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1USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 1
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INTRODUCTION
OVERVIEW OF BANKING SYSTEM IN PAKISTAN
BANKS IN PAKISTAN
HISTORY OF THE BANK OF PUNJAB
CONSTITUTIONAL BASE
SCOPE OF THE BANK OF PUNJAB
MANAGEMENT OF THE BANK
CORPORATE INFORMATION (BANK OF PUNJAB)
2USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 2
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MISSION STATEMENT
YEAR 2011 & FUTURE OUTLOOK
REGIONAL NETWORK
REGIONAL OFFICES
WORLD WIDE WEB
ORGANIZATIONAL STRUCTURE
FUNCTIONS OF DIVISIONS
OVERVIEW OF BANKING SYSTEM IN PAKISTAN (SBP
Report)
The year under review added further strength to the soundness of the banking system.
This is in line with trends witnessed over the past couple of years. Indicators of financial
soundness have shown significant improvement and the industry structure presents a
robust picture. The major developments during the year are summarized as follows:
A few more banks with low capital base, which could have posed a
systemic risk to the sector, merged and became part of more resilient
and consolidated institutions, better placed to withstand any adverse shocks.
Profitability and earnings showed a remarkable improvement, thereby contributing
significantly towards strengthening the capital base and resilience of the banking
system.
Credit to the private sector picked up significantly, after showing years of
sluggishness.
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The flow of non-performing loans has been stemmed and their stock came down
substantially during the year, as did the NPL indicators. Along with the creation of
additional provisions, this led to a considerable reduction in the burden of the
infected portfolio on capital base.
The system continued to have abundant liquidity. The
recent upward movement in the interest rates, however,
has increased the market risk.
The average intermediation cost came down as a result of cost controls and
expanding business volumes. This reflected an increased efficiency in financial
intermediation.
The privatization of Habib Bank Limited, a post-review development, has increased
the share of private sector in the banking system to around 80 percent. This will
further promote competition and efficiency in the system.
While these improvements owe much to financial sector reforms and improved
corporate governance in banks, the regulatory and macro-economic environment
have also contributed towards this:
The economy preformed well and remained on the projected growth trajectory. The
demand for bank credit by the private sector picked up. The key indicators of the
corporate sector showed robust earnings and debt servicing capacity.
Workers’ remittances, though decelerated as compared to the last year, remained in
the projected growth brackets. Consequently, the flow of funds to the banking sector
remained intact and was sufficient to maintain a comfortable liquidity position in the
market.
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Fiscal position of the government as well as inflationary trends was in favorable
shape, thus enabling the easy monetary regime during the year.
To support a vibrant financial system, the State Bank took a number of policy
initiatives. This included issuing guidelines on corporate governance to strengthen
the culture of accountability and transparency, change of ownership and
consolidation of weak institutions, encouragement of consumer financing, and
cleaning up of balance sheets through incentive-based recovery drives. Guidelines
were also issued to banks on risk management to provide the banks a broader
framework to identify measure, monitor and control/mitigate various risks in their
business. The State Bank also took a major leap forward shifting from a “one-size-
fits-all” approach of regulation to more risk-focused supervision by categorizing and
instituting separate sets of prudential regulations for corporate/commercial banking,
SME financing and consumer financing. Realizing the importance of much needed
expansion in the scope of business and the due risk management thereof, the SBP
issued guidelines in various areas and liberalized its exchange policy in respect of
trade financing.
The banking sector is sensitive to developments in the economic and political
sphere. The country’s political scene saw the resolution of some key issues, which
had a salutary impact on its economic condition. Improvement in relations with India
also helped restore investor confidence and as the process continues, prospects of
boosting regional trade become bright. Despite these improvements, some irritants
continue to haunt the geo-political environment. The western border continues to
pose problems and, despite some progress, will remain in the limelight considering
its potential impact on the state of law and order in the country. However, the
government’s resolve to address the issue generates hope for better days ahead.
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The results for the first half of the fiscal year paint a positive economic outlook and
promise achievement of major growth targets. Strong and robust growth in the
manufacturing sector and consistent surge in credit demand further support this
belief.
There are, however, some subtle concerns that may increase stress both on the
economy as well as the banking system. Higher level of economic activity is placing
pressures on the external account, despite satisfactory export performance, in form
of higher increase in imports, while there is a slowdown in capital repatriation and
official inflows, prepayments are being made on external debt. Its intensity will
depend upon the future terms of trade – oil prices have witnessed a sharp increase
recently. The comfort of substantially large foreign exchange reserves and an under-
pressure US Dollar (barring sporadic moments of strength) presents the SBP with
some significant maneuvering space.
Creeping inflation, along with an anticipated global rate hike, is generating
sentiments for a similar response in the local market. The magnitude and impact of
such a rate hike (as and when it comes) is likely to remain modest as much of the
prevalent liquidity is likely to remain in the system. This contributes to the continued
strength of the corporate sector over banks, which have already built up significant
cushions on the back of robust performance over a couple of years. The debt and
liquidity related indicators for corporate have continued their upward trend, giving it
the essential robustness for sustaining an upward march even in a changed interest
rate environment. This said, the recent string of anti dumping measures taken
against Pakistani exports, formation of new trade alliances and a continued influx of
cheap foreign imports in the local market have the potential of stalling the recent
corporate performance. The household paying capacity could come under strain in
the changed rate scenario but given the present leverage margins, it is unlikely to
result in growing defaults in the short run.
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The banking sector’s persistent robust operating performance over the last couple of
years is a healthy sign. But, the overwhelming portion of trading gains presents a
caveat, and this may not be sustainable on long-run basis. The recent upturn in
credit demand, if it is to sustain, has the potential of making up much of the lost
gains. Another caveat is the continuous drain on depositors’ wealth; they are at
present in a disadvantageous position as they have to settle at a negative real rate of
return.
Other than the depressing yields, the specter of massive liquidity has not had any
adverse impact on the system. Banks’ adventures in the booming stock market has
been capped at twenty percent of their equity. Along with upcoming margin rules for
stock trading (as against a highly leveraged badla trade, in which the banking system
is an important player) is likely to further solidify the banking system’s inherent
strength.
Credit disbursement at an exponential rate has, at last, broken the protracted spell of
sluggishness. However, it has also at the same time, increased the level of credit risk
for the banking system. Crucially important is the substantial increase in loans to
SMEs, agriculture and consumer finance. This may have helped in diversification of
loan portfolios of the banking system but at the same time have enhanced the risk
profile, as banks are still going through an evolutionary phase in developing risk
appraisals and mitigating techniques in these areas. The future expansion of credit to
these new sectors will largely depend upon the extent to which the banks are able to
develop internal procedures and controls in risk appraisals and mitigation.
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BANKS IN PAKISTAN
There is the list of Banks and Financial Institutions, servicing in Pakistan
Sr# Name of Bank Web Site of Bank
NATIONALIZED COMMERCIAL BANKS
1 First Women Bank Ltd
http://www.fwbl.com.pk/
2 Habib Bank Limited
www.habibbankltd.com
3 National Bank of Pakistan
http://www.nbp.com.pk
4 United Bank Limited
www.ubl.com.pk
DE-NATIONALIZED BANKS
5 Allied Bank of Pakistan Ltd
www.abl.com.pk
6 Muslim Commercial Bank Ltd
www.mcb.com.pk
SPECIALIZED SCHEDULED BANKS
7 Agricultural Development Bank of Pakistan
www.adbp.org.pk/adbp
8 Federal Bank for Co-operatives Nil
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9 Industrial Development Bank of Pakistan
www.idbp.com.pk
10 Punjab Provincial Co-operative Bank Ltd
PRIVATE SCHEDULED BANKS
11 Askari Commercial Bank Ltd
http://www.askaribank.com.pk/
12 Bank Alfalah Limited
http://www.bankalfalah.com/
13 Bank Al-Habib Limited
http://www.bankalhabib.com/
14 Bolan Bank Li
http://www.bolanbank.com.pk/
15 Faysal Bank Limit
http://www.faysalbank.com.pk/
16 Meezan Bank Limited
http://www.meezanbank.com/
17 Metropolitan Bank Limited
www.metrobank.com.pk
18 PICIC Commercial Bank Ltd
http;//www.picicbank.com.pk
19 Platinum Commercial Bank Ltd
http://www.platinumcommercialbank.com/
20 Prime Commercial Bank Ltd
www.primebank.com.pk
21 Soneri Bank Limited
http://www.soneri.com/
22 Union Bank Limited Nil
PROVINCIAL BANKS
23 The Bank of Khyber
www.bankofkhyber.com.pk
24 The Bank of Punjab http://www.punjabbank.com/
MICRO FINANCE BANKS
25 The First Micro Finance Bank Limited
www.khushhalibank.com.pk
FOREIGN BANKS
26 ABN Amro Bank N.V. http://www.abnamro.com/
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27 Al-Baraka Islamic Bank B.S.C.(E.C.)
www.albaraka.com.pk
28 American Express Bank Limited
http://www.aexp.com/
29 Bank of Cylon
Nil
30 Credit Agricole Indosuez
www.ca.indosuez.com
31 Citibank N.A.
www.citigroup.net
32 Deutsche Bank AG
www.db.com
33 Doha Bank
Nil
34 Habib Bank A.G. Zurich
www.habibbank.com
35
International Finance Investment & Commerce
Bank Limited (IFIC) Nil
36 Mashraq Bank psc
www.mashreqbank.com
37 Oman International Bank S.O.A.G.
www.obioman.com
38 Rupali Bank Limited
Nil
39 Standard Chartered Bank
http://www.scb.com/
40
Standard Chartered Grindlays Bank Limited www.scb.com
41 The Bank of Tokyo-Mitsubishi Limited http://www.btm.co.jp/
(this web site is maintained by their HO, Tokyo Japan)
42 The Hongkong and Shanghai Banking Corporation Limited
www.hsbc.com.pk
DEVELOPMENT FINANCIAL INSTITUTIONS
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43 Investment Corporation of Pakistan Nil
44 National Investment Trust Limited
In development phase
45
Pak Kuwait Investment Company(Pvt) Limited www.pkic.com
46
Pak Libya Holding Company (Pvt) Limited http://www.paklibya.com.pk/
47 Pak Oman Investment Company (Pvt) Limited
www.pakoman.com
48 Pakistan Industrial Credit & Investment Corp. Ltd.
http://www.picic.com/
49 Saudi Pak Industrial & Agricultural Investment Company (Pvt) Limited
www.saudipak.com
50 SME Bank Limited http://www.smebank.org/
INVESTMENT BANKS
51 First Standard Investment Bank Limited
Nil
52 Asset Investment Bank Limited Nil
53 Atlas Investment Bank Limited In development process
54 Crescent Investment Bank Limited www.cresbank.com
55 Escorts Investment Bank Limited Nil
56 Fidelity Investment Bank Limited www.fidelity.com.pk
57 First International Investment Bank Limited
www.interbank.com.p-k
58 Islamic Investment Bank Limited www.iibl.com
59 Jehangir Siddiqui Investment Bank Limited www.jahangirsidiqui.com
60 Orix Investment Bank (Pak) Limited
www.orixbank.com
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61 Prudential Investment Bank Limited
Nil
62 Security Investment Bank Limited
Nil
63 Trust Investment Bank Limited
www.trustbank.com.pk
VENTURE CAPITAL
64 Pakistan Venture Capital Limited
Nil
65 Pak Emerging Venture Limited
Nil
DISCOUNT HOUSES
66 First Credit & Discount Corporation (Pvt) Limited Nil
67 National Discounting Services Limited
http://www.ndsl.com.pk/
68 Prudential Discount & Guarantee House Limited
69 Speedway Fondmetal (Pak) Limited
Nil
HOUSING FINANCE COMPANIES
70 Asian Housing Finance Limited
Nil
71 Citibank Housing Finance Co. Limited*
Nil
72 House Building Finance Corporation
www.hbfc.com.pk
73 International Housing Finance Limited www.ihfl.com.pk
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HISTORY OF THE BANK OF PUNJAB
The Bank of Punjab started functioning with the inauguration of its first branch of 7-
egerton road, Lahore on November 15, 1989. The architect of the bank was Mr. Nawaz
Sharif Chief Minister of Punjab at that time performed the inauguration.
The emergence of new bank on the national scene in the early
1990s has done two important services to the nation.
The savings base of the economy has effectively enlarged and
hence the investment opportunities have increased.
The services of the banks in the fact of severe competition have improved
considerably so that now consumer are left with extensive choice to do or undo their
business relations with these banks keepings in view of the services.
The Bank of Punjab is working as a scheduled commercial bank with its network of 260
branches at all major business centers in the country. The bank
provides all types of banking services such as deposits in local
currency, client deposits in foreign currency, remittances, and
advances to business, trade, industry and agriculture. The Bank of
Punjab has indeed entered a new era of science to the nation under
experience and professional hands of its management. The Bank of Punjab plays a vital
role in the national economy through mobilization of hitherto untapped local resources,
promoting savings and providing funds for investments. Attractive rates of profit on all
types of deposits, opening of foreign currency accounts and handling of foreign
exchange business such as imports, exports and remittance, financing, trade and
industry for working capital requirements and money market operations are some
facilities being provided by the bank. The lending policy of bank is not only cautious and
constructive but also based on principles of prudent lending with maximum emphasis on
security. As agriculture in considered as backbone of our economy the Bank of Punjab
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has introduced “Kissan Dost Agriculture Finance Scheme” to small farmer and
cultivators.
The Bank of Punjab has the privilege to discharge its responsibilities toward national
progress and prosperity. Within the couple of years of its scheduling, the bank has not
only carved out for it self prominent niche in the mainstream banking of the country but
in certain areas it has the distinction of taking the lead. In the short span of time the
bank has been able to evolve a distinct corporate culture of its owned-based policies,
which are realistic and are on highly professional footings.
14USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 14
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CONSTITUTIONAL BASE
The Bank of Punjab was established under the provisions of section 28 of Federal list
included in the 4the schedule of the constitution of the Islamic Republic of Pakistan
1973.
The bank was established under the Act of Punjab Assembly viz. the Bank of Punjab Act
1989. The bill to this effect was passed by the provincial assembly on July 3, 1989 and
was passed to, by Governor Punjab in accordance with the provisions of the constitution
on July 26 1989.
The act provided for the foundation on which the edifice of the bank was erected. It also
included and provided for various modalities concerning the structure, the organization
and scope of the bank laying down its objective share capital and principle of lending.
The act defines rules for the following:
Short title, extent, and commencement
Establishment and incorporation of the Bank
Share capital
Register of shareholders
Qualification of shareholders
Government to be shareholders
Head Office of the Bank
Board of director
Managing director
Qualification and disqualification of the directors
Removal of directors
Terms of office of directors
Vacancies
General and special meetings
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Votes of the shareholders
Business, which the bank is authorized to transact
Business, which the bank is not authorized to transact
Auditors / Governments auditors
Right and duties of the auditors
Liquidations of the bank
Powers of the board to make bye law
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SCOPE OF THE BANK OF PUNJAB
eing a commercial bank, the Bank of Punjab performs all such functions as are
attributed to commercial banking institution both in the area of resources
mobilization, loans, and investment. The bank is thus providing all type of
advances to business, trade and commerce on seasonal and annual basis, and is
ensuring, through the prudent policy, the safety and protection of its loan portfolios, as
the resources base of the bank expands, projects financing will also be brought into its
fold.
B
17USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 17
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MANAGEMENT OF THE BANK
At the level of decision-making and implementation, senior management of the bank is
drawn from highly accomplished bankers with rich experience in the banking profession
both domestic and international.
The entire responsibilities of policy formulation and management have been placed,
under the law, the board of director. Furthermore it will be heartening to know that Mr.
Nawaz Sharif, during his CM-ship of the province of Punjab issued special instructions to
the political and executive echelons not to interfere in The Bank of Punjab, thereby
ousting the possibility any pressure which may be put on the management of the bank in
respect of recruitment of staff or provision of credit. These instructions have become an
essential part of the culture of the bank.
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CORPORATE INFORMATION ( BANK OF PUNJAB)
Name BANK OF PUNJAB
Registration # 00000013054/19891102
Registration Date 15-11-1989
CRO Lahore
AUDITORS
A. F. Ferguson $ Co. Chartered Accountants
REGISTERED OFFICE
7-Egerton Road, LahorePakistan
MOVEDHERE
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Pattern of other share holders
Shareholder Category Total No. of Shares Held %
PHYSICAL CDC TOTAL
Directors/CEO/Spouse 3611 10893 14504 0.01
Provincial Government 51781427 -------- 51781427 51.57
Foreign Funds 274063 169908 443971 0.44
Individuals 3422622 16721839 20144461 20.06
NBFI/FIN.INST/Insurance Co./Mudaraba 22935 17860878 17883813 17.81
NIT -------- 147500 147500 0.15
ICP 4075 3606042 3610117 3.60
Others 5224351 1165182 6389533 6.36
Total 60733084 39682242 100415326 100.00
Catagories of Shareholders
0.01
51.57
0.44
20.06
17.81
0.15 3.66.36
Director/CEO/Spouse Provincial Government
Foreign Funds Individuals
NBFI/FIN. INST./Insurance Co. /Modaraba's NIT
ICP Others
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Integrity
Integrity
DedicationDedication
TransparencyTransparency
Team workTeam work
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 programme driven products & services in the Agriculture and Middle Tier
Markets through a motivated team.”
Vision statement
"To be a customer focused bank with service excellence"
CORE VALUES
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YEAR 2011 & FUTURE OUTLOOK
Year 2011 raises expectation of growth in the major sectors of economy with large-scale
manufacturing, agricultural and services sector leading from the front.
Continuity of the focused economic reforms and policies of the Government together
with positive developments on the geo-political front has really placed the Country in a
position where the investors and the business community should start gaining comfort to
embark upon the much needed investment activity.
The prevailing economic scenario indicates that the GDP growth target of 7% plus is
very much achievable. Although, the prevailing money market scenario with low
spreads and almost stable interest rates suggest that the Banking sector will be facing
tough time ahead yet they believe that effective mobilization of resources and efficiently
utilizing them shall help the Banks to maintain their performance levels already achieved
while focused efforts to increase volumes in retail based consumer finance products and
services shall ensure growth and strengthening of the Bank’s earnings. Keeping the in
view the management of the BOP, during the year under review, Development and
growth of agricultural sector has always been given priority by the bank owing to its
importance and contribution to our economy. In this respect a large number of schemes
have been introduced by the bank to provide financial support and assistance to the
farmers in all sub sectors of agriculture.
Realizing the growth potential and huge exploration opportunity in SME and consumer
financing the bank has introduced variety of products and has enhanced its exposure in
These modes of financing to ensure market penetration and build market share.
Undoubtly, concentration on agricultural, SME and Consumer financing will strengthen
the backbone of the economy and maximize bank’s profits.
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Year 2012 will prove to be another challenging year for the bank with scattered
opportunities and tough competition in the offing. Diversification, innovation and mission
driven approach are the key to success.
The Bank of Punjab has launched electronic banking services like ATMs and online
banking for clients. The Bank of Punjab is now equipped with ‘e-banking technology’
and launched market products like house loan, car loan, small medium enterprise loan
and Bank of Punjab ready cash.
The Bank of Punjab Managing Director said that as a step forward towards our
mission to become an I.T. oriented Bank we have successfully installed 6
ATMs while we plan to add 25 more ATMs at our various branches. This year
our focus will be on connectivity to provide real-time online banking services
to our customers at all more than 260 branches of our Bank.
REGIONAL NETWORK
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There are 273branches of the BOP in all over Pakistan; the detail of the network is described
Below.
24USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 24
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Bahawalpur15
Bahawalpur15
Multan16
Multan16
Rawalpindi12
Rawalpindi12
Karachi12
Karachi12
Gujranwala10
Gujranwala10
Faisalabad20
Faisalabad20
H. O.The Bank of
PunjabLahore
H. O.The Bank of
PunjabLahore
These are some regions along numbers of branches contains
25USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 25
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WORLD WIDE WEB
http://www.bop.com.pk
This is the official website of The Bank of Punjab-established in 1989, in pursuance of
The Bank of Punjab Act 1989 and was given the status of scheduled bank in 1994. The
Bank of Punjab is working as a scheduled commercial bank with its network of 273
branches at all major business canters in the country. The Bank provides all types of
banking services such as deposit in local currency, client deposit in foreign currency,
remittances, and advances to business, trade, industry and agriculture. Information
regarding the share holder, foreign currency rates, branch networks, balance sheet etc
can be accessed through links on this website.
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ORGANIZATIONAL STRUCTURE
MANAGEMENT HIERARCHY
BOARD OF DIRECTORSBOARD OF DIRECTORS
CHAIRMANCHAIRMAN
SENIOR EXECUTIVE VICE PRESIDENTSENIOR EXECUTIVE VICE PRESIDENT
EXECUTIVE VICE PRESIDENTEXECUTIVE VICE PRESIDENT
VICE PRESIDENTVICE PRESIDENT
ASSISTANT VICE PRESIDENTASSISTANT VICE PRESIDENT
CASH OFFICERCASH OFFICER
OFFICER GRADE-IIIOFFICER GRADE-III
OFFICER GRADE-IIOFFICER GRADE-II
OFFICER GRADE-IOFFICER GRADE-I
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CATEGORIES OF SERVICES
BB CC DDAA
PresidentExecutive Vice PresidentSenior Vice PresidentVice PresidentAssistant
officer Grade Officer-IOfficer Grade-IIOfficer Grade-IIICash Officer
Clerical Staff DriverGuard/GunmanGate KeepersTea Boys
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CHAIRMANCHAIRMAN
GENERAL MANAGERGENERAL MANAGER CHIEF MANAGERCHIEF MANAGER
ADMINISTRATIONADMINISTRATION ORGANIZATION & METHODSORGANIZATION & METHODS
OPERATIONSOPERATIONS
BUSINESS DEVELOPMENTBUSINESS DEVELOPMENT
CREDITCREDIT
INTERNATIONALINTERNATIONAL
FINANCEFINANCE
RECOVERYRECOVERY
AUDIT & INSPECTIONAUDIT & INSPECTION
TREASURYTREASURY
INFORMATIONAL & TECHNOLOGY
INFORMATIONAL & TECHNOLOGY
OFFICERS TRAINING INSTITUTE
OFFICERS TRAINING INSTITUTE
SHARESSHARES
LAWLAW
STATIONERYSTATIONERY
PLANNING RESEARCH & PUBLICATION
PLANNING RESEARCH & PUBLICATION
* DIVISIONS AND DEPARTMENT
* Division Headed by General Manager, Departments Headed by Chief Manager
29USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 29
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FUNCTIONS OF DIVISIONS
ADMINISTRATION/HUMAN RESOURCE DIVISION
This division deals with the problems
related to the staff administration. The
main function of this department is to
arrange a comprehensive training program
for recruited staff. Others function
includes:
Recruitment
Staff remuneration
Placing the staff
Providing and defining the
opportunities for career development
and growth
Devising and implementing services
rules.
Promotion and demotion
Suspension and termination
Transportation
Security, health and benefits
GENERAL MANAGERGENERAL MANAGER
ADMINISTRATION & ESTABLISHMENT
ADMINISTRATION & ESTABLISHMENT
OFFICER’S TRAINING INSTITUTEOFFICER’S TRAINING INSTITUTE
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OPERATIONS DIVISIONS
This division is concerned with the
operational working in general banking,
which is concerned with the routing
working of the bank. Any problem or
ambiguity arise in any branch working are
rectified and suggested for correction by
this division. This Division usually takes
technical procedures involved the
decisions like commissions and
Maintenance of the existing building
owned by the bank
Opening new branches and their
maintenance
Stationery of the bank
GENERAL MANAGERGENERAL MANAGER
COMPUTER DEPARTMENTCOMPUTER DEPARTMENT
ENGINEERING & MAINTENANCEENGINEERING & MAINTENANCE
O & M DEPARTMENTO & M DEPARTMENT
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BUSINESS DEVELOPMENT DIVISION
It is the other name of marketing division.
It promotes the bank cause i.e. deposits
and work for the over all development of
the bank. Deposits are the lifeblood of
any. Without deposits bank cannot
perform any function of banking. This
division fixes the deposits target of every
branch by keeping and eye over the
potential customers in the area. It gives
motivation to branches to achieve their
targets through different campaign and
schemes like cash prizes and special
increments. It publishes an bulletin in
which those branches are encouraged
who achieves their monthly targets. The
main function is to develop and attract the
customers and depositors. It also manage
Advertising policy
Sales promotion
Schemes offered by the ban
GENERAL MANAGERGENERAL MANAGER
MARKETING CELLMARKETING CELL PRP DEPARTMENTPRP DEPARTMENT
32USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 32
REPORTINTERNSHIP
CREDIT DIVISION
This division control over all credit
operations like sanction of loans, inland bill
purchased (IBP) and also keeps check
over securities mortgage, hypothecating or
pledge. It also fix the rate of mark-up and
other decisions concerning with the credit.
There is a credit committee,
which consists of senior
officers; branches send the
credit proposal to head office
credit division. Credit committee
approves it after making a
through analysis. It also perform
Prepare the policies regarding the
sanctioning loan
Monitor loans and credit
Look after the portfolio of the bank
Define credit limits against specified
securities
GENERAL MANAGERGENERAL MANAGER
AGRICULTURE CREDIT WINGAGRICULTURE CREDIT WING
33USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 33
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INTERNATIONAL DIVISION
This division is providing important
services tot the bank regarding the
matters of international trade, import
export, letter of credit etc., it
develops correspondent relationship
with other commission basis and this
helps to deal with the clients having
import export business. It handles
treasury operations.
The marketing and spot inspection
cell, which were introduced by the
bank, are showing positive results in
terms of achieving foreign currency
deposit targets and other foreign
related businesses.
GENERAL MANAGERGENERAL MANAGER
INTERNATIONAL WINGINTERNATIONAL WING
FOREX MONEY MARKET INVESTMENT
FOREX MONEY MARKET INVESTMENT
ENGINEERING & MAINTENANCE
ENGINEERING & MAINTENANCE
34USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 34
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FINANCE DIVISION
It controls the routing financial matters.
The permission of special expenditure
Incurred in the branches, and other
such cases. The daily position and HO
extracts are daily sent to this division
by all the branches.
This division not only estimates the
profit and loss of every branch but
also prepare over all income
statement and balance of the
complete bank. It also keeps record of
total deposits of the bank and then
their classification in the form of loans
into different sectors of economy.
The basic functions are
Monitoring the fiscal and financial
policies of the bank
Deals in exploring means for investing
bank’s surplus funds
Maintenance and investment of
gratuity and pension funds of the
employees.
GENERAL MANAGERGENERAL MANAGER
BALANCE SHEET RESULTSMONITORING SBP AFFAIRS, AND
COMPLIANCE
BALANCE SHEET RESULTSMONITORING SBP AFFAIRS, AND
COMPLIANCE
SHARES DEPARTMENTSHARES DEPARTMENT
COMPANY AFFAIRSCOMPANY AFFAIRS
35USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 35
REPORTINTERNSHIP
RECOVERY DIVISION
The recovery division, which was
established in 1994 to assist in
regularizing the difficult loan accounts, has
rendered valuable services in this respect.
To affect recoveries in an efficient manner,
a policy has been framed in accordance
with the guidelines issue by the SBP;
moreover recovery cells at regional levels
have been setup to assist
the head office. This division looks after
the matters of recovery of loans with the
assistance of legal advisors.
GENERAL MANAGERGENERAL MANAGER
LAW DEPARTMENTLAW DEPARTMENT
36USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 36
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AUDIT AND INSPECTION
This department ensures appropriate
system of check and balance. It
checks all the irregularities, errors,
and forgeries if any, under the rules
and regulations formed by the
Government of Punjab. For this
purpose it doesn’t only keep and eye
on the branches in their vicinity but
also conduct surprise and
comprehensive audits of the
branches.
This strategy has improves working
at the branch level. It not only points
out the discrepancies but also tries to
solve it. Surprise audit maintain a
good check on the over all working of
the branch especially of the side of
finance.
GENERAL MANAGERGENERAL MANAGER
AUDIT OFBRANCHESAUDIT OF
BRANCHES
RECTIFICATION ANDPERSUASION
RECTIFICATION ANDPERSUASION
37USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 37
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Chapter 2
AREA OFFICE
INTRODUCTION
TEAM
BRANCHES UNDER AREA
FUNCTIONS OF AREA OFFICE
INTRODUCTION
38USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 38
REPORTINTERNSHIP
There is regional office in MULTAN. There is 11 branch in Multan. To cover all these
problems the area office/the regional chief of Multan covers all the threats faced by the
branches
TEAM
The team of regional office in the supervision of an experienced and highly qualified
person
Mr. RANA ZUBAIR is an excellent and very nice combination of young, intelligent and
energetic and TUHEED AHMED serving as a R.O.H, are hardworking, motivated, and
professional and committed with their duties. They are working strictly with the core
values of the Bank of Punjab
Mr. RANA ZUBAIR REGIONAL Chief
Mr.TUHEED AHMED R.O.H
FUNCTIONS OF REGIONAL OFFICE
Monitoring of branches business and helped them to expand the same.
Collection of daily, weekly and monthly reports from branches.
Coach and trained the staff.
Sanction salary loan,
Meet with present and prospective clients.
Transfer and posting of staff in the area.
39USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 39
REPORTINTERNSHIP
Chapter 3
BRANCH INTRODUCTION
BRANCH TEAM
BRANCH HIERARCHY
40USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 40
REPORTINTERNSHIP
INTRODUCTION Ahmed Pur East(APE) is historical city of south Punjab/NAWAB Sir Sadiq Muhammd
Khan, and branch of BOP is situated at the Kathery road APE.The team of branch in the
supervision of an energetic, highly qualified person Mr. Muhammad ARSHAD BHATTI is
an excellent and very nice combination of an
experienced persons (Muhammad Arshad Bhatti(BR MGR), Muhammad
Imran(Operational Manager) and young and energetic, all are hardworking, motivated,
professional and committed with their duties. They are working strictly with the core
values of the Bank of Punjab and have been appreciated by the Head Office and
Regional Office.
APE is famous about its cotton growing sunflower and the back bone of the south
Punjab and having the largest grain market. There is lots of factories in the surrounding
areas of APE city.
BOP branch is dealing in cash financing, demand financing, running financing and also
newly introduced consumer financing schemes for salaried and non salaried persons;
that are BOP Car Loan, BOP SME Loan, BOP Aasaish Loan, BOP House Loan and
Quick Cash.
41USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 41
REPORTINTERNSHIP
Punjab Development Fund (PDF tickets) collecting funds for the development of Punjab
through various banks including Bank of Punjab and BOP main branch at Bahawalpur
has best selling record for the sale of those tickets in Bahawalpur.
42USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 42
REPORTINTERNSHIP
BRANCH TEAM OF SHAH RUKN-E-ALAM
The branch manager of APE having a dayinamic personialty and he gave he is devoting
his experience to the branch whole heartedly truly a proud banker for the bop.and the
operational manager Muhammad Imran is young energetic and create magic in working.
he is leading his team from the front and he is the truly a motivating factor for his team
mates it is not wrong to say that he is deserving what he got
And the officer grade-i Malik Shoaib is a man of principal and working hard for the bank
and for the team always backing up his juniors he is a true example for the new comer
banker and the cash officer Mr. Irfan doing a great work with cash he is young and
energetic and know his work quite exceptionally well and the last but not the least Mr.
Arshad Bhatti is the most experienced person of the branch giving a rich experience to
Bop
Mr. Muhammad Arshad Bhatti Officer grade-i Manager
Mr. Imran Manager(op)
Mr. Ahmed Manager Agri
Mr. Shahid Raza Manager Advances
Mr.Shoaib Officer grade-ii
Mr. Tahir Ali Officer grade-i
Mr. Irfan Cash officer
Mr. Muhammad Asif Messenger
43USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 43
REPORTINTERNSHIP
BRANCH HIERARCHY
BRANCHMANAGERBRANCH
MANAGER
OfficerGrade IIOfficerGrade II
OfficerGrade IIIOfficer
Grade III
CashOfficerCash
Officer
Manager OperationsManager
Operations
CashOfficerCash
Officer
CashOfficerCash
OfficerMessengerMessenger MessengerMessenger
ManagerAdvancesManager
Advances
ManagerAgri-loansManager
Agri-loans
44USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 44
REPORTINTERNSHIP
Chapter 4
BANKING SERVICES
BOP CONSUMER FINANCING
AGRICULTURE AND ECONOMY
AGRICULTURE FINANCE SCHEME
BANKING SERVICES
ACCOUNTS OF SPECIAL CUSTOMERS
45USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 45
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BOP CONSUMER FINANCING
Aasaish Loan
For specified consumer goods of LG, PEL, Haier, Philips,
Samsung, Super Asia, Daikin and Daikool, Raffles.
19% mark-up for 12 months
Free Home Delivery
Tenure 6, 9, 12, 18 and 24 Months
Minimum PRs 20,000 Max PRs.500,000
House Loan
Salaried person of 5 years experience and min Rs. 20,000/- per month salary
Age limit 25-60 year at the end of loan term
For purchase of house / flat or construct house or renovate existing house.
Limit for purchase / construction Rs. 0.3M to Rs. 25M, for renovation Rs. 0.2M
to Rs. 10M
Banking financing for purchase / construction – up to 70% of
assessed value for renovation – up to 20% of assessed value
Markup- 1/2/3 Years ask side KIBOR+ 375 bps with floor of
17%p.a. (KIBOR of respective tenure of 1,2 &3 years shall be
used)
Non-refundable fee Rs. 450
Processing Fee Rs. 2,950
Tenure for purchase / construction 3 to 25 years, for renovation 3 to 25 years
Valuation charges / stamp duties and legal charges as per actual
Car Lease Salaried person of 3 years experience and min Rs. 20,000/- per month salary
Age limit 25-59 years at the end of loan term
For purchase of Suzuki and other motor cars
Limit of Rs. 0.2M to Rs. 50M
Down payment 10% to 20%
Markup- 1/2/3 Years ask side KIBOR+ 400 bps with floor of 17%p.a. (KIBOR of
46USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 46
REPORTINTERNSHIP
respective tenure of 1,2 &3 years shall be used)
Tenure of 1 to 5 years
Non-refundable fee Rs. 450/-
Processing fee Rs. 3,750/-
Registration charges – actual, payable directly to the dealer by customer
SME Loan
For small and medium enterprise
3 years of self business experience
Age between 25-55 years
Monthly income of min Rs. 36,000/-
Member of trade body, chamber of commerce or
anjuman-e-trajiran for at least 3 years
Taxpayer
Limit Rs. 1.0 m to Rs. 7.5 m
Non-refundable fee Rs. 450
Processing fee for loans up to Rs. 3.0 m is Rs. 4,950/- for loans over Rs. 3.0 m
Rs. 8,950/-
Valuation charges, all stamp duties, legal and documentation charges will be
charged at actual and will be borne by the applicant
Quick Cash
All kind of personal needs
Salaried person of 3 years experience and min Rs.
15,000/- per month salary
Age between 25 and 55
Limit Rs. 50 thousand to Rs. 0.2 m
Min repayment per month 5% of utilized amount
47USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 47
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AGRICULTURE FINANCE SCHEMES
Kissan dost Agricultural finance
scheme
Purpose:
Eligibil ity :1. Resident Self Cultivator having
Agriculture maximum 50 acres 2. Owner-cum tenant having
minimum land 5 acres under cultivation
3. Tenant having valid lease agreement for reasonable tenure (minimum area of subsistence land holding)
Amount:Maximum Rs.500, 000/- according to per acre limit of the crop.
Security:Charge on Agriculture Land through Agri. Pass Book.
ORRegistered / Equitable mortgage of Urban property assessed by PBA’s approved surveyor and cleared by Bank’s legal counsel.
ORLiquid security in the shape Bank’s Fixed Deposited Receipts/DSC/NSC or Regular Income Certificates.One personal guarantee of reputable person. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Two written satisfactory market checking reports must be obtained before disbursement.
Margin on Security:50% Margin on Agri land or Urban property.25% margin on liquid security.
Insurance:The borrower will have to arrange life assurance under the Bank‘s charge .
Mark-up:9% per annum .
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Repayment:Once in a year along with mark up.
Renewal:Automatic renewal upon adjustment of entire principal with full markup within one year. Fresh documents will be obtained after three years.
Kissan dost
Tractor
Finance
Scheme
Purpose:Provision of financial facility to the farmers and non farmers (those who provide tractors to farmers on rental basis for various tractor related operations), for purchase of Tractor on Lease Finance Basis.
Eligibility:Resident Self Cultivator having Agriculture Land minimum 5 acres and maximum 50 acres OR Persons providing their tractors to farmers on rental basis for their various Agriculture and Farming activities.The persons who are related with the business of providing services for tractor related farming practices to the farmers on rental Basis.
Amount:Maximum Rs.500, 000/-.
Equity:The borrower on case-to-case basis will pay 10% to 20% of the cost of Tractor.
Security:Farmers:
1. Lease Tractor (to be registered in the name of Bank) 2. Charge on Agriculture Land through Agri. Pass Book
3. One personal guarantee of reputable person. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Two written satisfactory market checking reports must be obtained before disbursement
Non Farmers:
49USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 49
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1. Lease Tractor (to be registered in the name of Bank) 2. Charge on urban immovable property through
equitable/registered mortgage
3. One personal guarantee of reputable person. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Two written satisfactory market checking reports must be obtained before disbursement
Insurance:The Lessee will arrange comprehensive insurance of tractor life assurance of lessee under the Bank’s charge.
Mark-up:11% per annum.
Repayment:10 equal half yearly installments (within five years).
KISSAN DOST
AABIARI SCHEME
PurposeProvision of financial facility to the farmers for purchase of Tube well.
EligibilityResident Self Cultivator having Agriculture Land minimum 5 acres and maximum 50 acres.
AmountMaximum Rs.500,000/-.
EquityThe borrower will pay 20% of the cost of project.
Security:Farmers
50USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 50
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1. Lease Assets i.e. Engine, Tube well and other related implements (The vendor will issue receipt in the name of Bank)
2. Charge on Agriculture Land through Agri. Pass Book
3. One personal guarantee of reputable person. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Two written satisfactory market checking reports must be obtained before disbursement
InsuranceThe Lessee will arrange comprehensive insurance of implements/assets life assurance of lessee under the Bank’s charge.
Mark-up11% per annum.
Repayment8-10 equal half yearly (within four to five years).
51USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 51
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Kissan Dost Mechanization
Support Scheme
Purpose:Provision of financial facility to the farmers for purchase of Agricultural Implements e.g. Trolley, thresher, plough, richer etc.
Eligibility :Resident Self Cultivator having Agriculture Land measuring 5 acres to maximum 50 acres.
Amount:Maximum Rs.500, 000/-.
Equity:20% of the cost of machinery tool and implements.
Security:Farmers:
1. Lease Assets/implements (The vendor will issue receipt in the name of Bank)
2. Charge on Agriculture Land through Agri. Pass Book
3. One personal guarantee of reputable person. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Two written satisfactory market checking reports must be obtained before disbursement
Insurance:The Lessee will arrange comprehensive insurance of assets life assurance of lessee under the Bank’s charge.
Mark-up:11% per annum.
Repayment:
8 equal half yearly installments (within four years).
52USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 52
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Kissan Dost Farm
Transport SCHEME
Purpose:Provision of financial facility to the farmers for purchase of Farm Transport Vehicles e.g. Small Pickups, VP/Vans and small chillers.
Eligibility:Resident Self Cultivator having Agriculture Land minimum 5 acres and maximum 50 acres.
Amount:Maximum Rs.500, 000/-.
Equity:The borrower will pay 20% of the cost of Vehicle.
Security:Farmers:
1. Leased Vehicle (to be registered in the name of Bank) 2. Charge on Agriculture Land through Agri. Pass Book
3. One personal guarantee of reputable person. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Two written satisfactory market checking reports must be obtained before disbursement
Insurance:The Lessee will arrange comprehensive insurance of Vehicle life assurance of lessee under the Bank’s charge.
Mark-up:11% per annum.
Repayment:10 equal half yearly installments (within five years).
53USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 53
REPORTINTERNSHIP
KISSAN DOST
ISLAH-E-ARAZI
SCHEME
Kissan Dost Live Stock
Development Scheme
Purpose:Provision of financial facility for purchase of animals (Milk & meat production, cattle farming, Poultry Farming and Fish farming) to the farmers and non farmers (those who have their own live stock farm/fish farm for commercial purposes).
Eligibility:Sufficient experience to handle Dairy Farm, Cattle Farm, Goat Farm, Poultry and Fish Farming. The persons who have their self owned Dairy Farms for production of milk on commercial basis).The applicant should be having adequate arrangements to sell out the products properly e.g. supply contract with milk processing company.
Amount:80% of cost of animals (Maximum facility can be granted upto 50% of forced sale value of property).
Security:1. Leased Animals (receipt will be issued in the name of
Bank)
2. Charge on Agriculture Land through Agri. Pass Book
ORCharge on urban immovable property through equitable/registered mortgage. The property will be cleared by Bank’s approved legal counsel and will be assessed by Bank’s and PBA’s approved surveyor.Liquid security in the shape Bank’s Fixed Deposited Receipts/DSC/NSC or Regular Income Certificates.
54USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 54
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Margin on Security:
1. 50% margin on landed property (Agri /Urban).
2. 25% margin in case of l iquid securi ty Insurance:The Lessee will arrange comprehensive insurance of Animals. In case of Poultry and Fish farming Borrower will have to arrange comprehensive insurance of poultry and fish stock himself form Bank’s approved A rated company life assurance of lessee under the Bank’s charge.
Mark-up:Average 6 month’s KIBOR + 600bps with floor of 11% per annum.In case of written assurance for recovery from DCO/Nazim mark-up will be KIBOR + 6% with floor of 8%.
Period:5 years (including one year dry period).
Repayment:16 equal quarterly installments within four years excluding one year dry period.
Kissan Dost Live Stock
Scheme
Finance for live Stock breed improvement through village veterinary workersPurpose:
Provision of financial facility to the Village Veterinary Workers (trained by Live Stock and Dairy Development Department) for purchase of Artificial Insemination kits on lease finance basis.
Eligibility:Village Veterinary Workers having diploma certificate and recommendations from Live Stock and Dairy Development Department Govt. of Punjab)
Amount:Maximum Rs.45, 000/- or 90% of purchase price of kit and bicycle .
55USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 55
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Security:
1. Lease Assets (Receipt will be issued in the name of Bank).
2. Two personal guarantees of reputable persons having fixed assets equivalent or more to value of advance.
Insurance:Comprehensive Insurance of Leased Assets life assurance of lessee under the Bank’s charge.
Mark-up:11% per annum.
Repayment:Equal monthly or quarterly installments (within five years).
Kissan Dost
Commercial
AgroServicesScheme
Purpose:Provision of financial facility to the commercially viable entities with immaculate track record for acquisition of Agri implements and equipments i.e. tractor trolleys, harvesters e.t.c. for providing Agri services to farmers.
Eligibility:Commercially viable entities with immaculate track record with the Bank/Other financial institutions.
Amount:To be decided on case-to-case basis keeping in view the financial/commercial viability of the transaction. Not to exceed 80% of the value of equipments/implements.
Mode of FinanceI Shall be demand finance/lease finance.
Security:
56USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 56
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1. Lease Assets (Vehicles/Tractors will be registered in the name of Bank or Receipt of equipments will be issued in the name of Bank)
2. Bank charge on Agri Land through Agri Pass Book Or Bank’s Charge on urban property through registered and equitable mortgage
3. One personal guarantee of reputable person. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Two written satisfactory market checking reports must be obtained before disbursement
Insurance:Comprehensive Insurance of Leased Assets life assurance of lessee under the Bank’s charge.
Mark-up:9% per annum .
Repayment :
Equal quarterly installments (within five years).
.
57USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 57
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Kissan dostAgri mallScheme
Purpose of Finance:
Four renowned companies of the country such as M/S Ali Akbar Group, Millat Tractors, PSO and Angro Services have established a joint venture company in the name of the Agrimall (Pvt) Ltd to provide agro services under one roof through its Franchisees.
The Agrimall (Pvt) Ltd has approached our Bank to provide financial help to their franchisees to establish and run these Agrimalls under their specialized management through out the country.We have launched a Kissan Dost Agrimall Finance Scheme. All facilit ies required by the Franchisees of the Agrimall (Pvt) Ltd will be provided through this scheme. The farmers who will be the clients of Franchisees, will also be provided production loans through Bank’s Kissan Dost Agriculture Finance Scheme (For purchase of inputs).
Amount of Finance:The amount of Finance will be 9.5 (M) maximum for all package of facilit ies mainly as under: Demand Finance:Maximum Rs.2.5 (M) for construction of site.
Lease Finance:Maximum Rs.1.50 (M) for purchase of tractors and machinery.
Running Finance :Maximum Rs.3.0 (M) for stocks of seed, ferti l izers, pesticides and oil etc .
L/C Limit:Maximum Rs.2.5 (M) for import of pre-engineered construction material for construction of site one time transaction.
58USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 58
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BANKING SERVICES
There are the following services being provided to the claims:
Acceptance of deposits
Granting of loans
Transaction Foreign Exchange Services
Remittance—Collection
SPEDFAX—instant Fund Transfer Service
Lockers facility
Utility Services
The Bank of Punjab attaches special importance to the fee earning business and
business base remuneration. As part of diversification of the banks utility services, it
established collection arrangements for WAPDA, SUIGAS, WASA, PTCL, and PAKTEL.
By using bank’s extensive branch network, effort have been to made to maximize the
exploitation of this source in view of its rich potential of yielding business and deposit
direct earning of commission.
DEPOSIT SECTION
In modern times very few business enterprises are carried out solely with the capital of
the owners. Borrowing funds from different sources has becomes an essential feature of
today business enterprise. But in the case of an entire banking system is based on it.
The borrowed capital of the bank is much greater then their own capital. Banks
borrowing is mostly in the form of deposits.
These deposits are lent out to different parties. The larger the difference between the
rate at which the depositors are borrowed and the rate at which they lent out the greater
of the profit margin of the bank. Furthermore, the larger the deposit the larger will be the
59USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 59
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funds available for employment; larger the funds lent out the greater will be the profit of
the bank.
To receive the deposit is the basic function of all commercial banks. The bank does not
receive these deposits for save keeping purpose only, but they accept deposits as debts.
When banks receive deposit from a customer, the relationship of a debtor and creditor is
established where by the customer become the creditor and the bank a debtor. When
the bank receives amount of deposit as a debtor, it becomes the owner of it. It may,
therefore use it as deems appropriate. But there is an implicit agreement that the
amount owned would be paid back by the bank to the depositor after a specified period.
NATURE OF DEPOSITS
Current deposits
Profit and loss sharing account
Short notice term deposits (SNTDR)
Call deposit
Term deposit receipts (TDR)
Current Deposits
In this type of account the customers allowed to deposit or withdraw cash as and when
one likes. Because of their nature, these deposits are treated as the current liabilities of
the bank. There is no profit on such deposits. Usually this type of account is opened by
the business community.
Profit and Loss Sharing Account
This type of account is one step toward the Islamic Banking in Pakistan, but the actual
theme of this account has been dead, this is being treated as markup/interest base
account now. There are two types of PLS accounts:
60USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 60
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PLS saving account
PLS -TDR (Profit and Loss Sharing Term Deposit Receipts)
PLS saving accounts can be opened with the minimum sum of Rs. 500/- and PLS-TDR
account can be opened for a sum of Rs. 5000/- or above. Profit is paid on both types of
accounts on half yearly basis.
Under PLS saving account the depositor undertakes to share profit or loss on the
deposits earned or sustained by the bank. Secondly the bank is at the liberty to invest
the funds of the deposits in any industry, it deems fit. The PLS deposits are invested in
non-interested channels.
Short Notice Term Deposits (SNTD)
This kind of deposit is for a short period. The depositor may withdraw his deposit at any
time by giving seven days notice to the bank. This type of deposit facilities the depositor
to withdrawn his amount with interest of the deposited period.
Call Deposit
Call deposits are the also the kind of deposits, which are deposited with banker against
any tender. This is without interest deposit. This may be with interest provided the
depositor has agreed to keep this amount with the bank for some fixed period.
Term Deposit Receipts (TDR)
This type of deposit is same as the SNTD. The difference is that SNTD is for the short
period (7-30 days) while TDR is for long period (1 month up to 5 years).
61USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 61
REPORTINTERNSHIP
ACCOUNT OPENING SECTION
Account opening is the first step towards establishing a relationship between the
customer and the bank. The Bank of Punjab is offering basically FIVE type of account in
this section:
Current Deposit Account
Profit and Loss Sharing Account
BTA(business tijarat account)
BBA(basic business account)
YLS(young lions savings account)
The necessary condition for a customer, who wants to open an account with the bank, is
introduction, which is preferably by the bank officers or any account holder of the bank.
The different categories of the accounts that are available are as under:
Individual Account
Joint Account
Partnership Account
Limited Company Account
Clubs, Society, Association, or Trust Account
SNTD (short notice term deposits)
TDR (term deposit receipts)
Foreign Currency Deposits
CLEARING SECTION
Clearing is the most important department of the bank performing various functions.
Clearing House
A clearing house is an organization of the member banks, working under SBP and which
62USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 62
REPORTINTERNSHIP
is for the purpose of setting inter banks claim resulting from transmission of funds from
one bank to another. The branch cheque/instruments are credited in the account of the
customer. The clearing can be:
Outward
Inward
Outward clearing
The instrument collected or stored bank wise and a schedules is prepared separately for
each bank mentioning the total number of instruments and the amount of the
instruments. Then these are recorded in a register called “OUTWARD CLEARING
REGISTER” then a main schedule is prepared showing the total number of cheque and
their aggregate amount being presented in the clearing.
The cheque/instruments are handed over the clearing branch. Central clearing branch
issue CREDIT ADVICE to the branch for passing credit to its customer immediately the
branch on receiving credit advice debits the clearing account and credit the respective
customer account.
Inward Clearing
On receiving cheque/instruments from central clearing branch, the Incharge checks the
number and amount of cheque received in clearing must tally with the main schedule
received from central clearing branch.
These cheque/instrument are enter in “INWARD CLEARING REGISTER” for the
cheque/instrument passed in clearing is a credit advice for the aggregate amount of
cheque passed in clearing is prepared, drawn on central clearing branch.
63USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 63
REPORTINTERNSHIP
RESERVE AT STATE BANK OF PAKISTAN
Deposit held by the bank at SBP serves as cheque clearing and collection balances.
Rather than physically transferring funds between banks, cheque clearing and collection
can be done by simply debiting or crediting a bank’s account at SBP.
REMITTANCE SECTION
Remittance is a major function of the bank. It is the transfer of money from one place to
another place. The need for remittance is commonly felt in commercial life particularly
and in everyday life generally.
By providing this service to the customers the Bank of Punjab earns a lot of income in
the form of service charges.
The Bank of Punjab deals with the following type of remittance:
Demand Draft (DD)
Mail Transfer (MT)
Telegraphic Transfer (TT)
Pay Order
Demand Draft (DD)
Demand draft is a written order given by the one branch of a bank on behalf of customer
to another branch of the same to a certain amount to the certain person.
Procedure to prepare demand draft
1. A draft voucher is filled which contains the following information
Name of the parties involved
Date
Amount to be sent
Account number (if DD is crossed)
64USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 64
REPORTINTERNSHIP
2. A credit voucher is filled in order to get the excise duty and exchange commission.
3. The sender deposits the total amount of the two vouchers i.e. the debit and credit
voucher.
4. Then the cashier sends the cash receipt voucher to the accounts section where the
officer records the amount paid in his cash scroll.
5. Accountant gives the DD leaf along with the DD voucher to his assistant who records
the sender’s name, amount the receiver’s name. After writing all the information in
the DD register he gives it to the officer along with the DD for authentication.
6. After authentication the DD is handed over to the sender and bank sends the advice
to the concerned branch. So when the part presents the DD in the concerned branch
it payment could be made.
Parties involved in the Demand Draft
There are the following parties involved in demand draft:
1. Purchaser or Sender
The purchaser is the person who sends the money to a particular person
payable at a certain branch.
2. Issuing or Drawing Branch
The branch from where the demand draft is issued to another branch of
the same bank.
3. Drawer Branch
Branch in which the draft has drawn and called upon to pay the amount.
4. Payee
The person who is entitled to receive the amount after presenting the
demand draft in the drawer branch
65USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 65
REPORTINTERNSHIP
Mail Transfer (MT)
It is the transfer of money from branch to another branch of the same bank through mail
service. In mail transfer there is no need of advice as the amount is directly credited to
the receiver’s account.
Procedure to prepare mail transfer
1. First a voucher is filled in which the sender writes the amount to be sent, name,
account number of the receiving person with the branch name and date.
2. A credit voucher is filled in order to deduct exchange, postage charges according to
the amount of the mail transfer.
3. Then sender deposits the total amount in the cash section.
4. The cash officer gives the voucher to the officer after affixing received cash stamp
and writing the amount in red ink.
5. Then the officer writes the amount paid in the cash scroll and gives the MT to his
assistant.
6. MT leaf is filled according to the information provided in credit voucher. He also
writes the same information in the MT register. Then he gives the MT leaf and MT
register to the officer for authentication.
Telegraphic Transfer (TT)
This is the most urgent method of remitting the money from one place to another place.
This method is used when the sender desires to send urgently, in this case the sender
request the manager of the branch to issue TT.
Procedure to prepare telegraphic transfer
1. For sending the TT, the manager and officer apply a test. In this test the manager
and officer uses a coding technique. They write their own code numbers, which is
66USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 66
REPORTINTERNSHIP
allotted to them as the bank branch code.
2. After making all the confirmation, the concerned branch makes the payment to the
receiver.
3. If sender wants to convey the same message through telephone then he has to pay
the charges of telephone along with the TT charges.
4. First the person deposit the TT amount along with the charges through the credit
voucher then this TT sent to the relevant branch.
Pay order (PO)
A pay order is written order issued by the bank on its own branch, drawn upon and
payable by itself to pay a specified sum of money to the person. The purpose of a pay
order is to transfer the fund from one place to another. It is usually not issued in favor of
the parties of other cities. Usually the pay order is issued for the local transfer of money
from one person to another or from the person to any other department. It is used fro
different purposes. The purpose may be the repairs by the repairs of the branch or
renovation of the branch.
67USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 67
REPORTINTERNSHIP
ADVANCES/CREDIT SECTION
It is the loan function, which produces the major portion of bank’s income, and as such it
is the major areas of professional banker’s concern and attention.
Principles while advancingBasically there are five principles that must be duly observed while advancing money to
borrowers.
Safety
Liquidity
Disposal
Remuneration
Suitability
Forms of Lending
Mainly there are two types of advances:
Short-term Lending (maturity with in one year)
Long-term Lending (maturity with the period of more than one year)
How ever they are further classified as
Running Finance
Demand Finance
Cash Finance
Letter of Guarantee
Running Finance
This form of finance was previously known as “overdraft”. When a customer requires the
temporary accommodation, his bank allows withdrawal his account in excess of credit
balance, which the customer has in its account, a running finance occurs. The
accommodation is thus allowed collateral security. When it is against collateral
68USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 68
REPORTINTERNSHIP
securities, it is called a “Secured Running Finance” and when the customer cannot offer
any collateral security except his personal security, accommodation is called a “Clean
Running Finance”. The customer is in advantageous position in running finance
because he has to pay the mark-up on the balance outstanding against him on daily
product basis.
Demand Finance
This is common form of financing to commercial and industrial concerns and is mad
available either against pledge or hypothecation of goods produce or merchandise. In
demand finance the party is financed up to a certain limit either at once or as and when
required. They party due to facility of paying mark-up only on the amount it actually
utilizes prefers this form of financing.
Securities of Advances
There are the following securities for advances:
Pledge
Hypothecation
Guarantee
Indemnity
Charge
Advances against Stock Exchange Securities
Advances against immovable property
Pledge
Pledge is defined as “The bailment of goods as security for the payment of the debt and
the performance of a promise is called pledge”. Pledge is the characteristics mode of
taking goods as the security and the pledge occurs when the goods or document of the
title thereto or the securities are delivered by the customer to his banker to be held as
69USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 69
REPORTINTERNSHIP
security for the repayment of the advance.
In a pledge, the ownership remains with the pledger but the pledge has the exclusive
possession of the property until the advances in repaid in full, while in case of default the
pledge has the power of sale after giving due notice. People with the safe custody of
goods, when entrusted with the goods for the specific purpose may not make the valid
pledge.
Hypothecation
Hypothecation is defined as “A legal transaction where by goods may be made available
as the security for a debt without transferring either the property or the possession to the
ledger”. When the property in goods is in charged as the security for a loan from the
bank but the ownership and the possession is left with the borrower, the goods are said
to be hypothecated. The essence of the hypothecation is that neither the property in the
goods nor the possession of them passes to the lender, but the security is guaranteed
by means of letter of hypothecation, which usually provides for a banker’s charge of the
hypothecated goods.
Guarantees
Guarantee is defined as “A contract to perform the promise, or discharge the liability of
the third person in case of his default”. This is so when an application for the advances
cannot offer any tangible security, the banker may rely on the personal guarantees to
protect himself against loss and advances or overdraft to the applicant. There fore a
guarantee may be either written or oral. The guarantee is a promise by one person
called the guarantor or security to another for answering the present or future debt if a
second person called the Principal Debtor.
70USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 70
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Indemnity
Indemnity is defined as “A contract by which one party promises to save the other from
loss caused to him by the conduct of the promisor him self or by any other person is
called the contract of indemnity”. Thus in an indemnity, the promisor is the only person
who becomes liable to the promise if the latter suffers a loss on account of his doing
something at the express desire of the former.
Charge
When immovable property of one person is by act of parties, or operation of law,
made security for payment of money to another, and the transaction does not
amount to mortgage, the latter person is said to have the charge on the property,
and all the provisions herein before contained which apply to a simple mortgage
shall, so far as may be apply to such charge.
This means that a charge is a right of payment out of certain property. The
charge can be created by the act of parties or by the operation of the law and
although the property is made a security the payment of loan, is still not the
mortgage.
Advances against stock exchange securities
A stock exchange security is the vast term which covers all gilt-edged securities such as:
Federal and provincial government bonds
Post trust or municipal bonds
Shares and debentures
Banker, as security for advances to the customer, frequently accepts these securities.
Advances can be against
71USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 71
REPORTINTERNSHIP
Preference shares
Ordinary shares
Preferred shares
It can be
Quoted or unquoted
Registered
Bearer
Inscribed
72USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 72
REPORTINTERNSHIP
Advances against immovable property (Mortgage)
A mortgage is the transfer of interest in specific immovable property of r the purpose of
securing the payment of the money, advanced or to be advanced. By way of loan, and
existing debts or the performance of the engagement this may raises the pecuniary
liability. The transferor is called the mortgager and the transferee the mortgagee the
principal money and interest of which payment is secured for the time being and
instrument, by which the transfer is affected, is called the letter of the mortgage deed.
73USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 73
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ACCOUNTS OF SPECIAL CUSTOMERS
Though every person, legally capable of
becoming a party to a contract, can open
an account with BOP, yet the capacity of
certain classes of persons to make valid
agreements are subject to well recognized
restrictions, as in case of agents, trustees,
executors, administrators, firms and joint
stock companies.
PARTNERSHIP ACCOUNT
Account opening form is duly signed by all the
partners
Account opening form is duly signed by all the
partners
Specimen signature cards containing the specimen signatures of the persons authorized to operate the
account.
Specimen signature cards containing the specimen signatures of the persons authorized to operate the
account.
All the partners assume the liability of the firm to
the bank as joint and several.
All the partners assume the liability of the firm to
the bank as joint and several.
This letter is obtain from both registered and non-
registered firms accordance with the
section 25 of Partnership Act1932
This letter is obtain from both registered and non-
registered firms accordance with the
section 25 of Partnership Act1932
A partnership letter duly signed by all the partners
in their personal capacity is also obtained.
A partnership letter duly signed by all the partners
in their personal capacity is also obtained.
74USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 74
REPORTINTERNSHIP
JOINT STOCK COMPANY ACCOUNT
Account of the company is opened on the resolution of the Board of Directors, which nominates the persons authorized to operate upon the account.
Account of the company is opened on the resolution of the Board of Directors, which nominates the persons authorized to operate upon the account.
Must take the specimen signatures of the authorized persons and allow the operations on the account under those signatures as long as the authority is not terminated.
Must take the specimen signatures of the authorized persons and allow the operations on the account under those signatures as long as the authority is not terminated.
The banker may open the account of a newly floated public ltd company without the certificate of commencement of business in order to receive the amount of issued capital from the prospective shareholders; but he should not allowed any withdrawal from the account till the certified copy of Certificate of Commencement of Business is submitted to him.
The banker may open the account of a newly floated public ltd company without the certificate of commencement of business in order to receive the amount of issued capital from the prospective shareholders; but he should not allowed any withdrawal from the account till the certified copy of Certificate of Commencement of Business is submitted to him.
Failure to obtain this certificate necessitates the refund the amount to the prospective shareholder by the promoters.
Failure to obtain this certificate necessitates the refund the amount to the prospective shareholder by the promoters.
When bankers receive a notice of death, retirement of dismissal of the authorized person, he should stop the operation on the account and wait for the fresh resolution authorizing another person before his death, retirement of dismissal, should be honored by the banker because they were valid instruments before the termination of his authority.
When bankers receive a notice of death, retirement of dismissal of the authorized person, he should stop the operation on the account and wait for the fresh resolution authorizing another person before his death, retirement of dismissal, should be honored by the banker because they were valid instruments before the termination of his authority.
75USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 75
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ACCOUNTS OF CLUBS, SOCIETIES AND ASSOCIATIONS
The resolution of the Governing Body/Managing Committee authorizing the opening of the account with the Bank of Punjab.
The resolution of the Governing Body/Managing Committee authorizing the opening of the account with the Bank of Punjab.
The resolution should name the persons authorized to operate upon the account, clearly specifying the powers of the authorized persons. The resolution should be signed by the Chairman of the meeting at which the resolution was passed and countersigned by the Secretary of the Governing Body/ Executive Committee.
.
The resolution should name the persons authorized to operate upon the account, clearly specifying the powers of the authorized persons. The resolution should be signed by the Chairman of the meeting at which the resolution was passed and countersigned by the Secretary of the Governing Body/ Executive Committee.
.
The account-opening form duly signed by the authorized person(s) who would operate on the account
The account-opening form duly signed by the authorized person(s) who would operate on the account
An undertaking signed by all the authorized persons on behalf of the institution, expressly mentioning that as and when any change takes place in the persons authorized to operate on the account, the banker will be informed immediately.
An undertaking signed by all the authorized persons on behalf of the institution, expressly mentioning that as and when any change takes place in the persons authorized to operate on the account, the banker will be informed immediately.
Certified copy of the bye-laws or rules and regulations, clearly showing the limitations of the Managing Committee or the Governing Body.
Certified copy of the bye-laws or rules and regulations, clearly showing the limitations of the Managing Committee or the Governing Body.
76USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 76
REPORTINTERNSHIP
Chapter 5
FINANCIAL ANALYSIS OPERATING HIGHLIGHTS
BALANCE SHEET
PROFIT AND LOSS ACCOUNT
STATEMENT OF CASH FLOW
RATIO ANALYSIS
PROJECTED ANALYSIS
77USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 77
REPORTINTERNSHIP
BALANCE SHEETAS ON DECEMBER 31, 2005
(Rs. in million)2005 2004 2003 2002 2001
ASSETS Cash and balances with treasury banks 8788 5,580 3,625 2,814 4,448
Balances with other banks 9368 2,118 3,192 3,17
0 433 Lending to financial institutions 7594 1019 5,662 7,480 6,776
Investments 1803 16,198 11,45
8 8,295 5,970
Advances 6362 39,439 18,34
4 6,621 5,772
Other assets 2041 1,27
7 864 751 943 Operating fixed assets 1715 689 407 394 276
Deferred tax assets - - 6
8 - 185
111,155 66,320 43,620 29,525 24,803
LIABILITIES Bills payable 478 267 345 250 163 Borrowings from financial institutions 6791 2,832 2,684 1,290 2,509 Deposits and other accounts 88465 54,724 34,938 23,767 19,035 Subordinated loans - - - - - Liabilities against assets Subject to finance lease
5581 53
64
19
Other liabilities 1474 568 393 732 686 Deferred tax liabilities 220 9 - 117 -
97484 58,481 38,413 26,220 22,412 NET ASSETS 13671 7,839 5,207 3,305 2,391 REPRESENTED BY
RATED BY PACRA
Short term A1+Long term AA-
78USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 78
REPORTINTERNSHIP
Share Capital 2349 1,506 1,004 1,00
4 980Reserves 4257 2,770 1,946 1,368 1,275
Un-appropriated profit 169 144 1
02 1 - 6776 4,420 3,052 2,363 2,255
Surplus on revaluation of assets 6893 3,418 2,1
55 942 136Contingencies and commitments - - - - -
13670 7,839 5,207 3,305 2,391
79USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 79
REPORTINTERNSHIP
PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED DECEMBER 31 2005
(Rs. in Million) 2005 2004 2003 2002 2001
Markup/return/interest earned 6125 2,555 1,664 2,070 2,173 Markup/return/interest expensed 2668 719 484 998 1,113 Net Markup/return/interest income 3456 1,835 1,180 1,072 1,060 Provision against non-performing advances 32737 46 7
76
39
Provision for diminution in the value of investment - - - (23) - Bad debts written off directly 362 1 1 1 -
330,99 8 54 39 Net Markup/return/interest income after provisions 3125 1,778
1,172
1,018
1,021
Non markup/interest incomeFee, commission and brokerage income 255 173 97 60 52 Dividend income 753 554 279 189 110 Income from dealing in foreign currencies 93 41 13 20 19 Other income 228 328 442 105 59 Total non markup/interest income 1329 1,096 831 374 240
4455 2,885 2,003 1,392 1,261 Non markup/interest expensesAdministrative expenses 1275 1,116 999 900 837 Provision against claim for recovery of shares - -
-
39 -
Provision against excise duty recoverable - 32
-
16 -
Provision against off balance sheet items 4 1 1 - - Other charges 11 1 2 5 1 Total non markup/interest expenses 1290 1,150 1,002 960 838 Profit before taxation 3165 1,736 1,001 432 423 TaxationCurrent 668 225 285 123 161 Prior years - - - - 3 Deferred 143 141 27 25 21
811 367 312 148 185 Profit after taxation 2351 1,368 689 284 238
80USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 80
REPORTINTERNSHIP
STATEMENT OF CASH FLOWFOR THE YEAR ENDED 31ST DECEMBER, 2005
(Rs. in Million)2005 2004 2003 2002 2001
Cash flow from operating activities
Profit before taxation 3165 1,735 1,00
1 432 423
Less: Dividend income (754) (554) (279
) (189) (110)
(Gain)/loss on sale of fixed assets (5) (1) (1) (13) (3)
Compensation for delayed assessedincome tax refund - (29) (95) - (15)(Gain) on sale of investment (3) (102) (294) (57) -
2401 1,049 332 185 285 Adjustment for non-cash chargesDepreciation and amortization 78 71 55 34 21 Provision for employee benefits 12 9 (8) 25 8
Reversal for provision for diminutionin value of investment - 32 - (23) - Provision for excise duty recoverable - - - 16 - Provision for claim for recovery of shares (12) (7) - 38 -
Provision against non-performing advances 327 46
8
76
39
Provision against off balance sheet items - 1 1 - -
405 152 56 166 68 2806 1,201 388 351 353
(Increase)/decrease in operating assets
Landings to financial institution /Govt. Securities (6174) 3,593
(283)
(604)
1,512
Advances (24516)(21,142
) (11,73
1) (926) 333
Other assets (excluding advance taxation) (1053) (375) 5 108 4
(31743)(17,924
)(12,009
) (1,422) 1,849
Increase/(decrease) in operating liabilitiesBills payable 211 (77) 95 88 32 Borrowings from financial institutions 3959 147 1,395 (1,218) 1,108
81USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 81
REPORTINTERNSHIP
Deposits 33740 19,786 11,171 4,732 2,006
Liabilities against assets subject to finance lease (26) (25)
(15) (9)
-
Other liabilities (excluding current taxation) 620 165 (331) (155) (32)
38503 19,996 12,315 3,438 3,114 9566 3,273 694 2,367 5,316
Income tax paid (68) (254) (301) (235) (224)Net cash flow from operating activities 9498 3,019 393 2,132 5,092
Cash flow from investing activities
Net investment in held to maturity securities 1099 (2,035)
(876)
(1,020)
(2,003)
Net investment in available for sale securities (328) (1,373)
(994)
-
-
Dividend income (44) 549 272 189 109
Investment in operating fixed assets (2) (338) (74
) (99) (34)
Sale proceeds of property and equipment disposed-off 725 40 11
3
14
Net cash flow from investing activities 1450 (3,87) (1,661
) (927) (1,914)
Cash flow from financing activitiesBorrowing from other banks - - - - - Net cash flow from financing activities - - - - -
Increase in cash and cash equivalents 10948 (168) (1,268
) 1,205 3,178
Cash and cash equivalents at the beginning of the year 7797 7,966
9,236
8,031
4,853
Cash and cash equivalents at the end of the year 18745 7,798
7,968
9,236
8,031
82USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 82
REPORTINTERNSHIP
RATIO ANALYSIS
The re la t i onsh ip o f one i t em to ano the r exp ressed i n s imp le
ma thema t i ca l f o rm i s known as a ra t i o . A s i ng le r a t i o i n i t se l f i s
mean ing less because i t does no t f u rn i sh a comp le te p i c t u re . A ra t i o
becomes mean ing fu l when compared w i t h some s tanda rd . So we
have t aken ra t i os and pe rcen tage o f t he BOP based i n i t s r eco rd o f
t he pas t f i nanc ia l and ope ra t i ng pe r f o rmance . On t he f o l l ow ing
pages , I make t he ana l ys i s o f t he f i nanc ia l s t a temen ts o f BOP by
us ing re l a ted i t ems f o r t he l as t f i ve yea rs .
Liquidity Ratios:
Current Ratio
Year 2005 2004 2003 2002 2001
Ratio (Times)
1.14 1.13 1.14 1.13 1.11
83USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 83
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CURRENT RATIO
1.14
1.13
1.14
1.13
1.11
1.09
1.1
1.11
1.12
1.13
1.14
1.15
2005 2004 2003 2002 2001
YEARS
RA
TIO
This ratio measures the firm’s ability to meet its short-term obligations. In 2001
this ratio was 1.11 and in 2005 it was 1.14. In 2002 there is an increase in this ratio and
here ratio is reached to 1.13 and it is due to increase in Lending to financial institutions
and decrease in current liabilities such as borrowing from financial institutions and a
minimal decrease in bills payable. After that this increase in 2003 and then decrease in
2004. In 2005 with some increase in present year of 2005 it is 1.14. So overall the firm’s
position is strong because the standard ratio of current ratio is 2.
Quick Ratio:
Year 2005 2004 2003 2002 2001
Ratio 1.16 1.19 1.06 0.68 0.7
84USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 84
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QUICK RATIO
1.16 1.191.06
0.68 0.7
00.20.40.60.8
11.21.4
2005 2004 2003 2002 2001
YEARS
RA
TIO
A quick ratio of 1.0 or greater is occasionally recommended, but as with current ratio, an
acceptable value depends largely on the industry. There is an increasing trend in the
quick ratio of the bank. In the starting 2 years this ratio was below from the standard
ratio of 1.0 but in the next 3 years it is increases and reaches above of standard 1.0.
This increasing trend is due to increase in cash balance with other banks and increase in
lending to financial institutions A/R.
Networking Capital:
Year 2005 2004 2003 2002 2001
Rs. 13670114 7839083 14051008 10057601 10625831
85USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 85
REPORTINTERNSHIP
NET WORKING CAPITAL
13670114
7839083
14051008
10057601 10625831
02000000400000060000008000000
10000000120000001400000016000000
2005 2004 2003 2002 2001YEARS
Rs
Net Work ing cap i t a l , a l t hough no t ac tua l l y a r a t i o , i s a common
measu re o f a f i rm ’ s ove ra l l l i qu id i t y . Th i s r a t i o i s ve ry use fu l f o r
l ende r because when t hey l end o r depos i t s i n t he bank t hey check
i t s f l ows o f ne t wo rk ing cap i t a l . The re i s a i nc reas ing t r end i n t he
ne t wo rk ing cap i t a l o f t he bank wh i ch i s ve ry bene f i c i a l f o r t he bank
because i t can ra i se more l oans o r a t t r ac t s more depos i t s f r om the
cus tomers .
Analyzing Debt:
Debt Ratio:
Year 2005 2004 2003 2002 2001
Ratio 88 89 90 89 90
86USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 86
REPORTINTERNSHIP
DEBT RATIO
88
89
90
89
90
8787.5
8888.5
8989.5
9090.5
2005 2004 2003 2002 2001
YEARS
RA
TIO
The Debt ratio measures the proportion of total assets financed by the firm’s creditors.
The higher this ratio, the greater the amount of other people’s money being used in an
attempt to generate profit. In the Bank of Punjab the outsider’s contribution is nearly
about 90% of the total assets. There is nominal increase and decrease in this ratio of the
Bank of Punjab.
Debt Equity Ratio:
Year 2005 2004 2003 2002 2001
Ratio (%) 14.38 13.2 12.6 11.1 9.9
87USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 87
REPORTINTERNSHIP
DEBT EQUITY RATIO
14.3813.2 12.6
11.19.9
02468
10121416
2005 2004 2003 2002 2001YEARS
RA
TIO
The debt equity ratio is another computation that determines him entity’s long-term debt-
paying ability. From the perspective of long-term debt-paying ability, the lower this ratio
is, the better the company’s debt position. In 2005 there is a increase in this ratio and it
is due to increase in the bank’s total liabilities as compare to increase in the total
equities of the bank.
Efficiency Ratios:
Total Assets Turnover:
Year 2005 2004 2003 2002 2001
Ratio (Times)
0.45 0.33 0.31 0.62 0.91
88USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 88
REPORTINTERNSHIP
TOTAL ASSETS TURNOVER
0.450.33 0.31
0.62
0.91
0
0.2
0.4
0.6
0.8
1
2005 2004 2003 2002 2001
YEARS
RA
TIO
(TIM
ES
)
The total assets turnover indicates the efficiency with which the firm uses its assets to
generate sales. Generally, the higher a firm’s total assets turnover, the more efficient its
assets have been used. In the bank of Punjab this ratio shows a decreasing trend, which
shows that the bank cannot utilize its assets more efficiently.
Fixed Asset Turnover:
Year 2005 2004 2003 2002 2001
Ratio (Times)
0.173 0.267 0.378 0.272 0.462
89USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 89
REPORTINTERNSHIP
FIXED ASSET TURNOVER
0.173
0.267 0.272
0.462
0.378
00.05
0.10.15
0.20.25
0.30.35
0.40.45
0.5
2005 2004 2003 2002 2001
YEARS
RA
TIO
(TIM
ES
)
The fixed assets turnover indicates the efficiency with which the firm uses its fixed
assets to generate sales. Generally, the higher a firm’s fixed asset turnover, the more
efficiently its fixed assets have used. This ratio is continuously decreasing which means
the fixed assets are not used at optimum level of generating sales revenue.
Profitability Ratios:
Gross Profit Margin:
Year 2005 2004 2003 2002 2001
Ratio (%) 56.43% 71.85% 71% 52% 48.78%
90USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 90
REPORTINTERNSHIP
GROSS PROFIT MARGIN
48.78%
71.85%
56.43%52.00%
71.00%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%
2005 2004 2003 2002 2001
YEARS
RA
TIO
The gross profit margin measures the percentage of each sales /service revenue rupee
remaining after the firm has paid for its services cost. The higher the gross profit margin,
the better the firm and vice versa. When we analyze the previous five years data of the
bank of Punjab it shows a very strong increasing trend. This is due to decrease in the
services cost.
Operating Profit Margin:
Year 2005 2004 2003 2002 2001
Ratio (%) 27.38% 14.34% 15.11% 13.48% 4.60%
91USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 91
REPORTINTERNSHIP
OPERATIN PROFIT MARGIN
4.60%
13.48%15.11%14.34%
27.38%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2005 2004 2003 2002 2001
YEARS
RA
TIO
The operating profit margin measures the percentage of each sales/service revenue
rupee remaining after all costs of services and expenses other than interest and taxes
are deducted. It represents the pure profit earned on each service revenue rupee. This
ratio also has an increasing trend, which is due to decrease in cost of sales as well as in
operating expenses.
Net Profit Margin:
Year 2005 2004 2003 2002 2001
Ratio (%) 38.41% 53.54% 41.41% 13.71% 10.95%
92USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 92
REPORTINTERNSHIP
NET PROFIT MARGIN
38.41%
10.95%13.71%
53.54%
41.41%
2005 2004 2003 2002 2001
YEAR
RA
TIO
The net profit margin measures the percentage of each sales revenue rupee remaining
after all services costs and expenses, including interest and taxes, have been deducted.
The higher the firm’s net profit margins, the better. The net profit margin is a commonly
cited measure of the firm’s success with respect to earnings on service revenue. So
when we analyze the previous 5 years data of the bank of Punjab it shows a strong
increasing trend. But in 2005 the percentage of net profit margin decreases at very point
as compared to previous years, it means the firm’s is going to very positively side in
respect to increasing trend.
93USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 93
REPORTINTERNSHIP
Return on Total Assets:
Year 2005 2004 2003 2002 2001
Ratio (%) 1.58 0.96 0.95 0.7 0.15
1.58
0.96 0.95
0.70
0.15
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
RA
TIO
(%)
2005 2004 2003 2002 2001
YEARS
RETURN ON TOTAL ASSETS
The return of total assets also called the return on investment. Measures the firm’s
overall effectiveness in generating profits with its available assets. The higher the firm’s
return on total assets the better. There is a increasing trend of the bank of Punjab return
on total asset which shows a effectiveness in generating profits with its available assets
94USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 94
REPORTINTERNSHIP
Return on Shareholder’s Equity:
Year 2005 2004 2003 2002 2001
Ratio(%) 22.58 12.01 9.88 7.2 1.54
Return on share holder equity
22.58
1.54
7.209.88
12.01
2005 2004 2003 2002 2001
Years
Ra
tio
(%)
The return on equity measure the return earned on the owner’s investments in the firm.
Generally, the higher this return, the better off is the owners. There is a increasing trend
in the return in equity of the bank of Punjab.
Price Earning Ratio:
95USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 95
REPORTINTERNSHIP
Year 2005 2004 2003 2002 2001
Ratio (Times)
3.12 3.95 3.18 8.58 99.57
PRICE EARNING RATIO
99.57
8.583.12 3.95 3.18
020406080
100120
2005 2004 2003 2002 2001
YEARS
RA
TIO
(TIM
ES
)
The price-earning ratio is commonly used to assess the owner’s appraisal of share
value. The P/E ratio measures the amount investors are willing to pay for each rupee of
the firm’s earning. There is a decreasing trend in the P/E ratio of the bank of Punjab, and
it is due to more proportionate increase in EPS as compare to market price per share.
Earning Per Share:
96USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 96
REPORTINTERNSHIP
Year 2005 2004 2003 2002 2001
Rs. 6.87 2.85 2.36 1.84 0.35
6.87
2.85 2.36 1.840.35
0
2
4
6
8
YEARS
2005 2004 2003 2002 2001
RATIO(%)
EARNING PER SHARE
The firm’s earning per share is generally of interest to percent or prospective
stockholders and to management. The earning per share represents the number of
rupees earned on behalf of each outstanding share of common stock. There is a
increasing trend in earning per share of the bank of Punjab which is very attracting for
the prospective stockholders and for management.
Dividend Payout Ratio:
Year 2005 2004 2003 2002 2001
97USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 97
REPORTINTERNSHIP
Ratio (%) 0 0.61 0.63 0 0
0
0.61 0.63
0 00
0.2
0.4
0.6
0.8
RATIO(%)
2005 2004 2003 2002 2001
YEARS
DIVIDEND PAYOUT RATIO
The dividend payout ratio measures the portion 0f current earning per common share
being paid out in dividends. The bank of Punjab declared dividend only in 2003 and
2004. In 2003 the dividend payout ratio is .63 and in 2004 this ratio is .61.
Dividend Yield Ratio:
98USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 98
REPORTINTERNSHIP
Year 2005 2004 2003 2002 2001
Ratio (%) 0 0.11 0.095 0 0
0
0.110.095
0 00
0.05
0.1
0.15
RATIO
2005 2004 2003 2002 2001
YEARS
DIVIDEND YIELD RATIO
The dividend yield indicates the relationship between the dividends per common share
and the market price per common share. If the firm successfully invests the money not
distributed as dividends, the price should rise; this situation is with the bank of Punjab.
That is why the bank of Punjab declared dividend only in 2003 and 2004.
99USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 99
REPORTINTERNSHIP
Chapter 6
CONCLUSION & SUGGESTIONS STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
CORPORATE PORTFOLIO ANALYSIS (THE BCG MATRIX)
AREAS OF IMPROVEMENTS FOR BOP
CORPORATE OBJECTIVES FOR BOP
SUGGESTIONS TO IMPROVE
SUGGESTION TO CHANGE
OBSERVATIONS ON BEST PRACTICES
100USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 100
REPORTINTERNSHIP
NOTE: These are my own studies and suggestions for the improvement and upgrading
of the Bank of Punjab, may be the management of the bank not agreed upon on these.
101USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 101
REPORTINTERNSHIP
STRENGTHS
The major shares of BOP are owned by the Government of the Punjab, so it can
develop a good image & trust among its customers.
Stability of Bank is strength of any bank. The Bank of Punjab has growth since its
establishment.
The Bank of Punjab provides the loan facility on sound basis that is very crucial for
any bank to recover the loan. The Bank of Punjab has conservative policy for
advances. So there are very few bad debts.
Personal selling has key role in banking services. The officers of the Bank of Punjab
go to the potential customers to develop the business. By the relationship with
customers, they achieve the deposit targets.
The promotion criteria of the bank are on the basis of the efficiency and passing the
diploma examination of Institute of Bankers, Pakistan.
It is the policy of the management that requirements are made according to the
principles of merit.
There is no union in the Bank of Punjab.
Working environment is good. Managers and Officers work together as a team.
They are very cooperative with each other.
The officers are really cooperative, supportive and helpful, in my experience during
internship in shah rukn-e-aIam branch noted their involvement to prepare each case
of loan.
102USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 102
REPORTINTERNSHIP
The bank has very spanned network of branches in Punjab as well as in other
provinces also.
Profit rate is high as compare to other banks.
It provides courteous services to its customers.
WEAKNESSES
The Bank of Punjab is centralized organization. The authority is not given to the
branch level. Branch Managers have to take permission from the Regional office or
Head office for credit except Quick Cash. Managers had to get permission if they
have to given more rate of profit to the customers. So the customers have to wait for
days, which may cause the change of customers. Managers cannot negotiate with
customers without the permission of Head office.
The Bank of Punjab has less modern technology. Most of branches are
computerized but not online. Due to lack of online facility, the bank’s services are
low and foreign banks and other online banks have large market share. In this era
modern technology like Online and ATM are very necessary for competition.
Salaries of the officers and staff members are less as compared to other private
banks.
The Bank of Punjab has very less promotional activities. Their advertising campaign
is very weak. They only use personal selling and some newspapers advertisements.
The Bank of Punjab has less staff members in the branches of Southern Punjab as
compared to Upper Punjab. This deviation creates problem for the employees, they
spent most of their time in the bank to complete even their daily routine work. They
have to sit till 7:00 or 8:00 pm before going back to their homes. For this reason their
normal life is disturbing which create the irritation in the behavior of employees.
103USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 103
REPORTINTERNSHIP
The bank’s expenses are increasing at very high rate.
The Bank of Punjab has less interest in foreign exchanges, and very few branches
are involved in the business of foreign exchange business.
Mostly small branches are running in loss.
The bank of Punjab has only six regional offices in whole Pakistan. It is very difficult
to control all branches.
The Bank of Punjab is deviating from the basic banking principles, because the basic
function of bank is to accept the deposit and advance loans. But analysis of financial
statement of Bank of Punjab showing the advances are less as compared to
investment.
BOP is not taking keen interest in the marketing of traveler’s cheque than other
banks. So, BOP is loosing its share due to the less interest.
Duty Hours Are not Properly followed the working hours are from 9:00 A.M to 5:00
P.M. this is because of extra burden of work on them and desire to fulfill the goal of
the branch
It has been observed that most of the staff member knowledge is limited. They only
know their routine duties. If any thing other than normal routine occurs, they are
confused.
It has a non-professional management.
There is Lack of modern banking techniques like ATM’s, online banking, credit cards,
and traveler cheques.
Employees are unsatisfied due to unfair promotion system. There is not a right
criterion for promotion; many of vacancies are filled at approach basis.
Employees have Lethargic attitude especially in main branches.
104USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 104
REPORTINTERNSHIP
OPPORTUNITIES
Although commercial banks have launched may products but a gap existing between
the customer’s want and what the banks are providing. This is an opportunity for the
Bank of Punjab to move in and fill the gap between the ideal bank and the current
service offerings by aggressive advertising, consumers’ friendly attitude products and
service for attracting customers.
The bank has opportunity to expand the branch network all over the county, and it
would be able to develop business and can start many other schemes for
investment.
The Bank of Punjab has opportunity to use latest technology for providing good
services to customers.
There is an opportunity for more businesses if the BOP opens its branches in foreign
countries.
There is an opportunity for more businesses if the BOP offered credit cards.
Different multinational are establishing their business in Pakistan. So there is a lot of
potential for future businesses.
Providing advance technologies through out the country in its branch network should
do modernization of bank. It will attract customer’s attention. Deposits and advances
rates will increase hence profit rate increases.
Steps should be taken to increase bank’s deposits and advances, as these are less
than other competing banks. Such policies should be adopted by bank that can
attract customers and rate of deposits and advances can increase.
105USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 105
REPORTINTERNSHIP
The presence of more technical and professional staff can help out the bank in
making progress especially in marketing department which should have effect on
Bank’s policy making, making schemes of bank successful and can stabilize down its
position.
BOP should concentrate more industrial sector and agriculture sector. They should
provide finances to the farmers both on short term and long term basis.
New schemes for deposits and finances should be introduced regularly.
Proper advertising of the products of the bank.
106USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 106
REPORTINTERNSHIP
THREATS
The salaries of the officers and staff members are less as compared to other banks.
It may cause experts’ drain from the Bank of Punjab to other banks.
Expansion of newly establishing banks like Faysal Bank, PICIC Commercial Bank,
Union Bank, Bank Alfalah, Askari Commercial Bank etc., and their better
performance may cause loss of the market share of the BOP. According to the
World Bank report, the Pakistan has become an “over banked” economy. With the
cutthroat competition for deposits in the industry, the battle is on for the market
share. The concept of 24 hrs banking, telephone and online banking, ATM and
credit card are a direct result of the intense competition. But BOP is far behind the
above mentioned services and will not provide better services as compared to other
banks; it will lose its market share.
The Bank of Punjab is also forced to give loans on potential basis. Due to this the
recovery of such loans may become very difficult.
Promotional activities of the BOP are not sufficient. Due to this it may lose market
share.
Due to low entry barriers, there are more competitors; also the global competition
has increased.
Because of unfair promotion system and absence of proper recruitment techniques
competent persons may move to o Financial environment is changing day to day,
new technologies are introduced by foreign banks that provide customer efficient and
quick services.
There is a need of proper marketing because certain schemes face failure due
ignoring marketing of the product. Failure of the schemes or products is a threat
because it becomes a cause of decrease in profits.
107USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 107
REPORTINTERNSHIP
Financial environment is changing day by day, new technologies are introduced
by foreign banks that provide customers by efficient and quick services.
Employees are involving so much in internal politics & lobbies among them,
which disturb working conditions & goodwill of the bank.
Lack of customization.
108USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 108
REPORTINTERNSHIP
CORPORATE PORTFOLIO ANALYSIS (The BCG Matrix)
109USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 109
REPORTINTERNSHIP
HIGH LOW
AN
TIC
IPA
TE
D G
RO
WT
H R
AT
E Star
MARKET SHARE
dogs
CASH LOW
QUESTION MARKS
HIGH
110USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 110
REPORTINTERNSHIP
AREAS OF IMPROVEMENTS FOR BOP
STRUCTURE> Work specialization> Departmentalization> Chain of command> Span of control > Centralization> Formalization> Job redesign
PEOPLE> Attitudes> Expectations> Perceptions> Behavior
TECHNOLOGY> Work processes> Methods> Equipments
111USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 111
REPORTINTERNSHIP
SUGGESTIONS TO IMPROVE
The banks overall objectives and strategies should be formulated.
Major objectives should be allocated among divisional and departmental units.
Regional chiefs collaboratively set specific objectives for their units with their
branch managers.
Specific objective must be collaboratively set with all department members.
Defining how objectives are to be achieved, are specified and agreed upon by
branch managers and employees.
The action plans should be implemented.
Progress toward objectives must be periodically reviewed, and feedback is
provided.
Successful achievement of objectives must be reinforced by performance based
rewards.
112USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 112
REPORTINTERNSHIP
CORPORATE OBJECTIVES FOR BOP
Strategic Objective
A bigger market share
A higher, more secure industry rank
Higher service quality
Lower cost relative to key competitors
Broader or more attractive product line
A stronger reputation with customer
Superior customer services
Recognition as a leader in technology and/or product innovation
Increased ability to compete n international markets
Expanded growth opportunities
Financial objective
Faster revenue growth
Faster Earnings growth
Higher dividends
Wider profit margin
Higher returns on invested capital
Stronger bond and credit ratings
Bigger cash flow
A rising stock price
A more diversified revenue base
Stable earnings during recessionary periods
113USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 113
REPORTINTERNSHIP
SUGGESTIONS TO CHANGE
Education and Communication
Communicate with the employees to help them see the logic of change.
Educate employees through one-on-one discussion, memos, group meetings, or
reports.
Appropriate if source of resistance is either poor communication or
misinformation.
Must be mutual trust and credibility between branch managers and employees.
Participation
Allow those who oppose a change to participate in the decision.
Assume that they have expertise to make meaningful contribution.
Involvement can reduce resistance, obtain commitment to seeing change
succeed and increase quality of decision.
Facilitation and support
Provide supportive efforts such as employee counseling or therapy, new skills
training, or short paid leave of absence.
Negotiation
Exchange something of value to reduce resistance.
May be necessary when resistance comes from a powerful source.
Potentially high costs and likelihood of having to negotiate with other resisters.
Coercion
Using direct threats or force.
Inexpensive and easy way to get support.
May be illegal, even legal coercion can be perceived as bullying.
114USMAN BIN MAHMOOD (MBA) DEPARTMENT OF MANAGEMENT SCIENCES UNIVERSITY OF LAHORE 114
REPORTINTERNSHIP
Chapter 7
APPENDIXES
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