CHAPTER 1

INTERNSHIP REPORTONTHE BANK OF KHYBER (Main Branch Peshawar) ByNAJEEB KHANClass#39MPA(HRM)

INSTITUTE OF MANAGEMENT STUDIESUNIVERSITY OF PESHAWAR-PAKISTANSESSION: 2013-15

INTERNSHIP REPORTONTHE BANK OF KHYBER (Main Branch Peshawar) ByNAJEEB KHANClass#39MPA(HRM)

An internship report submitted to the IMS, University of Peshawar in practical and fulfillment of the requirement for the degree of

MASTER IN PUBLIC ADMINISTRATION (HRM)

Approved by:

Advisor sign _____________________________________

Advisor Name: Sir Zia Obaid

Department: IMS university of Peshawar

INSTITUTE OF MANAGEMENT STUDIESUNIVERSITY OF PESHAWAR-PAKISTANSESSION: 2013-15

DEDICATION

Every challenging work needs self efforts as well as guidance Of elders especially those who were very close to our heart.My humble effort I dedicated to my Sweet and Loving

Father & Mother

Whose affection, love, encouragement and prays of dayand night make me able to get such success and honor.

Along with all hard working and respectedTeachers.Najeeb Khan

ACKNOWLEDGEMENT

Every praise is to Almighty Allah, the kind and merciful and the Holy Prophet Hazrat Muhammad Peace Be upon Him who is forever a Lantern of guidance and knowledge for humanity as a whole. I feel pride in expressing my deepest sense of gratitude to my honorable advisor Dr. Zia Obaid, who is the source of initiation of this internship.Her consistent advice, encouraging behavior, valuable suggestion, personal interest and dynamic supervision enabled me to complete the present report. This internship report was hard to be accomplished without her cooperation.I offer my sincere thanks to Mushtaq Ahmad, VP / Chief Manager of The Bank of Khyber, Main Branch Peshawar and all other members of the staff.Last of all no acknowledgement could never express my obligation to my loving Parents, Brothers and my Friends because my success is really the result of their devoted prayers.I can never compensate their unlimited love and kindness.

NAJEEB KHAN(MPA HRM)

PREFACEBanking has always been the main field of interest for most of the students of Business Administration. Todays banking holds many challenges as well as opportunities for young enthusiastic executives. The corporate banking, the changes of public behavior towards saving schemes and extensive use of paper money have made banks most important institutions.The Bank of Khyber (BOK) established in 1991, its objectives included promotion of saving and investment in the KPK. In 1994 it acquired the status of a scheduled bank that allowed at opening branches outside KPK become a member of the clearing house, and engaged in trade finance activities directly.The Bank of Khyber (Main Branch) is one of the outstanding and profitable branch of the Bank of Khyber. This branch has excellent working condition, corporate and professional environment. The purpose on undertaking this internship is basically to aid the students in their MPA program, and to prepare / furnish them with some experience of the practical work. The second purpose is to know complete picture and general description of the Bank of Khyber.I felt that the knowledge that I have gained through this experience is an excellent way of teaching the students to think analytically for solution of the problem and day-to-day life. The bank itself is a huge organization comprising of numerous departments. It is impossible to study each one in detail and include everything in the report.I have produced the knowledge about the working of the Bank of Khyber, which enable me to put down my observation in the shape of internship report. Which will hopefully serve as guideline for all those who are interested in a job of banking sector.I would like to express my gratitude to the bank management who guided me about the banking structure and procedure of the Bank of Khyber. My special thanks to Dr. Arsalan Khan, for his guidance and co-operation that provided me all the requisite information and data needed for this report.In the last but not least my high gratitude is to my Advisor Dr. Zia Obaid under his supervision and full support in the completion of this report.

EXECUTIVE SUMMARYThe Bank of Khyber was established in 1991 after a resolution was passed in the provincial assembly in the year 1994 it became a scheduled bank which allowed it to open branches outside KPK, engage in various Trade finance activities and become a member of the clearing house. The Head Office is situated at 24- The Mall, Peshawar Cantt. KPK-Pakistan. This bank has been playing an important role for the development of different sectors in Pakistan and especially in KPK. It has a network of 104 branches, which are located at different main cities of our country.A distinguished factor of BOK is that not only is it a scheduled commercial bank but it also plays the role of a development agent, through systematic process of long term lending, especially to small and medium size business as well as now making grounds to enhance Islamic Banking.The main purpose of this study is to so I got the opportunity in BOK, Main Branch Peshawar which is one of the profitable branch, because its location at one of the central business place of Peshawar. It has the following departments, which are operated by various officers of the bank i.e. Cash dept, Remittances dept, Advances dept, Deposit dept.The report is divided into six chapters:Chapter One includes some basic information regarding the process of preparation of the report. It includes some basic information about the topic under discussion. This chapter has further divided into five headings. Background of study, Purpose of study, Scope of study, Methodology of study.Chapter Two describes the existing situation of the organization under review. The information of this section has been collected through relevant documents of the bank and by interviewing people. This chapter has further divided into six headings. Brief history, Nature of the organization, Business volume, Product lines, Competitors, Brief introduction of the branch.Chapter Three includes the overall structure of the organization, number of employees, its main branches location, and a brief view of departments and their functions, Organizational hierarchy chart of H/O, Organizational hierarchy chart of Branch, Number of employees, Main offices, Introduction of the department, Function of the departmentChapter Four consists of Ratio analysis; Net Working Capital Ratio, Current Ratio, Cash Ratio, Investment Deposit Ratio, Advance Deposit Ratio, Dept to Asset Ratio, Dept to Equity Ratio, Gross Profit Margin Ratio, Net Profit Margin Ratio, Return on Assets, Return on Equity, Asset Turnover RatioChapter Five consists of SWOT analysis; (Strengths, Weakness, and Opportunities, Threats)Chapter Six is the most important part of the report. This section of the report consists of; Suggestions, Recommendations according to the SWOT analysis and Ratio analysis

LIST OF ACRONYMS

A.V.PAssistant Vice President

ATMAutomatic Teller Machine

BOKBank of Khyber

BODBoard of Directors

CADCredit Administration Department

CDACurrent Deposit Account

CMDCredit Management Division

CFConsumer Finance

DSLDemand Salary Lone

DCFDemand Consumer Finance

E.V.PExecutive Vice President

GovtGovernment

HOHead Office

HRDHuman Recourse Development

HRMHuman Recourse Management

IBDIslamic Banking Division

KPKKhyber Pakhtunkhwa

KIBORKarachi Inter Rank Offer Rate

LCLetter of Credit

LGLetter of Grantee

MDManaging Director

MISManagement Information System

NBPNational Bank of Pakistan

NIFTNational Institute of Facilitation Technology

OG-1Officer Grade One

OG-2Officer Grade Two

OG-3Officer Grade Three

P & EPersonal and Training

PLSProfit & Lose Saving Account

RFRunning Finance

SMEDASmall & Medium Enterprise Development Authority

S.V.PSenior Vice President

T & DTraining and Development

V.PVice President

S.No.LIST OF CONTENTS

SCHEME OF REPORT

CHAPTER 1INTRODUCTION TO THE REPORT

1.1Background of study

1.2Purpose of study

1.3Scope of study

1.4Methodology of study

CHAPTER 2ORGANIZATIONAL REVIEW

2.1Brief history

2.2Nature of the organization

2.3Business volume

2.4Product lines

2.5Competitors

2.6Brief introduction of the branch

CHAPTER 3ORGANIZATIONAL STRUCTURE

3.1Organizational hierarchy chart of H/O

3.2Organizational hierarchy chart of Branch

3.3Number of employees

3.4Main offices

3.5Introduction of the department

3.6Function of the department

CHAPTER 4CRITICAL ANALYSIS

4.1Net Working Capital Ratio

4.2Current Ratio

4.3Cash Ratio

4.4Investment Deposit Ratio

4.5Advance Deposit Ratio

4.6Debt to Asset Ratio

4.7Gross Profit Margin Ratio

4.8Net Profit Margin Ratio

4.9Return on Assets

4.10Return on Equity

4.11Asset Turnover Ratio

CHAPTER 5SWOT ANALYSIS

5.1Strengths

5.2Weakness

5.3Opportunities

5.4Threats

CHAPTER 6CONCLUSION & RECOMMENDATIONS

Table No.LIST OF TABLES

2.8.1Six Years Financials Highlights (Rs. In Millions)

2.9.4.1Livestock Loan Scheme

2.9.5.1Dairy Storage Loan Scheme

4.1.1Working Capital Ratio = Current Assets Current Liability

4.2.1Current Ratio = Current Assets / Current Liabilities

4.3.1Cash Ratio = Cash / Current Liabilities * 100

4.4.1Investment Deposit Ratio = Investment / Deposit * 100

4.5.1Advance Deposit Ratio = Advance / Deposit * 100

4.6.1Debt to Asset Ratio= Total Debt/ Total Assets*100

4.7.1Gross Profit Margin Ratio = Gross Profit / Total Revenue * 100

4.8.1Net Profit Margin Ratio = Profit after Tax / Total Revenue * 100

4.9.1Return on Assets = Profit after Tax / Total Assets * 100

4.10.1Return on Equity = Profit after Tax / Total Equity * 100

4.11.1Asset Turnover Ratio = Total Revenue / Total Asset * 100

Bank of Khyber1

SCHEME OF REPORTCHAPTER 1: INTRODUCTION TO THE REPORTChapter one includes some basic information regarding the process of preparation of the report. It includes some basic information about the topic under discussion. This chapter has further divided into five headings. These headings are:1. Background of study2. Purpose of study3. Scope of study4. Methodology of study CHAPTER 2: ORGANIZATIONAL REVIEWThis chapter describes the existing situation of the organization under review. The information of this section has been collected through relevant documents of the bank and by interviewing people. This chapter has further divided into six headings. These headings are:1. Brief history2. Nature of the organization3. Business volume4. Product lines5. Competitors6. Brief introduction of the branchCHAPTER 3: ORGANIZATIONAL STRUCTUREThis chapter includes the over all structure of the organization, number of employees, its main branches location, and a brief view of departments and their functions. 1. Organizational hierarchy chart of H/O2. Organizational hierarchy chart of Branch3. Number of employees4. Main offices5. Introduction of the department6. Function of the departmentCHAPTER 4: CRITICAL ANALYSISThis chapter of report consists of Ratio analysisThose are:1. Net Working Capital Ratio2. Current Ratio3. Cash Ratio4. Investment Deposit Ratio5. Advance Deposit Ratio6. Debt to Asset Ratio7. Gross Profit Margin Ratio8. Net Profit Margin Ratio9. Return on Assets10. Return on Equity11. Asset Turnover RatioCHAPTER 5: SWOT ANALYSISThis chapter of report consists of SWOT analysis1. Strengths2. Weakness3. Opportunities4. ThreatsCHAPTER 6: CONCLUSION & RECOMMENDATIONSThis is the most important part of the report. This section of the report consists of:Suggestions, Recommendations according to the SWOT analysis and Ratio analysis

CHAPTER-1INTRODUCTION1.1BACKGROUND OF THE STUDYIt is the common practice at the universities that during their MPA (Fin) program students are given exposure to different practical fields related to their studies. The undertaking concern of this report is to an internship at the Bank of Khyber 24- The Mall, Main Corporate Branch Peshawar. The study is about the general operation and management of Bank of Khyber 24- The Mall, Main Corporate Branch Peshawar, and focuses on the online banking and ATM (Automated Teller Machine), which was conducted through interviews in the branch. The study is carried out to familiarize the students with the working of banks and banking environment and to produce a comprehensive report on it.1.2PURPOSE OF THE STUDYThe primary purpose of the study is to understand the nature of a specific business organization and give the possible remedial action as this study as to find all facts upon which analysis of the organization is to be based.Second basic purpose is to work in an organization and to compare the theory and application of the management knowledge in real life situation.Another purpose is to improve personal skill i.e. human relation and communication skills that are to interview and work with them similarly. The reports purpose is also to develop analytical skills by analyzing the working of the organization through financial analysis.Specific Purpose A partial fulfillment as a requirement for the completion of BBA (HONS) degree in banking and finance sector. To objectively observe the operations of Bank of Khyber in general and the operations. To make recommendations or implementations plans for the improvements of the operations of BOK in the light of our professional studies.1.3 NATURE OF STUDYThe study is critical in nature. It was conducted to investigate critically in to the operation of Bank of Khyber and it also explain that how BOK provides facilities of online banking to its customers. The annual reports or the consolidation data of the BOK has not been focused in specific because it does not reflect on the operational performance of branches. However, they have been referred to as when and where required. 1.4 SCOPE OF STUDYThe internship of eight weeks is not long time for understanding the overall organization functioning. However, main emphasis of this study is on the working of the Bank of Khyber 24- The Mall, Main Corporate Branch Peshawar .More specifically, the operation department and credit department of the above mentioned bank branches is the major emphasis study. The scope of this particular study is confined to the Bank of Khyber 24- The Mall, Main Corporate Branch Peshawar. . As the functions of financial institution are much wider in scope so it is very difficult to clearly understand all these function in a limited time.1.5 METHODOLOGY OF STUDYThe data/ information for the internship report was gathered through different sources i.e. primary as well as secondary, Majority of the data presented in this report is collected through primary data sources. Primary data is collected when there is insufficient secondary data available.

1.5.1 PRIMARY DATA:-Primary Data refers to the data obtained for the first time and used specifically for the particular problem or issue under study. Primary data is collected directly from people and organization via 1. Questionnaires2. Personal observation3. Discussion with staff4. Informal interviews with branch manager or staff membere.g:Questions from Staff members

Name: Ahsan Raza Designation: OG1 Export Desk in Bank of Khyber Main Branch.Q. Name of Book Used for Rule of law of Banking Sector?Answer: Book Name UCP 600 (Rules Book) Book for law for Bank, Exporters and Importers.Q. Why Export / Import must be necessary?Answer: Because the things which are varied in the state then the country export these things & Import more things which are necessary to state / country.Q. why bank involve in this?Answer: Because the banks are guarantor.

Name: Noman Designation: OGII Import Desk in Bank of Khyber Main Branch.Discussion about LC (Letter of Credit)Letter of Credit or guarantee letter issue from bank in favor of beneficiary (exporter) on the behalf of applicant (importer).INVOICES:-> Indend / Agent> Performa / Quotation Invoice> Commercial Invoice

Name: Ahsan Raza Designation: OGI Export Desk in Bank of Khyber Main Branch.SITRS: Software used for Date Feeding of advance payment voucher of export. In SITRS date saved in Monthly, Yearly basis.SITRS Table:-1) Data entry2) Print Reports 3) Switch Period4) Period Maintenance5) Merge/ Export Data6)Setup7)View verification report 8) Exit.E-Reporting:-Microsoft excel software which is also used for data of exporters advance payment voucher.

CodesExporters export their merchandise like Matches, Culled Chicken, Vegetable Ghee, Woolen Carpets, and Machinery etc. These Merchandise have own codes these codes shown in advance payment voucher with full detail of Amount, Quantity, Shipment Date and advance payment date.

e.g:Country ID/CodeCountry Name1880Sudan1920Switzerland 0010Afghanistan

Purpose ID/CodeDetails84071000Aircraft Engines84351000Machinery93012000Rocket Launcher/ GrenadesName: Muhammad Aneel Designation: JO in Bank of Khyber Main Branch.Dispatch Dispatch is a word which is used for sending the documents from one organization to another organization / Department. There are two type of Dispatch 1) Inward:- Use for those documents or files which come from the outside organizations / department for the bank of Khyber.2) Outward:- use for those documents which the bank of Khyber sent to other organizations.1.5.2 SECONDARY DATA Secondary data refers to information gathered from sources that has already existed.There are several sources of secondary data including1. Annual reports of The Bank of Khyber 2011, 2012, 2013.2. The Bank of Khyber official website3. Manuals4. Broachers & Relevant books5. Asfar H. Siddiqi, (1993) practice and law of Banking in Pakistan. Pp-506. Mr. Ahsan Raza, Export Desk, The Bank of Khyber7. Mr. Noman, Import Desk, BOK Main Branch8. Mr. Anil JO , BOK Main Branch Peshawar.9. Nauman Amin, Session (2007), IMS Peshawar, pp 49-5110. The Bank of Khyber Employees Service Rules (1998) The Bank of Khyber, Annual Report, 2013 pp-6911. The Bank of Khyber, Recruitment Policy 2008, pp-9212. The Bank of Khyber, Information Memorandum 2008, pp-9813. The Bank of Khyber Employees Service Rules (1998), pp 6-814. The Bank of Khyber Employees Service Rules (1998), pp 9-1215. The Bank of Khyber Employees Service Rules (1998), pp 13-1616. The Bank of Khyber Employees Service Rules (1998), pp 20-2217. The Bank of Khyber Information Memorandum 1998, p-518. The Bank of Khyber Annual Report, 2013, p-21

CHAPTER-2HISTORICAL BACKGROUND OF THE BANK OF KHYBER2.1 DEFINITION OF BANKA financial institution, which deals with money and credit, broadly speaking, Banker draws surplus money from the people who are no using it at the time and lend to those who are in a position to use it for productive purposesBanks can play an important role in the economic development of a country. If the banking system of a country is unorganized and inefficient, it creates maladjustment and impediments in the process of development.2.2 HISTORICAL BACKGROUND OF THE BANK OF KHYBERThe Bank of Khyber was established through the Bank of Khyber Act passed by the Provincial Assembly in June 1991. It is the only Bank in Pakistan having its head office at Peshawar. It has different branches in all over Pakistan. It also deals in Islamic mode of financing.The BOK was established to: Meet demand of the business community to have a bank with its head office in the province. Have accessibility of local businessmen to senior management of the bank for the prompt credit decision making there by accelerating investment in KPK. Have maximum utilization of funds generated in the Province for the economic development of KPK.2.3 SCHEDULED BANK STATUSUp to 1994 the Bank was operating at provincial level as unscheduled bank under the auspices of the provincial government. But in 1994 it got the status of the scheduled bank and came under the regulatory framework of SBP, currently operating at the national level. Due to this status the BOK is also engaged in foreign trade business directly.2.3.1 Benefits of Scheduled BankFollowing are the benefits of scheduled bank status achieved by the BOK. Membership of the State Bank of Pakistan Compliance with the reserve requirements of State Bank of Pakistan Ability to engage in foreign trade business directly Ability to open branches outside the KPK 2.4 VISION STATEMENT OF BOKA vision statement is a long-term goal that a company wants to achieve. A vision statement should answer the basic question, What do we want to become? The vision statement of bank is as follows:To become a leading bank providing efficient and dynamic services in both Islamic and conventional banking through expanded nationwide network.2.5 MISSION STATEMENT OF BOKThe mission statement is declaration of organizations reason for being. It is an enduring statement of purpose that distinguishes one organization from other similar enterprises. It answers the pivotal question, What is our business? The mission statement of bank is as follows:To increase shareholders value and provide excellent service and innovative products to customers through effective corporate governance, friendly work environment, and contributing towards an equitable socioeconomic growth.

2.6 CORE VALUES OF BOKThe core values of BOK are as follows Highest quality of service Professionalism Integrity Team work Innovation and utilization of latest technology Risk Mitigation Corporate Social Responsibility2.7 OBJECTIVES OF BOKUnder the Bank of Khyber act of 1991 of provincial assembly of KPK the banks objectives are as follows:i. To mobilize private savings and public funds for diverting the same into productive channels and ensure their availability.ii. To promote industrial agricultural and socio-economic processes through the active participation of private and public sector in the province.iii. Help under-developed areas and create employment opportunities, especially in the areas of KPK. Further, to guide and assist the people of KPK serving overseas to effectively and profitably invest their foreign savings in the province as well as in others of Pakistan.iv. Create a diversified and sound portfolio for idle funds and their investment in the existing and new ventures especially in the pioneering of high-tech agro-based oriented and engineering projects to ensure maximum returns.v. Participate and seek the share of the province in the capital market of Pakistan by way of subscription through locally pooled resources in the leading stock exchanges of the country and eventually paving the way for establishing a stock market in the KPK.

2.8 BUSINESS VOLUMEThe initial paid up capital of the Bank was Rs. 153 million, which has now risen to billions. Six Years Financials Highlights (Rs. In Millions)Table 2.8.1201320122011201020092008

Deposits77,21860,04345,54836,98126,28624,732

Advances 35,45026,72222,28818,23811,83612,644

Investments53,36345,67236,68519,85317,9268,985

Total Assets 108,17082,17868,42450,79438,81131,339

Capital and Reserves11,91310,7769,7005,6045,0415,678

Profit/loss Before Tax1,6691,5721,285713(799)206

Profit/loss After Tax1,1541,078872563(637)137

Return on Equity10%10%9%10%-12%2.4%

Source: BOK Annual Report 2013.

2.9 PRODUCTS AND SERVICESADVANCES Fund Based Non-Fund Based Consumer Finance Agriculture Finance Micro Finance

2.9.1FUND BASEDRunning FinanceThis is a working capital finance facility available for one year and renewed subject to satisfactory utilization thereof.Cash FinanceCash finance is extended to manufacturing concerns for meeting their seasonal requirements (against pledge).Export RefinanceThis facility is encouraged to boost exports of the country. Funds are made available from SBP credit facilities.Demand FinanceIt is a term loan disbursed in lump sum or tranches and repayable in the form of monthly or quarterly installments. Loan against SalariesBOK provides loan against salary to employees of Government / Semi- Government organizations for personal domestic consumptions. The employee must be confirmed having minimum of three years of service. However, the remaining service period of the employees must not be less than terms of the loan. To avail this facility, the employee must be account holder of the bank. Loan limit is up-to 15 Take Home Salaries but not exceeding Rs. 1.00 million. This facility is available for a maximum period of 4 years but can be allowed for a shorter period.2.9.2NON-FUND BASEDDocumentary Letter of CreditImport and Export Letter of Credit Facility enhances trade with our countries.Letter of GuaranteeLetter of Guarantees is issued on behalf of customers to meet their commitments.2.9.3CONSUMER FINANCEThe Bank of Khyber is offering Consumer Finance to the general Public and Government Employees for meeting their personal and domestic financial requirements. BOK offers 3 loan facilities i.e. Loans Against Salaries, Car Finance and Suhana Ghar under consumer finance.Loan against SalariesThe Bank provides loan against salary to employees of federal / provincial governments, autonomous & semi-autonomous bodies and corporations listed on stock exchange for personal and domestic consumptions.2.9.4AGRICULTURE CREIDIT SCHEMES1. Sada Bahar Zarai Loan SchemeThis is a Revolving Finance Facility for input requirements of production nature such as seeds, fertilizers, feed etc. for small farmers. Maximum Loan Limit is Rs. 5 Million and the rate of return is 3-6 months KIBOR + 400 BPS. Loan tenor is 3 years. Mark up is recoverable after 6 months whereas principal is adjusted annually with automatic renewal for next day.2. Credit Guarantee SchemeThis is a Revolving Finance Facility for working capital requirements of production nature such as seeds, fertilizers, feed service charges etc. Maximum Loan Limit is Rs. 500,000/- and the rate of return is 3 months KIBOR + 300 BPS with no upper cap. Loan tenor is 3 years. Mark up is recoverable after 6 months whereas principal is adjusted annually with automatic renewal for next day.3. Agriculture Refinance Loan Scheme (for war affected areas of Malakand)This is a one year Demand Finance Facility for working capital requirements of production nature such as seeds, fertilizers, feeds, service charges etc. There is no maximum loan limit and rate of markup is 8% p.a. however, market rate will be changed in case of default. Loan is repayable in lump sum in 9 months for crop loans and yearly in case of orchards and off farm activities.4. Livestock Loan SchemeTable 2.9.4.1i. Nature of Facility.Demand Finance Facility

ii. Maximum Limit.Rs. 2.5 Million.

iii. Rate of Return.3-6 months KIBOR + 400 BPS.

iv. Tenor.5 Years including 3 months grace period.

v. Repayment.For Milk Production it is recoverable with in maximum period of 5 years in monthly installments. It is recoverable in quarterly/ half yearly installments with grace period of 3 months for Meat Production.

vi. Purpose.Purchase of animal heads for milking and fattening, Dairy Farm, machinery / equipment.

5. Dairy Storage Loan SchemeTABLE 2.9.5.1i. Nature of Facility.Demand Finance Facility.

ii. Maximum Limit.Rs. 2.4 Million.

iii. Rate of Return.3-6 months KIBOR + 400 BPS.

iv. Repayment.Recoverable with in maximum period of 5 years in monthly, quarterly, half yearly or yearly installments.

v. Down Payment.At least 10% of the price of the vehicle. Machine/cost of civil work.

vi. Purpose.For construction/acquisition of facilities required for storage of dairy products and by-products like Milk storage chilling tanks, refrigeration plants and milk carrying containers, refrigerated meat.

2.9.5.MICRO FINANCEMicro Finance has proved to be one of the most effective tools for facilitating socio-economic development through increased access to financial services. The economic landscape of KPK is characterized by a number of flourishing small-scale economic activities scattered throughout the cities, towns and rural areas. However, these smaller enterprise entities have never been a focused market for formal financial institutions operating in this region.Contributing significantly to income and employment generation, The (BOK) considers the promotion of micro-enterprises as one of the alternative economic development strategies for the province. For this purpose the BOK launched its micro business development in 1995 and rural financial services in 1997. This was the first formal and structured initiative by a commercial bank to broaden the base for micro enterprise market. The initiative was further strengthened and encouraged by various multilateral institutions such as Asian Development Bank (ADB), International Fund for Agricultural Development (IFAD), KFW (German Development Bank) and Swiss Agency for Development Cooperation through credit lines and technical assistance.

BOK aims to be the largest Micro Finance provider in KPK on sustainable basis. Our main Objective is providing access to financial services to the low income and disadvantaged segment of the society to raise their standard of living with specific emphasis upon women. The pursuit of this objective will significantly contribute to the improvement of employment opportunities, income generating activities and subsequently poverty alleviation.Pursuing its objective the BOK provides micro enterprise and group loans for existing and new enterprises engaged in value addition process, requiring technology improvement or working capital. BOK has made a modest beginning but a great potential for growth is still to be explored over the years. It has disbursed total loans of Rs. 1.3 billion to more than 27,000 borrowers with majority of the loans below Rs. 50,000 per client.2.10DEPOSITS2.10.1 Current Deposit AccountThe BOK current deposit account allows the facility of unlimited withdrawals up to the extent of the balance in account. There will be no tax deducted on the funds that some on chooses to keep in these accounts. Balance in current accounts are payable on demand. Any amounts can be with drawn without prior notice. Similarly there is no restriction on number of transaction during the day. All individuals including foreigners , firms and corporate bodies are entitled to open and maintain current accounts No profit is paid on current accounts Overdrafts are allowed on this account2.10.2Saving Deposits AccountThe BOK rupee saving deposit account allows the facility of multiple withdrawals up to the credit balance, while accruing profits on depositsTypes of saving deposit account Profit and loss sharing (PLS savings) account Special deposit account (SDA) PLS seven days notice deposits PLS 30 days notice deposits Profit is paid bi-annually on minimum monthly balance (Jan June & July-Dec) which is announced in July and January respectively. Generally, withdrawals from this account are allowed on demand that is without any prior notice of with drawl. Overdraft is not allowed on this account2.10.3BBA (Basic Banking Account) The minimum initial deposit will be Rs. 1000/- Will be non-remunerative account. No limit on minimum balance, incase, where balance in BBA remains nil for a continuous six months period, such accounts will be closed. No fee for maintaining BBA. Maximum two deposit transaction and two chequing withdraws are allowed, free for charge, through cash/clearing per month Unlimited, free of charge, ATM withdrawals from the banks own ATMs, incase of withdrawal from BBA through the ATM machines of other banks. The respective other banks may recover charges for such transactions. Statements of account will be issued once in a year.

2.10.4Be-Baha Mahana Amadani (BBMA)Salient Features of the Be-Baha Mahana Amadani (BBMA) Tenor of the scheme will be 3 months, 6 months and 1 year. Minimum deposit requirement is Rs. 1, 00,000/-. Expected rate of profit will be 10.50 % per annum for 3 months, 11.00 % per annum for 6 months and 11.50 % per annum for 1 Year. Profit payable on monthly basis. With-holding tax and Zakat to be deducted as per the Government rules.

Value added features Free issuance of Cheque-book Free issuance of ATM Card Free quarterly statement of account 90 % financing Facility will be made available to the depositor.2.10.5 Current Benefit AccountIntroducing a new business product in the name of Current Benefit Account w.e.f 1st March 2010The salient features of the scheme are given below:- Product Name Current Benefit Account For Conventional BranchesEligibility: Current Account Holders only (Individuals, Joint, Partnership, Corporate) Minimum Balance Requirement Rs.20, 000/- (Rupees Twenty Thousand) (For individual/joint Accounts) Rs.100, 000/- (Rupees One Hundred Thousand) (For Partnerships/Companies Accounts) 2.10.6Khyber Pak Munafa Scheme Halal Profit on your Investment

Key Features Minimum Investment Rs.100, 000/- Investment for 5 Years Profit Calculation on average Daily Balance Profit payment on Monthly Basis Profit Payment on every 5th working day of each month Profit up to 14% (based on previous history) Pre-Mature termination possible Free On-Line deposit/ Withdrawal Free Account Statement (once in a month) All other service charges are 50% for Senior Citizens 90% financing available2.11SERVICES2.11.1ATM ServiceIn order to keep pace with advancements in the field of technology, The Bank of Khyber has joined the electronic platform of 1Link switch. This will facilitate consumers by providing them access to their funds through the existing ATM network of the country.2.11.2Online Banking The Bank of Khyber offers Online Banking Facility to its customers at branches all over Pakistan. Cash may be accepted at a branch for crediting accounts at another branch; Cheques can be paid by a branch by debiting the customers account at another branch.Following facilities are available at The Bank of Khybers Online Program for its customers:1. Cheque Encashment2. Cash Transfer3. Transfer of Funds through Cheques among Branches.

Lockers service Bank of Khyber also provides lockers facility in the country. The lockers issued only to the depositors. No lockers are issued to any unknown person. The dual control system is used for lockers. The officer has master key to apply on the locker but he cannot open the locker of any person. The locker holder provides the bank has specimen signature. Whenever the locker holders come to open the locker, his signatures are verified by the officer and then will be able to open his locker. If the key of the locker is lost company providing these lockers breaks the locker and new lock is fitted in its locker and lock is destroyed in the presence of the locker holder and bank charges RS 2000 for that. In case the locker holder dies, the court opens his locker in the presence of his heir as mentioned in his will or and his belongings are given to them and the locker is closed. 2.12 COMPETITORS OF BANK OF KHYBERNow a day there is very strong competition among all the banks. The competitors of the BOK are all the public and private banks and financial institutions.Those are: National Bank of Pakistan The Bank of Punjab The Bank of Sindh, Bank of Baluchistan Habib Bank Limited ( HBL) Muslim Commercial Bank (MCB) Allied Bank Limited (ABL) Standard Chartered Bank National Investment Bank (NIB) Bank Islamic Banks Meezan Bank Bank Alfalah Limited Faysal Bank Limited & all savings centersCHAPTER -3ORGANIZATIONAL REVIEW

The banks ultimate governing body is Board of Directors comprising of eight members. The government of KPK is the major stakeholder of the bank therefore the chairman and all the members of the board are nominated by it. The Managing Director of the Bank represents the management in the Board and acts as a member of the Board. There is a company secretary who calls meeting of the Board of Directors. The current members of BOD are as follows:Chairman / Non-Executive Director Khalid PervezAdditional Chief Secretary, KPKBoard of Directors Mr. Maqsood IsmailNon-Executive Director Mr.Sajjad Ahmad Non-Executive Director Mr.Javed AkhtarIndependent Director Mr.Asad Muhammad IqbalIndependent Director Said Badshah BukhariNon-Executive Director / Secretary Finance KPK. Dr.Ihsanul HaqIndependent DirectorMANAGING DIRECTOR/ CEO (ACTING) Mr.Imran SamadActing Managing Director

3.1ORGANIZATIONAL HIERARCHYAt each position the duties, goals, function, responsibility and authority are clearly explained.The channels that delegate these activities are called organization hierarchy. This must be set in such a manner to best accomplish the organizational goals.The BOK ultimate governing body is the board of directors while the day-to-day affairs of the bank are managed by a Managing Director appointed by the board of directors for a term of three years on contract with the consent of the Government of KPK. Under the supervision of MD there are executive vice presidents (EVPs) the senior most officials in the banks hierarchy each heading a bank unit. Next to EVP there are senior vice president (SVPs) and vice president (VPs) heading their respective divisions and departments.At the branch network of BOK there are branch managers and assistant branch managers.The nomenclature of various posts and the bank is as under:1. Executive Vice President2. Senior Vice President3. Vice President4. Assistant Vice President5. Officer Grade-16. Officer Grade-27. Officer Grade-38. Junior Officer

3.2ORGANIZATIONAL HIERARCHY CHART OF THE BANK OF KHYBER (H/O)Board of DirectorsManaging DirectorShariah Supervisory Committee/ Shariah AdvisorIslamic bankingDivisionRisk Management Deptt.Operations Deptt.

MarketingCredits

Treasury

MIS

Accounts SectionProduct/ Business DevelopmentIBB(s)

Source: BOK Annual Report 2013.

Bank of Khyber`45

3.3ORGANIZATIONAL HIERARCHY CHART OF THE BANK OF KHYBER (24- THE MALL MAIN CORPORATE BRANCH)Mushtaq Ahmed (JVP/Chief Manager)Muhammad Irfan (OG-111)Manager Operations

Manager Foreign TradeNOT APPLICABLESyed Ghous Ali ShahIn charge Credits

Remittances M.Anil (J.O)ExportM.Arif(OG-1) ImportHassan Raza (OG-1) *Imran Baloch Compliance Officer M.Yousaf (OG-3) Accounts OpeningM.Zeeshan (OG-2)Deposits/TransfersOnline Banking

Nasir Shah Clearing/Remittances Miss Faiza KanwalCredit OfficerSME/Corporate

Asad Ali Credit OfficerSME/Corporate

Ibrahim Khan QASID Imran MessahSweepersShabir KhanTelephone Operator

M.Saeed (OG-2) Western Union

SBP/ HO Returns Dawood khan (J.O)

M.Zubair(OG-2)Incharge Cash/Payments

M.Tariq Reciepts/UtilityBil

Khuwaja iftikhar Payments

M.Ibrahim Cash Sorting

Muhammad Faisal Khan (OG-3)* System Administrator

3.4NUMBER OF EMPLOYEES IN BRANCH LEVELThere are sixteen employees working in the Bank of Khyber Main Corporate Branch.Those are One Chief Manager One Operational Manager One Credit In charge and Two Credit Officers One Cash In charge and Three Cash Assistants One Account Opening Officer One Bills & Remittances officer One Clearing Officer One Foreign Officer & Assistant One Compliance Officer One Recovery Officer.3.5MAIN OFFICES OR BRANCHES OF BOKBOK BRANCHES IN PAKISTANCurrently the Bank has One Head Office, One Hundred and four (104) Branches. Location of Branches55 KPK32 PUNJAB11 SINDH3 BALOCHISTAN3 AJ&KKHYBER PAKHTUNKHWA

3.6DEPARTMENTATION AT THE BRANCH LEVEL The Bank of Khyber H/O is located in Peshawar, and Main branch is located beside the Head Office, it has complete control over administrative matters and operations as well as other areas of the Bank of Khyber. Various departments are working in all branches of BOK to facilitate the customer. Following are the banking departments functioning. 1. Account Opening Department2. Cash Department3. Remittances Department4. Bills Department5. Clearing Department6. Credit Department3.7FUNCTIONS OF DEPARTMENT3.7.1Account Opening Department The opening of an account is the establishment of banker customer relationship. This department performs the duty of opening accounts for customer. It also issues cheque books to customers. A person who wishes to open an account with the bank has to fill an account opening form obtained from any branch of BOK at the time of opening an account. The bank officer fully obtains information about character, integrity, responsibility, occupation, and the nature of business of the respective customer.3.7.2Cash Department Cash department owes its importance to the fact that it is a major point of contract between the bank and the customer, the banks most valued relationships. This department is the showcase of the bank and conveys the first impressions about the banks commitment to professionalism in its system and procedures and to courteous and efficient customer service. This department performs the function of receipts and payments.

3.7.3Remittances Department Funds transfer facility or remittances of funds are one of the functions of the bank all over the world. Remittances through banking channels save time, costs less and eliminate the risks involved in physical; transportation of money from one place to another. Bank of Khyber transfers money in the following ways:1.Pay order (P/O)2.Demand draft (DD)3.Mail transfer (MT)4.Telegraphic transfer (TT)5.Foreign currency demand draft.6.Foreign currency telegraphs transfer.1. Pay Order / Cash Order If funds are to be transferred with in a city then Pay Order is used. It is an instrument like DD and payment is made by cash / cheques payment.2. Demand Drafts It is order cheque (instrument) drawn by one branch of the bank upon another branch or any other bank in Pakistan. It is negotiable instrument and can be made payable to bearer and it is only credited in the account of drawer himself or in the third party account. If DD amount exceed fifty thousand or more than a test telegram is issued to the bank to ensure prompt payment to payee. Demand draft is safe, secure and convenient to send carry instead of cash.3. Mail Transfer (MT) It is another quick way to transfer the funds from one station to another. In this mode the funds are transferred through main and may take two or more than two day.

4. Telegraph TransferWhen customer desires to send funds one place to another place on urgent basis. Such funds are transferred through TT from one account. Through TT money is transferred with is 24 hours and this is purely inter-bank / inter-branch transaction.5. Foreign Currency Demand DraftIt is an order cheque drawn by a branch of the bank upon another branch of the same bank or any other in a country other than Pakistan. Other functions are approximately the same as Demand Draft.6. Foreign Currency Telegraphic Transfer When customer of one country wants to send funds from one place to another in other country on urgent basis, such funds is transferred through this mean. The remaining functions are same as telegraphic transfer. 3.7.4 Bills DepartmentThe bills department deals with the collection, purchase and discounting of bills on behalf of the customers. The collection of cheque and other instruments has become a very important service that commercial banks render to their clients. While collecting cheque and other instruments, a bank acts as an agent of its customers and therefore, the banker-customer relationship to the agent principal relation.The collection of bills usually involves two banks; the collection bank and the paying bank. Both, collecting as well as paying, banks have certain obligations to each other and to their customers. They have certain legal rights also and legal protection is available against fraudulent transactions under section of Negotiable instrument Act, 18813.7.5Clearing Department BOK along with their daily business activity also provides the facility of collection credit claims for customers i.e. when a customer deposits a cheque or draft for collection, which is of the some other bank. Then bank collects this instrument for its customer through clearing and similarly in case of payments, the bank makes the payment through clearing for the instruments (cheque or draft), which are given by its customers for his obligation fulfillment customer of some other bank.

3.7.6 Credit DepartmentThe bank is profit seeking organization. It attracts surplus balance from the customer at low rate of interest and makes advances at a higher rate of interest to the individual and business firms. Credit and extensions are the most important activity of all the financial institution, because it is the main source of the earning. Credit department is one of the most sensitive and important department of the bank. The major portion of the profit is usually earned through this department. The job of this department is to make proposals about the loans; the credit management division of H.O directly controls all the advances.Facilities provided by BOK. Running Finance ( for one year) Demand Finance ( 3 to 5 years)CAD makes a check list and asked the credit officer to contact the party to complete the said documents. They are Letter of continuity Personal Guarantee Letter of Hypothecation of stock D.P Note Mortgage Deed NIC of executants and witness Stock report Insurance policy Party profileAfter completion of charge documents CO send it to CAD. When they found it correct, they issue sanction letter. Sanction letter is sent to CO and party account is opened and debit transaction starts.

CHAPTER-4FINANCIAL ANALYSISFinancial analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing relationship between the items of balance sheet and profit and loss account.The analysis of bank statements is undertaken by analyst, depositors, regulatory authorities, stockholders, borrowers, the bank management etc. A depositor is interested in the solvency of the bank, i.e. the safety and availability of his funds.The regulatory authorities desire to assure themselves that the banks are operating in accordance with the requirements of the law and are in sound financial conditions. Stockholders are interested in the general financial condition of the bank and the earning, the dividends, and the managements policy with reference to the accumulation of surplus. The borrower is interested in knowing the extent of available funds and the use that is made of the banks resources.Financial ratio that relates two accounting numbers and is obtaining by dividing one number by the otherASSUMPTION1. Ratios are calculated for three (#) years i.e. 2011, 2012, 2013.2. All the figures are taken in thousand i.e. Rs. In 000.3. Figures are rounded off up to 2 decimal points.

FINANCIAL RATIOS4.1.WORKING CAPITAL RATIOWorking Capital Ratio = Current Assets Current LiabilityTable 4.1.1Years Current AssetsCurrent LiabilitiesWorking Capital Ratio

201165,103,39656,221,4478,881,949

201278,623,79768,021,22210,602,575

2013104,195,59492,896,54111,299,053

Source: BOK Annual Report 2011, 2012, 2013.There are two concepts of working capital. The first define the working capital as the investment in current assets. Current assets mean which can be converted into cash with in an according period and include cash, short-term securities, debtors, bill receivable, stock etc. According to the other concept working capital is the excess of current assets over current liabilities.Interpretation The net working capital in the 2011 is 8,881,949 and in 2012 net working capital is increased to 10,602,575. While in 2013 the net working capital continuously increased to 11,299,053.4.2CURRENT RATIOCurrent Ratio = Current Assets / Current LiabilitiesTable 4.2.1Years Current AssetsCurrent LiabilitiesCurrent ratios

201165,103,39656,221,4471.17

201278,623,79768,021,2221.15

2013104,195,59492,896,5411.12

Source: BOK Annual Report 2011, 2012, 2013.

InterpretationCurrent assets are those assets which can quickly convertible to cash are very near to cash such as account receivable, inventory, investment, and advances etc. When the current assets are divided by current liability of the same year we find the current ratio. In the year 2011 the current ratio shows a positive figure of 1.17. And in the year 2012 and 2013 the current ratio is 1.15 and 1.12 it is due to Increase in current assets.4.3CASH RATIOCash Ratio = Cash / Current Liabilities * 100Table 4.3.1YearsCashCurrent liabilitiesCash ratio

20112,802,78156,221,4474.98%

20123,108,81968,021,2224.57%

20134,068,67892,896,5414.37%

Source: BOK Annual Report 2011, 2012, 2013.InterpretationThis ratio analyzes the cash and current liabilities that whether we can pay our current liabilities by cash or not. In 2011 the cash ratio is 4.98% while it decreases in 2012 and 2013.4.4INVESTMENT DEPOSIT RATIOInvestment Deposit Ratio = Investment / Deposit * 100Table 4.4.1YearsInvestment Deposit Investment deposit Ratio

201136,684,68945,548,42380.5 %

201245,671,70060,043,08376.06%

201353,363,16377,217,73369.10%

Source: BOK Annual Report 2011, 2012, 2013.

InterpretationThis ratio shows the comparison of investment and deposits. This is calculated as total investment divided by total deposits. From the above table it is very much clear that BOK is using their deposit very efficiently. In 2011 the ratio is 80.5% but in 2012 it was decreased to76.06%, while again in 2013 it decreases at 69.10% which show the performance of BOK is very good. Deposits and investments are continuously increasing.4.5ADVANCE DEPOSIT RATIOAdvance Deposit Ratio = Advance / Deposit * 100Table 4.5.1YearsAdvancesDepositsAdvance deposit ratio

201122,287,79945,548,42348.93%

201226,721,73360,043,083 44.50%

201335,450,20177,217,73345.90%

Source: BOK Annual Report 2011, 2012, 2013.InterpretationThis ratio show that how much efficiently the banks advances the deposits of their customer to borrower. In 2011 the advance deposit ratio is 48.93% which is decreased in 2012, while in 2013 the advance deposit ratio is little increased to 45.90%, this show that the bank has small concentrate on providing the loans to the customers due to lack information about the background and assets of customers.4.6 DEBT TO ASSET RATIOSDebt to Asset Ratio= Total Debt/ Total Assets*100Table 4.6.1YearsTotal debts.Total assetsDebt to assets ratio

201158,058,97268,424,46684.85%

201270,450,83982,177,63885.72%

201395,613,371108,170,16888.39%

Source: BOK Annual Report 2011, 2012, 2013.InterpretationThe debt to total assets ratio measures the percentage of the firms assets that are financed with debt. In 2011 is the debt to assets ratio is 84.85%, in 2012 the debt to asset ratio is increasing at small rate at 85.72%,while in 2013 it increases to 88.39% shows that the remaining 11.61% of financing came from equity investor.4.7.GROSS PROFIT MARGIN RATIOGross Profit Margin Ratio = Gross Profit / Total Revenue * 100Table 4.7.1YearsGross ProfitTotal revenueGross profit margin ratio

201112,85,4586,946,82718.50%

20121,572,0767,204,93721.8%

20131,669,2307,406,78722.53%

Source: BOK Annual Report 2011, 2012, 2013.

InterpretationThe gross profit margin measures how much profit remains out of each sales dollar after the cost of the goods sold is subtracted. This ratio show how will a firm generate revenue compared to its cost. The higher the ratio, the better the cost controls compared to the sales revenue. In 2011 the gross profit ratio is 18.50% which increases in 2012 to 21.8% and 22.53% in 2013. This shows the quality performance of BOK in generating gross profit4.8.NET PROFIT MARGIN RATIONet Profit Margin Ratio = Profit after Tax / Total Revenue * 100Table 4.8.1YearsProfit after tax Total revenue Net profit margin ratio

2011872,3086,946,82712.55%

20121,078.0587,204,93714.96%

20131,154,0397,406,78715.95%

Source: BOK Annual Report 2011, 2012, 2013.InterpretationThe net profit margin measures how much profit out of each sales dollar is left after all expenses are subtracted by dividing profit after tax by sales revenue. Net profit of BOK is fluctuating trend in 2013 are 15.95% as compared to 2011 and 2012. This means that selling price has increased the other expenses of the bank.

4.9.RETURN ON ASSETSReturn on Assets = Profit after Tax / Total Assets * 100Table 4.9.1YearsProfit after tax Total assetsReturn on assets

2011872,30868,424,46612.74%

20121,078.05882,177,6381.31%

20131,154,039108,170,1681.06%

Source: BOK Annual Report 2011, 2012, 2013.InterpretationThe return on assets ratio indicates how much income each dollar of assets produces on average, it show whether the business is investing in its assets effectively, the return on assets is calculated by dividing profit after tax by the total assets of the firm, in 2013 the average income is 1.066% this return on assets figure may seen low as compared to 2011 and 2012.4.10.RETURN ON EQUITYReturn on Equity = Profit after Tax / Total Equity * 100Table 4.10.1YearsProfit after tax Total equity Return on equity

2011872,308 10,365,4948.41%

20121,078.05811,726,7999.19%

20131,154,03912,556,7979.19%

Source: BOK Annual Report 2011, 2012, 2013.InterpretationThe return on equity ratio measure the average return on the firm capital contribution from its owners. It indicates how many dollars of income were produced for each dollar invested by the common stockholders. It is calculated by dividing net income by stockholder equity. In2011 the return on equity is 8.41% which increased in 2012 and 2013 with equal change at 9.19%.4.11.ASSET TURNOVER RATIOAsset Turnover Ratio = Total Revenue / Total Asset * 100Table 4.11.1YearsTotal revenue Total assetsAsset turnover ratio

20116,946,82768,424,46610.15%

20127,204,93782,177,6388.76%

20137,406,787108,170,1686.84%

Source: BOK Annual Report 2011, 2012, 2013.InterpretationThe total asset turnover ratio measures how efficiently a firm utilizes its assets. If a company has many assets that do not generate revenue, then the total asset turnover ratio will be low, in 2011 the assets turnover ratio is 10.15% but in 2012and 2013 it was decreased to 8.76% and 6.84%

CHAPTER 5SWOT ANALYSISSWOT analysis is a strategic development tool that matches internal organization strengths and weaknesses with external opportunities and threats. SWOT analysis is based on the assumption that if manages carefully review such strengths, weaknesses, opportunities, and threats a useful strategy for ensuring organizational success will become evident to them. SWOT analysis is an important too to analysis the overall situation in which organization is conducting its affairs; each issue remains relevant and useful of corporate strategy formulation.The purpose of strengths & weaknesses analysis is to express, quantitatively or qualitatively which areas of the business have Strengths that should be exploited by suitable strategies; Weaknesses for which strategies should be developed to improve themThe purpose of an external appraisal (opportunities & threats) is to identify profit-making opportunities, which can be exploited by the organizations strengths, and also to anticipate environmental threats, which will affect competitors and the organization as well. Thus internal and external appraisals are brought together in a SWOT analysis.5.1 STRENGTHSANALYSIS OF STRENGTHS OF BOKStrengths are the internal capabilities that promote organization objective in a competitive industry. BOK enjoys the following strengths. The Bank of Khyber emphasis on consumers banking by providing them with innovative saving scheme, products and services suiting best to their life style. The BOK also has many government accounts due to which its reputation and image becomes stronger & more positive. Examples of such accounts are Traffic Challan accounts, TV License accounts, secretariat account and NADRAs accounts. The BOK also obtained membership of SWIFT (Society for World Wide Inter-Bank Financial Telecommunication), which facilitates the settlement of cross border transactions pertaining to international trade and foreign exchange business. That is why most of the Importers and exporters are availing the facility of letters of credit on which the BOK earns a lot of revenue. Extension and improvement in services to domestic as well as foreign customers. Attractive and higher interest rates and prize on various accounts and producers. Best optional policies and attractive compensation packages for an employee, which has really improved their commitments, dedication and headwork towards the accomplishment of bank objectives. Human resources development and employment of technology towards modern development. Rupee traveler cheques (RTCS) that minimize the degree of risk. Attention and sensitivity prevailing in the country. An efficient and experienced private management group also involved in other interest like; textile and cement industries. Individual and personals attention. The BOK provides consume ring financing which contract with AYS in cant and city, which is very good for middle class group. 5.2 WEAKNESSANALYSIS OF WEAKNESSES OF BOKWeaknesses are just the opposite of strengths and include all those internal factors that restrict the accomplishment of organization objective. The bank has the following weaknesses. Most of the employees consider themselves to be government employees and do not take interest in their work, which does affect the performance of the bank (in the long run). Beside this, the behavior of the staff is sometimes very rude to their customers and naturally the customers want to wind up their accounts in the BOK as a result. Slowdown in advance growth in the short term as BOK focuses on quality customers in the market. Customers having accounts with small amounts are not given the same services and dealings, which is given to those who have high accounts. Political or government influence of pressure from some interest groups. The BOK faces a problem of availing technological facilities because on-line banking system and so many. In foreign countries the BOK has no branch and this creates problem for importers and exporters. System of recruitment and selection is not transport and few training programs in junior level officers.5.3 OPPORTUNITIESANALYSIS OF OPPORTUNITIES TO BOKOpportunities are the external circumstances, events or situations that offer an organization the chance to achieve its objective. The bank has following opportunities that can be availed. They have the opportunity to open new branches in the country as well as in foreign countries. They should open new branches at least al the district level. Besides this they have the opportunity to take an NOC from SBP and open new branches in Afghanistan. Growing policies of governments on business and commerce sector provided BOK an opportunity to efficiently meet with the business peoples requirements of instant cash and financing facilities. Foreign exchange department can be open in those cities branches where foreign activates are developing. The BOK has the opportunity to hire skilled, professional and educated persons who are specialized in the course of banking and accountancy like CAs (Chartered Accountants) & MBAs. Customers feed back on different products and accounts has really improved the bank performance and encourage the atmosphere for other future polices. BOK also has an opportunity to expand new technology.5.4 THREATSANALYSIS OF THREATS TO BOKTreats are the opposite of opportunities. These are external factors. Forces or situation that might potentially create problems, harm the organization, endanger its ability to achieve its objectives. The bank faces the following threats. Competitors are increasing in the private sector banking in Pakistan due to privatization of the domestic bank. The step of Islamic banking in Pakistan is a big threat for the BOK. Because the whole banking system will be changed. Increasing number of competitors as the form of foreign bank in Pakistan, whose services are move advance on modern techniques and they provide highly specialized and attractive services to their customers. Un-consistency in government policies regarding to business and economic sector. Rapid growth of advanced global technologies. Strict regulation by the government over credit facilities to the customer as well as to meet the prudential regulation. Hors of confidence of overseas prospects and customers due to freezing of accounts. Changing the customer needs.After SOWT analysis the top management of the bank should make a committee for the proper research and development to identify the customer needs and design some new schemes and strategies to overcome the stated weakness and use the opportunities. BOK should take some steps to face the threats and they have to properly plan for the growth of the bank and introduce some new scheme which has very effective. If BOK gives proper attention to their customer then in few years this bank will be the leading bank in Pakistan.

CHAPTER 6CONCLUSION AND RECOMMENDATIONSThe Bank of Khyber has an enthusiasm among the young business graduated to adapt banking as a promising career. This is because or its dynamic strategies that give totally new look to the banking industry of Pakistan.During the internship program of two months at the Bank of Khyber 24- The Mall Main Corporate Branch Peshawar. I learned a lot about the banking concepts. During the work in various departments of the branch and interaction with the employees as well as with customers helped a lot to understand the various operation of the bank.However, due to interaction with the staff and personal observation as well as from financial analysis specially, some key factors are pointed which are dropping the financial carrier of the BOK in this era of competition. And after that I am giving some suggestion that can help BOK in becoming the better institution among the leading banks of Pakistan.SUGGESTIONS & RECOMMENDATIONSIn this section, some suggestions are given to BOK for improvement of the bank overall situation. These suggestions include the application of most advance information technology and other factors of management, which can really contribute in the improvement of the performance of BOK.6.1 QUALIFIED STAFFThe first priority is to be given to highly qualified staff. The Bank of Khyber should acquire highly qualified persons for its banking operations. They should never compromise on lower level of management. The bank should hire well and experienced persons for its management, because management plays a huge role in the improvement of an organization.6.2 E-BANKINGThe bank has a golden opportunity to start Internet Merchant Accounts in the country, as State Bank of Pakistan (SBP) has asked bankers to start it, but yet fewer banks has come up practically. So the Bank of Khyber if started Internet Merchant Accounts will get a good size of business from the market of E-commerce and also Image will be enhanced.Similarly also other functions of E-banking like providing different services to the customers on internet, this can increase the customers of the bank, because of the growing number of internet users in the country, and The Bank of Khyber will capture the market.6.3 ADVANCESThe bank should introduce new scheme, of advances for self employment and also the bank should increase micro level credit, in which there is less risk of default and this also helps in poverty alleviation, thus strengthens the overall economy of the country along providing employment to the people, like Garmin Bank has done in Bangladesh. So BOK can think of his project too. Similarly the bank should offer loans to IT / Software developing firms and individuals, which will create a new segment of the customers.6.4 SERVICESIn this area The Bank of Khyber can work on problems to improve the bank performance and image like, reduction in customers time utilization in, on the counter services by providing quick and efficient over counter services.6.5 UNIFORM DRESS CODE AND OUTLOOKProper, modern dressing and outlook also helps in the improvement of banks image. The employees should look smart and well dressed, so that it gives a sound gesture to the customer.6.6 CLARITY OF PLANS/STRATEGIESThe management should clearly discuss plans/strategies and once adopted the plans/strategies should be clear to all levels of management in the bank, as this improves the implementation of plan/strategy.6.7 PROPER JOB ANALYSISThe job of the employees should be lucid and clear to them, similarly proper job analysis for the job of every member of the staff setting of targets as tasks for each job, thus invoking professionalism and removing lethargy from the staff.6.8 NEW COMPETITIVE SCHEMESThe Bank of Khyber should introduce new schemes especially new deposits schemes, with more features than competitors, targeting the low-income level segment and small savers. This will also increase the deposit base of the bank.6.8 INCREASE MARKETING ACTIVITIESThe Bank of Khyber should increase marketing activities, through reminder advertisement, increasing customer relations, promotional campaigns with products, and other tools of marketing. This will increase the credibility and image of the bank.6.9 DELEGATION OF POWERSBusiness environment has changed and time is one of the most important factors for the businessmen. The bankers have to exercise due care in transaction while dealing the customer, and the people want bankers to provide the needed service at the earliest. But delegating of authority to the lower level of management can relieve this. So that at branch level manager can decide about the short time decisions and the unnecessary delays can be reduced to a minimum.6.10 TRAINING OF STAFFEmployees should be provided constant on job training, refresher courses and workshops, so to get the required knowledge. Every member should be provided with a particular department, training.6.11 INTERNATIONAL BANKING The Bank of Khyber should expand its branches. They should expand their branches not only in Pakistan but also outside the country to provide better services of Pakistanis living there.6.12 USE OF MEDIAThe Bank of Khyber is new organization. In order to increase its customers and add to its publicity, it is recommended that the bank should advertise itself and introduce its services in detail through media.6.13 MODES OF FINANCINGThe bank should introduce more new modes of financing in its Islamic Banking Sector. By doing so, the profitability ratio will be increased and the bank will be able to compete in the challenging environment.a. RATE OF RETURNThe rate of return plays a vital role in a financial institute and especially in banking sector. The bank should improve its rate of return on deposits and should reduce the mark-up rate on advances. By doing so, it will attract a large number of customers.6.14 SHORTAGE OF EMPLOYEESShortage of employees increases the work load on existing employees and ultimately reduces the output and motivation level of employees. To overcome this problem job description should be revised and grouped together in order to create new jobs.Recruitment should be done fin order to fill up these new vacancies. In this way the workload on employees will be reduced, operations will be stream lined and employees will feel comfortable in performing their duties more effectively.

REFERENCES1. Broachers of the Bank of Khyber2. Manuals of the Bank of Khyber3. The Bank of Khyber Annual Reports4. The Bank of Khyber Annual Financial Statements5. www.BOK.com.pk6. www.banking/history/pakistan.com7. www.google.com.pk.8. www.business/dictionary.com9. www.answer.com