With The Name Of Allah, The Most Beneficent And The Most Merciful!

CONTENTS

SERIAL NO.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

DETAILS
DEDICATION ACKNOWLEGEMENT PREFACE EXECUTIVE SUMMARY INTRODUCTION TO BANKING OVERVIEW OF BANKING COMMERCIAL BANKING IN PAKISTAN HISTORICAL BACKGROUND OF ALLIED BANK LIMITED BOARD OF DIRECTORS MANAGEMENT TEAM OF ABL ORGANIZATION & FUNCTIONAL CHART ORGANIZATION HIERARICHY ORGANIZATION STRUCTURE OF BRANCH BRANCHES AND ATM FIELD OF ACTIVITIES WORKING AREA DURING INTERNSHIP BUSINESS PERFORMANCE SWOT ANALYSIS FUTURE PLANS AND SUGGESTIONS IMPORTANT ABREVIATIONS

PAGE
04 05 06 07 08 09 11 12 17 18 19 20 22 23 24 56 71 72 73 74

DEDICATION

I dedicate my internship report to

ALLAH ALMIGHTY
Who has created me as human being and helps me in difficulties, AND Specially My Loving

Mother
By virtue of whose prayers I have able to reach this position. And those who love, encourage and pray for me.

ACKNOWLEDGEMENT

First of all I am thankful to Almighty Allah who in spite of all my weaknesses enabled me to prepare this internship report. I pay hum-age to greatest personality of the Universe; Holly Prophet Hazrat Muhammad (PBUH) who is forever sourcing and spring of guidance of every sphere of life. I am also extremely grateful to all my teachers whose timely help and guidance paved a way for me to complete this internship report. It was surely their method of teaching and eagerness for imparting knowledge that I did not find much difficulty to give ink to my thoughts and information. I am also thankful to all Allied Bank Limited Samnabad Branch (0224) Lahore members who provide me information, material and give me proper training. Thats why I am able to prepare this internship report. I am also thankful to all friends and batch mates who have offered me help in order to complete this difficult task.

PREFACE
Internship, in fact, for the students of BBA (Hons) is a golden chance to develop their capability and skill of customer relationship and management in the practical environment of different business organization. In this contest, I select the Allied Bank of Pakistan Limited. This is among the leading domestic financial institution, as it is one of the oldest commercial banks in Pakistan. Moreover, particularly being a student of bussnies studies, it is necessary for me to get practical knowledge of the managerial and financial activities of the organization. This work is a collection my observation and experience during the internship period and afterward. The source of my information for the preparation of this report also includes the written notes, literature on banking, and verbal discussion with bank officials, senior student working in banks and my class mates. In the preparation of this report, I have received valuable assistance from the staff of Allied Bank of Pakistan Limited, Samnabad Branch LHR (0224). I am thankful to Mr. KHWAJA MASOOD UL HASSAN (Chief Manager) is very polite and courteous personality. He always positively enforced me to learn more and more. With the attachment of following people, I have learned about different type of activities performed by a banker now days.

Mr. RIFFAT JAVED JAFRI Mr. SAIMA EJAZ Miss. SAIMA SALEEM Miss. SYEDA RABIYA HASSAN Mr. KHAWAR Miss. MARIYUM AHMED

Customer Services Manager Supervisor (Bills/Remittance/Cash) General Banking Officer Customer Support Officer Cash Officer Cash Officer

I am very thankful to all of above-mentioned persons who are very much cooperative, and they provide me the detail information of all routine activities.

EXECUTIVE SUMMARY

Allied Bank was the first Muslim bank to have been established in Pakistan. Established in December 1942 as the Australasia Bank in Lahore with a paid-up share capital of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank attracted deposits equivalent to Rs. 0.431 million in its first eighteen months of business. At the time, the Banks total assets amounted to Rs. 0.572 million. Today, Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposits exceed Rs. 143 billion and total assets equal Rs. 170 billion. Now with its network of over 800 branches located in the urban and rural arrears throughout Pakistan, Allied Bank is positioned to provide personalized banking services to its customers at locations convenient to the customers. ABL has invested extensively in branch automation; all branches are computerized on branch based multi-user computer systems. I have chosen the Allied Bank for my internship because it is among the leading commercial banks of Pakistan and I want to continue my learning at well reputed organization which would be productive both for the organization and me as well.

INTRODUCTION TO BANKING
ORIGIN OF THE WORD BANK:
There are many definitions of the word Bank even the standard encyclopedia and law books find it difficult to state exactly what a Bank is. There have been many attempts by different writers to explain the exact significance of the term Bank. Here some of the definitions are quoted as follows.

According to the Banking Companies Ordinance 1962 Section 5 (b) defines:

Banker means a person transacting the business of accepting, for the purpose of lending or investment, of deposits from the public, and withdrawal by cheques, drafts, order of otherwise, and include any post office saving banks

According to Crowther:
Bank is a dealer of debt, his own and of other people.

According to Gilbert:
A bank is a dealer in capital or dealer in money. He is an intermediary party between the borrowers and lenders.

According to Samuelsion:
Commercial banks provide certain services for customers and in return receive payments from them.

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OVERVIEW OF BANKING
HISTORY OF BANKING
Bank is a pipeline through which currency moves into and out of circulation. Bank accepts deposits and repays cash to its customers on their demand. The Bank borrows money at a lesser rate of interest and lends it to the borrowers at a higher rate. It is thus a profit-lending concern. Bank cannot lend all the money that has been deposited with it. It has to keep a certain portion of the total deposits in cash with them in order to meet the cash requirements of the individuals and business concern.

BANKING HISTORY
Word Bank is said to be derived from the words Bancus or Banquewhich means bench Other authorities hold the opinion that the word bank is derived from the German word Back which means joint stock fund. The history of banking is traced to as early as 2000 BC. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths. They used to keep strong safes for storing the money and valuables of the people. The persons who had surplus money found it safe and convenient to deposit their valuables with them. The FIRST STAGE in the development of modern banking, thus, was the accepting of deposits of cash from those persons who had surplus money with them. The goldsmiths used to issue receipts for the money deposited with them. These receipts began to pass from hand to hand in settlement of transactions because people had confidence in the integrity and solvency of goldsmiths. When it was found that these receipts were drawn in such a way that it entitles any holder to claim the specified amount of money from goldsmiths. A depositor who is to make the payments may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These receipts were the

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earlier bank notes. The SECOND STAGE in development of banking thus was the issue of bank notes. The goldsmiths soon discovered that all the people who had deposited money with them did not come to withdraw their funds in cash. They found that only a few persons presented the receipt for encashment during a given period of time. They also found that most of the money deposited with was lying idle. At the same time, they found that they were being constantly requested for loan on good security. They thought it profitable to lend at least some of the money deposited with them too the needy persons. This proved quite a profitable business for the goldsmiths. They instead of charging interest from the depositors began to give them interest on the money deposited with them. This was the THIRD STAGE, in the development of banking. By experience the banks came to know that they could keep a small proportion of the total deposits for meeting the demands of customers for cash and the rest they could easily lend. They allowed the depositors to draw over and above the money actually standing to their credit. In Economics terminology we can say that they allowed the overdraft facilities to their depositors. This was the FOURTH STAGE, in development of banking. When every bank issues receipts and most of them allowed the overdraft facilities, there was then too much confusion in the banking system. The banks in order to earn profits could not keep adequate reserves for meeting the demands of the customers for cash. The failures on the part of the bankers to return money caused widespread distress among the peoples. In order to create confidence among the people, steps were taken to regulate the banking organization. A conference was held in Nuremberg in 1548. It was decided that a bank should be set up by the state, which should streamline the banking organization and technique. The first central bank was formed in Geneva in 1578. Bank of England was established in 1694. The responsibility of issuing of notes is now entrusted to a central bank of each country.

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COMMERCIAL BANKING IN PAKISTAN

At
the time of partition total number of Banks were 38 only. Out of these

Banks the Pakistani Banks were only 2 , Indian Banks 29 & Exchange Banks were 7. The total of deposits of Pakistani Banks was Rs.880 Million. & advances were Rs: 198 Million.. According to banking companies ordinance Banks are the companies, which transacts the business of Banking in Pakistan. Commercial Banks have constituted the most important [part of the intuitional credit in the economy of Pakistan. Being the largest source of credits, Banking Industry is a pivot of whole the economic activities in Pakistan. Section 37(2A) of State Bank of Pakistan Act 1965 lays down that the Banks must have paid-up capital & reserve of not less then Rs: 5 Lac & fulfilling certain other requirements for declaring as Scheduled Bank. At the time of independence Bank services was badly affected. But with the passage of time these are improving. The government of Pakistan nationalized all Banks in early 1974. This act was done to minimize control of few hands over banking. But this step was proved e futile for the Banking in Pakistan. So the Govt. had to revise its decision in1990. Two Banks (Allied Bank Of Pakistan Limited & Muslim commercial Bank Of Pakistan Limited

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have been denationalized. Since then Banks were working well. Now slogan of the Banks is to serve their customers in the best possible manner. Professor Berton: Banks are the guardian & distributor of money . Similarly we can say that it is a pipeline thorough which currency moves into & outside the circle. Banks accept deposited of money and repay it on demand. Bank borrows money at lesser rate of interest & lends it at higher rate of interest. In this way Banks earn money. Bank do not lend all money they collect, they keep certain portion of it as reserve to meet the uncertain demand of the customer.

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Overview
Allied Bank was the first Muslim bank to have been established in Pakistan. Established in December 1942 as the Australasia Bank in Lahore with a paid-up share capital of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank attracted deposits equivalent to Rs. 0.431 million in its first eighteen months of business. At the time, the Banks total assets amounted to Rs. 0.572 million. Today, Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposits exceed Rs. 143 billion and total assets equal Rs. 170 billion.

The Banks journey has been about dedication, commitment, professionalism and adapting to environmental changes, leading to its immense growth and stability. A view of Khawaja Bashir Bux's Residence. The first branch of Australasia Bank. It is these factors that have made it a Bank the rest look up to.
A view of Khawaja Bashir Bux's Residence. The first branch of Australasia Bank.

The Pre Independence History (1942 to 1947)

In the early 1940s, the Muslim community was beginning to realize the need for its active participation in the fields of trade and industry. Since the late 1880s, Hindus had established a commanding presence in the areas of industry, trade and commerce and were especially dominating in the Sub-continent area. Banking, in particular, was the exclusive forte of Hindus and it was popularly and wrongly believed that Muslims were
Mr. S.R. Jariwalla (sitting in the center) A legendary figure in the history of the Bank.

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Board of Directors

Pervaiz Iqbal Butt

(Director)

Muhammad 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)

16

Mohammad Aftab Manzoor

(CEO)

Mubashir A. Akhtar
(Director)

Mohammad Naeem Mukhtar

(Chairman)

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 Cheif, Treasury)

Mujahid Ali
(Group Cheif, Information Technology)

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)

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Chairman & Chief Executive Central Office/ Head Office

SEVP

SEVP

SEVP

PHQ SINDH PHQ NWFP/AK PHQ PUNJAB PHQ BALOCHIST AN

Islamic Banking Division

Admin & Human Resource Division Audit & Inspection Division Customer Services Division

International Division

Credit Monitoring Division Maintenance Engg.

Protocol and Stationary

Finance Division Environmental Protection Division Legal Affairs Division Overseas Operation (UK Branches)
Investment & Fund Management Division

Division

Agriculture & Small Finance Division

Presidents Secretarial & Board Affairs 10 Credit Audit Offices Located 4 Provinces Research & Development Division Credit Processing Division

Computer & MIS Division

Business Promotion, Marketing Planning Division

Recovery Division
General Services Credit & Division H.O. Corporate Division Lahore

Training Division Academies in Karachi, Lahore, Islamabad & Peshawar

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Sports Division Shares Division H.O. Lahore

Organizational Hierarchy Allied Bank of Pakistan Limited

PRESIDENT
SENIOR EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICERS GRADE III ASSISTANTS

II

CASHIER

PEONS

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Organizational Set Up Of Allied Bank Of Pakistan Limited

HEAD QUARTER

KARACHI

PROVINCIAL HEAD QUARTERS

PUNJAB

LAHORE

SINDH
NWFP & AZAD KASHMIR

KARACHI

PESHAWAR

BALOCHISTAN

QUETTA

CIRCLE OFFICES

BRANCH OFFICES

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Allied Bank Samnabad Road Branch Sialkot (0224) is a branch with fifteen staff members and they do all works very systematically.

CHIEF MANAGER / BRANCH MANAGER

CUSTOMER SERVICE MANAGER

CHIEF ACCOUNTANT

CLEARING OFFICER

ACCOUNTANT

CASHIERS

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Branches & ATM

Online Banking facilities are available to customers maintaining accounts at all online branches across the country. The following facilities are available: Cash Deposit for immediate credit to a remote branch. Remote Cheque Encashment from any online branch. Instant Funds Transfer between any 2 online branches. Remote Balance Inquiry and Statement of Account.

Additionally, account holders of all online branches can obtain the Allied Cash+Shop Visa Debit Card for use at ATMs as well as at POS terminals.

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FIELD OF ACTIVITIES
DEPOSIT DEPARTMENT:
The function of deposit department is to collect deposits from customers. Following type of deposits accounts are offered by Allied Bank. 1. PLS Account 2. Current Account 3. Allied Business Account 4. Allied Basic Banking Account 5. Foreign Currency Deposits 6. PLS Term Deposit Account 7. Allied Munafa Account (AMA) 8. Behtar Munafa Account (BMA) 9. Behtar Munafa Term Deposit (BMTD) 10. 11. 12. Mahana Aamdani Package(MAP) Allied Bachat Scheme (ABS) ALLIED e-SAVERS ACCOUNTS (ESA)

1) PLS Account:
Allied Bank offers PLS Savings Account facility to its customers with the following attractive features. Attractive return of 5.00% per annum

Free Online Transaction, DD/TT/PO for depositors maintaining average monthly balance of Rs. 100 & Above during the previous month.

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2)

Current Account:
Allied Bank offers Current Account facility for individuals as well as for

institutions and commercial customers. Free Online Transactions, DD/TT/PO for depositors maintaining average monthly balance of Rs. 2.500(M) & Above during the previous month. 3)

Allied Business Account:

Allied Bank offers you a banking experience beyond expectations!

Allied Business Account is a non-profit current account with countless benefits and services. If you are a businessman, trader or an individual, Allied Business Account is an ideal proposition for you. Slabs Rates effective from 01.01.07 Online/Manual Remittances Outward Cheque Return Issuance of DD/TT/PO/OBC /Expression Collection Free Free

Rs. 500,000/- and above

Free

Additional Benefits:
24 hours helpline service Free Internet Banking facility SMS transaction alerts Allied Cash+Shop Visa Debit Card for cash withdrawals through any ATM and debit transactions at various retail outlets Note: All profits payable are subject to applicable Zakat and Govt. Levies and changes in the Bank's Policy from time to time. 4)

Allied Basic Banking Account:

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In order to provide basic banking facilities to its lower-middle class customers, Allied Bank has introduced the Allied Basic Banking Account (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. 5) Unlimited withdrawals from ATMs.

Foreign Currency Deposits:

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. Note: All profits payable are subject to applicable Zakat and Govt. Levies and changes in the Bank's Policy from time to time. 6)

PLS Term Deposit Account:

Allied Bank offers the following rates in its normal term deposit account:

PLS Term Deposits Up to Rs. 5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs50,000,000 Rs50,000,001 to Rs100,000,000 Rs100,000,001 to Rs.500,000,000

1 Year 8.00% 8.50% 9.00% 9.25% 9.50%

Month Months Months 4.00% 6.50% 7.00% 4.50% 7.00% 7.50% 5.00% 7.50% 8.00% 5.50% 8.00% 8.50% 6.00% 8.50% 9.00%

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Above 500,000,000

9.25%

9.75%

PLS Term Deposits Up to Rs. 5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs50,000,000 Rs50,000,001 to Rs100,000,000 Rs100,000,001 to Rs.500,000,000 Above 500,000,000 7)

5 Years 8.50% 9.00% 9.50% 9.75% 10.00% 10.25%

Years Years Years 8.10% 8.25% 8.30% 8.60% 8.75% 8.80% 9.10% 9.25% 9.30% 9.35% 9.50% 9.55% 9.60% 9.75% 9.80% 9.85% 10.00% 10.05%

Allied Munafa Account (AMA):

Allied Munafa Account is a profit bearing checking account with the

payment of profit on a monthly basis. The estimated rate of profit is given below: Slabs Rs 0.5(M) to less than Rs 5 (M) >Rs 5(M) to Rs 25 (M) >Rs 25(M) to Rs. 50 (M) >Rs 50(M) to Rs. 100 (M) >Rs 100(M) to Rs. 250 (M) >Rs 250(M) to Rs. 500 (M) Rs 500(M) and above Rates effective from 01.01.07 5.00% 6.00% 7.00% 7.50% 8.00% 8.50% 9.00%

Salient Features:
The applicable profit rate would be based on slab of amounts maintained on average monthly basis and the profit credited in the account on monthly basis.

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Individuals,

Firms,

Companies,

Schools,

Hospitals,

Charitable

Organization & Non-Govt. Organizations etc are free to open their account in this scheme 8)

Behtar Munafa Account (BMA):

Behtar Munafa Account is a profit bearing checking account with the

payment of profit on a monthly basis. The estimated rate of profit is given below:

Slabs Rate (p.a.) Upto Rs.5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs.50,000,000 Rs50,000,001 to Rs.100,000,000 Rs.100,000,001 to Rs.250,000,000 Rs.250,000,001 to Rs.500,000,000 Above Rs.500,000,000 9) 5.00% 6.00% 7.00% 8.50% 9.25% 10.00% 10.50%

Behtar Munafa Term Deposit (BMTD):

Allied Bank offers following rates in its Behtar Munafa Term Deposit.
Average Monthly Balance Upto Rs.5,000,000 Rs.5,000,001 to Rs.25,000,000 Rs.25,000,001 to Rs.50,000,000 Rs50,000,001 to Rs.100,000,000 1Mon 3Mont 6Mont 1Yea th hs hs r 9.50 % 10.00 % 10.50

6.00% 8.00% 8.50% 6.50% 8.50% 9.00% 7.00% 9.00% 9.50% 7.50% 9.50%

% 10.00 11.00 % %

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Rs.100,000,001 to Rs.500,000,000 Above Rs.500,000,000

8.00% 8.50%

10.00 10.50 11.50 % % % 10.75 11.00 12.00 % % %

10)

Behtar Munafa Term Deposit (BMTD):

Mahana Aamdani Package is a unique product with attractive returns.

It provides an opportunity to earn a regular monthly income with a flexibility of placement for 12, 24 & 36 months. Saving has never been so convenient! Allied Bank introduces the Mahana Amdani Package, with which you can earn monthly profits on investments. Besides bringing high returns, this account also offers you the flexibility to choose from tenures of 12, 24 or 36 months.

Rate of Profit For 1 year For 2 year For 3 year Descriptio Retur Rat Retur Retur n Rate Rate n e n n 12 months 24 months 36 months 8.40 % Rs. 700 8.70 % 9.30 % Rs. 725 Rs. 775 9.00 % 9.30 % 10.30 % Rs. 750 Rs. 775 Rs. 858

Approximate monthly returns calculated on the investment of Rs. 100,000

Salient Features:
Account Type: Fixed term deposit Term Period: 1 - 3 years Minimum Deposit Amount: Rs. 100,000 (additional investment in multiples of Rs. 10,000)

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Profit: Payable on monthly basis Eligibility: Individuals and institutions (other than financial institutions)

Additional Benefits:
24-hour phone banking service Free internet banking facility SMS transaction alerts Allied 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 Note: All profits payable are subject to applicable Zakat and Govt. Levies and changes in the Banks policy from time to time.

11)

Allied Bachat Scheme (ABS):

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 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:

No. of Years

ABL Projected Rates

Repayment amount

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0 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5

0 7.00% 7.50% 8.00% 8.75% 10.00% 10.25% 10.50% 10.75% 11.00% 11.25% 11.50% 11.75% 12.00% 13.33%

50,000.00* 53,500.00 55,625.00 60,937.50 65,000.00 71,000.00 77,500.00 80,937.50 84,500.00 88,187.50 92,000.00 100,000.00

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

Note: All profits payable are subject to applicable Zakat and Govt. Levies and changes in the Banks policy from time to time.

12)

Allied e-Savers Accounts:

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!

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E-Savers Rs. 400,001 up to Rs. 500,000 Rs. 300,001 up to Rs. 400,000 Rs. 200,001 up to Rs. 300,000 Rs. 100,001 up to Rs. 200,000 Rs. 10,000 up to Rs. 100,000

Profit Rate 7.5% p.a. 6.0% p.a. 5.0% p.a. 4.5% p.a. 4.0% p.a.

Salient Features:
Investment: Rs. 10,000 to Rs. 500,000 Profit: Payable on quarterly 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

Note: All profits payable are subject to applicable Zakat and Govt. Levies and changes in the Banks policy from time to time.

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ALLIED VISA DEBIT CARD:

Allied cash+shop Visa Debit Card Features

Get Cash You are always on the move, now your bank account is too. You can use your Allied Cash+Shop Visa Debit Card to withdraw cash directly from your bank account from over 2,500 ATMs in Pakistan - including Allied Bank's largest network of ATMs - and over 1 million ATMs worldwide Shop Anywhere Use the Visa power of your Allied Cash+Shop Visa Debit Card to shop at over 49,000 retailers in Pakistan and over 27 million retailers internationally. Dine Out Go to all your favorite restaurants and order whatever you want without having to worry about how much cash you have in your pocket - thanks to your Allied Cash+Shop Visa Debit Card.

Enjoy Traveling Imagine traveling without carrying cash. With your Allied Cash+Shop Visa Debit Card, you can buy your plane tickets and do all your shopping abroad without worrying about spending too much or running out of cash. Get Groceries Go grocery shopping with your Allied Cash+Shop Visa Debit Card and you will never have to worry about having enough cash in your pocket when you're standing in line at the cash counter.

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Have Fun Whether you feel like taking the family to see a movie at the cinema or treating some friends to a night of bowling, you can do it all and more with your Allied Cash+Shop Visa Debit Card. Fuel Up Now you can fuel up your car without emptying your wallet. Pay for all your fuel purchases with your Allied Cash+Shop Visa Debit Card. Stay Alert Now, be more secure and keep better track of your spending. With your Allied Cash+Shop Visa Debit Card, you can get SMS alerts when you make transactions on your Card. You can also access the details of your transactions via internet banking at abl.com.pk So you are always updated and alert. Credit Protection Plus With Credit Protection Plus, your Allied Visa Gold Credit Card provides payment cover against: Death, due to accident or sickness Permanent and Total Disability, due to sickness or accident Temporary Total Disability, due to sickness or accident Terminal Illness Zero Loss Liability The Allied Visa Gold Credit Cards Zero Loss Liability feature protects you from paying for any unauthorized transactions on your Card in the event that it is lost or stolen. Please notify Allied Phone Banking immediately at 0800-22522 (within Pakistan) or at 9221-5301094 (outside Pakistan) in case your Card is lost or stolen. 24-hour Allied Phone Banking For any information and queries about your Allied Visa Gold Card, call Allied Phone Banking at 0800-22522. If you are calling from outside the country, please dial 9221-5301094.

Free CIP Lounge Access As an Allied Visa Gold Credit Cardholder, you are eligible to avail the free lounge facility at Quaid-e-Azam International Airport, Karachi and enjoy a variety of complimentary features. Relax while you watch leading television channels or select something to read

33

from an updated library of newspapers and periodicals. Also, feel free to plug in your laptop and mobile phone into the charging facilities provided, or browse the Internet or send and receive faxes while you wait. You can also treat yourself to a wide assortment of high quality snacks, beverages and fresh fruits.

Activation Instructions Please follow the instructions stated below so that you are able to use your Card at any merchant outlet or Visa ATMs. 1.Kindly sign the signature panel on the back of your Card in permanent ink as soon as you receive it. 2. To activate your Card, please call Allied Phone Banking. 3. Enter the PIN provided to you in order to use the Card at ATMs. Important Information Your Card is valid till the expiry date shown on it and will be renewed every year from then onwards. Please do not forget to cut your expired Card into two halves before using the renewed Card. In case of change of particulars, please call Allied Phone Banking on080022522and promptly communicate the changes so that your information is updated. Dont forget to mention your Card Account Number in all correspondence and on all cheques for payment. Please refer to the Schedule of Charges for details of all charges and fees associated with the use of your Card. Protect Your Card Do not bend your Card. Do not leave your Card near a television or any other electrical or electronic gadget, which has a continuous magnetic field. Do not expose your Card to direct sunlight. Please notify the Bank immediately of any irregularities. Avoid scratching or damaging the magnetic strip. This strip is sensitively encoded and requires special care. Do not disclose your Card Account Number or Personal Identification Number (PIN) to anyone.

ALLIED VISA CREDIT CARDS:

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Allied Visa Credit Card

Welcome to the world of privileges, benefits and savings with your Allied Visa Credit Card. In order to cater to your growing financial needs we are proud to introduce Allied Visa Credit Card with The Lowest Service Charge ever! So now you can save money where it counts and spend lavishly at your favorite places with greater flexibility, convenience and most important-Affordability! With your Allied Visa Credit Card you can enjoy a variety of state-of-the-art features and unmatched value by spending at over 49,000 merchants across Pakistan and 27 million merchant outlets worldwide! And what more, you can also use your credit card at over 1 million ATMs internationally!

Allied Visa Gold Credit Card

With your Allied Visa Gold Credit Card every Pakistani can now enjoy the benefits of a Gold Card internationally with unmatched savings greater flexibility, convenience and security.

Visa Platinum Credit Card

With your Allied Visa Platinum Credit Card you can enjoy exceptional benefits and a host of local and international benefits like never before!

HAJJ SERVICES:
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The Hajj Service is available to all pilgrims. The forms and other related services are provided by the Bank. Hajj applications are available with all branches during Hajj season, immediately after the Hajj policy is announced by the Government of Pakistan.

UTILITY BILLS:
Customers can pay their utility bills (e.g. electricity, gas, telephone) at any of the Banks branches. For further convenience, bills are collected on all working days during normal banking hours and also at certain times during the evening. Bills can be paid with cash or cheque, plus customers can even drop crossed cheques in drop-boxes available at all branches. Furthermore, customers can also pay their bills using any of the Banks ATMs or via Internet Banking for SSGC and SNGP bills.

LOCKERS:
36

Allied Bank Lockers are available, at an annual fee, in four different sizes - small, medium, large and extra large. Locker holders are not required to have an account with the Bank.

S. #

Locker Size

Annual Locker Rent (Current) Rs.1,500/Rs.2,000/Rs.4,000/Rs.5,000/-

Maximum Loss Coverage / Limit Rs.500,000/Rs.1,000,000/ Rs.1,500,000/ Rs.2,000,000/ -

1. 2. 3. 4.

Small Medium Large Extra Large

AGRICULTURE FINANCE:
The Bank, under the Agricultural Financing Scheme, as decided by the State Bank Of Pakistan, extends short, medium and long term, farm and non-farm credits. The farm credits are extended for production (inputs) and development purposes. Non-farm credits are allowed for livestock (goats, sheep, cattle), poultry and factories including social forestry and fisheries (inland and marine, excluding deep sea

37

fishing). Details are as follows:

Farm Loans
Production Loans 1.Inputs like seeds, fertilizers, pesticides, weedicides, herbicides, labour charges, water charges, vegetables, floriculture, etc. 2. Working capital finance to meet various farming expenses. Development Loans Improvement of agricultural land, orchards, etc. Construction of Godowns Tractors, Machinery & other equipments Tube wells Farm Transportation, etc Non-Farm Loans Livestock Poultry Fisheries Forestry

INTERNET BANKING:
Banking is now at your fingertips! Allied Direct Internet Banking offers you the convenience to manage and control your banking and finances when you want, where you want! It's Simple, Convenient, Secure and Faster. So, just get clicking! Some of the advantages of Allied Direct Internet Banking are:

38

Simple and Convenient Easier navigation and help provided at every step so you can make full use of this service. With Allied Direct convenience is just a click away. Secure and Faster Encrypted with latest tools and technologies, Allied Direct is the choice for secure and fast Internet Banking. 24x7 Access You now have access to your account 24 hours a day, 7 days a week. You can transfer funds or pay bills, even when it's a holiday. To use Allied Direct Internet Banking, you should be a registered Allied Bank Account holder with a valid ATM Card. If you do not have an account, please visit any of our nearest branches and open your account and obtain an ATM Card. Our friendly branch staff will help you open your account quickly.

ONLINE BANKING:
Allied Online Banking is a unique service being offering from Allied Bank. Through this service, your account in Allied Bank is available to you from any of our branches countrywide.

No matter where you are in the country and whichever branch your account is maintained at, you can have your cheque cashed at any of our 757 online branches located in 250 cities. You can also use the service, from any branch,

39

to deposit cash for instant credit into your account or any other account in Allied Bank. Similarly, the account-to-account Funds Transfer facility is also available for instant remittance. Your cheque drawn from a remote branch for credit into a beneficiarys account or encashment of a specified amount, can also be presented by a third person at any branch. Whats more, making a Balance Inquiry and getting an Account Statement are additional services available to Account holders from remote branches. Allied Online provides a secure, efficient and convenient facility for making payments to beneficiary accounts from any of our branches countrywide. Corporate customers requiring fund collection or a disbursement facility can use it for cash management services.

CORPORATE LEASING:
Allied Bank started lease operations when it integrated with Ibrahim Leasing Limited. Facilities include leases for machinery, commercial vehicles and equipments. The Bank provides lease facilities to corporate and commercial clients in all industrial enterprises for balancing, modernization, replacement and expansion schemes . Leasing is a popular mode of financing because of its distinctive features like tax shield, preserve working capital, easy documentation and less processing time.

40

Lease applications are processed at all Bank branches in Pakistan.

UNCLAIMED DEPOSITS:
All unclaimed deposits are surrendered to the State Bank of Pakistan. The customers may access relevant information from the following addresses:

Attention Valued Customers Unclaimed Deposists/Instruments In accordance with the Banking Companies Ordinance, 1962, Section 31, the Bank is liable to surrender to S.B.P, all unclaimed deposits and instruments which have not been operated/collected by the account holders/beneficiaries for last 10 years. All such customers/beneficiaries are requested to contect the concerned brance to re-activate their accounts/collect the instruments, failing which, the bank will be compelled to classify the same "UNCLAIMED" and surrender to SBP. State bank revised instruction on unclaimed deposits Public Notice

41

As per Section 31 of Banking Companies Ordinance 1962 A debt in Pakistan Rupee is owing by a banking company by reason of a deposit, not being a deposit in the name of a minor or a government or a court of law, at a branch of the banking company in Pakistan in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor during the last ten years period are considered as unclaimed deposits. These include demand deposit, time deposit, pay order, demand draft, etc. As per instructions of the State Bank of Pakistan, all un-claimed deposits are surrendered to the SBP. The customers may access this information at the following addresses: 1. Allied Bank website (http://www.abl.com.pk/), respective branches of the Bank and Finance Group, Central Office, Karachi. 2. Website of State Bank of Pakistan (http://www.sbp.org.pk/) 3. Field Offices of SBP Banking Services Corporation in Karachi, Lahore, Peshawar, Quetta, Islamabad, Rawalpindi, Faisalabad, Multan, Sialkot, Bahawalpur, Gujranwala, Hyderabad, Sukkur, D.I.Khan and Muzaffarabad. All the claimants can apply for refund in the bank branch where deposit/instrument account was opened/payable. In cases where such branches have been closed /shifted, the nearest branch of the same bank should be contacted. It may please be noted that after completion of one-year from the date of making the list public, all unclaimed deposits/instruments will cease to be claimable and will be transferred to the government.

CLEARING DEPARTMENT :
Every bank acts in two way i.e. 1. Paying Bank 2. Collection Bank Here in theory no legal obligation on a banker to collect cheques, drawn up to other banks for a customer. It is, however, an important function of crossed

42

cheques. A large part of this work is carried out though the bankers clearing house wherever it is established.

Clearing House:
A clearing house is the place where representatives, of all the banks get together for the purpose of off setting the inter bank indebtedness arising from the transfer of deposits by a customer of a particular bank to another bank.

Advantages of Clearing House:

The advantages are manifold. It prevents the cost and waste involved in collection each and every cheque and claim. Which a banker holds against another, across the counter with all the danger of loss in the transit incumbent upon it. Great economy is also achieved in the employment of liquid cash by setting the difference by simpler transfer of credit from one account to another, there by minimizing the necessity of holding large wash balances, clearing house works under the control of State Bank of Pakistan. A banker has no legal obligation to collect cheque drawn upon other banks for the customers, though modern banks have assumed this important function of their own choice. Therefore, it is very important that since they have assumed this function, the banker should be very careful in their performance, otherwise they will face more difficulties. So, if they provide this facility when the cheques are crossed.

Functions of Clearing Department:

The following are the main functions of clearing department. 1. To accept transfer deliveries and clearing cheques from the customer of the branch and to arrange for their collection.

43

2. To arrange the payment of cheque drawn on the branch and given for collection to any other branch of Allied Bank of Pakistan or any other members, or sub-members of the local clearing house. 3. To collect amounts of cheques drawn on members, sub-members of the local clearing house, sent for collection by those Allied Bank Limited branches which are not represented the local clearing house.

Procedure of Depositing Cheques in Clearing House:

Whenever a customer wants to deposit cheque, etc, he fills a pay in slip and hands it over the counter along with the instruments he wants to deposit with bank. As far as possible, the customer desire that on of the staff member fill in a slip for him, he should be obliged promptly. The smaller portion of the perforated pay in slip is handed over to the depositor and the portion becomes the regular portion of a credit voucher. 1. Transfer Cheques Transfer cheques are those cheques, which are collected and paid by the same branch of bank. 2. Transfer Delivery Cheques Transfer Delivery cheques are those cheques, which are collected and paid by two different branches of a bank, situated in the same city. 3. Clearing Cheques Clearing cheques are those cheques in which the payee (Person who deposit cheques for collection) and the drawer of a cheque maintain the account with different banks.

Scrutiny of Cheque:
When the cashier receives the cheques, which are to be deposited for clearing purpose the following points must be verified. 1. The instrument should be neither stale nor post dated.

44

2. If the instruments is crossed, not negotiable, it can be for the third party (can be endorsee of an order cheque, or a holder of bearer cheque) 3. The instrument should not bear any unauthorized alteration. 4. The amount in words and figures should be the same. 5. The instruments should be drawn on a member, or any of local branches. 6. If the cheque is crossed Account payees Account payee only or Payees Account, it should be accepted for collection for the payees account. 7. The cheques or drafts should not be crossed specially to any other bank. 8. A cheque payable to one of the joint account holder should not be collected for the joint account without the payees endorsement, or consent. 9. A cheque payable to a firm should not be accepted for credit to a partners account. 10. A cheque drawn by a customer in the capacity of an agent. Attorney, or

Manager of his company or firm, should not be collected for credit to his personal account. 11. Pay orders, although negotiable, should not be collected for third

parties. 12. Do not collect an instrument in the account of an agent, or of the

servant of the payees of endorsee of the instruments. 13. Mail transfer Receipts pay ships and treasury receipt should not be

collected for persons other than the payee. 14. If an account is new, or the balance or operation of the account is not

satisfactory, satisfy yourself about the titles of the customer to the instruments before the titles of the customer to the instrument before accepting the deposit. 15. Brach agents permission should be obtained before accepting a third

party cheque or draft for creditor the account of the staff member. 16. If the payee is a government department, government official, or a trust

account, the instrument cannot be collected, but of the payees account.

45

17.

If the payee of an instrument is Allied Bank Limited, it can collected for

credit of the drawers account, or the amount of the instrument may be utilized as desired be the drawer in writing. 18. Cheque payable to a trust, account should not be collected for credit to

at trustee account. All the endorsement should be regular, and on endorsement should be missing. After the cashier scrutinizes the cheques he must also scrutinize the pay in slip.

Scrutiny Of Pay-In-Slip:
The following steps are involved in the scrutiny of pay in slip. 1. On both the counterfoil and the pay in slip following should be checked. I. Date of Deposits II. Account number III. Title of the account IV. The cheque/number and the drawer bank/name. V. Total amount in words and figures 2. Customer should use separate pay in slip for transfer, transfer delivery, and clearing cheques. The amount noted should be the same as the amount of the instruments, and the amount in words and figures should be same.

Procedures After Scrutinizing:

After scrutinizing the cheques and other deposit instruments and paying slip at the counter the following procedure is under taken by cashier if he is satisfied. 1. Fixing the stamp. 2. Scrutiny, and receipt by the authorized officer 3. Returning the counter foil to the depositor. 4. Certificates and confirmation by the officer-incharge of the department. Separating the cheque into transfer delivery, and clearing cheque.

Procedure Of Clearing At Clearing House: 46

The mechanism of setting inter bank indebtedness operates as follows. Clerks representing various banks meet at a common place, The Clearinghouse, everyday. Every clerk then delivers to the others the cheques and the other claims which their respective banks hold against his banks hold against his bank cheques and other documents dishonored will be returned to the representative of the respective bank. The various amounts of receipts and deliveries are now added up and a balance is struck there in and the final settlement is effected by the supervisor of the clearing house by transferring balance kept and the central bank by these various clearing banks.

ADVANCES DEPARTMENT :
INTRODUCTION:
The function of advances department is to lend in the form of clean advances, against promissory notes, as well as secured advances against tangible and marketable securities. According to the Prudential Regulations of the State Bank of Pakistan, No bank can issue a clean advance of more than Rs. 100,000/-. The bankers prefer such securities that do not run the risk of general depreciation due to market fluctuations. Common Securities for the bankers advances are as under:

SECURITIES: Guarantees:
When an application for advance cannot offer any tangible security, the banker may rely on personal guarantees to protect himself against loss on advances or overdraft to the applicant.

Mortgage:

47

A mortgage is the transfer of an interest in specific immovable property for the purpose of security the payment of money advanced or to be advanced by; way of loan, and existing or future debt, or the performance of an engagement which may rise to a pecuniary liability. The transfer is called a mortgagor, the transferee a mortgage.

Hypothecation:
When property in the shape of goods is charged as security for a loan form the bank the ownership and possession is left with the borrower, the goods are said to be hypothecated. The essence of hypothecation is that neither the property in the goods not the possession of them are possessed by the lender, but the security is granted by means of letter of hypothecation, which usually provides for a bankers charge on the hypothecation goods.

Pledge:
In a pledge the ownership remains with pledge, but the pledgee has the exclusive possession of property until the advance in repaid in full. While in case of the default the pledgee has the power of sale after giving due notice.

Promissory Note:
Sometimes promissory note is also accepted as a security, A promissory note is an instruments in writing containing an unconditional undertaking signed by the maker, to pay ;on demand or at a fixed or determinable future time a certain sum of money only, to or to the order of certain persons, or to the bearer or the instrument. A promissory note is incomplete until has been delivered to payee or the bearer. Moreover, the sum promised in a promissory note may be made by two or more makers who may be liable there on jointly and severally.

KIND OF ADVANCES:
The advances which are given by Allied Bank Limited are as under.

48

RUNNING FINANCE (Overdraft):

Running finance (old name overdrafts) is a short term loan allowed by the bank for a period of one year. The running finance account can be operated and daily sale proceeds can be deposited into the account. The mark-up is recovered on the products of daily outstanding balance. The running finance is suitable for meeting day to day financial needs of the business.

Classification of Running Finance:

1. Unsecured Under such type of overdraft the bank pay upon the personal security of the customers mentioned on the customers account. 2. Secured Under this type of overdraft the bank allows his customer to withdraw more than his deposits after giving security against the amount overdrawn. The Securities against which they given are: Share certificate, Saving Certificate Deposits Mortgage of property Guarantee of person

Demand Finance (DF):

Demand Finances are those advances which are allowed in lump sum for fixed period and are repayable lump sum or gradually in installments which could be monthly, quarterly, biannualy or annually..

Classification of (DF)
1. Demand Finance (Packing Credit) Scheme introduced by SBP for exporter of carpet, surgical instruments, at zero percent rate of interest. While banks provides at concessional rate of interest. 2. Ordinary Loan

49

Qarz-e-Hasana Scheme Loans are allowed to the students, teachers without any interest or mark up with the recommendation of the MPA or MNA. 3. Loan for Staff Loans are offered to the staff of the following categories. House Building Loans against mortgage of property. Loan for purchasing vehicles. Loan equivalent to months salary.

Cash Finance (Commercial Loans Inward):

These type of loans are given against following: 1. Against locally manufactured goods. 2. Against pledge 3. Against commodities 4. Against Trust Receipts

Small Loans:
Loans are allowed to contractors clearing agents.

Finance Against Foreign Bills (FAFB):

This facility is available to both local and foreign bills 1. FAFB (local) advance against Railway receipts and truck receipt, a company with bills of exchange and invoices, are given under this head. FAFB (foreign) advances against foreign bill covering bills of exchange, bills of lading airway bills of exchange etc.

Agriculture Loans:
Loans to the farmers with holding up to 25 acres for meeting their short term, medium and long term agricultural production requirements, such as: 1. Agricultural inputs 2. Tube Wells

50

3. Live Stock Framing 4. Land improvements

Industrial Loans:
Besides the short-term loans which play an important part in working capital requirements, medium and long-term loans are also given to industrial sector for purchases of machinery and other capital nature goods.

Import Export Business/Trade Finance:

ABL Provides highly efficient trade finance services for import/export business for our clients/customers through large number of authorized branches where trained and motivated staff is available to handle the business on behalf of customer.

BILLS DEPARTMENT:
Bills department the following functions: 1. Inward Bills for Collection (IBC) 2. Outward Bills for collection (OBC)

INWARD BILLS FOR COLLECTION (IBC):

These are bills or cheques etc. which is collected locally. These are received from outstation branches banks and parties.

Demand Draft:
It refers to the payment of money on demand of the holder of draft. Demand draft includes DD issues and DD payable.

OUTWARD BILLS FOR COLLECTION (OBC): Clean Bills: 51

These are negotiable instruments, drawn on outstation branches, bills sent for collection on behalf of the customers i.e. cheques, drafts or treasury bills etc.

Documentary Bills:
These are bills accompanied by documents such as R.R.T.R. Bills of lading etc. having title to goods, collected by the bankers on behalf of their customers.

Pay Slip:
Pay slip is an instrument in receipt, issued by the bank in the following cases: 1. On account of expenditure incurred by the bank. 2. On account of refund of a payment to a persons under certain circumstances.

Pay Order:
Pay order is issued to other banks for collection of payments as said.

ACCOUNTS DEPARTMENT:
Usually accounts are maintained in two ways: 1. Journal System 2. Voucher System In journal system entries are posted in Journal Books and then posted to ledger. It is adopted by industrial institutions. Voucher system is use for every transaction. Voucher has to be prepared either in cash or in transfer or in clearing. The sheet upon which these vouchers are summarized transactions-wise and consolidated into a figure is called supplementary.

Types of Supplementary:
Supplementary are of two type: 1. Debit Supplementary 2. Credit Supplementary

52

Debit Supplementary is used for debit voucher and credit supplementary is used for credit voucher books.

Books and registers:

Books and registers used by bank are as follows: 1. General ledger 2. Ledger of A/Cs 3. Balance Book (for a/c ledger) 4. Token Book 5. Cashier Long Book 6. Cash Order Register (SND, DAC & Payorder is recorded) 7. Daily Transaction Long Book 8. Day Book 9. Transfer Book 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. Open/Close Register Pak A/C Book Suspense A/C Book Weekly Telegram Book (Cost is written) T.T. Issued Register T.T. or Telegraphic Transfer Payable Register D.D. Issued Register D.D. or Demand Draft Payable Register Law Charges Recoverable A/C Book (under suit account) Office Order Book Book for Allied Mahana Amadani Scheme (payment of monthly profit) P/L Income and Expenditure Accounts Book P/L Balance Book for Income and Expenditure A/C (weekly balances of

expenditure A/C are recorded)

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23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34.

Cheque Book Issue Register Stock Register Cheque Books in hand PLS (TDR) Term Deposit Register Stationery in Hand Register OBC (Outward Bills for Collection) Register Dak Inward Register Dak Outward Register Stationery in Hand Register Cash in Transit Register Clearing Register Inward/Outward Running Finance Register Office Attendance Register

Incomes:
Income Includes 1. Brokerage (A bank sells and buys shares, stocks, debentures, other securities and receives payments for these services) 2. Discount 3. Service Charges 4. Rent (On Building) 5. Commission (from utility services)

Expenditures:
Expenditures Includes 1. Salaries, allowances and provident fund 2. Rent, taxes, insurance, lighting etc. 3. Profit paid on deposits and borrowings 4. Postage, telegram, and stamps 5. Stationary, printing and advertisement charges etc.

54

6. Auditors fee and legal charges.

REMITTANCES DEPARTMENT:
Remittance department performs following functions: 1. Mail Transfer (MT)

2. Telegraphic Transfer (TT) 3. Demand Drafts (DD)

1) MAIL TRANSFER (MT):

When a customer requests the bank to transfer his money from one branch of bank to another branch of the same bank or from one city to another city to the same bank or any other bank. Customer fills the form given by bank. If the customer has an account with that amount as mentioned in the application form then concerned officer will undertake the following procedure to make the mail transfer complete. 1. Branch Mail transfer form 2. Receiving Branch Register copy 3. Issuing branch register Copy 4. beneficiary advice 5. advice to customer In case where the sustome4r is not account holder of the bank then the customer will have to deposit the amount which he wants to transfer under Mail. Then the above said procedure will be done.

2) TELEGRAPHIC TRANSFER (TT):

This type of transfer is simple. After filling the application form the concerning officer shall fill the telegraphic transfer form. Then it is sent to the required bank which on receiving it immediately makes the payment to the customer and afterwards the voucher are sent to that bank by ordinary mail.

3) DEMAND DRAFTS (DD): 55

Demand draft is just like cheques and issued when the customer wants to take cash with him personally. The idea behind is to avoid the risk and burden of currency notes in huge quantity. Demand draft can easily be handled whatever amount it has and the money can easily be taken from the bank when it is presented. In fact, the bank persuades the customer to transfer money by drafts and avoid the risk of frauds involves in MT and T.T. Draft is only issued when the bank knows customer and bank has the confidence in him. In case of transfer of money by drafts, the customer has to fill an application form. Then the concerned officer fills the following forms: 1. Customers advice 2. Customers debit form 3. Register copy 4. Cover Advice A foreign bank uses the cover advice if draft is issued to National Bank of Pakistan.

WORKING AREAES DURING INTERNSHIP

WORK DONE BY ME
The time span I passed at ABL Samnabad Lahore (0224) is very attractive and learned for me. I learn how to apply my theoretical knowledge in the practical field of business and commerce. During my internship I have spend large time in many desks, detail of that learning are discussed under as follows:

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CHEQUE ENCASHMENT
As soon as the customer came in the branch, he moves to the queue for cheque encashment indicated by a written notice on the wall. He now directly goes to the queue and presents his cheque to cheque encashment officer. Usually customers are aware that they have to double sign the cheque, they do it before or after the officer asks them. After this the cashier verifies the signs manually with signature card and then entries are posted to computer. These entries show the balance in the account. In case of no balance or insufficient balance the cheque is returned. But if sufficient balance is available, the same officer approves cheque. After this approval a second officer (superior to cashier) signs the cheque and now the cheque is finally ready for encashment. The cashier counts money and gives it to the customer. The customer counts money at the counter and then leaves after satisfaction.

Cheque Encashment Process (Flow Chart)

57

Cheque given with double signs

Cheque verified for signatures

Entries posting in computer

Cheque approval

Balance is checked

2nd signatures of senior officer

Cash counted and given

CLEARING
Customers come in the branch and go to clearing officer and give him the Cheque or other instruments for clearing along with the pay in slip. Or

58

sometimes it happens that the customer come and first take pay in slip from the same counter, fill it and then give to the officer. (Those who come with already filled slips they usually belong to or are daily customers like different companies etc, so they get the whole book of slips for this purpose). The officer takes slip; check the amount, sign, date etc on both the instrument and slip. After checking all requirements the officer out stamp on the slip as well as the instrument and sign it and then give the receipt to the customer. After the customer leaves instrument is stamped with other stamps for security purpose. At the same the entries are made in three books of accounts: one in daybook, second in clearing sheet, and third in add list. At the day ends all the instruments and slips (separated from the instruments) are given to another officer for verification and check for errors. After second officer verification the instruments are given to the computer for provisional computer entries to related accounts After this the main branch personnel come and take all the instruments (along with return instruments of the previous day if any) kept in a bag before they come. The same day in the evening they make provision computer entries to different banks accounts (First clearing). The next day these instruments are sent to related banks early morning. When the banking hours start these instruments are on their tables so they check and give back if accounts have no balance or there is any problem. At the end of the day the main branch collect them and check is there any return, if not then all provisional entries are confirmed or return entries are made (Second clearing). The third day the clearing is confirmed and banks are informed about return or not honored instruments. The banks in their computer confirm the clearing or in case of return debit the account again both in daybooks and computer. Party is informed the same day by phone or to their personnel if he is there, and instrument is also given to him. But in case of phone the instruments re sent through TCS to the related party.

59

Clearing Process (Flow Chart)

Cheque with slip

Slip is asked &

Cheque along with slip checked, signed & received by officer

Entries in daybooks are made

Entries checked & verified by another officer after banking hours by officer Cheques collected at the day end by Main Branchs Officials Cheques are sent to respective banks next day after posting in computer by Main Branch The same day not honored cheques are returned to Main The day after tomorrow the banks are informed about Provisional entries for returned cheques are debited again in both computer & daybooks

Part of process not carried out in ABL

Party is informed about returned cheques through

Cheques are mailed through TCS in case of no personal contact the same day

ACCOUNT OPENING DESK

60

Current Account
a) Eligibility
All-Pakistanis Resident/Non-Resident, Individuals (either Singly-Jointly) Companies/Firms etc. can open and operate this type of Account. Any Foreign National Individuals (Single-Jointly) having valid Resident Pakistan VISA/Work Permit can open and operate the Account.

b) Requirements for Opening of Account

Duly filled prescribed Account opening form. Attested photocopy of N.I.C./Passport of Account Holder(s), Proprietor, Partners, Directors and office Bearers as the case may be. Certified true copy of the certificate of incorporation or registration (in case of limited companies & registered bodies only). Certified true copy of the certificate of commencement of business (in case of public limited companies only). Certified true copy of the memorandum and articles of association (in case of limited companies). Certified true copy of rules and regulations or by-laws (in case of association etc.). Certified true copy of the resolution of the Board of Directors/Managing Committee/Governing Body regarding conduct of the account. List containing names and signatures of the Directors/Office Bearers duly certified by SECP/Registration Authority.

Letter of partnership or certified copy of partnership deed (in case of partnership).

c) Features 61

Account can be opened with Minimum Balance Rs.1000/- with no maximum limit.

Checking account and No PROFIT is paid. No limit of withdraws. Service charges Rs.180/- if average balance is less than Rs.5, 000/- during half year.

Statement of Account dispatched on quarterly basis or as requested.

PLS Saving Account

a) Eligibility
All Pakistanis Resident/Non-Resident can open and operate the Account. Any foreign national having valid Resident Pakistan VISA can open and operate the Account.

b) Requirements for Opening of Account

Duly filled prescribed A/C opening FORM. Photo Copy of National Identity Card (Resident Pakistani). Two Passport size photographs for Shaky Signatures/Thumb Impression (Resident Pakistani). Photo copy of Passport with Page bearing Resident Visa of the Country where Pakistani Residing (Attestation by ABL Branch or Pakistan Embassy). Two Passport size photographs and signatures on A/C Opening Form for nonresident Pakistani with Shaky Signatures/Thumb Impression. (Attestation by ABL Branch or Pakistan Embassy). Photocopy of Passport with Page bearing Resident Visa of Pakistan (Foreign Nationals).

62

c) Features
Account can be opened with Minimum Balance Rs.1000/- with no maximum limit. Checking account Profit is payable at yearly rate declared every half year. Profit is calculated on monthly products i.e. on minimum balance of Rs.5,000/- and above from 1st day to the last day of the month. Service charges Rs.180/- if average balance is less than Rs.5, 000/- during half year. Profit is Paid/Credited in Account on half-yearly basis. Statement of Account dispatched on half yearly basis after posting of profit. There is no restriction for withdrawals of amount and numbers of cheques.

d) Conditions
Deduction of Zakat Withholding Tax as per rules of the Government.

PLS 7 days special notice time deposit & PLS 30 days special notice time deposit:
a) Eligibility
All Pakistanis Resident/Non-Resident Companies Firms, Govt. /Semi Govt. Depts. can purchase an SNTD. Any foreign national having valid Resident Pakistan VISA can purchase an SNTD.

b) Requirements for Opening of Account 63

Duly filled prescribed A/C opening FORM. Photo Copy of National Identity Card (Resident Pakistani). Two Passport size photographs for Shaky Signatures/Thumb Impression (Resident Pakistani).

Photo copy of Passport with Page bearing Resident Visa of the Country where Pakistani Residing (Attestation by ABL Branch or Pakistan Embassy).

Two Passport size photographs and signatures on A/C Opening Form for Non-Resident Pakistani with Shaky Signatures/Thumb Impression. (Attestation by ABL Branch or Pakistan Embassy).

Photocopy of Passport with Page bearing Resident Visa of Pakistan (Foreign Nationals).

c) Features
SNTD can be purchased with Minimum Balance Rs.1000/- with no maximum limit. Profit is payable at yearly rate declared every half year and on date of encashment. Profit is calculated for the days deposit remained with Bank. No profit/return is paid for premature encashment before 7 days or 30 days (as the case may be) from date of issue. Similarly if notice given falls short of 7 or 30 days (as the case may be), no profit shall be paid for the days short of required notice. Profit is paid Cash or Credited in Account on encashment.

d) Conditions
Deduction of Zakat Withholding Tax as per rules of the Government.

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PLS Term Deposit Receipt (PLS TDR):

a) Eligibility

All Pakistanis Resident/Non-Resident individuals, Firms/Companies, Govt. /Semi Govt. Departments can purchase the TDRs.

Any Foreign National having valid Resident Pakistan VISA can purchase TDRs.

b) Requirements for Purchase of TDRs

Duly filled prescribed FORM. Photo Copy of National Identity Card (Resident Pakistani). Two Passport size photographs for Shaky Signatures/Thumb Impression (Resident Pakistani). Photo copy of Passport with Page bearing Resident Visa of the Country where Pakistani Residing (Attestation by ABL Branch or Pakistan Embassy). Two Passport size photographs and signatures on A/C Opening Form for Non-Resident Pakistani with Shaky Signatures/Thumb Impression. (Attestation by ABL Branch or Pakistan Embassy). Photocopy of Passport with Page bearing Resident Visa of Pakistan.

c) Features
TDRs can be purchased with minimum of Rs.1000/- with no maximum limit but for not less than 1-month period. Profit is payable at yearly rate declared every half year. Profit is Paid/Credited in Account on half-yearly basis.

d) Conditions 65

Deduction of Zakat With-holding Tax as per rules of Government

PLS KHAS Term Deposit Receipt (PLS KHAS TDR):

Indicative Rate may Minimum of Rs.1000/For 1 years and over but less than 2 years For 2 years For 3 years For 4 years For 5 years and over but less than 3 years and over but less than 4 years and over but less than 5 years and above varies as per SBPs advise 7.50 % 8.00 % 8.50 % 9.00 % 9.50 %

a) Eligibility
All Pakistanis Resident/Non Resident individuals Firms, Companies, Govt. /Semi Govt. Departments can purchase Khas TDRs. Any Foreign National having valid Resident Pakistan VISA can purchase Khas TDRs.

b) Requirements for Purchase of Khas TDRs:

Duly filled prescribed FORM. Photo Copy of National Identity Card (Resident Pakistani). Two Passport size photographs for Shaky Signatures/Thumb Impression (Resident Pakistani).

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Photo copy of Passport with Page bearing Resident Visa of the Country where Pakistani Residing (Attestation by ABL Branch or Pakistan Embassy).

Two Passport size photographs and signatures on A/C Opening Form for Non-Resident Pakistani with Shaky Signatures/Thumb Impression. (Attestation by ABL Branch or Pakistan Embassy).

Photocopy of Passport with Page bearing Resident Visa of Pakistan (Foreign Nationals).

c) Features
Khas TDR can be purchased with minimum of Rs.1000/- with no maximum amount limit for the period ranging from 1 year to 5 year in multiple of six months. For over 5 years there is no such restriction. Profit is payable at yearly rate declared every half year. Profit is paid on maturity of Khas TDR in Cash or Credited in Account. Zakat is not deducted every year but only once at the time of encashment.

d) Conditions
Deduction of Zakat With-holding Tax as per rules of the Government

PLS Special Saving Deposits (SSD)

The given rate may change as per SBP instructions On Average Saving Deposits of over but less than Rs.25 (M). On Average Saving Deposits of over but less than Rs.50 (M). On Average Saving Deposits of over but less than Rs.100 (M). On Average Saving Deposits of Rs.3 (M) and Rs.25 (M) and Rs.50 (M) and Rs.100 (M) Indicative Rate 7.00 % 7.25 % 7.50 % 7.75%

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and over but less than Rs.250 (M). On Average Saving Deposits of Rs.250 (M) and over but less than Rs.500 (M). On Average Saving Deposits of Rs.500 (M) and over but less than Rs.1000 (M). On Average Saving Deposits of Rs.1000 (M) and above.

8.00 % 8.25% 8.50 %

a) Eligibility
All Pakistanis Resident/Non-Resident Individual/Company can open and operate the Account. Any Foreign National Individual/Company having valid Resident Pakistan VISA/Work permit can open and operate the Account. The depositors falling under any of the above category must maintain the required average balance to earn profit.

b)

Requirements for Opening of Account

Duly filled prescribed A/C opening FORM. In case of individuals, same terms as of PLS SB & in case of companies etc. as following:-

Attested photocopy of N.I.C./Passport of Account Holder(s), Proprietor, Partners, Directors and office Bearers as the case may be. Certified true copy of the certificate of incorporation or registration (in case of limited companies & registered bodies only). Certified true copy of the certificate of commencement of business (in case of public limited companies only). Certified true copy of the memorandum and articles of association (in case of limited companies).

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Certified true copy of rules and regulations or by-laws (in case of association etc.). Certified true copy of the resolution of the Board of Directors/Managing Committee/Governing Body regarding conduct of the account. List containing names and signatures of the Directors/Office Bearers duly certified by CLA now SECP/Registration Authority. Letter of partnership or certified copy of partnership deed (in case of partnership).

c) Features
Account can be opened with Minimum Balance Rs.1000/- with no maximum limit. CHECKING ACCOUNT Profit is payable at indicatives rates for each half year. Profit under this scheme is calculated and paid to the depositors on daily products basis on the 1st working day of the following month according to above slab. In case the average balance during any calendar month changes (rises/falls) from a slab, the profit for that month will be paid at the rate applicable to relevant average balance slab. If during a calendar month a party maintains average balance which does not come within the ambit of SSD scheme then No Profit shall be paid. SERVICE CHARGES Rs.180/- if average balance is less than Rs.5, 000/during half year. Profit is paid in Cash or Credited in Account. Statement of Account dispatched on monthly basis. There is no restriction for withdrawals of amount and numbers of cheques.

d) Conditions 69

Deduction of Zakat With-holding Tax as per rules of the Government

PLS Monthly Income Scheme (3-YEARS)

Minimum Balance Rs.50,000/Indicative Rate 9.00 %*

a) Eligibility
All Pakistanis Resident/Non-Resident individuals Firms, Companies, Govt. /Semi Govt. can purchase MIS-TDR. Any foreign national having valid Resident Pakistan VISA can also purchase this TDR.

b) Requirements for Opening of Account

Duly filled prescribed A/C opening FORM. Photo Copy of National Identity Card (Resident Pakistani). Two Passport size photographs for Shaky Signatures/Thumb Impression (Resident Pakistani). Photo copy of Passport with Page bearing Resident Visa of the Country where Pakistani Residing (Attestation by ABL Branch or Pakistan Embassy). Two Passport size photographs and signatures on A/C Opening Form for Non-Resident Pakistani with Shaky Signatures/Thumb Impression. (Attestation by ABL Branch or Pakistan Embassy). Photocopy of Passport with Page bearing Resident Visa of Pakistan (Foreign Nationals).

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c) Features
Account can be OPENED with Minimum Balance Rs.50, 000/- for 3 years maturity with no maximum limit, but is accepted in the multiple of Rs.10, 000/-. Profit is payable on monthly basis at yearly rate declared every half year. Deposit withdrawn within 3 months of date of issuance will not earn profit. The profit already paid will be recovered from depositor. Deposit withdrawn after 3 months but before maturity will earn profit admissible for PLS saving account applicable for the period deposit remained with Bank. The profit paid in excess to PLS Saving A/C rate will be recovered from depositors. Deposits can be renewed for further 3 years on maturity at request of Depositors.

d) Conditions
Deduction of Zakat With-holding Tax as per rules of the Government

STRENGTHS
Allied Bank Limited has certain strengths which are different from the other Banks. ABL is the first Muslim Bank of the world, which is owned and managed by its own employs. This is the biggest strength of the Bank. A feeling of

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ownership is present in every employ, which not only helps in increasing the productivity of employs but also creates sincerity with the Bank in them. Strength is the high motivation of employees to their work because they know that what so ever they do, it will be in their own benefit. They know that the profit, which they will earn, will be distributed among all the employees. So they work with high motivation and concentration. Salaries are very reasonable, so the employees are not financially disturbed and they devote their selves fully to their work. They have wide area network in all over the Pakistan, so that they cover a lot of portion of cash transactions and make customer satisfied. The Bank has very strict rules and regulations about the customers complaints. The customers are treated as very special persons in the Bank.

WEAKNESSES
No entertainment facilities are available in the Bank when customer goes to the Bank and wait for a longer time. These facilities can be the newspaper, magazines, etc. Advertisement of ABL is not such goods as of other banks. Out look of the ABL branches is not attractive to the people. As compare to other private commercial banks the limited branches of ABL are computerized.

OPPORTUNITIES
The policies of the new government to uplift the economy and pursue financial sector reforms are expected to yield positive results in the

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banking industry of the country. promising opportunities.

The ABL is very well praised to avail

As a result of the different steps taken by the Government regarding the betterment of the economy, small borrowers are attracted to get the financing and start small businesses. So, the ABL has an opportunity to attract the customers by giving them attractive schemes.

They have wide area network in all over the Pakistan, if ABL can make it possible the fast delivery of fund from abroad through online banking, it can cover the major market of Pakistan which still is capturing by Hundi.

THREATS
First threat is that of political influence. Three boards of directors are of government. So that they can influence on the decisions of the ABL. The biggest threat in the banking sector is the continuous downfall of the country economy since the last few years. If this downfall remains for more few years then it may be the great hindrance in achieving the Banks objectives. New Privates Bank coped with emerging new Technology of IT.

FUTURE PLANS
Some future plans of ABL are as follows:

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Installation of ATMs in every major city of the country. Computerization of all the branches through out the country. In the first instance a target of 250 branches has been set. Among them about all the branches of Lahore and Karachi have been computerized.

Shares Investment Scheme i.e. Bank will trade in shares of different renowned companies to earn profit.

Purchase of Sick Units, rebuild them and make them profit earning institutions.

SUGGESTIONS
Following are some observations and suggestions during the internship. When giving the loan, the Bank must carefully analyze the past six months transaction history of the borrower. This will help in judging the dealing behavior and financial status of the client. In most cases, this thing is not properly done and it is the major reason of default of many clients. The Bank should keep the proper cheque on stock which is hypothecated. A textile owner may ret the loan on same 10,00 bales of cotton from checking system of the Bank. The Bank should have the moving cameras in their branches for security purposes. The Bank should try to give more loans to the small borrowers as the past history shows that most of the loans given to the corporate borrowers have converted into bad debts.

The Bank has a lot of financing schemes but there is very little advertisement advertisement. of these schemes. So Bank should increase its

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When any one comes to operate the lockers, then the things which he keeps in locker should be checked through metal detector for security purposes.

All the Bank Branches should be getting online to provide the quality and speedy services to the customers and also remain competitive in the market.

Most of the bank employees are sticking to one seat only, with the result that they become master of one particular job and loose their grip on other banking operations. In my opinion all the employees should have regular job experience through job rotation. The promotion policy should be adjusted.

The circle of ATM machines should extend in all the major cities of Pakistan. Every year some of the employees should be sent for training to other countries and employees from other branches should be brought here. More reading material should be brought / provided in the reference Room, it should be relevant and its purpose should be to educate the employees with the advance studies in their field. The employees should be provided the opportunities to attend and participate in seminars and lectures on banking.

With the internship letter should also be requested to provide us the financial reports. Because when we demanded the financial reports they said that this is confidential. And they are not allowed to provide these statements to any trainee.

To create royalty in customers ABL should start the facility of online banking through Internet, so that customers can check their balances and make transfer of fund online.

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SOME IMPORTANT ABBREVIATIONS

HO RHQ TFCs CDR CEO COD CDR MICs PLS A/c DD MT TT IBC IBCA OBC OBCA OD ATM DA DP LC SLC ULC B/L FOB C&F C, F & I B/E E-Form
Head Office Regional Head Quarter Term Finance Certificates Call Deposit Receipts Chief Executive Officer Certificate Of Deposit Call Deposit Receipt Monthly Income Certificates Profit & Loss Sharing account Demand Draft Mail Transfer Telegraphic Transfer Inward Bills Collection Inward Bills Collection Advice Outward Bills Collection Outward Bills Collection Advice Over Draft Auto Teller Machine Delivery against Advance Delivery against Payment Letter of Credit Sight Letter of Credit Usance Letter of Credit Bill of Lading Free On Board Cost & Freight Cost, Freight & Insurance Bill of Exchange Export Form

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KIBOR LIBOR

Karachi Inter Bank Offer Rate London Inter Bank Offer Rate currency)

(in Pak Rs.) (in foreign

T-Bills PIB NIDF NICF CAD RCAD DAC SME CIB LPR BBFS TC CRM

Treasury Bills Pakistan Investment bonds (common bonds) Non Interest Demand Finance Non Interest Cash Finance Credit Administration Department Regional Credit Administration Department Disbursement Authorization Certificate Small & Medium Enterprises Central Information Bureau (of SBP) Leaves Prior to Retirement Borrowers Basic Fact Sheet Trade Checking Credit Risk Management

THANK YOU
FROM: SHEIKH USMAN AHMED BBA (Hons) ROLL NO. 997 Hajvery University, Lahore.

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