All praises for ALLAH, Who guides us in the darkness and helps us in difficulties, which gives us knowledge and

wisdom out of His infinite mercy through His Messenger, The Holy Prophet (Peace Be upon Him) who enables us to recognize our Creator. In our time banking has become an industry. In Pakistan, millions of people are engaged with it to benefit to billions. More people are employed in banking services than any other profession in the world. Internship program is essential which makes students familiar with the practical activities regarding their future. It is also important because a student can understand the technical procedure and methods in an organization, which will be helpful for them in future. This is why a practical training is compulsory part in our M.com program. For internship of two months, I have selected Allied Bank. During my internship program, I spend my time in different departments of bank. I have learnt much of the things only due to cooperation of the bank staff. Most of the things require more time for learning. I tried my best to attain best knowledge within this short time. At the end I feel grate honour to express my deep and sincere gratitude to my respected teachers and Principal of Hailey College of Commerce prof. Chudray Nazir Ahmed for their affectionate guide ness attitude, keen interest and behaviour during the M.com session.

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All thanks to Allah Almighty, the benevolent and compassionate, who blessed me with the power & capabilities and remained contented on all intricacies found during the successful completion of my task. I feel myself indebted and highly grateful to honorable Principal of Hailey College of Commerce Chudry Nazir Ahmed for allowing me to avail such a precious opportunity of eight weeks Internship at ABL,enhance and polish my skills and knowledge under a qualitative supervision and constant market touch. I also extend my thanks to Manager , Allied Bank Limited staff or their encouraging response and guidance to make my assignment as a real learning experience.

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BANKING
There is various viewpoints about the origin of the word Bank. One point of view is that it is derived from the word Banks which means a bench. Other viewpoint is that it is derived from a German word Bank which is called banco in Italian language. As far as concern about the origin and growth of banking, it can be traced too as early as 600B.C. A bank or bankers is a dealer in credit or more properly a dealer in money. Its is and intermediate party between the borrower and the lender. It borrows from one party and lends to another. The difference between the terms on which it borrows and that on which it lends forms the sources of his profit. The bank, therefore, can be called a financial intermediary whose primary motive is profit.

ACCCORDING TO CROWTHER
Bank collects money from those who have it spare or who are saving it out of their incomes.It lends money the those who require it

ACCORDING TO PROF.DR.HARTS
A banker is one who, in the ordinary course of his business, receives money which he repays by honoring checks of persons from whom or on whose account he received it

ACCORDING TO PROF.SAYEARS
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A bank is an institution whose debt are widely accepted as settlements of other peoples debts to each other.

IMPORTANCE OF BANKING

In modern economy, the banks play vital role in the economic development of a country. Commercial banks are now-a-days considered not merely dealers in credit but also leaders in development.

The banks play an active role in capital formation by stimulating saving, expanding branches to mobilize resources and making the resources available for productive investment. Banks create no new capital, but their borrowings, lending and financing activities facilitate the process of production and exchange.

Banks promote savings by offering attractive saving facilities. Banks educate the people about importance of savings, and faster the will to save. As a result, there is considerable increase in the total savings of a country, which is used for development purposes.

Banks receives deposits of money from the general public for purposes of lending and investment. Thus, what is more important for economic point of view is that the banks make the saved funds available to those who need them for financing investments.

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Banks provide capital to bnussinessmen to take the risks and invest in new businesses. They initiate the person, who have ability and want to make the investment but has lack of funds to finance, to invest and increase the productive capacity of the economy. In this way banks raise not only the rate of savings but also the rate of productive investments and thereby the rate of economic growth.

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ALLIED BANK OF PAKISTAN

HISTORY
Overview
Allied Bank is the first Muslim bank, to have been established on the territory that became Pakistan.

Established in December 1942 as the Australasia Bank at Lahore with a paid-up share capital of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank had attracted deposits, equivalent to Rs. 0.431 million in its first eighteen months of business. Total assets then amounted to Rs. 0.572 million. Today Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposit exceeded Rs. 143 billion and total assets equal Rs. 170 billion. The Allied Bank's story is one of dedication, commitment to professionalism, adaptation to changing environmental challenges resulting into all round growth and stability, envied and aspired by many.

The

Pre

Independence

History

(1942

to

1947)

In the early 1940s the Muslim community was beginning to realize the need for the active participation in the field of trade and industry. The Hindus had since the late 1880s established a commanding presence in these areas and industry, trade and commerce in the undivided Sub-continent was completely dominated by them. Banking, in particular, was an exclusive enclave of the Hindus and it was widely believed, and wrongly so, that Muslims were temperamentally unsuited for this profession.

It was particularly galling for Khawaja Bashir Bux to hear the gibe that Muslims could not be successful bankers. He decided to respond to the challenge and took lead in establishing this first Muslim bank on the soil of Punjab that was to become Pakistan in

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December

1942;

by

the

name

of

Australasia

Bank

Limited.

The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs 0.5 million by the end of first full year of operation, and by the end of 30th June 1947 capital increased to Rs. 0.673 million and deposits raised to Rs 7.728 million.

Australasia Bank (1947 TO 1974) AUSTRALASIA W the only fully functional Muslim Bank on Pakistan territory on August he14th,1947.

It had been severely hit by the riots in East Punjab. The bank was identified with the Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala, Jalandhar, Ludhaina, Delhi and Angra (Agra)) were closed down. New Branches were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later it network spread to Multan & Quetta. The Bank financed trade in cloth and food grains and thus played an important role in maintaining consumer supplies during riot affected early months of 1948. Despite the difficult conditions prevailing and the substantial set back in the Banks business in India, Australasia Bank made a profit of Rs 50,000 during 1947-48.

By the end of 1970 it had 101 branches. Unfortunately it lost 51 branches in the separation of East Pakistan. The bank did well in despite losing lot of its assets. By the end of 1973 the bank had 186 branches in West Pakistan.

Allied

Bank

(1974

to

1991)

In 1974, the Board of Directors of Australasia Bank was dissolved and the bank was renamed as Allied Bank. The first year was highly successful one: profit exceeded the Rs 10 million mark; deposits rose by over 50 percent and approached Rs 1460 million. Investments rose by 72 percent and advances exceeded Rs 1080 million for the first time in bank history. 116 new branches were opened during 1974 and the Bank started participation in the spot procurement agriculture program of the Government. Those

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seventeen years of the Bank saw a rapid growth. Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs 1.46 billion, and Advances and investments from Rs 1.34 billion to Rs 22 billion during this period. It also opened three branches in UK.

Allied

Bank

(1991

to

2004)

As a result of privatization in September 1991, Allied Bank entered in a new phase of its history, as the worlds first bank to be owned and managed by its employees. In 1993 the First Allied Bank Modaraba (FABM) was floated. After privatization, Allied Bank registered an unprecedented growth to become one of the premier financial institutions of Pakistan. Allied Banks capital and reserves were Rs. 1.525 (Billion) and assets amounted to Rs. 87.536 (Billion) and deposits were Rs. 76.038 (Billion). Allied Bank enjoyed an enviable position in the financial sector of Pakistan and was recognized as one of the best amongst the major banks of the country. In August 2004 as a result of capital reconstruction, the Banks ownership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group. Today the Bank stands on a solid foundation of over 63 years of its existence having a strong equity, assets and deposits base offering universal banking services with higher focus on retail banking. The bank has the largest network of on-line branches in Pakistan and offers various technology based products and services to its diversified clientele through its network of more than 700 branches.

(2005

To

date)

In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and vested in with and into Allied Bank Limited. ILL shareholders were issued ABL shares in lieu of the ILL shares held by them. Application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan was made. ABL was formally listed and trading of the shares of the Bank commenced w.e.f. the following dates.

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Islamabad Lahore Karachi

Stock Stock Stock

Exchange Exchange Exchange

8th 10th 17
th

August August August

2005 2005 2005

Now all shareholders of Allied Bank Limited can trade in the shares of the Bank at their free will.

PRODUCTS PROVIDED BY ALLIED BANK OF PAKISTAN LTD

Allied bank offers a wide range of products geared towards the customers. The following products are available for customers:

ACCOUNTS
Rupees Deposit Accounts - Foreign Currency Accounts

Allied Bank offers the highest rate of return on Foreign Currency Deposits in the Country. Accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated branches. All Pakistani nationals residing in Pakistan and outside Pakistan can also open Foreign Currency Accounts. Resident Firms, Companies including Investment Banks can open Accounts.

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PRODUCTS

Allied bank offers a wide range of products geared towards the customers. The following products are available for customers.
ACCOUNTS RUPEE DEPOSIT ACCOUNT FOREIGN CURRENCY ACCOUNT ALTERNATE DELIVERY CHANNELS

ATM / Debit Card

Online Banking

Internet Banking Contact Center Consumer Products

-

Master Card

Lending Products - Seasonal Finance - Agricultural Finance - Running Finance - Import Export Business/Trade Finance
Demand Finance

ACCOUNTS
Rupee Deposit Account

Foreign Currency Account

Allied Bank offers the highest rate of return on Foreign Currency Deposits in the Country. Accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated branches. All Pakistani nationals residing in Pakistan and outside Pakistan can also open Foreign Currency Accounts. Resident Firms, Companies including Investment Banks can open Accounts.

ALTERNATE DELIVERY CHANNELS

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ATM/Debit Card
Allied Bank has vast network of ATM's presently consisting of 100 ATM's installed in over 40 cities which is undergoing expansion. In addition Allied Bank is a member of 1-LINK ATM sharing switch comprising of over 600 ATM's nationwide. Consequently, the Bank's ATM card holders can avail services of Allied Bank's own or 1-LINK ATM's. Besides the services of ATM's installed by the MNet ATM sharing switch are also available to the Allied Bank's Card holders through inter-switch connectivity.

Online Banking Internet Banking Contact Centre

Since the launching of Allied Cash+ Debit Card on January 27th 2003, Allied Bank embarked on the path of value added consumer products. Customer related services were being provided through our ATM-Wing situated at Central Office Karachi. As the numbers of Allied Cash+ Card increased, so did the services related inquiries, complaints and requests from our customer. Hence, to facilitate and to offer Quality Service to our customer, Allied Bank decided to provide Toll Free Number Customer Services through 0800-22522.

Consumer Products Master Card

LENDING PRODUCTS Seasonal Finance

Seasonal Finance facility is allowed against pledge of produce of Cash Crops harvested in that particular crop season. The delivery of pledged stocks/goods is made against appropriate cash payment. Agricultural Finance Bank under Agricultural Financing Scheme envisaged by the State Bank Of Pakistan extends short, medium and long term, farm and non-farm credits. The farm credits are extended for production (inputs) and development purposes. Non-farm credits are

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allowed for livestock (goats, sheep and cattle), poultry, factory including social forestry and fisheries (inland and marine excluding deep sea fishing).

Running Finance

Running finance is a short-term loan allowed by the bank for a period of one year. The running finance account can be operated and daily sale proceeds can be deposited into the account. The mark-up is recovered on the products of daily outstanding balance. The running finance is suitable for meeting day to day financial needs of the business. Import/Export Finance ABL Provides highly efficient trade finances services for import/export business for our clients/customers through large number of authorized branches where trained and motivated staff is available to handle the business on behalf of customer Demand Finance It is disbursed in lump-sum or in accordance with the agreed disbursement schedule and it is repayable as per the agreed installments, which could be monthly, quarterly, biannual or annual.

SERVICES
You can rely on allied banks friendly staff that is eager to assist their customers as best as possible. Allied Bank offers the following services to its customers: Home Remittances Remittances Hajj Services Utility Bills

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 Lockers Commodity Operations

Home Remittances The Bank having a network of 800 branches all over Pakistan, undertakes to provide safe and instant payment of remittance from expatriates, routed through designated foreign exchange companies and correspondent banks with whom special arrangements have been made in this regard. Through the Allied Express Service, ABL ensures that beneficiaries' Accounts in ABL branches are credited with in 48 hours of receiving home remittance information from overseas. Inter Branch Remittances Allied Bank can transfer funds to the remotest part of the country for payment/credit to the customer himself or a third party, through Telegram/Telex/Tealeaf for payment/credit on the same/next day. Telegraphic transfers can also be made abroad in Foreign Currency.

Hajj Services The Bank serves the intending pilgrims by helping them in performing this religious obligation. The Hajj forms and other related services are provided by the bank. However, the terms and conditions for accepting the Hajj forms from intending pilgrims are in accordance with the Hajj Policy announced by the government, each year. Hajj applications are available with all branches during Hajj season, immediately after the Hajj the Government of Pakistan announces policy

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UTILITY BILLS
All branches of the Bank collect utility bills of electricity, gas and telephones. For convenience of the customers, Utility Bills are collected by the branches during banking hours and also in the evening-banking on all working days. Bills can be paid through Cash or Cheques. Consumers may drop bills with crossed Cheques into a drop box available at the branches under "Cheque Drop-in" system.

Utility Bill payment facility - Pay your telephone, electricity, and gas utility bills on any of our ATMs without having to wait in long queues outside your branch.

Lockers Allied Bank Lockers are available in three different sizes Small, Medium and large on a yearly fee. Locker holders need not have an account in the Bank
COMMODITY OPERATIONS

It is a Cash Credit Financing to Government Department for procurement of various commodities, as per allocation of the limits by SBP on Government of Pakistan Guarantee

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MANAGEMENT
We can classify the management of Allied Bank into three main categories.

1) Top Management

2) Middle Management

3) Lower Management

Top Management
Top management of ABL is that which is involved in the policy and decision making and working at the highest level of the ABL organizational hierarchy. Top management is consisted of three parts.

1) The Chairman or Chief Executive

2) Board of Directors

3) Executive Committee

The Chairman

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Chairman is the highest management post in bank. He has to act as a Chief Executive and at the same time has to chair the Board of directors and Executive committee.

Chairman or Chief Executive of Bank is elected through voting by the banks shareholders in AGM according to the provisions of companies ordinance.

BOARD OF DIRECTORS
Board of directors of ABL is consisted of 8 members along with the chairman. So in board of directors there is one chairman and other 7directors elected through the procedure laid down in the ordinance 1984.

Board of directors is responsible for each and every step taken by the management of ABL.In other words we can say that Board of directors is responsible and have to make very much care in decision making and policy making and conducting affairs of ABL.

EXECUTIVE COMMITTE
Executive Committee is formed in order to strength the controlling activity with in the bank or it controls all inner activities of the bank.

The Committee is the very important part of the top management and so it facilitate in coordinating the decision of top management to the middle an Hailey College Of Commerce

dlower management this committee also takes decipliniary and other important issues into consideration for the better activities of the bank.

Executive committee consists of the members of board of directors, the chairman and the head of all provisional headquarters.

MIDDLE MANAGEMNET
Middle management consists of those persons who are responsible to implement the policies framed by the top management.

Middle management has to look at the activities and ha to make sure that the tasks are performed within the framework of the policies and according to the goals set by the top management. Middle management in other words bridges the gap between the top a d lower management. Middle management consists vice president, assistant vice president, zonal chief, circle chief and branch manager

LOWER MANAGEMENT.
Lower management is responsible for achievement of goals by actual performance of policies and goals. It plays an important role just like the wheels of car. Without proper performance of it, the objectives cannot be achieved fully.

Lower management consists branch accountants, officers, asst cashier and other clerical staff.

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ORGANIZATIONAL STRUCTURE
To perform its function well, ABL headquarter in Karachi, who controls and monitors the whole bank. The Bank is further build on division, departments and the sections.

The Bank performs its function locally in branches, which are part of zone in regional office. Branch manager, zonal office by zonal chief and regional office, heads the branch by regional chief where head office headed by president of ABL.

Head Office

President

Regional Office

Regional Chief

Zonal Office

Zonal Chief

Branch

Manager

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Hailey College Of Commerce

Organizational Chart

To perform its function well, ABL headquarter in Karachi, who controls and monitors the whole bank. The Bank is further build on division, departments and the sections. The Bank performs its function locally in branches, which are part of zone in regional office. Branch manager, zonal office by zonal chief and regional office, heads the branch by regional chief where head office headed by president of ABL.

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BRANCH NETWORK
ONLINE BRANCH NETWORK
Online Banking facilities are available to customers maintaining accounts at all online branches across the country. The following facilities are available: Cash Remote Instant Remote Deposit for immediate credit to Cheque Encashment from any Funds Transfer between any 2 Balance Enquiry and Statement remote online online of branch. branch. branches. Account.

In Addition to the above, account holders of all online branches can obtain Allied Bank's Allied Cash+ Card for use at ATMs as well as at Debit Card POS terminals. To locate a Branch simply select the city.

Regional Offices
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Region

Office Address

Email
[email protected]. pk

Abbottabad Tel:0992-334794, 334795 Fax:0992-334762 Bahawalpur Tel:0621-877131. Fax:0621-876516 Faisalabad Tel:041-618144, 618202 Fax:041-617987 Gujranwala Tel:04319200470,9200316 Fax:0431-9200319 Hyderabad Tel:0221-784662 Fax:0221-784345 Islamabad Tel:0512820556,2820558 Fax:051-2823817 Karachi Tel:021-

517-Mansehra Road, Abbottabad2201

Outside Farid Gate, Circular Road, Bahawalpur-63100

ro_bahawalpur@ lhr.abl.com.pk

Sitara Tower, Mezzanine Floor, Bilal [email protected] Chowk, New Civil Lines, Faisalabad - msats.net.pk 38000

2nd Floor, Chamber Plaza, GT Road, ro_gujranwala@l Gujranwala -52250 hr.abl.com.pk

10/A, GOR Colony,Hyderabad-71000 ro_hyderabad@a bl.com.pk

2nd and 4th Floor, ABL Building, Blue Area, Islamabad-44000

ro_islamabad@is b.abl.com.pk

4-Banglore Town, Main Sharea Faisal, Karachi-75350

ro_karachi@abl. com.pk

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4311129,4311130 Fax:021-4311124 Lahore Tel:042-5750227 Fax:042-5754044 Mardan Tel:0931-68103 Fax:0932-68493 Mirpur (AJK) Tel:05861042045,44058 Fax:058610-42303 Multan Tel:061580166,510766 Fax:061-584196 Peshawar Tel:091276209,278248 Fax:091-271579 Quetta Tel:081821949,825114 Fax:081-821067 Sargodha Tel:0451Liaquat Market, Block No. 01, Sargodha-40100 ro_surgodha@lh r.abl.com.pk CC & I Building, Zarghoon Road, Quetta Cantt-87300 [email protected] om.pk 1st Floor, Statelife Building, The Mall, Peshawar Cantt-25000 ro_peshwar@isb .abl.com.pk 90- Aziz Shaeed Road, Multan Cantt - ro_multani@lhr. 60000 abl.com.pk Main Post Office, Banks ro_Mirpurak@is 204 - I Sector, Sheikh Maltoon Township, Murdan-23200 [email protected] t.pk 199 - Upper Mall, Lahore-54000 [email protected] bl.com.pk

Squre(NANGI), Mirpur-10250, Azad b.abl.com.pk Kashmir

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711744,700155 Fax:0451-712459 Sialkot Tel:0432273616,265045 Fax:0431-265045 Sukkur Tel:071-24355 Fax:071-24221 Minara Road, Mohammad Bin Qasim [email protected] Park, Sukkur-65200 om.pk Goolam Kadir Arcade, Aziz Shaheed [email protected] Road, Sialkot Cantt - 51300 bl.com.pk

FUNCTIONS OF MANAGEMENT
In order to make good planning, organizing, leading and controlling the activities of the middle management and lower management, the top management of ABL is performing the managerial functions. To control these functions, there are Senior Executive Vice President (SEVPs).

The SEVPs have to control the following:

1.

ISLAMIC BANKING

The management makes the banking policies in the light of values Islam and they are trying to eliminate the element of interest dn they introduce the markup system and up to some extent Modarba and Musharika scheme.

2.

CREDIT MONITORING

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The credit monitoring division emphasis on the credit extension made by the bank among different sectors

3.

AGRICULTURE AND SMALL FINANCE

Agriculture and small finance division provides the loan to small manufacturers and farmers in the rural areas in order to increase the growth of agriculture and trade

4.COMPUTER AND MIS The function of computers and MIS division is to computerize whole networking of ABL. Nowadays majority of branches are computerize. An other role of this department is to call the daily, weelky and monthly progress and compile in the prescribed manner and send to other division e.g. financial and audit division.

5.BUSINEES PROMOTION AND MARKETING The business promotion marketing planning division makes the policy for the promotion of the business

6.RECOVERY DIVISON Recovery division with the help of credit monitoring division takes the necessary steps about the recovery of loans.

7.CREDIT COPORATE DIVISION It makes the policies to modernize the banking system and provide more banking facilities to the general public and a swell as importer and exporter

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8.AUDIT AND INSPECTION DIVISION This division audits the circle and zonal office time to time and find out the irregulation and takes the necessary corrective actions and also informs to top management about the working of circle and zonal offices.

9.FINANCE DIVISION The finance division of ABL is playing a key role in penetration and market retrenchment of ABL. They anticipate acquisitive and allocate the fund in profitable channels. This division also prepares the budget of bank and checks the performance of the branches with the help of weekly and monthly reports and this division also guides the audit division.

10.CREDIT PROCESSING DIVISION The credit processing division with the help of credit monitoring and recovery division formed the policies for the sanction of loans and also sets the limits of loan in different sectors of economy under the guidance of SBP.

11.TRAINING DIVISION The function of this department is to provide the training to existing and newly appointment. This division provides the modern banking training to staff for the purpose they establish academies in different provinces and different cities. The refresher courses are also provided to the existing staff of the bank according to their abilities.

12.RESEARCH AND DEVELOPMENT DIVISION

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It does the research in the field of banking and adopts all necessary measures for the growth of banking.

13.GENERAL SERVICES DIVISION It assists the general servicing e.g. remittance receiving on behalf of customer, transfer of money from one place to another place, locker facility, TT made and issued and receiving of drafts and also collects general utility bills from the general public.

FIELDS OF ACTIVITIES
Allied Bank is performing activities through the following departments. 1. Deposit department 2. Clearing department 3. Advance department 4.Bills department 5.Accounts department 6.Remittance department

1 Deposit department

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The function of department is to collect deposits from customers following type of deposits are offer by ABL (a) Current deposits

(b) Saving bank deposits (c) Profit and Loss sharing account

(d) Fixed deposit (e) (f) Called deposits Short notice turn deposits

(g) Foreign Currency deposits

Current deposits In this type of account the client is allowed to deposit or withdraw money as and when he likes. He may, thus, deposit or withdraw several times in the day if he likes. Usually the bank allows this and service charges are deducted by the bank on current deposits account

Saving bank deposits This type of account is for those persons who want to make small savings. This type of account is open with Rs.100 in this case deposits can be made only up to a costing amount and withdraws are allowed twice a week. If the depositors want to withdraw more than Rs15000 seven days notice is required before the withdrawal

Profit and Loss sharing account These types of accounts are once step towards the Islamization of banking system in Pakistan. Under such type of accounts the bank allowed Hailey College Of Commerce

no interests to the customer. The executive board of the bank declares profit or loss every year. PLS saving account having running minimum credit balance of Rs100 would be eligible for sharing profit and loss of the bank. The rate of profit or loss on PLS saving account shall be determine by the bank at the close of each half year, in its sole discretion and the banks decision shall be final and binding on the PLS account holder.

Fixed deposits In this type of account a certain amount of deposited for a certain period such as 6 months .2 years and longer. A fix deposit receipt is issued in the name of depositor. The officer incharge and bank manager signs the receipt. A notice is given to the depositor requesting the depositor to withdraw his money or to renew this deposit the interest allowed on fixed deposit varies with the period for which the depositors are made.

Called deposits Call deposits are the sorts of deposits, which are deposits with the hanker against any tender these deposits may be without interest or with interest provided the depositor has agreed to keep his /her amount with the banker for some fixed period.

Short notice term deposits This kind of deposits is for a short period. The depositor may withdraw his deposits at any time by giving seven days notice to the banker. In this Hailey College Of Commerce

type of deposit facility the trader is allowed to withdraw his amount with interest of the deposited period.

Foreign Currency account On depositing foreign currency opens foreign currency accounts.Interest is paid in the shape of foreign currency. Travellers cheques ,foreign currency barrier certificates can be deposited in this accounts. In ABL you can open open foreign curerncy account in US dollars. Pond sterling, Japanese Yen and Deutsche Mark.

2.Clearing Department
A Clearing hose is the place where representatives of all the banks get together for the purpose of offsetting the inter bank and indebtedness arising from the transfer of deposits. . Advantages Of Clearing House The advantages are manifold. It prevents the cost and time involved in collection of each and every cheque and claim. It enables the bank to provide speedier and better services to the customer in connection with the collection of cheques. Banks are able to grant larger amount of credits for financing trade industry and agriculture, as banks do not meet to keep very big sums of cash at hand. Great economys also achieved in the employment of liquid cash by setting the difference by simpler transfer of credit one account to another, there by minimizing the necessity of holding large cash balances, clear house works under the control of SBP.

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A banker has no legal obligation to collect cheques drawn upon other banks for the customers though modern banks have assumed this important function of there own choice. Therefore, it is very important that since they have assume tis important function the banker should be very careful in their performance otherwise they face more difficulties.

FUCTIONS OF CLEARING DEPARTMENT The following are the main functions of clearing department.

1)To

accept

transfer

deliveries

and

clearing

cheques

from

the

customer of the branch and to arrange for there collection.

2)To arrange the payment of cheque drawn on the branch and given for collection to any other branch of ABL or any other members or sub members of local clearing house,

3)To collect amounts of cheques drawn on members ,sub members of the local clearing house send for collection by that ABL branches which are not representatives at the local clearing house.

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PROCEDURE OF DEPOSITING CHEQUES IN CLEARING DEPARTMENT

Whenever a customer wants to deposits cheque , etc he fills the paying slip and hands it over the counter along with the instruments he want to deposits with bank. As far as possible the customer desire that one of the staff member fill in the slip for him, he should be oblige promptly. The smaller portion of the perforated paying slip is handed over to the depositor and other portion becomes the regular portion of credit voucher.

TYPES OF CHEQUES COLECTED BY CLEARING DEPARTMENT

Clearing department collects following types of cheques.

Transfer Cheques The transfer cheques are those cheques which are collected and paid by the same branch of the bank.

Transfer Delivery Cheques Transfer delivery cheques are those chequs, which are collected and paid by to different branches of a bank situated in the same city.

Clearing Cheques

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Clearing cheques are those cheques in which the payee and the drawer of a cheque maintained the account with different banks.

CONSIDERATION GIVEN TO THESE IMORATANT POINTS When the cashier received the cheques, which are to be deposited for clearing purposes, the following points must be verified The instruments should be neither stale nor post dated If the instrument is crossed, not negotiable, it can be for the third party. The instrument should not bear any unauthorized alteration. The amount in words and figures should be the same The instrument should be drawn on a number, or any of local branches. If the cheque is crossed Account Payees Accounts payee only, or Payees account, it should only be accepted for collection for the payees account. The cheque or drafts should not be crossed specially to any other bank. A cheque payable to one of the joint account holder should not be collected for the joint account without the payees endorsement, or consent. A cheque payable to a firm should be accepted for credit to a partners account. A cheque drawn by customer in the capacity of an agent, attorney or management of his company or firm, should not be collected for credit Transfer to his personal account. Pay orders, although negotiable, should not be collected for 3rd parties. Do not collect an instrument in the accounts of an agent, or of the servant of the payees of endorsee of the instruments. Hailey College Of Commerce

 Mail transfer receipt pay ships

and treasury receipt should not be

collected for persons other than payee. If an account is new or the balance or the operation of the account is not satisfactory, satisfy yourself about the titles of the customers to the instruments before accepting the deposit. Branch agents permission should be obtained before accepting a 3 rd party cheque or draft for credit of the account of the staff member. If the payee is a Government department, Government official, or a trust account, the instrument cannot be collected, but for the payees account. If the payee of an instrument is ABL it can be collected for credit of the drawer account or the amount of the instrument may be utilized as desired by the drawer in writing. Cheque payable to a trust, account should not be collected or credit to a trustee account.

SCRUTINY ON PAY IN SLIP The following steps are involved in the scrutiny of pay in slip 1)On both the counterfoil and the pay in slip following should be checked Date of deposits Account number Title of the account The cheque/number of the drawer bank Total amount in words and figures

2) Customer should use the seperate pay in slip for transfer, transfer delivery and clearing cheques Hailey College Of Commerce

3)The amount noted should be the same as the amount of the instruments, and the amounts in words and figures should be same.

PROCEDURES AFTER SCRUTINZING After scrutinizing the cheques and the others deposits instruments and pay in slip at the counter cashier undertakes the following procedures if he is satisfied; Fixing the stamp Scrutiny and receipt by the authorize officer. Returning the counter foil to the depositor. Certificates and confirmation by the officer incharge of the department. Separating the check in to transfer delivery, and clearing house.

PROCEDURE OF CLEARING AT CLEARING HOUSE

The mechanism offsetting inter bank indebtedness operates as follows

Clerks representing various banks meet at a common place , that is clearing house .Every representative then delivers to the others the cheques and the other claims which their respective banks hold against his bank. Cheques and other documents dishonored will be returned to the representative of the respective bank. The various amounts of receipts and deliveries are now added up and a balance is struck their in and the supervisor of the clearing house effects the final settlement by transferring balance kept and the central bank by these various clearing banks.

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3.ADVANCES DEPARTMENT
The function of advances department is to lend money in the form of clean advances, against promissory notes ,as well as secured advances against tangible and marketable securities. The bankers prefers such

securities that do not run the risk of general depreciation due to market fluctuation.

SECURITIES Common securities for the bankers advances are as under

Bankers Lien Lien is the bankers right to withhold property until the claim on the property is paid. The bankers look at there lien as a protection against loss on loan or overdraft or any other credit facility. In ordinary lien the borrower remain the owner, but the possession of the property is with the creditor unless it is the banker lien their is in most cases no right of sale.

Guarantees When an application for advance can not offer any tangible security, the banker may rely on personal guarantees to protect himself against loss on advances or overdraft to the applicant

Mortgage A mortgage is the transfer of an interest in specific and immovable property for the purpose of securing the payment of money advance or to be advanced

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by way of loans an existing or future debt or the performance of an agreement, which may rise to a pecuniary liability. The transfer is called a mortgagor, the transferee a mortgage .

Hypothecation When property in the shape of goods is charged as security for loan from the bank the ownership and the possession is left with the borrower, the goods are set to be hypothecated. The essence of hypothecation is that neither the property in the goods nor the possession of them are possessed by the lender, but the security is guaranteed by means of letter of hypothecation which usually provides for a bankers charged on the hyphotecated goods.

Pledge In a pledge the ownership remains with borrower, but the banker has the exclusive possession of property until the advance is repaid in full. While in case of default the bank has the power of sale after giving due notice.

Promissory note Sometimes promissory note is also accepted as security, A promissory note is an instrument in writing containing an unconditional undertaking signed by the maker to pay on demand or at a fixed or determinable future time ascertain some of money to or to the order of certain persons, or to the bearer on the instrument Promissory note is incomplete until has been delivered to payee or the bearer. Moreover, the sum promised in the promissory note may be made by the 2 or more makers who may be liable thereon jointly severally.

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Types of Advances The advances, which are given by Allied Bank Of Pakistan, are as under: 1. Demand Finance Demand finances are those advances, which are allowed in lump sum for a fixed period and are repayable in lump sum or gradually In installments.

Types of demand finance a) Demand finance (Packing credit) Scheme introduced by SBP for export of carpet, surgical instruments at 0% rate of interest.

b) Demand finance to students(Loan ordinary) Qarz-e-hasna scheme loans are allowed to students and teachers without any interest or markup with recommendations of MNA or MPA.

c) Demand finance to staff Loans are offered to the staff for the following three categories i. house building loans against mortgage of property ii. loans for purchasing vechiles iii. loan equivalent to 3 months salary

2. Running finance (overdraft) Running finance are advances which are generally ,given to temporary requirements of the customers .A good customer use the bank running finance limit as a mean of protecting his credit in the market and as a line of security defense to meet his commitments. Hailey College Of Commerce

Types of running finance a) Unsecured Under such type of overdraft the bank pay upon the personal security of the customers mentioned on the customers account

b)Secured Under this type of overdraft the bank allows his customer to withdraw more than his deposits after giving the security against the amount withdrawn. The securities against which they are given are : i. Share certificates & saving certificates ii. Deposits iii. Mortgage iv. Personal guarantee

3)Cash finance(Commercial loans inwards) This type of loans are given against following i. Against locally manufactured goods ii. Cash finance against rice and paddy iii. Against pledge iv. Against commodities v. Against Trust Receipts To obtain adjustments of an overdue account or to facilitate the borrower to sell the pledge good it is sometimes necessary to deliver a portion of the Hailey College Of Commerce

goods, against trust receipts and promise from the borrower to deposited against trust receipt the sale proceeds with the bank

4)Finance against foreign bills(FAFB) The advances facility is allowed both to the local and foreign bills and is classified as under: i. Finance against foreign bill(local) are advances against Railway receipts, a company with bills of exchange and invoices, are under this head. ii. Finance against foreign bill(foreign) are advances which are against foreign bills, covering bills of exchange ,bills of lading airways bills of exchange and etc

5) Agriculture loans Loans to the farmers with holding up to twenty five (25) acres for meeting there short term , medium term and long terms agricultural production requirements such as i. Agricultural inputs ii. Tube wells iii. Livestock Farming iv. Land improvement

6) Industrial loans Besides the short term loans which play an important part in working capital medium and long term loans are also given by the ABL to industrial sectors for purchase of machinery and other capital nature goods.

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4.Bills Department
Bills department performs three important functions which are given below.

i. Inward bills for collection that is known as IBC. ii. Outward bills for collection that is OBC. iii. Demand draft.

Inward bills for collection These are bills and cheques which are collected locally They are received from banks and parties.

Outward bills for collection There are four kinds of outward bills explanation of these are given below

i. Clean Bills These are negotiable instruments, drawn on outstation branches, bills sent for collection on behalf of the customers that is checks, drafts, treasury bills etc.

ii. Documentary Bills These are the bills accompanied by documents such as R.R.T.R Bills of lading etc. having title to goods, collected by the bankers on behalf of their customers.

iii. Pay-in-Slip

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Pay slip is an instrument in receipt, issued by the bank in the following cases: On account of the expenditure incurred by the bank. On account of the refund of a payment to a person under certain circumstances.

iv. Pay order Pay order is issued oilier banks for collection to make the payment as said.

Demand Draft It refers to the payment of the money on demand of the holder of draft. Demand draft includes DD issues and DD payable

5.Accounts Department Usually accounts are maintained in two ways: I. II. Journal System Vouchers System

Journal System Some commercial and industrial institutions adopt journal system. In journal system entries are reported in journal books and then posted to ledger.

Vouchers System Vouchers System is used for every transaction .Voucher has to be prepared either in cash or in transfer or in clearing the sheet upon which these Hailey College Of Commerce

vouchers are summarized transactions wise and consolidated into a figure is called supplementary.

Types of Supplementary

Debit Supplementary Credit Supplementary

Debit supplementary is used for debit vouchers and credit supplementary is used for credit voucher .Other books which are maintained by the bank are as follows

a) General Ledger b) Statement of daily affairs c) Cash book d) Transfer book e) Income and expenditure ledger etc

6.Remittances Department
Remittances Department performs following functions

(a) Mail transfer (MT) (b) Telegraphic Transfer(TT) (c) Demand Drafts(DD)

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Mail transfer (MT) When a customer requests the bank to the transfer his money from one branch to another branch of the same bank or from one city to another city to same bank or any other bank. Customer fills the form given by the bank ..If the customer has an account with that amount as mentioned in the application form then concerned officer will undertake the following procedure to make the mail transfer complete. Branch mail transfer form Receiving branch register copy Issuing branch register copy Beneficiary advice Advice to customer In case where the customer is not account holder of the bank then the customer will have to deposit the amount which he wants to transfer under mail. Then the above said procedure will be done.

Telegraphic Transfer (TT) A form is provided to the customer and when he fills the application form the concerning officer shall nil the telegraphic transfer form. Then it sent to the required bank which on receiving it immediately makes the payment to the customer and afterwards the vouchers are sent to the bank by ordinary mail.

Demand Draft (DD) Demand draft is just like checks and issued when the customer wants to take cash with him personally .The behind it is to avoid risk and burden of currency notes in huge quantity. Demand draft can easily be handled Hailey College Of Commerce

whatever the amount it has and the money can easily be taken from the bank when it is presented .In fact, the bank persuades the customer to transfer money by drafts and avoid risk of frauds involved in M.T and T.T. Draft is only issued when bank knows customer and has a trust on him. In case of transfer of money by draft, the customer has to fill an application form.. Then the concerned officer gives the following forms: a) Customer advice b) Customers debit form c) Register copy d) Cover advice.

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WORK DONE

An internship program of 2 months is arranged in different organization for the students M.Com to have practical application of their knowledge. In this regard, I joined ABL (Hall Road Branch) to have an internship training of two months. I did the following work in this branch:

1. HOW ACCOUNT IS OPENED I gained the practical knowledge about opening of account. This branch deals with opening current and saving account for its customers and all matters regarding there of. The customers opening Current / Saving accounts can be categorized follows;

a. Individual b. Firm c. Company d. Staff e. Others In order to open an account, first of all the customer has to fill a form prescribed by the bank. The customer is required to bring some introduction for opening of account of that person who already has any account with ABL. Some important information regarding introducer is taken. Then in order to find out whether he is a true introduces or not, a letter is sent

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to him for thanks for introduction. So, that anything wrong may come into notice. There are different requirements for different types of accounts and account holders. Foreign currencies accounts are also maintained in that branch of ABL.

I. DEPOSITS

The procedure for receiving deposits from the customer is as following: 1) Checking the deposits slip to ensure that the man and the account numbers are clearly indicated. 2) Counting the cash / cheques and agree or match the total with the amount on the deposit with slip. 3) After that pay-in-slip is validated for cash transaction / transfer / clearing transfer as appropriate the counter is handed over to customers.

II. WITHDRAWLS

Amount can be withdrawn by cheque form branch where the account is maintained. The manager under his full signature authorizes all cash withdrawals. In current account, the bank does not offer any interest. Customers can deposit or withdraw any amount during banking hours. Hailey College Of Commerce

In PLS Account, customer can withdraw up to Rs. 25,000 without notice. If customer wants to withdraw more Rs. 25,000 he must have to give a notice to bank. When a customer wants to withdraw any amount, he draws a cheques and gives to relevant officer who enters it into token book. He stamps the cheques and writes the serial no. and date of receiving this cheque and gives a token to the client. On the credit side of token book, he records all receipts of the ay and at the end of public dealing time, the total of token book is matched with cashiers book.

III. ISSUANCE OF CHEQUE BOOK

The account holder can request for the new cheque book by presenting the requisition slip along with the authority letter to concerned officer. Accounts holders signatures are verified before giving him a new cheque book. The presence of the account holder is compulsory to get a new cheque book. But if he sends a third person to collect his cheque book then the procedure is as follows: 1) An authority letter is given to person by accountholder. 2) The account holder verifies the signatures of third person on authority letter. 3) The bank officer gets the signature of third person for verification on his own behalf. Hailey College Of Commerce

4) The bank keeps the authority letter and gives the chequebook to person.

2. CLEARING DEPARTMENT

I prepared the clearing myself. I had to receive all the clearing cheques and to make schedule of these cheques after making an entry in the inward of outward clearing registers and then to submit these schedules along with cheques to main branch. An advice is sent to the issuing bank that the cheques are honored. If the cheque is dishonored a memorandum is issued to bank on which reasons of dishonored are mentioned.

Types of Clearing

There are two types of clearing:

1) Inward Clearing 2) Outward Clearing

1- Inward Clearing When the cheques of other banks are deposited in our bank these cheques are verified from the issuing bank first and then after verification these are credited in to account holders account and this is called inward clearing. 2- Outward Clearing

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When cheques of our bank are deposited in other banks and those banks send these cheques to us for verification. It is called outward clearing.

Books Maintained For Clearing

I- Clearing Inward Register:

Clearing Inward register all the sums, which are received by other branches or other banks, are recorded. In this register, the serial number, date of clearing, date of instrument issue, amount of instrument and name of other branch or bank to which the funds are transferred are recorded.

II- Clearing Outward Register

In this all register all the sums, which are received by the branch from the same bank, and other banks on behalf of its customer are recorded. In this register, serial number, date of issue of instrument, name of drawer (branch of same bank or other bank) and amount of instrument is recorded.

3- Income Expenditure Register

In income and expenditure register all the incomes of the branch and expenses made by the branch are recorded. Income of the branch are Hailey College Of Commerce

commission etc and expenses are on salaries. Postage, interest, Stationery etc.

4- Mail Inward Register In this register any letter or instruction received by branch is recorded. In this register the serial number, from whom the mail is received, subject of the mail and date of receiving are also written.

5- Mail Outward Register In this register the serial numbers, the purpose of mail, address and date of letter issued are recorded.

6-Daily Report/Day Book The branch sent its daily report to the zonal office. All the change in the books are recorded in this report. Daily report is also called daily balance sheet.

7- Weekly Report In weekly report the branch informs to the zonal office of all the weekly changes in books of accounts and also told about the position of deposits, advances and all concerned aspects to the zonal office.

8- Salary Register In the salary register the salaries of all the employees are recorded. In salary register the basic salary and all the facilities are recorded and accommodation, conveyance, utilities, and provident fund recorded. In Hailey College Of Commerce

salary register the amount of tax deduction at source on salary are also recorded.

9- Demand Draft Issue Register When a person wants to transfer some amount from one place to another place he can transfer through draft. The branch order to another branch or bank to pay certain sum of money according to apparent tenor of the instrument. The bank charge commission against this facility. In DD issue register the date of draft issue, name of payee and name of drawer and amount of draft is also written. The bank issues the advice to drawee branch against the issuance of draft.

10- Demand Draft Payable Register In DD payable register the bank record all the particulars of the DD payable. The bank only pays that DD against which advices have been received.

11- Telegraphic transfer issue register In TT issue register, all the particulars of TT are recorded e.g. drawee branch, name, account number of beneficiary and amount of TT also recorded.

12- Telegraphic Transfer Payable Register When the branch receives the advice from other bank it is also recorded in TT payable register with all particular e.g. date, name of drawer, amount, name and account number of beneficiary also record.

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13- Send Register In SNDR register the branch records all the particulars of short notice deposit receipts e.g. The date or deposit receipts and the date of withdrawal of deposits.

14- Dac Register

In DAC register the bank records all the relating matters of deposit at call.

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