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Masters of Business Administration University of Wah, Wah Cantt. Name: Yasir Khan Reg #: UW-09-MGT-MBA-035 Specialization: Marketing Telephone: +92 3135834658 Email: yasirz.dreamz@yahoo.com
EVALUATION
Yasir Khan
INTERNSHIP REPORT SUBMITTED FOR THE FINAL EVALUATION IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF
IT IS CERTIFIED THAT, THE INTERNSHIP REPORT AND THE WORK CONTAINED IN IT CONFIRMS TO ALL THE STANDARDS SET BY THE INSTITUTE FOR THE EVALUATION OF ANY SUCH WORK.
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2.___________________
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Dedication:
To my LOVING PARENTS (especially my MOTHER), TEACHERS, BROTHERS, SISTERS, FRIENDS and all those who enabled me to make all this humble contribution towards the Transfer of Knowledge.
Acknowledgement:
All praises are for Allah Almighty that has bestowed upon human being the crown of creation and has endowed him with knowledge and wisdom, after Allah, the last Prophet Mohammad (S A W W) who brought for us revelation and unlimited knowledge and civilized the barbarian human being. I am very thank full to Allah Almighty who gave me the courage to complete this complex task and to my ever caring and loving parents whose prayers helped me to reach this stage of my life. Besides, there are many people who supported me in formulation of this report and without the support of them I could never be able to complete this report successfully. In this respect I am very thank full to Mr. Saqib Zaheer (Branch Manager) and the qualified staff members of Bank Alfalahs Limited Haripur, who cooperated with me with their guidance at each step of my internship. They have provided me a lot of important information and knowledge about the banking operations in a very short period of time.
Preface:
Internship is the integral and basic requirement of all the business study programmes in all of the business study institutes as it is necessary and basic requirement of the MBA (Marketing) degree of the Department of Management Sciences University of Wah. Because it is the practical implication of the theoretical knowledge which we have taught in our business subjects to gain further knowledge and experience about professional business activities. It equips us with the necessary knowledge, skills and values of business culture which are basic requirement of the business professional and which also helps new graduates to perform professionally as they get first step in their practical professional life. For this reason I was placed at Bank Alfalah Limited Main Shahra-e-Hazara Haripur Branch where I have done my six weeks internship. During my internship tenure I have gained a lot of knowledge about operations under the supervision and guidance of my Internship supervisor. During my whole duration I was rotated in all the different departments of the bank and was thoroughly briefed about the procedures of all the banking operations by the concerned staff. My internship report major focus on Marketing and contains all the knowledge which I have learnt there. Dear readers this report is prepared in very simple, easy and understandable way so that common and ordinary readers who do not have banking knowledge can also take benefit from this report. I hope my report will give you easy and deep overlook of all the banking operations to the readers.
Executive Summary
Pakistan after getting its independence, did not inherit a strong banking industry and since then saw a number of events in the industry, like the nationalization of banks in the 1970s. However today, the banking industry of Pakistan has been growing over the past few years, mainly because of the consistent policies implemented by the Government of Pakistan, including the privatization of banks in Pakistan. Also the State Bank of Pakistans, monetary policy has been very friendly toward the banking industry. There are a number of different banks established in Pakistan, including local incorporated commercial banks, foreign incorporated commercial banks, development financial institutions, investment banks, discount & guarantee houses, housing finance companies, venture capital companies, micro finance banks and Islamic banks. Bank Alfalah was incorporated in 1997 and was later privatized by the Government of Pakistan. The Abu Dhabi Group bought the majority shares of the bank and so got the rights to control the banks operations. Since the privatization of the bank, Bank Alfalah has implement different policies to make it one of the best banks of Pakistan, which included introducing new products and services and increase its operations by opening new branches in Pakistan. Today Bank Alfalah is operating in more than 70 cities of Pakistan and operating its foreign branches in Bangladesh, Afghanistan and Bahrain. The total employees of Bank Alfalah in 2011 were 6,543, which was an increase of 25% from the past year. The increase in the number of employees joining Bank Alfalah shows that people feel confident in Bank Alfalah as a prospect employer. The financial statistics of Bank Alfalah are also as impressive as their human resource. The profit after taxation for Bank Alfalah in 2011 amounted to Rs 1,762,691 (000) and its total assets for 2011 amounted to Rs.275,685,541 (000). The stock prices and earning per share of the bank have also increased over the years. Bank Alfalah promotes its products and services through print and electronic media. Bank Alfalah also promotes itself by sponsoring different events. For Bank Alfalah, it has to compete in an industry that has grown in 2011 by almost 17% in overall assets and profits growth was 33% from the previous year in 2011. The major competitors of Bank Alfalah, pose close competition and are mainly large nationally incorporated banks and a few international banks, that all want to become the leading banks of Pakistan, by creating some edge in the industry. To create this edge, technology has played an important role in the industry as banks are continuously trying to improve its products and services by introducing innovative products. I did my six weeks internship at Bank Alfalah Haripur Branch and worked in account opening department,car finance department and customer
care department. Some of the work that I did in these departments included collecting cheques, filling account opening forms. Although there were no such big problems found in the working of Bank Alfalah, there were some problems in training of the employees, incentive schemes and product innovation. Some of the recommendations include workshops for employees, job rotation, teams work to find innovative products and scholarship programs for employees. Lastly Bank Alfalah has seen a rapid growth in its activities by introducing a range of products and services and showing its presence in the country by opening new branches and in future should keep this momentum and always strive to become the best.
Table of Content
CONTENT Page #
CHAPTER # 01
Introduction of Banking Banking in Pakistan Islamic Banking Board of Directors Mission, Vision, Objectives, Slogan &Brand Personality of Organization Organizational Structure, Competitors Products & Services
08
19 19 10 10 11 12 13
CHAPTER # 02
Marketing Department Function of market department Marketing Strategies
15
16 16
Chapter # 03
Market Segmentation Strategies Product Planning & Development Positioning Positioning Strategies Pricing Strategies Distribution Strategies Promotion Strategies Basic Promotion Tools Promotion Decision
17
18 19 19 20 20 20 21 21 22
Chapter # 4
Structure & Functions of Sales Department Customer Service Department
23
24 25
Chapter # 5
Learning
26
27
Chapter # 6
SWOT Analysis
32
33
Chapter # 7
Corporate, Business and Departmental level Strategies How I Feel After Studying BAL Conclusion & Recommendations References
35
36 37 38 39
Chapter # 01 INTRODUCTION
INTRODCTION OF BANKING:
The word Bank is derived from the Italian word Bancus or Banque which means bench, desk or counter. Because in ancient times the benches were used by the Jews for the purpose of exchanging money. In ancient times the religious temples were used as the safest place for keeping money and gold by people of that time under the supervision of the priests. Goldsmiths then acted as the financial agents in exchange of gold and valuables which provided the basis of modern banking. Todays modern banking system is the ultimate and step by step achievement of the ancient banking system of accepting deposits from those who have surplus and lending to those who do not have it or have little.
Banking In Pakistan:
Prior to Independence British banks controlled the banking operation in Pakistan. After independence there were no resources so that Pakistanis could start their own banking system in a very short period of time. Then at that time it was decided that Reserve Bank of India will control the banking operations in Pakistan. But this was not good for the best interest of Pakistan because British Government at that time distributed the reserves of the Reserve Bank of India between India and Pakistan with the share of 70% India and 30% Pakistan. It was a very big loss for Pakistan at that time as being a new nation with new country having few resources for survival. Then Quaid-e-Azam Muhammad Ali Jinnah (The Governor General of Pakistan) at that time took a step ahead and inaugurated The State Bank of Pakistan on July 1st , 1948 which then took control of all the banking operations of Pakistan. Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 1st, 1997.The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through 195 branches in 74 cities, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the Management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place. Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank has invested in revolutionary technology to have an extensive range of products and services. This facilitates our commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. We perceive the requirements of our customers and match them with quality products and service solutions. During the past five years, we have emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today.
Islamic Banking;
A separate division is a recently initiated, which operates as separate branch. It offers Shariah Compliant products through a network of branches nation wide Bank Alfalah Limited has a strong commitment to Islamic Banking with objective of operating Shariah Based Banking in the country. Bank Alfalahs Islamic Banking Division (BAL-IBD) started operations in 2003 and at its yearend reflected a modest capital base of Rs 100 million and deposits totaling Rs 113.7m. By following yearend, BAL-IBDs equity had risen more than 4 times to Rs 569m and the balance sheet footing had swelled to Rs 7,799 million. Deposit size had grown from less than Rs 114m to over Rs 7,229 million. It gives following products to its customers
1. Alfalah Masharaka Homes 2. Murabaha Finance 3. Aflalah Car Ijarah
Strategies of branding used by the organization Bank Alfalah has wide range of products for there customers. And for this they adopt different brand strategies to enhance there business in the market. And also strengthen the position of there brands in the country and worldwide.
Board of Directors:
H.E. Sheikh Hamadan Bin Mubarak Al Nahayan Chairman: Mr. Abdulla Nasser
Hawalileel Al-Mansoori Director: Mr. Abdull Khalil Al Mutawa Director: Mr.Khalid Mana Saeed Al Otaiba
Director: Mr. Ikram Ul-Majeed Sehgal Director: Mr. Nadeem Iqbal Sheikh Director Mr. Sirajuddin Aziz
Mission
To develop & deliver the most Innovative products, manage Customer experience, deliver Quality services that contributes To brand strength, establishes a Competitive advantage and Inhances profitability, thus providing value.
Vision
To be the premier organization Operating locally & Internationality that provides the complete range of financial Services to all segments under one roof.
Objectives
o o o o To create an efficient System of banking in Pakistan. Maintain high profits. Expanding Islamic banking. Delivering every service and product less than one roof.
Brand personality
A sober and established, strong, empathic, professional Person; who is an extremely loyal and dependable friend and business partner, and is committed to offering comprehensive value-based Business financial solutions.
List of main competitors The major competitors of Bank Alfalah are Meezan Bank Ltd Faysal Bank MCB Bank Ltd Punjab Bank Ltd UBL
Debit Card/ Hilal card Car Financing Money Gram Agri Finance Credit Cards Online Banking
2. Car Financing:
Bank Alfalah has introduced Car Financing in which you have two options, either you get the Vehicle leased or financed. There is no hidden charges Minimum down payment Quickest processing Tenure period 1-5 years
3. Money Gram:
Bank Alfalah is providing the facility of Money gram which is the person to person transfer of money that allows consumers to receive money in just few moments. Money Gram is available in over 180 countries and territories and in more than 190,000 locations worldwide, and money is handled by quality agents linked through computers who makes it sure that your money is safely transferred to the desired place and person.
5. Credit Cards:
Alfalah credit card is globally accepted at all those locations which have the logo of VISA. It is accepted at nearly 29 million locations in more than 200 countries around the world and in Pakistan also. It enables you to pay for shopping, travel, entertainment, meals and much more. The features which makes Alfalah Credit card as an important product for customers are, No joining/ Annual / Renewal fee (except Platinum Card) Electricity, Sui Gas, PTCL ,Warid bills payment through 24 hour Call Center and Auto Debit instructions. SMS for card usage, mini statement, payment receipt confirmation, etc. Cash withdrawal at all 1LINK ATMs Special offer on Warid post paid connections.
6. Online Banking:
Bank is providing online banking services to its customers such as balance inquiries statement requests through automated online telephone service and online ATM services anywhere and at every place where bank exists.
Marketing Department:
The priority banking marketing manager is responsible for the deposits of the require money in the managers referral customers accounts. Also this department connects to the big account holders and maintains good relation with them. And this propose they meet them and made meetings with them that where they satisfied with there services that the banks offers to them. And incase any problems that the customers victim than that problem would be eradicated by the following customers through meetings with them.
The Relational manager : has the responsibilities that they give solutions if the deposits of the banks down due to un-satisfaction by the customers and close an account in the particular branch. They also have the responsibilities to open a number of fresh accounts in BAL. And for this they meet the number of big clients in particular and other in general and convey them to be part of BAL. The relational manager consults the branches under his custody. And they have the authority to know info regarding bank accounts of big customers. Also they have little meetings about there business products that whether the customers get benefits or not. And want give suggestions from the operation officers for the betterment of there different products. Also they interact with the operations officers and wanted to know the behavior of there loyal customers and what kind of services they wants for them. And every month they build a report and send to the regional Head of marketing department of BAL.
Also branch is a source of retail marketing as well as for sound marketing too. Its really helps the BAL to carry there product info to other customers friends etc, and make there customers because of there good services provided to them. The marketing department of Bank Alfalah Limited also involve in operation nationwide through 283 branches and a comprehensive network of 236 ATMs. The banks countrywide operations are controlled through two most critical systems, namely the web based Online Centralized Core Banking software applications having Retail Banking, Trade Finance, Corporate and Commercial Finance, Consumer Finance, Foreign Exchange & Treasury modules; and the ATM switch.
Chapter # 3
Marketing Strategies
In product and development they have a separate department for this work. The main purpose of product and planning is to search the needs and wants of the peoples living in the particular societies. After the market segmentation of the organization they develop different products for there customers. For example the business community wants cheap online transaction. So bank Alfalah made Alfalah Karobar Account properly design for the local business community. And for product development the supporting material that they get from branches marketing managers BDOs officers they also have separate department for credits and all these info are brainstorming in the R&D department of the organization and then they create products for the required customers with specification of there customers needs.
Positioning;
In this process bank marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the relative competitive comparison their product occupies in a given market as perceived by the target market. Positioning is what the customer believes bank products value, features, and benefits; it is a comparison to the other available alternatives offered by the competition. These beliefs tend to based on customer experiences and evidence, rather than awareness created by advertising about or promotion. Marketers manage product positioning by focusing their marketing activities on a positioning strategy. Pricing, promotion, channels of distribution, and advertising all are geared to maximize the chosen positioning strategy. It is the aggregate perception the market has of a particular bank, product or service in relation to their perceptions of the competitors in the same category. It will happen whether or not a organizations management is proactive, reactive or passive about the on-going process of evolving a position. But a company can positively influence the perceptions through enlightened strategic actions. Generally, there are following strategies for product positioning:
Positioning strategies;
Bank Alfalah is the fifth largest private bank of Pakistan operating nationwide with 283 network branches with the facilities of 232 ATM machines nation wide.
Pricing Strategies;
A critical marketing mix tool is price. Price is important since it represents the amount of money that customers have to pay for the services received and it is the only element of the bank marketing mix that creates revenue. The most important pricing in the banking system relates to interest rates; but as the government controls basic interest rates therefore the use of price as an important element in bank marketing has tended to be neglected. Bank Privatization, coupled with the introduction of new technology and the arrival of the new aggressive bank and non-bank competitors is forced a reappraisal of the use of pricing strategy. In this regard the writer noticed that Bank Alfalah Ltd has an advantage of credible bank image and on the basis of it the bank has set out particular pricing system. Hence the bank gives right to the branch managers to waive the inline bank charges of there loyal customers having monthly balance of more than 2 lacks. So this strategies acting as sound marketing strategies to attract more customers to deposits there accounts and enjoy that facilities.
Distribution Strategies;
In marketing, distribution is the means through which a seller makes his product available to the buyer. A channel of distribution for banking should be considered in a somewhat different manner. It can be regarded as any means of increasing the availability and / or convenience of a service that increases its use or the revenue from its use. Strategy: Special counters available to customers for to do their transactions without having to wait in the regular line. Provide the service through our network of branches throughout the country. Install six additional ATMs at strategic locations throughout the country. Introduce telephone banking to allow customers to transfer funds between accounts, perform account inquiry and pay their utility bills without visiting the bank. Perform personal banking for busy professionals, including doctors, lawyers, managers, etc. Distribution Decision: Means of delivery of bank services to customers Levels of service banks customers want Impact of technology on distribution. During the early phase of the privatization, Bank Alfalah Ltd seemed to focus on two channels of distribution Bank branches: This is the most important channel of distribution for the bank as the bank is conveniently serving potential
customers and from which the largest portion of business is being generated. Following are some basic steps taken by the bank at the initial stage of the implementation.
Promotional strategy
This tool stands for the various activities the bank undertakes to communicate its products merits and to pursue target customers to use their services. Bank Alfalah Ltd has used term promotion to decide how information about the bank and its services can be disseminated. The Bank widely used (still using) the four basic promotional tools for this purpose. These are Basic Promotional Tools Advertising Personnel Selling Publicity Sales Promotion Broachers Point of Sale Service Banners
Advertising
Banks paid non - personal presentation and promotion of goods and services by an identified sponsor; television and media are typical examples.
Personal selling
Managers use this in order to create an impression of trust, reliance, friendliness and familiarity.
Sales promotion;
These include the clocks, pictorial cheques books, gifts etc.
I must say that the bank promotional tools have enhanced the perception of the bank and its brands through increasing awareness. This awareness was essential especially when there was increasing competition from foreign banks, and other financial institutions. Strategy: Email or write to prospective customers informing them of the service. Phone prospective customers or visit them at their residents or place of business to sell the service to them. Advertise the service on our website. Develop an advertising program targeting the selected group. Promotion Decision: Communication with customer Persuading customers to buy Role of advertising Branch displays Direct mail Personal selling Cold calling Telephone selling Sales promotions Promotional campaigns.
Chapter # 04
Sales Structure
Types of selling;
The BAL use different types of selling services for there customers to buy those services and for this purpose they have different departments for there different selling techniques. The bank branch itself is the on spot selling techniques to attract the customers for there product. The other techniques they are personal selling in which they appraise there employees that what they do for the bank. And for this purpose the employees of the bank also attract there relatives to open an account in BAL. And for financial services they have credit and other finance department for giving the finance services to there customer. Also they have BDOs and relational managers who responsible for the increasing of the deposits of banks. Also they have call centers agents who call the local peoples and peruse them to buy there products like credit cards, car finance and it is known as telemarketing.
CHAPTER # 05 Learning
I did my internship at Bank Alfalah Limited Circular Road Bahawalpur. During my whole duration of six months I have done work in the following departments.
Basic Banking Account (BBA account) Simple Current Account Alfalah Kamyab Karobar Account Thee detail on each is as under. i).Basic Banking Account (BBA account)
This account is introduced for low income people like persons with 25,000 salary and for students who cannot maintain minimum balance of Rs.10, 000 in their accounts because in this account there is no requirement of minimum balance maintenance. This account is also called as Student Account.
Features:
Minimum Initial deposit of Rs. 1,000. No service charges at all. Facility of ATM.
Only 4 transactions through cheque are allowed in a month otherwise Rs.58 will be charged per month.
2. Saving Account:
Saving account is an interest-bearing account. It has following types of accounts, Simple saving account Royal Profit Account Kifayat Account. Alfalah Mahan Amdan Account Alfalah Mahan Amdan Plus(Term Deposit)
iii).Kifayat Account:
It is a type of saving account in which minimum initial deposit and average balance Maintenance of Rs.10, 000 is required. Maximum amount of deposit in this account is of Rs.1 million. Profit is paid at the rate of 7% per annum. If balance falls from 10,000 then no profit will be given to account holder. Profit is given on Quarterly basis. Only 3 debit transactions are allowed per month.
iv).Alfalah Mahan Amdan Account: Its a term deposit for three years. Minimum balance of account is Rs.100,000 with an upper limit of Rs 1.5 million. Profit rate is 10 % per annum and paid on monthly basis.
Free insurance.
In case of withdrawn of your money before maturity date then the profit will be distributed as follows, If you withdraw your money within 6 months you will get a profit at 5% . If you withdraw your money between 6-9 months you will get a profit at 8%. If you withdraw your money between 9-12 months you will get a profit at 9%.
Opening an Account:
For new customers who want to open an account at Bank Alfalah has to fill a Relationship Contract, which includes such information as follows Title of Account.
This portion is important for securing the money of the customer in case of his/her death of or any incident with the account holder. By this thing the accountholder specifies and provide the information and data of the person who will be the owner of his/her money after his/her death or any serious incident with him/her. If account holder leaves it blank then bank will be the owner of his/her money. Address for correspondence
4. Type of Entity
Individual Joint sole proprietorship Public/Private Ltd Co. Partnership.
5. Nature of Account
Current Account PLS Saving Account Royal Profit Account Saving Account Others
6. Currency of Accounts
Bank Alfalah deals in five currencies and account holder must have select from them. These are PKR, USD, GBP, Euro, and JPY
7. Zakat Deduction 8. Details of other bank accounts 9. Introduced by Basic Requisites for Opening an Account for individuals/self employed persons are as follows
CNIC Company letterhead or authorization (as required)
Procedure:
The procedure of financing car starts when a person comes and asks for a vehicle to be financed. First thing which that person have to do is to fill an application form stating the car which he wants to be financed, its color and two references with his complete personal information regarding his profession, source of income, age etc. This is all what is required from the customer. After this bank working starts. Bank verifies all the information provided by the customer along with the verification of two references provided. After completing the verification process Bank generates the Credit Line Proposal (CRP).This proposal then sent to the Area Office for approval. After the approval from the Area office the customer will sing a legal document of this deal with Bank along with the down payment. When this process completes a quotation is sent to the car dealer for a stated car. Registration of car is carried out and Bank insured the car with collaboration of Insurance Company and car handed over to customer. After the completion of finance tenure the Bank issues NOC to customer stating that there is no obligation left to be fulfilled by the customer.
SWOT Analysis;
This analysis was required in broader business environment. SWOT analysis describes the position of the organization with respect to its customers in the market Strengths are the core competencies of any organization & as far as BAL is concerned the
Weaknesses are the lacking points which every organization must avoid in order to make its operational effectiveness.
Hectic Working Environment Work load. Lack of Self Marketing Department. Low Training & Coaching. low incentives like bonuses overtime pay etc. Human Resource Department is not so much effective. Appraisal is not done frequently. Low salary packages as compared to other banks. Opportunities In fact, when we study all our weaknesses critically & deeply than we come to know that we can convert our weaknesses into strengths. So basically these are our opportunities. The opportunities for BAL are: On the job training & coaching sessions can be conducted. Good relation with foreign banks Growing in deposits E-banking
Work sharing activities should be started so that a person who is working continuously for 9 hours can get relax. Marketing department should be started in order to promote the name of BAL. Appraisal should be conducted frequently so that employees get motivated & do their work as a loyal employee. Attractive salary packages should be awarded. Threats Though Bank Alfalah has a strong footing and maintain a good number of loyal customers; still bank has threats in various sectors. When we see the possible threats for BAL, the threats are prevailing such as: The conventional banks those having high growth rate and high market share are always being a threat. There is an average not low turnover rate, mainly because of low incentives as compared to the other banks. Large business parties have fewer attractions in being a client of BAL-IBD,mainly. Because of excessive amount of documentation.
reason behind is that business should be done when some one get services from the organization, If they dont get services from the organization than, what the organization do.
Conclusion
So in my conclusion I would to say that I really seeks allot of information regarding to my discipline that is marketing. Especially I seek CR techniques and retail marketing concepts. I observe the bank environment regarding there discipline there way of communication with different types of customer and there problems. And see what they relay likes and what they dont like. It really affects the banking system because they hate one recruit of the management and love and easily speaks the other one. I meet the quality assurance mangers and see there works and in there works they are very critical and observe the bank environment in a critical way. In short BAL have a good management team and best organize hierarchy and wide range of there brand products which Symbolize that BAL is really the Caring Bank.
Recommendation
Spent six weeks of my internSship in BAL Branch, Haripur. During these six weeks, I felt myself to be a part of BAL. Even, this was my first experience of working in a banking organization, but I learned a lot from this experience. Based on my experience & observation regarding the operations and policies of Bank Alfalah,
References Sir Saqib Zaheer (BAL Haripur) Sir Zubair (BAL Haripur) Sir Qazi Murtaza (BAL Haripur) www.bankalfalah.com www.scribd.coms