3. INTERNSHIP REPORT 2012
Report Date: 12th
November, 2012
Preface
This report documents the work done during the internship at Burj Bank,
Hyderi branch, Pakistan under the supervision of Muhammad Rizwan
Ullah, (Branch Manager). The report first shall give an overview of the
tasks completed during the period of internship with technical details.
Then the results obtained shall be discussed and analyzed.
Report shall also elaborate on the future works which can be persuaded as
an advancement of the current work.
I have tried my best to keep report simple yet technically correct. I hope I
succeed in my attempt.
SANA AHMED
4. INTERNSHIP REPORT 2012
Acknowledgement
All praise to Almighty Allah, the most merciful and compassionate, who
give me skills and abilities to complete this report successfully I am grateful
to my parents who are always been a source of encouragement for me
throughout my life and from start to the end of this report I feel deeply
indebted to all my teachers for provision of inestimable, priceless and
valuable cooperation and support. I would also like to thanks Burj Bank
Limited for provision of valuable guidance and information. I found every
one very co-operative and helpful for providing me the theoretical as well
as practical knowledge about the function and operation of the bank. Last
but not least I would prefer to convey the credit to Authorities without
whose on time support and guidance it would be difficult for me to achieve
this task successfully.
SANA AHMED
5. INTERNSHIP REPORT 2012
Abstract
The report presents the tasks completed during this internship at Burj
Bank, Hyderi Branch which is listed below:
1. Account opening;
2. Remittances;
3. Clearing.
All these tasks have been completed successfully and results were
according to expectations.
As Burj Bank is performing all these functions in a proper manner
according to their segmentations in their respective departments and these
functions make it possible for Burj Bank to have a bright colored future as
it's shown by its text/image as per logo.
Beside all these tasks there is a summary of introduction and the
organizational overview.
6. INTERNSHIP REPORT 2012
Executive Summary
Banking has always been the main field of interest for most of the students
of business. It is also an academic requirement to undergo internship
therefore the main purpose behind this report is partial fulfillment
of requirements, for the certification of ACCA. The objective is that report
encompasses the experience of mine, learning, and analysis. In light of
which recommendations are made. In the first chapter of introduction to
the report, background of study, scope of the study and merits of the study
are given. The second chapter is about introduction to the organization, its
historical background, how it came into being, what the major reasons
behind it were and what areas of banking it covers. Corporate profile of the
bank consisting of Board of Directors, Audit committee and legal advisors.
The organizational structure of Burj Bank LTD, its core values, financial
highlights all are provided ,What procedures are used to receipt and pay the
cash, what kinds of Cheaques are used by the customers to draw money?
Then in advances department the types of advances given to different types
of customer are discussed. And then finally the clearing procedure is
discussed in this chapter. For the management to know the financial
condition, strengths and weaknesses so that it can take appropriate
corrective actions. The management should know the weak areas and
should develop elaborate plans for capitalizing on the available
opportunities.
7. INTERNSHIP REPORT 2012
Chapter 1: Introduction to Study
1.1 Back ground of studies
As part of the course out line of ACCA (Association of Chartered Certified Accountant) students are
required to undergo 6 weeks of internship with an organization. The internship is to serve the purpose of
acquainting the students with the practice of knowledge of the discipline of business administration. This
report is about Burj Bank. Burj Bank was established in 2006and since then, it has expended its network,
becoming the Islamic Bank of the country. It offers different products of services to its customers.
1.2 Purpose of the studies
The main of the study in hand is together relevant information to compile internship report on Burj Bank
LTD:
1. To observe, analyze and interpret the relevant data competently and in a useful manner.
2. To work practically in an organization.
3. To develop interpersonal communication.
4. This report is an essential and academic requirement for the fulfillment of the degree.
5. To what extent the practical things differ from the theory.
6. To analyze the activities performed by the bank during the internship.
1.3 Research Methodology
The report is based on my two months internship program in Burj Bank, Hyderi Branch. The methodology
reported for collection of data is primary as well as secondary data. The biggest source of information is my
personal observation while working with staff.
1.3.1 Primary data:
Personal observation Interviews of staff Staff at night position in bank Staff at circle office.
1.3.2 Secondary data:
Manuals Journals Magazine Annual reports.
1.4 Scope of studies
As an internee in Burj bank the main focus of my study research was on general banking procedures in one of
the branches of Burj Bank. These operations include remittances, deposits, and to small extent foreign
exchange and advances. Similarly different aspects of overall of Burj Bank are also covered in this report.
1.5 Merits of the study
This report proves beneficial to all the finance students because it almost contain all the information about
the finance department of Burj Bank LTD. So one can easily understand to what extent the theory is different
from practical implications.
1.6 Limitation of the study
8. INTERNSHIP REPORT 2012
The report does not contain all the facts and figures about the area under study due to certain limitations.
Most of the data related to financial practices is confidential. And that’s why access to that information was a
difficult task. Another factor is the time limitations. As the internship is
Of 6weeksthat’swhysomuchtimetostudyallaspectsanddetailshaven’t.Despiteofthesethereportencompassesallthe
information required.
Chapter 2: Introduction to Banking & Burj Bank Ltd
2.1 Introduction:
Banks play very important role in the economic life of the nation. The growth of the economy is closely
related to the soundness of its banking system. Although banks create no new wealth but they borrow,
exchange and consume wealth. In this way, they become very effective partners in the process of economic
development. Modern banks are very useful for the utilization of the resources of the country. The basic role
of the banks is to encourage the habit of savings among the people and to mobilize these savings for the
investment purpose. Banks deposit surplus from the public and then advance these surplus in the form of
loans to the industrialists, agriculturists, businessmen and unemployed people under different schemes so that
they set up their own business. Thus banks help in capital formation. If there are no banks, then there would
be concentration of wealth in few hands and the great portion of capital of the country would remain idle. In
the fewer developing countries rate of saving is very y low and due to this, rate of investment and rate of
economic growth remains very much low. We can take bank just like a heart in the economic structure and
the capital provided. By it is like blood in it. As long as the blood is in circulation, the organs will remain
sound and healthy. If the blood were not provided to any organ then that organ would become useless. So if
the finance is not provided to agriculture sector or to industrial sector, it will is destroyed .Loan facility
provided by the bank works as an incentive to the producer to increase production. Banks provide transfer
of payment facility, which is cheaper, quicker, and safe. Many difficulties in the international payment have
been overcome and volume of transactions has been increased. These facilities are very much helpful for the
development of trade and commerce.
2.1.1 Banking Industry in Pakistan
Banking is one of the fastest growing industries but it is one of the most sensitive businesses all over the
world. Banks play very important role in the economy of a country and Pakistan is no exemption. Banks are
custodian to the assets of the general aliases. In our lifetime, we use plenty of banking products that were
previously not available to the ordinary person. Most of us have Credit cards, loans, and we have the
insurances. This has banking a much more competitive Industry and we have the right to expand great
services for our customers. The banking sector plays a significant role in a contemporary world of the money
and economy. It influences and facilitates many different but integrated economies activities like mobilization,
poverty elimination, production and distribution of public finance. If it is purchasing a car or building a
home; banks are always play there are serve better. It is play ground or any educational or healthy societal
activity the money of banks nurtures them. In an industrial project or agricultural development of the country
the sponsor -ship of banks is very much involved. Banks play very important role in the overall economic
development of the country. Pakistan Banks Association (PBA) represents the Pakistan Banking Industry.
Established in 1953, its main objectives are to coordinate the efforts of the banking industry, and to share
common vision of progress and development with its members. Pakistan has a well-developed banking
system, which consists of a wide variety of institution ranging from central bank to commercial banks and to
specialized agencies to cater for special requirement of specific sectors. The country started without any
9. INTERNSHIP REPORT 2012
worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it
acquired a flourishing banking sector.
2.1.2 Growth of Pakistan’s Banking Industry
Pakistan is a developing country and in the recent year the banking industry in Pakistan has been
transformed from state owned sector to vibrant sector industry. Banking industry has not only gained
strength from positive inter play of economic and political factors also become an engine of growth for
economy. Growth of SME’s in Pakistan is increasing at very rapid pace.
SME’s constitute 90% of business in Pakistan. SME’s represents a significant component of Pakistani’s
economy in term of value. Domestic banks are 7301 and Foreign Banks are 105 Banks in year 2005? Strong
monitoring and credit control measures has been made by SBP. There are weak Functional strategies within
and among financial institutes, like co-ordination, communication. There is a lack of system to solve the
banking crises. The challenge facing the financial sector is transforming the existing interest based system into
Reba free system. The Supreme Court of Pakistan has given its verdict and also set the deadline, June 30,
2001, for completing the transformation according to Islamic Conjunction (Sharia’h). In 2007 economic
recession all over world affects all business sectors including banking sector. Therefore growth of banking
sector slow due to economic recession and challenges like terrorism as compared to past years.
2.1.3 Banking Law in Pakistan
All banks are following a certain law, and they are working under the Banking ordinance 1962 and controlled
by State Bank of Pakistan.
2.1.4 State Bank of Pakistan (Central Bank)
The guiding principal of State Bank which is the central bank of Pakistan is that, it acts only in the public
interest and for welfare of the community as a whole and without regards to profits a primary consideration.
As all the banks are following the defined set of rules and procedures (SOPS) standard operating procedures,
same as Burj Bank LTD limited is also doing so while dealing with accounts, cash, remittance, clearing,
finance, auto loans etc. as if any one doesn’t follow the rules then future of the bank can be in wild darkness.
2.2 Banks in Pakistan:
There are three types of banks, serving in Pakistan as; Government banks, Private Banks, and Foreign banks.
2.2.1 Government banks:
The period of 1990s took a revolution in the sectors of privatization, deregulation and restructuring in the
domestic banking industry and financial institutions. The Muslims Commercial Bank was the first bank to
privatize. One good thing for the particular period was the recruitment of the fresh officers in the domestic
banking industry through well- organized policies of the Banking Council. Government banks include;
National Bank of Pakistan (NBP)
FirstWomenBankLimited(FWB)
TheBankofPunjab(BOP)
The Bank of Khyber (KM)
2.2.2 Private Banks:
The Government of Pakistan per mitted small private sector banks to operate, which indulged in doubtful
policies to promote business. These banks include;
AlliedBank
10. INTERNSHIP REPORT 2012
PICICCommercialBankLimited
MuslimCommercialBankLimited
United Bank Limited
Bank Al-Falah Limited
Union Bank Limited
Askari Commercial Bank Limited
My Bank Limited
Saudi Pak Bank Commercial Limited
Bank Al Habib limited
2.2.3 Foreign Banks
Due to the policies by Pakistani Government, many foreign banks are getting influenced and started entering
into the business in Pakistan, as the economic condition and SOPS by bank and Pak government is favorable
for new entrants but this has reduced the profitability of the local banks. Foreign banks include;
CitiBank
Standard Chartered Bank
Hong Kong Shanghai Banking Corporation (HSBC)
Dubai Islamic Bank
All the foreign banks of the country are busy to invest heavily in the field technology and e- commerce in
order to overcome branch limitation. All the domestic and foreign banks vigorously institutionalizes
consumer financing in the country and earned handsome profits.
2.3 Introduction to the Burj Bank LTD:
Islamic banking has been defined as banking in consonance with the thousand value system of Islam and
governed, in addition to the conventional good governance and risk management rules, by the principles laid
down by Islamic Sharia’h. Interest free banking is a narrow concept denoting a number of banking
instruments or operations, which avoid interest.
2.3.1 Competition Situation:
Burj Bank LTD is the Joint venture project of 6 groups with, namely Bank Alkhair, Islamic Corporation for
the Development of the Private Sector (ICD), Mr. Azam Essof Kolia, AL Safat Investment Company,
Gargash Enterprises (LLC), Sheikh AbdullahMohammad Al-Romaizan. Irrespective of stiff competition in
the market the Bank has successfully managed to grow overduring lasts few years and all set to be Online
Branches Network by the year end 2011.The same was achieved by the existing largest player in the Islamic
Banking Industry Meezan Bank in 6 years’ time at December 2007. Burj Bank LTD has become a hallmark of
innovation and bringing new products and services in the market.
2.3.2 History Burj Bank LTD:
Burj Bank Limited, formerly known as Dawood Islamic Bank Limited
(DIBL) is Pakistan's sixth full-fledged Islamic commercial bank. The bank received its license from the State
Bank of Pakistan in May 2006, and officially commenced its operations on Friday, April 27, 2007. The Bank
was the result of an initiative of the First Dawood Group, with the Islamic Corporation for the Development
of the Private Sector (ICD) in Jeddah, Unicorn Investment Bank in Bahrain, Al SafatInvestment Company in
11. INTERNSHIP REPORT 2012
Kuwait, Gargash Enterprises (LLC) in Dubai, the Singapore-based entrepreneur Azam Essof Kolia and
Shaikh Abdullah Mohammad Al-Romaizan, an entrepreneur from the Kingdom of Saudi Arabia. In July
2011, the bank was renamedBurjBankLtd.Prof. Mufti Munib-Ur-Rehman is heading Sharia’h Department of
the Bank as the bank’s Sharia’h advisor. It currently has 50 online branches. Burk Bank has a diversified
range of Sharia’h Compliant funded and non-funded products and services aimed at both individual and
corporate customers. The bank also offers investment and corporate advisory services.
2.4 Vision:
To be Islamic Bank of choice.
2.5 Mission:
Provide Innovative and efficient Islamic banking solutions to exceed customer expectations and optimize
shareholder value.
Defining Values
Values that define our culture, our business, our processes and who we are.
Purity
Purity encompasses essential business values for Islamic banking such as purity of return and truthfulness of
character / actions
Integrity
Integrity is the essential value of banking, particularly Islamic Banking; it reflects honesty and clarity within
our communication, processes and our business dealings.
Progressive Values
Values that will take us forward and reflect an enduring commitment to growth and progress.
Passion
Passion reflects a winning attitude, an obsession with our profession, delivery of highest levels of customer
services and an over whelming strive towards excellence.
Devotion
Devotion indicates the need for hard work, consistency, perseverance & a commitment towards the
organization, its customers and all its stakeholders.
2.6 Structure of Burj Bank LTD: Board of Directors
Mr. Ahmed Khizer Khan President & CEO
Mr. Khalid Mohammad Al- Aboodi Chief Executive Officer
Mr. Basheer A. Chowdry Managing Director
Mr. Nicolas E. Martin Managing Director
Mr. Azam Essof Kolia
Mr. M Jamil A. Qureshi
Mr. Adel Yousef
Mr. Shehab Gargas
2.7 Sharia'h Supervisory Board:
Prof. Mufti Munib-ur-Rehman (Sharia’h Advisor)
Mufti Syed Sabir Hussain (Sharia’h Coordinator – Compliance)
12. INTERNSHIP REPORT 2012
Mufti Syed Zahid Siraj (Sharia’h Coordinator - Audit)
Chapter 3: Product, Services & Department
3.1 Introduction:
Burj Bank ltd, Hyderi branch is in main commercial area;alsoBurjBankltdhistoryisnottoomuchold.It’sall about
to 5 to 6 year old. The organization of Burj Bank ltd Hyderi Branch is a complete banking system but it is
covering modern technologies like ATM. This banking system is collection of interrelated departments that
works together to achieve the objectives of the organization. Burj Bank ltd is a hierarchical system in that it
includes other sub departments and these are integrated to work together. In the internship of six weeks I
have worked in different departments to see how they are functional.
Figure 3.1 BURJ BANK Ltd branch organizational Structure:
Clearing Department
Remittances Department
Operations Manager
Account Opening
Cash Department
Department Bills
3.2 Departments:
Burj Bank LTD Hyderi Branch divided into different departments.
Credit Department
Operations Department
Consumer Banking.
a) Credit Department:
The main purpose of this department is to extend loans to its clients for the productive purpose. Credit
Department is also called Corporate Banking Group. Bank can offer different type of financing in their
branches. This type of financing are based upon Islamic mode of financing. Islamic Auto Ijra-new vehicle and
same with imported vehicles.
b) Operations Department:
Operations department of the Burj Bank LTD is responsible for the overall operations of the bank,
Customer Services Department, Remittance Department, Clearing Department, Accounts Department, etc.
all come under it.
c) Consumer Banking:
Consumer banking is the Marketing Department of the Burj Bank LTD. At Burj Bank LTD, consumers are
treated very well. They are of the opinion that customers must be satisfied with the services provided by the
13. INTERNSHIP REPORT 2012
Bank. All of the Branches try to make sure that customers are satisfied with the services being provided by
the Bank.
Burj Bank LTD accounts are same as other commercial banks accounts but in some accounts they can offer
Islamic mode transactions. Accounts are given below.
3.2.1.1 Nature of the deposits
Bank deposits can be broadly classified as:
Burj Business Account
Burj Smart Saving
Burj Monthly Income Account
Burj Term Deposit Certificates
Burj PLS Saving Account
Burj Current Account
A. Burj Business Account:
Open Burj Business Account to meet the requirements of your fast growing business. Burj Business Account
is especially designed to meet the requirements of the businessmen in a Sharia’h compliant manner. With Burj
Business Account enjoy free of cost banking services and liberty to make unlimited transactions whenever
required
Following complimentary services are offered:
Pay Order / Demand Draft
CheaquesBook
ATM Card
Bank Statement
Intercity Clearing
Online banking
B. Burj Smart Saving:
Burj Smart Saving is a unique Sharia’h compliant savings account that gives you Halal profit on your savings
while offering you the liberty to make unlimited transactions, anywhere anytime.
Soit’sabouttimeto opt for the best and the most convenient account because only Sharia’h leads to prosperity.
Features & Benefits:
Attractive profit rates. (Tier based)
Profit calculated on daily basis with monthly payout.
Unlimited number of transactions free of charge.
Additionally, you enjoy the following free services:
ATM Card
CheaquesBook
14. INTERNSHIP REPORT 2012
C .Burj Monthly Income Account:
Why invest your money elsewhere when Burj Bank is offering the most attractive profit rates for those who
are interested in saving their hard earned money and reap handsome income every month in a Halal manner.
Features & Benefits:
Most attractive profit rates
Minimum investment amount as low as PKR 25,000/-
Investment term ranging from 3 Months / 6 Months/ 9 Months/ 1 Year / 3 Years / 5 Years
Profit paid out monthly
Pre-mature withdrawal facility available
You can also avail our online banking and SMS alert facilities available in all branches nationwide
terms & conditions apply
D. Burj Term Deposit Certificates:
Why invest your money elsewhere when Burj Bank is offering the most attractive profit rates for those who
are interested in saving their hard earned money for a longer period of time and reap handsome income every
month, in a Halal manner.
Features & Benefits:
Minimal initial investment amount.
Flexible tenures ranging from 7 days / 1 month / 3 month / 6 month / I year / 3 years and5 years
Profit paid out monthly / quarterly / semiannually or at maturity
Attractive profit rates
Pre-mature withdrawal facility available
E. Burj PLS Saving Account:
Burj Bank is offering attractive profit rates in its Savings products based on deposit tiers and at the same time
allowing customer to make transactions on his account without any limits.
Features & Benefits:
Attractive tiered profit rates.
Profit calculated on daily basis with monthly and half yearly payout.
Unlimited number of transactions free of charge.
Free online banking.
Unmatched services available at Burj Bank branches present nationwide.
F. Burj Current Account:
Current Account provides safety to your hard earned money with liberty to make unlimited withdrawals
through Cheaques or ATM card and enjoy suite of value added services facilitating yourself in managing your
account. Current Account is based on the Islamic principle of Qard, whereby bank is liable to pay back your
money on demand and invest it in purely Sharia’h compliant avenues.
Current Account Features & Benefits:
No minimal balance requirement;
Account can be opened in PKR, US$, GBP and EUR;
No restriction on number of transactions and withdrawals;
Availability of free of charge ATM Card/Debit Card;
15. INTERNSHIP REPORT 2012
Free of charge access to Burj online banking;
Free internet banking service including free funds transfer within Burj Bank branches.
3.2.1 Kinds of Products:
Accounts can be classified in the following types:
Individual accounts
Joint accounts
Partnership accounts
Minor accounts
A. Individual Accounts:
Individual accounts are the account, which is opened and operated by a single person. Before opening the
account bank sees proper identity
And introduction of the individual. Individual’s instructions are strictly observed in operation of the account.
B. Joint Account:
Two or more persons who are neither partner s nor trustees can open this type of account. At the time of
opening account specials instructions are taken by the account holders that who is going to operate the
account they are asked whether it will be operated singly or jointly and to whom the balance will be
transferred at the death of an account holder on the basis of either or survival. If the joint account holder
wishes to delegate their authority to operate on the account to an outside party all the joint parties should sign
this authority.
C. Partnership Account:
Partnership accounts are opened in the name of the business e.g. M/S ABC Electronics etc. for opening of
this account a partnership deed NIC required. Bank staff acquires special instructions by all partners for the
operation of the account. Partnership account can only be opened in the form of a current account.
D. Minor Account:
The contract act 1872 has disqualified a minor from entering into a contract except the one for his necessities.
According to Pakistan Law a person is regarded as a minor until he has attained the age of 18 years. However
under section 3 of majority act 1875 if a competent court of law appoints a guardian of his person or property
before his 18 years the majority extends to the age of 21 years. Bankers in Pakistan have allowed the opening
of minors account only with the idea of inculcating in them the habit of saving. So guardian requests in the
name of the minor for opening of an account. There are other accounts, which are called specialized
accounts. These are given below:
Joint stock account;
Accounts of clubs;
societies and associations;
Agent accounts;
Executors and administrators accounts;
Pak rupee non-resident account.
3.2.2 Procedures for account opening:
In order to operate an account with the bank, a customer has to open an account. In large branches Grade 1,
II or III officers is made responsible for opening new accounts. However in small branches, the manager
himself fulfills all the formalities for opening new accounts. It is necessary because in case of fraud
unintended over draft, or negligence, the bank will have a source to trace out the customer. Such source is
16. INTERNSHIP REPORT 2012
established by asking the customer to bring an existing customer of the bank that will introduce him to the
bank. In order to protect against losses resulting from fraud or unintended overdraft the account opening
activity has been formalized through certain steps. These steps include:
Formal Application:
Customers are required to fill in the prescribed account opening form, which the bank provides to the
customers free of cost. In this basic information about himself is provided by the customer like his name,
address, occupation and nature if account he wants to operate.
Obtaining introduction:
Introductory references are quid pro quo for opening the account. For this it is necessary that an existing
customer verify the authenticity of the facts provided in the account opening form.
Specimen Signature:
The customer gives the banker a specimen signature generally taken on a card specially designed for this
purpose. Name of the customer and account number are entered on it. This specimen signature is used later
on by the bank to verify the signature on Cheaques drawn on the bank by comparing these signatures on the
card and the other on the Cheaques.
Minimum Initial Deposits:
The customer has to make a certain minimum deposits to open an account. However, later on customer can
withdraw part of this amount but must maintain minimum deposits to avoid closure of the account or service
charges.
Operating the Account:
When the account is opened banker customer relationship is established. The customer in order to be able to
operate the account is given the following documents:
Pay-In-Slip Book:
This book is issued to the customer containing slips upon which money is deposited. Each slip contains blank
spaces for amount, account number, date, depositor signature and name of the account holder.
Cheaques Book:
The customer to withdraw the money from the bank uses Cheaques book. Cheaques book consists of 10,
25,100 leaves. When new Cheaques book is required by the customer he has to fill in the Cheaques book´
requisition slip´ with two signatures on it and give it to the concerned officer who on verification of the
signature will issue new Cheaques book.
Qualification of the Customer:
The relation of the banker and the customer is purely a contractual one. Therefore any person who is capable
of entering into a contract according to the Section 11 of the contract Act 1872 can be a customer. However
the following qualifications are necessary for a person to become a customer:
He must be of the age of majority
He must be of sound mind
17. INTERNSHIP REPORT 2012
He must not be disqualified under any law.
3.2.3 Remittances Department:
One of the important functions of a bank is to transfer funds for customers from one location to another.
Remittances department deals with the transfer of money for customer from one bank to another or from
one branch to another. Instrument used by the Burj Bank ltd for remittances includes:
Telegraphic transfer
Demand draft
Mail transfer Pay order
a) Telegraphic Transfer:
Telegraphic transfer is one of the quickest modes of transferring funds. It is an electronic system of transfer
ring funds that is why it is used by most of the businesses for the purpose of transferring funds.
b) Demand Draft:
A draft is just like an order Cheaques. A draft is drawn by one branch of a bank upon the other branch of
the same bank. The late down procedure is that the sender has to fill the beneficiary name, account number
and his name in the form. After the deposited is given to the customer and transaction is registered in the
issuing register and an advice is sent to the branch to which the DD is sent. It is common mode of fund
transfer. It is different from telegraphic transfer and in sense that funds are not immediately to the collecting
branch and the receipt of the branch. The collecting branch will credit the account of the beneficiary at the
receipt of advice from the Paying branch. Demand draft can be open, which can be cashed at cash counter
after properly identifying the true beneficiary, or crossed which can only be cashed by crediting is to the
account of the beneficiary.
c) Mail Transfer:
Mail transfer (MT) is same as Demand Draft, but the characteristic which makes it different from Demand
Draft that incase of demand draft bank physically hands the DD to the customer And upon presenting the
draft the amount can be withdrawn. But as regards the mail transfer one Branch sends instruction to the
other branch ordering it to the credit the amount to the account of the person in whose favor the amount is
deposited.
d)PayOrder:
Pay order is the most convenient, simple and secure way of transfer money. It is just like demand draft
except that pay order is made for local order of money where as demand draft is meant for remittances of
funds from one city to other.
3.2.4 Cash Department:
Cash department basically handles cash receipts and cash payments. The procedure for which is given below:
a) Receipts:
Cash department receives money from customers for crediting it to their respected accounts for which then
used for paying their bills or remitting to their creditors and suppliers as the case may be. When depositing
cash the client fills the prescribed form of pay and slips wherein he provides basic information like the
amount to be deposited, date, account nature and number etc. then he hands over the form and paying slip
along with the money to the cashier to the counter. The cashier signs and stamps the form or paying slips and
returns one copy of the same to the depositors. After the hours, all pay and slips to the computer section,
which credits the same, their respective accounts.
b)Payments:
18. INTERNSHIP REPORT 2012
When bank receives money from customer s, it undertakes to repay the same upon demand. The money can
be withdrawn through Cheaques, drafts or pay orders. However before making payments, bank satisfies itself
that the instrument is valid and there is sufficient balance in the customer account to support the payment.
For making payments the procedure followed. Cheaques is first presented to token clerk. Token clerk notes
down date, amount on the Cheaques, and account number in token register, assign token number to
Cheaques on the back of it gives token to the customer and then forwards the Cheaques to an officer to the
check the signature and verify it with signature on specimen card which the customer signed at the time of
opening the account. The Cheaques is then forwarded to the computer department for verification of the
balance. The Cheaques is then forwarded to the cashier who makes payment to person who presents the
token. The process may differ from what mentioned above depending the nature of Cheaques. A Cheaques is
defined as written order of a depositor to pay to or to order of a designated party or bearer, specified sum of
money on demand.
3.2.4.1 Kinds of Cheaques
Basically there are three types of Cheaques. They are as follows.
A. Bearer Cheaques:
It is en cashable at the counter. Payments of the Cheaques can be made to any people who present it to the
bank.
B. Order Cheaques:
It is also en cash able on the counter. But its holder must satisfied the banker that he/she is true holder and
entitled to collect the payment of the Cheaques for this he/she has to prove his/her identity through an
existing accountholder of the bank.
C. Crossed Cheaques:
It is not en cash able on the counter. It can only be credited to the Payees account. If there are two persons
having accounts at the same bank and one of account holder issues cross Cheaques in favor of the other then
the Cheaques will be credited to the account of the person to whom the Cheaques was issued at debited from
the account of the person who had issued the Cheaques.
3.2.5 Credit Department
Burj Bank Ltd offer different mode of financing according to Islamic mode. There are main two types of
financing modes in Burj Bank Ltd Mudarabah and Musharakah. Other modes of financing are divided in two
categories Short term financing and long term financing.
3.2.5.1 Banca Takaful Plan
Keeping in view its spirit for innovation and providing its customers with the best Sharia’h compliant
financial solutions, Burj Bank has joined hands with Pakistan's leading Family Takaful Company, Pak-Qatar
Family Takaful Limited, to ensure a brighter and more comfortable future for you and your family. Now you
can save and protect your family's future with a Takaful plan that is compliant to your beliefs and principles.
There are two elements by which you can work to make your dreams into reality. One is by saving and the
other by utilizing risk mitigation tools so that in the case of any unforeseen scenario your family is able to
carry out your dreams as you had planned to. For both of these you have Burj Bank's Banca Takaful to help
you.
Takaful is an Islamic insurance concept which is grounded in Islamic Muamalat, and has been practiced in
various forms forover 1400 years.Takaful comes from the Arabic word 'Kafala' - to guarantee. Takaful is not
only a tool to mitigate loss or to make Halal profits; it is an ideology which promotes:
Solidarity and joint guarantee
19. INTERNSHIP REPORT 2012
Self-reliance and self-sustainability for community well being
Assistance to the needy
Community pooling system
Product Features
Saving for long term requirements (child education, purchase of property, retirement, marriage, etc.)
Regular contributions are invested in a diversified portfolio of Islamic funds ranging from Sukuk to
Mutual Funds.
Flexible payment plan.
Takaful cover allows family to receive funds in case of death of the participant.
Benefits:
Access to a wider range of Sharia’h Compliant financial products and services.
No need for further documents except Customer ID card
No need for medical exams (conditions apply)
No need to wait for manual underwriting.
Total sales process takes 30 minutes
Customer Service Available 24/7 at your nearest Burj Bank branch or Burj Phone Banking.
Transparent terms, conditions and charges structure.
Additional Benefits:
Increase and decrease your contributions
Switch Investment Strategies
Partial Withdrawal
Payment Deferral Conditions apply
3.2.5.2 Burj Carsaaz
Burj Carsaaz provides you with the easiest and fastest processing of auto finance facility. With Burj Carsaaz
you can have a care of your own choice without being heavy on your pocket. You are a salaried individual or
a businessman; Burj Carsaaz is designed to meet vehicle finance needs of those who are aspiring to drive a
new vehicle or change their existing ones.
Features:
Minimum and Maximum Financing Limit > PKR 0.2 Million PKR 10 Million
Tenors: 1 year to 5 years
Floating profit rates renewable each year
Mandatory Takaful and tracker installation
Financing new, used and reconditioned / imported vehicles
Minimum Security deposit to be 10%
Age limit between 22 years to 65 years
Co borrower facility
3.2.5.3 Fleet Financing
Burj Bank offers fleet financing facility under Ijra mode of financing to suit the specific requirements and
financial needs of Corporate and SME customers. Our Fleet Financing proposition is aimed to fulfill the
vehicle requirements of small to big corporate in a cost effective and swift manner.
Features:
20. INTERNSHIP REPORT 2012
Maximum period Five (05) Years.
Quick approval process
Minimum documentation required
Title of Ijra vehicle in the name of Burj Bank
Comprehensive Takaful of the Ijra Assets
Profit Rate: 1 Year / 6 Month KIBOR + Spread (to be recovered along with monthly rentals)
3.2.5.4 Working Capital Finance (Fund based)
WorkingCapitalFinanceforLocalManufacturedGoodsfirsttimeinPakistanBurjBankmadethe“locallysaleablefresh
finished goods” (produced by a manufacturer) as basis to provide finance to that manufacturer. Now the
manufacturing concerns can avail working capital finance on goods manufactured for domestic market. The
manufacturing concern thus now can enjoy the working capital facility equivalent to the agreed value of their
finished goods. The tenor is made as suitable as the manufacturing concerns are able to manage their cash
operating cycle days.
3.2.5.5 Mudarabah for Local and Imported Goods (Fund based) Concept:
A contract of sale between a customer and Burj Bank Limited ("Burj Bank") under which Burj Bank first
purchases the goods(permissible under Sharia’h) at the request of the customer and then sells these goods to
the same customer after adding profit. The Mudarabah Sale Price includes all acquisition costs borne by Burj
Bank and a mutually agreed profit.
Mudarabah Transaction at a Glance
1. Request from the customer to Burj Bank for the purchases of specific local / imported goods.
2. Appointment of customer as agent of Burj Bank.
3. Bank purchases the goods upon request of the customer and takes ownership, thus transforming its
money into goods.
4. After purchase of goods the risk of the goods is borne by Burj Bank until the ownership of the goods is
transferred to the customer by way of offer and acceptance. At the same time, specification of the goods,
delivery, place and other terms of the contract are ensured.
Burj Bank's Mudarabah Financing is available for local and foreign purchases of:
Raw Materials
Commodities
Equipment’s/Machinery
Other tangible assets
Types of Mudarabah
1. Spot Payment Mudarabah:
Immediate repayment in cash against Letters of Credit (Sight).
2. Deferred Payment Mudarabah:
Repayment on mutually agreed future date.
3.2.5.6 Equipment Ijra Financing (Fund based)
21. INTERNSHIP REPORT 2012
Ijra is an Islamic mode of leasing and can be used for assets that are not consumed while they are in use, for
instance, it can be a house, car or any other tangible asset. During the tenure of Ijra financing the asset given
by the bank remains in Burj Bank's ownership and all risks are borne by the Bank. According to Sharia’h
compliant. Car Ijra financing, Burj Bank gives its car on rental basis to the customer against agreed payment
and period. After the determined period of Ijra, customer may purchase the car at an agreed price or may
return it back to Burj Bank.
Salient Features:
Free from Riba.
Fully Sharia’h compliant.
No up-front insurance payment.
No up-front registration fees and related expenses.
Minimum Tenor 3 years; Maximum Tenor 5 years.
Payment period: Monthly/Quarterly/Semi-annually.
Nature of Equipment/Machinery
Foreign manufactured and purchased through Letter of Credit
Locally manufactured all agreements/documents are approved by Burj Bank's Sharia’h Advisor.
3.2.5.7 Diminishing Musharakah Financing (Fund based)
Diminishing Musharakah Financing for Plant/Machinery/Equipment/Factory Building
DiminishingMusharakahisaShirkat(partnership)basedtransactionthroughwhichDawoodIslamicBankLimited BurjBank
anditscustomercontributetheirequityatanagreedratio for the purchase of equipment/machinery and other tangible
assets.
Diminishing Musharakah at a Glance
Request from the customer to Burj Bank for the purchase of specific equipment/machinery. Burj Bank and
the customer jointly contribute their share of equity at an agreed ratio to purchase the equipment/machinery
by executing a diminishing Musharakah Agreement. Burj Bank's share is divided into monetary units subject
to purchase by its customer periodically until such time that the sole ownership of equipment/machinery is
transferred in the name of the customer. Besides purchase of Burj Bank's equity periodically, the customer
utilizes the usufructs/benefits of the equipment/machinery and pays agreed consideration to Burj Bank,
periodically. As continuing security for the obligations of the customer, the following documents shall be
executed between Burj Bank and the customer:
Diminishing Musharakah Agreement.
Agreement for Periodical Payment (Monthly/Quarterly/Semi-Annually).
Undertaking to Purchase the Musharakah Units.
Authority letter to be executed by customer in favor of Burj Bank to make an offer by the client to sell the
ownership in property subject to Sale & Purchase Back Diminishing Musharakah. The customer shall create a
charge over the equipment/machinery in favor of Burj Bank. All agreements/documents are approved by
Burj Bank's Sharia’h Advisor.
3.2.5.8Working Capital Finance (Trade Finance)
First time in Pakistan Burj Bank made the "exportable fresh finished goods" (produced by an exporter of
Pakistan) as basis to provide finance to that manufacturer. Now the exporters can avail working capital
finance on goods manufactured for export to international/foreign market. The foreign currency value of
"exportable fresh finished goods" are agreed upon between Burj Bank and exporters to provide the best
advantages of the local currency value to the exporters keeping in view the FOREX conversion rate.
3.2.5.9 Islamic Export Refinance Scheme (Trade Finance)
22. INTERNSHIP REPORT 2012
IERS has been prepared by SBP, as the Sharia’h Compliant alternative to the Export Refinance Scheme
(ERS) with the aim of providing finance at concessionary rates to exporters. DIBL can apply to SBP for
allocation of ERF limit in favor of DIBL. Since the list of eligible commodities to be exported, operations of
the scheme in terms of procedures/documentation and submission of relevant statement are essentially the
same as under ERS, the distinctive features of the scheme are taken care by DIBL.
Salient Features of IERS
Under IERS the State Bank of Pakistan (SBP) shall provide finance to the DIBL on Musharakah (profit and
loss sharing) basis. The branches shall be mandated to finance exporters (eligible under the scheme) through
approved modes of Islamic Finance (This in case of DIBL is Mudarabah).
3.2.5.10 Sight and Issuance Import LOC (Non Fund Based)
These facilities are available at Burj Bank to facilitate traders, manufacturers and service providers to import
goods to meet day-to-daySharia’hCompliantbusinessactivities,incasetheywantto retire the LC from their own
sources.
3.2.5.11 Guarantee Al Kafala (Surety ship):
Kafala literally means guarantee. It is defined as a contract which combines one's Zimmah (Liability) with
another person's Zimmah or Kafala means to add an obligation to an existing obligation in respect of a
demand for something. This may relate to a person, finance or act (performance).
Types of Guarantees
Performance Guarantees
Bid Bonds / Tender Deposit Guarantees
Guarantees for Advance Payment Mobilization
Security Deposit Guarantees
Guarantees for Payment of Dues
Loan Repayment Financial Guarantees (For transactions under Islamic Modes)
Permanent / Open-ended Guarantees
Guarantees Expressed in Foreign Currency
3.2.5.12 Lockers:
Let us make this world safer and secure for you and your family. Our Safe Deposit Locker facility enables
you to store your valuables in strong heat resistant steel lockers with 24 hour security. Be it jewellery,
passports, share certificates or title deeds, you can rest assured that your valuables are not prone to loss, fire
or theft. You can also nominate/authorize your dear and loved ones to operate the Locker. Now you can live
a carefree & stress free life while we take care of your valuables while retaining your privacy. Following are
the key benefits that you will get out of using safe deposit locker facility protection against weather conditions
&power failures with smoke-sensor, backed by firefighting equipment and 24 hour manned security. A
Locker custodian to offer friendly and personalized assistance. Maximum of four (4) deposit operators per
Locker. Safety of your valuables from loss, fire and theft. Unlimited free visits to your Locker.
23. INTERNSHIP REPORT 2012
Chapter 4: Analysis
4.1 SWOT Analysis:
In past the organizations were limited to their own performance and outputs, they only consider what they
get and what they lose, with the emergence of management studies and globalization now the organization
cannot survive until they competes with their surroundings and then Internationally. World has set some
standards for organizations so each and every organization have to look what is happening around.
Today’s organizations are perplexed with the phenomena of intense competition. It has become imperative
for them to be taking guard for their survival. So in search for excellence it is the critical self-appraisal which
is attached so much importance. Even in mundane affairs of life, introspection is necessary even at the
individual level. Every sagacious person examines his conduct critically in relation to his environment. And
then pauses, looks, transform and conform towhatisrequired.Ifhedoesn’theislackingsagacityandworldtellshim
emphatically.Whenwecometowardsorganization then it is the question of its very survival. It is a practice, which is
indispensable for future growth. There are many techniques to analyze the organizations performance i.e.
input/ output analysis, pest analysis, SWOT analysis etc. SWOT analysis is kind of tool that is used to analyze
an organization’s performance in relation to its environment external or internal opportunities and threats.
Strategy analysis and selection of the best alternative is of critical importance and prime responsibility for any
organization’smanagement.Managementhastogothroughextensiveinternalandexternalanalysistodetermine
theirorganization’s performance in relation to their mission and objectives.
The SWOT analysis of Burj Bank LTD is as follows:
4.1.1 Strengths:
Advantages of religious proposition in a country made on name of Islam i.e. Pakistan.
Competitive advantage: Less marketing is required than conventional banking and better cost control
as a result.
Morale and commitment to serve is higher among bankers and staff due to religious value.
Huge amount of savings can be mobilized and thus boosting the deposit base of banks using
charities and Zakat, fund schemes, etc.
Less use of money for speculative purposes thus chances of investment failure and much volatility in
investment is reduced.
Innovative aspect is also found in it, using phone banking, e- banking, etc. A blend of tradition and
modern life can be easily served to customers.
Location wise & geographically, it is feasible and operational all across the country, as
Pakistan is 98% Muslim population country scattered in all nooks of national territory.
Quality of services will not less than conventional banking services so a competitor to established
banking (interest based) in same market.
4.1.2 Weaknesses:
Lack of standardization across the Muftis /scholars of the country and among the scholars and
bankers.
Disadvantage of proposition is that there would be a hesitant and new thing not fully accepted /
suited to World Bank, ADB, and other multinational donor agencies to invest through banking
sector in country.
A lot of capital is needed to boost it in front of conventional banking, and also huge reserves have to
be maintained, to meet any loss sharing situation in Islamic finance modes of investment.
24. INTERNSHIP REPORT 2012
Time/season factor becomes a major problem in case of Islamic banks, as people would like to shift
their money from Zakat deductible accounts or they wish to pay their Zakat from Halal´ funds
during Ramadan or on
Eid festivals, etc. creating short term liquidity problems for the banks.
There are differences in theory and practice of Islamic banking in Pakistan to some extent creating an
inherent weakness.
Management and staff need further training to serve Islamic financial services and relevant
experience as well to done their job efficiently.
Value chain management will become a major hurdle to Islamic
Halal funds of Islamic banks, as it will need Islamic money and call money markets, investment
opportunities with pure Halal businesses, Islamic equity market (instead of stock market), etc.
4.1.3 Opportunities:
More opportunities now lie in Islamic banking as it has been accepted by BASEL, WB,
ADB, international agencies, multinational corporations, non-Muslim governments, etc. With
creation of big Sukuk and Islamic deposit base in Gulf and Malaysian regions Traditional interest
based banking will have to defend through heavy marketing and Advertising in Muslim countries
which off course reduce their profitability.
Islamic banking is a complete solution to economic and to some extent social needs of Muslims from
House building to education in addition to conventional help in commerce, business and industry,
information age, thus it is naturally blended with tools of internet, and computer based banking, and
will witness a sharper growth than traditional banking growth of last500years.
New markets have been emerged with growth of Islamic banking as well: Islamic mortgage, Islamic
insurance, new investment projects etc.
In non-Muslim countries, like France where Muslim are in minority (around 10%) of population,
Islamic banking will enjoy the benefit of niche marketing and if properly targeted will obtain better
results.
4.1.4 Threats:
A lot of legislation is required for Islamic banking worldwide and especially in non- Muslim
countries; even in Pakistan some legal loopholes are present in its proper implementation.
Comprehensive Islamic economic and banking models have yet to develop or they are not in their
maturity stage to provide a blueprint of economic development and prosperity.
IT developments and Research in latest Banking are in non-Muslim countries where conventional
interest based banking have a very strong position thus Islamic banking will enjoy latest tools of IT,
but lesser than conventional banking.
Environment for Islamic banking in west has been declined after 9/11 attacks on WTC, New York
and later Prophet Mohammad (P.B.U.H.) protests in Muslim world, widening the gaps between the
western investors and Islamic banking markets.
Market demand is good but very less as compared to conventional interest based banking throughout
the world, i.e. beyond some countries.
Sustainable financial backing by large multinational firms, investment banks, and World major
economic powers is lacking.
4.2 CONCLUSION
25. INTERNSHIP REPORT 2012
Burj Bank Ltd is an Islamic bank in Pakistan. The mission of Burj Bank Ltd is to introduce Islamic banking in
Pakistan and globally. They can work under leadership of Islamic Banking rules.
This internship experience has been very much informative for me as it helped me in numerous ways like in
learning new things and ideas about official environment and now I have the knowledge and experience of
working in office environment I have realized my abilities and expertise of working in that kind of
environment. Internship is a supervised pre-professional career related experience paid or unpaid, part or full
time, with measurable learning objectives, formal evaluation. And it is requirement for MBA degree.
The branch manager is usually given very little regarding sanction of advances and over draft whereas their
responsibilities are numerous.
I can study and make analysis on year 2011-12annualreportofBurjBankLtd.It’sfifthannual report of that bank but
till yet bank is going in loss. There may be different reasons behind that bank is newly being opened and they
can offer Islamic mode of financing.
The branch yet not stared financing, that problem same as different cities with Burj Bank Ltd branches.
The mobilization of deposits is mainly considered as the responsibility of the branch manager but the rest of
the staff is usually least interested
The bank has been applying he modern concepts of management and marketing at both micro levels. The
interior and exteriors of the branch have been changed but the staff of the branch has been found less
motivated towards the organizational objectives.
The decision making is still centralized as the middle and low level management is not taken into confidence.
The promotional policy of the bank was observed as without any specific direction.
Though the bank has defined its mission and vision but no specific plan has been designed so far.
The bank staff has been found as less satisfied with bank policies and the recent retrenchment in the bank has
created unrest and panic.
The relationship between the employees of the branch is not that good because of which the whole
environment of the branch becomes less favorable for work miss utilization of office utilities, especially the
telephone.
4.3 RECOMMENDATION
The branch manager should arrange a training program for its existing employees to help them perform their
duties more effectively. The branch manager can start financing in there branch with their existence capital.
There should be a proper platform provided to its employees from where they can help the management in
achieving its objectives.
The branch should try to enter into the new markets for Islamic banking it would increase its competitive
edge over the other branches in the region.
The bank should appoint customers relation officer where the volume of work is too high. This will give an
impression to client for personal Banking. This will help in improving the image of the bank and hence will
attract more clients.
Burj Bank Ltd is not very well known bank in the market. Their market standing is not as strong as their
competitors. For this Burj Bank Ltd should opt for heavy advertisement both electronically and on print
media to create public awareness. This product Business Power is suffering because of this reason as well.
The bank must ensure the participation of the staff in all promotional activities of the bank to this end the
bank must adhere to the policy of fringe benefits rapid promotion of capable management and official. The
old age benefit of the bank employee must be increased to motivate fee staff.
