to 9.00% p.a. Eligibility: Individuals, and institutions
Additional Benefits: 24-hour phone banking service Free internet banking facility SMS transaction alerts Allied Cash + Shop Visa Debit Card
BEHTAR MUNAFA TERM DEPOSIT

Department of Management Sciences 36
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If you want to fix your money now to secure your future, this is the product for you. Rate of Profit: BEHTARMUNAFA TERM DEPOSITS: Up To Rs. 5,000,000 Rs.5,000,001 To Rs.25,000,000 Rs.25,000,001 To Rs.50,000,000 Rs.50,000,001 To Rs. 100,000,000 Rs.100,000,001& Above Salient Features: Account Type: Fixed Term Deposit Profit: Payable on maturity Highest Profit: Up to 9.00% p.a. Eligibility: Individuals, and institutions 1 MONTH 3 MONTH 5.00% 5.25% 5.50% 5.75% 6.00% 6.00% 6.50% 7.00% 7.50% 8.00% 6 MONTH 6.50% 7.00% 7.50% 8.00% 8.50% 1 YEAR 7.50% 8.00% 8.50% 8.75% 9.00%
ALLIED BACHAT SCHEME

Allied Bachat Scheme is a PLS Term Deposit Scheme based deposit scheme whereby you can double your investment in just 7.5 years.
Maturity Period: 7.5 years Minimum Deposit: Rs. 50,000/- with multiples of Rs. 10,000/Expected rate of Profit: The deposit amount will be doubled in 7.5 years.
Allied Bachat Scheme is a PLS Term Deposit Account, whereby you can double your investment in just 7.5 years This scheme comes with the following schedule of profit rates: Department of Management Sciences 37
The Allied Bank
No. of Years 0 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5
Projected Rates ABL 0 7.00% 7.50% 8.00% 8.755 10.00% 10.25% 10.50% 10.755 11.00% 11.25% 11.50% 11.75% 12.00% 13.33%
Repayment amount 50,000.00 53,500.00 55,625.00 58,000.00 60,937.50 65,000.00 67,500.00 71,000.00 74,187.00 77,500.00 80,937.50 84,500.00 88,187.50 92,000.00 100.000.0
Salient Features: Maturity Period: 7.5 years Free Internet Banking facility Minimum Deposit: Rs. 50,000 (additional investment in multiples of Rs. 10,000) Expected Profit Rate: Up to 13.33% p.a. Eligibility: All individuals and institutions
REWARDING TERM DEPOSIT
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The Allied Bank
A term deposit scheme which gives a high rate of return and the flexibility of various tenure. Investment can be made with the minimum of PKR 25, 000 only. Rate of Profit:
DEPOSIT AMOUNT
Rs.25,000 to less than Rs.10 million Rs.10 million to less than Rs.100 million Rs.100 million & Above Salient Features: Account Type: Term Deposit Term Period: 1-12 months Investment: Rs. 25,000 & above Profit: Payable on maturity
1 Month
9.50%p.a 10.00%p.a 10.50%p.a
3 Months
9.75%p.a 10.50%p.a 11.00%p.a
6 Months 12 Months
10.00%p.a 11.00%p.a 11.25%p.a 11.25%p.a 11.75%p.a 12.00%p.a
Eligibility: Individuals & Institutions
REWARDING PROFIT ACCOUNT

Rewarding Profit Account is introduced for the customers who have liquidity and can manage to maintain sizeable monthly average balance and earn greater profit on it. Rate of Profit: Rewarding Profit Account Rs.10 million to less than Rs. 50 million Rs.50 million to less than Rs. 100 million Rs.100 million to less than Rs. 250 million Rs.250 million to less then Rs. 1 billion Department of Management Sciences 8.00% 9.00% 9.50% 10.50% 39
The Allied Bank
Salient Features: Account type: Chequing Profit: Payable on monthly basis Maximum Investment Amount: Rs. 1 Billion Eligibility: Individuals, and institutions
Additional Benefits: 24-hour phone banking service
ALLIED RISING STAR

Youths 1st Bank Account is a savings account for all youngsters below 18 years of age. It can help you save your pocket money and earn daily profit. And when youve collected enough, theres so much you can do with your savings like buy your favorite books and toys or a special present for your mummy or daddy, or even carry on saving! So if youre below 18 years of age, you can open your very own Allied Rising Star.
ACCOUNT OPENING PROCEDURE

In every bank, there is a procedure through which the customer becomes the client of the bank. Through this procedure, various relationships are established i.e. debtor creditor etc. The bank opens an account in the following manner. AOF (Account Opening Form) The customer is required to fill the AOF of the bank and sign it in front of the concerned officer. Furthermore, his signatures are taken on a specimen signature (S.S) card which will help in verification of his signatures when a cheque is presented for payment. Copy of CNIC is also Department of Management Sciences 40
The Allied Bank
provided by the customer and original CNIC is got verified from NADRA through online system. In case of rejection from NADRA the account is kept BLOCKED automatically. Inactive / Dormant Accounts Accounts having no transaction activity for 6 months are identified as inactive or dormant accounts by the bank.
REMITTANCES/CLEARING DEPARTMENT
This chapter deals with the Remittances/clearing and its working.
INTRODUCTION
Remittance means the transfer of funds. It is a mode of transferring money from one branch to another branch within the city/outside the city or outside the country. It is an order by a bank to its branch agent or correspondent in a foreign centre. It is an order to pay a specified sum of money to the person named in the instrument. The remittances department of ABL deals with the different funds transfer facilities for its customers. These facilities are discussed below.
MAIL TRANSFAR
When a customer requests the bank to transfer his money from this bank to any other bank or the branch of some other bank in the city/outside the city or out side the country the 1st thing he has to do is to fill an application form. In which he states that I want to transfer the money from this bank to another bank by mail. If the customer is account holder of the bank, then the bank will debit his account. The concerned officer will fill three different forms to make the mail transfer complete. The forms used for this purpose are listed below. Department of Management Sciences 41
Internship Report on ABL Limited a)
The Allied Bank
Debit voucher. Credit voucher. Mail transfer register.
b) c)
If the customer is not the account holder, then firstly, he has to deposits the money and then above said procedure will be adopted to transfer his money.
TELEGRAPHIC TRANSFAR (T.T)

This type of transfer is simple. After filling the application form the concerned officer fills the telegraphic form. This telegram is sent to the concerned bank which on receiving it immediately makes the payment to the customer and afterwards the vouchers are sent to that bank by ordinary mail.
DEMAND DRAFT
Demand draft is just like cheques and is issued when the customer wants to take the draft personally. The idea behind this is that as the cash is not safe to be kept along and a cheque in the shape of a draft is safer and one can easily get cash by presenting it in the bank, on whose favour it has been made. Draft is only issued when the customer is known to the bank and the bank has the confidence that the customer will not do anything wrong with the draft. For the preparation of a draft first of all the customer has to fill and application form. Then the concerned officer fills the following three forms (four in case of foreign exchanged involved) before delivering the draft to the customers. The forms full for this purpose are as follow:
a)
Credit voucher. 42
The Allied Bank
b) c)
Debit voucher. Demand draft registers.
ABL deals in two types of DDS:

1.
Open DD: It is one which is payable directly at the counter and crediting it to the account.
there is no need of
2.
Crossed DD: It is one which payment is done through account. The amount of DD is credited to the favoring account and then he can transact it in ordinary way through cheques.
DEMAND DRAFT PAYMENT

On receipt, DD is checked and verified and payment is made. If advice is not received, managers approval for payment is obtained. Only the applicant who has signed the application form has the right to cancel the DD. He has to make a request in writing.
PAY ORDER
Pay or (P.O) is the most convenient, simple and secure way of transfer of money. Pay order is banker cheque issued favoring a named beneficiary. Application for pay order is stamped and customers account balance is checked or cash received for the amount of pay order and other charges. Pay order leaf is typed and crossed if required and signed by two authorized signatories. It is used for local transfer only.
RUPEE TRAVELER CHEQUES

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The Allied Bank
Issuance of rupee traveler cheques is also an important function of remittances department. Now-adays ABRTCs of Rs.10000/- are issued bearing cost of Rs.5/- each. On issuance, the HO account is credited, and when cashed, the HO account is debited. On loss of ABRTCs, the details are communicated to the HO and the client is either repaid or new ABRTCs are issued.
ADVANCES F/ FINANCES DEPARTMENT

INTRODUCTION
The progress of a countries performance, especially a developing country is heavily dependent upon the dynamic growth of its industries, trade and commerce, as well as agriculture. ABL plays a pivotal role in ensuring the proper employment and distribution of funds for rapid, sustained growth in all these sectors of vital importance. Also, the indicators which mainly reflect the high quality of ABLs management are its prudent financing decisions, proper control of financing and prompt recovery of banks dues, as per borrowers commitment / repayment schedule. Keeping in view all these factors, SBP lays down the regulation / guidelines of credit policy and within this broad framework, ABL develops its own individual financing strategies and policies.
TYPES OF CREDITS
Credits can be classified as fund based which involves immediate provision of fund to the customer upon sanction of the respective lines. Whereas, the second i.e. Non Fund based are contingent facilities such as letter of credit, and letter of guarantees etc. On the basis of time period, credits can be classified as short term up to one year, medium term up to 3 years, and long term above 3 years.
RUNNING FINANCE
This is a multi transaction facility. The funds are allowed in the form of a limit to the customer and drawing power is created in his current account up to the sanctioned limit. The customer is allowed to with draw funds from his account in excess of available funds. The purpose of RF is meeting the Department of Management Sciences 44
The Allied Bank
short term working capital requirement, usually for 1 year. Expiry date of this facility should fall on the last day of calendar quarter. Mark up is recovered at the end of each quarter. The sanctioned limit is enhanced on the request of borrower/ loanee keeping in view his provided business last year and repayment power.
CASH FINANCE
Cash finance is also called working capital. This finance is purely for manufacturing concerns this facility is provided against the pledge of inventory. The basic purpose is to enable the customer to purchase seasonal raw inventory. Customer can utilize the facility only when the goods are pledged and banks moqadama verifies the quality of pledged goods. This facility is sanctioned for a period of 1 year. This facility commences from the date of procurement of raw material. Since the goods are pledged in lots, therefore finance against each lot is required to be adjusted within 90 days or as the requirement of sanctioning authority. Markup is recovered at the time of issuance of delivery order and at the quarter and, Markup on the outstanding amount is calculated and collected from the customer.
DEMAND FINANCE
This facility is provided to meet short/long term requirements. Since this facility requires a bulk of funds, therefore, this facility is usually sanctioned for more than 1 year. At the time of issuance / sanction, a repayment schedule is prepared by the branch/ sanctioning authority, a copy of which is provided to the customer. Customer is required to pay installments according to repayment schedule.
AGRICULTURE FINANCE
Agriculture is the back bone of our economy. ABL also provides credit facilities to this segment of economy. ABL provides two types of loans to the agricultures. A) Production Loan: which is short term loan and is for the purpose of purchasing of seeds, fertilizers etc. Department of Management Sciences 45
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B)
Development Loan: which is for the purpose of development of land or purchase of machinery etc, related with the agriculture?
HOUSE BUILDING FINANCE

The bank extend house building Finance to customers, under the scheme envisaged by the state bank of Pakistan. The house building finance can be considered for the construction or purchases of house or flat. The silent features of this scheme are as under:
i)
The house building finance can be made to a person once in his or her life time. The House building Finance is considered for an amount of more than Rs 1, 50,000 and up to Rs 3, 00,000.
ii)
iii)
The house building Finance is admissible maximum up to 60 % of the value of house and flat to be constructed or purchased.
iv)
The house building finance is repayable during the maximum period of 15 years.
TYPES OF ADVANCES OFFER BY ABL

It is the loan function which produces the major portion of banks income; and as such it is one of the major areas of professional bankers concerned and attention. A bank generally deals in following areas: i) ii) iii) Agriculture Finance. Industrial finance. Export Finance
In addition to the above mention broad areas, there are loans available for small size business men, construction companies etc. In ABL advance department is responsible to deal with the Following cases. Department of Management Sciences 46
The Allied Bank
i) ii) iii) iv) v) vi)
To handle all the cases of short and long term loans. To process all the loans concerned. To forward the cased for approval and consideration to the higher authorizer. To deal with borrower directly. To make disbursement of loans. To give feed back to higher authorities on advances.
PROCEDURE FOR APPLYING LOAS

Any customer who applies for loan should have an account usually current account with ABL branch concerned. The account must be in running position. When approval comes bank give terrns and conditions to the party. Bank does not advance 100 % loan against a security. Rather a 30 % margin is deducted from all loans. The borrower has to provide some important documents i.e. a) b) c) Charge form Confidential report. Two personal guarantee.
Charge form is taken from party, if it turns bankrupt, bank go to court of law then this agreement helps in this situation.
Foreign Exchange Department

INTRODUCTION
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The Allied Bank
In modern banking system foreign exchange department play very crucial and important role from every aspect. It is parallel banking with general banking with additional function of import and export business controlled by state bank of Pakistan. Rules and regulation are by SBP. International banking at ABL is also carried out by foreign exchange department under SBP regulations. Foreign exchange is being controlled by SBP. No transaction can be effected without permission of SBP under foreign exchange regulation act 1947 and notification issued there under. Exchange control department of SBP is responsible for day to day administration of exchange control. All the transactions shall be done at rate authorized by SBP. For this purpose us dollar rates are fixed by the SBP and the rate of other currencies are calculated. In accordance with the formula approved by SBP and as published daily by the foreign exchange rate committee in Karachi H.O ensure that rate published by foreign exchange committee are received by branches on the same day. Foreign exchanges dept provide services like foreign currency A/C and import export advances etc. These will be discussed one by one.
FOREIGN CURRENCY ACCOUNT

Foreign currency A/C in ABL can be open in 4 major currencies of the world i.e. US dollar, Japans yen, German mark and UK pond sterling. Only authorized branches of ABL can deal in foreign currency account. At present in Pakistan many branches have this facility. Foreign currency account can be opened both by Pakistani citizens and foreigners by introduction and following the procedure required for general account with one exception for the foreigner that they will have to submit a copy of their passport. The account may be personal or joint when the customer will withdraw the money. He will receive the principle amount plus interest in the same foreign
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currency. Deposits Schemes of Foreign Currency Accounts are very much related with Pak Rupees Accounts such as saving deposits, fixed deposits and current deposits. SAVING DEPOSIT In these accounts there is no minimum limit for opening the account and the Bank offers certain rates of interests on all Foreign Currency Accounts. Rate of Interests on Saving Accounts For Dollar, 6.5% rate of interest is offered For Sterling, Pound 8% rate of interest is offered For Deutsche Mark, 4.2% rate of interest is offered For Yen 1% rate of interest is offered
FIXED DEPOSIT Fixed deposit facility is also provided to clients. These deposits can be for three months, less than six months, six months, less than twelve months, twelve months, two years, three years, four years and five years. Rate of interests are different for different Currencies for different Period. CURRENT DEPOSIT Multiple withdrawals of any part of balance can be made on demand. Funds can be credited into the current deposit account in the form of Cash, Cheques and other financial instruments drawn on any bank or other branch of ABL. The current account is suited to meet both domestic and business requirements of the customers.
TRAVELAR CHEQUES
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It is just like cash. It is a facility given to Pakistani citizen. The traveler cheque may be defined as an order drawn by a bank upon itself to pay a specified sum of money on demand to the purchaser of the traveler cheque. ABL after compeering the signature of purchases which he has sign at the time of purchase makes payment. ABL sells the foreign exchange in the form of traveler's cheques and foreign currency to Pakistani citizen's visiting in Pakistan for travel to foreign countries. For traveler cheque following documents are required. a) b) c) National identify card. Passport and visa. O.K ticket.
SALE AND PURCHASE OF THE FOREIGN CURRENCY

ABL is an authorized dealer of state bank of Pakistan. It can sell and purchase foreign currency. ABL usually involves in sale and purchase of us dollar, Japanese yen, UK pound sterling, German Mark, Saudi Riyal and UAE Dirham. Daily exchange rate issued by State bank of Pakistan from ANZ Grind lays bank Karachi, are sent to all the branches authorized in foreign exchange. Daily sale a purchase of foreign currencies is done according to that rate sheet. The purchase of coin will be avoided only notes will be purchased. Only those foreign currency will be purchased for which resale to customers is possible. Demand for respective currency and regulations of SBP must be kept in view at the time of purchase and sales of foreign currency by ABL. It is the policy of ABL to deal only in the hard currencies i.e. those which are early acceptable. H.O of ABL has fixed a certain limit to each authorized branches about the custody of foreign currency. If the amounts exceed this limit, the branch must transfer it to feeding branch or SSB. All the authorized branches of ABL must submit following reports about foreign exchange business to the; a) Report to General Manager Office. 50
The Allied Bank
b) c)
Business report to SBP (monthly barns) Monthly report to head office.
LETTER OF CREDIT A documentary credit is an conditional bank undertaking of payment, expressed move clearly it is a written undertaking by the bank (issuing bank) to the seller at the request and in accordance with the instructions of the buyer (applicant) to effect payment that is be making a payment or by accepting bill of exchange up to state sum of money, with in prescribe time limit and against stipulated documents. These stipulated documents are likely to include those require for commercial official, insurance or transport purposes, such as commercial invoice, certificate of origin, insurance policy and bill of loading.
MY LEARNING EXPERIENCE
One of the most important aims of the student life is to express him correctly and adequately. This was the believe in my mind when I first decided to go to the allied bank to complete my internship program. FIRST WEEK: I started my internship from "General Banking" in the first week. In the first week I learnt many new experiences like how to understand & deal with your customers? How to guide your Department of Management Sciences 51
The Allied Bank
customers? What should our dressing be? To reach at what time in your office (here bank) or
organization?
The second day of exposure to the practical field was at the (sub department) Account opening. I spent my first working day in Enquiry section. In Enquiry section I learned about how to open an Account, How to deal with customers and how to guide them about opening an account and How to fill the account opening form. I helped many clients to fill their forms. The relationship of customer starts with this department. Everyone is not allowed to come and open an account in the bank, for this purpose there should be an introducer who himself is the account holder in the same branch. He has to introduce the new client by signing the opening account form and then his signatures are verified. I have learnt the procedure that an Account Opening Officer has to follow in order to open and maintain an Account. SECOND WEEK: I have learnt that how bank can deposit cash to their customer accounts. How banks can transfer money online what charges banks can be taken in online transfer of money. THIRD WEEK: In the third week of my internship I was shifted to the Clearing section and Bills for collection section as well. Three days I worked with the "Clearing" and then with the "Bills for collection" section. CLEARING: This is a "Inter-city clearing" i.e. the cheques of KABIRWALA city from different banks like NBP, MCB, UBL, askari bank limited, bank alfalah limited are deposited here. The deposited cheque is received carefully by checking the title of cheque, date, amount, and signature on the cheque. All the cheques go to the State Bank of Pakistan for clearance. BILLS FOR COLLECTION: Two types of cheques are deposited here Department of Management Sciences 52
The Allied Bank
Outstation cheques ABL other branch cheques (local)
Outstation cheques mean different cities cheques are deposited and Local means ABL other Branches if has Are deposited. All cheques account numbers on the computer and these figures go to SBP. FOURTH WEEK: In the fourth week of internship I was transferred to the "Remittances department". He tells me about the issuance, procedure and the entries of the demand drafts and pay orders. FIFTH WEEK: In the second last week of my internship I worked for two days in the "ATM section" and then In the cash department. SIX WEEK: In the last week I was shifted to the "foreign exchange" department. For the first three days I worked there but in the last three days I was shifted again to the account-opening department due to the absence of one of the Account opening officer. Therefore I was sent back to the account-opening department. At the end of my work I observe that I can work in branch as an employee.
FINANCIAL ANALYSIS
INTRODUCTION OF FINANCIAL ANALYSIS
Financial analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing relationships between the items of balance sheet and profit and loss account. The analysis of bank statements is undertaken by analyst, depositors, regulatory authorities, stockholders, borrowers and the bank management etc. A depositor is interested in the solvency of Department of Management Sciences 53
The Allied Bank
the bank, i.e. the safety and availability of his funds. The regulatory authorities desire to assure themselves that the banks are operating in accordance with the requirements of the law and are in sound financial conditions. Stockholders are interested in the general financial condition of the bank and the earnings, the dividends, and the managements policy with reference to the accumulation of surplus. The borrower is interested in knowing the extent of available funds and the use that is made of the banks resources.
FINANCIAL STATEMENTS
BALANCE SHEET STATEMENT (Rs in millions)
ASSETS Cash and balances with treasury and other banks LIABILITIES Lending to financial institutions Customer deposits Investments- Gross Inter bank borrowings Advances - Gross Bills payable Other liabilities assets Operating Fixed Sub ordinate loans Other assets Total Liabilities Total assets Liabilities Net Assets / Share capital Provisions against non-performing advances Share premium Reserves Other provisions Un - appropriated profit / (loss) Total assets - net of provision Equity - Tier I Department of Management Sciences Surplus on revaluation of assets
2006 24,745 19,050 206,031 47,156 18,410 151,705 2,278 5,119 6,445 2,500 10,800 234,339 259,902 17,688 4,489 (7,672) 4,316 1,817 (203) 5,608 252,027 16,230 1,458 17,688
2007 30,408 18,419 263,972 84,151 22,934 178,524 3,494 7,332 7,549 2,499 11,368 300,231 330,419 19,878 5,386 (10,117) 3,419 2,632 (192) 6,971 320,110 18,408 1,470 19,878
2008 25,751 15,793 297,475 84,602 27,778 223,640 2,952 13,636 11,134 2,498 18,399 344,340 379,319 22,356 6,464 (10,668) 2,341 3,463 (1,956) 8,537 366,696 20,805 1,550 22,356
2009 27,716 28,123 328,875 96,975 39,819 249,887 3,162 11,061 12,447 5,497 17,955 388,414 433,103 29,960 7,110 (12,543) 1,695 4,888 (2,186) 12,198 418,374 25,891 4,069 29,960
2010 31,845 11,489 371,284 123,855 20,774 268,530 4,119 12,284 15,360 5,495 16,965 413,957 468,044 35,975 7,821 (15,430) 984 6,533 (2,682) 15,829 449,932 31,166 4,808 35,975 54
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PROFIT AND LOSS STATEMENT
2006 Markup / Rerurn / Interest earned Markup / Rerurn / Interest expensed Net Markup / Interest income Fee, Commission, Brokerage and Exchange income Capital gain & Dividend income Other income Noninterest income Gross income Operating expenses Profit before provisions Donations Provisions Profit before taxation Taxation Profit after taxation 17,216 67,93 10423 1636 540 273 2449 12872 5289 7583 9 (913) 6661 (2264) 4397
2007 21201 10093 11108 2258 1585 77 3920 15029 6174 8855 28 (2874) 4953 (1877) 4076
2008 30571 17273 13298 3266 1571 59 4897 18195 8431 9764 82 (3561) 6121 (1964) 4157
2009 41122 22422 18700 3470 2452 36 4958 24658 9609 15049 97 (4416) 10536 (3414) 7122
2010 44993 22428 22565 2910 25114 251 5672 28237 11529 16708 38 (4326) 12343 (4118) 8225
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ANALYSIS OF THE FINANCIAL STATEMENT

There are two types of the statement which I give the name of comparative statement. Comparative Statements 1. Comparative Income Statement 2. Comparative Balance Sheet
TOOLS OF ANALYSIS
There are different tools which are used to analyze the financial statements. There are two major tools which are as under.
HORIZONTAL ANALYSIS (INDEX ANALYSIS)

There are three types of the of horizontal analysis which are as under. i. Absolute increase or decrease in amount. ii. Absolute increase or decrease in % age. iii. Trend % age.
VERTICAL ANALYSIS (Common Size)

Formula= components A X100 Total Asset (Base) And in profit and loss statement I use sales as a base Now we discuss these above tools one by one in detail. Department of Management Sciences 56 (I use this formula for common size analysis)
The Allied Bank
i.
Absolute increase or decrease in amount: It means to change in absolute amount which is quite different between Base Year and Current Years or Proceeding Years.
Formula: Increase / decrease in amount= Proceeding Year Base year ii. Absolute increase or decrease in % age: This tool is same with the pervious tool. There was increase or decrease in amount but here after calculation the amount change the calculation comes in use the increase or decrease in % age. In the tool we observe that how many percent (%) change will be occurring as compare to Base year. Formula: Increase / decrease in % age = Preceding year Base Year 100 Base Year
OR Increase / decrease in % age = Total Changes 100 Base Year

iii.
Trend % age: The change in financial statement items form a base year to proceeding year or often expressed as Trend % age to show the extent and direction of changes. Two steps are necessary to compute Trend % age. i. First Base year selection.
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ii.
The second step is to express each item in financial statement for the Proceeding year as a % age of its Base year amount.
Formula=
Current Year 100 Base Year
(I use this formula for index analysis)
Balance Sheet (Horizontal or Index Analysis)
ASSETS Cash and balances with treasury and other banks Lending to financial institutions Investments- Gross Advances - Gross Operating Fixed assets Other assets Total assets Provisions against non-performing advances Other provisions Total assets - net of provision
2006 100% 100 100 100 100 100 100 100 100 100
2007
2008
2009
2010
122.89% 104.07% 112.00% 128.69% 96.69 178.45 125.99 117.13 105.25 127.13 131.86 94.58 127.01 82.90 179.41 147.42 172.75 170.36 145.95 139.05 963.55 145.58 147.62 205.64 164.71 193.12 166.25 166.64 163.49 1076.84 166.00 60.31 262.65 177.00 238.32 157.08 180.08 201.12 1321.18 178.53
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LIABILITIES Customer deposits Inter bank borrowings Bills payable Other liabilities Sub ordinate loans Total Liabilities Net Assets / Liabilities Share capital Share premium Reserves Un - appropriated profit / (loss) Equity - Tier I Surplus on revaluation of assets 100 100 100 100 100 100 100 100 100 100 100 100 100 100 128.12 124.58 153.3 143.23 99.96 128.11 112.38 119.98 79.21 144.85 124.30 113.41 100.82 112.38 144.38 150.79 129.59 266.38 99.92 146.94 126.39 143.99 1 54.24 190.59 152.22 128.19 106.31 126.39 159.62 216.29 138.81 216.07 219.88 165.74 169.38 158.38 39.27 269.01 217.51 159.52 279.08 169.38 180.21 112.84 180.81 239.97 219.8 176.65 203.39 174.23 22.79 359.55 282.26 192.03 329.77 203.39
INTERPETATION Horizontal analysis of balance sheet show that our assets are increases each year. It shows that our assets are increases due to increased in investment and increase in advances. For Investments increase Bank intends to increase investment in order to maintain long term growth, gain market share and improve penetration, simultaneously increasing returns to shareholders. It shows that bank is increases its business. So therefore our assets are increases year by year.
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Liabilities of the banks increase from 2006 to 2010 increases in borrowings. During 2006, 2007, 2008, 2009, 2010 number of branches were opened in different areas in order to expand the business and facilitate the customers by reducing the distance from residents to bank, for this purpose bank borrowed money more in these periods. Over all equity of the company also increases due to increase in reserves and share capital. So over all business of the bank increased year by year which is positive sign for the bank.
Profit and Loss (Horizontal or Index Analysis)

2006 Markup / Return / Interest earned Markup / Return / Interest expensed Net Markup / Interest income Fee, Commission, Brokerage and Exchange income Capital gain & Dividend income Other income Noninterest income Gross income Operating expenses Profit before provisions Donations Provisions Profit before taxation Taxation Profit after taxation 100% 100 100 100 100 100 100 100 100 100 100 100 100 100 100 2007 2008 2009 2010
231.14% 177.57% 238.85% 261.34 148.57 106.57 138.0 293.51 28.20 160.06 116.75 116.73 116.77 311.11 314.78 74.35 82.90 92.69 254.28 127.58 199.63 290.93 21.61 199.96 141.35 159.41 128.76 911.11 390.03 91.89 86.75 94.54 330.00 179.41 212.10 454.07 13.18 202.44 191.56 181.67 198.45 1077.77 483.68 158.17 150.79 161.97 330.16 216.49 177.87 465.00 91.94 231.60 219.37 217.98 220.33 422.22 473.82 185.90 181.89 187.06
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INTERPETATION Horizontal analysis of income statement shows that interest earned is increased year by year and due to increase in interest earned the expense wills also increased and net income will also increase. The net profit of the bank increased year by year which is minimum in 2006 which is 100% and higher in 2010 which is187.06% which shows good for bank. Total none mark income has also increased in 2010 as compared to previous years Net profit after taxation and profit before taxation is also increased, which motivates the investor, and give confidence to them to invest in ABL shares. Because more the net profit of the organization have more the dividend of the share holders of the organization.
Balance Sheet (Vertical or Common Size Analysis)

ASSETS Cash and balances with treasury and other banks Lending to financial institutions Investments- Gross Advances - Gross Operating Fixed assets Other assets Total assets 2006 10% 8 19 56 3 4 100% 2007 9% 6 26 53 2 4 100% 2008 7% 4 23 58 3 5 100% 2009 7% 7 23 56 3 4 100% 2010 7% 3 27 56 3 4 100%
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LIABILITIES Customer deposits Inter bank borrowings Bills payable Other liabilities Sub ordinate loans Total Liabilities Net Assets / Liabilities Share capital Share premium Reserves Un - appropriated profit / (loss) Equity - Tier I Surplus on revaluation of assets 82 7 1 2 1 93 7 2 1.66 2 2 6 1 7 83 7 1 2 1 94 6 2 1.03 2 2 6 0 6 80 8 1 4 1 94 6 2 0.617 2 2 6 0 6 78 10 1 4 1 94 6 2 0.39 2 2 6 0 6 82 5 1 3 1 92 8 2 0.21 2 3 7 1 8
INTERPRETATION:
By vertical analysis the balance sheet of 2006 to 2010 shows that few portions of total assets have been kept for lending to financial institution and investments, this should be increased. Cash balance should also be increased so that it can be utilized to generate more income. Similarly on Liability side we observe that owners equity portion should be increased and bank should acquire fewer funds from outsider. In 2006 cash increased due to more lending to financial institutions and more interested received. Cash was decreased in 2008. Despite of decrease in cash, advances were increased; more branches were opened in different location that increased the operating fixed
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assets. Investment continuously decreased from 2007 to 2009 which is 26%, 23%, 23% because bank spent more portion of amount on advances and fixed assets.
Profit and Loss (Vertical or Common Size Analysis)
2006 Markup / Return / Interest earned Markup / Return / Interest expensed Net Markup / Interest income Fee, Commission, Brokerage and Exchange income Capital gain & Dividend income Other income Noninterest income Gross income Operating expenses Profit before provisions Donations Provisions Profit before taxation Taxation Profit after taxation
100% 39.45 60.54 9.50 3.13 1.58 14.22
2007
100% 47.61 52.39 10.65 7.48 0.36 18.48
2008
100% 56.50 43.49 10.68 5.13 0.19 16.01
2009
100% 54.53 45.47 8.44 5.96 0.08 12.06
2010
100% 49.84 50.15 6.46 55.82 0.55 12.60
74.76
30.72 44.04 0.05 (5.30) 38.69 (13.15)
70.89
29.12 41.77 0.13 (13.56) 23.36 (8.85)
59.51
27.57 31.93 0.26 (11.64) 20.02 (5.37)
59.96
23.37 36.59 0.24 (10.73) 25.62 (8.30)
62.75
25.62 37.13 0.08 (9.61) 27.43 (9.15)
25.54
19.22
13.59
17.32
18.28
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The Allied Bank
INTERPETATION By vertically analyzing shows that major portion of income statement expenses are comprised of operating expenses which are 31%, 29%, 28%, 23%, and 26% respectively so bank should make effort to reduce these expenses in order to gain maximum profit. It is observed that over the entire Net markup and EAT or Net income have increased in 2010 as compare to 2008 and 2009. Which show that the overall financial position of the ABL will be strong? due to the more administrative and operating expenses the profit before taxation of the bank decreased from 2006 to 2008 and increased in 2010 which is 18.18%.the taxation rate of the bank in 2006,2009 and in 2010 is higher because to increased in assets and low in 2007 and 2008 which is 8.85%,5.37% that shows that in these two year the assets of the bank not increased.
RATIO ANALYSIS
Ratio analysis is basically a technique of establishing meaningful relationship between significant variables of statements and interpreting the relationship to form judgment regarding the financial affair of the unit.
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RETURN ON ASSET:
Formula= Net income / Total Asset X 100 4397/252027 X100=1.74% YEAR 2006 1.74% 2007 1.27% 2008 1.13% 2009 1.70% 2010 1.83%
Interpretation Return on Assets is the most comprehensive measure of the banks earning capacity. In other words, the calculations show the efficiency of management to improve its earning capacity. This ratio is used to determine the overall effectiveness in generating profits with available assets. Return on assets or earning power on total assets of Bank is showing increasing trend in which
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The Allied Bank
reflects that there is increase in turn over on assets, and increase in the net profit margin. As shows in 2008 this increased from 1.13% to 1.70% and 1.83% in 2010.which god for bank.
INTEREST RATIO:
Formula= interest paid / interest earned X 100 6793/17216 X 100=39.46% YEAR 2006 39.46% 2007 47.61% 2008 56.50% 2009 54.53% 2010 49.84%
Interpretation This ratio shows the relationship between the interest paid and the interest earned of the bank. The lowest ratio was in the year 2006 which is 39.46%.in 2007 and 2008 this percentage of interest Department of Management Sciences 66
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paid increased from 47.61%,56.56% which not god for bank. But in 2009 and 2010 this again decrease to come in 49.84% which is good for bank as compare to 2008 and 2009. It shows in 2008 and 2008 that bank paid higher cost of debt due to that ratio is increase.
DEBT EQUITY RATIO:

Formula = Total liabilities / Total share holder equity 234339/16230=14.44 years 2006 14.44 times 2007 16.31 times 2008 16.55 times 2009 15.00 times 2010 13.28 times
Interpretation This ratio shows the extent to which the firm is financed by debt. Creditors would generally like this ratio to be low. The lower the ratio, the higher the level of firms that is being provided by Department of Management Sciences 67
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shareholders. This ratio also tells as about capital structure, what portion of debt in the bank overall capital. In 2008 this ratio is 16.55 and in 2009 the ratio is 15.00 and in 2010 this ratios continuous decreases which is 113.28 which is good for bank and in2007 and 2008 this ratio was 16.31 and 16.55 which was not god for bank as a creditors.
EQUITY RATIO:
Formula= shareholder equity / total asset 16230/252027=0.064 Years 2006 0.064 2007 0.057 2008 0.056 2009 0.061 2010 0.069
Interpretation
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This ratio indicates that how many total assets are being financed by shareholders fund... Higher the ratio, better it is, because the low equity ratio reveals the extensive use of leverage (borrowing) that is not good for bank. Here the ratio is increasing from 0.061 to 0.069 in 2009 and 2010 which is the good for investor points of view as financing of total assets by shareholders are increasing. If it compare in 2006 and 2007 the year 2006 is god for bank which the ratio is 0.064 times.
RETURN ON EQUITY:
Formula= Net Income/shareholder Equity 100 439716230100=27.09% years 2006 27.09% 2007 22.14% 2008 19.97% 2009 27.50% 2010 26.39%
Interpretation Department of Management Sciences 69
The Allied Bank
This ratio shows the profit on equity. In this ratio the total profits of the bank are compared with the total equity of the shareholders. The profits of the bank are decreasing. This ratio is maximum in 2009 and minimum in 2008 and if we compare the profit of bank in 2006 which is 27.09% and in 2010 which is decreased to 26.39% which show not god for bank in this year. It shows that operation of the company is not performing well.
NET PROFIT MARGIN:

Formula= net profit after tax / net sale X 100 4397/10426 X 100=42.19% years 2006 42.19% 2007 36.69% 2008 31.26% 2009 38.09% 2010 36.45%
Interpretation
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Net profit margin measures the %age of sales remaining after all expense has been deducted. This ratios shows the efficiency of the bank, how bank efficiently uses its assets and generating profits, the percentage of net profit based on sales, the bank higher net profit ratio in 2006 is 42.19% it decreased in 2008 and 2010 which is 31.26% and 36.45% and in 2009 bank net profit ration increases which good is 38.09%.
TOTAL ASSET TURN OVER RATIO:

Formula= net sale / total asset X 100 10423/252027 X100=4.14% years 2006 4.14% 2007 3.47% 2008 3.63% 2009 4.47% 2010 5.02%
The Allied Bank
This ratio is useful to determine the amount of sales that are generated from each rupee of assets. With low profit margins tend to have high asset turnover, those with high profit margins have low asset turnover. The bank total assets turnover ratios increased, in 2008 the ratio is 3.63% and in 2009 is 4.47% and in 2010 it is 5.02%.
GROSS PROFIT MARGIN:

Formula= gross income /sales x 100 12872/17216x100=74.77% years 2006 74.77% 2007 70.89% 2008 59.52% 2009 59.96% 2010 62.76%
The Allied Bank
This ratios shows the percentage of gross profit based on sales, the bank gross profit ratio in 2008 is 59.52% it increased in 2009 which is 59.96% and in 2010 bank gross profit ration increased which good for is 62.76%.the higher gross profit in 2006 which is 74.77% and minimum in 2008 is 59.52% .the result of decreasing this ratio is decreased in sale in that years.
OPERATING PROFIT MARGIN:

Formula= operating income / sales x 100 7583/17216x100=44.05% years 2006 44.05% 2007 29.12% 2008 27.58% 2009 23.37% 2010 25.62%
Interpretation
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This ratio basically tell us percentage operating profit based on sales, so the bank operating income margin ratio which is maximum in 2006 is 44.05% and minimum in 2009 which is 23.37%.this ratio tells us the higher the increases in sales the higher the operating profit. In 2006 to 2009 sales of the bank decreased continuously from 44.05% to 23.37%.due to this reason the operating profit of the bank is lower.
ASSET GROWTH RATIO:

Formula= (current year total asset previous year total asset) / previous year total asset X 100 (320110-252027)/252027x100=27.01% years 2006 --------2007 27.01% 2008 14.55% 2009 14.03% 2010 7.54%
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Interpretation This ratio highlights the percentage increase or decrease in the volume of total assets over a period of time. The above analysis shows that asset growth ratio is higher in 2007 which is 27.01% as compare to 2010 which is 7.54%. There is a decreasing trend in this ratio in 2010.
DEPOSIT GROWTH RATIO:

Formula= (current year deposit- previous year deposit) / previous year deposit X 100 (263972-206031)/206031x100=28.12% years 2006 --------2007 28.12% 2008 12.69% 2009 10.56% 2010 12.89%
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Interpretation This ratio reflects the percentage increase or decrease in the volume of deposits over a period of time. The deposits growth is higher in 2007 as compare to 2009. There is 28.12% increased in deposit growth ratio in 2007.now a days due to opening of a new braches the operating cost bear by bank is high instead to deposit it.
ADVANCE GROWTH RATIO:

Formula = (current year advances previous year advances)/ previous year advances (178524-151705)/151705x100=17.68% Years 2006 2007 2008 25.27% 2009 11.74% 2010 7.46%
------------ 17.68%
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Interpretation This ratio highlights the percentage increase or decrease in the volume of advances over a period of times. Advances growth was low in the year 2010. Due to better credit management and attracting new and maintaining the existing clients the advances growth ratio grew high in 2008 which is 25.27%.
DEBT TO EQUITY RATIO:

Formula= total debt (total liabilities) / total equity 234339/16230=14.43times
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years
2006 14.43 times
2007 16.31 times
2008 16.55 times
2009 15.00 times
2010 13.28 times
Interpretation This ratio shows the extent to which the firm is financed by debt. The relationship between borrowed funds and internal owners fund is measured by Debt Equity ratio. This analysis shows that bank are trying to reduce dependence on debt financing i.e. bank is trying to finance its assets more by equity. The bank higher debt ratio in 2007 and 2008 which is 16.31 & 16.55 times and lower in 2010 which is 13.28 times.
DEBT TO TOTAL ASSET RATIO:

Formula= total debt (total liabilities)/ total assets x 100 234339/252027 x 100=92.98% Department of Management Sciences 78
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years
2006 92.98%
2007 93.79%
2008 93.90%
2009 92.84%
2010 92.00%
Interpretation The debt ratio is varying year to year. In 2007 and 2008 the debt of bank is more as compared to other year, which is 93.79% and 93.90% it means that 93% portion of asset is from debt. The ratio also shoes that bank focus on debt financing.
ADVANCE TO TOTAL DEPOSIT RATIO:

Formula = advances / total deposit x 100 151705/206031 x 100=73.63%
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years
2006 73.63%
2007 67.63%
2008 75.17%
2009 75.98%
2010 72.32%
Interpretation This ratio depicts the relationship between advances and deposits and it reveals how productively the deposits are being utilized. Here is an increase in loan to deposit ratio, from year 2007 to 2009, from 67.63% to 75.98%. This condition is favorable as advances increased with increased in deposits. If deposits increase by higher rate than an increase in advances then bank has to face difficulty, its mean that bank is not utilizing its deposits very well.
SWOT ANALYSIS
SWOT Analysis is the abbreviation of
S: Strength
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W: Weakness O: Opportunity T: Threats Strength and weakness represent the internal environment of the organization and weakness and Opportunity represent the external environment of the organization. Hence, SWOT analysis is the critical and complete but comprehensive study of the organization. The following are the strength, weakness, opportunities and threats of the allied bank limited kabirwala branch.
STRENGTH OF THE BRANCH

The branch is linked through an online network of 830 BRANCHES, thus enabling them to
serve customer in better way.
This branch is provided with latest computer which increases the speed of computer work. Allied Bank has a well-engineered structure and a timely execution and hence having a successful transaction. ABL financially a strong bank and having a tested and effective strategy thats why the ABL not affected by the financial crisis and bad condition of economy, and continuous toward growth and getting competitive growth.
It has local branched as well as international branches. Having the strength of more than 580 ATMs in more than 145 cities and towns. The KABIRWALA ABL branch is situated in the Commercial Area which enhances the strength of this branch and hence this branch increases and attracts the number of customers and expends its volume.
The branch is situated in commercial area were business activities perform greater as compare to residential area. Thus it increases the number of customers.
The Branch has the most experienced and the least experienced staff, which is a good
combination of experienced heads and enthusiasm of youth. Department of Management Sciences 81
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The branch is linked through an Online Network of Branches, it enables them to serve customer in better way ABL has the large network of ATM and they expend their branches.
WEAKNESS OF THE BRANCH

The technical training of the staff in branch is negligible e.g. in case of the absence of
computer there is no alternate trained personal who can record the daily transactions.
It is observed that employees have mostly slow-moving and hard attitude towards the
customers.
There is a high part of favoritism in a branch, and mostly employees are hiring on the basis of
favoritism and references.

ATM and online facility is yet provided by branch but its functioning is not very appropriate.
Often the ATM machine and online system is not working and hence many a times the customers get disappointed by the services of the branch and they go another bank for transferring the online transactions.
The branch has not yet providing the car financing and house financing, which is a very large
weakness.
This branch is lack of efficient and proper Research development activities which is very
essential for collecting the essential data which is used for future planning and strategy such as Macro Environmental data and Micro environmental data. Delays were observed because the prescribed procedures are not followed.
The filing system is not up-to-date. Much time is wasted while searching for even a week old
data and documents. Department of Management Sciences 82
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The Branch has a good staff combination on the basis of experience, but their training capabilities are not up to the requirements of the fast changing banking environment. The customers Long-term contacts are not maintained with customers. There is less emphasized on the long term relation with customers those have low deposited (less protocol)
Branch has less furniture than requirement, and less sitting arrangements. The job distribution
is not proper
The level of technology management in the branch is very low. The technology available is
not maintained well mainly because of the lack of technically trained staff. For instance the scanner, in spite of its availability has not been used for scanning the specimen signature cares.
OPPORTUNITIES OF THE BRANCH

The Internet facility in the area provides an opportunity to ABL to get Online. ABL is not yet giving the facilities of car financing and house financing to their customers. It is a big opportunity for ABL to expending its business at a more large scale by starting the business of car and house financing. Kabirwala branch has the deficiency of honest and hard work employees. The branch can increases its progress by availing the more technical, professional and hard work employees. This branch of ABL is giving the facility of collection of utility bills. ATM and online facility is yet provided by branch but its functioning is not very appropriate. Often the ATM machine and online system is not working and hence many a times the customers get disappointed by the services of the branch and they go another bank for transferring fund by online transactions etc. If they overcome these weaknesses then they Department of Management Sciences 83
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have an opportunity to attract and retain the large customers. As, there are coming large numbers of customers daily for ATM and online transaction. The branch is located in a commercial area hence its location is the big opportunity for the bank to attracting the customers at a large scale. The bank has the facility of internet it is a big opportunity the bank can expand itself by increasing its use in more appropriate way. The bank has a large network all over the world it can cover the major market of the Pakistan if it will make it possible to fast delivery of funds. The BANK has the basic infrastructure, which can facilitate the online process This ABL branch can hire the fresh MBAs instead of graduates who are working on old basis and dont know the use of new technology.
THREATS OF THE BRANCH

The biggest threat to the operational success of the branch is the better competitors services.
Many private sector banks are offering higher rates of return to customers than Allied Bank of Pakistan. The allied bank is one of the strong and leading banks so, it has many competitors.
The HBL is located in front of this branch that is a big threat for ABL of kabirwala branch.
Dissatisfied customers is the one of the biggest threat to this ABL kabirwala branch, As
discussed above (in opportunities) ATM and online services is yet provided by branch but its functioning is not very appropriate. Often the ATM machine and online system is not working and ATM machine sometimes is not filled by the funds from the main branch of ABL, and hence many a times the customers get disappointed by the services of the branch and they go another bank for getting the online transactions. If this draw back will not be sort out early, the customers will terminate towards other bank such as towards its neighbor bank HBL
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One of the biggest to the ABL, kabirwala branch is the increasing rate of dissatisfies customers. Most of these customers were observed to be dissatisfied with the delays in their servicing. ABL as compare to other top banks is yet not providing many services such as car financing, house financing services and many other new services. Hence it can lose its reputation.
FINDINGS AND RECOMMENDATION

FINDINGS
During my internship, I have worked in every department of the branch. I found all the employees sincere with their jobs. They told me about their jobs. They answer my questions in a good way. They shared their knowledge with me and told me about their experiences during job. I learnt how to handle different customers, how to fill Account Opening Form, what are the required documents that should be with you in order to open an account, what types of account ABL is offering to the customers, what are the facilities that an account Holder can enjoy and what are the profit rates ABL is giving to its customers. I have learnt the procedure that an Account Opening Officer has to follow in order to open and maintain an Account. In the remittance and clearing department I have learnt that how bank can deposit the cheques and transfer of money from one department to another. What types of stamps are requiring in if cheques can be clear. How many charges bank can charge to their chequeas payments I have learnt that how bank can deposit cash to their customer accounts. How banks can transfer money online what charges banks can be taken in online transfer of money? I got a lot of things from there. How to understand & deal with your customers? How to guide your customers? What should our dressing be? To reach at what time in your office (here bank) or organization? Following are the findings of ABL
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NEED OF DIVERSITY
ABL is very innovative indeed, keeping in view the introduction of almost all the banking products. But for the past couple of years, ABL was not able to diversify its deposit product base. ABL has a well identified target market. Hence to better achieve what it has in target, a well properly attributed product line is the cry of the day.
LACK OF MOTIVATION
My internship was completed wholly in Karak region. The employees working in these branches lack motivation. Their needs have to be assessed, valuated and properly interpreted. This will help increase their motivation and boost up their morale.
TRAINING REQUIRED
The Standard Operating Procedures (SOP) and the Turnaround Time (TAT) of these branches is unsatisfactory. This need to be geared up, which will require proper training and planning.
LACK OF OPPORTUNITIES FOR GROWTH

There is lack of career development opportunities in ABL. A proper career development programmed is also necessary for the employees.
POOR FEED BACK SYSTEM

There is no knowledge of appraisal among the employees of ABL in Peshawar. This in turn results in a fear of downsizing among the employees. A proper appraisal system might be effective in gaining the confidence of the employees.
R&D REQUIRED FOR THE FUTURE PROSPECTS

Afghanistan is an open golden opportunity for every organization. It is presently in the recovery stage after the devastating war effects. Hence, it is a proper time to conduct a research on the different market situation there. The Bank should utilize this opportunity to its maximum. Department of Management Sciences 86
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MARKETING RESEARCH
Marketing is the only means left for organizations to get an edge over each other in this competitive scenario. HBL has to work hard in this area. Good marketing research and advertisements having good cost benefit aspects must be incorporated.
EXPENSION OF ATM FACILITIES

ATM facility of ABL is restricted. People nowadays dont have that much time to stand in long queues. They want auto encashment facility almost everywhere. Expanding the ATM network will catch more customers.
TREND OF EVENING BANKING

There is no Evening Banking in Peshawar. Evening Banking can be a good start in Peshawar and ABL has the potential to avail this opportunity being the largest banking institution in Pakistan and having the oldest experience curve.
LACK OF BANKING KNOWLEDGE

The employees in most of the branches have banking experience but they lack banking knowledge. Fresh graduates specialized in banking and finance can be acquired and trained for better functioning of the bank.
OUTDATED BUILDING
The physical outlook and appearance of ABL branches in kabirwala are outdated. They require attention from the higher level management of the bank. A nice and decent appearance will help in improving the image of ABL more appropriately.
PROPER MONITORING SYSTEM
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A proper dress code is there for the employees but due to the lack of monitoring, the employees are least bothered about it. Discipline and proper dress code should be highly recommended.
RECOMMENDATION ON THE BASIS OF FINANCIAL ANALYSIS
1.
Debt to equity ratios shown in the above table have a positive increase during the last four years so it means that they can have lots of investment opportunities in the market which can lead to a much profitable portfolio of the bank.
2.
Current asset test implies that MCB has the liquid securities on hand floating these marketable securities can earn more than expected in the cross sectional analysis of the three banks ABL has an advantage so it should get and explore new channels of investment (short term).
3.
Due to the unstable economic conditions of the country and interest rates are not stable which have an effect on the asset turn over ratios. Which implies that MCB is not effectively using its assets to generate revenues?
4. 5. 6. 7. 8.
Comparison between the debt and assets speaks loudly the requirement of increasing its both current and long-term assets. But it is growing with slow pace. Coverage ratios indicate the covering of earning over the interest which shows a positive trend during the years. Due to the diversified products and products innovations has a shown a good impact on the profit margin. Investing is the main function of any financial institution. ABL realizing the need for diversified investment portfolio has achieved good results. Equity is the reserves of the bank which he utilizes in case of emergencies or it can create opportunity or experimenting different5 products in the market. ABL has adequate supply of equity, which shows positive trends during the five years analysis.
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9.
Deposits are the lifeblood of the bank. Banks mostly make advances from its deposits ABL has a positive graph against its deposits so it means they have a good or positive advances portfolio.
10.
Analysis of the balance sheet reveals a very good picture because balance sheet is a picture at particular point but when it is compared with the previous balance sheet of the previous years it shows changes. And if that change shows positive trends it means that the organization is staidly approaching and adopting the newer trends of the banking industry. ABL after privatization is now considering reviewing all its functions and operation throughout the organization. So its focus is mainly of the Asset management Investing activities Foreign reserves Tax efficiency and handling its liquid securities.
11.
Due to the strong hold on the money laundering now the people have started using banking channels for the remittances so it is found in theses years that many banks have developed very efficient system for fund transfer around the globe. It is now a growing trend and earning a lot of revenues on the service charges.
12.
Government reviews its monetary and fiscal policies from time to time. Banks are required to adapt changes in such a way that at any time or point it do not coincides with each other which can leave a bad impact on the operation of the overall bank.
13.
ABL realizing the need of the efficient labor has invested a lot on its employees as a off job and on job training during recent years.
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14.
24 hours cash access is one of the most important functions of the bank these days. ABL has increased its no of ATM machines round the country to facilitate its customers in time. This system has many problems but time and technology is helping it a lot.
15.
Lastly project financing is the link between development and revenues. Bank should initiate and implement efficient steps to improve its goodwill and development in country.
CONCLUSION
Although the country is suffering from the financial crises, slow economic growth, and lack of political stability, however, still the ABL continues to fulfill its commitment by contributing in a structured manner, by focusing on Agriculture sector and SME, strengthening cooperate and commercial relationships, product innovation, creativity , technological advancement, and continuous focus on service quality. Due to its strong foundation and well-built strategy. Customer is the focus of everything for ABL and ABL is working tirelessly to enhance relationship with customers by understanding them and then offering relevant products and services all the times and ABL tirelessly continues to working very hard to strengthen the relationship with customers and number of initiatives has been taken by ABL to strengthen its overall function. With the above study I concluded that ABL is one of the most active and challenging organization in its business. Strong corporate banking performance, increased emphasis on middle market, target deposit mobilization, improved customer confidence, largest ATM network with the widest geographical coverage and strong branch network were few key factors behind the impressive growth. Statements are prepared according to the approved accounting standards applicable in Pakistan. During three years analysis of ABL such as form 2007 to 2009, I observed that ABL has impressive profit growth as form 2008 to 2010 its profit after tax rose by 59.52% to 62.76%. And it resulted in increase in increase in ROA and ROE by 1.13% to 1.83%, and ROE by 19.97% to 26.39%. Thus I have concluded that the ABL is a financially strong bank and having the long term Department of Management Sciences 90
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rating of AA and short term rating of A1+ by pacra.and serving and continuously attracting the large number of customers by offering them the innovative, reliable and better competitive products and services and capture a great part of the market in the country by having a large number of depositors and customer. ABL has strong ability to generate future net cash flows from operations to pay debts, interest and dividend. Through financial analysis I conclude that deposits, advances, loans and investments are going up year on year basis. Rapid developments are taking place in remote areas. In ABL risk management encompasses risk identification, assessment, measurement, monitoring and mitigation/controlling all risk inherent in the business of bank. All expenditure which is occurring during the year was for the purpose of the banks business. Banking underwent a complete metamorphosis; clients were naturally attracted to the bank, which provided better and quicker banking services. I found my internship training at ABL Limited kabirwala Branch to be a very rewarding experience. The training was beneficial because it helpful me to aware a real life working environment. So far my learning is concerned; all the employees at branch were quite cooperative. They helped me to understand the activities of a bank to possible extent. I feel pleasure that I have really gained a lot during 8 weeks & enjoyed working with experienced cooperative & intelligent staff.
ACTION PLAN
The action plan must be in the following sequence:
HUMAN RESOURCE POLICY AND IMPLEMENTATION

In order to make selection, recruitment, and promotion free from any influence or pressure favoritisms, the bank needs to have its own standards and have an ill-developed human resource policy. It must be ensured that there should not be any deviation from the policy and standards. Highly qualified, reputable, and honest persons should conduct interviews and performance appraisals. The services of external agencies can also be acquired like for selection and recruitment Department of Management Sciences 91
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Institute of Bankers Pakistan can be used etc. The employment policy should be free from gender bias. Both mean as well as women are encouraged to join the bank as an employee.
TRAINING OF EMPLOYEES
Training and refresher courses should be conducted for all level of employees. At least all the employees should get training of at least five days in their respective department in each year. Special emphasis should be given to the customer service improvement.
INFORMATIO TECHNOLOGY TRAINING

Now-a-day in bunks all the operations are computerized and rapid developments are undergoing in the field of information technology. In order to stay in the race and to stay competitive the Bank needs to train the employees about the use of information technology in banks at all levels. At least all the employees should be familiar with MS Office and the software that the bank is using. A lot of computer professionals are available in the market at a very low cost. The services of this manpower can be utilized.
HIGH LEVEL OF MOTIVATION

In order to increase the level of motivation of the employees few steps should be taken. For this purpose some incentives should be announced for achieving the given targets. Some points should be allotted for performing III and these points should be considered in promotion. Managers at branch level and high authorities at high Level should conduct a meeting once in a week after the working hours with subordinates in which they should discuss what needs to be done to increase and improve the performance and services.
ADVANCES
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It is very difficult to identify all the risks associated with the advances by relying only on quantitative data, which is usually unauthenticated. They often rely only on financial analysis and thus ignoring the qualitative analysis and other risks. The combination of both qualitative and quantitative analysis will help identify the right type of barriers and will results in the profitability of the bank.
QUICK PROCESSING OF LOAN APPLICATION

Banks have high level of liquidity as a result of which the level of profit is declining because the bank is getting no profit on this money but paying mark up to depositors, therefore in order to get profit, the loan applications should be processed quickly. The necessary documentation, and credit approval authorities should process it as quick as possible and the decision of granting or refusal should be made quickly.
INNOVATIVE PRODUCTS
A special committee should be established or a separate small department should be established in which some outside professionals from the financial sector, marketing sectors and banking sector should be taken. They are asked to find the needs of the different target customers and find the solutions of those needs and problems along with the profitability of the bank. University students can also be encouraged to conduct research work or surveys to find what the financial sector wants and how bank can provide them the services that not only satisfy their needs but also provide a healthy profit to the bank.
MODERN EQUIPMENTS
Branches should be equipped with all modem equipments working in the banking sectors like counting machines, faxes, computers, signature identification software, currency identification machines etc, this will increase the expenditure but it will increase the customer base and efficiency of the bank in the long run. Department of Management Sciences 93
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WRITTEN POLICES IN ALL LEVELS

Policies are guidelines for decision-making. Therefore policies should be in written form and should be available at all levels of management. This will ensure the working in the right direction and will act as guideline for the achievement of bank's objectives.
REFERENCES:
www.Abl.com.pk by interviewing to staff manual of department annual reports
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ABL Toseef Word 2003

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Internship Report on ABL Limited

The Allied Bank

COMSATS Institute of Information Technology (WAH Cantt

Internship Report on ABL Limited

The Allied Bank

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

Internship Report on ABL Limited

The Allied Bank

REMITTANCES /CLEARING DEPARTMENT

FOREIGN EXCHANGE DEPARTMENT

Internship Report on ABL Limited

The Allied Bank

MY LEARNING EXPERIENCE FINANCIAL ANALYSIS

FINDINGS & RECOMMENDATION

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

Internship Report on ABL Limited

The Allied Bank

Internship Report on ABL Limited

The Allied Bank

MODRN DEFINITION OF BANKS

MAJOR FUNCTIONS OF THE COMMERCIAL BANKS

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

Cheap Medium of Exchange Transfer of Money Investment ACCEPTING DEPOSIT

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

MAKING LOANS AND ADVANCES

Internship Report on ABL Limited

The Allied Bank

ROLE OF COMMERCIAL BANK

Internship Report on ABL Limited

The Allied Bank

Internship Report on ABL Limited

The Allied Bank

HISTORICAL BACKGROUND OF BANKING IN PAKISTAN

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

BRIEF HISTORY OF ALLIED BANK LIMITED

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

To play a proactive role in contributing towards the society.

Integrity Excellence in Service

Department of Management Sciences

Internship Report on ABL Limited

The Allied Bank

High Performance Innovation and Growth

Internship Report on ABL Limited

The Allied Bank

Department of Management Sciences