Pressure From Substitute Products

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02 Nov 2017

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Rivalries naturally develop between companies competing in the same market. Competitive revelry is high in banking sector. There are too many banks in the market so ABPL should improve its quality, price & compatibility. There are following competitors of the ABPL; e,g Faysal Bank, Meezan Bank, Alfalah Islamic Bank, Askary Bank etc. these all banks are dealing in Islamic banking but these all are not dealing in all Islamic products while ABPL is providing all type of Islamic banking products.

Pressure From Substitute Products.

A substitute product involves the search for a product that can do the same function as the product the industry already produces. Substitute products of ABPL are the products of commercials banks which fulfill the same need. In substitution threats there are also include private firms & leasing companies who offer easy loan, high investment rate etc rather than ABPL.

Bargaining Power of Suppliers.

Suppliers have a great deal of influence over an industry as they affect price increases and product quality. The main supplier of banks is SBP that supply each & every term, condition, policy, cash etc to banks. Cash of different organization’ account is also used as the input in ABPL so in other words these organizations also work as the supplier of the ABPL. They negotiate for their high profit.

Bargaining Power of Buyers

In banking sector bargaining power of buyers is high because there are too many banks in the market that are offering the same products like ABPL. The main buyers of ABPL are Tayab Motors, Inayat Auto Corporation, Gujrat Flour & General Mills, HMH Rice Mill etc. that bargain for their benefits.

Potential Entrants

Threats of new entrants into an industry depend largely on barriers to entry. In Pakistan threat of new entrants in banking sector is high because of

Economies of scale, or decline in unit costs of the product, which force the entrant to enter on a large scale and risk a strong reaction from firms already in the industry, or accepting a disadvantage of costs if entering on a small scale.

Product differentiation, or brand identification and customer loyalty with ABPL.

Capital requirements for entry; the investment of large capital, after all, presents a significant risk.

Switching costs, or the cost the buyer has to absorb to switch from one supplier to another.

Access to distribution channels. New entrants have to establish their distribution in a market with established distribution channels to secure a space for their product.

Cost disadvantages independent of scale, whereby established companies already have product technology, access to raw materials, favorable sites, advantages in the form of government subsidies, and experience.

5.4- Ratios

Financial Analysis

Introduction of Financial Statement:

The ACPA (American Institute of Certified Public Accountants) has said this about financial statements: Financial Statements are prepared for the purpose of presenting a periodical review or report on progress by the management and clear with the status of the investment in the business and results achieved during the period under review.

Financial Statements are a major source of information about a firm the statements are accounting derived compilations of the firm activities as of a point in time or for a particular period of time these accounting transactions are based on the accrual concept, reflect primarily historical costs and are prepared according to generally accepted accounting principles.

As firm financial statements typically are part of the annual rep that the firm sends its stockholders the financial statements are presented along with any footnotes needed to explain or elaborate upon items in the statement themselves. The footnotes contain considerable detail and often cover several pages. By analyzing the United Bank limited financial Statements and the foot notes as, necessary, we can obtain a useful assessment of the firm form an accounting standpoint, including its recent performance, its current financial] position and its general financial health.

"Financial Statements are the statements which show the financial position of a business at the end of an accounting year"

Financial Statements are those statements, which give information about the Economic resources and obligation of a business.

Importance Of Financial Statements:

The study of financial statement discloses the profitability and financial soundness of a company. Such study provides various accounting information. The following points disclose the importance of financial statement analysis.

Financial stability.

Profitability

Operational efficiency.

Firm solvency position.

Future growth of the business

Comparative study.

Evaluation tool.

Provide information to the taxation authorities.

Screening tool for investment.

10. Provide information’s about the sources and uses of the funds.

Types of Financial Statement:

1) Balance Sheet.

2) Income Statement

3) Statement of Changes in Financial position.

4) Statement of Retained earnings.

1) Balance Sheet:

It has two sides one is called debit side" which shows assets and the other is credit side showing liabilities and owners equity at the date.

2) Income Statement:

Income statement is also known as profit and loss account. A statement showing the profit end loss of a company for a particular period, is known as income statement. In income Statement the positive result represent the net income and the negative result represent the net loss.

3) Statement Of Changes In Financial Position:

1) Statement of changes is also known as such names.

2) Working capital Statement.

3 ) Funds flow statement.

Sources and Application of funds statements. Statement of changes in financial position shows the flow of working capital during a stated period of time.

4) Statement Of Retained Earnings:

Retained Earnings represents the profit that has been kept by the company and not distributed the shareholders of the company.

At the end of Fiscal period a statement of retained earnings is prepared statement of retained earnings prepared for sole proprietorship and partnership.

AL-BARAKA BANK PAKISTAN LTD

COMPERATIVELY BALANCE SHEET

AT YHE PERIOD ENDED ON 31 DECEMBER 2010

. Rupees in (000)

2007

2008

2009

2010

ASSETS

Cash and bank balance

15649561

17274461

23844435

258456450

Balance with other banks

9985788

11386434

17699334

17187250

Lending to financial Institutions

3627557

19050791

16262504

17826109

Investments

69244328

56516760

54953 728

74425667

Advances

72808106

160170415

146249184

169560882

Other assets

3636065

3001793

4393852

6041671

Operating fixed assets

2710892

3754236

3969006

4170585

Taxation recoverable

314712

283171

45728

74956

Deferred tax asset-net

5026457

5486357

5194892

4129977

Total assets

183003466

216924418

272612663

319262553

TOTAL LIAB. & OWNER EQUITY

.

Bills payable

1832981

2975910

3811284

5446989

Borrowing From Fin. Institutions

5347349

7710375

11975684

14124220

Deposits & other A/c's

158263495

185071502

230256627

269130356

Sub – ordinted loans

-

-

-

-

Liabilities against assets subject to finance lese

81548

39995

288

-

Other liabilities

544441

5707204

3513569

5923127

Deferred liabilities

861935

1535059

2191180

2257099

Share capital

5180000

518000

518000

518000

Reserves

4243352

4678317

5915928

6185214

Unappropriated profit

797100

218900

3274439

4212342

Surplus on revaluation of asset

2445465

3807066

2993664

2803590

Total liabilities and owner eqvity

183003466

216924418

272612663

31926553

AL-BARAKA BANK PAKISTAN LTD

BALANCE SHEET SHOWING ABSOLUTE

INCREASE / DECREASE IN AMOUNT

FOR THE PERIOD ENDED Dec 31, 2008-2010

Taking 2008 as base year

Rupees in (000)

2008

2009

2010

ASSETS

Cash and bank balance

1624900

8194874

10195889

Balance with other banks

1400646

7713546

7201462

Lending to financial Institutions

15423234

12634947

1418552

Investments

12727568

14290600

5181339

Advances

87362309

73441078

96752776

Other assets

634272

757787

2405612

Operating fixed assets

1043344

1258114

1459693

Taxation recoverable

31541

268984

239756

Deferred tax asset-net

459900

168435

896480

Total assets

93920952

78239197

123479087

TOTAL LIAB. & OWNER EQUITY

.

Bills payable

1142929

1978303

5264008

Borrowing From Fin. Institutions

2363026

6628335

8776871

Deposits & other A/c's

26808007

71993132

110866861

Sub – ordinted loans

-

350010000

-

Liabilities against assets subject to finance lese

41553

81260

378686

Other liabilities

162763

2030872

Deferred liabilities

673124

1329245

1395164

Share capital

0

0

0

Reserves

4324965

1672576

1941862

Unappropriated profit

578110

2477339

3415242

Surplus on revaluation of assets

1361601

548199

358125

Total liabilities

30965151

88014997

AL-BARAKA BANK PAKISTAN LTD

COMPARITIVE BALANCE SHEET SHOWING

TREND % AGES

FOR THE PERIOD ENDED Dec: 31, 2007-2010

Taking 2007 as base year

Rupees in (ooo)

2007

2008

2009

2010

ASSETS

Cash and bank balance

153.72

174.96

103.91

81.61

Lending to financial Institutions

153.94

174.96

103.91

81.61

Investments

152.79

174.96

103.91

81.61

Financing

153.17

174.96

103.91

81.61

Other assets

152.36

174.96

103.91

81.61

TOTAL ASSETS

153.13

174.96

103.91

81.61

LIABLITIES & OWNER EQUITY

Share holder's equity

153.61

174.96

103.91

81.61

Borrowing From Fin. Institutions

152.85

174.96

103.91

81.61

Revaluation reserve

154.10

174.96

103.91

81.61

Deposits & other A/c's

153.04

174.96

103.91

81.61

Other liabilities

153.69

174.96

103.91

81.61

TOTAL LIAB. & OWNER EQUITY

153.13

174.96

103.91

81.61

AL-BARAKA BANK PAKISTAN LTD

COMPARATIVE INCOME STATEMENT

FOR THE PERIOD ENDED DEC,31, 2007-2010

2007

2008

2009

2010

Net markup/interest income after provision

5497554

7162247

6493858

4901027

Non markup/interest income

1918244

4406224

4544112

3272119

Total Income

74157958

11568471

11037970

8173146

Non markup/interest expenses

Administrative expenses

3610291

6702709

6153913

5390233

Other provision/write offs

191405

34422

551840

27353

Other charges

2704

10456

5501

24252

Total Non markup/ interest expenses

3804400

6678743

6711254

5441838

Extraordinary items

-

-

-

-

Profit before tax

361138

4889728

4326716

2731308

Tax

1526612

1188184

1691098

1316992

Profit-after Tax/net income

2084786

3701544

2635618

1414316

AL-BARAKA BANK PAKISTAN LTD

COMPARATIVE INCOME STATEMENT

INCRESE/DECREASE IN AMOUNT

FOR THE MPERIOD ENDED DEC,31, 2008-2010

2008

2009

2010

Net markup/interest income after provision

596.527

2261220

6493858

Non markup/interest income

1353875

1134105

1271993

Total Income

757348

3395325

2864824

Non markup/interest expenses

Administrative expenses

1779942

1312476

5614890

Other provision/write offs

164052

7069

524487

Other charges

2704

10456

5501

Total Non markup/ interest expenses

1637438

1236905

1269416

Extraordinary items

-

-

-

Profit before tax

880090

2158420

1595408

Tax

209620

128808

374106

Profit-after Tax/net income

670470

2287228

1221302

AL-BARAKA BANK PAKISTAN LTD

INCOME STATEMENT SHOWING

TREND % AGE

FOR THE PERIOD ENDED Dec: 31, 2008-2010

2008

2009

2010

Net markup/interest income after provision

112.17 %

146.14 %

132.5 %

Non markup/interest income

58.6

134.7

138.9

Total Income

90.73

134.7

138.9

Non markup/interest expenses

Administrative expenses

66.9 %

124.3 %

114.2%

Other provision/write offs

699.8

125.8

2017.4

Other charges

11.15

43.12

22.68

Total Non markup/ interest expenses

3804400

6678743

6711254

Extraordinary items

-

-

-

Profit before tax

132.2 %

179.0 %

158.4 %

Tax

115.9

90.2

128.4

Profit-after Tax/net income

147.4 %

261.7 %

186.9 %

Ratio Analysis:

The term ratio means a numerical relationship between items or group of items and is determined simply by dividing one item in relationship by the other.

In this chapter only such ratios will be taken into consideration, which help in analysing and interpreting the current financial position of the industry. The analysis of current financial are beneficial both for owners and creditors particularly short term creditors.

A business has strong financial position if it is able:

To meet the claims of short-term creditors.

To meet current interest and dividend requirements.

To maintain sufficient working capital for effective normal position.

To utilize working capital efficiently.

To maintain favorable credit rating.

A. Current Position Analysis:

Following are the ratios, which are used in analyzing the current financial position such as:

1. Working Capital:

Working capital is the excess of current assets over current liabilities. In other words working capital is the amount of current asset after deducting the current liabilities represent a margin of safety that is a claim of protection for the current creditors. Larger the amount of working capital the position would be satisfactory to meet current debts, fixed investment and absorb operating loses while the inadequacy of working capital is harmful for the operation of business as well as the policy of the firm . It is computed by following formula:

Net Working Capital = Current Assets - Current Liabilities.

Rupees In (m)

Year

2007

2008

2009

2010

Current Assets (a)

15649561

17274461

23844435

25845450

Current Liabilities (b)

1600964760

188047412

234067911

274577345

Working Capital (a-b)

(1585285199)

(170772951)

(210223476)

(248731895)

2. Current Ratio For Working Capital Ratio:

Current Ratio is use to measure current liquidity position. It is computed by following formula.

Total current assets/Total current liabilities

Rupees in (m)

Year

2007

2008

2009

2010

Current Assets (a)

15649561`

17274461

2384435

25845450

Current Liabilities (b)

1600964760

188047412

234067911

274577345

Current Ratio (a/b)

.009

0.092

0.01

0.09

3. Working Capital Turnover:

It is computed to know the utilization of working capital during the period under analysis. It is calculated by following formula:

Working Capital Turnover = Net Income/ Net Working Capital

Rupees in (m)

Year

2008

2009

2010

Net Income(a)

2635618

3701544

2084786

Working Capital (b)

(170772951)

(210223476)

(248731895)

W.C. Turnover (a/b)

1.54

1.76

0.08

I

Relationship Of Current Liabilities To Total Liabilities:

This relationship shows the current maturity of obligation. It enables the creditor to get information about three participation in the business. It is computed by dividing the current liability by total liabilities and multiplied by 100 as shown below:

Year

2008

2009

2010

Current Liabilities (a)

188047412

234067911

274577345

Total Liabilities (b)

216924418

272612663

319262553

Relationship of C.L to T.L (a/b)*100

86.0

86.0

86.0

Relationship Of Current Asset To Total Assets:

This relationship will indicate the percentage of investment in current assets. it is computed by divisions current assets by total asserts.

Rupees in (m)

Year

2008

2009

2010

Current Assets (a)

17274461

23844435

25845450

Total Assets (b)

216924418

272612663

319262553

Relationship of C.A toT. A (a/b)*100

7.96

8.75

8.09

B. Stability Analysis:

Generally short term creditor are interested in the current financial position of the business whereas long term creditors and stockholders are much concerned with the long term financial position of the company.

The long-term financial position is analysed to get the answer of the following question such as:

Whether the borrowed funds and owners equity is appropriate and profitable.

Whether there exist a proper balance of investment in each group of assets.

Is the investment in operating assets commensurate with current sales prospective sale volume and the net income.

Whether the long term financial strength is improving or not.

In order to give answer to the questions above we pursue the following ratios.

1. Ratio Of Owners Equity To Total Assets:

This ratio expresses the amount of total investment in the assets that has been financed by shareholders. It is calculated by the following formulae.

Ratio of Owners Equity to Total Assets = Owners Equity X 100

Total Assets

Rupees in (m)

Year

2008

2009

2010

Stockholder’s Equity (a)

13884373

17364031

18381146

Total Assets (b)

216924418

272612633

319262553

Ratio (a/b)*100

6.40

6.40

5.76

2. Ratio Of Owners Equity To Fixed Assets:

This ratio indicates the percentage of fixed assets financial by owners. It is calculated by the following formulae.

Ratio of Owners Equity to Fixed Assets = Owner equity X 100

Fixed Assets.

Rupees in (m)

Year

2008

2009

2010

Stockholder’s Equity (a)

13884373

17364031

18381146

Fixed Assets Net (b)

193880429

243527608

30050383

3. Ratio Of Owner Equity To Total Liabilities:

This ratio shows the owners interest in the business. It shows the position of the shareholders as well as creditors. It is calculated by the following formulae.

Ratio of Owner Equity to Total Liabilities = Owner Equity X 100

Total Liabilities

Rupees in (m)

Year

2008

2009

2010

Stockholder’s Equity (a)

13884373

17364031

18381146

Total Liabilities (b)

203040045

255248632

300881407

Ratio (a/b)*100

6.8

6.8

6.1

4. Ratio Of Fixed Assets To Long Term Liabilities:

This ratio measure the security of the fixed obligations, when the long term liabilities are secured by the fixed assets It is computed by the following formulae.

Ratio fixed assets to long term liabilities = Fixed Assets X 100 Long Term Liabilities.

Rupees in (m)

Year

2008

2009

2010

Fixed Assets Net (a)

193880429

243527608

30050383

Long Term Liabilities (b)

14992633

21180721

26304062

Ratio (a/b)*100

1293.2

1149.8

114.2

5. Ratio Of Total Assets To Total Liabilities:

This ratio determine as to how much has been financed out of total assets and hove much have been provided for financing out of owners equity. This ratio is computed by following formulae.

Ratio of Total Assets to Total Liabilities = Total Assets x100

Total Liabilities

Year

2008

2009

2010

Total Assets (a)

216924418

272612663

319262553

Total Liabilities (b)

216924418

272612663

319262553

Ratio (a/b)*100

100

100

100

6. Ratio of Net Income To Fixed Assets:

This ratio measures the utilization of fixed assets. It is computed by following formulae.

Ratio of sale to Fixed Assets = Net Income x 100

Fixed Assets

Year

2007

2008

2009

2010

Net Income (a)

1414316

2635618

3701544

2084786

Fixed Assets Net (b)

162012736

193880429

243527608

30050383

Ratio (a/b)*100

.872

1.36

1.52

6.93

5.4- Summary:

SWOT analysis is very important to get to know the current position of the organization as it tells about the weaknesses so when the organization knows where the problems exist then it makes strategies to remove those weaknesses. When it knows the opportunities that can availed then it takes those steps which can be beneficial in order to avail the existing opportunities. After knowing the strengths it tries to maintain and cash those strengths. And finally by knowing the threats it tries to make measures to save the organization from those threats.

Porter's five-forces models concentrates on five structural industry features that comprise the competitive environment, and hence profitability, of an industry. Applying the model means, to be profitable, the firm has to find and establish itself in an industry so that the company can react to the forces of competition in a favorable manner. For Porter, Competitive Strategy is not a book for academics but a blueprint for practitioners-a tool for managers to analyze competition in an industry in order to anticipate and prepare for changes in the industry, new competitors and market shifts, and to enhance their firm's overall industry standing.

Throughout the relevant sections of Competitive Strategy, Porter uses numerous industry examples to illustrate his theory. Since those examples are now over twenty years old, changes in technology and other industrial shifts and trends have made them somewhat obsolete. Although immediate praise for the book and the five-forces model was exhaustive, critiques of Porter have appeared in business literature. Porter's model does not, for example, consider nonmarket changes, such as events in the political arena that impact an industry. Furthermore, Porter's model has come under fire for what critics see as his under-evaluation of government regulation and antitrust violations. Overall, criticisms of the model find their nexus in the lack of consideration by Porter of rapidly changing industry dynamics. In virtually all instances, critics also present alternatives to Porter's model.

In this chapter only such ratios will be taken into consideration, which help in analysing and interpreting the current financial position of the industry. The analysis of current financial are beneficial both for owners and creditors particularly short term creditors.

ABPL is a well-known and successful financial institution in the banking sector especially in Islamic Banking sector. It is said that nothing is perfect in the world and there is always same space for improvement of deficiencies.

It should format a research cell that will continuously try to get information about the present actions of its competitors and expected future actions.

In order to compete with the other banks, ATM service should be excellent as we can see the growing competition among the banks.

The bank should acquire the services of the highly qualified people accompanied by worthwhile incentives to promote its status as desirable.

In order to market its products attractively, it should emphasize to give advertisements on both print and electronic media.

The quality of human resource lies at the centre of every organization’s success and no doubt ABPL is fully aware of the importance of a satisfied and well-trained work force that gives competitive advantage. So the policy of the bank should be to continually encourage its employees for their knowledge enhancement about their products. The state of the art training and development center at ABPL should arrange workshops and seminars for the employees at every level to empower them professionally.

There is also a need of proper recruitment and selection program. New talent should be introduced to inject new ideas.

Deterioration in efficiency is mostly due to promotion without merit. So promotion should be awarded on merit and also with due.

The reward system should be strong. As it is also said that a happy employee delivers more than he receives from the organization. ABPL should also try to make its employees happier.

The infrastructure of any organization matters a lot. It must have a good and attractive building that would be able to attract a lot of customers as in the market many banks are having their own buildings with very attractive infrastructure so this bank also improve its outlook.

What Experience I Got:

It was a tough job but I enjoy the internship, initially I had difficult time in mixing with organization members and felt uncomfortable in that new place with new people. However, after some time, I became a part of it just like everyone else and felt completely comfortable.

The other major problem was the hectic routine of the bank. It made me uneasy at first but with the passage of time I became used it. I had to face a great difficulty in understanding bank’s terminology by the knowledgeable guidance of the staff I was able to overcome the problem to a satisfactory level.

The real problem I faced in the bank was the difference between what I had learnt from the books and what was being practiced. Practical application of the theories learnt during academic sessions was a great challenge, which I overcame by the cooperation of the staff.

My internship experience has given me a realistic preview of practical life. Now I feel that I am better prepared to enter the world of professional work. I have come to know and been appreciated by a number of professionals who are lending their services to the banking sector for more than a decade. I feel honored that I have worked with such experienced professionals. I must admit that such interaction in this respectable professional community will help me in seeking out good job opportunities in the near future.

Each task I performed was a different experience in itself. By the end of it, I must say I realize my potentials, I have realized that practical life is not so easy after all; it takes a lot of hard work and devotion, and not to forget time. And I now know that if I want I can make things possible, and I also know how good it feels to having accomplished something and being appreciated for it. I definitely have learnt things, which will impact my career and my character.

The overall experience of my internship was very good; I have learnt the sense of responsibility in its literal meaning. I am now capable of dealing with different sort of customers, and how to be patient while doing so. Besides this I also gained knowledge about banking which I previously lacked and many more products being offered by the bank. So in a nutshell, this internship gave me the experience, which would no doubt boost my confidence to work in future.

Details of Supervisors:

On the 1st day of my internship I was asked to work under supervision of Miss Sadia Arshad is the Assistant Manager Operations. I learned things related to Account Opening process. She has been too much supportive and she told me everything Cleary.

In my 3rd and 4th week of internship I worked with Mr. Imran Yousaf who is Assistant Manager Credits and Marketing. He made me learn the basics of Credits and I worked with him two weeks. He is also a very supportive man, he tells me clearly related his department. And he is the man who provides me much related information for making my report.

Mr. Waqas Sharif is Accountant in ABPL Gujrat Branch. In my 5th week I worked with him and learned the basics of accounts.

Mr. Naghman Ahmad is in Remittance Department. I worked with him in the last week and he taught me mail sending and receiving and basics of Remittance.

Summary of the duties assigned to me:

Filling of the Murabaha sets

Compiling of Ijarah set and filling the lease agreement

Attending and making calls to customers

Opening of Accounts and filling the Account Opening Forms with the responsibility to collect the necessary documents

Reconciliation

Filling the deposit slips of customers

Receiving and sending the mails

Issuing cheque books

Weekly timetable:

Date

Name of Departments & Supervisors

Activities

Week 1:

6th October to 12th October

Operations

(Miss Sadia Arshad)

In this department I was first told the basic information regarding account opening. Then Miss Sadia told me the details of the products & kinds of account opening. She helps me in filling the form of account opening. Before that she showed me all type of account opening forms that have been opened in the bank so that I could have the clear vision & idea. Then she told me the documents to open different kind of accounts. She introduced me every thing about account opening process. She also allowed me to deal with clients. She taught me to make the deposit slip as well.

Week 2:

13th October to 19th October

Operations

(Miss Sadia Arshad)

In this week I actually opened accounts of different clients my self with the help & guidance of Miss Sadia. I learned to deal with clients & got to knew about the necessary documentation related to account opening & read them in details to have the idea of their importance.

Week 3:

20th October to 26th October

Credits

(Mr. Imran yousaf)

I learned the introduction of this department & got an idea about the products of finance including Murabah, Musharka, & Car Ijarah. Then I was told about the necessary documentation required for each of the product. I was told the term & conditions for applying all these financial products.

Week 4:

27th October to 2nd November

Credits

(Mr. Imran yousaf)

In this week I filled all the documents myself & made credit application with the help of Mr. Imran Yousaf. I did all the necessary documentation & found out to whome & how we can provide these facilities to the customers.

Week 5:

3rd November to 9thNovember

Accounts

(Mr. Waqas Sharif)

In this week I worked with Mr.WAQAS & I did the voucher checking & reconciliation. I also observed payment of profit on customer deposits, review of discrepancies, and accrual of monthly expenses.

Week 6:

10th November to 17thNovember

Remittances

(Mr. Naghman Ahmed)

In this department I worked with Mr. Naghman. I learned clearing & I actually participate in making clearing myself. I just observed & learned about DD and PO

Detailed description of the tasks assigned to me:

I worked in ABPL six weeks and during this time period I was given a chance to go through all the departments in the bank except cash.

My 1st two weeks were spent in Operations Department under the kind supervision of Miss Sadia. She does Account Opening and she told me the basics of Account Opening. I opened almost 15 to 18 accounts in ABPL by the help of Miss Sadia. In the beginning she told me types of Accounts that are being opened in our bank, necessary documentation for different accounts, and how to fill the account opening form. I was asked to call different customers to remind them to take their Cheque Books. This is how I began to deal with customers. Then I was asked to deal some customers myself and open accounts in the presence of Miss Sadia. I opened different accounts including company accounts, individual and sole proprietorship account and also some foreign account. I also opened accounts of some Illiterate people. These kinds of accounts were opened in my presence and other types of account’s forms were shown to me in order to have a complete idea.

In my 3rd and 4th week I was sent to Credits department and as the details of credit have been discussed earlier. I was given many tasks to perform during these two weeks. First I was given the complete introduction of this department. Credit is done for loaning purpose and its basic work is to finance its customers by using Murabaha and Ijarah. Details of both of them have been told earlier. In this department the most crucial part is the documentation and I was given many sets of Murabaha and Ijarah to fill correctly and carefully. I filled almost 20 to 30 sets of Murabaha and almost 8 files of Ijarah. Murabaha’s documents include Appointment as Agent, Schedule I, Possession Report, Purchase of goods, Promissory Note and Purchase Agreement. I filled all these documents myself by the guidance of Mr. Imran. These all documents are quite confidential and one has to be very careful while filling those documents. Then the 2nd thing was to complete the files of Ijaraj which include DAC (disbursement authorization certificate), Approval, Offer Letter, Lease Agreement, Credit Application, CIB (Credit Information Burro), BBFS(Borrower’s Basic Fact Sheets), Registration and Insurance. I was asked to complete the files with proper arrangement and then fill the remaining documents like Lease Agreement. I was also given an assignment to make the Credit Application. It’s a very confidential document and one of the important too. Without this we cannot do anything ourselves as it is for the approval purpose that whether the head office allows us to provide loan or not

I did reconciliation with the help of Mr. Waqas of Accounts once and then for the next 3 days it was my responsibility to do reconciliation, after doing it I used to give it to Mr. Waqas for rechecking.

I had spent time with Sir Naghman as well and observed Remittance but did not perform any thing myself.

Besides that I was given some tasks on daily basis like filling of Deposit Slip, Receiving and sending of mails and I did these all independently and these were given completely to me, I handled the customers and my staff was much satisfied with my performance.

Summary of Learning:

Doing an internship is of much importance now-a-days as it gives a clear picture of the professional life. I did my six weeks internship in ABPL and there I had a chance to learn a lot. I have learned that one has to be extra hard working, efficient, active and careful in his/her job in order to gain success in life as I realized that the competition is very high in the market and it has become tough to achieve success now.

By having the experience of internship, I gained many skills and it changed my personality and thinking in a very positive manner.

I learned the skills including punctuality, working under pressure, time management, tolerance, team work, communication skills, confidence, problem solving techniques, organizational abilities etc. I became much punctual as time has a great value and if you are entered late in the bank, it gives an image of non-serious attitude so I had to be very punctual as I didn’t want to give a bad image. I learned to work under pressure as I had the pressure of many things including reputation building, the pressure of time and the accuracy of my work that has been taught to me. Sometimes I was asked to complete a task in a very short time so I had to be very fast and efficient to fulfill the task. In this way I also learned to mange time efficiently. I became very careful in doing anything as the working of bank is very sensitive and a little mistake can cause big harm. I also learned tolerance as sometimes you have to face the things and have to do the work that you don’t like to do. And sitting from 9am to 5:30pm in the bank is itself very tolerating thing to do. I learned the skill to work in the team work that was one of the best experiences. I had to deal with many customers and this is how I learned to improve my communication skills as I had to deal with different people and some were quite difficult to handle but I did it well. It raised my confidence a lot. During my internship I made some mistakes in my work and then my supervisors used to solve those problems and this is how I learned the tactics to solve problems in an effective manner. In short I learned most of the organizational skills and it also made me much conscious about my future and my personality improvement.

This internship also helped in knowing the bank and business terminologies and provided me with the knowledge of Account Opening, Credits, Accounts and Remittance. I learned many terms that I didn’t know before and it improved my practical knowledge. I got to know the importance of this sector and the contribution of this sector in the development of the country.

During my internship I was responsible of receiving the mails that used to come in the bank almost at 10 am. Then I used to put the details on the register and stamped all the received mails. It was completely under my responsibility. Then I used to make deposit slips of the customers. These responsibilities were on daily basis and besides that I worked in the Credits department and there I did all the documentation and compiling of the files. I was given the responsibility of making the Credit Application that was quite confidential and usually they don’t allow internees to make it but they gave me this responsibility and I was much scared in the beginning but then Sir Imran kept on guiding me so I felt relax and completed that work. In Operations I was given responsibilities to fill the Account Opening forms and also I was asked to deal with different customers. I used to call the customers and also received the calls of many customers. I also had to deal with them face to face and satisfy them. In Accounts I was given the responsibilities of reconciliation and Voucher checking as well. At the end of the day I regularly sent mails of the bank to different branches, GEPCO,NIFT, PTCL office and Head Office.

This internship experience has given me the opportunity to meet with many professionals. I had a chance to learn from them and I have tried a lot as well. This will affect my future career plans as I never thought that doing a job is very important but now I think that even the girls must do jobs as it enhances your personality and gives you confidence, makes you independent and most importantly you get a chance to serve your country in anyway. My links with educated and professional people have increased and I can have guidance from them for my future career plans. Besides that I have learned many ways to adjust in the organizations so it would be beneficial for me in my future life.

Professional knowledge is bit different from the bookish knowledge as there is a difference between theory and practical experience. I found my bookish knowledge only in Accounts and a bit in Credits but in account opening and especially in Remittance there was nothing related to my bookish knowledge. But in spite of this fact the importance of bookish knowledge cannot be ignored and in order to be successful one must have bookish knowledge as well as professional and practical knowledge.

Overall my internship experience was a good one and it has helped a lot in utilizing my time efficiently. I believe that this was the support of my team and staff that guided me in the best way they could. This experience showed me the actual picture of professional life and the life out side home. It is not that easy but one’s hard work can make it successful as nothing is impossible in the world and last but not the least that one should keep on moving forward as this life has much to offer.

Conclusion:

A summary of key conclusions derived from the internship experience:

My experience in ABPL was very good in developing my whole personality in a very positive manner. I got to knew that if one desires success in life then he/she has to work hard as the competition is too much tough in the market and you have to be extra ordinary to become a successful person. During my internship I learned punctuality, hard work, confidence and most importantly passion as I am a very straight forward person but in professional life you have to bear many things opposite to your nature. Being punctual is also one of the most important parts of doing a job as it spoils your image and in an organization image building is also very important.

I learned the tactics of being a professional person. I learned to work under pressure and to manage things sometimes with limited resources. This experience made me realize that the world is going very fast and one has to be fast to be in a better and acceptable position. This experience gave me opportunity to meet with different professionals and learn from them the staff of my bank is very experienced and expert in their fields so I had a chance to learn and develop links with such people who can guide me in future as well.

General observation about the sector:

The global economic environment is changing, creating challenges and opportunities for the world’s policy makers. Islamic banking is being much popular throughout the world especially after the recent credit crunch that affected the whole world.

Banks are playing very important role in the economic growth of the country. In the past, banks were used just for the saving purpose but now banks not only save deposits but also provides loans, make investments in different projects and businesses, and so many other facilities like credit cards, debit cards, ATM, Car Ijarah and many more so it has become one of the important sector as it is contributing a lot in the development of the country and affecting its GDP so now it has become impossible to survive without this sector.

ABPL, no doubt is a positive contribution in this perspective. It’s a pioneer in Islamic banking in Pakistan so it has great responsibility to introduce innovative products according to Islamic Shariah. It has now acquired EGIBL so now its shares in the market have also increased and people are expecting a lot from this bank. It must make its strategies in a way that would be beneficial not only for itself but for the customers, employees and society as a whole.



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