The Bank of Punjab

The Bank of Punjab 2012

FINAL PROJECT P a g e | 2 PIMSAT LAHORE



TTAABBLLEE OOFF CCOONNTTEENNTTSS

Sr. No Contents Page No.

1 Preface 3

2 Acknowledgement 4

3 Executive summary 5

4 Mission Statement & Vision &Core values 6,7

5 Introduction To BOP

8

6 Introduction 9

7 History 10

8 Corporate Information 11,12

9 President’s Message 12,13

10 Functions of Board 14,15

11 Total Branches 16

12 Ownership 17

13 Management Hierarchy 17,20

14 Online Branches 20,24

15 Service Process of Departments

24

16 Departments at branch 25

17 BOP customer Service Design 25

18 Cash Department 26,28

19 Remittance Department 29,32

20 Account Opening Department 33

21 Cheque Book Issuance Dept. 37,39

22 Clearing Department 39,41

23 Credit Department 42

24 Types of Financing

42,46

25 Procedure To Getting Finance 46,47

26 Business Promotion 47,52

27 SWOT Analysis 52,57

28 Consolidated Financial Statements 57,61

29 Horizontal Analysis 61,65

30 Vertical Analysis 65,69

31 Financial Ratio Analysis 71,85



DEDICATION

This project is dedicated to our parents who

ever wished to see us a successful man in

every field of our life.



PREFACE

First of all, I thank Almighty Allah who provided me the opportunity and strength

to undertake this project. on THE BANK OF PUNJAB.

We are thankful to our teachers without whose cooperation it would have not

been possible for me to make this project.

Although I have face a lot of difficulties in my report but I have also learnt a lot

from it and this is only and only due to the guidance of the staff of THE BANK OF

PUNJAB

At the end, I request to my honorable teacher, there is a need of improvement in

my project but I hope you will accept my project.

THANK YOU



ACKNOWLEGMENT

It is my pleasure and bounden duty to acknowledge with all humility that the preparation of this PROJECT has been a transcontinental matter with the respectable teacher and management of The Bank of Punjab.

First of all I have achieved great intellectual depth only because due to my brilliant teachers for their creative guidelines, back up, unflinching support, understanding and tolerant behavior and having given me a valuable chance for practical research, and now I cannot get last in the shadows what I have achieved. It is incredible how many of the insights that one gains as student of a superb researcher and teacher live on with the rest of one’s life

Finally we would like to acknowledge the support of seniors and special thanks for their valuable suggestions.



EEXXEECCUUTTIIVVEE SSAAMMMMUURRYY

TThhee BBaannkk ooff PPuunnjjaabb always aimed for innovation in environment friendly

banking. Being a division of such a renowned and well respected company in

business of banking, we offer services for all key consumer market sectors. They

aim at satisfying their customers’ demands better and more profitably than their

competitors.

The banking sector has been accelerated within 4-5 years in Pakistan. The

banking sector has become more competitive and the banks have competitive

advantage are achieving their goals more efficiently as compared to other banks.

TThhee BBaannkk ooff PPuunnjjaabb comes to know this fact vary late but they have managed to

face this competitiveness. As a comparison of 2009, 10 and 011 TThhee BBaannkk ooff

PPuunnjjaabb has increased their growth marketing share by giving more and more

customers value services.

Now, TThhee BBaannkk ooff PPuunnjjaabb has come up with an innovative investment in the

market for consumer satisfaction. TThhee BBaannkk ooff PPuunnjjaabb has really made huge

investment of opening and renovation of new branches for customer

convenience. They understand that their customers are aware of the friendly

services provided by us. Since the awareness is increasing, our potential

competence in the market is also increasing. So they are trying to increase their

market share.

TThhee BBaannkk ooff PPuunnjjaabb is marketing their services in an appropriate way that also

takes into account the risks of competitiveness, and our services and products

are aimed to reduce that risk. They also believe that their consumers have

chosen to be served by them by providing value added services.



TThhee BBaannkk ooff PPuunnjjaabb product’s main aim is to satisfy the customers is the bank’s

first priority. For the prosperity of the bank’s stakeholders that allows the bank to

constantly invest, improve and succeed. To enrich the lives of community in

where the bank operate. For the talented and high performance of employees,

Bank of Punjab constantly launches programs of recognition and rewards. Bank

of Punjab seeks excellence in everything it does. TThhee BBaannkk ooff PPuunnjjaabb follows

integrity in all their dealings and seeks respect for its customers and others.

MM II SS SS II OO NN SS TT AA TT EE MM EE NN TT

“To exceed the expectations of our stakeholders by leveraging our

relationship with the government of Punjab and delivering a complete

range of professional solutions with a focus on program driven products



and services in the agriculture and middle tier markets though a motivated

team.”

V I S I O N

“To be a customer focused bank with service

excellence”.

CCOORREE VVAALLUUEESS

The bank focuses on these values in its operations:

CUSTOMER

To satisfy the customers is the bank’s first priority.

PROFITABILITY



For the prosperity of the bank’s stakeholders that allows the bank to constantly invest, improve and succeed.

CORPORATE SOCIAL RESPONSIBILITY

To enrich the lives of community in where the bank operate.

RECOGNITION & REWARD

For the talented and high performance of employees, Bank of Punjab constantly launches programs of recognition and rewards.

EXCELLENCE

Bank of Punjab seeks excellence in everything it does.

INTEGRITY

Bank of Punjab follows integrity in all their dealings.

RESPECT

The bank seeks respect for its customers and others

IINNTTRROODDUUCCTTIIOONN

TTHHEE BBAANNKK OOFF PPUUNNJJAABB



II NN TT RR OO DD UU CC TT II OO NN

The Bank of Punjab was established in 1989, under

The Bank of Punjab Act 1989 and was the eminence

of scheduled bank in 1994.

The Bank of Punjab is functioning as a scheduled

commercial bank with its network of 226 branches at

all key business centres in the country. The Bank of

Punjab provides all types of banking services such as

Deposit in Local & Foreign currency, remittances &

advances to business, Trade, Industry & Agriculture.

BOP has indeed entered a new era of science of 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 saving and

providing funds or investments. Attractive rates of

profit on all types of deposits, opening of Foreign

Constitutional

Base

The Bank of Punjab

was established

under the provisions

of Section 28 Federal

list included in the

4th schedule of the

constitution of the

Islamic Republic of

Pakistan, 1973. This

section prescribes

that the parliament

i.e, the Federal

legislature has

exclusive powers to

enact legislation to

conduct banking

business by

corporations except

in the case of those

corporations, which

are “Owned or

controlled bye a

province and carrying

out business only

within that province”.

This means firstly,

that the constitutions

pre-supports the

existence of banking

corporations outside

the control of the

federal government

and allow the

provinces the right to

establish corporation

owned or controlled

by them provided

that they do business

only within the

administrative

boundaries of the

provinces and

secondly, that the

parliament has been



Currency Accounts and handling of Foreign Exchange business such as imports,

exports and Remittance, 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 constrictive but also

based on principles of prudent lending with maximum emphasis on security.

The

bank of Punjab appeared on the

banking horizon on November

15, 1989. The bank was

established under an act of

Punjab assembly via. The bank

of Punjab Act, 1989. The bill of

this effect was passed by the

provincial assembly on July 3,

1989 and assented to by

governor of the Punjab in

accordance with the provisions

of the constitution on july 26,

1989. In a short period, after its

inception, it has developed at a

pace unequalled by any other

institution of its kind in the

country. Being the fastest

growing banking institution in

Pakistan, it is playing a pivotal

role in the economic

development of the country.

Though the bank was

established under

circumstances that were not too

congenial for the establishment

of a provincial banking

institution, it has however,

shown tremendous growth in all

areas of its activities due mainly

to pragmatic policies based on

merit and professionalism. The

bank has extended its branch

network throughout the Punjab;

the bank is also extending its

network of branches to other

provinces of the country. By the

end of March, 1995branches

are opened at Karachi and

Islamabad. There are total 266

branches all over the country

including Azad Kashmir. It may

not be irrelevant to mention

here that the 10 new

commercial banks, permitted in

the private sector, have been

allowed to open only 10

branches, each in a period of

two years. In other words, these

10 banks will open 100

branches in all during the first

two years.

In crating the bank, the efforts of the

management have not only been

directed towards maximization of profit

but also towards creating a corporate

culture in which talent and

professionalism can thrive and

motivation can be enhanced to the

highest possible level. Experience has

shown that to get the best out of

employees, it is necessary to create a

HISTORY



conductive environment in which the

employed feel that the organization

belongs to them and the merit and the

professionalism are the only basis for

the career advancement

.

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PPRREESSIIDDEENNTT’’ MMEESSSSAAGGEE

By the grace of Allah the Almighty, year 2011 has marked itself as an addition of

another successful chapter in our history of achievements. Throughout the year,

we have kept up our gait, pacing steadily and beneficially in almost all the areas

of banking business operations.

Comprehensive deposit and loan growth strategies, progressive new consumer

and business banking solutions, and experienced, highly trained financial

professionals have positioned us ,the bank of Punjab, for continued success

throughout the country.

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



During previous half decade, Government effort and its efficacious policies have

created a benevolent business environment, especially, for industrial and

financial sectors. The banking sector has remained an active participant in

developing financial sectors, consequently gained huge profits from sharp rise in

private sector credit off take that has grown by an average of 27% , in pars 3

year, compound with higher dividend income and immense capital gains derived

as a result of astonishing rise in our stock markets.

Unlike some other commercial banks, which derived substantial portion of their

income and growth from capital markets and investment banking activates, our

focus remained intact a core banking activates supported by our robust policies

and business strategies. We have made strong efforts for deposit mobilization.

Almost all the segments of the market are tapped by us for marshalling deposits.

Our real test was to deploy the available resources in most efficient manner in

order to reach the optimum level of productivity minimizing the overall risk. This is

where we, the Bank of Punjab, have stood most successfully as evident from our

record results of past three years.

Beside corporate sector, we are also aware of the opportunities arising out of

consumer and SME sector. We have contrived a very comprehensive strategy

with the aim to continuous enhancing performance also in consumer and SME

sector together-with yhe corporate sector.

The strategy is based on offering relevant, tailored consumer banking products

for the niche market rather than offering generic products foe the entire segments

of the market. Targeting this niche market has not only saved huge marketing

and advertising costs but also helped the bank achieve most of the share of its

consumer loan portfolio fully secured. Another significant achievement of this

strategy is increased customer base as the customers have to open their

accounts with the bank of Punjab in order to avail a certain facility.

Information Technology, nosegays, has become a very prominent booster in daily

operational activates of almost all business segments. Employing Information

Technology for cost effectiveness and to increase efficiency has become a global

truth and practice. We are definitely not unaware of this fact, as we have

embarked upon a pretty ambitious project of designing our own core banking

system in collaboration with a local leading software company.

We have accomplished a lot in the past years, and we are certainly gratified by

our performance results. But we are not the ones who rest on their accolades.

BOP's management is very optimistic for year 2007. There are challenges and

opportunities ahead that both keep us up at night and inspire us to charade into

the office every day to keep growing our bank, the Bank of Punjab.



President of BOP

NAEEMUDDIN KHAN

BANK MANAGEMENT

ADMINISTRATION DIVISION

ADMINISTRATION DIVISION

The administration division of the bank in Lahore (The Head Office). In the

administration division all the record related to the officers that they kept. It is the

duty of the administration division or the personnel department in head office to

make assessment for the requirement of manpower in each branch of the bank.

This division also decides whether the employees are selected within the bank or

outside the bank. The administration department makes the general policy for

employee’s welfare, transfer posting, discipline action, medical converge

insurance and group life insurance is also their responsibility. Their functions

are:-

Recruitment

Training

Performance Review

Salary Administration

Executive Training and Development

FINANCE DIVISION

This division is basically performed functions as a central body. It estimates the

optimal investment, which the bank should invest for maximum profit. It also

controls the expenditure of the branches.



AUDIT & INSPECTION DIVISION

This division performs the internal audit of the bank and inspects the sincerity of

the employees with their work.

CREDIT, TRAINING & SPECIAL PROJECT DIVISION

General Manager heads this division. This division is related to the loans. This

division provides loan to different departments according to their requirements as

well as to the requirements of the people that how much they need the credit

about their special projects.

RECOVERY DIVISION

This division makes recoveries of the loans and advances which are not received

even after maturity date. It also takes decisions for the recovery through litigation.

OPERATIONS DIVISION

It estimates and makes proposal to the administrative department about the

opening of new branches at different places of the country. It also gives

instruction to the branch manager regarding the purchase of the branch. It also

helps the branches to make repairs and maintenance. Giving operational

instructions to the branch manager also includes in divisions functions.

BUSINESS PROMOTION & MARKETING DIVISION

Like all other divisions the General Manger also heads this division. This division

deals with the development of the software. This division also makes the planning

in the development of the new software and computer programming so that the

bank performs well and there is no chance for any kind of error. With this

planning the bank improves its efficiency. This division also deals with

E-banking

ATM cards

FFUUNNCCTTIIOONNSS OOFF BBOOAARRDD

Policy formation

Management of bank



Corporate strategy

Others functions

OTHER FUNCTIONS

The board of directors also performs the following important function.

Risk management

HRM including preparation of a succession plan

Procurement of goods and services

Marketing

Determination of terms of credit discounts to customers

Write-off of bad/doubtful debts, advances and receivables

Acquisition/disposal of fixed assets

Investment

Determination and delegation of financial powers

Health, safety and environment

Borrowings of money and the amount is excess of which borrowing

shall be sanctioned by a general meeting of shareholders

Demotions, charities, contributions and other payments of a similar

nature.

TTOOTTAALL BBRRAANNCCHHEEss

Faisalabad Total Branches: 43

Gujranwala Total Branches: 45

Karachi/Quetta Total Branches: 05

Lahore Total Branches: 67



Multan Total Branches: 63

Rawalpindi Total Branches: 37

Peshawar Total Branches: 06

Other cities 06

TToottaall 227722

OOWWNNEERRSSHHIIPP

In 1989 the percentage of ownership was Government of Punjab owned 60% and

autonomous bodies, general public and foreigners owned 40%. After that with the

inclusions of foreign investors the ratios was disturbed as:

Government of Pakistan 51.50%

General Public + Autonomous 48.50%

MMAANNAAGGEEMMEENNTT HHIIEERRAARRCCHHYY



Central Management Hierarchy

Hierarchy on the basis of Power



Bank Management Hierarchy



Management at Head Office

OONNLLIINNEE BBRRAANNCCHHEESS

There are 247 online branches of BOP working all over Pakistan. Here are only

the online branches working in Lahore region:

Sr. No LAHORE REGION Code Tel Fax

1 Main Br., Lahore

9200419 -

9200187 9200351

2 Kasuri Tower 7353427 7353541

3 Civil Sectt.

9212170 -

9212171 9212169

4 Model Town

9230254 -

9230451

5 Railway Road, Kasur 0492 9250167 9250098

6 Sahiwal Road Okara

Regional Offices



7 Shadman Branch 7565594

8 Bank Square

9212207 -

9212205 9212208

9 Saddar Bazar 9220644 9220644

10 Temple Road 6361797 6361797

11 LCCHS

5724364

5722885 5724365

12 New Muslim Town 9231236 9231236

13 Garhi Shahu, Lahore 66365106 6315236

14 Baghbanpura 6820414 6871053

15 Chouburji 7119984 7237554

16 Shad Bagh 7281789 7605162

17 Bilal Gunj 7230823 7230823

18 Empire Center 5758370 5710063

19 Cavalary Ground 9220640 9220635

20 Sadiq Plaza, Lahore 6362038 6362067

21 Patiala Ground 7236987

22 Karim Block 7448024 5417627

23 Wahdat Road 7574329 7590964

24 Ravi Road Br., Lahore 7723200 7725400

25 Tufail Road 9220643 9220642

26 Mcleod Road, Lahore 6361459

27 Link Model Town 5880475 9230342

28 Kot Abdul Malik 7928889

29 Gulshan-e-Ravi

30 Liberty Market 5710221 5873291



31 Township 5110455

32 Badami Bagh

7729340 -

7704776 7722394

33 Icchrah 7596580 7577778

34 Depalpur

35 New Garden Town 5881812 5833812

36 Pak Block 7841592 7841593

37 Chattan Building 7233679 7228568

38 New Anarkali 7238742 7239504

39 Samanabad 7573525

40 Johar Town 5313340

41 Shahdara 7931121 7931738

42 Auriga Complex 5750688 5750086

43 Mustafa Abad

44 Pattoki

45 Begum Kot

46 Walton Road 6660504

47 Jinnah Hall 9212172 912173

48 Mandi Road Okara

49 Multan Road 7593347

50 Central Model School 7249815

51 IslamPura 7247251

52 Mazang Chungi 7586689

53 Circular Road, Lahore 7660810 7668399

54 Rang Mahal, Lahore 7656765



55 Defence Road 6666060 6666060

56 Mustafa Town 5424668 7832268

57 Lytton Road 7234921 7313057

58 Corporate Br., Lahore

6317456 -

6317334

59 Lady Walington 7721403

60 Sanda Road 7119714

61

Services Hospital Jail Road

Br. 7591326

62 Queens Road 6362975

63 Chunian 04946 310136 311212

64 Raiwind

65 Renala Khurd

66 Dera Chal

FOREIGN EXCHANGE BRANCHES FOREIGN EXCHANGE BRANCHES

The Foreign Exchange Branches are listed below;

Main br., Lahore, Railway road br., Sialkot, Quaid-e-azam road, Multan,

Kasuri tower, Lahore, Trust plaza, Gujranwala, Shaheen chowk br. Sargodha,

Model town, Lahore Railway road, Faisalabad, Circular road br., Gujrat, Gul-e-

akra plaza, Rawalpindi Railway road, Kasur, Shahi rd,Rahim Yar Khan br, Bank

square, Lahore, Ram din br., Jhelum, Lcchs, Lahore, Empire center, Lahore,

Madina town br., Faisalabad, Karim block, Lahore, Ravi road br., Lahore, Satellite

town, Rawalpindi, Badami bagh, Lahore, Bhera Circular road, Lahore, Corporate

br., Lahore, Blue area, Islamabad, I. I. Chundarigar Karachi, Saddar road,

Peshawar, Mir pur br., AJK, Chowk yadgar, Peshawar, Malir halt, Karachi,

Shahra-e-faisal Karachi, Jinnah road, Quetta, Khurrian wala, Faisalabad Mardan

branch, Abbottabad branch.

CORRESPONDENT BANKS CORRESPONDENT BANKS



The correspondent banks of Bank of Punjab are;

Standard Chartered Bank, Bank Saderat Iran, National Bank of Canada, United

Bank AG Zurich, Danske Bank Akteisalkab, Commerz Bank, National Bank of

Pakistan, ABN Amro Bank, Habib Bank Ltd, City Bank NA.

SSEERRVVIICCEE PPRROOCCEESSSS && DDEEPPAARRTTMMEENNTTSS

TTHHEE BBAANNKK OOFF PPUUNNJJAABB



DDEEPPAARRTTMMEENNTTSS AATT

BBAANNKK OOFF PPUUNNJJAABB

The fields of activities of “The Bank of Punjab” are considerably wide and

deal them with great success.

The areas of activities covered are as following:

1. General Banking

2. Commercial Banking

3. Corporate Banking

4. Agricultural Banking

5. Consumer Banking

6. International Banking

7. E-Banking

8. Foreign Exchange

9. Business Promotion Banking

10. Different Service

Cash Department

Account Department

Credit Department

Remittances Department

Clearing Department

Deposits Department

Bill Collection Department

The Bank of Punjab’s Customer Service Division

Billing

Dept.

Cash

Dept.

Accoun

t

Openin

g

Clearin

g Dept.

Cheque

book &

Pension

Dept.

Credit

Dept.

Cheque

Posting

Dept.



CCAASSHH DDEEPPAARRTTMMEENNTT Cash department is most important department because it is point of contact between the bank and customer. The Bank of Punjab provides efficient and personalized services to their customer. This department creates impression of bank commitment of professionalism in its system and procedures and to courteous and efficient customer service. So the staffs of cash department are well equipped and trained not only in technical handling of cash but also in the art of customer. This department of the bank deals in operations relation to cash accounts i.e cash receipts, cash deposits, sale purchase of prize bonds. The main purpose of cash department is that it deals in money. As bank is borrowing and lending institution, therefore cash is the top most priority of Bank. Another aspect is that cash department is for the security purpose, security in a sense that there should be no embezzlement of funds or in money leaded to bank by any party or person

Billing Current

a/c,

BBA

a/c, PLS

a/c

FDR

(Fix)

Fee

Collecti

on Deman

d

Notices

of

LESCO

Cash

Deposit

s

Pay

Order

Deman

d Draft

Online

Services

CDR

Statement

s

Over

Drafts

Prize

Bonds

Letter

of

Credit

Advance

s

Pension

s

Wester

n

Union

Accoun

t

Openin

g

Clearin

g Shares

Applicat

ion

Foreign

Exchang

e

Misc.

ZARCO

/

Money

Express



FUNCTION OF CASH DEPARTMENT

It includes:

Receiving cash from the customer

Making payment to the customer against their cheques or other payment

instruments

Handling cash withdrawal and deposit into the bank account with State

Bank of Pakistan and with other branches of bank.

Ensuring proper storage safety and security of the cash in cash and in

transit.

Ensuring proper cash management and storing out of issue able cash into

the denominations.

Maintaining daily cash positional register transfer of cheque from one

account to other account and shift the cheques of other bank to clearing

department.

CCAASSHH DDEEPPAARRTTMMEENNTT HHAASS TTWWOO CCOOUUNNTTEERRSS

Cash Receipt Counter

Cash Payment Counter

CCAASSHH RREECCEEIIPPTT CCOOUUNNTTEERR

CCAASSHH RREECCEEIIPPTT CCOOUUNNTTEERR If the customer wants deposit in his account then he fills the pay in slip. In pay in slip, the customer writes his account title, account number, amount in figures and words, particulars mention the mode of deposit either cash or cheque and sign it. The customer makes his payment to cashier along with the pay in slip. The cashier checks the details of pay in slip and if the customer gives broken cash then its detail are written by the cashier at the back of a in clip. Then he enters into cash receipt book and transfers it to the officer. The officer credits the customer account with same amount. He posts the transfer stamp and sign on pay in slip. Finally, the cashier returns the sign counter foil to the customer

CCAASSHH PPAAYYMMEENNTT CCOOUUNNTTEERR

CCAASSHH PPAAYYMMEENNTT CCOOUUNNTTEERR



When the customer presents the cheque to withdraw the money the cashier check its date, amount in figure, signature and either it is of The Bank of Punjab branch or any other branch or it is branch of other bank. If it is of The Bank of Punjab Mustafa Town branch with right date then cashier enter into cash payment book and transfer to the officer. The officer feed the amount number to the cheque that demands amount is available in his account. If amount is available then he verifies his signature from SS card already feed in computer The officer passes the cheque and debits the customer amount with the same amount and posts the stamp of transfer it. Then cashier makes the payment to customer and writes the detail of notes at the back of cheque in maintains daily cash position. The cheque can be returned to customer due to following reason:

If the cheque is post dated; i-e some future date is written on it.

If the date is of 6 months back

If the amount is not available to customer account

Is the signature is not verified by the SS card

If the amount in figure and words in different

If any cutting is made on the cheque

TTRRAANNSSFFEERR OOFF CCHHEEQQUUEESS

TTRRAANNSSFFEERR OOFF CCHHEEQQUUEESS

If one account holder wants to transfer some account from one account to another, then he will give the cheque favouring the other account holder and also fill the pay in slip. The cashier after checking the details and enter in the register transfer to the officer. The officer transfers the mentioned amount from one account to another.

MMAAIINNTTAAIINN TTHHEE CCAASSHH PPOOSSIITTIIOONN

MMAAIINNTTAAIINN TTHHEE CCAASSHH PPOOSSIITTIIOONN

The cash department maintain the daily cash position due to following two

reasons: All the banks are advised to maintain liquidity limit according to SBP

regulation All the funds of the bank are insured to a limit. When the funds in

branch exceed from these two above mention limits then branch office report to

head office of the bank. The head office takes appropriate measure to maintain

these limits.



RREEMMIITTTTAANNCCEE DDEEPPAARRTTMMEENNTT

Remittance means transfer of money from one branch to another branch. The

bank charge commission for this type of transfer. The Bank of Punjab provides

various services. In this department the internees are advised only to observe the

working of the transfer of money from one place to another place of the country

by the above modes of transferring money .During my stay in this department I

observed that how these remittances are issued. The bank receives the written

request from the customer for DD/PO/TT/OT .The followings are the main

function of this department. Remittance can take place in these ways

Demand Draft (DD)

Pay Order (PO)

Online Transfer (OT)

Call Deposit

Telegraphic Transfer

Demand draft, Pay Order, Online Transfer, Call deposit and all have the same

remittance form in Bank of Punjab. If a customer want any of the above facilities

then he have to fill a form that contains the details about Beneficiary and

Benefactor.

Beneficiary’s Detail:

The applicant or benefactor has to fill the beneficiary’s information such as name

of beneficiary (Receiver), Account No, Amount, Account Title, C.I.N.C No.,

Beneficiary’s bank, branch code, address and City.

Benefactor’s Detail:

The sender of the remittance is called the benefactor he has to fill these

requirements name, Copy of C.N.I.C No, Address, City, Contact number.

22..22..11 PPAAYY OORRDDEERR

PPAAYY OORRDDEERR

Pay order is used where the payment has to be made within a city. Pay order

form has two parts, one for the applicant and 2nd for the band record. Customers

fill from and pay the cash to the cashier at counter. Cashier collects the cash and

gives the 2nd slip to the applicant. The applicant presents the slip to the officer.

Officer authenticates the Pay Order and makes entry in the computer. The officer



prints a pay order, containing the name and branch of Drawer’s bank and the

Drawee’s bank along with their codes. Then this pay order is given to the drawer.

Bank charge Rs. 50 for the account holder of the branch and the persons other

then the account has to pay Rs. 200 for each pay order. And there are no

charges for the issuance of pay order to the Government. The amount can be

paid through cash or cheque.

DDEEMMAANNDD DDRRAAFFTT

DDEEMMAANNDD DDRRAAFFTT

Demand Draft is used where the payment has to be made out of city. The process of Demand Draft is similar to the Pay Order process. Demand Draft form has two parts, one for the applicant and 2nd for the band record. Customers fill from and pay the cash to the cashier at counter. Cashier collects the cash and gives the 2nd slip to the applicant. The applicant presents the slip to the officer. Officer authenticates the demand draft and makes entry in the computer.

The officer prints a Demand order containing the name and branch of Drawer’s

bank and the Drawee’s bank along with their codes. Then this pay order is given

to the drawer. Bank charge Rs. 50 for the account holder of the branch and the

persons other then the account has to pay Rs. 200 for each pay order.

At last PO/DD/CDR is signed by officer and PO/DD/CDR is ready

CCaanncceellllaattiioonn OOff DDeemmaanndd DDrraafftt

In case of cancellation of demand draft the client has to give an application to the bank that the DD is not longer required and has to sign on the application. After proper verification of the signatures, officer will cancel the DD and will pass the



entry by debiting to head office and crediting party’s account. The bank then issues a debit advice to the main office. The bank charge Rs. 200 for the cancelation of the Demand Draft.

TTEELLEEGGRRAAPPHHIICC TTRRAANNSSFFEERR ((TTTT))

TTEELLEEGGRRAAPPHHIICC TTRRAANNSSFFEERR ((TTTT))

The transfer of funds by means of fax or telegram is called telegraph transfer. It is fast way to transfer of funds from one branch to another of same bank. The amount will credit to the beneficiary account within 24 hours. TT application form is filled by the customer. The bank officer enters into TT issued register. The bank officer writes the message and apply test on the TT message and give appropriate instruction such as “advice and credit” or “advice & pay” telegraph transfer receipt is issued to make cash payment to the beneficiary. The beneficiary bank enters it into TT payable register and credit to beneficiary account. But if the beneficiary has no account, then payment will be made by TTR. It is quick mode but it is not used for business purpose and preferably used for personal use.

OONNLLIINNEE TTRRAANNSSFFEERR

OONNLLIINNEE TTRRAANNSSFFEERR When the customer wants to transfer the money to the other branch of Bank of Punjab, within city or out of city, after f i l l ing the form and deposal of money the bank off icer get connected to the online status and enter the branch code of the other branch, and then the account number of the receiver is entered. All information about the account holder is queried on the screen then the entry is made.



Procedure of Online Transfer of Money

Then the other officer authenticates the entry then the amount is credited in the

account of the receiver. This process is called online transfer.

22..22..33 FFOORREEIIGGNN RREEMMIITTTTAANNCCEESS

FFOORREEIIGGNN RREEMMIITTTTAANNCCEESS

Now a faci l ity is available in the BOP that we can also send or receive the money from outside the Pakistan, using the Western Union. The sender of the money sends he money through Western Union, he deposits the money to the western union to send the money to the other country. The western union gives a 10 digits code number to the sender of the money which is private and confidential. The sender gives the ID card number and other the information of the receiver to the western union. Thus the money is transferred within 15 minutes. Sender of the money discloses the 10 digits code number to the person who will receive the money after mentioning the 10 digits code number. Thus the online transfer is made. The Bank of Punjab also used the services of ZARCO.



ACCOUNT OPENING DEPARTMENT

In this department, I gain the practival knowledge about opening account. This

department deals with

Current Account

Saving Account

Basic Banking Account

Accounts are opened for its custoemrs and all matters regarding thereof. The customer opening current and saving account can be categorized as follows

Individual account

Copy of computerized national identity card required

One account holder’s reference

Joint account

Copy of CNIC required

Proprietorship account

Copy of partnership deeds

Identity cards of partners

Partnership account

Ltd company (Pvt/Public) account

Trust/club/society account

Govt. (District/provincial/Federal) account

Others.

AACCCCOOUUNNTT OOPPEENNIINNGG PPRROOCCEEDDUURREE

AACCCCOOUUNNTT OOPPEENNIINNGG PPRROOCCEEDDUURREE In order to open an account, first of all the customer have to fill a from prescribed by the bank. The person is required to bring some references or introduction for opening the account. Introduction may be the person wo has any account with The Bank of Punjab. Introducer is written on space prescribed on the specimen signature card. Then in order to find out whether he is true introducer or not, a lettr of thanks is sent for his introduction so that nay thinkg worng may come into notice.



AACCCCOOUUNNTT OOPPEENNIINNGG FFOORRMM

The bank officer fills each every column of account opening from correctly with all necessary details. The specific information is recorded in the form. It is preferred that the customer in the presence of introducer fills account opening form.

IINNTTRROODDUUCCTTIIOONN OOFF AACCCCOOUUNNTTSS

It is the most important column of account opening form. Without the proper introduction, the new account cannot be opened. The bank officer consider following precaution in this respect. The introducer should come with prospective customer to the bank, so there will be no doubt about the identity of customer. If the introducers do not come then office must take extreme care about his signature verification. Introducer having doubtful dealing with the bank should be discreetly declined. Current account holder cannot be introducer of both types of deposit but saving bank account holder cannot be the introducer of current account holder. But in exceptional cases then can introduce when saving account holder maintain substantial balance and they are old and operative account. The staff member can become introducer if they personally know to the prospective customer.

NNAATTIIOONNAALL IIDDEENNTTIITTYY CCAARRDD

The bank officer check that number of national identity card is correctly recorded in the AOF and a copy of national identity card is kept in record

SSPPEECCIIMMEENN SSIIGGNNAATTUURREE CCAARRDD ((SSSS CCaarrdd))

The bank officer takes signature on AOF and specimen signature card. Latterly this card is scanned in the computer and when ever customer makes any transaction in his account then his signature is verified by it.

LLEETTTTEERR OOFF TTHHAANNKKSS

A letter of thanks is sent to customer through mail to verify his address. And A letter of thanks is send to introducer to verify him as introducer.



Account Opening Procedure

TYPS OF ACCOUNTS

CCUURRRREENNTT AACCCCOOUUNNTT

CCUURRRREENNTT AACCCCOOUUNNTT

Current account holders are those who can withdrawal their amount any time in

banking hours by presenting a cheque. He may thus withdraw the money several

times in a day usually type of account is open by the businessmen. The current

account can be open with minimum amount of Rs. 500 in The Bank of Punjab.

Current Deposit Accounts are opened normally with a minimum of Rs 5,000.00

as initial deposit. Withdrawals will not be allowed against postdated (payable on

any future date) and stale (06 months after issuance date) Cheques and against

un-cleared funds. Where any account is not conducted to the satisfaction of the

Bank, the account may be closed without any notice and the balance will be

remitted to the depositor at the address given by the Account Holder(s).

SSAAVVIINNGG AACCCCOOUUNNTT

SSAAVVIINNGG AACCCCOOUUNNTT

As the entire banking system has been converted into PLS system i.e non-

interest base, instead of interest based banking system. The general public with

minimum Rs.100 can be open. Mark-up rat fluctuates from 6% to 9%. For



withdraw of larger amount seven days notice in writing is required to be given.

The Zakat of 2.5% per annum is deducted on these accounts.

Statements of saving accounts are provided to customer twice in a year as on June 30 and December 31.profite is paid at the end of June and December at a fixed rate and this profit is calculated at minimum month balance this element of profit encourage the habit of saving among the people

BBAASSIICC BBAANNKKIINNGG AACCCCOOUUNNTT

BBAASSIICC BBAANNKKIINNGG AACCCCOOUUNNTT

The BBA (Basic Banking Account) in The Bank of Punjab specially designed to targets the persons with low level income. This account favours these persons to deposit their amount in the bank and bank does not deduct any kind of charges on these accounts.

? WHO WILL OPEN THE ACCOUNT?

The branch manager is responsible to handle job of account opening but in some cases, it is assigned to other officers. Information at the time of opening of account, than bank officer must assure that customer has the following characteristics:

The customer must have the age of majority, it means it must be the age

of 18 according to law.

The customer must be of sound mind.

The customer must not be bankrupt and insolvent.

The customer must not be debarred under any law from entering into any

contract

IINNDDIIVVIIDDUUAALL AACCCCOOUUNNTTSS

Individual accounts are classifies as:

Accounts of literate ladies and gentlemen.

Accounts of illiterate ladies and gentlemen.

Accounts of parda observing ladies.

Joint Accounts.

Minor Accounts.



JJOOIINNTT AACCCCOOUUNNTTSS

The bank will fulfil the stop payment instruction of any cheque lodged by

any member of joint account but removal of these instructions must be

signed by the entire member.

If any member dies then there will be no transaction in the account and

balance in the account will be paid according to instruction recorded at

the time of account opening.

The member of joint account can delegate authority to any third party to

operate the account. All the members sign such mandate but it will be

cancelled if any of the members dies, insolvent of insane.

JJOOIINNTT SSTTOOCCKK CCOOMMPPAANNYY AACCCCOOUUNNTT

Joint Stock companies include:

PRIVATE LIMITED COMPANIES

The companies whose share capital is not offered to the general public instead the offer is restricted to particular class of society or within the family members called private limited. These companies are not listed in stock exchange and are not transferable.

PUBLIC LIMITED COMPANIES:

Promoters and general public contribute the share capital of these companies. These companies are listed in stock exchange and their shares are transferable and brought and sold freely in stock exchange.

CCHHEEQQUUEE BBOOOOKK DDEEPPAARRTTMMEENNTT

The Bank of Punjab provides a safe service of Cheque books. The each cheque is entered in the computer and the account holder name is printed on the each cheque. In this ways, there are minimum chances of fraud. The process of new cheque book is to fill a cheque book requisition application this requisition is sent



to the Karachi. Where the cheque book is printed and sent back to Lahore. This service process takes 7 days to be completed.

If the client is illiterate then an additional stamp of thumb impression is necessary on each leaf of the cheque. It means that such cheque can only be cashed when the account holder is present to withdraw the cash.

For the very first time, the cheque book is issued to the account holder only for the security of the account holders. Second time any authorized person of the account holder can get the cheque book. The number of each cheque book is already entered into the computer.

AATTMM CCAARRDD SSEERRVVIICCEE

AATTMM CCAARRDD SSEERRVVIICCEE

The ATM card form is filled then this form is sent to Karachi. The ATM card is prepared and sent to Lahore. This process takes 7 days to be completed. The account holder is required to present itself to get the ATM card. The ATM card enclosed in private and confidential envelops.

Cheque Book/ATM Card Process

BOP Apna Cash Card is an ATM plus Debit Card.



The front of the card will have the following matter on it:

Card Holder’s Name

International Bin Number (6 Digits - XXXXXX)

Card Number (YYYYYYYYYY) (total IMD+CARD num has to be = 16) The back of the card will have:

Magnetic Strip

Signature Panel

Conditions of Usage

M-Net and M-Net logo

CLEARING DEPARTMENT

It originated many years ago when clerks from various banks had the job of

taking around the other bank offices, bundles of cheques for payment. The clerks

used to meet at a state bank’s clearing house. Before in Pakistan National Bank

of Pakistan provides the clearing house facility. Now the NIFT (National

Institution of Facilitation of Technology) has under taken this working. All the

banks make their cheques cleared through NIFT. NIFT supervision the whole

clearing functions. It collects all cheques send in clearing from the bank an

collects it in their own clearing house. The next morning the cheques are

presented to the paying bank. The bank after verifying all manners debit the

account of the customer and prepares an advice which is send to the NIFT.

There are two types of clearing

Inward clearing

Outward clearing



CClleeaarriinngg HHoouussee FFaacciilliittyy ((NNIIFFTT))

The NIFT attached an advice with the cheques of a particular bank. The bank

varifies the cheques date, signature, clearing stamp and suficient balance of the

customer then makes the entry in the computer. There are

Local bills for collection(LBC)

Other bills for collection (OBC)

LLOOCCAALL BBIILLLLSS FFOORR CCOOLLLLEECCTTIIOONN ((LLBBCC))

LLOOCCAALL BBIILLLLSS FFOORR CCOOLLLLEECCTTIIOONN ((LLBBCC))

The bills/instruments of local city are called the local bills for collection. A

seperate register for LBC is maintained by The Bank of Punjab.

OOTTHHEERR BBIILLLLSS FFOORR CCOOLLLLEECCTTIIOONN ((OOBBCC))

OOTTHHEERR BBIILLLLSS FFOORR CCOOLLLLEECCTTIIOONN ((OOBBCC))

The bills/instruments of out side the city are called the other bills for

collection(OBC). A special register is maintained bye the Bank for OBC.

RREEJJEECCTTIIOONN OOFF TTHHEE CCHHEEQQUUEE

RREEJJEECCTTIIOONN OOFF TTHHEE CCHHEEQQUUEE

In case of rejection of any cheque a cheque return slip is attaced along with

cheque. The slip contains various reasons for the rejection of the cheque. The

entry of rejection is also made in manual registers called cheque returm register.

The rejected cheques are also sent back throug NIFT along an advice. The NIFT

NIFT

BOP

OTHER

BANKS



representer comes two time in the bank. First in the morning for inward clearing

cheques and at afternoon for outward clearing cheques.

IINNWWAARRDD CCLLEEAARRIINNGG

IINNWWAARRDD CCLLEEAARRIINNGG

When the account holder of the Bank of Punjab make payments via cheques to

the account holders of other Branchs of Bank of Punjab or other banks, these

cheques are presented to the account holder’s branch by NIFT, is called the

inward clearing

Let suppose account holder of BOP pay someone the amount via cheque. But

the receiver of the cheque has his/her account in other bank, such as, MCB, ABL,

and UBL etc. so the receiver of the cheque deposit the cheque in its own bank

account. Now it is the responsibility of the receiver’s bank to collect the amount

and credit in the bank account of the receiver. This is called clearing.

Now a day NIFT (National Institution of Facilitation of Technology) has

undertaken this job. Before clearing was done by the State Bank of Pakistan

(SBP) or National Bank of Pakistan (NBP).

OOUUTTWWAARRDD CCLLEEAARRIINNGG

OOUUTTWWAARRDD CCLLEEAARRIINNGG

When the cheques of other banks are deposited by the branch account holders in

the branch, these cheques are sent for collection through NIFT, this is called

outward clearing.



CCRREEDDIITT DDEEPPAARRTTMMEENNTT

The Bank of Punjab provides various finance facility to the general public, Businessman and to agriculture sector. The Bank of Punjab provides a specified credit limit decided. The customer can withdraw cash within credit limit as and when you require. The interest is charged only on the consumed amount and for the number of days the credit is used. Finance Amount: Up to Rs 1 Mill ion revolving credit l imit.

CCRREEDDIITT LLIINNEE PPRROOPPOOSS AALL ((CCLLPP))

CCRREEDDIITT LLIINNEE PPRROOPPOOSS AALL A credit l ine proposal is made for those cl ients whose credit l imit has been approved by the banks’ credit departmen t

OONNEE TTIIMMEE TTRR AANNSSAACCTTIIOONN ((OOTTTT))

OONNEE TTIIMMEE TTRR AANNSSAACCTTIIOONN An one time transaction for a client who has no approved credit l imit, but the bank is doing business with that client on a one-time basic.

TTYYPPEESS OOFF AADDVVAANNCCEESS

RRUUNNNNIINNGG FFIINNAANNCCEE

RRUUNNNNIINNGG FFIINNAANNCCEE



The businessmen meet the need of working capital requirement of business by getting finance/credit form the banks. It’s a form of short term because the credit is granted for one year after which agreement expires and then borrower must pay back the loan or can get it renewed for another one year. The payment is made on demand or on expiry. A special cheque book is issued to borrower. The borrower can boost this competence through its time period. The limit is authorized to the borrower which is a rotating limit, means, by repaying limit can be utilized another time if the time does not expires. Markup is charged quarterly on outstanding amount of loan. There are two types of finance modes

CFH (Credit Finance against Hypothecation)

CFM (Credit Finance against Mortgage)

)) CCRREEDDIITT FFIINNAANNCCEE AAGGAAIINNSSTT HHYYPPOOTTHHEECCAATTIIOONN

CCRREEDDIITT FFIINNAANNCCEE AAGGAAIINNSSTT HHYYPPOOTTHHEECCAATTIIOONN It means the charging of property to a creditor while the property itself remains in the possession of the debtor or at least does not pass in to the creditor’s possession. It is a verity of mortgage. Stocks of goods in the possession of a debtor may be hypothecated to the banker and in the letter of hypothecation the debtor undertakes.

To pay the proceeds of sale of such goods to his current account with the banker.

To have the stocks adequately insured against fire, riots and civil commotion with the usual bank clause incorporated in the policy

CCRREEDDIITT FFIINNAANNCCEE AAGGAAIINNSSTT MMOORRTTGGAAGGEE

CCRREEDDIITT FFIINNAANNCCEE AAGGAAIINNSSTT MMOORRTTGGAAGGEE A mortgage is the transfer of an interest in specific immoveable property for the purpose o securing the payment of an existing or future debt or the performance of an obligation that may give rise to a financial liability. Before advancing mortgage against immovable property as security, the bankers conduct following preliminary enquiries

Nature and value of property

Investigation of title

Search for prior charges

CCAASSHH FFIINNAANNCCEE



CCAASSHH FFIINNAANNCCEE Cash finance is generally sanctioned against pledge of goods. In this case the goods pledged are seasonal in nature; the customer is being required to regulate this feature before the period Completes. Under this type of financial accommodation the facility amount is disbursed in specially opened account for the purpose. The pledged goods are unrestricted to the borrower when the customer pays back the loan to the bank.

CCRRIITTEERRIIAA

The customer has to meet the criteria for advances against pledge of goods. Loan is disbursed in specially opened CF A/C for the purpose. It shall be ensured that Goods tendered for pledge are

When there is variation in pricing is observed during periodic assessment, the customer shall be advised to make good the deficit in the drawing power.

The Goods should be free from credit restrictions obligatory by State Bank of Pakistan (SBP).

The Goods should be easily saleable and their price is not extremely fluctuating. If so higher margins shall have to be approved & retained

It shout not be perishable and do not need particular storing arrangements/conditions and have short expiry period.

DDEEMMAANNDD FFIINNAANNCCEE

DDEEMMAANNDD FFIINNAANNCCEE Advances are also made next to fair mortgage of property, whereby the original

title actions are deposited with the Bank as Security and the charge is registered

with the Registrar SECP.This credit facilities provided next to registered

mortgage of property (i.e, land/buildings constructed or to be constructed) is by

nature classified as a Secured Advance. An official charge on the property is

established and recorded with the registrar land and property termed as

Registered Mortgage.

When the Finance is sanctioned to Limited Companies, where the original

documents of Land/Building and other Fixed Assets are supposed by the senior

charge holders, our charge (Pari-Pasu or ranking) as approved by Credit

Committee, shall be recorded with the Registrar Securities & Exchange

Commission of Pakistan (SECP). However, in case of Pari-Pasu Charge, NOCs

from the senior Charge Holders shall be obtained before registration of charge



with SECP. In case of borrower’s failure to liquidate the obligation, or on

classification of the advance to “Non-Performing” the Bank has a legal recourse

to apply for a decree in a court of law, to sell off the mortgaged property through

auction as ordered by the court.

CCRRIITTEERRIIAA

Demand finance are allowed to be availed by the clients only on receiving of a

formal DAC issued by RCAD & duly signed by CAD Head. CAD shall issue DAC

only when charge Documents & Securities as spelled out in the authorize

recommendation have been arriving and stuck in the safe vault, however in rare

cases DAC shall be issued where some of the secondary nature documents are

not received for acceptable reasons and that the deferment is approved for a

specified period by the level of the authority as given below:-

Formal approval for deferment of specified documents from Credit

Committee shall be necessary, in terms of Credit Policy.

SSMMAALLLL && MMEEDDIIUUMM EENNTTEERRPPRRIISSEE ((SSMMEE))

SSMMAALLLL && MMEEDDIIUUMM EENNTTEERRPPRRIISSEE

This facility is up to RS. 75 million amount of advance, an entity falls into SME in BOP along with an entity, preferably not a public limited company, which does not use more than 250 personnel and 50 persons and also fulfills the following criteria

That any concern with net sales not beyond RS. 300 million as per

financial year

A mechanized concern with total assets at cost not including land and

building RS. 100 million

A trading/service concern with total assets at cost excluding land and

building up to RS. 50 million

An individual, if needs the above policy, can also be categorized as an SME.

CCOORRPPOORRAATTEE FFIINNAANNCCIIGG

CCOORRPPOORRAATTEE FFIINNAANNCCIIGG BOP if amount of loan is more than from RS. 75 million, loan tends into corporate category. Terms and circumstances for the corporate body;



Demand for loan

CIB description

Special guarantees necessary

Security vacant

Assessment of the security

Charge on assets of business

BBFS (Basic Fact Sheet)

Creation of credit approval package

Lawful outlook from the legal advisor of the bank

Financial analysis of the balance sheet, profit and loss account and cash

flows which are projected

Credit approval letter is sent to the H.O for advancing of loan

Then the bank makes the facility of offered letter in which all terms and

condition of loan are mentioned

Authority letter signed by the customer to use his deposits, (TDR) in case of fraud

then after letter of disbursement disburse the loan

PPRROOCCEEDDUURREE OOFF GGEETTTTIINNGG FFIINNAANNCCEE

PPRROOCCEEDDUURREE OOFF GGEETTTTIINNGG FFIINNAANNCCEE

When a corporation comes for the credit assistance, the credibility of the

corporation is confirmed in the market. Then application is made and endorsed to

head office. The head office receives credit Sanction Approved (CSA). After

consent charge is taken on certain assets of the company requesting for credits.

Then the party singes this security sheet. After this Disbursement Authorization

Certificate (DAC) is complete. The reason of building of DAC is that the party

completes documentations next to the particular confines. In a DAC following

details are written:

Name of the branch

Name of the party

Nature of finance



Account of finance

Sanctioned Advice no

Expiry date

Limit approved by

After mentioning the necessary documents required are promissory note

hypothecation certificate, which is actually the detail of the assets on which the

bank takes charge. The mark-up is then calculated, after the calculation of mark-

up, the customer is sent MUP letter in which the mark-up on his requested credit

limit is given. The credit recovery department of the bank takes charge on

company’s assets. The customer to each bank from which he is taking credit

submits joint Pari Passu of Hypothecation.

BBUUSSIINNEESSSS PPRROOMMOOTTIIOONN && MMAARRKKEETTIINNGG DDIIVVIISSIIOONN

THE BANK OF PUNJAB



3.1 BBUUSSIINNEESSSS PPRROOMMOOTTIIOONN SSCCHHEEMMEESS

The Bank of Punjab provides efficient services at minimum cost. It differentiates itself from other bank due to its worthiness and a premature Goodwill. BOP was formed for the Punjab province. Punjab province formed this bank by passing a bill in the National Assembles. It is another major characteristic of the BOP, which differentiates it from other banks. The Goodwill of BOP differentiates itself from other. BOP charge lowest rates in online transaction, remittances as compared to other banks. The Bank of Punjab differentiate itself by providing such services

BOP Quick Cash Scheme

BOP Car Loan Scheme

BOP House Loan Scheme

BOP SME Loan Scheme

BOP Aasaish Loan

BOP House Loan for Federal Govt.

33..11..11 BBOOPP QQUUIICCKK CCAASSHH

BBOOPP QQUUIICCKK CCAASSHH Bop quick cash is running finance facility provided to salaried individuals through their bank account with BOP purchase of consumer items or personal needs. The facility is an alternative to consumer financing offered by banks except it is R/F instead of Demand finance which is more favourable to borrower. You can get this personal loan from BOP if you are: ELIGIBILITY

Between 25 and 55 year of age

Permanent employee of selected organizations having at least 3 year

experience

Computerized National Identity Card

You net take home salary is Rs.15,000 & above as mentioned on

salary slip

For Govt. Employees net take home salary is Rs.10,000



BBOOPP CCAARR LLOOAANN

BBOOPP CCAARR LLOOAANN

Easily affordable & flexible Instalments

Quick processing

Minimum down payment

Minimum Insurance

BOP car loan is demand finance facility to purchase brand new locally manufactured/ assembled car for personal use.

You can avail the facility if you are:

Salaried person: Permanent employee of selected organizations

with at least 3 year service minimum takes home salary of Rs.

15,000. For Govt. employee net take home salary is Rs. 12,000

Self employed: business person and professional having minimum

3 year in current business

Between 25 to 55 years of age

Minimum amount is Rs. 200,000 and maximum amount is Rs. 1,000,000. Loan is available for a period of minimum 3 year and maximum 5 years. Most competitive rate available in the market. Down payment is 10 to 20% of car value.

BBOOPP HHOOUUSSEE LLAAOONN

BBOOPP HHOOUUSSEE LLAAOONN Bop house loan is long term finance facility for purchase of house flat or

construction of house on self owned plot or for renovation home improvement.

You can avail this facility if you are



Salaried Person: permanent employee of selected organization with a

minimum takes home salary of Rs. 20000.

Self employed: Business person and professional having minimum 5 year

in current business.

Holder of CNIC

Between 25 and 60 year of age.

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

basis (for each year new amortization schedule will be provided to the customer

in case of any change in the mark-up)

OTHER CHARGES

MMUUNNAAFFAA HHII MMUUNNAAFFAA

MMUUNNAAFFAA HHII MMUUNNAAFFAA

Another example is Munafa hi Munafa Scheme in The Bank of Punjab, this scheme provide the return @ 11% per month. This scheme attracts a large number of customers.

AAGGRRIICCUULLTTUURRAALL SSCCHHEEMMEESS

The Bank of Punjab also supports the agricultural sector. A number of schemes were introduced by the BOP to facilitate the KISAN sector. Such as

Kissan Dost Agricultural Finance Scheme

Kissan Dost Tractor Finance Scheme



Kissan Dost Aabiari Scheme

Kissan Dost Mechanization Support Scheme

Kissan Dost Farm Transport Scheme

Kissan Dost Eslah-e-Arazi scheme

Kissan dost live stock Scheme

Kissan Dost Live stock scheme

Kissan Dost Commercial Agro Services Finance Scheme

Kissan Dost Agri Mall Finance Scheme

While doing this all the centre view of the BOP management is the Customer.

SSWWOOTT

A N A L Y S I S

33..44..11 SSTTRREENNGGTTHHSS

SSTTRREENNGGTTHHSS

Over the years, the Bank has proved its strength as a Leading Banking Sector Entity by receiving several awards for quality banking services as well as by achieving the following firsts in Pakistani Banking: (First bank to offer) Countrywide on-line real-time banking: Nation-wide on-line ATM Network, Internet Banking Services, E-Commerce agricultural Solutions. The major strengths of BOP are as follows:

STRENGTH WEAKNESS

OPPORTUNITY THREATS



LLEEAADDEERRSSHHIIPP IINN TTEECCHHNNOOLLOOGGIICCAALL IINNNNOOVVAATTIIOONNSS

Technology rapidly changes and the bank of Punjab thinks, act and does business with respect to the current technology. By adapting to the new technology, the bank of Punjab has achieved success in enhancing customer expectations, particularly with respect to speed and quality of its service.

IINNTTEERRNNEETT BBAANNKKIINNGG Internet Banking Services" are offered by the bank of Punjab for purposes of remotely accessing certain banking services through the Internet, which have otherwise been made available by the Bank through traditional means. By availing Internet banking facility, the customers can check their account balance, transfer their balance and take a print out of their bank statements.

PPHHOONNEE BBAANNKKIINNGG SSEERRVVIICCEE && IINNTTEERRNNEETT BBAANNKKIINNGG FFAACCIILLIITTYY The Bank’s Phone Banking service and Internet Banking facility allows customers to enjoy routine banking services from anywhere in the world, 365 days a year, 24 hours a day. The bank of Punjab has also pioneered e-commerce venture in Pakistan through a major retail distributor.

DDIISSTTRRIIBBUUTTIIOONN CCHHAANNNNEELLSS Bank of Punjab’s customer needs are changing and their expectations are growing. Technology is fast proliferating the distribution channels and now banking services can be accessed from multiple contact points. The Bank believes that balanced growth is the key to survival in today's global banking environment. From a humble beginning with just few branches in 1989, today bank of Punjab enjoys a network of 266 outlets, spread across the country.

CCOOSSTT CCOONNTTRROOLL PPRROOCCEEDDUURREESS The Bank of Punjab employs certain cost control procedures. Each branch is assigned a list of budget and Discretionary Power (DP) for the expenses. The DP percentage is 20%. At the end of each month, incurred expense and budget is compared, if certain expense exceeds the budget but within DP limit i.e., 20%, then, the amount is sent to Regional office for approval. When the expenses incurred exceeds the DP limit i.e., exceeds by 20%, then the report is sent to Head Office for approval. In this way, cost incurred by each branch is controlled, and is in the knowledge of Head Office and Regional Office if exceeds its limit.



33..44..22 WWEEAAKKNNEESSSSEESS

WWEEAAKKNNEESSSSEESS

Though the bank of Punjab has won several awards and achievements, yet the internal environment of BOP faces a number of weaknesses, which need to be resolved. The major weaknesses of Bank of Punjab are as follows:

SSTTAAFFFF AALLLLOOCCAATTIIOONN

Number of Employees is not equally allocated to each branch according to the load of work. In some branches there is understaffing, imposing burden over the employees. In turn, customer dealing is affected broadly. Whereas in some branches there is overstaffing. The employees are hired without any vacancy and they are not given their proper postings.

MMAANNUUAALL AACCCCOOUUNNTTIINNGG:: Although most of the office work is computerized yet in some branches there is still manual accounting. In some departments vouchers are manually made which require much burden of work. The computers in branch are not properly connected. The employees have to make use of sneaker net. The employees face the major problem when they have to take printouts, the employee copy the data in floppy then after copying the data to the computer attached with printer, and they get printouts.

PPRROOLLOONNGGEEDD CCUUSSTTOOMMEERR DDEEAALLIINNGG

The customer dealing is not very modified in the bank. The customer counter is not easily accessible to the customer. The clients instead of reaching the customer counter in the first instance, ask other officers for the help, which interrupts their work. In addition to this, the procedure of token wastes much time of the customer.

LLAACCKK OOFF EEMMPPOOWWEERRMMEENNTT

The office environment of The bank of Punjab is very tough and not very encouraging. The employees are not empowered with their jobs and thus they are not motivated to perform their jobs well and in efficient way. The staff is given limited authority, the reason being that they have fewer incentives to perform their duties well.



HHIIGGHH EEMMPPLLOOYYEEEE TTUURRNNOOVVEERR

The bank of Punjab tries to create a ‘WE’ culture where there is mutual trust and respect for each other but due to the problems faced to employees of bank and due to bright and more attractive opportunities available outside the bank, the staff is switching over to other organizations.

11..44..33 OOPPPPOORRTTUUNNIITTIIEESS

OOPPPPOORRTTUUNNIITTIIEESS

The emerging global trends and development in the service sector have created new opportunities and challenges in the realm of corporate strategy of Bank of Punjab. The Bank of Punjab has a nationwide presence of 266 branches. As of December 31, 2007, the Bank had total assets of Rs. 164,855,137,000 with satisfied customers. The opportunities of Bank of Punjab are as follows:

CCOORRPPOORRAATTEE CCIITTIIZZEENNSSHHIIPP

The Bank’s role as a responsible corporate citizen is as important to the bank as the products and services it offers. Bank of Punjab has the major opportunity to achieve the corporate citizenship by delivering its products and services to its customers nationwide.

CCUUSSTTOOMMEERR RREELLAATTIIOONNSSHHIIPP MMAANNAAGGEEMMEENNTT ((CCRRMM)) PPRROOGGRRAAMM

The Bank’s qualified and experienced technology team is now focusing on data warehousing to enhance the Customer Relationship Management (CRM) program. This program will enhance the Bank’s opportunity to achieve its goals in effective and efficient manner.

TTEECCHHNNOOLLOOGGIICCAALL IINNNNOOVVAATTIIOONNSS

Bank of Punjab enjoys a strategic competitive advantage over all domestic banks by virtue of its leadership in technological innovations. The Bank of Punjab has fully automated transaction-processing systems for back-office support. Its branch network is connected on-line real-time and its customers have access to off-site as well as on-site ATMs, all over Pakistan.



AASSSSEETTSS

The total assets of Bank of Punjab have now exceeded to Rs.164 million and the bank has many products and services to match its customers' individual needs. As part of the Bank growth strategy, the bank is now extending its banking services to the remote and rural areas.

TTAAKKIINNGG OOVVEERR PPPPCC Bank of Punjab is completing the formalities to take over Punjab Provincial Cooperative (PPC) having 160 branches up to 31st December of this year. This take over will increase its strength and business area.

33..44..44 TTHHRREEAATTSS

TTHHRREEAATTSS

We live in a whirlpool of domestic banks, giving their best services nationwide, so it is challenging for Bank of Punjab in this competitive era to attract new customers and keeping its old customers satisfied so that they would not switch to other banks. The threats facing by Bank of Punjab are as follows;

PPOOLLIITTIICCAALL IINNSSTTAABBIILLIITTYY

The country’s political instability is the major threat faced by Bank of Punjab. As the political conditions of Pakistan are very unstable so it is challenging for Bank of Punjab to continue it business in competitive banking sector.

EECCOONNOOMMIICC CCOONNDDIITTIIOONNSS

The economy of Pakistan is not very strong and is in fluctuating conditions so it is also one of the major threats for Bank of Punjab is to carry on its business in changing economic conditions.

OOPPEERRAATTIINNGG EENNVVIIRROONNMMEENNTT

Operating Environment of Banking Sector is a major threat for Bank of Punjab to maintain its existing position and to meet the challenges and prepare for the future.

CCOOMMPPEETTIITTIIOONN WWIITTHH OOTTHHEERR BBAANNKKSS



BOP has to compete with other banks in the banking sector of the country. The major competitor of Bank of Punjab is PICIC commercial bank and ABL. The bank of Punjab competes with other banks on the basis of agriculture. Bank of Punjab as a Commercial Bank has made certain strategies to cope with its rival banks and has succeeded to some extent. The bank is planning to overcome it major flaws and to achieve higher position in banking sector

FINANCIAL STATEMENT ANALAYSIS

The Bank of Punjab



CONSOLIDATED BANLANCE SHEET 2011

ASSETS 2011 2010 2009

Rs.(000) Rs.(000) Rs.(000)

CURRENT ASSETS

Cash and balances with treasury

banks 14,054,859 8,787,387 5,579,566

Balances with other banks 3,722,089 9,367,595 2,118,242

lendings to financial

institutions 11,864,823 7,593,681 1,019,488

Investments 28,233,211 18,026,181 16,197,505

Short term performing

advances 67,844,727 45,530,539 25,663,287

Other assets 3,609,457 2,040,568 1,277,201

129,329,166 91,345,951 51,855,289

FIXED ASSETS

Long term performing

advances 33,475,227 18,093,166 13,775,636

Operating fixed assets 2,068,744 1,715,061 689,486

35,543,971 19,808,227 14,465,122

TOTAL ASSETS 164,855,137 111,154,178 66,320,411

CURRENT LIABILITIES



Bills payable 856,448 478,001 267,113

Borrowing from financial institutions 6,989,424 6,791,007 2,831,605

Deposits and other

accounts 137,727,606 88,465,051 54,724,311

Other liabilities 2,816,341 1,474,425 567,540

148,389,819 97,208,484 58,390,569

LONG TERM LIABILITIES

Liabilities against assets subject to

finance lease 40,988 55,403 81,795

Deferred tax

liability 298,616 220,177 8,964

339,604 275,580 90,759

TOTAL

LIABILITIES 148,729,423 97,484,064 58,481,328

NET WORTH 16,125,714 13,670,114 7,839,083

CONSOLIDATED PROFIT & LOSS ACCOUNT 2011



PARTICULARS 2011 2010 2009

Rs(000) Rs(000) Rs(000)

MARK-UP/INTEREST EARNED 11,643,963 6,125,093 2,555,039

Mark-up/return/interest expensed 7,573,722 2,668,739 719,074

Net mark-up/return/interest

income 4,070,241 3,456,354 1,835,965

Provisions against non-performing

advances 340,626 327,373 46,940

Bad debts written off

directly 100 3,623 121

NET MARK-UP/RETURN/INTEREST

INCOME AFTER PROVISIONS 3,696,515 3,125,358 1,788,904

NON MARK-UP INCOME

Fee, commission and brokerage

income 473,212 255,149 172,873

Dividend income 1,385,875 753,669 554,218

Income from dealing in foreign

currencies 239,804 93,208 41,311

Other income 855,498 228,749 328,361

TOTAL NON MARK-UP INCOME 2,954,389 1,330,775 1,096,763

NON MARK-UP EXPENSE

Administrative expenses 1,751,970 1,274,971 1,116,097

Provision against off balance sheet items 175 - 364

Provisions against receivable from NIT - 4,744 32,064

Other charges 38 11,461 1,217

TOTAL NON MARK-UP EXPENSES 1,882,183 1,291,176 1,149,724



PROFIT BEFORE TAXATION 4,768,721 3,164,957 1,735,943

TAXATION

Current 880,997 668,700 225,916

Deferred 83,469 143,015 141,853

PROFIT AFTER TAX 3,804,255 2,353,242 1,368,174

Unappropriated profit brought forward 169,817 143,590 101,699

Transfer from surplus on revaluation of fined

assets 6,174 3,166

PROFIT AVAILABLE FOR

APPROPRIATION 3,980,246 2,499,998 1,469,873

HHOORRIIZZOONNTTAALL

AA NN AA LL YY SS II SS

((22001100--1111))

BBaassee yyeeaarr 22000099

BBAALLAANNCCEE SSHHEEEETT

((RRuuppeeeess iinn TThhoouussaannddss))

2011-10 %Age 2010-09 %Age

CURRENT ASSETS



Cash & Balances with Treasury

Banks 5,267,472 59.94% 3,207,821 57.49%

Balances with Other Banks (5,645,506) (60.26%) 7,249,353 342.20%

landings to Financial

Institutions 4,253,142 56% 6,574,193 644.85

Investments 10,207,030 56.62% 18,287,676 11.29

Short Term Performing

Advances 22,314,188 49% 19,867,252 77.41%

Other Assets 1,568,889 76.88% 763,367 59.77%

FIXED ASSETS

Long Term Performing

Advances 15,382,061 85.01% 4,317,530 31.34%

Operating Fixed

Assets 353,683 20.62% 1,025,575 148.74%

Deferred Tax Assets - - - -

TOTAL ASSETS 53,700,959 48.31% 44,833,767 67.60%

CURRENT

LIABILITIES

Bills Payable 378,447 79.17% 210,888 78.95%

Borrowing from Financial

Institutions 198,417 29.21% 3,959,402 139.83%

Deposits and Other Accounts 49,262,555 55.68% 33,740,740 61.56%

Other Liabilities 1,341,916 91.01% 906,885 159.79%

LONG TERM LIABILITIES

Liabilities Against Assets Subject

to Financial Lease (14,415) (26%) (26,392) (32.26%)



HHOORRIIZZOONNTTAALL


((22001100--1111))

BBaassee yyeeaarr 22000099

PPRROOFFIITT && LLOOSSSS AACCCCOOUUNNTT

PPAARRTTIICCUULLAARRSS 22001100--1111 %% 22001100--

0099 %%

Rs(000) Rs(000)

MARK-UP EARNED 5,518,870 90 3,570,054 139.73

Mark-up Expensed 4,904,983 183.97 1,949,665 271.1

Net mark-up Income 613,887 17.76 1,620,389 88.26

Provisions against non-Performing 13,253 4.05 280,433 597.43

Deferred Tax

Liability 78,439 35.26% - -

TOTAL

LIABILITIES 51,245,359 52.56% 39,002,736 66.69%

2011-10 % 2010-09 %

NET WORTH 2,455,600 17.96% 5,831,031 74.38%

Share Capital 552,771 23.52% 843,489 56%

Reserve Funds and Other

Reserves 1,596,833 54.30% 1,486,692 53.66%

Inappropriate Profit 1,732,491 116.52% 26,227 18.26%

Surplus on Revaluation of Assets (1,426,495) (20.69%) 3,474,623 101.63%



Advances

Bad Debts written off directly (3,523) (97.24) 3,502 2894.1

INCOME AFTER PROVISIONS 571,157 18.27 1,336,454 74.7

NON MARK-UP INCOME

Fee, Commission and Brokerage

Income 218,063 85.46 82,276 47.59

Dividend Income 632,206 83.88 199,451 35.99

Income from dealing in Foreign

Currencies 146,596 157.27 51,897 125.63

Other Income 240,849 106.76 99,612 -30.34

TOTAL NON MARK-UP

INCOME 1,623,614 122 234,012 21.34

NON MARK-UP EXPENSE

Administrative

Expenses 476,999 37.41 158,874 14.23

Provision against off Balance Sheet

Items 175

Provisions against Receivable

from NIT (4,744) (100) (27,302)

(85.19

)

Other Charges (11,423) (99.66) 10,244 841.74

TOTAL NON MARK-UP

EXPENSES 591,007 45.77 141,452 12.3



PROFIT BEFORE

TAXATION 1,603,764 50.67 1,429,014 82.32

Taxatio

n

Current 64,997 7.96 442,784 195.9

Deferred (59,546) (41.63) 1,162 0.819

PROFIT AFTER

TAXATION 1,451,013 61.66 985,068 71.99

VVEERRTTIICCAALL


((22000099--1100--1111))

BBAALLAANNCCEE SSHHEEEETT

2011 % 2010 % 2009 %

Rs(000) Rs(000) Rs(000)

ASSETS

Cash and Balances with

Treasury Banks 14,054,859 8.52 8,787,387 7.91 5,579,566 8.41

Balances with other

Banks 3,722,089 2.25 9,367,595 8.43 2,118,242 3.19



landings to Financial

Institutions 11,864,823 7.18 7,593,681 6.83 1,019,488 1.54

Investments 28,233,211 17.12 18,026,181 16.21 16,197,505

24.4

2

Advances 12068744 61.45 1715061 57.24 1135126

59.4

7

Operating

Fixed Assets 2,068,744 1.26 1,715,061 1.54 689,486 1.04

Other assets 3,609,457 2.18 2,040,568 1.84 1,277,201 1.93

TOTAL 164,855,137 100

111,154,17

8 100 66,320,411 100

LIABILITIES

Bills payable 856,448 0.57 478,001 0.49 267,113 0.46

Borrowing from financial

institutions 6,989,424 4.7 6,791,007 6.97 2,831,605 4.84

Deposits & other

Accounts 137727554 92.6 88,468949 90.75 60659663

93.5

8

Others 2,816,341 1.9 1,474,425 1.51 567,540 0.97

Liabilities against Assets

Subject to Financial Lease 40,988 0.027 55,403 0.057 81,795 0.14

Deferred tax

Liability 298,616 0.2 8,964 0.02 220,177 0.23

Total 148,729,423 100 97,484,064 100 58,481,328 100

EQUITY

Share capital 2902490 18 2,349,719 17.19 1,506,230 19.2



Reserve funds and other

reserves 4537232 28.13 4,257,337 31.14 2,770,645

35.3

4

Inappropriate

profit 3219246 19.96 169,817 1.24 143,590 1.83

Surplus on revaluation of

assets 5466746 33.9 6,893,241 50.43 3,418,618

43.6

1

TOTAL 16125714 100 13,670,114 100 7,839,083 100

2363 3052

4420

6777

10659

2007 2008 2009 2010 2011

Share Holders Equity (Rs in M)

Series 1

Schedule 2007

(Rs. In M)

2008

(Rs. In M)

2009

(Rs. In M)

2010

(Rs. In M)

2011

(Rs. In M)

Shareholders’

Equity 2,363 3,052 4,420 6,777 10,659



EXPLANATION

The above chart and the schedule clearly shows that the shareholders’ equity of The Bank of Punjab is continuously tend to increase during last 5 year. The authorized capital of The Bank of Punjab is one Million. The issued and subscribed capital of the bank is 193,333 ordinary share of Rs. 10 each in year 2006. The share capital is consist of

Share Capital 2011

Fully paid in cash

Issued as bonus share

Rs. 19,333,340

Rs. 270,915,660

Total Rs. 290,249,000

VVEERRTTIICCAALL


((22000099--1100--1111))

PPRROOFFIITT && LLOOSSSS AACCCCOOUUNNTT

Particulars 2011 % 2010 % 2009 %

Rs.(000)

Rs.(000

)

Rs.(000

)

Mark-up/interest earned 11644560

79.7

4

6,125,2

62

82.1

5 356956

69.9

7

Fee, commission and

brokerage income 473,212 3.25

255,14

9 3.42

172,87

3 4.73

Dividend Income 1,385,875 9.5

753,66

9

10.1

1

554,21

8

15.1

8

Income from dealing in

foreign currencies 239,804 1.64 93,208 1.25 41,311 1.13

Other income 855,489 5.87

228,74

9 3.07

328,36

1 8.99



TOTAL NON MARK-

UP/INTEREST INCOME

14,598,35

2 100

7,455,8

68 100

3,651,8

02 100

NON MARK-UP

EXPENSE 7,573,722

81.2

1

2,668,7

39

32.4

1

719,07

4

37.5

3

Administrative expenses 1754665

18.7

8

127785

4 66.9 965896

52.2

6

Provision against off

balance sheet items 175

0.00

18.0

0 - - 46,940 2.45

Bad debts written off 100

0.00

1 3,623 0.04 121 -

Provisions against receivable from NIT -

- 4,744 32,046 1.67

Other charges 38

.000

4 11,461 0.12 1,217

0.06

TOTAL

9,326,005

100

4,290,9

11 100

1,915,8

59 100

Summary

2011 2010 2009

Rs.(000) Rs.(000) Rs.(000)

Share capital 2,902,490 2,349,719 1,506,230

Reserve funds and other reserves 4,537,232 257,337 2,770,645



Unappropriate profit 3,219,246 169,817 143,590

Surplus on revaluation of assets 5,466,746 6,893,241 3,418,618

Shareholders' equity 10658968 6,776873 4,4204,65

Long term debts 339604 275,580 90,759

Net profit 3,804,255 2,353,242 1,368,174

Net profit before tax 4,768,721 3,164,957 1,735,943

Total income 6,650,904 4,456,133 2,885,667

Total deposits 137,727,606 88,465,051 54,724,311

Total advances 101,319,954 63,623,705 39,438,923

Interest expenses 1,882,183 1,291,176 1,149,724

Interest earned 11,643,963 6,125,093 2,555,039

Interest income 6,650,904 4,456,133 2,885,667

Outstanding shares 290,249,000 234,971,860

150,622,98

8

Dividend per share Rs. 3.25 Rs. 5.20 Rs. 4

Earning per share 9.08 10.01 13.14



FFIINNAANNCCIIAALL RRAATTIIOO


Ratio expresses the mathematical relationship between one quantity and another. The relationship in expressed in terms of a percentage, a rate or simple proportion.

FFIINNAANNCCIIAALL RRAATTIIOO

Computation of financial ratios is very useful approach that keeps the management, shareholders and creditors etc. in making various decisions about the company. The term Financial Ratio is used to describe significant relationship between figures shown on a balance sheet or in a profit and loss account in a Budgetary control System. Financial Ratio thus shows the relationship between accounting data. So we can say

DDEEFFIINNIITTIIOONN

““AAnn iinnddeexx tthhaa tt rree llaatteess ttwwoo aaccccoouunntt iinngg nnuummbbeerrss aanndd ii ss oobbttaa iinneedd

bbyy ddiivv iiddiinngg oonnee nnuummbbeerr bbyy tthhee ootthheerr”” ..

Computation of financial ratios is very useful approach that keeps the management, shareholders and creditors etc. in making various decisions about the company. For analysis of the financial statement rations can be classified as follows:

11.. LLIIQQUUIIDDIITTYY RRAATTIIOOSS

LLIIQQUUIIDDIITTYY RRAATTIIOOSS The ratios measure the short term ability of the company to pay its current short term liabilities and meet the unexpected needs for cash currently is called Liquidity Ratios. It includes

i. Current Ratio

ii. Acid test Ratio

Ratio Analysis

The term financial ratio

is used to describe

significant relationship

between figures shown

on a balance sheet or in

a profit and loss account

in a budgetary control

system. Financial ratio

thus shows the

relationship between

accounting data



22.. SSOOLLVVEENNCCYY RRAATTIIOOSS

SSOOLLVVEENNCCYY RRAATTIIOOSS

These ratios measure the ability of the company to survive over a long period of time is called Solvency or Leverage Ratios. It includes

i. Debt -to-Equity Ratio

ii. Debt –to- Total Assets

iii. Proprietary Ratio

33.. CCOOVVEERRAAGGEE RRAATTIIOOSS

CCOOVVEERRAAGGEE RRAATTIIOOSS

Ratios that relate the financial charges of a firm to its ability to service or cover them are called Coverage Ratios.

i. Interest Coverage Ratio

ii. Service Coverage Ratio

44.. AACCTTIIVVIITTYY RRAATTIIOOSS

AACCTTIIVVIITTYY RRAATTIIOOSS

Ratios that measure how effectively the firm is using its assets are called Activity Ratios.

55.. PPRROOFFIITTAABBIILLIITTYY RRAATTIIOOSS

PPRROOFFIITTAABBIILLIITTYY RRAATTIIOOSS

Ratios that relate profits to sales and investment are called Profitability Ratios. These ratios measure the income and operating success or overall performance of the company for a particular period of time.

AANNAALLYYSSIISS OOFF MMAANNAAGGEEMMEENNTT EEFFFFIICCIIEENNCCYY

OPERATIONAL EVALUATION



ADMINISTRATIVE EXPENSE ANALYSIS Administrative Expense * 100 = Mark Up /Interest /Discount And Return Earned

Year Admin Expense

Interest Earned

Ratio

2009 965,896 3,568,956 25%

2010 1,277,854 6,125,262 20%

2011 1,754,665 11,644,560 15%

0% 10% 20% 30%

2009

2010

2011

INTERPRETATION

In general administrative expanse shows decrease by 1.49%. But this is the minor increase in expenses.

Ratio Of Administrative Expense To Deposit Administrative Expense * 100 = Deposit

Year Admin Expense

Deposits Ratio



2009 965,896 60,659,663 1.59%

2010 1,277,854 88,464,949 1.44%

2011 1,754,665 137,727,554 1.27%

0% 1% 1% 2% 2%

2009

2010

2011

INTERPRETATION

In case of particular category administrative expense indicates decrease, it means organization had the ability to utilize its recourses as well curtailing of its expanses. Reduction of expanses not only increases the profitability as well as the good sign for prosperity.

iii- Ratio Of Mark Up Earned To Advances Mark Up /Interest / Return Earned * 100 = Advances (Net Of Provision)

Year Mark-up Earned

Advances Ratio

2009 3,568,956 1,135,126 314.40%

2010 6,125,262 1,715,061 357.50%

2011 11,644,560 2,068,744 563.12%



0% 200% 400% 600%

2009

2010

2011

INTERPRETATION

There was a slightly increase in the mark up ratio earned through advancing of loan. This means that bank was following soft policy in giving loan. This is the main factor, which was putting the bank on progress track.

Cost Paid On Deposit Mark Up /Return /Interest Expense*100 = Deposits

Year Mark-up Expense

Deposits Ratio

2009 1,556,263 60,659,663 2.56%

2010 2,668,739 88,464,949 3.01%

2011 7,573,722 137,727,554 5.50%



0% 2% 4% 6%

2009

2010

2011

INTERPRETATION

This indicates the return provided by the bank on their deposit. But the bank was following very aggressive policy in that concern. Bank was receiving deposit from people at lower rate.

Average Cost Of Funds Mark Up Paid On Deposit +Administrative Expenses*100 = Deposits

Year Mark-up Expense

Admin Expense

Deposits Ratio

2009 1,556,263 965,896 60,659,663 3.86%

2010 2,668,739 1,277,854 88,464,949 4.46%

2011 7,573,722 1,754,665 137,727,554 6.67%



0% 2% 4% 6% 8%

2009

2010

2011

AA.. LLIIQQUUIIDDIITTYY RRAATT IIOOSS

The liquidity ratios are calculated for short term creditors such as bankers and supplier are particularly interested to know the liquidity position of the company.

CCUURRRREENNTT RRAATTIIOO

The Ratio expressed the relationship of current assets to current liabilities. It widely used for evaluating a company’s liquidity and short term debt paying ability. I is also called working capital ratio.

FFOORRMMUULLAA

CCuurrrreenntt RRaattiioo == CCuurrrreenntt AAsssseettss // CCuurrrreenntt LLiiaabbiilliittiieess

Rs. In (000)

CURRENT RATIO SCHEDULE

Current Ratio Current Assets Current

Liabilities

Ratio

2009 65630925 58472364 1.12

2010 10943911 97263887 1.125

2011 162786393 148430807 1.10



INTERPRETATION

The current ratio should ideally be 2:1 and it depicts the situation that the bank is operating at an ideal level but minimum acceptable level is 1:1. The bank is maintaining its ratio more than 1:1 but still it has decreased in 2010 as compared to 2010. The bank is in good current ratio position.

BB.. LLEEVVEERRAAGGEE RRAATTIIOOSS

Long term creditors and stock holders are interested in company’s long term solvency particularly it ability to pay interest as its come due and to repay the face value of the debt of maturity. Solvency position of the company can be measured by the following ratios:

DDEEBBTT TTOO EEQQUUIITTYY RRAATTIIOO

Debt to Equity Ratio indicates the relationship between the external equities or outsider funds and internal equities or shareholders funds. It is used to ascertain soundness of the long-term financial policies of the company. It tells how much share is of creditors in response to share holder. If shareholders shares are more than it the creditors is considered that company is going well. It is calculated by dividing long term debts on share holder funds, greater the debt equity ratio bad the financial position of the company. Lesser the debt equity ratio betters the financial position of the company.

FFOORRMMUULLAA

DDeebbtt ttoo EEqquuiittyy RRaattiioo == LLoonngg TTeerrmm DDeebbtt // SShhaarreehhoollddeerrss’’ EEqquuiittyy

(Rs. in 000)

DEBIT EQUITY SCHEDULE

Year Long term Debt Shareholder

Funds

Ratio

2009 90759 7929842 0.011



2010 275580 13945694 0.0198

2011 339604 16465318 0.0206

0% 20% 40% 60% 80%

2009

2010

2011

INTERPRETATION

As the debt to equity ratio discl0se the long term financial positions of the firm, so The Bank of Punjab’ debt to equity ratio is continuously tend to be increase over past 2 years. Its mean that the bank is getting more and more external funds.

DDEEBBIITT TTOO TTOOTTAALL AASSSSEETT RRAATTIIOO

The debt to total asset ratio is derived by dividing a firm’s total debt by its total assets. It highlights the relative importance of debt financing to the firm by showing the percentage of the firm’s assets that is supported by debt financing.

FFOORRMMUULLAA

DDeebbiitt ttoo TToottaall AAsssseett RRaattiioo== TToottaall DDeebbtt // TToottaall AAsssseettss (Rs. in 000)

DEBIT TO TOTAL ASSET RATIO SCHEDULE

Year Total Debt Total Assets Ratio

2009 58481328 66320411 88%

2010 97484064 111154178 87.70%

2011 148729423 164855137 90%



86 87 88 89 90 91

2009

2010

2011

INTERPRETATION

The bank’s debt ratio is increasing that means bank’s assets are in the position to

cover the total debts.

PPRROOPPRRIIEETTAARRYY RRAATTIIOO

Proprietary ratio is also used to know the financial position of the company by solvency wise. So, this ratio can be finding if shareholder funds are divided by total assets. We can say that equity utilized to bring the assets of the company.

FFOORRMMUULLAA

PPrroopprriieettaarryy RRaattiioo== SShhaarreehhoollddeerr EEqquuiittyy // TToottaall AAsssseettss

(Rs. in 000)

PROPRIETARY RATIO SCHEDULE

Year Shareholder

Funds

Total Assets Ratio

2009 4420465 66320411 0.066

2010 6776873 111154178 0.0609

2011 10658968 164855137 0.0646

0.055 0.06 0.065 0.07

2009

2010

2011



INTERPRETATION

This ratio measures the proportion of capital that is prior charge to capital. The trend of this ratio is showing the good position and improvement.

CC.. CCOOVVEERRAAGGEE RRAATTIIOO

Coverage ratios are designed to relate the financial chargers of a firm to its ability

to service, or cover, them. One of the most traditional of the coverage ratios is the

interest coverage ratio, or times interest earned.

IINNTTEERREESSTT CCOOVVEERRAAGGEE RRAATTIIOO

This ratio is simply the ratio of earnings before interest and taxes for a particular

reporting period to the amount of interest charges for the period. It indicates a

firm’s ability to cover interest charges for a particular period of time.

FFOORRMMUULLAA

IInntteerreess tt CCoovveerraaggee RRaatt iioo== EEBBIITT // IInntteerreesstt EExxppeennssee

(Rs. in 000)

INTEREST COVERAGE RATIO SCHEDULE

Year EBIT Interest

Expenses

Ratio

2009 1,368,174 1,556,263 0.88

2010 3,164,957 2,668,739 1.18

2011 4,768,721 7,573,722 0.63



0 0.5 1 1.5

2009

2010

2011

INTERPRETATION

The Analysis shows that The Bank of Punjab is paying more and more interest as compared to the Earnings of the bank

D) PPRROOFFIITTAABBIILLIITTYY RRAATTIIOOSS

These are ratios which indicate the prof it generating abil ity of the company. The creditor ad investors are more interested in evaluating the company earning power. Prof itabil ity is frequently used as ult imate test of managements operating effectiveness. Prof itabil ity rat ios are:

1. Return on Assets Ratio

2. Return on Equity Ratio

3. Earnings Per Share

4. Payout Ratio

RREETTUURRNN OONN AASSSSEETTSS RRAATTIIOO

Another group of profitability ratios relates profits to investment. One of these measures is the rate of return on investment or return on assets. The return on assets ratio of the SNGPL as fellow:

FORMULA

RReettuurrnn oonn AAsssseettss RRaattiioo == NNeett PPrrooffiitt aafftteerr TTaaxxeess**110000

TToottaall AAsssseettss

(Rs. in 000)



RETURN ON ASSETS RATIO SCHEDULE

Year Net Profit Total Assets Ratio

2009 1368174 66320411 2.06%

2010 2353242 111154178 2.12%

2011 3804255 164855137 2.30%

1.9 2 2.1 2.2 2.3 2.4

2009

2010

2011

INTERPRETATION

This ratio is depicting the efficiency with which assets are being utilized. There is increasing trend from year 2009-2011 showing good sign for banking business. Increasing return on assets is healthy position of business.

RREETTUURRNN OONN EEQQUUIITTYY RRAATTIIOO

This rat io is one of the most important rat ios used for measuring the overal l eff iciency of a f irm. This ratio shows the return on Shareholders’ funds -paisas per rupee. This rat io is more meaningful to the equity shareholders who are interested to know prof its earned by the company because the dividend is pay on this earning prof it. This ratio is also reveals how well the resources of a f irm are being used, higher this ratio, better are the results.

FORMULA

RReettuurrnn oonn EEqquuii tt yy RRaatt iioo== NNeett PPrrooff ii tt aa ff tteerr TTaaxxeess

SShhaarreehhoollddeerrss ’’ eeqquuii tt yy

(Rs. in 000)

RETURN ON EQUITY RATIO SCHEDULE

Year Net Profit Shareholders’ Ratio



28 30 32 34 36 38

2009

2010

2011

INTERPRETATION

As this ratio measures the efficiency of management, the trend is towards increment that is 35.69 % in 2011 showing good position of the bank.

DDIIVVIIDDEENNDD PPAAYYOOUUTT RRAATTIIOO

Earnings per share of stock are a measure of the net income earned on each share of stock. It is a small variation of return on equity capital and is calculated by dividing the net profit after taxes by the total number of equity shares. Thus the Earning per share ratio of The Bank of Punjab is as follows:

FORMULA

PPaayy--oouutt RRaattiioo== DDiivviiddeenndd ppeerr SShhaarree**110000

EEaarrnniinnggss ppeerr sshhaarree

PAY-OUT RATIO SCHEDULE

Year Dividend per Share

Earnings per Share

Ratio

2009 4.00 9.08 44

2010 5.20 10.01 52

2011 3.25 13.14 24.73

equity

2009 1368174 4420465 30.95%

2010 2353242 6776873 34.72%

2011 3804255 10658968 35.69%



0% 20% 40% 60%

2009

2010

2011

INTERPRETATION

Lower the payout ratio, higher will be the earnings ploughed back in the business. 2009 and 10 are showing increasing trend but in 2011, the ratio has declined up to 24.73% which is in favour of bank.

THE BANK OF PUNJAB