Internship Report on

BANK ALFALAH LIMITED

Retail & Middle Market Central Area Lahore /*** Branch

Internee's Name: ***

VU Student ID: mc100200***
Session: Fall 2011
Submission Date: 13/01/2012

VIRTUAL UNIVERSITY OF PAKISTAN

LETTER OF UNDERTAKING
INTERNSHIP CERTIFICATE

DEDICATION

I would like to dedicate the effort & struggle which I have made in the last 2 years since
getting admission in VU to my beloved parents & my family, especially to my mother. It was
looking impossible for me to complete this degree but with her sincere prayers and moral
support today with the blessing of Allah I am submitting my internship report. I am thankful
to Allah Almighty from the depths of my heart.

ACKNOWLEDGEMENT
This was looking like an uphill task but with the endless blessings of Allah and the vital
support from my parents I have reached this far. I am thankful to all the staff at Bank Alfalah
for being so cooperative and kind. I would specially like to thank the very kind Branch
Manager Mr. *** who was so supportive throughout my training. It has been a difficult
period of my entire life but with the blessing of Allah and the cooperation of all the people
around me I have managed to hang in there. I wish I had the words to express my feelings
here. I would humbly thank Allah Almighty for what he has blessed me with. I would extend
this special thanks to all the people who supported and helped me during the internship
program. Thank you.

Executive Summary

I was lucky enough to avail this chance of doing an internship at Bank Alfalah Ltd. ***
Branch. This duration of internship was six weeks. During the training I was introduced to
the functioning of all the departments operating in the branch. My report starts by discussing
the brief history of banking in the human history. Some types of banks that are operational in
the practical world are discussed briefly. History of banking industry in Pakistan follows that.
Then the report discusses the overview of my internship organization. It illustrates the history
of Bank Alfalah, its chairman & board of directors. Detail information about the bank's
branch network comes next. The financial performance of Bank Alfalah from the year 2010 is
presented. List of bank's products and services is also mentioned in detail followed by a brief
introduction to its various departments. Detail of my internship learning experience comes
after that. It contains the information that I was able to gather and understand regarding the
activities of the bank. Risks which the bank is facing are also discussed & after that in the last
portion of the report I have presented the conclusions which are followed by my humble
recommendations for the improvements.

Table of Contents

Brief Introduction of Banking Sector

---------------------------------------------- 4

Over View of Bank Alfalah

---------------------------------------------- 5

Bank Alfalah Hierarchy Chart

---------------------------------------------- 6

Message of The Chairman

---------------------------------------------- 7

Board of Directors

---------------------------------------------- 8

Vision & Mission Statement of Bank Alfalah ------------------------------------ 9

Bank Hierarchy Chart

--------------------------------------------- 10

Introduction to Bank's Branches

--------------------------------------------- 11

Business Volume of Bank Alfalah

---------------------------------------------13

List of Bank Alfalah Products

----------------------------------------------14

List of Bank Alfalah Services

--------------------------------------------- 15

Bank Alfalah Competitors

---------------------------------------------- 18

Introduction to Bank Alfalah Departments -------------------------------------- 19

Comments on Organization's Structure ------------------------------------------- 21
Plan of Internship Program

--------------------------------------------- 22

Training Program

--------------------------------------------- 23

Critical Analysis

-------------------------------------------- 27

Future Prospects of Organization

--------------------------------------------- 29

Recommendations for Improvement --------------------------------------------- 31

Reference & Annex

--------------------------------------------- 32

Brief Introduction of the Banking Sector

The banking sector plays a very important and vital role in the economy of any country.
Generally the state bank of a country is responsible for policy making and over seeing all the
activities being carried out in the banks. A lot of sources say that the word bank is derived
from the word "bancus". They reason that the early Jews used to sit on benches and did
transactions similar to what are carried in modern banks today. In addition to that the
functions of the earlier banks were quite simple but in this modern world we see that the
banks perform a wide variety of functions. Their role is not just limited to depositing money
or issuing loans to different people or organizations. We see that the commercial banks today
are involved in buying and selling of shares, debentures & various stocks. They sell different
types of securities, bonds and deal in foreign exchange. Every bank issues credit cards to its
customers as well. As stated earlier a bank plays a very vital role in the economy of a country.
It serves as a channel through which the borrowers borrow money from the savers. They
utilize the money and earn a return on that which is paid to the bank. The banks after
deducting their intermediate costs give the lenders their share. In this way all the parties
involved in this transaction are benefited.

Following are the types of banks that are generally present in a country.

State Bank
Every country has its state bank. Its name may be different in different countries for example
in Pakistan it is known as the State Bank of Pakistan where as in the US it is called as the
Federal Reserve Bank. The functions of the state bank regardless of its name are the same in
every country. The most important function of the State Bank is to make an effective
monetary policy of a country with the help of which economic stability prevails in the
economy. It is responsible for printing of currency notes and gives loans to the government as
well. It also makes rules and regulations for all the banks working in the country. It monitors
their performance, audits & inspects them. If any bank is found involved in illegal banking
practices then it has the authority to penalize the bank.

Commercial Banks
These banks are interested in making profit. They give loans to people in the business sector
and earn profit on that. The business community of a country is an important customer and
asset of such banks.

Agricultural Banks

Agricultural banks provide loans to the farmers depending upon their needs and
requirements. In a country like Pakistan these banks have special importance as our country
heavily depends upon agriculture. Satisfying and fulfilling the needs of the farmer is very
important for the growth of our economy.

Saving Banks
Mostly these banks are state owned financial institutions which cater the needs of the savers.
These banks offer various saving schemes to the people with the help of which they can earn
a profit on their savings. National Saving Scheme is am example of such banks working in
Pakistan.

History of Banking in Pakistan

Before Pakistan came into being the Reserve Bank of India acted as the central bank for the
entire indo-pak sub continent. Before partition there were a total of 44 banks with 631
branches in the territories of Pakistan & East Pakistan (Bangladesh). On August 14th 1947
partition of the Indian sub continent took place and Pakistan was created. On December 30th
1948 the British Government's commission distributed the reserves of Indian central bank
between Indian & Pakistan with 70:30 ratio. India got 70% of the assets where as Pakistan
got 30%. It is note worthy that the total losses of 230 million which the reserve bank had
were also taken from Pakistan's share. Thus the financial activity in Pakistan technically
started from negative.
Quaid e Azam Muhammad Ali Jinnah took immediate steps to establish the State Bank of
Pakistan. Due to these efforts the State Bank of Pakistan started its operations on July 1st
1948. However the Reserve Bank of India continued to perform important banking functions
for State Bank of Pakistan until September 30th 1948.
By the end of the year 2001 there were 43 banks working in Pakistan. After that there was a
mushroom growth in the banking sector of Pakistan.

Over view of the Bank

Brief History of Bank Alfalah

This bank on June 21st 1992 was incorporated as a public limited company under the
companies ordinance 1984. November 1st 1997 was the day when it's banking operations
commenced. Bank Alfalah deals in commercial banking and other services associated with it
as defined in the Banking companies ordinance 1962. The bank has almost 336 branches in

more than 100 cities all across Pakistan. In addition to that it has branches in Bahrain,
Bangladesh and Afghanistan. The registered office is at B.A. Building I.I Chandrigar Road
Karachi. Since 1997 the management of the bank has implemented new strategies and
policies to give the bank a distinct position in the market place.
Bank Alfalah is owned by the Abu Dhabi Group. The management of the bank has invested a
huge amount of money in new and revolutionary technologies to provide its customers with
an extensive range of excellent products and quality services.
The management of the bank is committed to strengthen its bond of trust with its customers
and provide them with uninterrupted services. The management of the bank strives to serve
its customers with the products and services according to their requirements. During the last
five years Bank Alfalah has emerged as one of the foremost financial institutions in the
country. There is an interesting attribute of bank Alfalah which is its Islamic banking
branches through out the country. Thus in addition to that conventional banking practices if
offers Islamic banking branches to its customers. Hence Bank Alfalah has two types of
branches in Pakistan:

1-

Conventional Banking Branches

2-

Islamic Branches

Bank Alfalah Hierarchy Chart

Message of the Chairman

H.H Sheikh Hamdan Bin Mubarak Al Nahayan is the chairman of Bank Alfalah Limited. He
is the member of UAE's ruling family. Following is presented his unedited message from
Bank Alfalah's official web site.

Since the inception of Bank Alfalah, by the grace of the Almighty, we have moved rapidly in
expanding our branch network and deposit base, along with making profitable advances and
increasing the range of products and services. We have made a break-through in providing
premier services at an affordable cost to our customers.
Keeping in view our valued clients and the need for constant and effective communication of
information, we have designed this website to be as user-friendly as possible.
As we pursue the path of excellence, customer satisfaction remains our priority. It is only
when we know our customers better, can we deliver a higher quality of services, thereby
adding synergy to our existing management expertise, financial strength and profitability.
This is yet another channel of communication for the delivery of quality products and
services that enhance value to our stakeholders.
Thank you for visiting our site.
H.E.Sheikh Hamdan Bin Mubarak Al Nahayan

Board of Directors of Bank Alfalah

H.H Sheikh Hamdan Bin Mubarak Al Nahayan

Chairman

Mr. Abdulla Khalil Al Mutawa

Director

Mr. Abdulla Nasser Hawaileel Al-Mansoori

Director

Mr. Khalid Mana Saeed Al Otaiba

Director

Mr. Ikram Ul-Majeed Sehgal

Director

Mr. Nadeem Iqbal Sheikh

Director

Mr. Sirajuddin Aziz

Chief Executive Officer

Vision Statement of Bank Alfalah

To be the premier organization operating locally & internationality that provides the complete
range of financial services to all segments under one roof.

Mission Statement of Bank Alfalah

To develop & deliver the most innovative products, manage customer experience, deliver
quality services that contributes to brand strength, establishes a competitive advantage and
enhances profitability, thus providing value to the stakeholders of the bank.

Bank Hierarchy Chart

Following is the hierarchy which is generally found in Bank Alfalah Branches.

Important to note is that Bank Alfalah has outsourced some of their tasks. These tasks include
receiving the postal mail from the courier service, keeping the record of all incoming and
outgoing mails, maintaining the attendance registers of employees, answering to telephone
calls and all the work of a peon. All of these tasks are non financial. At present Bank Alfalah
has an agreement with a local company and they go by the name of NIL who provide the
bank with people to carry out these tasks. All these people work under the branch manager.

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Permalink Reply by Irfan Khan MSCS on November 3, 2012 at 8:23pm
Introduction of Bank Alfalah Branches
As stated earlier there are two types of branches working in Pakistan. There are total of
336 branches of this bank in the country. Among them there are 256 conventional
branches and 80 Islamic branches. The bank has its network of ATM machines in
every branch across Pakistan. Following is the complete list of its working branches
according to the Bank Alfalah Audited Report of the year 2010.

Introduction of Bank Alfalah Headquarters

The head quarter of Bank Alfalah is located in B.A Building on I.I Chandrighar road
in Karachi. This road is like the wall street of Pakistan. The offices of major financial
and non financial companies are located here.

Branches of Bank Alfalah in PAKISTAN

Following is the list of cities with operational branches of Bank Alfalah in Pakistan.

Conventional Branches (non-islamic):

City

Branch(es)

City

Branch(es)

City

Branch(es)

Karachi

55

Manshehra

Fatehjang

Hyderbad

Bannu

Taxila

Sukkur

Chitral

Wah Cantt

Gawadar

Gojra

Hangu

Jacobabad

Muridke

Multan

MirpurKhas

Jaranwala

Sailkot

Larkana

Bahawalnagar

RY Khan

Lahore

43

Islamabad

14

Gugranwala

Kasur

Rawalpindi

18

Sahiwal

Sarghoda

Jehlumn

Ghotki

Chak 111SB

MianChannu

Haroonabad

Gugrat

Sheikhupura

Hasilpur

Mardan

DI Khan

Kharian

Bahawalpur

Okara

Gilgit

Dina

Phalian

Khanewal

Charsada

Chakwal

Jahanian

Chillas

Bhalwal

MingoraSwat

Pir Mahal

Jampur

Haripur

Depal Pur

Layyah

Dinga

Narowal

Muzzafarabad

Jahurabad

Lora Lai

Nowshehra

Mandi F'bad

Bhakkar

Qaboola

Mianwali

Kamoke

Saidan Shah

Behra

Chinnot

Abbotabad

Tala Gang

Daska

Jhang

Pakpattan

Hafizabad

DG Khan

Muzaffargarh

Burewala

Skardu

Khanpur

Kohat

Turbat

Chichawatni

Sadiqabad

Battagram

Arifwala

MandiB'uddin

Chistian

Chenabnagar

Pishin

Shakargarh

Haveliah

Swabi

Wazirabad

Dharki

Murree

RenalaKhurd

TobaTekSingh

Lala Musa

Sibi

Kotle AJK

Ahmed Pur

Waisa

Yazman

Rawat

Islamic Branches:

Permalink Reply by Irfan Khan MSCS on November 3, 2012 at 8:23pm

City

Branch(es)

City

Branch(es)

City

Branch(es)

Karachi

18

Gugrat

Kot Addu

Lahore

19

Dhudial

Shah Kot

Islamabad

Pindi Ghaip

Sukkar

Rawalpindi

Kamalia

Faisalabad

Mailsee

Sargodha

Mumtazabad

HasanAbdal

Bewal

JalalPurJatta

Gugranwala

Khushab

Vehari

Multan

Sangla Hill

Bahawalpur

Peshawar

SarariAlamgir

Kabirwala

Sialkot

Quetta

Abbotabad

RY Khan

Hyderabad

DI Khan

Number of Employees of Bank Alfalah

The staff strength of Bank Alfalah is presented below. These figures are official as
they are taken from the Bank Alfalah Annual Audited Report of 2010.

Description

Permanent

Temporary/ On Contractual Basis

Number of Employees

6,876

695

Bank's own staff at the end of the year

7,571

Outsourced

2,438

TOTAL

10,009

Business Volume of Bank Alfalah

The members of UAE's ruling family in addition to the leading businessmen of UAE
own majority shareholding of Bank Alfalah. It is note able that the bank has its
investments in the communication sector and some segments of the financial sector,
asset management and insurance.

Now some important data from Bank Alfalah Audited Report of Dec 31st 2010 is
presented as under:

Description

In Pak Rupees '000

Total Assets of the Bank

411,483,839

Total Liabilities of the Bank

389,178,295

Net Profit (After Tax Deduction)

968,452

Following is given a comprehensive list which highlights the investments made by

Bank Alfalah in the year 2010.

Description

Investment in Pak Rupees '000

Federal Government Securities

Market Treasury Bills

45,958,506

Pakistan Investment Bonds

12,496,250

Overseas Government Bonds

4,022,704

Sukuk Bonds

20,539,488

Pakistan Dollar Bond

395,673

Pakistan Euro Bond

845,772

Fully paid Up Ordinary Shares/

Preference Shares/ Units/ Certificates

Listed Companies/ Mutual Funds

1.476,653

Un-Listed Companies

129,821

Preference Shares-Unlisted

242,744

Term Finance Certificates(TFC),

Debentures, Bonds, Notes &
Participation Term Certificates

Listed TFCs

1,308,932

Unlisted TFCs

19,349,400

Sukuk Bonds

2,349,036

Overseas Bonds

190,512

Credit Linked Note

856,367

Investments in Associate Companies

Warid Telecom (Private) Limited

4,366,796

Wateen Telcom Limited

417,474

Alfalah Insurance Limited

68,990

Alfalah GHP value Fund

100,000

Alfalah GHP Income Multiplier Fund

353,196

Alfalah GHP Islamic Fund

250,000

Alfalah GHP Investment Limited

130,493

Alfalah Securities Private Limited

76,000

Product Line of Bank Alfalah

(1)- List of Products

Bank Alfalah provides various deposit accounts to fulfill the needs of its customers.
The accounts are designed according to the requirements & needs of the customers. At
present the bank is offering seven different types of accounts to the customers and
these are briefly defined below:

(i) - Simple Current Account

v It is a non interest bearing checking account.
v The minimum account opening requirement is of Rs. 5,000 only.
v If gives you the facility of Free Online Banking.
v The VISA Debit/ATM card can be used at over 30 million outlets and at 1.5
million ATMs across the world.
v There is no restriction on number of withdrawals and on number of
deposits.
(ii) - PLS Savings Account
v It is a Profit & Loss sharing saving bank account.
v The minimum account opening requirement is of Rs. 100 only.
v Profit on saving accounts is credited to the customer account on half-yearly basis.
v The Debit card can be used to withdraw cash and make purchases at thousands of
outlets across Pakistan which provides access to funds 24 hours a day.
v There is no restriction on number of withdrawals and number of deposits.
(iii) - Royal Profit Account (RP)
v The minimum deposit requirement is of Rs. 50,000 only.
v Higher returns on higher balances.
v There is no restriction on number of withdrawals and on number of deposits.
Debit card can be used to withdraw cash and make purchases at thousands of outlets
across Pakistan which provides access to funds 24 hours a day.
v Profit is credited to the customer account on monthly basis.
(iv) - Basic Banking Account (BBA)

v The initial deposit for account opening is of Rs. 1,000 with no minimum balance
requirement.
v It is a non interest bearing checking account.
v Maximum 2 deposits & 2 withdrawals through cheques are allowed.
v Debit card can be used to withdraw cash and make purchases at thousands of
outlets across Pakistan which provides access to funds 24 hours a day.
v There is no restriction on ATM withdrawal.
(v) - Alfalah Kifayat Account
v Any Pakistani resident can open this account. This account is for individual/joint
customers only. Other customers like companies, corporate etc are not eligible for
opening of this account.
v Cheque books, VISA, Debit Cards are issued to the customers.
v There is no restriction on deposits or withdrawals.
v Minimum account opening balance of Rs. 10,000 only is required.
v Online banking facility is also available.
(vi) - Alfalah Mahana Amdan Account
v This account is signed with a contract of 3 years with the bank.
v Minimum placement limit is Rs. 100,000/- and maximum placement
is Rs.15,000,000/-.

limit

v Expected Rate of profit is 10% Per annum.

v Profit will be automatically credited on the 1st working day of each month into
customers Current/PLS/RP/BBA account.
v Free Personal Accident Insurance coverage up to the deposit amount or Rs.
1,500,000/- whichever is lower.
v Customer can avail financing facility up to 90% of the deposit(as per banks policy)
v Any Pakistani resident over the age of 18 can open this account.
(vii) - Alfalah Kamyab Karobar
v This account is designed for the businessmen.
v The minimum account opening balance of Rs. 25,000 only is required.

v This account is strategically divided into three tiers which are Silver, Gold and
Platinum. The unique tier based structure ensures that the customers can avail smooth
& cost efficient facilities based on their current level of deposits i.e. Higher the
deposit, higher the number of free services. Some of the services are

Free Online Transactions

Free Pay order /Demand Drafts

Free cash deposit across Pakistan

SMS alerts on VISA Debit/ATM Card

Gold VISA Debit/ATM Card with every account.

(2)- List of Bank Alfalah Services

(i) - Currency Exchange
Bank Alfalah offers the facility of foreign currency being exchanged to local
(Pakistani) currency. This comes under the foreign exchange department of the
bank.
(ii) - Lockers
Bank Alfalah provides safe deposit locker facility to its customers for safe keeping of
their valuables like documents, securities and jewellery etc. Lockers are present in
various sizes. They range from small, medium to large. Annual locker rent ranges
from Rs.2,000/- to Rs.4,000/-. Locker rent is waived for customers maintaining a
minimum deposit of Rs.2 million in current account or above US $25,000/- in a
current account or US $50,000/- in a savings account.
(iii) - Remittance
Through Bank Alfalah's international correspondent banking relationships it provides
direct and indirect foreign currency remittance facility around the world.
(iv) - Hilal/Debit Cards
Bank Alfalah offers it customers with Hilal VISA cards that are accepted at all ATM
machines around the world. These cards are
based on Islamic and not on the conventional credit card rules.

(v) - Credit Cards

Bank Alfalah offers its customer with four types of conventional VISA
Credit cards. These are namely:
v Platinum Card
v Titanium Card
v Gold/ Classic Card
v Supplementary Cards
(vi) - Home Loans
Under this category Bank Alfalah at present is offering the following
products.
(1)- Buy Your Home
Bank finances from 0 to 70% of the value of the property.
Repayment period ranges from 3 to 25 years.
(2)- Build Your Home
in

Bank provides you 100% of the construction cost

addition to 60% value of the plot.
Repayment period ranges from 3 to 25 years.
(3)- Renovate Your Home
Financing of Rs. 3.50 million or 40% value of the home
to be renovated.
(4)- Start It Together
Financing for buying a constructed house designed to assist
professionals who wish to buy a home early in their
careers.
(5)- Easy Transfer

100% finance on the existing finance. Repayment period

may be stretched to 25 years.
(vii) - Auto/Vehicle Loans
Any one can apply for auto loan at bank Alfalah if he is having income from
following sources:
v Employment (Permanent/Contractual)
v Business (Partnership/Proprietorship)
v Co-Borrowers Income (Clubbing of Income)
Features of the Auto Loan Plans:
v Quickest processing & Turn Around time in the Market
v Minimum Documentation Requirements
v Variable & Fixed rates to cater to every Budget
v No Termination Charges on car Replacement
v Discounted Insurance Rate with Free Tracking Device
v Balloon payment Options
v Deferred Insurance & Registration Charges
v 150 Cities Existence
(viii) - Alfalah Agri Finance
Bank Alfalah Limited acknowledging the vital role of agriculture in the economic
development of Pakistan has designed Rural Finance Program named as "BANK
ALFALAH ZARIE SAHULAT". The product is designed to cater for multiple
financing requirements of our farming sector. Following are the products of this
scheme.

Permalink Reply by Irfan Khan MSCS on November 3, 2012 at 8:24pm

Plan of Internship Program

Brief introduction of the Internship Branch

This particular branch of Bank Alfalah is located at *** Lahore. The branch lies in the
Retail & Middle Market Central Area according to Bank Alfalah's strategic division of
Pakistan. This branch was opened about 7 years back in order to capture the market
share of the huge customer base of the "***" located in *** Lahore. A lot of
commercial banks were already present in that area so Alfalah's management decided
to open its branch immediately. This branch started its operations with a minimum
number of departments. The idea was to penetrate in the market, create a good will
and capture the market share. So far according to the bank's internal sources the
branch has reached its targets successfully and there are plans to increase the number
of departments and branch employees. This upon the inspection of the branch looks
true as there are renovations going on at a rapid rate. New offices and customer
booths are made to accommodate customers & their requirements for the future.

Starting and ending dates of the internship

I started my internship program on 22nd of November 2011. Saturday's were not off at
this branch of Alfalah so I had to participate 6 days of the week from 9:00 AM to 5:00
PM in order to complete my six weeks internship program. The internship program
ended on the 2nd of January 2012. However I spent an additional 7th week in the HR
department of the bank.

Name of the departments where internship was done

Detail of Department(s) Attended by the Internee during the Internship Program

Duration
Sr #

Name of the Department

Account Opening Department

From (Dates)

To (Dates)

22/11/2011

28/11/2011

Clearing Department

29/11/2011

5/12/2011

Remittances Department

6/12/2011

12/12/2011

Trade Department

13/12/2011

19/12/2011

Credits Department

20/12/2011

26/12/2012

Accounts Department

27/12/2011

3/1/2012

HRD

4/1/2012

9/1/2012

Training Program

I started my internship in the account opening department at the bank. This

particular department comes under the general banking facilities provided by the
bank. I was introduced to the seven different types of accounts which could be opened
at Bank Alfalah Shadbagh Branch. The accounts namely are:

Simple Current Account

PLS Savings Account

Royal Profit Account

Basic Banking Account

Alfalah Kifayat Account

Alfalah Mahana Amdan Account

Alfalah Kamyab Karobar

The features of all of these different accounts are listed under the Product Line of
Bank Alfalah of this report. Now the basic requirements for opening an account are as
follow.
The basic requirements for opening an individual account are:
1-CNIC
2-Source of Income
3-National Tax Number (optional)
4-Letter from person's employer

The basic requirements for opening partnership account are:

1-CNIC of the Partners
2-Partnership Deed
3-National Tax Number Certificate (optional)
4-Company's Letterhead

The basic requirements for opening a company's account are:

1-CNIC of Director(s)

2-Article of Association
3-Memorandum of Association
4-National Tax Number Certificate (optional)
5-Company's Letterhead

This department is responsible for generating the Bank Statements which reveal the
account activity of any account. In order to obtain the bank statement the account
holder has to come and fill a form. Some people call the bank and inquire their
account balances. Normally such queries are not entertained over the phone unless the
bank's representative knows the person calling is the account holder and not some one
else. Such information is not disclosed to any one else except for the account holder.
The bank officer may ask questions like the person's date of birth, his contact
numbers, current residential address and the address mentioned in the account
information to make sure that the person calling is genuine and not some one else
trying to gain the financial information.
If an account holder wants the payments on the cheque he has issued to be stopped
then he has to contact this particular department of the bank. The person can inform
the bank about a particular cheque number on which he desires to stop the payment.
In such way no payment is done against the cheque as soon as the department is
informed. Additionally suppose a person has lost his cheque book then he can inform
the bank to stop the payments on all the cheque numbers from the cheque book that
was issued to him. This also stops the payments on those cheques as soon as the
department is informed.

My Activities in the Account Opening Department

After obtaining all the necessary information I was told to adopt the role of an account
opening officer and deal with another bank official who was playing the role of a
customer. I tried my best to answer all the questions asked by the customer and guide
him in the best way I could regarding the account opening process in the bank. My
performance was rated as reasonable by the account opening officer.
At a later stage I helped a customer organize the required documents for account
opening and even helped him fill out the form as it was to be filled in English
language.
I also gave information about the benefits of "Alfalah Kamyab Karobar" account to
some existing customers of the branch as well.

The next was the clearing department. I was informed about the clearing process of
cheques which the bank receives on daily basis. Important to note is that the process
of clearing takes place through the clearing house of the State Bank Pakistan. National
Institute of Facilitator Technologies (NIFT) is used for the process of clearing by the
State Bank. The inward clearing takes place when Bank Alfalah's account holder
draws a cheque in favour of a non Alfalah customer. The cheque is sent to the cheque
issuer's branch for clearing.

The events in the inward clearing takes place as follow:

1 Bank receives the cheque through NIFT
2- Clearing Department verifies the cheque, if every thing is found to be true then the
cheque is posted in the bank system & customer's account is debited. Otherwise if
some thing is found wrong then the cheques are returned.
3- The details of the cheque are registered in the out ward return of inward clearing
register and the cheques are delivered to NIFT.

In case of outward clearing the cheques presented are from other banks (other than
Alfalah) that are in favour of Bank Alfalah customer. The events in the outward
clearing are:
1-

Cheques are received by the Bank.

2-

The customer to whom the cheque was drawn is credited.

3-

The cheque is stamped and sent to the issuer's bank through NIFT.

In case of the online clearing the cheque is collected by the bank. The cheque is drawn
in favour of a bank Alfalah customer. The cheque is then sent through NIFT for
outward clearing. When the cheque gets cleared then the money is transferred via the
online system of computers.

My Activities in the Clearing Department

I got a chance to call a few customers of the branch over the phone to let them know
that the cheque which they had deposited a few days back has been cleared i.e. the
funds according to that cheque have been transferred to their accounts. This activity
was fairly easy. I asked a few questions regarding the identity of the customer, upon
receiving positive response I simply delivered the information to the customer that
money is transferred to his account and it is available for him to use.

In the remittances department I was introduced to the various instruments that were
being used to transfer funds from the branch to other banks. Pay order is an
instrument which is used to transfer money with in the same city. The customer has to
fill a form giving all the necessary information about the place where the money has
to be transferred, his name, contact details etc. The payment for the pay order can be
done both through cash or by cheque. Demand Draft is an instrument through which
money can be sent outside the city. Outward DD is used to transfer money outside of
the city where as inward DD are presented by customers to collect money from a
branch. Now when the money is sent from outside the country it comes under the
foreign exchange department of remittances. This department of remittances is not
operational at the Shadbagh branch of Alfalah. However the services of sending
money outside the country through money gram are available. Call deposit receipts
(CDR's) are used by people to submit money in favour of a beneficiary when they are
bidding for tenders. If the tenders are approved in the favour of a person then the
money is used by the beneficiary otherwise the CDR's are returned to the issuer who
later deposits them in the bank to get their money. The rupee travellers cheques (RTC)
is another form to carry money safely. Rather than carrying cash people can carry
these RTC which are issued in the form of certificates by Bank Alfalah. These
certificates are accepted at major stores, hotels, travel agents all across Pakistan.

My Activities in the Remittances Department

This department at Bank Alfalah Shadbagh Branch is responsible for issuing new
cheque books to the account holders. Upon receiving the new cheque books the
customer has to either sign or put his stamp on the new cheque book. The stamps are
used if the account is opened in the name of a company. I guided a few people who
wanted to collect the new cheque book on the original account holder's behalf. I
explained that the original account holder has to come in person and collect the
cheque book himself and it is not possible to collect the cheque book on his or her
behalf. I also got a few cheque books stamped by the customers and handed them over
their new cheque books. Once I helped the customer regarding the information of
cheque book charges. He wanted to know the price of a single cheque which Alfalah
charges from its customers. While conveying the information he desired additionally I
explained to him the different cheque books according to the leaves (cheques) & their
charges which Alfalah charges from its customers.

The trade finance department acts as a bridge between the importer and the exporter
in a practical world. The type of financial instrument it issues is helpful in settling the
payment between the two parties. The main activities which this department handles
are the imports and exports. The letter of credit (issued by this department) facilitates
the payment between the importer & exporter and the bank charges its fee on it. Bank
Alfalah has added more than 81 banks around its network since 2001 and thats the
reason the LC issued by Alfalah is acceptable to approximately 100 countries around

the world. The records of all the transactions taking place through the letter of credit
are kept at the State Bank of Pakistan.

My Activities in the Trade Finance Department

I was able to go through some old LC's that were shown to me. I was explained about
the format of LC that is used in the organization. I even prepared a LC according to
that format while given with hypothetical values assuming a real life situation.

The credit department of Bank Alfalah deals with the small and medium scale
businesses. I was informed that the bank has adopted a very aggressive strategy in this
department. They are working closely with the business men that own either small or
medium scale companies. It is discussed in the Introduction of Departments section of
this report about the types of credit facilities Bank Alfalah is providing to its
customer. In the funded credit facility the money is physically given to the borrower
with him signing a contract with the bank according to which he will repay the money
to the bank. Malkiat Fiance & Karobar Fiance come under this category.
1-

Alfalah Milkiat Finance (AMF)

AMF is a unique long term financing facility offered to SMEs to purchase, renovate
or expand their business premises. It is being offered keeping in mind requirements of
the small business owner who needs to take his/her business to the next level. The
mandatory requirement is that your business must be 3 years old. The amount of loan
obtained ranges from 0.5 Million to 3.5 Million Pakistani rupees. Money obtained up
to 3 Million can be repaid from 2-15 years but money obtained beyond 3 million must
be repaid between 2-4 years.
2-

Alfalah Karobar Finance (AFK)

AFK is a financing facility between Rs 0.50M to Rs 20.0M. The purpose of the AKF
is financing procurement of raw material, finished goods and receivables of SME
businesses.
Now there are other two types of financing facilities available but that are not for
SME. These two facilities are:
1-

Alfalah Quick Finance (AQF)

It is a personal loan against National Saving Certificates, Prize Bonds, Alfalah GHP
Principal Protected Fund & PKR/FCY deposit for meeting personal, family and
household needs. It is one year revolving limit with quarterly mark-up payments. The
amount of financing under AQF ranges from Rs. 50,000 to 2.5 Crore.

2- Alfalah EEZEE Finance

A Running Finance Facility for individuals for meeting their personal, family or house
hold needs. The amount ranges from Rs. 3Lac to Rs. 10Lac. In order to get the loan a
residential property or plot which is acceptable to bank is required.

My Activities in the Credit Department

Permalink Reply by Irfan Khan MSCS on November 3, 2012 at 8:24pm

In this particular department I got a chance to talk with some customers and explain to
them the features of the funded credit facility that was being offered at the branch of
the bank. I was able to explain the features & benefits of availing the facilities of
Alfalah Karobar Finance & Alfalah Malkiat Finance. The typical questions which the
customers used to ask was how much credit would be available to them and what was
the maximum amount of time which they can avail to repay the money to the bank.
According to my experience & observations almost no one was interested or bothered
about the interest rate on the credit.

My Activities in the Accounts Department

I assisted the officer of this department while sorting all the utility bills of the branch
in a file. Activity of sorting all the vouchers from all the departments of the branch
was also carried out by me with the help/ guidance of the officer. I regularly used to
carry documents that were to be approved by the branch manager, once he signed
them I brought them back to the officer of the accounts department.

Critical Analysis

Risk framework of Bank Alfalah

Almost all of the banks explain their risk management framework in their annual
reports. Management of risk is a core function of banking business. The reason is that
it performs vital activities of measuring, monitoring, controlling and reporting credit,
market, liquidity and operational risks. According to the Annual Report 2010 of Bank
Alfalah the economic and security situation witnessed by Pakistan during 2010

demanded further strengthening of the Bank's internal risk and management controls
through a renewed focus on special asset and portfolio management. In order to be in
a better position to respond to all the challenges faced by the bank and to effectively
monitor and control the resulting shocks the Risk Management Framework was
revitalized through integrated risk management approach for managing credit risk,
market risk, liquidity risk and operational risk. A dedicated Risk Management
Division (RMD) is in place with the General Manager of RMD department reporting
directly to the Chief Executive Officer. Risk Management Division has been
structured to address credit, market, IT and operational risk. This division consists of
highly capable people. Additionally the Board of Directors through its sub-committee
called "Board Risk Management Committee (BRMC)" oversees the overall risks
faced by the bank.

Risks faced by Bank Alfalah

The banks face a number of risk during their operations however there are a certain
number of risks that are considered to be the main types of risks. Bank Alfalah is no
exception to that as it also faces the same types of risk faced by other commercial
banks in the market. These main risks are:
1- Credit Risk. Risk from the borrower as he fails to repay the money to the bank.
2- Liquidity Risk. Risk than a security/asset cannot be traded in a quick time frame in
the market.
3- Market Risk. Risk of the reduction in value of a portfolio due to market conditions.
4- Operational Risk. Risk due to the transactions of the business.
5- Reputation Risk. Risk of the bank loosing its repute among the customers.

Branch Risk of Bank Alfalah

The management of the bank have made their best efforts in terms of planning and
constructing all of their branches safe and secure from all sorts of threats. All of the
branches have a single entry/ exit system which is supported by walk through gates
that scan a person for any weapons.

Security system in the Branches

Alfalah has an agreement with Phoenix Security Systems who provide the bank with
armed guards who protect the staff/ customers and all the valuables of the bank. In
addition to that CCTV cameras are installed at all possible points which record the
footage of the activities in the bank. Walk through gates are installed at the entry

points for metal detections. In addition to that the security guards also check the
people coming in the bank with their metal detector scanners. No parking of vehicle is
allowed in front of the bank for security purpose. The cash department is given special
importance as they have liquidity at all times. The cash department is always behind a
glass wall which protects the staff and the liquidity. Generally a master alarm is also
installed in the bank which is connected to the local law enforcement agencies and it
can be used in case of emergency. Phoenix also provides the services of an armored
car to all the branches of the bank. This vehicle is used to transport cash to the head
offices in an area. The ATM Machines are specially installed in a room which is well
protected. The customers only have access to the user interface of the machines.
Breaking into the ATM machine required breaking the wall which is not possible at
any time since every ATM machine is assigned a security person who guards the
machine at all times. All the branches are well guarded by the security personal at
nights as well.

Management Information System

Bank Alfalah uses its MIS to generate large volume of reports and data on daily basis.
It utilizes the total branch computerization software packages to carry its transactions.
These softwares dont accept any data packets from outside the network of Bank
Alfalah. All the transfers of data packets takes place with in the bank Alfalah network
even the e-mail system is such that it works only on the domain of Bank Alfalah, no
bank employee can send an email to any other domain neither he can receive any
message from another domain. Thus it is a very safe system. Every branch has its own
IT department which provides technical support to the branch computer network.
With the help of this system all the data is updated on daily basis and is sent to the
area head quarters. This MIS contains all the necessary functions which are required
for modern day banking business. User friendly interface makes it easy for bank
employees to use it in the most efficient way.

Employees Integrity
If the employees in the bank are not working according to the code of conduct
specified by the management then the organization will fail to achieve its goals. The
management of bank Alfalah understands this important concept. The competition and
the competitors are tough so it is extremely important that the bank employees adhere
to good moral and ethical principles and perform their roles with honesty. Bank
Alfalah promotes and practices transparent and honest work behaviour for all its
employees. The sense of responsibility inculcated in every member of the
organization demands impeccable and intact work ethic system.

Systematic Risk

As stated earlier that management of Bank Alfalah has made its risk control
framework even stronger because of the financial conditions in Pakistan during the
year 2011. It is true that the systematic risk is often beyond the control due to the
macroeconomic factors such as inflation, interest rates, tax changes etc which change
for the entire market. However at Bank Alfalah now there is a Risk Management
Division (RMD) in place with the General Manager of RMD department reporting
directly to the CEO. Additionally the Board of Directors through its sub-committee
called "Board Risk Management Committee (BRMC)" oversees the overall risks
faced by the bank. As this risk is largely beyond control so the management has to
adopt the reactive approach in order to deal with the situation when the changes will
occur. The conditions will change for every one in the banking business so the
appropriate department after analyzing the situation will make necessary changes in
the bank polices and practices.

Un-systematic Risk
During my internship program and my experience of talking to the employees I was
not able to spot any risks that were unique to that particular branch of the bank or to
the whole organization. The employees looked satisfied and happy with the working
environment and all the facilities which the bank had provided them. So there is no
such risk of a strike or any thing similar. The bank's management makes rules that suit
their employees. Keeping them happy is one way of boosting their productivity and
thus the organization as a whole will prosper.

Loaning system at Bank Alfalah

The types of loans or credit facilities which Bank Alfalah is currently offering are
described earlier. Generally a client goes to the branch which offers these services and
fills out the appropriate forms. These forms are submitted along with the supporting
documents. Then the client is evaluated by the credit officer of the branch. Evaluation
is done in many ways. People from the credit department might visit his business and
see how things are going on. They can check his past financial records at the bank etc.
Then the credit rating of the client is obtained from the credit information bureau. If
the credit rating is good then the credit officer sends all the info to the head office of
the credit division along with his comments and referral. The appropriate people at the
head office after checking all the documents sanction the loan. It is in their authority
either to sanction the loan or make a negative decision.

Risk Mitigation Approaches

Bank Alfalah has a strong risk control framework. There is a fully operational Risk
Management Division working under the CEO of Bank Alfalah. The Board of
Directors with the sub-committee of "Board Risk Management Committee (BRMC)"
also oversees the overall risks faced by the bank.

Future Prospects of the Organization

The Management of Bank Alfalah intends to widen its network of branches with in
Pakistan in the future. This intent has been shown by the senior management and the
stress is on maintaining its quality of service and its standards for its customers. The
senior management has made a clear statement that they will go aggressively in the
fields of microfinance and SME lending. Alfalah intends to offer more innovative
products in the department of SME.
In addition to that the bank's management has realized the potential of Islamic
banking in Pakistan. A lot of people are taking interests in the products currently
offered by the Islamic banking system of Bank Alfalah. Thus we would see more
Islamic Branches of Bank Alfalah being established inside Pakistan. Their strategy
looks to be aggressive here too as the intent is to grab most of the market share by
offering new products to its customer and take an early lead in the competition.

Conclusion
I would like to conclude by doing the SWOT analysis of Bank Alfalah. During my
internship program at the branch and doing some observations I found the following
strengths of Bank Alfalah.

Strengths:
Bank Alfalah provides its customers with conventional baking facilities and the
Islamic banking option. Products like the Hilal VISA card, loans according to Islamic
laws are gaining popularity among the people. Hence bank is gaining more of the
market share.
Since it is a new bank thus the work force is quite young & energetic. The bank has
placed its branches at strategic locations. That has helped the bank attract more
customers. The branches in Pakistan are located very close to the areas where the
financial activity takes place.
The HR Department is very active & I was told that it provides excellent training
programs for its newly inducted employees. In addition to that refresher courses are
also conducted for the employees.

Weakness:
As the work force is young so there is less banking experience among the employees.
But the major weakness of Bank Alfalah in my opinion is that the employees
complain about their salary salaries. Bank Alfalah sits on number 6 in terms of most
assets according to the report of State bank for the year 2010. But its profits are very
low. The reason is not that Alfalah failed to make any profits in 2010, it certainly
made lots of profit. But most of the money from the profits was used by the
management to cover the losses incurred but the sister companies of Bank Alfalah. So
the benefits were not given to Alfalah employees.

Opportunities:

Permalink Reply by Irfan Khan MSCS on November 3, 2012 at 8:24pm

Seeing the current trend Bank Alfalah can rely on its Islamic Banking system to
increase its market share. The management has realized this and so they have plans to
open new Islamic branches in the year 2012. Bank's management has always used an
aggressive marketing strategy to market its products, with its young work force it can
really excel in the market if all the resources are used effectively and efficiently. The
competition is tough thus the top management has to make sure that they make the
right decisions at the right time in the best interest of the bank.

Threats:
Political situation in Pakistan is not good. Investors and businessmen are shifting their
assets outside Pakistan. Most important of all is that the policies of Pakistani
Government are not consistent. Bank's work force is relatively inexperienced. As
stated earlier in order to avoid any undesired circumstances the bank's management
has to make the right decisions.

Recommendations for Improvement

The bank's management has to introduce new training programs in coordination with
the HR Department. This program should update the employees with the current
economic situation of Pakistan, the latest trends and the possible outcomes in the
future. This program should include training that would help the employees to deal in
a much better way with the customers. I sensed that there is a lack of organizational
citizenship in the employees of the bank. The reason is that the profits which the bank
is making due to their efforts is being used to cover losses faced by the sister
companies of Bank Alfalah and so Alfalah employees are not getting raise in their
salaries, bonus or other financial benefits . The top management and the Board of
Directors must find a solution towards this problem. Because if this continues it will
cause dissatisfaction among the employees. They will either leave the organization or
will not work with the same level of commitment. Bank Alfalah is in no position to
face this loss. The top management has to find ways to solve this problem soon and at
the same time what they can do is take some load off the employees temporality so
that they dont get over stressed.
Secondly the bank has to increase its advertising of products and services. Honestly I
think that the top management is quite reluctant to spend money on advertising. This
is beyond my understanding. The reason might be that it is looking to save its funds
but this is not the proper way to do it. As stated earlier that the bank is fairly new and
the staff including the top management has less banking experience. This is one of
main reason that it is not paying the much needed attention on advertising its
products. Bank involvement in cricket advertising in the Gulf region is commendable
but it has to advertise about its products in the local print and electronic media in the
same way other banks are doing in Pakistan.

Reference & Sources used

bankalfalah.com
Bank Alfalah Annual Audited Report 2010
Bank Alfalah Un-audited Quarterly Report 2011

State Bank of Pakistan Annual Financial Report 2010

State Bank of Pakistan Statistical Report 2010

Annexes

Bank Alfalah Broachers of

1-Credit Cards
2- Loaning Facilities
3- Car Financing
4- Account Features
5- Halal Debit Cards
_____________________________________________________________________

NOTE: My annexes section was NOT according to the way as told by VU. However I
was declared pass in the report with a little note from the instructor that this section
(annexes) is not properly illustrated. My report is concise and to the point thats why
it got the approval from the instructor, my final presentation slides were entirely
based on the points taken from this report (I passed the presentation and viva section
too).
Believe in Allah & yourself. Good luck every one. Warm Regards!
VU Alumni { MBA (Banking)}