CHAPTER 1

INTRODCUTION TO THE REPORT

1.1 Background of the Study

It is common practice during the completion of bachelor program to attain practical experience in different fields. Khurasan University in the case of Bachelor degree undergo two months internship program. The internship is to serve the purpose of acquainting the student with practice of knowledge of the discipline of banking administration. The concern of this report is to study and analyze the performance of Maiwand bank in the country of Afghanistan.

Maiwand bank is the fastest emerging strong commercial bank in Afghanistan established and commenced banking business from 1^st january,2009 promoted by afghan nationals and managed by international banking professionals within the short span of 12 months, the bank has a branch network of 18 branches with us $ 67 million business level. Another 7 branches will opened with in next day’s further licenses for opening 12 more branches are under process. Thus targeted network of branches by end of first year of operation is 37 also the Da Afghanistan bank has issued no objection certificate for opening of an overseas branch in Tajikistan. We expect to have this branch operational in the very near future.

1.2 Objectives of the Study

The primary purpose of this study is to fulfillment of the requirement for the degree of BBA (Finance). The secondary purpose of this internship is to understand how the theoretical knowledge can be applied to the practical situation and examine an organization’s management issues

The main objectives of the study are:

· To study the organizational and management setup of Maiwand bank

· To critically analyze the functioning of Maiwand bank and point out the deficiencies and problems in it.

· To give recommendations for improvement in the functioning of Maiwand bank.

· To get some experience in working with well reputed organization

· To gain knowledge about the professional environment of the bank.

· To know about the technology utilized in the banks

· To deal and manage with the situation of stress

1.3 Scope of the Study

We explore the implications of financial system design for financial innovation. We begin with assumptions about the investment opportunities of firms, their observable attributes, and the roles of commercial banks, investment banks, and the financial market we examine the borrower's choice between bank and financial market funding, the commercial bank's choice of monitoring capacity, and the investment bank's choice of whether to invest in financial innovation. Our main result is that financial innovation in a universal banking system is stochastically lower than innovation in a financial system in which commercial and investment banks are functionally separated.Maiwand bank have more branches in Afghanistan the main branch is in Kabul in Mohammad Jan khan watt and the provincial branches are in.

☆ Head Office

☆ Ladies Branch

☆ Sarai Shahzada Branch

☆ Ladies bra Kote sangi Branch

☆ kote sangi Branch

☆ Macro Ryan Branch

☆ Macro Ryan Ladies Section

☆ Khair khana Branch

☆ Kabu Gulbahar center branch

☆ university branch

☆ Karti sih branch

☆ Kotel khair khana branch

☆ Islamic banking Branch

☆ Provincial Branches

☆ Islam Qala Branch

☆ Mazar Ladies Branch

☆ Badakhshan Branch

☆ Takhar Branch

☆ Pule Khomri Branch

☆ Jalalabad Branch

☆ Jalalabad Branch Ex. Counter

☆ Hairatan branch

☆ Khan Abad branch

☆ Sher Khan Bandar Branch

☆ Kunduz Branch

☆ Kandahar branch

☆ Ghazni Branch

1.4 Limitation of the Study

Two months time period was not enough to completely understand functioning of the bank and making report about all function of the bank They did not give me more information for the sake of the Confidentiality of the bank and

The updated information is not available, and the clients were very busy to provide me more for interview, and also the time is also a big constraint for my report.

1.5 Methodology of the Study

Both primary and secondary data were used in compilation of the report

Methodological tools used were:

i. Primary Data

· Personal Observations.

· Discussion with Bank Personnel.

· Focus group meeting.

· Direct observation.

· Communication with manager.

· Communication with employees.

ii. Secondary Data

· Monthly magazine of Maiwand Bank

· Newspapers and books.

· Internet.

· Operational manual

· Annual reports

Scheme of Study:

Chapter 1 Introduction to the Report

Chapter 2 overview of the organization

Chapter 3 Plan of my internship program

Chapter 4 Departmentalization at the branch level

Chapter 5 Financial statement analysis

Chapter 6 critical analysis & Swot analysis

Chapter 7 conclusion & recommendation

CHAPTER 2

OVERVIEW OF THE ORGANIZATION

2.1 Brief History

Maiwand bank is the fastest emerging strong commercial bank in Afghanistan established and commenced banking business from 1^st january,2009 promoted by afghan nationals and managed by international banking professionals within the short span of 12 months, the bank has a branch network of 18 branches with us $ 67 million business level. Another 7 branches will opened with in next day’s further licenses for opening 12 more branches are under process. Thus targeted network of branches by end of first year of operation is 37 also the da Afghanistan bank has issued no objection certificate for opening of an overseas branch in Tajikistan. We expect to have this branch operational in the very near future.

2.2 Natures of the organization

In the Afghanistan before 76 years there were not any commercial sector in government and as well in private sector it means that not government bank or private commercial bank because of that the people of Afghanistan saved their money with money keeper in the city ( Saraf) so the government of Afghanistan by demand of the public made banking sector such as central bank of Afghanistan(Da Afghanistan bank) in 1939 it was the first bank which made by government of Afghanistan but there was not promotion in the bank sector for a long time because there were in Afghanistan more than 30 years civil wars in 2001 when the afghans new democratic government structured and took the authority of all Afghanistan the central bank ( Da Afghanistan bank) allowed others private bank sector to start their commercial working there in Afghanistan under rule and laws of central bank of Afghanistan(DA Afghanistan bank) so there in Afghanistan a lot of investor came invested their money in business sector, Agra-culture, banking sector now there are 2 state owned bank, 7 foreign bank, 7 local bank, one of them is Maiwand bank which is made in 1 Jan 2009 yet in Kabul and others province of Afghanistan to offer good services and products to public, Maiwand bank promoted by afghan nationals with huge capital 15 million to provide new products and services for the Afghanistan public Maiwand bank supported by professional promotors, qualified and experienced international banking sector professional in the Management of Maiwand bank and controlling the bank by the team which are qualified, experienced international bankers, this team hiring others local talents and trained employees to grow the operations of the bank and trying for the bank promotion, advancement of the banking sector in the Afghanistan because the afghanis want advancement in the their country.

2.3 Business Volume

Within the short span of 12 months in operation, Maiwand bank was able to set solid standards in the banking industry with sustainable growth and measurable parameters. Maiwand bank largely concentrating and targeting on business segment with an aim to capture the current account clients by catering to their special needs of settlement of payment for their export and import businesses.

Ø Total business of the bank stands at USD 67.49 millions

Ø Deposits of the bank stands at USD 38.23 millions

Ø Advances of the bank stands at USD 29.29 millions

Ø No of customers around 33,000

Ø Current account deposits constitutes 74% of the total deposit

2.4 Service & Products Line

In many countries in the world commercial bank helping the people in their business in daily trading, one of them maiwand bank is in Afghanistan this bank providing products and services for it costumer and it is type of bank that provides services such as accepting deposits, making business loans, offering basic investment products, and as well in promotion of marketing in the markets of Afghanistan, This bank can also refer to bank or division of a bank that mostly deals with deposits and loans from corporations or large business, as opposed to individual members of the public.

[B1] 2.4.1 Deposit Products

Deposits are broadly divided into:

a) Demand deposits:

In demand deposits the public can deposit their money by their own choice it means that we accepted deposit money of the public than they can withdrawing their money by withdrawing by cheques, draft, withdrawals, transfer, ATM and internet banking all these kind of deposit offer by the bank.

b) Current deposits:

Current deposits is a type of deposits in the bank sector that current deposits will often be made into the bank or other financial institutions account in the local currency of the country this deposit will generally be made available to the customer for withdrawal at any time and without an early withdrawal penalty, fund are typically made immediately available to the customer for withdrawal by writing a check this type of account are generally used for businesses that have a need for issuing cheques to pay employees’ salaries and as well for providing cash for inventories and other such businesses expenses, the bank where the current deposit account is held usually pays out interest on the fund periodically, such as monthly or quarterly in kind of deposit the terminology current deposit refer to a deposit to a bank account or financial institution without a specified maturity date, these types of current deposit account generally only earn demand deposit interest.

Current Accounts for Individual
Account opening	No charge – FREE
Initial deposit & minimum balance	AFN 10,000 & Other currencies 200 (USD, EUR, GBP)
Current Account for corporate/ govt./ organization
Account opening	No charge – FREE
Initial deposit & minimum balance	AFN 10,000 & Other currencies 200 (USD, EUR, GBP)
Cheque Book Charges	One cheque book will be issued free of cost after that charge 5 USD or 250 AFN
20 Leaves	AFN 250 & Other currencies 5 (USD, EUR, GBP)

c) Saving deposit

These types of deposits are mainly to inculcate a sense of saving for the future accumulating funds over a period of time, whatever your occupation, starting saving and let your money earn for you saving account offer you one of the most suitable ways to manage your hard earned money, so start saving and earning profit today, you should choose to open saving account not to merely make money but also to secure your future in Maiwand bank because our prophet Muhammad ص said that save your money not spend more than your need it means that if earn 100 AFS spent from it according to your need suppose your expenses is 60 but you spend 100 it is not the good way, the good way is spend 60 because it is your need and save 40 saving deposit done as below in the Miawand bank.

Saving Accounts
Account opening	No charge – FREE
Initial deposit & minimum balance	AFN 1,000 & Other currencies 100 (USD, EUR, GBP)
Interest payable to customers (p.a.)	AFN 6%, USD 6%, EUR 6% & GBP 6%
AC closing charges	AFN 250 & other currencies 5 (USD, EUR, GBP)

d) Time deposit/term deposit/fixed deposit

These types of deposit accounts in which we deposit money of the public for long time it means that this type of account done for long term and type of deposit designed for all customer regardless of individual or small/ big org with a short to medium term investment appetite, it offers customer the option of investing for some time which mention from the bank it is 3 Months up to 1 Year, it has designed keeping in the saving needs of the customer who want substantial profit at the end of some specific tenure.

Fixed Deposit Accounts
Initial deposit & minimum balance	AFN 100,000 & Other currencies 2,000 (USD, EUR, GBP)
3 months	AFN 4% USD 2.5%, EUR 2%
6 months	AFN 4.25%, USD 2.8%, EUR 2.25%
1 year	AFN 4.35%, USD 3%, EUR 2.50%

[B2]

2.4.2 Credit Funded Facilities (Conventional)

Maiwand bank offers the following credit facilities under the conventional credit facilities, tailored for the needs of its customers.

· Overdraft

· Term finance / project finance

· Bill discounting

2.4.3 Credit non funded facilities (conventional)

· Bank guarantees

· Bid security

· Advance

· Performance

· Letters of credits

· Usance

· Standby

General Terms & Conditions Funded Facilities

· Period: average facility period is 1 year

· Interest Rate: 14% to 16% depending on the history of the customers with Maiwand Bank

· Collateral: maiwand bank finances its customers against reliable depending on the nature of the facility and history of the customer with Maiwand bank

· Registered Mortgage – primary required by maiwand bank and the central bank of Afghanistan (DAB)

· Assignment of Receivable – from reputed donors only

· Pledge of Stock

· Currency : facilities available in US Dollars & Afghani

· Overdraft

Terms and Conditions

Over drafts are the credit facility that are offered those customer and business who on the daily

Weekly or monthly bases by products for further sell the customer are allowed to buy supplies from the authorized limit anytime and they can repay anytime when they have available idle cash to avoid interest.

In overdraft facility, the customers are served with the following services

· Unlimited transactions

· Deposits local and international transfers

· Monthly interest payments

· Principle adjustments up to the customer’s turnover conditions

· Loan purposes can be working capital for trade, import, export, services providing, and Construction and production businesses.

Bank Guarantees (Continues) Terms and Conditions

· Advance payment: maiwand bank issues advance payments for the customers with projects in hands and required by the beneficiary from a reputable bank to make their project payments.

· Security : this guarantee should be 100% secured (by cash and or collaterals)

· Charges: 0.3% per quarter and with minimum processing fee of 1% from the (total) amount of the bank guarantee ) – (negotiable)

Letter of credits (continues)

· Usance letter of credit

Under usance LCs payment for the goods is deferred by the exporter to allow the usance LC are for tenor specified in the LC and are payable by the importer on due date

Letter of credits (continues)

· Stand by letter of credit

Standby letters of credit act as a payment guarantee for trade transactions.

The standby letters of credit cover the risk of nonperformance.

Letter of Credits Terms & Conditions

· LC can be opened from 1 quarter up – to 8 quarters

· Commissions & fees payable at the time of issuance

· Can be opened on minimum of 35% cash margin

· LC’s are confirmed by 1^st class gulf European & British banks

· Quickly processed.

2.4.4 Internet banking

Maiwand bank delighted to bring you people the next level of internet banking, offering an intuitive, simpler online banking or internet banking experience that is safe and secure, in the internet banking you can banking whether you are at the office, at home, or on the way, our new internet banking is at your fingertips on smartphone, tablet, laptop or desktop computer, Now you have freedom to bank easily and seamlessly across all of your devices.

2.4.5 Sms banking

Maiwand bank providing mobile banking system that allows customer of a financial institution to conduct a number of financial transaction through a mobile device such as a mobile phone or tablet, Mobile banking differs from mobile payments, which involve the use of a mobile device to pay for goods or services either at the point of sale or remotely, this facilities provided Maiwand bank to check your bank account balance and last transaction, fall balance by mobile anytime and anywhere.

[B3]

2.5 Competitors of Maiwand Bank

· Bakhtar bank

· Aryan bank

· Afghanistan international bank (AIB)

· Azizi bank

· New kabul bank

· Bank alfalah limited

· Ghazanfar bank

· Afghanistan commercial bank

· Habib bank of Pakistan

· National bank of Pakistan

· Punjab bank of India

· Standard chartered bank

· The first micro finance bank

· Afghan united bank

· Pashtany bank

· Bank-e-Millie afghan

2.6 Organization Structure

Organizations can be structured in different ways:

· By function, for example, operations, marketing, finance, fundraising, etc

· By region

· By product, for example, books, support, consultancy, delivery

· In work teams, for example, client/customer groups.

The hierarchical organization structure in the top management just one person small members of employees working under his or her responsibilities and giving report to his or her directly it his or her authority to increase or decrease in the numbers of employees according to the organization, in hierarchical organization structure the manger or director easily can share his or her message with subordinate because of directly connectivity’s with top level of management in this type of organization the top level management easily explain below terms of organization as well for the subordinate in the org what is the need of the organization for the future it maybe appliance, material, or employees, it is easy to manager who to control over all tasks of the employees and easy get information from his labors, what is office organization, state briefly the principle of org, explain the term org structure, what is the importance of the sound org structure, line of org, discussion of merits, characteristic features, demerits, staff system of org, feel is this system an improvement over the pure line system, see advantage and disadvantage of system, plan for financial, generally followed for the organizing of the office, discuss the org with diagram, arranging of training of employee.

2.6.1 Commercial banks:

Commercial banks are those banks which are dealing with the capital of the public giving facilities for the public in their daily businesses and works, commercial bank authorized by law to receive money from businesses and individual and lend money to them, commercial bank are open to the public and serve individual, and businesses, commercial bank is almost regulated by government laws depending on how they are organized and the services they provide, this kind of bank also monitored by government central bank, commercial bank mostly deals with deposits and giving loans to corporation or large businesses, commercial bank provide the daily businesses of the people and businesses men because of its good services such as transfer of money, salaries payment of the employees, investment in small and large businesses etc.

[B4]

2.6.2 Mission Statement

To be the most preferred and convenient commercial bank in the country through continuous innovation and services excellence To become one of the strongest player in the market with professional promoters in the back ground supported by well qualified & experienced international banking professionals in the management and to raise the capacity and maintain a team of committed and motivated national talent with high work ethics for providing excellent customer satisfaction in order to make value addition to all the stake holders viz Shareholders, customers, staff and ultimately to the society at large

2.6 .3 Vision Statement

To provide customers with the most comprehensive and state of the art financial solution for establishing long lasting associations through committed and motivated professionals with our relentless efforts to bring finest banking experience in Afghanistan we ensure to create more value and exceed the expectations of the stakeholders and the society To emerge as one of the strongest international commercial banking institutions in Afghanistan with state of art technology and innovative products & services to act as a strong catalyst for economic growth and business prosperity in the economic reconstruction process of Islamic Republic of Afghanistan. By leveraging the technological innovations, Maiwand Bank will certainly create a true partnership with the private and public sectors in establishing a modern international commercial bank to meet Afghanistan’s financial services needs in strict compliance of laws and regulations by international banking standards and best practices.

. 2.7 Core values:

Values are the underpinning of Maiwand bank’s operations. They reflect Maiwand bank’s identity and influence Maiwand bank’s course and direction. Every Maiwand bank staff member is expected to exhibit the Maiwand bank core values in every task execution.

The core values of Maiwand bank are the following:

Commitment to Serving Public

Maiwand bank is dedicated to complete the needs of the public and pave the way for those people who are jobless.

Stakeholder Orientation

Maiwand bank takes pride in offering the best services to its stakeholders containing the government for which it acts as an active agent.

Ethics and Integrity

Maiwand bank is committed to upholding professional ethics and integrity in all its activities and try its best to take active part in the society.

Transparency

Maiwand bank Accepts and welcomes public scrutiny of all its actions

Leadership By Example

Maiwand bank is dedicated to practicing what it preaches at both the organizational and individual levels.

Teamwork

Maiwand bank is committed to work together within and across organizational divisions.

Equity and fairness

Maiwand bank is faithful to the fair treatment of customer, employees, and other stakeholders. This includes a conductive working environment and gender sensitivity and it will always take care of equity and fairness.

Confidentiality

Maiwand bank maintains appropriate confidentiality in all transactions with its customers, employees, and other stakeholders.

2.8 Objectives and Main Tasks of Maiwand Bank

1. The primary objective of Maiwand bank shall be to achieve and dominating domestic price stability.

2, The other objectives of Maiwand bank which shall be subordinated to the primary objective of Maiwand bank Shall be to foster the liquidity, Solvency and proper functioning of a stable market based financial system, and to promote a safe, sound and efficient national payment system Afghanistan.

3. Without prejudice to its primary objective of domestic price stability Maiwand bank shall support the general economic policies of the Government of Afghanistan, and to contribute to sustainable economic promotion.

4. The basic tasks of Maiwand bank for which Maiwand bank shall be exclusively responsible are:

A. to formulate, adopt and execute the monetary policy of Afghanistan.

B. to formulated, adopt and execute to foreign exchange policy and exchange arrangements of Afghanistan;

C. to hold and organize to official foreign exchange reserves of Afghanistan;

D. To print and issue Afghani banknotes and coins:

E. to act as banker and adviser to, and as fiscal agent of, the state;

F. to license for register and to regulate and supervise banks, foreign exchange

Dealers, money service providers, payment system operators, Securities service providers, securities transfer system operators and such others as shall be submitted to its oversight by or pursuant to the law

2.10 Our Business Principles and operational ethics

Maiwand bank invest for it clients and for the satisfaction of clients.
We respect and see to our client as our business partners.
We need trained and qualified employees in bank and we arrange training for employees.
Never invest clients’ money for our own profit and keep trust of our clients in every time of life.
We always try to fulfill our client need which we promise them.
We promise our clients which we can deliver to them and never promise which we cannot deliver to them.
We honestly keep the money and return to those who trust us.
We know our responsibilities which we have and know how to keep trust of our clients.
We try the best to increase the value for all the stake holders.
We do not think this clients is better than that client because of skin color, language, religious and gender.
We are very strictly honest or careful when we select our clients.
In the selection of clients we must know the source of income and legality business of clients.
We strongly following these procedure and compliance of the laws.

2.11 Banking software (CBS)

Banking software is software the banking sector use for easily recording of transaction before 2001 the transaction recorded in the book it means that there were bookkeeping record in the central bank of Afghanistan when the private commercial banks start their work in the Afghanistan the started the recording of the transaction in their own banking software, this is the best way for banking sector because in the booking keeping recording there were a lot of mistake by in the recording of transaction but in software recoding transaction this problems solved and Maiwand bank has it owned software to record the transaction easily and secure, Maiwand bank software are POS, internet banking/ SMS Mobile banking/ call center/ ATM as well Maiwand bank clients can take advantage of banking facilities 24 hours and 365 days of the year anytime and anywhere.

2.12 IT Department

IT department it is a department which means information technology this department has all information of the organization or bank with itself and making good facilities for the employees and bank Management Maiwand bank also has active and professional IT employees for controlling of daily activities of the bank all the data or information of the bank maintained with central Management, keeping connectivity’s all branches of bank anywhere and anytime provide to the clients good facilities of services such as securities, mobile banking, SMS facilities etc.

2.13 Ladies Banking:

Maiwand Bank starting ladies banking in Kabul in shar-e- naw city the most secure and safe location for ladies shopping centers in capital of Afghanistan, Maiwand bank opening special branch of banking sector for ladies intend to set historical event(milestone) for the local banking industries, this section of banking are organizing and managing by well trained, talent and professional female banking staff at the ladies bank branch, these ladies which are employees in the bank branch are qualified and attend to their banking needs quickly and efficiently in complete privacy, confidentiality and convenience that really deserve, this special branch provides good bank facilities to ladies of Afghanistan by dedicated professional and good behavior ladies staff, it is also the rule and regulation of Maiwand bank to respects ladies client.

2.14 Organization Structure of Maiwand bank:

Branch Manager

Mohammad Khalid

(Hamidy)

Operational Manager

Customer Service Department

Hamid

Kaihan

Rafiullah

Jayhoon

Head Casher Department

2.15 Comments on the Organization Structure

Maiwand bank is commercial bank this bank is made up of individuals and persons of trained and educated .it means that employees of Maiwand bank are competent and talented

They take their jobs very well, Maiwand bank has centralized policy, centralized organizational structures rely on one individual to make decision and provide directions for the company. I thank centralized organizational structure is more beneficial for Maiwand bank or any banking sector.

Centralized organizations can be extremely regarding business decisions

Business owners typically develop the company’s mission and vision, and set objectives for manager and employees to follow when achieving these goals.

Decentralized organizations utilize individual’s whit a variety of expertise and knowledge for running various business operations.

2.16 Number of Employees

The total numbers of employees work in Maiwand bank are more then 1800 which include foreign employees as well; nangarhar branch has 45 employees with two branches

Maiwand bank jalalabad branch is located in mukhabirat chawk it has 45 employees working together for achieving of organizations goal of the bank.

Jalalalabad branch staff has to achieve the goal which is set there from the top management of the maiwand bank which is they must have more then two hundred and fifty millions AFG deposit at the end of every month

The mentioned target is divided in such a way that.

50% of the target should achieve by branch manager, and the remaining 50% will distribute amongst the remaining staff.

2.17 Main Offices of Maiwand Bank

Maiwand bank headquarters is strategically located at Turabaz khan square, share-e-naw, Kabul Afghanistan, the most commercial part of Kabul, the capital city of Afghanistan,. This provides a central location accessible from different parts of Kabul. And as per the vision and mission statement of the bank, it is planning to open in most of the commercial areas of Kabul along with in all provincial capitals of the country to provide the banking services across the country

CHAPTER 3

PLAN OF MY INTERNSHIP PROGRAM

3.1 Branch where I did internship:

Maiwand bank is the fastest emerging strong commercial bank in Afghanistan, established and commenced banking business from 1^st June, 2009, opened by one of its shareholder government and businessmen representatives in Jalalabad.

Bank plays an active and important role in the economic development of a country if the banking system in a country is effective efficient and disciplined it bring about a rapid growth in the various sectors of the economy. This bank provide the facilities of banking to Jalalabad peoples

Maiwand bank Jalalabad branch is strategically located at Chawk-e Bazaz-e, Jalalabad Afghanistan, and the most commercial part of jalalabad 1^th Dec, 2014 to 1^th Feb, 2015 two months internship with Maiwand bank have practice in all sections of the mention bank.

3.2 Starting ending date of my internship report

I practically started my internship report activities in Maiwand Bank effective from 1, Dec, 2014 and completed my internship report at 1, Feb, 2015 which took about two months

3.3 What I did in my internship

3.3.1 Cash Department

In this department I learned how to collect cash from the people and we daily received cash from the people as current account and give cash to the public as loans and daily dealing now I can cash management and know the meaning of cash management and I also knew that how to save cash and invest my cash on those projects which we can get daily cash like factories of ice cream, chocolate, it is one of duties of Maiwand bank to give people long term loan and short term loan to invest in these projects which we can get daily cash and earning more money from these projects.

3.3.2 Finance department

In finance department I got much knowledge about finance and learned how to analysis the company income statement and plan for the next year budget it means that how to make budget for the next year which we will have in the future budget all things such as daily budget, monthly budget, yearly budget Finance department prepared budget for every departments of Maiwand bank.

3.3.3Marketing department

Maiwand bank have marketing department in a week very three days of the week one member of Maiwand bank go to the market and ask people about Maiwand bank services and distribute the brusher and newspaper of Maiwand bank four days of my working there in Maiwand bank I went to the jalal abad city and collect some information about Maiwand bank for the Marketing department of Maiwand bank and Maiwand bank mostly do there marketing on TV, radio, newspaper, boards, and elect ration boards.

3.3.4 Account opening department

I worked in the account department for one week and I practiced a lot of thing there such as opening account of current account, fix account, Islamic account ( musharaka and mudarabi) accounts in making account or opening account of current account is by 200 dollar exchange of 10000 Afghani , saving account by 100 dollar exchange of 5000 Afghani and sending of cheque for the first time is free than it has 5 dollar charges.

CHAPTER 4

DEPARTMENTALIZATION AT THE BRANCH LEVEL

4.1 Finance & Accounting Department

Finance and accounting department has it main role in the bank because of its duties and responsibilities this department every start the next year make decision of finance it means budgetary plan, for every department of the bank and as well for external projects of the bank, finance department help other department on their duties and responsibilities of day to day and also introducing the ways for implementation of those decision which made by finance and accounting department, financially planning of next year prepared by finance and account department it maybe in Advancement sector, construction sector such as markets for selling, apartment for rent, and industrial sector and indicate how to implement in Afghanistan .

Responsibilities of finance & accounting department

The activities expected from a finance department cover a wide range from basic bookkeeping to providing information to assisting managers in making strategic decisions. What to expect from your finance department will depend largely on factors such as how much involvement the owner/manager has in the organization much responsibilities as below

Providing budgetary systems in annually , monthly , and daily budget base;
It is the responsibilities of finance department Cash management and Bank Management;
Preparing of Vouchers of payments it maybe salary payments, purchasing payments or others payments and proper Processing of Payments;
Transaction of Maiwand bank recorded in it own banking software so safe and secure;
Dedicating of Financial Statements( income statement , balance sheet)for top management to show the bank profit and loss and in balance sheet show the capital, assets and liabilities of bank in the end of every year;
Preparation of Invoices(mention rates of all things) for the costumer to inform them about rates on Customer Parties;
Dealing Honestly and controllable method with costumer in daily transaction ;
Finance and account department information must suitable in financial decision making which is made by the top level management and identified the ways for implementation ;
It the duties and responsibilities finance and account department coordinating to procurement, HR, and others department up to achieve the org goals.
Saving and controlling assets of the Company who much is available and loss during the operation of the businesses;
Financially coordination and help other international companies it maybe loan, transfer of money, and payment;
Report on project wise profitability;
Dealing with Government Departments it maybe investment, payment of salary, and education sector or other task related to bank and Local Authorities;
Statutory Audit of the accounts of the Company; etc

4.2 Human Resources Department

Human resources department has the main role in bank this department has full authorities and responsibilities of hiring and firing in organization and try to find qualified, talent and professional employees for the bank for working honestly and doing right job on right time, with the growing realization of proper HR in the corporate sector it will grow into important activities of the bank, New idea is the ways for HR to organize and support employees and banking sector in their daily work, every bank or financial institution involved in various function on their every days job for the fulfillment of function need for highly effective team and appropriate manpower to run these function, all matters relating to the development and effective utilization of the Human Resources of the Company plays the key role in the formation of Human Resource Development policies and strategies and their implementation there are options that related to HRM mention as below.

More emphasis on professional, education, and training
The employer must control and think about current situation of employer
Conducting disciplinary enquiries and selecting of professional team
Handling sensitive activity through respective professional employees
Recruitment is a routine function of HR hire people educated
Identifies hiring need it means where need, for which duties need, develops the position description, Recruitment Plan, organizational chart and other recruitment related documents
May serve as Search Committee Chair and identifies Search Committee members
Conducts recruitments showing good faith efforts to broaden diversity
Ensures understanding of collective bargaining agreements’ specific provisions with respect to filling of bargaining unit positions
Strongly decision making capacity and greatly emphasized by the employers

Works with the (HM) to prepare the job description and ensures proper procedures for review and approval are met at the department level
Posts recruitment on selected job boards
Routes recruitment for review and routing
Processes final offer and finalizes the recruitment
Notifies interviewees not selected

Selected by the Hiring Manager and assigned to each recruitment
Reviews applications, participates in the interview process and recommends final applicant

4.3 Account Opening Department

Banking sector offer different type of account for their customer to open it maybe current account, fixed account, saving account, salary account it is depend up the customer choice which type of account they open in the bank when the customer come to the bank first all the account opening department meet them his or her before at all this department explain all rule and regulation of the bank for her or his, for example explain that they must have ID card or any other card of office, required money by which the bank open account, interest the bank have interest system it is belong to the customer if they want or do not want, explain history of the bank, and how much photos require.

· Be honest and keep reality in their daily businesses

· Secure against unintended over draft.

· Attention for proper care and give awareness to client bank careful for them.

· Collection information about clients and dedicate to top level management.

There are certain formalities, which are to be observed for opening account with a bank.

· Written application for administration of the bank to open account in formal form

· Identification of client in details

· Signature or fingerprint of client in formal paper

· Show the minimum money require for opening account for different type of account

· Making account for clients in good ethical behavior

· Give cheque for client and explain that

This is a department while the customer is come to the bank and want to open account in Maiwand bank, for the first time to make an account in Maiwand bank this department starting interview with client asking some question from client about his or her life, explain the rule and regulation of the bank what are the rules and regulation which the bank following in the Afghanistan, during the interview mention those requirement which require and necessary for opening account, in the period of interview the employee of the bank entering new or unique data to the bank software to sharing this new data to all branches of Maiwand bank in Kabul as well in provincial branches, Maiwand bank also has forms which they filling that during interview it is call KYC (know your customer), the employee of the bank share info of the client by flax cube to head office to provide card for customer.

We made two type account in the Maiwand bank individual AFS or USD and corporate AF or USD

· Individual:

(1) Individual USD : the bank made this type of account for single person or his/ herself USD

(2) Individual AFS: this type of account same as above but it is in AFS.

· Corporate

i) Corporate USD: this account is for corporation or large businesses or companies in this type of account president and vice president of the corporation can deposit and withdrawal money from bank it means both of them authorize person for bank in this type account include corporate finance, capital finance, credit extension, trade services, foreign exchange an treasury services.

ii) Corporate AFS: this corporate account the client can open in AFS as well.

[B5] 4.4. Remittance Department

A remittance is a transfer of funds to an overseas account. For example, if you need to send money to your child who is studying overseas or help your maid to send money back to his/her country, you may do so by arranging for a remittance with an authorized remittance agent.

4.4.1 Telegraphic Transfer (TT)

T/T stands for telegraphic transfer, a form of bank transfer. T/T payments are a cheap and fast way of transferring money overseas through most banks the customers for ordinary mail to keep the record, TT charges are taken from customer, no excise duty is charged on TT, and the TT charges are:

Telegram charges on TT= actual minimum USD.75

4.4.2 Swift

Swift is stand for (worldwide interbank financial telecommunication) the task and duties of this financial institution are messaging financial transaction and exchanging among member of banks and financial institution, multination companies, and main securities firm this services for the first time started in Belgium law in 1977 corporative organized by Belgium law, now in these days has 6500 participating members in the world and more than 208 countries process in excess of 300 million message daily.

If any cooperative organization owned has membership with worldwide interbank telecommunication (Swift)[B6] this cooperative organization can send their message so secure, safe and stablish format and now these days thousands of trading banks, securities firms and corporation around the world use this worldwide interbank telecommunication (Swift) system.

Over 8468 banking sector in world have membership with Swift the headquarter is located in Belgium and has it major financial centers and development market just solely carrier message it does not hold fund or dose it manage account on behalf of customer.

Since 2003 the central bank of Afghanistan has transferred the fund by via swift in the Afghanistan the commercial bank in Afghanistan now or currently offering international funds transfer some of banks has their own facilities but others use central bank of Afghanistan it is the demand of the banking sector cash in domestic currency(Afghani) or US dollar to remit money or funds in Afghanistan, individual and businesses entities need to have an account with central bank of Afghanistan and following the below steps:

If your account is at dab: order your financial institution abroad to initiate a swift transaction with the following information:

Ø Beneficiary your name or name of your entity

Ø Beneficiary account number your account number at dab

Ø Beneficiary bank- dab, Kabul, Afghanistan

Ø Beneficiary swift bic, afgbaka

Ø Correspondent bank for clearing for USD clearing use

Ø Citibank New York citius33 account # 10920169

Ø Bank of America bofaus account # 629008872 for euro clearing used

Ø Deutschebank- deutdeff account # 400871070

If your account is with a commercial bank: order your financial institution to initiate a swift transaction with the following information.

Ø .beneficiary – name of your bank

Ø beneficiary account number- account number at dab for your bank

Ø beneficiary bank- dab, Kabul, Afghanistan

Ø beneficiary swift bic, afgbafka

Ø correspondent bank for clearing ( same as above)

Ø forward credit information: you must have the sending bank include instruction that the transfer is for forward credit to: your name, your account number

Ø To remit funds from Afghanistan to another country please contact your bank for detailed assistance.[B7]

4.4.3 Western Union:

Western Union is a financial services and communication company of transferring money for the first it started in America now it headquarters office in meridian Colorado this financial services center transfer money person to person, Money orders, Businesses payments and other commercial services because of this it call global leader in money transfer services and it is the first industrialized monopoly dominated as telegraph industry 19 th century but western union more than 150 years has been connecting people globally Maiwand bank also has the facilities of western Union providing money transferring facilities services for it costumer all over the world this bank will help it costumer sending and receiving from near or far places worldwide this method of transferring money is fast, convenient and trust.

Special features:

· Online it means that done by internet

· Western Union by Mobile introduce mobile money transfer services

· Sending and receiving funds

· It has transfer fees

· Anyone can send and receive money through any Maiwand bank branches displaying the western union logo across Afghanistan.

· Can receive money as least as 7 minutes it means slightly can receive your money anywhere.

· In transferring money there no need of account of opening of account.

· Can transfer your money so secure, faster, and easily.

· Complaint with da Afghanistan bank regulations.

How to send money:

· A person can simply send amount go to the any branches of Maiwand showing logo of western union.

· Step one : complaint the form

· Fill out the required form. The, simply show the bank representative your identification card.

· Step two : present the payments amount which you have to transfer

· Give the bank representative the form, cash and sign the receipt.

· Step three: get the receipt

· Your receipt will have MTCN (Money Transfer Control Member) that will allow you.

Ex:

How to send money?

· Ask customer to fill quick form;

· Sender name

· Receiver name

· Reason for send

· Amount

Tell customer about financial details.

· Charges & exchange rate

· Net amount including charges (principle + charges)

How to receive money

· Step one: visit Maiwand bank branches in every province of Afghanistan

Provide the bank representative with the following information:

· The money transfer control number (MTCN) from your sender’s receipt its required

· Sender’s must issue his or her issue first and last names

· Mention of Country and city the money was send from

· The amount that was send how much is that

· Identified your first and last names, address, and telephone number

· Step two: identify yourself who are you

· Simply give the bank representative your identification card (ID card).

· Step three: sign the receipt of money

· So carefully review and sign the receipt that bank representative gives you.

· Step four: check, calculate and receive the money

The bank representative will give you the money that was sent to you with a copy of the receipt and you are on your way.

Charges

Maiwand bank does not charge any fee/commission from the receiver against money received through western union.

As an affiliate of westron union, we as maiwand bank offer our customers the convenience of money transfer services through our several designated branches.

4.5 Cash Department

Cash department performs the following functions

Receipt

Cash department is one of the important department in bank which perform the function of coming money and outgoing of money to bank all deposit of client control by cash department by the name of ledger account, the bank make for every client their own ledger card.

Payments

Banker is responsible to repay the money the person from whom he or she received money usually by honoring cheques.

Cheques and Their Payment

The negotiable instruments. Act, 1881

“Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand”.

Since a cheque has been declared to be bill of exchange, it must have all its characteristics as mentioned in section 5 of the negotiable instruments act, 1881.

Therefore, one can say that a cheque can be defined as an:

“an unconditional order in writing drawn on a specified banker, signed by the drawer, requiring the banker to pay on demand a sum certain in money to, or to the order of, a specified person or to the bearer, and which does not order any act to be done in addition to the payment of money (Law of banking by dr. hart, p.327).

The Requisites of Cheque

There is no prescribed form of words or design of a cheque, but in order to fulfill the requirements mentioned in section 6 above the cheque must have the following.

· It should be in writing

· The unconditional order

· Drawn on specific banker only

· Payment on demand

· Sum certain in money

· Payable to a specific person

· Signed by the drawer

Parties to cheque

The normal cheque is one in which there is a drawer, a drawer banker and a payee, or no payee but bearer.

· The drawer

· The drawee

· The payee

Types of cheques

Bankers in Afghanistan deal with three types of cheques

a) Bearer cheques

Bearer cheques are cashable at the counter of the bank. These can also be collected through clearing.

b) Order cheque

These types of cheques are also cashable on the counter but its holder must satisfy the banker that he is the proper man to collect the payment of the cheque and he has to show his identification. It can also be collected through clearing.

c) Crossed cheque

These cheques are not payable in cash at the counters of a banker. It can only be credited to the payee’s account. If there are two persons having accounts at the same bank. One of the account holder issues a cross-cheque in favor of the other account holder. Then the cheque will be credited to the account of the person to whom the cheque was issued and debited from the account of the person who has actually issued the cheque.

Payment of Cheques

It is a banker’s primary contract to repay money received for his customer’s account usually by honoring his cheques. Payment of money deposited by the customer is one of the root functions of banking. The acid test of banking is the receipt of money etc. from the depositors, and repayment to them. This paying function is one, which is the distinguishing mark of a banker and differentiates him from other institutions, which receive money from the public. However the banker’s legal protection is only when payment is in ‘Due Course’ the payment in due course

means payment in accordance with the apparent tenor of the instrument, in good faith and without negligence to any person in possession thereof under circumstances, which do not afford a reasonable ground of believing that he is not entitled to receive payment of the amount there in mentioned. It is a contractual obligation of a banker to honor his customer’s cheques if the following essentials are fulfilled.

· Cheques should be in a proper form:

· Cheque should not be crossed:

· Cheque should be drawn on the particular bank:

· Cheque should not mutilated:

· Funds must be sufficient and available:

· The cheque should not be postdated or stale:

· Cheque should be presented during banking hours:

4.6 Operation Department

Operation department also an important department in the bank which control over all activities of the bank and it is the responsibilities of operation department to control the whole systems of branch and authorize the big and huge transaction which is making by cahier of the bank.

4.7 Internal audit Department

Internal audit department is an independent department it object is assurance and consulting activities designed to add value and improve an org operations it helps an org to accomplish its objectives by bringing a systematic, discipline approach to evaluate and the effectiveness of risk management, internal auditors test and evaluate internal control in all areas of the bank and collect a report to top level management on finding and recommendation of them this department start auditing consisting of at least 3 person jointly from finance department, account department, operation department, and Administration department outstandingly good nature of payment will refer to the internal audit department for suitable verification and investigation.

Annual audit

Every end of the year independently audit the financial statement by external, qualified and experienced chartered accountant.

Develop an understanding of the business area under review, it involve objectives, measurement, and key transaction types.

Describe the key risk facing the business activities

Identify management practices properly control and monitored

The report of audit must be objectively, clarity, brevity, timeliness and accuracy

All the reports will be submitted to the Finance & Accounts Department in English language only. Submission of reports other than English language will not be accepted in the Finance & Accounts Department.

4.8 Islamic Banking Department

Islamic banking is that kind of banking which process with the principle of Shariah or Islamic ruling and it is an application to development of Islamic economics in Islamic banking or ruling of shariah prohibits payment or acceptance of riba for the lending and acceptance or money as well as carrying out trade or other activities to make facilities of services and products in considered in contrary to its principle, at less it has 20^th century history in lslamic banking purpose is just development of Islamic economics in Islamic banking must following the recorded saying and action of prophet Muhammad (ص), islamic banking the method of ethical financing and the way to show for all the world muslim and others ethical operation of financing, now in these days in Islamic countries and other countries in the world these method of Islamic financing applied because our prophet Muhammad ص done with his wife trading operation or Islamic partnership (mudarabah) dominated as Islamic method of financing in day to day businesses, in generally Islamic law also prohibit trading in financial risk( which is seen as a form of gambling) in Islamic banking this kind of investment called unlawful or haram, Islamic financing or banking at less 30 year ago common in the all over world now a lot commercial bank in the world doing western and as well Islamic banking Islamic banking doing by muslim and non-muslim bank in world. Maiwand bank also has the department of Islamic banking in Kabul and other branches of Maiwand bank providing Islamic banking under Islamic method and law ( shariah) or regulation of islam it means following Islamic principle”.

Following Islamic Banking Applications are in used in Maiwand bank

Musharka (Partnership)

Musharakah is the one of method which Islamic banking offer to all the providers of money or capital have an agreement between each other’s and investment of their capital in business enterprise and others in law of shari ah, both parties provide capital for financing in the project, both parties share profit on pre agreement ratio, share losses on basis of equity participation, this word derived from Arabic language word sharikah which means making partnership, all the participants can participate in daily management of the business but if not necessarily require to do this it means that every parties can take part in management of the venture is carried by all or some or just one party member, all the participants included in the contribution of financing of a venture, all the parties share their profit on pre agree ratio if there losses are shared to each parties equity participation, the profit distribute between the participants in predetermined ratios in the loss is borne by each partners in proportion of his contribution in other means the profit distribute according to an agreed ratio, which need not be the same as the capital proportion. However, loss are shared in exactly the same proportion in which the different partners have provides finance for the business.

Mudaraba

Mudarabah is the method of Islamic financing in to two person or two parties with each other on the basis of partnership where the capital owner of the businesses providing capital and the other puts his or her management skills in to the business. Capital of the owner is not involved in the actual day to day operation of business after expiry of the period it maybe termination of the contract return are obtained from the business, the capital owner gets back his principal amount together with a pre agreed share of profit, both parties must agree on the ratio in which profits will be shared between them, the capital of owner may not have the ability or the experience to run a profitable businesses, on the other hand, agent(the mudarib) may not have adequate capital to invest in a business or projects, therefor by entering into a contract of mudarabah each parties compliments one another, allowing a business venture to be financed.

Steps of Mudaraba

Mudarib use his or her effort and abilities for the investment of capital in exchange for sharing in profit that both parties made agreement, the duties of the bank is providing capital as capital of the owner.

1. The Results of Mudaraba: the end of period according to agreement which agreed by both parties, both parties calculate the earnings and distribute the profit at end of mudarabah, the subject is to distribute legally and honestly.

2. Payment of Mudaraba Capital: first at all the bank recover all the mudarabah capital contribute before distribute the profit which gain from the business among both parties because of the profit is considered guarantee for the capital.

Difference between Islamic Conventional Financial Systems

A survey of the literature point outs that there are numerous experimental studies that tries to look into the relative efficiency of financial institutions operating within a country (and in some cases between countries). Generally, these studies differ in the specific methodology used and the type of banks considered in the study sample. This reviews some of these studies by well-located dividing them into works on bank efficiency in general and comparative efficiency between Islamic and conventional banks. Every Islamic bank has a committee of religious advisers whose view is sought on the acceptability of new instruments and who provide a religious audit of the bank's accounts. In Islam moral and equitable values form an integral part of the law governing contractual and financial relations to such an extent that the relationship between equity, law and religion is central to all business. Table 1 and Table 2 compare the Islamic financial instruments and practices with those of conventional banking.

Islamic Bank (La Riba)	Conventional Banking (Riba Based)
Dominant Attractor
As advised by God in all Abrahamic beliefs and Faiths, as declare by law of Judeo-Christian-Islamic Value system and way of life	Money
Defining Purpose
All the resources presented by employs it means fulfill the basic need of everyone without more spending	Providing money by spending money for those who have it
Bank size
It is in small and medium size bank	Very large with huge amount (Mega-banks)
Ownership

In this perform an acting with shareholder as personal in role , direction and procedure of bank	It is and impersonal method of banking with stay away shareholder role in different cases
Financial Capital
Financing local and national with clear community boundary and estimate the value of areas	Globally, With no border with broad range
Purpose of investment
Purpose of the investment is make incensement in production for community to provide to rich and success	Just incensement of a person gained profit, wealth and properties
Role of profit
An incentive to invest productively in the community	An be end Maximized
Coordinating mechanisms

Self organizing market and networks of communication around temples, synagogues, churches, Masajid, and other Social congregations and networks	Centrally planned by Mega-corporations
Cooperation
Among people and communities to advance the common good for all	Among competitions, to escape the discipline of competition and in some cases to avoid regulations
Purpose of competition
Stimulate efficiency and innovation	Eliminate the unfit and capture markets
Government’s Role
Advance the human interest, as revealed in all God’s message	Protect the interest of property
Trade
Free , But fair and balanced	Free, but for the benefit of mega corporations
Political orientation
Populists, democracy of persons	Elitist, Democracy of the money(greed is good!)

This comparison is based on a comparison originated by Professor David C. Korten; it was adapted by the author to compare conventional riba-based banks with riba- free banks. David C. Korten, the post-corporate world, a co publication of Kumarian press Inc. and Berret Koehler publishers, Inc, 1999

Chapter 5

FINANCIAL STATEMENTS ANALYSIS.

5.1 Statement of Financial Position

5.2 Statement of Comprehensive income

5.2.1 Common Size Analysis (Vertical and Horizontal):

The term "trend analysis" refers to the concept of collecting information and attempting to spot a pattern, or trend, in the information. In some fields of study, the term "trend analysis" has more formally defined meanings. Although trend analysis is often used to predict future events, it could be used to estimate uncertain events in the past. Financial statement information is used by both external and internal users, including investors, creditors, managers, and executives. These users must analyze the information in order to make business decisions, so understanding financial statements is of great importance. Several methods of performing financial statement analysis exist. I will discuss two of these methods: horizontal analysis and vertical analysis.

vertical analysis

MAIWAND bank

Balance sheet

as on as on dec 31, 2013 and 2012

			Common size Analysis $ in (000)
Asset	2012	2013	2012	2013
Cash and cash equivalents	4815547	3934146	26.52487	172.7688
Loans and advance to customers	3391243	2678555	38.95858	245.3307
Investment in subsidiary	18722	17199	6067.37	44438.42
Property and equipment	680699	560181	186.2839	1222.238
Intangible assets	206767	158263	659.3626	4023.737
Deferred tax assets	254115	213315	489.1953	3274.014
Other assets	1054392	703204	148.3961	789.0577
Total assets	10402763	8247664	12.65239	79.97645
Liabilities
Deposit form bank	200579	1348713	77.37206	4147.872
Deposit from customers other liabilities	8245763	4883659	21.36773	100.8974
Other liabilities	822964	618633	168.6827	1010.951
Total liabilities	9269306	6851005	15.23174	89.75603
Equity
Shared capital	950000	880000	118.5826	875.7643
Accumulated losses	416543	588756	177.2427	1997.335
Total equity	1366543	1468756	71.04836	608.8181
Total equity and liabilities	1043527	8319761	100	100

Interpretation: Common size Analysis . There is decrease in long term assets of which mainly cause the decrease in long term advances which are decrease in long term investment. on the liability side the total current liability has shown change The main reason for which is increase in current deposits, which are The longterm liability of the organization is also decreased The main reason for this is that fixed deposits of organization are increased which shows that there is a slight change in the organization’s position

The common size analysis given in the table shows that there have been unimproved in the current assets in 2013s compared to 2012.

vertical analysis

MAIWAND bank

consolidated profit & loss account

as on dec 31, 2013 AND 2012

Items			Common Size Analysis $ in(000)
	2012	2013	2012	2013
Interest income	626045	433456	4.879	0.9879
Interest expense	126788	98723	7.090	4.8795
Net interest income	752833	532179	1.6754	5.8456
Fee and commission income	21146	44334	6,3451	0.8970
Fee and commission expense	9568	4511	2.876	3.5460
Net fee and commission income	107814	48845	0.8970	2.6573
Foreign exchange gain	128960	78520	9.923	0.7689
Gain on disposal of noncurrent asset held for sale	34546	67860	3.098	3.3487
Other operating income	128960	78520	0.8796	2.9000
Prizes on Qismat deposit	4536	98071	0.8765	5.9080
Operating income	12890	78520	7.980	0.67580
Not impairment loss on loan and advance	10395	4666	0.534178	0.333212
Employee benefit expenses	6157	6236	0.316396	0.44533
Business development expenses	177259	143300	9.108988	10.23345
Depreciation and amortisation	63283	34241	3.251988	2.445244
Amortisation of intangible assets	367	136	0.018859	0.009712
Operating lease expenses	1321	1361	0.067884	0.097193
Other operating expenses	45998	243218	2.363746	17.36887
(loss)profit before tax	135911	163180	2.6789	12.7897
income tax	850000	42652	0.6786	9.0876
(loss)/profit for the year	220911	208832	2.8765	0.8976
Income for the year	1945979	1400310	100	100

Interpretation: From Income Statement in common size Analysis we see there is a percentage of deceases in all Items of (2013) in minus () compare to (2012) which means losses in this (2013) years.

The common size analysis of the Maiwand Bank is clearly showing that the bank has shown unimproved in its performance. The organization shows losses in this (2013) years which is a negative sign and it will not build up the moral of the employees by which they cannot work effectively and efficiently decreasing the performance of the bank.

4.2.2 Horizontal Analysis (index analysis)

Methods of financial statement analysis generally involve comparing certain information. The horizontal analysis compares specific items over a number of accounting periods. For example, accounts payable may be compared over a period of months within a fiscal year, or revenue may be compared over a period of several years. It is a procedure in fundamental analysis in which an analyst compares ratios or line items in a company's financial statements over a certain period of time. The analyst will use his or her discretion when choosing a particular timeline; however, the decision is often based on the investing time horizon under consideration.

Following as an example of Horizontal Analysis of Maiwand Bank balance sheet & Income Statement

Horizontal analysis

MAIWAND bank

Balance sheet

as on dec 31, 2013 AND 2012

			Index Analysis $ in (000)
Asset	2012	2013	2012	2013
Cash and cash equivalents	4815547	3934146	100	81.69676
Loans and advance to customers	3391243	2678555	100	78.98446
Investment in subsidiary	18722	17199	100	91.86519
Property and equipment	680699	560181	100	82.29496
Intangible assets	206767	158263	100	76.54171
Deferred tax assets	254115	213315	100	83.94428
Other assets	1054392	703204	100	66.69284
Total assets	10402763	8247664	100	79.2834
Liabilities
Deposit form bank	200579	1348713	100	672.4099
Deposit from customers other liabilities	8245763	4883659	100	59.22628
Other liabilities	822964	618633		75.17133
Total liabilities	9269306	6851005	100	73.91066
Equity
Shared capital	950000	880000	100	92.63158
Accumulated losses	416543	588756	100	141.3434
Total equity	1366543	1468756	100	107.4797
Total equity and liabilities	10635849	8319761	100	78.22376

Interpretation: Here will be increases & decreases in Assets. Liabilities & Owner Equities compare to (2013) to(2012) we cannot say correct (numerically) figures because shortages of years

horizontal analysis

maiwand bank

consolidated profit & loss account

as on dec 31, 2013 and 2012

Items			Index Analysis $ in(000)
	2012	2013	2012	2013
Interest income	626045	433456	100	69.2372
Interest expense	126788	98723	100	77.86462
Net interest income	752833	532179	100	70.69018
Fee and commission income	98246	44334	100	45.1255
Fee and commission expense	9568	4511	100	47.14674
Net fee and commission income	107814	48845	100	45.30488
Foreign exchange gain	21146	29675	100	140.3339
Gain on disposal of noncurrent asset held for sale	128960	78520	100	60.8871
Other operating income	152	662	100	435.5263
Prizes on Qismat deposit	2303	614	100	26.66088
Operating income	455558	229458	100	50.36856
Not impairment loss on loan and advance	10395	4666	100	44.88696
Employee benefit expenses	6157	6236	100	101.2831
Business development expenses	177259	143300	100	80.84216
Depreciation on fixed assets	63283	34241	100	54.10774
Amortization of intangible assets	367	136	100	37.05722
Operating lease expenses	1321	1361	100	103.028
Other expenses	168977	176049	100	104.1852
(loss)profit before tax	45998	143218	100	311.357
income tax	9200	28627	100	311.163
(loss)/profit for the year	36798	114591	100	311.4055
TOTAL	2149273	1598384	100	2504.104

Interpretation: in Index Analysis Compare (2013) to (2012) the percentage of net income of (2013) is in minus () which means the losses in this (2012) year. The Index analysis of the Maiwand Bank is clearly showing that the bank has shown The common size analysis of the Maiwand Bank is clearly showing that the bank has shown unimproved in its performance. The organization shows losses in this (2013) years which is a negative sign and it will not build up the moral of the employees by which they can work ineffectively and inefficiently decreasing the performance of the bank. in its performance. The organization shows losses in this (2013) years which is a negative sign and it will not build up the moral of the employees by which they cannot work effectively and efficiently decreasing the performance of the bank.

5.3 Ratio analysis:

Financial ratios are useful indicators of a firm's performance and financial situation. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms. Ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements. Financial ratios are usually expressed as a percent or as times per period. Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two variables. With the help of ratio analysis conclusion can be drawn regarding several aspects such as financial health, profitability and operational efficiency of the undertaking. Ratio points out the operating efficiency of the firm i.e. whether the management has utilized the firm’s assets correctly, to increase the investor’s wealth. It ensures a fair return to its owners and secures optimum utilization of firm’s assets. Ratio analysis helps in interfirm comparison by providing necessary data. An inter firm comparison indicates relative position. It provides the relevant data for the comparison of the performance of different departments. If comparison shows a variance, the possible reasons of variations may be identified and if results are negative, the action may be initiated immediately to bring them in line. Yet another dimension of usefulness or ratio analysis, relevant from the view point of management is that it throws light on the degree efficiency in the various activity ratios measures this kind of operational efficiency.

a) Liquidity ratios

b) Leverage ratios

c) Profitability ratios

Several financial services provide composite data on various industries. The following are the different sources of financial services that provide the industry medians and averages over industries.

· The Department Of Commerce Financial Report

· Robert Morris Association Annual Statement Studies

· Standard And Poor’s Industry Surveys

· The Almanac Of Business And Industrial Financial Ratios

· Dun And Bradstreet

· Value Line Investment Service

a) Liquidity ratios

Liquidity ratios measure a firm’s ability to meet its current obligations. These include:

Current ratio:

Current ratio = current assets / current liabilities

This ratio indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future. Current assets normally include cash, marketable securities, accounts receivables, and inventories. Current liabilities consist of accounts payable short term notes payable, current maturities of long term debt, accrued taxes, and other accrued expenses. Current assets are important to businesses because they are the assets that are used to fund day-to-day operations and pay ongoing expenses.

Maiwand bank

Year	2012	2013
Current assets	8247664	10402763
Current liabilities	6151005	9269306
Current ratio	1.07	1.06

Interpretation:

The ratios for the last 2 years are 1.07 & 1.06, shows below standard of 2:1 which means efficient use of funds but at the risk of low liquidity.

Sales to working capital:

Sales to working capital = sales / working capital

Sales to working capital give an indication of the turnover in working capital per year. A low working capital indicates an unprofitable use of working capital_.

Maiwand bank

Year	2012	2013
Sales	433456	626045
Working capital	588756	416543
Sales to working capital	0.6 times	0.9 times

Interpretation:

This liquidity ratio for the years 2012 & 2013s 0.6 & 0.9 times respectively, compared to standard ratio 2:1 this ratio is lower which shows low short term liquidity efficiency at the same time holding less than sufficient current assets mean inefficient use of resources

Working capital:

Working capital = current assets – current liabilities

A measure of both a company's efficiency and its short term financial health. Positive working capital means that the company is able to pay off its short term liabilities. Negative working capital means that a company currently is unable to meet its short term liabilities with its current assets (cash, accounts receivable and inventory).
Also known as "net working capital", or the "working capital ratio".

Maiwand bank

Year

2012

2013

Current assets

8247664

10402763

Current liabilities

6851005

9269306

Working capital

1396659

1133457

Interpretation:

It is very clear from the above calculations that the working capital of the bank is gradually increasing over the years, which shows good short term liquidity efficiency

b) Leverage ratios:

By using a combination of assets, debt, equity, and interest payments, leverage ratio's are used to understand a company's ability to meet it long term financial obligations. Leverage ratios measure the degree of protection of suppliers of long term funds. The level of leverage depends on a lot of factors such as availability of collateral, strength of operating cash flow and tax treatments. Thus, investors should be careful about comparing financial leverage between companies from different industries. For example companies in the banking industry naturally operates with a high leverage as collateral their assets are easily collateralized.

These include:

Debt ratio:

Debt ratio = total debt / total assets

The ratio of total debt to total assets, generally called the debt ratio, measures the percentage of funds provided by the creditors. The proportion of a firm's total assets that are being financed with borrowed funds. The debt ratio is calculated by dividing total long-term and short term liabilities by total assets. The higher the ratio, the more leverage the company is using and the more risk it is assuming. Assets and liabilities are found on a company's balance sheet.

Maiwand bank

Year	2012	2013
Total debt	6851005	9269306
Total assets	8247664	10402763
Debt ratio	0.84	0.89

Maiwand bank

Calculating the debt ratio, we came to see that this company is highly leveraged one

Debt to equity ratio:

Debt to equity ratio = total debt / total equity

The debt to equity ratio is the most popular leverage ratio and it provides detail around the amount of leverage (liabilities assumed) that a company has in relation to the monies provided by shareholders. As you can see through the formula below, the lower the number, the less leverage that a company is using. The debt to equity ratio gives the proportion of a company (or person's) assets that are financed by debt versus equity. It is a common measure of the long term viability of a company's business and, along with current ratio, a measure of its liquidity, or its ability to cover its expenses. As a result, debt to equity calculations often only includes long term debt rather than a company's total liabilities. A high debt to equity ratio implies that the company has been aggressively financing its activities through debt and therefore must pay interest on this financing.

Maiwand bank

Year	2012	2013
Total debt	6851005	9269306
Total equity	1468756	1366543
Debt to equity ratio	5.25	7.35

Interpretation

We can see from the above calculations that this ratios continuously increasing in the last two years.

c) Profitability ratios:

Profitability is the net result of a number of policies and decisions. This section of the discusses the different measures of corporate profitability and financial performance. These ratios, much like the operational performance ratios, give users a good understanding of how well the company utilized its resources in generating profit and shareholder value. The long term profitability of a company is vital for both the survivability of the company as well as the benefit received by shareholders. It is these ratios that can give insight into the all important "profit". Profitability ratios show the combined effects of liquidity, asset management and debt on operating results. These ratios examine the profit made by the firm and compare these figures with the size of the firm, the assets employed by the firm or its level of sales. There are four important profitability ratios that i am going to analyze:

Net profit margin:

Net profit margin = net profit / sales x 100

Net profit margin gives us the net profit that the business is earning per dollar of sales

This margin indicates the profit after all the costs have been incurred it shows that what % of turnover is represented by the net profit. An increase in the ratios indicates that a firm is producing higher net profit of sales than before.

Maiwand bank

Year	2012	2013
Net profit	208832	220911
Sales	322132	483025
Net profit margin	65%	46%

Interpretation

Maiwand bank

Therefore, the net profit margin was 65 % in 2012, increase to 46% in 2013

Chapter 6

CRITICAL ANALYSIS & SWOT ANALYSIS

6.1 Critical analysis

During internship it was my prime objective to furnish my knowledge (theory) to various practical situations. The practical work presents an analytical problem while relating theory with practice. As a result, analysis of practical versus theory requires a distinct approach. This part of report is the essence of the internship, as this will help to better understand the working environment of the bank by finding the relationship between what is written in the books and what is actually going on in fields. The theory written in the books in cases is not implemented as it is. In some cases theory is implemented with a little modification but in other cases theory has nothing to do with practice. In accounting, banks don’t prepare worksheet, but part of worksheet is prepared like trial balance. The securities for the loans are handled in the same way as theory says like mortgage, pledge, hypothecation, advances against insurance policies or liquidation procedure is the same. There is some difference lies in type of loans in bank that is theory talks about four or five type of loans that is cash finance, overdraft, loan etc. but in practice there are some more types used by bank like running finance, demand finance etc. all other concepts of remittances, bills foreign exchange deposits, letters of credit are in accordance with theory almost. A bank’s balance sheet is different from that of a typical company. You won’t find inventory, accounts receivable, or account payable, instead under assets, you’ll see mostly loans and investments, and on the liabilities side, you’ll see deposits and borrowings.

6.2 SWOT Analysis

Swot analysis is a process to identify where we are strong and where we are vulnerable, where we should define and where we should attack. It tells us our strengths, our weaknesses, the opportunities which prevail in the market and the threats which we may face from our competitors and other from other potential factors.

SWOT analysis is an acronym that stands for Strength, Weaknesses, Opportunities, and Treats SWOT analysis is careful evaluation of an organization’s internal strength and weaknesses as well as environmental opportunities and treats.

6.2.1 Strength

Maiwand bank is one of the leading banks in the banking sector of Afghanistan, its growing day by day and public love to open an account in Maiwand bank.
Maiwand Bank Jalalabad branch is located in the main place of Jalalabad city which is near to money exchange market
The employees at Maiwand Bank are offered reasonable monetary benefits.

Normally two bonuses are given Eid-ul-Fiter&Eid-ul-Azha.

This serves as an additional benefit and competency for bank and source of motivation for the employees.

Maiwand Bank has online banking system which can not only increase the business of the branch but also enhanced the importance of the branch, rather strategic step.
The bank has another competency, i.e. it has board bass’s network of branches throughout the country.

It also has more than one branch in high productive cities. This ensures that provided services at their nearest possible place to confirm customer satisfied.

6.2.2 Weaknesses

Being a huge and large network of branches the IT base of the bank overall is weak. It would take time to online the bank fully each and every branch.
There is immense pressure on the branch for ATM installation as during the peak time.
j affecting the bank in negative way, they sometime have to provide loan under the pressure, which leads to uneven and adjusted feeling in the bank employees.
The promotion and bonuses etc. in the bank are often powered by senor’s favoritism or depends upon their wills and decision.
The overall staff of the branch is very supportive but due to overload sometimes it becomes a headache for walking customer to get proper attention. So there is drastic need for one customer facilitation seat at the branch to facilitate the customer at the branch during the peak (salary and pension) days.
The top management of the bank is taking keen interest in the training of its workforce however there is dire need of training the cash officers of the branch specially and generally for the bank.
As there is huge load on the cash staff they need proper training in the area of time management and stress management.
The workload in Maiwand Bank is not evenly distributed and workload trends to be more on employees while others abscond away from their responsibilities, which server as demonization factor for employees performing above average work.
There is a communication gap between different levels of management.

6.2.3 Opportunities

The word today has become a global village because of advancement in the technologies, especially in communication sector.
More emphasis is now given to avail the modern technologies to better the performance.
Maiwand Bank has utilized the electronic banking opportunity to ensure on line banking 24 hours a day, this would give a competitive edge over others.
New products and services can be added to its product line.
Because of the need for micro financing in the market, there are lots of opportunities in this regard.
Other banks have already initiated, now the time has arrived when Maiwand Bank must realize it and take on step to cater an ongoing demand.
New and attractive schemes should be introduced for overseas Afghani, so that they should save their money in Afghani banks.

6.2.4 Threats

The bank is facing threats with emergence of new competitors especially in terms of foreign bank.
These foreign banks are equipped with heavy financial power with excellent and innovative ways of promoting and performing their services.
The bank has to take initiative in this regard or will find itself far back in competition.
Demand of ATM machines is increasing day by day. All commercial banks surrounding the vicinity are providing ATM facility to its customers Maiwand Bank Jalalabad though recently on lined is lacking behind in this area.
The bank is currently acting upon the policy of downsizing which threaten the environment of the bank. The employees feel insecure in doing their jobs and work. Hence affecting the overall performance of employees negatively.
There exists no regular and specific system of the removal of customer complaints. The branch is facing a high number of customer complaints.

CHAPTER 7

CONCLUSION AND RECOMMENDATION

7.1 CONCLUSION

Criticism with positive approach is an important initiator that gives birth to recommendation. In this section some findings and recommendation are given to Maiwand bank improvement of Bank.

In the history of banking, the origins of the first sector goes back to the goldsmiths and their receipts confirming the deposit of gold by a client and its availability to the bearer, and the second sector goes back to the moneylender who lent his own money on interest. Later on these two were combined to form the progenitors of the modern bank.

The activity in the first sector provides the modern bank with the ability to create bank credit second the bulk of the monetary basis for this creation (using depositors’ money). And the

Thus this combination enables the modern bank to lend huge sums of money.

In turn, this enables the debt-based financing of enterprises, large and small.

This contributes to greatly accelerate economic activity, using a relatively small monetary base; but it also has its negative side. Business cycles are traced back to speculation and excessive bank credit. Beyond a certain limit, unstable banks, bank failures, and the consequent economic chaos are the results.

Institution that delivers elegant services by nourishing supreme, competitive and favorable environment. Overall experiences there were very good. Branch management pays keen attention and concern for all employees. The employees are motivated, energetic, well groomed and trained in order to serve the customers in most effective manner. Special individualized attention is paid t every customer and is also given guidance in important consultancy. However due to growing number of customers and over whelming work, its becomes very difficult for managers to properly gaud interns. And internees have to put maximum effort and patience to get guidance to get guidance and knowledge. All the department have their own importance is bank s. And so internees are sometimes rotated in all departments but this gives them negligible times to get adequate grip and knowledge in any particular department. Before me few inertness were given full rotation in bank but at my time and after that, internees were confined to few department only. I started my internship at general credit department, then proceeded to account department, then to leasing department, then to agri credit department and finally again back to general credit departme3nt where my tenure of internship ended.

7.2 RECOMMENDATIONS

Recommendations are considered to be the most important part of an internship report, without which no report is considered complete and meaningful. This Part of the report is bases on the previous sections I.e. Review and analysis. Moreover, for bringing suggestions, discussions have been conducted with the staff of Maiwand bank officers, who not only provided the basis for recommendations but also pointed, out some areas, where the change for the development is utmost important. Realizing the importance of this section, efforts have been made to give feasible recommendations, which are categorized under the following headings.

Maiwand bank should develop a modern connectivity architecture to effectively maintain an online connection of the branch with other branches and also the ATM link, which may include using modern technologies like fiber cable, routers etc. Also backup links should also be developed; also a proper IT department should be established in all branches, with professional having the knowledge to maintain a secured connection with other banks. Also scheduled backups of data should be done within the bank.

Work shop programs should be conducted in every city, rather than just two centers, for all Maiwand bank employees. These Workshops should relate to all aspects of banking an may also be conducted with other banks as an joint program. Also as parts of the human resource training, counseling programs should be stated for junior executives or new entrants into the banks, introducing them to their prospects in this industry. The lower staff employed at Maiwand bank should also be given a chance to succeed inline by training them in different simple jobs at the bank, which may include sorting of cheese, phone banking etc.

Incentive schemes should be developed for the employees that can help motivate them,which might include:
Personal loans and car financing facilities for all ranks of employees
Scholarship program for all employees.

Introducing employees awards at branch and regional levels

Job rotation programs to enhance the skills of employees

New and innovative product should be introduced by Maiwand bank, like other bank such as Kabul bank and Azizi Bank develops for their customer. For this purpose, special teams should be developed that include professional from all department s of the banks to come with ideas. This process will increase the number of ideas generated and produce innovation products for the bank that might give them the edge.

There are some departments in the banks that do not have enough employees, while some have more than needed. All this creates inefficiencies and so the operations manager should look at the department of the branch and see where inefficiencies lie. In consultation of with the heads of the departments and hire individuals where there are less employees or rotate employees from other department.

There should be a prayer room developed in all branches as many employees want to pray, but do not have the proper place to do it. Also work like sorting, which takes up a lot of apace should be done in a separate place and amenities like television and internet connection should be placed in the common room, so as to give employees a relaxing environment when they have a break today is the era of electronic media and advertising play a major role in the success and worth building of any organizations. Maiwand bank's management should pay some attention at this side as well

Recommendations necessary for the success of Islamic banking are as follows

· Islamic banks can expand its operation by implementing Shariah law this would not be achieved without hiring professionals with the skill and experience in financial consultancy and preparation of feasibility studies for projects.

· Public faith can be constructed by communicating the Shariah law by indicating the allocation of the bank’s current investments, the plans for future investments and information about the management of such investments.

· Technology is vital tool to assist communications, transactions and interactions and to survive in the highly competitive environment of the banking industry in world.

· Islamic banks must be clearly defined about their practices, strategies, objectives, missions and visions, and convey them to the public.

Finally, it is recommended that use of Islamic finance principles for public sector financing needs more attention, as regulators need to provide and enabling environment and ensure that proper procedures for good corporate governance, transparency and ensuring Shariah compliance are in place it could be helpful in ensuring fiscal discipline and thus giving a just basis for monetary management

· Maiwand Bank should introduce more schemes like bakht account. Which help the bank to attract more deposits in short terms.

· Jalalabad is popular place for tourists, most of the tourists used ATM cards, so this facility should in the branch in order to attract the local as well as foreign customer.

· The customer should be able to request for issuance of check books from their mobile phones through Maiwand Bank mobile banking.

· It is recommended that employees should be trained to be polite and maintain silence as much as possible and do not do not discuss politics or personal problems with each other during working hours.

· The bank should ensure the quality of staff. Capable persons should be placed for every position rather than fulfilling it.

· Physical verification of the property offered as a security is must rather to rely on the documents. Investigation should also be conducted if the property is of ancestral nature or joint property.

· The competent consultants should do valuation of the property and mere completion of formatives should not be taken into account.

· Maintain in safe custody all collateral i.e. shares, govt. securities, property title deeds, mortgage documents etc.

· Bank must ensure receipt of periodical statements of stock and receivables from customers, as per frequency specified in the credit approval.

· Bank should also do the periodic physical checking and evaluation of pledged inventories as per terms of the approvals, i.e. using applicable margins, such that the drawing power adequately covers out standings amount at all times.

· Bank officials must ensure that the goods hypothecated or pledged are covered through a valid insurance policy with appropriate risk coverage, adequately covering the bank’s amount.

· Concerned bank staff should ensure compliance with the institutional credit policies and procedures as laid down in the policy book or credit manual and advised from time to time by the credit committee or top management.

· Ensure compliance with local regulatory requirements.

· Confirm timely submission of correct information in the prescribed format as may be required by the central bank.