Usama Report

8/8/2019 Usama Report

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The Bank of Punjab

Submitted By:Usama Masood

MBA-4

SP07-MBA-056


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Table of Content

TABLE OF CONTENT.................................................................................2

EXECUTIVE SUMMARY ...................................................................4

OVERVIEW OF THE ORGANIZATION..................................5

1.1 HISTORY OF BANKING IN PAKISTAN ..................................... 5

1.2 NATIONALIZATION OF BANKS.........................................................6

1.3 HISTORY & NATURE OF BOP ................................................... 6

1.4 OBJECTIVES .................................................................................. 7

1.4.1 MISSION STATEMENT ............................................................7

1.4.2 VISION STATEMENT ........................................................................7

1.5 BUSINESS VOLUME .....................................................................7

1.7.1 TYPES OF ACCOUNTS ...........................................................15

PROCEDURE FOR ACCOUNT OPENING .....................................16

1) APPLICATION FORM..........................................................................16

2) SPECIMEN CARD.................................................................................16

3) ACCOUNT OPENING REGISTER.......................................................16

4) CHEQUE BOOK....................................................................................17

TYPES OF CUSTOMERS ..................................................................17

1) INDIVIDUAL.........................................................................................17

2) JOINT.....................................................................................................17

3) PARTNERSHIP A/C..............................................................................17

4) COMPANY ACCOUNT........................................................................17

1.8 SERVICES OFFERED .................................................................21

E-BANKING................................................................................................23

2.7 FINANCIAL ANALYSIS ............................................................34

INTRODUCTION AND IMPORTANCE OF FINANCIAL ANALYSIS.35

FINANCIAL STATEMENTS (2006-07).....................................................35

2.8 RATIO ANALYSIS...............................................................................38

2.9 INTRODUCTION (SWOT ANALYSIS)..............................................39

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STRENGTH...............................................................................................40

WEAKNESSES...........................................................................................40

OPPORTUNITIES .....................................................................................41

THREATS...................................................................................................42

2.10 RECOMMENDATIONS (FINANCIAL &

ADMINISTRATIVE ASPECTS)...............................................42

INTERNAL CONTROLS...........................................................................42

STAFF PROFESSIONAL TRAINING......................................................42

STAFF AUTHORITY.................................................................................43

PERFORMANCE APPRAISAL.................................................................43

RENOVATION REQUIRED......................................................................43

TRANSFER.................................................................................................43

NEED CHANGES IN POLICIES...............................................................44

NEED OF QUALIFIED STAFF.................................................................44

LINK WITH THE HEAD QUARTER.......................................................44

CREDIT CARD...........................................................................................44

ADMINISTRATIVE EXPENSES MUST BE LOW..................................44

SHOULD BE AGGRESSIVE IN CREDIT POLICY.................................44

TECHNOLOGY UP GRADATION & ADVANCEMENT.......................45

RELATIONSHIP AMONG STAFF...........................................................45

IMPROPER DISTRIBUTION OF WORK.................................................45

FAVOURITISM..........................................................................................46

DEPARTMENTAL TRANSFER...............................................................46

MARKETING POLICY..............................................................................46

DESK FOR COMPLAINTS OF CUSTOMER..........................................46

ORGANIZATIONAL COMMITMENT.....................................................47

2.11 RECOMMENDATIONS FOR STUDENTS ..............................47

TRY TO WORK IN DIFFERENT DEPARTMENTS................................47

MAKE RELATIONSHIP BETWEEN THEORY AND PRACTICE........47

CONCLUSIONS..........................................................................48

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ACKNOWLEDGEMENT...........................................................49

Executive Summary

I have done my internship at The Bank of Punjab, Sikandarabad branch

Rawalpindi. There are four departments in the branch, and I worked as an assistant in that

branch. For the first week I worked in cash department and deposit department under the

supervision of Mr. Jahanzeb.

Afterwards I have maintained cheque records and cheque book records in second week of

my internship. In which I maintained cheque book register and files and also all the daily

cheque record.

In third week I have worked in remittance department. In this department I have

maintained and kept record of LBC, OBC, MT, PO and bills of SNGL, PTCL and

IESCO.

In the fourth week of my internship I worked in advance department in which regular

checking of finance accounts and record keeping, dispatching, Account opening is been

done.

In the fifth week I have learnt about vouchers, checking of vouchers is essential to

confirm that correct calculation has been done. Vouchers are properly bind sealed, and

checking by the manager. I have checked the following things:

The check should not be post-dated/anti-dated.

Amount in words and figures tallies.

Cash paid stamps (with dates) are duly affixed in case of cash cheques and in

case of clearing stamps is affixed.

I also gave Pension to retired employees of different organizations.

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In the last week I learned about ATM card, its form and all the relevant detail. I also

learnt about the online Banking facility of BOP which includes Zarco Exchange, Western

Union Money Transfer etc.

My work timings were from 9am to 5pm, six days in a week.

OVERVIEW OF THE ORGANIZATION

1.1 History of Banking in Pakistan

Pakistan came into being on 14th August, 1947; sufficient banking services were

available in the areas forming Pakistan. Out of the total branches of the nearly 3,500 in

the undivided India, as many as about 1,500 branches were existing in these areas.

It was agreed between the two countries that reserve bank of India shall continue to

function in the Pakistan territory until 30th September 1948 and that Indian notes would

continue to be legal tender at Pakistan until 30th September 1948. Unfortunately,

relationship between the two countries became most strained immediately after

independence; banking was mostly in the lands of Hindus who immediately started

transferring their offices and assets into India. As a result most of the banks in Pakistan

were closed down and even those which were open were not doing any effectivebusiness.

The number of banking office in Pakistan came down to about 200 on 30th June 1948.

Branches of some European banks were also functioning in a limited manner, financing

in export of crops, and their number was limited to about 20.

It was only the Habib bank, which transferred its office from Bombay to Karachi Austral

Asia bank was another bank, which was in existence in the Pakistan territory at the time

of independence. Despite of best efforts on the part of government of Pakistan, no heady

way could be made on this behalf and reserve bank of India was in no mood to help the

new country. Imperial bank of India, agent of the reserve bank of India also started

closing down its branches in Pakistan.

Reserve bank also refused to advance money to Pakistan to make essential payments such

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as salaries etc, also Pakistans share of Rs.75 billion in cash balance was with held by

bank, causing hardships to the newly born state. In view of these hopeless state affairs it

was agreed between the two countries that reserve bank would serve as monetary

authority in Pakistan only up to 30th June 1948.

1.2 Nationalization of Banks

The principle of nationalization of banks is to stream line the operation of

commercial banks in such a way that it may be conductive to the development activities

in process in the country.

Since the commercial banks were owned controlled by big business groups of the country

it was feared that these banks would not maintain uniformity in their operational and

would be instrumental to inflationary pressure. However, the considerations behind

nationalization are

1. To form uniformity in the policy of the commercial banks so they may serve the

best national interest.

2. To make the operation of commercial banks highly sensitive and responsive to the

policy of the government relation to financial matters.

3. To make the credit policy of the commercial banks more purpose full and

effective especially in the development of economic sectors of the country. It acts

as an agent of the State Bank of Pakistan

4. To make the best use of the funds available at the disposal of these banks for the

economic development of the country.

5. To eliminate unhealthy and uneconomic competition among commercial banks.

6. To development strong money banks market in the country so that the value of

currency may be maintained at stable level both in national facilities to exporter

and agriculturists which have not been satisfactory in the past years.

1.3 History & Nature of BOP

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The Bank of Punjab was established in 1989 and was given the status of scheduled bank

in 1994.

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

280 branches at all over major locations in the Punjab. The Bank provides all types of banking services such as Deposits in Local Currency and client foreign currency,

remittances, and advances to business, trade, industry and agriculture. The Bank of

Punjab has indeed entered a new era of science to the nation under experience and

professional hands of its management. The Bank of Punjab plays a vital role in the

national economy through mobilization of hitherto untapped local resources, promoting

savings and providing funds for investments. The bank offers attractive rates of profit on

all deposits, opening of foreign currency accounts and handling of foreign exchange

business for example imports, exports and remittances, financing, trade and industry for

working capital requirements and money market operations. The lending policy of bank

is not only cautious and constructive but also based on principles of prudent lending with

maximum emphasis on security.

1.4 Objectives

1.4.1 Mission Statement

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

tire markets through a motivated team.

1.4.2 Vision Statement

To be a customer focused bank with service excellence.

1.5 Business Volume

These are the quick facts of the business in October 2007. At that instant BOPs business

volume is as under.

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Assets(Current +Fixed)

US$ 2.7Billion PKR 164.7 Billion

LoansUS$ 1.7Billion PKR 103.7 Billion

Deposits

US$ 2.3

Billion PKR 140.3 Billion

Business Volume in terms of Investment, Current & Fixed Assets, Share Capital,

Revenues, Deposits, Advances, Income, and EPS for the last 5 years is as under:

2003 2004 2005 2006 2007

Total assets RS (M) 43,621 66,320 111,154 164,855 234,974

Revenue RS (M) 3,675 5,488 10,912 18,603 26562

Shareholder'sEquity RS (M) 3052 4,420 6,777 10,659 15,110

Investment RS (M) 11,458 16,198 18,026 28,233 73,462

Deposits RS (M) 34,938 54,724 88,465 137,728 191,968

Advances (net) RS (M) 18,344 39,439 63,624 101,320 133,894

Income RS (M) 831 1,368 2,353 3,804 4,446

EPS (Rs/share) Rs 6.86 9.08 10.01 13.14 10.51

ROI % 7 8 13 13 6

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1.6 BOP Organizational Chart

1.6.1 Hierarchical Flow

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1.6.2 Organizational Detail

BOARD OF DIRECTOR

Chairman

President

Board of Directors

Finance Division

Marketing Division

Special Asset Managment Division

Comm. Asset Division

Treasury and Intel Division

Operations Division

Information Technology Divisions

Product/SME Division

Liability Division

Human Resource Division

Audit & Inspection Division

Credit Risk Management Division

Establishment Division

Training, Research, Publication & communication Division

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01 MR. SAFDAR JAVAID SYED CHAIRMAN

02 MR. NAEEMUDDIN KHAN PRESIDENT

03 MR. TARIQ MAHMOOD PASHA DIRECTOR

04 MR. SHAFQAT ELLAHI DIRECTOR

05 MR. AZHAR HAMID DIRECTOR

06 MR. SHAFQAT MAHMOOD DIRECTOR

07 MR. MUHAMMAD NAVEED MASUD DIRECTOR

08 MR. VIQAR AHMED KHAN DIRECTOR

01 MR. RAZA SAEEDSECRETARY

TO THE BOARD

AUDIT COMMITTEE

01 MR. VIQAR AHMED KHAN DIRECTOR

02 MR. AZHAR HAMID DIRECTOR

BOP MANAGEMENT

Mr. Naveed Hafeez Shaikh Acting General Manager HR

Mr. Nadeem Amir General Manager Finance

Mr. Sharjeal Masud General Manager Operations

Mr. S. M. Atif Addl. General Manager

Mr. Muhammad Salim

MirzaGeneral Manager Treasury

Mr. Shaheen N. Qureshi General Manager Special Assets

Mr. Mahmood Sadiq General Manager I&PSL (LDD)

Mr. Zalmai Azam Durrani General Manager Broad Base Liability

Dr. Shahid A. Zia General Manager T.R.C. & P Division

Mr. Feisal Azmat Khan General Manager IT

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Mr. Mohammad Nauman Acting Country Risk Manager

Mr. Muhammad Hanif General Manager Audit & Inspection

Mr. Salman Saeed Head Credit Policy

Mr. Hafeez ud Din Acting Country Head C&IBG

Mr. Aseer Ahmad Khan Acting Country Commercial Head

Mr. Moazzam M Maneka Head Agriculture Credit Department

BOP DIVISION

Finance Division 042-5783700-10, 5783794

Comm Assets Division 042-9203705

Marketing Division 042-9203820

Special Assets Management

Division042-9200421-28

Treasury & Intl Division 021-2412114-6

Operations Division 042-5783700-10

Information Technology Division 042-6315362, 6310799

Liability Division 042-5783720, 5783700-10

Products/SME Division 042-9200421-28

HR Division 042-5783700-10, 5783792

A & I Division 042-5783700-10, 5783734

042-5783700-1012


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1.7 PRODUCTS OFFERED BY BOP

A. Vice President/Manager

(Mrs. Samina Khalid)

Operation Manager

(Mr. Nouman)

OG 2

(Mr. Naseem Ahmed)

OG 2

(Mr. Ashfaq)

OG 3

(Mr. Rashid)

Cashier

Messenger

Guards

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1.7.1 Types of Accounts

There are three types of accounts

SAVING ACCOUNT

CURRENT ACCOUNT

FIXED OR TERMS ACCOUNT

1. SAVING ACCOUNTS(PLS)

These types of accounts are designed to encourage the saving habit of the

customer and lead to long term or invest relationship. Bank saving account are in

the nature of deposit accounts and are not normally available for drawings. Ratesof interest are typically ahead, by a small margin. Savings accounts with the

banking sector represent a very small proportion of total deposits. Customer can

make withdrawals from this type of account. The cash reserve ratio is typically

low then the current account because the withdrawals against this account are

very low.

2. CURRENT OR DEMAND ACCOUNT

These are those deposits, which can be drawn by the depositor at any time

by representing a cheque to the bank. People deposits their money in this account

they gave a ready command on their account in developed countries of world, a

very significant part of money is kept under current or demand account. On this

type of account of interest transfer of cash or by at sight. The cash reserve ratio

for his account is very high. The operating cost for the handling of this type of

account is very regular.

3. FIXED OR TERMS ACCOUNT

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Fixed accounts are those which are deposited for a fixed period of time and

repayable after the expiry of stipulated time to the customer. Those people who

have surplus funds and want to have save investment deposit the amount in the

fixed account.

The rate of interest given to depositor varies with the length of deposit, i-e. It is

higher for longer period and lower for shorter period. The rate of this type of

deposits is higher the saving bank accounts. The cash reserve against this deposit

are very low because there no fear of with draw of a month before the stipulated

of time.

Procedure for Account Opening

1) Application Form

The customer would like to open his account is required to meet with the manager

or second officer, who will give him an APPLICATION FORM specifically

used for account opening. Separate color-coded Application Form is available for

each type of account. So that a particular colored form is given to the customer to

fill in for opening a related account.

2) Specimen Card

As I have already mentioned about SIGNATURE SPECIMEN CARD. This

card contains three signatures of an applicant, applicant A/c no, A/c type, branch

code, title of A/c, it will be attached with an application form. Banker uses this

card at the time when he receives the cheque; he compares customers signature

with the signature on the cheque for avoiding fraud.

Manager has every right not to accept this contract if he is not satisfied by thedetails provided by the customer.

3) Account Opening Register

The manager records the necessary details into this register and allots an a/c

number from this a/c opening register. This register is maintained for each type

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of account and the a/c numbers are allotted serially. After opening a saving and

current account every applicants data is entered into the computer to maintain a

safe record and application form is properly filled so that it can be available when

necessary. For fixed deposit only that application form is needed this is prepared

manually, because most of the procedure of fixed deposit is done manually.

4) Cheque Book

Cheque book is issued to the customer when the bank accepts the A/C opening

application form.

Types of Customers

1) Individual

Only one person can operate this a/c. We can call it a personnel or individual a/c.

2) Joint

In case of joint A/c, applicant mentions that how much person will operate the

A/c. Instruction are given for joint A/c such that the account shall be operated by

3) Partnership A/C

For partnership a/c, along with the application form signature card. Other

documents are also needed such as

Registration Certificate

Agreement among partners

Commencement of business

Note: In case of addition or withdrawal of any partner a new agreement will berequired.

4) Company Account

For company accounts following documents are required: -

Private registration

Resolution of board of directors

Commencement of business

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Memorandum and Articles of Association

Balance sheet

1.7.2 FINANCE PRODUCTS

1. Agriculture Schemes

2. Business Promotion Finance Schemes

1. Agriculture Schemes

There are many agriculture promotion schemes provided by BOP.

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 Development Scheme

Kissan Dost Live Stock Scheme

Such type of schemes provides farmers a real plate form to accelerate. Some

facilities given by Kissan Dost Agricultural finance scheme are:

- Purpose

Provision of financial facility to farmers for purchase of inputs (Seed, fertilizer,

pesticides, fungicides etc).

- Amount

Maximum of Rs.500000 according to per acre limit of the crop.

- Security

Charge on Agriculture Land through Agriculture Pass Book.

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- Insurance

The borrower will have to arrange life assurance under the Banks charge.

- Mark-up

9% mark-up per Annum.

2. Business Promotion Finance Schemes

BOP Quick Cash

BOP Car Loan

BOP House Loan

BOP SME Loan

BOP Assaish Loan

BOP House Loan For Federal Govt

BOP Quick Cash

MARK-UP RATESAnnualized Percentage

Rate

BOP QUICK CASH SCHEME

For Senior

Bureaucrats &

Executives of

Corporate Clients

Average Six Months KIBOR +

700 bps with Floor rate of 16%

p.aIts running finance facility

and Mark-up is calculated on

daily product basis.For all customers

including BOP

Employees


700 bps with Floor rate of18%

p.a

BOP Car Loan

BOP CAR LOAN SCHEME

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Average Six Months KIBOR + 375 bps with

Floor rate of 12% p.a*7.53%

BOP House Loan

BOP HOUSE LOAN SCHEME

Average Six Months KIBOR + 375 bps with

Floor rate of 10% p.a*

01 Year: 7.38%

02 Years: 7.25%

03 Years: 7.31%

04 Years: 7.41%

05 Years: 7.53%

BOP SME Loan

BOP DEMAND FINANCE (CLEAN) - ADVANCE SALARY LOAN

For all customers

including BOP

Employees


850 bps with Floor rate of 20%

p.a

01 Year: 11.16%

02 Years: 11.07%

03 Years: 11.26%

04 Years: 11.52%

05 Years: 11.79%

BOP Aasaish Loan

BOP AASAISH LOAN SCHEME

S

#Tenure

Mark-up

Rate

(FLAT)

Annualized

Percentage Rate

1. 12 Months 0% 0%

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2. 18 Months 12% 8%

3. 24 Months 16% 8%

4. 36 Months 24% 8%

BOP AASAISH LOAN SCHEME - PUNJAB PC PROGRAM (INTEL CORPORATION)

S

#Tenure

Mark-up

Rate

(Reducing

balance

method)

Annualized

Percentage Rate

1. 12 Months

20% p.a

11.16%

2. 18 Months 11.05%

3. 24 Months 11.07%

4. 36 Months 11.26%

BOP House Loan for Federal Govt.

Rate is based on the KIBOR of 3rd July 2006. The rate is applied by taking KIBOR of the

1st day of each quarter. The differential mark-up amount in lieu of increase in rate shall be

adjusted accordingly.

1.8 SERVICES OFFERED

These are the services provided by the BOP.

ATM Facility

Letter of Credit

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Pay Order

On-Line Banking

E-Banking

Debit Card

Consumer Financing

Agriculture Financing

Mail Transfer

Corporate Financing

Commission free Remittance

Demand Drafts

Collection of Utility

Lockers Facility

Automated Teller Machine (ATM)

Through the ATMs Customers have access to the various services such as withdrawal,balance enquiry and mini statement? Complete security is ensured because access to the

account is only possible by entering a four digit personal identification number (PIN)

known only to the account holder. Cash withdrawal limit is up to Rs.20, 000 per day.

Annual charges of ATM is Rs.250/- per card.

Letters of Credit

BOP is offering its business customers the widest range of option in the area of money

transfer. BOPs letter of credit service is with competitive rates, security, and ease of

transaction, BOP Letter of credit is the best way to do the business transactions.

Pay Order

BOP provides transfer of money using different facilities. Its pay orders are a secure and

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easy way to move the money from one place to another. The charges for this service are

extremely competitive.

Online Banking

BOP is currently offering window-based online banking to its customers, which gives

access to information on their accounts and the liability to act on the latest information

received over the net.

Agricultural Finance

It help farmers utilize funds efficiently to further develop and achieve better production.

Provides farmers an integrated package of credit with supplies of essential inputs,

technical knowledge, and supervision of farming.

Mail Transfer

Moves money safely and quickly from BOP Mail Transfer service. The rates for this

service is quiet impressive as compare to the market.

Demand Drafts

BOP provides safe, speedy and reliable way to transfer money at vary reasonable rates.

Any person whether an account holder of the bank or not, can purchase a Demand Draft

from a bank branch.

Lockers

It is one of the utility services that BOP provides to their customers for keeping jewellery,

important documents and other valuables.

E-Banking

The bank has a centralized database that is web-enabled. All the services that the bank

has permitted on the internet are displayed in menu. Any service can be selected and

further interaction is dictated by the nature of service.

2. LEARNING DURING MY INTERNSHIP

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I did my internship in The Bank of Punjab Sikandarabad Branch, Rawalpindi for 06

weeks from 14.07.2008 to 24.08.2008. It has been a great experience for me to learn a lot

about banking which will be helpful and beneficial for me in my career in future.

Task learned during internship

1. Cash management.

2. Deposit departments.

3. Maintenance of cheque records.

4. Maintenance of cheque book records.

5. Remittance/Bills department.

6. Advances department.

7. Lodgement of clearing/LBC/OBC.

8. Payment of pension of different departments.

9. Inward & Outward mail.

10. Information about ATM Card application form.

11. Online Banking.

2.1 1st

WEEK

OF

INTER

NSHIP

Major activities performed during my 1st week are as follows:

2.1.1 Cash management

1. Counting and sorting of cash as per SBP instructions.

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2. Receipts of utility bills.

3. Maintenance of cash books.

4. Dealing with fresh cash.

5. Dealing with prize bonds

2.1.2 Deposit department

1. Opening of new accounts of all types including CD, PLS, CPA, firm accounts,

Private Ltd accounts, Government Accounts & Security Accounts.

2. Issuance and payment of fixed deposit accounts (after maturity and before

maturity).

3. Issuance and payment of call deposits.

CASH DEPARTMENT

Cash department is the most important department of any bank. There are two

sections of cash department. One is payment side and other is receipt side.

1. PAYMENT SIDE

When the customer presents the cheque to the cashier, first of all the cashier

should verify the following points on the cheque.

Signature of the account holder.

Amount in words should be matched with the amount in figures.

Cheque must not be post dated.

After verification the cashier will enter this cheque in system and get the entry

number. If the balance is sufficient in the customers account then the cashier

(after supervision) will give the desired amount to the customer and put the

stamps of signature verified & paid cash on the front of the cheque and

enter this cheque in the payment book.

If the balance is insufficient in his account the cheque will be dishonoured and

must be entered in the cheque return register.

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RECEIPT SIDE

DEPOSIT

If the customer wants to deposit some amount in his account, first of all he

should fill the deposit slip and make the denomination of the cash he want to

deposit.

For example,

5,00*25

1000*40, etc.

Then he will give this slip with cash to the cashier.

Cashier should check the following points:

Date.

Signature of the depositor.

Denomination should be made in the mentioned section on the deposit

slip.

Amount in figure must be matched with the amount in words.

After verification the cashier will check the cash and sign the deposit slip andput the stamp of Cash Received on it and enter in Receipt Book. Afterwards he

will post it in the system and supervise it.

2.2 2nd WEEK OF INTERNSHIP

2.2.1 Maintenance of cheque records

1. Maintenance of token register.

2. Maintenance of Cheque returns register.

3. Cheques return memo.

2.2.2 Maintenance of cheque book records

1. Record of new cheques books.

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2. Issuance of cheque books.

3. Cheque book register.

4. Cheque book requisition.

2.2.3 Token System

The customer will present the cheque to the officer who has tokens for the

cheques. The officer will enter this in the token book and allot token to the

cheques according to the following rules.

If the amount of cheque is less than or equal to Rs.10,000 then we will allot

Silver Tokens.

If the amount of cheque isRs.10,000 to Rs.100,000, then we will allot Bronze

Tokens.

If the amount of cheque is above Rs.100,000 then we will allot Golden

Tokens.

After entering the cheque in the token book, the officer will stamp this allotted

token at the back of the cheque and give token to the customer & cheque to the

cashier.

Now the cashier will call such token number and customer will give this token to

the cashier. After verifying the token number the cashier will give the desired

amount to the customer.

Now through teller system token system is diminished. Because cashiers are

allowed to post and supervise the cheques amounting Rs.10,000 or less on their

own behalf.

2.3 3rd WEEK OF INTERNSHIP

2.3.1 Remittances/LBC/OBC/bills department

1. Issuance and payment of demand drafts, MTs, Payment Order etc.

2. Maintaining the proper record regarding remittance department.

3. Lodging & realization of collection bills (local & outstanding).

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LBC

Stands for Local Bills for Collection and it contains cheques of different banks

of the local areas.

OBC

Stands for Outwards Bills for Collection and in OBC we have to lodge cheques

of different banks lying outstation. Our customers submit their cheques of

different banks in their accounts for easy recovery of money and now it becomes

banks headache to recover the money from those banks.

So we lodge these cheques to our main branches in these cities and if we have no

branch in the required city then we lodge them on the relevant bank. And these

banks issue a DD in response and we lodge that DD on our main branches and

can get money by this mean and we deduct some amount as a service charges and

it become source of income for a bank.

After few days we get advices from those branches on which we have drawn our

cheques. And those branches transfer funds to us. Then we will debit our head

offices a/c and credit our customers a/c.

In case if any cheque is returned in case of insufficient balance in customers a/c

then we will deduct cheque return charges from the customers a/c and issue a

debit advice to customer. And if it is returned due to our mistake in lodging the

cheques then we cannot deduct money and we have to lodge it 2nd time by

making correction.

MT

Stands for Mail Transfer. And we also have an option of Fax Transfer with it.

So we can transfer money within the same date by faxing the advice to the

relevant branch. It has no physical instrument but only money is transfer through

advices.

DD

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Means Demand Draft. If a customer is willing to get a DD then he has to fill up

a form given by our bank to him and he has to note beneficiarys name and

applicants details on it. Then we issue him a DD and charge some commission,

postages and tax from our customers and it become our income.

PO

Means pay order. It is issued for the local city and same procedure is adopted as

for dd. But postages charges doesnt include in it.

2.3.2 BILLING

First of all cashier should check that either the bill is of due date or not. If the

bill is of due date then he will encircle and receive this amount and kept its bank

copy himself. After this he will enter all the bills in the system and transfer the

funds to their relevant accounts.

SNGPL

The bills (stubs) of SNGPL are dispatched with one copy of scroll and its original

advice at:

SNGPL

NIFT

LAHORE.

IESCO

The bills of IESCO are dispatched with one copy of scroll at:

C.S.O (P)

IESCO

SIKANDARABAD

RAWALPINDI.

The advice of electricitys bills is sent to:

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B.O.P

REHMAT

CENTER

Islamabad.

PTCL

The bills of PTCL are dispatch with one copy of scroll to:

CITI BANK

KARACHI.

The advice & one copy of scroll is sent to:

B.O.P

Main branch

Rawalpindi.

NOTE: One copy of scroll of each bill is kept by the bank itself for office record.

2.4 4TH WEEK OF INTERNSHIP

2.4.1 Advance department

1. Initiating a credit proposal and record keeping.

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2. Calculation of mark-ups on different types of finances.

3. Regular checking of finance accounts and record keeping.

4. Dispatching.

5. Account opening.

2.4.2 DISPATCH SECTION

Dispatch department plays the basic role in the bank applications. Most of the

transactions (including LBCs and OBCs, MT, DD, etc) are transferred from one

branch to another branch through mails. So dispatch is important part of our

banking system. Mostly our mails are based on advices which are of following

types.

Original copy.

Head office copy or extract copy.

Office copy.

Original copies are sent to their relevant addresses.

Head office or extract copies are sent to:

Bank of Punjab

Finance Division

Lahore.

Office copies are kept by the bank itself for office record.

ACCOUNT OPENING

(HOW TO OPEN AN ACCOUNT).

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There are many types of accounts. Which are as follows.

PLS saving account.

Current deposit account.

SSA.

BBA.

If a customer wants to open an account in any bank then first of all he should have

to fill account opening form. And he should have to provide all the necessary

information as required in the form. For example,

Copy of his CNIC.

His name and signature.

Introducers name and signature.

Introducers NIC number.

Next of Kin information.

His own contact number.

His mailing address.

Should mention account type he wants to open.

Initial deposit is according to circular and maximum deposit is according to his

desires. After this the form is checked and signed by the officer. Then officer will

post it in the system and allot account number to the customer.

After three days, we will issue him a cheque book after verification of his CNIC

from NADRA.

2.5 5th WEEK OF INTERNSHIP

2.5.1 Payment of pensions of different departments

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We have a list given by bank from state bank of Pakistan in which names and

amounts of pension holders is given. For the payment of pension to pension holders

some documents are required and following procedure is followed

1. Pension holder will give filled pension form with pension book.

2. Respective officer will checks the book number, amount and name in the given

list.

3. If all the information is correct then pension will be paid to pensioner by

cashier.

2.5.2 Writing Vouchers:

Two main types of vouchers are used i.e. Debit and Credit vouchers. Debit

vouchers are used for paying cash or transfer of amount from an A/C. Credit

vouchers are used for cash in flow or transfer of amount to an A/C. Petty cash

vouchers are used for billing purpose such as amount paid to taxi driver after

using taxi for bank official purpose.

2.5.3 Writing Daily Clearing Record Register:

This register holds the record of all inwards and outwards clearing.

2.5.4 Writing Daily Cash Book:

It holds the information regarding opening cash balance and ending cash balance

on daily bases.

2.5.5 Writing Daily Cash Paid and Received Register:

This register holds the information regarding the payments and receiving of cash.

This shows the amount of cash paid or received against cheques or vouchers.

2.6 6th WEEK OF INTERNSHIP

2.6.1 Information about ATM card application form

Automated Teller Machine (ATM card)

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Through the ATMs Customers have access to the various services such as

withdrawal, balance enquiry and mini statement? Complete security is ensured

because access to the account is only possible by entering a four digit personal

identification number (PIN) known only to the account holder. Cash withdrawal

limit is up to Rs.20, 000 per day. Annual charges of ATM is Rs.250/- per card.

If a customer wants to make his ATM card of the bank then first of all he should

have to fill ATM card form. And he should have to provide all the necessary

information as required in the form. For example,

Copy of his CNIC.

His name and signature.

Introducers name and signature.

Introducers NIC number.

Next of Kin information.

His own contact number.

His mailing address.

After this the form is checked and signed by the officer. Then officer will post it

in the system and form will sent to the main branch and customer will receives it

ATM card with in one month from the given date.

At that time, we will issue him a receipt after verification of his CNIC from

NADRA.

2.6.2 Online banking

1. Zarco.

2. Western union.

3. Xpress money.

2.7 Financial Analysis

To analyse the financial position of BOP, different tools are use, which includes

Ratio Analysis, Common size Analysis of the last five years.

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Introduction and Importance of Financial Analysis

Financial analysis involves the use of various financial statements. These

statements do several things. First the balance sheet and the second is income

statement.

The balance sheet summarizes the assets, liabilities, and owners equity of a

business at a point in time, while the income statement summarizes revenues and

expenses of a firm over a particular period of time. A conceptual framework for

financial analysis provides the analyst with an interlocking means for structuring

the analysis.

Financial Statements (2006-07)

Balance Sheet

Balance Sheet

As of DEC 31, 2007

2006 2007

Rupees in 000

Assets

Cash and balances with treasury banks 14,054,859 14210302

Balances with other banks 3,722,089 1927662

Lendings to financial institutions 11,846,823 2450000

Investments 28,233,211 73461695Advances 101,319,954 133893585

Operating fixed assets 2,068,744 3252759

Deferred tax assets - -

Other assets 3,609,457 5778192

164,855,137 234974195

Liabilities

Bills payable 856,448 937647

Borrowings 6,989,424 17842915

Deposits and other accounts 137,727,606 191968909

Sub-ordinated loans - -

Liabilities against assets subject to finance lease 40,988 40321Deferred tax liabilities 298,616 2205530

Other liabilities 2,816,341 2983079

148,729,423 215978401

Net Assets 16,125,714 18995794

Represented By

Share capital 2,902,490 4230379

Reserves 4,537,232 7427232

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Unappropriated profit 3,219,246 3452842

10,658,968 15110453

Surplus on revaluation of assets - net 5,466,746 3885341

16125714 18995794

Income Statement

Income Statement

As of the year ended Dec 31, 2007

2006 2007Rupees in 000

Mark-up/return/interest earned 11,579,036 17,539,094Mark-up/return/interest expensed 7,508,795 13,939,377

Net mark-up/ interest income 4,070,241 3,599,717

Provision against non-performing loans and

advances 340,626 1,616,421

Provision for diminution in the value of

investments 33,000 24,479Bad debts written off directly 100 246,869

373,726 1,887,769

Net mark-up/ interest income after provisions 3,696,515 1,711,948Non Mark-up/interest Income

Fee, commission and brokerage income 473,212 653,512Dividend income 1,385,875 1,804,878Income from dealing in foreign currencies 239,804 377,233

Gain on sale and redemption of securities 389,063 2,039,535

Unrealized gain / (Loss) on revaluation of

investmentsclassified as held for tradingOther income 466,435 547,635Total non-markup/interest income 2,954,389 5,422,793

6,650,904 7,134,741Non Mark-up/interest Expenses

Administrative expenses 1,751,970 2,250,777

Provision against lending to financial

institutions 130,000 -Provision against off balance sheet items 175 292Other charges 38 37,950Total non-markup/interest expenses 1,882,183 2,289,019

4,768,721 4,845,722Extra ordinary/unusual items - -

Profit Before Taxation 4,768,721 4,845,722Taxation - Current 880,997 169,252

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- Prior years (19,921) -- Deferred 83,469 250,772

964,466 400,103

Profit After Taxation 3,804,255 4,445,619Unappropriated profit brought forward 169,817 3,219,246

Transfer from surplus on revaluation of fixedassets - net of tax 6,174 5,866

175,991 3,225,112

Profit available for appropriation 3,980,246 7,670,731

Basic Earnings per share - Rupees 9.01 10.51

Diluted Earnings per share - Rupees 9.01 10.51

Financial Business Summary (5Yrs)

2003 2004 2005 2006 2007Operating Results Markup/ return/ interest

earned

Rs in

m 1,664 2,555 6,125 11,579 17,539

Markup/ return/ interest

expenses

Rs in

m 484 719 2,669 7,509 13,939

Net markup income

Rs in

m 1,180 1,836 3,456 4,070 3,600

Non-markup based IncomeRs inm 831 1,097 1,331 2,954 5,423

Non-markup based expenses

Rs in

m 1,002 1,150 1,291 1,882 2,289

Provision against NPLs

Rs in

m 8 47 331 374 1,888

Net profit before tax

Rs in

m 1,002 1,736 3,165 4,769 4,846

Net profit after tax

Rs in

m 689 1,368 2,353 3,804 4,446Balance Sheet

Total Assets

Rs in

m 43,621 66,320

111,15

4

164,85

5 234,974

Advances (net)

Rs in

m 18,344 39,439 63,624

101,32

0 133,894

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Staff Strength No. 3,019 3,144 3,430 3,681 3,859

Gross margins % 4.00% 3.51% 4.19% 3.10% 3.30%

Net margin % 3.30% 3.41% 3.99% 3.03% 3.16%

Net Interest Margin % 3.23% 3.34% 3.90% 2.95% 3.09%

Total revenue % 5.50% 5.34% 5.39% 4.81% 4.91%

Equity / Assets %

11.60

%

11.90

%

12.10

%

10.80

%

10.30

%

RoE %

16.20

%

21.00

%

21.90

%

25.50

%

25.40

%

Cost/Income %

49.80

%

38.10

%

26.90

%

26.40

%

24.70

%

2.9 INTRODUCTION (SWOT Analysis)

The SWOT analysis is an extremely useful tool for understanding and decision-

making for all sorts of situations in business and organizations.Here S stands for

strengths, W for weaknesses, O for opportunities and T for threats.

The Strengths and weaknesses are the internal factors of the company, while

Opportunities and Threats are the external factors ofthe company.

SWOT stands for strengths, weakness, opportunities, and threats SWOT analysis

is evaluation of an organizations internal strengths and weakness as well as its

environment opportunities and threats.

SWOT analysis is a situational which includes strengths, weaknesses,

opportunities and threats that affect organizational performance.

The overall evaluation of a company strengths, weaknesses, opportunities and

threats is called SWOT analysis.

In SWOT analysis the best strategies accomplish an organizations mission by:

1. Exploiting an organizations opportunities and strength.

2. Neutralizing it threats.

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3. Avoiding or correcting its weakness.

SWOT analysis is one of the most important steps in formulating strategy using

the organization mission as a context; managers assess internal strengths

distinctive competencies and weakness and external opportunities and threats. The

goal is to then develop good strategies and exploit opportunities and strengths

neutralize threats and avoid weaknesses.

STRENGTH

The Bank officers of BOP are considered as one of the most able

professionals in the banking world (some belong to BCCI). However, they

have added some local flavor in accordance with their targeted segmented.

In my observation that they interact with their clients as if they are their

personal friends and discuss about their problems as their own.

As a result of the compassionate and personalized services of the officers,

the clients perception for BOP is very high. They have trust and feel

themselves to be secure while dealing with BOP.

BOP has opened all its branches at commercial areas so that the customers

or clients face no problems in reaching to the bank. For example,

Khanewal Road Branch is being situated in business and commercial hub

of Multan as big volume in trade.

BOP has got a reliable and easy to use internal computer system. Every

information regarding the transactions in customers deposits has been

computerized. Data are properly maintained.

Good security system

Not excellent but good facilities are given to employees

WEAKNESSES

Weaknesses are the activities that the firm does not do well or the resources it

needs but does not possess. It also includes the factors that cause losses,

hardships, disputes and complaints for a business. Here is weakness of our

company.

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I observed during my internship that some of the employees were

burdened with over work. So I think that the work should be distributed

according to their post and capabilities.

Lack of proper internal controls is one of the major weaknesses of BOP. It

is also pointed by the auditor in his review.

BOP has formulized a lot of products and services for its customers, even

more than other commercial banks, but any advertisement on electronic

media has not been seen.

Biased selection of employees.

OPPORTUNITIES

Opportunities are the external factors of a company where a company could avail

chances of enhanced business. They are the directions that the business could

profitably take in future because of its strengths or because of the elimination of

its weaknesses. This involves a consideration of the business environment from

the widest and most creative possible standpoints. Our opportunities are:

Satisfy dynamic consumer needs, BOP has made significant in roads in its

entire service spectrum. A lot of products have been introduced especially

in Retail Banking (Agriculture side) and people are increasingly becoming

loyal to the bank and because of feasible transactions. Optimum pricing

and branding strategies of the bank are helping to make customer feel

secure and convenient.

All the opportunities of the 21st century are to be availed in the

information technology. Information technology is the future of this

dynamic world. Therefore BOP should emphasize much on IT, especially

on E-Banking. Bank can design a universal account like other foreign

banks, to enhance online facilities.

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BOP has introduced a number of financial schemes including special

Deposit Accounts. These accounts have their unique features. During the

last three years, BOP deposits have been increasing @ 40%, which is a

very healthy sign. Therefore, with the commencement of new schemes

there can even be a greater increase in its deposits

THREATS

A threat to a business arises from the activities of competitors and from failing to

take opportunities or to build on successes. Threats also come from complacency,

a lack of rigor, and from falling profits, perhaps due to rising costs. Changes in

the external environment also may be a threat to the firm.

Despite the difficult circumstances that confronted the banking sector in

particular and the country in general, BOP has been still highly profitable.

But, the facts cant be denied and there might be an adverse impact of

such situation.

BOP is facing a strong competition by its competitors, Business of all

these Banks are growing at very high pace.

2.10 Recommendations (Financial & Administrative Aspects)

Internal Controls

The most important weakness in the BOP is lack of internal controls and inter

communication between different branches of the bank. As far as financial aspect

is concerned there is no proper system is configured thats why there is always a

risk of big frauds with in the bank. I during my internship also pointed out that

point but no one bothered. To me the bank should install some proper resource

planning and controlling systems like other banks do i.e., oracle financials etc.

Staff Professional Training

Staffs lack professionalism. They need training to do the job efficiently and

properly. Although staff colleagues are in all major cities of the Punjab but they

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are not performing well. For this purpose these staff colleagues should be

reorganized and their syllabus should be made in such a way which can help the

employee understand the ever-changing global economic scenario.

Banking council of Pakistan should also initiate some programs to equip the staffwith much needed professional training.

Staff Authority

Employees of the bank should be given a task and authority and they should be

asked for their responsibility. The sense responsibility in employees mind is one

of the most important factors in the success of any organization.

Performance Appraisal

I observe during my internship that there is no or very less appraisal of any ones

cool performance. The manager should strictly monitor the performance of every

staff member. All of them should be awarded according to their performance and

result in the shape of bonuses to motivated and incite them to work more

efficiently.

Renovation required

In the critical analysis this, problem is discussed. To overcome this problem it is

suggested that a special section should be made inside the branch. Which should

only handle the treasury function, salaries and pensions of federal personnel or the

bank should do these functions in the evening time. Also management should

purchase more furniture and arrange them in such a way which provides

maximum space and convenient especially in deposit department and there should

also be convenient sitting place for customers.

Transfer

Transfer is not properly carried out. Some of the employees are continually

serving at the same post. They are simply rotated at the same branch. Therefore it

is recommended that evenly rotation of every employee should take place after

every three years in different braches of the bank.

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Need Changes in Policies

There should not be any abrupt policies change by the upper management, as this

practice hurts the customer confidences in the bank. Government should make

long-term policies

Need of Qualified Staff

Required, qualified staff should be provided to branch in order to improve the

functioning of the branch. Especially a telephone operator should be appointed.

Link with the Head Quarter

100 major branches of BOP should established a direct link with the, head quarter

in Lahore, through Internet or Intranet. This will make the functions and decision

making of the management easier and convenient. Though management has a

plan to connect all branches via WIMAX technology.

Credit Card

BOP should start its operation in credit card. These cards are very helpful for the

ordinary customer in general and the business people in particular. To make it

mores secure and to eliminate the misuse of it, the management is required to

keep proper security against the card.

Administrative Expenses must be Low

Bank should decrease their administrative expenses. This was Rs 2.25 billion in

the year 2007. That can be done by lying off the surplus pool of employee with

golden hand shakes scheme. The branches that are not much used could also be

closed. That will give positive results in the future.

Should be Aggressive in Credit Policy

As mentioned earlier, BOP is very conservative in advances and loans policy. It

reduces the investment opportunities. Also loans should be given to the small

businessmen and the other businesses on large scale like in agriculture sector at

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the low mark-up rate. It should adopt flexible credit policy while giving credit to

the agriculture sector.

Technology Up gradation & Advancement

All the main branches of BOP should be fully computerized in order to expedite

the dealing process among bankers and their customers. Every department should

be provided a computer with adequate training (especially Advances, Deposits

and Foreign Exchange departments). Daily records should be entered directly into

these computers, (instead entering the overall daily transactions after the banking

hours). It will not only reduce transaction time, will increase accuracy but will

also be efficient as well.

Not only it will be economical but will also reduce the extra burden of work of the

bank. It will also help in reducing the use of excessive paper work.

Relationship among Staff

Healthy relationship among staff member leads to the peak performances in any

organization. I observed that the staff relationship was normal otherwise but some

time I noticed that there exists little conformity among the staff members. Some

of the officers used to say that if I am absent for a day the bank would stop

working. So this sort of attitude is not good because it makes bank image and

juniors willingness learn and work hard and in the end will hurt the whole team.

Improper Distribution of Work

There is no proper distribution of work. Proper distribution of work leads to

success in every organization. Proper distribution of work prevents the employee

from over and under work situation. So for a smooth running of an organization

proper distribution of work is the hint to be followed.

During my internship I observed that there was no proper distribution of work in

the bank. I saw that some of the employee worked like ants other sat idle staring

here and there. So this created a lot of over work situation for while relaxation for

other.

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Favouritism

In the BOP branch during my internship I saw that when some of the employees

are transfer to other places, due to their relation with influential people and with

top management they can cancel their transfer in few weeks, when they are

unsatisfied at that place.

So I suggest that in the organization there should be no favouritism, nepotism and

politics and their transfer and promotion should be made on merit and according

to the rules and regulations of the bank and provided favourable environment to

the employee to show their performances.

Departmental Transfer

I watched during my internship that, there are many employees who have worked

on one seat for many a year. It can have negative effects motivation of employee

who is hard working and intelligent. Take the example of advances section. In

advance section if the employee is transfer after sixth month or seven month, how

can he be able to show his performances and how can he be able to know the bank

customer in a short period of time.

Marketing Policy

The branch should adopt various marketing strategy and promotion strategy to

promote the bank and its product.

The most important in my opinion is personal marketing; it is the most effective

of all when you think in term of branch level. But on the whole organization level,

they should arrange the seminar with in the bank and outside the bank. They

should do more advertising through newspaper and media and through channel of

personal contacts.

Desk for Complaints of Customer

There should be a desk to provide the information and to receive the complaints

of the customer in the bank.

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ACKNOWLEDGEMENT

Thanks to Almighty Allah for giving me knowledge, power and strength to accomplish

this task. I learned a lot while doing my Internship and preparation of my internship

report and this will certainly help me in my forth-coming life. Many friends helped me

during this project. In the end I would like to thank all of my friends, bank staff, teachers

for their support and encouragement.

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Documents

Usama Report