allied bank internship report 2009
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DEPARTMENT OF MANAGEMENT SCIENCES
ALLIED BANK OF
PAKISTAN
.Allied Bank
Internship Report
2009
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DE DIl 1 O
I dedicate my report
and work to my
parents, Whose rove is
a source of
encouragement for me
at the every step of my
Cfe.
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Acknowledgement
First of all, I want to express all my humble thanks to Allah who is very
sensitive about Each and every activity of all His men and without whose help,
I am unable to accomplish any objective in my life. Who blessed me with an
opportunity to get internship training in a Dream organization -Allied Bank,
Nawan sheher.
Secondly, I am grateful to my prestigious institute that made this learning
opportunity a part of our education, especially 1 would like to thank the
department of management of sc ience Virtual University of Pakistan
Internship coordinator who not only guided me well but also helped me in
finding such an excellent place for internship. I am also thankful to all other
teachers as the knowledge imparted by t hem enables me to gain knowledge
of the organization in a best way.
I would also thank all the staff of Allied Bank, particularly Mr. Nacem who
gives me an opportunity to work in the Bank and gave me a chance to
explore my knowledge. I would also like to thank all staff member who
prove to by very cooperative with me.
I submit my earnest thank to my affectionate parents, who always remains
at my back to support me, I can never give the return of their un-tired
struggle for mc, but I can only prove myself as they expect form me. And
[ am also grateful to all uther family members and all my friends for their
mural boosting and spiritual support during my study and especially in this
internship program. I want to pay gratitude to all persons, who had helped
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me in completing this support
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Table of Contents
DESCRIPTION__________________________________________________________PAGE #
Executive Summary .........................................................................................-- 7
Vision ...................................................................................................................7
Mission .................................................................................................................7
Core ti:i]ues .........................................................................................................S
Scanned Copy of Internship Letter ....................Error! Bookmark not defined.
Brief Introduction of the Organization's Business Sector ....................................{
import Export Business ........................................................................................9
Running Finance ..................................................................................................9
Cotporale leasing .................................................................................................9
Agriculture Finance ..............................................................................................9
Our banking system today: ................................................................................[0
Types of hanks: ...................................................................................................] I
Cuntnlercial Banks ..............................................................................................l I
Overview of the Organization ............................-----------------------------.....----....l2
History Of Allied Bank Ltd ..................................................................................[3
Cctii pe[ilsrrs... ......................................................................................l $
Probtre'.5'rrfr.rr CnuarurnOrt Brrrrk.r......................................... ....................... ...... ..14
L o erd Pr iv y ro Bo o th s ...........................................................................................1 y
n F s r e i .vilieHibs ............................................................................................................................ 1 ).5'peeifflied Bunk.A .............................................................................................................'
PRODUCT LINE ......................................................................................................................22
n ORGANIZATIONAL STRUCTURE ..........................................................................23
MANAGEMENT SYSTEM OF ABL ...........................................................................2
n Bank's Information .............................................................................................23
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n E.erurrrire C rruinrirtc, ...........................................................................................24.l lj ir.c r.. ............................................................................................................................................... 24
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STRUCTURE OF AB L LlrNITED ........................................................................................24
HX:1NCH ,sL1'11'f1k~ ...............................................................................................................s
n YKO 1.YCIAL I)L.il){ll'Ak7`Lh'.7' ..................................................................................... ....25
n !RAINING AC..'tIEMl1_,5' ......................................................................................................2b
8rarrr.Ir lt'r,r' iri ...........................................................................................................................27
FUNCTIONS OF BRANC H OF Al3L L I D ........................................................................... 27
n Branch Hierarchy ....................................................................28
* Plan of Internship Programme ................................................29
n Training program .....................................................................29
C'rrrrrrre 1)epcrr'ur7c?rr ..............................................................................................29
Structure or the Finance Department .....................................44
Cearreri rpurrnaaia;li,orri~~rr ....................................................................................................44
Brrrrrr-Ir 1)~Irrrrrrrrrrrurl+~rrrrr,;L ........................................................................................45
Finance Departmentalization ..................................................4
n :1
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f)rrlh'r1!'rr'r.I[trJ'lY I J :............................................................................................................. ..5y
n lrr i.'rrr'
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Sr,kenes Rath,v ....................................................................................................... ioo
Market Analysis .....................................................................................101
Cash Bow analysis .................................................................................105
HorizontaE & vertical analysis .................................................................108
Financial Statemems Scanned Copies (ANNEX LIRE)................................115
I-Balance ShceL ....................................................................................115
2-Profit Loss Account..............................................................................116
3-Cash How StaLeruent .........................................................................117
4-Changes in Equity ..............................................................................11S
SWOT ANALYSIS ...................................................................................119
FUTURE PLANS AND SUGGESTION ..........................................................121
SUGGESTIONS ......................................................................................121
GLOSSARY ......................................................................................................123
REFERNCES ....................................................................................................12S
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Executive Summary
Allied Bank is amongst the leading commercial hunks in the country and
has always played a pioneering role in introducing innovative -
technology-based banking services The role played by its human
resources is highly valued, both in terms of their skills and dedication In
implementing unique harking services. The Bank
Allied Bank Limited was the first bank to he established in Pakistan. It
started out in Lahore by the name Australasia Bank before
independence in 1942; was renamed Allied Bank of Pakistan Limited in
1974 and then Allied Bank Limited in 2005.
In August 2008, because of capital reconstruction, the Bank's ownership
was transferred to a consortium comprising Abraham Leasing Limited
and Abraham Group. Today_ with its existence of over rl) yea s. 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 Lhc largest network if
over 700 online branches in Pakistan and offers various technology-
based products and services to its diverse clientele.
VISION
To hc.conle a dynastic and effic ient bank providing integrated solutions
and the first choice of hank for all customers
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MISSION
n To provide value-added services Lo our cuscuniers
n To provide high-tech innovative so lutions to meet customer
requirements
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+ To create sustainable value through growth, eff iciency and
diversity for all stakeholders
n To provide a challenging work environment, and reward dedicated
[cam members
+ To play a proactive role in contributing toy ands the society
CORE VALUES
Integrity
n Excellence in Service
n High performance
Innovation and Growth
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Brief Introduction of the Organization 's Business Sector
IMPORT EXPORT BUSINESS
Allied Bank provides highly efficient trade finance servieec for
import/export business Inc our Clients/Customers through large number of
authoriLed branches where trained and Motivated staff' is a%ailahle to
handle the business on behalf of customer.
RUNNING FINANCE
It is a short term loam allowed by the hank for a period of one year. The
running finance account can he operated and daily sale proceeds can he
deposited into the account,
CORPORATE LEASING
Allied Bank Limited commenced lease operations upon amalgamation
with Ibrahim Leasing Limited. Facilities include leasing for machinery,
commercial vehicles.
AGRICULTURE F1NANCE
The Bank, under the Agricultural Financing Scheme. as decided by the
State Bank of Pakistan, extends short, medium and long term - farm and
[ion-farm credits. The Farm credits ;ire extended fur production (inputs)
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and devclopmenl purposes. Non-farm credits are allowed for livestock
(goats, sheep. and cattle)- poultry and factories including loci: l forestry
and fisheries {inland and marine. excluding deep sea fishing!
The function of eommelcial banking and [lpplication of the fundamental
principles (If the depositor hank relationship have remained essemially
the same since about 5O0 B.CBank operation methods and procedures.
on the other hand, have undergone a constant
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process of evolution because of econontic growth, the mounting volume
of transactions and greater use of banking facilities.
As a result of these contributing factors. methods and practices
necessary to handle the increased volume of detail work have been
developed while other and quicker methods have been adopted in order
to cope with the increased volume. much of which has been
accomplished without Land LEIS increasing the cost of doing business.
During the last twenty years we have experienced a constant transition
from the old to the new - from manual to mechanical methods and
procedure, - from old established practices la current techniques and to
at more scientific approach to the solution of problems brought about by
day to day changes in business practices.
OUR BANKING SYSTEM TODAY:
The Banking Business as we know it today is composed of three separate
and distinct principal functions.
The acquiring of funds to invest and loan.
2- The investing of such funds in loans and bonds_
3- The servicing of such funds, such as providing ofcheckinglsavine facilities. and the collection of draft, notes and
checks.
These functions, while differing in detail of operation. follow the same
principles established hundreds of years go by money-lenders and
exchangers
Bank Definition
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"Banks are institution that enjoys the public money doing nothin g for thepublic
According the banking ordinance 1962 sec (61,
"Banks mean the acceptance of deposit for the purpose the lending or
the investment of deposit of money from die public repayable on demand
or otherwise withdraw able by cheques. drafts. orders, and otherwise"
Banker
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Banker includes at body of persons whether incorporated or not who
curry on business of banking.
Customer
Customer is defined as one who has account with the bank. 'The word
customer signifies a relationship in which duration is no( of the essence.
A person whose money has been accepted by the Bank on the footing
that they Lmdenake to honour cheques up to the amount standing to thiscredit is a customer of the Bank in the sense of the statute. irrespective
of whether his connection is of short or lone* standing- All the city
branches accounts are computerized
TYPES OF BANKS:
Today the principal banking and financial facilities avai lable w serve
cotnmercial are provided, and made available to them through five types
of banks.
Conunerctal Banks
Trust companies
Saving Banks
4 - Saving and Loans association
5 . Finance companies
COMMERC1:Y1. BANKS
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Commercial banks may he defined as "moneyed" ccrporattions,
authorized by law L receive deposits and pay such funds to others on
order discount and negotiate promissory notes, drafts, hills of
exchange,and other evidences of debt: to lend
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money on real or personal security: to make collectives: and conduct
such other moneyed transactions as ale not inconsistent with its charter
or the law under which it operates.
Overview of the Organization
AL the Lime of independence in 1947 the banks s er vices were very badly
affected and by June 30. 1945. he number of offices of scheduled banks
came down to only SI in the territories comprising Pakistan: but by
December 31. 1973 there were following 14 scheduled Pakistanicommercial hanks with 3323 offices u1I over the Pakistan and 74 offices
in foreign countries.
1. National Bank of Pakistan
2. Habib Bank Limited.
3. Habib hank lOycrseasl Limited.
4. United Bank Limited.
5- Muslim Commercial Bank Limited
(i. Commerce hank Limited.
7. Standard haink Limited.
S. Australasia hank limited.
9. Bank of Bahawalpur Limited.
10. Premier bank limited
11. Pak bank limited.
12. Sarhad Bank limited
1 Lahore commercial hanks limited.
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14. Punjab Provincial Cooperative bank limited.
The facts show that commercial banking has made tremendous progress
and achieved at phenomenal growth since independence and that the
commercial hanks have duly played a vital role as a mohiLiter of
people's saving Lo constiLute the most important source of financing in
country economy. However iL was felt that these hank Iaailed to ensure
that the resources so mobilized by them [low in those sectors of
economy where they would
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produce the _gods and services needed badly by a very large number of
people in Pakistan.
History Of Allied Sank Ltd
ABL is the first Muslim Bank established on territory that later on became
Pakistan. It was established on December 3, 1942 as Australasia Bank at
Lahore with capital of 0.12 million. AL that time the chairman was Rh_
Bashir Bak,h. A13L's story was one of the dedication_ commitment to
professionalism and adaptation to changing environmental changes.
The hank's history is divided into many phases. During 25 yeah of united
Pakistan the hank advanced forward in all areas of its activities_ 1970's
were a difficult decade for all Banks of Pakistan. In 1971 East Pakistan
was separated and Australasia Bank lost its 5[1 branches and a lot of
capital as well. Nevertheless the growth remained steady.
In 1974 all the Banks were nationalized including Australasia Bank. The
small provincial Banks were merged into Australasia Bank. On 1st July
1974 the new entity was renamed as ABL of Pakistan Limited "[hen it
started its operations as Public sector financial institution_
Different Phases ofthe RunkAre ii Fe/lows:
THE PRE INDEPENDE.NC'E PERIOD [1942-47)
Australasia Bank had the unique distinction of being closely identified
with some of the country's most Prominent leaders of the freedom
moment. Such as Mian Mumtaz Daullana [Board of directors). Minn
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Iftikhatr Hussain and Maulana Zalar Ali Khan. The bank originally started
its operation in the garage it Khawaja Bashir 13aksla's bungalow (who
was the chairman) near the Lahore Railway Station. But the success of
Bank enforced the directors Lo open its another branch iii Anarkali on 1st
March 1944. Kb. Bashir was first chief executive. He was the person who
was really working in its development. His sincerity of purpose can be
judged from his great moments.
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Another branch was opened at Aniaratsar in 1945. in June 1946, the
bank earned the status of scheduled hank. During 1946-47 many other
branches were opened at Mcleod Road Lahore. Jallandhar. Ludhiana,
Agra and Delhi.
At independence the industrial and coniuiercial sectors were
underdeveloped but ABL contributed a lot in the development of these
sectors.
AUSTRALASIA BANK IN PRIVATE SECTOR (1947-711
It was the only full functional Muslim Bank on the land of Pakistan. On
August 14, 1947 hank was identified with Pakistan moment. Many of its
Board of Directors were prominent Muslim League leaders. Jallandhar
and Ludhiana branches were attacked by rioters because of Muslim staff
appointed in these branches of bank- But when the Pakistan flags wee
hoisted on the branches then all the batiks in India were closed down.
With this. the hank lost a lot or capital and its deposits and almost h
branches. During 1948 new branches were opened it Karachi,
Rawalpindi. Peshawar. Sialkot. Sargodha. Jhang. Gujranwala and Kasur.
But later on its branches were spread to Multan and Quetta - At that
time, the hank financed trade in cloth and food grains and thus
maintained consumers supplies during the riot effected early months of
1948. Australasia[ Bank made a profit of Rs.50,000 in 1947-48.ln August
1948. Australasia Bank became the first Pakistani Bank to successfully
negotiate and open L/C for a Sialkot based importer of hooks. So it also
made correspondence relations with Midland (UKt -Chase Manhattan
(USA) and Lloyd, ( India t.
During the treasury functions of Federal Govt. of Pakistan and it also
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acted as Banker to several local Govt. Bodies and to the Punjab
University during this period. Treasury functions were taken by National
Bank of Pakistan in 1949. In 195(1-5 I. Chairman was replaced with his
own brother Kb. Shari[ Baksh.
During 1955-56. Mr- Naseer A. Sh. became the Chairman of Board and
close working relationship was forged between the new Chairman and
Managing Director. This partnership priwed in modernising its operations
and consolidating its financial position.
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In 1963, Bunk had 29 branches in various cities. And deposits were 119
million and advances were 66 million. Bank was mainly concerned with
g
eneral banking and bade financing (including foreign exchangetransactions). It helped a lot in development of small and medium sized
husiness houses. These were Nishat, Crescent, Pak Cement. Haroon
traders. Takht Bhai Sugar. insar. Punjab soap. Pak fruit and Sahaor Oil
Mills etc. in 1964, 13 new branches were opened including 3 in East
Pakistan. In ]965. 17 new branches were opened and over 83 `/c of gross
profit for the year was earmarked for development expenditure in
connection with opening of new branches.
In 1966 hank opened 26 new branches and doubled its reserved funds.
For the first time in history. its advances were increased to Rs. 160
million and deposits raised by almost 58 'f exceeding Rs. 232 million. In
1966, Central Office was huilt in Karachi but Head Office remaining at
Shah Chiragh Building, Lahore.
16 new branches were opened in 1967 and 2(1 in 196H. Respectively
their funds were increased gradually. 21 new branches were opened in
1971. But separation time the 51 branches were lost by the bank which
was a big loss.
ALLIED BANK: PUBLIC SECTOR YEARS (1974-91)
Under the Nationalization Act or 1974. 14 scheduled banks were taken
over by the Government. Australasia Bank's Board of Directors was
dissolved and the bank was renamed as Allied Bank of Pakistun Limited.
Barbed Bank. Lahore Commercial Bank and Pakistan Bank Limited were
merged into Australasia Bank. At time of merge..ABL was second highest
among :111 the banks Nationalized in 1974.
Allied Banks first Executive Board was constituted of Mr. lybatl A. Ricvi as
President. Mr. Ajnrtl Khalil as Joint ['resident and Mr. Khadim Hussain
Siddique as member. In 1974 Mr_ I.D. Junejo and Mr. Safd:r Abbas Zaidi
joined the Board later. 116 new branches were opened in 1974 and it
started participation in commodity Operation program of Government.
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In 1970's Bank played an important part of a griculuu-a] area loans and
other loans. In 1976 Mr. Ajmal replaced Mr. Iticvi as Chief Executive and
President. During 1974-77,
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361 new branches were opened and 230 of these were located in
villages and small [owns. It also opened its foreign branch in London.
near the Bank of England. in 1980 the Bank of Englund granted Allied
Bank recognition as a full fle dge Bank under the U.K. Banking Act.
In 1981. President was changed. In l984. again new president was come
to know. He tries to increase the international business. It also initiated a
major coLUaler program. In 1985. mainframe computer was installed and
effective management system was developed. During this period
profitability was increased. New President Mr. Mayboul introduced
different schemes in 1987-88. In 1989. new 13 branches were installed.
Over 1991. 745 branches were there in all over the Pakistan_
A NEW BEGINNING
In November/ December 1990. [he Government announced its
commitments to the rapid privatization of the Banking sector. Allied
Bank's management under the leadership of Mr. Khalid Latil' decided to
react positively to this challenge In September 1991. ABL entered in a
new era of its hisLory as world's First bank to he owned and managed by
its employees. The 1350 executives and 721)11 stuff members spread
over 801) branches throughout the ['akistars established a high degree
of cooperation and family feelings
Allied bunk Objectives
Allied hank has Bellowing objectives:
I) Main objective of Allied bank is to cam profit.
ii[ To provide services to their customers and assistance in tlhe
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development 01' commerce and trade.
Allied hank also have another responsibility to give service to their
communities. IL watches the growth and development of his community
especially the commerce and business oF the area.
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Allied Bank Mission
'To provide quality financial services with an edge of technology to
businesses pairticul rrfy mut[ and medium sired enterprises through a
motivated human resource endeavoring to achieve customer satisfaction
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COMPET ITORS
Nationalization of banks in the seventies was a major upset to domestic
banking industry of the country, which changed the whole complexion of
the banking industry. With irrational decision at the top all the
commercial hanks were made subservient to the political leadership and
the bureaucracy. Specialized banking inslilutinns were already working in
the public sector_ The new accountability paradigm changed the
business ethics in the banking indust ry. and with this change started the
disaster. Nationalization of banking indust ry was accompanied by violent
changes in the external value of rupee. The commercial banks thus lust
their assets management equilibrium. initiative and growth momentum.
'They ceased to he a business concern and became big bureaucracies.
This was accompanied by indiscreet loaning under political pressure.
They suffered from three terminal diseases: non-performing loan.: higher
intermediation cost: and loss of initiative and entrepreneurship. The rise
to Labor Unions and Officers Associations made life tough and working
conditions ugly to honest, dedicated and industrious workers in the
realms of domestic banking industry.
The era of nineties was the climes of privatization, deregulation and
restructuring in the domestic banking industry and financial institutions.
The Muslim Commercial Bank was the first hank to privatize. Fol lowed by
Allied Bank limited. United Bank Limited and now the Habib Bank Limited
have been prisatized. One thing good for that particular period vas the
recruitment of fresh officers in the domestic banking industry through
well-organized policies of Banking Council. With the decay of Banking
Council there was flood of insincere. nonprofessional. incompetent
candidates directly appointed) recruited in all the domestic banks of the
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country.
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Public Sector Commercial Banks
'National Bank of Pakistan NBP
First Women Bank Limited FWB
The Bank of Khyber KB
The Bank of Punjab BCH'
The government of Pakistan permitted small private sector hanks to
operate, which indulged in doubtful policies to promote business, The
public sector banking, which constituted the backbone - thus continued to
suffer because of their approach. title and carried over liabilities- Mehran
Bank is the prime example of that kind of lax banking in the country.which ultimately merged into National hank of Pakistan i.e. last resort of
domestic banking industry.
Local Private Banks
My Bank Limited
Bank Al-Falah Limited Bank Al Habib
Limited Askari Bank
Faysal Bank Limited Metropolitan Bank
Limited
i
Prime Commercial Bank Limited 'Saudi Pak
Commercial Bank Ltd I['ICIC Commercial
Baulk Limited Soneri Bank Limited
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Muslim Commercial Bank Limited
Allied Bank of Pakistan
Atlas Bank
Faysal Bank
In the meanwhile. western hanks started entering into the business. They, with the support of
ruling elite, concentrated on the big business_ leaving the routine business to the local hanks,
This reduced the profitability of the local hanks.
Farreign Banks
ABN Antro Bank
AI Baraka Islamic Bank
American Express
The Bank of Tokyo Mitsubishi
CIT1 Bank
Credit Agricole Indo Suez
Deutsche Bank
Doha Bank
Habib Bank A. G. Zurich
Corpnt ation
Mashrey Bank PJSC
man Bank
Rupaii Bank
Standard Chartered Bank
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Specialized
Banks
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IZari Taryiati Bank Lid.
industrial Development Bank of (Pakistan
I l'unjah Provincial Cooperative Bank Limited
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PRODUCT LINE
The lollowing is the list of Product line of Allied Bunk Limited
n interne[ Banking
n Online Banking
ATM Network
Deposit Account
SME
ACricullure
Corporate Leasing
Corporate Banking
Project Finance
Long Term Financing
Short Term Financing
Trade Finance
Investment Banking
Project Finance
Syndication
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Advisory
Financial institution
Cash Manutement
n Home Remittances
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ORGANIZATIONAL STRUCTURE
M A N A G E M E N T S Y S T E M O F A B L
Successful acid profitable banking management depends on two
principal factors.
al The manner in which the functions of banking_ that is the acquiring
of deposits. the investing or converting such deposits into earning
assets, and the servicing of such deposits, are performed
hl The degree to which officers and employees contribute their
talents to the progress and welfare of the bank in discharging duties
and responsihtlittes_ A hied Bank Management
Banks are managed by board of director or similar group of men who
are responsible to the owners. creditors, and the government for Lhe
well being of their institutions_ The government selects all or some of
directors of ABL. Management of ABL are given as follows:
BAr4K'S I N F O R M A T I O N
Direct urs
Mr. Khalid A. Slrerwani is the chairman and Mohanrmadi Yaqoob is
secretary of ABL. are also the hoard of directors.ABL's other directors
are M. Saleeln Shaikh. S. Jauhar Husain, I.A. Lsmaini, Raja Rara Arshad.
Mohammad Salem] Sethi, Athar Mahmood Khan. Stockholders elect the
directors for a term of one year and they are eligible for ncelection.
Voting is cumulative. that is. each shareholder has die right to vote the
member of shares owned by him. The boards may format major
policies and select officers to execute them. They may supervise these
olTicers, review their act.
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Execulisc Committee
Executive Committee consists of Mr. Klralid A. Shcrwani (president). M.
Salmi Shaikh. S. lauhar Husain. I. A. Lismain, Naveed Masud. Bilal
Mustafa, M. Saleem Khan Durruti, Ashfacl Hassan Qureshi. Sharigt Lunar
Faruoyi (secretary I.
Officers
Officers are selected by the directors to manage their hanks. An officers
relationship to the board is that of tut employee to an employer. Chief
Officer (Rashid M. Chaudaryl of ABL is known as Chairman. Senior
Executive Vice President M. Saleem Sheikh. S. Jttuhar.). They are also
members of the board of director and are large shareholders. They are in
a position, to dominate the hank's policies as well as its administration.
The Chief duty of the chairman is to lend the honk's funds. This work is
often subject to little supervision by the hoard of directors.
STRUCTURE OF AEI_ LIMITED
No hank can be expected to operate efficiently unless all employees with
in at department, division or section know:
A) From whom they are Rt receive the work they are to do.
1 What they are supposed to do with the work alter they receive it.
Cy How they are supposed to handle the operation of item.
D) When they are supposed to du work. perform the
operation.
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E) To whom theyg
ive the item or function after finishing it.
To pet-form the functions efficiently the hank hats its Head Office in
Karachi, which is controlled by the president of the Bank. The hank has
repiunal office under head office in major areas of the country. Re gional
Chief heads this office. The region Consist of many zonal offices with a
/tanal chief, There are many branches in a conic to cant' the functions
effectively and performing customer services locally.
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ABL Ltd. is functionally organized into divisions and divisions are further divided into
department and sections. Every prisince has its own regional office :hid zonal offices.
Executive vice president heads the divisions and departments acre further headed by OG1
{Officer of Grade Ii. Manager heads branches.
BRANCH NETWORK
There are Four Provincial Headquarters of Allied Bank Limited situated at Lahore
(Punjab)_ Karachi {Sind], Peshawar {NWFP & Azad Kashmir{ and Quetta (Baluchistan),
800 domestic branches
Arrangements with large number of Correspondent Banks/Exchange Companies.
Oser 20(1 branches for Foreign Currency Accounts
Over 70 branches for trade finance.
Larne number of branches for Inland Remittances
Large number of branches for Rupee "traveller. Cheques
PROVINCIAL HEADQUARTERS
PUNJAB:
196/Upper Mall. Lahore
SINDH:
Jubilee Insurance House, 1.1. Chundritrar Road. Karachi N
W FP:
1st floor, State Life Building The Mall,
AZAD KASHMIR:
Peshawar Cant'.
BALUCHISTAN:
C.C. & I Building, Zau-khoon Road, Quetta,
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Now with its network of over st}o branches located in the urban and ruralareas [luoughoLtl Pakistan, Allied Bank is positioned to provide
personalized banking services to its customers at locutions convenient to
the customers. ABL has invested extensively in branch automation_ 560
branches out of a total of 819 branches are computerized Mr. Khalid A.
Sherwatti, look over as President of Allied Bank on 18th October 2000
The President gave policy guide lines and the strategy to run the affairs
of the Bank in the light of changed requirements of the banking industry.
He emphasized that the Bank Executives, officers & stall must work
fearlessly' and put in all-out eFlurt to ensure steady growth of the Bunk.
He emphasized that customers have to be given the best possible service
as it is [hey who are the source of our growth Sc success.
TRAININGi ACADEMIES
Allied Bank limited has five [raining academies. two in Lahore. two in
Karachi. and one in Islamabad. In these training academies the new as
well as the existing staff get [raining. When at new employee comes in
ABL then most often he is sent to any of these academies for training.
The training period may be minimum of one-month upto maximum of one
year. The training period depends upon the nature of the jolt_ During the
[raining the new employees are acquainted with all the necessary
information about [heir jobs.
When any change occurs in the policies of the Bank_ then the seminars
are held in these academies in which employees as well its executrses
participate to gel information about the tress policies of the Bank. For
example if the. Bank policy regarding the financing schemes change then
the Managers of the Advances Section are invited in these seminars. They
learn about the new changes and then implement these changes in their
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branches.
in these academies at permanent staff is present for the training ofemployees. However_ if requires. subject specialists are invited to deliver
lectures on certain suhjccts. For example the Bank has at contract with
Satjjad Associates which send its executives to deliver lectures on
protect finimeinsg. Exams are also held in these training academics.
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Branch Working
The Branch of ABL Ltd. is responsible to provide all services to its
customer. This branch is located in Green Town Lahore.
FUNCTIONS OF BRANCH OF ABL LTD
There are [(Aiming [unctions which are per[urrned by Allied hank
Limited Branch The Bank provides deposit facility to its customers.
The types of deposits are:
a) PLS Saving Account:
in this type. the depositor- shares profit and loss pith the bank,
Ii Fixed Deposits
They hear high pi-tint. but these can only he withdrawn after a fixed
period of time c) Current Accounts
No profit is paid on hear deposits but amount could he withdrawn
without any reslriclion-
-M A l l i e d B a n k , InternshiBRANCHHIERARCHY
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M A N A G E R
Advanc
e Genera! Banking
Token C:unenL Rciniu:u>;ce Account C -learins;
N O N l - C L E R I C A L
S T A F F
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Plan of Internship Programme
I have worked in General Banking Departments and following are the
departments where I worked and their detail is eis .en below
Duration 6 weeks
Timing- 9:00 a.m to 5:00 P.m
Genera] Banking where l worked
General banking is one at the mater departnten[s of Allied Bank_ Ltd. It
consists of sub deparnluent, which are following
1. Current department
2. Token department
3. Remittance debarment
4. Clearing department
c Accounts department
6.
TRAirINC PROGRAM
CURRENT DEPARTMENT
This department maintains all formalities of the accoun[a and accounts
holder, like aecoun[s name. account holder's name, code No., and lull
address. Different cliques debit and credit voucher come from
different depar[mmnts like Token, Clearing. Remittance. Cash. and
Foreign Exchange_ Advance and posted against different accounts,
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A working Journal called Manual is prepared daily which shown the
balance accounts of all parties. Mark-up and profit are calculated daily.
That would he debited or credited from or to Account holders account
after specific period of time. Mark-up is debit from the account after
every three month and profit is credited to accounts alter every 6 month.
New accounts are also opened in this department. Total function perform
by this department is shown by block diagrams. These diagrams show
the sequence of activities. These are simplified diagram of what is
actually being done in current department and what happen to a
customer who conies I[1 open an account in die branch.
Following are the three accounts_ which are maintained by this
department
n Current Account
Saving Account
Fixed Account
TOKEN DEPARTMENT
In token department, token are issued for the encashment of chequesDemand draft. Telegraphic transfer. Mail transfer and miscellaneous
expanses voucher of bank before issuing term we check the following
n Date should be current or previous not advance.
Specimen Signature of account' react shouldthere.
Signature ofbearershould on backside ofcheques.
Amount.thauld he sonic both in .figure and wards.
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In case of Dl), checking sign of authorized officer of hank if there is any
discrepancy in above-mentioned point, no token would he issued. Before
issuing token, we stamped on backside of cheques and write the no. Di
token both from and backside of cheques, etc. After all the process_ die
entry of cheques would he posted on the given register_ which include
token no. Code no and amount. After banking hours. Total Iunount on
register would he tallied with the cash department amount_ that which
has been paid. Any cheques that is returned from the current department
because of any discrepancy. is debited from the total amount on the
register in token department.
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CASH DEPARTMENT
Cash department deals with the cash. which either comes in the Bank or
goes out side the Bank. Cash can be in any form of currency.
SOURCES OF THE CASH
There are different sources through the cash inflows the Bank. These
sources are as follows.
DEPOSITS
This is the major source of the cash inflow. When someone deposits the
cash in the Bank in any currency. it means that the cash is coining in the
Bank.
1. DEMAND DRAFT AND TELEGRAPHIC TRANSFERCOMMISSIONI
These are the second major sources of the cash inflow of the Bank When
the Bank issues the DDs and TTs on the behalf of customer then the
Bank takes certain charges as commission. These DDs and the TTs can
he issued in any currency on the demand of the customer.
2. PRIZE BONDS. FEBCS,NDSCS ETC
Price bonds. FEBCs. and NDSCs are other sources of cash. These
instruments are sold to the general public and cash is received from
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them. Though this cash is ultimately transferred w SBP but still the Bank
has to manage this cash.
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MANAGEMENT OF CASH
It is necessary for every branch to maintain at specific amount of cash
with it at any Lime, so that when it customer conies Lo get cash, he may
gel iL promptly. If a brunch is not able to maintain such appropriate level
if cash then it will have a had effect on its repute and it will not be able
Lo fulfill [lie customer ex cLalions. So, effective matnaizenienL uC cash is
very necessary for every Bank. ABL has put an appropriate limit on iLS
branches [hat [hey should keep that minimum levels of cash wit [hem at
tiny time. This limit is d ifferent Fur main branch and other sub-branches.
TREATMENT OF SURPLUS CASH
The surplus cash means the cash, which is over and above the limit of
any particular branch. It may happen that at branch niay have the
surplus cash with it. If a sub branch has surplus cash with it than that of
limit, [hen iL will transfer it w the main branch on daily bases. IF the
main branch has [he surplus limit [hen he will transfer the surplus
money to head office in Karachi through the SBP if these surplus funds
remain with the main branch. they will be of no use and will act as idle
money because they are earning no profit. So these funds are remitted
to the head office, where they are invested and ~yil] earn profit for the
Bank. The main branch earns the profit on the funds, which it remits to
the head orrice. C un-ently this rate of profit is 13'I. There is no profit
given on the funds which the soh-branches which they transfer to the
main branch.
TREATMENT OF CASH DEFICIT
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As surplus or he cash occurs, similarly the deficit can also be [here in
the Bank. It means that the cash shortage is there in the branch. To
cover this shortage the patterns are followed. If shortage is there in sub-
branch. then it may take the cash from the main branch. If the main
branch has the shortage of cash. then it may take the funds ['tom the
head office. The head office charges certain rate of profit. which is 13 %
on thee funds,
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which iL remits to the main branch. There is no profit charged by the
main branch on the funds provided to the sub-branches.
CASH IN TRANSIT
The rash - which is transferred from any sub-branch to Main branch or
from main branch to SBP is called cash in transit. There is limit of cash in
transit tin actin branch. This I im iL is of Rs. 2(1 millions i.e. main branch
can lake the cash from any sup-branch or can Lransfcr the cash to SBP up
to the I im iL to the 20 millions.
INSURANCE OF CASH
All the cash of the Bank is insured. The major companies, which insure
the cash include Adamjee Insurance Corporation. General Insurance
Company and East West Insurance Company. The Central Office pays all
the expenses of the insurance of cash.
SECURITY ARRANGEMENTS
Few years earlier, the Bank has its own guards for the transfer of Lhe
cash from main branch to SBP or fntm sub-branch to the main branch.
But now the Bank has hired a security company for the transference of
cash. This company is "Brinks". The commission which is charged by the
Brinks Company varies from place Lo place and is dil ferenl for different
amounts of cash,
CLEARING DEPARTMENT
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Introduction
The Bank is the member ofthe Clearing House and receives Cheques.
demand drafts and other negotiable instruments for presentation of its
payment by the branch of a drawee
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hank located within the city other than ABL_ The proceeds of the clearing
instruments are credited into the account of the customer. The clearing
facility is as tilable on all working days.
Wherever the clearing facility is both available or the drawee institution
is not the member of clearing house the Bank receives Cheques. demand
draft or negotiable instruments for collection and upon receipt of
payment Iroril the drawee the same is credited into the account of the
customer. Clearing may be outward or inward.
OUTWARD CLEARING
Suppose a customer deposits cheque in ABL HASSAN ARCADE BRANCH_
drawn on Habib Bank Multan Cant branch. Then the representative of
ABL HASSAN ARCADE BRANCH will take this cheque to the Clearing house
in SBP, where representatives of all hanks gather daily Now in first
clearing this cheque will he exchanged with the representative of Habib
Bank A lultan Cant branch. In the second clearing. if the cheque is
honored. he will tell it to the ABL representative and so the SBP credits
the account of ABL HASSAN ARCADE BRANCH and debits the Habib Bank
Multan Cant branch through the clearing account. This is called Outward
Clearing.
1NW'ARD CLEARING
Suppose a person deposits a cheque in Habib Bank Melton Cant branch,
drawn on any ABL Nlultan branch: let it he the ABL main branch Cant.
The representative of HBL will exchange this cheque with the A BL's
rrpresentative iii the first clearing iii Clearing House. If the cheque is
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honored by the ABL main branch then SBP will debit and credit the
respective accounts. This is called Inward Clearings.
TRANSFER DELIVERY
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The clearing between the ABLs own branches within one city is called
Transfer Delivery. During this clearin g Pak Account is not involved. in ABL.
it is done twice in It week. The Bank charges no commission from its
customers for th is transfer delivery.
BILLIREMITTANCE DEPARTMENT
Bills for collection means the Cheques or DDsITTsIPOs which are receis
ed from or sent to other branches outside the city for collection, drawn
on any other Bank. Bills for collection M Ay be inward or outward.
Remittances means, the transfer of cash from one place to other place
through paper transaction. Remittances may be inward and outward.
BILLS FOR COLLECTION
There are two types of hills for collection
I.Inwardhills for collection (inland &
foreign) 2. Outward hills forcollection
(inland& foreign)
1NWARD BILLS FOR COLLECTION
Suppose a customer Llt ABL Mall Branch Lahore deposits a cheLgLtc draws] in
the name of Habib Bank Multan Cant Branch. Now the .ABL Mall Branch
Lahore will send this cheque Ln ABL Main Branch of Mulutn for collection
from Habib Bank Branch. Now A BL Main MulLan branch will collect this
cheque from Habib Bank Branch through clearing. and will remit the
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amount to the ABL Mall Branch Lahore - This is called Inward Bills for
Collection (inland) for ABL e1ain Branch Mahan. It will he recorded in
Inward Bills Collection Register. In the same w;iv if the cheque is
received for collection drawn on any other Bank from Foreign Branch of
ABL- then this will he called as
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Foreign inward Bills for Collection. It will also he recorded in Inward Bills Collection
Register.
OUTWARD BILLS FOR COLLECTION
When any branch of ABL sends a cheque or DD/TTIf O to main branch ABL in another
ci[y for collection from any other Bank. then it is known as Outward Bills for Collection.
Suppose a person deposits a cheque in ABL Rashidabad Mahan branch drawn on Habib
Bank Lahore branch_ Now ABL Rashidahad branch will send this cheque to ABL main
branch Lahore for collection from Habib branch Lahore branch. ABL main branch Lahore
will collect this cheque through clearing from Habib Bank branch through clearing and
will renli[ the amount to ABL Rashidahad branch Mahan_ This is called) Outward Bills for
Collection (inland)
and iL will be recorded in Outward Bills Collection Register.
In the same way, ii ABL Green Town branch sends any cheque or DDJTT/PO to its foreign
branch 'Or collection from any other Bank- then it will be called as Foreign Outward Bills
for Collection and will also he recorded in Outward Bills Collection Rcgis[er.
COMMISSION
The rule of commission for both Inward and Outward Bills for Collection is .25 rk-. with a
limit of minimum of Rs.20, plus courier charges.
REMITTANCES
The remittances call be made through the following anode of transference.
1- Demand Draft WD)
Telegraphic Tran4cr ITT)
3 . Prtvtrtertl Order(PO)
I . SBP Cheque
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DEMAND DRAFT
It is a kind of cheque. which is issued by the ABL to the other hanks, or
oCher branches of the ABL on the demand of the client. On the Demand
Draft there are different heads mentioned on that. Such as the amount to
he sent. the name of the person to whom it is to be sent It is very
convenient and safe method of sending the money from one place to
another. The businessman to transfer or send the money from one place
to another usually uses it. If one person issues the DD in the name of
other person. then it can be transferred to the account of the second
person easily. DD can be in Pakistani Rupee or in any Foreign Cur rency.
When DD is issued. it is given to the person, who wanted to make it. At
that time Bank will have no concern with that DD but an advise is sent to
the concerned branch lhaiL we have issued the DD of such amount and
on the name of this person. and you will pay him on the demand of the
client. This DD can he closed before the issuing the amount. On issuance
the DD. Bank lake some commission.
TELEGRAPHIC TRANSFER
It is also a sway of sending the money from one place to another. Like DD
certain forms are to be filled. In this the message sill not he sent through
the paper. but with the help of the fax or Ihins_*s like that.
PAYMENT ORDER
Il is an order issued by the Bank and payable on itself. through this client
can easily transfer the money from one person to another within the
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same city. Il is a written docuiateut on which the certain commission is to
he paid and certain documents are filled by the client. For this certain
amount is needed to deposit with the Bank.
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PROCESS FOR REMITTANCE
All branches ofABL deal with each other through a central account named as "Pak
Account".
PAK ACCOUNT
Pak Account is nutin[ained in Central Office Karachi. In Central Office there is an account
of every branch and all these accounts of all branches are maintained through this Pak
Account. In Pak Account. at specific code has been allotted to every branch's accoul[.
These Pak Account controls all the renhiuances made by different branches.
Remittances may he outward or inward.
REMITTANCES OUTWARD
Suppose a person comes to the ABL HASSAN ARCADE BRANCH and asks to [Hake a
Demand Droll [DD) of Rs.50. 0001- in the name of beneficiary whose Bank is ABL Mall
Branch Lahore. Now the ABL Multan branch will receive the cash and prepare the DD of
Rs.50. 4001- and will send it to the ABL Lahore branch. AL the same time it will also
prepare an advice and send it to the Central Office In this advice, the ABL Multan branch
will tell the Central Office that it has sent a DD oC amount Rs. 50,0001- to the ABL Mall
Branch Lahore. so make its account debited by RN. 50.0001- and make the account of
ABL Mall Branch Lahore credited with the Name amount This is called 'Remittances
Outward"
REMITTANCES INWARD
Similarly when the ABL Mall Branch. Lahore sends at DDITTIPO or cheque to ABL Mohan
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Cant Branch then it will he remittances inward for []us branch. This tope its
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account will be credited by central office in Pak-Account and the account
if ABL Mall Branch, Lahore will he debited.
REMITTANCE IN TRANSIT
Suppose the ABL Main Branch- Malian wants to send the surplus fund to
the central office Karachi - This branch will first deposit the funds in the
State Bank of Pakistan. which will transfer these funds to central office,
Karachi. Here the SBP acts as a cash agent. Now the ABL Lahore. Branch
will send an advice to central office. Karachi that it had remitted thatmany amounts through SBP. This is called Remittance in Transit Now the
SBP Lahore- Branch will remit this fund to the SBP Karachi - Branch and
from there. funds will he ultimately transferred to the central office.
In the same was when ABL Lahore, Branch requires the funds thenCentral Office
will
remit these funds through SBP and will send an advice to the ABL
Lahore. Branch. The funds will be ultimately transferred from SBP
Lahore. Branch to ABL Lahore. Branch. This is also Remittance in Transit.
FOREIGN BILLS AND REMITTANCES
These can he
n Foreign Currency Telegraphic Transfer
n Foreign CurrencyDemandDrafi
Allied hank can transfer funds to the remotest fart of the eountry Cor
paynienilcrcdit to the account of the customer himself or a third party,
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through Telegraph Transfer for the payment on the same or next day.
The Bank also issues the Demand draft for remittance of fund by
customer. The Demand draft can he issued di favor of the purchaser
himself or a third party. It is secured and convenient to send/carry_
instead of cash.
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TELEGRAPHIC TRANSFER
In this case the aulhurity is given to one hank from another hank on the
behalf of the customers though Ielecil]nnwnicatiun to debit their inter
office account with them and credit his/her or party's account mentioned
in telegraphic transfer ['LT.) This is the fastest way of transferring money
from one place to another within the country as swell as out side the
country.
As we know that when a bank issues a T.T. it is given some service to the
customers, so service charges her issuing TT S . credit vouchers areprepared. Crediting [lie cable charges and a dehit advice is made for the
party telling them that so much services charge have been deducted I -
rum your account with us. All the TT'S are serially numbered. There are
two types of TT'S
1. !wonting TT :S
2. Out-going TT'S
So far both type of T.TS separate registers are maintained While issuing a
TT a confidential code no. called the test numbers is also being given to
TT by two authorized officers and this code number IS only under stood by
the two other authorized officers in the receiving hank. By this test some
mulLip[ications 'C done which confirm the instructions in the body of T.T.
MAIL TRANSFER
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As it is clear from its name that in this case the transfer of mone y in the
shape of at document/ takes place through mail. The procedure is like TT.
that is instructions are given to the receiving bank that inter office
account should be debited and 'edited to the mentioned party's account.
It is slower as compared to the TT. Records are maintained in the same
way as of Iclegruphic transfer. commission is also charged in the same
manner but at at different rate.
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ACCOUNT DEPARTMENT
Every Transaction. which takes place, is recorded in the computer.Transaction takes place through different vouchers which are finally
posted to computer. As I already wrote dial total branch was C o
nlpuLCriLed so all transaction in different dept. Would be made on
computer. Each dept prepare at summary of daily transaction 'at is
forwarded to Account dept Since all voucher from differ-it dept also
forwarded to current dept. So this dept. swill tally it such transaction ssiLh
current dept after maintaining the ledger each dept
The dept take care about bookkeeping, maintains ledger and current
accounts of different dept.
Following are the different functions performed by this department.
I. Preparation oftttonthls', quarterly. . S .emicrrtttnatl[' and vearhvbalance
sheet of the hrant.h.
2. To tnainrain all accoeotr.s ofdifferentdepartment.
3. Calculation of profitcifdifferent investmentschemes.
4. Calculation of mark-irp t / ' different advances.
5. Preparation of difkrerrr type of reports for state hank ofPakistan.
ti. Preparation ofdailyposition return ofcash and every account.
7. the most important jiurerion is the clteckin, and tallying daily summaries of
different depetrtitrents with ledger's hrrltrnce
DEPOSITS SCHEME
Deposits to the hank are ats the backbone to the body of elan it is
lil'ehload of at bank. The hank borrows money from general public by
accepting or by an offering suitable rate of lit on them, or simply promise
to repay on demand. When the bank receives the deposits. it becomes
the debtor and client assumes position of creditor.
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AL ABL the main thrust is on customer satisfaction. The Bank provides
many opportunities to place the funds in variety of deposit accounts
including foreign currency
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deposit account and offer a wide range of facilities and services Lai bred
to suit the personal as well as domestic and foreign business
requirements of its customers. The different deposit schemes offered by
ABL are as follows:
1.Current Deposit Scheme
Purpose
The purpose of this account is to provide the facility to die account
holder that he can deposit or withdraw any amount of money from his
balance at any time.
Deposit of Funds
Funds can be credited into the current deposit account in the forth of
cash, Cheques and other financial instruments drawn on any other Bank
or any other branch of ABL. Minimum & Maximum Balance
This account can be opened with a minimum balance of Rs. 100 and
there are no maximum limits on balance.
Mark-Up
No Mark-up is given to the current deposit account holders. Furthermorethe current accounts are exempled from Zakat.
2-PI.S Saving Bank Deposit
Minimum & Maximum Balance
Profit and Loss sharing Bank account can be opened with a minimum of
Rs. thfl. There are no limits on the maximum balance.
Deposit of Funds
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Funds can he deposited into this account through Cash. Cheques and
other financing instruments drawn on any Bank or any other branch of
ABL. The Bank will take care of to sec that the credit and debit entries
are correctly recorded in the accounts of the account holders but in case
ofany error. the Bank shall he responsible make the correct
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adjusting entries without noticing the account holder and recover any
amount clue from the account holden.
Profit
The profit is given after every six nuanihs and the rate of profit is
announced semi annually. The overall profit of Bank for six months is
determined and on that basis the rate of profit on this account is
calculated. The profit is given to the account holder on the month wise
product. It is determined on the minimum balance of account from 7th to
31st of every month. The PLS saving rate announced by ABL on 3lst
June. 2{}0R. l iar the next six months is 2.5%.
Eligibility for Sharing Profit/Loss of the Bank
PLS saving account having a running minimum credit balance ill' Rs. 100.
would he eligible fur sharing profihiloss of the Bank the proportion of the
profit or loss on PLS Saving Account shall be determined by the Bank in
its sole discretion and the Bank decision shall he final and binding on the
PLS Account holder.
The Bank shall he within its rights to make investment of credit
balances/deposits in PLS Saving Account in any manner at its vole
discretion and to make use of thc funds to the best of its judgement in
the banking business under the PLS system
Wilhdrawadii
Account holder can only withdraw sums from his account by [means of
Cheques supplied to him by the Bank for that particular account.
Cheques should he signed as per specimen signature supplied to the
Bank and if there is any alteration in the signature of the drawer. then it
must he authenticated by the drawer's full signatures.
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Post dated and stale Cheques shall not he paid. Withdrawals from PLS
saving accounts are allowed not more than ei ght times in a month and a
total amount not exceeding Rs. 25.000. For withdrawal of larger amount.
seven days notice is required to he given
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criItMministraunnDepartment
Human Rewu ru flpartmen;
ST'RUCT'llu IN T'IEE: FINANCE DEPARTMENT
Central Departmentalization
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cm
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B r a n c h D e p a r t i n e n t a i ic a t i o n
B r a m e Manager
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FINANCE DEPARTMENTALIZATION
Following divisions are there in finance departments
ADVANCES DEPARTMENT
n Introduction
Securities.
Types of advances
INTRODUCTION
The function of advances department is to lend money in the form of clean advances,
against pr9omissorv notes. as well as secured adsanccs against tangible and marketable
securities. The bankers prefer such securities that do not run the risk of general
depreciation due to market fluctuations.
Conunon Securities for the hankers advances are as under.-
SECURITIES
1. Guarantees
When an application for advance cannot offer any tangible security. the hanker may rely
on personal guarantees to protect himself against IONS on advances or overdraft to the
applicant.
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2. Mortgage
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A mortgage is the transfer of an interest in specific immovable property
or the purpose of security the payment of money advanced or to be
advanced by way of loan. and existing or future dehi, or the performance
of an engagement which may rise to a pecuniary liability. The transfer is
called a owrtgagor, the transferee a mortgage.
3- Hypothecation
When property in the shape of goods is charged as security for a loan
form the hank the ownership and possession is left with the borrower, thegoods arc said to he Hypothecated The essence of hypothecation is that
neither the property in the goods not Lhe possession of them are
possession is left with the borrower. the. goods are said Lo be
Hypothecated the essence of hypothecation is that neither he properly in
the goods not Lire possession of them are possessed by the lender, but the
security is granted by means of Letter of hyptullrtcation. which usually
p]uvides fur a banker's charge on the hypothecation goods.
4-Pledge
In a pledge the ownership remains with pledge_ but die pledge has the
exclusive possession of property until the advance is repaid in full. While
in case of the default the pledge has the power of sale after giving due
notice.
5. Promissory Note
Sometimes promissory note is also accepted us a security. 'A promissory
note is an instruments in writing containing an unconditional undertaking
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shined by the maker. to pay on demand or at a fixed or determinable
future Lime a certain sum of money only, to or tit the order of certain
persons_ ur Lc) the hearer or the instrument." A promissory note is
incomplete until has been delivered to payee or tire hearer. Moreover. the
sum promised in a promissory note may be made by two or more makers
who may be Liable there on jointly and severally.
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TYPES OF ADVANCES
The advances which are given by Allied Bank Limited are as under:-
1. DEMAND FINANCE {Ordinary Loan)
Demand f=inances are [hose advances which are allowed in lump sum for
a fixed period and are repayable lump sum or gradually in insJallmenLs.
TYPES OF ADVANCES
Demand Finance (Packing CrediL)
n Scheme introduced by Stale Bank of Pakis[an f o r exporter of
carpet. surgical instruments, au Lerf~ percent rate of inLeresl. While
banks pros ides at C{111cessional rate of interest.
Loan ordinary (Demand Finance to Students)
Qari-e-Hasana Scheele Loans are allowed to the students, teachers
without any interest for mark up with the recommendations of the
M PA or MN A.
Demand Finance {Staff}
Loans are offered to the staff of the following four categories.
n Howse Building Loans against mortgage of property.
Loan for purchasing vehicles.
n Loan uyuivalcnt Lo month, salary.
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RUNNING. FINANCE (OverdraftI
Running finance ]old name overdrafts) are advances, which are
generally, given to meet temporary requirements of the customers. A
good customer use he banks running finance limit as at mean of
protecting his credit in the ]narkeL and as a line of security defense to
meet his cumin] itnie'n[s.
TYPES OF RUNNING FINANCE
Unsecured
Under such type of overdraft the hank pay upon the personal security of
the customer's mentioned on the CUSLUETIer t. JCCQU[E.
Secured
Under this type of overdraft the hankallows his customer to withdraw
mutt than his deposits after giving security against the amount
overdrawn.
The securities against which they given are:
Share certificate. Saving certificate
Deposits
Mortgage of property . Guarantee of person
CASH FINANCES (Commercial !mans Inward)
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This Lvpe of loans are given against following:
Against locally manufactured goods.
n Cash finance against Rice and Paddy
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n Against pledge
n Against commodities
n Besides advances against the above commodities parties For advances againstother commodities like tobacco. oil. may approach hank.
To obtain adjustment of an overdue account or to facilitate the borrower to self the
pledged good it is some times necessary u) deliver a portion of the goods. against the
trust receipt and promise from the borrower to deposited the sale proceeds with the
b k -
Sntall Loans
Loan is allowed to contractors clearing and forwarding agents.
FINANCE AGAINST THE FOREIGN BILLS (FAFB)
The advance facility is allowed both to local Foreign hills and is classified as under:-
FAFB (Local) advance against Railway receipts and truck receipt, a company with hills ofexchange and invoices. are given under this head.
FAFB tForeignl advances against Foreign bill. covering bills of exchange hills of lading
airway hills oi' exchange bills of lading airways bills etc -
AGRICULTURE LOANS
Loans to the farmers with holding up to 25 acres for meeting their short terms, medium
and long terms Agricultural production requirements. such as:
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Agricultural inputs
Tube wells
Live Stock Framing Land improvement
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INDUSTRIAL LOANS
Besides the short-term loans which play at part in working capital
medium and long-term loans are also given Lo industrial sector for
purchase of machinery and other capital nature goods.
FOREIGN EXCHANGE DEPARTMENT
international trade is growing and with the development of international
trade it has become more imperative.
For countries Lc) devote more and more attention to the complicated
mechanism of Foreign Exchange. It is more important in rase of
developing countries. It is need of Lime, that at country should conserve
its foreign exchange resources.
MEANING OF FOREIGN EXCHANGE
The foreign exchange term refers to the principles that determine Lhe
rate of exchange. 1L covers following three senses:
The mechanism or system by which international obligations or
indebtedness are fulfilled.
The currency of one country is exchanged for that of another.
The principles on which the people ofthe world settle their debts to one
another.
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FOREIGN EXCHANGE TRANSACTIONS
The foreign exchange transactions are usuallyof two types.
i. Merchandise Transaction
These consist ofvisible imports and exports, i.e. the purchase of goods, for abroadand
sale of goods to abroad.
ii. Service Transaction
These represent inward and outward payments in respect of shipping, insurance,
banking and travel services. It inch:des payments in respect of interest, dividends, rents
andpro/i1.s etc.
iii. Unrequited Transfers
in indicates the payments and receipts from rrf reign countries in shape of such items
as home remittances by workers abroad, gifts, aids etc.
H. Capital Account Transactions
These arefarther dividedinto two classes:
i. Lung Term Capital Transfers
Those trans;fers whereby residents of one conntryacquire securities (stocks and bonds)
and tangible assets (baud etc.) in foreign countries with the purpose ofearningprofits in
future.
ir. Short Term Capital Transfers
Those transfer which move relativelyquickly from country to country;
Fore speculativepurposes
To lake advantages ofdifferences in interest rates
As balancing items where a countryhas a debit or credit balance on currentaccounts.
The important examples are.
Money Gold. and
Holdings ofcommercial credit, hills, cheques etc.
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Transactions with I.M.F
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BILLS DEPARTMENT
Bills department performs the l'o11owing
functions. Inward Bills forCollectiott (IBC)
Outwards Bill for Collection 9OBCI
INWARD BILLS FOR COLLECTION (IBC)
These are bills or cheques etc. which are collected locally. They are
received from outst:uinn blanches banks and parties.
DEMAND DRAFT:
If refers to the payments or money an demand of the holder of draft
Demand draft includes DD issues and DL) payable.
OUTWARDS BILL FOR COLLECTION (OBC)
CLEAN BILLS:
'These are negotiable instruments, drawn on outstation branches, hillssent for collection on behalf of the customers i.e. cheques. drafts or
treasury bills etc.
DOCUMENTARY BILLS:
These are hills accompanied by documents such as R_R.T.R Bil ls of
landing etc. having title to goads, collected by the hankers on behalf of
their customers.
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PAY SLIP:
Pay slip is an instrument in receipt. issued by the hank in the
following cases. On account of expenditure incurred by the
bank.
On account of refund ofan payment to a persons under certain
circumstances.
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PAY ORDER:
Pay order is issued to other banks for collection of I n c a k t h e payment as said.
ACCOUNTS DEPARTMENT
Usually Accounts are maintained in two ways:
Journal System
Vouchers System
Journal system is adopted by some commercial industrial institutions. In journal system
entries are reported in Journal Books and then posted Lo ledger.
Voucher system is used for every transaction. Voucher has to he prepared either in cash or in
transfer or in clearing, the Sheet upon which these voLte'hers are summarized transactions-
wise and consolidated into a figure is called supplementary.
Types of Supplementary
Debit Supplementary
Credit Supplementary
Debit supplementary is u