DEDICATED

TO My PARENTS

WHO ALWAYS LOVED ME

& all those who have a soft corner for

me in their hearts
 Bank Al-Falah limited

Bank Al-Falah Limited was incorporated on June 21st, 1997 as a public limited company under
the Companies Ordinance 1984. Its banking operations commenced from November 1st,
1997. The bank is engaged in commercial banking and related services as defined in the
Banking companies ordinance, 1962. The Bank is currently operating through 104 branches in
36 cities, with the registered office at B.A.Building, I.I.Chundrigar, Karachi.

Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the
management of the bank has implemented strategies and policies to carve a distinct position for
the bank in the market place.

Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set
out by its board of management, the Bank has invested in revolutionary technology to
have an extensive range of products and services.

This facilitates our commitment to a culture of innovation and seeks out synergies with
clients and service providers to ensure uninterrupted services to its customers. We perceive
the requirements of our customers and match them with quality products and service solutions.
During the past five years, we have emerged as one of the foremost financial institution in the
region endeavoring to meet the needs of tomorrow today.

Bank Al-Falah limited was incorporated on June 21, 1992 as a public limited Companies
Ordinance 1984 and commenced banking operation from Nov 1, 1992. The bank is growing
rapidly in its equity & asset base due to strategic managerial policies and assistance of Abu
Dhabi Group.

The strength and standing of Abu Dhabi Group, principal owners of BAL have helped Bank Al-
Falah Limited launch high quality consumer and corporate banking operation in Pakistan. Bank
Al-Falah Ltd has embarked upon a rapid expansion program to make sure that our services
reach more and more peoples. We are headed towards an optimum sized network reaching
major urban centers in Pakistan and soon to go International.
ATM machines locations have been increased inmost of the branches but still need to expand
their network in every branch and collaboration with other commercial banks in ATM services. It
is also introducing a new; more advanced and latest funds settlement computerized SWIFT
program in late 2002. Which is a strong point of BAL that makes it a sophisticated and highly
technological oriented bank?

Regarding the investment and deposits portfolios BAL is playing dynamic strategies to diversity
their funds in more productive assets like; investment in T. Bills and export related concerns,
which are producing healthy profits. But all this goes to the staff of Bank Al-Falah Ltd bank that
is more proficient and good risk managers.

BAL has numerous opportunities in future to increase the volume of business because it has
options to tap the market of its own peer units (Al-Falah Car Financing, Al-Falah Visa, & also Al-
Falah Home Finance etc) beside BAL has strong assets base, it can diversify its funds in more
lending & investment opportunities live; Petroleum concerns, financial derivatives business
through treasury.

In nutshell, BAL has been performing very well since its birth. All financial institutions of
Pakistan regarding commercial banking concerns give Bank Al-Falah Ltd as a leading bank in
domestic sector title. Through SWOT analysis we have found that BAL has competitive edge
over other peer banks and it wants to tap the prospects of foreign banks to achieve long-term
objectives of the bank it ought to have astute, well-designed, comprehensive and dynamic
frame of undertaking which might be established after diagnosing the conditions of country and
drawbacks due to which it lags behind.

　
　

Title, Logo and slogan

Title of Bank Al-Falah

Logo of Bank Al-Falah

Slogan of Bank Al-Falah

Vision and mission statement

Vision

Mission Statement
　

head office at glance

Head Office of Bank Al-Falah

Bank Name:

Bank Al-Falah

URL:

http://www.bankAl-Falah.com/

Email

[email protected]

STREET

B.A. Building, I.I. Chundrigar Road

CITY

Karachi

STATE

Sindh
COUNTRY

Pakistan

PHONE

021-2414030

FAX

021-2417006

TELEX

29823 FALAH-PK

BANK TYPE

Commercial Bank

DATE UPDATE

Aug. 15, 2001

INTERNET BANKING

Yes

Chundriger Road of Karachi has same importance in Pakistan’s economy as of the Wall Street
in world economy. The divisions working under Bank Al-Falah Limited Head office are as
follows:
Administration

Credit Management

Investment Banking

Human Resource

Information Technology

Corporate Planning & Budgeting

Finance & Treasury

International Division

Inspection & Audit

Law Division

Marketing & Development

Trustee Division

Under the President an Executive Committee and a Credit Committee works. All the matter of
the bank join to the board of director are presented to the executive committee which is
responsible for daily operation of the bank .The request for credit exceeding the General
Manager power is approved by the Credit Committee. Under the area Executive is the General
Manager who is the in charge of the Circle Office.

board of directors

The board of directors has the authority in guiding Bank affairs and in making general policies.
Some directors are the personnel of the Bank Al-Falah Limited follows.

chairman’s message

Since the inception of Bank Al-Falah, 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.

H.E. Sheikh Hamdan bin Mubarak Al-Nahayan

　
　

Bank Al-Falah branch network

The Bank is fully aware that the branch network has direct implications on the services that it
provides to its customers. We offer services through a network of 160 branches and 60 state of
the art ATM machines.

· Conventional Branches

· Islamic Banking Branches

· Overseas Branches
· ATM Machines

　
　

departments of Bank Al-Falah

As far as Bank Al-Falah Ltd is concerned, it is one of the top in all-domestic commercial banks
in Pakistan. The rapid increase in branch network shows the Bank’s performance within seven
years, which is worth considerable.

However, this branch works with mostly all banking operations, which are normally performed
by every commercial bank. It has basically following departments under which it operates all
functions of bank diligently. These are mainly:

1. Account opening department

2. Remittances department

3. Clearing department

4. Accounts department

5. Warid telecom department

6. Cash department

7. Car financing department

8. Credit department

9. Credit card department

10. Trade financing department

account opening department

This department is responsible for the opening and closing of accounts. In consideration of
Bank Al-Falah Limited, opening and/or continuing to maintain any account, the Account
Holder/Depositor or Investor would be bound by the terms and conditions written on the account
opening form.

The first part establishes the preference regarding the type of account to be maintained. The
various choices offered in this regard are:

· Current Account
· Saving/ PLS Account

· Royal Profit Account

· Term Deposit Account

· Basic Banking Account

Current Account

The current account is the most common account and the most preferred amongst business
concerns. There is no restriction on the amount of withdrawal. Current account enables the
client to do cash transactions in a more efficient manner.

Features:-

v Current Accounts can be opened in the BAL with the sum not less than Rs.10, 00/-

v No Profit

v No deduction of Zakat

v Account close charges Rs.150

v Service charges for maintaining minimum balance Rs.100

v Online Charges Rs.100

　

Saving / PLS Account

In Pakistan (PLS) saving account was introduced in January 1982. Individuals who wish to
invest their money in order to get profit maintain this account.

Features:-

v The minimum balance requirement for opening the account is Rs.5000.

v There can be profit or loss on the investment of the Customer’s funds deposited with the bank
and this amount shall be acceptable to the Customer. The profit is paid half yearly.

v Deduction of Zakat

v With holding tax on profit @ 10%

v No Service Charges to close the account

v Service Charges for maintaining minimum Balance Rs.50

v Online Charges Rs.150

　

Royal Profit Account

Royal Profit is also opened in BAL and it is not the most common account. Royal profit has
some features.

Features:-

v The minimum balance requirement for opening the account is Rs.50, 000.

v Profit on Monthly Basis

v Higher the amount higher the profit

v Deduction of Zakat and Withholding Tax

v No Service Charges on minimum balance requirement but no profit for that month.

v No Charges to close to Account

Term Deposit Account

A term deposit is a deposit that is made of a certain period of time. At the end of specific period
the customer is allowed to with draw the principal amount.

Features:-
v Fixed Profit

v The longer the period for which the amount is kept higher is rate of interest.

v Term Deposit usually for the period of three months, six months, One year, and five years.

v Deduction of Zakat and withholding Tax @ 10%.

Basic Banking Account

Basic Banking Account is opened is BAL. The minimum amount deposit in this account is very
small as compared to other accounts.

Features:-

v Minimum Deposit amount is Rs. 1000

v 1st two transactions is free of cost

v Bank can close the Account after six month if balance is zero.

　
　

Procedure of opening an account

The Account Opening Form:-

When a client comes to the bank, and makes a request for opening of an A/C. The officer says
that first fill up a prescribed application form.

Completion of The Form:-

The name, occupation, and complete address of the person opening the account are written in
the columns that are provided in the form. Signatures are obtained from the customer where it is
required. These signatures should be usual signatures and he would operate the account with
them.

Introduction:-

The introduction of a current account holder is accepted for the opening of either a current
account or a saving account. The introducer should be Account Holder. The signature of the
account-holder introducing the account is obtained at the place provided for in the account
opening form.

Specimen Signature Card, Cheques Book Requisition, And Online Form:-

The signatures of the client are obtained on a specimen Signature card Cheque book requisition
and online form. These specimen signature cards are obtained in duplicate with two signatures
on each card from the customer. Every time a Cheque is received for a payment from the client,
the signature on the Cheque are verified by comparing them with the Specimen Signature Card.
Signature Difference Form:-

The signatures of the client are obtained on a signature difference form if his / her signatures
differ from the computerized National Identity Card.

Vernacular Form:-

The signature of the customer is also obtained on the vernacular form if he / she signs in a
language other than English.

Account Number:-

When all the formalities are completed then the final approval of account has to be taken from
the Branch Manager. After obtaining approval of the branch manager an account number is
allotted to the customer all the information is entered into the computer. Then that account
number is written on the Cheque Book, Specimen Signature cards and account opening form.

Send the form to Head Office:-

After fulfill all the requirement and verify the form from operation manager the account opening
form send to Head Office Karachi and make request to issue the printed cheque book.

Issuance Of A Cheque book:-

After opening an A/C with the bank, the A/C holder receive a letter of thanks from Head Office
Karachi then after receiving this letter client come to bank and makes a request in the name of
bank for the issuance of a Cheque book. The A/C holder mentions title of A/C, A/C number,
signs it properly. Normally BAL issues a Cheque book having 25 leaves for Saving Account and
50 leaves Cheque Book to Current Account Holder. Every Cheque book also contains one leaf
that is used for another issue of a Cheque book.
Entry Of A Cheque book:-

Before issuance of a Cheque book, the employee performs certain functions. They include:

Stamping requisition slip that is in Cheque book.

Enters it in the Cheque book issue register.

Check whether or not a senior officer has verified the signatures, if not then first gets them
verified.

After entry in the manual register, the employee issues the Cheque book to the A/C holder with
his/her signature on the register.

TYPES OF ACCOUNT

1. Accounts Of General Customers

Ø Minor Account

Ø Illiterate Person Account

Ø Joint Account
2. Accounts Of Special Customers

Ø Individual Account

Ø Proprietorship Account

Ø Partnership Account

Ø Limited Company’s Account

Ø Account of Club Societies and Association

Ø Agents Account

Ø Trust Account

Minor Account

Account Opening Procedure:-

The natural guardian who signs both Account Opening Form and Specimen Signature Card can
open account in the name of minor.

Title of Account:-

The title of account should clearly indicate both the names of minor as well as guardian in the
following manner:-
e.g. Imran Rafique (minor) Muhammad Rafique (Guardian)

Special Instructions:-

The guardian will continue to operate the account even if minor attains the age of majority.

Documents:-

Ø Computerized National Identity Card of Guardian

Ø Form “B” of minor

Ø In case guardian is appointed by the court of law then attested copy of guardianship
certificate be obtained and placed on record.

Illiterate Person Account

Before opening such account the illiterate person should be informed that he / she cannot issue
Cheques in favor of any other person.

Account Opening Procedure:-

Title of Account:-

Name of account holder should be written in block form.

Special Instructions:-
Personal Withdrawal

Documents:-

Ø Copy of Computerized National Identity Card

Ø Two attested photographs to be obtained for pasting on AOF and other on Specimen
Signature Card.

Ø Thumb Impressions

Male -------- Left Hand Thumb Impression

Female ------- Right Hand Thumb Impression

Joint Account

These are the account of two or more persons who are neither partners nor trustees.

Account Opening Procedure:-

Title of Account:-

Title of account holder should mention the names of all the joint account holders.

Special Instruction:-
At the time of opening the account clear and specific instructions should be obtained regarding
operation of the account and payment of the balance at the death of one or more joint account
holders in the following manner:-

· The account shall be operated by any joint account holders singly.

· By either or survivor singly

· By any two or more joint account holders or by any two or more survivors jointly.

· By all the joint account holders jointly

· By all the survivors jointly.

These instructions as far as possible should be obtained in handwriting of the parties

concerned, under the signature of all the joint account holders.

Documents:-

Ø Computerized national Identity Card of all the joint account holders.

Mode of Signature:-

Ø All joint account holders are required to sign as applicant and in the column of special
instructions.

Ø Specimen Signature of only those joint account holders are required who are authorized to
operate the account.
Individual Account

When a single man or woman opens an account in his or her own name and has the right to
operate, it is called individual A/C.

Account Opening Procedure:-

Title of Account:-

Title of Account should mention the name of the person who operates the account.

Special Instructions:-

At the time of opening the account clear and specific instructions should be obtained regarding
the nominee of the account holder means after the death of the account holder who will operate
the account.

Documents:-

Ø Computerized national Identity Card.

Ø Proof of Income if he / she is a salaried person then the pay slip or salary certificate of that
person.

Proprietorship Account

When the owner of the firm operating singly, open an account in his firm name.

Account Opening Procedure:-

Title of Account:-

Title of account must be in the name of the proprietorship concern.

Special Instructions:-

In case of proprietorship concern, the special instruction should cover the style of the account
and the name of the person who will operate the account as sole proprietor. For example, if the
account to open is in the name of “Islamabad Cloth Store”, the person who is the sole proprietor
should declare as such.

Documents:-

Ø Computerized National Identity Card (CNIC) of proprietor.

Ø Declaration for proprietorship concern.

Ø Proprietorship Stamp
Ø Letter of request to open the account on the letterhead of proprietorship.

Ø Third party Mandate, in case any other person has been authorized by the proprietor to
operate the account.

Ø National Tax Number (NTN) but it is optional.

Partnership Account

“Partnership” is a relationship between persons who have agreed to share profits of a business
carried on by all or any of them acting for all.

Account Opening Procedure:-

Title of Account:-

Title of account must be in the name of the firm as declared by the partners.

Operational Instructions:-

Ø Operations on the account must be allowed strictly in accordance with the instructions given
in partnership mandate and Declaration (Part III) in terms of section 25 of Partnership Act 1932.

Ø According to Partnership deed, if given.

Documents:-

Ø Copy of Computerized National Identity Card of all the partners.

Ø Copy of registration Certificate (if a registered firm)

Ø Letter of request to open the account on the letterhead of partnership.

Ø Partnership Stamp

Ø Partnership Deed

Ø Third Party Mandate, if third party is authorized to operate the account.

Ø NTN (optional)

Limited Companies Account

Section 2 of the Companies Act, 1913, defines companies as:-

“An association of individuals for the purpose of profit, possessing a common capital contributed
by the members constituting it, such capital being commonly divided into shares, of which each
possess one or more and which are transferable by the owners.”

Account Opening Procedure:-

Title of Account:-

Title of account should be exactly in the same name and style as mentioned on the
memorandum and article of association.

Special Instructions:-
All the special instructions should be given to the bank in the form of Resolution of Board of
Director.

Documents:-

Ø Computerized National Identity Card (CNIC) the entire Director attested by company CEO.

Ø Resolution of Board of Director passed under Company’s seal to open account.

Ø Memorandum and Article of Association

Ø Certificate of Incorporation Form 29 (B) (Lasted Copy). Company secretary will certify all
these copies.

Ø List of Directors and authorized signatories.

Ø Certificate of Commencement of Business (for Public limited company’s only).

Trust Account

According to section 3 of Trust Act, 1882:

“A trust is an obligation annexed to the ownership of property and arising out of a confidence
proposed in and accepted by him for the benefit of another, or of another or owner.”

Account Opening Procedure:-

Branches are allowed to open the Trust Account subject to the prior approval of Area Manager,
after scrutiny of the legal documents by the legal advisor.

Title of Account:-

The account should be opened in the name of the trust. However, if the account is opened in
the name of the trustees, the account should not be treated as a joint account, rather it should
be treated as a trust account.

Special Instructions:-

The Banker should examine the trust deed very carefully. Particular attention should be paid to
the borrowing powers, status of account in case of death of any trustee or signatory, and
provisions for the appointment of new trustees.

Documents:-

Ø Attested photocopy of Computerized National Identity Cards (CNIC) of all the trustees.

Ø Attested copy of Certificate of Registration.

Ø Certified copy of Instrument of Trust / Trust Deed

Mode of Signature:-

All the trustee are required to sign the account opening form, Specimen Signature Card, and
Cheque book requisition slip in their official capacity.

Clubs, Societies and Associations Account

These are non- trading / non- profit organization and are formed for the promotion of culture,
education, recreational activities and charitable purpose etc.

Account Opening Procedure:-

Title of Account:-

Account must be opened in the name of organization in the following manner:-

e.g. Islamabad Cricket Association

Operational Instructions:-

Ø All the parties must be in accordance with the clauses of the resolution.

Ø In case of death of office bearer, account should be blocked until new resolution is received.

Documents:-

Copy of bye- laws / regulations.

Ø List of members of managing / executive Committee.

Ø Copy of certificate of Registration (if registered)

Ø Copies of CNICs of the members of Executive Committee.

Ø List of names of officials authorized to sign on behalf of the organization along with the
Specimen Signature under the signature of the Secretary of the club/society.

Agent Account

Account Opening Procedure:-

Title of Account:-

Account must be opened in the name of agent.

Special Instructions:-

Ø Manager should ensure compliance of contract between principle and agent.

Ø Agent cannot delegate powers to third party.

Ø Transfer between principle and agent account should be in accordance to agreement.

Ø In case of death / insolvency / insanity of principle agency transactions are automatically

terminated.

Documents:-

Ø Attested photocopy of Computerized National Identity Card (CNIC) of the agent.

Ø Certified copy of Power of Attorney.

remittances department

Meanings of Remittances

“Remittance is transfer of funds from one place to another or from one person to another.”

A Remittance is an important service provided by banks to customers as well as non-customers.

Since it is not a free service it is a source of income for the bank.

Parties involve in remittances

Four parties involved in remittance:-

Ø Remitter

Ø Remittee

Ø Issuing Bank

Ø Paying Bank

Remitter:-

One who initiates, or requests for a remittance. The remitter comes to the issuing or originating
branch, asks for a remittance to be made, and deposits the money to be remitted. The bank
charges him a commission for this service. He may or may not be the branch’s customer.
Remittee:-

A Remittee is also called the beneficiary, or the payee. The person in whose name the
remittance is made. A remittee is also the one who receive the payment.

Issuing Bank:-

The bank that sends or affects the remittance, through demand drafts, telegraphic transfers, or
Mail Transfers.

Paying Bank:-

Paying Bank also knows as the drawee branch. The branch on which the instrument is drawn. It
has to make the payment (usually located in a different city country).

Kind of remittances

Ø Transfer within the branch

Ø Transfer from one branch to another

Ø Transfer from one bank to another bank in the same city

Ø Transfers from one bank to another bank in two cities.

Instruments used in remittances

Ø Demand Draft (DD)

Ø Pay Order (PO)

Ø Pay Slip

Ø Call Deposit Receipt (CDR)

Ø Telegraph Transfer

Ø Rupees Traveler Cheque (RTC)

Ø Cancellation of PO, DD & CDR

Ø Advance Tax against Remittances

Demand draft

Demand Draft is a negotiable instrument, which is drawn by one branch to another branch of the
same bank. In case of agency arrangement Demand Draft can also be issued by one branch of
the bank payable to other branch of the other bank e.g. DD issued by the BAL payable by UBL.

Explanation:

If any person wants to make payment from one city to another city then he can make payment
through demand draft. Bank charges a commission for performing this kind of service according
to bank rate schedule, which is revised after 6 months. Demand draft may be issued or paid.
There are two ways to issue
Demand Draft:-

1. Issue of DD against cash payment

2. Issue of DD against Debit of the account

The current rate schedule of DD is as follows:-

Up to Rs. 10,000 0.25% or Rs.25

Which ever is higher

Rs.10, 001 to Rs. 100,000 0.20% or Rs.40

Which ever is higher

Rs. 100,001 to Rs. 10, 00,000 0.10% or Rs.200

Which ever is higher

Rs. 10, 00,001 to Rs. 20, 00,000 0.75% or Rs.1000

Which ever is higher

Above Rs. 20, 00,000 0.06% or Rs. 2000

Which ever is higher

Process of the issuance of DD:-

When a customer requests BAL Urdu Bazaar Branch, Lahore to provide him a DD made on his
account or against cash payment for a particular city like Islamabad. Then, after having the total
amount including commission demand draft is issued in favor of the specified person in that city
and is drawn on BAL, Islamabad Branch. So, when payee in any bank presents this demand
draft, it constitutes the inward clearing of Bank Al-Falah Limited, Islamabad Branch.

When BAL receive the Demand Draft then it pass the following entry:-

Entries

Dr. Head Office Account with Treasury

Cr. Demand Draft Payable Account

Entry when bank issue demand draft

Dr. Customer Account

Cr. Transit Account

Then
Dr. Transit Account

Cr. Head Office Account with Treasury

At the end of day the Transit Account will be zero (nil).

Entry Of Commission that BAL Received From Customer:-

Dr. Customer Account

Cr. Commission on Remittances Account

Entry Of Excise Duty that BAL Recovered From Customer:-

Dr. Customer Account

Cr. Excise Duty Recovered Account

Pay order

Pay order is a negotiable instrument made by the bank, on account of a customer, to pay on
order the specified amount to the directed person (payee).

Use of Pay Order:-

Pay orders are used to make payment or to transfer money, with in the same city. Pay order is
always drawn on the bank that has issued it. The main advantage of pay order is that it cannot
be dishonored by the bank. Pay order can be endorsed if it is not crossed. The payee may
present pay Order for payment either over the counter for cash payment or the payee may
transfer credit to his account.

The current rate schedule of Pay Order is as follows:

Issuance of Pay Order Rs. 50/- for a/c holder

Rs. 500/- for non-a/c holder'

Cancellation Rs. 100/- for a/c holder

Rs. 100/- for non-a/c holder

Duplicate Issuance Rs.100/- for a/c holder

Rs. 100/- for non-a/c holder

　
　

　
　

Process of issuance of pay order

Cash Deposited or gives Cheque in favor of BAL

Fill Application Form for Pay Order and signed by Applicant

Entry in Bank Smart

Bank issue a Pay Order after recovering Charges (2 Copies) which is signed by two officers

Do necessary Vouchering and Take Signature of Applicant at the Place of received Instrument

Copy of Pay Order is given to Customer

Copy is for Filing Purpose

　

　
　

Entries
When BAL issue the Pay Order:-

DR. Customer Account

Cr. Transit Account

Then

Dr. Transit Account

Cr. Pay Order Issued Account

When BAL receives the Pay Order:-

DR. Treasury Account

Cr. Pay Order Payable Account

Entry Of Commission that BAL Received From Customer:-

Dr. Customer Account

Cr. Commission on Remittances Account

Entry Of Excise Duty that BAL Recovered From Customer:-

　

Dr. Customer Account

Cr. Excise Duty Recovered Account

Pay slip

“It is a negotiable instrument like cheque issued by the bank on its own account to pay a
specified amount to the directed person.”

Use of Pay Slip:-

Pay Slips are used to make payment by the bank itself against certain expenses incurred; like
furniture purchased by bank, electricity charges.

Issuance of pay slip

Ø Bank issue a pay slip in favor of person, to whom payment is made.

Ø Affixes payee’s Account only stamp.

Ø Revenue stamp pasted on it.

Ø Entry in bank smart.

Example:-

If bank has purchased furniture (fixed Asset) costing Rs. 40,000 from a company then a pay slip
in the name of that company is made and, instead of writing the issuing date on pay slip, date of
encashment (realization) is written when it is presented in bank.

Call Deposit Receipt (CDR)

Bank Al-Falah Limited also issues Call Deposit Receipts (CDR).

“It is an instrument like Cheque issued by the bank on account of a customer & in favor of a
person, to pay the specified amount”.

CDR’s are issued to make payments, especially when a company goes for some tenders or for
purchase of government securities. The bank enjoys the benefit of keeping funds deposited until
the payment is not made.

Telegraph Transfer

Rupee Traveling Cheque

It is just a shape of Demand Draft. The difference is that it is not drawn on the specified branch.
It can be drawn on any branch of the same bank.

The paying bank has to verify the signatures and after verification payment is made.

Cancellation of PO, DD and CDR

After issuance of Pay Order, Demand Draft or Call Deposit Receipt by Bank Al-Falah Limited,
Urdu Bazaar Branch, Lahore, if any one of these has to be cancelled by the customer, it is
returned in the bank. Then, after deducting the cancellation charges of Rs.100 for PO and Rs.
200 for DD, the remaining (net) amount is paid to the customer.

Advance Tax against remittances

Advance Tax is deducted on issuance of PO & DD from customers except those who have tax
exemption form and credited in Tax on PO & DD account. Tax deducted has to be paid to State
Bank of Pakistan (SBP) with in one week of issuance of these instruments.

Collection

All the cheques under collection are called cheques under Collection in Bank Al-Falah Limited.
There are two types of bills for collection:

Ø Outward Bills for Collection (OBC)

Ø Local Bills for collection (LBC)

Our ward bill for collection

Meaning of OBC:-

“When an instrument is drawn on a bank, which is located outside the city, its proceeds can be
collected through a mechanism called Outward Bills for Collection (OBC).”

Features:-
Ø Remunerative

Ø Transfer of funds between cities

Ø Collecting Bank work as an agent

Ø Collecting Bank is the holder in due course

Procedure

All the cheques are received on one counter along with the paying slips duly filled in properly
containing particulars of cheques and account holder. Counter folio of paying slip is handed
over to the customer by putting stamp for “cheque received for collection for Bank Al-Falah” on it
duly signed by officer. These cheques are scrutinized and cheques for local clearing are
separated from OBCs. Cheques for local clearing are entered in Clearing Register, whereas
cheques for collection are entered in OBC register. OBC number is allotted to the cheque from
OBC register. Special crossing and bank endorsement stamps are affixed on the cheque.

Date

OBC No

Title Of Account

Account No

Drawn On

Mailed To

Instrument No

Amount Rs.

Initial
OBC registrar

OBC schedule is attached with the cheque and dispatched to the main branch of that city for
collection. If they do not have any branch in that city, then cheque will be sent to the Collecting
Agent of Bank Al-Falah for that city, and if they do not have any collecting agent even, then
cheque can be sent directly to the drawing branch. Instructions are given on the OBC schedule
for the payment of that cheque. Contra-liability vouchers are also posted in the system. When
OBC is realized, collection bank pays the amount through IBCA if it is the same bank or through
DD if it is another bank. If DD is received against OBC, it is presented in the clearing for
collection. If IBCA is received from the branch for the payment of OBC, certain vouchers are
posted in the system.

OBC Realization

Commission

Postage

Net Amount

Date Of Payment

Initial

Remarks

　 　 　 　 　 　

　 　 　 　 　 　

　 　 　 　 　

　 　 　 　 　 　

　 　 　 　

Entries

Lodgment Entries:-

Dr. Customer Liability

Cr. Banker Liability

Realization Entries:-
Dr. Banker Liability on OBC

Cr. Customer Liability on OBC

(Reversal of the Contra Liability)

Dr. M.O Account

Cr. Customer Account

(For the amount of the instrument)

Dr. Customer Account

Cr. Postage Charges

Cr. Commission on OBC

OBC return unpaid

Ø Take out schedule and pay in slip

Ø Mark both as return unpaid

Ø Entry in the OBC register and Cheque return register

Ø Reversal of contra liability

Ø Recover Cheque return charges

Ø Hand over the instrument to customer after getting acknowledgement from the customer.

Local bill for collection

If any other bank sends a cheque of Bank Al-Falah Limited, it is Inward Bill for Collection. Bank
Al-Falah remits money after checking the balance of the customer account.

The process of collection starts when the cheques of Bank Al-Falah Ltd are received from other
banks. Then these cheques are sent to the Head Office Karachi, which sends the cheques to
SBP for clearing and get the confirmation of cheque and credit advice. Main activity of clearing
is performed by Head Office, which contacts other banks through SBP.

Entries

Dr. M .O Account

Cr. Customer Account

　
　

clearing department

Meaning of clearing

The word clearing has been derived from the word “clear” and is defined as:

“A system by which banks exchange cheques and other negotiable instruments drawn on each
other within a specific area and thereby secure payment for their clients through the Clearing
House at specified time in an efficient way.”

EXPLANATION:-

By clearing means sometimes the account holder of Bank Al-Falah Limited present a cheques,
which is not drawn on Bank Al-Falah but the person, has an account in Bank Al-Falah Limited.
In this case bank accepts this cheques in clearing department and later on collets the amount
from bank on which cheques is drawn through clearing house. This function is called clearing.

Clearing House

It is a place where representatives of all banks sit together and interchange their claims against
each other with the help of controlling staff of NIFT.
It is one of the services provided by NIFT to other commercial banks. NIFT acts as a
clearinghouse. Different banks are the members of the clearinghouse. A representative of each
bank represents his bank in the clearinghouse.

Each bank has collected cheques as behalf of their customer but these cheques are not drawn
on their own bank so in the clearinghouse, they hand over these cheques to respective banks
on which these cheques are drawn. Similarly each bank receives cheques from other banks if
any.

Instrument to be presented

Ø Cheques

Ø Demand Drafts

Ø Pay Orders

Types of clearing

There are four types of clearing:-

1. Inward Clearing
2. Outward Clearing

3. Intercity Clearing

4. Same Day Clearing

1. Inward Clearing

Those Cheques and other negotiable instruments which are drawn on BAL Urdu Bazar Branch
Lahore, sent by other banks, constitutes the inward clearing of Bank Al-Falah Limited. After
having all the stamps and dates of cheques confirmed, the concerned drawer’s accounts are
debited in BAL Urdu Bazar Branch Lahore.

Inward Return:-

Return may be of any reason:-

· Presentation Flaw e.g. Clearing stamp not affixed or wrong discharge given by collecting
banker.

· Defect in the Cheques i.e. Post dated cheques, unauthorized cutting.

· Insufficient Balance

Accounting Entries OF Inward Clearing

Inward Clearing Single Branch:-

In Case OF Lodgment:-

Dr. Customer Account

Cr. SBP Account

In Case Of Return:-

Dr. SBP Account

Cr. Customer Account

Inward Clearing Main Branch:-

In Case OF Lodgment:-

Dr. M.O Account

Cr. SBP Account

In Case Of Return:-
Dr. SBP Account

Cr. M.O Account

Inward Clearing Centre Branch:-

In Case OF Lodgment:-

Dr. Customer Account

Cr. M.O Account

In Case Of Return:-

Dr. M.O Account

Cr. Customer Account

　
　

2. Outward Clearing

When cheques and other negotiable instruments drawn upon other banks like City Bank, MCB,
ABN-AMRO or Askari Bank of the same city (Lahore) are presented in BAL Urdu Bazar Branch
to deposit them in the respective payee’s accounts, these instruments are lodged in outward
clearing of BAL Urdu Bazar Branch.

Outward Return:-

Ø Cheques return will be treated as inward cheques.

Ø In case the cheques is returned because of wrong presentation e.g. clearing stamp not
affixed or wrong discharge given on the cheques etc. it should be reloaded in the next day
clearing after rectification of the mistake.

If the cheques is returned for any other reason then

Ø Enter the cheques in cheques return register, mentioning the reason as appearing on the
cheques return memo received from the paying bank.

Ø Advice the customer about fate.

Ø Return the cheques to the customer after getting sign on the register.
Ø Collect the cheques return charges as per S.O.C (Schedule of charges).

Accounting Entries OF outward Clearing

Outward Clearing Single Branch:-

In Case OF Lodgment:-

Dr. SBP Account

Cr. Customer Account

In Case Of Return:-

Dr. Customer Account

Cr. SBP Account

Outward Clearing Main Branch:-

In Case OF Lodgment:-

Dr. SBP Account

Cr. M.O Account

In Case Of Return:-

Dr. M.O Account

Cr. SBP Account

Outward Clearing Centre Branch:-

In Case OF Lodgment:-

Dr. M.O Account

Cr. Customer Account

In Case Of Return:-

Dr. Customer Account

Cr. M.O Account

3. Inter City Clearing

The cheques that are presented in inter city clearing are of another city and received by air. In
this type of clearing the bank confirm at that time that the cheques are clear or not and give to
the rider.
　

4. Same Day Clearing

The cheques that are presented in same day clearing are the local cheques and these cheques
are clear in same day. Basically it is the benefits that are provided to customer.

Clearing process

i. Stamps Put On the Cheques:-

When the cheques are presented in BAL Urdu Bazaar Branch to be deposited in their
respective payee’s accounts, different stamps are put on cheques before their lodgment in
outward clearing.

ii. Crossing the cheques:-

Crossing means two parallel lines, drawn across the face of the cheques with or without words
written in between them. Crossing may be general or special. In clearing, cheques are crossed
specially. Cheques are stamped with bank’s name between two parallel lines to constitute
special crossing. After the cheques have been crossed specially, the holder cannot receive
payment except through the banker named on the cheques crossing saves the instrument to go
it in illegal hands. If, crossed cheques is lost or stolen, there is no risk involved. So it is an
effective means of minimizing the risk of loss.
iii. Clearing Stamp:-

After the cheques have been crossed specially, clearing stamp is put on the cheques and other
instruments, with the next date, so these cheques would have to be presented in their
concerned drawee banks on the subsequent day.

iv. Endorsement Stamp:-

The word endorsement means anything written or printed on the back of an instrument. So
endorsement stamp has to put with words “Payee’s account Credited in Bank Al-Falah Limited,
Urdu Bazaar Branch, Lahore”.

v. National Institutional Facilitation Authority:-

After putting these three stamps on cheques & other negotiable instruments, they are sent to
NIFT. NIFT after segregating the cheques of different banks delivers them to their concerned
banks.

VI. SEND Report To The Bank:-

After delivering the cheques to different banks NIFT send report to BAL Urdu Bazaar Branch
Lahore, then the bank’s staff tally the amount of that report for its own record.

vii. Delivered Cheques to Respective Banks:-

Next morning, these cheques are delivered to the respective banks between 9:00 to 9:30AM. In
the same manner, other banks present their clearing drawn on Bank Al-Falah. Total number of
cheques and their amount delivered to other banks and received from them are written on the
Clearing House schedule branch for their payment. After proper scrutiny of cheques, verification
of signatures and confirmation of balance in the account, the Officer Clearing Department Debit
the customer Account. If any cheque is not passed due to insufficient balance or any other
reason, Officer Cash Department returns the same cheque by attaching a cheque return memo
containing reason for return.

viii. Credit the Customer Account:-

If the cheques are clear then the BAL Urdu Bazaar Branch Lahore credit the customer Account.
If the bank receives the outward return due to any reason then this cheque is entered into the
cheque returned register and bank charges are deducted according to the schedule of charges.

Then send the outward and return inward as IBDA (Inter Branch Debit Advise) to Main Branch
LDA Plaza. And LDA Plaza sends outward return and inward to BAL Urdu Bazaar Branch,
Lahore.

Procedure of settlement

Assume that BAL got the cheques which are drawn on HBL, NBP, and MCB for amount Rs.50,
000/-, Rs.30, 000/-, Rs.15, 000/- respectively, its total being Rs.95, 000/-. It means that this
amount is to be credited to BAL account with NIFT. On the other hand the cheques drawn on
BAL are from HBL, NBP and MCB of Rs.15, 000/- Rs.75, 000/-, and Rs.30, 000/- respectively,
its total being Rs.120, 000/-. It means that this amount is to be debited from BAL account. The
difference between Rs.95, 000/- credit and Rs.120, 000/- debit is Rs.25, 000/- debit, which
means the house is against BAL for Rs.25, 000/-.

Settlement sheet:-

In clearing department this sheet is prepared and contain detail amount of cheques received,
amount of cheques will be paid and balance of these accounts.

　
　

accounts department

This department is responsible to keep the record of each and every transaction and prepare
reports about the amount of deposits and advances and sent to Head office or State Bank of
Pakistan on monthly, quarterly and yearly basis.

Activities

The accounts department deals with various routine activities for the bank. The main activities
performed by it are:-

a) Budgeting

b) Reporting

c) Maintenance & depreciation of fixed assets

d) Miscellaneous functions
Budgeting

Accounts department of a bank, for a year makes budget of every branch. Fiscal year of bank
starts from January 01 and ends on December 31. The accounts department starts preparing
budget from October for the next year.

Reporting

The accounts department, in the form of reports, clubs the details of various departments
together. Each and every minute detail is provided in weekly, monthly and annual reports. The
reports are submitted to head office, SBP and to the government. The accounts department
prepares many reports, of which the most common are:-

· Statement Of Affairs

· Income & Expenditure

· Business Report

· SBP Report

· Outstand Receipt Report

· Currency Wise Deposits Report

Maintaining of Fixed Assets & their Depreciation

Accounts department maintains the record of all the assets and charges depreciation on them.
The bank normally uses the straight-line method to compute the depreciation.

It is calculated on monthly basis and charged yearly. Bank not only depreciates the existing
assets but also the assets but also the assets transferred in and transferred out.

Miscellaneous Functions

The accounts department also performs some other miscellaneous functions like

i. Closing Entries

ii. Daily activity checking

iii. Report Generation

iv. Minor expense recording

i. Closing Entries:-

Accounts department also passes the closing entries on monthly, 6 monthly and yearly bases to
calculate the profit and analyze the overall performance for a certain period.
ii. Daily Activity Checking:-

All the operations performed in various departments of Bank Al-Falah Limited Urdu Bazaar
Branch Lahore are computerized. The functions are performed through the customized
software. In order to facilitate double-checking of all the transactions done, every concerned
official also passes vouchers and cheques manually. At the day end all the vouchers passed by
various officers working in different departments are given to Accounts Department.
Furthermore the I.T. department also prints a very bulky report of all the transactions / entries
which have been fed into the computer system of the branch that day. When both of these
things are at the desk of concerned officer, he performs the job of tallying the daily activity report
with all the corresponding vouchers and cheques, in order to track down any discrepancy.

iii. Report Generation:-

The reports generated by the accounts department on a daily, weekly, monthly, bi-yearly and
yearly are written in a proper format. It is neither necessary nor possible to get acquainted by all
of these reports in a short period of time. Some of the common reports are:-

Ø Daily Advance and Deposit Position:-

· Daily Exchange Position

· Daily Fund Management

Ø Closing Reports:-

· Monthly Assets & Liabilities

· Monthly Budget Review Report

· Monthly Monitory Statement

· Monthly Performance Review Report

· Monthly fixed investment

From these statements, five reports carry extreme importance. The five reports are:-

· Daily position of advances and deposits

· Statement of affairs

Daily exchange position report

· Fixed assets statement

Monthly review of performance.

iv. Minor Expense Recording:-

The account department of BAL Urdu Bazaar Branch has to record even the minor expenses of
the branch like tea for the staff, stationery for the branch.

cash department

The cash department is the most important department of the bank. It receives cash from
customers and then deposits it into the accounts of the customers and maintained their
balances.
The officers in this department are called teller and there were four tellers at the counter. This
department involves in two activates:-

1. Deposit cash in customer’s account

2. Make payments from customer’s account

Deposit Cash In Customer’s Account:-

When the customer want to deposit amount in his account at opening of account or after that
then he has to fill a deposit slip that shows the amount and the account in which the cash will be
deposited. Then teller will receive amount and credit the customer’s account that shows
increase in customer’s bank account.

Make Payments From Customer’s Account:-

When the customer draws a cheque on the bank to pay a certain amount then teller will debit
the customer’s account that shows reduction in his account balance.

There are two main types of cheques that are

Open Cheques

Crossed Cheques

Open Cheques:-

Open Cheques are those cheques, which are paid across the counter of the bank. Open
cheques may be
· Bearer Cheques

· Order Cheques.

Bearer Cheque:-

If the drawer orders the bank to pay a stated sum of money to the bearer, it is called a bearer
cheque. Any person who lawfully possesses a bearer cheque is entitled to receive payment of
that cheque.

Order Cheque:-

The amount of this cheque is payable to the person whose name is written on the face of the
cheque. The amount is paid at counter after identification of that person.

Crossed Cheque:-

The amount of this cheque is not paid at counter. The amount of this cheque is transferred to
the person’s account whose name is specified on the cheque. Two parallel transverse lines are
drawn across the face of the cheque.

Kinds Of Crossing:-

Legally there are two kinds of crossing

· General Crossing

· Special Crossing
General Crossing:-

In case of General Crossing the payment can only be deposited into the payee’s account only.

Special Crossing:-

In case of Special Crossing the payment can only be made to bank named therein the cheque.

Cheque encashment procedure

Cheque Encashment are made in four steps, these are:-

1. Receiving Of Cheques

2. Verification Of Signature

3. Computer Terminal Process

4. Payment Of Cash

1. Receiving Of Cheques:-

The cash is paid against the cheque of the client. The following points are important.

v Cheque is drawn on BAL

v Cheque is not post dated.

v Amount in words and figure are same.

v It should be a bearer cheque so the word bearer should not cross.

2. Verification Of Signature:-

After receiving the cheque the cheque the officer verify the signature of the account holder and
the signature on the cheque. If the signature is not same it is returned back otherwise forward to
computer terminal.

3. Computer Terminal Process:-

The cheque is received in computer terminal, where the computer operator checks the balance
of the account holder. The operator also sees the stop payment instructions are received from
account holder or not. After considering these points computer operator post the cheque in
account holder ledger and returned back to the officer.

4. Payment Of Cash:-

After posting the cheque the officer cancelled the cheque and returned back to cashier. The
cashier enters the cheque in cash paid registered and pay against the second signature of
receiver on the back of the cheque.

If the payment is of Rs. 50000 the cashier can make it on its own. If the amount is greater than
Rs. 50000 to Rs. 100,000 the cashier and cash deposit Incharge will verify the check and will
sing it. Then the payment will be made. But, if the amount is greater than Rs. 100000 to Rs.
1000,000 the manager operation will also verify the check and sign it so that the payment can
be made. If the amount is greater than Rs. 1000,000 the Branch Manager will also verify the
check and sign it. Otherwise the payment will not be made.
　

finance/credit department

Car finance

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

Tenure period ranging from 1 to 5 years.

Financing of all brand new locally assembled vehicles and used cars.

Financing limit ranging b/w Rs. 200,000/- to Rs. 2000, 000/- for brand new cars

Corporate and individual car leasing

BAL’s 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.

insurance

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}

Bank Al-Falah's mark-up rates are as follows:

Pak Suzuki Cars

11.9 %

All other local assembled Cars

12.9 %

Imported Cars

12.9 %
Repayment

Easily affordable installments on monthly basis in the form of postdated cheques will set you
free of depositing your rental cheques every month.

Security

Hypothecation of vehicle in the name of the Bank Al-Falah Limited.

YOU CAN ACT AS A CO BORROWER

Acting as a co borrower, will enables your family members {spouse, children- 18 year and
above} to avail the financing facility and can get the car registered in their names as well.

Documents required

Two passport size photographs.

Copy of National ID card.

Bank statement for the last six months.

Salary certificate {for salaried individual}.

Business proof {for a business person}.

N.T.N Certificate.

Co borrower’s NIC copy {if the car is to be in the name of the co-borrower}.

Eligibility

Yes you get a car loan form bank Al-Falah 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.

Home finance
With this facility, you no longer need to just dream about the home you want for yourself and
your family .We will provide you up to Rs. 10.00 million or 70% of the purchase price of the
property (whichever is less), so that you can realize your dream and enter the reality of owning
a home!.

Payment period ranges from 3 to 20 years.

You already own a home, but need extra space for a growing family. Simply apply for financing
of up to Rs. 3.50 million or 40% of the surveyed value of your home (whichever is less) and get
yourself the extra space!

You can stretch payments for up to 10 years

You have a plot and need finance to construct a home, which excites everyone in your family!
No problem. We will provide you up to Rs.10.00 million, or 70% of the estimated value of
constructed property to enable you to say good-bye to rent forever! Even if you don't have a
plot, we will provide you up to 60% of the value of the plot that you have selected to purchase!
Do we excite your imagination?

Payment period ranges from 3 to 20 years.

Does your existing installment on a home finance leave you with nothing to spend? You need
not worry any more because we have genuinely low rates and payment options that could leave
more funds with you each month. With our BTF, repaying your home finance will not make you
break into a sweet! Transfer up to Rs. 10.00 million or 100 % of the existing finance, whichever
is less.

Stretch your repayment period for up to 20 years again!

The crown jewel of our Home Finance Scheme, the golden opportunity for someone starting a
career to buy an already constructed housing unit so early in life! We offer a moratorium of up to
3 years in principal payments, for a financing of up to 20 years. You service only the mark-up
element initially, and principal repayment starts after the end of moratorium period. Home Start
is specially designed for young people to own a home of their own.

　
　

Credit department

a good financial support when officials of this department invest money of depositors into
feasible projects by lending loans to various business concerns. As the core activity of
Commercial bank is to provide short-term finance, which is mostly for working capital
requirements. As business concerns have money to complete the one production cycle, but it is
not necessary that amount would be received just after sale, but credit sales are also made. So
to finance next production cycle they obtain loans from commercial banks on short-term basis,
for continuity in operations.

Evaluation of client

This is the first requisite for team of credit department, to evaluate the client's position regarding
the financial and business performance concern. As for as, credit policy of Bank Al-Falah Ltd. is
concerned, it doesn't given loan to individuals & business concerns.

i) Financial Statement Analysis:

This is the main source to evaluate the client of business concern, Annual Reports of last 2 to 3
years are obtained from enterprise, which is requesting for credit/loan. These are examined by
various techniques like; Horizontal Analysis, trend, ratio analysis are conducted to get true and
fair view of the final statements of that concern.
ii) Nature of Business to be Considered:

Secondly, nature of business should be considered because if business concern to which we

are giving loan related with that industry which is not growing and declining and we sanction
loan to that concern would lead to definite bad debts. So if we examine the nature of business
properly and make sure about its growing trend, then loans can be sanctioned to that concern.

iii) Bank References:

By correspondence BAL makes confirm to send letters to various banks in order to know about
client's record/dealing with them. If they give proper information about client then decision made
for loan becomes more strong and healthy.

iv) Plant Visit:

This is another source of evaluating client. In this technique credit department team visit the
plant of concern to assure that plant is actually in a position to get market value as which
mentioned in Balance Sheet. To get real picture of that business is obtained through personal
visit.

v) Credit Rating:

From various credit rating agencies reports are obtained which show the past record of that firm
regarding the paying capacity and dealing to discharge liabilities. If credit rating is good enough
then that symptom will also lead to sanction loan.

vi) Report From SBP:

From State Bank of Pakistan, report is required regarding that client. SBP has record of every
client past and present scenario. So it is essential to examine that report.
However, some other techniques are also used to evaluate the performance of business like,
credit vetting and information from peer concerns. After this appropriate examination, credit
department makes credit appraisal report and sends to head office corporate division (Credit
Division) for sanctioning that amount to concern.

Various types of credit products, nature of advances

There are various means to provide credit. Credit can be in the form of lending money for credit
cards, guarantees, letter of credit, Trust Receipt and against bill of exchange. Every type of
credit product has some features regarding interest/marketing rates, maturity period and some
other things.

In BAL, all such sort of products are offered which are mostly provided by other commercial
banks of Pakistan, but as for as BAL's credit policy is concerned it is very conservative. It hardly
sanctions loan against mortgage or property but prefer to give cash collateral. So BAL secures
its money against getting more than 100% security from clients.

BAL usually, gives loans against refinance scheme and letter of credit transactions. There were
various cases which were rejected or not sanctioned for loan due to some minor risky things
involved. Mostly credit proposal form was rejected by head office.

Processing of a credit line proposal form

When client fills the credit line proposal form for getting loan. Then credit officer conducts
financial statements analysis and with his own views statement refer to head office for
sanctioning credit limit. Businessmen make arrangement with banks for credit line, which is
used for future needs. They pay some commission on that fixed credit line. In this way, they
secure their money for future working capital requirements.

Principle of lending

Before describing principles of lending basic considerations in primary evaluation of credit

proposal is necessary to be mentioned here.
i) Purpose of Facility:

- Should be Legally/Morally Valid/Legitimate.

- Should conform to the Bank's Credit Policy guidelines.

- Should conform to the guidelines provided by the State Bank of Pakistan.

- Should be geared towards meeting national economic priorities.

ii) Amount of Facility:

- Should be within the actual requirements of the borrower.

- Should be such that the principle of maintaining a diversified portfolio is not sacrificed, without
any extra ordinary considerations.

- Customer should not be working on borrowed capital only, there should be substantial own
stake of the customer.

iii) Period of Facility:

- Should match the availability of resources.

- Should conform to the bank's policies/guidelines.

- Should conform to the actual requirements of the customer.

iv) Repayment:

-Period of repayment should be specific and should match the cash flow of customer's
business.

- Primary and secondary sources of repayment should be specifically identified.

v) Security:

- The facility should be fully secured, in light of security and margin requirements determined by
the bank and the SBP.

vi) Market Reputation:

- The customer should have good market reputation & standing.

Now we will discuss on the principles of lending. Based on the aforementioned considerations,
following principles of lending have been evolved.

1) SAFETY

Covering the elements of character, capacity, capital, and security offered/held. Security should
be identifiable, enforceable, realizable and valuable, in order to ensure safety of the facilities
committed.

i. The borrower should have impeccable character market standing and reputation. He should
be reliable and dependable for meeting his commitments and the terms of the facility.

ii. The capacity or capability of the borrower to manage his business and generate enough
profits and cash flows to meet his commitments for repayments and debt servicing is of pivotal
importance.
iii. By capital is meant the monetary worth of the customer and his own resource base.

2) LIQUIDITY

i. Covering the element of capability to liquidate or repay on maturity and also prior to maturity,
in case of need, Ask how "Liquid a loan is, not just how good".

ii. Does he have an identified primary liquid source of repayment? This will determine his ability
to repay the bank's facilities.

iii. It is also important to determine the amount that can be lent as a one time transaction or as a
continuing credit line, depending upon customer's requirements, capacity to repay, trade cycle,
business turnover, cash flows and the regulatory guidelines.

The five C’s of Credit

Credit team officials should be known as the five C's of lending. These are discussed below:

i) Capital:

- The capital & resources of the borrower.

- The capital structure of the borrower and the gearing ratios.

- Is the borrower Under-capitalized?

- Does the borrower has its own resources to fall back on, in case of need.
ii) Capacity:

- Capacity or the capability of the borrower to manage his business profitably and the capacity
to repay the advances and service the facilities according to agreed terms.

- Is the borrower in a capacity to borrow? or is there any legal complication?

iii) Collateral:

- The security provided against the facilities.

- Is the security provided: Adequate, Realizable, Marketable, Valuable, Storable, Non-

perishable, Durable, Transferable/with clear Title. Transportable un-cumbered etc?

iv) Character:

- Is the borrower's personal character, market standing and reputation impeccable?

- Has he met his part commitments?

- Does he have good bank reference?

v) Conditions:

- Have the conditions of lending been drawn up taking into account all possibilities or
eventualities?
- Is the sector/industry in decline, is growing or it has reached at plateau?

- Is there a market for the products and the market size to justify production plans and sales
forecasts?

- Are the economic conditions feasible generally and for the business, in particular?

Forms of lending

In credit department of BAL, various forms of credit are offered to different clients. Following are
the main forms of lending:

i) Cash Credit

ii) Running Finance

iii) Term Finance

iv) Purchase and Discounting of Bills etc.

i) Cash Credit (PLEDGE):

In this form of lending, cash is required to keep as a security. This form is less risky than others.
Because bank is fully equipped with cash. Mostly this is used for very special purpose like;
payment to exporter for the goods delivered. Below are mentioned core features of the cash
finance.

a) Most secure type of finance

b) Stocks are in possession of bank.

c) Whatever amount he may want to release stocks then pay equipment amount.

ii) Running Finance:

Running finance is most popular sort of credit facility given to clients. This is mostly obtained for
the purpose of working capital requirements. Client can draw money even daily from the
account but not more than the limit (BAL normal limit was up to 1,000,000/- (one million) that
can be drawn by him). In running finance, it is not necessary that security would be in the
possession of bank, but all important documents of stocks, property etc, are in its possession.

However, the case may be, one limit is for one year, not more than this can be sanctioned. But
on the other way around, if client doesn't repay amount in one year after making all possible
correspondence and personal contacts then Bank will sue him after 210 days in the court. The
amount received by him would be with the markup. It should be noted that if limit is more than 1
million then proposal would be sanctioned by credit committee of Head Office.

iii. Term Finance:

This credit facility is also required for working capital requirements. This is the same like running
finance but difference is that in this term finance, disbursement of amount is in once a time.

Beside, time limit for term finance is 1 year to 10 years, payment is made in the form of
installment which can be on monthly, quarterly, half yearly, yearly basis. Markup is received on
quarterly basis. It is important to note that markup should be received on that specific time, if
principal account is not paid by him on that date.

iv. Purchase and Discounting of Bills

This is also a unique type of financing. Bank purchases the bills from its own client at lower
value but when bills are discharged, and then amount received will be more than that purchased
value. This is mostly happened in case of export and import transaction. In addition, markup on
these bills is received at the time of purchase or negotiation.

Documents required

Documents we mean those papers which are essential to provide facility. In this connection,
following are the documents in case three types of business concerns:

In case of sole proprietorship

i) Security/lien paper

ii) Collateral

iii) Demand promissory note.

iv) Letter of continuity.

v) I.D card

in case of partnership

i) Security/lien paper

ii) Collateral

iii) Demand promissory note.

iv) Letter of continuity.

v) Partnership deed.

In case of cooperation (private limited)

i) Personal Guarantee (Director)

ii) Charge Registration form (form 10).

iii) Memorandum & Articles of Association etc.

creation of charges

When an asset/property is identified as a security against facility in an agreement or document

creating a borrowing relationship, a charge is said to have been created. This charge can either
be registered formally or remain unregistered. A registered charge obviously provides a higher
degree of security.

A charge can be further classified according to its ranking, in the event of default or liquidation.
Thus it can be a First Charge, in case a lender's right of appropriation of the property or its rates
proceeds, in the event of default/liquidation, is prior to any other lender's right. Similarly there
can be second or subsequent charge-holder would be entitled to recover his dues only after the
first charge-holder's dues are settled.

Monitoring/renewal of credit facility

When credit team sanctions some loans to different clients then it becomes essential for it to
monitor the affairs of credit given to them, any during such period if customer wants to extend
his loan by accepting some other conditions from credit team, then role of credit officer is very
important to monitor such affairs. However, this team looks after the condition of his business as
the repayment with markup amount can be assured to get. If this feels that such concern is not
doing well from certain period, then it would take some measures to get loan back with markup
immediately and restrict to sanction loan further. Personal visits are also made by credit team as
to know the actual worth of property asset mentioned or deposited for security.

Application of Mark-up

Markup is like interest rate, but it describes some what different from interest rate. Entire interest
rate was received by borrower either loosing or gaining but in markup bank purchases goods
from borrower by lending money on the terms of repurchase the goods by banks from customer.
In this way, bank gains some amount on sold goods and makes sure to its receipts.

From following calculation of mark up we can understand the application of mark up.

Mark up = P x R x D

365

P = Principal amount

R = Rate

D = Days

Shipping guarantee

This is the "Guarantee" given by the bank for the importer's creditability to show the documents.
This sort of guarantee is due to avoiding "Dambrage" which is incurred by the shipping
authorities, if the goods are not released from port within specific time.
When documents are not received by importer and he wants to resale goods, then he gets
shipping guarantee from bank through equivalent amount of letter of credit must be in account
of the bank.

Bank takes guarantee of importer that original documents will be submitted at later date. Any
discrepancy in documents will be part of the bank, but it also takes undertaking from importer
that discrepancy will be his part.

credit card department

Types of Credit Card

There are two Types of Credit Card.

MASTER

VISA

Further types of Visa Card:-

Bank Al-Falah visa card offering five types of cards.

Visa Gold

Visa Classic

Visa Classic Blue

Women Exclusive

Al-Falah Mini

Facilities for BAL Customers:-

Bank Al-Falah Limited giving facilities to his customers.

No joining Fee:-
Join Al-Falah VISA with out paying any joining fee. Start enjoying your FREE card from the
moment you become a Card member.

No annual/Renewal Fee:-

Al-Falah Visa is the Only Card in Pakistan with no Annual or Renewal Fee, so benefit from your
card with out worrying about renewal fee.

Lowest services charges:-

Only Bank Al-Falah gives you the un matched feature of lowest service charges @ 2.50% per
month.

Balance transfer:-

As an Al-Falah VISA card member customer can avail Balance Transfer Facility @1.5% per
month applicable on all existing credit card in Pakistan.

Global acceptability:-:

Al-Falah VISA card globally accepted at nearly 19 million establishments in more than 130
countries around the globe, including 10,000 establishments in Pakistan.

Cash withdrawal:-

75% of your assigned credit limit is available to you for cash withdrawals. Your Al-Falah VISA
Card gives you access to ready cash and PIN (Personal Identification Number) at 840,000
ATMs or you can request Over the counter cash advance at 360,000 financial institution world
wide or at any Bank Al-Falah branch or other Visa member in Pakistan.

Revolving credit:-
Al-Falah VISA Card gives you the option of paying only 5% of your monthly out standing
balance by the payment due date or pay in full and incur no further charges.

Petrol facility

The facility that saves you from paying surcharge while using your Al-Falah Credit Card at all
petrol Stations in Pakistan.

Free supplementary card:-

Present your family members with exclusive Al-Falah VISA supplementary cards. Only Al-Falah
Visa gives you the unique feature of having up to 6 free supplementary cards on your Gold,
Classic or Women Exclusive Cards for your spouse, children, parents, brothers, sisters, house
staff, any one of your choice. With Classic Blue you can have 1 free supplementary card.

Zero loss liability:-

You enjoy zero loss liability for all fraudulent transactions made on your card, once you report it
lost or stolen. New card will be issued within 72 hours of the loss/ theft being reported.

All billing in Pak rupees:-

Whether you make transaction in dollars or any currency, all your billing will be in pak rupees for
your convenience.

Comprehensive travel protection:-

Al-Falah Visa offers a Comprehensive cover up to Rs.7 million on Al-Falah VISA Gold card and
RS.3.5 million on Visa Classic, Classic Blue and Women Exclusive card.
Fortunes:-

Al-Falah VISA offers you Fortunes a reward program that allows you to earn points on every 50
rupees you spend on your card. You can accumulate and exchange the Fortune points earned
for gift of your choice from a diverse range of items to match your life styles.

Documents Required

Salaried person:-:

For Gold, Classic and Classic blue

Copy of NIC

Current Salary Slip / Salary Letter / Proof of BPS (For Govt. Employees) / Proof of rank (For
Armed Forces Personnel).

Computerized Personal bank statement (on ban letterhead in original) for last six months

Additional documents for classic blue

Proof of minimum six-month experience

Copy of Graduation Certificate or equivalent.

Self Employed:-

Copy of NIC
Computerized personal bank statement (on bank letter head in original) for last six month.

Additional requirements:-

Partnership deed & personal account statements of the partners (if any) for last six month.

Bank letter / certificate confirming Proprietorship.

Memorandum / Articles of Association /Form A.

Financial Statements

Recognized professional degree / membership certificate to professional association.

trade finance departments

Trade Finance involves the import and export activities. This department provides protection to
the rights of importer and exporter. The function of this department is to serve as a bridge
between the importer and exporter in order to settle a transaction.
Trade Finance Department handles two activities:-

· Import

· Export

Import

Import Department of BAL deals with the import of merchandise. Import can be defined as:

“The bringing of commodities into Pakistan from outside by sea, land or air.”

Requirement for the Importer:-

These requirement / document must be fulfilled from importer before doing the import:-

v NTN

v Sale Registration Certificate

v Membership from Chamber Of Commerce

Methods of Doing Import

Ø Letter of Credit
Ø Contract

Ø Advance Payment

Ø Open Account

Letter Of Credit

A Letter Of Credit is a financial instrument issued by a bank on behalf of the registered

customers It gives surety to the Exporter that his amount is safe.

“The letter of credit is a written instrument issued by the buyer’s bank authorizing the seller to
draw in accordance with certain terms and conditions.”

Parties Involved In A Letter Of Credit:-

There are four basic parties involved

1. Importer

2. Issuing Bank

3. Exporter (Beneficiary)
4. Advising Bank

Contract

These are the contracts on which there is no liability of the bank. Bank charge commission
against this service.

Main Reason of Bank evolvements:-

Bank involve in contract for that purpose:-

The record of this foreign exchange entered in State Bank Of Pakistan (SBP) and this record
shows that how many Foreign Exchange go outside Pakistan that is helpful to count the total
imports of Pakistan.

Advance Payment

In mean some part of payment is made before shipment and remaining is made after shipment.
Advance Payment is through TT (Telegraphic Transfer). But State Bank Of Pakistan allows limit
of Rs.10, 000 it means that Advance Payment does not exceeds Rs.10, 000.

In case of Advance Payment the importer show the document to Bank Al-Falah Limited after
four months as a proof of import.

Open Account

Open Account is reciprocal of Advance Payment. In this case importer first receives the
shipment and then makes the payment. And there is no limit involved in open Account. Importer
makes payment of any amount.
In open Account there is no as such restrictions from State Bank Of Pakistan (SBP) importer
simply show the document and make payment after one year means no restriction of time is
involved.

In all these four methods Letter of Credit is mostly used in Bank Al-Falah Limited Urdu Bazaar
Branch Lahore.

Requirements of opening a letter of credit

For opening L/C, the importer has to submit the following documents

Ø Performa Invoice

Ø Indent

Ø Application For Import

Ø Annexure B

Ø Insurance of consignment

Ø Promissory Note

Ø L/C Margin

Ø L/C Commission

　
Clauses of Letter of Credit

A letter of credit contains various clauses prominent of them are:

Ø Type of L/C

Ø Amount

Ø Description Of Goods

Ø Trans-shipped / Part-shipped or not.

Ø Collection Charges

Ø Validity Period Of L/C

Import Process

Ø An L/C form is filled.

Ø The customer prepares insurance document from any insurance company.

Ø Filled the SBP Application form that is called Appendix B.

Ø Performa Invoice is Prepared.

Ø Undertaking from the customer on letter Head.

Ø Prepare four copies of Form I (Form I explain the detail of import that are helpful for the SBP.

Ø Approval From Area Office

Ø Prepare voucher and make entries in the system.

Ø Preparation of L/C

Ø These forms are then sent to the Swift Centre of BAL.

Swift Centre Machine:-

· It is the fastest and the safest mode of financial communication in the world.

· These are according to the rules and regulations of ‘UCP-500’ just like prudential regulations
of SBP.

Ø Now this is received by the exporter’s bank.

Ø When BAL receives shipment documents and documents are either rejected or accepted
within 7 days.
Ø If accepted, the payment from the importer is made.

Ø An IBCA is received of that amount and send to the exporter’s bank.

Ø Now during these transactions, both the banks receive profit in the form of commission.

· BAL startly receives commission / charges from the importer.

· Conversion of foreign currency into Pakistan rupees.

Ø Payment Against Document (PAD)

In case the payment is not made, then an account of PAD is opened. The bank the issuing bank
on the customer’s behalf of a letter of credit, pays the negotiating or advising bank, and debits
the PAD account, till its payment by customer. Until the realization of the amount a full set of
documents representing title to the goods shipped by the foreign exporter, is held by the bank
as security.

Dr. Payment Against Documents (PAD)

Cr. Bank Current Account

When the importer brings payment then,

Dr. Current Account

Cr. Payment against Documents (PAD)

Exports

Exports are major sources of earning foreign exchange and play an important role in the
economic development of the country. It helps to utilize excess resources of the country.

“Exports mean selling goods to another country.”

Exports of all eligible commodities through authorized banking channels are admissible under
exchange control regulation.

Requirement for the Exporter:-

These requirement / document must be fulfilled from exporter before doing the export:-

v NTN

v Sale Registration Certificate

v Membership from Chamber Of Commerce

As well as the market stability, reputation, financial position of the exporter is first of all checked.
Documents to Be Attached For Export

Ø Commercial Invoice

Ø Bill of lading

Ø Packing list

Total quantity

Net weight/carton

Gross weight/carton

Total net weight/carton

Total gross weight

Ø Bill of exchange (original or draft)

Ø E-form: Initial document on which total export proceeding is based. In this form, all the
conditions are given, which are necessary for exports.

Ø Letter of credit: It is written agreement between importer and exporter.

Ø Certificate of Origin (Form –A)

Ø Insurance (if any)

Procedure:-

Ø Receipt of Letter Of Credit:

Ø Issuance of E-Forms that is verified by an authorized signatory. There are four copies of it.

Copies of E-Form

v Original: is sent to the custom officer

v Duplicate: Bank receive the duplicate

v Triplicate: is sent to the State Bank Of Pakistan

v Quadruplicate: is kept by the exporter for his personal record.

v Verification of E-Form

v Export Documents

v Scrutiny Of The Documents

v Dispatch

v Realization of Export Proceeds.

　

swot analysis

　
SWOT Analysis

· Strengths

· Weaknesses

· Opportunities

· Threats

What is a SWOT?

SWOT analysis is a process to identify where we are strong and where we are vulnerable,
where we should defend and where we should attack. It tells us our strengths, our weaknesses,
the opportunities which prevail in the market and the threats which we may face from our
competitors and other from other potential factors.

This analysis can be performed on a product, on a service, a company or even on an individual.

SWOT Analysis of Bank Al-Falah

Here we have applied this very useful technique to identify the strengths, weaknesses,
opportunities and threats of Bank Al-Falah.

Strengths

Strong Financial Position

As we can see in the financial statements of the bank, the financial position of the organization
is very sound and its profitability is in increasing. The Earning per share has been increased on
a rate of about 50%, which is a very positive sign.

Highly Qualified Employees

The bank has highly qualified and skilled workforce and it has succeeded to attract the best
banking professionals from across the country due to its growing pace and sound reputation.

Conducive Environment

The management of the bank is very much concerned with the development of and
improvement of the working environment. The bank has state of the art and purpose built
branches where all the modern technologies are provided to get the efficiency of the workforce
and the customer satisfaction.

Govt. Support and Encouragement

As the owners of the bank belong to UAE and the type of their investment in Pakistan is a
foreign investment, the govt. is fully supporting the bank management due to its policy to
maximize the foreign investment in the country, to get the economic prosperity.

Fastest Growing Financial Institution

Due to its successful business policies and the strong financial position the bank has achieved
the reputation of fastest growing financial institution in the country. It has greatly increased the
customers confidence in the bank

Huge Expansion Plan

Due to its strong financial position the bank has undergone a huge expansion plan to compete
with the existing bank all over the country and with the passage of time the branch network is
expanding at a very good pace.

Young and Energetic Workforce

As the bank is a newer one in the country, the bank has an advantage over its competitors
because the majority of its workforce is young and not very much over aged. Thus the bank is
getting maximum out put from its young and energetic workforce by spending comparatively
less on their remunerations.

Islamic Banking Division

The bank is one of the pioneers of the commercial banks who have started the Islamic Banking
along with their conventional banking. The bank has a separate network of its Islamic Banking
Division which has 16 branches across the country and this network is also expanding at a very
good pace.

Weaknesses

Waiver of charges

Currently the middle management of bank Al-Falah is the big reason for waiver of charges.
Bank Al-Falah loosing a lot of its income likes (Cheque book charge, online charges, statement
charges, and other things) because of management. This is a weakness of bank Al-Falah.

Inexperienced workforce

As the majority of the workforce consists of young professional, they lack in their experience.
And sometimes lack of experience becomes a hurdle while serving to the customers. It is the
point where they feel difficulty while competing the other bank, which have a very experienced
workforce.
Over work Load on Employees

It was observed in the branch that as compared to huge business the bank is dealing in, the no.
of employees is lesser and thus there is an increased workload on the employees. Due to this
the efficiency of the employees is reduced.

Employees are not very much Motivated

As discussed before, the workload is high and the employees, especially the credit department,
have to do late sittings to complete their tasks. On the other hand the bank has revised its
salary increments policy to decrease the increment rate, as a result a decreased motivation
level of employees is observed.

Opportunities

Rapidly Growing Economy

At present the Pakistan’s Economy is growing on a very fast pace. The rapid growth of economy
has resulted in the increase in the growth rate of all economic sectors especially in the banking
sector which is growing at a fastest speed than ever and in future the growth is expected to
increase even a higher rate.

Increased Interest Rates

The SBP has revised the interest policy and the interest rates have been linked with the KIBOR
rates. Due to which the banks interest rate has been substantially increased which will greatly
increase the banks’ profitability.

Mega Projects Financing

As the increase in overall business activity in the country, the investors are launching various
types of Mega Projects especially in housing and textile the bank has a great opportunity to
finance these projects at very profitable term.

Huge Demand for Consumer Financing

The increase in per capita income and overall economy has resulted into a great demand for the
consumer financing especially for home finance and car financing and it is said that this trend
will increase more in future. The bank can earn a lot by focusing on its consumer financing
sections.

Merger with UBL

After the privatization of United Bank Limited, the management of the BAL has purchased the
majority shares of the UBL, and it is planning to merge these two banks. As UBL is the second
largest bank in the country, this merger can make the bank the largest bank of the country.

Growing Trend of Islamic Banking

There is a very good growth trend in the Islamic banking in the country and in the world as well.
BAL has the advantage of having full fledged Islamic Banking network and the growth in this
particular field can be very fruitful for the bank.

Spending Practices of Mass

As the Pakistani’s are known for their extravagant practices, and to fulfill their funds
requirements they don’t hesitate from getting loans from banks. Thus there is a very good scope
for the bank to run successful business in such circumstances.

Threats
Uncertainty of Economy

Although the economy is growing at a good pace, but there are many factors which results in
the uncertain position of the economy. Such as political uncertainty, WTO, increase in poverty
etc. etc. As a result there are permanent threats of future risks and losses for the bank.

High Rate of Inflation

The inflation rate of the country has gone above the 10%. This can result into an unfavorable
situation for the bank. And especially when the ownership of the bank is UAE based, the net
spread for them can substantially decrease.

Trend of Mergers

There is a trend of mergers among the banks to become prominent in the market and to get the
maximum market share. This trend can result into the union of some leading banks which can
give tough time to the bank and it will become difficult for the bank to compete with them.

Privatization of Banks

Due to its privatization policy, the govt. is privatizing the state owned banks. The change in
management may result in the increase in the efficiency and productivity of the banks. Thus it
can become a threat for the bank.

Risk of Defaults

As discussed earlier that there is a trend of launching mega projects in the country. And every
one is involved in this trend without taking any measure for the successfulness of these
projects. This can result into the failure of this project which can make it difficult for the banks to
recover their funds from these defaulters.
　

learning and experience

I did my internship in Bank Al-Falah Limited Urdu Bazaar Branch Lahore. This internship started
on 10th July and ended on 21st August. It is not a very big branch but only a small retail branch
of big giants...

It is a new branch and working there for the customers for almost one year.

First day, I reported to the manager of the branch Mr. Zafar Ullah who gave me brief
introduction about the management and working of the branch, he also check my knowledge
about banking by taking a little test and interview. He has also taken a Computer Test from.
Then he introduced me to the other employees.

Management of the Branch

Staff of the branch consists of 27 members:

DESIGNATION

NO OF EMPLOYEES

Branch Manger

01

Operation Manager

01
Credit Manager

01

Officer Range I

05

Officer Range II

05

Officer Range III

02

Cashier

04

System Administrator

01

Telephone Operator

01

Gun Man

03

Peons

03
Learning from A/c Opening Department

This Branch is having about 2000 accounts but there was only one officer, Mr. Muhammad
Waseem Qaiser to handle this tough work. He has to deal different people.

My experience in this department was really very good. I learnt how to handle different
customers, how to fill Account Opening Form, what are the required documents that should be
with you in order to open an account, what types of account Bank Al-Falah is offering to the
customers, what are the facilities that an account Holder can enjoy and what are the profit rates
Bank Al-Falah is giving to its customers.

I have learnt the procedure that an Account Opening Officer has to follow in order to open and
maintain an Account.

Learning in Remittance and Clearing Department

There were two officers in this department one was Miss. Hina Naeem Khan and the other was
Mr. Nadeem Zahid.

Miss Hina Naeem Khan was handling inward clearing and Outward Clearing. While issuance of
other negotiable instruments like Pay Order, Demand Draft, Pay Slip etc, were handled by Mr.
Nadeem Zahid.

I worked one week in this department.

In this department I learned that how the transfer of money from one branch to another branch
takes place. In this department It was my responsibility for doing following jobs:-
Ø Issuance of Demand draft and their Computer feeding.

Ø Responsibility of DD Advice and its Payment.

Ø Issuance of Telegraphic Transfers and their feeding in Computer.

Ø Payment of IBC (Inward Bills For Collection)

Ø Lodgment of LBC (Local Bills For Collection), OBC (Outward Bills for Collection) and their
Realization.

Ø Issuance of CDR (Call Deposit Receipt) and its Computer feeding.

Learning from Accounts & Finance Department

There were two officers in this department; Mr. Atif and Mr. Nouman They have divided their
work between them. Mr. Atif handles Reporting and Mr. Nouman handles daily activity checking.

I used to help Mr. Nouman in Daily Activity checking, sorting and counting of vouchers and how
to calculate the deprecations of all fixed assets. I learnt from Mr. Atif the items of the Balance
Sheet of Bank and saw the format of different reports. He helped me to understand his work. He
told me about the reports that he has to prepare & the purpose of those reports. It was one of
those Departments in which Customer interaction is not involve rather paper interaction is
important.

Learning in Home Finance department

In Home Finance there was one officer – Mr. Kashif. I saw few customers in this department. I
learnt what the debt to equity ratio is in Home Finance, how to calculate installment, what are
the documents required to get this product, what the eligible criterion is for Home Finance
Agreement, and what is the procedure and activities of this department. What are requirement
to apply for this Finance, what is that maximum limit.
　

Learning from Trade Finance

This was a new department in Bank Al-Falah Limited Urdu Bazaar Branch so there was only
one officer whose name was Mr. Hafiz Farrukh who had experienced in trade finance. I learnt
the different methods of Trade Finance, requirement of importer and exporter before doing
import and export and procedure of opening L/C, I read L/C that helped me understand that
what things would be included in it. In this department few Customers were seen because this
was a new department and it will take time to generate profits for the bank.

Learning in Corporate & SME’s Finance

This department was at second floor of the branch. This department is giving a huge amount of
return to the branch. There were two officers Mr. Irfan Ahmad Khan and Mr. Atif. I learnt that
which assets could be leased through this department. What are the documents that are
required from different type of client like sole proprietorship, Partnership, company and trust.
How the risk can be evaluated. Preparations of offer latter, Credit line proposal, approval
process, Borrower’s Basic Fact Sheet for SME’s, Financial Statement of applicant.

Learning From the Car Finance Department

One officer in this department, whose name was Mr. Shakeel used to sit the second floor of the
branch.

Although the Urdu Bazaar Branch was small but still the demand for financed cars through Bank
Al-Falah lead this department to prosperity. This department handles a large number of
customers daily and, without overstatement; this department is the third “busiest” department
after the Account Opening Department. It requires constant customer interaction and requires
high level of intelligence to screen the validity of the customers.

Where as sound marketing skills are required to actually force the walk-in customer to select Al-
Falah Car Financing, still stronger skills are needed to scan the incoming customer for validity. I
learnt how to face the customers conveniently, how roper files should be maintained, how to
apply for a car, what are requirement to apply for this Product, what is that maximum limit, what
is the procedure to this department.

conclusion

If I have to express my experience of internship in Bank Al-Falah Limited Urdu Bazaar Branch
Lahore I would briefly say:

Bank Al-Falah is a good Organization in the way that anybody can join it for his/ her long-term
career. Overall working environment is comfortable. Management of branch cares a lot of its
employees and considers them as the Asset of bank. Behavior of senior executive of bank is
very polite and they are caring about the individual’s career and their growth.

However management is very demanding about the targets but good reward at the achievement
of assigned targets is awarded.

Employees at Bank Al-Falah are quite efficient. As Urdu Bazaar Branch is a new one, its
employees have to bring their bank among the list of good banks. Therefore, they work more
than their working hours and it is all according to their will. It also shows their loyalty,
commitment to organization.

Employees are given the benefits like bonus, gratuity funds, loans, increments, and medical.

All the customers are entertained individually. Same kind of behavior and attention is given to all
the customers. Getting ideas for improvement from customer side is a new idea and that is
working very well in Bank Al-Falah Ltd. All the customers are asked to fill a suggestion form and
the standards of the bank are improved through them.

Prioritizing its product portfolio in line with its corporate and consumer needs and wants the
bank is committed to develop products that give more value to its customers in both the sectors.
In bank, all the work is done on computers. All the entries are made in computer. Balance are
fed into the computer. This increases efficiency of the bank.

During my internship training I gathered information regarding how a successful bank

operational aspect decorticated with the practical.

I found my internship training at Bank Al-Falah Limited Urdu Bazaar Branch Lahore to be a very
rewarding experience. The training was beneficial because it helpful me to aware a real life
working environment.

So far my learning is concerned; all the employees at branch were quite cooperative. They
helped me to understand the activities of a bank to possible extent. Their good attitude gave me
more confidence to learn more and to ask if I have any query in my mind. Besides their ever
going activities they never get irritant by my questioning. I had made an honest efferent to
present the working & operation of Bank Al-Falah Limited Urdu Bazaar Branch Lahore in
simplest way.

I feel pleasure that I have really gained a lot during 6 weeks & enjoyed working with
experienced cooperative & intelligent staff.

RECOMMENDATIONS

It was an interested experience to do internship in Bank Alfalah Limited. The staff was highly
cooperated and due to their help I learned big deal about modern banking.

I suggest that such an internship program highly integrative for the students of commerce
education so that the students should be enquired with the knowledge of practice world .I do
summarize that it would be a great help to me in selection of job or future field of work.
Here I am putting some suggestions, which will enable the bank to compete with other banks
more effectively & efficiently.

Ø It is observed that the employees were overburdened so they have to stay at branch till late at
night. In this way their efficiency is affected and hiring more employees can reduce their work.

Ø The employees should be signed jobs for specific period and than they should shifted to other
department so that they gain knowledge of other jobs.

Ø Bank Alfalah Limited should properly advertise and Communicate to public about the services
provided by it, so that more customers will be attracted.

Ø The bank’s management should give more incentives and pay scale of officers should be
revised & improved.

Ø System and operations should be more defined and organized.

Ø IT draw backs should be improved.

Ø Administration drawbacks should be improved by the strict control of general issues.

Ø Audit should be held internally. Rather there should be an Audit Department in the branch to
make audit on daily basis. This can become so helpful as different banks are having this
department of their own.

Ø Lockers, ATM, all these facilities should be provided to attract more customers.

Ø Expenditures must be control, which are very high.