Alfalah bank ltd

EXECUTIVE SUMMARY
Following privatization, Bank Alfalah emerged as new identity of Habib Credit and
Exchange Bank with a revived purpose and commitment. Charged with the strength
of Abu Dhabi consortium and under the leadership of his Highness Sheikh Nahayan
Mabarak Al - Nayayan, the bank has already made significant contributions in
building and strengthening both corporate retail-banking sectors in Pakistan.
Bank Alfalah has invested in revolutionary technology to have
an extensive range of products and services. This facilitates its commitment to
a culture of innovation and seeks out synergies with clients and service providers to
ensure uninterrupted services to its customers. It perceives the requirements of its
customers and matches them with quality products and service solutions. During the
past seven years, it has emerged as one of the foremost financial institution in the
region endeavoring to meet the needs of such a dynamically changing market.
Designing the product portfolio of bank response to the customer’s preferences, the
product like Royal Profit, Royal Patriot and Royal Custodial are prime examples of
quality and innovation providing timely banking opportunities to customers of bank.
Assessment of the needs and wants of the customers is an on going process at Bank
Alfalah, which helps to continually develop new products and services. To
continuously offer courteous, professional and advanced banking solutions, the team
of bank has recently been rejuvenated by going though training programs with a focus
on information technology.
To make their banking solutions become accessible to more and more people, they
have embarked upon a rapid expansion program, aiming to provide a networking that
makes the services available to any of their customers in all the major urban centers
of Pakistan with a view to go international in the future.
With their key indicators of progress already soaring to new heights, the bank is
committed to dedicate all its energies, resources and time to bring higher value and
satisfaction to their customers, employees and shareholders. The graph of bank is
going up and up every year. The ratio of profit is increasing at good percentage. Thy
bank is serving the people at high level of standard by going according to the whishes
of the customers.

Lets Look Ahead Towards a Brighter Future Together 1

HISTORY OF BANKING
According to Professor Berton;
“Banks are the guardian & distributor of money”
“Bank is a pipeline through which currency moves into and out of circulation.”
Bank accepts deposits and repays cash to its customers on their demand. The Bank
borrows money at a lesser rate of interest and lends it to the borrowers at a higher
rate. It is thus a profit-lending concern. Bank cannot lend all the money that has been
deposited with it. It has to keep a certain portion of the total deposits in cash with
them in order to meet the cash requirements of the individuals and business concern.
Banking History
Word Bank is said to be derived from the words Banc us or Banque or Bank. The
history of banking is traced to as early as 2000 BC. The priests in Greece used to keep
money and valuables of the people in temples, acted as financial agents. The origin of
banking is also traced to early goldsmiths. They used to keep strong safes for storing
the money and valuables of the people. The FIRST STAGE in the development of
modern banking, thus, was the accepting of deposits of cash from those persons who
had surplus money with them.
The goldsmiths used to issue receipts for the money deposited with them. These
receipts began to pass from hand to hand in settlement of transactions because people
had confidence in the integrity and solvency of goldsmiths. When it was found that
these receipts were drawn in such a way that it entitles any holder to claim the
specified amount of money from goldsmiths. These receipts were the earlier bank
notes. The SECOND STAGE in development of banking thus was the issue of bank
notes.
The goldsmiths soon discovered that all the people who had deposited money with
them did not come to withdraw their funds in cash. They found that only a few
persons presented the receipt for encashment during a given period of time. At the
same time, they found that they were being constantly requested for loan on good
security. They thought it profitable to lend at least some of the money deposited with
them too the needy persons. This proved quite a profitable business for the


goldsmiths. This was the THIRD STAGE, in the development of banking.
By experience the banks came to know that they could keep a small proportion of the
total deposits for meeting the demands of customers for cash and the rest they could
easily lend. They allowed the depositors to draw over and above the money actually
standing to their credit. In Economics terminology we can say that they allowed the
overdraft facilities to their depositors. This was the FOURTH STAGE, in
development of banking.
When every bank issues receipts and most of them allowed the overdraft facilities,
there was then too much confusion in the banking system. The banks in order to earn
profits could not keep adequate reserves for meeting the demands of the customers
for cash. The failures on the part of the bankers to return money caused widespread
distress among the peoples.
In order to create confidence among the people, steps were taken to regulate the
banking organization. A conference was held in Nuremberg in 1548. It was decided
that a bank should be set up by the state, which should streamline the banking
organization and technique. The first central bank was formed in Geneva in 1578.
Bank of England was established in 1694. The responsibility of issuing of notes is
now entrusted to a central bank of each country.

FORMS OF BANK

FORMS OF BANKS

Central Bank Commercial Banks

Scheduled Banks

Non-Scheduled Banks


INTRODUCTION

Following privatization, Bank Alfalah emerged as new identity of Habib Credit and
Exchange Bank with a revived purpose and commitment. Charged with the strength
of Abu Dhabi consortium and under the leadership of his Highness Sheikh Nahayan
Mabarak Al - Nayayan, the bank has already made significant conditions in building
and strengthening both corporate retail-banking sectors in Pakistan.
Designing the product portfolio of bank response to the customer’s preferences, the
product like Royal Profit, Royal Patriot and Royal Custodial are prime examples of
quality and innovation providing timely banking opportunities to customers of bank.
Assessment of the needs and wants of the customers is an on going process at Bank
Alfalah, which helps to continually develop new products and services. To
continuously offer courteous, professional and advanced banking solutions, the team
of bank has recently been rejuvenated by going though training programs with a focus
on information technology.
To make their banking solutions become accessible to more and more people, they
have embarked upon a rapid expansion program, aiming to provide a networking that
makes the services available to any of their customers in all the major urban centers
of Pakistan with a view to go international in the future.
With their key indicators of progress already soaring to new heights, the bank is
satisfaction to their customers, employees and shareholders.
The graph of bank is going up and up every year. The ratio of profit is increasing at
good percentage. Thy bank is serving the people at high level of standard by going
according to the whishes of the customers.


COMMERCIAL BANKING SCENARIO IN
PAKISTAN

At the time of independence in 1947, there were 38 scheduled banks with 195 offices
in “Pakistan” but by December 31, 1973, there were 14 scheduled Pakistani
commercial banks with 3,233 offices all over Pakistan & 74 offices in foreign
countries.
Nationalization of Banks was not done 1st January 1974 under the Nationalization
act 1974, due to certain objectives. But it had negative effects on efficiency of the of
the banking sector afterwards a privatization Commission was set up on January 22,
1991, the commission transferred many banks to the private sector i.e., MCB & ABL.
The government approved & permitted the establishment of 10 new private banks in
1991; hence many new private banks have incorporated, since then, BANK
ALFALAH in one of the namely established private scheduled banks in Pakistan.


INTRODUCTION TO BANK ALFALLAH
Bank of Credit & Commerce International (BCCI) was a Pakistan based bank,
established by Mr.Agha Hassan Abdi from UBL, in association with U.A.E and
Europe. BCCI has its branches in 74 different countries of the world. It had its 3
branches in Pakistan. In 1991, the BCCI was banned, when it was accused by
European countries, that the bank was involved in some illegal operations with Gulf
countries. The major reason behind European accusation was that BCCI was of
Islamic mode. Therefore, the bank was closed due to international pressure. Then, its
3 Pakistani branches were taken over by the Government of Pakistan, which were
named as Habib Credit and Exchange Bank (HCEB) and these were working as
subsidiary of Habib Bank Limited.
Following the privatization in July 1997, Habib credit and Exchange Band assumed
the new identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based
bank as the family of Sheikh Nahayan Mubarik Al Nahayan purchased 70% of its
shares and 30 % shares remained with Habib Bank on behalf of Government of
Pakistan.
It has it 42 branches in 17 cities in Pakistan. The D.G.Khan branch was opened in
August 2002. Alfalah has emerged as one of the leading commercial banks in the
financial sector of Pakistan. Charged with strength of Abu Dhabi consortium and
under the leadership of his highness Sheikh Nahayan Mubarak, minister of higher
education and scientific research and prominent member of Royal family. The bank is
energized with vision, envisaging.
The development of various sectors in Pakistan. The bank has already made
significant contribution in building and strengthening both corporate and retail banks
sector in Pakistan. Assessment of the needs and wants of customer is an on going
process at Bank Alfalah, which help to centennially develop new products of services.
Designing the product portfolio in response to royal patriot, royal custodial, Alfalah
car finance, Alfalah rupee traveler cheques home loans are prime example of quality


innovation providing timely banking opportunities to customer. To continuously offer
courteous, professional and advanced banking going through training programs with
focus to information technology has recently rejuvenated solution the team of bank.
With their key indicators of progress a steady soaring to new heights, the bank is
satisfaction to their customers and employers.
The graph of the bank is going up and up every year. The ratio of profit is increasing
at a good percentage. The bank is serving the people at high level of standard by
according to expectation of customers.

Evolution of Islamic banking

In 1984 General Zia Ul Haq made ISLAMIC IDEOLOGICAL COUNCIL. THEN
AFTER 2 YEARS ISLAMIC MODE OF FINANCE was introduced but people did
not accept because they said these are not ISLAMIC in true sense. In 2002
SUPREME COURT OF PAKISTAN had taken decision of INTEREST FREE
BANKING. UNITED BANK took stay order from the court. Then it was decided that
there should be a separate LICENSE for ISLAMIC BANKS. So first of all, Meezan
Bank took the license of Islamic Banking. Then Alfallah Islamic, Muslim
Commercial Bank, and Askari Bank took the license. In January 2004, Alfallah
started Islamic Banking. And in 2005, Alfallah Islamic Banking Division Multan
started working .Mr. IJAZ FAROOQ is supervising the Islamic bank of Alfallah
Bank.


BRANCH LEVEL HIERARCHY

Corporate Manager
Mr.m. saqib

Branch Manager
Mr.ahsan qureshi

Operation Manager
Mr. Faisal

OPERATION FOREIGN
DEPARTMENT EXCHANGE
DEPARTMENT
Imports
Cash Department
Mr. Amar
Mr. ikhlaq
Exports
A/C Opening Ms. Maria
Ms Humera

Remittance Dept.
Mrs. Qurat ul ain
Accounts Dept.
Mr. M.Waqar


Our Vision
Establish Islamic banking as banking of first choice to
facilitate the implementation of an equitable economic
system, providing a strong foundation for establishing
a fair and just society for mankind

“The introduction of a just and equitable financial system by
being a world class multi-purpose financial institution, providing a range of
specialized services, working on Shariah principles.”

Mission Statement

To be a premier Islamic bank, offering a one-stop shop
for innovative value added products and services to our
customers within the bounds of Shariah, while optimizing
the stakeholders' value through an organizational culture
based on learning, fairness, respect for individual
enterprise and performance.
THE PHILOSOPHY
 Excellence in service
 Quality performance
 Product innovations

THE BOARD
H. H. Sheikh Hamdan Bin Mabarak Al-Nahayan
Chairman
Mr. Abdulla Khalil Al-Mutawa
Mr. Omar Z. Al-Askari
Mr. Abdullah Nasser Hawaileel Al-Mansoori
Mr. Nadeem Iqbal Sheikh


Mr. Ikram Ul-Majeed Sehgal
Mr. Mohammad Saleem Akhtar
Chief Executive Officer

BOARD OF DIRECTORS

Chairman

Secretary of the
Board

CEOB Director Director
Director Director Director
(member) (Govt. Nominated) (Govt. Nominated)

CORPORATE INFORMATION
Company Secretary
Mr. Hamid Ashraf
Auditors
A. F. Ferguson & Co.
Chartered Accountants
Head Office
B. A L Building
I. I. Chundrigarh Road
P.O. Box 6773
Karachi
EXECUTIVE COMMITTEE
Mr. Mohammad Saleem Akthar
Chairman
Mr. Parvez A. Shahid
Mr. Ikram Ul-Majeed Sehgal
Mr. Mohammad Yousuf
Mr. Tanweer A. Khan
Mr. Sirajuddin Aziz
Mr. Mahmood Ashraf


BANK ALFALLAH’s SLOGAN
Let’s Look Ahead Towards a Brighter Future Together.
BRANCHES NETWORK
Bank Alfalah has 55 branches in 23 cities of Pakistan. Detail of some major branches
as under: -
Karachi
 Main branch, B.A. Building, I.I. Chundrigar Road
 Cloth market branch
 Clifton branch
 Shahrah-e-Faisal Branch
 Jodia Bazar branch
 Korangi industrial area branch
 M.A. Jinah Road Branch
 S.I.T.E Branch
 Paper market branch
 North Karachi branch
 Gulshan-e -Iqbal
 Karachi stock exchange
 North Napier road branch
 S.I.T.E Branch
 P.E.C.H.S Branch
 Timber Market Branch
 D.H.A. Branch
Lahore
 Gulberg branch
 Defense branch
 Circular road branch
 Township branch
 LDA Plaza branch


 Badami bagh branch
 Allama Iqbal branch
 Shah Alam Market branch
Rawalpindi
 Mall road branch
 Satellite town branch
Other Branches
 Sialkot
 Islamabad
 Peshawar
 Multan.
 Faisalabad
 Quetta
 Sukkur
 Hydrabad
 Gujranwala
 Rahim Yar khan
 Sahiwal
 Sargodha
 Gujrat
 Mardan
 D.G.Khan
Now, Bank Alfalah is going to establish its branches in some foreign countries.
Hopefully, in Dhaka (Bangladesh) and Bahrain, its branches will be opened in the
year 2004. Some branches will also be opened in European countries. Bank is going
to establish its branches in D.G. Khan, boray-e- wala and in Bahawalpur as well.


ABOUT THE BANK FEATURES
(Islamic Banking)

For prosperity in Business,
Come to Islamic Banking,
For Islamic Banking,
Come to Bank Alfallah!

Bank Alfalah Limited is an established bank. It has some special features with the
help of those it is growing rapidly. The Islamic banking system has seen resurgence
in the last few years. This financial system is unique since profitability is not the
ultimate aim but the social implications of the economic decision are equally
important. Communal Welfare and social justice are integral values to be upheld
during normal course of business and can not be neglected. While profitability and
economic viability as a priority is not the sole criterion for judging the performance of
an Islamic financial Institution. This ensures a more equitable distribution of wealth
and enhanced equity participation.
While this unique form of financial intermediation can emerge as an impactful engine
of economic growth, this mode of finance needs effective nurturing before its true
potential can be realized. If implemented sagaciously Islamic banking can contribute
effectively to national economic activities. We realize the significant market that
exists in Pakistan which demands Sharia compliant financial solutions and aspire to
serve this market segment with high service and value. Bank Alfallah Islamic banking
branch units have been instituted all over Pakistan and active expansion is underway.
Our comprehensive Islamic banking product portfolio includes deposits for current
accounts, saving accounts and investment deposits, capital financing trade financing,
house financing and leasing etc which imbibe product features based on the Sharia.
At the same time there is a strong focus on research and innovation in order to give
our clients greater returns and security. We wish to promote an operating system that
is geared towards supplying state of the art cutting edge financial products and
educate potential clients in the benefits and advantages of the Islamic banking system.
 Pursuit of Excellence


 Dedicated Professionals
 Outstanding Work Environment
 Efficiency
 Customer Services
 Suggestions Asked From Customers
 Employee Benefits
 Computerized Working Environment

PRODUCTS

 Current Account
 Alfallah Musharaka Saving Account
 Musharaka Time Deposits on PLS Basis
 Alfallah Car Ijarah
 Alfalah Corporate Ijarah
 Alfalah Consumer Ijarah
 Alfallah Musharaka Homes
 Trade/Project financing
 Import/Export Financing
 Remittances
 All Types of Guarantees
 Safe Deposit Lockers
 On Line Banking
Designing its portfolio bank is committed to develop products that give more value to
its customers in both the sectors in corporate and consumer need.


Competitors
Despite notable economic uncertainties, the financial strength of Bank Alfalah Limited
has greatly enhanced during the previous years. The successful expansion program
proved their capability and commitment in comparison with the competition in the
financial sector. The Banking structure in Pakistan comprises of:
 Central Bank
 Commercial Banks
 Investment Banks
 Development finance Institutions (DFIs)
 Specialized Banks
 Foreign Banks
Bank Alfalah is a private commercial ISLAMIC Bank so the major competitors of
Alfalah Islamic Bank are the following:
 Askari Commercial Bank Ltd
 Muslim Commercial Bank
 Meezan Bank

Internship Program

I did internship of EIGHT weeks at Bank Alfalah Limited. There I worked in six
departments. I started up with account opening, where I learned about different types of
accounts, and how to open a new account, etc. Also I worked in TDR, CDR and
collection. Here I worked with Ms. Humera
Then I moved to Cash and Deposits Department. The in charge of this department is Mr.
Rana Ikhlaq There I learned the handling of Cash.
Then I was sent to Accounts Department where I Worked under Mr. Mubashir.
Then I was send to Foreign Currency Accounts Department. Here I worked under Mr.
Amir.
After working in Accounts I worked in Trade Finance department. The in charge of this
department is Maria Irum. Here I learned about International Banking and the procedure
of import and export.


Alfallah CAR ijarah
It is basically transfer of usufruct of fixed asset to another person for an agree period at
an agreed consideration. Under ijarah agreement the asset will be given to the customer
on a rent for the period agreed at the time of contract.
Following the mission of providing Islamic Based Financing, Bank Alfalah’s Islamic
Banking has introduced” Alfallah Car Ijarah” a sharia compliant car leasing scheme. It is
based on the principles of Ijarah and is completely free from the element of interest. This
product is ideal for interest aversive individuals, looking for a car financing scheme that
not only provides the convenience of a well designed product but also helps in avoiding
interest based transaction. In “Alfallah Car Ijarah”the vehicle (car) remains in the
ownership and risk of bank and the customer only pays the rental for use of the vehicle
(car) just like house rent. The “Alfallah Car Ijarah” scheme has been designed under the
supervision of our sharia advisor (centre For Islamic Economics providing training and
consultancy of Islamic Banking to Islamic Banks through its sharia advisors). Moreover
our sharia advisor Mufti Khalil Ahmad Azami shall oversee the activities of Bank
Alfallah’s Islamic Banking on day to day basis to ensure that all the documentation and
procedures are fully compliant to Islamic Laws. The sharia advisor shall also periodically
review the activities and approve its new products. .
The Centre of Islamic Economics is operating under the chairmanship of
Justice Muhammad Taqi Usmani.
On the other hand, a conventional car financing scheme is actually an interest based loan
given by the financial institution and interest is charged on that loan. Also, the lease
contact is not in compliance with Islamic Sharia and has Riba and other un-Islamic
elements in it.
Alfallah Car Ijarah gives you the flexibility of acquiring all locally assembled new cars
costing up to Rs. 1.0 million. You can pay in flexible, easy rentals over a period of 3, 4 or
5 years, with as low as 15% security deposit. Bank Alfallah Islamic Banking being the
owner of car will be responsible for insurance of the car and for paying the insurance
premium. Until the availability of Islamic Insurance in Pakistan the Insurance will be
done under the present insurance modality. Yes, you can buy the car prior to the


termination of lease. The rental agreement will contain the purchase price schedule. After
receiving the completed application form along with the required documents, your
application will be processed in 3-4 business days.
Car Ijarah - Islamic Car Financing
Our totally halal auto finance facility that is very affordable, with quick processing and
minimal documentation. Car financing that is very competitively priced, hassle-free, and
totally Halal. Ijarah is simply a rental agreement under which the car is given on rent for
an agreed period ranging from 3 to 5 years. There is no advance rental, no up-front
insurance payment, and as little as 20% security deposits.
Rights & liabilities of Owner v/s User
An Islamic Ijarah is an asset-based contract, i.e. the Lessor should have ownership of the
asset during the currency of the contract. Under Islamic Shariah, all ownership related
rights and liabilities should lie with the owner while all usage-related rights and liabilities
should lie with the user. A conventional lease contract does not distinguish between the
nature of these liabilities and dumps all liabilities on the user, which is contradictory to
Islamic Shariah. Under Ijarah, all ownership-related risks lie with the Bank while all
usage related risks lie with the user, thus making the Lessor the true owner of the asset
and making the income generated through the contract permissible (Halal) for the Bank.
Continuation of lease rentals in case of total loss or theft of vehicle
If the leased vehicle is stolen or completely destroyed, the conventional leasing company
would continue charging the lease rent till the settlement of the Insurance claim. Under
the Islamic system, rent is consideration for usage of the leased asset, and if the asset has
been stolen or destroyed, the concept of rental becomes void. Alfallah bank does not
charge the lease rental.
Is there a Penalty for Late Payment of Rent and how is this permissible
under Islamic Shariah?
In most contemporary financial leases, an extra monetary amount is charged if rent is not
paid on time. This extra amount is the considered as Riba and is Haram. This amount is
taken by the leasing institution. Under Ijarah, the Lessee may be asked to undertake that
if he fails to pay rent on its due date, he will pay certain amount to a charity which will be
administered through the Islamic Bank. For this purpose the bank maintains a charity


fund where such amounts may be credited and disbursed for charitable purposes.
Key Features of Car Ijarah

 No application fee
 Ease of acquiring any new locally assembled car
 No upfront Insurance Payment
 No advance Rental
 Available in tenures of 3, 4 and 5 years
 Minimum security deposit as low as 15%

• This facility is for locally manufactured cars of Suzuki, Toyota, Honda & the new
model of Santro only.

Rental Calculations

To calculate the monthly rentals simply multiply the cost of the car with the rental factors
given in the table below or use our online rental calculator

Rental Calculation for new cars**
Security Deposit 3 years 4 years 5 years
15% 0.032303 0.026765 0.023652
20% 0.030619 0.025398 0.022240
25% 0.028934 0.024032 0.021273
30% 0.027249 0.022666 0.020083
35% 0.025565 0.021299 0.018894
40% 0.023880 0.019933 0.017704
45% 0.022195 0.018567 0.016515
50% 0.020511 0.017200 0.015325

* No separate Insurance will be charged

For example: If you are interested in a car costing Rs. 300,000 for a tenure of 5 years
and are willing to pay a 50% Security Deposit, your monthly rental would be,


Rs. 300,000 X 0.015325= Rs.4, 597/- per month for 5 years **
(**All other costs will be charged at actual)

Required Documents for Car Finance Facility
{AGE LIMIT BETWEEN 21-55 YEARS}
1) Copy of national identity card.(new)
2) Copy of driving license (optional).
3) N.T.N certificate.
4) Copy of current utility bill of residence.
5) Bank account statement for last six months from the date of application.
6) Signature verification from banker.
7) Copy of NIC of references provided.
8) 2 passport size photographs.
Additional Requirements for Business Class Individuals
a) Copy of NIC of partners.
b) Copy of Partnership deed (if applicable)
c) NOC from other partner (if applicable)
Additional Requirements For proprietor
Business proof Bank Certificate, NTN certificate.
Additional Requirements for Salaried Persons
a) Certificate from employer showing permanent employment for the last 2 years.
b) Original salary certificate.
c) Copy of Form29 ( in case of Director of Limited Company)

How can I apply?
Simple! All you need to do is fill out a customer application form, attach the required
documents mentioned in the form and get your financing approved in a 1-2 working days.
To experience the comfort of our personalized services just visit your Alfallah Bank
Branch.


ALFALLAH HILAL CARD
Alfalah Hilal card is debit card that gives you access to your bank account. Alfalah Hilal
Card allows you to purchase goods merchant establishments across Pakistan and abroad
and also gives you the freedom to withdraw cash from any Visa/Electron/Plus ATMs in
Pakistan and abroad, and all Local Bank Alfalah and 1 link ATMs.
The Alfalah Hilal Card comes with all saving and current accounts except Non resident
(ordinary) accounts with joint mandate or condition mandate. However, accounts with
joint/conditional mandate can obtain the Alfalah Hilal Card on request by completing the
required formalities.
The main benefit of being a Alfalah Hilal Cardholder is that you enjoy unparallel access
to your account-whatever you want, wherever you go. Besides, you can control your
finances since the balance in your account determines your spending limit. Alfalah Hilal
Card is accepted at more locations worldwide than any other debit card available in
Pakistan. You can now enquire on your balance or withdraw cash using ATMs. You can
use all Alfalah ATMs, local 1linkATMs and all other bank’s 840,000 ATMs worldwide
on the VISA electron network for cash withdrawals. Subject to the maximum cash
withdrawals limit of Rs.50, 000/-per day. Presently, the card can be used at over 7,000
establishments in Pakistan and at over 13 million outlets worldwide, where the VISA sign
is displayed. The card is also welcomed at over 840,000 ATMs worldwide.
There is no monthly outstanding in the case of Alfalah Hilal Card. your account will be
instantly debited to the extent of purchase made or the amount withdrawn from ATMs in
addition to other charges on Alfalah Hilal Card. if in case of losing your card, it is
important to report Alfalah call center 111-225-111.or it is also advisable to report in
writing. There will be nominal charges of Rs.200 for the replacement of the card.


Easy Home: Islamic Housing Finance
(Musharika Homes)

Welcome to Pakistan’s long awaited totally Shariah-compliant Home Finance facility!
One that is comprehensive, affordable, and totally hassle-free. At Alfallah Bank, we are
committed to meeting our customers’ needs in a truly Shariah-compliant manner coupled
with dedicated service excellence. Alfallah Bank’s Easy Home is the answer you’ve been
waiting for

Home Financing Options
Buy Your Home: property: 80% bank: 20% customer
With this facility, you no longer need to just dream about the home you want for yourself
and your family, disbursements of bank’s shares is one time or as per terms of deal.
Build Your Home:
Land: 60% bank: 40% customer
Construction: 70% bank: 30% customer
You have a plot, and need finance to construct a home, which excites everyone in your
family! No problem. We will provide you up 70:30.construction of house/ flat to be
completed with in 12 months from the date of disbursement of the first tranche.
Renovate Your Home:
Up to a maximum of 30% of the value of your property or Rs. 2.5 Million whichever is
lower.
You already own a home, but need extra space for a growing family. One time
disbursement of bank’s shares.
Let’s Start It Together:
In” Alfallah Musharika Homes” you enter into a joint ownership agreement with the
Bank for purchase/ construction/ renovation and/ or replacement of your outstanding
housing loans to own a Musharika property, where the bank will provide you a certain
amount of financing maximum up to 80% of value of property and sign Musharika
Agreement. You also sign a Monthly payment Agreement, to pay rental for the use and
occupation of the Musharika property, and certain amount for the purchase of Bank’s
Musharika unit. The purchase of Musharika units by you shall result in Transfer of Title


of Musharika Property and you become the Sole Owner with a free and clear title to the
property.
All agreements used for Alfallah Musharika Homes are sharia compliant approved by our
SHARIA ADVISOR. Purchase of Musharika property through a joint ownership
agreement and Musharika agreement and then transferring the title of ownership to the
Customer through purchase of Musharika Units. This operational modus opendi makes
Alfallah Musharika Homes different from conventional bank’s mortgage loans. Bank
Alfallah participates in the cost of the Musharika property being purchased/ constructed/
renovated as joint owner whereas, in mortgages loans from conventional banks, the banks
charge mark-up / interest on the money lent to the customer. The rental charged by Bank
Alfallah is for the use and occupation of bank’s share in the Musharika property.
Documents
The following documents are required to be submitted by an applicant with the
completed application
1) 3 passport size photographs
2) Copy of NIC (new).
3) Copy of co-applicant’s NIC-NEW.
4) Copies of last Salary / Pay Slip duly attested by the HR department.
5) Salary Certificate (original) from the employer, showing the gross salary
and deductions.
6) Copy of paid utility bill.
7) Borrower’s fact sheet.
8) Copy of recent Credit Card Bill
9) Bank Statement for the last SIX months.
Processing charges
You will be required to deposit processing fee in the branch according to schedule given
below;
Processing charges: up to Rs 2.0 Million- Rs.5, 000
Up to Rs5.0 Million-Rs. 10,000
Up to Rs. 7.5 Million- Rs.15, 000
Up to Rs. 10.0 Million- Rs. 20,000


The processing charges shall be non refundable.
Furthermore, you will have to bear the actual stamp fee, registration fee and other
incidental charges required for registration of various agreements/ Mortgage deed/
irrevocable power of attorney etc.
Determination of BAL-IBD‘s share rent
BAL-IBD‘s share of monthly payment of rent shall initially be calculated as under:
Monthly rent * AL-IBD’s invest in property/ total value of property = BAL-IBD’s
share in monthly rent
Musharika Unit
BAL-IBD’s total Musharika investment / number of months allowed = cost of one
Musharika unit
Late Payment Charges:
No we never encourage Customers to delay the monthly payment As far as the Islamic
point of view, we can not charge any penalty on the late payment but to avoid late
payment, charge certain amount according to your undertaking in Monthly Payment
Agreement. This amount shall be utilized by BAL-IBD on behalf of customer for Charity
purposes in line with Sharia Principles.
.The Eligibility Criteria
 You are a Pakistani National
 If your age is between 25 and 65 years.
 If you are in continuous employment for 2 years or more.
 . If you have been a Bank Alfalah borrower for past one year with clean payment
record.
 You can apply for minimum of 03 years and a maximum period of 20 years.
 Maximum financing up to Rs.10 Million or three times of gross annual income of
the main customer plus 1.5 times of gross annual income of the spouse, whichever
is less.
 If you have 3 years (or more) of business or professional experience.
 If your gross annual income is Rs: 200,000/ — or more [Your spouse’s income (up
to 50%) can also be combined with yours].


 If you require a financing of at least Rs: 500,000/- or more (maximum Rs:
7,500,000/-).
If you are eligible and provide the required information/ documentation, we will take
maximum of 3 to 4 weeks for approval depending on the amount of facility.
10 Steps to Arranging Your Bank Alfalah Home Financing
1. We provide you with all the information you need about Bank Alfalah Home
Musharika. This can be through a face-to-face meeting with our Relationship
Officer, or over the telephone, or through the post.
2. You give us some basic information about your income and the amount you need
so that we can give you an agreement in principle.
3. Once you have decided on the amount you want, you complete an application
form and pass it on to us, together with the required documents.
4. We make some inquiries about your financial circumstances.
5. We carryout a valuation of the property and verification of your income.
6. Once we have carried out all the initial processing, we send you our offer through
a “Facility Advice Letter”.
7. You sign the Facility Advice Letter and return it to us.
8. Our Documentation Control Center will get in touch with you to complete
Finance & Security documentation including legal opinion on the title documents
of the property and also the insurances.
9. You sign the Finance Agreement and Charge documents.
10. Our legal advisor will accompany you to the Registrar’s office on the
appointed date with our cheque against the financing for conveyancing of the
property and your home finance begins.


BANK GUARANTEES
Bank Alfallah Islamic Banking offers following types of Bank Guarantees:

 Bid bond
 Performance bond
 Retention money guarantee
 Contract Guarantee
 Advance payment Guarantee
 Deferred payment Guarantee
 Guarantee Favoring Courts
 Guarantee Securing Gas Connections
 Back to Back Guarantee
 Shipping Guarantee
 Container Guarantee
 Guarantee Favoring Collector of Customer
 Financial Guarantee
 Bank Alfallah Islamic Banking shall also issue guarantees securing financing
facilities to be availed from Islamic Banks and or Conventional Bank’s branches
operation under Islamic modes of financing.


MURABAHA FINANCE

Morabaha is a particular kind of sale where the seller (i.e. the bank) expressly mentions
the cost of the sold commodity ha has incurred, and sells it to another person (i.e. the
Customer) by adding some profit thereon. Thus morabaha is not the loan given on
interest, it is the sale of commodity for cash/deferred price. This is a mode of sale and
purchase of commodities. The agreement is made between the Bank and a Customer,
whereby Bank purchases a commodity and sells the same to Customer on a deferred
payment basis. In other words, a contract between a bank and a customer under which
the customer first purchase certain goods / commodities / assets as an agent of bank and
bank after taking possession of the goods / commodities / assets sells it to the same
customer by adding certain profit margin to its cost.

MURABAHA SALE PRICE
Cost+ Expenses incurred + Agreed profit
MODE OF PAYMENT
 Immediately in cash
 On mutually agreed future date
 Spot Murabaha
 Deferred Sale Murabaha
TYPES OF MURABAHA
(Local purchase)
Murabaha for purchase of locally available goods / commodities on defer payment basis.
It can be lump sum and or in installments.
Imported goods / commodities / Assets
Murabaha for purchase of locally available goods / commodities / assets is allowed on the
following basis:
a) Spot Murabaha
b) Deferred Payment Murabaha (lump sum/ installments)
o Pledge of imported goods/ commodities


o Trust receipt

COMMON FEATURES
 Request from customer for purchase of specific goods /
commodities.
 Appointment of customer as an agent of bank
 The bank takes the possession of goods / commodities and
established its ownership
 Customer offers the purchase the same goods / commodities
from the bank at a specific price to be paid on some future date.
 Bank accepts customer’s offer to purchase the goods /
commodities and Murabaha documents are signed
 All associated costs / charges to be incurred pre/ post Murabaha
execution, to be determined, calculated earlier and included in
Murabaha price.
 In case of Import Murabaha , customer duties by the bank shall
be part of Murabaha price
 Appropriate collateral / securities can be obtained as per mutual
consent.
CUSTOMER’S GUIDANCE
1. Murabaha is always allowed for Fresh Purchases.
2. Goods shall not be used by the customer before Murabaha offer and
acceptance are signed
3. Roll over in Murabaha is not allowed. However, fresh purchases can be
made under new murabaha arrangements
4. Murabaha price one fixed can not be changed.
In the late payment customer have to pay certain amount in charity fund
according to his undertaking in Murabaha agreement.


FUNCTIONING OF BANK ALFALLAH IS DIVIDED
INTO FOLLOWING DEPARTMENTS

 OPERATION DEPARTMENT
 FOREIGN EXCHANGE DEPARTMENT
 CREDIT ADMINISTRATION DEPARTMENT
 CORPORATE DEPARTMENT
 CONSUMER FINANCE DEPARTMENT

OPERATIONS DEPARTMENTS
Operation Department has following segments:
a) Cash
b) Clearing
c) Remittance
d) Account opening
e) Accounts department
Operation Departments
Operations department of the Bank Alfalah Limited is responsible for the overall
operations of the bank. Mr.Faisal Nouman (Op’s Manager) is responsible for all function
under operation department.
The detail of those departments, which are controlled under this department, is as under.
a) Account opening
b) Cash department
c) Clearing
d) Remittances
e) Fixed Deposits:
1. Term Deposit.
2. Call deposit.
3. NDR.


ACCOUNT OPENING DEPARTMENT
It is most important department of bank and its major source of income for bank.
Ms.Humera operation officers deal in this department. Following procedure is adopted
for this purpose.
Procedure of Account Opening
Just fill in the Account Opening Form, bring in your original Identity Card, and get
introduced by an existing banker. This is all that you need to open a Saving Account with
us and enjoy our personalized banking services.
It is very simple and quick procedure. A person who wants to open an account must have
the introduction of bank’s staff or any already existing account holder of the bank. The
customer is required to fill an account opening form. Then signatures of the introduce are
verified from S.S. Card (signature specimen) before opening account. AOF is very
standard and up to the mark which contains almost whole information about customers.
Customer is guide to fill all columns of AOF. All formalities and requirements are
completed and verified, and all supportive documents are taken and checked according to
the nature of account. If any formality is incomplete, chequebook is not issued until it is
fulfilled.
If a person cannot sign write his / her hand thumb impression is affixed marked, which is
attested by one male or two female witnesses. Thumb impression for female right hand
and for male left hand.
Account number is allotted to the customer and all particular such as nature of account,
opening date, initial deposit, title of accounts are written in register.
Account is opened in the system (Bank Excel) by putting all the particulars of the
customers in the system. S.S. cards are handed over to in charge of operations department
for record and verification. The letter of thanks is sent to customer for confirmation of
address and other particulars of customer and one copy is attached to AOF. After
complete procedures finally the manager of bank signs the AOF and these forms are filed
in a proper sequence.
They also have to give identity letter
1) NIC copies


2) Passport size photograph
One place on the form other is on SS Card they have non-bearer cheques. On their
cheque book a stamp is affixed on it there is written. Thumb impression should be fixed
in front of an officer of the bank.
Cheque book request forward by fax to the head office and cheque books will received
after one day and derived to the customer on the desk by taking their signature or if some
one else want to take on the behalf of account holder he must have to show initial deposit
slip and give ID card photo copy.
The bank does not make payment of a cheque bearing a six months or older date. If an
account is not operated in six months. It is called dormant account.
Types of Accounts
The bank different types of accounts exist.
1) INDIVIDUAL ACCOUNT
Any individual or proprietor of business can open an individual account at BAF.
PLS (profit and loss sharing) saving accounts can be opened with the minimum balance
Rs. 10,000/-. Following requirements has to be fulfilled for this account.
 Signature of customer on back of AOF.
 Mention next of kin (nominee)
 Name and A/C # of introducer.
 Verified sign of introducer.
 Customer signature admitted by officer.
 N.I.C photocopy attached.
 Letter of thanks.
2) JOINT ACCOUNT
When different people want to or need to share a single account it is called joint account.
The names of persons are written on the title of A/C and on S.S. card.
Single person cannot open joint A/C. Both persons have to sign on cheque. When two or
more person neither partner nor trustee open account in their name is joint account.
Requirements
 Sign of both customers on back of AOF


 Sign on joint A/C # mandate
 Name and A/C # of introducer
 NIC copies of both members.
 Mode of operation.
3) BUSINESS ACCOUNTS
When the owner of the firm operating singly, open an in his term name.
I) SOLE OF PROPRIETOR ACCOUNT
This account is for those person who has his own business and he must be the solely
owner of the business.
Requirements
 Companies stamp
 Declaration of proportion companies’ letterhead.
 Sign on AOF.
 NIC copy
 Verified signature of introducer.
 Sole proprietorship declaration
II) PARTNERSHIP ACCOUNT
Account title will be the name of the partnership firm.
Requirements
 Sign of customers on back of AOF.
 NIC copies of partners
 Partnership deed (certified copy) duly attested by notary republic.
 Partnership mandate (prescribed format)
 Companies rubber stamp
The A/C is opened in the firm name and all partners designate one or two persons to act
behalf of the partnership firm all acts of the firm jointly and severely.
III) LIMITED COMPANY
Limited Co:
1) Private Limited
2) Public Limited


PRIVATE LIMITED
Requirements
 Restrain on companies letterhead dully attested by chairman.
 Sing of all directors on back of AOF.
 NIC copies of all directors.
 List of directors on companies’ letterhead.
 List of memorandum and article of association.
 Copy of board resolution.
 Latest form 29 (if director is to be changed or in case of his death, this kind of
form is filled, it includes information that a new director has how much number of
shares with him.
 Companies’ rubber stamp.
 Director should attest copy of certificate of incorporation; co register an office
stamp should be affix.
PUBLIC LIMITED
1) Certificate of commencement of business
2) Same as home documents.
Club / Society / Association
These concerns are non-trading in nature. They have their own rules and regulation and
their affairs are mentioned by the committee called as a governing body or managing
committee.
1) Stamp of directors
2) NIC copies
3) Certified copy of resolution
4) Memorandum and article of association
5) List of heads on companies’ letterhead.
6) Bank account opened in their name with BAL.
7) Name of person to be specified for the operation in account.
8) The manner in which the account shall be operated.
9) Letter of registration.


Cheque Book Issuance
When the account is opened, then the customer is given a chequebook to sign upon and to
cash money. It proceeded as under.
Procedure
All the account opening formalities must be completed before issuance of chequebook.
Particulars of the chequebook requisition should be completed containing:
1. Account Opening Form
2. Introduction
3. Specimen Signature Card
4. Requisition slip
5. Know Your Customer Form
6. Account Number
7. Depositing of amount in account
8. Issuance of a Cheque Book
9. Entry of Cheque Book
10. Filing of AOF
Chequebook is delivered to the customer and his signature on the chequebook issuance
register. Chequebook serial number entered. In the system (FoxPro). Stock of
chequebook are balanced at the end of each day and kept under safe custody.
Earlier the banks were charging a fee for issuance of chequebook but now whenever a
new account is opened, the account holder issued a chequebook free of charge.
Bank Alfalah issues the following chequebooks.
 Saving account-25 leaves
 Current account 50 to 100 leaves.
 Current account – 25 leaves
 Foreign currency $ 10 leaves
 Foreign currency 10 leaves
Loose cheques are also issued in some cases. Number of leaves can be increased on the
request up to 100 leaves.


RECEIVING INWARD CHEQUES
Another responsibility &function of Account Opening Department is to receive Inward
cheques for collection of other banks. These cheques are sent to clearing official who
clears these cheques at SBP from other banks.
EVERY DAY POSTING
At the end of each day, Posting of cheque books is performed. The account opening
department makes credit vouchers of excise duty and provincial tax on chequebook
leaves, and posts it in the company.

CLOSING OF ACCOUNT
When a customer wants to close an account he has to given a hand written application to
the head of the operations department to close his account plus remaining leaves of
cheque book.
The manager first verifies the sign of account holder, and then closing is done from the
registers on the computer where the account was opened. In the file of the account holder
his account opening form is crossed. For this closing a fee of Rs. 150/- is charge in BAF.
CURRENT ACCOUNTS

Current deposits are those which are payable to bank whenever demanded by the
customer. Bank does not pay any profit on current deposits. There are of different
scheme of saving deposits, which are classified under different duration purpose and rate
of interest. Fixed deposits are those deposits which are by the bank under the conditions
that they will not be payable on demand but will be payable under fixed or determinable
future time date.

FEATURES
A sum of Rs. 500/= in cash as initial deposit is required for opening a current account and
the same may be maintained as minimum average running credit balance. No profit will
be paid on credit balances held in current accounts. The bank reserves the right to allow
opening of current a/c at its description. All deposits and withdrawal from a current a/c
will take place only at the branch where the account is being maintained. Current a/c
cannot be overdrawn, except by prior agreed agreements with the bank. The


correspondence relating to current A/Cs should be addressed to manager of the branch
where the account is being maintained. A distinctive number will be allotted to each
current account and shall be quoted on all correspondence relating to the respective
account and at the time of making deposits and withdraws.
The account holder can draw sums from his account by means of cheque supplied to him
by the bank for that particular account. Account holder should take well care of the
chequebooks issued to them. The account holder will pay excise duty of Rs.4 per leaf to
the government.
PAY–IN SLIP
This slip is used for depositing the additional amount. The bank will accept the
Pakistanis notes. All cheques and other instruments should be crossed before they are
deposited for credit into the account. There shall be no restriction on number of
withdrawals in current account. The account holder is expected to maintain a minimum
running credit balance of Rs.500/. An account holder wishing to close his account must
surrender the unused cheques to the bank. The current account is computerized, thus it
generate the statement of account for all account holders periodically. Incidental charges
are beard by the account holder if its credit balance is less than Rs.500/. Service charges
of RS. 20/= will be taken by the bank, if an account is closed within 6 months from the
date of its opening.

FINANCIAL PRODUCTS

SAVING ACCOUNT
Saving accounts are opened on proper introduction with sums of credit balance within
certain limit for individual (single, joint) institutions, companies, educational institutions
etc. ABL has introduced various schemes under saving a/c are following:
 Mala Maal Scheme
 PLS Account
 Saving 365 Account
 Capital growth certificate scheme
 Fund Management Scheme


 Khanm Bachat Scheme
 Khushali Bachat Account
 Term/ Fixed Deposits
PROFIT & LOSS SHARING (PLS) ACCOUNT
This account was started in 1980s after the issuing of banking ordinance in 1980 by Zia
Government to develop Islamic banking in Pakistan. In this case customer would be
responsible for bearing profit as well as loss. The bank would be within its rights to
make investment of credit balances in the PLS saving accounts in any manner at its sole
discretion and to make use of the fund to the best of its judgment in the banking business
under the PLS system. For withdrawal of larger amount, 7 days notice in writing is
required to be given:
 Minimum balance is Rs.500/=
 Below minimum balance charges will be debited
 Not more than eight withdrawals in a year allowed
 More than Rs.15000/= are not allowed to draw
 Seven day notice is required for withdrawal
 Profit calculated on monthly basis
 Profit paid on annually basis
 Profit paid on lowest balance at the end
 10% Withholding Tax on minimum balance
 Zakat deducted on @ 2.5%

SAVING 365 ACCOUNTS

This account is newly developed of ABL and it provides flexibility of saving account to
business people. Profit on deposits will be payable on daily product basis on balance of
RS. 500,000/- and above. However, if balance in the account falls below RS. 500,000/-
on any day, the product will be ignored. There will be no restriction on withdrawal from
the account. Zakat and withholding Tax is also applicable on the account opened under
this scheme.
 Minimum balance is Rs.500,000/=
 Below minimum balance, profit calculation ignored


 Profit calculated on daily basis
 Profit paid on annually basis
CAPITAL GROWTH CERTIFICATE SCHEME

 Long term deposit
 Profit rate as that of PLS Saving Account
 Minimum amount of deposit is Rs. 10,000/=
 Amount deposited double in of 5 years
 No maximum limit of Deposits

TERM DEPOSITS
Term deposits are fixation of certain amount of money for a specific span of time. These
can be of major two types i.e. short term notice deposits and long term notice deposits.
Different rates are charged for different period of times like as shown by following table.
If presented before maturity then previous period rate would be charged.
Duration Rate of interest
01 month 08.1%
02 month 10.1%
03 month 11.0%
06 month 11.5%
01 year 12.5%
02 year 13.3%
03 year 14.5%
05 year 16.4%

The instrument term deposit is like a slip containing issuing bank name, a/c # to operate
on computer, deal #, customer name, reference #, date of issue, amount, rate maturity
date etc.

CALL DEPOSITS


These call deposits are presented in the bidding process as guarantee or security from the
bank that this much money is deposited in the bank. These are made in the favor the party
offering contract or any other person. The bank offer no interest rate on it because these
can be called at any time. For encashment the applicant must have to cancelled the call
deposit instrument from its beneficiary. For collection the beneficiary usually send the
authority letter for paying in the shape of Demand Draft or pay order. The call deposit
instrument containing the information regarding applicant and beneficiary name, joint
name a/c opened signature cards for encashment, reference #, amount, date of issue,
authorized signature etc.

CASH DEPARTMENT
Cash department of Bank Alfalah works under the operation department. This department
is given the complete responsibility of cash, as result of transaction in touch local and
foreign currencies. It is also responsible for the book keeping of these transactions and
the safe custody of cash.
This department performs the main function.
a) Cash receipts
b) Cash payments
Cash Receipts
In cash department depositors use deposit slip for depositing the amount into their
accounts. The officer checks if the deposit slip is properly filled up containing title of
account, A/C number, date and amount in words and figures. Detail on both counter file
and cash receipt voucher should be the same. Cash receiving officer, after twice counted
and matched with the deposit slips will handover cash to the customer. The cash details
are written on the back of the deposit slip and are also entered in cash receiving register.
Cash received stamp is affixed on the face of the deposit slip along with the signature of
the cash receiving officer.
Deposit slip and cash receiving register is given to the officer in the cash department. The
officer cash department both on cash receipt and cash receiving register do again proper


checking. Officer cash department signs both the deposit slip and register. Deposit slip is
credited and posted in the concerned accounted in the system. Counter folio is given the
deposition as receipt. One consolidated cash debit voucher is posted in the system to
balance the cash.
Cheque Encashment Section:
The process of cheque encashment is done with the help of the following procedure.
1. Receiving Cheques
2. Verification of signatures
3. Computer terminal process
4. Payment of cash

Procedure
Mr. Waqar & Ikhlaq deals with cash payments the process for payment of cheque local
and foreign currency is same. First the cheque is presented by the customer or holder to
cash payment officer. He confirms that it is drawn on the same branch and the particulars
of cheque are properly filled in. one signature of the holder is taken on the back of the
cheque. Cheque is handed over to the officer cash department for scrutiny where officer
checks the date, amount in words and amount in material figures, payee’s name, crossing
if any, account number, cheque serial number, any alterations / endorsements and
signature of the customer. Account is debited and then the officer cancels cheque. It is
posted in the system and posting stamp and number is affixed on it. Cheque is handed
over to the cash payment officer for payment. One more signature on that back of the
cheque is taken from the holder to match with the first one, and then cash is paid to the
cash detail is written on the back of the cheque. Cash paid stamp is affixed on the face of
the cheque. Entry is passed in the cash payment register and system.

CLEARING DEPARTMENT
Mr.Raza deals this department. Before discussing it is necessary to know what is
“clearing”.


“The process by which cheque exchanged between the collecting and paying bank and
the ensuing financial settlement is called “clearing”. This facility is provided by the state
bank of Pakistan for offsetting of cross obligations between the different banks. Clearing
is of two types.
1) Inward clearing
2) Outward clearing
Inward Clearing
When cheque drafts, etc, of our branch presented to us for clearing by the SBP. Cheque
to be honored by bank.
Outward Clearing
The cheque of other banks, which the account holder deposit in their accounts is, sends
for collection.

CLEARING PROCESS (INWARD/OUTWARD)
Here the local cheques are received that are drawn on BAF. All the cheques are received
on one counter along with the paying slips duly filled in properly containing particulars
of cheque and account holder. Counter folio of paying slip is handed over to the customer
by putting stamp for cheque received for collection for Bank Alfalah on it duly signed by
officer. These cheques are scrutinized and cheques for local clearing are separated from
OBCs. These are then entered in clearing register and cheques for collecting are entered
in OBC register and handed over the bills department of collection. Clearing officer
checks and verifies title of all the cheques deposited by the customer to confirm the good
title of the cheques. Cheques are scrutinized properly and paying slips are separated from
cheques. Special crossing, endorsement and clearing stamps are affixed on the cheques.
Cheques of each bank are sorted and arranged branch wise. All the cheques are then
entered into the clearing system of bank. Print out of the clearing is taken and details are
attached.
With the cheques of each bank. Details of these banks are then entered into the clearing
schedule containing number of cheques presented and their total amount against the name
of each bank. Then total number of cheques presented to all banks and their total amount
is written on the foot of that schedule, which is tallied with the clearing register.


Next morning, these cheques are delivered to the respective banks in clearing house of
SBP between 9:00 to 9:30 AM. In the same manner, other banks present their clearing
drawn on Bank Alfalah. Total number of cheques and their amount delivered to other
banks are received from them are written on the clearing house schedule and handed over
to the officer clearing house SBP. Cheques / DD received in clearing are given to the
officer cash department of the branch for their repayment. After I proper scrutiny of
cheques, verification of signatures and confirmation of balance in the account, officer
cash department pays these cheque by canceling and posting them in the system.
If any cheque is not passed due to insufficient balance or any other reason, officer cash
department returns the same cheque by attaching a cheque return memo containing
reason for return. This cheque is entered into the cheque returned register and bank
charges are deducted according to the schedule of charges.
Second clearing is called at 2:30 PM to check the fate of the cheques presented to other
banks in the morning. If any cheque is to return, that is delivered to the same bank in
second clearing. In the same manner, if any cheque presented by Bank Alfalah in first
clearing is returned, they receive it and once again give schedule of clearing figure to the
officer-clearing house SBP containing number of cheques and their amount delivered and
received unpaid.


ACCOUNT DEPARTMENT
Account department is the most important department of the bank. Because it is
concerned with:
 Revenue
 Expenses
 Assets
 Liabilities
These are the pillars of any business. In this department, all the vouchers that are posted
during one day are sent to the account department next day. These vouchers are already
posted to computer by the concerned department. So computer also sends a report to the
accounts department. The accounts department has to tell that the requirements for
cheques and vouchers are fully checked.
If any kind of renovation or construction or rebuilding is done, all is paid from the
accounts department.
Daily Customer Movements List
All the changes that are made in accounts of customer are shown in the daily customer
movement list. By using this list, people of accounts department can prepare the
vouchers.
Account department performs following activities.
 Data Controlling
 Reporting
 Expense Management
 Taxation
 Pay Role
 Budget Preparation
 Monthly closing Monitory & Monthly Closing Statement
Preparation
 Leave Record & General Administration
 Fixed Assets, Record, Depreciation, Maintenance, Insurance &
 Approvals


 Voucher preparation
 Preparation of daily, weekly, monthly, and annual statement.
 Budgeting and fixed assts
 Employer’s benefit
 Expenditure approval.
The bank does not make payment of a cheque bearing a six-month or older date. If an
account is not operated in six months, it is called dormant account.
In Account Department Function Are Performed In 3 Steps
 Data controlling
 Payment/disbursement/payroll system.
 Reporting system
In Data controlling, vouchers are received from every department like Account Opening,
Car-Financing, Cash dept, credit card section etc and then sorting will start and sorting by
two ways
1) By Customer Activities.
2) By General Ledger
After sorting sub-sorting will start and this can also be done in two ways
1) By A/C title (current, saving, royal group, royal profit etc)
2) By Computer codes (01,02,05,019,12,029)
In disbursement and payment function they perform IBCA’s and preparing cash payment
Vouchers & pay slips etc.
In reporting different types of reports are prepared, stored in folders or mailed to head
offices. There are 6 basic reports on Daily basis.
1. Daily Branch Position. (Treasury)
2. Daily Deposit & Advances Position.
3. Daily Management Information System.
4. Daily Foreign Currency Report.
5. Daily fund Rupee position.
6. Statement of Affairs.
Weekly Reports
1. Weekly FE-25.


2. Advances & Deposit Statements.

Deposits can be categorized as follows:

1. Call Deposits
Depending on local practice Call Deposits are to be repaid immediately upon demand and
during counter hours.

2. Notice Deposits
Notice deposits are kind of fixed deposits. The minimum balance requirement for
opening the account is Rs. 500/- and payment is drawn on maturity of the specific period.

TYPES OF ACCOUNT
 Riba Free - Current Account
 Saving account
 Riba Free - Dollar Saving Account
 Riba Free - Rupee Saving Account
 Riba Free Karobare Munafa Account
Current Account
A bank account that is ideal for businesses and individuals looking for Shariah compliant
banking and ease of access. With a minimum amount of only Rs.10, 000/- you can open a
Riba-Free Current Account. Offering you a range of benefits including free online
transactions, no restrictions on the number of transactions, Call Center facilities, balance
certificates, priority banking and much more.
Saving Account
A unique bank account that offers the opportunity to earn Halal profits, while enjoying a
range of added benefits. It can be opened with a minimum amount of only Rs.10, 000.
The profit on this account is calculated and paid on a monthly basis, and comes with a
variety of free benefits including personalized check books, no restrictions on
transactions, priority banking and so on.


Riba Free - Dollar Saving Account
With a minimum deposit requirement of only US$100, the dollar saving account is under
a Mudarabah arrangement that is strictly in conformity with the principles of Islamic
Shariah. Profit on this account is also paid on a monthly basis and comes with a range of
benefits including checking facility, balance certificates, and personal financial
consultancy services.
Riba Free - Rupee Saving Account
A unique bank account that offers the opportunity to earn Halal profits, while enjoying a
range of added benefits. It can be opened with a minimum amount of only Rs.10, 000.
The profit on this account is calculated and paid on a monthly basis, and comes with a
variety of free benefits including personalized check books, no restrictions on
transactions, priority banking and so on.
Riba Free Karobare Munafa Account
Karobari Munafa is a savings account specifically tailored for large Corporate or GOP
controlled entities. It allows customers to earn higher returns on surplus cash balances. It
has no preset transaction limits and comes with a variety of free packaged benefits.

REMITTANCE DEPARTMENT
The need of remittance is commonly felt in today’s business. A major function of any
bank is to “transfer of funds form one place to another”. Bank Alfalah uses the following
modes of transfer of funds.
a) Demand draft (DD)
b) Telegraphic Transfer (TT)
c) Pay order (PO)
d) Call deposit
e) Pay slip
f) Money gram
Demand Draft
It is instrument, which is used to transfer amount from one city to another city it can be
made on cash as well as on cheque. If it is made through cheque that it is necessary that


person must be A/c account holder while in case of cash any person can make. The
demand draft is secured mode of payment. It consists of three copies.
1) Original copy, which is given to account holder.
2) DD advice is sent to the central branch.
3) Third copy is for reconciliation. Its photocopy is kept with us (bank) while
original is sent to head office for reconciliation.
Parties Involved in DD:
♦ Purchaser
♦ Issuing Branch
♦ Drawee Branch
DD is of following two types:

 DD payable
 DD Paid Suspense a/c
In the first type as advice reaches for payment the immediately pay to the customer while
in later as DD presented by the customer, it is paid and the suspense account is debited.
Procedure
The client who wants to transfer his funds form one city to another fills a form requesting
the bank to prepare a DD. DD application form contains columns requiring information
for the preparations of DD e.q.
 Beneficiary name
 Applicant’s name
 Address
 Amount to be sent etc.
Bank deducts some charges against DD.
Telegraphic Transfer
It is another mode of transfer of funds. It is quickest mode of transfer of funds from one
city to another. For TT, client has to submit the application on a prescribed form of the
bank. Client can deposit money in to the bank or can request the bank to deduct the
amount against the TT along with the charges against the issuance of TT from his
account. The charges against the issuance of TT charged by Bank Alfalah.


Procedure for Telegraphic Transfer Issuance
Application form is given to the customer to fill. Two signatures are taken on the form
one for request and other for receiving the instrument. All the particulars of application
form are checked and bank commission charges and with holding tax are written on the
top of the applicant form. If the customer is maintaining his account with the branch he
can give cheque for total amount of instrument plus bank charges. Cheque and
application form is then given to the officer cash department for the payment of the
cheque. After proper scrutiny, officer cash department posts whom cheque and signs the
application form to assure that payment is received. If the customer wants to pay cash,
the customer on cash counter deposits it. Cash receiving officer receives cash on the
application form along with the bank charges and withholding tax; application form is
then given to the remittances in charge for issuance of the instrument. He enters all the
particulars of the application form in the system (BPG) and computer gives an Auto
Control Number to the T.T message of receiving branch. This message is then sent
through telex to the receiving branch followed by a T.T. advice. The customer is
confirmed that T.T. has been sent.

COLLECTION
All the cheques under collection are called cheques under collection in Bank Alfalah
Limited. There are two types of bills for collection:
 Outward Bills for Collection
 Inward Bills for Collection
Pay Order
Written order which is issued and received to the save book or drawn or payable on same
branch. Application form is given to the customer to fill. Two signatures are taken on the
form one for request and other for receiving the instrument. All the particulars of
application form are checked and bank commission charges and with holding tax are
written on the top of the applicant form. If the customer is maintaining his account with
the branch he can give cheque for total amount of instrument plus bank charges. Cheque
and application form is then given to the officer cash department for the payment post the
cheque and signs the application form in token of payment received. If the customer


wants to pay cash, cash is deposited by the customer on cash counter cash receiving
officer receives, cash on the application form along with the bank charges and
withholding tax. Application form is given to the remittances in charge for issuance of
instrument. He enters all the particulars of the application form in the system (BPG) and
computer gives an auto control number to the instrument. Print out a take on the block
payment order. Two authorized officers of the branch then sign it. Instrument is the
protect graphed and given to the customers. When the instrument is presented for
payment, it is posted in the BPG and canceled by the remittances in charge after proper
scrutiny.
Call Deposit
When the party wants to give payment from itself to another party then it makes call
deposit. The bank keeps it with itself unless it does not receive instructions from other
bank. Normally it is made on cash and goes in party account.
Pay Slip
It is used when bank itself pay for any type of transaction e.g. purchased of stationary.
Money Gram
Bank Alfalah Limited, in collaboration with money gram offer remittance services to
Pakistan. “It’s basically a person to person money transfer service that allows consumer
to receive money in just a few minutes.”
Procedure
 Person must have reference no.
 Person must tell reference no. And compute the simple form.
 Person has to show NIC and tell compute introduction after that he can obtain
money.
Vouchers are also posted in the system. When OBC is realized collection bank pays the
amount through IBCA if it is the same bank or through DD if it is another bank. If DD is
received against OBC, it is presented in the clearing for collection. If IBCA is received
the branch for the payment of OBC, certain vouchers are posted in the system.


FOREIGN EXCHANGE DEPARTMENT
“The transfer of credits to a foreign country to settle debts or accounts between resident
of home country and those of the foreign country” or “the foreign bills currencies etc
used to settle such accounts”.
Foreign exchanged department deals within exports and imports. The bank acts as
exporter as well as importer bank for different parties who are in the business of export
and import.
Imports
Letter of Credits

All Letter of Credit transactions are handled in accordance with the Uniform Customs
and Practice for Documentary Credits as published time to time by the International
Chamber of Commerce. The vast network of our correspondents connected through
SWIFT ensures speedy processing of LC transactions.

Import Murabaha Finance
To facilitate the financing requirements of imports, we offer Riba free, Import Murabaha
Facility. This product is approved by our Sharia Advisor as true alternative of
conventional modes.
Other services
. We offer full range of services related to imports e.g. Contract Registration, Import Bills
for Collection, Shipping Guarantees and Advance Payments against Imports under
guidelines of foreign Exchange Manual.
Export
All goods and services sent from one country to another country.
Export Murabaha Finance
In order to facilitate the production / manufacturing of goods for onward export to
international markets, we offer Export Murabaha Finance completely Riba Free for our
exporters.


SBP Islamic Export Finance Scheme
We also offer SBP Islamic Export Finance under Part I & II on Murabaha basis in line
with the Sharia principles.
Other services
We offer all export related services i.e. Collection of export bills, Negotiation under Sight
Lcs, Advising/ confirmation / Transfer of Letter of Credits opened by other banks.
Document Required For Exporter
1) National tax number
2) Registration with EPB
3) Sales tax registration
Documents to Be Attached For Exporters
 Invoice
 Bill of lading
 Packing list
 Total quantity
 Net weight / carton
 Gross weight / carton
 Total net weight / carton
 Total gross weight
 Bill of exchange (original or draft)
 E-form: Initial document on which total export proceeding is based. In this form,
all the conditions are given, which are necessary for exports.
 Letter of credit: It is written agreement between importer and exporter.
 Beneficiary certificate.
 DHL certificate (TCS certificate)
 Form ‘M’
 Certificate of Origin (Form – A)
Payment from Importer Bank
It is the choice of importer to open L/C from any bank and the bank from which L/C is
opened can also refer to some other bank for payment. So bill of exchange is sent to refer
bank and other documents are sent to L/C opening bank.


SWIFT (Standard World Wide Inter Bank Financial Transaction)
It is network among all banks. No other institute can get involved in it.
Bill Of Lading
Certificate from shipping company for loading commodities. If requirement of L/C is to
issue bill of lading in favor of L/C opening bank, then authorized dealer certificate will be
provided by bank in favor of L/C opening bank.
Bank Keep In Record
 Covering schedule
 Invoice
 Packing list
 AWB
 Certificate of origin
 E-form
Normally bank keeps photocopy of all documents in record.

DOCUMENTARY CREDIT
DC Department
Alfalah Bank has his full-fledged documentary credit department.
As a credit instrument and as a means of making as a payment the documentary credit is
an essential instrument for conducting word trade today. A documentary credit represents
a commitment bank to pay the seller of goods or services a certain amount provided
present stipulated documents evidencing the shipment of the goods with prescribed
period of time.
For imports or exports first the parties have to do upon a sale contract regarding the term
and condition of sale. One mode of payment is by L/C, which is secured, and now days
mostly use the business.
Letter of credit is under taking by opening bank (Negotiating bank) that it will make
payment if documents are as per terms of LC.


Four Parties Are Involved In Letter Of Credit
 Applicant Importer
 Beneficiary Exporter
 Issuing bank Bank of importer
 Advising bank Bank of importer
According to import policy, no import is valid with out import license, which is issued by
the chief controller of import, and export or we can say export promotion bureau (EPB).
Types of L/C:
Letter of Credit is
1. Revocable
2. Irrevocable
1. Revocable Letter of Credit:
A revocable Letter of Credit can be amended or cancelled by the issuing bank at any
time without prior notification to the seller. This form of credit gives the buyer
maximum facility but it places the seller in difficult position when the goods are in
transit and the credit is revoked before the documents are presented and payment has
not been made on presentation. Since it offers little security to the seller, it is hardly
used in foreign trade.
2. Irrevocable Letter of Credit:
An irrevocable letter of Credit constitutes a definite undertaking of the issuing bank
to accept and pay the bills drawn upon it so long as the terms and conditions
stipulated in the letter are fulfilled.
This form of credit can be amended or cancelled only with agreement of all parties to
it. Since it gives the seller greater assurance of payment, it is always preferred to
revocable letter of credit.
Banks involve in Letter of Credit:
Following Banks are involved in letter of credit:
i. Issuing Bank (Opening Bank)
ii. Reimbursing Bank
iii. Advising Bank


iv. Negotiating Bank
v. Intermediary Bank
L/C Opening Procedure
When the importer obtained import license, then the bank will open letter of credit. “A
letter of credit is undertaking by LC opening bank to put an agreed sum of money to
sellers’ bank on behalf of the buyer of the goods under clearly defined terms and
conditions”. Pakistani banks open only irrevocable LC. An essential feature of the
irrevocable LC is that it cannot be modified, altered, amended, or canceled without the
prior consent of all the parties. Party comes to the bank and fills the form, which is
provided on the payment of Rs. 100. This form is filled by the party and is return to the
bank, it includes details like.
 Name of company
 Address
 Country of origin
 Branch name
 Quantity
 Insurance company
 Shipment from
 Shipment to
One thing should also be submitted which is INDENT. If the foreign party has any agent
they will issue the indent with following details.
 To Messer
 Importers, etc
Document Required for “LC” Opening
When the bank opens LC, it requires following documents.
 Valid import license
 Performa invoice
 Importer should be Pakistani
 Letter of under taking form importer
 Insurance cover.
After the LC is opened following entries are made.


 LC opening register
 Margin / Liability Account Register.
Payment to Seller
The negotiating bank upon receiving the documents from the seller checks the documents
according to terms and conditions of credit upon satisfying it self of this the negotiating
bank makes payment to the seller if sight credit. It then forwards the documents to the
opening bank and reimburses it self through the opening banks account with itself.
Documents Received By the Opening Bank
Importers bank or opening bank receives the following documents form the exporter’s
bank or negotiating bank.
 Bill of exchange
 Invoices
 Bill of lading
 Packing list
 Certificate of origin
 Insurance

CREDIT ADMINISTRATION DEPARTMENT

The credit department as its name implies is basically concerned with the credits
extended to the individuals & institutions. The credit dept. is considered as the basic
earning unit of the bank. The overall functioning of the credit department covers the
following areas: The functioning of the credit department is again divided into two
departments whose functioning is interrelated with each other, which are:

 Credit Operation Department.

 Credit Administration.

Now we will take a closer look at the area of functioning of each of these departments in
the coming section.


Credit Operation Department

Credit operations department as its name suggest is responsible for the control &
performance of the operations that comes under the head of the credit department.

Function of Credit Operations Department

The functions of the credit operations department extend to the following areas:

1. The function of COD rotates around the disbursement
and recovery of Morabahas. All of the morabahas are
processed using a specific procedure, which is as
follows:

i. COD books the morabaha after receiving the duly approved Risk
Appraisal Form (RA) or the approval of Offering Sheet duly
approved by appropriate credit authority.

ii. The officers dealing the morabaha do not take direct instruction
from the customers.

iii. All instructions/documentations are routed through the head of
COD/CBG.

2. COD prepares the monthly summary of the account
detailing balances of classified customers, applicable
classifications, forced sale values of securities,
overdue period, etc. These reports are prepared as per
the prudential regulations and submitted to the
management.


3. COD also prepares the report as they are needed by the
regulatory authorities.

Deal-in Products of COD

ABL currently offers the following credit facilities to its customers:

A.Morabaha- Local Purchase Order (LPO).

B.Morabaha- Trust Receipts (TR).

C.Morabaha- Payment against Documents (PAD).

D.Morabaha- Pledge/FIM.

E.Ijara- Leasing.

F.Musharaka Financing.

G.Morabaha- Export Finance.

H.Car Ijara Financing.

Documents required for approval of facility

Before extending any facility to the customers the bank has got some documentation
requirements that are to be fulfilled by the customer. These requirements are almost the
same for all the different types of facilities. The formalities are given as under:

i. Request letter.

ii. Board resolution.

iii. Signature of customer/partners/directors.

iv. Visiting card.


v. NIC card.

vi. Memorandum and article of association.

vii. Certificate of incorporation.

viii. Certificate of commencement of business.

ix. Form 29 (List of directors).

x. Import/Export registration number.

xi. Financial of last three year + Audit report.

Credit Department Functions and Facilities
Credit means belief or trust. “The quality of being credible or trustworthy”. Credit as
“trust in one’s integrity in money matters and ones ability to meet payment when due”.
. The earnings of BAL are chiefly derived from interest charge and discounts. This
department is the revenue-generating department. Credit department basically has three
segments.
1) Credit marketing department
2) Credit administration department
3) Trade finance services department
Credit and advance department deals with extending loans (credit facility) to customers.
State Bank of Pakistan (SBP) has prescribed regulations, which are called
“PRUDENTIAL REGULATIONS”. Every bank has to follow these regulations. If any
bank violates the regulations it should be liable for penalties under the core spirit of SBP
PAK (RS).
Commercial Credit
A commercial Credit facility is the core business area of the Bank. The types of facilities
being offered to customers can be broadly presented as follows:
a) Facilities where the bank actually advances money against future repayment -
('Funded Credits'), and


b) Facilities where the bank substitutes 'its' own credit for that of its customer e.g.
opening import Letters of Credit, issuance of bank guarantees - ('Non-Funded Credits')
Credit lines must be defined as to currency, total amount and time, purpose and the
general or specific conditions upon which they are made available to a customer. The
mark-up and/or commission rates and method of computing should be specified. The
agreement should also provide for default rate for delayed payments, unless default rate is
waived with the approval of the sanctioning authority.
Following Are the Different Types of Facilities Offered By the Bank
Funded Credits NON-Funded Credits
a) Current Finance a) Letters of Credit
b) Term Finance b) Guarantees
c) Syndication / Consortium Financing  Shipping Guarantees
d) Negotiations of Export bills under L/C  Bid Bonds
e) Preshipment Finance (Packing Credit)  Advance Payment Guarantees

f) Import Financing  Performance Bonds
i) Finance Against Trust Receipt (FTR)  Others
ii) Finance Against Imported Merchandise
(FIM)
g) Contract Financing

Current Finance CF
A facility under which the bank makes available funds upto a specific amount at any
time over a specified period of time (i.e. one year) is termed as current finance. It allows
a borrower to borrow from time to time, upto the validity period, according to his needs.
The funds may be borrowed partially, be repaid and borrowed again upto the amount
established and within the time period allowed under the agreement.
This facility is a revolving advance and mark-up is charged only on the utilized part of
the facility. CF facilities are allowed primarily for working capital requirement and
repayable on demand. In order to strengthen the control environment all CF accounts
should be scrutinized by the Brand/Credit Managers and/or their designates, at least once
every month to.


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