abl internship report
TRANSCRIPT
INTERNSHIP REPORT
Allied Bank of Pakistan
MBA (Banking & Finance)
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAB
In the Name of
Most Merciful and Compassionate the Most Gracious and Beneficent whose help and guidance
I always Solicit at every step, at every moment.
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PREFACE
This Report is specially meant for the student of MBA. It is concerned to a brief study of the operation, Function, tasks and services of Allied Bank of Pakistan.
Banking play very important role in the commerce and economic development of a country. Now-a-days banks are using different modern technologies, which influence the managerial activities, that’s why I decided to do my internship Training in the bank.
In preparation of this Report is have tried my best to provide all Possible information about the operation, function and tasks of ABL in brief and comprehensive form. It also includes a brief department worked during internship. I have also tried my best to use simple and easy words and language.
Then internship report ends with some recommendation after identification of some problems observed during the course of internship.
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ACKNOWLEDGEMENT
All praise to Almighty Allah, the most merciful and compassionate, who give me skills and abilities to complete this report successfully
I am grateful to my parents who are always been a source of encouragement for me throughout my life and from start to the end of this report
I am thankful to all my staff members so Allied Bank Of Pakistan Limited G - 9 Branch Islamabad.
I found every one very co-operative and helpful for providing me the Theoretical as well as practical knowledge about the function and operation of the bank.
I express my greatest gratitude to my kindhearted Supervisor Mr. Asad Ullah Makhdoom who was the Person who made me able to write this report, His enthusiasm shows the way forward to me to achieve this success and who kept me in high spirit through his appreciation. He helped me a lot each time I went up to him.
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EXECUTIVE SUMMARY
ABL is one of he most dynamic and progressive bank in the banking industry of Pakistan. This is due to its impressive growth and development. It has 756 branches through out the country. It also provides facilities online banking and ATM. Allied Online Banking is a unique service being offering from Allied Bank.
I did my internship of six weeks in ABL G - 9 Branch (0681) from 15-09-09 to 31-10-09. It is one of the small branches of ABL, which is yet to be renovated. I selected this branch because of two reasons. First, I was of the view that one can find more learning opportunities in a small branch as compare to a big one. Secondly it is situated near to my residence.
My report contains all the things which I learned during my internship in ABL G-9 Branch. The report contains overview of ABL, organizational structure of ABL, functions of accounts and finance department of ABL, critical analysis of theoretical concepts, financial analysis of ABL, weaknesses of the ABL, conclusion and recommendations as required.
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TABLE OF CONTENTS
S.No. Topic Page No.
1 Objectives of Studying the Organization 1
2 Overview of the Organization
2.1 History Of ABL2.2 Nature Of The Organization2.3 Business Volume2.4 Number of Employees2.5 Product Lines & Services of ABL
1
15677
3 Organizational Structure
3.1 Overall Organizational Structure3.2 Organizational Structure of ABL G-9 Branch3.3 Various Departments of ABL
14
141616
4 Structure of Finance/Accounts Department
4.1 Structure of Finance/Accounts Department4.2 Finance & Accounting Operations4.3 Role of Financial Manager4.4 Technical Methods (Use of Electronic data)4.5 Funds Management
31
3132333450
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5 Theoretical and Practical Concepts
5.1 Daily Schedule For Evaluate A Bank’s Money Position5.2 Account Opening Procedure5.3 Customer Privacy
53
535353
S.No. Topic Page No.
6 Financial Analysis
6.1 Balance Sheet 6.2 Income Statement6.3 Ratio Analysis6.4 Horizontal Analysis of Balance Sheet6.5 Horizontal Analysis of Income Statement6.6 Vertical Analysis of Balance Sheet6.7 Vertical Analysis of Income Statement6.8 Organizational Analysis6.9 Future Prospects of ABL
54
545555697173757778
7 Weaknesses of ABL 80
8 Conclusion 84
9 Finding and Recommendations 85
10 References 92
11 Annexes
10.1 Annexure I10.2 Annexure II10.3 Annexure III
93
939495
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1. OBJECTIVES OF STUDYING THE ORGANIZATION
Objective of studying the organization is to analyze the performance of the organization
and to know the all possible information about the operation, function and tasks of ABL
in brief and comprehensive form. Relate theoretical concepts with practical concepts and
seek knowledge. Learn with practical experiences and analyze to what changes occur in
banking industry. Another objective is to learn the financial analysis by computing
different ratios that must be imperative for any business. Other objectives are:
To get acquaintance to the banking operations.
To know what sort of changes it brings in managerial activities.
To see the application of our Professional studies especially.
To objectively observe the operations of Allied Bank of Ltd in general and the
operations of ABL, in specific.
To make recommendations or implementation plans for the improvement of the
operations of ABL, in the light of professional studies.
2. OVERVIEW OF THE ORGANIZATION
ABL is one of the largest banks in Pakistan, serving the Country for over 60 years in all
spheres at banking and financial Services.
2.1 HISTORY OF ABL
Established in December 1942 as the Australasia Bank at Lahore with a paid-up share
capital of PKR 0.12 million under the Chairmanship of Khawaja Bashir Bux, and his
business associates, including Abdul Rahman Malik who was amongst the original Board
of Directors, the bank had attracted deposits, equivalent to PKR 0.431 million in its first
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eighteen months of business. Total assets then amounted to PKR 0.572 million. Today
Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposit exceeded
Rs. 143 billion and total assets equal Rs. 170 billion. The Allied Bank's story is one of
dedication, commitment to professionalism, adaptation to changing environmental
challenges resulting into all round growth and stability, envied and aspired by many.
2.1.1 1942 - 1947: Pre Independence
In the early 1940s the Muslim community was beginning to realize the need for the active
participation in the field of trade and industry. The Hindus had since the late 1880s
established a commanding presence in these areas and industry, trade and commerce in
the undivided Sub-continent was completely dominated by them. Banking, in particular,
was an exclusive enclave of the Hindus and it was widely believed, and wrongly so, that
Muslims were temperamentally unsuited for this profession.
It was particularly galling for Khawaja Bashir Bux and Abdul Rahman Malik to hear the
gibe that Muslims could not be successful bankers. They decided to respond to the
challenge and took lead in establishing this first Muslim bank on the soil of Punjab that
was to become Pakistan in December 1942; by the name of Australasia Bank Limited.
The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs 0.5
million by the end of first full year of operation, and by the end of 30th June 1947 capital
increased to Rs. 0.673 million and deposits raised to Rs 7.728 million.
2.1.2 1947 to 1974: Australasia Bank
Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on
August the 14th, 1947.
It had been severely hit by the riots in East Punjab. The bank was identified with the
Pakistan Movement. At the time of independence all the branches in India, (Amritsar,
Batala, Jalandhar, Ludhaina, Delhi and Angra (Agra)) were closed down. New Branches
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were opened in Karachi, Rawalpindi, ISLAMABAD, Sialkot, Sargodha, Jhang,
Gujranwala and Kasur. Later it network spread to Multan & Quetta. The Bank financed
trade in cloth and food grains and thus played an important role in maintaining consumer
supplies during riot affected early months of 1948. Despite the difficult conditions
prevailing and the substantial set back in the Bank’s business in India, Australasia Bank
made a profit of Rs 50,000 during 1947-48.
By the end of 1970 it had 101 branches. Unfortunately it lost 51 branches in the
separation of East Pakistan which became Bengladesh. The bank did well in despite
losing lot of its assets. By the end of 1973 the bank had 186 branches in West Pakistan.
2.1.3 1974 to 1991: Allied Bank
In 1974, the Board of Directors of Australasia Bank was dissolved and the bank was
renamed as Allied Bank. The first year was highly successful one: profit exceeded the Rs
10 million mark; deposits rose by over 50 percent and approached Rs 1460 million.
Investments rose by 72 percent and advances exceeded Rs 1080 million for the first time
in bank history. 116 new branches were opened during 1974 and the Bank started
participation in the spot procurement agriculture program of the Government. Those
seventeen years of the Bank saw a rapid growth. Branches increased from 353 in 1974 to
748 in 1991. Deposits rose from Rs 1.46 billion, and Advances and investments from Rs
1.34 billion to Rs 22 billion during this period. It also opened three branches in the UK.
2.1.4 ESOP Revolution (Employee stock ownership plan)
Under the philosophy of ESOP ownership of an enterprise is transferred to its employees
who are in an advantageous position in running the enterprise. The added advantage of
ESOP that it strengthens the workers stake in the free enterprise system, in job securities,
better profitability & unique corporate culture symbolizing family feelings & professional
fraternity.
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September 10,1991 is the historical date as on this date the bank became the country’s 1st
bank to be reconstituted as an institution jointly owned by its employees through the
unique concept of Employees Stock Ownership plan (ESOP) developed by the Allied
Management Group headed by Mr. Khalid Latif enabled the bank staff to react creatively
to the privatization challenge. More that 7500 staff members acquired a share in the bank.
The articulation of the ESOP is a landmark in the financial history of Pakistan-indeed of
the entire world .It is a practical step ensuring an increase in workers participation and in
productivity a means for enhancing an equitable redistribution of financial assets & an
effective strategy for achieving the cherished goal of national self-reliance.
2.1.5 1991 to 2004: Privatization
As a result of privatization in September 1991, Allied Bank entered in a new phase of its
history, as the world’s first bank to be owned and managed by its employees. In 1993 the
First Allied Bank Modaraba (FABM) was floated.
After privatization, Allied Bank registered an unprecedented growth to become one of the
premier financial institutions of Pakistan. Allied Bank’s capital and reserves were Rs.
1.525 (Billion) and assets amounted to Rs. 87.536 (Billion) and deposits were Rs. 76.038
(Billion). Allied Bank enjoyed an enviable position in the financial sector of Pakistan and
was recognized as one of the best amongst the major banks of the country.
In August 2004 as a result of capital reconstruction, the Bank’s ownership was
transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.
Today the Bank stands on a solid foundation of over 63 years of its existence having a
strong equity, assets and deposits base offering universal banking services with higher
focus on retail banking. The bank has the largest network of on-line branches in Pakistan
and offers various technology based products and services to its diversified clientele
through its network of more than 700 branches.
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2.1.6 2005
In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and vested in with
and into Allied Bank Limited. ILL shareholders were issued ABL shares in lieu of the
ILL shares held by them. Application for the listing of ABL shares in all the Stock
Exchange Companies of Pakistan was made. ABL was formally listed and trading of the
shares of the Bank commenced w.e.f. the following dates.
Islamabad Stock Exchange - 8th August 2005
Lahore Stock Exchange - 10th August 2005
Karachi Stock Exchange - 17th August 2005
2.1.7 2007
Mohammad Aftab Manzoor has taken charge as CEO and President of the Bank on
August 13 2007. He is an ex-president of MCB Bank Ltd.
2.1.8 Today
Today, with its existence of over 60 years, the Bank has built itself a foundation with a
strong equity, assets and deposit base. It offers universal banking services, while placing
major emphasis on retail banking. The Bank also has the largest network of over 756
online branches in Pakistan and offers various technology-based products and services to
its diverse clientele.
2.2 NATURE OF THE ORGANIZATION
The main objective of the bank is to accept deposits and provide loans to its customers
and also to be more efficient in providing services. The bank maintained its commitment
to most efficient and personalized services to its customers. Allied Bank of Pakistan
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introduced many remunerative schemes for its depositors and introduced computer
services for the first time in the banking history of Pakistan. Allied bank gives advances
to small, medium and big industries, commercial establishment, agriculture, construction
companies and other needy persons. Allied bank collects electricity gas and telephone
bills from public and over hundred branches of Allied Bank Ltd. deal in foreign exchange
were facilities are given to financial and commercial so its ultimate objective is to receive
funds from the depositors and provides loans/credit facilities to different sector including
trade, industry and agriculture in its most branches.
2.3 BUSINESS VOLUME
Description (in
Millions) 2005 2006 2007 2008 2009
Revenue 13,176 41,423
32,5
37
40,1
49
52,
864
Investments 57,657 45,269
47,1
56
84,1
51
84
,587
Deposits 126,392 161,140 206,031
263,
972 297,475
Advances 69,949 119,866 151,705
178,
524
2
23,640
Source: Annual Report of ABL 2009
Volume of revenue has been increased since 2004 due to increase in interest income
earned. Volume of investments has been increased since 2007 because of increase in
long-term investments by ABL. Volume of deposits has also increased due to increase in
consumer deposits in past three years after great increase in inflation. Volume of
advances in 2009 is also showing a great increase.
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2.4 NUMBER OF EMPLOYEES
Following is the total number of employees working in 756 branches of ABL:
Management Employees 2,945
Support Staff 3,802
Total Number of Employees of ABL 6,747
Following is the total number of employees working in the G-9 Branch of ABL:
Management Employees 2
Support Staff 13
Total Number of Employees in ABL G-9 Branch 15
2.5 PRODUCT LINES & SERVICES OF ALLIED BANK LTD
Following are the various product lines and services offered by ABL:
2.5.1 All-Time Banking (ATM)
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Allied Bank has introduced the Allied Cash last year also referred to as ATM card. The
customer will now have the convenience of withdrawing cash from any of ABL’s ATMs
(Auto Taller Machine) conveniently located in major cities at any time of the day or night
even on closed days/holidays. Other services include customer being able to inquire
about the balance of his/her account or printing an abbreviated (mini) statement showing
the most recent eight transactions up to the previous working day.
In order to obtain Allied Cash+ Card, the customers simply have to fill out prescribed
Application form available at selected Allied Bank Branches in Karachi and Lahore. The
dully-filled form should be handed over the Manager of the Branch where the customer is
maintaining his account. Non-account holders would first have to open an account with
Allied Bank to have access to this facility. The Customer can feel absolutely safe his
Allied Cash + Card because it can only be used with the Personal identification Number
(PIN), which is given to him by the bank. Graphical representations have been employed,
where appropriate, for ease of understanding.
2.5.2 Allied Umrah Aasan
This unique scheme facilities those persons, who cannot afford to incur the lump sum
expenses for Umrah. It allows the intending pilgrims (Aazmeen) to make payment of
Umrah charges in monthly installments. Its salient features are:
It is free of interest and markup.
Using this scheme family, relatives and household servants can be sent for
Umrah.
Around 2500 Aazmeen are to be sent for Umrah every month.
Lucky winners of the draw are duly informed by their respective branches.
Total package for Aazmeen from Karachi is being Rs. 45,000. Aazmeen from
Lahore and Islamabad will have to pay an extra Rs. 3,000/- for Airline fare.
Umrah packages are of 10 days duration. The charges include Airline return
ticket.
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Fee Visa, family accommodation and traveling within Saudi Arabia (Jeddah to
Makka, Makka to Madina and Median to Jeddah).
Application for whole Family/Group can be filed through a single Application
Form. All applicants of a family/group are sent for Umrah even if only one
member of that family/group is declared successful in the draw.
Due to any reason if Umrah Applicant needs to withdraw his/her application,
he/she will given a refund of all money deposited through installments till that
time.
At the time of submitting the application Aazmeen has to deposit Rs. 2,000 per
person as first installment. Rest of the money is to be deposited through monthly
installments of Rs. 2,000/- person on every 5th day of the month.
If an Applicant wins in the draw he/she is required to pay the balance amount
through monthly installments on returning from Umrah.
Aazmeen have to submit a copy of their NI Cards and Passports with the
application.
Applicants have to deposit the monthly installment using deposit slips still 5th of
every month. Defaulters will not be included in the draw.
2.5.3 Master Cards
The customer can now become the holder of a true Credit Card here in Pakistan. Allied
Bank under license from Master Card International, U.S.A. issues its Master Card to
anyone meeting the eligibility criteria. With the Allied Bank Master Card the customer is
assured of a service meeting the highest international standards maintained by Master
Card.
The Allied Bank Master Card helps the customer pay without the complications of cash
or checks. It doesn’t cost the customer anything if he pays in full within the due date, but
if he decides to spread the payments over several months a service charge @ 2.50% per
month is charged. Allied Bank – Master Card is safer than cash and simpler than checks.
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The customer has been an account holder with the Allied Bank to apply for the Allied
Bank – Master Card that is available to the customer for an initial fee of Rs. 2,000/- (Rs.
500/- membership fee + Rs. 1,500/- annual fee). Once the customer obtains his card, he
simply presents it at Shops, Supermarkets, Hotels, Pharmacies, Nursing Homes,
restaurants, Petrol Pumps and hundreds of other establishments which display the
familiar Master Card sign throughout Pakistan and abroad.
Once purchases are made, the customer signs a voucher and that’s it he is not required to
take extra troubles. Every month the customer receives a statement showing details of
transactions, outstanding and the minimum amount due. The statements also give the last
date for payment so the customer can avoid paying service charges.
In order to avoid disruption in use of the card, it is essential that a least minimum payable
amount of the bill be paid regularly. In case the required payment is not received the
operation of the Master Card is automatically, suspended by the system. In such case, the
card is activated after receipt of overdue payment only.
2.5.4 Allied Tahafuz Deposit Scheme
Brings the customer unparalleled life insurance covers along with attractive monthly
profit. Minimum Deposit amount – Rs. 50,000/- or multiples thereof. Insurance cover up
to - Rs. 5,000,000/. As Competitive rate profit. The features of this scheme are:
Prospective client who will maintain a return free deposit for at least 3 months
shall eligible to avail interest free/mark-up free finance.
Payment of profit on monthly basis, automatic renewal on face value.
Life insurance up to 5 times of the customer’s deposit amount with no extra cost.
Premium shall be paid by the bank.
Full payment of claim in case of – Death – Permanent total Disability.
Eligibility Age – 18 to 64 years.
No medical examination for:
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- Deposit up to Rs. 500,000/- and age up to 60.
2.5.5 Allied Karzas Scheme (No Interest/Markup)
Allied Bank moves a step forwards by introducing interest free banking through Allied
Karzas Scheme. The aim of this scheme is to provide an opportunity to the depositors to
take advantage of a real Riba Free economic environment and avail following:
Prospective client will maintain a return free deposit for at least 3 months shall be
eligible to avail interest free/mark-up free finance.
Deposit amount Rs. 100,000/- and multiples thereof.
Minimum deposit period, 3 months with automatic rollover facility.
Premature encashment allowed, without any penalty/charge.
Minimum deposit period for eligibility of finance, 3 months.
Maximum period of finance, 6 months.
Maximum period to avail finance, 12 months from the maturity of deposit.
Every month (30 days) completed by the deposit shall be taken into account for
calculation of entitlement of finance.
Finance proposal processing fee Rs. 100/- (non-refundable) plus documentation
cost on actual basis.
In case of default/delay in repayment @ 0.055% per day (20.075% p.a._ to be
placed in charity A/C.
Formula for calculation of entitlement of finance.
- Same amount of finance for half the period of deposit or
- Same period of finance for half the amount of deposit.
2.5.6 Other Products
Home Remittances
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The Bank having a network of 755 branches all over Pakistan, undertakes to
provide safe and instant payment of remittance from expatriates, routed through
designated foreign exchange companies and correspondent banks with whom
special arrangements have been made in this regard. Through the Allied Express
Services, ABL ensures that beneficiaries’ Accounts in ABL branches are credited
with in 48 hours of receiving home remittance information from overseas.
Hajj Services
The Bank serves the intending pilgrims by helping them in performing this
religious obligation. The Hajj forms and other related services are provided by the
bank. However, the terms and conditions for accepting the Hajj forms from
intending pilgrims are in accordance with the Hajj Policy announced by the
government, each year. Hajj applications are available with all branches during
Hajj season, immediately after the Hajj policy is announced by the Government of
Pakistan.
Utility Bills
All branches of the Bank collect utility bills of electricity, gas and telephones.
For convenience of the customers, Utility Bills are collected by the branches
during banking hours and also in he evening banking on all working days. Bills
can be paid through cash or checks. Consumers may drop bills with crossed
checks into a drop box available at the branches under “Checks Drop-in” system.
Agricultural Finances
Bank under Agricultural Financing Schemes envisaged by he State Bank of
Pakistan extend short, medium and long term, farm and non-farm credits. The
farm credits are extended for production (inputs) and development purposes. Non-
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farm credits are allowed for livestock (goats, sheep and cattle), poultry, factory
including social forestry and fisheries (inland and marine excluding deep sea
fishing).
Lockers
Allied Bank Lockers are available in three different sizes Small, Medium and
Large on a yearly fee. Locker holders need not have an account in the Bank.
Import Export Business/Trade Finance
ABL Provides highly efficient trade finance services for import/export business
for our clients/customers through large number of authorized branches where
trained and motivated staff is available to handle the business on behalf of
customer.
Allied Bank Rupee Travelers Checks
Carrying cash to strange alien location can prove to be risky as a single incident
can render one without monetary backup of any sort. Hence banks introduce
traveler’s checks in order to protect against any contingency.
Seasonal Finance
Running Finance is a short-term loan allowed by the bank for a
period of one year. The running finance account can be operated and
daily sale proceeds can be deposited into the account. The markup is
recovered on the products of daily outstanding balance. The running
finance is suitable for meeting day-to-day financial needs of the
business.
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Cash Finance is allowed against pledge of goods. The delivery of
goods is made against payment.
Demand Finance is disbursed in lump sum or in accordance with the
agreed disbursements schedule and it is repayable as per the agreed
installments, which could be monthly, quarterly, biannual or annual.
3. ORGANIZATONAL STRUCTURE OF ABL
Organizational Chart of ABL
Note: Organogram of ABL is given in Annexure I.
3.1 OVERALL ORGANIZATIONAL STRUCTURE OF ABL
The day-to-day affairs of ABL are managed by Management of ABL who has to report to
Board of Directors of ABL.
Their reporting lines are given as follows:
Head Office
Regional Offices
Zonal Offices
Branches
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Management of ABL is given as follows:
Asim Tufail (Group Chief, Consumer & Personal Banking)
Fareed Vardag (Chief Risk Officer)
Iqbal Zaidi (Group Chief, Compliance)
Mohammad Abbas Sheikh (Group Chief, Special Assets Management)
Mohammad Aftab Manzoor (Chief Executive Officer)
Muhammad Jawaid Iqbal (Group Chief, Corporate & Investment Banking)
President
Senior Vice President
Vice President
Executive Vice President
Senior Executive Vice President [rosodmemtPresident
Regional Head Managerxecutive Vice
President
Branch Manager
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Muhammad Shahzad Sadiq (Group Chief, Audit & CRR)
Muhammad Yaseen (Group Chief, Treasury)
Mujahid Ali (Group Chief, Information Technology)
Shafique Ahmed Uqaili (Group Chief, Human Resources)
Khawaja Mohammad Almas (Head, Core Banking Projects)
Tahir Hassan Qureshi (Chief Financial Officer)
Tariq Mehmood (Group Chief, Operations)
Waheed ur Rehman (Company Secretary)
Zia Ijaz (Group Chief, Commercial & Retail Banking)
3.2 ORGANIZATIONAL STRUCTURE OF ABL G - 9 Branch
In ABL G-9 Branch, main authority lays with the Branch manager, Mr. Muhammad
Tanvir who has to report to Regional Head Officer. Mr. Tariq Abassi is the Customers
Service Manager who reports to the Branch manager. Customers Service Manager
furthers looks at the various departments or desks of the branch and rest of the staff has to
report to him.
Note: Organogram of ABL G-9 Branch is attached in Annexure II.
3.3 VARIOUS DEPARTMENTS OF ABL
In the same branch different departments of ABL are working. So I got the opportunity to
know briefly about every department.
3.3.1 IT Department
In ABL, IT department performs several duties that are as under:
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I. Daily Transactions
To record all the transactions in case of deposits made by the people and also to
record all the withdrawals made by the people or customers. Each transaction has to
be recorded in its appropriate head of account with the help of prescribed codes.
II. Vouchers
To record all the vouchers made by the remittance department. Remittance
department have to prepare debit and credit vouchers for about every transaction
recorded in their department. Then these vouchers are sent to computer operator to
record those in computer.
III. Advices
To record all advices received from other branches. Most of the-inter branch or intra
branch- remittances are subject to ultimate receipt of advices from the corresponding
branch to materialize the transactions. These advices also have to be recorded in
computer.
IV. Statements (End Of Day report)
To close the daily record a number of statements have to be printed out, like:
Day’s transactions (sequence)
Overdrawn facilitated a/c statement
Markup sheet
Inter branch transactions
Detail of PLS and Current a/c
• Day’s transactions (a/c wise)
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• Operative, Dormant, Inoperative and Unclaimed a/c
All ATM transactions
Detail of GL entries (official & non customer transactions)
Summary of all a/c (debits, credits & balances)
Profit due, transferred, disbursed, etc.
3.3.2 Deposits Department
Accounts Department of ABL deals with deposits of ABL. Bank borrowing funds from
outside parties is more important because the entire banking system is based on it.
Receiving of deposits is a basic function of all commercial banks. Commercial banks do
not receive these deposited for safekeeping purpose only. When the bank receives the
amount of deposited as a depositor, it becomes the owner of it. The bank may therefore
use these deposits, as it deems appropriate. But there is an implicit agreement that the
amount owned by the bank will be paid back to the depositors on demand or after a
specified period of time.
The borrowed capital of the bank is more than the bank’s own capital. Bank’s borrowing
is mostly in the form of deposits. These deposits are lend-out to different parties. Larger
the difference between the rate at which these deposits are borrowed and the rate at which
they lend-out the greater will be the profit margin of the bank. Larger the funds lend-out
the greater will be the return earned on them and greater the amount of return on these
deposits earned greater will be the profit for the bank. It is because of this interrelated
relationship. Deposits are referred to as the “life blood small” for any banking sector.
There are numbers of account that ABL offers to its customer keeping in mind their
needs and dealing as follows:
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I. Saving Bank Account P & Loss Account
In Pakistan the saving Bank accounts are know as profit and profit and loss sharing
accounts (PLS A/C) fowling the illumination of bank. The owners of such account are
not allowed to withdraw money more than once are twice a week. In case of
withdrawal of large sum, the depositor is required to give to prior notices a week or
two. Thus the bankers are not required is always available to bank for giving to loans
to their customers. Thus these deposits also serves as source of credit certain by the
commercial banks.
The rate or profit on this type of account varies from time to time. All the commercial
banks declare the rate of profit every year that is paid on these accounts on the basis
of their monthly credit balance. The bank will determine the proportion of profit & its
decision will be final. Profit will be determined on daily product basis while it will be
paid on monthly basis & will be paid on the minimum balance between the first day
& last day of the month. Zakat will be deducted on the exceeding amount as
exempted from the Zakat deduction. Taxes will be imposed according to the rules &
regulation. In Pakistan post offices & national saving centers also maintain this
savings bank account to encourage saving habits among the people.
At the time of opening this account, a minimum amount of Rs.1000 is to be
deposited. Subsequently the account is opened & account number is located. The
depositor is given a chequebook.
The depositors who are wishing to close his account are required to present his
cheques to the bank in order to draw the credit balance and to close the account.
And this type of account a customer can open joint account also, which can be
operated by anyone.
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II. Current Account
There is no limit of withdraw of money from these accounts. In practice the bankers
do not allow any profit to such deposits in Pakistan. The customers are required
maintaining the minimum credit balance in their account in case of failing incidental
charges are recovered from defaulters. This is because the depositors may withdraw
current deposits at any time and as such the bank is not entirely free to employ such
deposits. In general, the bank allows the overdraft facilities to current account holders
& the prevailing rate of markup is charged from these customers.
In ABL the minimum amount required to open the current account is
Rs. 1000. No profit is paid to account beside this that the account holder has the
facility to taking s much money as he wants.
Individual account is opened in the name of the single personal one person on whose
name it is opened only conduct it. While two opens joint account and partnership
account are more person and the bank fallow their instructions for the conduct of the
account. Similarly limited companies can also open their current account.
III. Fixed Deposit Account/Term Deposits
These deposits are also called as time deposits because these deposits are based on the
fixed duration. The period for which these deposits are kept with bank are ranged
from seven days to ten years in light of the agreement between the customer and the
banker. The profit allowed on these account depend on the duration longer the
duration of the deposits the higher will be the rate of profit.
The operation of fixed account is different from saving & current accounts. Every
time money is deposited with the bank an application from filled and the bank issue a
fixed deposit receipt for amount deposited along with specific period. Fixed deposit
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receipt is given to the depositor and the bank retains the counterfoil of the same
receipt.
Fixed term deposits may be in the joint names of two or more person. The payment to
one of those people will not discharge by the bank without the authority of others.
Opening and Operation Of Bank Account
As discuss earlier there is a prescribed procedure for opening different types
of account. Following steps are followed while opening a new account.
a. Application from for Opening of Accounting
A person who wishes to open a bank account is required to complete this from
the personal information is to be furnished. The application signs the
declaration to effect that he has understood the rules and regulation of the
bank.
b. Introduction
As required by the banking law the new customer needs to be introduced by
the account holder of the same branch where the account is being opened. The
manager or any other bank officer may introduce the new customer if they
know them personally.
c. Signature card
At the time of opening an account a specimen signature card containing two
signature of the customer is required which the manager of the branch attaches
with application form. During the operation of account the signature is
verified when the cheque is presented for payment.
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d. Cheque Book
After completing formalities for opening saving and current a cheque book is
issued to the customer for withdrawing cash from his or her account at the
time of need. The cheque contains minimum 25 pages & maximum 50 pages.
The bank also charges excise duty on cheque book.
3.4.3 Advances & Credit Department
The basis function of the bank is to accept deposit and lend money to the borrowers
against a spread so to be able to give some profit to the depositors as well as to earn profit
for the bank.
While lending the money to the borrowers the bank should observe the following lending
principals:
I. Safety Principle
It means that the lended money will come back along with interest or service charges
etc. The borrower should not invest the money borrowed in unproductive or speculative
business.
II. Liquidity Principle
The money which has been lended to the borrower should be returned to the bank on
demand or as per repayment schedule provided by the client. The sources of repayment
should be clear and definite
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III. Purpose Principle
The purpose of the advances should be legitimate and productive. It should be ensured
that the banks, funds are not being utilized for speculative business. The credit
restrictions by the central bank should not be violated & it should also be ensured. It is
always beneficial for the bank to finance for short-term requirements.
IV. Profitability Principle
The end result of every business activity should be to earn some profit. Similarly the
bank must get some profit out of the activity of lending so that the depositors could get
their shares as well as the shareholders could earn something for their investments.
V. Security Principle
The proposal should be dealt on its merit not on security. The security should be
considered a safety for the bank only in case of unexpected emergencies. All the
relevant documents of securities must be obtained & got valuation of the property or
any other security should be assessed correctly.
VI. Spreading of Risk Principle
It is always safe for the bank to spread the risk in large number of borrowers instead of
loaning huge amount to few big shots, it is better to obtain different types of securities
instead of concentrating on one security.
VII. National Interest and Suitability Principle
It is Bank’s moral as well as legal obligation to ensure that no loaning is running
counter to national interest. It is also bank’s duty to ensure that their lending policies
are not against the social conditions or bindings.
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VIII. Lien
Lien is the bank right to with hold property until the claim on the property is paid. The
bank looks at their lien as a protection against loss or overdraft or any other credit
facility. In ordinary lien the borrower remains the owner of the property, but the actual
or constructive possession remains with the creditor or bank though the borrower has
no right to sell it.
IX. By Cash Credit
In this the bank lends money to the borrower against tangible security. The total amount
of the loan is not paid in one installment. The borrower has to pay markup on the
amount borrowed. Cash credit is favorite loan for large commercial & industrial
concern.
X. By Overdraft
This the most common type of bank lending. When a borrower requires temporary
accommodation, ABL allows its customer to withdraw an excess of the balance form
their account, which the borrowing customers have in credit and thus called overdraft.
This facility is given to regular reliable & well-established customer. When it is against
collateral securities, it is called “Secured Overdraft” & when borrowing customer
cannot offer any collateral security except his personal security then the
accommodation is called “Clean Overdraft”.
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Types of finance
I. Short Term Finance
Allied Bank Ltd. receives the saving of the people and lends it for short term to its
customers. Short-term finance is generally given for a period of one year or less in
duration.
II. Medium Term Finance
The duration range of the intermediate term finance is from one year to three years. It is
also called term loan. Intermediate term finance is usually given for the expansion of an
existing business or for the purchase of new equipments.
III. Long Term Finance
This type of finance is required for the period of more than five years. Long-term
finance is generally given for the compilation of big projects, for the construction of
building and for the purchase of machineries.
IV. Producer of Applying for Loan
Any customer who applies for loan should have an account (usually current account)
with ABL branch concerned. That account must be in running position. When approval
from head office is given, branch gives tern & condition to the party. Bank does not
advance 100% loan against a security, rather the profit margin is different in different
type of loan.
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3.4.4 Remittances Department
Another important department in ABL is Remittances Department. The remittances
department transfers the funds from one bank to other bank and from one place to another
place.
In remittances department the collection take place. The ABL made payment of only
open cheques on the counter and prohibits the payment of crossed cheques. ABL
transfers money from one place to another by the following means:
I. Mail Transfer
When a customer requests the bank to transfer his money from this bank to any other
bank or the branch of some other bank, the first thing he has to do is to fill an
application form. In which he states that he/she wants to transfer the money from this
bank to that bank by mail. If the customer is the account holder of the bank, operating
personal will proceed further with steps like:
Writing a debit voucher for a/c holder’s a/c
Preparing an advice in favor of stated bank/branch
Writing credit voucher for GL
Mail the advice
If the customer is not the account holder of this bank, then firstly, he has to deposit the
money and than above procedure will be adopted to transfer his money.
II. Telegraphic Transfer
With the changing requirements of the customer, ABL has introduced the fastest
transfer of money. The sender is required to apply through a form in which he will give
all the necessary details about the sender and beneficiary. The sender deposits the
money to be transferred plus bank charges at the bank counter. The remittances
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officials send a telegram to concerned branch with specified code words and the
receiving branch makes payment to the beneficiary. Vouchers are sent by ordinary mail
to keep the record. On TT, no excise duty is charged only commission and telegram
charges are charged.
III. Pay Order
Pay order is the most convenient simple and secure way of transfer of money. It is
issued by, drawn upon and payable by the same branch of the bank. It is neither
transferable nor negotiable and as such it is payable to the payee named there in. The
following are the parties to a pay order.
Purchaser is a person, firm, company or local authority.
Issuing/paying branch is one which issues/pays on presentation.
Payee is a person named there in.
IV. Demand Draft
Demand Draft is another way of transfer of money from one bank to another bank.
Unlike pay order, a form is required to be filled for the issuance of the demand draft in
which necessary particulars about the beneficiary and sender are given. The sender
deposits the amount of DD plus commission and other charges on the bank counter,
from where he is given a receipt and in accordance with this receipt he is issued.
The following are the main essential of draft:
a) It is a Negotiable Instrument.
b) Filling a form and depositing the amount written on it prepare 2} Draft.
c) It is a written order to its branches or to another bank to pay the stated amount on
draft.
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3.4.5 Cash Department
This is the most important and critical department in a Bank. There are two basic
functions performed by the cash department. These are
I. Receipts
An individual who has account in the Bank can deposit money in his account. For
deposit of the money the individual has to fill the deposit slip in which the account
holder writes his name, Account number, amount of the money both in figures and in
words.
After filling the deposit slip the Cash amount along with the deposit slip is submitted
with the cashier. The cashier collects the cash and counts it and after verification the
cashier stamps the deposit slip. One part of the deposit slip is given back to the
customer and the other part of the deposit slip remains with the bank for the record
purposes.
The cashier also record the deposits made by the customers in credit sheets daily. The
deposits of all customers of the bank are controlled by mean of ledger account. Every
customer has its own ledger account and has separate ledger cards in which his / her
total record is kept.
Bill collection is also one of the main functions of bank. Cashier has to prepare a list of
bills’ serial number, a copy of which is to be sent to the corresponding organization.
II. Payments
The procedure of clearance of a cheque or payments is as following. First of all the
customer presents his cheque to the cashier. The cashier records the account number
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and the amount, which is to be drawn. Then the cashier check the cheque number in the
computer for the verification whether the account holder has such amount in his
account which he is demanding or not. If the computer passes the cheque, the Passing
officer signs the cheque and sent it to the cash counter then cashier pays the written
amount to the customer and then in the end cashier records the amount paid in
computer.
3.4.6 Foreign Currency Department
Like Pak rupees account the foreign currency has many accounts like
Saving account
Current account
Term deposit account.
The bank deal in three type of foreign currency account:
1. Dollar
2. Euro
3. Pound
The account is open with 500 dollar if it is less 5-dollar per month is deducted. For
opening the account NIC & introduction is required of the same bank. If any person
wants to import goods from foreign, an account is required and for international trading
the FC is needed. ABL provide foreign currency on Pak rupee at booking rate and the
central office sent Rates
In foreign currency department the remittance is sent through Foreign Telegraphic
Transfer. The account holder can sent the amount in foreign bank account. If any
transaction is made the daily report is given to the central office Karachi daily.
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Different accounts can b open like joint account or company account. The thankful letter
is sent for opening the foreign currency account to account holder and introducer. When
any transaction is made the bank inform stock exchange daily. The foreign currency note
is counted and recorded in the cash memo book. The people in the foreign country sent
the amount through S.W.I.F.T. Weekly and monthly report of all the transaction is given
to the stock exchange.
Cheque book is also issued to the account holder & the foreign currency Account number
is given to him. In this FBC & FBR is done. Debit Credit Voucher is used. The charges
are deducted while closing the foreign currency account. And the cheque book is return
while closing the account.
The branch sent excess foreign currency to its main branch. If any branch needs foreign
exchange they sent to this branch.
3.4.7 Clearing Department
In clearing process, if the account holder of ABL receives the cheque of other bank like
City Bank, Habib Bank Limited etc, and he submits it in ABL branch to be cashed. At the
same time the clearing process starts. First the bank name. Cheque number and the
amount are written in the register. After this three kind of stamps are required first bank
name stamp, secondly clearing stamp of next date and If the cheque is not local then the
inter city clearing stamp is required.
Some cheques are local and some are outstation. The institution N.I.F.T. provides the
services in clearing the cheque. They send the different cheque to different banks. The
N.I.F.T service is only in few cities. The cheque of inter city is send through N.I.F.T. And
where, the N.I.F.T service is not available so the cheque is sent through T.C.S.
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The clearance of cheque is informed through advice. Some cheque is not passed so they
should return so Rs. 200 is deducted and if the cheque is inter city then the postage
charges is deducted. For this purpose the Debit & Credit voucher is used. When the
cheque is cleared the today stamp is required. Some cheque is drawn on ABL. This is
called outward clearing. These cheques will be entered in the outward clearing register.
And the advice is sent for the clearance of cheques. The account holder account is
credited.
OBC means the cheque of other banks. When they sent OBC the OBC is credit & OBR is
debited and the advice is made on that time, one copy is remain in the bank and the other
copy is sent to the related branch. When they realized the opposite entry is made. It is
entered in the OBC register. The income A\c commission is credited, and postage.
4. STRUCTURE AND FUNCTIONS OF FINANCE
DEPARTMENT OF ABL
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4.1 STRUCTURE OF FINANCE/ACCOUNTS DEPARTMENT
ABL has separate departments for accounts and finance. Both of these departments are
controlled by CFO. Accounts Department has further Accounting and Operation
Department, Accounting & Audit Department and Control Department whose officers
report to CFO. Finance Department has further Portfolio Management Department and
Investment and Finance Planning Department whose officers also report to CFO.
Portfolio Department has further sub-department of lending who report to Portfolio
Officer. Investment and Finance Planning Department has further sub-department of
Funds Raising who report to Financial Planning Officer.
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Note: Organogram of Finance and Accounts Department of ABL is attached in Annexure
III.
4.2 FINANCE & ACCOUNTING OPERATIONS
4.2.1 Generation of Accounting Information
Finance and accounting policies and procedures are strictly followed. With them come
new departments and divisions to help management more effectively focus and control
the bank’s resources e.g. fund raising and fund management division, funds allocation
department, portfolio management department, personal financial services division,
investment and funding group etc. These new departments and divisions require the
appointment of bank management and staff that can devote more time to surveying
customer surveys, and modifying old service offerings to reflect changing customer
needs. The technology of financial services production and delivery has shifted more and
more in recent days towards computer-based system and electronic service delivery.
Automated bookkeeping has reduced the time managers spend in routine operations, thus
allowing greater opportunity for planning new services and new operations.
4.2.2 Recording of Accounting Information
Accounting information handle by preparing journal, ledger and trial balance and
information recorded electronically. The preparation of financial statements in
conformity with approved accounting standards requires the use of certain critical
accounting estimates, judgments and assumptions that affect the reported amounts of
assets and liabilities and income and expenses. It also requires management to exercise its
judgment in the process of applying the accounting policies. Estimates and judgments are
continually evaluated and are based on historic experience and other factors, including
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expectations of future events that are believed to be reasonable under the circumstances.
Revisions to accounting estimates are recognized in the period in which the estimate is
revised and in any future periods affected.
4.2.3 Uses of Accounting Information
In the process of applying the Bank’s and its subsidiary’s accounting policies,
management has made the following estimates and judgments which are significant to the
financial statements:
Classification of investments
Valuation of derivatives
Impairment
Recognition of taxation and deferred tax
Provisions
Accounting for post employment benefits
Calculation of depreciation, amortization and revaluation of operating fixed assets
4.3 ROLE OF FINANCIAL MANAGER
Financial manager mainly emphasize on maximize shareholder’s wealth. All important
decisions related to finance and investment that must improve the success of the
organization. Financial manager also perform several tasks as follows:
Advice institutions on high net worth individual customer on investing funds,
managing assets, reorganizations, raising capital.
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Purchase short term assets (mainly accounts receivable) from business in
exchange for supplying temporary financing.
Purchase short term credit to improve commercial use.
Offer saving deposit plans and housing related credit predominantly to
individual.
Execute customer buy and sell orders for marketable securities and exchange
traded financial futures and option contracts and provide other full service
brokerage functions.
Control of the composition of a bank’s assets to provide adequate liquidity
and earnings.
Control over a bank’s liabilities, usually through changes in interest rates
offered to provide the bank with adequate liquidity.
Invest in corporate stock to help finance the start of new branches to support
the expansion of existing business.
4.4 TECHNICAL METHODS (USE OF ELECTRONIC DATA)
Any new technology in banking sector has its own effects because new technology
indicates the improved operation and performance of the sector. Introduction of new
technology has an extensive effect on customers. So the quick adopters of new
technologies have an edge over others in the industry. Allied bank use Linux and UNI
BANK. Allied bank uses new technology in different department, which improved the
quality of services of that department.
4.4.1 Cash Department
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Cash department involves receipts and payments process manually. But now ATM is
used which has affected the cash department in some extent.
Before
Before ATM and online technology ABL was able to provide only 8 hours
services for payment.
Customers were enforced to wait in huge lines for getting payments.
To check the total amount of account customer had to give application to the bank
Needs number of cashier and clerks
Everything took a long time.
After
Now ABL can provide 24 hour banking to its customers so that customers can
withdraw money at any time.
Now customers have no need to wait for the payment in long queues.
When customer withdrawal the money and mini statement of his account is shown
to the customer.
ATM technology reduces the extra burden on the cashier, and now bank don’t
need extra cashier and clerks
4.4.2 Remittances Department
The remittances department transfers the funds from one bank to other bank and from one
place to another place. ATM and online banking has also effected the remittances
department and increased its efficiency.
Before
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Before ATM if customer wanted to transfer his fund to other bank account or
other branch account, then he had to submitted a cheque which takes a lot of time
for clearance process
Before online banking to transfer the funds to other braches or to other banks
bankers had to use demand draft, telephonic transfer pay order and mail transfer
etc.
After
Now customer can transfer money from his account to any other account at any
time any where in Pakistan, without waiting for the clearance process.
Through online banking bankers has no need to send cheque or money through
demand draft or telephonic transfer etc. the banker can access any branch and
transfers funds to it with in no time.
In online transaction the account holder has account in another bank. The account
holder sent the amount to his account. Online transaction is made only ABL to
ABL. So they can transfer the amount, they can cash the amount they can find the
balance & receive the statement of his account in another branch. In this type of
transactions the application is filling for this purpose.
Date
Name
Remote
Account number
Amount
4.4.3 Online Banking
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Allied Online Banking is a unique service being offering from Allied Bank. Through this
service, account in Allied Bank is available to from any of branches countrywide. ABL is
the first bank in the history of Pakistan which connects with each branch of it through
online banking. These branches can offer the facilities of remote cheque encashment,
cash deposit, funds transfer, balance enquiry and statement of account printing to
customers of other online branches besides issuance of ATM cards to their own account
holders.
Rules
With the introduction of online banking services in branches, the computerized
operations of the banking system in branches has become even more sensitive
that’s why the top management has set some rules and given some guidelines to
each and every branch to be followed:
1. Only authorized persons should be allowed access to the computer system of the
branch. Physical access to the branch server machine should especially control.
All maintenance activity, whether by IT Centre personnel for trouble-shooting or
by authorized service providers for hardware / communication support should be
documented. For this purpose, a separate register should be maintained in the
branch where in the name / identity of the person concerned along with the date
and time of such activity should be recorded.
2. Personnel of the branch who have been authorized to use the system to enter
transaction or carry out end of day processing should not divulge their password
to anyone under any circumstances, in case, it is felt by the password holder that
his password has become known to someone else, it should be changed
immediately.
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3. It is the responsibility of the branch to take back-ups on daily basis and to ensure
that these are sent to the IT Center as per laid down procedure, Taking of backup
or restoring of backup of the branch based system should never be allowed to be
carried out by and outsider, Under no circumstances, should a backup be carried
out of the branch by and unauthorized person, The dispatch of backup of IT
Center/Division should only be handled by designated couriers in sealed
envelopes.
4. Use of PC workstations having removable drives and/or modem is not allowed,
Internet access / Internet mail I not permitted on any workstation of the branch
system. Strict compliance of this must be ensured.
5. In case of any problems related to end-of-day processing or in respect of
hardware/ software, the matter should invariably b referred to the IT Centre.
Attempts to the fix problems without the knowledge of IT Centre staff must b
avoided.
Transaction Amount Limits
1. Cash Withdrawals: As per standing instruction the online transactions are
restricted to a maximum of Rs. 500,000/- per instance for Cash Withdrawals.
2. Third Party Cheques Encasement: The customers can encash third party
cheques of an account holder of Allied Bank subject to a maximum of Rs.
25,000/- per instance.
3. Funds Transfer: The maximum amount is restricted to Rs. 500,000/- for funds
transfer except when the customer is transferring funds from the branch where
his account is maintained, to any other account in any ABL branch.
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4. Deposit of Third Party Cheques for Instant Credit: The account holders can
deposit third party cheques, either drawn in his favor or bearer, at the branch
where he holds an account for instant credit.
The maximum value of each third party cheque, which is being deposited, should
not exceed Rs. 500,000/- and utmost precautions must be undertaken to ensure
authenticity and genuineness of the third party cheques.
Physical Presence Of Account Holder
It is essential for the account holder to present a cheque in person at the remote
branch for encashment from his account at the parent branch, The presence of
customer is necessary in case of Funds Transfer transactions, however customer
presence is not necessary for cash deposit or third party encashment of cheques
up to Rs 25,000/- .
Fund Transfer
The customers will be allowed to transfer funds from an account in the local
branch to an account in the remote branch and vice versa. In this case the “from”
account must b Customer’s own account whether in the local branch or the
destination branch and a cheque for the transfer would be required to be
presented.
Supervision Of Transactions
All cash and Fund Transfer transactions require immediate online supervision at
the local branch before being transmitted to the remote branch for acceptance;
Supervision requires re-entry of all transactions particulars by the Supervisor,
Transactions relating to Balance Enquiries and Display of statements of account
do not require and supervision
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KYC / Customer Due Diligence
The banks are required to perform KYC / customer Due Diligence as per
Prudential Regulation issued by State Bank of Pakistan, Accordingly, all
abnormally high / suspicious transactions particularly cash transactions, are
required to be examined and reported to the concerned departments,
4.4.4 Automated Teller Machine (ATM)
Allied Bank has a vast network of over 460 ATMs installed in over 130 cities, which
continues to grow at a rapid pace.
The ABL Automated Teller Machine (ATM) launched in 1995 is a means of providing
customers with 24 hour cash convenience. Over the years its success has encouraged the
bank to expand its network to major cities. In the past six years, ABL installed this
convenience in Karachi, Lahore, Hyderabad, Islamabad / Rawalpindi, Faisalabad,
Multan, Gujranwala, Quetta, Sialkot and ISLAMABAD. Further expansion plans to other
cities are on the way.
Debit Card Facilities
1. Funds transfer on ATM
A cardholder can transfer funds on the ATM from his account to any other
account in any branch of Allied Bank up to a maximum of Rs. 100,000 per day.
2. ATM Daily Withdrawal Limit
Previously the card holders were allowed to withdraw Rs 25, 000 per day, which
has now been enhanced as follows:
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ATM Cash Withdrawal Limit:
Per transaction limit Daily limit
Rs. 25,000 Rs 100,000
3. Debit Card on POS
The debit transactions on POS were previously up to a maximum limit of Rs
50,000 per day which has not been enhanced to Rs 100,000 per day.
4. Other Enhancements
For the convenience of the Cardholders the following enhancements have also
been incorporated:
Screens have now become bilingual and the card holder has the option to
operate the ATM in English or Urdu language.
Fast cash maximum amount, which was previously Rs. 10,000, has now been
enhanced to Rs. 25,000.
Guide Lines for Standardization of ATM Operations.
1. Cash Balancing Procedure
The actual cash in ATM is to be balanced with ATM Journal Roll, in order to
identify the suspect transaction
Following steps must be taken before end of day
Put the ATM in Supervisory mode.
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Obtain ATM Cash position on ATM Journal Roll
The physical Cash in ATM must b equal to the amount appearing in the ATM
Receipt. Under no circumstances the physical Cash should be placed shot
in ATM while checking the cash in ATM, cash in the Reject Bin should also be
checked and taken into account and the print in ATM journal for Reject Cash
should also be verified.
In case the physical / actual cash in AT M is more than the cash appearing in the
journal then it means that customer’s account has been debited without cash
disbursement, now the individual suspected transactions are to be identified on
the basis of the verification from ATM Journal Roll, Branches should
immediately complete process of “Automatic Credit” as per procedure and time
frame mentioned below.
2. Procedure And Timelines For Automatic Credit
Same Bank-Same Branch:
Branch to credit customer account on next business day.
Same Bank-Different Branch (within same city)
ATM acquiring branch after verification of the transaction from their ATM
Journal Roll, must issue Credit Advice to the card issuing branch (the branch from
where the card was issued / account of the card holder is maintained) on next
business day.
Same Bank – Different branch (different cities)
ATM acquiring branch after verification of the transaction from their ATM
Journal, Roll, must issue Credit Advice to the card issuing branch (the branch
from where the card was issued / account of the card holder is maintained) on
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next business day. This whole process should be completed within maximum 4
business days.
ABL ATM Branch and Other Banks / Switches.
On verification by ABL ATM Branch (acquiring branch) from the PAN/ Card
number, if it appears that the cash has been retracted against the ATM card of a
bank other than ABL (First six digits of the ATM card represent the bank, in case
of ABL IMD/ Bank no, is 589430) the ABL ATM branch, after verification from
the ATM Journal Roll will issue a credit advice of the suspected transaction in
favor of Bath Island Branch, Karachi (0949) and A list containing identification
number of the different banks (IMD) is enclosed as annexure
They will send the Credit Advice through TCS to ATM Wing COK along with a
copy o the ATM Journal Roll as an evidence, ATM Wing upon receipt of the
credit advice from the ATM branch will credit the same in settlement account and
will issue a Debit.
Authority to the respective switch/bank authorizing them to Debit ABL’s Nostro
account against the suspected transaction for credit to the other bank’s ATM card
holder account.
3. ATM Cash Replenishment
ATM cash replenishment is done on daily basis, which is joint operation.
The locking / opening of ATMs for replenishment is under dual control of the
officers assigned by the customer services manger.
Following steps are performed before ATM cash replenishment:
a. Putting ATM in supervisory Mode.
b. Part of ATM Journal Roll for same date shall be taken out and signed by
bother officers.
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c. Logging in as Supervisor on UNIBANK running Option “06” for
calculation of cash replenishment position which shall b signed by both
officers and attached with vouchers.
All remaining physical cash in ATM shall be taken out and counted.
Fresh currency notes shall be fed in to ATM according to assigned branch limit.
4. Working of ATM
It is a high speed mode of transporting data from one branch or bank to another.
With ATM, a customer able to transmit data in small data packets over a single
network. It can carry traffic at speeds up to 622 Mbps. Data is transmitted in fixed
length cells, which gives it advantages over other methods of data transfer. ATM
is a cell switching network which takes data and breaks it into 48 bytes. These
bytes are then affixed to a 5 byte header which will contain the source and
destination information. The use of cell switching and multiplexing is employed
and the information is routed in a calculated manner. This method makes it so that
transmission is constant and has a guaranteed capacity.
Following diagrams will better help in understanding the working of ATMs:
Use cases: A use case describes a sequence of actions that provide something of
measurable value to an actor and is drawn as a horizontal ellipse.
In above diagram four main use cases has been drawn
1. System startup
2. System shut down
3. Session
4. Transaction (Transaction is an abstract generalization. Each specific concrete
type of transaction implements certain operations in the appropriate way. The
flow of events given here describes the behavior common to all types of
transaction. The flows of events for the individual types of transaction
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<withdrawal, deposit, transfer, inquiry> give the features that are specific to
that type of transaction)
Actors: An actor is a person, organization, or external system that plays a role in
one or more interactions with system.
In above diagram there are 3 Actors
1. Operator
2. Customer
3. Allied Bank
Allied bank
Card insertion
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Associations: Associations between actors and use cases are indicated in use case
diagrams by solid lines. An association exists whenever an actor is involved
with an interaction described by a use case.
I. System Startup: The system is started up when the operator turns the
operator switch to the "on" position. The operator will be asked to enter
the amount of money currently in the cash dispenser, and a connection to
the bank will be established. Then the servicing of customers can begin.
II. System Shutdown: The system is shut down when the operator makes
sure that no customer is using the machine, and then turns the operator
switch to the "off" position. The connection to the bank will be shut down.
Then the operator is free to remove deposited envelopes, replenish cash
and paper, etc.
III. System Session: A session is started when a customer inserts an ATM
card into the card reader slot of the machine. The ATM pulls the card into
the machine and reads it. (If the reader cannot read the card due to
improper insertion or a damaged stripe, the card is ejected, an error screen
is displayed, and the session is aborted.) The customer is asked to enter
his/her PIN, and is then allowed to perform one or more transactions,
choosing from a menu of possible types of transaction in each case. After
each transaction, the customer is asked whether he/she would like to
perform another. When the customer is through performing transactions,
the card is ejected from the machine and the session ends. If a transaction
is aborted due to too many invalid PIN entries, the session is also aborted,
with the card being retained in the machine.
The customer may abort the session by pressing the Cancel key when
entering a PIN or choosing a transaction type.
xlvi
IV. System Transaction: A transaction is started within a session when the
customer chooses a transaction type from a menu of options. The customer
will be asked to furnish appropriate details (e.g. account(s) involved,
amount). The transaction will then be sent to the bank, along with
information from the customer's card and the PIN the customer entered.
If the bank approves the transaction, any steps needed to complete the
transaction (e.g. dispensing cash or accepting an envelope) will be
performed, and then a receipt will be printed. Then the customer will be
asked whether he/she wishes to do another transaction.
If the bank reports that the customer's PIN is invalid, the Invalid PIN
extension will be performed and then an attempt will be made to continue
the transaction. If the customer's card is retained due to three invalid PINs,
the transaction will be aborted, and the customer will not be offered the
option of doing another.
If a transaction is cancelled by the customer, or fails for any reason other
than repeated entries of an invalid PIN, a screen will be displayed
informing the customer of the reason for the failure of the transaction, and
then the customer will be offered the opportunity to do another.
The customer may cancel a transaction by pressing the Cancel key as
described for each individual type of transaction below.
All messages to the bank and responses back are recorded in the ATM's
log.
V. Event Trace Diagrams
To represent objects & events in a scenario
xlvii
Objects in transition drawn as vertical lines
Events drawn as horizontal arrow from the sending object to receiving
object
Event timing sequence shown - timing proceeds vertically
An object can send simultaneous events to other objects
VI. Event Flow Diagram
An Event Flow diagram consists of interconnected objects and explains
the flow of data among those objects. Complex Event relationships and
Synthetic Events are also represented in an Event Flow diagram.
Object is drawn as rectangle
Arrow sign show the association between objects and flow of data
between objects.
In below 2 diagrams objects are.
User
ATM
Consortium (An association of banks for some definite purpose)
Bank
xlviii
Event Trace Diagram for the Normal ATM Scenario
xlix
Event Flow Diagram for the ATM System
4.5 FUNDS MANAGEMENT
Funds management deals with following aspects;
Sources of funds
Generation of funds
Allocation of funds
l
4.5.1 Sources of Funds
Following are the sources of funds of ABL and their figures for last 5 years:
Description (in
millions)
2005 2006 2007 2008 2009
Share Capital 10,256 14,550 17,688 19,878 22,356
Reserves 10,640 4,316 4,316 3,419 2,341
Customer Deposits 126,392 161,410 206,031 263,972 297,475
Inter bank
borrowings
12,538 9,694 18,410 22,934 27,778
Source: Annual Report of ABL 2008
Bank’s major source of funding is individuals who deposit their funds. Bank also have
other sources e.g. borrow from other banks and financial situation and in time of need it
also approach state bank of Pakistan for extra funds and state bank provide funds after
fulfilling basic requirements according to prudential regulations.
4.5.2 Generation of Funds
Following figures shows the generation of funds in last 5 years of ABL:
Description (in
millions)
2005 2006 2007 2008 2009
Interest Earned 5,245 9,892 17,216 21,201 30,571
Fee, Commission,
Brokerage Income
1,520 1,471 1,636 2,258 2,522
li
Capital Gain &
Dividend Income
65 196 540 1,585 1,571
Non-interest Income 1,740 1,940 2,449 3,920 4,152
Source: Annual Report of ABL 2008
Funds are mostly generated from the interest income earned by banks. Other places from
where funds are generated include commission earned, capital gain and dividend income
and non-interest income earned by bank.
4.5.3 Allocation of Funds
Following are the places where funds are allocated and their figures for last five years:
Description (in
millions)
2005 2006 2007 2008 2009
Interest Expensed 794 2,025 6,793 10,093 16,560
Operating Expenses 4,115 4,264 5,289 6,174 8,399
Donations - 15 9 28 82
Taxation 290 1,744 2,264 1,877 1,964
Source: Annual Report of ABL 2008
The main place where banks allocate its funds is in interest expenses. Other main place of
allocation of funds is the operating expenses. Banks are heavily taxed which is a major
portion of allocation of bank’s funds.
lii
5. THEORETICAL AND PRACTICAL CONCEPTS
During internship I relate theoretical concepts relating to practical experiences. More
opportunities expand my practical knowledge and understanding. I under go an internship
program of six to eight weeks in bank to get exposure to the real time business
environment and to know what sort of changes Information Technology brings in
management activities. The real purpose of this internship program is to provide an
opportunity to the students to see the practical applications of their background
professional studies.
5.1 Daily Schedule For Evaluate A Bank’s Money Position
In this schedule I studied that bank manager trying to keep and record track of the many
transactions each day. The bank name as day of end report consist of all record of
vouchers, cheques, deposits, online transfers.
5.2 Account Opening Procedure
Account opening procedure is a procedure when a customer applies to open new account.
A document consist of a form called account opening form for basic introduction of the
customer and other details e.g. residence source of income and for security purpose
specimen signature card, on this card customer signature three times to operate the
account.
5.3 Customer Privacy
Bank protect the personal information that customer supply to manager so that customers
are not damaged by the release of their private data to outside parties. Manager strictly
follows privacy policy. Moreover, at least once a year the customer must be reminded
about the content of those privacy policies.
liii
6. FINANCIAL ANALYSIS OF ABL
6.1 BALANCE SHEET (2005-2009)
(figures in millions)
December 31 2005 2006 2007 2008 2009 Assets Cash and balances with treasury and other banks 18,035 24,745 30,408 25,751 27,716Lending to financial institutions 5,777 19,050 18,419 15,793 28,123Investments- Gross 45,269 47,156 84,151 84,602 96,975Advances - Gross 119,866 151,705 78,524 223,640 249,887Operating Fixed assets 4,721 6,445 7,549 11,134 12,447Other assets 7,908 10,800 11,368 18,399 17,955Total assets - Gross 201,575 259,902 330,419 379,319 433,103Provisions against non-performing advances (8,659) (7,672) (10,117) (10,668) (12,543)Provisions against diminution in value of investment (342) (203) (192) (1,956) (2,186)Total assets - net of provision 192,574 252,027 320,110 366,696 418,374
Liabilities & EquityCustomer deposits 161,410 206,031 263,972 297,475 328,875Inter bank borrowings 9,694 18,410 22,934 27,778 39,819Bills payable 2,449 2,278 3,494 2,952 3,162Other liabilities 4,472 5,119 7,332 13,636 11,061Sub-ordinated loans - 2,500 2,499 2,498 5,497Total Liabilities 178,025 234,339 300,231 344,340 388,414Net Assets / Liabilities 14,550 17,688 19,878 22,356 29,960Share capital 4,489 4,489 5,386 6,464 7,110Share premium 4,316 4,316 3,419 2,341 1,695Reserves 1,377 1,817 2,632 3,463 4,888Un - appropriated profit / (loss) 2,732 5,608 6,971 8,537 12,198Equity - Tier I 12,914 16,230 18,408 20,805 25,891Surplus on revaluation of assets 1,636 1,458 1,470 1,550 4,069
14,550 17,688 19,878 22,356 29,960
Source: Annual Report ABL 2009
liv
6.2 INCOME STATEMENT (2005-2009)
December 31 2005 2006 2007 2008 2009PROFITABILITY Markup / Rerurn / Interest earned 9,892 17,216 21,201 30,571 41,122Markup / Rerurn / Interest expensed 2,025 6,793 10,093 17,273 22,422Net Markup / Interest income 7,867 10,423 11,108 13,298 18,700Fee, Commission, Brokerage and Exchange income 1,471 1,636 2,258 3,266 3,470Capital gain & Dividend income 196 540 1,585 1,571 2,452Other income 273 273 77 59 36Non interest income 1,940 2,449 3,920 4,897 5,958Gross income 9,807 12,872 15,029 18,195 24,658Operating expenses 4,264 5,289 6,174 8,431 9,609Profit before provisions 5,543 7,583 8,855 9,764 15,049Donations 15 9 28 82 97Provisions - (charge) / reversal (694) (913) (2,874) (3,561) (4,416)Profit before taxation 4,834 6,661 5,953 6,121 10,536Taxation (1,744) (2,264) (1,877) (1,964) (3,414)Profit / (Loss) after taxation 3,090 4,397 4,076 4,157 7,122
Source: Annual Report ABL 2009
lv
6.3 RATIO ANALYSIS:
Five years ratio analysis of bank consists of profitability ratios, liquidity ratios, market
ratios and solvency ratios.
6.3.1. Debt Ratio
Debt Ratio= Total Debt / Total Assets
2005 144671/154926 =0.933
2006 178025/192574 =0.924
2007 234339/252027 =0.930
2008 300231/320110 =0.938
2009 344325/366680 =0.939
Debt ratio increase first and then decreases in year 2007 the reason being this increasing
trend of both total debt and the total assets till 2006 and in the year 2007 the increase in
total debt is greater whereas the increase in total assets is comparatively less.
6.3.2. Return on assets (ROA)
lvi
Return on assets (ROA) = Earnings After Tax / Total Assets
2005 192 / 154926 = 0.001
2006 3090 / 192574 = 0.016
2007 4397 / 252027 =0.017
2008 4076 / 320110 =0.013
2009 4157 / 366680 =0.011
Return on assets increases till 2007 after that it shows downward trend, reason behind
this increase in income is less then the increase in total assets.
6.3.3. Gross Profit Margin
Gross Profit Margin = Gross Income / Total Operating Revenue * 100
2005 6191 / 5245 * 100 = 118.04
2006 9807 / 9892 * 100 = 99.14
2007 12872 / 17216 * 100 = 74.77
0.001
0.016 0.017
0.0130.011
0
0.005
0.01
0.015
0.02
2003 2004 2005 2006 2007 2008 2009
Years
RO
A
lvii
2008 15029 / 21201 * 100 = 70.89
2009 18163 / 30571 * 100 = 59.42
Gross profit margin shows downward trend because increase in gross income is less
whereas increase in total revenues is greater.
6.3.4. Return on Equity (ROE)
Return on Equity (ROE) = Earnings After Tax / Total Equity
2005 192/10250 =0.19
2006 3090/14550 =0.21
2007 4397/17688 =0.25
2008 4076/19878 =0.21
2009 4157/22355 =0.19
Going year 2004 to 2008 return on equity first increases till 2006 and after that is starts
falling.
lviii
6.3.5. Debt to Equity Ratio (D/E)
Debt to Equity Ratio (D/E) = Total Debt / Total Equity
2005 144671/10250 =14.11
2006 178025/14550 =12.24
2007 234339/17688 =13.25
2008 300231/19878 =15.10
2009 344326/22355 =15.40
Debt to equity ratio shows downward trend till 2005 after that it show upward trend
reason behind this increase in total debt increases.
lix
6.3.6. Operating Efficiency Ratio
Operating Efficiency Ratio = Total Operating Expenses/ Total Operating Revenues
2005 4115 / 5245=0.79
2006 4264/9892=0.43
2007 5289/17216 =0.31
2008 6174/21201=0.29
2009 8399/30571 =0.28
Operating efficiency ratio decreases from 2004 to 2008 because increase in operating
expenses is less whereas increase in total revenues in comparatively greater.
6.3.7. Plow Back Ratio
Plow Back Ratio = (Earnings After Tax-Dividends) / Earnings After Tax
2005 192-65/192 =0.66
lx
2006 3090-196/3090=0.94
2007 4397-540/4397=0.88
2008 4076-1585/4076=0.61
2009 4157-1571/4157=0.62
Plow back ratio increases till 2006 after that it stars falling and in year 2009 it again
increases because in 2009 difference of earnings and dividends is greater as compare to
increase in earnings.
6.3.8. Absolute Ratio
Absolute Ratio = (Cash+Marketable Securities)/ Current Liabilities
2005 12320/141464=0.087
2006 18035/173553=0.104
2007 24745/226719=0.109
2008 30408/290400=0.105
2009 25751/328205=0.079
Going through the years from 2005 to 2009 absolute ratio increases till 2007 after that it
decreases reason behind this increase in current liabilities is comparatively high.
0.66
0.940.88
0.61 0.62
00.10.20.30.40.50.60.70.80.9
1
2003 2004 2005 2006 2007 2008 2009
Years
Plo
wb
ac
k r
ati
o
lxi
6.3.9. Time Interest Earned Ratio
Time Interest Earned Ratio= EBIT/ Interest Expense
2005 482/794=0.61
2006 4834/2025=2.39
2007 6661/6793=0.98
2008 5953/10093=0.59
2009 6121/16650=0.37
0.61
2.39
0.98
0.590.37
0
0.5
1
1.5
2
2.5
3
2003 2004 2005 2006 2007 2008 2009
Years
tim
e in
tre
st
rati
o
lxii
Time Interest Earned Ratio increases in year 2005 and 2006 and decreases till 2009. This
value in year 2005 is very small the reason being very small amount of earning before
interest and taxes. And this amount in the coming years is very large. The value again in
2009 is also very small.
6.3.10. Net Non Interest Margin
Net Non Interest Margin = (Non Interest Revenue – Non Interest Expenses)/ Total Assets
2005 1740-3321 / 154926 = -0.01
2006 1940-2239 / 192574 = -0.001
2007 2449-(-1504) / 252027 =0.01
2008 3920-(-3919) /320110=0.02
2009 4152-(-8161) /366680 =0.03
Going through the years from 2005 to 2009 the trend of the net non interest margin is
increasing in first two years it was negative because in these two years the net interest
revenue was less than the net interest expenses. Then in the last three years revenue
becomes greater which was mainly in the form of interest. Also the amount of total assets
is increasing along the years.
-0.01
-0.001
0.01
0.02
0.03
-0.015-0.01
-0.0050
0.0050.01
0.0150.02
0.0250.03
0.035
2003 2004 2005 2006 2007 2008 2009
years
Ne
t N
on
Inte
res
t M
arg
in
lxiii
6.3.11. Net Bank Operating Margin
Net Bank Operating Margin = (Total Operating Revenue – Total Operating Expenses) /
Total Assets
2005 5245- 4115 / 154926 =0.007
2006 9892-4264 /192574 =0.03
2007 17216-5289 / 252027 =0.04
2008 21201-6174 / 320110 =0.04
2009 30571- 8399 / 366680 =0.06
Net bank operating margin is first of all decreasing and it became constant in year 2006
and 2007 and then it increases. This trend is due to the smaller difference in the total
operating revenue and the total operating expenses in the beginning years and this
difference goes on up side which makes the ratio first increasing then constant and then
decreasing and the total assets were increasing with the years.
6.3.12. Net Interest Margin
Net Interest Margin = (Interest Income – Interest Expense) / Total Assets
0.007
0.030.04 0.04
0.06
00.010.020.030.040.050.060.07
2003 2004 2005 2006 2007 2008 2009
years
Net
Ba
nk
Op
erat
ing
M
arg
in
lxiv
2005 5245-794 / 154926 = 0.028
2006 9892-2025 / 192574 = 0.040
2007 17216-6793 / 252027 =0.041
2008 21201-10093 / 320110 =0.034
2009 30571-16560 / 366680 =0.038
The net interest margin first increases from 2005 to 2007 and then it decreases from 2008
and 2009. The reason behind this increase and decrease is the greater increase in interest
income and the smaller increase in interest expense with the passing years.
6.3.13. Bank’s Equity Multiplier
Bank’s Equity Multiplier = Total Assets / Total Equity Capital
2005 154926 / 10250 =15.11
2006 192574 / 14550 =13.24
2007 252027 /17688 =14.25
2008 320110 /19878 =16.1
2009 366680 /22355 =16.4
lxv
Bank’s equity multiplier decrease first and then increases in year 2006 the reason being
the increasing trend of both total assets and the equity capital till 2005 and in the year
2006 the increase in total assets is greater whereas the increase in capital is comparatively
less.
6.3.14. Assets Utilization Ratio
Assets Utilization Ratio = Total Operating Revenue / Total Assets
2005 5245 / 154926 = 0.033
2006 9892 / 192574 = 0.051
2007 17216 / 252027 =0.068
2008 21201 / 320110 =0.066
2009 30571 / 366680 =0.083
0.033
0.051
0.068 0.066
0.083
0
0.02
0.04
0.06
0.08
0.1
2003 2004 2005 2006 2007 2008 2009
years
As
se
ts u
tili
zati
on
Ra
tio
lxvi
Assets utilization ratio shows increasing trend the reason behind the increase in both total
operating revenue and the total assets.
6.3.15. Earning Spread
Earning Spread = (Total Interest Income / Total Assets) – (Total Interest Expense /Total
Interest bearing bank liability)
2005 0.033 -0.005 = 0.028
2006 0.051-0.011= 0.04
2007 0.068-0.028= 0.04
2008 0.066-0.033= 0.033
2009 0.083-0.048= 0.035
The trend in earning spread is first increasing till 2007 and then it shows decreasing
trend. And it shows positive values.
lxvii
6.3.16. Net Profit Margin
Net Profit Margin = Earnings after Taxes / Total Operating Revenue * 100
2005 192 / 5245 * 100 = 3.66
2006 3090 / 9892 * 100 = 31.23
2007 4397 / 17216 * 100 = 25.54
2008 4076 / 21201 * 100 = 19.22
2009 4157 / 30571 * 100 =13.59
Net profit margin increases in year 2005 and 2009 and decreases till 2009. This value in
year 2005 is very small the reason being very small amount of earning after taxes. And
this amount in the coming years is very large. Therefore NPM in year 2005 is very less.
3.66
31.23
25.54
19.22
13.59
0
5
10
15
20
25
30
35
2003 2004 2005 2006 2007 2008 2009
years
Ne
t P
rofi
t M
arg
in
lxviii
6.4 HORIZONTAL ANALYSIS OF BALANCE SHEET
2005 2006 2007 2008 2009ASSETS Cash and balances with treasury and other banks 100% 200.8% 246.8% 209.% 225.%Lending to financial institutions 100% 117.8% 113.9% 97.6% 173.9%Investments - net 100% 81.8% 146.% 146.7% 168.2%Advances - net 100% 216.9% 255.2% 319.7% 357.2%Operating Fixed assets 100% 252.5% 295.8% 436.3% 487.7%Other assets 100% 152.7% 160.7% 260.1% 253.9%Total assets 100% 156.8% 199.4% 228.9% 261.3%
LIABILITIES & EQUITY
Customer deposits 100% 163.% 208.9% 235.4% 260.2%Inter bank borrowings 100% 146.8% 182.9% 221.5% 317.6%Bills payable 100% 89.9% 137.9% 116.5% 124.8%Other liabilities 100% 159.7% 228.7% 425.3% 345.%Sub-ordinated loans 100% 100.% 99.6% 99.9% 219.9%Total Liabilities 100% 162.% 207.5% 238.% 268.5%Share capital 100% 101.9% 122.3% 146.7% 161.4%Reserves 100% 40.6% 32.1% 22.% 15.9%Un - appropriated profit / (loss) 100% 188.8% 210.4% 235.2% 293.2%Equity - Tier I 100% 171.8% 194.8% 220.2% 274.1%Surplus on revaluation of assets 100% 180.4% 181.9% 191.8% 503.4%Total Equity 100% 172.5% 193.8% 218.% 292.1%
Total Assets have greatly increased in 2009 on terms of increase in cash, net investments,
advances and operating fixed assets. Liabilities have also increased due to a very great
increase in inter bank borrowings. Total equity has also increased due to a great increase
in reserves of ABL. These analysis shows that ABL is going through a growth phase due
to which it is incurring great increases in various items of balance sheet.
lxix
Horizontal Analysis of Balance Sheet also shows that ABL is in good financial health and
is following proper strategies for expanding its business. Comparing the asset
composition in the two years the advances of the ABL have increased considerably, and
also the amount of the total assets has been increased. The increase in the advances shows
that customers have trust over the banks money and they are getting more and more
money from their bank and also the collection policy is fair and successful.
This deposit growth has enabled to increase market share of ABL by 40 BPs in only one
year’s time to reach 7.8%. In end of year 2009 loan portfolio of bank grew by 25.3% to
Rs.223.62 billions represented by 72% corporate loan book and 19% SME loan. Bank’s
managing portfolio while remaining vigilant of change economic environment. Bank has
managed to increase its market share by 40BPs to 7.1% to end of year 2009.
lxx
6.5 HORIZONTAL ANALYSIS OF INCOME STATEMENT
2005 2006 2007 2008 2009Interest / Return / Non Interest Income earned Markup / Return / Interest earned 100.% 328.2% 404.2% 582.9% 784.1%Fee, Commission, Brokerage and Exchange income 100.% 107.6% 148.5% 214.8% 228.2%
Capital gain & Dividend income 100.% 830.6% 2,438.9%2,417.8
%3,772.8
%Other income 100.% 176.5% 50.1% 38.2% 23.3%Total 100.% 281.5% 359.7% 507.8% 674.%
Interest / Return / Non Interest ExpenseMarkup / Return / Interest expensed 100.% 855.4% 1,271.%
2,175.1%
2,823.5%
Operating expenses 100.% 128.7% 150.7% 206.9% 235.8%Provisions 100.% 57.3% 180.3% 223.4% 277.%
Taxation 100.% 780.8% 647.4% 677.5%1,177.5
%
Total expense 100.% 224.8% 309.8% 460.9% 588.2%
Profit / (Loss) after taxation 100.% 2,292.7% 2,125.4%2,167.4
% 3,714.%Total 100.% 281.5% 359.7% 507.8% 674.%
Profit and loss after taxation of ABL has greatly increased in the past three years due to
the following factors:
Fee, Commission, brokerage income was increased in the past four years.
Gross Income was increased.
lxxi
Interest Income of ABL was increased on account of consumer deposits.
Operating expenses proportionally didn’t increase that much.
Non-interest Income has also increased in the past two years due to increase in income
dealings in foreign currencies. Operating profit is increasing from 2005 to 2009 but
initially the increase was small but from the year 2005 the increase is greater and this
value is largest in year 2009 with a greater increase of more than 500% as compared to
value in 2009. And profit after taxation is also increasing from 2005 to 2009. Mark-up /
interest income of the Bank grew by 44% to reach Rs.30.6 billion led by earning assets
growth coupled with the re-pricing of assets at higher interest rates. With the quality of
growth given priority, average earning assets rose by 21%. Further, the management was
able to structure its assets to ensure that assets are re-priced adequately in the rising
interest rate scenario. As a result, the yield on average earning assets rose by 2%. Mark-
up / interest expense rose to Rs.16.6 billion depicting a rise of 64.1%.
The bank’s operating expenses rose to Rs.8.4 billion or 36% over last year. Increased
loan book and deposits volumes, that too amid overwhelming challenges on deposits
retention front, planned expansion and renovation of branch network complemented by
the high inflation were the primary reasons for such an increase. Further, various
branches were relocated to strategic locations, incurring higher costs, to support business
lxxii
growth. Various expenses tend to have a long term impact on improving bank’s image
and in turn, on business retention as well as growth.
6.6 VERTICAL ANALYSIS OF BALANCE SHEET
2005 2006 2007 2008 2009ASSETS Cash and balances with treasury and other banks 9.4% 9.8% 9.5% 7.% 6.6%Lending to financial institutions 3.% 7.6% 5.8% 4.3% 6.7%Investments - net 23.3% 18.6% 26.2% 22.4% 22.7%Advances - net 57.7% 57.1% 52.6% 58.1% 56.7%Operating fixed assets 2.5% 2.6% 2.4% 3.% 3.%Other assets 4.1% 4.3% 3.5% 5.% 4.3%Total assets 100.% 100.% 100.% 100.% 100.%
LIABILITIES & EQUITY Customer deposits 83.9% 81.8% 82.3% 81.1% 78.6%Inter bank borrowings 5.% 7.3% 7.2% 7.6% 9.5%Bills payable 1.3% .9% 1.1% .8% .8%
Other liabilities 2.3% 2.% 2.3% 3.7% 2.6%Sub-ordinated loans 0.0 1.% .8% .7% 1.3%Total Liabilities 92.4% 93.% 93.7% 93.9% 92.8%Share capital 2.3% 1.8% 1.7% 1.8% 1.7%Reserves 3.% 2.4% 1.9% 1.6% 1.6%Un - appropriated profit / (loss) 1.4% 2.2% 2.2% 2.3% 2.9%Equity - Tier I 6.7% 6.4% 5.8% 5.7% 6.2%Surplus on revaluation of assets .8% .6% .5% .4% 1.%
Customer deposits hold a portion of 80 to 98 percent of the total liabilities and equity this
shows how much customer deposits ABL has. Total Equity holds only 6 to 7 percent of
the total liabilities and equity which shows that ABL mainly generates its funds from
customer deposits rather than equity financing.
Advances hold the most portion in total assets of ABL. In the year 2009 banks suffer
major crises in which heavy withdrawals from the accounts observed, during this period,
lxxiii
bank wanted to maximize their profit by advancing, that’s why in 2009 liquidity its cash
balance lined with other banks as result 52.6% to 58.1%.
5.5% amount brings interest that is income of bank. In previous years, bank profited from
foreign investments. Banks use to survive very tough situation decline, a lot of mergers
observed, many banks lost their name. But, ABL survived with little decline on deposits
time.
Some time bank use to increase interbank borrowing advises adverse situation equity was
increase. As 2007 base year, equity decrease in appropriated profit increase 2.2% to
2.3%.
lxxiv
The total deposits of the bank have been increased by 16 % and over all trend in the
deposit is increasing which shows that the customers are putting more and more money
into the bank and they trust that their money is safe in ABL.
6.7 VERTICAL ANALYSIS OF INCOME STATEMENT
2005 2006 2007 2008 2009Interest / Return / Non Interest Income earned Markup / Return / Interest earned 83.6% 87.5% 84.4% 86.2% 87.3%Fee, Commission, Brokerage and Exchange income 12.4% 8.3% 9.% 9.2% 7.4%Capital gain & Dividend income 1.7% 2.7% 6.3% 4.4% 5.2%Other income 2.3% 1.5% .3% .2% .1%Total 100.% 100.% 100.% 100.% 100.%
Interest / Return / Non Interest ExpenseMarkup / Return / Interest expensed 17.1% 34.5% 40.2% 48.7% 47.6%Operating expenses 36.2% 26.9% 24.7% 24.% 20.6%Provisions 5.9% 4.7% 11.4% 10.% 9.4%Taxation 14.7% 11.5% 7.5% 5.6% 7.3%Total expense - percentage of total income 73.9% 77.6% 83.8% 88.3% 84.9%Profit / (Loss) after taxation 26.1% 22.4% 16.2% 11.7% 15.1%Total 100.% 100.% 100.% 100.% 100.%
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From the vertical analysis, it is clear that ABL like any other banks earns its most income
from interest income earned on giving out consumer and business loans. They hold
almost 80 to 170 percentage of the gross income. Interest expenses also incur to a great
deal on account of giving out deposits to consumers and businesses. Operating expenses
also hold a considerable portion in income statement that is up to 40 to 70 percent of the
gross income.
Markup interest income of the bank grew by 45% to reach Rs.30.6 billions to which the
quality of the growth priority. Average earning asset rose by 21%. Markup interest
expense grew to 16.6 billion the banking industry experienced shrinking liquidity this
year, which therefore led to pressure on to banking industry and liquidity issues.
Non mark-up income grew by 5.9% to Rs.4.2 billion, contributing 23% to gross income.
The core fee, commission and brokerage income grew by over 19% to Rs.1.98 billion.
Amidst global recession and weakening economy, the bank was still able to grow its
investment banking fee income remarkably by 24% to Rs.299 million. Account
maintenance charges fell by 23% to Rs.314 million primarily
ABL has performed well. Despite various challenges faced by country (Pakistan) in
domestic front and led by global reflationary trend as the bank has posted and operating
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profit of Rs.9.8 billions, which is by 10% over 8.8 billions registered during 2009 profit
after tax 6.12 billions. The growth has been achieved in spite of a good portion of
impairment losses. This growth has been achieved in spite of expected losses.
6.8 ORGANIZATIONAL ANALYSIS
Although ABL is in an industry where it has many competitors but it is being compared
as following two biggest competitors which are MCB and HBL:
Description (in
millions)
ABL MCB HBL
Assets 366,680 443,615 717,302
Liabilities 344,325 385,179 652,257
Profitability 4,157 20,526 10,001
If ABL is compared with MCB and HBL, it is observe that HBL is a big banking group
as compare to ABL and MCB. Deposit wise HBL is in front of both ABL and MCB.
Although ABL is in good position as compare to MCB in deposit situation. It shows
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customer’s trust on both banks. HBL again ahead in case of advances portfolio as
compare to ABL and MCB. Here health portfolio of advances places the ABL in second
position which is a good indicator. But profit wise MCB is in front of both HBL and ABL
in year 2008. Branches of HBL are greater than ABL and MCB. There is a less difference
between ABL and MCB in number of branches. MCB has greater number of employees
as compared to ABL and HBL.
These figures show that HBL and MCB are in much better position than ABL. After the
privatization business of ABL is taking high growth. The Bank's long term rating is AA
+, which denotes good credit quality. Protection factors are strong. Risk is modest but
may vary slightly from time to time because of economic conditions. The short-term
rating is A-1+, which denotes the highest certainty of timely payment. Short-term
liquidity, including internal operating factors and / or access to alternative sources of
funds, is outstanding and safety is just below risk free Government of Pakistan's short-
term obligations.
The bank is increasing resource mobilization through regular deposit campaigns and
accelerating the process of recovery of outstanding advances and non-performing assets.
The Bank is making every effort to meet the up-coming challenges through strategic
planning and making the best use of the resources at its command. These financial figures
and improving condition of the bank shows that ABL is among the leading commercial
banks of Pakistan.
6.9 FUTURE PROSPECTS OF ABL
ABL aims to offer products that will change the industry norms by providing innovations,
options and flexibility unmatched so far by any other bank due to the investment made in
the state-of-the-art systems at ABL. ABL plans to expand the market by its vast
distribution network. ABL’s products & services are being developed keeping in view the
increased level of consumer awareness due to increased accessibility of information, and
hence the demand for better products and services with options.
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Management believes that their business process reengineering initiative supported by
their customized core banking technology platform will also help them to compete more
effectively in the changing landscape of the Pakistani banking sector. Bank’s Credit Risk
Environmental and Monitoring system which is in its final stages of implementation is
expected to assist them in more effective post disbursement monitoring. They expect
their efforts in this area to show positive results in the coming months.
Macro economic and political instability, going forward, will continue to impact growth
and profitability of the banking sector. Management believes that political reconciliation
will result in renewed attention to economic management and hence improvement in the
operating environment.
Management is focusing on converting the manual branches into online branching system
and also to expend their branch network domestically and internationally. Management is
also keen to increase the ATM network in future and plans have prepared for it.
Management believes the bank is well positioned to take advantage of the next economic
upturn.
ABL is expected to fulfill following demands in future:
Achieve high performance
To provide high-tech innovative solutions to meet customer requirements
To provide value-added services to our customers
Innovation and Growth.
To create sustainable value through growth, efficiency and diversity for all
stakeholders
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To provide a challenging work environment, and reward dedicated team members
To play a proactive role in contributing towards the society
Integrity
Provide excellence in Service.
More technical methods.
ABL has emerged as one of the foremost-privatized financial institutions in Pakistan
endeavoring to gear up its operations to meet the demands of the future. It has the
following opportunities which it can meet in future:
The biggest opportunity for the ABL, Islamabad is the greater number of non
Muslim customers who get their payments through ABL, Bank. These customers
can be easily convinced to open their accounts with ABL.
A considerable portion of the labor force of the area is serving overseas. Their
families can be encouraged to use ABL as channel for remittances.
The Internet facility in the area provides an opportunity to ABL to get Online.
The Bank has the basic infrastructure, which can facilitate the online process.
The location of the ABL, G - 9 branch itself provides an opportunity to ABL to
get more and less cost deposits.
The group from its survey and analysis of IT companies has found out that there
are many companies which are not satisfied with its current bank, so Khyber
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branch with its superior service quality and long working hours can capture those
customers.
7. WEAKNESSES OF ABL
Following are the weak areas of ABL stressing on financial aspects which needs
management’s attention:
The Branch has a good staff combination on the basis of experience, but their
training capabilities are not up to the requirements of the fast changing banking
environment.
The customer’s Long-term contacts are not maintained with customers.
The technical training of the staff is negligible e.g. in case of the absence of
computer there is no alternate trained personal who can record the daily
transactions.
The organization is very much mechanistic and provides no flexibility to
encourage creativity.
The lower staff is non cooperative as compared the lower staff of other branches.
The control of manager is not effective.
The discretionary powers of manger are very low to offer more incentives and
value added services to its customers.
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There is a lack of commitment and professionalism on part of the employees. The
staff is always in a hurry to leave the bank as soon as possible. They were also
observed to starting their operations comparatively late.
The organizational culture is not cooperative.
Nepotism was observed on part of the manger as well as the top management
towards some staff members.
The branch has no industrial accounts.
The level of technology management in the branch is very low. The technology
available is not maintained well mainly because of the lack of technically trained
staff. For instance the scanner, in spite of its availability has not been used for
scanning the specimen signature cares.
In spite of the presence of technology many jobs are done manually such as the
letters, drafts for fax messages and other calculations, which could be easily, done
in MS Word and Ms Excel.
The branch lacks some physical facilities such as clean washrooms which can
affect employee’s performance
The layout of the branch is such that it is hindering the flow of work on one hand
and the documents are lying exposed which can be easily taken away by any
person entering the branch.
The job distribution is not up to the mark. The immediate result of this immediate
result of which is:
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The filing system is not up-to-date. Much time is wasted while searching for
even a week old document.
The staff spent ore time in collections than required.
Delays were observed because the prescribed procedures are not followed.
Though ABL in the area it lack specialized counters or facilities such as:
Investment advisory counters;
Leasing or leasing arrangements;
Credit services.
The four branches of Allied bank in Islamabad are closely located where most of
the services offered are not at all differentiated.
No efforts are made to recover the outstanding debts.
There is no facility for receiving and satisfying complaints and inviting
suggestions.
Foreign currency accounts are not entertained. The main reason for these negative
responses that the staff is not trained in dealing foreign currency accounts.
Customers’ coming to the Bank for TTs TCs etc. are not received with open
hearts and thus deprives the bank of revenues.
Some shortcomings on part of Allied Bank of Pakistan, which affects the
operations of the bank:
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There is a lack of functional and proper research and development, which
could scan the micro and macro environmental data for future planning and
strategy.
Financial audits are conducted but operational audits have not received proper
attention as much as it should get.
There is no procedure, which could encourage the middle and lower level
management to initiate creativity.
The biggest threat to the operational success of the branch is the better
competitor’s services. Many private sector banks are offering higher rates of
return to customers than Allied Bank of Pakistan.
Cannibalization of profits is yet another threat to the success of Bank. The
branches of Allied Bank are located very close to the each other. All these
branches are taking away each other’s customers.
One of the biggest to the ABL is the increasing rate of dissatisfies customers.
Most of these customers were observed to be dissatisfied with the delays in their
servicing.
The greatest threats to the performance of ABL, are the decreasing morale of
employees. They feel that they are not provided with bonuses. They are not given
proper attention to have a say in the annual meetings. The proxy forms are signed
on their behalf without letting them know.
High-pressure interest groups are developing which poses a constant threat to
Allied Bank.
8. CONCLUSION
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ABL offering a growth menu of services through multiple ways. for providing better
services it has increase the departments and divisions. Moreover the skills bank need to
function efficiently are changing rapidly with new technology and increasing
competition. There is growing emphasis on services marketing, corporate planning,
electronic banking and efficient services delivery and improved management information
system that link the computer more closely with both management and customer service
need.
Banks use to survive very tough situation decline, a lot of mergers observed, many banks
lost their name. But, ABL survived with little decline on deposits time. Not only survive
also captured profits in perplex situation. Financial position espouses due to the quality of
its management and the economic conditions in the banking industry are appearing to be
for more important to success.
Bank has maintained a relationship among bank operations, profitability and efficient
service delivery. It performed well in serving customers and in providing acceptable
returns to their customer. Increasingly bank mangers are being forced by both
competition and regulatory pressure to asses that bank’s performance over time and
relative to the other banks.
9. FINDINGS AND RECOMMENDATIONS
The critical analysis ABL in the previous section is the representation of its past, mirror
of its present, and an insight into its future. The past data of ABL G - 9 branch enabled
me to study the organization in a historical perspective and understand the nuisances in
the banking operations. Study of he present of ABL helped me evaluate the organization
in comparison to its future and competitors. The data obtained from the analysis of its
present and future in combination with my professional studies resulted in some
suggestions and implementation plans, which can help to increase the profitability and
operational success of the ABL.
Some of the major findings suggestions are discussed as below:
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9.1 Physical Facilities
The physical facilities or the layout are the most fundamental features in an organization,
which the customers observe in forming an opinion, perception or idea about the
organization. Therefore, every organization tries to make a good first impression on
customers through the presentation of its physical facilities or layout. The physical
facilities in the branch are not up to the mark, which requires timely changes to provide
good environment to customers. The suggested changes and corrective actions are gives
below:
The lighting system must be improved and all the out of use lights must be
replaced.
There is always a stinking smell in the Bank due to the out of order condition of
washroom. Therefore the washroom must be brought into order to remover this
unpleasant smell.
Generators should be made available to the branch to minimize the disruptions
due to power failure.
Newspaper should be provided to the customers to avoid the pain of waiting long.
A cash counting machine can help reduce the time spent in counting cash.
9.2 Availability of Staff
The existing staff in the Bank is overburdened due to the non-availability of more staff.
Staff in the branch must be in proportion to the customer has so as to expedite the
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workflow, avoid overloading of staff and remove the customer’s grievances arising
mainly due to delay in workflow.
The additional staff required is in the fallowing categories:
More technically trained staff should be added to the existing staff
strength.
One staff assistant or grade 2 officers properly trained in computer and
sufficiently trained in foreign currency accounts.
One employee of grade 4 should be hire on daily wages or contract, to maintain
filing.
9.3 Commitment of Employees
The decreasing commitment of employees can be increased by introducing an effective
performance appraisal system, which can reward and recognize the achievements and
services of employees for the Bank.
The appraisal system must have the following features:
Feed Back: Periodically provided to employees and recognizing their efforts
through reward (bonuses) and publicly appreciation.
Uniform: The appraisal system must be uniform in evaluating all the employees
without any discrimination.
Objectivity: The appraisal system must be based on facts and figures and
objective evaluation of the facts on grounds.
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9.4 Simplification of Advances
The biggest source of the bank revenue is advances. The advances of ABL, G - 9 branch
are on him decreasing trend, causing a decrease in the revenue for the bank. The bank
should make the advance procedure simple and quick to meet the customer’s
requirements. The following steps are suggested for simplifying the advance procedure.
Increasing the discretion of manager for the amount of advance to Rs. 100,000.
Speeding up the process of investigation and verification.
Expanding its customer base.
9.5 Marketing Concept
The concept of marketing should be followed in every aspect of the organization.
Generally, the bank’s staff considers that marketing is to go to customers, beg them for
opening an account with the Bank and to abide by his every just and unjust action
They should be taught that marketing is not only to go to customers only. A customer can
also be attracted by provided customer oriented services, showing empathy to customers
and attending him personally.
9.6 Customer Orientation
Deposits are the main source of funds for commercial banks. Therefore, the priority of
every bank is to increase the number and amount of deposits. The key to successful
business does not lie in simply attracting new customers. The real success is to maintain
in the old customers and attract new customers at the same time because retaining a
customer is more difficult than attracting new customers.
lxxxviii
Every depositor should be given equal importance and there should be no
differentiation between customers so that every customer feels himself as much
important as the other customer.
The attitude of the staff should be friendly to all the customers. The customers
should be taken to the concerned person or guided friendly if the concerned
person is not available. The attitude of “that’s not my job” should not exist
anymore.
9.7 Mobilization of Less Cost Deposits
The analysis of expenses shows that 43% of expenses of the bank are the payments on
fixed deposits, which is a very high proportion. Apart from this the interest earned on
advances Rs. 0.265 million is smaller than the interest paid on different deposits Rs. 4.1
millions
The bank should launch a campaign to get less cost deposits much as high amount
current account as well as low cost PLS saving accounts.
9.8 Information Access
The Bank should provide information to all the present and potential customers relating
to the new products, services, some service’s fee structure and other matters, which are
likely to affect the customers. It should be made sure that all the customers have access
to this information. Conveying information is of no use, unless, there is some feedback
from the customers. The following measures are suggested to implement this suggestion.
lxxxix
Brochures, hand outs, pamphlets and other printed reports must be provided to
customers, which should provide all the information necessary to attract and retain
customers and to satisfy the customer’s need for more information.
Personal contacts with the customers can help in providing information to
customers. All the customers must be provided a chance to get the desired
information by personal contact with the Bank staff.
Complaint and suggestion box should be maintained at the door of the Bank where
the customers can point out drawbacks in the customer’s services and put forward
their suggestions on his improvement of the services quality of the Bank.
9.9 Performance Audit
The financial audit of the bank is conducted on regular basis both as a surprise and
routine audit. However, the performance and system audits are completely ignored
which, other wise, should have been a compulsory part of the auditing services of the
Bank. The immediate outcome of ignoring performance outcome is shortcoming in the
non-financial aspects of this organization such as customer relations, lack of necessary
facilities, motivation of employees, and the control of manager.
In the light of the above facts it is suggested that the performance audit of the bank must
be carried out on both regular and surprise basis to keep the Bank competitive in the run
of for more customers, more deposits and high profitability.
9.10 Campaign for Increasing the Deposits
The numbers of account holders in a bank make a significant contribution to the deposits
of the Bank and determine its business volume, profits and size of a bank. Therefore,
ABL, G - 9 branch must a clear plan for increasing the number of accounts. The details of
plan for increasing the number of accounts are given in the implementation plan.
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9.11 Increases in Business Share
Along with concentrating on increasing the customer base, the Bank must also
emphasize on securing the highest market share in other banking services such as
issuance of letter of credit, foreign exchange, remittances, bills identification of
productive secure and easily realizable advances etc. to achieve this strategy the Bank
should have a clear plans with the consent of the higher management. The plan must be
divided into different periods – weekly, monthly, semiannual and annual. Every stage of
the plan must be monitored and controlled on regular basis.
9.12 ATM Network Problem
I have found some problems with ATM network. Many customers have complaints that
their requests placed on ATMs don’t carry out. It is mainly because of bad PTCL lines.
Distortion in lines of PTCL restricts the execution of requests placed on ATM machines
by customers. Although there is a network of dedicated lines for ATM machines, a
request may not be successfully carried out because of complicated request processing. A
successful execution of a request needs to be approved from three places:
The branch (online) with which the customer (placing the request) have the account
Main branch of that area (city)
The head office (in Karachi)
So connecting to all of these three places simultaneously and getting the request approved
is a complicated process. However management claims that there is nothing wrong with
processing. The only problem lies with PCL lines. So to solve this problem the bank
should hire technicians who can work during public holidays to make the ATM useable
while it shows any distortion.
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9.13 Cash Deposits Using ATM
Now-a-days in foreign countries ATM machines are also used for deposits of money and
utility bills can b paid up through ATM. But in Pakistan these services have not been
utilized yet. So if ABL upgrades its ATM technology so definitely it will get the
competitive advantage over other banks.
9.14 Networking among Banks
In allied bank the networking is only done with in the bank, means the customer can’t
transfer his funds to other bank through online. The account holder who has the debit
card can transfer his money to other bank account through ATM. But the customer who
doesn’t have account but some one gave him a Habib bank cheque to transfer it online
through near situated Allied bank. So the allied bank can’t transfer it to Habib bank via
online. So I recommend an idea that there should be a networking among different banks
so that they can transfer funds via online.
9.15 Manual Vouchers System
As all the ledger system and vouchers are made manually which is a much time
consuming job and it also requires much more efforts most importantly human error
chances are there that’s why if the organization implement “SAP FINANCE MODULE”
in their current saving department that will help them creating automatic vouchers and
ledger if any transaction is made by customer because SAP has the capability to keep all
the records of a an individual at just one place and it has the capacity to store much data.
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9.16 Online Loans
I have found that there is no online facility to apply for a loan. Where as, in other banks
especially in foreign banks the customer who has an account in the same bank, can apply
for a loan through Internet. So that he can save his time from going physically to the
bank.
10. REFERENCES
1. Muhammad Tanveer. Grade-1 officer. Branch manager, ABL G.9 Islamabad.
2. Muhammad Tariq Abbasi. Customer Services Manager, ABL G-9 Islamabad.
3. Asad Ullah Makhdoom. MTO, ABL I-8 Islamabad.
4. Yousaf Shah. Grade-1 officer. ATM coordinator Zonal office Islamabad.
5. Allied Bank Ltd Annual report (2007), Karachi.
6. Allied Bank Ltd Annual report (2008), Karachi.
7. Head office of Islamabad performance report (2007)
8. Head office of Islamabad performance report (2008)
9. http://www.abl.com.pk
11. ANNEXES
11.1 ANNEXURE I
President and CEO
Board of Director
Head of Departments
Regional General Manager Controllers of Operation
Branch Manager
Office G-I, II and other lower Staff
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Organogram of ABL
11.2 ANNEXURE II Customer Service Manager (M.Tariq Abbasi)
Remittance Deptt(Ms. Farida Saeed)
CD Deptt(Nabeel Ashraf)
Branch Manager (M. Tanveer)
Clearing Deptt(Shahid Hassan)
Payment/receipts(M.Irfan)
U.Bills(M.Saleem)
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Organogram of ABL G-9 Branch
11.3 ANNEXURE III
CFO
Finance Department
Accounts Department
Investment/Financing
Planning Deptt
Portfolio
Management Deptt
Accounting & Operation
Deptt
Fund Raising Deptt
Commercial Loan Officer
Lending Deptt
Accounting & Audit
Deptt
Consumer Loan
Officer
Control Deptt
Asset Liability Management
Deptt
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Organogram of Finance Department of ABL
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