Bank of Punjab

The Bank of Punjab

THE BANK OF PUNJAB MAIN BRANCH

LAHORE

Internship Report

ON BUSINESS PRACTICES AT THE BANK OF PUNJAB

SUBMITTED TO:MADAM AYESHA AZIZ

SUBMITTED BY:RAO ISHFAQ AHMADCIIT/SOO4-MBA-028/LHR

COMSATS Institute of Information Technology Lahore

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The Bank of Punjab

ACKNOWLEDGEMENT

I am really pleased here to acknowledge the sheer efforts and extreme of numerous

people, those who have provided me their relentless service in the completion of my

internship report on “Business practices at The Bank of Punjab”.

I would like to express my gratitude to my advisors in The Bank of Punjab who support

me to under stand the working in the bank, during my internship. They really helped me

a lot to gain practical knowledge about general banking and corporate banking. I am

also grateful to Mr. Mazhar (Manager) and all my supervisors during internship period.

Without their guidance, this exercise of internship would not have resulted in a success.

Secondly I would like to thank my advisor Madam Ayesha for her assistance and

inspiring attitude. I am highly obliged to my respectable advisor and state my gratitude

for her valued guidance and her concern about my internship.

Rao Ishfaq Ahmad


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The Bank of Punjab

DEDICATION

I dedicate this report to my loving parents without their guidance I

would have gone astray.


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The Bank of Punjab


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The Bank of Punjab

Table of Content

EXECUTIVE SUMMARY...........................................................................................5

INTRODUCTION TO THE BANK OF PUNJAB..................................................6

HISTORY.........................................................................................................................6VISION.............................................................................................................................6MISSION STATEMENT...................................................................................................7

BANK PROFILE..........................................................................................................8

BOARD OF THE DIRECTORS.........................................................................................8MANAGEMENT.............................................................................................................10

ORGANIZTIONAL CHART....................................................................................14

BRANCH HIERARCHY....................................................................................................17

COMPARATIVE ANALYSIS..................................................................................18

BANKING INDUSTRY..........................................................................................................18COMPARISON WITH OTHER BANKS.....................................................................................18CURRENT FINANCIAL POSITION OF THE BANK OF PUNJAB..................................................26

SIX YEAR AT GLANCE..........................................................................................30

BUSINESS PROCESS ANALYSIS......................................................................32

1. ATM Facility.....................................................................................................322. Online banking.................................................................................................343. Consumer Financing........................................................................................354. Agriculture Financing.......................................................................................495. Corporate Financing........................................................................................506. Trade Services.................................................................................................50

OBECTIVES OF INTERNSHIP......................................................................................54

LEARNING AS A STUDENT INTERN................................................................56

DUTIES............................................................................................................................56NEW KNOWLEDGE ACQUIRED...........................................................................................57

SWOT ANALYSIS.........................................................................................................63

RECOMMENDATIONS..................................................................................................66CONCLUSION...............................................................................................................66BIBLIOGRAPHY..............................................................................................................67GLOSSARY....................................................................................................................68Appendix......................................................................................................................71


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The Bank of Punjab

EXECUTIVE SUMMARY

This report is about The Bank of Punjab, its history, and the functions of the bank.

This report contains detail about what I have learned in my eight-week internship in

The Bank of Punjab. It starts with the short history and background and brief

introduction about the management of The Bank of Punjab. The vision of the bank

along with its mission and existing status has also been discussed. This report

contains detail about “business practices in The Bank of Punjab.

The purpose of this exercise was to learn while working in the practical field.

Specially, the knowledge related to the General Banking, foreign exchange and

advances. It has really helped me observe to what extent the bookish knowledge is

being practiced in real field.

This report contains the Comparison of other banks with the bank of Punjab, current

financial position of the bank, the business process of the bank and all my learning,

during the internship period.

Rao Ishfaq Ahmad


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The Bank of Punjab

Introduction to The Bank of Punjab

The Bank of Punjab is working as a scheduled commercial bank with its network of 254

branches at all major business centers in the country. M/S PACRA has awarded the

Bank with the credit rating AA- for Long term and A1+ for Short term, based on its

financial results for the year ended as on 31st December 2004. The Bank provides all

types of banking services such as Deposit in Local Currency, Client Deposit in Foreign

Currency, Remittances, and Advances to Business, Trade, Industry and Agriculture.

The Bank of Punjab has indeed entered a new era of science to the nation under

experience and professional hands of its management. The Bank of Punjab plays a vital

role in the national economy through mobilization of hitherto untapped local resources,

promoting savings and providing funds for investments. Attractive rates of profit on all

types of deposits, opening of Foreign Currency Accounts and handling of Foreign

Exchange business such as Imports, Exports and Remittances, Financing, Trade and

Industry for working capital requirements and money market operations are some

facilities being provided by the Bank. The lending policy of Bank is not only cautious and

constructive but also based on principles of prudent lending with maximum emphasis on

security. As agriculture is considered as backbone of our economy the Bank of Punjab

has introduced "Kissan Dost Agriculture Finance Scheme" to small farmers.

HISTORY

Established in 1989, in pursuance of The Bank of Punjab Act 1989 and was given the

status of scheduled bank in 1994. It is principally engaged in commercial banking and

related services with its registered office at 7-Egerton-road Lahore.

VISION

To be cus tomer focused bank w i th se rv ice exce l lence


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The Bank of Punjab

MISSION STATEMENT

To exceed the expec ta t ions o f our s takeho lders by leverag ing our

re la t ionsh ip w i th the Government o f Pun jab and de l i ve r ing a complete

range of professional solutions with a focus on programmed driven products & services

in the Agriculture and Middle Tier Markets through a motivated team.

OUR VALUES

Our Customers as Our first priority

Prof i tab i l i ty for the prosperity of our stakeholder

that allows us to constantly, improve

and succeed

Corporate soc ia l to Enrich the Lives of community where

responsib i l i ty we operate

Recogni t ion and for talented and high performing

reward employees

Excel lence in every thing we do

In tegr i ty in all our dealing

Respect for our customer and each other


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The Bank of Punjab

Bank Profi le

BOARD OF The DIRECTORS

Mr. Shahzad Hassan Pervez

Chai rman

A Serving Grade-22 Govt. Officer, having wide management &

administrative experience. Last assignment Secretary Ministry of

Science & Technology Government of Pakistan.

Mr. Hamesh Khan

Pres ident

Professional Banker. MBA from USA.

Mr. Sa lman S iddique

Director

Serv ing as Secre ta ry F inance - Government o f Pun jab

Mr. S ikandar Mustafa Khan

Director

An eng ineer by p ro fess ion – Cha i rman & Ch ie f Execu t i ve Mi l l a t T rac to rs L im i ted .


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The Bank of Punjab

Mian Muhammad Lat i f

D i rector

A prominen t Indus t r ia l i s t - Chenab Group .

Syed Salman Al i Shah

Director

An Economis t by p ro fess ion ho ld ing PhD ( f inance) f rom Ke l ley Schoo l o f Bus iness Admin is t ra t ion , Ind iana Un ivers i t y , USA.

Mr. Shehzad Al i Mal ik

Di rector

A lead ing Indus t r ia l i s t f rom the Guard Group o f Compan ies .

Mr. Gohar E jaz

Di rector

Chie f Execu t i ve E jaz Group o f Compan ies .

Mr. Qaisar Zu l faqar Khan

Director

A renowned agr i cu l tu r i s t . Gradua te f rom Cambr idge .

Mr. Jahangi r S idd iqui


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The Bank of Punjab

Director

A prominen t Inves tment Adv isor .

MANAGEMENT

Pres ident Secretar ia t

Mr. Hamesh Khan Pres iden t

Mrs . An jum Ami r Pr inc ipa l S ta f f O f f i ce r

In format ion Technology Div is ionMr. An is Iqba l E .V .P . / Genera l ManagerMr . Abdu l Rash id Khan S.V .P . / In -charge

Adminis t ra t ion Div is ion

Mr. Aami r I f t i khar AhmedGenera l ManagerMr . R iaz Akh ta r E .O.C. / Ch ie f Manager

Operat ion Div is ion

Mr. Javed Ahmed Khawa ja

E.V .P . / Genera l Manager

Mr . A thar Az iz Dogar O.O.C. / Ch ie f ManagerMr . Sa j id Ar i f Noman i E .O.C. (Consu l tan t )

Finance Div is ion

Mr. Nadeem Ami r Of f i c ia t ing Genera l ManagerMr . Rash id Mehboob F inanc ia l Ana lys t Mr . Nadeem Ami r A .V .P . / Ch ie f Manager

In ternat ional & Treasury Div is ion

Mr. Muhammad Sa l im Mi rza

E.O.C. / Genera l Manager


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The Bank of Punjab

Mr. Babar Saeed Khan A.V .P . / Manager ( In te rna t iona l D iv is ion)Mrs . Saba Far rukh A.V .P /Ch ie f Dea le r

Audi t & Inspect ion Div is ion

Mr. Muhammad Han i f Head Mr . Raza Saeed V .P

Credi t R isk Management Div is ion

Mr. Az iz U l Hameed E.O.C. / Count ry R isk ManagerMr . Ab id Mahmood V.PMr . Ha feez Ud D in V.PMr . Tar iq Javed Bu t t V .P

Specia l Asset Management Div is ion

Mr. Shaheen Nazar Quresh i

E .V .P / Genera l Manager

Mr . B i la l Husna in Chandan

E .O.C

Liab i l i ty & Consumer Products Development Div is ion

Mr. Mahmood Sad iq Khan

E.O.C. / Genera l Manager

Mr . Ha j i Muhammad As lam

V.P

Commerc ia l Asset Development & Market ing Div is ion

Mr. Haroon Az iz E .O.C. / Genera l ManagerMr . Sa j jad Hussa in S.V .P

Products / SME Div is ion

Mr. Muhammad Shoa ib Quresh i

Genera l Manager

Corporate Banking Head

Mr. Muhammad Hassan E .O.C. / Corpora te Head, Fa isa labad /


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The Bank of Punjab

Khan Mul tanMr . Kha l id Qa iyum E.O.C. / Corpora te Head, (Nor th ) I s lamabad

Trade Processing Centre

Mr. Muhammad Han i f E .O.C. / Execu t i ve In -chargeMr . Ta jammal Hussa in A.V .P

Off icer ’s Tra in ing Inst i tu te

Mr. Naveed Hafeez Sha ikh

S.V .P . / Admin is t ra to r

Mr . Tar iq Mahmood Mugha l

A .V .P

Law Depar tment

Si rdar Ahmed Jamal Sukhera

Lega l Consu l tan t / Coord ina to r

Ms. Zub ia Ramzan In -charge

BOP 1st Punjab Modaraba

Mr. Sa lman Saeed Ch ie f Execu t i ve Mr . Muhammad Sa lman Corpora te Secre ta ry

Agr icu l ture Credi t Depar tment

Mr. Muhammad Javed Muzaf fe r

S .V .P . / Head

Mr . Moazzam Mahmood Maneka

E.O.C / Marke t ing Coord ina to r

Shares Depar tment

Mr. Muhammad Iqba l A .V .P . / Ass is tan t Secre ta ry

Compl iance Cel l

Qaz i Muhammad La t i f E .O.C. / Ch ie f Compl iance Of f i ce r


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The Bank of Punjab

Regional Of f ice Lahore

Mr. Za lma i Azam V.P. / Reg iona l Ch ie fMr . Azhar Nawaz A .V .P . / Reg iona l Manager

Regional Of f ice Rawalp indi

Mr. Ami r Mumtaz A.V .P . / Reg iona l Ch ie fMr . Abdu l Sa lam Reg iona l Manager

Regional Of f ice Fa isa labad

Mr. Ami r A l i Sad ique V.P . / Reg iona l Ch ie fMr . Saeed Ahmad Rah i Reg iona l Manager

Regional Of f ice Guj ranwala

Mr. S .M.A t i f E .O.C. / Reg iona l Ch ie fMr . Sar f raz Ahmad Reg iona l Manager

Regional Of f ice Mul tan

Mr. Naeem u l Hassan Mehmood

A .V .P . / Reg iona l Ch ie f

Mr . I j az Iqba l Reg iona l Manager

Regional Of f ice Karachi

Mr. Ami r Hassan A .V .P / Reg iona l Ch ie fMr . Inam ud D in Akbar Manager


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The Bank of Punjab

ORGANIZTIONAL CHART

The Bank of PunjabOrganizational chart


Chairman & Board of Directors

Managing Director

Regional Office Lahore

GM Operation

GM Treasury

GM AdminGM Finance

GM Liability

GM Special

Mgt. Div.

GM IT.Country Risk Mgr.

GM SME Div.

Regional Office Multan

Regional Office FSD.

Regional Office RWP.

Regional Office Karachi

Regional Office

Gujranwala

254 Branches

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The Bank of Punjab

LAHORE REGION

In Lahore region The Bank of Punjab have 65 branches out of which 11 branches are

dealing in foreign exchange. In Lahore region regional office is at 7 Egerton roads

Lahore.

FAISALABAD REGION

In Faisalabad region The Bank of Punjab have 38 branches, out of which 4 branches

are dealing in foreign exchange.

GUJRANWALA REGION

In Gujranwala Region, there are 45 branches. In this region 5 branches are providing

foreign exchange banking facility.

RAWALPINDI REGION

In Rawalpindi region BOP have 41 branches with 4 branches dealing in foreign

exchange.

MULTAN REGION

In Multan region Bop have 60 branches, out of which 7 branches are providing the

foreign exchange services facility.

KARACHI REGION

There are only four branches in this region. All these branches are dealing in foreign

exchange.4 branches

.


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The Bank of Punjab

Branch hierarchyMain Branch Lahore


ManagerAdvances

Forex. ManagerBranch Manager

Chief Corporate

AdvancesDept.

Accounts Dept.

Remittances Dept.

Forx. Dept.

Acc. opening Dept.

Cash/Deposit Dept.

Consumer Finances

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The Bank of Punjab

Comparative Analysis

Banking Industry

Banking is one of the most sensitive businesses all over the world. Banks play very

important role in the economy of a country and Pakistan is no exemption. Banks are

custodian to the assets of the general masses. The banking sector plays a significant

role in a contemporary world of money and economy. It influences and facilitates many

different but integrated economic activities like resources mobilization, poverty

elimination, production and distribution of public finance. It is purchase of car or building

of a home, banks are always there to provide the services. It is playground or any

educational or healthy societal activities the money of banks nurtures them. It is an

industrial project or agricultural development of the country the sponsor-ship of banks is

very much involved. Banks play very positive and important role in the overall economic

development of the country.

Pakistan has a well-developed banking system, which consists of a wide variety of

institutions ranging from a central bank to commercial banks and to specialized

agencies to cater for special requirements of specific sectors. The country started

without any worthwhile banking network in 1947 but witnessed phenomenal growth in

the first two decades. By 1970, it had acquired a flourishing banking sector.

Comparison with other banks

Nationalization of banks in the seventies was a major upset to domestic banking

industry of the country, which changed the whole complexion of the banking industry.

With irrational decision at the top all the commercial banks were made subservient to

the political leadership and the bureaucracy. Specialized banking institutions were

already working in the public sector. The new accountability paradigm changed the


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The Bank of Punjab

business ethics in the banking industry, and with this change started the disaster.

Nationalization of banking industry was accompanied by violent changes in the external

value of rupee. The commercial banks thus lost their assets management equilibrium,

initiative and growth momentum. They ceased to be a business concern and became

big bureaucracies. This was accompanied by indiscreet loaning under political pressure.

They suffered from three terminal diseases: non-performing loans; higher intermediation

cost.

The era of nineties was the climax of privatization, deregulation and restructuring in the

domestic banking industry and financial institutions. The Muslim Commercial Bank was

the first bank to privatize. Followed by Allied Bank limited, United Bank Limited and

now the Habib Bank Limited have been privatized. One thing good for that particular

period was the recruitment of fresh officers in the domestic banking industry through

well-organized policies of Banking Council. With the decay of Banking Council there

was flood of insincere, nonprofessional, incompetent candidates directly appointed/

recruited in all the domestic banks of the country.

Public sector banks

National Bank of PakistanNBP

First Women Bank Limited FWB

The Bank of Khyber KB

The Bank of Punjab BOP

The government of Pakistan permitted small private sector banks to operate, which

indulged in doubtful policies to promote business. The public sector banking, which

constituted the backbone, thus continued to suffer because of their approach, size and

carried over liabilities. Mehran Bank is the prime example of that kind of lax banking in


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The Bank of Punjab

the country, which ultimately merged into National bank of Pakistan i.e. last resort of

domestic banking industry.

Local Private Banks

Askari Commercial Bank Limited

Bank Al-Falah Limited

Bank Al Habib Limited

Bolan Bank Limited

Faysal Bank Limited

Metropolitan Bank Limited

Platinum Commercial Bank Ltd

Prime Commercial Bank Limited

Saudi Pak Commercial Bank Ltd

PICIC Commercial Bank Limited

Soneri Bank Limited

Union Bank Limited

Muslim Commercial Bank Limited

Allied Bank of Pakistan

Union Bank Limited

Mashreq Bank


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The Bank of Punjab

In the meanwhile, western banks started entering into the business. They, with the

support of ruling elite, concentrated on the big business, leaving the routine business to

the local banks. This reduced the profitability of the local banks.


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The Bank of Punjab

Foreign Banks

ABN Amro Bank

Al Baraka Islamic Bank

American Express

The Bank of Tokyo Mitsubishi

CITI Bank

Credit Agricole Indo Suez

Deutsche Bank

Doha Bank

Emirates Bank

Habib Bank A. G. Zurich

Hong Kong Shangai Banking

Corporation

IFIC

Mashreq Bank PJSC

Oman Bank

Rupali Bank

Standard Chartered Bank

Special Banks

Zari Tarqiati Bank Ltd.

Industrial Development Bank of

Pakistan

Punjab Provincial Cooperative Bank


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The Bank of Punjab

Limited

Comparative Analysis of Domestic Banking Industry of Pakistan (Rs. million)

Bank Deposit Advances Investments

ACB 51,732 30,035 26,759

BAH 34,240 23,775 18,831

BOP 23,767 6,6218,295

BB7,761 3,298 1,328

FB 24,554 21,935 6,842

UNION

BANK

328,182 167,523 142,877

KB 2,640490

2,118

MB 5,079 3,532 856

Metro 28,515 19,444 15,013

MCB 182,706 78,924 89,610

NBP 362,866 140,547 143,525

PCB 21,155 10,876 10,306

PB 14,640 9,016 7,534

SPB 12,341 8,5226,365


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The Bank of Punjab

SB20,545

11,3789,844

UB37,760 28,890 11,822

UBL154,915 74,117 69,385

Comparative Analysis of Earning per Share of domestic Banking Industry of

Pakistan

Name of the Bank 1Q2003 1Q2004 Growth

Askari Comm. Bank 2.16 2.43 13%

Bank Al Habib 0.70 1.44 107%

Bank of Punjab 0.23 1.17 407%

Bolan Bank 0.07 0.10 43%

Faysal Commercial

Bank

1.91 1.39 -28%

KASB Bank 0.16 0.05 -68%


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The Bank of Punjab

MCB 2.21 1.92 -13%

Meezan Bank 0.17 0.38 126%

Metropolitan Bank 1.09 1.68 54%

PICIC Commercial

Bank

0.56 1.05 88%

Prime Commercial

Bank

0.46 0.76 66%

Saudi Pak Commercial

Bank

0.92 0.36 -61%

Soneri Bank 0.60 1.21 102%

Union Bank 0.54 0.62 13%


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The Bank of Punjab

Above chart show the growth of all local banks. The bank of Punjab has highest growth

among its local competitors.

Gross Assets of Different Domestic Banks of the Country (Rs. in Million)

Gross Assets

Bank 2002 2003

ACB 70,313 85,387

BAH 49,437 58,148

BOP 29,525 43,621

BB 10.595 11,726

FB 36,671 47,606

KB 4,037 8,990


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The Bank of Punjab

MB 6,971 11,102

Metro 41,381 58,982

MCB 235,139 272,324

NBP 432,803 471,860

PCB 27,982 40,134

PB 21,637 29,566

Total 955,907 1,139,446

Administrative Expenses of Different Domestic Banks

Bank 2002 2003

ACB 1,090 1,436

BAH 760 1.062

BOP 900 999

BB 380 375

FB 619 835

KB 204 327

MB 195 255


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The Bank of Punjab

Metro 513 662

MCB 8,079 7,575

PCB 326 564

PB 512 719

Total Equity of Different Domestic Banks (Rs. Million)

Bank 2002 2003

BB 1,113 1,092

FB 4,120 5,080

KB 593 1,216

MB 1,476 1,637

Metro 2,074 2,753

MCB 6,314 7,726

NBP 14,279 18,134

PCB 1,323 1,784

PB 1,380 1,536

Current Financial position of The Bank of Punjab

Director’s Report


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The Bank of Punjab

On behalf of the Board of Directors, I am pleased to present accounts of the Bank of

Punjab for the half year ended June 30, 2005.

During six months period under review, Pakistan’s economy has gained significant

momentum with broad based economic growth in all sectors, which can be attributed to

consistent application of wide-ranging structural reforms, prudent macro economic

policies, confidence in private sector and financial discipline. Resultantly, the country

economic growth rate has exceeded eight percent and the economy has positioned

itself as the second fastest growing economy in Asia.

Manufacturing & agricultural sectors exceeding their targeted growth rates denote that

positive affects of growth in these important sectors of our economy shall be transferred

to other sectors of the economy augmenting their growth in periods to come.

It gives me immense pleasure to inform you that your bank has achieved an un-

precedented results for the six month period under review by earning highest ever profit

(both before & after tax) & EPS for any half yearly period since its operations. Profit

(before tax) of Rs.1,908 million indicates growth of Rs.791 million (71%) from last year

corresponding period figure of Rs.1,117 million. While Profit (after tax) of Rs. 1,531

million shows increase of Rs.644 million (73%) resulting in EPS of Rs.8.47. This

impressive performance is essentially ascribable to increase in net markup income of

Rs.789 million (101%) showing consistence in banks reliance on earning from its core

activity. Total asset base of the bank has risen by Rs.19,229 million to Rs.85,548

million. Advances have reached a level of Rs. 46,840 million, signifying growth of 19%

in high return asset of the bank from the figure on December 31, 2004, while deposits

have increased to Rs.70, 481 million showing growth of 29%. Bank.s determined focus

on improving its deposits base has resulted in phenomenal rise in deposits, which apart

from providing much required liquidity also lowered bank.s advances to deposits ratio to

a healthy & satisfactory %age of 66%.

Owing to splendid performance & sound financial footing M/s PACRA have upgraded

long term credit rating of your bank from A+ to AA- (double A minus) and short term

rating from A1 to A1+ which is the highest benchmark in short term rating scale. Your


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The Bank of Punjab

bank is in compliance with all regulatory rules & regulations including compliance with

recommendations of Basel-II Committee. Keeping in view excellent results the Board of

Directors of your bank have approved an interim dividend for its shareholders in the

form 30% stock dividend. Apart from remunerating stakeholders this bonus issue shall

make your bank in compliance with minimum paid-up capital requirement of Rs. 2,000

million well before specified date.

Management is consistently in pursuit of opportunities to improve the Bank.s

performance and improve operational aspects of the bank, both qualitatively and

quantitatively, benefits of which shall accrue in future.

We extend our utmost appreciation to the management for their record performance.

The Board of Directors is also grateful to the Government of Punjab for its consistent

support, State Bank of Pakistan for its guidance, valued customers for their patronage

and business and to its staff for their untiring effort to make the organization a success.


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The Bank of Punjab

THE BANK OF PUNJABBALANCE SHEET AS AT JUNE 30, 2005 (UN-AUDITED)


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The Bank of Punjab

ASSETS

June December30, 2005 31, 2004

Note (Rupees in thousand)


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The Bank of Punjab

Cash and bank balances with treasury banks 7,944,933 5,579,566

Balances with other banks 4,593,346 2,118,242

Lendings to financial institutions 7,867,739 1,019,488

Investments 5 14,587,620 16,197,505

Advances 6 46,840,452 39,438,923

Other assets 2,021,944 1,277,201

Operating fixed assets 1,692,930 689,48685,548,964 66,320,411

LIABILITIES

Bills payable 333,479 267,113

Borrowings from financial institutions 3,027,676 2,831,605

Deposits and other accounts 70,480,955 54,724,311

Sub-ordinated loans - -

Liability against assets subject to finance lease 61,989 81,795

Other liabilities 743,702 567,540

Deferred tax liability 1,373 8,96474,649,174 58,481,328

NET ASSETS 10,899,790 7,839,083

REPRESENTED BY

Share capital 1,807,476 1,506,230

Reserves 3,011,642 2,770,645

Unappropriated profit 1,132,764 143,5905,951,882 4,420,465

Surplus on revaluation of assets 4,947,908 3,418,618


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The Bank of Punjab

Contingencies and commitments 710,899,790 7,839,083


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The Bank of Punjab


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The Bank of Punjab

Six year at glance

Profitability related ratios

Balance sheet & Relevant Ratios


36

The Bank of Punjab


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The Bank of Punjab

Business process analysis

SERVICES

The Bank of Punjab provide the following services to its customers

1. ATM Facility

The Bank of Punjab provides ATM Card facility to its customer, using M net system, giving

to customer 24-hour access to their accounts from any ATMs.

Safety Tips

Guard Your Card

To avoid any damage keep your Online Cash ATM card in a safe place.

Sign on the back immediately after receiving your ATM card.

Never write your PIN or share it with anyone including the bank staff.

Don’t use your phone number or other personal information’s like your date of

birth etc. as PIN.

You can make maximum of three PIN entries (i.e. two entries in case you

enter the wrong PIN first time) after which your card will be captured by the

ATM machine.

Be Bright

In case you need to use an ATM after dark always choose an ATM, which is

well lit.

It is advised to retain the receipts until you match them against your account

statement.

Stay Alert

It is safe to check your surrounding before using ATM. Visit another ATM if

the machine is obstructed or poorly lit.

Shield the screen and keypad so anyone waiting to use the ATM cannot see

your PIN or transaction.


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The Bank of Punjab

On realizing anything or someone suspicious in the area cancel your

transaction and leave right away.

Don’t Flash Your Cash

Count your cash before leaving the ATM. Don’t try to count your money after

leaving the ATM or at any other insecure place.

Make sure to keep your money, receipt, and card safe in the wallet after

making a withdrawal.

Act Immediately

Pick your cash or reclaim your card in 20 seconds otherwise the ATM

machine will capture your card.

Remove your card immediately because the ATM will only dispense cash

after you remove the card.

ATM Charges

Sr. Transaction Type Charges

1 Issuance of ATM Rs.250/- Per Card (except for

staff)

2 Annual Charges Rs.250/- ATM Card (except for

staff)

3 Cash Withdrawals “Self Customer +ATM” Rs.10/- per Transaction(except for

staff)

4 Cash Withdrawals “Self Customer +

Other ATM”

Rs.30/- per Transaction (except for

staff)


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The Bank of Punjab

5 Cash Withdrawals “Other Customer +

Self ATM”

Rs.15/- per Transaction (except for

staff)

6 Balance Query Rs.10/- per Transaction (except for

staff)

7 Mini Statement Rs.10/- per page (except for staff)

8 80 column Statement Rs.15/- per page (except for staff)

2. Online banking

The Bank of Punjab provides the Online Banking Facility to its account holders at 147

branches all over Pakistan. Cash may be accepted at a branch for crediting accounts at

another branch; a branch can also pay the Cheques by debiting the customer’s account at

another branch. There are 147 branches, which are providing online facility at this time.

Following facilities are available at Bank of Punjab’s Online Program for its customers:

1. Payments of Cheques.

2. Cash Receipts.

3. Transfer of Funds through Cheques or Cash between Branches.


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The Bank of Punjab

Online banking charges

Sr. Transaction Type Charges

12

For Transfer- Account to Account 1) For Cash Transactions;

i) Up to Rs.500, 000/-

ii) Above Rs.500, 000/- to Rs.1000, 000/-

iii) Above Rs.1000, 000/-

Rs.50

0.02% Min Rs.50/-

Rs.100/- (Flat)

Rs.200/- (Flat)Note 1) (Staff members will be exempted)2) (The charges will be applicable on depositor in case of deposits and from payee in case of cheque encashment)

3. Consumer Financing

Consumer financing refers to any financing allowed to individuals by financial institutions to

meet their personal needs. It gives individuals the ability to generate funds for their

personal consumption by borrowing against future income. It can range from financing a

vacation, to buying a car or a house, etc.

Consumer financing department of The Bank of Punjab is offering loans under the following

schemes

BOP Quick Cash

BOP Aasaish Loan

BOP Car Loan

BOP House Laon

BOP Demand Finance


41

The Bank of Punjab

BOP QUICK CASH

The Bank of Punjab QUICK CASH is a running finance facility provided to salaried

individuals through their bank accounts with the Bank for purchase of consumer items or

personal needs. The facility is an alternative to consumer financing offered by other banks

except it is R/F instead of Demand finance, which is more favorable to the borrower.

ELIGIBILITY CRITERIA

Between 25 and 55 years of age

Permanent employee of selected organizations having at least 3 years of

experience

Computerized National Identity Card holder

Net take home salary is Rs.15000/ - & above as mentioned on salary slip/

salary certificate (excluding benefits). For Govt. Employees net take home

salary is Rs.10, 000/-

Loan amount/Limit

Minimum amount is Rs.50, 000 and maximum amount is Rs. 200,000?

Tenure of Loan

Loan is available for one year, further renewable subject to satisfactory conduct of account.

Mark-up Rate

Most competitive rate in the market, which will be calculated on daily product basis, which

is

For senior Bureaucrats & Executive Average six months KIBOR+ 600BPS of

Corporate Client with floor rate of 14.5% p.a.

For all other client Average six month KIBOR + 600 BPS

With Floor rate of 16% p.a.


42

The Bank of Punjab

Other Charges

Non-refundable fee Rs.450/

Processing Fee Rs. 1,850/

Documentation charges Rs. Actual

How Loan will be repaid

Loan will be repaid on Demand / Lump sum.

Pre-Sanction Document Requirements

Application Form

Copy of CNIC

2 recent photographs

Latest Salary Slip/Salary certificate on Company's letterhead

Latest Copy of utility Bills

Copy of service ID card

6 months A/C statement showing salary being credited

Post-Sanction Document Requirements

Two personal guarantees (expected incase of BOP employee)

Financing Agreement

D.P. Note

Letter of hypothecation

Post Dated Cheques

White Documents

I. Letter Of authority

II. Authorization /consent

III. Letter of Arrangement

IV. Debit Authority

V. Letter of Installment

VI. Under taking regarding KIBOR


43

The Bank of Punjab

BOP AASHAISH LOAN

0% Mark-Up (12 months)

0% Down Payment

FREE Home Delivery

Financing Tenures of 18, 24 & 36 months are also available with nominal

markup

Easily Affordable & Flexible Installments

Quick Processing

No Hidden Cost, No Insurance cost

Product

The Bank of Punjab Aasaish Loan is Demand finance facility for purchase of consumer

durable goods like TV, Refrigerators, Mobiles, Microwave Ovens, and Fans, Audio/Video

system


Salaried Person

Confirmed permanent employee with one year experience

Salary is routed through a bank account

Private Employees

In addition to the above mentioned condition:

Having age between 25 and 59 years OR date of retirement, whichever is

earlier

Having minimum Take Home salary of Rs.10,000/-(Rupees Ten Thousand)

per month

Self-employed business / Professional


44

The Bank of Punjab

In addition to above condition

Having age between 25 and 57 years (57 Years at maturity of facility).

Minimum 2 years in current business

Having minimum Net Income of Rs.15,000/-(Rupees Fifteen Thousand) per

month

Documentation required for processing

Application form

Copy of NIC/CNIC

Customer Consent Form, if loan is Rs. 50,000/- OR above

The Govt. employees will submit the following two documents in addition to

documents mentioned in Serial # 1, 2 & 3

i. Latest Salary Slip

ii. Employer Certificate on letterhead

Additional requirements for private employees

The Private employees will submit the following three documents in addition to above

documents mentioned.

Bank Statement for last 3 months

Latest Copy of utility bills (Electricity & phone)

Income Tax Return/Wealth Statement

Additional requirements for self-employed professional/business Person

The Self-employed Professional/Businesspersons will submit the following

documents in addition to documents mentioned above following documents are attached.


45

The Bank of Punjab


Latest Copy of utility bills (Electricity & phone) of residence

Income Tax Return/Wealth Statement

Business related documents

Documentary evidence in business or in the profession for the last 2 years

Proprietorship Certificate/Partnership deed

Copy of Professional Degree (For Professionals)

Latest utility bills of current business address

Processing Charges: Rs.190/-

Documentation Charges: Actual

POST-SANCTION DOCUMENT REQUIREMENTS

Financing Agreement

D.P. Note


Post Dated Cheques

White Documents

I. Letter Of authority



IV. Debit Authority


BOP CAR LOAN

Easily Affordable & Flexible Installments

Quick Processing


46

The Bank of Punjab

Minimum Down Payment

Minimum Insurance

Product

BOP car loan is a Demand Finance Facility to Purchase Brand new locally manufactured/

Assembled Cars for Personal Use


Salaried Person

Permanent employees of selected organizations with at least 3 years of service with a

minimum take home salary of Rs.15, 000. For Govt. Employees, Net take home salary is

Rs. 12,000/-

Self-employed

Business person and professional having minimum 3 years in current business

Holder of computerized national identity card


Loan Amount

Minimum amount is Rs.200, 000 and maximum amount is Rs. 1,000,000

Tenure of Loan

Loan is available for a period of minimum 3 years and maximum 5 years

Down Payment

Down payment is (10 to20%) of the value of the car


47

The Bank of Punjab

Mark up rate charged

Most competitive rate available in the market

For all customers average six moths KIBOR+ 375 BPS with

With Floor rate 10% p.a.

Other Charges

Non refundable fee Rs.450/-

Processing Fee/ Documentation charges Rs. 3,750/-

Registration Charges Actual

Insurance of the car

BOP has arranged insurance facility from its approved list of companies at discount rates

for the convenience of its customers. Insurance premium for the first year will be paid in full

up front with down payment and for subsequent years along with installment

Monthly Installment plan

L oan will be repaid in equal monthly installments through postdated cheques. Total monthly

installment includes principal, mark up and insurance amount.

We can easily calculate monthly installments by multiplying the loan amount with the

pricing factor:

Tenor of Loan Pricing Factor

3 Years 0.03111

4 Years 0.02418

5 Years 0.02004

DOCUMENTS REQUIRED

For salaried individuals:


48

The Bank of Punjab

Copy of NIC

2 Recent Photographs

Latest Salary Slip / Certificates on Comp. Letterhead


Latest Copy of Utility Bills

For self employed business persons/professionals

Copy of CNIC

Two recent photographs

Bank statement for the last I year of business account

If not banking with us Banking certificate from branch manager stating Title,

Account number, Business entity, Maintained since, Authorized signatory

Copy of Latest utility bills

Business Related Documents

Documentary evidence in business or in profession for the last 3 years

Income Tax return / wealth tax statement

Proprietorship/Partnership Deed

Articles & Memorandum of Association

Latest copy of paid utility bills (Phone & Electricity) of current business

address

Membership/payment receipts of Chamber of Commerce/Trade Association /

Anjuman-e-Tajiran, if available


49

The Bank of Punjab

BOP DEMAND FINANCE (CLEAN)



Permanent/ confirmed GOVT/ private employee/ professional maintaining

salary account in any bank, having at least 1 years of experience

Monthly installment should not exceed 40% of take home salary

Computerized National Identity Card holder

Loan amount/Limit

Up to 25 take home salaries (Maximum Loan amount + Rs. 500,000/-)

Tenure of Loan

Loan is given for the period of 1year to 5 year

Mark-up Rate

Most competitive rate in the market, which will be calculated on daily product basis, which

is

For all other client Average six month KIBOR + 550 BPS

With Floor rate of 14% p.a.

Other Charges

Non-refundable fee Rs.450/

Processing Fee Rs. 1,850/

Documentation charges Rs. Actual


50

The Bank of Punjab

Pre-Sanction Document Requirements

Copy of CNIC

Latest Salary Slip/Salary certificate on Company's letterhead

Two personal guarantees with CNIC (exemption of BOP staff)

Employer Certificate on company’ letter head with joining date, current

designation, length of service, gross salary & certificate from HR department

for perks

Departmental Undertaking regarding salary rout though

Data check

Undertaking Regarding Payment of post dated cheques.

Post-Sanction Document Requirements

Two personal guarantees (expected incase of BOP employee)

Financing Agreement

D.P. Note


Post Dated Cheques

White Documents

I. Letter Of athoriety



IV. Debit Authority


VI. Under taking regarding KIBOR


51

The Bank of Punjab

HOUSE LOAN

Product

The Bank of Punjab house loan is long-term finance facility for purchase of house/flat or

construction of house on self-owned plot or for renovation/ home


Salaried Person

Permanent employees of selected organizations with a minimum take home salary of

Rs.20, 000

Self-employed

Business person and professional having minimum 5 years in current business

Holder of computerized National Identity Card


Loan Amount

PurposeMinimum

Amount

Maximum

AmountBank Rate

Purchase of House/Flat&

ConstructionRs. 300.000/- Rs. 7,500,000/-

Bank financing up

to 70% of

assessed value

Home Improvement/

Renovation / AdditionRs. 300.000/- Rs. 3,000,000/-

Bank financing up

to 20 % of

assessed value


52

The Bank of Punjab

Tenure of the loan

Purpose Minimun Maximum

Purchase of House/

flat3 years 15 years

Construction 3 years15 years with maximum 12 months grace

period.

Home improvement 3 years 05 years

Mark up rate charged

Most Competitive rate in the market, which will be calculated on daily product basis, linked

with Average six months KIBOR +300 BPS; it will be reviewed every quarter.

(For each year new amortization schedule will be provided to the customer in case of any

change in mark up)

Other charges

Non-refundable fee Rs.450/-

Processing Fee Rs. 2,950/-

Valuation charges, legal charges Stamp duties, levies etc Actual

How will the loan be repaid?

Loan will be repaid in equal monthly installments through postdated cheques. Total monthly

installment includes principal, mark up and insurance amount.


53

The Bank of Punjab

Monthly installment can easily be calculated for e.g. .if, you take a loan for Rs. 1,000,000

for 15 years. Simply multiply the 15-year factor by your amount Rs. 1,000,000 * 0.00985 =

Rs. 9850 will be your monthly installment payable excluding insurance (Life & Property).

Financing

periodPricing Factor

3 0.03157

4 0.02465

5 0.02052

6 0.01778

7 0.01584

8 0.01439

9 0.01328

10 0.01240

11 0.01169

12 0.01110

13 0.01061

14 0.01020

15 0.00985

(Insurance premium for the first year will be paid in full up front with down payment and for

subsequent years along with installments.)

Security of the loan

House/flat purchased

Plot on which construction is to be carried out

House on which renovation is to be carried out


54

The Bank of Punjab

Documents are required

Copy of CNIC

Two recent photographs

Last three Salary slips/ salary certificate on company's letter head with joining

date Current designation, length of service, gross salary & certificate from HR

department for perks.(for salaried individuals)

Bank statement for last six months for salaried individuals and for the last I

year incase of self-employed businessperson

Copy of utility bills

Fee slip of children if applicable

Income tax return / wealth statement

Copy of Rent agreement if living in rented house

Business proof (for a business person)

4. Agriculture Financing

The bank of Punjab is offering following agriculture schemes

Kissan Dost Agricultural Scheme

Kissan Dost Tractor Scheme

Kissan Dost Mechanization Scheme

Kissan Dost Farm Transport scheme

Kissan Dost Eslah-E-Arazi Scheme

Kissan Dost live stock development Scheme

Kissan Dost livestock Scheme

Kissan Dost Commercial Agro Services Scheme

Kissan Dost Agri Mall Scheme

Basic requirement for all these schemes are same. But there is little bit difference

according to the scheme and amount of the loan. In most of the schemes the requirement

is that the Brower should be resident of cultivated area and own a minimum 5-acre and

maximum 50-acre area. Amount of loan is different for different loans. For all these loan

there must be some security for bank. Mark up rate is different according to scheme.


55

The Bank of Punjab

5. Corporate Financing

Relationship Managers, at the bank of Punjab are dedicated towards developing

relationships with corporate clients to service their financial needs. Advances department

provide the advance to the reliable corporate client. The corporate finance department of

bank of Punjab is offering different types of loan facilities, like Demand Finance, Cash

Finance, Running Finance over draft etc.

For corporate financing bank the financing limit for client on the basis of its asset and

bossiness exposure. The Corporate Banking Group manages a high quality asset portfolio

being an active player in many sectors including textile, sugar, leather, pharmaceutical,

fertilizer, petrochemical, power, automotive, oil and gas distribution, marketing and refining

and fast moving consumer goods industries.

In the dynamics environments of business bank provide the short-term and long-term

funding needs in the most efficient manner, drawing from the full range of our resources

and capabilities. To provide finances bank must look at the affectivity and efficiency of the

business. The bank of Punjab is offering the variety of working capital financing facilities.

The bank of Punjab is also providing the structured finance syndicate to its clients.

6. Trade Services

The foreign exchange department of bank of Punjab is offering the trade service to clients.

The bank of Punjab offers a full range of documentary letter of credit services as well as

discounting and reimbursements to support any or every part of the customer trade

transaction. Experienced personnel use their specialized expertise to innovatively structure

trade transactions and process daily trade transactions, and have end-to-end responsibility

for your letters of credit, reimbursements, negotiation of documents, and inquiries. They

also handle export guarantee transactions and government donor flow intermediation.

The bank of Punjab can provides trade related facilities, for an appropriate period, in line

with working capital cycle of client, to assist client in financing their imports/exports. There

are two types of LC, sight LC and usance LC. In sight LC bank pay the amount when it


56

The Bank of Punjab

receive the Bill Lading from Correspondent bank. In usance LC, there is limit of payment

normally 90 days. For providing these facilities bank have following charges schedule.

Charge schedule of the bank of Punjab

I)

Sight Billsa) At Negotiation end:

b) Collection charges for restricted L/C (where negotiation is restricted to some other Banks and presented to us for forwarding).

c) At opening end (at the time of retirement) Rates of Mark-upi.) If retired within 3 days from the date of lodgment.ii.) If retired after 3 days of lodgement.

Negotiation commission @ 0.50% - Min Rs. 200/-+ Courier Charges Rs.50/-

Rs. 250/- (Flat) Per Bill + Courier Charges Rs.50/-

As per approval of Sanctioning Authority

As per approval of Sanctioning Authority

NOTE:* No Mark-up will be charged from the date of negotiation till the date of lodgement of documents received under Inland L/Cs, where the payment as per reimbursement arrangement is made to the negotiating bank only on receipt of documents.2 Usance Bills

1) Negotiating End

i) Markup on documentary Bills Purchased /Negotiated under Inland L/C

0 2) Opening End

a) At the time of Acceptance of the Bills.

Negotiating commission Rs.200/-Flat+Courier charges Rs.50/-(I) In case of Sight L/Cs Mark-up is to be recovered/charged as per approval of Sanctioning Authority.(II) In case of Usance L/Cs Mark-up is to be recovered/charged as per approval of Sanctioning Authority.(III) In case of Usance LCs of our own Bank, Mark-up is to be recovered/charged as per approval of Sanctioning Authority

Acceptance Commission @ 0.10% per month shall be recovered/charged for the usance Import Bills for the period beyond the date upto which the commission has already been charged at the time of opening of LC or thereafter any extension is made in the validity of the LC.


57

The Bank of Punjab

3

b) At the time of booking

c)At the time of maturity/due date

At Collection End

Collection Charges

Discrepancy Charges

Rs.350/- (Flat).

Rs.350/- (Flat).

Rs.250/- (Flat) per bill + courier charges Rs.50/-

Rs.500/- (flat)

These all facilities are provided on the specific limit maintained by the corporate bank. The

bank of Punjab is offering FIM, FATR facilities to its clients.

For foreign trade, The Bank of Punjab has collaboration with following foreign bank for

correspondent.

CORRESPONDENT BANK

Bank Name Address Swift & Telex Currency Account No.

STANDARD CHARTERED BANK

23-25 Mahatama Ghandi Road, FORT Mumbai 400 001

SCBLINBB ACU $ 22205248426

BANK SADERAT IRAN

Sepehr Tower Somayeh Ave. P.O. Box 15745-631 Tehran, Iran

BSIRIRTH 0088-212352

ACU $ 216/1/1/6501

NATIONAL BANK OF CANADA

Banque Nationale du Canada 600,rue de la Gauchetiere Quest Montreal H3B 4L3,

BNDCCAMMINT 00210-525181

CAD 097613-228-001-01


58

The Bank of Punjab

Canada

UNITED BANK AG ZURICH

8034 Zurich, P.O.Box 1176 Feldeggstrasse 55, Switzerland

UNILCHZZ CHF 859.03.01.001

DANSKE BANK AKTIESELKAB

Holmens Kanal 2-12, DK-1092 Copenhagen K, Denmark

DABADKKK 27000 daba

DKK 3996077691

COMMERZ BANK

Commerz Bank AG, Frankfurt ZFO BC MITTE 9.6.4 Heidrun Koch-Vollbracht

COBADEFF 0041-4152530

EURO400-8807406-00-

EUR

NATIONAL BANK OF PAKISTAN

Filale Frankfurt/M. Frankfurt Branch, Germany

NBPADEFF 0041-414103

EURO 491551


37 Grace Church Street London EC3V OBX-U.K.

SCBLGB2L 0051-885951

EURO 01-7087888-96

U.B.A.F., PARIS190 Avenue Charles de gualle 92523 Neuilly Cedex france

UBAFFRPP 0042-610334

EURO01-092225-001-

51-0


90, AV. DES Champs-Elysees 75008, Paris, France

NBPAFRPP 0042-651828

EURO1210-1227-1-18-

70

ABN AMERO BANK

New York Branch, P.O.Box 4555/Grand Central Station, New York, N.Y 10017 USA

ABNAUS33 0023-62734

EURO 005747324350

BAYERISCHE HYPO-UND VEREINSBANK AG (HYPO VEREINSBANK)

Am Tucherpark 16, 80538 Munich Germany

HYVEDEMM EURO 69106935

UNITED NATIONAL BANK

18 Finsbury Circus London, EC2M 7BJ U.K

NBPAGB2L 0051-884892

GBP0001-000063-

001


37 Grace Church Street London, EC3V OBX U.K

SCBLGB2L 0051-885951

GBP 01 7087888 01


3F, 7-4, 2-Chome, Nishi Shimbashi, Minato-KU, Tokyo 105, Japan

NBPAJPJT 0072-23830 JPY 21067

ABN AMERO BANK

New York Branch, P.O.Box 4555/Grand Central Station, New York, N.Y 10017 USA

ABNAUS33 0023-62734

USD 574073243541

HABIB AMERICAN BANK

HABL, 99 Madison Ave., New York, NY. 10016-7419 USA

HANYUS33 0023-275859

USD 20729586

MASHERQ BANK , PSC

255 Fifth Ave. New York, NY 10016 USA

MSHQUS33 0023-239881

USD 70120078

NATIONAL BANK OF CANADA

Banque Nationale du Canada 600,rue de la

BNDCCAMMINT 00210-525181

USD 097613-240-002-001-01


59

The Bank of Punjab

Gauchetiere Quest Montreal H3B 4L3, Canada


100 Wall Street, 21st Floor, new York, N.Y. 10048 USA

NBPAUS33 0023-232455

USD 55804561


1 Madison Ave., New York N.Y 10010-3603, U.S.A.

SCBLUS33 0023-420117

USD3582-040168-

001

U.B.A.F. (HONGKONG) LIMITED

UBAF, 18th Floor Far East Finance Centre, 16 Harcourt Road, G.P.O. Box 9917 Hong Kong

UBAFHKHX 00802-75386

USD60 030000 001

03 0/96

CITIBANK N.A111 Wall Street, 5th Floor / Zone 9 New York, NY 10005

CITIUS33 USD 36208954

UNITED BANK LIMITED

30 Wall Street, New York, U.S.A.

UNILUS33 USD 040-0498-5

OBECTIVES OF INTERNSHIP

This internship was the part of my study course, so objective of this internship was to

learn and gain some practical experience. During the MBA program, I studied many

courses about finance, management etc. Here my aim was to see the application of this

bookish knowledge and its practical implementation. How it is useful in practical life. I

saw the differences in bookish knowledge and its application.

In all jobs related to finance, there is involvement of banks. So my aim was to learn how

banks deal with corporate and general information about rules and regulation of banks.

My second objective of this internship was to learn about general banking, as customer

I tried to get experience, how to work with people of different age, different educational

background, and different interests. How I can be a best team player, how to interact

with officer and deal with subordinates.

.


60

The Bank of Punjab


61

The Bank of Punjab

Learning As a Student Intern

Duties

Date Description Supervisor

12 July to

16 July

Account opening is the entrance to bank.

In this department I worked on different

old account and open new account for

individual, proprietor and companies.

Mr. Amin Dogar

18 July to

23 July

I worked in Consumer finance

department. In consumer finance major

job was “customer dealing”

Mr. Muhammad Afzal

25 July to

26 July

I worked in Clearing department. Here

major activities were to receive the

cheques and send these for clearing to

other bank after stamping and keeping in

record.

Mr. Amir Butt.

27 July to 1

August

I worked in remittance department. Here

we issued, DD, Pay order, TT, MT and

like other responsibilities.

Mr. Shahid

2 August to

4 August

I worked in cash department. Here I

learnt how they calculate profit on

corporate accounts and transfer the

amounts.

Mr. Raheel

5 August to

6 August

I worked in utility collection. Here I learnt

how bank adjust the collection from other

branches with the accounts of PTCL and

WAPDA.

Miss. Aneela

8 August to

23 August

I worked in foreign exchange department.

Here I worked in import, Export and

Foreign currency accounts. In each of

Manager Foreign

exchange.


62

The Bank of Punjab

these, I performed different duties.

24 August

to 5

September

During this period, I worked in advances

department.

Manager advances

New Knowledge Acquired

As this was my first experience in any bank, so all working of bank was new for me.

About account opening

Account opening is a simple process but it becomes complicated in case of corporate

accounts. For individual or joint account, account opens on following simple requirements.

Copy of national ID card

Written evidence of what applicant is doing

An introducer (a person who already holds account in the bank) for account

opening.

Requirement for company account are as follows

Written request on the letterhead of company from an authorized person to

open company’s account

Chief executive, company secretary and director along with common seal

must sign resolution

Attested CNIC copies of all directors

Form 29 attested from registrar of joint stock companies

Memorandum and articles of association.

Certificate of incorporation

Certificate of commencement of business only in case of public limited

company


63

The Bank of Punjab

After the completion of these requirements, bank will open the account and sends letter of

thanks to its customer. When account holder comes with letter of thanks bank will issue

chequebook to account holder. If chequebook is lost the account holder has to give written

application for the stop payment of cheques of that chequebook and fill a form for issuance

of new chequebook.

Remittance

Banks offers different types remittance having different specification. These remittances are

demand draft, for out station payment. Mail transfer is to transfer the amount by mail in any

account of same bank. Telegraphic transfer is same like the MT but here fax machine is

use instead of mail. Pay order is used for intercity payment. This is main difference

between Demand Draft and Pay Order. Call deposit receipt is used in case of tender or

auction.

CLEARING

Clearing is used to pay or receive payments to other banks. There are 2 types of clearing

Inward clearing

Outward clearing

Inward clearing

Cheques of our branch that are deposited at other banks are brought to us by NIFT. This is

called inward clearing. In inward clearing we DEBIT a/c of our a/c holder and CREDIT other

branch.

Outward clearing

In outward clearing cheques of other banks are presented in our branch. In it we check

certain factors such as words and figure difference, date of cheque etc.3 stamps are

stamped in these cheques

Clearing stamp

Crossing stamp

Payees a/c credited stamp


64

The Bank of Punjab

In outward clearing we DEBIT suspense a/c and CREDIT a/c no. of our a/c

holders.

CHEQUE RETURN IN OUTWARD CLEARING

If cheque is returned in outward clearing we make an entry of the returned cheque in the

register and give it back to our customer after having his signatures in the register.

CHEQUE RETURN IN INWARD CLEARING

If the cheque is returned in inward clearing, we fine our a/c holder Rs 100 as a penalty and

also make an entry in the register.

INTER BRANCH CREDIT TRANSACTION (IBC)

IBC advice is made for both inward and outward clearing.

CASH

Cash department perform the responsibilities to deal with cash, transfer amounts from one

account to other accounts and calculate the profit for different types of accounts. When

cheque is presented to bank, officer match the word and figure of cheque. If words and

figure is correct then officer verify the signature and check the date. A cheque can be

converted in to cash within six month. After six month cheque expires. For PLS account

bank calculate the profit on the minimum balance in account from 6th to 29th of the month.

Bank pays this profit after six moth or transfer in account of account holder after six month.

For corporate account profit is calculated on daily basis. Profit is credited after a moth in the

CPA account. Formula used to calculate the profit is

Profit = Capital X days X (%)

365 X 100


65

The Bank of Punjab

FOREIGN TRADE

Foreign trade is divided in two parts, Import and Export

Imports

For import any product, importer first contact with foreign exporter. There are three

possibilities for trade, one is the advance payment of the imported product, second is

contract between two parties and is the LC, when both parties importer do not rely on

foreign exporter. Advance payment and contact is simple payment through bank, but in LC

bank guarantee about the foreign exporter. To open LC importer request for issuance of LC

on legal required paper with Performa invoice, I forms and insurance of the product.

Importer also gives detail of condition of LC. After this request bank will send LC through

swift. After receiving LC documents, foreign importer ships the product and sends the bill of

lading or AWB to local bank. Bank checks the LC and bill of lading. If there is any

discrepancy, bank takes the acceptance from importer about the discrepancies. To clear

the imported product from port, importer takes the bill of lading from bank after the payment

of LC. If importer cannot pay the amount there is two facilities from bank, FIM and FATR. In

FIM the imported product remain in the custody of bank. Importer has facility to realize the

quantity of product as after payment of that quantity. FATR facility is normally for 120 days.

This facility is for the reliable customers. In this facility customer release the whole

imported product.

Export

Export is just like imports but here we act as exporter bank. In export we perform all that

activity which foreign banks perform in case of import. Exporter provides the documents

like bill of exchange, AWB, certificate of origin, packing list and all other document required

in contract or LC with E form. Bank sends these documents to foreign bank. On receiving

these documents, bank pays the amount according to conditions in LC. Or Contact. In

export bank provides the refinancing and purchasing facility to customers. When customer

has relied on foreign importers then bank take risk and purchase the exports after

shipment. Exporter receives payment from bank, now whole risk of this trade is converted


66

The Bank of Punjab

to bank. This facility is called negotiation or purchasing. In refinancing bank finance the

local exporter according to prudential regulation of state bank.

Advances

Main working of Advances is department is to provide loan to corporate client. This main

job of this department is to maintain the credit limit of client, offer loan, approve loans and

like other work related to corporate loan. Normally banks offer the loan in form of Demand

finance, cash finance, running finance and other schemes according to customer

requirements. Running finance facility is to meet the day-to-day expenses. In running

finance bank debit the account of corporate client and issue the chequebook. Client can

cash the require amount from this account. Cash finance facility is to meet seasonal

requirement of cash. For example in cotton season, textile related companies require cash

to buy cotton. Bank provide loan and cotton remain in custody of bank, to provide different

loans banks require different securities like Lien, Pledge, Hypothecation and Mortgage.

Lien is marked on liquid assets; mortgage is for the assets like land or building. Pledge is

offered for cash finance or seasonal finance.

Documentation Require

Generally for all types of loans, bank of The Bank of Punjab require following documents.

Document For

Accepted Facility offer letter “FOL”

Letter of arrangement

Demand promissory note

Letter of continuity

Letter of authority

Letter of installment

Agreement for financing


Letter of pledge

All facilities

All facilities

All facilities

Running finance

All facilities

Demand finance

All facilities

HYPO

Pledge


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The Bank of Punjab

Memorandum of deposits of title deeds

Comprehensive insurance policy

Personal guarantee of the Mortgagor/ Director

Where required

Where required

Where required


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The Bank of Punjab

SWOT ANALYSIS

Strengths

I. The Punjab government is supporting to “The Bank of Punjab”. It builds trust of client

on Bank.

II. M/S PACRA has awarded the Bank with the credit rating AA- for Long term and A1+

for Short term, based on its financial results for the year ended as on 31st December

2004

III. The Bank of Punjab has a large network of branches. There are 254 branches all

over the Pakistan

IV. The Bank of Punjab has computerized banking system.

V. The Bank of Punjab provides the online Banking facility to its customer.

VI. To train its employees Bank of Punjab have training center. There are different

training session are held for new and old employees.

VII. Financial position of The Bank of Punjab is growing every year. The Bank of Punjab

has highest earning per share.

Weaknesses

I. The Bank of Punjab has only few branches out of province Punjab. Other banks

have competitive edge.

II. As Bank of Punjab has extensive branches within the Punjab province. It is difficult

to manage large number of branches, further it increase the cost.


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The Bank of Punjab

III. The staff members of The Bank of Punjab are not satisfied with the pay scale

increments and promotion criteria as compare to other banks.

IV. The work responsibilities are broken into small parts.

V. The bank is offer regular product line. There is need to enhance the product line.

VI. Turn over rate of employees is increasing, as they are not satisfied with the pay

structure.

Opportunities

I. As economy is growing, there is more investment demand in Pakistan. Banks have

opportunity to enhance their business.

II. Imports and exports of the country are increasing.

III. With the threat of WTO SMEs require more funds to enhance their infrastructure to

improve the quality. Banks are the source of these funding.

IV. The number of salaried persons is increasing with the economy structure of the

country. This creates opportunity in consumer financing.

Threat

I. The Bank of Punjab has major GOVT. deposits. With change of government policies

it may affect the bank

II. Entrance of foreign bank in competition with local bank is great threat for bank of

Punjab


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The Bank of Punjab

III. The State Bank of Pakistan often imposes various restrictions on banks. Therefore,

none of banks is independent in policy making and can launch any product without

the permission of the State Bank of Pakistan.

IV. Government legislations about banking sector

V. Political factor more influence on The bank of Punjab


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The Bank of Punjab

RECOMMENDATIONS

Last five year performance of The Bank of Punjab shows that the bank of Punjab is

increasing its profitability and its deposits. Being the bank of government, the bank of

Punjab has major government accounts.

The bank of Punjab should try to maintain the accounts of diversified

companies. This will reduce the risk of government policies

To manage its all branches the bank of Punjab should establish the intranet

system.

To attract new customer bank should offer value added services

The Bank of Punjab should increase the line of product to attract the new

clients.

Those activities, which a one person can perform, should be integrated to

save time.

The bank should revise its pay structure and compensation plan according to

the market, in view to decrease the turn over rate

CONCLUSION

The bank of Punjab is the one the best bank in local banking sector. Its growth rate is

highest among all local banks. There are some flaws like the small product range, have

two are three major GOVT accounts and like others. The bank of Punjab has potential to

become top ranking bank in Pakistan banking industry.

My basic purpose of this internship is to learn about the working of bank. During my

internship I got knowledge about general banking, foreign exchange and advances. Staff

member of bank of Punjab are cooperative with me and really help me to achieve my

objective.


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The Bank of Punjab

Bibliography

http://www.bop.com.pk

http://www.sbp.org.pk

http://www.business-standard.com

http://www.sheshunoff.com

Staff of the bank of Punjab

Annual report of the Bank of Punjab


73

http://www.sheshunoff.com/

http://www.business-standard.com/

http://www.sbp.org.pk/

http://www.bop.com.pk/

The Bank of Punjab

Glossary

Advice A bank's written acknowledgement of a transaction

ATM automated/automatic teller machine

Asset turnover is a ratio focusing on the volume of sales achieved by the business

Asset portfolio Allocating the funds to different assets classes

AWB Air way bill

Bill of exchange An order written by an exporter instructing an importer, or an Importer’s agent, to pay a specified amount of money at a specified time

Bill of lading A document issued to an exporter by a common carrier transporting merchandise. It serves as a receipt, a contract, and a document of title.

BPS Basic points (Set by the bank to adjust markup)

Capital Adequacy Capital adequacy means having enough capital funds to protect it from the risk that customer could lose their deposits as a result of trading losses, e.g. from bad debt by the bank.

CDR Call deposit receipt

CPA Corporate premium account

Credit rating A measured judgment, or formal opinion, about the likelihood that Interst payments on particular issue of bonds or other debt security will be paid full and on time, and that debt principle will be repaid in full at maturity. Ratings are by specialist agencies. The highest credit rating for long-term debt is AAA.

Commercial banks An authorized institutions and perform four functions. They accept deposits, make loans, arrange payment of bills and provide a number of customer services

Data Check Data check is a document has records of all loan of customer form all banks


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The Bank of Punjab

DD Demand draft

D.P. Note Demand promissory note, a legal document

Dividend Part of a company's profits paid to shareholders

Earning per Share the portion of a company's profit allocated to each outstanding share of common stock

Equity Total assets minus total liabilities.

FIM Finance against imported merchandise

FATR Finance against trust receipt

Hypothecation

KIBOR Karachi Inter bank offer Rate

LC A bank issued document that guarantees payment for a pre-specified period and amount

Letter Of authority A written agreement to allow Bank to deposited or withdrawn from an account Lien An asset held in exchange for debt financing. In lien normally there are liquid assets like bonds, shares.

Markup The charge you pay if you borrow money or the income you get if You invest it.

MT Mail transfer

Mortgage Mortgage is charge on immoveable property to secure the finance

NIFT National Institute of facilitation technology (pvt)

PLS account Profit loss sharing account

Profitability Ratio The ratio used to measure the ability of a company to generate profits.

Pledge Pledge is the bailment of goods for security. In pledge goods are in possession of bank.

Sight LC In sight LC payment will be made on receiving the shipment


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http://www.advfn.com/money-words_term_2792_liabilities.html

http://www.advfn.com/money-words_term_273_assets.html

The Bank of Punjab

documents.

Stock dividend A payment by the corporation in share of stock rather than cash

Syndicate A group of banks acting together temporarily to loan money in a syndicated credit or to underwrite a new issue of bonds

TT Tele graphic transfer

Usance LC In usance LC payment will be made after 90 or 120 days of shipment

Working Capital Stock plus debtor minus short-term creditor


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The Bank of Punjab

Appendix


77

The Bank of Punjab


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The Bank of Punjab


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