3. Presentation of Accounting
Presented to:
Prof. Nadeem Baig

4. Definition of Business
Business includes all the activities of
manufacturing trading and services
with the object of earning profit through
the satisfaction of the human wants all
the activities must be carried out under
the law of the country

5. Definition of Accounting
Accounting is the art of classifying,
recording, summarizing, results in a
significant manner and in term of
money the transaction & events
which are at least in financial
character & interpreting the results
thereof.

6. Name of Organization
Bank Alfalah Limited

7. Slogan
“Let’s Look Ahead Towards a
Brighter Future Together”.

8. Vision:
To be the premier organizations operating
locally & internationally that provides the
complete range of financial services to all
segments under one roof
Mission:
To develop & deliver the most innovative
products, manage customer experience, deliver
quality service that contributes to brand
strength, establishes a competitive advantage
and enhances profitability, thus providing
value to the stakeholders of the bank.

9. Historical Overview
Bank Alfalah Limited was incorporated on June 21st,
1997 as a public limited company under the Companies
Ordinance 1984. Its banking operations commenced
from November 1st ,1997. The bank is engaged in
commercial banking and related services as defined
in the Banking companies ordinance, 1962. The Bank is
currently operating through 104 branches in 36 cities,
with the registered office at B.A.Building,
I.I.Chundrigar, Karachi.
Since its inception, as the new identity of H.C.E.B after
the privatization in 1997, the management of the bank
has implemented strategies and policies to carve a
distinct position for the bank in the market place.

10. Hierarchy
President
Chief Operating Office
Head of County Country Risk Executive Vice Executive Vice Charted
Operations Manger President President Accountant
Information Corporate Branch Branch
Department Heads Manager Manager

11. Chairman Message
Our core Philosophy of
honesty, transparency in
customer dealings, product
innovation, excellence in
customer service and our
commitment to being a
responsible corporate citizen.

12. Board of Directors
Mr. Mohammad Mr. Abdulla Nasser
Saleem Akhtar Hawalileel Al-
Chief Executive Mansoori
Officer
Mr. Abdulla Khalil Al Mr. Ikram Ul-Majeed
Mutawa Sehgal
Mr.Khalid Mana Mr. Nadeem Iqbal
Saeed Al Otaiba Sheikh

13. About the Bank
Following the privatization in July 1997,
Habib Credit and Exchange Bank assumed
the new identity of Bank Alfalah on February
25, 1998. It is now Abu Dhabi based bank as
the family of Sheikh Nahayan purchased 70%
of its shares and 30% remained with Habib
Bank on behalf of Government of Pakistan. It
has 115 branches in 46 cities of Pakistan.

14. Products
• Royal profit
• Royal patriot
• Royal group
• Financing scheme
• Alfalah Car financing
• Bank Alfalah home finance
• Rupee traveler cheque
• Credit Cards
• Agri-Finance

15. Bank Alfalah Home
Finance
They have six types of home
finance loans.they are:-
•Buy Your Home with Bank
Alfallah Home finance
You have a plot and need to finance to
construct a home.they will provide you
7.50 million or 70% of the estimated value
of constructed property.

16. Payment period ranges from 3 to 20
years
•Renovate Your Home with Bank Alfalah
Home Improver
They provide upto Rs 7.50 million or
100% of the existing finance.
Payment period upto 20 years
•Let’s Start It Together with Bank
Alfalah Home Start
They will provide you Rs 7.50 or 70%of
the purchase price of the property

17. Payment ranges from 3 years to 20
years
•Build Your Home with
Bank Alfalah Home
Construct
You already own a home and need extra
space for growing family.they will
finance you upto Rs 2.50 million or 30%
of the surveyed value of your home.
Payment period upto 7 years

18. •Make An Easy Transfer with
Alfalah Home BTF
The crown Jewel of their home finance
scheme.they offer a moratorium of up to
3 years in principal payment,for a
financing of up to 20 years.you service
only the mark up initially and principal
repayment starts from the 4th year.Home
start is specially designed for young
people to own a home of their own.
Processing fees:-
•For financing up to Rs 1.00 m Rs 5,000

19. •For financing up to Rs 5.00 m Rs10,000
•For financing up to Rs 10.00 m Rs 20,000
Mark up rates:-
•For SVR option:
•SBP discount rate +1% currently
7.5%+1%=8.5%
•For fixed rate option:
•1 year 7%

20. 2 year 8%
3 year 9%
•Late payment charges
•Rs 400/ late payment
•Prepayment charges
•Upto 5% of the outstanding amount

21. Credit card department
Bank Alfalah offers:
•VISA Classic
•VISA Gold

22. Features of Alfalah
Classic and Alfalah Gold
•No Joining fee
•No Annual/ Renewal fee
•Low service charges are
only 2.50% per year

23. •Balance transfer facility
valid on all credit cards in
Pakistan
•Global Acceptability in more
then 150 countries
•Free supplementary cards
•Zero loss liability

24. Departments
Accounts Operation Credit
Department Department Department

25. Operations Department
Operation department of Bank Alfalah Main
Branch Multan is responsible for the overall
operations of the bank. Here operations officer
is responsible to make the daily report of
operation and solve the queries of different
branches remaining under the policies of Bank
Alfalah.
a) Account Information
b) Cash Department
c) Clearing
d) Remittances

26. Types of Accounts
a) Current Accounts
No interest or profit shall be payable on current
account to allow the customer to overdraw the
Account, the bank shall charge Markup/Interest. The
minimum balance required for opening the current
account is rupees 5000/- inter bank fun transaction
are handled by current account.
b) Saving Account
The purpose of this account is to introduce the debit
of saving individuals in the neighborhood. The profit
on saving account is paid on the basis of profit and
loss sharing at 2% six monthly. The minimum balance
requirement for opening the account is Rs. 2500/-

27. Types of Accounts
c) Notice Deposits
Notice Deposits are kind a fixed deposits the minimum
balance requirement for opening account is Rs. 2500/-
and payment is drawn on maturity of the specific
period.
Notice Deposit is of Two Types:
> One for which a prior notice of 30 days and
is required from the customer before withdrawing
deposited amount and for which rate return is 6.10%.
> Second for which a prior notice of 30 days
and above is required from the customer before
withdrawing deposited amount and for which the rate
of return is 7.50%.

28. Types of Accounts
c) Term Deposit
A Term Deposit is a deposit that is made of a
certain period of time. At the end of specific
period the customer is allowed to withdraw
the principal amount. The rate of return of
this amount varies from 2.5% to 5.75%. The
term deposit account varies from one month
to 5 years and the minimum balance
requirement is Rs. 2500/-

29. Cash Department
This Department is given the complete
responsibility of Cash as a transaction in
touch local and foreign currencies it is also
responsible for the book keeping for these
transactions and the safe custody of cash.
This department performs the main function:
i) Cash Receipts
ii) Cash Payments

30. Cash Department
Cash Receipts:
In Cash Department Depositors use deposit
slips for depositing the amount into their
account the officer checks if the deposit slip
is properly filled up containing title of
account, A/C number and amount in words
and figures.
Cash Payments:
First the cheque is presented by the customer
or holder to the cash payment officer. He
confirms that it is drawn on the same branch
and the particulars of cheque are properly
filled. One Signature or the holder is taken
on the back of the cheque.

31. Clearing Department
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:
a) Inward Clearing
When Cheque drafts etc, of our branch
presented to us for clearing by the SBP. Cheque to be
honored by bank.
b) Outward Clearing
The Cheque of other banks, which the
account holder deposit in their accounts is, sends for
collection.

32. Remittance Department
The need of remittance is commonly felt in today’s
business. A major function of any bank it to transfer
of funds from one place to anther. Bank Alfalah uses
the following modes of transfer of funds.
a) Demand Draft (DD)
Its an instrument, which is use to transfer from on
city to another it can be made on cash as well as on
cheque, if it is made through cheque that it is
necessary the person must be account holder while in
case of cash any person can make. It consists on three
copies.
1) Original Copy, which is given to the account
holder
2) DD advice sent to the central branch
3) Third party for reconciliation. Its photocopy
is kept with bank while original is send to
head office for recociliation.

33. Remittance Department
b) Telegraphic Transfer (TT)
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.
c) Pay Order (PO)
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 the other for
receiving the instrument

34. Remittance Department
d) Call Deposit
When the party wants to give the payment from it self to
another party then its makes call deposit the bank keeps it
with itself unless it does not receive instruction from the
bank. Normally it is pain in cash and goes in party account.
e) Pay Slip
It is use when bank itself pay for any transaction for e.g
purchase of stationary.
f) Money Gram
Its 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 have to show NIC and tell compute introduction
after that he can obtain money.

35. Credit Department
Type of Borrowers:
This section classifies and describes various
types of borrowers in the market along with
specific lending guide lines. The policy
should be read and understood carefully as
the bank may enter into a business
relationship with them at any point in time.
Following are the three broad categories of
borrowers.

36. Credit Department
Individuals:
> Existing Account Holders
> Staff Members
> Close Relatives of Staff Members
> Businesses sponsored by staff members
> Employees of other banks
> Joints Accounts
Business Entities:
> Sole Proprietorship
> Partnership
> Joint Venture
> Limited Liability Company
> Group Accounts

37. Credit Department
Others:
> Clubs and Associations
> Federal Provisional and Local Government
Bodies.
> Traders
> Contractor or Construction Companies
> Transport, Storage and warehousing
> Property Dealers
> Manufacturers

38. Credit Department
Credit Department Function and Facilities:
The earning of Bank Alfalah are chiefly
derived from interest charge and discounts.
This department is the revenue generating
department. Credit Department basically has
three segments.
> Credit Marketing Department.
> Credit Administration Department,
> Trade Finance Services Department.
Credit and advance department deals with
extending loans (credit facility) to customers.

39. Credit Department
Following are the different types or facilities
offered by the bank
Funded Credits Non-Funded Credits
a) Current Finance a) Letters of Credit
b) Term Finance b) Guarantees

40. Accounting Department
Account department is the most important
department of the bank because it is concerned
with:
> Revenue
Income from sales of goods and services,
minus the cost associated with things like
returned or undeliverable merchandise also called
"Sales", "Net Sales", "Net Revenue", and just plain
"Revenue".
> Expenses
All operating, overhead and production
costs incurred in producing gross revenue.

41. Accounting Department
> Assets:
Assets include holdings of obvious market value (cash, real
estate), harder-to-measure value (inventory, aging
equipment), and other quantities (pre-paid expenses,
goodwill) considered an asset by accounting conventions but
possibly having no market value at all.
> Liabilities
An obligation to pay. These include accounts payables, and
bond and bank debt.
> Short Term Liabilities:
Which are expected to be paid with in one year.
> Long Term Liabilities:
Which are expected to be paid in more than one year.

42. Accounting Department
In this department all the voucher that are
posted during one day are send to the head
office account department next day. These
vouchers are already posted to computer by
the concern department so computer also
sends are report to the accounts department.
The account department has to tell that the
requirements for cheques and vouchers are
fully check if any kind of renovation or
construction or rebuilding is done, all is paid
from the accounts department. Like
stationary charges medical charge etc.

43. Accounting Department
Daily Customer Movements List:
All the changes that are made in accounts of
customers are shown in the daily customer
movement list. By using this list, people of
accounts department can prepare the
vouchers.
Account Department performs following
activity: > Voucher preparation
> Preparation of Daily Weekly and monthly
statements
> Budgeting and fixed assets
> Employers benefit
> Expenditure approval

44. Accounting Department
The bank does not make payment of a cheque
bearing a six month or older date. If an
account is not operated in six month. It is
called dormant account

45. Accounting Department
In Account Department functions are
performed in three steps:
> Data Controlling:
i. Collection of data from a department on
daily basis.
ii. Sorting of data and voucher with respect
to General Ledger and customer activity
iii. Further sorting of voucher product wise

46. Accounting Department
General Ledger (GL) Activities:
i. Sorting of different heads of accounts
ii. Separation of DD from TT, PO etc, Income
accounts, and expense accounts
iii. Checking of voucher with generated
reports
iv. Counting of no of vouchers, preparation of
summary and bunching of voucher
v. Data retrieval
vi. Rectification of Data

47. Accounting Department
> Payments:
This section is concerned with all
types of payments
i. Preparation of pay slips
ii. Preparation of cash slip vouchers
iii. Calculation of with holding tax on
weekly basis
iv. Few miscellaneous commitments

48. Accounting Department
> Payroll
Payroll is one of a series of accounting
transactions dealing with the process of
paying employees for services rendered, after
processing of the various requirements for
withholding of money from the employee for
payment of payroll taxes, insurance
premiums, employee benefits, garnishments
and other deductions

49. Accounting Department
> Reporting System
In reporting system different types of
reports are prepared, stored in folders or
mailed to head office. There are six basic
reports on daily basis.
i. Daily Branch Position. (Treasury)
ii. Daily Deposit and Advances position
iii. Daily management information system.
iv. Daily foreign currency report.
v. Daily fund rupee position.
vi. Statement Affairs.

50. Accounting Department
Transaction used in Bank Alfalah’s accounting
system:
Customer presents a cheque:
Customer A/C Dr
Cash Cr (GL Activity)

51. Accounting Department
Balance Sheet:
A Balance Sheet is a Statement which shows the
Financial position of the Company at a
particular date. With the help of Balance Sheet,
management can assess the company's position
in terms of solvency, it's liquidity and it's
profitability. The Balance Sheet is followed by
number of schedules separately detailing assets,
liabilities and revenue. The Balance Sheet must
necessarily refer to a particular date because
the financial condition of the company will
change from time to time depending on whether
the Company is operated as a profit or loss,
whether additional resources are brought

52. Accounting Department
in by way of capital or loans, whether some assets are
purchased etc. It should, therefore, be useful to
visualize the Balance Sheet essentially in terms of
resources of the company. Shareholder or institutions
providing funds to the company (either directly as
investors or indirectly by providing credit) shall have
claims against the assets and at appropriate the
funds originally made available by them to the
company shall have to be repaid. Since all existing
funds invariably represent claim on assets, they are
technically known as equities in the Company. One
part of the Balance Sheet set out claims or equities,
those relating to shareholders being classified as
capital and the other equities relating to outsiders
being classified as liabilities.

53. Accounting Department
Balance Sheet Sep 30, 2005
• ASSETS
• Cash and balances with treasury banks
• Balances with other banks
• Lendings to financial institutions
• Investments
• Advances
• Other assets
• Operating fixed assets
• Deferred tax assets
• LIABILITIES
• Bills payable
• Borrowings from financial institutions
• Deposits and other accounts
• Sub-ordinated loans
• Liabilities against assets subject to finance lease - -
• Other liabilities
• Deferred tax liabilities
• NET ASSETS
•
• REPRESENTED BY
• Share capital
• Reserves
• Unappropriated profit
• Surplus on revaluation of assets - net of deferred tax
• Grand Total:

54. Accounting Department
Depreciation:
Bank depreciates its own assets by state line methods
Cost – Residual Value
years of useful life
Bank uses IT Software's in helping with the accounts
system.
> Accounts Maintenance
> Inward Clearing
> Cash Posting
> Transferring Posting
> Cash Supervision
> Transfer Supervision
> Quick Statement

55. Swot Analysis
Strengths:
> Bank Alfalah has moved rapidly in expanding branches
network and Deposit base, along with making profitable
advances and increasing the rang of products and services.
> As Bank Alfalah Limited pursuing the path of excellence,
customer satisfaction remains its priority
> Bank Alfalah developing and delivering the most
innovative products, manage customer experience, deliver
quality service that contribute brand strength, establishes a
comparative advantage and enhances profitability
> In comparison to other banks Alfalah providing high
excellence service like home, car, agri-financing
> Modernize Banking system with highly integrated
information system record kept properly, online banking
and integrated circuits.
> Salaries are very reasonable, so the employs are not
financially disturb and they devote their selves fully to their
work.

56. Swot Analysis
>Entertainment facilities are available for customers
>Bank Alfalah is lending more
money then any other bank in
Pakistan by providing least interest
rates
Bank Alfalh is offering two types of
banking
II. Consumer banking
III. Islamic banking
>Alfalahs credit cards are
globally accepted in more then
150 countries

57. Swot Analysis
Weakness:
> The majority of people are not well aware about the
products of Bank Alfalah their for it should advertise
especially home, agri & car loans and credit cards.
> Miss management of time is another draw back in
Bank Alfalah branches, The bank official timing for
closing is 6 pm but due to miss management
employees leave there desk at 8 pm.
> A behavior has been noted that Bank Alfalah tries to
feel at ease with good looking rich and educated
people and the uneducated and old customers feel a
bit strange in the environment of the bank.
> The number of counter must be increased because
the customer have to wait at peak hour on the counter
for deposit, withdraws and online.

58. Swot Analysis
Opportunities:
> The policies of new government to uplift the
economy and pursue financial sector reforms are
expected to yield positive results in the banking
industry of the country. Bank Alfalah should avail
these promising opportunities.
> Bank Alfalah is surrounding by many competitors it
has an opportunity to aggressive marketing and
increase its business.
> As Government is taking bold steps in promoting IT
in Pakistan, Bank Alfalah should be well aware of
this opportunity as it will help in the near future.

59. Swot Analysis
Threats:
> Bank Alfalah has many competitors who are
continuously increasing their products and marketing
aggressively, it may cause its customers to shift to the
other competitors.
> The privatization of other banks is a threat for Bank
Alfalah. Due to the privatization of different banks
the competitions has increasing a lot.

60. Recommendation:
> The Bank is now over staff the building under operation is
in adequate for such a large staff as new branches opening
in different part of city should be availed.
> Under no circumstances cheque book should be given if the
account formalities should be complete.
> There are two officer involved in Cash Deposit process
which is time consuming. Cashier should be given certain
powers to receive cash of US$ and DM to provide prompt
services.
> Cheque which are drawn on Bank Alfalah Branch and
returned unclear in clearing are not reflected in the
statement of account of the customer. These cheques must be
reflected in the account so that credibility of the customers
may be assessed.
> The bank should try to give more loans to the small
borrowers as the past history shows that most of the loans
given to corporate borrowers have converted into bad debt.

61. Observation & Conclusion:
I observed the Bank Alfalah a financially sound bank, its
profits are increasing year by year, its staff is very good
sincere with the bank. Bank Alfalah under the leader ship of
Sheikh Hammad Bin Mubarak Al Nahyan has made
significant in building and both the corporate and retail
banking sectors in pakistan. The bank attained number two
position in terms of its balance sheet size amongst the
private bank in Pakistan in 2000.
Bank Alfalah use specialization and service excellence as
the corner stone of its strategy the people at bank realize that
innovation, creativity, reliability, customized, service and
their execution are the key ingredients are the key
ingredients of their future

62. Observation & Conclusion:
Revenue from these activates have started yielding
dividends they expect significant growth. They are
aware that they have stepped into 21 Century and
they must meet its challenges by acquiring the highest
level of technology. They say that they will continue to
invest in the modern tools and substantial allocation
to resources will be made to achieve this objective
during the current year. Online banking has been
started and the introduction of ATM at strategic
location have been of great help since June 2001.