Allied-Bank by usmanjee123

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									ALLIED BANK LIMITED
TABLE OF CONTENTS

TOPIC                                     PAGE NO.


CHAPTER 1                                     1

INTRODUCTION                                  1

    Definition of Banking                     1
    Origin of Banking                         1
    Banking in Pakistan                       3
    Organization of Banking in Pakistan       4
    Historical background of ABL              6
    Socio-Economic Objectives of ABL          8
CHAPTER-2                                     12

    The Business of ABL                       12
    Functions of ABL                          12
    Management by Employees                   17
    Serving the Community                     18
    Departmentation                           18
CHAPTER-3                                     27

    HUMAN RESOURCE MANAGEMENT                 27

    Classification of ABL                     27
    Recruitment                               28
    Selection and Hiring Process              29
    Probation and confirmation                30
    Training                                  30
    Promotion                                 30
    Salary Administration                     31
    Performance Appraisal                     31
    Transfer                                  32
    Retirement                                32

                                                     1
    Resignation                     32


    Termination of Services         32
    Discharge                       33
    Disciplinary Rules              33
    Penalties                       34
    Appeal                          34
    Leave                           34
    Allowances                      35
    Fringe Benefits                 36
    Compensation                    36
    ABL saver‟s schemes             37
CHAPTER-4                           48

    Critical Analysis of ABL        48

CHAPTER-5                           53

    Recommendations & Conclusions   53




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CHAPTER – 1

      INTRODUCTON

      DEFINITION OF BANKING

       The best definition of a bank is in terms of its functions. “A banker is a dealer
in credit, he borrows from the public or people, and lends to merchants or
manufacturers. He borrows by accepting deposits, and lends by way of advances
against goods or securities or by discounting bills.”

       Collins English Dictionary defines band as “ an institution offering certain
financial services, such as the safe keeping of money, conversion of domestic into and
from foreign currencies lending of money at interest.”

       A band is an organization or a business house, which deals with money, credit
and other financial transactions. In general banks attract surplus money from the
people who are not using it at the time and lend to those who are in a position to use
for productive purposes. Thus people who have spare money they deposit the same in
the band where it can earn profit. On the one hand bank receives deposits from the
people and pays profit at a specified rate and on the other hand it advances loans to the
people in need at the specified interest rate of mark-up.

 ORIGIN OF BANKING

       The word “Bank” itself is derived from the words “Banco” “Bancus” or
“Banque” which means a bench. The early bankers, the Jews to Lambardy, transacted
the business of money exchange on benches in the market.

       Banking is an ancient institution. It is in fact as primitive as human society.
Modern banks have developed from very old system of banking. It has been growing
side by side with the human civilization. Historians are of the opinion that perhaps they
were the Babylonians who developed banking system as early as 2000 BC There is
evidence to show that the temples of Babylon were used as bands.


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       This was all because of the prevailing respect and confidence in the Clergy.
King Hammurabi (1728 – 1686 BC) the founder of the Babylonian Empire drew up a
code where in he laid down standard rules of procedure for banking operations.

       In Greece, such temples are those of Ephesus and Delphi, were the most
powerful and biggest band of their time where the people deposited their money and
other callable for safety and security. The private bankers of Greece brought banking
to a high state of safety and security. The private bankers of Greece brought banking to
a high state of development thorough lending. Banking became so popular in the
business life of Athens that a special body of law was developed covering all financial
transactions.

       The Romans organized and regulated the conduct of private banks in such a
way that utmost confidence was created in them. They were familiar with the use of
cheques and bills of exchange.

       The Sub-continent society was also quite familiar with banking system right
from the beginning. Borrowing and lending of money existed in this area between
2000 and 1400 BC and the banking institution existed in one form or the other. G.
Crowther in his book “An out-line of Money” suggests that bankers has three
ancestors. Firstly; Gold Smiths, Secondly; merchants and thirdly; moneylenders.

       In Europe, Eastern Bankers were moneychangers. At that time, these people
took an advantage of the process and started keeping deposits of valuables and
jewelries on the basis of their sound financial position in the community. The origin of
banking, which started in the 12th century after the fall of Roman Empire
subsequently, developed with the development of trade. The Jewish merchants of
Lombard developed baking system. Many of these Lombard (Merchants) migrated to
England in the 14th century, were the pioneers of Banking.

       The “Bank of Venice” established in the year 1157 or 1171 AD is perhaps
among the first public banking institutions. Other bands such as Back of Barcelona in
Spain was founded in 1401, the Bank of Geneva (Italy) in 1407, the bank of
Amsterdam in Holland was established in 1609.In England development of bank took

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place in the days of Elizabeth-1. In 1640 public banking started. The Bank of England
was established in 1694. In 1935, Reserve bank of India was established. Quaid-e-
Azam Mohammad Ali Jinnah inaugurated the State Bank of Pakistan on 1st July 1948.

      BANKING IN PAKISTAN

       At the time of independence, the areas, which now constitute Pakistan, were
producing only food grains and agricultural raw material for Indo-Pakistan Sub-
Continent. There were practically no industries, and whatever raw material was
produced was being exported from Pakistan. However Commercial banking facilities
were provided fairly well here. There were 487 offices of scheduled banks in the
territories now constituting Pakistan.

       Therefore, in accordance with the provision of Indian Independence. Act of
1947 an Export Committee was appointed to study the issue. The Committee
recommended that the Reserve Bank of Indian should continue to function in Pakistan
until 30th Sep. 1948, so that the problems of time and demand liability, coinage,
currencies, exchange etc. are settled between India and Pakistan.

      Organization of Banking in Pakistan

       At present the banking structure in Pakistan comprises of the following:

      State Bank of Pakistan

       Operates as the controller of money market. It is the Central Bank of the
Country with its offices at Karachi, Lahore, Peshawar, D.I.Khan, Sialkot, Sukkur,
Hyderabad, Gujranwala, Multan, Quetta, Faisalabad, and Rawalpindi/Islamabad.

      Commercial Banks

       Commercial Banks have been the most effective mobilizes of savings and have
been providing working capital to trade commerce and industry. Presently these banks
are operating in the nationalized and private sectors, after implementation of various
amendments in the Bank‟s Nationalization Act 1974 in 1991.Upto Dec. 31, 1973 there


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were 14 Pakistani Commercial Banks, which were functioning all over the country and
in some foreign countries through the network of branches.

       These were joint-stock banking companies incorporated under the Banking
companies Act. However, all these banks were nationalized with effect from January 1,
1974. According to the provision of the Bank‟s Nationalization Act, 1974, all the
commercial banks were reorganized and merged into the following five banks.

  i.   Habib Bank Limited

ii.    United Bank Limited

iii.   National Bank of Pakistan

iv.    Muslim Commercial Bank Limited

 v.    Allied Bank of Pakistan Limited

       However, keeping in lime with the policy of liberalization of economy,
Government of Pakistan intends to disinvest and denationalized these banks in various
phases. So far Muslim Commercial Bank and Allied Bank of Pakistan already been
disinvested while efforts are underway to disinvest the United Bank Limited, Habib
Bank Limited and National Bank of Pakistan too.

      Exchange Banks

       Foreign banks other than Indian banks have been commonly known as
„Exchange Bank‟ due to the fact that prior to Independence foreign banks in the Indo-
Pakistan Sub-continent were engaged primarily in finance of foreign trade and
exchange business.

       At present more than twenty-four foreign banks and European, American,
Middle Eastern, African and other countries are operating there more than 83 branches
in the port and main commercial towns in Pakistan.

      Cooperative Banks

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       Cooperative banks are an integral part of the cooperative movement which
aims at the promotion of thrift self-help and mutual aid amongst agriculturist and
others with common economic needs so as to bring about betters living, better business
and better methods of production etc. Generally, there is a three- tier system of
cooperative banks in Pakistan; and this system consists of Primary Cooperative
Societies at the base; Central Banks and Banking Unions in the middle; and Provincial
Banks at the top as „Apex Banks‟.

       There are 4 provincial or Apex Cooperative Banks, one each in Punjab, Sindh,
N.W.F.P., and Balochistan; Fifty-two Central Cooperative Banks and Banking Unions
and above 28000 Primary Agricultural and Credit Societies.

      Cooperative Credit Societies

       These are the societies, which have been formed to promote thrift, and self help
among its members belonging to groups of agriculturists, artisans and persons of
limited means. With the promulgation of Federal Bank for cooperative Act 1977, these
societies are no more affiliated with provincial cooperative banks and cannot use the
word “Bank” in the names.

      Saving Banks

       There is only one Saving Bank in Pakistan i.e., Post office Saving Bank and it
is controlled wholly by the Government of Pakistan. It accepts deposits from public
and invests them in various government projects. Its operations, therefore, is very
limited.

      Specialized Credit Institutions

       These institutions are generally government sponsored corporations that
provide medium and long-term finance to various sectors. Most of these institutions
are players in the capital market in Pakistan.




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      HISTORICAL BACKGROUND OF ABL

       Allied Bank of Pakistan Limited is the first commercial bank established on
Pakistani soil. It has emerged as an Australasia Bank on Dec. 3, 1942 at Lahore with
paid up share capital of RS. 0.12 million in a motor garage under the chairmanship of
Khwaja Bashir Bux 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. 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 Authorized Capital is RS.
5000 million, Paid up Capital & Reserves amount to RS. 3012 million, Deposits come
to RS. 93107 million and total assets equal to RS. 106926 million (as on Dec. 31,
1999). The Allied Bank‟s story is one of dedication, commitment to professionalism,
adaptation to changing environment challenges resulting into an all round growth and
stability, envied and aspired by many.

       Later in 1973, Government of Pakistan decided to nationalize all banks of the
country and in the process, three smaller banks namely Sarhad Bank (Frontier Based),
Lahore Commercial Bank and Pakistan Bank were merged with a relatively bigger and
stronger Australasia Bank. A joint force with fresh zeal and enthusiasm was emerged,
named as Allied Bank of Pakistan Limited. Being a National Bank, ABL kept moving
forward steadily, contributing towards economic growth of country. As time passed,
our nation entered into the phase of denationalization and privatization. During 1991,
the Government of Pakistan decided to privatize Allied Bank of Pakistan Limited.
Prime Minister Mian Muhammad Nawaz Sharif during his first regime handed over
management of the bank to its own employees, as a unique phenomenon in the
country. At present the employees are acquiring 51% shares where as the rest of 49%
are held by Federal Government apart from holding 49% bank‟s shares the
Government has also representation of 3 Directors in the total strength of 7 member of
Board of Directors of the bank who are fully and actively involved in the bank‟s affairs
such as policy making and other financial matters.

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       Post privatization era proved a blessing for ABL and it has shown tremendous
progress in all fields of banking.

       ABL has a network of over 900 branches in Pakistan, whereas 150 branches are
working in N.W.F.P.

      SOCIO-ECONOMIC OBJECTIVES

       The Socio-Economic targets and goals of ABL are:

●      To participate in the economic development of the country.

●      To ensure greater satisfaction of its customers by providing better quality
       services.

●      To ensure more utilization of public money.

●      To provide loan on easy terms to the unorganized sector of the economy so as
       to reduce the income disparities and to help raise the standard of living of the
       poor.

       Beside these corporate and socioeconomic objectives, profit is the primary
objective of all financial organizations, and all different activities are aimed towards its
achievement.

       The ABL is also a business organization and its main objective is to maximize
its profit. The ABL can achieve its objective of profit maximization by two ways:

      INCREASE IN DEPOSITS

       Competition in banking is intense and every bank, whether foreign or Pakistani
tries to increase their field deposits by providing better facilities to its customers. There
are eighteen foreign banks and five nationalized Pakistani banks and all of them try to
attract more and more customers in order to increase their deposits. The bank can
extend greater amount of loans by increasing deposits, and hence profit. It can extend
greater amount of loans and hence profit maximization will be achieved.




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             The bank always tried to attract customers to open current accounts because on
      current account, no interest is paid, although facilities are provided. Infect companies
      are not allowed to invest their money in saving or other deposits because of nature of
      saving accounts which will be discussed later.

             ABL and all other banks are to report to the State Bank of Pakistan. The only
      difference is increase in the profit through few of the following factors:

  i.         Providing better product with attractive interest rates.

ii.          Improving its services.

iii.         Courtesy.

iv.          Professional Customers Services Officers.

            Better Product with Attractive Rates:

             Providing such products, this can attract people from other competitors.

            Improving its Services:

             Services like prompt payment of cheques, TT‟s drafts etc. provided by the ABL
      make it different from other Pakistani Banks which are nationalized and most cannot
      provide such efficient services.

            Courtesy:

             Courtesy is an essential part of business and by being courteous one can attract
      more and more customers. All the staff of Grindlays is required to undertake a
      compulsory training which is intended to make them learn to be polite with the
      customers.

            Professional Customer Officers:

             Providing Professional Customer Services Officers who can deal with the
      customers professionally and can satisfy them easily.

            Extension of Loans:

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       The profitability of a bank depends on the amount given to the people as loan
and the type of people to whom credit is given i.e., the credit worthiness of the
borrows. Deposits are collected from people and invested in different projects.

       It is the duty of the bank staff to determine the viability and profitability of the
projects. It is also the duty of the bank staff to attract people, who are reliable and
worthy of being given loans by the bank. The bank charges mark up on the credit it
extends and the mark up charged on credit is the biggest source of income for the bank.
Thus a bank‟s profitability will increased in the bank‟s profits.ABL has an extremely
well organized investment bank. The staff is educated, trained, well mannered and
competent.

       There are different officers whose job is to look after certain account holders,
which are either borrower. Complete financial analysis is made of the loan applicant
and different ratios are calculated. The bank specially emphasizes a sound quick ratio
because it shows the current assets, which are cashable and can be relied upon to
provide cover for the loans.

      SERVICE OBJECTIVES

       ABL is strongly oriented towards providing banking services to meet the needs
of the customers. It offers a wide range of services to its customers in addition to the
proper banking functions.




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CHAPTER 2

      THE BUSINESS OF ALLIED BANK:

       The business of the bank is to satisfy customers who seek assistance and advice
in meeting their financial goals. Its primary emphasis is general banking services,
namely deposits, loans, payment and collection. Fund management services, merchant
banking and leasing, credit for small and large enterprises etc. are also being offered by
the bank. It has selectivity entered into new areas that broaden the range of services,
logically extend the existing strengths and match and surpass competitor offerings.
Pakistan is its principal market. Abroad. It has presence in the United Kingdom, along
with a number of representative and correspondent banks around the Globe. It‟s
rapidly seeking expansion in the Middle East and Central Asia.

      FUNCTIONS OF ALLIED BANK LIMITED

       Functions of ABL are summarized below:

      Accepting Deposits:

       The primary function of the commercial bank is to receive surplus balances of
individuals, public houses and institutions and to honor cheques drawn unto them. The
funds deposited with Allied Bank are as follows:

(a)    Current deposits:

       Current deposits are those deposits, which can be withdrawn at any time by
drawing a cheque on the bank. ABL does not charge markup on the deposits because
they are short-term deposits and are repayable without any notice.

(b)    Profit and Loss Sharing Account (Saving):

       These deposits are not meant for the purpose of current payment but for
payment but for employing savings.



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       The bank undertakes to repay deposits on demand upto certain limit. On such
deposits to declare the following PLS profit rates for the period

       Types of Deposit

       PLS Saving Deposits                     8.00% per annum

       PLS TDRs – 1 Month                      8.40%

                       2 Month                 8.80%

                       3 Month                 9.20%

                       6 Month                 10.40%

                       1 Year                  10.80%

                       2 Years                 11.80%

                       3 Years                 12.70%

                       4 Years                 13.70%

                       5 Years                 15.00%

       PLS SNTD 7 Days                         6.00%

                     30 Days                   6.80%

(c)    Fixed Deposits:

       These deposits are repayable only after the expiry of the period for which they
are repayable only after the expiry of the period for which they are deposited. The bank
allows high rate of interests on them depending on the time period of loan. The shorter
the time period of loan, the less will be the interest rate and vice versa.

      FINANCING;

       The other important function of the ABL is to provide finances to the
individuals and business houses against securities at a certain fixed rate of interest.
ABL tried to attract the idle funds of the public and lend them at higher rate of interest
then what they pay to their customers following four types of financing takes place at
ABL:

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i.     Demand Finances:

       Demand Finances are those finances, which are given on demand. It is a single
transaction. It can be long, medium and short term. Markup is also charged. Here the
amount can be withdrawn once at the time of disbursement.

ii.    Running Finances:

       It is always a short-term loan i.e., one-year. It can be withdrawn at any time and
deposited at any time. It is basically for running day today business operations.

iii.   Cash Finances:

       Cash finances are for a limited period of time i.e., one year. It is advanced to
people to complete the working process.

iv.    Fixed Asset Financing:

       Fixed asset finances are long term finances. These are provided to projects for
purchase of machinery and cost of purchase.

      DISCOUNTING BILLS OF EXCHANGE:

       The bank utilizes their surplus funds in another important way. They discount
the bills of exchange at their market worth, i.e., the pay to the holders of the bill an
amount equal to their face value after deducting interest at the current market rate for
the period the bill has to mature. The bills of exchange are a very liquid asset for a
bank to hold. These bills are usually drawn for three months and are used for financing
internal as well as external trade.

       In addition to the above main function, ABL performs a number of other
services for their clients. These services are as follows:

      Agency Services to Customers:

       Following are the agency services to ABL.



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i.     Collection of Cheques

       ABL acts as an agent to its customers in the collection and payment of cheques,
bills and promissory notes. Bank charges 60% commission on collection of cheques.

ii.    Collection of Dividends:

       The bank provides a very useful service in the collection of dividends or
interest earned on stocks and shares held by his customers. The customer is simply to
inform the issuer of the securities that the interest on the securities is to be credited to
his account in the bank. Bank charges 30% on this collection.

iii.   Purchase and Sale of Securities:

       ABL is authorized by the customer, purchase or sale securities on his behalf
and thus adds another benefits to his portfolio. Banks charges are as follows:
                       15% upto RS. 10000
                       10% on amount exceeding RS. 10000
iv.    Execution of Standing Instructions:
       The customer may order in writing to his bank to make payments of regularly
securing nature to an individual or firm by debiting to his account. The payments will
be stopped on written instruction of the customers only. ABL charges RS. 20 per
transaction.

v.     Transfer of Funds:

       ABL also transfer funds of the customers from one bank to another bank. If the
transfer is at one station, they don‟t charge any commission and even if they charge,
they charge on reduce rate.

vi.    Acts as an Agent:

       ABL also acts as an agent, correspondent or representative of his customers at
home and abroad.

      GENERAL UTILITY SERVICES:

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        ABL also performs a number of other general utility services to his client,
which are as follows:

i.      Foreign Exchange Business:

        ABL transacts foreign exchange business by discounting foreign bills of
exchange and thus provides facilities for financing the foreign trade.

ii.     Acts as a Referee:

        ABL provides a useful service to his customers by acting as a referee for his
credit worthiness. The information is supplied in almost secrecy and is based
impartially on the respectability and financial standing of the client.

iii.    Acceptance of Bills of Exchange:

        ABL also undertakes acceptance business in connection with bills of exchange
and thus enables its customers to obtain the desired credit.

iv.     Issue of Traveler’s Cheques:

        The bank has introduced the schemes of Rupee Travelers Cheques and issues
them for the convenience of travelers and charges a nominal commission. In addition
to these bank also performs a number of functions and activities for and on behalf of its
clients with the sole purpose of serving them to the best of its capabilities and
potentialities.

v.      Collection of Utility Bills:

        The ABL branches throughout the country accept all sorts of telephone, water,
gas and electricity bills from public and even it has set up special booths for utility bills
collection in areas where branches of ABL are not available nearby. ABL has got the
widest bills collection network throughout the country.

vi.     Locker:




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        ABL also provides locker facility ro its clients where valuable of people can be
kept. Following are the charges of bank:

        Small          RS. 300/- per annum

        Medium         RS. 500/- per annum

        Large          RS. 800/- per annum

        Extra Large    RS. 1500/-per annum

       MANAGEMENT BY EMPLOYEES:

        Almost every employee is a shareholder and owner of the Bank. Management‟s
foremost responsibility is to keep them fully informed and participate. With the help of
about 9000 employee owners the bank maintains a prudent risk profile and a strong
credit rating to protect shareholders‟ investment.

       SERVING THE COMMUNITY:

        Local communities expect from bank to consistently discharge its social
responsibility as employee-cum-owner corporate organization. It is achieved by
serving the public interest and the interests of consumers and local business
nationwide. It encourages its business its business partners to participate in community
work.

       DEPARTMENTATION:

        ABL has various departments, which are performing different jobs assigned to
them. It has following seven departments.

        1.      Cash Department.

        2.      Advances Department

        3.      Remittance Department

        4.      Foreign Exchange Department

        5.      Clearing department


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         6.     Bills Department

         7.     CD Department

1.       Cash Department:

         Cash department deals with the cash in the bank. The basic function of cash
department is that it receives money from people and makes payment to people. When
the bank receives money, it is deposited with the bank and cheque is presented to the
customers with the help of which they can withdraw money at any time.

         Payment can be done through cheque and cheque is merely an order on a bank
by its client to pay a sum of money to himself or to a third party on demand.

        Features / Essentials of Cheque:

         a.     It must be in writing.

         b.     It must be an unconditional order.

         c.     The drawer must sign it.

         d.     The banker must be specified on the face of the cheque.

         e.     It must be payable on demand.

         f.     The cheque must contain sum of money to be paid.

         g.     It must be payable to the order or bearer of the cheque.

         There are three kinds of cheques:

       i.       Bearer Cheque

     ii.        Order Cheque

     iii.       Cross Cheque

i.       Bearer Cheque:

         Bearer Cheque is that which any person who presents it at the counter can cash
from a bank. It requires no endorsement.



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 ii.     Order Cheque:

         If the word bearer is cut from the cheque and the person who issue the cheque
 write the name of the person e.g., pay to Mr. Ahmad, then the payment will be made to
 the same person which is written on the cheque, it then become an order cheque. Order
 cheque is a safe form of payment because it cannot be enchased unless a bank
 ascertains that it is paid to the person.

 iii.    Crossed cheque:

         If the parallel line are drawn across the face of the cheque and the words “&
 Co.” are written between term, it becomes a crossed cheque. This cheque can only be
 deposited in the payee‟s account, or the payee can endorse it to somebody else‟s
 account.

        Dishonored Cheque:

         A cheque is said to be dishonored when it is not paid on presentation by the
 bank on which it is drawn on account of the following reasons:

   i.    Cheque is out of date.

  ii.    Date is not mentioned.

 iii.    Amount written in words and figures does not agree.

 iv.     Customer has become insolvent or has no funds at his credit.

  v.     When the signature over the cheque differs from specimen signature.

 vi.     Drawer has closed his account.

vii.     Cheque is mutilated.

viii.    When the banker has been served with “ Garnishee order” i.e., an order by the
         court of law ordering the bank not pay or honor any cheque drawn by his
         customer.

 ix.     Lack of full signature on any alteration.

  x.     When the banker receives the notice about the death of customer.

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   xi.    When the amount of the cheque exceeds the funds of the customer.

  xii.    Post-dated cheque presented before date.

 xiii.    Cheque is six months old i.e., stale cheque.

 xiv.     Spoiled cheques.

  xv.     Title of holder is defective.

 xvi.     The drawer stops payment.

xvii.     Funds are not received.

xviii.    Payee‟s endorsement is irregular.

 xix.     Payee‟s endorsement is not made.

  xx.     Pencil written cheque.

 xxi.     Cheque bears a rubber stamp signature.

xxii.     When the banker receives a notice of loss of cheque and the cheque is
          presented for payment.

          Banks deals with three types of transactions when they receive cheques from
  their clients:

  a.      Clearing:

          It deals with transaction or cheques relating with other banks.

  (a)     Transfer:

          It deals with cheque relating with Allied Bank Limited branch.

  (b)     Cash:

          Cash means cash transaction.

  1)      Advances Department:




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       Advance department deals with all the advances, which are made to the
customer. The basic aim of grant is to utilize money and get better returns i.e., profit.
Following types of financing takes place at ABL.

i.     Demand Finances:

       Demand finances are those finances, which are given on demand. It is a single
transaction. It can be long term, medium and short term. Markup is also charged.
Amount can be withdrawn once at the time of disbursement.

ii.    Running Finance:

       It is always short-term loan i.e., one year. It can be withdrawn at any time and
deposited at any time. It is basically for running day to day business.

iii.   Cash Finance:

       Cash finance is for a limited period of time i.e., one year. It is advanced to
people to complete the working process.

iv.    Fixed Asset Financing:

       Fixed Assent Financing are long term finances. These are provided to projects
for purchase of machinery and cost of purchase.

2)     Remittance Department:

       The bank transfers a large proportion of money from one place to another or
from person to person. The department, which deals with transfer of money, is called
Remittance Department. Transfer of money takes place through the following bills of
exchange.

i.     Mail Transfer:

       A mail transfer is an order by a bank to its branch agent or correspondent bank
in a foreign center. It is an order to pay a specified sum of money to the person named
in the instrument. Surface mail or airmail sends it. There is no risk of falling into the

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 hanks of wrong persons, as the bank sends it directly to its agent in the foreign country.
 The commission charged by the bank is called MT rate.

ii.     Telegraphic Transfer:

        The order to pay is dent by cable. The buyer of goods or the debtor makes the
 payment to his banker in the home currency and purchases the telegraphic transfer. It
 informs its foreign or local correspondent by wire to make payment in the foreign or
 local currency to a specified person. The bank generally uses a private and secret code
 to ensure payment to the right person. T.T rate is always higher than M.T rate.

iii.    Demand Draft:

        Money could be remitted from a place to another by means of demand drafts. A
 draft is an order drawn by a bank on its branch in a different place requiring the letter
 to pay on demand the sum of money specified in the draft. A person, who wants to
 remit money specified in the draft. A person, who wants to remit money by draft pays
 the money and the commission to the local banker and obtains the draft. This is sent to
 the other party by posts that will encash it by presenting it to this bank.

 3)     Foreign Exchange Department:

        Foreign exchange is concerned with exchanging the currency of one country
 for that of another country. This exchange of currencies necessitates calculating and
 expressing the ratio of one currency to the other, in other words, determining a rate of
 exchange.

 ABL has four sub-departments in the foreign exchange department.

  i.    Import and Export Department

 ii.    Remittance Department

iii.    Collection and Exchange Department

iv.     Foreign Currency Account Department

 1)     Import and Export Department:

                                                                                        22
       Import and export department deals with import and export transaction. Here
letter of credit is an important means of making payment. The letter of credit is not an
instrument that is directly used for effecting payments but it is an arrangement by
which facilities are offered for settlement of obligations, whether internal or
international.

2)     Remittances Department:

       It deals with the transfer of money. There are four types of remittances.

a)     Outward Remittances

b)     Inward Remittance

c)     Commercial Remittances

d)     Private Remittances

a)     Outward Remittances:

       The term “outward remittance” means sale of foreign exchange in any form and
includes not only remittances by FITs, FMTs, drafts etc., but also sale of traveler
cheques, travelers letters of credit, foreign currency note and coins etc. The three types
of application form for outward remittance is:

       Form 1 for Import

       Form T-1 for Travel and

       Form M for all other purpose.

b)     Inward Remittance:

       The term “ inward remittance” means purchase of foreign currencies in
whatever form and includes not only remittances by MT, T.T, drafts etc. but also
purchase of travelers cheques, draft under traveler, letter of credit, bill of exchange,
currency note and coins.

c)     Commercial Remittances:


                                                                                       23
        In the context of exchange control regulations, commercial remittance is
outward remittances in foreign exchange from Pakistan arising from business needs
and obligations to invisible items and therefore excludes remittance for imports.

d)      Private Remittance:

        Private remittance is outward remittances in foreign exchange arising from the
personal needs and obligations of residents.

3)      Collection and Exchange Department:

        This department deals with the collection and exchange of all foreign cheques
and bill etc.

4)      Foreign Currency Account Department:

        Designated branches of ABL may without prior approval of State Bank of
Pakistan, open with them foreign currency account of:

        Pakistan National residing abroad and

        Pakistan Nationals having dual nationality.

5)      Bills Department:

        Bills department is mainly concerned with collection of bills and lodging of
bills. There are two main types of bills.

a)      Clean Bill

b)      Documentary Bill

a)      Clean Bill:

        When an outstation cheque is deposited with the bank that is known as clean
bill.

b)      Documentary Bill:


                                                                                    24
        `Where the bill is supported by documentary proof i.e., R.R. or truck receipt.

6)      CD Department:

        The basic purpose of CD department includes following functions such as
maintaining records of saving account holders, current account holder, their signatures,
their scrutiny etc.




                                                                                         25
CHAPTER-3

      HUMAN RESOURCE MANAGEMENT

       Management of people at work is very important in every organization, because
organizational goals and objectives are achieved by co-ordination of people working in
that organization.

       Human resources office of ABL is an important office of the entire
administrative setup. This office manages whole administrative matters relating to
personnel right from recruitment to selection, pay, promotion, etc. to retirement
matters.

       The ABL doesn‟t have its human resources department in every branch, rather
all its personnel activities, no matter how trivial they are controlled by human
resources department at Head Office, Karachi.

      CLASSIFICATION OF ABL:

       The categories of services in ABL are classified as under:

      Category A

       Chief Executive

       President

       Executive Vice President (EVP)

       Senior Vice President (SVP)

       Vice President (VP)

       Assistant Vice President (AVP)

      Category B

       Officer Range 6

       Officer Range 5


                                                                                   26
         Officer Range 4

         Officer Range 3

         Officer Range 2

         Officer Range 1

        Category C

         Clerical Staff

        Category D

         Drivers

         Guards

         Chowkidars

         Peons

         Sweepers

        RECRUITMENT:

         Recruitment is the process searching for prospective employees and stimulating
them to apply for jobs in the organization.

         Human Resource Officer is responsible for the recruitment of personnel for
almost all the departments of ABL. When any department require personnel it put, its
demand before this office along with the job specification. Human Resource Office
first tries to locate the desired person from within the various sections of the bank. If it
fails to find a desired person than it hires from outside. Appointment to different
grades are prescribed by board of directors from time to time selections are made on
the basis of merit and merit is determined on the following basis:

    i.   Educational qualification

 ii.     Professional qualification

iii.     Place of resident location of branch where staff is required.

                                                                                         27
 iv.    Experience in banking.

  v.    Experience in the position and job description in the case of specialized
        position.

 vi.    Past achievement in marketing.

vii.    Marks obtained in the written test.

viii.   Marks secured in final interview.

       SELECTION AND HIRING PROCESS:

        After the applications have been received call letters are issued to the
 candidates.

        The various steps involved in the selection process are:

 1.     Preliminary interview.

 2.     Intelligence test.

 3.     Interview.

 4.     Investigation of background of the candidates.

 5.     Merit list.

 6.     Preliminary selection.

 7.     Approval by competent authority.

 8.     Physical examination.

 9.     Placement.




                                                                              28
       PROBATION AND CONFIRMATION:

        An employee selected by the Bank may be placed on probation for a period of
six months or it may be extended if it so required usually for the officer‟s probation
period is six months and for non-clerical staff it is three months.

        On the satisfactory period or extended period of probation the employees
concerned may be confirmed in any grade.

       TRAINING:

        After the employee has been recruited, selected and inducted they are trained
and developed to better fit the job in the organization. No one is perfect fit at the time
of hiring and some training an education must take place. Banking industry is
backbone of every economy; therefore the need of trained personnel in this typical
service industry is much more important. ABL has one training institute in Lahore,
suitable training method increase the quantum of learning within a given period of
time.

        The bank provides on the job training facilities to employees through job
rotation to in different department as per requirement training more emphasis is in
practical.

        There is a four months off the fob training at the ABL Training Academy
Lahore. Which is followed by four months on the job training.

       PROMOTION:

        Promotion cannot be claimed as a matter of right as on the basis seniority but
on the basis of performance. Main criteria for promotion are the performance and skills
of the individuals though seniority is also taken into consideration but it is of
secondary importance. ABL has defined perfect career paths for its employees and the
staff gets promotion accordingly in their grades by way of transferring from one
position to the other. Normally employee is promoted to the next grade after 3 years
but promotion is totally based on 3 years performance of the employee.
                                                                                       29
      SALARY ADIMINISTRATION:

       One of the most difficult functions of personnel management is that of
determining those rates of monetary compensation. Not only is this one of the most
complex duties but it is one of the most significant to both the organization and the
employee. It is important to the organization because wages and salaries often
constitute the greatest single cost of doing business. Salary package offered by ABL is
quite attractive in the market.

       An employee draw the pay of the range to which he is appointed from the date
of appointment to such grade.

      PERFORMANCE APPRAISAL:

       As the name indicates, performance appraisal is evaluating the performance of
the employees for given period of time. It is a systematic evaluation of the individual
with respect to his performance of employees as ABL is appraised on the basis of
Annual Confidential Reports. A Performa made by head office is send to immediate
superior for filling. There are three different types of appraisal proformas used for
evaluating the performance of an employee in ABL:

1.     Executive

2.     Officers

3.     Clerical Staff

       Increments are decided on the basis of these appraisal reports according to the
performance role in the development and encouragement of the staff.

       In ABL the performance of the employees are evaluating on the graphic or
linear method.

      TRANSFER:

       ABL takes a lot of its employees so there are very few inter branch transfer.
Further different kinds of problems may crop up in transferring an employee from one


                                                                                    30
station to another station. Therefore transfers are rarely made and are only on the
managerial levels according to the requirements of position. It may also be possible at
the request of the employees.

      RETIREMENT:

       An employee shall retire from service on attaining the age of sixty years,
provided that the board in a special cade may allow extension in its desecration. At the
time of retirement the worker are given their compensation on the form of provident
fund and gratuities.

      RESIGNATION:

       An employee other than a probationary officer may resign from the services of
the bank after providing prior notice in writing or in lieu of notice pay to the bank an
amount equivalent to his substantive pay for the period of notice.

      TERMINATION OF SERVICES:

       The bank may terminate the service of any employee or call upon him to resign
from the service of the bank. In either case he will be entitled no notice in writing.
Salary in lieu is given for the period as under:

       90 days notice Category A to Category D for confirmed employees.

       30 days notice Employees on Probation.

      DISCHARGE:

       When an employee in the opinion of the management is incapable or has
ceased to be capable by reasons of infirmity of mind or body.

       The competent authority may discharge him on medical ground and pay him
such compensation as may be decided by the board.

      DISCIPLINARY RULES:



                                                                                     31
       It is a force that prompts individuals or group to observe rules regulation and
procedure, which are deemed to be necessary for the effective function of the
organization. Discipline; in ordinary conduct of affairs by the members maintain
harmony and peace in organization willingly.

1.     Observance of rules.

2.     Maintenance of secrecy.

3.     Absence from duty.

4.     Misconduct

5.     Direct representation to director

6.     Disobedience with any lawful and reasonable order of the supervisor i.e.
       transfers.

7.     Fraud and forgeries.

8.     Damage or loss (bank property).

9.     Sleeping while on duty.

10.    Collection of money with in the office premises for any purpose not approved
       by bank.

11.    Striking.

12.    Unauthorized use of bank property.

       Any violation in these disciplinary rules result in different types of penalties
given below.

      PENALTIES:

       An employee found guilty under any rule or any offense of misconduct is liable
to one or more of the following penalties.

1.     Reprimand.

2.     With holding for a specified period confirmation on promotion or increment.



                                                                                     32
3.     Recovery form salary of the whole or part of any particular loss caused to the
       bank by the employee.

4.     Demotion to any lower grade.

5.     Removal from services.

6.     Termination by way of punishment.

7.     Dismissal from services

8.     Compulsory retirement from the service with or without retirement benefits.

      APPEAL

       An employee who has been awarded penalty shall have right to appeal before
the competent authority.

      LEAVE

       At ABL., following types of leave are granted to employee.

      SICK LEAVE

       The annual entitlement is 30-calendar day‟s sick leave. In the event of
prolonged illness the competent authority may sanction further sick leave up to a
period, not one ending the period of leave that has been lapsed.

      EARNED LEAVE

       This leave is over 45 days in a calendar year. Maximum period of earned leave,
which can be taken at one time by an employee, is 60 days. Under special
circumstances at the discretion of chief executive.

      EXTRA ORDINARY LEAVE

       Extra ordinary leave can only be granted to an employee when no other leave is
available to him. An unauthorized leave at the discretion of the competent authority is




                                                                                     33
treated as extra ordinary leave. No pay allowance or any other benefits or increments
are given.

      MATERNITY LEAVE

       Female staff is entitled to maternity leave for period not exceeding six weeks.
Time interval between first leave and last leave should not be less than two months.

      ALLOWANCES.

       The Grant of special pay or allowance to the holder of any post or to any other
employee shall require the sanction to the competent authority kinds of allowances for
employees at ABL are:

       House rent allowance

       Technical allowance

       Utility allowance

       Washing allowing (non-clerical staff)

      FRINGE BENEFITS

       Medical facility

       Facilities at residence

       Leaves fare assistance

       Grants of incentives for improving qualification every year

       Increment (annual increase in the basic pay)

       Cash prizes

      COMPENSATION

       Allied Bank Limited offers three types of compensation to it‟s workers.




                                                                                       34
      Provident Funds

      Employees Insurance Scheme1

      Gratuity

      PROVIDENT FUNDS
       Provident fund scheme is funded by equal contribution from both employer and
employee at the rate of 8.50% of basic salary is deducted every month from the salary
of employee and is doubled by Bank. It is payable after retirement of the employee.

      EMPLOYEE INSURANCE SCHEME

After confirmation ABL is given life insurance. The amount of insurance is equivalent
to 48 basic salaries of the employee. In this way, the worker feels more secure and
satisfied while working as ABL employee.

      GRATUITY

Employees who have completed 5 years of service are entitled to Gratuity after
retirement. Bank compensates the employees on the basis of one basic salary for every
completed year 10.

      SAVER’S SCHEMES

       Allied Bank has offered many saving schemes for savers there curative saving
schemes are:

Young Saver Certificates

Overseas Savers Account

Allied Mahana Acadani Scheme

Super Premium Term Certificates

Premium plus Account




                                                                                      35
High Premium Account

      ALLIED YOUNG SAVERS CERTIFICATES

       The habit of saving has always paid dividends to make savings grow at a faster
rate to meet customers future needs. Allied Bank introduces a highly curative scheme
Allied Young Savers Certificate.

      Salient features.

       Children and individuals of all age groups are the investors of the scheme.
There is no age limit.

       The children will open and operate their account. Through their
parents/guardians, the investors will be provided certificates against their investments.

       The certificates shall be of the following denominations:

       RS. 1000/-        RS. 10,000/-

       RS. 3000/-        RS. 50,000/-

       RS. 5000/-        RS. 100,000/- 2

       Maturity period of the certificate will be 10 years. The average expected rate of
profit for 10 years would be 15%.

      ALLIED OVERSEAS SAVERS ACCOUNT:

       Overseas Pakistani is playing an important role in the economic development
of the country. Allied bank is always greatly concerned about the due recognition of
these stalwarts for making a singular contribution to the progress and prosperity of the
nation. We are always in the lead to offer greater banking facilities to Pakistani
working overseas. Most of saving‟s schemes pay special attention to the fact that




                                                                                       36
overseas Pakistani is working there heats out, should get all the facilities possible for
not only remitting their earnings home buy also getting better value of this savings.

       The beneficiaries receiving the remittances through Allied bank and investing it
through Allied overseas savers Account will not only be able to earn a higher rate for
profit buy the remitters will also feel that the money being sent to their kith and kin
will remain safe, secure and growing.

      Salient features.

       This is the easiest, fastest and safest way of sending remittances home, the
amount I saver‟s account will get 3% extra profit in the first ear. Account holder‟s get
the entire professional services and facilities offered by ABL. Many saved from
domestic expenses not only remains safe but also earns profit continuously.

       Unlike other saving accounts saver‟s can withdraw as much money a they want
from ABL overseas savers account without ginning any advances notice.

      ALLIED MAHANNA AMADANI SCHEME:

      Salient Features

       Minimum investment Rs. 25,000/-

       Maximum investment Rs. 100,000/-

       The maturity period for Mahanna Amadani certificates is 5/10 years.

       Investment can be done by:

       Individuals singly of jointly

       Proprietary/Partnership concerned companies in their names.

       It carries special attraction for

       Retired civil and armed forces employees

       Widows and children being brought up by guardians

       Expatriates looking for permanent monthly income


                                                                                        37
       ALLIED SUPER PREMIUM

        TERM CERTIFICATES

        Allied bank has launched yet another saving scheme containing very attractive
rates of profit rates of profit the scheme has been names “ Allied Super Premium Term
Certificates ”.

       Salient Features

        Allied super premium term certificates are of the following denominations:

        Rs. 10,000/-   100,000/-

        Rs. 500,000/- 1,000,000/-

        Super premium term certificates have been categorized as A, B and C referring
to quarterly, half yearly and yearly profit payment respectively.

        Super premium term certificate, which bear the names of respective account
holders. The maturity period of these certificates in 3 years.

       MODE OF PROFIT PAYMENT.

        The valued customers will enjoy the facility to receiving their profit through
cash postal money order/Demand Draft/Pay order or by transferring it to their usual
current/saving bank Account as per their written instructions and addresses provided
by them.

       ALLIED PREMIUM PLUS ACCOUNT

        Allied bank keeping up its tradition of introducing innovative banking schemes
and pans for the services and benefit of valued clients has developed a new product
titled premium plus account (PPA). This scheme with higher rates of profit has been
introduced exclusively for the benefit of:

1.      Large corporate Groups

2.      Govt. and semi – govt. concerns

                                                                                     38
3.      Multi-National companies

4.      Big companies

5.      Individuals

       Salient Features

        Investment can be made with a minimum deposit of Rs.10.00 million under two
types of accounts.

1.      Premium Plus operational account

2.      Premium Plus term deposit account

        Following are the estimated rates of profit:

        ON operational account                  10 per annum

        ON term Deposit Account         12% per annum

        30 days                         14% per annum

        6 months                        14 1/2% per annum

        One year                        14% per annum

        Rates of profit shall be subject to revision/adjustment on half yearly basis.
Operational account shall be opened in the style of current account.

        The minimum balance shall have to be maintained at Rs. 10.00 million. In case
the balance droops below Rs. 10.00 million on a day in a month, the account holder
will not be entitled for the profit of that particular month.

        Profit shall be paid on half yearly basis there is no upper limit of investment for
maintaining the account.

       Premature Encasement

        In case of premature encasement of certificate profit will be paid as per scheme
schedule of rates. However, no profit will be paid for broken period e.g. If the


                                                                                        39
customer with draws from. The scheme during the 7th year, before its completion,
he/she will be paid profit with compound effect for six years only.

      ALLIED MAHANNA AMADANI SCHEME

      Rates of Return

       The estimated minimum rate of profit will be 1.166-% month. The monthly
return on various amounts would be as follows:

       Rs. 1,00,000/-         Rs. 11,666/-

       Rs. 5,00,000/-         Rs. 5,830/-

       Rs. 100,000/-          Rs. 1,166/-

       Rs. 50,000/-           Rs. 583/-

       Rs. 25,000/-           Rs. 291/-

       If the profit declared by the bank is higher additional profit shall be paid to the
depositors.

      Mode of Payment

       You will enjoy the facility of receiving the profit through payment
order/demand draft postal money order every month at your doorsteps.

       At your discretion you or your authorized representative can also receive the
profit through cash/pay order/demand draft.

       Since the profit shall be payable by the branch where you will open your
account under the “ Allied Gahanna Amadani Scheme” your profit can also be credited
to customers account every month.13

      PREMATURE ENCASEMENT




                                                                                       40
        Following rates of profit are to be applied in case of premature encasement. If
the certificate is held for less than 90 days no profit.

If the certificate is held for 3 Preceding PLS Saving Rates
months but less than 3 months
but less than 6 months

If the certificate is held for 6 PLS IDR Profit Rates Declared for
months but less than 1 year           the particular period, would be
                                      paid
If the certificate is held for 1 year
but less than 2 year

If the certificate is held for 2 year
but less than 3 year

If the certificate is held for 3 year
but less than 4 year

If the certificate is held for 4 year
but less than 5 year




       ALLIED SUPER PREMIUM

       Rates of Profit

Allied super premium term certificates carry the profit at the estimated rate of 151/2
per annum on quarterly payment

16% per annum on half yearly payment

16 ½% per annum on half yearly payment

Net payment on an investment of Rs. 100,000/- is being illustrated here under similar
pattern will be followed in case of other sums of investments.

Principal amount Rs. 100,000/-          Estimated Profit

Quarterly payment @15 ½% PA                     3,875/-

Half yearly payment @16% PA                     8,000/-


                                                                                    41
Yearly payment @16 ½ PA                        16,500/-

        ALLIED HIGH PREMIUM ACCOUNTS

         In order to serve the customers with higher returns on their investments as well
as to encourage the savings on national level. Allied bank has brought forth a special
scheme named Allied High Premium Account.

        Salient Feature

         It is PLS saving account

         It can be opened and operated by anyone with a minimum deposit of Rs. 0.250
million (average monthly balance).

         There is no upper limit of investment and investors can invest as much as they
like.

         There is no limit on numbers and amount of withdrawals.

        ESTIMATED RATE OF PROFIT

         Current P/s savings rate provided the required average monthly balance does
not fall below the minimum deposit level i.e. Rs. 0.250 million for the particular
month.

        Mode of Payment

         Profit will be paid Half yearly.

         All the saving and profit based scheme are liable to Zakat and with holding tax
as per rules. However, exemptions on Zakat are available in accordance with the law.

         Profit payment schedule of Allied Young Saver Certificates

         On completion of Expected maturity value

         (In case of Rs. 100/denominations).

                                                                                      42
       01 Years                       Rs. 1103.20

       02 Years                       Rs. 1226.76

       03 Years                       Rs. 1375.76

       04 Years                       Rs. 1555.35

       05 Years                       Rs. 1773.10

       06 Years                       Rs. 2039.10

       07 Years                       Rs. 2371.47

       08 Years                       Rs. 2786.48

       09 Years                       Rs. 3315.91

       10 Years                       Rs. 4028.20




Note: The above pattern of profit calculation will be applicable in case of certificate of
higher denominations. 15

      GENERAL UTILITY SERVICIES
       ABL also performs a number of other general utility services to his client,
which are as follows:

      Foreign Exchange Business

       ABL transacts foreign exchange business by discounting foreign bills of
exchange and thus provides facilities for financing the foreign trade.

      Acts as a referee




                                                                                       43
ABL provides a useful service to his customer by acting as a referee for his credit
worthiness. The information is supplied in almost secrecy and is based impartially on
the respectability and financial standing of the client.

      Accepting of bills of exchange

       ABL also undertakes acceptance business in connection with bills of exchange
and thus enables its customers to obtain the desired credit.

      Issue of Travelers cheque

       ABL also issues travelers cheque for the convenience of the travelers and
charges 1% of the amount of traveler‟s cheque sold.

      Locker

       ABL also provides locker facility to its clients where valuable of people can be
kept following are the charges of bank:

       Small           Rs. 300/- per annum

       Medium          Rs. 500/- per annum

       Large           Rs. 800/- per annum

       Extra Large     Rs. 1500/- per annum

      Collection of utility bills

       Electricity telephone and other such bills can also be deposited.




                                                                                    44
CHAPTER 4

      CRITICAL ANALYSIS

       In the present era of competition, it is not so simple to attain the reputation of a
very good bank even more harder is to maintain and improve the position attain in the
competitive world of banking today.

       In my story stay at ABL, Defense colony branch, I spent almost one week in
each department and this short span is not sufficient for having all the information
about the organization. Therefore, I have pointed out some of the drawbacks in this
organization.

      Recruitment

       In ABL, defense colony branch, recruitment is not on the basis of merit but on
recommendation. There is an element of favoritism in recruitment.

      Selection

       Unsuitable candidates are selected who prove to be a great source of problem
for ABL in the future. It cost negative effect on the goodwill of ABL.

      Transfer

       Some employees are not transferred and they are continually serving at the
same post. They are simply rotated at the same branch. Some of the favorites remain in
the same seat.

      Job Analysis and Wages

       As we have learned from out personnel administrator course, that job analysis
is very important for any organization. In job analysis we describe the job and specify
the person for equitable wage system.



                                                                                        45
       In ABL Peshawar, there is no concept of job analysis that is why wages are not
according to the work performed by the workers e.g. two workers of the same cadre
and with the same salary are performing different kind of jobs, one with less
responsibility and the other performing a complex one. This creates dissatisfaction
among the workers.

      Promotion is not done according to rules.

       As promotion is concerned it is not according to the rules and regulations.

      Transfer

       Transfer means when a person is shifted from one place to another it of the
favorite remains in the same seat.

      Lack of Special Training

       ABL does not provide the facility of specialized training to its staff. Training is
provided on the basis of centralization.

      Undue Promotions

       As far as promotion is concerned it is not done according to the rules and
regulations. Employee having good term and conditions are more likely to be
promoted than the rest. Many of the employees do not get timely promotions. As a
result the employees have disliking for some of their senior.

      Retirement

       Fixed retirement policy is not adequate. This policy reduces the morale of
employee and their interest in work. Fixed retirement age kills the spirit of work in
employees.

      Centralized Decision Making




                                                                                       46
        In ABL we find centralized decision making process. The president takes all
the decision and senior executive committee lower level staffs can not participant in
decision making process.

       Decisions are not properly supported

        The decision of a manager are not properly supported and backed by the higher
level management.

       Change in country

        Fiscal and economic changes, which take place in a country also, effect the
recovery of loan.

       Political Pressure

        The important thing is political pressure on bank. Who ever come in power
tried to pressurize bank they try to write off their loans.

       Recovery of loans

        One of the problems faced by ABL in the recovery of loan, because sponsors
do not show their actual papers which is the requirement of the bank.

       Sponsors do not show actual cost

        At the same time sponsors do not show the actual cost of machinery so then
they show them selves bankrupt.

       Written policies are not properly followed

        All written policies and procedures for appointing employees are not properly
followed.

       Expenses




                                                                                  47
       ABL has too much administrative expenses employs a higher level have much
more facilities than lower level.

      Improper Appointment

       Although we find written policies and procedures for appointing employees to
the bank but these policies are not properly followed at ABL. The upper management
sometimes recruit and appoint people purely on recommendation not on merit when
proper appointments are not made people are discourage and it adds to many social and
economic problems.

      Promotion is not done according to rules

       As promotion is concerned it is not done according to the rules and regulations.
Transfer means when a person is shifted from one place to another it of the favorites
remains in the same seat.

      Performance Appraisal

       The system of performance appraisal as we learn in our course is some how
different because ABL workers are appraised by the management and not by the
immediate supervisor. The element of subjectivity is very high as further promotion is
very much dependent on this appraisal report, so a manager can run or build the career
of any worker by giving his/her own subjectivity judgement.

      Insufficient Staff

       There is lack of staff in the branches as a result of which one person has to
conduct working in different seats. Heavy work and shortage of staff are two main
elements, which do not allow staff to their time.

      Disciplinary Action

       Allied Bank Limited has its own disciplinary actions. It is clearly written off
and understood but that are not followed strictly by bank staff.


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      Lack of proper information

       For public dealing, clients come to get some information but they refer them to
zonal office. This creates a lot of tension and dissatisfaction in the mind customer.

      Excessive paper work

       There is excessive paper work in the bank because of unavailability of
computer.




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CHAPTER 5

      RECOMMENDATIONS

       It is human nature that one tried to find out the loopholes and drawback is the
existing structure and to criticize as well. It is quite easy to recommend solutions along
with criticism. Here the recommendations are as follows.

      Recruitment Policy on Merit

       Recruitment should be strictly based on merit. Favoritism and nepotism should
be strictly controlled. Transparent recruitment procedure should be adopted.
Employment should be strictly based on merit instead of reserved quota system.

      Transfer

       Transfer policy should be implemented well because in transfer many favorite
people are not transferred, they are working one seat for several years and they are not
transferred. Transfer is not properly made.

      WAGE STRUCTURE

       Wage policy should be implemented well. Dissatisfaction among the workers
can be removed by implementation of fair and equitable wage policy.

      Specialized Training

       As the worker finishes his/her training, he/she is introduced in a specific field.
Since he/she does to have knowledge about the specific job assigned to him, thus
he/she faces difficulties in performing the job.

       It is recommended that both generalized and specialized training should be
provided to fresh as well as old workers to maintain the high standard of service.

      Promotion Policy


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        The bank promotion policy should be based on experiences hard work ability of
workers.

       Retirement

        A flexible retirement policy should be introduced. So that experienced
employee who is capable and is wishing to continue service is allowed to continue the
service that enhances the moral of employee and bank will get high benefits from these
experienced employees.

       Motivation

        Such motivation techniques should be adopted which fulfill the belongings,
love and self-esteem needs of the employees. Only cash awards do not fulfill the
motivation requirement. Giving employees different assignment should create
environment of competition. This can be proved to be a great source of motivation.

       Discipline Policy

        The Branch manager should be delegated more power to tackle with the
problem of discipline in bank. She should be empowered to take immediate and
effective action in case of administrative problem without any fear and favor.

       Management by Objectives (MBO)

        MBO or management by objectives needs to be introduced in the bank
immediately. It will help to improve the functioning of the bank and will lead to
greater participation. Management by objective is in fact program of basing much of
managerial planning operation and appraisal of having each manager set objectives in
verifiable terms I will the superiors approval and assessing his or her performance
against the achievement of these objectives MBO will also lead to great participation at
all levels.

       Decentralization



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       It is one of the problems in Allied Bank limited most of the function is
centralized which is adversely effecting the performance of the bank. There is a need
of decentralizing some of the functions, and decision making which can improve and
unnecessary delay can easily be avoided.

      Flexibility Principle

       The authority of ABL should introduce flexibility principle in the bank in
smooth functioning of the bank. Here the flexibility principle implies that the more that
flexibility the ability to change direction without under cost embarrassment or friction
can be built into plans, the less the danger of losses incurred by unexpected events.

      Forecasting

       Forecasting needs to be introduced at Allied Bank Limited before making any
decision in planning its activities, its should properly forecast to see that the decision
which they are likely to take has any good or bad implications for the bank and for the
economy as a whole. It will help in better planning.

      Avoiding Mistakes by Planning

       As with the other functions of management establishment of objectives and
orderly planning are necessary of good organization. Planning helps determine future
personnel needs and attending attendant training programs without knowing what
managerial personnel will be needed and what experience to demand an enterprise can
not intelligently recruit people and train then. Further more organization planning can
disclose weaknesses in the organization and other aspects keeping in view. The
importance of planning, it can not be ignored.

      Availability of Information

       To avoid the problem of inviolability of information, bank should provide
brochures etc and there should be a specific person who should available to clients to
provide information to them.



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         Required Staff.

          Required staff should be provided to branch in order to improve the functioning
of the branch. Especially a telephone operator and a customers services officer should
be immediately appointed.

         Stable Fiscal and Economic Policies

          There are changes in the fiscal and economics policies with the change in
government needs to eliminate fiscal and economic policies should be stable and not to
be changed frequently.

Such laws should be made that even if there are changes in the government from time
to time, there should be no changes in the prevailing fiscal economic and monetary
policies.

         Administrative Expenses needs to be reduced

          At ABL, there are too many expenses incurred on administration and other
things. Their unnecessary expenses need to be reduced to have more funds for other
things.

         Computerized Network

          There is excessive paper work in the branch. But if computerized network is
introduced in the bank, it will reduce the excessive paper work, which in turn will
reduce their burden.




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