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This Internship report is submitted in partial fulfillment of the
requirement for the degree of M.COM.

Arif Ullah
Roll No. 78
REG. NO: 16-03252-02724

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Approved by:

___________________ __________________
Mr Mr
(Internal Supervisor) (External Supervisor)

___________________ __________________
Mr Mr
(Head of Department) (Internship Coordinator)

Affiliated with
University of Swabi


I hereby declare that the report on UBL is my original work and has not been published or submitted for any degree, diploma or other similar titles elsewhere. This has been undertaken for the purpose of partial fulfillment of Degree in field of finance, from Govt College of Management sciences swabi affiliated with University of swabi.

Name: Arif Ullah
Sign: ____________

Keep your dreams alive. Understand to achieve anything in your life require faith and believe in yourself, vision, hard work, determination, and dedication. Remember all things possible for those who believe.
I want to dedicate these humble efforts to my honorable and respected Parents, Teachers and all of my Best Friends.

Banking sector owes a pivotal importance in the economy of any country through its vibrant functions. This is the deep seated motivator that geared up me to join any bank for internship. Moreover, the practice and familiarity learned during this tenure would also attest very helpful and alleviating in the awaiting proficient life.
This report is an upshot of my eight weeks internship in Bank Alfalah Peshawar Branch. Bank Alfalah posses an imperative importance in the banking sector of Pakistan. It always remains the center of hustles in business activities. It always endows with great covenant of rally round in terms of funds and services at all epochs of its dynamism.
Although, a derisory period of eight weeks is not enough to learn the complex operations of Bank Al-Falah Limited yet I made industrious efforts to converse them comprehensively in this report. Particularly, I have remunerated more accents on study of distinguishing features and services of Bank Al-Falah Limited. I have made maximum venture to elaborate this report with the material read, listened and observed.
I have strong belief that this report will guide and ease the readers to understand the operations of banking system and more prominently have good knowledge about Bank Al-Falah Limited, one of the most trusty and leading banks in Pakistan.

Over and above everything else, I offer my humblest thanks to the ALMIGHTY ALLAH for bestowing upon me the sense of inquiry and requisite potential for diligence to successfully accomplish this piece of project. My special praise to the Holy Prophet Muhammad (Peace be upon him) who is forever a source of guidance for humanity as a whole. I wish to express my deepest and heartiest gratitude and profound regard to my Advisor for his keen interest, sympathetic help, valuable suggestions which he extended to me during my internship report.
Lastly, I would like to mention that all this has only been done by the grace of Almighty Allah and with the support of my very kind and loving parents, who have always been remembering me in their prayers and encouraging me to be a true Muslim as well as to achieve excellence in academic education which is the building block of my future life.
I must acknowledge the assistance provided by the staff of the bank, which has generously allowed me to make use of all books and other material available with them.

1.1 BACKGROUND OF THE STUDY—————————————————-1

PRIMARY AN SECONDARY DATA——————————————————-2 1.5 SCHEME OF REPORT———————————————————————2
CHAPTER 2—————————————————————————————————-4
INTRODUCTION TO ALFALAH———————————————————————————4
2.4 VISION————————————————————————————–8
2.8 BANK ALFALAH LIMITED—————————————————————9
2.9 BRANCH NETWORK OF BAL ———————————————————10
2.11 MANAEMENT OF BAL—————————————————————-11
CHAPTER 3———————————————————————————-13
WHAT I LERANT IN BAL——————————————————————–13
DEPARTMENTATION ———————————————————————-13
3.1 GENERAL BANKING DIVISION——————————————————-14
3.2 CREDIT DIVISION———————————————————————–28
CHAPTER 4———————————————————————————-37
4.1 LIQUIDITY RATIO———————————————————————–37
4.2 LEVERAGE RATIOS———————————————————————39
4.3 PROFITABILITY RATIOS—————————————————————41
4.4 OTHER RATIO—————————————————————————43
4.5 GROWTH RATIOS———————————————————————–44
BALANCE SHEET—————————————————————————–46
PROFIT AND LOSS ACCOUNT———————————————————–47
SWOT ANALYSIS —————————————————————————-49
CHAPTER 5 ———————————————————————————54
5.1 BETER TRANING PROGRAM———————————————————54
5.2 ENHANCED CUSTOMER SERVICE—————————————————54
5.3 BETTER COMMUNICATION———————————————————-54
5.4 PROPER JOB ANALYSIS—————————————————————-55
5.6 PROMOTION AND PUBLICTY——————————————————–56
5.7 MARKET VISITS————————————————————————-56
5.8 SEPARATION OF ACTIVITIES———————————————————56
5.9 USE OF MOTIVATORS—————————————————————–57

Institute of Management Studies requires its student to undergo an eight-week internship program. Selection of organization depends upon the interest of the student as well as the field of specialization. This document known as “Internship Report” is based on theoretical and practical learning of the internee. This report is about Bank Alfalah Limited (BAL) PESHAWAR BRANCH. This Alfalah bank has given new dimension to banking in Pakistan. It provides new and improved customer service, facilities and also mobilizes the foreign investment. BAL has 189 branches in Pakistan, which are working in all big cities of the country.
The purpose of this study is to review and analyze the functions being performed by the BAL Haripur branch and to translate attained knowledge into practice and preparing an analytical review with findings of the research and specific recommendations regarding the organization. This study will help the reader to know about the insight story and operational efficiency of the organization.
BAL has only one branch in Peshawar and this study is limited to the functions performed by the organization. However, the financial analysis and HRM functions are related to the whole bank because data is gathered from annual reports and the personnel of the bank.
The method for data collection is central theme of the study. No study is completed without using the scientific and systematic ways to get latest knowledge about the study. So the methodology for data collection is based on the traditional categories i.e;
i. Primary Data ii. Secondary Data
Primary data is collected based on my
i. Personal observation.
ii. Briefing and discussion with officers of different departments.
iii. Unstructured interviews.
Besides secondary data is collected from Working manual issued by Head office to branches.
i. Annual reports from 2016 to 2017.
ii. Brochures for information to customers
iii. Pamphlets
iv. Inter-bank office memo
v. Newspapers and magazines
This internship report is broadly divided in four sections with number of chapters required in each section. The brief of each chapter is as follows:
i. “INTRODUCTION OF REPORT” is divided into different topics which includes, the background of Study, Purpose of Study, Scope of Work, and Methodology of Research used during the internship.
ii. “INTRODUCTION TO BANK ALFALAH LTD” is about the brief history of banking sector in Pakistan and then specifically in NWFP. Then, background history of BAL, Bank’s Mission, Vision and Corporate Goals and Strategic Objectives are discussed under the shelter of this chapter.
iii. “ORGANIZATIONAL STRUCTURE” discusses the organizational setup in BAF and brief about Branch Network of bank.
iv. “BAL PESHAWAR BRANCH” highlights the departmentalization in Peshawar branch and then each department is discussed in detail about its functioning and working which include: Deposit department, Account department, Remittances department, Credit department and Trade Finance department etc.
v. “BANK ALFALAH PRODUCT MIX” is about the product line and mix offered to their valued customers. It includes car financing, home financing, debit cards, credit cards and traveler cheques etc.
vi. HUMAN RESOURCE MANAGEMENT” is about the functions of HRM department at head office and branches and related issues to employees of the branch e.g. Procurement, Development, Promotion of Personnel and so on.
vii. FINANCIAL ANALYSIS” In this part, an analysis of financial data has been made which include computation of various critical ratios and its interpretation.
viii. “ORGANIZATIONAL ANALYSIS” highlights the various critical aspects of the branch, which include: Administrative, Personnel and Functional Analysis of the bank.
ix. “RECOMMENDATION AND ACTION PLAN” is about to suggestions and action plan for further improvement of the bank performance, which are both in qualitative and quantitative terms.

Banking in primitive societies also existed in some form. The greatest invention of all times is considered to be the invention of wheel which made transportation easy and transportation opened a gateway to business and exchange of goods flourished. The initial business was done on “barter” which meant an exchange of “commodity for commodity”. There is a myth also about the invention of money, which tells that king Midas of Libya invented money in 800 B.C. Another statement states that the king of Babylonian empire named as King Hummurabi in 1700 B.C. made all the rules and regulations of lending and borrowing and interest etc. He got his code inscribed on blocks of diorite about 8 feet tall, containing about 150 paragraphs which deal with nearly all aspect of loans, interest, pledges, guarantees, natural accidents, loss , thefts etc. It is not certain as to who invented money; but history records that Gyges (Croesus), King of Lydia, casted electrum(a natural alloy of gold and silver) of identical shapes and of uniform weights with a triple emblem engraved on it as an official guarantee of value in 687 B.C.
The first bank was established in Barcelona in Spain. Another statement tells that “Venice” and “Genoa” was the hub of financial transactions and the first bank was founded there in 14th century. The first public bank in Germany was formed comprising the operations of discounting, deposit and transferring of money. In the 16th century, some more public banks were formed in Hamburg, Nuremburg and Milan.
In 15th Century a number of conferences were held in Nuremburg for organize the banking techniques with facilities of growth and transfer. In 1587 the bank of Genoa was formed. In 1609 the Bank of Amsterdam was also formed. This bank rendered valuable services to the Netherlands traders up to the year 1795. Bank of Hamburg came into existence in Hamburg with the business of accepting deposits of fine silver or foreign currency. The bank rendered great service to the merchants as well as the countries. It dealt with them until 1873, when it was merged with the Reich bank.1
Before the partition of India and Pakistan in 1947, branches of British banks dominated banking in Pakistan. The first domestic banking institutions emerged in the 1940s, immediately after Pakistan’s independence. These institutions include the Australasia Bank (today, Allied Bank Limited) or Habib Bank Limited, Muslim Commercial Bank, and the National Bank of Pakistan. The NBP was wholly government owned but prominent merchant families established the other three. In 1948, the State Bank of Pakistan (SBP) was formed. It assumed that the supervisory and monetary policy powers of the State Bank of India. From 1960 to 1970, a number of specialized Development financial institutions (DFIs) such as Industrial Development Bank of Pakistan and the Agricultural Bank emerged. These DFIs were either controlled directly by the state or through the SBP, and were intended to concentrate on lending to long-term projects in specific priority sectors.
In 1974 Government of Pakistan nationalized all the private sector banks. In addition to managing the monetary policy, SBP also oversees the entire financial system and has institutionalized the procedure for appointment of chief executive officer (CEO) and Board of the Nationalized Commercialized Banks and DFI’s.
Banking and Financial services sector in Pakistan comprises the commercial banks and the non-banking financial institutions, including the development finance institutions (DFIs), leasing companies, modarabas (Islamic Mutual Funds) and investment banks. These are controlled and regulated by the SBP. Pakistan is in the process of adopting an Islamic (Shariah) financial system, under which interest-based banking is not allowed. Since 1990 the Government of Pakistan has introduced various reforms in the financial services sector enhancing the level of autonomy enjoyed by the SBP.
Privatization program that began in Pakistan in 1991, two of five NCB’s and DFI’s were privatized and 11 new private banks were setup. The number of banks operating in Pakistan has increased, which in turn has resulted in increased competition. During previous five years, the combined total assets of domestic banks, showed an average annual increase of 22 percent, while combined deposits have recorded an increase of 27 percent per annum. A total of forty-six commercial banks, including twenty-one foreign banks, are operating in Pakistan. Additionally, sixteen Investment Banks, twenty-nine Leasing Companies and fifty-three Modaraba Companies provide a mix of financial services.
Opportunities for new foreign banks exist in consumer banking, corporate bonds, investment banking, leasing and housing finance sectors. Good reputation enjoyed by the existing foreign banks will be helpful for new entrants. Some challenges, however, do exist in the form of weak economic conditions in Pakistan and the turnaround possibilities in NCB’s through privatization.
Bank Alfalah Limited was incorporated on June 21, 1997 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November1st, 1997. Bank Alfalah Limited started its life as “Pakistan Operation” of BCCI. A multi-national conglomerate based in Luxembourg and Grand Cayman. BCCI was the 7th largest bank in the world. The estimated assets of BCCI were 20 billion dollars. The operations of the Bank were in 70 different countries. In July 1991, the Bank of England and International Liquidators accused BCCI of being involved in money laundering to the tune of 1.54 billion dollars.
Upon closing down of BCCI in 1992 the operations of BCCI in Pakistan were acquired by HBL, and were run as a wholly owned subsidiary by the name of Habib Credit & Exchange Bank (HCEB). HCEB was later acquired by the Abu Dhabi Group through privatization under the leadership of Sheikh Nahayan Mubarak Al-Nahayan, in 1997 and its 70% ownership was transferred to Abu Dhabi Group. The agreement was signed on July 7, 1997.
The strength and stand of Abu Dhabi Group, principal owners of BAL, have helped Bank Alfalah Limited launch high quality consumer and corporate banking operations in Pakistan. BAL have embarked upon a rapid expansion program to make sure that the services reach more and more people, BAL is headed towards an optimum sized network reaching major urban centers in Pakistan. The Bank is well positioned and geographically poised, to cater for increased business demands, from its existing and potential clients.
There are 189 Branches of Bank Alfalah Limited in 74 different cities of Pakistan, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. Islamic Banking Division is a recent initiative which operates as a separate branch. It offers shariah complaint products through a network of 50 branches.
With the implementation of the office automation and communication system BAL will be poised to compete with the best in quality and speed of customer services. Recently WARID telecom private limited signed strategic alliance agreement with Ericsson. Earlier, a latter of intent was signed in this regard on 5th September, 2004. The chairman of Abu Dhabi consortium, and of Warid telecom, his Highness Sheikh Nahayan Mubarak Al-Nahayan was the chief guest of the ceremony. Under this Strategic alliance agreement, Ericsson will provide Warid telecom a complete turnkey state of the art network GSM online.
“To be the premier organizations operating locally & internationally that provides the complete range of financial services to all segments under one roof.”
Bank Alfalah is one of the leading financial institutes and Bank alfalah day by day increasing its products for all the segments in Pakistan i.e for Businessmen, Industrialists, Agriculturists and for the Government bodies in the country. Bank Afalah is trying to reach each segment in Pakistan, and trying to provide its products at lowest charges and with easiest way, under one roof.
“To develop & deliver the most innovative products, manage customer experience, deliver quality service that contributes the brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank.” In the above Mission the Management of Bank Alfalah emphasis on the following areas:
• To provide the new and more innovative products than the other banks.
• To take and manage the ideas of the valuable customer for the Bank
• To deliver high quality and quick services to the customers, who are keep great value for Bank Alfalah.
• Bank Alfalah tries to promote those activities which give the fruitful result to the customers and the stakeholder of the bank.
The corporate values of the bank are excellent customer service, creativity, integrity, respect, teamwork and professionalism, which play an integral role in the fulfillment of the bank’s mission. Clearly these values are not new to the bank and have been high priorities since the bank was established. B continuously recognizing the importance of corporate values, the individual contributions from all employees has made the bank what it is today. In addition to the corporate values, bank urges to provide all those having interest in the bank with a number of criteria by which they can access the bank.
• To create maximum economic value for shareholders through constant relationships focus on financial services.
• To promote industrial agricultural and socio-economic processes through active participation of private and public sector in the country,
• Create diversified and sound portfolio for utilization of idle funds and their investing in the existing and new venture especially in the pioneering of high tech agro based, export oriented and engineering projects to ensure maximum return
Pakistan Credit Rating Agency – the leading credit agency in the country – has rated Bank Alfalah very favorably. The Bank has been awarded an AA- (double A minus) and an A1+ (A one plus) in the long and short term respectively. These ratings denote very high credit quality and very low expectation of credit risk.
Since the privatization in 1997, Bank Alfalah Limited has remained consistent in its mission to excel in providing innovative products and services to its customers. As a result of that, the yare 2007 has been most favorable for bank inspite of varying market conditions. The Bank recorded significant increase in its business volumes coupled with the broadening of network and clientele base.
The Bank is fully aware that the branch network has direct implications on the service that it provides to its customers. In the year 2007, commercial banking branches have reached to 166 and Islamic branches to 23. So in 2007, Alfalah network extend the coverage to 189 branches covering 74 cities nationwide and bank has also six international branches in four countries. Bank Alfalah is confident that a well-integrated branch network offers greater potential for serving a larger client base through high value products.

Organizing is a function of management. It is a process of breaking down the overall tasks of an enterprise into individual assignments and then getting them put together in units along with delegation of authority to a manager of a department.
Bank Alfalah is a highly developed organization, disciplined along clear lines. This principle of clarity of authority, responsibility, and job description is evident from their organizational hierarchy. At the top of the structure is the Board of Directors, which is in Abu Dhabi. The Chairman of the Board of Director is His Highness Sheikh Nahayan Mubarak AI-Nahayan. Then there are six directors. The CEO is Pakistani and holds his office at Head Office Karachi. The CEO is reported by five executive in charges looking after personnel training, credits, IT, operations, strategic planning and finance.
The whole country is divided into two zones (areas) Northern and Southern, headed by two Area Managers. All Branch Managers reports to Area Managers. The organizational structure of Bank Alfalah is pyramid like, though culturally the pyramid works upside down. The different zones are encouraged to setup their own targets, subject to approval from top authority. In the same way, the different departments after choosing their realistic targets allow these goals to cascade down to employee level.
A general view of the structure of BAL is shown in the following organizational chart.

BAL is managed by a 6-member Board of Directors headed by a Chairman. There is an Executive officer, who runs the Executive Committee. In Executive Committee there are 12 members.
The names of members of the Chairman, Board of Directors and Executive Committee along with their designations are given below:
H.E. Sheikh Hamdan Bin Mubarak Al Nahayan
Board of Directors
H.E. Sheikh Hamdan Bin Mubarak Al Nahayan
Mr. Abdulla Khalil Al-Mutawa
Mr. Abdulla Nasser Hawaileel Al-Mansoori
Mr. Khalid Mana Saeed Al Otaiba
Mr. Ikram Ul-Majeed Sehgal
Mr. Nadeem Iqbal Sheikh
Chief Executive Officer
Mr. Mohammad Saleem Akhtar
Executive Committee
Mr. Mohammad Saleem Akhtar
Mr. Parvez A. Shahid
Mr. Mohammad Yousuf
Mr. Sirajuddin Aziz
Mr. Shakil Sadiq
Mr. Shahid M Murtaza
Mr. Nadeemul Haq
Mr. Bakhtiar Khawaja

I worked as an Internee in Alfalah Bank for 8 weeks as per required by University. During my Internship, there was a tremendous atmosphere in Alfalah Bank. I learned so many things from their management like how to work in a standard place. At my first day in Peshawar branch the bank manager, Mr. Muhammad Aleem Awan has introduced me with different persons and department of the bank. After that I have personally visit every department one by one and observe what is happening there. All the officials have co operate me very much and provide main formation, which I needed the most important benefit of this internship is that I got practical exposure of work place..I got practical experience of working practices related with my field I learned that how to manage things and how to create balance among work life
and personal life Management did help me a lot during my work they always guide me especially Branch Manager I learned whole process of account opening of individuals practically. I remained involved very much in practical activities of account opening I learned whole process of Clearing. processed the Inward Cheques for collection and learance, and have also prepared vouchers.
Bank Alfalah is a financial institution showing strong growth and development over the last five to six years. The Peshawar Branch started its operation in December, 2006. It performs all the functions of a commercial bank from deposits to advances and from remittances to save custody services.
The branch will ensure that all its activities are properly recorded in accordance with direction and procedures of the bank, there by showing compliance with reporting requirements to be prompt and full.
It seems quite apparent that if the stated goals and objectives of an organization are to be attained, certain activities have to be performed and it would also seem that the organizing function of a manager would involve grouping the functions and activities necessary to attain the goals of an enterprise. The term for that process is “Departmentalization” or Division of Organization.
In Bank Alfalah Peshawar Branch, departments are made on the basis of functions performed by the bank. The major divisions in the bank are:
• General Banking Division
• Credits Division
• Trade-Finance Division
In each division there are certain departments, which are as follows:
The general banking division includes:
• Deposits Department
• Accounts Department
• Cash Department
• Remittances Department
• Clearing Department
The major activities and operations performed under this department are;
Deposit Department
In line with the “Client First” philosophy, Bank Alfalah offers a wide range of deposits to cater to the specific needs of various business segments classified as follows:
• Current Account
• Saving Account
• Term Deposits
• Call Deposits
Current Account
Current accounts are the running and active accounts, which may be operated upon by the customers for any number of time during a day I-e the depositor can deposit money. Cheques, warrants, dividends and other instruments and can demand payment for a part or the entire credit balance at any time during business hours without any restriction as to number of withdrawals. It can be further classified as Individual Account and Joint Account.
Individual Current Account:- Individual Account is opened by a single customer, only he can operate the Account, but he can give the Authority to the other person to operate the Account.
Joint Current Account:- If there are two or more customers who want to open Current Joint Account, so they will open a Joint Account. This Account may be operated;
• Jointly by all partners
• Either or savoir
• Any one of the partners
Saving Account
Saving account gives higher return with the added benefit of flexibility of drawing money at any time within business hours than the Current Account. Different types of Saving Accounts are:
• Individual Saving Account
• Joint or Partnership Saving Account
• Minor Saving Account
Features of Saving Account
Main features of Saving Accounts are as follows
• Currency Option PKR, US$, GBP, J¥
• Minimum Balance Requirement Rs. 5000 or US $ 500
• Checking Facility Unlimited
• Tax Application With holding Tax on Profit ;
• Zakat on total amount
• A/C Statement Monthly
• Cheque Book 25, 50 leave @ Rs.2/leaf
Call Deposit
It is an interest bearing deposit account with a mandatory 7 or 30 days notice period preceding the release of funds. This account can be maintained in PKR. The interest depends upon the tenor of the deposits and is payable on maturity.
The tax withheld on the profit and Zakat is applicable to principle amount only.
• Currency Option PKR
• Minimum Balance Required None
• Tenor 7 to 30
• Profit On Maturity
• Checking Facility Nil
• Tax Application With holding tax on profit ;
• Zakat on Total amount
• A/C Statement Nil
Term Deposit
It is one of the popular account types. The amount is deposited in this account for fixed i.e., from one month to five years. The interest varies with the variation of time limitation. The rate of profit increases as per increase in time period. The customer does not withdraw money before maturity of his/her account. The profit is paid after the maturity but in certain cases money can be withdrawn with the adjustment of rate of profit according to the time limitation.
Different Schemes Of Bank Alfalah
To boost up its deposits and to provide more facilities to its clients, Bank Alfalah has launched different peculiar schemes i.e.
• Royal Profit
• Royal Patriot
• Royal Custodial Services
• Royal Group
• The detail of the above stated schemes is as follows:
Royal Profit
It is highly flexible interest bearing account which calculates return on daily product basis.
Features of Royal Profit
• Currency option PKR, US $
• Checking Facility Unlimited
• Cheque Book 25 leave free of Cost
• Account Statement On Request
• Tax Application Zakat
Royal Patriot
This is a rupee term deposit which is designed to give your money at a much higher growth rate than a foreign currency account.

Features of Royal Patriot
• Choice of Term 1,3,6,9,12,24 months
• Profit Rate improves with tenure and amount
• No penalty in case of premature encashment
• No prior notice required before withdrawal
• Low minimum balance requires Rs. 25,000/-
Royal Custodial Service
Dollar Bond Custodial and Return Management Services are:
• Absolutely safe
• No need to maintain account to benefit from service
• Automatic opening of account both in PKR and US $
• Opens a door to an array of our top quality
• The service is available for bearer and registered bonds

Royal Group
This is a joint investment plan which allows the investors to make a group of people and open an account.
Features of Royal Group
• Profit will be calculated on daily product basis
• Profits will be disbursed on monthly basis
• Option of salary disbursement (for employees)
• Arrangement of secured collection of cash/cheque from work place
• High rate of return for even small depositors group
• Required number of people is two or more
Deposit Portfolio Highlight
Nature of Deposits Percent Per Annum
Saving Account 9%
Notice Deposits
7-29 Days 6.10%
30 Days ; Above 7.50%
Term Deposits
1 Month 8.00%
3 Month 10.00%
6 Month 10.50%
1Year 11.00%
3 Years 12.00%
5 Years 13.00%
Royal Profit
From 50,000 to 999,999 9%
From 1,000,000 to 9,999,999 9.5%
From 10,000,000 ; above 10.5%
Royal Patriot
Duration Amount 1 month 3 months 6 months 12 months 2 years
25,000 to 999,999 8.00% 10.00% 10.50% 11.00% 11.00%
1,000,000 to 4,999,999 8.10% 10.10% 10.60% 11.10% 11.25%
5,000,000 ; above 8.20% 10.25% 10.70% 11.20% 11.50%
Royal Group
100,000 to 999,999 9.50%
1,000,000 to 9,999,999 9.70%
10,000,000 ; above 10.50%
Accounts Department
This department coordinates all the banking activities there by keeping track of each activity in a sequential manner and provides up-to-date data. The accounts department is also responsible for proper accounting of assets and liabilities of the branch. This department is the backbone of the entire banking system. All the banking activities are placed through this channel. The main functions of this department are:
• Maintenance of books of accounts
• Preparation and disbursement of salaries of bank’s staff
• Maintenance of superannuating funds and investment of the staff
• Dealing with the disposal of commercial and external audit reports
• Preparation of budget and other financial statements
Cash Department
Unlike other departments in the bank, Cash Department also categorizes itself as one of the important department of the bank. Its significance being obvious by the fact that banking started because of transactions relating to cash its safe keeping trading etc. One drafts all the cash transactions with the clients by the cash department, specifically by the tellers. The amount of cash available at teller’s area is enough to meet daily requirements and is insured. After closing of the business hours, the teller verifies the amount of cash, physically, which is cross verified by the manager operations and tailed with the general ledger account. All the activities of the cash department are divided into two i.e. Cash Collection and Cash Payment.
Cash Collection
Cash collection is accompanied by cash deposit slip. The slip contains the account number; title of account and denomination of cash deposited both in words and in figures followed by the signature of the depositor. The cash received is counted and is verified with the deposit slip. Entries for cash deposits are recorded before handling over receipts to the customer. Customer’s copy of the deposit slip is handed over to the depositor. Before cash deposit slip is released, it is matched and validated with the entries in the register for cash collection.
Cash Payment
Amount of payment of cash in a single transaction is fixed. Payments beyond a certain limits are supported to be approved by an appropriate authority. Before payment, the cheque must be checked for staling, post dated, payee’s name, crossing, amount both in words and in figures and authentication of alterations. Tellers verify signatures on cheque before payment. In case of illiterate account holder the customer is identified through the photograph available in the bank’s record and thumb impression attested under the full signature of the teller who is authorized to approve the transaction.
Remittances Department
One of the most frequently used banking services is the transfer of funds through the banking channels, being local or outstation. Transfer of funds entails high level of efficiency and security on part of the bank. It creates a legal obligation for the bank of debtor/creditors in case of DD and principle agent in case of TT.
The remittances are of two types i.e.
? Local Remittances
? Foreign Remittances
BAL offers following modes for Local Remittances:
• Pay Order
• Demand Draft
• Tele-Phonic / Tele-Graphic Transfer
• Mail Transfer
• Travellers Cheques
The detail of each is as under:
Pay Order
Payment Order is a negotiable instrument to transfer money to other banks within the station and is payable on demand. It is non-transferable instrument valid for three months, making it an order by one party to make payment in favour of another party. It is also known as Banker’s Cheque.
The customer fills an application form for Pay Order in favour of a party and submits the amount in the cash department. It is competitively less risky. In case of cheques, the bearer might not get the desired amount for non-having sufficient funds available to him.
Demand Draft
Demand Draft is basically a bill of exchange, which orders to pay money on demand to a certain person specified on the instrument, or to the order, drawn by one bank to the branch of the same bank outside the station or on its corresponding banks. Legally, the instrument is governed by the Negotiable Instrument Act. The following parties are involved:
• Purchaser: The customer, one who’s request the DD is issued
• Drawing / Applicant Bank: The bank, which issues the DD
• Drawer Bank: The bank on which the issued DD is drawn
• Payee: The person entitled to receive the payment
Tele-Phonic / Tele-Graphic Transfer
It is an encoded message between the bank of the beneficiary and the remitter. It is one of the quickest mode of transfer of money where by the funds are transferred through telex or cable from remitter / customer at one bank / branch to a payee in another city / country through an intermediary bank / branch. It is neither transferable nor negotiable. In this case the customer is responsible for the instructions, being given, and the bank carries everything out. The payment instruments in a TT should be clearly specified and must contain the following information:
• Payment of specified amount
• Currency in which the payment is to be made
• The bank / branch where the payee’s account is being held, including the payee’s name and account number
• Value date for effecting the payment
The message is reproduced and signed by two officers. It is sent for test where coding and decoding figures related to day, month, amount, currency and city takes place.
Mail Transfer
When money is not required immediately, the remittances can also be made by MT. Here the sending office of the bank sends instructions in writing by mail to the payee bank for the payment of specified amount of money.

Travellers Cheques (TCs)
With the Rupee Travellers Cheques market growing rapidly, BAL is the latest entrant into the market. The bank was first to introduce TC’s in 2 Lac and 5 Lac denominations, the highest ever face value for any Travellers Cheques available in the Pakistani market. In fact the TC’s come in eight denominations, which according to the bank will help clients conduct transaction at all levels and with complete security. These cheques have added security features, including the fact that they are printed on scan proof paper and carry the bank’s watermark and security thread with a 24/7 security and Tele-verification line. Bank also launched a reward program aimed at buyers of the TCs and will not be charging any commission on the purchase or encashment of the Cheques.
Features of TCs
• Highest Denomination Available of Rs. 5, 2 and 1Lac along with 50, 20, 10, 5 and 1 thousands
• Receive commission if in cash TC’s in any of BAF branches
• Unlimited validity
• Maximum-security features
• Fully refundable
• Transferable and endorsable
• No account needed
• Round the clock customer services
Foreign Remittances
Foreign remittances include remittances (incoming and outgoing) outside Pakistan. There are two types of remittances i.e. Inward Remittances & Outward Remittances.
Inward Remittances
The term “Inward Remittances” means purchase of foreign currencies in whatever form and includes not only remittances by MT, TT, Draft etc. but also purchase of TC’s, Drafts under Traveller Letters of Credit, Bills of Exchange and Currency Notes etc.
Outward Remittances
The term “Outward Remittances” means sale of foreign exchange in any form and include not only remittances by MT, TT, Draft etc. but also sale of Travellers Cheques, Travelers Letters of Credit, Foreign Currency Notes etc.
Since Bank Alfalah does not have branches in all countries, it has correspondence with the following banks for remittances:
US Dollar ($) Citi Bank, American Express, ABN Amro,
Bankers Trust and Habib Bank New York
Pound Sterling (GBP) Habib Bank London
Deutch Mark (DEM) National Bank of Pakistan Frankfurt
Euro (€) Commerce Bank Frankfurt
Types of Outward Remittances
The foreign outward remittances can be of following types:
• Foreign Tele-Graphic Transfer (FTT)
• Foreign Demand Draft (FDD)
• Foreign Outward Bill for Collection (FOBC)
The details are as follows:
Foreign Tele-Graphic Transfer
The transfer procedure is same as for local TT. The customer either pays cash or gets his account debit. Since all arrangements are through main office, Bank Alfalah sends credit advice to Head Office, which gives credit to the correspondent bank of Bank Alfalah in that particular country, ultimately giving credit to required / designated bank and account. For ITT, Head Office account is debited and credit is given to the beneficiary account. If beneficiary does not have account with BAF, then M-form is required to fill in stating purpose of remittances.
Foreign Demand Draft
FDD is also an instrument to transfer fund from one country to another. The customer can make payments in three modes:
• Debit to Foreign Currency Account
• Foreign Currency (Cash)
• PKR (M-form is to be filled in)
When the customer fills in the M-form, he/she has to state the purpose of remittance. These can be on account of:
• Membership Fee of Institutions
• Examination Fee
• Membership Fee of Social Clubs
• Subscriptions to newspaper/magazine/purchase of books
Once the customer fulfills all the requisites of the prescribed, BAF issues FDD and deducts bank charges, excise duty and withholding tax. Customer being NTN cardholder is exempted to pay tax in this case. FDD is then allotted a number for reference purpose and finally FDD is issued (always typed written). Credit advice to Head Office along with a Telex message to foreign correspondent bank is sent.
Foreign Outward Bills for Collection
When customer deposits a foreign cheque / travelers cheques to Bank Alfalah, it becomes the bank’s liability to collect it. It is then sent to the bank of expected country and payment is made after confirmation. The foreign bill is sent for correction first and then payment to beneficiary is made. It is commonly presented through clearing.
Clearing Department
Clearing system is a device that enables bankers to settle cheques and other instruments, drawn on each other. System is of immense value in saving a lot of labor, time and expenditure there by increasing the efficiency of the banking system. SBP has its branches in all big cities nationwide and clearing in these cities is supervised by SBP. In cities with no SBP coverage, the clearing is supervised by NBP.
Brief Working of Clearing Department
The Cheques received by a bank drawn on other banks are sorted bank wise. A schedule is prepared for cheque drawn on each bank. The cheques along with the schedule are presented in the clearinghouse where they are delivered to the representative of the various banks. Thus each bank receives from other banks cheques drawn upon it and delivers to other bank cheques drawn upon them. The first one is the inward clearing and the other is the outward clearing. The net difference is settled by Dr, Cr. to their account with the supervising bank.
The Credit Division at Bank Alfalah is categorized into three sub- departments according to the functions:
• Advances Department
• Car Finance Department
• Structure Finance Department
Bank is a profit seeking institution which attracts surplus balances from the customers at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms. Advances made by commercial banks are of three types, namely:
• Over Drafts
• Cash Credit
• Loan against movable/immovable property and documents of title to goods
Over Draft
Over draft is the right given by a commercial bank to his customers to draw in excess of his current account up to a fixed limit.
The bank scrutinizes the application for over draft, examine the credit worthiness of each borrower and then approve the upper limit to overdraw the current account with or without security.
The bank often requires that the advances be secured, to reduce the risk of the bank. The principal type of securities assigned to the advances is:
• Government Securities
• Shares and bonds of listed companies
• Saving certificates
• Fixed deposit receipts
Cash Credit
Cash credit is the advancement of funds against the security of movable goods. Bank takes the physical possession of the goods.Cash credit is a short term, self-liquidating commercial loan. The bank allows the business firms to borrow up to a certain limit either in lump sum or installments.
A loan is an advance made by BAL to the borrower in lump sum for a period exceeding one year from the date and extended is to meet the long-term capital requirements of the borrower.
Bank loans are classified into:
• By Security
• By Maturity
• By Purpose
Loans by Security
Secured loans are backed by collateral. The main type of securities pledged with the bank for obtaining loans is:
• Stocks & Bonds
• Real Estate
• Live Stock
• Ware House Receipt
• Equipment
Loans by Maturity
Loans classified according to the maturity of the loans are:
• Short term loans — payable to the lender upon demand or a short notice.
• Intermediate loan — run from 1-5 years and repaid on installments.
• Long term loans — having longer maturity date and may be repaid before maturity.
By Purpose
Bank Alfalah advances loans to its customers for a variety of purposes.
• Commercial and Industrial loans
• Personal loans
Documentation Requirement for Loan Advancement
The bank while advancing loans needs written proof of the dealings between the party and the bank.
Documents required for applying for a loan are:
• Credit sanction advice
• Credit report
• Permanent information memo
1. Credit Sanction Advice
It is document for a loan, which is filled by a customer. It includes a margin and security section, which is filled by the banker.
2. Credit report
Credit Information Bureau (CIB) is a department of the State Bank of Pakistan, which has information about all the account holders of every bank. The credit request by customer is sent to CIB to check the client’s credit worthiness and send a CIB report of the client, containing complete information about the clients other accounts at other banks.
Other documents are:
• Balance sheet of the company
• Information and detailed address of stockholders
• Proposed letter from the company for the required facility
• Articles/memorandum of association.

Alfalah Car Financing is specially designed for you with easy affordable and flexible installment plan
Benefits and Features
• Quickest processing
• No hidden charges
• Minimum down payment
• Complete repayment at any point of time
• Balance transfer facility {BTF} for existing as well as new clients from other Banks
• Tenor period ranging from 1 to 5 years.
• Financing of all brand new locally assembled vehicles.
• Financing limit ranging b/w Rs. 200,000/- to Rs. 2000,000/-
Corporate ; Individual Car Leasing
BAL Peshawar branch has recently introduced car leasing facility for individuals and corporate sector has set new dimensions for the product. Now you are provided with the option of either to get the vehicle leased or financed.
Renowned and reliable Insurance companies are offering the competitive rates of Insurance. Pay year insurance premium in advance {at the time of down payment}and remaining in the subsequent equal monthly installment.
How Much Extra Money Being Paid? {Mark-up}
Offering lowest rate of markup of 9.5%, {per annum}, BAL has captivated a major market share and so is the plan for future.
Easily affordable installments on monthly basis in the form of postdated cheques will set you free of depositing your rental cheques every month.
Hypothecation of vehicle in the name of the Bank Alfalah Limited.
Documents Required
The following documents are required to be submitted by an applicant with the completed application.
• Two-passport size photographs.
• Copy of National ID card.
• Bank statement for the last six months.
• Salary certificate in case of salaried individual}.
• Business proof for self employed and business people}.
• Current Utility Bill.
• Co borrower’s NIC copy {if it is a co borrower case}.
Yes you get a car loan form bank Alfalah to purchase a brand new car if you are
• Pakistani National Identity Card holder.
• Over 20 years of age (Maximum 60 years in case of salaried and 62 in case of a business person at the time of maturity of the loan).
• Salaried, Businessman or self employed.
Checking of Documents
After receiving, documents are checked against letter of credit, Generally following information is checked:
* Applicant’s full name
* Full or partial name
* Tenure
* Ready rates or forward booking rate
* Free list
* Shipping date
* Time limit for documents for presentation
* Date and place of expiry
Discrepancies in Documents
After checking whether documents are according to term and conditions of L/C or not, discrepancies (if any) are intimated to Importer.
If the importer accepts the documents with discrepancies e.g. excess amount, quantity differences or any other documents from L/C or contract terms or conditions, then before making payment to negotiating bank, the issuing bank is bound to seek permission from SBP.
If the importer rejects the documents then the documents are sent back to negotiating banks for removal of discrepancies.
Forms of Settlement
Settlement of L/C can take the following forms
By Payments
In case of sight L/C goods imported are part of securities because title documents to goods imported are released against payment i.e., reversing L/C opening entries and creating PAD (Payment against documents). In other words, on the receipt of set of documents the issuing bank is obliged to make payments immediately, therefore, the payment is made to the debit of PAD.
By Acceptance
Usance L/C requires some collateral securities because title documents are released against acceptance (a commitment to pay subsequently). The exporter draws a bill of exchange for required amount on importer. When the importer accepts the Bill of Exchange, the documents are released against acceptance. The L/C opening entries are reversed and entries for acceptance are made.
Forms of Bank’s Import Income
In the procedure of settlement of imports, Bank earns income from two sources
In case of sight L/C, mark up is recovered right from the date of negotiation until the payment from importer is received at prescribed rate. The period for which mark-up is recovered is classified as following Pre-lodgment Period: Period from date of negotiation to date of lodgment. Post-lodgment Period: Period from date of lodgment to the date when PAD is retired.
Mark up for pre-lodgment period is charged on total L/C amount, where for post lodgment period on the total L/C amount less margin, already held by the branch (if any)
In case of Acceptance, monthly commission is charged and on transfer to PAD, no mark up is charged for pre-lodgment period; only post-lodgment mark-up is recovered form client.
Commission and Charges
The second form of income is the Bank commission and courier charges.
Payment against Documents (PAD)
Payment against Document (PAD) is created at retirement of L/C or acceptance. It is a temporary loan to the computer and is adjusted as soon as the payment is received and documents are delivered to importer. At the lodgment date the L/C amount is converted at prevailing or booked rate.
Short-term Financing
BAL provides short term financing to the importer if he is short of working capital. In this case, there is an arrangement with the customer to allow him the facility of Finance against Imported Merchandise or finance against trust receipt.
Short-term financing facilities for imports include:
• Finance against Imported Merchandise
• Finance against Trust Receipt
Finance against Imported Merchandise
If the customer has not enough working capital to adjust PAD or to release the imported goods, and he has a limit to enjoy the facility of FIM, he requests the bank to transfer his obligation from PAD to FIM partly or in full amount. The set of documents is given to Mukadam (clearing agent) who release the imported goods from customer, which then are pledged in the name of bank for the agreed period and kept in a bounded warehouse. The terms of repayment are agreed between the bank and the customer. On the receipt of the part or full payment from the importer, the goods are released for the equivalent amount or as agreed upon. The pledged goods are insured on the customer’s expense and held under lock and a responsible bank official authorized and delivery from bounded warehouse whose specimen signatures are provided to Mukadam.
Finance under Trust Receipt
If the customer wants to release his goods immediately in absence of working capital and has a limit to enjoy FTR, he applies for the said facility. Application is received by import officer who checks the request with the sanction limit of the party against particular facility.
If found appropriate goods are delivered to importer under trust and the importer is supposed to pay back after the sale of goods or availability of working capital or at expiry of specified period which ever is earlier. Normally the repayments are made after the period agreed i.e., 30 days, 60 days etc.
A duly signed “Letter of Trust” is obtained from the client usually known as IB-27. FTR is secured by collector securities for example mortgage of property, pledge of deposits etc.

“Financial analysis involves the use of various financial statements. These statements do several things. First the balance sheet summarizes the assets, liabilities and owner’s equity of a business at a moment in time, usually the end of a year or a quarter. Next, the income statement summarizes the revenues and expenses of the firm over a particular period of time, again usually a year or a quarter.
Financial Ratio
“To evaluate a firm’s financial condition and performance, the financial analyst needs to perform check ups on various aspects of a firm’s financial health. A tool frequently used during these check ups is financial ratio or index.
Liquidity Ratios help us understand if we can meet our obligations over the short-run. Higher liquidity levels indicate that we can easily meet our current obligations. We can use several types of ratios to monitor liquidity.
1. Current Ratio
It measures the ability of the firm to meet the current debts with currents Assets. OR It shows the short-term debt-paying ability of an organization.
Current Ratio = Current Assets / Current Liabilities
2016 = 237842197 / 231922580 = 1.026: 1
2017 = 259549500 / 250994656 = 1.034: 1

This means that bank Alfalah has Rs.1.026 and Rs.1.034 in its Current Assets to meet its every Rs.1 Current Liabilities in the years 2016 and 2017 respectively.
The ratio has increased in 2017 by Rs.0.008 due to increase in Current Assets and less increase in Current Liabilities. It has resulted due to the following reasons.
i. High level of Cash
ii. Increase in Account Receivable
iii. Decrease in bills payable
iv. Decrease in Short Term Finances
Any how the bank Alfalah is in a good position to pay its short term liabilities.
2. Absolute Liquidity Or Super Quick Ratio
It shows the the comparison of the absolute liquid assets of a firm to current debts. Absolute liquidity is represented by cash and near cash items.
Absolute Liquidity Ratio = Absolute Liquid Assets / Current Liabilities
2016 = 34511439 / 231922580 = 0.15 : 1
2017 = 40591312 / 250994656 = 0.16 : 1

This means that bank Alfalah has Rs. 0.15 and Rs. 0.16 as absolute liquid Assets to meet its every Rs.1 current debts in the years 2016 and 2017 respectively.
The ratio has increased in 2017 by Rs.0.01 because increase in cash and near cash items is more as compared to increase in Current Liabilities. This shows an increased liquidity of bank Alfalah limited. It has resulted due to the maintenance of high level of cash at BAL.
Another important group of detail ratios are Leverage Ratios. Leverage Ratios measure the use of debt and equity for financing of assets
1. Debt-to-Equity
It indicates the extent to which the debt financing is used relative to Equity financing. This ratio is used to determine an entity’s long-term debt-paying ability. It helps to determine how well the creditors are protected in case of insolvency of a company. It compares the funds provided by creditors to the funds provided by shareholders.
Debt to Equity Ratio = Total Debt / Share holders Equity
2016 = 240849667 / 6738063 = 35.74: 1
2017 = 263443596 / 10572605 = 24.92: 1
This means that for each Rs.1 brought by shareholders, the Creditors brought Rs.35.74 and Rs.24.92 during the years 2016 and 2017 respectively to finance the BAL.
The debt to equity ratio of BAL is too high which shows a great risk for creditors in case of insolvency and also not a good sign for BAL in case of attracting and satisfying the creditors.
The ratio has decreased in 2017 by Rs.10.82 due to the fact that the increase in the debts is less as compared to increase in Share Holder’s Equity due to decrease in bills payable and tax liabilities.
2. Debt-To-Total-Assets
The Debt to total assets Ratio measures the level of debt in relation to our investment in assets. The Debt Ratio tells us the percent of funds provided by creditors and to what extent our assets protect us from creditors. A low Debt Ratio would indicate that we have sufficient assets to cover our debt load. Creditors and management favour a low Debt Ratio
Debt to Total Assets = Total Debt / Total Assets
2016 = 240849667 / 248313793 = .969: 1
2017 = 263443596 / 275685541 = .956: 1
This means that for each Rs 1 invested in the Total Assets of the BAL,
Rs 0.969 and Rs 0.956 have been brought by the creditors during the years 2016 and 2017 respectively.
A low Debt Ratio would indicate that we have sufficient assets to cover our debt load. Creditors and management favour a low Debt Ratio, whereas here we see that the BAL debt ratio is high some how.
The decrease of 0.013 in 2017 has occurred due to the fact that out of the total assets i.e. Rs.275685541, Rs.263443596 has been provided by the creditor while the rest of the difference i.e. (275685541-263443596 =12241945) has been invested by the share holders, so the ratio is lower in 2017 because of high investment by shareholders and ratio is high in 2016 because of low investment by shareholders as compared to 2017.
Profitability Ratios measure the level of earnings in comparison to a base, such as assets, sales, or capital. Analysis of profit is of vital concern to stockholders as they derive revenue, in the form of dividends, when paid from profit. Profits are also important to creditors as they are source of funds for debt coverage.
1. Net Profit Margin
Profit Margin measures the percent of profits you generate for each dollar of sales. Profit Margin reflects your ability to control costs and make a return on your sales. Management is interested in having high profit margins.
Net Profit Margin = (Net Profit / Net Sales or total income) * 100
2016 = (1702094 / 14515344) *100 = 11.73%
2017 = (1762691 / 24416109) * 100 = 7.21%
This means that the BAL earned Rs.11.73 and Rs. 7.21 as net profit for each Rs 100 for 2016 and 2017 respectively.
The ratio has got down tremendously by 4.52 % in 2017; it may be due to the following reasons;
i. The management has been unable to control costs.
ii. The Administrative and selling expenses have not been controlled by the management.
It measures the overall effectiveness in generating profit with available assets i.e. the earning power of invested capital. It is used to evaluate enterprise performance.
Return On Assets = Net Profit / Total Assets
2016 = 1702094 / 248313793 = 0.00685: 1
2017 = 1762691 / 275685541 = 0.00639: 1

This means that BAL is able to earn Rs. 0.00685 and Re.0.00639 return on its each Rs.1 invested capital in 2016 and 2017 respectively.
In 2017 the ratio has decreased by .00046, it is due to the following reasons;
i. The management has not been able to control costs
ii. The Administrative and selling expenses have not been controlled by the management.
iii. While net profits have not been increased as much as assets increased, so assets have not been efficiently utilized.
3. Return on Equity
It measures the earning power on shareholder’s book value investment. A high return on equity often reflects the firm’s acceptance of strong investment opportunities and effective expense management. Higher the ratio more the risk for entity, and more returns for shareholders.
Return on Equity = Net Profit / Shareholder’s Equity
2016 = (1702094 / 6738063) * 100 = 25.26 %
2017 = (1762691 / 10572605) * 100 = 16.67 %

This means that BAL has been able to grant a return of 25.26% & 16.67% to all shareholders on their equity during, 2016 & 2017 respectively. It is a high return for shareholders & thus too much attractive for investors.
In 2017 the ratio has got down by 8.59%, it is due to the following reasons;
i. The management has simply assumed higher risks thus resulting in higher returns.
ii. There is too much less increase in net profits as compared to owners equity in 2017 due to inefficient control on costs, higher administrative and selling expenses, higher taxes.
iii. A lower receivable turn over and lowerer inventory turn over.

1. Cash to Deposits Ratio = (Cash / Deposits) *100
2016 = (24798070 / 222345067) *100 = 11.15 %
2017 = (27859360 / 239509391) *100 = 11.63 %
2. Advances to Deposits Ratio = (Advances / Deposits) *100
2016 = (118864010 / 222345067)*100 = 53.46 %
2017 = (149999325 / 239509391)*100 = 62.63 %

3. Investment to Deposit Ratio = (Investment / Deposits) *100
2016 = (57416255 / 222345067) *100 = 25.82 %
2017 = (56502210 / 239509391) *100 = 23.59 %

The BAL cash to deposits ratio has increased by 0.48 % in the financial year 2017. This shows an increased liquidity of bank Alfalah limited.
BAL advances Rs 0.53 and 0.62 for its each Rs. 1 deposit in 2016 and 2017 respectively. The advances to deposits ratio has increased by 9.17% in the year 2017. It means that BAL focus is more on advancing loans than opening accounts in the year 2017.
The investment to deposits ratio has decreased by 2.23 % in the financial year 2017. It shows that bank is concentrating more on advances than investment. It means that the bank has found more proper areas for advances of loans, which in other words shows the increased reputation of bank Alfalah.
? Assets Growth Ratio =
(Current year assets – previous year assets / previous year assets) * 100
2016 = (248313793 – 154834457 / 154834457) * 100 = 60.38 %
2017 = (275685541 – 248313793 / 248313793) * 100 = 11.02 %
? Investment Growth Ratio =
(Current year investment – previous year invest / previous year invest) * 100
2016 = (57416255 – 35503678 / 35503678) * 100 = 61.72 %
2017 = (56502210 – 57416255 / 57416255) * 100 = – 2.11 %

? Advances Growth Ratio =
(Current year advances – previous year advances / previous year advan) * 100
2016 = (118864010 – 88931155 / 88931155) * 100 = 33.6 %
2017 = (149999325 – 118864010 / 118864010) * 100 = 26.2 %
? Deposits Growth Ratio =
(Current year deposits – previous year deposits / previous year deposits) * 100
2016 = (222345067 – 129715230 / 129715230) * 100 = 71.4 %
2017 = (239509391 – 222345067 / 222345067) * 100 = 7.72 %

As at December 31, 2017
2016 2017
Rupees in ‘000’ Rupees in ‘000’
Cash and balances with treasury banks 24,798,070 27,859,360
Balances with other banks 9,713,369 12,731,952
Lending to financial institutions 27,050,493 12,456,653
Investments 57,416,255 56,502,210
Advances 118,864,010 149,999,325
Operating fixed assets 6,620,067 10,502,290
Other assets 3,851,529 5,633,051
Total Assets 248,313,793 275,685,541
Bills Payable 3,733,124 3,091,135
Borrowings from financial institutions 5,844,389 8,394,130
Deposits and other accounts 222,345,067 239,509,391
Sub-ordinated loans 3,223,355 3,222,106
Deferred tax liabilities 484,066 1,921,338
Other liabilities 5,219,666 7,305,496
Total Liabilities 240,849,667 263,443,596
Net Assets 7,464,126 12,241,945
Represented By:
Share capital 3,000,000 5,000,000
Reserves 1,851,218 2,749,533
Unappropriated profit 1,886,845 2,823,072
6,738,063 10,572,605
Surplus on revaluation of 726,063 1,669,340
7,464,126 12,241,945
For the Year Ended December 31, 2017
2016 2017
Rupee in 000 Rupee in 000
Mark-up/Return/interest earned 12246811 21191470
Mark-up/Return/interest expensed 7204992 15232886
Net Mark-up/Interest income 5041819 5958584
Provision against non-performing loans and advances (402298) (697690)
Bad debts written off directly (512) (1537)
Net Mark-up/Interest Income after provisions 4639009 5259357
Non Mark-up/Interest Income
Fee, commission and brokerage income 1158747 1804998
Dividend income 52014 37393
Income from dealing in foreign currencies 290091 386997
Gain on sale of securities 239551 180751
Unrealized (loss) /gain on revaluation of investments 23163 (27599)
Other income 504967 842099
Total non-mark-up/interest income 2268533 3224639
6907542 8483996
Non Mark-up/Interest Expenses
Administrative expenses 4313023 5874745
Other provisions/write offs 10125 – – – – – –
Other charges 21104 43306
Total non-markup/interest expenses 4344252 5918051
Profit before taxation 2563290 2565945
– Current 592635 476226
– Prior years 1037 (100874)
– Deferred 267524 427902
Profit After Taxation 1702094 1762691
Unappropriated profit brought forward 860300 1886845
Transferred from surplus on revaluation of fixed assets 24870 26074
Profit available for appropriation 2587264 3675610

“A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (0) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it operates.
A firm’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include:
• Patents
• Strong brand names
• good reputation among customers
• cost advantages from proprietary know-how
• exclusive access to high grade natural resources
• Favorable access to distribution networks”.
Strengths of BAL
1. Reputation
BAL has a very good reputation for its auto finance, home finance and agriculture finance. They have been the pioneers of auto finance and have carved a name for themselves in this field.
2. Market Leader
BAL has been the market leader in auto finance since its early days. Auto finance was offered by other banks as well but BAL was far ahead of other banks because of better service and low mark up rate.
3. Deal with Auto Dealers
BAL has signed a contract with Suzuki motors and for six months only BAL can provide any Suzuki vehicle which the other banks can’t so in this way BAL has got the product to be delivered.
4. Better service
BAL’s management pays a lot of attention to customer service. They make sure that the customer are treated in a nice way and their complaints and suggestions are always welcomed.
5. Better Environment
BAL has got a very friendly environment and the surroundings are also very pleasant. The clients are treated as guests and are given proper place to sit and discuss different issues.
6. Quick processing
BAL sanctions the auto loan for your car much faster than any other bank.
7. Credit Rating
BAL has been rated as AA- (double A minus) and Al + (A one plus) in the long run and short run respectively. These rating donate high credit quality and very low expectations of credit risk.

“The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses:
• Lack of patent protection
• A weak brand name
• poor reputation among customers
• High cost structure
• Lack of access to the best natural resources
• Lack of access to key distribution channels.
1. Lack of Commitment
The staff members are not very committed to their position in auto finance department. Most of the officers show negligence to customer’s complaints and often delay the delivery of the vehicle due to inefficient working.
2. Insurance Company
The bank makes the deal with insurance company on behalf of the customer but once the car is financed the customer comes in contact with insurance company which makes the customer go through a lot of problems faced by the virtue of the insurance company thus damaging the image of the bank.
3. Risk Management
The risk management department is not very developed and faces shortage of employees and resources. Most of the work that belongs to the risk management department is don e by the auto finance agents thus bridging the information regarding the client.
4. Employees Comfort
There is too much burden of work on employees. The official bank timing is from 9:00 a.m. to 5:00 p.m but they are insisted to sit up to 7.00 p.m or 8.00p.m or more to complete their work thus their comforts are ignored. Most employees are unhappy with this heavy work burden.

“The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include:
• An unfulfilled customer need
• Arrival of new technologies
• Loosening of regulations
• Removal of international trade barriers”.
¬1. Strong Promotional Campaign
BAL is already the market leader and has brought its rate down to 8.5%. So the market department should increase its potential and get as much customers as possible through corporate deals, discounts for organizations and promotional campaign. They can utilize their image to maintain their image.
2. Insurance Agent
The bank should have an involving agent who should deal with the complaints of the customer from the insurance company and should help the customer in solving their problem.

“Changes in the external environmental also may present threats to the firm. Some examples of such threats include:
• Shifts in consumer tastes away from the firm’s products
• Emergence of substitute products
• New regulations
• Increased trade barriers ,,
1. Arrival of Other Banks
MCB and HBL have entered the market but with dynamic rates and much better features. So BAL’s superiority and leadership might not last long if it didn’t make a major change in the marketing strategy and rates as well.
2. Insurance Problems
The attitude and performance of insurance companies are bothering the customers a lot and people are regretting to have financed their car from BAL. because they come in contract with insurance company through BAL so they consider BAL for all the mishaps.

The Human Resource Management given are primarily based on the analysis for the improvement of bank’s efficiency, if these were followed it will give positive effects on the profitability, and the role it plays in the development of the province of the bank.
It has been notified that the training programs of BAL is not adequate. Special marketing training should be given to employees for motivating customers. The training programs of bank should include modern techniques to improve decision-making and inter-personal as well as individual needs of an employee.
Constant improvement in customers’ services is needed in today’s competitive environment. Personalized banking should be introduced to attract more customers. Equal respect should be given to all customers.
Computerized Telephone Banking System
The satisfaction with convenient secure and time saving way of banking . Just on phone call the customers can always remain in touch. This latest computer service which truly brings banking to home , offices and can ensure the security of account by providing with a user ID. With the help of this facility one can get the facilities of account balance, transaction history and foreign currency exchange rates etc by just one phone call.
The management of BAL should concentrate on improving upward communication to have better feedback system involvement in bank operations.
Introduction of Management by Objectives (MBO)
The concept of MBO should be introduced in the bank where the subordinates should be expected to formulate objectives for themselves.
This will ensure the setting up of objectives according to the capabilities of individuals. In addition to this, it will also help in achieving the goals because they are involved in the process of goal setting.
A detailed and systematic study of the job should be done to know the nature and the characteristics of the people to be employed. This will help in identifying the training needs, evaluating the job and in appraising the performance of the employees.
In BAL no audit is carried out on the bank computer system. There should be Electronic Data Processing (EDP) audit so that any material discrepancies resulting from fraud or error can be deducted.
Introducing Career Planning
As a matter of personal policy, personnel department should prepare a career plan showing their future growth potential, depending on the job performance and evaluation which should be made known to the employees. In this regard, the employee should be given opportunities to show their performance.
Better Working Conditions
The working area is comparatively smaller as compared to the needs of the branch. As a result there is a lesser working space provided to employees. They have to work about eight hours and sometime even longer. The congested place effects their efficiency at work. It is suggested that better working conditions should be provided for effective and efficient output.
BAL relies heavily on personal banking, thus it does not give proper attention to the more sophisticated methods of promotion. Although billboards are displayed in different parts of the city, yet no proper advertisements have ever appeared in the dailies. The web site too does not give complete information and unique features, which give its edge over the market. So they should adopt strong strategies for promotion and publicity of their services they offer.
International Banking
BAL should expend its branches not only in Pakistan but also outside the country to fulfill their mission statement.
A very useful mode of contact is through personal market visits. Such visits have other important by products such as information about the customer financial and business position, about his market reputation and creating a feeling of importance in the mind of client. Such visits should be properly planned and documented with regularity and consistency. The BAL assigns this task to its new recruited employees and rely on their reports. But market specialists should also be send to market for analysis.
There is no separation of activities as such. A function of clearing is partially done in deposit department and partly in account department. This creates confusion and conflict in decision-making. To avoid such confusions, the functions of clearing be done in one department. This separation of activity will help greatly in reducing confusion also added in efficiency and effectiveness.
To motivate employees, individuals must have a job with a challenging content that is a job with responsibilities for achievement, recognition, advancement and growth. Such motivators should be used for efficient working.
Latest Computer Equipment
Latest software and hardware should be introduced in the bank so that the data processing speed of the computers can be enhanced.
Introduction of Forecasting Techniques
Advanced qualitative techniques of forecasting and inventory maintenance should be introduced so that the management should be aware of its future needs and can make better arrangements to meet these needs.
Encourage Small Depositors
Along with big depositors, small depositors should be given proper attention and care to encourage saving in the country.
Awareness to Employees
All employees of BAL at every level must be aware of basic mission, values & objectives of the organization, so that they can perform best to their abilities and ensure that BAL continue to be recognized favorably at home & abroad.
Motivate Saving Habits
A big portion of the home remittance is send by Pakistan working capital through BAL. A big portion of that amount is wasted by purchasing luxury items. BAL should motivate the people towards savings by offering the deposits through various investment schemes & the rate of profit should be increased by 1% to 2% then other banks.This will a profitable step for the bank.
Refresher courses for the staff are most important in any international organization. Every employee should have these courses according to their requirement. Foreign experts can also be called for this purpose.
Using the organizational analysis of the study, some critical issues are evident in the bank. Currently the bank enjoys a market leader status in its own segment. Growth possibilities are slim because deposit mobilization has reached its peak. New deposits can only be taken away from competitors and this would require a value package to the customers, which includes value added packages and extra ordinary services. However, this will reduce the profitability of the bank.
Moreover, because of a general economic slump, the proposed increase in deposits at term not favorable to bank’s profitability would increase pressure on advances at a period when demand for advances has slowed. BAL Haripur branch employees currently have poor inter-relationship amongst themselves because promotion prospects are dim. The reason for dim promotion prospects is the inability of the branch to give extra services to their clients. The reason for this is the lack of industrial and commercial activities. Consequently the employees in the bank are concentrating only in the business of account maintenance and deposit mobilization, which is unfavorable to the branch.
To overcome these problems a plan is presented here on the bases of recommendations i.e., E-Banking, which include electronic fund transfer, PC banking, Internet banking, Tele-banking etc. If these plans were implemented then it will help the bank to compete with leading foreign and local banks like Emirates, Standard Chartered Grind lays, MCB, Metropolitan, Askari etc in their geographic territory. As well as these plans enables the organization to be effective (in terms of less paper work and time saving), competitive and hopefully profitable and to boost the business by catching new customers and keeping the potential customers to do business for long period of time.
The highlights of the implementation plan are as follows:
Electronic Funds Transfer (EFT): The first thing in the E-BANKING is the Electronic funds transfer which also includes the ATM, the most visible form of EFT. Others are standing instructions performed for utility bill payments and so on. Another well-known form is SWIFT, the international payment system. The important point to highlight is that funds transfer takes place electronically without any paper-base transactions involved. In Pakistan, the number of installed ATMs is still comparatively few due to high installation and operating costs, while use of SWIFT is not as prevalent as it should, though most of the major banks are members.
EFTPOS (EFT Pont of Sale): is an electronic payment method, which involves goods or services being paid for, at the point of sale. The transaction may be initiated either by the EFTPOS card being swiped through a card reading device, prior to the authorization of transaction by means of a Personal Identification Number (PIN) being inputted into a hand-held pad by the customer, or else through the card swiped being followed by the customer signing a paper voucher.
PC or Home Banking: is a service in which customers can use their personal computers at home, or at their office, to access their accounts for transactions, by subscribing to & dialing into the bank’s own intranet proprietary software system, by use of password. This virtually establishes a bank branch in the customer’s home and offers 24 hour service seven days a week for the test marketing purposes this service is initially given to the corporate customers.
Internet Banking: Simply one form of PC banking, not only offers customers 24 hour access, but also the ability to bank from multiple venues, since
a. Proprietary software need not reside on each machine (a browser is used),
b. The customer accesses the bank from its web site.
A number of banks in Pakistan, particularly the foreign ones, are planning initiatives in this area since their parent organizations already offer these services abroad. Tele-banking can be considered as a form of remote or virtual banking, which is essentially for the delivery of branch financial services via telecommunication devices where the bank customers can perform retail banking transactions by dialing a touch-tone telephone or mobile communication unit, which is connected to an automated system of the bank by utilizing Automated Voice Response (AVR) technology.
Tele –Banking: Tele-banking service provides yet another alternative to almost all of the functions available on the Automated Teller Machines except withdrawal and deposit of cash. The facilities available include checking account balance, funds transfer between current, savings and credit car accounts and bill payments. As far as the customers are concerned, it provides increased convenience, expanded access and significant time saving. On the other hand, from the bank’s prospective, the costs of delivering telephone-based services are substantially lower than those of branch-based services.

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2. Web Master.(2007)Technology and Immediacy of Information(on-line)
Available at:
3. Internet Site
4. Web Master. (2014) Technology & Immediacy of Information (On-line) Available at:
5 Bank Alfalah annual report 2016.
6 Bank Alfalah annual report 2017.
7 Rose Peter.S. (1999).Commercial Bank Management. Boston:Megraw Hill Irwin.P.4-5.
8 Bank Alfalah Limited, (2007). Employee Hand Book. Karachi, P.5.
9 Web Master.(2007)Technology and Immediacy of Information(on-line)
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10 Internet Site
11 The Bank Alfalah. (1998) Recruitment Policy
12 Van Horne, James.C & Wachowicz,John.M (1998) . Fundamentals of Financial Management. New Jersey: Tenth Edition, Prentice Hall Inc, Upper Saddle River. Page No: 126
12. Fundamental Concepts of FASB (Financial Accounting Standards Board

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