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Executive Summary:
The economic growth and success behind every developed all
developing country revolve around an efficient banking system. No one
would argue the fact that banking sector plays the vital role in maintaining
sustained growth and development.
Allied bank is the first Muslim bank established on the territory that
became Pakistan, Established on December 3, 1942 as the Australasia Bank
at Lahore under the chairmanship of Khawaja Bashir Bux,Allied Bank of Pakistan offered services, Deposit of Money, Acquiring
Loans, Transfer of Money, foreign currency account, ATMs and Master
cards and lockers services. Cash, Accounts, Advances and Remittance etc.
are departments of the ABL. In Account or Deposit department open the
different type of accounts like, Current and PLS saving account of their
customers. ABL lunched the different Products for their customers, like this
Master card, Debit and ATMs cards.
Now with its network of 735 branches located in the urban and
rural areas throughout Pakistan, Allied Bank is positioned to provide
personalized banking services to its customers at locations convenient
to the customers. ABL has invested extensively in banking
automation. 680 branches out of a total of 735 branches are fully
equipped with On-Line Banking facility.
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MISSION STATEMENT
To provide quality financial services with
an edge of technology to businesses
particularly small and medium sized enterprises
through a motivated human resource
endeavoring to achieve customer satisfaction.
Objectives of the ABL.
Following are the objectives of Allied Bank of Pakistan.
Our customers come first they will be served at all times by friendly,
caring and responsibility.
Our services must be characterized by fairness and respect
Professionalism, integrity and ethical conduct.
To explore the opportunities of joint ventures in central Asian
countries, which have won their independence and to agency
arrangement with exchange companies and other financial situation of
Middle Eastern countries, be pursued to boost the mush need homeremittance business.
To develop and introduces new products for moving up small saving at
the grass root level.
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To achieve the ultimate object of customer orientation, we have
already lunched an ambitions plan of automation of our operation,
which will to a long in providing prompt and efficient serves to our
customers.
Upgrade technology particularity computerization and automation of
the banks operation.
Enhance research on the banks operation and product development.
Business diversification-involving merchant banking and credit market
operation. Increase training of staff.
Develop an institutional capacity effectively serve small business.
Organization restructuring to minimize the time of transactions.
Accelerate recoveries, Expansion of network at selective strategic
location.
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Presidents Message:
I joined Allied Bank in October 2000 to lead the Bank towards
completion of its privatization. At the very outset, I found that certain
operational and functional areas of the bank required urgent restructuring and
strengthening for effective management.
To Address these areas, restructuring process at field arid Central
Office was initiated with a view to ensure more effective control, improve
customer responsive and cut costs. There were gaps in the management levels
and to fill them, some lateral entries have been made and a few are in the
pipeline. Another round of restructuring will be implemented shortly to bring
in the required focus for different market segments and to further improve
our credit and audit processes after review pf actions to date.
The Bank faced possibly the most difficult situation in history during 2000.
Due to low interest margin, providing previous years adjustment and meeting
the provision needs, there was a very substantial pre-tax loss in addition to an
operational loss. However, in the year 2001, cost of funds has been
nationalized resulting in improvement in interest margin. Similarly
intermediation cost has also been cut-down. Revenues from investments have
substantially improved, Consequently operational profitability has been
restored and pre-tax loss almost eliminated.
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I am happy that in all my endeavors I had the desired support of the
staff of the Bank and with renewed zeal and spirit, we shall surmount all our
difficulties and be able to regain our position as one of the leading
Commercial banks of the country. In this journey, we should be keen
to adopt market-based policies for the long-term financial health of the Bank.
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EVOLUTION OF BANKING
BANKING:
The economic growth and success behind every developed all
developing country revolve around an efficient banking system. No one
would argue the fact that banking sector plays the vital role in maintaining
sustained growth and development.
EVLUTION OF BANKING:
It has not so far been decided as to how the word Bank originated.
Some authors opine that this word is derived from the words Banque which
mean a bench. The explanation of this origin is attributed to the fact that the
Jews in Lombardy transacted the business of money exchange on benches in
the market place, and when the business failed, the people destroyed the
Banco. Incidentally the word Bankrupt is said to have been evolved from
this practice.
Others authorities hold the opinion that the word Bank is derived
from the German word Back which mean joint stock fund. Later on,
when the Germans occupied major part of Italy, the word back was
Italianized in to Back.
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EARLY GROWTH:
Banking in fact is as primitive as human society, for ever since man
came to realize the importance of money as a medium of exchange, the
necessity of, a controlling or regulating agency or institution was naturally
felt perhaps it were the Babylonians who developed banking system as it
early as 2000 Bait is evident that the temples of Babylon were used as banks
because of the prevalent respect and confidence in the clergy.
King Hammurabi (1728 1686 B.C.), the founder of the Babylonian
empire, drew up a code wherein he laid down standard rules of procedure for
banking operations by temples and great landowners. He got his, code
inscribed on a block of diorite about 8 feet tall, containing about 150
paragraphs which deal with nearly all aspects of loans, interest, pledges,
guarantees, natural accidents, loss, theft etc. Later on, the Sumerians
Babylonians, Hittites and Assyrians standardized the values of the goods in
silver, copper, bronze or electrum.
In 1401 a German Public Bank was formed comprising the operations
of discounting, deposit and transferring of money. By the 16th century, some
more public banks were formed in Venice, Milan, Amsterdam, Hamburg, and
Nuremberg.
In the old times Gold Smith in England started banking system. People use to
deposit their valuables and commodity money with Gold Smiths. So Gold
Smiths can be said the people who firstly started formal banking people use
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to deposits their valuables with the Gold smiths for the purpose of
safekeeping. Then when after some time these valuables were drawn from
Gold smiths, Gold Smith used to charge some service charges. So in this
system the deposits were backed up with hundred present reserves with Gold
Smith.
If we make a balance sheet of a Gold Smith today, it looks like this,
ASSETS LIABILITIES
Reserves =Rs. 1000 Deposits = Rs. 1000
---------------- ----------------
Total = Rs. 1000 Total = Rs. 1000
------------------ ---------------
by and by Gold Smith started thinking that al the deposits are not with drawn
at the same day. In a particular day some people withdraw their deposits and
some also comes to make new deposits. So over all effect is offset. So Gold
Smith realized that a handsome amount always remained with them. Then
they decided to keep fractional reserves for daily transactions.
This was of course a revolutionary idea realized by Gold smith that
gave birth to modern banking system by keeping fractional reserves with
them Gold Smith started lending money to the needy people and thus
increasing their profits. From these profits, Gold Smith started giving other
services to the common public. So a balance sheet under fractional reserve
system would look like as,
ASSETS LIABILITIES
Reserves = Rs. 100 Deposits = Rs. 1000
Loan extended
To public = Rs. 900
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------------- --------------
Total =Rs. 1000 Total =Rs. 1000
-------------- ---------------
In 1672, however, English banking faced great crises when Charles-11
borrowed huge sums of money from the Gold Smiths and later refused to pay
them back. Therefore, a number of Gold Smith bankers formed themselves
into a corporation in 1695, known as the Bank of England. This bank lent
pound sterling 12,00,000 at 8 % interest to William-111, who in return,
allowed a number of privileges to the bank, specially the right to issue Notes
payable to bearer on demand upto the amount of this loan. This was known
as fiduciary issue, not covered by the gold. This new bank becomes very
serious competitor to the comparatively smaller private banks run by the
London Gold Smiths.
BANKING IN PAKISTANAt the time of independence the areas which now constitute Pakistan
were producing food grains and agriculture raw material for sub-continent so
there were no industrial zones in these areas however, there were 487 offices
of banks in these areas which were providing banking facilities.
When Pakistan came into existence its was decided that reserve bank
of India will continue solving problems of time and demand liabilities,
coinage, currencies, exchange etc.
There were only two Pakistani institutions Habib bank and Australasia
bank in Pakistani. In July 1st, 1948 Govt. of Pakistan decided to establish a
full-fledge central bank. Governor General of Pakistan Quaid-e-Azam
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Muhammad Ali Jinnah inaugurated state bank of Pakistan. The first
important task, which the state bank of Pakistan had to do, was the issue of
currency noted and withdrawal reserve bank of India notes with over
printing there of Govt. of Pakistan, which had been in circulation in Pakistan.
The central bank of Pakistan was assigned an urgent task creating a
National banking system. In order to attain this task it provided every help of
Habib bank to expand its network of branches and also recommended to
Govt. the establishment of a new bank, which could server as an agent of the
state bank. As a result, the National bank of Pakistan came into being in
1949.
The outbreak of Korean War in 1950 provided a great boom for
Pakistans export, and thus the demand for bank advances increased shapely.
However, when the Korean war ended in 1952, there was a shortfall in the
countrys export earnings with no appreciable change in imports earnings
with any appreciable change in inputs. This naturally caused a drain or the
foreign exchange reserves, and in turn, affected the balance of payments
position the government had, therefore, to reduce inputs and provide
adequate incentives to the business and industry in the form of protective
tariffs. This induced banks to provide working capital for industries. The
state bank of Pakistan sponsored the setting up of and industrial finance
corporation.
Agriculture development bank was setup to attend agriculture finance.
All these measures and the devaluation of Pakistani rupee on August 1st, 1955
had a very favorable effect on market and balance of payments position in
1955-56. Thus Pakistan now entered in to a phase of planned economic
development in 1956, and naturally further expansion in banking and credit
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facilities was mad. However, despite the intensive needs, private enterprise
was not coming in Pakistan consequently the state establish
a regional bank by the name of EASTERN MERCANTILE BANK in east
Pakistan. In 1960 RURAL CREDIT FUND was setup with one Crore to
provide medium and long-term credit in the rural areas.
Small business finance corporation etc. are contributing there due
share in the countrys economic life. The nationalized of banks in Pakistan
since January 01, 1974 has heralded a new area of development and progress.
It has taken a completely new turn with the phased introduction of interest
free banking system with effect from January 1981.
KINDS OF BANKING IN PAKISTAN
In Pakistan following types of banks are operating in the business
circle like economics.
Central banks:Each country in the world has its own central banks. This bank does
not deal with public directly. This means that it neither receive cash deposit
from the people.
State bank is the central bank of Pakistan. It was set up on July 1st, 1948.
Commercial banks:
The first commercial bank in the world is Bank of Venus. It was set up
in 1171 in Italy.
These banks are set up on commercial bases therefore; their primary
objective is to earn profit and maximize it is far as possible. For this they
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received cash deposits from the people in different accounts. They give loans
to different business enterprises and thereby create credit money.
The state bank of Pakistan is the central bank of Pakistan, commercial
banks, financial institutions and cooperative banks are the other components
of the banking system.
Agricultural banks:
The bank is responsible for development of agricultural sector in the
country. The public linked with agriculture and agro-based industries can get
financial help from agricultural bank.
These banks are providing long term and short term credit facilities to thefarmers for the purpose of seeds, fertilizers and agriculture tools, fencing and
tube wells.
The agriculture development of Pakistan is working as a agriculture
bank in Pakistan.
Industrial banks:
The banks meets financial needs of industrial sector loans are grantedto set up new companies to purchase of new machinery and construction of
buildings requires long term loans at responsible rate of interest. Industrial
development bank of Pakistan is working as industrial bank.
Mortgage banks:
The banks provide loans against land and building for short and long
term. The bank can lend money to buy or construction of new house.Moreover purchase and development of land require funds. In Pakistan there
is need of mortgage banks. At present House Building Finance Corporation is
doing work of Mortgage banks in housing sector.
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Exchange banks:
The exchange has their head offices in foreign countries. They deal in
foreign exchange due to foreign trade. The importer makes payments in
foreign currency. The exporter receives foreign currency. American express
bank limited bank of Tokyo limited Rupali bank limited, Bank of Oman and
Doha Bank Ltd. are some example of exchange bank in Pakistan.
Cooperative Banks:
These banks can provide banking facilities to member for meeting their
financial requirement. The members may be farmers or small producers. The
Punjab provincial cooperative is the example of cooperative bank.
Saving Banks:
The banks receive idle money from people having low income. The
people save money for future needs. The saving offers responsible rate of
profit on saving account. The student Govt. employees and house hold
women can open such account. Post offices and national saving centers are
example of such banks in Pakistan.
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INTRODUCTION OF AUSTRALASIA BANK
The Australasia bank was established in 1942 in a motor garage in
Lahore with a staff of three. Initially, it was little more than an agency for the
collection of rents from the family estate. Then, the tenants began to open
accounts and the bank to make advances against gold, insurance policies, and
merchandise Management of family properties led to the business of
managing other peoples estates and the new ban soon encountered
opposition from the established banks. Discrimination took the form of acollection charges applied to local cheque, n the grounds that the new bank,
was not located in the Bank Square, the Australasia bank was at that stage a
non-scheduled bank, it was claimed that at this time it was not accorded the
facilities available even to that class of bank.
The reserve bank of India was loath to grant facilities for the exchange
of notes or the grant of accommodation. After two years, the bank was
moved to a new building. It did the same business as before though on an
increased scale a number of branches were opened. In due course it applied
for inclusion in the schedule and was accorded the status of a scheduled bank
in the financial year 1946-47. After partition the bank was entrusted with the
collection of treasury revenues and payments on behalf of the government in
certain centers, subsequently it was granted a license to undertake foreign
exchange business, and further branches were opened. The bank is still small,
though included in the schedule, but its does a business comparable in quality
and scope with larger and longer established banks. If any proof wore needed
that the Muslim is capable of the initiative and
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Persistence to embark upon the complex business of banking, this case
study should provided useful evidence.
OVERVIEW:
Allied bank is the first Muslim bank established on the territory that
became Pakistan, Established on December 3, 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 Banks paid up
capital & reserves amount to Rs. 565.7 million., deposits come to Rs.
101.554 billion and total assets equal Rs. 121.164 billion.
Now with its network of 735 branches located in the urban and
rural areas throughout Pakistan, Allied Bank is positioned to provide
personalized banking services to its customers at locations convenient
to the customers. ABL has invested extensively in bankingautomation. 680 branches out of a total of 735 branches are fully
equipped with On-Line Banking facility.
History:
The Allied Bank's story is one of dedication, commitment to
professionalism, adaptation to changing environmental challenges
resulting into an all round growth and stability, envied and aspired by
many.
The Pre-Independence Period (1942-1947)
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When Quaid-e-Azam Muhammad Ali Jinnah began the reorganization
of the Muslim league in 1934, he realized that as a mass party, the League
would have to provide not just political but also socio-economic guidance
for the uplift of the Muslim community. After the passage of the historic
Pakistan Resolution in March 1940, the Quaid became acutely conscious of
the need for producing a Muslim business and industrial leadership.
Being a dedicated person Khawaja Bashir Bux, the founder of the
Australasia Bank, was successful in obtaining the support of several
prominent Muslim Leaguers including Mian Mumtaz Daultana who was later
elected as Chairman of the Board of Directors in 1943. Mian Iftikhar Hussain
Nawab of Mamdot, Syed Amjad Alt and Nawab Muzzafar Ali khan Qizibash
also joined the Board. Another enthusiastic supporter (though not a Director)
was Maulana Zafar Ali Khan. Thus Australasia Bank had the unique
distinction of being closely identified with some of the countrys most
prominent leaders of the freedom movement. The subscribed share capital
was raised to Rs. 0.5 million at the end of the first full year of operations
during which the Bank earned a profit of Rs. 9840 and declared a dividend of
3 percent. The bank originally started its operations in the garage of Khawaja
Bashir Buxs bungalow near the Lahore Railway Station. But its success
encouraged its Director to open a branch at Anarkali on the15th march 1944.
Khawaja Bashir Bux was the Banks first Chief Executive. His contribution
to the success of the bank is acknowledged in several reports of the Board of
Directors. His selflessness and sincerity of purpose can be judged from the
fact that he would not draw more than a rupee as his emoluments per month.
The second branch of the Bank was opened in 1945 in Amritsar, and was also
established a full-fledged Head Office at shah Chiragh premises nest to the
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building of Reserve Bank of India in the heart of the business and banking
locality of Lahore. In June 1946 the bank earned the status of a scheduled
bank. During 1946-47 more branches were opened
at Mcleod Road Lahore, Jallandhar, Laudhiana, Agra and Delhi. During the
period between 1942-47 the Bank made considerable progress. On 30th June
1947 share capital increased to Rs. 0.673 million and deposits had risen to Rs
7.728 million. The bank continued to pursue a prudent and cautious policy
throughout the period and managed to maintain a highly liquid position. The
total income of the bank on 30-06-1947 was Rs. 0.265 million of which over
90 percent was obtained from interest bearing investment. At the time of
partition the total salaried staff of the bank was 55 and the total wages
expenditure amounted to Rs. 0.126 million. Mian Mumtaz Daultana remained
Chairman of the Board of Directors throughout this period.
At independence the industrial and commercial sector were under-
developed. Under the able stewardship of Quaid-e-Azam Muhammad Ali
Jinnah, the Govt. responded imaginatively to the challenge. A full-fledged
Central Bank, the State Bank of Pakistan
Became operational on 1st July 1948 and under its guidance the financial
sector also flourished.
Australia Bank in the Private Sector (1947-1974)
Australasia Bank was the only fully functional Muslim bank on the soil
of Pakistan on August the 14th, 1947. it had been severely hit by the riots in
East Punjab. The Bank was identified with the Pakistan movement.
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Several if its Directors were prominent Muslim League leader. Its
offices throughout. East Punjab was ransacked and rioters attacked Muslim
staffs at Laudhiana. The Jallandhar branch was burned immediately after
independence as the manger Mr. Abdul Karim had hoisted Pakistani flag and
the branch had become a symbol of Muslim national determination. At that
time all brandies in India, (Amritsar, Balata0 Jallandhar, Laudhiana, Delhi
and Agra) were closed down. All told the bank lost about Rs. 3 million in
deposits and 6 branches, the Govt. of India refused to provide any assistance
for transfer of records from the East Punjab branches despite the very
generous facilities made available to banks seeking to shift to India by the
Govt. of Pakistan. The true picture of the Banks liabilities and assets in India
thus could not be ascertained. This was a particularly important problem
since the Bank was fully committed to reimbursing the clients who had lost
their deposits in its branches in East Punjab, U.P. and Delhi. Up to 30th June
1948, the Bank had paid claims to the extent of Rs. 1.112 million. The bank
also absorbed its officials and staff members who migrate to Pakistan. New
branches were opened during 1948 at Karachi, Rawalpindi, Peshawar4,
Sialkot, Jhang, Gujranwala and Kasur. Later its branch network spread to
Multan and Quetta. Australasia Bank made a profit of Rs. 50,000 during
1947-48.
In August 1948, Australasia Bank became the first Pakistani bank to
successfully negotiate and open an L/C for a Sialkot based importer of books.
Correspondent relationships were also established with Midland (U.K),
Chase Manhattan (U.S.A), and Lloyds (India). A single distinction accorded
to Australasia Bank was that during the period September 1947 to March
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1948 it performed the treasury function of federal Government of Pakistan.
The Treasury functions were taken over by the National
Bank of Pakistan in 1949. During the financial year 1950-51 the
founder, first chairman and first Managing Director of the bank, Khawaja
Bashir Bux was replaced by his brother Khawaja Sharif Bux. By the
beginning of 1950-51. Paid up share capital amounted Rs. 1.1 million and
assets amounted to Rs. 26.7 million. The bank had 21 branches, 16 in Punjab,
2 in Sindh, 1 in Balochistan and 1 in NWFP.
The Banks profit had increase after 1951 due to the export boom at
about Rs. 20.1 million marks throughout this period. During 1955-56 Mr.
Naseer A. Shaikh became chairman of the Board and a close working
relationship was forged between the Banks new Chairman and Managing
director. This partnership proved instrumental in overhauling the bank,
modernizing its operations and consolidating its financial position.
By the end of 1963, the bank had 29 branches in various cities of
Pakistan. Deposits rose to Rs. 89 million and advances to talled Rs. 66
million. The bank was still mainly concerned with general banking and trade
financing (including foreign exchange transactions) but it was playing an
increasingly important role in the development of small and medium sized
business houses. Many, now familiar business names were helped to establish
themselves by Australasia Bank during the golden 1960s. These
Included, Nishat, Crescent, Pak Cement, Haroon Traders, Takht Bai Suger,
Insaf, Punjab Soap, Pak Fruit and Saboor Oil Mills etc.
Mushtaq Ahmed Yousufi, the well-known banker, writer and
administrator took over as General Manager from Mr. S.R. Jariwala in May
1965. Bank staff does not however, remember Mr. Yousufi as a humorist but
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as a professional banker interested in streamlining operational procedures and
enhancing efficiency. Mr. Yousufis period was marked by sustained and
orderly growth during 1965. 17 new branches were opened and over 83
percent of the gross profit for the year was earn marked for development
expenditure in connection with the opening of new branches. The bank
contributed Rs. 0.125 million to the National Defense Fund in the wake of
the September 1965 war. In 1966 the bank opened 26 new branches and
doubled its reserve funds. Its advances portfolio exceeded Rs. 160 million for
the first time in its history and deposits raised by almost 58 percent exceeding
Rs. 232 million marks. In 1966 the Central Office of the bank was
established at Karachi while the Head Office remained at Shah Chiragh
Building, Lahore. This problem of a dual control structure could not be
effectively tackled until the banks nationalization 1974.
16 new branches were opened in 1967 and 20 in 1968. In that year the
banks reserve fund equaled Rs. 2.5 million. By the close of the 1960s, the
total number of branches of Australasia Bank was 136, total deposits Rs. 300
million and the advances portfolio amounted to Rs. 231 million. 1971 was a
better year despite the troubled conditions in East Pakistan. 21 new branches
were opened (including two in east Pakistan). Deposits exceeded Rs. 400
million and the investment portfolio surpassed Rs. 283 million marks.
The Bank list 51 branches and a sizeable proportion of its assets by the
separation of East Pakistan. Problems were also encountered in connation
with advances for financing inters provincial trade. However flexible and
adroit financial management ensured that these losses were soon made good.
Profit during 1972 amounted to Rs. 2.9 million. 31 branches were opened
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during that year and advances rose by over 73 percent. Progress was
sustained during 1973 when the bank made a profit of Rs. 6.7 million.
On the eve of nationalization, the banks paid up capital amounted to
Rs. 5.83 million, reserves were Rs. 6.2 million, deposits amounted to Rs. 849
million and advances exceeded Rs. 628 million.
On 1st January 1974 all the scheduled banks, including Australasia
Bank, were nationalized. Three small provincial banks were merged into
Australasia bank and on 1st July 1974, the new entity was renamed as the
Allied Bank of Pakistan Limited. Allied Bank began its operation as a public
sector financial institution. During the 17 years (1974-1991) the value of total
net assets rose to Rs. 24.4 billion and deposits to over Rs. 21.3 billion with
747 branches network (figures are for 10-09-1991, this date the bank was
privatized).
Allied Bank: Public Sector Years (1974-1991)
Under the Bank Nationalization Act of 1974, 14 scheduled banks were
taken over by the Govt. Australasias Board of Directors was dissolved and
the bank was renamed as Allied Bank of Pakistan Limited. Sarhad Bank,
Lahore Commercial Bank and Pak bank limited were merged into Australasia
Bank. Australasia Bans outstanding performance is reflected by the fact that
the break-up value of its share as estimated in 1974 exceeded tree times its
nominal value. At the time of merger, it was the second highest among all
banks nationalized in 1974. Allied Banks success is also reflected in the fat
that Mr. Yousufi, its Managing Director since 1965, was soon to become the
chairman of the Pakistan banking council.
Allieds first executive board was constituted of Mr. Iqbal A. Rizvi as
President, Mr. Ajmal Khalil, Joint President. And Mr. Khadim H. Siddiqui as
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a Member during 1974. Mr. Rizvi was also appointed as Chief Executive of
the Bank. The first year was a highly successful one; gross profit exceeded
Rs. 10 million mark, deposit rose by over 50 percent and approached Rs.
1460 million. Investment rose by 72 percent and advances exceeded Rs. 1080
million for the first time in banks history. 116 new branches were opened
during 1974 and the bank stated and the bank started
anticipation in the commodity Operations programme of the Govt. Spot
financing remained an important activity of the bank during the 1973 76
period and trade financing in the area of wool, cotton and rice was also
expand. In the 1970s the bank an important part in procuring the services of
Govt. Tahsildars for the recovery of agricultural and other loans, the
approach was lauded by the Pakistan Banking Council and provided the basis
of a Recovery Model which was subsequently adopted by all other
commercial banks and DFIs.
In 1976 Mr. Ajmal Khalil replaced Mr. Rizvi as Chief Executive and
President. 1975 was an important year for the staff. The award of the Wage
Commission for Financial Institutions ensured that remuneration scales at
Allied become equivalent to that of all other NCBs and DFIs. Nationalized
also saw a rapid increase in dividend, these rose from 7 to 8 percent in the
early 1970s to 20 percent in 1974 and 1975.
The 1970s also saw a major shift in policy in which the bank expanded
promotional activities. During this period the bank played an important role
in expanding financial support to public corporations such as OGDC, the
capital Development Authority, Fauji Foundation etc. interaction with ADBF
also increased. The bank rapidly increased its commitment of financing
cotton and rice transactions. The commitment to the development of under
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developed areas is evident from the fact that during 1974-77, 361 new
branches was opened, of these as many as 233 were located in villages and
small towns. A very important development during this period was the
opening of Allieds first foreign branch at 14-Trinity Square, London near the
bank of England. The 1970s also saw a major expansion in the home
Remittances related business and this encouraged the Bank to increase its
branches in Britain to three. In 1980 the Bank of England granted the Allied
Ban recognition as a full-fledged bank under the relevant U. K. Banking Act.
Mr. Khadim H. Siddiqui succeeded Mr. Ajmal Khalil as President of
the Bank in 1981. In his first year of office there was a significant increase in
the capital base, which increased to Rs. 132.2 million by the issuance of
bonus and rights shares. Under Mr. Khadim Hussains leadership, the bank
launched an extensive meet the client programmed which led to the
addition of 122,000 new clients during 1981. It was estimated that he total
number of clients being serviced by the Bank as at end 1981 was 1.2 million.
In 1984 Mr. I.D.Junep as the Banks President replaced Mr. Khadim H.
Siddiqui. As important concern of the new President was the expansion of
international business. The U.K. operations were streamlined. The
international correspondents network was enhanced and measures were
taken to expand import and export business. In 1984 the Bank also initiated a
major computerization programme. A mainframe computer was installed at
Central Office in 1985 and an effective Management Information System was
developed.
The overall profitability of the Bank continued to improve during
1984-86, partly due to the institution of several incentives an awarded
schemes ant the operation of the staff welfare fund. The bank also succeeded
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in mobilizing a substantial amount of saving deposits despite the more
attractive profit being offered by Govt. sponsored saving schemes.
In 10988 Mr. Maqbool A. Soomro took over as President of the Bank.
In both 1986 and 1987 the bank achieved the distinction of obtaining the
highest rate of growth in assets, deposits and profit among me NCBs.
This encouraged the Bank to increase its capital base and the Banks
paid up capital rose to Rs. 272.2 million in 1987. Authorized capital was
increased to Rs. 500 million.
In 1986 and 1987 the Bank adopted several measures to assist the social
development programme of the Govt. These included:
1. Expansion of the supervised agricultural credit schemes.
2. Provision of loans for cost housing and Qarz-I-Hasna for education.
3. Collection facilities for utility Bills.
4. Facilities for Hajis.
Mr. S. Amjad Ali assumed charge as President in 1989. During that year
the bank made significant progress in its foreign exchange operations-
Earnings from currency management rose by over 40 percent.
This was an important step for developing merchant banking business and
diversifying operations. In 1989 bank deposits exceeded Rs. 16 billion bench
mark and profit from foreign exchange transactions rose by two-third and
exceeded Rs. 100 million for the first time in the Banks history. The
international operation of the Bank received a fillip when Allied Bank took
over the entire British operations of the Muslim Commercial bank. The take
over of the MCB Glasgow Brach enabled the Bank to establish its business is
Scotland. In 1989 also saw the addition of 19 new branches. In 1990 tempo
of new branch opening was maintained and 36 new braches were opened.
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Mr. Muhammad Khan Memon replaced Mr. S. Amjad in December 1989
as president of the bank. Mr. Muhammad Khan Memon was replaced by Mr.
Inam Elahi presently President of the countrys largest bank, (National Bank
of Pakistan) of deputation from Allied Bank of Pakistan Ltd. He held the post
of the President from December 1990 till September 1991.During the
tenure of Mr. Inams President ship, Allied Bank benefited a great deal
through his variegated banking experience.
On the eve of privatization, net assets of the bank amounted to Rs. 24.4
billion. Its paid up capital was Rs. 272 million. Reserves amounted to Rs. 178
million. Deposits had just surpassed Rs. 20 billion benchmark, investment
and advances were in excess of Rs. 19 billion and it had more than 2 million
customers. The bank had a network of 745 branches in Pakistan and three in
the U.K.
In November/December 1990, the government announced its commitment
to the rapid privatization of the financial sector. Allied Banks management
under the leadership of Mr. Khalid Latif decided to react creatively to the
challenge.
A New Beginning:
In September 1991, Allied Bank entered in a new phase of its history,
as worlds first bank to be owned and managed by its employees.Mr. Khalid Latif, an employee of the bank since 1971, had anticipated
that an opportunity would emerge for the workers to take management
control of the bank. He proceeded on long leave in November 1990 to make
an in-depth study of the concept of Employees Stock Ownership Plan
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(ESOP). He was thus well prepared when in May 1991, the privatization
Commission announced the impending privatization of Allied Bank and
invited pre-qualifications bids.
During May/June 1991, almost all the officers, staff members and
CBA union had given a mandate to Mr. Khalid to acquire Allied Bank for
employees through the Allieds Management Group which had been formed
specially for this purpose.
Within a week the formal letter of acceptance of this bid was handed
over by the Prime Minister of Pakistan to Mr. Khalid. The executives,
officers and representatives of all CBA union confirmed Mr. Khalid as
Chairman of the Allieds Management Group. In September 1991, the Board
of Directors approved the transfer of 26 percent of the banks shares to the
Allieds Management Group. The Board of Directors was reconstituted. It
elected Mr. Khalid Latif as its Chairman and Chief Executive of the Bank.
The State Bank of Pakistan also approved this decision.
ANGELES, CAMay 24Interlink Considers $200M
investment in ABL Buyout LOS, 2002.
US Based Interlink, a global investment group has given a vote of
confidence of Pakistans investment outlook, in committing up to USD$200
million in the interlink led buyout of 49% shares in Allied Bank Ltd. of
Pakistan. This was announced following the landslide victory of Pakistans
President Pervaiz Musharraf in a referendum that guarantees his Presidency
for another five years.
Interlink plans to further the banks expansion into the Middle East and
later Europe and the US. ABL is currently one of the largest banks in
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Pakistan with USD$3 billion in assets, 7000 employees and 855 branches. In
1991 the Government sold 51% shares in ABL to the employees and retained
49%.
A high level Interlink delegation is also expected to visit in Pakistan
along with other group partners soon, once the Privatization Commission
And State Bank of Pakistan gives Interlink the clearance to proceed with the
ABL privatization, which is expected by May 31, 2002. During the upcoming
visit, they hope to complete the necessary arrangements required to formalize
the purchase. Post acquisition, Interlink plans to restructure and expand the
ABL deposit base by an additional USD$ 500 million or 30 billion rupees
and introduce an array of Islamic banking products to Pakistan.
Current position of ABL:
Mr. Khalid A. Sherwani, took over as President of Allied Bank on
18th October 2000 The President gave policy guide lines and the
strategy to run the affairs of the Bank in the light of changed
requirements of the banking industry. He emphasized that the Bank
Executives, officers & staff must work fearlessly and put in all-out
effort to ensure steady growth of the Bank. He emphasized that
customers have to be given the best possible service as it is they who
are the source of our growth & success.Habib Allied International
Bank PLC Financial Services Authority was desirous to form a UK
incorporated independent subsidiary by all the Pakistani Banks or a
joint subsidiary of two Banks. Accordingly the Management ofAllied
Bank of Pakistan LTD and Habib Bank LTD agreed to incorporate a
joint venture Bank named "Habib Allied International Bank PLCC"
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Whose initial paid-up capital is 25.00 million pound sterling. With a
network of 10 branches located in all big cities of UK, the bank will be
Well poised to handle large volumes of business, particularly of the
Asian community.
Now with its network of 735 branches located in the urban and
rural areas throughout Pakistan, Allied Bank is positioned to provide
personalized banking services to its customers at locations convenient
to the customers. ABL has invested extensively in banking
automation. 680 branches out of a total of 735 branches are fully
equipped with On-Line Banking facility.
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HIERARCHY OF ABL
Department of Management Sciences (IUB) 34
PRESIDENT
SECRETRAY
Board of
Directors
Executive
committee
Secretary
Executive
committee
SEVPC
O NST
SEVP
Corporate
Affairs
SEVP Eco
Research
SEVP
Credit
Local
Collection
SEVP
EDP
SEVP
Treasury
SEVP
Inter
division
SEVP
Audit
SEVP
Capital
Market
SEVP
Admin
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Branch Structure
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MANAGER
FOREIGN
EXCHANGE
GENERAL
BANKING
ADVANCES &
FINANCES
Accounts
Department
On Line
Department
Cash
Department
Remittance
Department
Clearing
Department
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BOARD OF DIRECTORS
Chairman:
Mr. Khalid A. Sherwani
Board of Directors:
Mr. Asif Bajwa
Mr. Shoukat Hiyyat Durrani
Mr. Muhammad Sami
Mr. Muzafar Iqbal
Mr. Saeed Anwar
Mr. Muhammad Azam khan
Mr. Justice (Retd) Aamir Raza
Company Secretary:
Mr. Muhammad Yaqoob
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Executive Committee:
A committee called as executive committee is formed in order tostrengthen the controlling activities within the bank. The members are board
of directors, chief executive and the head of all provisional head quarters are
the members of the executive committee.
The executive committee facilitates the top management, being an
important part of it, in coordinating the decision made by top management to
the middle and lower management. Moreover disciplinary and other
important issues are also taken into the consideration by the executive
committee in mailing proposals and decision for the betterment of the bank.
BRANCH NETWORK:
Allied bank of Pakistan limited has a branch network all over the
country. There are total 735 branches of the bank. Besides country branches,
there are four foreign branches of ABL located in United Kingdom for the
banking operation outside Pakistan.
The network of branches in the Pakistan and outside Pakistan is providing
good banking services to people.
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ON-LINE BRANCH NETWORK
REGIONAL OFFICES BRANCHES
Islamabad 78
Lahore 68
Multan 89
Faisalabad 73
Gujranwala 27
Sialkot 35
Karachi 95
Hyderabad 57
Quetta 28
Peshawar 106
Azad Kashmir 25
-----------------
Total On-line Branches = 680
-----------------
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List of overseas correspondents
With whom Allied Bank
Maintain NOSTRO Account
# Currency Name of Foreign Correspondence Abbreviated Name
1 ACUD Bank Melli Iran, Tehran, Iran BKMIRANTEH
2 ACUD Mashreq, Bank, Psc, Mumbai, India MASHBKMUM
3 ACUD Muslim Commercial Bank Ltd, Colombo, SriLanka. MCBCOLOMBO
4 ACUD Rupali Bank Ltd, Dhaka, Bangladesh RUPBKDHAKA
5 ACUD ANZ Banking Group Ltd, Melbourne, Canada ANZMELB
6 CAD Bank of Montreal, Canada BKNONTMONT
7 CHF Union Bank of Switzerland, Zurich, Switzerland UBSZURICH
8 EURO Banca Comm. Italiana, Milano, Italy BCIMILANEUR 9 EURO Commerze Bank AG, Frankfurt, Germany COMMBKFFEUR
10 EURO Credianstalt Bank Verein, Vienna, Austria CRBKVEREINEUR
11 EURO Dresdner Bank AG, Frankfut, Germany DRESBKFFEUR
12 EURO Fortis Bank Brussels, Belgium FORTISBRUSEUR
13 EURO Habib Ban Intl Bank Plc. London, UK ABLLDNEUR
14 EURO Habib Bank Ltd, Pairs, France HBLPARISEUR
15 EURO National Bank of Pakistan, Frankfurt, Germany NBPFFIUR
16 EURO National Bank of Pakistan, Pairs France NBPPARISEUR
17 GBP Habib Allied Intl Bank Pic, London, UK ABLLDNGBP
18 GBP HSBC, Bank Plc, London, UK MIDBKLDN
19 GBP National Westminster Bank Plc, London, UK NATWESTLDN
20 JPY Bank of Tokyo Mitsubishi Ltd. Tokyo, Japan BOTMITTOKYO
21 JPY National Bank of Pakistan Tokyo, Japan NBPTOKYO
22 JPY Union De Bq. Arabes Et Francaises, Tokyo, Japan UBAFTOKYO
23 SEK Nord Banken Stockholm, Sweden. NORDBANKSHOLM
24 SAR Saudi British Bank Riyadh, Saudi Arabia. SBBRYAD
25 SGD HSBC, Bank USA Singapore. RNBNYSING
26 USD American Express Bank Ltd. New York, USA. AMEXNY
27 USD Citibank N.A., New York, USA CITINY
28 USD Habib Allied Intl Bank Plc. London, UK. ABLLDNUSD
29 USD Habib Bank Ltd. New york, USA. HBLNY
30 USD Mashreq Bank Psc, New York,USA. MASHBKNY
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Services offered by Allied Bank of Pakistan
These are the following services, which are offered to the Pakistanicustomers as well as the foreign by the Allied Bank of Pakistan.
Deposits of Money
Deposit At Call
Transfer of Money
Acquiring Loans
Evening banking services Hajj services
Buy and Sell Securities and Bounds
Utility Bills
Lockers facility
Collection of Zakat
Foreign Currency Accounts
ATMs Cards
Allied Bank Master Card
On-line Banking
Home Remittance
Inter Branch Remittance
Import Export Business/Trade finance
Cash finance etc.
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DEPARTMENT OF ALDEPLIED BANK
OF PAKISTAN
Deposit Department
Cash Department
Remittance Department
Advances Department
Foreign Exchange
Clearing Department
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DEPOSIT SECTION:
All types of transaction are deled under this section. Now we see thetypes of accounts, which are opened in this section.
TYPES OF THE ACCOUNTS:
Depositors can open the following types of accounts with the Allied
Bank of Pakistan.
Current Account
PLS Saving Account
PLS Term deposit Account
CURRENT ACCOUNT:
As the name signifies the depositor can draw of demand amount at
any time by presenting the cheque in the bank. Unlike time deposits there is
no restriction of withdrawals. The bank neither pays any kind of interest nor
deducts the Zakat from the deposits of this account. The bank also does not
tale any series charges up to the minimum balance of account from the
depositors. The minimum balance required to an account to be opened is Rs.
5000/-. If balance in account reduces from the minimum balance then the
bank charges Rs. 50/- as service charges. In developed and developing
countries a very significant amount of money is kept under current account.
Businessman normally opens this kind of account.
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PROFIT & LOSS SHARING (PLS) ACCOUNT:
PLS saving accounts the gives no fixes rate of profit. These types of
deposit are designed to encourage the saving habits of the people. The
minimum to opened is Rs. 100/-
Now a day if an account holder maintains Rs.3000/- minimum
balance throughout the year then his account is eligible for profit. Also on
first day of Ramzans zakat is deducted at the rate of 2.5 percent. If the
balance is less than Rs.5000/- then Rs. 25 per month will deducted as service
charges.
PLS TERM DEPOSIT ACCOUNT:
These accounts are opened with a minimum initial balance of Rs.
1000. The deposits are accepted for period of minimum 3 months and
maximum 5 years. Profit rate is determined by bank. Profit and loss is paid
on a condition that deposit will be not withdrawn from the bank within a
period of less than 3 months. PLS terms deposit withdrawn after completionof 3 months but before due date will be eligible for sharing of profit. But after
the due date profit is not paid even if amount is not withdrawn from account.
Account opening procedure:
The customer can open an account with the Allied Bank of Pakistan
in the following categories:
Individual Account
Joint account
Sole proprietorship
Partnership
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Corporation
Individual Account:
A person can open in Allied Bank of Pakistan in Pak rupee. First of
all he or she has to fill the account opening form provided by the bank. Then
his or her introduction is done before the branch manager. An existence
account holder of the bank or an officer of the bank who know him or her
very well can do this introduction. A copy of his/her identity card is must
attached with his/her account opening form. If the account holder is illiterate
then he/she provides his/her recent photographs to the branch. The account
holder can get the statement of accounts from the bank at his/her will at anytime without any charges.
Joint account:
One or two person can open an account jointly. An account opening
form is given from that branch where they want to open their account. In that
opening form they provide complete information about the account the
account holders. If any one or both of them are illiterate then he or they give
the photographs to the bank. Then the introduction of the persons is done.
Copies of identity cards are must attached with their account opening form.
In jointly mode both the persons must signed the cheque. And for any kind of
transaction they must dually signed the documents while the either or
survivor mode any one of them can sign the cheque and withdraw their
money.
Sole proprietorship:
Sole proprietorship account is that, which is opened for the individual,
trading under the style of the firm on his declaration to the effect that he is
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the sole proprietor of the firm. After getting proper introduction and
establishing identity of the account opener the account is opened and will be
operated by the account holder easily. The sole owner of the business is
providing the following documents to the bank officer.
Current Municipal License
Commercial Registration Certificate
Copy of Identity Card
Partnership Account:
The partnership can open the account in the bank but he has to
provide the following information to the concerned branch and the person
who can draw the amount is also nominated.
Name of the Firm
Name of parties
Identity card of partners
Registration Certificate of the Firm
Limited company/Corporation:In order to open the account of a company the following documents
are required by the bank, so that the bank could take action in case of any
fraud of discrepancy.
Memorandum of Association
Memorandum of Article
Most recent balance sheet and profit & loss statement
Resolution of Board of Director the person who is authorized to
Sign the cheque
Any other documents
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Issuance of Cheque Book:
The size of the chequebook varies from 10 to 50 leaves. The bank
deducts the charges (Rs.3 per leave) from his account. The assistant writes the
following information on the title page of the chequebook and on chequebook
issuance register.
o Issuance date
o Name of account holder
o Account number
o Type of account
After the signature of authorized officer the chequebook is handed over to the
account holder.
Depositing of the Amount:
Account holder can deposit the amount in cash of draft etc. in his
account through credit voucher. In ABL white slip use for current account
and blue slip use for PLS Saving Accounts.
Payment of cheque:
Ways to make payment of cheque:
The cheque may be paid in one of the following ways:
* By cash payment over the counter. ** By collection/clearing.
*** By transfer from one account to another.
Closing of Account:
There are many reasons for closing an account. Some of the more common
reasons are given below:
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At the request of account holder
Death of the account holder
Bankruptcy of account due to bad conduct of account holder
If an account holder wants to close the account then he has to give an
application to the bank manager. In other case bank manager is authorized to
close the account but first the letter is sent to the account holder.
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CASH DEPARTMENT
It provides its users with following facilities:
1. Make payments on cheque.
2. Accept deposits
3. Collect utility bills.
Cheque: The cheque is the most important, convenient and well-established
medium of modern banking used for withdrawal of funds and settlement
of debts by an account holder i.e. a drawer.
Definition: A cheque may be defined as A written order of a depositor
upon a bank to pay or to the order of a designated party, a specified sum of
money on demand.
Parties of cheque: Parties involved in cheque are:
A. Drawer: the person who is ordering for payment.
B. Drawee: that bank that has to pay the amount.
C. Payee: the person who is receiving the payment. The drawer and
Payee may be the same person.
Payment of cheque:
Ways to make payment of cheque:
The cheque may be paid in one of the following ways:
1. By cash payment over the counter.2. By transfer from one account to another.
3. By collection/clearing.
Token: Before start of business the cashier hand over the stock of tokens to
token issuing official. Token issuing official count the tokens and arrange
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them in a serial order for issuing. When a customer goes to get payment from
a bank first it will go to token issuing officer. The officer enters the
information in token book and after that put a stamp on the back of the
cheque. The token is made of braes engraved with bank and branch name.
But the officer must be careful in issuing token and have to make sure that
the cheque is honored.
Token book: Before issuing token to customer the officer put information
related to cheque and token in a token book.
Verification of signatures: After token issuing the sign of the drawerwill be checked. It must match to the sign that put up on the signature card at
the account opening time.
Posting and supervision: After passing above two steps the cheques are
given for posting. The account no written over cheque will be entered in the
computer and computer will display the information of respective account.
While posting following information is put up:
Name of drawer.
Cheque no
Amount
Date of cheque
When cheque is posted it is supervised to know the effect of posting and if
the cheque is ok it is forwarded to the cashier for payment.
Payment by cashier: Cashier makes payment of cheque that is clear after
taking back the token from the customer. It is very important to take the
token back because until token is in customers custody he can demand for
the payment.
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Cashier long book: After making the payment the cashier will enter the
amount in cashier long book on the debit side.
Dishonor of cheque: While making payment of cheque the officer must
check it according to following guidelines. If any of the following case is
appeared then payment is not given to the customer.
When cheque presented at a branch where customer not held his
account.
When customers account is closed before presentation of cheque
When a notice of customers insanity is given to bank.
When notice of loss of cheque is given to bank.
When signatures of drawer differ.
When the cheque is undated or post dated.
When balance of customers account is insufficient to meet
the demand.
When order of court prohibits the payment of cheque.
Accept deposits: When a customer wants to deposit any amount in its
account it goes to the relevant officer who accepts deposit and gives a receipt
to the customer. The cashier in cashier long book enters the amount deposited
by the customer on its credit side.
Collection of utility bills: The branch also provides the facility of utilitybills collection of electricity, gas and telephones. The branches collect utility
Bills during banking hours. Bills can be paid through cash or cheque.
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Remittance Department
One of the major functions of bank is remittance. This department provides
this facility through following instruments.
1. Demand draft (DD)
2. Telegraphic Transfer (TT)
3. Deposit at call (DAC)
4. Pay Order (PO)
Demand Drafts (DD):Draft is an order cheque drawn by the one branch of the same
bank to pay sum of money to drawer on demand. It is payable on demand.
A bank Demand draft has following particulars:
Payees name
Date of issue
Amount in words and figures
Drawer Branchs name and code
Address
Serial number
Demand Draft Issue Register:
When a Demand draft is filled out and made than an entry is made in
demand draft issue register.
Demand Draft Issue Payable Register:
When a Demand draft is received and paid than an entry is made in
Demand draft payable register.
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Telegraphic Transfer (TT):
This is the most urgent method of remitting the money from one place
to another place. This method is used when sender desires to send urgently,
in this case the sender request the manager of the branch to issue TT.
Following are the particulars of Telegraphic transfer.
Name of applicant
Telegraphic transfer number
Amount in words and figures
Name of sending branch
Name of receiving branch
Address of applicant
Telegraphic Transfer Outward Payable Register:
When a Telegraphic transfer is prepared an entry is made in
Telegraphic transfer outward payable register.
Telegraphic Transfer Payable Register:
When a branch receives a Telegraphic transfer an entry is made in
Telegraphic transfer payable register.
Deposit At Call (DAC):
These are made for tender purposes. These are kept as security when
a person to a company submits a tender. If the tender is approved than these
are payable to that company but if person fails to get approval of tender than
these are cancelled and will be refunded by the person. There is no limit of
the period of deposit at call.
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Deposit At Call Register:
When a deposit at call voucher is filled out an entry is made in
deposit at call register.
Pay Order:
A Pay Order is written order issued by the bank no its own branch,
drawn upon and payable by itself to pay a specified sum of money to the
person. The purpose of a Pay Order is to transfer the fund from one place to
another. It is usually not issued in favor of the parties of other cities. Usually
the Pay Order is issued for the local transfer of money from one person to
another of from the person to any other department. It is used for different
purposes. The purpose may be the repairs of the branch of renovation of the
branch.
Procedure:
The procedure of the Pay Order varies with the nature of the purpose.
If the work is of huge amount then first the manager writes a latter to theZonal Chief in order to get sanction of the work. Then the advertisement of
the work is given in the newspaper in order to invite the contractors. But if
the work is small then the branch manager has discretionary power to select
the party whose rate is lowest. After finishing the work the contractor
submits the bill of work on his stamp pad. Then the bank issues a pay order,
against the pay order the contactor gets the amount from the issuing branch.
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Advances Department:
Allied Bank of Pakistan facilitates into customer by providing
Different type of loans. Following are the types provided by the bank.
Running Finance:
Running finance is the short-term loan usually 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 to the account. The mark-up is recovered
on the product of daily outstanding balance. The running finance is suitablefor meeting day-to-day financial needs of the business.
Cash Finance:
Cash finance is allowed against pledge of goods. The delivery of goods is
made against payment.
Demand Finance:
Demand finance is disbursed in lump sum or in accordancewith the agreed disbursement schedule and it is repayable as per the
agreed installments, which should be monthly, quarterly, biannually
or annually.
Finance Against Imported Merchandize:
The Bank also extends facility of clearing the consignment through its
approved clearing agents and considers finance against pledge of
consignment imported through the bank. This is called finance against
imported merchandise.
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Letter of Guarantee:
The Bank issue letter of guarantee in local and foreign currency and thereby
undertakes the responsibility on behalf of the customer for the debt, default
or miscarriage by the customer, whether, such requirement is domestic or
overseas.
Performance Bond:
The Bank issues a performance bond in local and foreign currency on
account of the customer engaged in building and construction industry,
whether, such requirement is domestic or overseas.
Bid Bond:
The bank issue a guarantee in local and foreign currency in support of his
customer tendering for a public works contract overseas.
Fixed Industrial Investment / Term Finance:
The Bank for building plant and machinery of the project extends the
fixed industrial investment. The debt / equity ratio could be 60: 40 or 70: 30
depending upon the government policy in this regard.
Working Capital Finance:
The Bank extends working capital finance to the industry / project. The
working capital finance may be in the shape of running, cash finance or one /
some forms of finance products of imports and exports.
Agricultural Financing: 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 the
development purposes. Non-farm credits are allowed for livestock (goats,
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sheep and cattle), poultry, factory including social forestry and fisheries.
Procedure For Loan Approval
Following is the general procedure adopted by bank while approving loan.
Proper Introduction To Client:
In this process the first and very important step is to take introduction
of that person. He may be the existing client or may be a new one.
In case of existing client it is easy to get introduction because bank already
possess his record, past dealing with bank, his background.
In case of new client it is difficult to get proper introduction. They will obtain
his record of dealing with previous bank, because it may be possible that he
is defaulter of any other bank.
Application By Client:
After introduction of client the client fills an application. All relevant and
important information is obtained by this application.
Testing And Evaluation:
After obtaining information it will attest and after that the authority on
the basis of collected information and after evaluates the application that
decision is made for approval or not approved.
After giving loan the dealing of customer is constantly viewed by the
banker. It is important for bank.
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Foreign Exchange Department
Foreign exchange is defined as the mechanism of exchanging currency of one
country with that of another country.
Foreign Currency:
Foreign currency is defined as the currency other than local currency.
Importance of Foreign Exchange:
Trade when take place among different countries there is need forsettlement of payments mechanism because more than one currencies are
involved in it foreign exchange department performs that function and
facilitates the international trade.
Controlling Authority:
In Pakistan authority to regulate in State bank of Pakistan and policies
are made by SBP, which are followed by all dealers of foreign exchange, andthey have to report to SBP at every months end.
International Trade:
To organize international trade there is ICC. ICCs publications are
available that provide instructions to monitor international trade, both import
and export are covered in it.
Function of Foreign Exchange Department:
The department provides function of import, export letter of credit,
export refinancing, negotiation, collection, foreign currency accounts, foreign
currency drafts, telegraphic transfer, import on consignment basis, advances
payments in import.
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Allied bank Foreign exchange department deals in following currencies.
a). US Dollar b). GBP (UK)
c). Euro d). Japanese Yen
Type of Accounts:
1. Frozen Accounts
2. NewAccounts
Frozen Accounts:
These are the accounts that are freeze after the nuclear blast by
Pakistan on 28 May 1998.
These accounts are further divided into
Current Account
Saving Account
Fixed Deposit
New Account:
When permission is given to open the foreign currency accounts than
accounts open after that are called new accounts.
These are the following types.
Current Account
Saving Account
Fixed Deposit
Modes of Payments in import export:
These are different mode of payment for importer such as advance
payment but in that there is high risk for the buyer another way in import on
consignment basis and in that commodity is send and than payment is given
which involves risk for seller another method in collection is that there is
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Involvement of there party but there is no guarantee of bank. So the softest
way is letter of credit.
Letter of Credit:
Definition:
A concept is developed between seller and buyer. Buyer goes to bank and
makes his letter of credit. It is just like a guarantee. Guarantee to pay account
from bank but if terms and conditions of letter of credit are fulfilled.
Parties Involve in L/C:
Following parties are involved in it.
Importer:
The person who wants to open a letter of credit in favor of exporter when
importing something from abroad.
Exporter:
The person who is selling in abroad letter of credit is open for exporter.
Issuing Bank:
The bank that issue letter of credit. It is the bank of importer.
Advising Bank:
The bank with whom issuing bank negotiates in exports country.
Export Company:
The bank that work on behalf of exporter. Advising bank and exporter bank
may be the same but it is not necessary.
Confirming Bank:
In case if exporter hesitates for trading due to bad economic conditions of
importers country than confirming bank assure the exporter bank that
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Payments are made to exporter.
Reimbursement Bank:
This bank maintains the account of issuing bank and it is situated in that
country whose currency is used for payments.
L/C Opening Register:
When L/C is opened some information is maintained in that register.
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Clearing Department
When the branch receives cheques of other banks than one process of getting
payment against these cheques is that you sent a person who will take money
on your behalf but in these cities where State bank exist this function is
performed by clearing. In State bank of Pakistan there is a clearinghouse. The
representatives of local banks meet there at 9:00oclock and exchange there
cheques and other instruments with each other. Than they come to their bank
andcheck these instruments that these are ok or not. The representative again
meet at 12:00 oclock in the clearance house and the cheque which are ok get
payment against these and the cheque that cannot be cashed these are again
exchanged. In State bank every local bank has its account from that account
payments for clearing are made.
Outward Clearing Register:
When through clearing payment is given to the other bank than this entry will
be recorded in outward clearing register.
Inward Clearing Register:
When payment is received from the other bank than entry is recorded in
inward clearing register.
Transfer Delivery:
All cheques and other instruments received for collection, which have been
drawn on other local branches of Allied Bank Of Pakistan Limited, their
collection system is called transferdelivery.
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Outward Transfer Delivery:
When the branch sends on instruments for collection than it will called
outward transfer delivery. All such instruments will be entered in a separate
register called outward transfer delivery register.
Inward Transfer Delivery:
When the branch pays against an instrument it is called inward transfer
delivery. All such instruments are recorded in a separate register called
inward transfer delivery register.
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PRODUCTS OF ABL:
Following are Products and Services, which are offered to the customers.
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, Deutsche Mark, 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.
Home Remittances:
The Bank having a network of 735 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/Telefax for payment/credit
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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 the bank provides services.
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 availablewith all branches during Hajj season, immediately after the Government
of Pakistan announces the Hajj policy.
Utility Bills:
All branches of the Bank collect utility bills of
electricity, gas and telephones. For convenience of the
customers, the branches collect Utility Bills 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.
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.
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Allied Bank Rupee Travelers Cheques:
Carrying cash to strange alien location can prove to be risky as a single
incident can render one without monetary backup of any sort. Hence banks
introduce travelers cheques in order to protect against any contingency.
Commodity Operations:
It is a Cash Credit Financing to Government
Departments for procurement of various commodities, as
per allocation of the limits by SBP on Government of
Pakistan Guarantee.
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 Finances:
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 allowed for livestock (goats, sheep and cattle), poultry, factory
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including social forestry and fisheries (inland and marine excludingdeep sea
fishing).
Import Export Business/Trade Finance:ABL Provides highly efficient trade finance services for import/export
business for our clients/customers through large
number of authorized branches where trained and
motivated staff is available to handle the business on
behalf of customer
Running Finance:
It 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.
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.
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ELECTRONIC PRODUCTS OF ABL
These are following Electronic Products and
Services, which are offered to customers.
All Time Banking:
Allied Bank has introduced Allied Cash+ Card
also referred to as ATM card. You will now have the convenience of
withdrawing cash from any of our multiple ATMs ("All-Time Banking"
locations) conveniently located in major cities like Karachi and Lahore at
any time of the day or night even on closed days/holidays. Other services
include customer being able to inquire about the balance of his/her account or
printing an abbreviated (mini) statement showing the most recent eight
transactions up to the previous working day....
Master Cards:
You can now become the holder of a true Credit Card
here in Pakistan. Allied Bank under license from
Master Card International, U.S.A issues it's Master Card to anyone meeting
the eligibility criteria. With the Allied Bank - Master Card you will be
assured of a service meeting the highest international standards maintained
by Master Card.
DEBIT Card:
Now you can use your existing ABL ATM Card as
DEBIT Card at over 2500 outlets ofORIX networks.
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Online Banking:
Online Banking facilities are available to
customers maintaining accounts at all online branches across the country.
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ALLIED BANK OF PAKISTAN
Income statement
For the year ended-----------
Rs. (000)
1996 1997 1998 1999
Total interest revenue 4,692,220 5,026,784 6,059,060 7,287,432Interest Expense 3,802,172 4,639,053 5,289,971 6,953,006
Net interest Revenue 890,048 387,731 769,089 33,4426
Other Income 405,746 361,322 426,229 358,997
Commission & Fees 1,185,396 1,130,242 1,033,310 1,172,024
Trading Securities 491,449 564,453 755,170 971,956Gain (Loss) on Foreign Exchange -- -- -- --
Other income 795,933 1,313,718 710,238 1,081,457
Total income 3786572 3757466 3694036 3918860
Administrative expenses 3,019,703 2,960,699 3,396,440 3,772,889
Other charges -- 32,001 128,004 128,004
Provision against non- performing Loans 515,000 736,000 -- (53,131)Total expenses 35347033 3728700 3524444 3847762
Income before tax 233869 28766 169592 71098
Taxation 164000 15102 150000 60554
Income after Tax 69869 13664 19592 10544
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Allied Bank of Pakistan
Balance Sheet
As on December 31, ------
Rs. (000)
Assets 1996 1997 1998 1999
Cash 7195269 6,316,337 7,646,937 8,601,193
Balance with other banks ,627,627 1,380,840 1,878,796 1,757,510
Money at call ------ 450,000 100,000 300,000
Total Investment 15,552,713 20,192,699 25,605,470
26,774,766
Total loans & advances 32,766,263 36,231,357 42,719,169
55,263,762
Fixed Assets 901,904 872,730 2,488,619 3,062,045
Other assets 5,395,334 6,959,687 8,919,166 11,1167,055
Total Assets 63,439,110 72403650 89358167 106926331
Equities & Liabilities
Total deposit 55,896,800 63,429,709 76,541,153
93,107,291
Borrowing 4,015,193 4,914,558 6,243,517 7,144,163
Bills payable 548,575 802,367 1,084,151 1,073,491
Other liabilities 1,589,147 1,741,598 2,487,440 2,588,936
Total liabilities 62042715 70888232 86356261 103913881
Paid up capital 950,797 1,063,156 1,063,156 1,063,156
Reserves 438,598 452,262 1,938,750 1,949,294
Total equity 1389395 1515418 3001906 3012450Total Equity + Total Liabilities 63439110 72403650 89358167 106926331
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RATIO ANALYSIS
Regulatory Ratio:
Advan