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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
Average Six Months KIBOR +
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
Average Six Months KIBOR +
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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