INTERNSHIP REPORT
BANKISLAMI PAKISTAN LIMITED
PREPARED BY
SUNBLA MARIA
REPORT
ON
SUBMITTED TO
MA'AM MARIAM ARIF
SUBMITTED BY
SUNBLA MARIA
MBA BANKING & FINANCE
MB2M-21-21
SESSION 2021-2023 (MORNING)
INSTITUTE OF BANKING & FINANCE
BHAHAUDIN ZAKARIYA UNIVERSITY
MULTAN
ACKNOWLEDGEMENT
First of all I would like to take this opportunity to
pay my humble gratitude to ALLAH (SWT), who
enabled and gave me the courage and enthusiasm
to complete this report.
I owe a lot to many people. Without the support
of these helping hands, I would never have
successfully completed the internship as well as
the report. These were continuous prayers and
support of my parents, family and friends that I
am at this stage. Most importantly I would like to
pay tribute to Ma'am Mariam Arif and rest of
IBF faculty, who were an amazing guidance to
complete this report. I owe a great deal, to all
BIPL staff and especially to Mr. M. Raheel
Aslam (CSO) for being a great support
throughout this internship.
My special thanks to:
Mr. Chaudhary Masood Ghani (CSM)
Mr. Ibtihaj Riaz (BDO)
Miss Saima Malik (CSO)
Mr. Shehryar (PBO)
EXECUTIVE SUMMARY
A good banking system plays an important role in development of
country’s economy. The aim of this report is to show knowledge and
observation during my eight weeks (i.e. from 27-06-2022 to 22-082022) of internship at BIPL, shah rukn-e-alam colony, Multan.
During this internship I came to know about some crucial banking
procedures and activities.
This report is divided into different chapters that cover all aspects of
Islamic banking. This report comprises of 6 chapters overall. The
first chapter is about history of Islamic Banking and introduction to
BIPL & its management, products & services, and its departments.
The second chapter consists of my groom and lessons learnt from
this internship. The third chapter of includes the financial analysis
and financial position of the BIPL and where the company stands
financially. The fourth chapter of this report is about SWOT analysis
of BIPL and explanation of the strengths, weaknesses, opportunities
and threats to it. The fifth chapter is about the findings and
recommendations to BIPL. Lastly, the sixth chapter is the annexure,
that has letter of joining and completion.
CONTENTS
Chapter - 01
INTRODUCTION
1.1 History of Banking & Scope of Islamic Banking
1.1.1 History of Banking and its Origin
1.1.2 What is Islamic Banking
1.1.3 History of Islamic Banking
1.1.4 How are Conventional and Islamic Banking Different?
1.2 Background & Scope Of BIPL
1.2.1 History of BIPL
1.2,2 Credit Rating of BIPL
1.2.3 Board of Directors
1.2.4 Shariah Supervisory Board
1.2.5 Mission, Vision & Values
1.2.6 Management of BIPL
1.3 Culture of BIPL
1.4 Products & Services Offered
1.4.1
1.4.2
1.4.3
1.4.4
Syndication & Debt Capital Market (Syndication & DCM)
Project Finance & Structure Finance (PSF)
Equity & Advisory (E & A)
Trustee and Agency Services (TAS)
1.5 Major Competitors
1.6 Departments at BIPL
1.6.1 Credit Department
1.6.2 Operations' Department
1.6.3 Consumer Banking
1.7 Sector Wise Financing of BIPL
1.7.1 Agri-Financing
1.7.2 SME Financing
1.8 BIPL's Unique Selling Point
1.8.1 BIPL's Branch Network Expansion Strategy
1.8.2 One Touch Banking
CHAPTER - O2
GROOMING
2.1 My Internship Experience
2.2 The Department Where I Worked
2.3 Hierarchy Chart of the Branch
2.4 Responsibilities as an Intern
2.5 My Learning Experience at Internship
2.6 Biweekly Reports
2.6.1 1st & 2nd Week
2.6.2 3rd & 4th Week
2.6.3 5th & 6th Week
2.6.4 7th & 8th Week
CHAPTER - 03
FINANCIAL ANALYSIS (2020-2021)
3.1 Banking Industry Outlook
3.2 Financial Performance of BIPL
3.3 Horizontal & Vertical Analysis
3.31 Horizontal Analysis
3.3.2 Vertical Analysis
CHAPTER - 04
SWOT ANALYSIS OF BIPL
4.1 Strengths
4.2 Weaknesses
4.3 Opportunities
4.4 Treats
CHAPTER - 05
FINDINGS & RECOMMENDATIONS
5.1 Short Fall/Weaknesses of Organization
5.1.1 Low Job Satisfaction
5.1.2 Lack of Specialization
5.1.3
5.1.4
5.1.5
5.1.6
5.1.7
Centralization
Lack of Training Facilities
Customers' Unawareness about Charges
Work Life Balance is compromised
Lack of Appreciation
5.2 Recommendations
5.3 Conclusion
CHAPTER - 06
ANNEXURE
6.1 Letter of Joining
6.2 Letter of Completion
CHAPTER - 01
INTRODUCTION
1.1 HISTORY OF BANKING & SCOPE OF ISLAMIC BANKING
1.1.1 History of Banking & its Origin:
In ancient times, the religious temples used to perform all the important activities of a bank
and were developed around third millennium B.C. Perhaps it was the banks that predated the
invention of money; at the beginning the deposits were mostly in the form of grains but
ultimately turned out in the rare metals for e.g. gold, silver etc. Before the concept of banks,
temples were considered the safest place to store the valuables because they were built
strong and safe. During the 3rd century AD., banks in Persia and in a few Persian territories
such as Sassanid Empire, they used to issue letters of credit called Sakks. Since the times of
the Caliphate Harun al-Rashid the Muslim traders were known to have used the Sakk system
which now a days is known as cheque.
1.1.2 What is Islamic Banking:
Islamic banking, also referred to as Islamic finance or Shariah-compliant finance, refers to
financial activities that adhere to Shariah (Islamic law). Two fundamental principles of
Islamic banking are the sharing of profit and loss and the prohibition of the collection and
payment of interest by lenders and investors.
1.1.3 History of Islamic Banking:
The practices of Islamic banking are usually traced back to businesspeople in the Middle
East who started engaging in financial transactions with their European counterparts during
the Medieval era. At first, they used the same financial principles as the Europeans.
However, over time, as trading systems developed and European countries started
establishing local branches of their banks in the Middle East, some of these banks adopted
the local customs of the region where they were newly established, primarily no-interest
financial systems that worked on a profit-and-loss sharing method. By adopting these
practices, these European banks could also serve the needs of local business people who
were Muslim. Beginning in the 1960s, Islamic banking resurfaced in the modern world, and
since 1975, many new interest-free banks have opened. Though the majority of these
institutions were founded in Muslim countries, Islamic banks also opened in Western
Europe during the early 1980s. In addition, national interest-free banking systems have been
developed by the governments of Iran, Sudan, and (to a lesser extent) Pakistan.
1.1.4 How Conventional and Islamic Banking
ARE Different?
One of the primary differences between
conventional banking systems and Islamic banking
is that Islamic banking prohibits usury and
speculation. Shariah strictly prohibits any form of
speculation or gambling, which is referred to as
maisir. Shariah also prohibits taking interest on
loans. Also, any investments involving items or
substances that are forbidden in the Quran—
including alcohol, gambling, and pork—are also
prohibited. In this way, Islamic banking can be
considered a culturally distinct form of ethical
investing.
1.2 BACKGROUND & SCOPE OF BANKISLAMI PAKISTAN LIMITED
1.2.1 History of BankIslami
a. The Idea
The epochal idea of BankIslami was conceptualized by Jahangir Siddiqui & Company
Limited and Randeree family in late 2003. Mr. Hasan A. Bilgrami was appointed as Adviser
to the sponsors on March 16, 2004 to formalize the idea. He presented the concept paper of
BankIslami to sponsors on March 24, 2004. A detailed business plan was then prepared and
a formal application was submitted to the State Bank of Pakistan on May 26, 2004. On
September 26, 2005, Dubai Bank joined the Sponsors and became one of the founding
shareholders of BankIslami by investing 18.75% in the total Capital.
b. Accreditation by State Bank of Pakistan
The State Bank of Pakistan issued a No Objection Certificate in no time on August 19, 2004
and BankIslami Pakistan Limited, the second full-fledge Islamic Commercial Bank in
Pakistan, was incorporated on October 18, 2004 in Pakistan. BankIslami Pakistan Limited
was the first Bank to receive the Islamic Banking license under the Islamic Banking policy
of 2003 on March 31, 2005. The Bank envisioned to focus primarily on Wealth Management
as the core area of business in addition to Shariah compliant Retail Banking products,
Proprietary and Third party products, and Integrated financial planning services.
c. Initial Public Offering of BankIslami
BankIslami Pakistan Limited made a public offering of Rs. 400 Million, at par, from 6th to
8th March 2006. This was the first primary issue by a Bank in over a decade in Pakistan.
The Initial public offering (IPO) of BankIslami received overwhelming response from the
general public as the applications received were 9 times higher than offered, fetching nearly
Rs. 3.5 Billion, against the demand of Rs. 400 Million.
d. ·Inauguration and Network Expansion
The State Bank of Pakistan declared BankIslami Pakistan Limited as a Scheduled Bank with
effect from March 17, 2006. BankIslami started its Banking operations on 7th April 2006
with its first branch in SITE, Karachi. By the end of 2006, the Bank had 10 branches, nine
in Karachi and one in Quetta. The Bank further concentrated in building a nationwide
network and by the end of year 2007; its branch network grew to 36 branches in 23 cities. In
2008, the Bank opened 66 new branches nationwide which expanded its network to 102
branches in 49 cites. By the end of 2014, the Bank has achieved the target of 213 branches
in 80 cities nationwide. This gave BankIslami the distinction of having the fastest expanding
network in Pakistan as well as offering the widest network by any Islamic Bank. On May 7,
2015 State Bank of Pakistan approved the amalgamation of KASB Bank with and into
BankIslami. With this amalgamation all 104 branches of KASB Bank were merged into
BankIslami making it the country’s 11th largest banking network with 317 branches in 93
cities in a short span of 9 years. Currently, the Bank has 340+ branches in 123 Cities of
Pakistan.
1.2.2 Credit Rating of Bankislami
Credit Rating of BankIslami Pakistan Limited issued by PACRA in June 2021.
1.2.3 Board of Directors
BankIslami’s Board of Directors comprises of leading professionals from the industry.
These include Mr. Ali Hussain, Dr. Amjad Waheed, Mr. Haider Ali Hilaly, Dr. Lalarukh
Ejaz, Mr. Tasnim-ul-Haq Farooqui, Mr. Sulaiman Sadruddin Mehdi, Mr. Syed Ali Hasham.
a. Mr. Ali Hussain (Chairman)
Mr. Ali Hussain has over forty five years of professional and managerial experience in both
corporate and private entities. For the past thirty years he has been managing his own global
organizations and international financial investments in the field of technology, medical
electronics and strategic investments with operations in USA, Canada, Singapore, UK and
Germany.
b. Mr. Syed Amir Ali (President & Chief Executive Officer)
He excelled in the ambit of Finance, Treasury, Investment & Corporate Banking throughout
his association with domestic and international organizations i.e. A.F Ferguson & Co,
ShellHe spearheaded corporate and investment group of Meezan Bank before moving to
BankIslami in 2018.
c. Dr. Amjad Waheed (Independent Director)
He is the Chief Executive Officer of NBP Fund Management Limited (NBP Funds),
formerly: NBP Fullerton Asset Management Limited) (NAFA). Before joining the
Company, he had been the Head of Equity Mutual Funds & Portfolios at Riyadh Bank,
Saudi Arabia, Head of Asset Management at NIT, and Chief Operating Officer of FC-ABN
AMRO Equities.
d. Dr. Lalarukh Ejaz (Independent Director)
An academic by profession and an economist by training, Dr. Ejaz is an Assistant Professor
at the Institute of Business Administration, Karachi, since 2003. She has taught and engaged
with learners enrolled in different degree programs such as EMBA, MBA, MS and BBA.
She is also actively involved in research projects and independent researches in the field of
her study.
e. Mr. Haider Ali Hilaly (Independent Director)
Haider Ali has been a principal investor in equities for 20 years. He currently serves as the
Managing Director of Ithaca Capital (Private) Limited, a privately held investment holding
company with a 20 year track record of deploying growth capital in various businesses
across multiple sectors in Pakistan including transportation, leasing, power generation,
outsourcing, armed security, cinemas, vehicle rental, technology, publishing and FMCG.
f. Mr. Sulaiman Sadruddin Mehdi (Independent Director)
Mr.Sulaiman is the CEO of the TPL Development (Pvt) Limited. He has also served as CEO
Cyan Ltd., formerly Central Insurance Company Limited (CICL). In 2011, Sulaiman
orchestrated the business restructuring of CICL (insurance) to Cyan (investments), a
landmark transaction, and the first of its kind in Pakistan. Before Cyan, he has served PICIC
DFI, PICIC Asset Management Company Ltd., Allied Bank (ABL) and ABL Asset
Management Company Limited. He has had the privilege of establishing two leading AMCs
of this country.
g. Mr. Syed Ali Hasham
Hasham is an associate member of the Institute of Chartered Accountants of Pakistan
(lCAP) and holds a Bachelor’s degree in Commerce from the University of Karachi. He has
more than six years of experience in the fields of finance, taxation, auditing, internal control
evaluation, and corporate affairs. He is currently the Company Secretary of Jahangir
Siddiqui & Co. Ltd.
h. Mr. Tasnim-ul-Haq Farooqui
Mr. Tasnimul Haq Farooqui is LLM with Diploma in Banking. He is Fellow Member of the
Institute of Corporate Secretaries of Pakistan and a Certified Director from Pakistan
Institute of Corporate Governance. He has served in one leading Financial Institution and
two Commercial Banks for around 44 years. He retired as Company Secretary & Head of
Legal of a leading Islamic Bank.
1.2.4 Shariah Supervisory Board
a. Mufti Irshad Ahmad Aijaz (Chairman, Shariah Supervisory Board)
Mufti Irshad Ahmad Aijaz is graduated from Jamiat-ul-Uloom Islamiyyah, Binnori Town,
Karachi and obtained his Shahadat-ul-Aalamia (Masters in Arabic and Islamic Studies) from
there. He is actively involved in providing consultation for development of policies and
regulations for regulatory authorities and different Islamic financial institutions. He also
regularly delivers lectures on Islamic Economics and Finance at different forums and
educational institutions.
b. Mufti Muhammad Hussain Khaleel Khail (Member, Shariah Supervisory Board)
Mufti Muhammad Hussain is a prominent scholar in the field of Islamic jurisprudence. He
graduated from Jamia Dar-ul- Uloom, Karachi and obtained his Shahadat-ul-Aalamia
(Masters in Arabic and Islamic Studies) from there. Afterwards, he completed his Takhassus
fil-Iftaa (Specialization in Islamic Jurisprudence and Fatwa) from Jamia -tur-Rasheed,
Karachi. He has been teaching Islamic studies including Fiqh and Fatwa for years.
c. Mufti Syed Hussain Ahmad (Member, Shariah Supervisory Board)
Mufti Syed Hussain Ahmed is a Shariah Scholar carrying good reputation with ample
experience of giving Shariah pronouncements (Fatawa). He graduated from Jamia Darul
Uloom Karachi and obtained from there his Shahadatul Alamia (Masters in Arabic and
Islamic Studies) and Takahssus fil Iftaa (Specialization in Islamic jurisprudence and fatwa).
He is also one of the prominent experts on Islamic Astronomy in the country.
d. Mufti Javed Ahmad (Resident Shariah Board Member)
Mufti Javed Ahmad has completed his Shahadat-ul-Alamia (Masters in Arabic and Islamic
Studies) from Jamia Dar-ul-Uloom, Karachi, and Takhassus fi Fiqh-el-Muamlat
(Specialization in Islamic Jurisprudence of trade and finance) from Jamia-tur-Rasheed,
Karachi. He is also a Certified Shariah Advisor and Auditor (CSAA) from AAOIFI, Bahrain
and Chartered Islamic Finance Professional (CIFP) from INCEIF, Malaysia. He has
completed M.A. Economics from Karachi University.
1.2.5 Mission, Vision & Values
a. Vision
The vision of BankIslami is to be recognized as the leading Authentic Islamic Bank.
b. Mission
The Mission of BankIslami is to create value for our stakeholders by offering Authentic,
Shariah Compliant and technologically advanced product and services. We differentiate
ourselves through:
Authenticity
Innovation
Understanding our client’s needs
Commitment to excellence, and
Fast, efficient and seamless delivery of solution. As a growing institution, the
foundation for our performance lies on our human capital and BankIslami remains
committed to becoming an employer of choice, attracting, nurturing and developing
talent in a transparent and performance driven culture.
c. Core Values
BankIslami is strongly committed towards its core values of:
Product authenticity
Customer focus
Meritocracy
Integrity
Team work
Humility
Innovation
1.2.6 Management of BankIslami
1.3 CULTURE OF BANKISLAMI
As one of the leading Islamic Banks, BankIslami views Islamic Banking not only as a
business but as a mission driven by a deep rooted faith in Islamic values. Accordingly, the
Bank takes pride in taking new initiatives not only for the promotion of Islamic banking but
also for the spreading of Islamic values, culture and traditions through different means. In
line with the above, “Deen Connect” was launched by BankIslami in Feb, 2021 as a
completely free of cost Islamic awareness program aimed at assisting all Muslims – both
customers and non-customers - in connecting with their faith. The underlying intent behind
this initiative is to propagate the teachings of Islam and ultimately to seek the benefit of
Allah S.W.T. Considering that it is an unprecedented initiative in the local banking sector,
Alhamdulillah it so far has received an overwhelming response from customers and noncustomers alike. Under Deen Connect, the Bank offers different courses, webinars, seminars
and workshops which are delivered by authentic Shariah scholars.
1.4 PRODUCTS & SERVICES OFFERED
BankIslami’s Investment Banking offers a full range of the comprehensive, innovative and
uniquely structured customer centric advisory solutions to its clients. After categorizing the
products and services of low, medium and high risk the product is structured on the
guidelines of Shariah.
1.4.1 Syndication & Debt Capital Market (Syndication & DCM)
Medium & Long Term Sukuk
Short Term Sukuk (STS)
Islamic Commercial Papers (ICP)
Syndicated Working Capital Facility
Syndicated Medium to Long-Term Financing
1.4.2 Project Finance & Structured Finance (PSF)
Structured Finance
Project Finance
Project Development Advisory
Bridge Financing
Public Private Partnership (PPP) Projects
Infrastructure Development Projects
1.4.3 Equity & Advisory (E &A)
Initial Public Offering (IPO)
Right Issue
Underwriting Services
Banker to the Issue (BTI)
Mergers & Acquisitions (M&A)
Financial Advisory
Corporate Advisory
Shariah Advisory
1.4.4 Trustee and Agency Services (TAS)
Trusteeship
Investment Agency
Issuing and Paying Agency if ICP
Escrow Agent
Collection Agent
Security Agent
1.5 MAJOR COMPETITORS
Here is the list of competitors of BankIslami, depending on its nature of Islamic Banking:
Meezan Bank Limited
Soneri Mustaqeem Islamic Bank
Dubai Islamic Bank
Al Baraka Bank
Bank Alfalah Islamic
Askari Bank Ltd
MCB Islamic Banking
UBL Islamic Banking
HBL Islamic Banking
National Bank of Pakistan
Bank Al Habib Islamic Banking
Bank of Punjab Islamic Banking
Allied Islamic Bank
Faysal Bank (Islamic)
1.6 DEPARTMENTS AT BANKISLAMI
BankIslami’s branches are divided into different departments.
Credit Department
Operations Department
Consumer Banking
1.6.1 Credit Department
The main purpose of this department is to extend financing to its clients for the productive
purpose. Credit Department is also called Corporate Banking Group. Bank is offering
different type of financing in its branches. This type of financing is based upon Islamic
mode of financing as for example; MUSKUN home financing, Islami Auto Ijara-new
vehicle and same with imported vehicles.
1.6.2 Operations Department
Operations department of the BankIslami is responsible for the overall operations of the
bank, Customer Services Department, Remittance Department, Clearing Department,
Accounts Department etc. all of these come under it.
1.6.3 Consumer Banking
Consumer banking is the Marketing Department of the BankIslami. At BankIslami,
consumers are treated very well. They are of the opinion that customers must be satisfied
with the services provided by the Bank. All of the Branches try to make sure that customers
are satisfied with the services being provided by the Bank.
1.7 SECTOR WISE FINANCING OF BIPL
BIPL has its major share in sectors like Agriculture and SMEs. It promotes financing in
these two sectors because these provide the main chunks of profits to BIPL.
1.7.1 Agri-Financing
This is basically the loan scheme that allows farmers to get loan and promote agri-business.
It offers following following products
Islami Tractor & Equipment Finance
Islami Renewable Energy Finance
Islami Livestock Finance (Dairy, Cattle & Poultry Farming)
Islami Haryali Finance (Land Development & Crop Growing)
Islami Agri. Machinery / Equipment Finance
1.7.2 SME Financing
Small and Medium Sized Enterprises (SMEs) drive economic growth by stimulating
innovation, acting as a competitive spur to existing businesses to increase their productivity
and making a disproportionately large contribution to job creation. BankIslami Pakistan
Ltd (BIPL) is dedicated in supporting SME business with all the products and services
available through its branch banking network. The products and services are offered to
SME clients strictly under Shariah modes.
WC Financing
Term Financing
Trade Financing
1.8 BIPL'S UNIQUE SELLING POINT
1.8.1 BIPL's Branch Network Expansion Strategy
BIPL has a competitive edge over other Islamic & Conventional Banks as their decision to
expand sales in new markets and territories through geographical representation certainly
an amazing way of expanding their market share through physical branch locations. BIPL
is providing its banking services in various remote areas where it seemed impossible to
have any such banking service. On contrary, it has become popular among customers
because of its smooth banking service to the people.
1.8.2 One Touch Banking
BankIslami has been the pioneer of Biometric ATMs since its inception followed by
introduction of cardless ATMs.
This unique proposition focuses on convenience and value innovation which mitigates your
dependency on cards and cheque-books and enables you to perform following transactions
with just a thumb impression.
Chequeless Cash withdrawal
Chequeless Pay order issuance
Funds Transfer
Bills payment
Mobile Top up
Dormant account activation
CHAPTER – 02
GROOMING
In this part of the report, I would be talking about my entire internship experience and the
lessons learnt from it. My internship experience is based on branch banking and my
placement was at BankIslami Pakistan Limited, Shah Rukn - E - Alam Branch (code: 2115).
2.1 My Internship Experience
This period of 8 weeks internship, was a very positive experience that gave me skills and
knowledge. This program helped me to transform as a person and brought immense value to
me in terms of some real life working event. It aided me in collaborating with a bunch of
amazing people from different designations and getting motivated to bring out the best
version of myself. I also learnt how to fuel the motivation that I received, into a productive
lifestyle. Lastly, I experienced becoming a more productive and self-affirmative person and
became aware of all the departments and their functionalities in the banking world, thanks
to this journey.
2.2 The department where I worked
My internship-placement branch has two major departments:
Operations Department
Sales Department
I was hired as a finance intern and worked in operation’s department of the branch. The
main functions in this department includes; providing bank account services, accepting of
deposits, marinating bank’s clearing & settlement accounts and remaining deposit accounts.
This department also provides facilities for interbank transactions to the customers.
I specifically served the deposits' counter
2.3 Hierarchy Chart of the Branch
Mr. Chaudhary Masood Ghani is the Customer Service Manager of the branch who reports
to the Regional Manager. Mr. Shehryar (Personal Banking Officer), Mr. Ibtihaj Riaz
(Business Development Officer), Mr. Muhammad Raheel Aslam (Customer Service Officer)
and Miss Saima Malik (Customer Service Officer) report to CSM of the Branch.
2.4 Responsibilities as an Intern
Being a finance Intern at BankIslami I had to perform various finance tasks and assist to the
operations’ department of the branch. The main responsibilities of my internship involved
preparing cheques, filling deposit slips and processing & archiving of files. Other duties
included the small bank-management activities; as for example welcoming the customers
and guiding them about the bank’s products & services.
Here is the list of key responsibilities:
Filling of deposit slips,
Filling of cheques,
Assistance in scanning of vouchers,
Helping with other small management activities for e.g. giving awareness to the
customers about the products & services of bank and welcoming the customers,
Other tasks that were asked from the supervisor to perform, in line with internship
learning scope.
2.5 My Learning Experience at Internship
Firstly I was taught the basic functions of Islamic Banking through practical approach.
Islamic Banking is an emerging concept in Pakistan. This banking system involves
providing financing services, accepting deposits according to the principles of Shairah.
Difference between conventional banking and Islamic banking, was the second lesson that I
received at this internship. Then I was up-skilled with some basic banking practices like
filling of deposit slips, basis of deposits in Islamic Banking, modes of financing in Islamic
Banking.
Operating of Lockers, Anti-Bribery & Corruption Policy of BankIslami and Account
Opening (LCY/FCY/NR) and Documentation & Opening & Maintenance Matters were
some other lectures that I was acknowledged. Lastly my internship learning experience
involves filling of cheques, assistance in scanning of vouchers, helping with other small
management activities and maintain & archiving of files.
2.6 Biweekly Reports
2.6.1 1st & 2nd Week
1. The first week included the basic insights about Islamic banking which are as follows:
What is Islamic Banking: The first lesson that I was given, was about the nature of
Islamic Banking and how it is emerging in Pakistan. This banking system involves
providing financing services, accepting deposits according to the principles of Shairah.
The Differences between Islamic & Conventional Banking: In Islamic banking are
activities are based on Shariah while in conventional banking the activities are Shariah
non-compliant. Islamic banks use mudarabah basis for the saving deposits while
conventional banks use loan basis that results in interest. When it comes to customers
then Islamic banks do not deal with customers that have the business activity that might
be based on non-shairah compliant while conventional banks deal with every type of
customer.
Basis of Deposits in Islamic banking: There are two bases of deposits in Islamic
banking one is Qard which is also known as loan and the other one is Mudarabah; it is
like a partnership where one partner invests while the other provides his services.
2. The second week was about kick starting a few basic banking operations, which are listed
below:
Modes of Financing in Islamic banking: There are two basic modes of financing in
Islamic Banking that BankIslami follows one is Shirkat which is Islamic form of
partnership and the other mode of financing in Islam is Diminishing Musharakah which
is mix of partnership, lease and sale of ownership share.
Learning to fill a Deposit Slip: Deposit slip is used from every bank for getting the
customer’s money deposited with the bank. In the second week of my internship I was
taught to fill the deposit slip and how these could be different for current and saving
accounts. Deposit slip has the title of the account, account number, amount to be
deposited, name of the depositor, depositor’s CNIC/account number, purpose of the
deposit, signature of the depositor and contact number.
Filling the Account Opening Form (Individual/Joint/Sole Proprietor: This form is
especially designed for individuals. Mostly it is pursued from the traders, sole
proprietor and rest of the small businesses. This form includes the detailed personal
information of the customer as part of the procedure. A customer is asked to give no
fake information. Nature of the account is also chosen while filling this form as for
example minor account, joint account, photo account etc.
2.6.2 3rd & 4th Week
3. In third week of the internship I was taught:
Operating the Lockers: In 3rd week, I had been taught how to operate the lockers and
how their system. BankIslami Pakistan Limited's protected Deposit Locker office
empowers the clients to store their assets in solid intensity safe steel storage spaces with
24 hour security. Be it gems, identifications, share authentications or title deeds, they
can have confidence that their assets are not inclined to misfortune, fire or burglary.
Clients can likewise name/approve their dear and friends and family to work the
Locker. They can carry on with a calm life whereas the bank deals with their resources
while keeping them safe.
4. In 4th week I learned two crucial topics, details of which are covered below:
BankIslami’s Anti-Bribery & Corruption Policy: I was taught how this policy works
and its basic purpose which is to ensure that all valuable open doors on defilement and
any activity corresponding to pay off, irreconcilable situation, misbehavior,
maltreatment of force could be successfully and proficiently tended to; and to ensure
the consistence with all relevant enemy of debasement administrative prerequisites
while directing business.
Account Opening (LCY/FCY/NR) & Documentation & Opening & Maintenance
Matters: My last lesson for this week was about account opening & documentation &
opening & maintenance matters, which included the topics; like:
Introduction to customer & account holder
Purpose & Importance of Account Opening
Classification of Bank Accounts
Current & Saving Accounts
Account Opening & Handling
Minor Account
Illiterate Account
Paradah Observing Ladies Account
Sole Proprietorship Account
Partnership account
Joint Venture Account
Bling & Visually Impaired Person Account
Pensioner Account
Asaan Account
2.6.3 5th & 6th Week
5. The learning of 5th week comprised of filling the cheque,
Filling of cheques: Filling the cheque involves writing the current date; it is mostly
located in the right top corner of the cheque. On second step we have to fill the name of
the payee; it is actually the name of the person or organization to which the payment
would be made through that cheque. Then we fill the amount that would be paid to the
person in numeric form and then writing that same amount in words. Lastly it includes
the signature of the payer in the right corner at bottom of the cheque.
6. In 6th week I learnt scanning the vouchers,
Assistance in scanning of vouchers: This responsibility involved helping in scanning
of banking receipts and vouchers. As the number of daily transactions increase the need
for scanning the vouchers increases accordingly. This duty included the photocopying
and scanning of the vouchers that are basically the proof of transaction made in a
specific period of time.
2.6.4 7th & 8th Week
7. In 7th week of my internship I was taught some basic management activities,
Helping with other basic management activities: This responsibility included giving
awareness to the customers about the products & services of bank and welcoming the
customers. This involved telling customer about what type of account would be suitable for
them depending on their needs, telling the customer about the type of loans that BankIslami
provides and assisting the supervisor with any type of help in accordance with the nature of
my internship.
8. The 8th and last week of my internship was about learning the BIPL CDD measures
BankIslami’s approach to CDD Measures: I was taught what CDD measures are to be
adopted in different situations for e.g. for establishing the business relationship, money
laundering & terrorist-financing and proliferation financing. Then I was given insight
on topics like; associated risk in case of non-compliance, risk matrix, non-cooperative
Jurisdictions, issues related to account opening, dormant account, third party mandate
(TPM), Deceased account and account disclosure.
CHAPTER – 03
FINANCIAL ANALYSIS (2020-2021)
Financial analysis is the process of evaluating businesses,
projects, budgets, and other finance-related transactions to
determine their performance and suitability. Typically,
financial analysis is used to analyze whether an entity is
stable, solvent, liquid, or profitable enough to warrant a
monetary investment.
Rs in Million
3.1 Banking Industry Outlook
With the uptick in economy of Pakistan, Banking sector has posted stable growth during
CY2021 (Jan to Dec). When compared with Dec 2020, deposits of banking industry grew by
17.3% while financing rose by 19.4% on account of increased economic activity during the
period. Stability in policy rates during first nine months; supportive budgetary measures
and injection of potent stimulus in shape of Covid-19 related packages have remained
instrumental in enhancing the credit off take. Likewise, investment book of banking
industry also depicted increase of 22.3% during the period under review. With introduction
of additional tax levy by the Government on banks having gross ADR (Advances to Deposit
ratio) lower than 50%, growth in both private and public sector financing will continue to
be the mainstay of earning assets for the banks. Moreover, this may lead to fierce
competition amongst banks with regards to pricing their credit offerings to large corporate
and public sector entities. On the liability side, deposits are also anticipated to grow as the
apex authority has somewhat shifted its stance towards monetary tightening via gradual
increase in benchmark rates to encourage savings as opposed to lavish spending.
Nonetheless, with this trend of growth, mobilization of deposits is expected to remain
skewed towards high yielding remunerative deposits instead of non-remunerative products.
While non-performing financing tally of the banking industry has increased from Rs. 829
Bn in Dec 2020 to Rs. 860 Bn in Dec 2021, infection ratio has improved from 9.8 percent in
Dec 2020 to 8.5 percent in Dec 2021, mainly due to overall growth in the financing book.
However, with rising trend in policy rate and KIBOR, increase in delinquencies appears to
be more imminent in the year 2022. Profitability indicators of banking industry remained
subtle during 9M 2021 where local commercial banks witnessed growth of 6% during 9M
2021. This was largely due to shrinking spreads on account of lower yield on earning assets
vis-à-vis same period last year. However, this trend is expected to reverse in the coming
quarters due to potential upside in net margins on account of favorable repricing of floating
rate assets linked with KIBOR and PKRV. It is pertinent to note that in the rising interest
rate scenario, profitability of banks may remain under pressure in short-run due to time-lag
in repricing of assets. On the capital adequacy side, majority of banking companies are
expected to remain compliant as the regulator has reduced the minimum solvency
requirement from 12.5% to 11.5% to allow banks to absorb expected increase in credit risk.
This relaxation may also continue in the year 2022
3.2 Financial Performance of BIPL
Explanation
As at December 31, 2021, total assets of the Group rose by 20.9% when compared with
total assets as at December 31, 2020. Growth in the financial position of the Group mainly
ensued from growth in Deposits and Earning Assets of the Islamic Banking segment. On
account of downward reprising of assets since 4Q 2020, net spreads earned by the Group
reduced during FY2021 when compared with FY2020. However, the Group still reported a
PAT of Rs. 2,060 Mn for FY2021, up by 31.4% when compared with PAT of Rs. 1,568 Mn
for FY2020. This was mainly attributable to (i) decline in provisioning charge of the book
due to reversals booked against non-performing financings, (ii) settlement of dispute related
to owned property, and (iii) increase in profit from associated entity based on recovery in
demand for branded dairy products during post lockdown period. During the year ended
December 31, 2021, the Group successfully completed the sale transaction of its two
subsidiaries which were classified as ‘Non-Current Assets held for sale’, namely, BIPL
Securities Limited and BankIslami Modaraba Investments Limited. As a result, these
entities have now ceased to be part of the Group.
3.3 Horizontal & Vertical Analysis
3.3.1 Horizontal Analysis
Horizontal analysis is an approach used to analyze financial statements by comparing
specific financial information for a certain accounting period with information from other
periods. Analysts use such an approach to analyze historical trends.
Trends or changes are measured by comparing the current year’s values against those of the
base year. The goal is to determine any increase or decline in specific values. A percentage
or an absolute comparison may be used in horizontal analysis.
Horizontal analysis can also be compared with vertical analysis. Whereas vertical analysis
analyzes a particular financial statement using only one base financial statement of the
reporting period, horizontal analysis compares a specific financial statement with other
periods or the cross-sectional analysis of a company against another company.
3.3.2 Vertical Analysis
Vertical analysis is a method of analyzing financial statements that list each
line item as a percentage of a base figure within the statement. The first line of
the statement always shows the base figure at 100%, with each following line
item representing a percentage of the whole. For example, each line of an
income statement represents a percentage of gross sales, while each line of a
cash flow statement represents each cash inflow or outflow as a percentage of
total cash flows.
Using percentages to perform these financial analytics and comparisons makes
the data you gather more meaningful and easier to understand. Because the
vertical analysis method uses percentages to represent each line item, you can
proportionately compare a company's relative account balances to those of
another company or the company's industry average regardless of whether the
total sales for the other company or industry average are higher or lower than
the company you are analyzing.
When you want to perform a vertical analysis on a financial statement that
does not already show each line item as a percentage, you can find the
percentage of each line item by dividing the line item amount by the base
figure and multiplying the resulting dividend by 100.
CHAPTER – 04
SWOT ANALYSIS OF BIPL
Due to globalization and management studies now organizations cannot survive until they
compete with their surroundings than internationally. SWOT analysis is the kind of tool
which is used to analyze the organization’s performance in relation to its internal and
external environment strength; weakness, opportunities and threats face by BIPL are as
follow.
4.1 Strengths
It has a competitive advantage of doing less marketing as compassed to conventional
banking and as a result better compassed cost control.
For speculative motive less money is used due to which there is reduction in volatility
in investment and chances of investment failure.
It is feasible location wise and geographically.
To attract new customers and retain potential customers by beginning innovative
products and service like BIPL offers e-banking, phone banking etc.
As BIPL was made on name of Islam in Pakistan so, it has advantage of religious
position in a country.
Saving can be mobilized and increasing deposits of banks using as charities and zakat
fund schemes etc.
4.2 Weaknesses
To complete with conventional banks a lot of capital is required and large amount of
recourses have to maintain to meet any loss situation in Islamic finance modes of
investment.
To do job efficiently and serve Islamic financial services, training is required for
improving skills of management and staff.
Staff of BIPL is less experienced and young.
Main weakness of BIPL is lack of specialization i.e. employees are rotated from one job
to another job of totally different characteristic.
4.3 Opportunities
Bank van also concentrate on the relatively untapped market in Islamic agri-products as
well as Islamic SME products.
4.4 Threats
Market demand is less as compared to conventional interest based banking.
After 9/11 attacks on WTC environment of Islamic banking in west has declined.
For implementation of Islamic banking a lot of legislation is required especially in nonMuslim countries.
Increasing competition in Islamic banking sector.
Poor economic condition of country.
CHAPTER - 05
FINDINGS AND RECOMMENDATIONS
5.1 Short Fall / Weaknesses of Organization
According to my observation, it is pointed out that
there are some short comings in this branch.
5.1.1 Low Job Satisfaction
It is becoming clear that the true lasting competitive
advantage comes through human resources and how
they are managed. BIPL is not focusing on this critical
issue as the job satisfaction level of the employees
working at BIPL, was quite low.
5.1.2 Lack of Specialization
The employees are constantly rotated from one job to
another that is totally different in nature and they do
not have know-how of the working in other unrelated
departments. But I think this is not a very good tactic
used by the management. Otherwise the situation
might be like, ‘Jack of all and master none’.
5.1.3 Centralization
There is a high degree of centralization in the bank.
Almost all the decision-making is in the hands of the
upper management. But centralization is effective up
to a certain level otherwise it becomes inefficient and
and at times costly too. I personally observed that delay occurred in operations of the bank
only due to the fact that they had not gotten any instruction from the head office.
5.1.4 Lack of Training Facilities
Currently there are no specific training program arrangements for the new recruiters. They
have to learn based on their own observations and also from their mistakes. It takes a bit
time for the freshers to learn the banking the result is huge amount of blunders, mistakes
etc.; resulting in monetary and non-monetary losses for the bank. There is pressure not only
on the new learners but also on the person placed upon their scrutiny.
5.1.5 Customers’ unawareness about charges
Mostly customers are unaware about charges for DD, TT, PO etc. so manager should tell
them charges before giving form to fill, through this time wastage could be minimized.
5.1.6 Work life balance is compromised
Employees are overburdened, so their work life balance is compromised. Due to high work
load efficiency of employees is affected.
5.1.7 Lack of appreciation
Sometimes bank ignores the good performance of employees. If hard work of employees is
not recognized from their supervisor then they might get disheartened and would lose
interest in their work.
5.2 Recommendations
It was an interested experience to do internship in BankIslami Pakistan Limited. The staff
was very cooperative and due to their help I learned big deal about modern banking. I
suggest that such an internship program is highly integrative for the students of business
education so the students should be inquired with the knowledge of practice world .I do
summarize that it would be of a great help for me in selection of further jobs that I might be
pursuing in the future.
Here I am listing some suggestions, which would enable the bank to compete with other
banks more effectively & efficiently,
It is observed that the employees were overburdened so they have to stay at branch till
late at night. In this way their efficiency is affected and hiring more employees can
reduce their work.
The employees should be assigned jobs for specific period and then they should be
rotated to other department so that they would gain more knowledge and experience.
BankIslami should properly advertise and communicate to public about the services
provided by it, so that more customers would be attracted.
The bank’s management should give more incentives and pay scale of officers should
be revised & improved.
System and operations should be more defined and organized.
Administration drawbacks should be improved by the strict control of general issues.
Expenditures must be control, which are very high.
BankIslami has not strong position in market. So BankIslami should do heavy
advertisement both electronically and print media to create public awareness.
Branch manager should also arrange training programmers for existing employees to
improve their performance.
Proper distribution of work should follow to run the organization in smooth way.
There should be a complaint box in bank for hearing complaints of customers because
most of the people feel hesitation to go to manager for complaint.
IT department should be establishing in order to maintain connection with other banks.
5.3 CONCUSION
The aim of this internship was to implement the knowledge I have gained during my MBA
to real working events and to gain some practical experience of working on projects. By the
grace of Almighty Allah I have gained what I aimed to get from that internship. This was
an extremely pleasant experience for me and I got to learn the actual organizational
structure and how the work is being done in banking organizations. Also I got opportunity
to implement the concepts I gathered in different courses I studied while my MBA to this
internship and by working with highly experienced personnel from BIPL helped me in
building my confidence on my skills and knowledge. In short this internship evolved a new
motivation in me and now I am able to look the things in holistic way.
CHAPTER - 06
ANNEXURE
6.1 Letter of Joining
6.2 Letter of Completion