Intrenship Report of Bank of Punjab

1
INTERNSHIP REPORT
THE BANK OF PUNJAB
SUBMITTED BY
Ghulam Nabi
Roll#993, Sec.F (Afternoon)
B.com(Hons)
30th Sep, 2009
UNIVERSITY OF THE PUNJAB
DEDICATION
I DEDICATE THIS REPORT TO MY FAMILY AND FRIENDS.
EXECUTIVE SUMMARY
The Bank of Punjab was established in 1989 and was given the status scheduled bank in 1994.
The Bank of Punjab is working as a scheduled commercial bank with network of almost 272 branches
at all over major locations in the Punjab. The Bank provides all types of banking services such as
Deposits in Local Currency and client foreign currency, remittances, and advances to business, trade,
industry and agriculture. The Bank of Punjab has indeed entered a new era of science to the nation
under experience and professional hands of its management. The Bank of Punjab plays a vital role in
the national economy through mobilization of hitherto untapped local resources, promoting savings
and providing funds for investments. The bank offers attractive rates of profit on all deposits, opening
of foreign currency accounts and handling of foreign exchange business for example imports, exports
and remittances, financing, trade and industry for working capital requirements and money market
operations. The lending policy of bank is not only cautious and constructive but also based on
principles of prudent lending with maximum emphasis on security.
PREFACE
y the grace of almighty Allah , The Internship Report At The ank Of Punjab Garhi Shahu
Branch is ready to submit.
Along with theory , practical work is very important for experience and handling all types of
situation ,Every BBA student has to undergo and internship that really helps them to gain practical
knowledge .
During my internship at Bank of Punjab Garhi sahau branch Lahore , I got a chance to observe
all departments of banking . I learned lot of experience here.
I am thankful to my teachers and management staff of Garhi Shahu Branch Lahore to take
interest in completion of this internship program
Ghulam nabi
ACKNOWLEDGEMENT
We are very thankful to Allah Almighty who has given us the power and ability to think and judge
the matters and then to make use of the blessed abilities. I also deeply appreciate the wide range
of suggestions and comments provided by my friends and colleagues.
Table of Contents
Page#
1. History,----------------------------------------------------------------
06- 14
Nature of the Organization

Business Volume
Product Line
Competitors
Management of the Bank of Punjab -----------------------------------------Organization Hierarchy Chart
Number of Employees
Main Offices
Field of Activities------------------------------------------------------------
15 - 17
18 - 109
Plan of MY Internship Program ---------------------------------------------
110- 58
Introduction of the Branch

Starting & Ending date of Internship
Department in which I got Training
Financial Analysis & concluding remarks ------------------------------------SWOT Analysis of The Bank of Punjab--------------------------Recommendations --------------------------------------------------
98
99 - 101
102-103
Conclusion-----------------------------------------------------References & Sources Used -------------------------------------------------------
104
Annexes -------------------------------------------------------------------------
105- 107
BRIEF HISTORY
Established in 1989, in pursuance of The Bank of Punjab Act 1989 and was given the status of
schedule commercial bank with its network of 272 branches at all major business centers 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. 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 remittances, Financing, Trade and industry for working capital requirements and money
market operations are some facilities provided by the Bank. The leading policy of bank is not only
cautious and constructive but also based on principles of prudent leading with maximum emphasis
on security. As agriculture is considered as backbone of our economy the Bank of Punjab has
introduced Kissan Dost Agriculture Finance Scheme to small farmers.
THE BANK OF PUNJAB CORPORATE INFORMATION

Board of Directors
Mr. SAFDAR JAVAID SYED
Mr. NAEEMUDDIN KHAN
Mr. TARIQ MAHMOOD PASHA
Mr.SHAFQAT ELAHI
Mr.AZHAR HAMID
Mr. SHAFQAT MAHMOOD
Mr.VIQAR AHAMD KHAN
Mr. M. NAVEED MASUD
Mr. HAROON KHAWAJA
Chairman
President
Director
Director
Director
Director
Director
Director
Director
Mr. RAZA SAEED
Secretary to the Board
AUDIT COMMITTEE
Mr.M. NAVEED MASUD
Mr.AZHAR HAMID
Mr.HAROON KHAWAJA
Chairman
Member
Member
AUDITORS
Ford Rhodes Sidat Hydar & Co., Charter Accountants
REGISTERD OFFICE
BOP TOWER, 10-B, BLOCK-E-II
MAIN BOULEVARD, GULBERG-III,
LAHORE.
TELEPHONES: +92-042-5783700-10
FAX NO. +92-042-5783975
WEBSITE: www.bop.com.pk
UAN: 111-200-100
REGISTRAR
M/s corplink (Pvt) Ltd
8
Wings Arcade, 1-k (Commercial) Model Town, Lahore.
Ph: 042-5839182
CORPORATE GOAL
Organizational goal and strategy define the purpose and competitive techniques that set it apart
from others organizations. Goals are often written down as an enduring statement of company
intent.
A strategy is the plan of action that describes the resource allocation and activities for dealing with
the environment and for reaching the organizational goal. Goals and strategies define the scope of
operations and the relationship with employees, clients and competitors.
With over 140 years of experience in trade finance and an extensive international branch network,
The Bank of Punjab is committed to help the customer succeed in every competitive environment.
To keep pace with changing needs, BOP constantly review its comprehensive cash, trade and
treasury products and services, ensuring that a full range of flexible and innovative services is
always available for the customer wherever they trade.
THE VISION STATEMENT:

To be a customer focused bank with service excellence.
THE MISSION STATEMENT:

To exceed the expectations of our Stakeholders by leveraging our relationship with the
Government of Punjab and delivering the complete range of professional solutions with
the focused on programme driven products and Services in the agriculture and middle tier
markets through a motivated team.
OBJECTIVES:
The main objective is
To offer outstanding value to the customers by providing a knowledgeable,
efficient and reliable service in a personal, helpful and responsive-manner.
The objectives of The Bank of Punjab carving way towards the mission are
To be fast, focused, and determined.

Its tough out there- we face brutal challenge from both global competitors and local banks.
Like leopard- be more agile, move swiftly, respond faster, and work smarter.
Creating values for the customers, shareholders and employees.
Customer satisfaction and delight is given the top priority as we are for the customers and
not the customers for us.
HOW WILL WE DELIVER THE CHALLENGE?

These objectives and guiding mission will be achieved through
Focused objective
Winning as a team
Excellence in delivery
Relentless quality
PUNJAB GOVERNMENT MESSAGE

Punjab Government Shows Faith in the Bank of Punjab.
Punjab Government wishes to state that being the major stake holder in the Bank of Punjab it has
full faith in the new management and operations of the Bank. The government further pledges its
unequivocal support to the Bank and firmly believes that the affairs of the Bank are sound and its
financial health robust.
Finance Department
Government of the Punjab.
CORE VALUES:
Our Customer
as our first priority
Profitability
for the prosperity of our stakeholders that allows us to

constantly invest, improve and succeed
Corporate Social Responsibility
to Enrich the Lives of community where we operate
Recognition and Reward
for the talented and high performing employees
Excellence
in every thing we do
Integrity
in all our dealings
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Respect
for our customers and each other
BUSINESS VOLUME
These are the quick facts of the business in Dec 2008. At that instant BOPs business
volume is as under.
Assets (Current + Fixed) PKR 185.91 Bn
Loans
PKR 1.7 Bn
Deposits
PKR 164.73 Bn
Share Capital= Rs. 5,287974

Reserves
=Rs. 7,427,232
Future outlook:
The year 2009 will prove to be another challenging year for the bank with scattered opportunities
and tough competition. Diversification, innovation and mission driven approach are the key to
success. Management of the bank is committed to continue its efforts for outstanding
performance. Improvement in stakeholders value shall be ensured through progressive but
cautious business expansion with strategic branch network extension and introduction of
innovative products in all areas of business.
THEY BELIEVE
People
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The Bank of Punjab has 272 branches in all major business centers in the country. THe
Bank of Punjab has world-class managers and employees. Its aim is to develop this talent
even further. This will create greater customer loyalty and greater benefit for all - staff,
shareholders and the community
The challenge for the bank is that, unlike organizations who may be working in one country
or countries with similar cultures and laws, the bank have to achieve the best people
policies it can while being mindful of the different countries and cultures in which it operate.
Differences in culture, social structure and economic status mean that one size may not fit
all. Each of the countries in which it operates will potentially have different laws, regulations
and customs. It strives to balance the need for global policies and processes without
imposing rules that may conflict with the diverse local needs and ways of working of
different countries.
Ethics
The Bank of Punjab reputation is critical to being the world's leading emerging markets
bank. The preservation and enhancement of that reputation depends upon businesses
operating to the highest standards of ethical conduct.
BOP faces a particular challenge to uphold consistent standards of conduct while at the
same time respecting the culture and varying business customs of all the countries in which
it operate.
The principles that govern the behaviour of its business and employees are reflected in a
Group Code of Conduct. The Group Code of Conduct is a practical working document
which guides employees through the many difficult conduct issues which confront them on
a daily basis. Complying with each element of the Code will not always be easy but the
employees recognise that they will be judged not just by what is set out in the Code but on
how this is reflected in their day to day activities and the behaviours.
Environment
The Bank of Punjab is proud to showcase commitments to and awareness for the environment
and encouraged if motivated by the customers in making day to day choices.
CODE OF BUSINESS PRINCIPLE OF

THE BANK OF PUNJAB
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Act with honesty and integrity including ethical

handling of actual or apparent conflicts of interest between their personal, financial,
commercial interest and responsibility to BOP.
Give a true and fair view of the state of affairs of the Bank in the reports and documents
that POB files with or submit to shareholders .Government authorities and stock
exchanges or otherwise makes public.
Respect the confidentially of information acquired in the course of their work, except or
otherwise legally obligated to disclose and not to use such confidential information of
third party ,which BOP has rightfully received under nondisclosure agreement a well:
Achieve responsible use of and control over all assets and resources employed or
entrusted
Exercise good judgment to ensure the safety and welfare of its employees, agents and
contractor and to maintain a cooperative, efficient, positive harmonious and productive
work environment and business organization.
To comply with the Trading Codes of Conducts as laid down by BOP
Proactively promote and be an example of ethical behavior as a responsible partner
among peers, in the work environment and the community.
PRODUCTS AND SERVICES OF THE

BANK OF PUNJAB
o
o
o
o
o
o
o
o
o
o
o
o
o
ATM facility
On-line Banking
E-Banking
Debit cards
Consumer Financing
Agriculture Financing
Corporate Financing
Commission free Remittance
Zarco exchange remittance
Collection of utility
Lockers facilities
Account opening form
Prize Bonds
o Deposit product
BBA Account
Current Account
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Saving Account
Corporate Philosophy
OF THE BANK OF PUNJAB
BOP Bank has a progressive and a dynamic human resource (HR) philosophy. The Bank
believes in transforming its human capital into a key source of competitive advantage. There is a
strong value system in place, which is driven by result orientation, adaptability to change, humility
and respect for subordinates and peers. The Bank believes that investment in human capital is
critical for achieving and sustaining growth.
The Banks constant endeavor is to create a performance driven work culture with focus on
employee satisfaction and retention.
We strongly believe that the interests of the Bank and the employees are inseparable. At BOP we
try to create a we culture where there is mutual trust and respect for each other. We encourage
ownership behavior so that everyone feels responsible for the performance and reputation of the
Bank. We are committed to develop and enhance each employees skills and capabilities through
extensive in-house and external training programs and job rotations
COMPETITORS
The competitors of Bank of Punjab are all financial institutions providing services to the public.
Like
Al- habib bank
Meezan bank
citi bank
Saudi pak bank
Alfalah-bank
Askari bank
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MANAGEMENT
BOP Management
1. IJAZ UR RAHMAN QURESHI
HEAD AUDIT AND RAR
2. SHARJEAL MASUD
HEAD OPERATIONS
3. SHAHID WAQAR MAHMOOD
HEAD RETAIL BANKING
4. SAJJAD HUSSAIN
HEAD SPECAIL ASSET MANAGEMENT
5. ASEER AHMAD KHAN
COUNTRY COMMERCIAL HEAD
6. AZHAR HUSSAIN DILAWARI
HEAD INFORMATION TECHNOLOGY
7. HAFEEZUDDIN
HEAD CORPORATE AND INVESTMENT BANKING
8. NAEEMUDDIN KHAN
PRESIDEDNY/CEO
9. KHALID S. TIRMAZI
DEPUTY CEO
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10.
MOAZZAM MANEKA
HEAD AGRICULTURE
11.
NADEEM AMIR
CHIEF FINANCIAL OFFICER
12.
S.M. ATIF
HEAD CONSUMER BANKING
13.
KHAWAR S. ANSARI
HEAD TREASURY
14.
IRFANUDDIN
HEAD CONTROL & COMPLIANCE
15.
MUHAMMAD NAUMAN
COUNTRY RISK MANAGER
16.
NAVEED HAFIZ SHIEKH
HEAD HUMAN RESOURCE
ORGANIZATIONAL HIERARCHY CHART
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BOARD OF DIRECTORS
Head of HR
President & CEO
Head of
compliance &
internal control
Company section
CEO secretariat
Board Risk
management
Board audit
committee
Head of risk & credit policy
committee
Business
manager
Chief financial
officer
Head of Audit &

RAR
Head of operations &

IT
DCEO
Head of treasury
& Equity capital
market
Head of
corporate &
investment
banking
Head of retail
Banking
Head of
commercial
banking
Agri-Head
Head of
strategic
development
BOP BRANCH NETWORK
Special Assets
Management
Head of Islamic
Banking &
Modarba
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Lahore Region
Faisalabad Region
Gujranwala Region
Rawalpindi Region
Karachi / Quetta Region
HEAD OFFICE
Multan Region
Peshawar Region
MAIN BRANCH, LAHORE
10-B, block E-II, Main Boulevard

Gulberg III, Lahore
Tel: (042) 5783700-10
FIELDS OF ACTIVITIES
7 Egerton Road Lahore

Tel: (042) 9200419, 9200187
Fax: (042) 9200351
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BOP has following departments:
1. Account Opening Department

2. Accounts Department
3. Cash And Deposit Department
4. Advances / Credit Department
5. Clearing Department
6. Foreign Remittances
7. Compliance Department
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ACCOUNTS OPENING
DEPARTMENT
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1)
ACCOUNTS OPENING DEPARTMENT
Account opening department is the most important department in any commercial banks
operations. The reason is that it serves as a first step in establishing customer-bank relationship.
The main objective of any bank is to attract as many new accounts and deposits as possible. In
order to fulfill the objectives first step is to opening the new accounts and maintaining the existing
ones. The department of account opening is the major source of doing so. That is why such
departments are maintained by the all banks in all there branches.
The Bank of Punjab Garhi Shahu Branch has an account opening department that
provides service to new as well existing customers. It provides a wide rang of services to its
customer and is strongly oriented towards providing banking services to the needs of a business.
Understanding the customer requirements and guiding them accordingly is the basic function of
the department.
1
FUNCTIONS OF ACCOUNT OPENING DEPARTMENT
Account Opening
Account Closing
Customer Service
Answering Balance Inquiries
Issuance of SSCs and DSCs
Issuance of Long Term and Short Term Certificates
Issuance of Lockers
Issuance of cheque Books
Zakat Declaration
CATEGORIES OF ACCOUNTS
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BOP has the following classification of accounts:
INDIVIDUAL ACCOUNT
This account is opened by individual as well as sole proprietor i.e. individual business which is not a
legal entity. The nature of the account opened depends on the requirements of the holder. BOP offers
various deposits as well as saving accounts for its customers which are discussed later in the forth
coming pages.
JOINT ACCOUNT
It is also opened by the business as well as non business customers. The account opening forms
provide the option to the customers whether they want the account to be operated by using by using
either or both option. Either or survivor option is that anyone can operate the account. Both options
means that both account holders have to make signatures in order to operate the account and if one of
them expires, the order has to show a succession certificate to continue using that account .
PARTNERSHIP ACCOUNT
Opened by any partnership firm and operated as a joint account to be operated by the authorized
partners. Authorized partners are those who are authorized by the partnership firm to operate the
account.
LIMITED COMPANIES ACCOUNT

Limited companies are a legal entity. The account of a limited company is not requires to be
introduced.
CLUB, SOCIETY OR ASSOCIATION
TYPES OF DEPOSITS
Current Deposits
Saving Deposits
Term Deposits
Special Notice Deposits
Foreign Currency Deposits
CURRENCIES OF ACCOUNTS
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Pak Rupees
US Dollars
Pound Sterling
Deutsche Mark
Japanese Yen
Euro
ACCOUNT CODES
Current Account..01
Saving Account.....02
Primax Classic..06
1. ACCOUNT OPENING
It is the first and major function of the department. There are various steps involved in
opening of an account. When the person wants to open an account with the bank he is
required to fill an account opening form. along with this account opening form certain
documents are to be attached to start the customer- bank relationship. There are certain
formalities to fulfill before opening an account depending upon the nature of account and
the nature of the customer.
PROCEDURE
a. ACCOUNT OPENING FORM
A printed account opening form along with the requisition slip and the signature card is given to
the customer. The condition of opening the account is also attached with the form. It includes the
information regarding the customers name, address, NIC #, telephone no.; Information about the
account holders successor is also to be filled in the account opening form. This information is
required to obtained the legal successor
Appointed by the account holder.
b.
INTRODUCTION
The customer whose account is to be opened has to be introduced by an existing account holder
of the bank. The introducer is the person who makes an introduction of the account opener by
signing on his account opening form. The introducer should know about the whereabouts of the
account opener and should know that the customer is bonafide i.e. he is opening the account in
his real name. Introducer is not a guarantor. His only responsibility is to locate the customer if any
problem comes up. The main purpose of getting the introduction of the account opener is to:
Avoid any serious consequences
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Desirability of the customer

Respectability
Occupation and nature of business of the customer
To get maximum information about the customer
c. REQUIRED DOCUMENTS
INDIVIDUAL ACCOUNT
Copy of CN.I.C
Signature Card
ACCOUNT OF PARDANISHEEN
A pardanisheen lady has to come to the bank personally to open the account as well as operate
her account. A vernacular form is to be filled in by her if she makes her signatures in Urdu or she
is unable to provide her photograph.
FOR ILLITERATE PERSON
An illiterate person is required to submit two passport size photographs. One is put on the account
opening form and the other one is out on the signature card. Another requirement is the account
holder has to personally visit the bank to operate his or her account. The cheque of an illiterate
person is to be written by the 2 nd manger of the bank or the person who is not engaged in making
payments in the bank.
JOINT ACCOUNT
Copy of CN.I.C
Signature Card
PROPRIETORSHIP ACCOUNT
Copy of CN.I.C
Signature Card
Registration (if applicable)
Request letter on company's letter head
Stamp
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PARTNERSHIP ACCOUNT
Copies of CN.I.C of partners

Copy of partnership deed (preferably registered)
Signature Card
LIMITED COMPANY ACCOUNT
Memorandum of Association
Articles of Association
List of Directors
Copy of CN.I.C of all directors (attested)
Signature Card(s)
Copy of Board Resolution with embossed seal
Copy of Certificate of Incorporation (only for public ltd. Company)
Certificate of Commencement of Business
CLUB. SOCIETY OR ASSOCIATION
Copy of Resolution
Signature Card(s)
Copy of Rules/By-Laws
List of Management
Copy of N.I. C of members of committee
Copy of registration in case of registered club, society or association
JOINT STOCK COMPANY

Copy of resolution of board of directors
Memorandum of association
Articles of association
Certificate of incorporation
Certificate of commencement of business Form Q.A.22 is obtained from the foreign nationals
resident in Pakistan and companies whose head offices are outside Pakistan for maintaining bank
account.
d. VERIFICATION OF DOCUMENTS AND

ISSUANCE OF ACCOUNT NUMBER
The documents provided by the account opener are verified by the department head. In Bank of
Punjab this verification is done by the cash and deposit department head. The signatures are also
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verified and a signature card is maintained for the purpose of future verification if required. The
account is then entered into the bank's system and processed for getting the account number and
the customer number. This system number comprises of following components
Branch code:
Account type code:
Customer number:
Computer number
e. MINIMUM CASH REQUIREMENT

After providing the properly filled form and all the necessary documents the account holder has to
deposit the minimum cash requirement for opening a specific account according to bank's rules.
The customer's account is opened after following the above stated procedure.
f. LETTER OF THANKS
After this process a letter of thanks is sent to the customer in order to verify that the address
provided by him is correct.
g. ISSUANCE OF CHEQUE BOOK
After the customer brings the letter of thanks to the bank he fills in the requisition slip for obtaining
a cheque book. This makes him the account holder of the bank and now he is able to operate his
account.
ATTORNEY CARD
An attorney card is issued to authorize some other person to operate the account. The nature of
the account remains individual. The benefit of this card is that its authorization can be revoked at
anytime. On the other hand in case of a joint account you have to close the account in order to
cancel the other person's authorization and open a new one. Therefore an attorney card is
preferred.
2. RECORDING OF ALTERATIONS AND

ADDITIONS
In case of any alteration the account opening officer is required to update the customers account.
The updating is required in the following cases
Change of address
Addition of signatories and attorneys
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Change in signatures
Changes in any required documents
3. ACCOUNT CLOSING
It is the second function of this department. For closing an account the customer is required to
Submit a signed account closure request
REQUEST FOR CLOSURE OF ACCOUNT

I/We am/are maintaining account no............................
Titled ....................................................with you.
I/We request you to please close my/our account. Unused cheque containing...... leaves is also
enclosed.
Surrender the cheque book with the bank
Pay a statutory fee of Rs. 100 to the bank
The account opening officer gets an annexure (given on next page) approved by all the
departments and then closes the account. This is a sort of clearance from all the
Departments. The cheque book is then destroyed.
Account closed log file is printed in order to complete the process of closing an account. In the
end the account opening form is filed in the closed accounts file.
3. CUSTOMER SERVICE
It is the third very important function performed by account opening department. It is the customer
service provided by the bank which ensures loyalty of customers and new accounts and deposits.
Any service that a customer requires should be provided in order not only to satisfy him but also
delight him. The following services are provided by the account opening department
Balance confirmation
The account opening officer is responsible to provide answer to inquiries about balance on
telephone as well as personal visits of the customers.
Cheque clearing inquiries
Account number confirmation
Issuance of statements
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The bank provides statements of accounts on the requirement and instruction of the
customers. Normally the bank sends the statement of account after every six months but if
desired by the customer the statement can be sent on quarterly basis monthly basis or
even weekly basis.
Filling deposit slips on request of the customers
4. CHEQUE BOOKS
A cheque book is issued to the new account holder on receiving a duly filled and signed requisition
slip attached with account opening form. The number of leaves required by the customer is
mentioned on this requisition slip.
Similar procedure is adopted for the issuance of cheque book to an existing account holder after
receiving the requisition slip from the cheque book already issued.
Daily record of cheque books issued and the remaining cheque books with the bank is maintained
according to serial number of the cheque book leaves.
REQUEST LETTER FOR DELIVERY OF CHEQUE BOOK

Please deliver the cheque book of my/our Account titled.....................
A/c no....................to the bearer of this letter Mr. / Mrs. ................... whose specimen signatures
are verified by me/us.
BOP issues 25 leave and 100 leave cheque books for current and saving accounts. A 25 leave
cheque book is issued for a foreign currency account. The account opening officer gets the
customers signatures on the cheque book issued register as he gives the cheque book to the
account holder to complete the process.
In the end all the entries related to issuance of cheque books are entered into the system and a
print out is taken in order to get it signed by manger operations.
5. ISSUANCE OF SSC'S AND DSC'S
Defense Saving Certificates and Special Saving Certificates are issued on request of
customers.
Forms are filled and completed on behalf of the account holder.
Settlement advice is made.
Certificates are received and delivered to the customers.
Formalities in case of encashment of the certificates are completed.
Formalities for profit paid on maturity.
28
These certificates are being issued through Gulberg branch. If any client comes to the branch, his
portfolio, which includes the denomination and the amount of the certificates, is being sent to the
main branch and the certificates are issued in his name and again sent to the respective branch.
The requirements for getting the certificates issued are
a) Account with the bank
b) Application form
c) Deal Application
d) ID card copy
e) Zakat declaration
ISSUANCE OF CERTIFICATES
Following certificates are issued
Account maintenance certificate
Sole proprietor certificate
Internship certificate
Tax deduction certificate
Profit paid certificate
Charges of Rs.200 are recovered for issuance of each certificate. These charges are for
Accounts having a balance of less than one million. Following are the requests for statements by
the clients:
8.
ISSUANCE OF LOCKERS
Bank of Punjab providing locker facilities in almost all of its branches. Four size lockers are
available at Garhi Shahow branch
LOCKER CHARGES
Locker Size
Key Deposit
Annual Rental Charges
Small
1500
1000
Medium
1500
1500
Large
1500
2000
Extra Large
1500
3000
The only condition, which a customer has to fulfill, is that he has to be an account holder of The
Bank of Punjab. The charges include RS.1000 as key deposit. The key deposit is refundable if a
customer decides to surrender the locker. A locker register is maintained to keep the daily record
of locker operation. This register records the timing and date of use. As soon as the customer's
locker renewal becomes due, it is being communicated to the client whether he wants to renew it
or not.
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RENEWAL OF LOCKER NO
Your Locker No..................is due for renewal on.................... Please confirm at your earliest
convenience if you wish to renew the locker. The annual charges for the above locker will be
Rs.........................
As soon as the renewal charges are due, these are debited from the clients account and the client
is being informed about it through a letter. In case the client does not want to continue the locker
then he should surrender the key before the next year's charges become due.
ACCOUNTS DEPARTMENT
30
2)
ACCOUNTS DEPARTMENT
The most important aspect in record keeping of a bank is its accounting system. The basic
purpose for maintaining an accounting system is to ensure consistency in record keeping and
accounts. The accounting system used in The Bank of Punjab is given in a computerized
accounting software developed by the Banks IT department which very user friendly and easy to
learn and operate, which states all the accounting practices to be adopted while recording any
transactions.
The basic requirement for any accounting system is that it should be in accordance with the GAAP
i.e. Generally Accepted Accounting Principles. There are two choices available to an organization
for an accounting system
Cash Basis of Accounting
Accrual Basis of Accounting
MAIN FUNCTIONS OF ACCOUNTS DEPARTMENT

The major function of accounts department is related to record keeping and maintenance of
accounting books. It performs the following two functions in this regard
To maintain General Ledger
Closing of Books of Accounts
GENERAL LEDGER
It is the main record of the branch reflecting its assets and liabilities and serves as the master
control of accounting system of the branch. It consists of only those accounts which are
authorized and approved by head office.
VOUCHER SYSTEM
Voucher is a written authorization used in approving a transaction for recording and payment.
Voucher system is generally designed to provide strong internal control over the transactions,
which take place during the business hours. Whenever a transaction takes place in any
department of the bank, one debit and one credit voucher is prepared. At the end of the day, these
vouchers are collected and recorded i.e. general ledger accounts or other related accounts are
either credited or debited by that amount. There are two types of vouchers:
Debit vouchers
Credit vouchers
31
1.DEBIT VOUCHERS
A debit voucher is prepared whenever an expense is incurred or whenever a withdrawal is made
by any customer of the bank. The debit voucher used by The Bank of Punjab is white in color and
it contains the following specifications regarding the transaction
Name of the branch
Date
Branch Code
Account Number
Transaction Code
Amount
Other details or narration about the transaction
The number of the contra voucher is also stated on it
2.CREDIT VOUCHERS
A credit voucher is prepared whenever a customer deposits any amount with the bank or an
income is received by the bank. The credit voucher used in The Bank is white in color and shows
the information similar to the one on the debit voucher. The credit voucher is used for general
ledger entries and simple entries to credit any account.
VOUCHER RECEIPT
This receipt is used when it is required to make similar vouchers, all the related entries whether
debit or credit are being entered in this voucher sheet to save time .
DOUBLE ENTRY SYSTEM

The Bank of Punjab uses double entry system i.e. whenever a transaction takes place its debit
and credit entry is made simultaneously to keep the debit and credit sides of the general ledgers
equal. The sequence of these debit and credit entries depends on the type of transaction
FUNCTIONS OF ACCOUNTS DEPARTMENT

ACTIVITY VERIFICATION
This is the foremost function and responsibility of the accounts department. Activity is the detailed
report of all the transactions that take place in the branch during one day. This detail is provided by all
the departments separately. For example the cash and deposits department will generate reports
regarding all the cash receipts and payments made during the day, all the pay orders, demand drafts,
telegraphic transfer and call deposit receipts issued to the clients. The procedure of activity verification
is to tally all the vouchers and cheques with the information contained in the batch report. Before that
all the vouchers and cheques and any other instruments are checked whether they are complete and
valid or not. In case of cheque the following things are checked
Date (whether post dated or stale dated)
Signatures of the client
Two signatures on the back of the cheque
Amount in figures and words
32
All necessary stamps e.g. paid stamp

Signatures by the respective verifying authority are checked. For example the checks which are
up to Rs.25, 000 have to be signed by the CD department head and the cheques which are
above that amount have to be signed by the manager operations before making payment
against them.
After checking the above stated requirements, these cheques are tallied with the activity report.
Similar process is adopted for all other vouchers and instruments.
RECTIFICATION OF ERROR
If there is any error found out during activity verification, it is rectified and communicated to the
respective departments. These errors might be some mistakes in the face of the instrument or the
signature requirements.
ROUTINE EXPENSES
The accounts department is responsible for monitoring routine expenses of the branch. Majority of
these expenses are related to daily routine of the bank and incurred by the accounts department on
request of the concerned departments. These expenses are paid and then entered into the expense
register to maintain an up to date record. This record is verified by the manager operations. These
expenses include repair and maintenance expenses etc. The accounts department makes contracts
with the suppliers,
ADMINISTRATION
This department is responsible for the administration activities of the bank therefore it is responsible
for all the administrative costs of the branch. It removes any branch grievance that is being observed
or communicated to it. These complaints can be related to the customer service, external functions or
bank's internal working.
STAFF REIMBURSEMENTS
All the reimbursements related to staff e.g. medical allowance, conveyance allowance etc are the
responsibility of the accounts department. The staff members provide the required documents in this
regard to the accounts officer and then after getting approval from the manager operations he
reimburses the amount to the employees.
TREASURY RECONCILIATION
It is the process which involves reconciliation of all the branch record with that of treasury after every
10 days. All the debit and credit entries of the branch have to be in accordance with the debit and
33
credit entries of the treasury. If there are some outstanding figures then these should be carried
forward to the next reconciliation until they are being reconciled.
HEAD OFFICE REPORTING

Different reports are generated by the accounts department to send to the head office.
Some of them are stated as follows
Suspense account report (every 15 days)
Reports about key data (profit, deposits, advances)
Politician account report
Frozen account report
These reports are being prepared to facilitate coordination between the head office and the branch
operations. In this regard the accounts department at Garhi Shahow branch takes direct instructions
from the accounts division at the head office and reports to it directly.
PREPAID EXPENSES
Monthly charging of depreciation and amortization on pre paid expenses is being done by this
department.
RECORD KEEPING
All the records in the form of activity sheets and vouchers etc. are being kept by this department so
that if there are some discrepancies that occur in the future, it is easy to get the previous record.
SYSTEM
It is another important function performed by accounts department. System of the bank acts as a
backbone of all its internal record keeping. If there is any problem with this system then the banking
operations cannot be carried out properly. The accounts department does the following functions in
this regard
Look after the system troubleshooting
Update the system
Run end of day on daily basis
SALARIES TO THE STAFF

Accounts department is responsible for payment of salaries to the staff members. All the voucher
entries related to this payment are being made and then the pay cheques are given to the branch
employees.
REPORTING TO SBP
This department is responsible for making any reports required by State Bank of Pakistan.
34
UPDATION OF TAX RECORD

The department is responsible for updating the record with the tax department. Depositing the
withholding tax with the respective authority is also the responsibility of the accounts department.
CLOSING ACTIVITIES
Annual closing of branch accounts is done and reported to the head office. This information is required
by the head office to make consolidated financial statements.
STATEMENTS GENERATED BY SYSTEM

All departments use debit and credit vouchers for recording the transaction and at the end of the day
all vouchers with batch headers are sent to the accounts department where following statements are
prepared by the system.
TRANSACTION LIST
It states all types of transactions related to cheques, pay orders, demand drafts, call deposit/receipts
and telegraphic transfers.
NEW ACCOUNTS OPENED

This report states all the details about any new accounts opened during the day. The information
provided by this report is as follows
Account number
Account type
Currency code
Customer type
DAILY ACCOUNT MAINTENANCE AND STATUS REPORT

Daily statement regarding the maintenance of account is issued to give information about the
account status. It gives an up to date balance of all the accounts.
TRANSACTIONS WITH OTHER BRANCHES

This statement shows all the transactions that are being done with branches of The Bank of Punjab
other than Garhi Shahow.
GENERAL LEDGER AND SUBSIDIARY LEDGER REPORT

This report contains accumulative balances of all accounts in-group format or subsidiary ledger.
35
DEPOSITS PRODUCTS
1: Current Account:
The Accounts shall be opened upon submission of duly filled-in Banks prescribed Account
Opening Form properly introduced in the manner provided and on submitting all such
documents as may be revised by the Bank. The Bank reserves the right to demand such
relevant documents even after opening of account as deemed necessary.
The Bank has the right to refuse to open an Account without assigning any reason.
The Accounts shall be opened with an initial/minimum deposit as stipulated by the Bank from
time to time unless specifically exempted.
A distinctive number shall be allotted to every account and this number should be quoted in all
correspondence relating to the account and at the time of making a deposit or withdrawal. The
Bank reserves the right to change the Account Number or any part of it in order to meet its book
keeping/administration requirement. However, intimation of change in the account number shall
be sent to the account holder.
(a) Account for the recipient of Zakat or recipient of grants from Bait-ul-Mall, maybe opened
with an initial deposit of Rs.100/- (introduced vide Inst Cir#97/129 dated 25.11.1997 & Inst Cir
98/53 dated 03.06.1998)
The Accounts may be opened singly in one name or jointly in two or more names.
2: Basic Banking Account:

The minimum initial deposit will be Rs.1000.
No profit will be Payable.
No fee (service charges) for maintaining such accounts will be charged.
There will be no limit for maintain minimum balance. In the cases, there balance in BBA does
remain "NIL" for a continuous 6 month period, such accounts will be closed.
Account holder will be allowed a maximum of 2 deposit transactions and 2 checking

withdrawals, free of charge either through cash/through clearing per month otherwise service
charges of a regular banking account shall be applicable for that month as per Bank's Schedule
of Charges.
36
Unlimited free of charge ATM withdrawals from Ban's own ATM's will be allowed. In case of
withdrawals from BBA though the ATM Machine of other Banks, the Charges of these Banks
shall be applicable for such transaction
PLS SHARING PRODUCTS

1: PLS Account:
The Accounts shall be opened upon submission of duly filled-in Banks prescribed Account
Opening Form properly introduced in the manner provided and on submitting all such
documents as may be revised by the Bank. The Bank reserves the right to demand such
relevant documents even after opening of account as deemed necessary
The Bank has the right to refuse to open an Account without assigning any reason.
The Accounts shall be opened with an initial/minimum deposit as stipulated by the Bank
from time to time unless specifically exempted.
A distinctive number shall be allotted to every account and this number should be quoted in
all correspondence relating to the account and at the time of making a deposit or
withdrawal. The Bank reserves the right to change the Account Number or any part of it in
order to meet its book keeping/administration requirement. However, intimation of change
in the account number shall be sent to the account holder.
(a) Account for the recipient of Zakat or recipient of grants from Bait-ul-Mall, maybe
opened
with an initial deposit of Rs.100/- (introduced vide Inst Cir#97/129 dated
25.11.1997 & Inst Cir 98/53 dated 03.06.1998)
The Accounts may be opened singly in one name or jointly in two or more names.
Deposit may be accepted from minors provided the account is opened and operated
through a guardian. The Account thus opened will continue to be operated upon by the
guardian even if the minor attains the age of majority. The necessary consent to this effect
will be obtained at the time of opening of the account. The orders of the court will, however,
be followed in case the guardian is appointed by the court.
All monies/instruments to be deposited in an account should be accompanied by a pay-inslip showing the title and number of the account. The entry of transaction shall be
authenticated by putting Banks stamp under the joint signatures of two officers of the Bank
on the pay-in-slip and counterfoil thereof. However in case of branches where teller system
37
has been introduced, teller only shell authenticate the transactions up to the prescribed
limits.
Withdrawals will not be allowed against postdated (payable on any future date) and stale
(06 months after issuance date) Cheques and against un-cleared funds.
Where any account is not conducted to the satisfaction of the Bank, the account may be
closed without any notice and the balance will be remitted to the depositor at the address
given by the Account Holder(s).
PLS Savings Accounts may also be opened by charitable institutions, for Provident Funds
and other funds of Benevolent nature by Local Bodies, Autonomous Corporations,
Companies, Associations, Societies, Educational Institutions, Firms etc. and in all other
cases where such accounts are required to be opened under the orders of Competent
Court of Law
Not more than one PLS Savings Account may be opened at a branch in any one name
except in the name of a parent or guardian for more than one child or for keeping funds of
specified nature category by an entity, with the Banks prior approval.
Profit payable or Loss recoverable on PLS Saving Accounts to be credited or debited will
be determined by the Bank at its sole discretion on the basis of its net working results at the
end of each half-year within the time prescribed by SBP from the date of the close of the
half-yearly books of accounts of the Bank. The rates of profits may vary from period to
period viz January to June/July to December each year. Calculation of Profit on PLS Saving
Accounts will be made for each calendar month on the lowest credit balance of an account
between the close of the 6th day and the last day of the month. However, profit accrued
even for Re. 1/- after deducting withholding tax will be payable to all Account Holders.
When an account is CLOSED before declaration of profit rates, the accrued profit will be
first credited in the account at the profit rates previously declared by the Bank. However, no
recovery or payment of profit as a result of increase/decrease in the rate of profit will be
affected upon such A/C holders after announcement of half-yearly profit rates by the Bank.
Withholding Tax at the rate notified by the Government of Pakistan from time to time will be
deducted out of profits payable to the Account Holders.
ZAKAT is leviable on the assets as described in the Zakat & Ushr Ordinance 1980 (as
amended from time to time) on balances which will fall within the definition of zakatable
assets as notified by the Government of Pakistan on valuation date each year, provided
Declaration (original/attested photocopy) for exemption from compulsory deduction of zakat
38
is filed on the prescribed proforma (CZ-50) in the prescribed manner one month preceding
the valuation date except in the case of newly opened accounts.
The branches shall ensure completion of all the formalities required by State Bank of
Pakistan vide Prudential Regulation No.M-1with regard to KNOW YOUR CUSTOMER
2: Senior Citizens Saving Account:

This is a saving bank product available for all senior citizens i.e. persons of 60 years and
above who are eligible to open a saving account as per our Banks criteria. The account can be
opened singly or preferably jointly (husband & wife) provided either of them is of 60 years or
above. This product is designed to attract procure deposit/savings of senior citizens by offering
attractive,
innovative
incentives
and
higher
rate
of
profit
to
senior
citizens.
The Main Features are:
A customer can open only one BOP Senior Citizens Saving Account singly or jointly
regardless of the branch. In case it is found out that more than one account exists under
this category, the Bank reserves the right to recover & forfeit the profits paid or not to give
any profit.
The account can be opened with a minimum initial deposit of Rs.10,000/-. However in case
average deposit during the month falls below Rs.10,000/-, account maintaining charges
shall be levied as per Banks Schedule of Charges.
The profit slab is as follows:

Minimum Monthly Balance
* Expected rate of profit
Rs. 0
Normal PLS SB rate
up to 10,000/-
Rs.10, 001 up to 200,000/-
5 % p.a.
Rs.200, 001 up to 400,000/-
7 % p.a.
Rs.400, 001 up to 500,000/-
8 % p.a.
This product is governed under PLS rule of Profit & Loss sharing system. The rates
mentioned are expected and the Bank reserves the right to review/revise the profit rates
quarterly.
Maximum profit @ 8.0 % p.a. as per different slabs shall be paid on minimum monthly
deposit upto Rs.500, 000/-. Deposit can exceed Rs.500, 000/- but no profit will be paid on
amount over and above Rs.500, 000.
39
The profit will be calculated on monthly basis based on the minimum monthly balance
maintained by the customer during that particular month.
The profit will be credited on monthly basis in the respective account.
Profit once disbursed will not be recovered in case of decrease in rate at the time of
announcement of Half Yearly profit rates. However in case of rise in profit rate the
difference amount will be paid.
Existing senior citizen account holders can also open account under this scheme.
In case they wish to close their existing PLS or other account, same may be allowed
without deducting account closure charges
Zakat will be deducted as per law like any other saving/profit bearing account.
Withholding tax will be deducted from the profit as per law in force
Preferably PLS SB joint a/c should be opened with special instructions of Either or
Survivor which must be jointly authenticated under full signatures of the Joint A/c holders.
Unlimited transaction (debit/credit)
Free complimentary issuance of first ATM/Debit Card
Free complimentary issuance of first Cheque Book of 25 leaves
25 % reduction in rental charges of small or medium locker subject to availability.
Priority banking especially in utility bills payment, counter service etc
The product carries all characteristics/conditions pertaining to PLS SB account i.e.

issuance of DD/TT/MT/PO etc as per Banks Schedule of Charges except payment of profit
which shall be paid on monthly basis on minimum monthly deposit upto Rs.500,000/- only
as per admissible rates shown against each minimum monthly balance.
3: Gharayloo Saving Account:

This is a saving bank product available for all females who are eligible to open a saving
account as per our Banks criteria. The account can be opened singly or jointly with husband. This
product is designed to attract procure deposit/savings of ladies particularly housewives of
expatriate&
students.
The Main Features are:
A customer can open only one BOP Gharayloo Saving Account singly or jointly regardless
of the branch. In case it is found out that more than one account exists under this category,
the Bank reserves the right to recover & forfeit the profits paid or not to give any profit.
40
The account can be opened with a minimum initial deposit of Rs.10, 000/-. However in case
average deposit during the month falls below Rs.10,000/-, account maintaining charges
shall be levied as per Banks Schedule of Charges
The profit slab is as follows:
Minimum monthly balance
* Expected rate of profit
Rs. 0 upto 10,000/-
Normal PLS SB declared rate
Rs. 10,001 upto 250,000/-
7.25 % p.a.
* This product is governed under PLS rule of Profit & Loss sharing system. The rates mentioned
are expected and the Bank reserves the right to review/revise the profit rates quarterly.
Maximum profit @ 7.25 % p.la. Shall be paid on minimum monthly deposit upto Rs.250,
000/- but over Rs.10, 000/-. Deposit can exceed Rs.250, 000/- but no profit will be paid on
balance over and above Rs.250, 000.
The profit will be calculated on monthly basis based on the minimum monthly balance
maintained by the customer during that particular month.
The profit will be credited on monthly basis in the respective account.
Profit once disbursed will not be recovered in case of decrease in rate at the time of
announcement of Half Yearly profit rates. However in case of rise in profit rate the
difference amount will be paid.
Existing females account holders can also open account under this scheme.
In case they wish to close their existing PLS or other account, same may be allowed
without deducting account closure charges
Zakat will be deducted as per law like any other saving/profit bearing account.
Withholding tax will be deducted from the profit as per law in force.
Preferably PLS SB joint a/c should be opened with special instructions of Either or
Survivor which must be jointly authenticated under full signatures of the Joint A/c holders.
Unlimited transaction (debit/credit).
Free complimentary issuance of first ATM/Debit Card
25 % reduction in rental charges of small or medium locker subject to availability
Priority banking especially in utility bills payment, counter service etc
The product carries all characteristics/conditions pertaining to PLS SB account i.e.

issuance of DD/TT/MT/PO etc as per Banks Schedule of Charges except payment of profit
which shall be paid on monthly basis on minimum monthly deposit upto Rs.250,000/- only
as per admissible rates shown against each minimum monthly balance
41
4: PLS-Saving Profit plus Account:
Individuals, corporations, organizations and various provincial / federal government

departments can open accounts under the scheme.
This is an operating/checquing account
The accounts can be opened in individual or joint names.
The deduction of Zakat and Withholding tax will be applicable as per law of the land.
Average balance during a calendar month will be taken to determine the deposit slabs and
applicable profit rate for that month for the purpose of creating provisions. However, in case
the average balance in any month falls below Rs. 1(M) being the minimum slab, the
account for that particular month will be treated as an ordinary Pls-sb account and profit will
be calculated on minimum balance during the month at the normal rate declared for Pls- sb
account.
Profit payable on half yearly basis.
5: Corporate Premier Account:
This account has been introduced for corporate clients.
This is an operating/checquing account
Profit on the account will be calculated on daily product basis by determining the slab on
the basis of average balance maintained in the account.
42
The deduction of Zakat and Withholding tax will be applicable as per law of the land
Profit payable on monthly basis
7: Corporate Premier Term Account:
This account has been introduced for corporate clients.

This is non operating/checquing account
Minimum amount of investment is Rs.500 (M).
The deduction of Zakat and Withholding tax will be applicable as per law of the land.
Profit payable at maturity
8: Munafa Hi Munafa III:

This is a term deposit product. The term is from 1 month to 1 years and the profit is paid on
monthly basis. The minimum amount of deposit is Rs.100,000/-. The rate of profit is from 8.0 % p.a. to
12 % p.a. depending on the tenure which is higher than Banks normal term deposits as follows:
Term
*Expected Profit Rates p.a. Minimum amount of Deposit Rs.
on monthly basis (With Holding Tax to be deducted)
1 month
8.00 %
100,000/Rs.667
Profit
payment
43
3 months
6 months
1 year
10.00 %
10.5 %
12.00 %
100,000/100,000/100,000/-
Rs.833
Rs.875
Rs.1000
* This product is governed under PLS rule i.e. the rates mentioned are expected and the Bank
reserves the right to revise the rates and terms & conditions of profit under Profit & Loss sharing
system.
BOP TIJARAT ACCOUNT (LCY)
INCENTIVE
Average
Balance from
Rs.100,000
To
Rs.500,000/Free
Inter- Free
city/within-city
unlimited
deposit/withdrawal transaction
Free Issuance of One Card
ATM/Debit Card
Free Renewal of Allowed
ATM/Debit Card
Free Issuance of One 50 leaves
Cheque Book
per month
Free Issuance of
Duplicate
A/c 1 per month
Statement
Free
Rental
Charges
for NONE
Lockers
(small/medium)
No key deposit for No
Key
lockers
deposit
equivalent of
small locker
Commission free Free
issuance
of unlimited
PO/DD/MT/TT
transaction
Free/reduction in Free
on
Outward Bills for equal to last
Collection charges months
average
balance
and
above
this
amount
reduced
commission @
0.32%
No Cheque return
charges
for 3 per month
cheques
presented
in
clearing
as
collecting banker.
Average
Balance from
Rs.500,001 To
Rs.1,000,000/-
Average Balance
from
Rs.1,000,001
&
Over
Free
unlimited
transaction
One Card
One Card
Free unlimited
transaction
Allowed
Allowed
Two 50 leaves Free No limit

per month
2 per month
Free No limit
One
Small
One Medium
subject
to subject
to
availability
availability
No Key deposit No Key deposit
equivalent of equivalent
of
small locker
medium locker
Free
unlimited
transaction
Free - on equal
to twice of last
month average
balance
and
above
this
amount
reduced
commission @
0.28%
Free unlimited
transaction
5 per month
Free No limit
Free - on equal to
three times of last
months average
balance
and
above this amount
reduced
commission
@
0.25%
44
Free Call Deposit No charges, if
Receipt
in own name
or in favour of
deptt on a/c
holders behalf
for earnest/bid
money
by
debiting own
account
CONSUMER
FINANCING
Reduction
in
processing
upto 10%
charges from 10
to 50 %
Reduction in rate
of markup upto 50 upto 25 bps
bps
No charges, if
in own name or
in favour of
deptt on a/c
holders or on
other
contractors
behalf
for
earnest/bid
money
by
debiting
own
account
No charges, if in
own name or in
favour of deptt on
a/c holders or on
other contractors
behalf
for
earnest/bid money
by debiting own
account
upto 25%
upto 50%
upto 40 bps
upto 50 bps
N.B. 1) The rent free locker facility will be allowed on availability of locker and after maintaining
average balance for six months.
2) The reduction in rate of markup on Consumer finance will be on loan amount equal to twice of last
months average balance.
3) In order to further facilitate the managers in targeting customers, it will be at the discretion of the
manager to offer the incentive package from day one. However it will be the responsibility of the
branch ensure that customer completes the criteria as per above table otherwise recover the charges
waived
4) The incentive package will be reviewed on quarterly basis and on the deposit procured vis--vis
cost benefit, package can be revised downward.
9: PLS Supreme Saving Account:
INCENTIVE
Average
Balance from
Rs.300,000
To
Rs.1,000,000/Free
Inter- Free
city/within-city
unlimited
deposit/withdrawal transaction
Free Issuance of One Card
ATM/Debit Card
ATM/Debit Card
Free Issuance of One 25 leaves
Cheque Book
per month
Free Issuance of
Duplicate
A/c 1 per month
Statement
Average
Balance from
Rs.1,000,001
To
Rs.5,000,000/Free
unlimited
transaction
One Card
Average Balance
from
Rs.5,000,001
&
OVER
Allowed
Allowed
Free unlimited
transaction
One Card
Two 25 leaves Free No limit

per month
2 per month
Free No limit
45
Free
Rental
Charges
for NONE
Lockers
(small/medium)
No key deposit for No
Key
lockers
deposit
equivalent of
small locker
Commission free Free
issuance
of unlimited
PO/DD/MT/TT
transaction
Free/reduction in Free
on
Outward Bills for equal to last
Collection charges months
average
balance and
above
this
amount
reduced
commission @
0.32%
No Cheque return
charges
for 3 per month
cheques
presented
in
clearing
as
collecting banker.
CONSUMER FINANCING
Reduction
in
processing
upto 10%
charges from 10
to 50 %
Reduction in rate
bps
One
Small
One Medium
subject
to subject
to
availability
availability
No
Key
deposit
equivalent of
small locker
Free
unlimited
transaction
Free
on
equal to twice
of last months
average
balance
and
above
this
amount
reduced
commission @
0.28%
No Key deposit
equivalent
of
medium locker
5 per month
Free No limit
upto 25%
Upto 50%
upto 40 bps
Upto 50 bps
Free unlimited
transaction
Free - on equal to
three times of last
months average
balance
and
above this amount
reduced
commission
@
0.25%
waived.
4) The incentive package will be reviewed on quarterly basis. The Bank reserves the right to change,
modify the package.
5) The rate of profit will be same as per Banks declared rate of PLS SB
46
10: BOP FCY SUPREME CURRENT A/C (US $)

INCENTIVE
Balance from
US$10,000/To
US
$
20,000/Free Issuance One Card
of
ATM/Debit
Card for Pak
Rs. A/c
Free Renewal Allowed
of
ATM/Debit
Card for Pak
Rs. A/c
Free Issuance One per month
of Cheque Book
Free Issuance
of Duplicate A/c 1 per month
Statement
(Max. 2 per
month)
Free
Rental
Charges
for NONE
Lockers
(small/medium)
*
No key deposit No Key deposit
for lockers
equivalent
of
small locker
CONSUMER
FINANCING
Reduction
in
processing
upto 10%
charges from 10
to 50 %
Reduction
in
rate of markup upto 25 bps
upto 50 bps *
Balance from
US$20,001/To
US
$
50,000/One Card
Balance
from
US$50,001/&
above
Allowed
Allowed
Two per month
Two per month
2 per month
2 per month
One Small
One Medium
One Card
No Key deposit No Key deposit

equivalent of equivalent
of
small locker
medium locker
upto 25%
upto 50%
upto 40 bps
upto 50 bps
47
waived.
4) The incentive package will be reviewed on quarterly basis. The Bank reserves the right to change,
modify the package.
11: BOP FCY SUPREME CURRENT A/C (EURO)

INCENTIVE
Balance from
EURO 7,500/To
EURO
15,000/Free Issuance of One Card
ATM/Debit Card
for Pak Rs. A/c
ATM/Debit Card
for Pak Rs. A/c
Free Issuance of One per month
Cheque Book
Free Issuance of
Duplicate
A/c 1 per month
Statement (Max. 2
per month)
Free
Rental
Charges
for NONE
Lockers
(small/medium)
No key deposit for No Key deposit
lockers
equivalent
of
small locker
Standing
1 instruction per
Instructions
month
CONSUMER
FINANCING
Reduction
in
processing
upto 10%
charges from 10
to 50 %
Balance from
EURO 15,001/To
EURO
37,500/One Card
Balance from
EURO 37,501/& above
Allowed
Allowed
Two per month
Two per month
2 per month
2 per month
One Small
One Medium
No Key deposit
equivalent
of
small locker
2 instruction per
month
No Key deposit
equivalent
of
medium locker
3
instruction
per month
Upto 25%
upto 50%
One Card
PRODUCT LINES
PRODUCTS:
48
LOAN PRODUCTS
1: Commercial finance:
1.1: Running Finance:
A: Against Pledge of Shares:
Pledge of Shares
This facility is generally extended to companies or individuals on selective basis against pledge of
tangible securities such as Shares. Such financing is supportive to secondary Capital Market
concept. The facility is required to be adjusted periodically or within the period as specified in the
Sanction Advice/DAC. Given that Stock Market in Pakistan is volatile, banks are required to refrain
from extending loans to the market players who are engaged in speculations for short term
Gains, which quite often they fail to make, consequently rendering the facility to non-performing
ultimately.
POLICY:
Advances against shares shall not be allowed to:
Take exposure against sponsor directors shares (issued in their own name or in
the name of their family members) of banks/DFIs.
Take exposure on any one person (whether singly or together with other family
members or companies owned and controlled by him or his family members) against
shares of any commercial bank/DFI in excess of 5% of paid up capital of the share
issuing bank/DFI.
Take exposure against the shares/TFCs of listed companies that are not members of
the Central Depository System.
Take exposure against unsecured TFCs or non rated TFCs or TFCs rated below BBB
or equivalent.
Unless otherwise adequately secured by other acceptable collaterals, Advance to
finance Subscription, towards floatation of Share Capital of public limited company, is
not allowed, under Credit Policy.
Advances approved shall be within Per Party Limit (i.e., 30% of un-impaired equity of
Bank for fund based and non fund based subject to condition that the maximum
outstanding against fund based exposure doest not exceed 20% of Banks equity) and
supported by positive CIB/DFIs confidential reports. Loans exceeding Rs. 500,000/(Total Accommodation) shall not be more than 10 times of Borrowers Equity i.e. Capital
and Reserves minus losses and 04 times in case of fund based facility, as disclosed in
their balance sheets.
49
Financing shall be allowed against shares registered in the name of Borrower, however in
case the shares tendered for pledge are registered in the name of a Third Party, the letter
of lien shall be signed by the Third Party and not by the Borrowers.
Advances Department Head or RCAD shall conduct a monthly review of financing against
shares and exercise vigilance over:Market Rates of pledged shares.
Their marketability.
Dividend/Bonus declarations etc.
Minimum margin requirements:

1. Exposure against Shares of Listed Companies shall be subject to minimum margin of 30% of
their current market value as per prevalent Prudential Regulations, which may at the discretion of
the Bank be set higher. However, in terms of the Prudential Regulations the Bank shall monitor the
margin on at least weekly basis and shall take appropriate action for top-up and sell out, on the
basis of approved Credit Policy and prior written authority from the borrower.
2. Exposure against TFCs rated A and above, by State Bank of Pakistan approved Credit Rating
Agency, shall be subject to a minimum margin of 10%, while the exposure against TFCs rated A-
and BBB shall be subject to a minimum margin of 20%.
B: Against Government Securities:

Government Securities:
Government Securities include Defense Saving Certificates (DSCs), Special Saving
Certificates (SSCs), Regular Income Certificates (RICs), and Behbood Certificates, US Dollar
Bonds & NIT Units etc, issued by National Saving Centre Government of Pakistan/National
Investment Trust.
Large amount of funds representing Provident Fund, Benevolent Fund collections are invested in
the Government Securities, which are yielding better return compared to placements with
Commercial Banks. Banks also extend credit facilities against pledge of Deposit Certificates or
other instruments of value issued in the name of Individuals, Joint Holders Public Bodies, and
Firms, issued by various Government regulated Investment/Saving Organizations, which at the
moment are restricted to Maximum of Rupees One Million and are subject to change.
50
POLICY:
1. All Credit Financing against pledge of Securities require Credit Limit approved by Credit
Committee, even if 100% covered by cash or collateral.
2. Documents complete in all respect duly vetted by Banks legal counsel signature verified shall
be obtained ensuring their validity in a Court of Law. Signatures shall be verified in pencil on
each document.
C: Against Hypothecation of Stocks:
Industrial organizations have to invest a large sum of money to build stocks of raw material to up
keep their manufacturing line. This is apt to create liquidity constraints in the Financial Balance
Sheet of the customer. To manage such financial gaps/shortfall in their cash flow they usually
resort to borrowings from Banks against Hypothecation of raw material/semi or finished goods
held by them in their stocks.
Banks in such cases although do not have a physical custody of the goods, however have a legal
Charge/Lien established, thereon, providing a legal recourse to the Bank to take custody of the
stocks, in the event the borrowers default to repay the loan or fail to meet their obligations, as
agreed. Criteria to merit this facility is provided in the Banks Credit Policy Manual, which is care
fully assessed by Risk Managers, while recommending a credit proposal to credit committee.
Some of the basic requirements are as follows which are included for general understanding of
the Processing Officers at Branches/CAD:
It shall be ensured that the borrowers have absolute title to the goods and the same are not
encumbered or previously hypothecated to any other Bank.
Formal charge (First/Second/Pari Passu) is created in the name of the Bank.
Goods offered are not perishable, or have short expiry period and do not warrant special
storing.
Stocks offered for hypothecation are easily marketable and its price is not highly fluctuating,
otherwise the Bank retains higher margin.
Stocks under hypothecation are not restricted by SBP/Government as a policy to maintain

market supply.
51
POLICY:
Advances against hypothecation of goods is subject to the policies as applicable to other loans,
and as spelled out in the Credit Policy Manual with the exceptions given below:Stock Reports, duly signed by borrowers, are received periodically at a frequency as spelled out in
the DAC/Credit Proposal etc.
Limits are adjusted by CAD in the system in accordance with the Drawing Power worked out each
time a stock reports is received and value of stocks reassessed by applying latest Pricing Index.
Negative Variance between the net value of stocks (i.e., market value less margin) and the
outstanding advance shall be reported to the relationship/Risk Manger, who shall advise the
borrowers to cover the shortfall by additional stocks or adjust the facility accordingly.
1.2: Demand Finance:

Credit facilities extended against registered mortgage of property (i.e., land/buildings constructed
or to be constructed) is by nature classified as a Secured Advance. A formal charge on the
property is established and recorded with the Registrar Land and Property termed as registered
mortgage. Advances are also made against equitable mortgage of property, whereby the original
title Deeds are deposited with the Bank as Security and the charge is registered with the Registrar
SECP.
In case the Finance is allowed to Limited Companies, where the original title documents of
Land/Building and other Fixed Assets are held by the senior charge holders, our charge (PariPasu or ranking) as approved by Credit Committee, shall be recorded with the Registrar Securities
& Exchange Commission of Pakistan (SECP). However, in case of Pari-Pasu Charge, NOCs from
the senior Charge Holders shall be obtained before registration of charge with SECP. In case of
borrowers failure to liquidate the obligation, or on classification of the advance to NonPerforming the Bank has a legal recourse to apply for a decree in a court of law, to sell off the
mortgaged property through auction as ordered by the court.
POLICY:
52
Facilities are disbursed or allowed to be availed by the customers only on receipt of a formal DAC
issued by RCAD & duly signed by CAD Head.
CAD shall issue DAC only when charge Documents & Securities as spelled out in the Sanction
Advice have been received and lodged in the safe vault, however in rare cases DAC shall be
issued where some of the secondary nature documents are not received for acceptable reasons
and that the deferment is approved for a specified period by the level of the authority as given
below:
- Formal approval for deferment of specified documents from Credit Committee shall
be necessary, in terms of Credit Policy.
- DAC issued where receipt of some of the documents is deferred shall clearly highlight
the deferment approval and the period of deferment. Extension in the deferment
period, if required further shall require appropriate level of credit approval.
1.3: Cash Finance:
This facility is generally provided against pledge of goods. Under this type of financial
accommodation the facility amount is disbursed in specially opened account for the purpose. The
pledged goods are released to the borrower against cash payment only. In case the goods
pledged are seasonal in nature, the customer would be required to adjust the facility before the
season ends. Rollover shall not be allowed.
POLICY:
Basic criteria to qualify for advances against pledge of goods is as follows:
Facility is disbursed in specially opened CF A/C for the purpose
It shall be ensured that Goods tendered for pledge are:-
Free from credit restrictions imposed by State Bank of Pakistan
Not perishable, do not require special Storing arrangements/conditions and have short
expiry period.
53
Easily marketable and their price is not highly fluctuating. If so higher margins shall have to
be approved & retained
Where variation in pricing is observed during periodic evaluation, the customer shall be
advised to make good the shortfall in the drawing power.
Where variation in pricing is observed during periodic evaluation, the customer shall be
advised to make good the shortfall in the D.P.
The borrowers hold an absolute un-encumbered title to the goods
2: Consumer Finance:
1. BOP Aasiash Loan
2. Quick cash
3. Car loan
4. house loan
5. smart cash personal loan
3: BOP ATM / Debit Card:
BOP Apna Cash Card is an ATM plus Debit Card.

(a) The front of the card will have the following matter on it:
Card Holders Name
54
International Bin Number (6 Digits - XXXXXX)
Card
Number
(YYYYYYYYYY)
(total
IMD+CARD
num
has
to
be
16
(b) The back of the card will have:
Magnetic Strip
Signature Panel
Conditions of Usage
M-Net and M-Net logo
1. Service :
The BOP Debit Card holders will be able to transact at any of the 1000 + Merchants across the
country. The following services can be utilized at the Point of Sale (POS) terminals.
1.1. Purchasing:
Your BOP Debit Card can be used in place of cash at all outlets where the M-Net logo is
displayed. This is a service which lets you pay directly from your account without using cash.
When a payment is made through the debit card, your account is directly debited.
1.2. Balance Enquiry:
The Point of Sale (POS) terminal also lets you view your balance of all the linked accounts to
your card.
2. Sites:
BOP Debit Card Holders can transact at any of M Net merchant locations country wide. These
POS terminals are available at Shopping Malls to Petrol Stations. The list of country-wide
merchants is attached as Annexure I. All merchants who display the M-Net logo will accept the
BOP Debit Card.
3. Plastic with M-Net logo:
All new plastic that will be ordered from now on will bear the M-Net logo. The existing plastic
will be used for customers who want the debit card facility, as the cost of the wastage of
scrapping our existing stock is too high. Merchants will have to be informed to accept all BOP
plastic, irrespective of M-Net logo. New order of plastic will bear M-Net logo.
55
Customer Eligibility
The ATM Card will be issued to Savings and Current Account holders who maintain their
accounts with the bank and in terms of the account opening documentation are authorized to
operate the account singly or jointly.
For Joint Accounts, which are operated on the signature of any one of the account holders,
ATM / Debit card can be issued. The joint accountholders will be jointly & severally liable for
any transactions processed by the use of the cards and the terms and conditions as laid down
shall be jointly & severally binding on all account holders.
Cards will not be issued on the following accounts:
i. Any non-personal account i.e. Companies, Organizations, Trust Account,
Government account and Collection account etc.
ii. Dormant, inoperative, blocked or restricted accounts.
iii. Accounts with NIL balance.
iv. Term Deposit Accounts.
v. NIDF Accounts. (Non Interest Demand Finance Accounts)
vi. Accounts requiring thumb / photo for operation (illiterate accounts) ATM/Debit
cards can only be issued on local currency accounts.
4: SME Finance:
CNG Filling Station
Lady Entrepreneur Scheme
Auto lease financing scheme
Car Dealers financing scheme
Karobar Barhao scheme
Fertilizer Dealer
Ali Akbar group financing scheme
Alas Honda limited authorized dealers financing scheme
Financing scheme Office / Shops Purchase
56
5: Agriculture credit:
1.1: Kisan Dost Agree Finance Schemes.
Purpose:
Provision of financial facility to farmers for purchase of inputs (Seed, fertilizers, pesticides,
fungicides e.t.c).
Eligibility:
Resident Self Cultivator having maximum 50 acres. The applicant should not be defaulter of any
other Bank and property should be free from any encumbrances.
Amount:
Maximum Rs.500, 000/- according to per acre limit of the crop.
Security:
Charge on Agriculture Land through Agri. Pass Book.
OR
Registered / Equitable mortgage of urban property assessed by PBAs approved
surveyor and cleared by Banks legal counsel.
OR
Liquid security in the shape Banks Fixed Deposited Receipts/DSC/NSC or Regular
Income Certificates. One Personal guarantee of reputable person. ACOs along with
Regional Chief can waive this condition if they deem the borrower to be very credit
worthy. Two written satisfactory market checking reports.
Margin on Collateral Security:
50% Margin on Agri land or Urban property assessed by Surveyor.
25% margin on liquid security or Agri land as per value in revenue record.
The maximum amount of Finance will be allowed up to 75% of the Oast Bai Value of land
(Oast Bai is verified by Revenue Officer)
Insurance:
Borrower will to arranged Crop Insurance and Life assurance by company on banks
57
panel.
Mark-up:
Average Six month KIBOR + 350 bps (3.5%) with floor of 8.5% per annum.
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.
1.2: corporate farming scheme:
Mode and Purpose of Finance:
I.
FUND BASED FACILITIES:
Following fund based facilities can be provided under this scheme.
1. Agricultural Finance Facility (Purchase of crop inputs i.e. seed, fertilizer,
pesticides, fungicides etc.)
2. Tractor Finance Facility (For purchase of maximum two tractors on lease finance
basis).
3. Finance for Farm Mechanization (For purchase of Farm Mechanization Machinery,
Tools and implements on lease finance basis).
4. Finance for Farm Aabiari (For installation of tube wells and adoption of modern
irrigation systems on lease finance basis).
5. Finance for Farm Transport (For purchase of Small pick-ups and loader for Farm
Transportation).
6. Finance for Live Stock Development (Purchase of animals for Dairy Farms,
Poultry Farms and Fish Farms).
7. Finance for Islah-e-Arazi (Land development, improvement and reclamation).
Any of all above facilities can be provided as a package deal.
58
II.
NON FUND BASED FACILITIES:

1. Opening of Letters of credit for import of farm related agriculture goods for
corporate farming e.g. inputs, machinery, tools, implements and Vehicles etc.
2. Issuance of Bank guarantee for purchase of farm related commodities e.g.
inputs, machinery, tools, implements, and Vehicles etc.
ELIGIBILITY:
1. Resident Self Cultivator doing corporate farming on an area not less than 50
acres of agri land.
2. Self Cultivator cum Tenant having total farming area not less than 50 acres of
Agriland (owned and leased). The Lease Agreement for lease hold area should
be valid and for reasonable tenure.
3. Tenant having valid lease agreement for reasonable tenure for not less than
area of 50 acres agri land.
Following persons will not be eligible for the said scheme:
1. The applicant who is not a genuine farmer.
2. The applicants whose name does not appear in the Revenue records.
3. The applicant should not be defaulter of the banking system.
4. The applicant is unable to produce proper security/securities/passbook.etc
SECURITY:
1.
Charge on
OR
Registered/Equitable mortgage of Urban property assessed by PBAs approved

surveyor and cleared by Banks legal counsel.
OR
Lien on Liquid security in the shape of Banks Fixed Deposited receipts/DSC/Regular
Income Certificates.
2.
One personal guarantee of reputable person. ACO along with Regional Chief can
59
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 landed property (Agri/Urban)
25% margin in case of liquid security or Agriland assessed as per revenue record.
The maximum amount of Finance will be allowed upto 75% of the Oast Bai Value of land
(Oast Bai is verified by Revenue Officer)
AMOUNT OF FACILITY:
The amount of facility will be based on value of security provided and future Cash Flows from the
avenues on which the funds will be invested.
In order to assess the amount of future cash flows following aspects should taken into
consideration:
1. Past three years output of the farm under cultivation with the applicant.
2. Future expected output of the farm.
3. Complete Feasibility Report of the project.
MARK UP:
The prevailing Mark-up of respective Scheme.
REPAYMENT PERIOD:
Repayment period of any or all facilities to be provided to an Owner cum Tenant or a Tenant
should be fixed according to the validity of Lease Agreement of Agri Land e.g. if a person has
lease agreement in his name which is valid up to 30-06-2007 all the facilities should be repaid or
amortized before the expiry of lease agreement.
In case of exclusive owner repayment period will be fixed according to the terms and conditions of
respective Kissan Dost Agriculture Finance Scheme.
INSURANCE:
Crop Insurance and Borrowers Life Assurance.
60
DOCUMENTATION & OTHER TERMS AND CONDITIONS:

Documentation and other terms and conditions of facilities mentioned herein above will be the
same as that of respective Banks Kissan Dost Agriculture Finance Schemes.
1.3: Commercial Lease Finance Tractor Scheme:
PURPOSE:
For Purchase of Tractors to be used in Agri related activities. The terms and conditions will be
according to the structure of Lease Companies.
ELIGIBILITY:
Farmers, self-employed persons/firms/companies/institutions related directly or indirectly related
with Agri Business.
(i)
(ii)
(iii) AMOUNT OF FINANCE:
The amount of finance will be 80% of purchase price of the Tractor and lessee/borrower will
contribute 20% equity towards the purchase price of Tractor.
(iv) SECURITY:
1. Tractor itself which will be registered in the name of Bank.
2. Two personal guarantees of the persons having good market reputation and acceptable to
the Bank. The guarantors should be having sufficient assets to cover the amount of finance.
The Manager and ACO will verify the worth and market reputation of client and guarantors.
3. Comprehensive insurance of the assets (with Bank mortgage clause) and life assurance of
the borrower.
RATE OF RENTAL INCOME/MARK UP:
Average Six months KIBOR + 500bps (5.00%) with floor of 10% per annum.
PERIOD OF REPAYMENT:
61
In five years 60 monthly installments (Principal + Markup). The installment will start from the
month of delivery of tractor.
Sixty post dated cheques equal to the amount of installment (Principal + Markup) will be obtained
from the borrower at the time of disbursement.
INSURANCE:
Insurance coverage of agriculture finance is compulsory. Comprehensive Insurance of asset
acquired and Life Insurance of borrower should be arranged through Head Office at the cost of
borrower.
DOCUMENTATION:
(b) Applications will be entertained on Agriculture Loan Application Forms. ACO and Branch
Managers will conduct verifications as in vogue in other Agriculture Credit Schemes. All
charge documents as per Lease Finance Tractor Scheme will be obtained along with 60
post dated cheques.
(c)
(d) DOWN PAYMENT:
Total down payment includes equity (margin), processing charges, Insurance Premium for first
year.
PENALTY/PRE-PAYMENT:
Late payment surcharge @ 5% on amount of installments delayed.
Pre-payment penalty @ 5% on principal outstanding. However, if the customer repays in order to
obtain finance for new tractors no penalty may be charged.
LOAN APPROVING AUTHORITY:
Regional Chiefs/Chief Manager, Main Branch,
CREDIT BUREAU:
State Bank of Pakistan has a Credit Information Bureau (CIB), which maintains credit information
of companys as well as individuals. Another independent consumer Credit Bureau by the name of
Data Check (Pvt) Ltd. is also operating in the country containing negative data of large consumer
Banks. CIB report will be obtained for the cases of Rs.500, 000/- and above whereas report from
62
Data Check (Pvt) Ltd or confidential reports from other Banks will be obtained for the cases below
Rs.500, 000/-.
1.4: Lease Finance Facility for Purchase of Milch Animals:
PURPOSE:
Lease Finance Facility for purchase of Milk producing animals for Dairy Farming.
ELIGIBILITY:
The applicant should be well experienced and having its own well constructed Live Stock Farm,
Semen Production Unit.
AMOUNT:
(e) In case of Lease Finance 80% of cost of assets (animals/equipment/vehicle/machinery)
(Maximum Facility can be granted up to 50% of forced sale value of property)
Section I.2
Section I.3 Primary Security:

Leased assets in the name of Bank.
COLLATERAL SECURITY:
I.
Charge on property through equitable/registered mortgage OR Liquid security in the shape
Banks
Fixed Deposited Receipts/DSC/NSC or Regular Income Certificates.
II.
One personal guarantee of reputable person. ACO along with Regional Chief can
waive this condition.

MARGIN OF TANGIBILE SECURITY:
50%-25 margin on landed property (Agri/Urban). & 25% margin in case of liquid security. The
maximum amount of Finance will be allowed up to 75% of the Oast Bai Value of land (Oast Bai is
verified by Revenue Officer)
INSURANCE:
63
Comprehensive Insurance of the Lease/Hypothecated stock at borrowers cost.
Life assurance of borrower under the Banks charge.
MARK-UP:
15% per annum.
VALIDITY:
Five years in case of Lease Finance Facility.
REPAYMENT:
20 equal quarterly installments (Principal and Mark-up) in five years.
6:Non-Fund Based Scheme:
1: Documentary letter of credit:
Letters of Credit
a) A Letter of Credit (LC) is one of the most widely used modes of settling
international trade debts. It is also convenient and common method of obtaining
short term finances from the banks.
b) LCs are broadly classified as follows:
I) Sight Letters of Credit (DP)
ii) Usance Letters of Credit (DA)
In case of Sight LC, the draft is drawn at sight and the relevant documents are held by the
importing bank until retired (released) by the customers. In the case of Usance LCs, the draft is
drawn for a certain period (number of days) clearly mentioning in the LC, payable by the customer
on due date.
Third Party LC:
Documentary Letters of Credit established on behalf of third parties (parties other than the
principal obligor) represent an additional element of risk. Therefore, if imports on behalf of third
parties are anticipated, the line description should clearly state. Additionally, the customer should
64
clearly state on the LC Application, the LC is issued at customers risk and liability.
Deferred Payment Credits:
Normally the terms of a documentary credit will include an instruction to the beneficiary to draw
bills of exchange, and issuing bank will guarantee that such bills will be honored, provided all the
other terms of the credit are met.
However, in deferred payment credits, there is no need for the exporter to draw a bill of exchange.
The issuing bank simply undertakes that payment will be made on a fixed or determinable future
date, provided the other conditions have been fulfilled.
Although the exporter does not draw a bill of exchange, in all respects these credits are identical
to other documentary credits and some banks, in practice, will negotiate the documents providing
they are entirely satisfied with the standing of the issuing bank. One benefit of deferred credits is
that they avoid the need for payment of stamp duty on bills of exchange. All credits must clearly
indicate whether they are available by sight payment, by acceptance or by deferred payment.
Shipping Guarantees:
a) Policy The issuance of shipping guarantees to cover missing documents under our own
documentary Letters of Credit and documentary collections will be subject to the requirement set
forth in this section. Issuance of shipping guarantee will require a sub-limit under LC.
b) Customer Documentation In all cases involving shipping guarantees, the customer will sign our
standard shipping guarantee application, which includes an irrevocable undertaking that the
customer will accept the relative documents when received, regardless of discrepancies.
c) Security Shipping guarantees related to sight/Usance documents under LCs and collection will
be issued against cash collateral. Cash collateral should be kept in local currency unless
requested by the customer, since it will be refunded as soon as the shipping guarantee is received
back by the Bank.
65
d) Missing Invoices In case of documentary collections when the invoices are not available with
the Bank the value of merchandise for issuance of shipping guarantees will be established on the
basis of supporting documents relating to price along with an undertaking to indemnify the Bank in
case of any fluctuation in price resulting in a shortfall in value. In such cases approval of
appropriate authority will be required.
e) Open Ended The requirement for a fixed expiry date will be considered as waived in all cases
since carriers and Customs Department do not accept shipping guarantees with a stated
expiration date.
f) Decontrol Shipping guarantees can be decontrolled after settlement of documents in the
following scenarios:
Return of original shipping guarantee instrument.
On settlement of documents related to Airway Bills.
When original Bill of Lading (B/L) is with us, and provided two follow-ups have
been sent to the importer with an interval of 2 weeks each.
The original B/L should be kept in the file to serve as evidence in the event
the shipping agent inquire or call on the shipping guarantee. Credit Committee
approval for the amount of the transaction should be taken.
2: Standby letter of credit:
An alternative to the bond is a Stand-by Letter of Credit issued in favor of the beneficiary,
promising to pay a given amount against specified documents, usually a formal default claim.
There are various types of SBLCs, the main ones being linked to the various types of obligations
covered by bonds. Thus the main stand-by credits are called:
a) Bid/tender bond stand-by credits
b) Counter stand-by (to support the issue of a performance stand-by if a commercial contract is
awarded which had a bid/tender stand-by included)
c) Performance stand-by
d) Advanced payment stand-by
As a generalization, the applicant of such a credit would be the equivalent of the person who
66
applied for a bond/guarantee and the beneficiary would be the same as the beneficiary of a bond/
guarantee. Thus in the equivalent of a bid, counter and performance bond situation, the applicant
would be the exporter/seller and the beneficiary would be the importer/buyer. However, the use of
SBLCs is not necessarily restricted to the above situations and there are many instances where a
documentary credit promising to pay a given amount against specified documents such as a
formal default claim would be appropriate.
From a banks point of view an SBLC is better than a bond because it will be subject either to
Uniform Customs and Practice for Documentary Credit (1993 revision), or to the International
Standby Practices 1998, instead of being subject to complex legalities. In addition, an SBLC will
always have a definite expiry date which can overcome one of the main problems for issuers of
bonds. It is anticipated that the bulk of SBLCs in future will be drawn subject to ISP 1998, since
these rules are more appropriate than the traditional UCP for a bond type situation. The new rules
make SBLCs even more attractive as an alternative to bonds.
SERVICES:
1: Commercial Banking:
The Commercial Banking Group has been formed to cater the needs of small & medium size
customers for increasing Banks business significantly with clear focus, repositioning of resources
and active marketing to improve Banks profitability. Commercial Banking will deal with customers
having sales turnover and aggregate credit exposure as per benchmarks prescribed in the SBPs
Prudential Regulations.
This Groups emphasis will be to meet necessary business needs of customers which are
numerous as compared to CIB clients but their individual credit requirements are relatively much
smaller. In view of this peculiar nature of this business segment that involves a higher turn over a
much wider network is needed. The SME will concentrate on rebuilding its set up which suits to its
peculiar needs on all locations.
2: Corporate Bank:
67
The Corporate Banking shall endeavor to market new clients and retain the existing relationships
and build market share through offering superior services, competitive pricing and wide product
range to valued corporate clients including the Multi National Companies (MNCs). This Unit taking
advantage of tremendous growth potentials of corporate accounts will continue its endeavor to
remain a major contributor to Banks earnings.
The human resources of CIB shall be beefed up by inducting adequate number of professionals
and approval process streamlined by installing credit committees of various tiers at all Regional
locations. The benchmark for Corporate Banking clients would be as per criteria laid down in the
SBPs Prudential Regulations.
3: Investment Banking:
IBG specializes in providing innovative and unique advice to its clients to assist them in meeting
challenges in an ever-changing market. The Unit shall be equipped with experienced
professionals. IBU will either lead or participate in the major TFCs in the market.
Investment Banking Unit offers full spectrum of services, which include TFCs, Syndicated
Finances, Structured Finances, Leveraged Buyouts, Project Finance, Quasi-Equity Products,
Independent Advice, Equity Placements, IPOs, Equity Underwriting, Mergers, Corporate
Restructuring, Acquisitions and other products. IBU shall also work on and come up with providing
Fund Management Facilities.
4: Cash Management Service:
Cash Management is a process of collections & payments on behalf of the Customers using the
Bank Network. The objective is to facilitate organizations with multiple collection points in
gathering Cash / Funds and making them available in the customer operating Account. Similarly it
facilitates
disbursement
of
frequent
and
or
Bulk
payment
to
multiple
locations.
This should be accomplished with minimal supervision by the customer, supported by an

automated system to provide timely and requisite MIS / Reconciliation under agreed Service
Levels.
5: Utility Bills:
68
The bank collects all kinds of utility Bills including Electricity, Gas and Telephone from customer.
All Branches of the Bank collect Utility Bills during banking hours which are paid through cash and
cross checks.
6: BOP Locker:
The Bank of Punjab Lockers are available in three different sizes Small, Medium and Large on an
annually fee with one time Security Deposit respectively to the size of locker. Locker holders need
to have an account in the Bank.
EXCHANGE OF DATA WITH OTHER BRANCHES

The accounts department is responsible for exchanging information with other branches. This
information or data consists of all the branch transactions and activities.
Reduction in rate
upto 40 bps
upto 50 bps
bps
2) The reduction in rate of markup on Consumer finance will be on loan amount equal to twice of
last months average balance.
3) In order to further facilitate the managers in targeting customers, it will be at the discretion of
the manager to offer the incentive package from day one. However it will be the responsibility of
the branch ensure that customer completes the criteria as per above table otherwise recover the
charges waived.
4) The incentive package will be reviewed on quarterly basis. The Bank reserves the right to
change, modify the package.
5) The rate of profit will be same as per Banks declared rate on foreign currency.
INTERACTION WITH THE AUDITORS

Accounts department is maintaining all the record of all the departments and running all the
branch expenses and keeping a record of revenues. All this information is provided to the auditors
by the accounts department.
69
CASH AND DEPOSITS DEPARTMENT
70
3) CASH AND DEPOSITS DEPARTMENT

The cash and deposit department performs the operational functions of the bank. Basically it deals
with transfer of funds. The following activities are the done in this department
Cash receipt and payment
Cash management
Issuance of DD, PO, TT, MT, CDR
Clearing (inward and outward)
Stop Payments
RECEIPTS AND PAYMENTS

Separate counters for depositing cash or cheques and payment of cash against instruments are
present in the branch. Cheques are received and payment is made against them. The signatures
of the cheque are being verified by the CD incharge if the amount is less than Rs.25, 000 and by
the manger operations if the amount is above Rs.25, 000. Two signatures of the presenter are got
on the back of the cheque before making payment. The cheque is stamped as PAID after making
the payment.
When a cash amount is to be deposited with the bank the client has to fill in a deposit slip. The
cashier stamps the deposit slip as RECEIVED and gives one portion of it to the depositor and
keeps the other part for bank's record.
CASH MANAGEMENT
This is done by balancing all the cash receipts and payments in the branch. It also includes
transactions with other branches and internal transfer of funds.
STOP PAYMENTS
The CD department also makes arrangements for stop payment of
Cheques on the request of the client. The request of stop payment is made in the following case
The cheque has been stolen or lost
To cancel the cheque which has already been written out and handle to the counterpart and
the client will request the bank not to make the payment if presented.
The particulars of stop payment cheque are immediately recorded
TRANSFER OF FUNDS
The Bank of Punjab's cash and deposits department provides remittance facility to its customers.
This facility is related to the general transfer of funds and includes the following modes
Demand Draft
Telegraphic Transfer
Pay Order
71
Mail Transfer
Cheques
Letter of authority to encash cheques
DEMAND DRAFT
Demand Draft is a negotiable instrument, which is drawn by one branch of bank in the name of
another branch of the same bank or any other bank anywhere in the country. It is an
unconditioned instrument in writing drawn by a bank in favor of any person on a branch of its own
bank or any other bank to pay a certain sum of money to his order for value received. Demand
Draft is an order instrument being capable of transfer by endorsement coupled with delivery.
Demand Draft can be issued to customer as well as to non-customers against cash receipt,
cheque and against letter of instruction.
The beneficiary has to prove his identity at the paying office of the bank to receive the payment.
Demand draft is the most common and popular form of remitting funds from one place to another.
The reason is that there is no chance of return or stop payment. The bank is held liable if it
refuses to make payment against DD and there is a penalty imposed by State Bank of Pakistan.
ISSUANCE OF DD
The drafts are issued on submission of a funds transfer application form (printed), filled in and
signed by the purchaser with his full address. The following particulars are generally required in
these applications
Date
The name of office on which it is drawn
The name of the beneficiary
Amount in words and figures
Bank 'exchange' amount
The signature and address of the applicant the draft is issued after the applicant has submitted the
money. The draft has the following particulars:
Date
Beneficiary's name
Name of the drawee branch
Amount in words and figures
The demand draft is then signed by two authorized signatories of the bank.
The entry of the DD's issued is made in the DD issued register to keep the record of DD's
updated. The drawing branch of the bank will give credit to the drawee branch on the same date
the draft is issued, for settling their branch transactions.
Now days it is the uniform practice among all the Pakistani banks that they do not pay the drafts
before the receipt of the relative advice. On receiving the relative advice the drawee branch will
72
credit the amount in their drafts payable account and each time the draft is paid, this account is
debited with the amount paid. In case the draft advice is not received the draft will be paid 'ex
advice' and entered into a separate register and marked off when the advice is received.
An advice is prepared and a number is assigned to it which is known as S.A number or Settlement
advice number. S.A number includes the code of the drawing branch and the code of the drawee
branch. Incoming and Outgoing files are maintained to a lot numbers to settlement advices
accordingly. In coming number is allotted to the settlement advice prepared for received funds and
outgoing number is allotted to the settlement advice prepared for funds sent to other branches.
One copy is sent to the drawee branch and the other is sent to the
Treasury for settlement of inters branch transfer.
Service charges for DD, and other fund transfer instruments are credited to the service charges
head and the applicant's account is debited.
ISSUANCE OF DUPLICATE DRAFT

In case the draft is lost or destroyed by mistake, its duplicate can be issued at the request of the
purchaser after obtaining indemnity bond on stamped paper of appropriate value. This is done to
cover the risk of double payment. The entry is done in the relative register against the original
draft.
The duplicate draft is issued after receiving confirmation from the drawee office to the effect that it
has not been paid. The drawing office is also advised separately by a letter regarding the issuance
of a duplicate draft.
The drawee bank marks a caution and will not pay the draft if presented thereafter.
CANCELLATION
The payment of DD can be made to the applicant by cancellation. This is done only after the draft
is being surrendered to the issuing office.
MAIL TRANSFER
A fund application is submitted by the customer. The mail transfer instrument is not delivered to
the applicant, but instead it is sent by the issuing office to the beneficiary's branch. This type of
remittance facility is provided only if the beneficiary is the customer of the bank. The amount is
directly credited to the beneficiary's account. A bank's customer can very easily remit the funds
from one place to another, by giving instructions to the bank.
Credit balance of the customer can also be transferred from one branch to another with .the help
of this instrument. The customer can either deposit cash or get his account debited by the amount
that is to be remitted, including the bank charges.
Mail Transfer advice is prepared and the test number if written on the MT advice. The advice is
given to dispatch department for onward transaction. The particulars of mail transfer are recorded
in a mail transfer register.
73
PAYMENT ORDER
It is an order to pay. It is a facility provided to customers it contains instructions for payment to
certain person whose name is written on pay order or in whose name/favor pay order is prepared.
Pay order is used within a city for making payment to the parties having account in the bank other
then the payer's bank. For the issuance of pay order prime commercial receives nothing, it is a
free service.
PROCEDURE
Following process takes place when a customer comes to The Bank of Punjab for pay order
issuance. A funds transfer application is filled that specifically mentions the word Pay Order. The
application form similar to that filled in case of a demand draft. Actually the bank has only one
format for fund transfer application and the customer just has to mention the mode of fund
transfer.
After the form gets filled bank officer makes an entry in the register about a pay order issuance.
This page of register contains following information:
Name of applicant
Beneficiary's name
Date of issuance
Date on which it is paid
Signature of the bank officer who is issuing p/o
Serial number
The customers account is debited by the amount of pay order or cash is received from him. Then
original p/o is typed. At the same time entries in the system are also made about p/o issuance
such entry contains the name of issuing party amount of p/o date and entry no or transaction no
and the p/o no with serial no as according to register. The bank uses software for the p/o known
as power builder. Pay order is either issued against
Cash or against debit of account. Application form also contains a place, which is for
Bank use only. It contains pay order number that is going to be issued. After this 2 copies are
prepared of a pay order. One copy is held with the department for the purpose of record the other
copy is for the auditor. And the original p/o is handed to customer. Now this p/o enables the holder
to get the amount from any bank in the city where the holder has its account. The customer will
present the pay order in any bank and it will reach BOP through clearing and settlement will be
made. After the payment of pay order again entries are made into the system. A list of all
outstanding pay orders is prepared twice a month. The department also maintains the record of
P/O stock that is left with the bank.
CALL DEPOSIT RECEIPTS

These are issued for transfer of funds for both within and out of city. These instruments are usually
used for bids. There are no charges for CDR.
CDR is call deposit. In case of tenders' parties prepare CDR's. If tender is accepted then payment
is made to the party to whom CDR was presented by The Bank of Punjab through clearing.
74
A list of outstanding CDR's is prepared twice a month.
ADVANCES / Credit
DEPARTMENT
75
4) ADVANCES / CREDIT DEPARTMENT

Credits department is responsible for advancing loans. There are basically two types of financing
Fund Based
Non-fund Based
FUND BASED FINANCING FACILITIES:

BOP CAR LOANS
Bop car loans is a Demand Finance facility to Purchase Brand new locally manufactured
/Assembled Cars for Personal Use
You can avail this facility if you are;
Salaried persons; Permanent employee of selected organizations with at least 3 years of service
with a minimum take home salary of Rs 15,000. For Govt. Employees, Net take home salary is RS
12,000/Govt- Employees; Net take home salary is Rs .12, 000/Self Employed; Business person and professional having minimum 3 years in current business.
Holder of computerized national identity card
Between 25 and 57 years of age
How much loan facility can you avail?
Rate available in the market Minimum amount is Rs 200.000 and maximum amount is Rs
1,000,000
What will be the tenure of the loan?
76
Loan is available for a period of minimum 3 years and maximum 5 years
What will be mark up rate charged?
The mark up will be the most competitive
What will be in the initial down payment?

Down payment is 10% to 20% of value of the car.
The Bank Of Punjab has a foreign Exchange department in its main branch Davis Road. Daily
exchange rates are being issued by the main branch.
CREDITS
Credits department is responsible for advancing loans. There are basically two types of financing
Fund Based
Non-fund Based
FUND BASED FINANCING FACILITIES
These include all those facilities in which the disbursement of funds takes place from the bank
to the borrower. Examples of fund based facilities are
Running finance
Cash finance
Demand finance
Export refinance
Finance against imported merchandize
Finance against trust receipt
Finance against foreign bills
Finance against packing credit
NON-FUND BASED FINANCING FACILITIES

These include guarantees of payment or performance of a contract, on behalf of the customer.
Examples are
Letters of credit
Letters of guarantees
The procedures adopted by a bank while advancing a loan are discussed on the next page
77
PRINCIPLES OF LENDING
Lending is a very important portfolio of a commercial bank which requires great vigilance and technical
skill on the part of the banker. Some basic principles that are being followed while advancing a loan
are as follows:
1.
SAFETY
A 5 C's analysis is being conducted to ensure the safety aspect
CHARACTER
General reputation
Nature of business
Past record of borrowings (CIB report)
CAPACITY
To utilize the funds

To repay the funds
CAPITAL
The borrower must invest a considerable amount of money in a particular business from his own
resources. This will indicate his seriousness in the conduct and progress of the business.
COLLATERAL
Any security offered in addition to the primary security.
COMPLACENCY
The banker should take adequate measures to make proper documentation for the facility being
advanced.
2. LIQUIDITY OF SECURITY
Since the security is the only safeguard in case of a default, therefore, the banker should take
adequate steps to ensure the liquidity and marketability of the security.
3.
DISPERSAL
Loan portfolio of the bank should be for diversified sectors of the economy, so that in case of recession
in one sector, the loans may not become doubtful or bad.
4.
SOURCES AND MODES OF REPAYMENT
The modes and sources of repayment of borrowed funds must be determined. Cash flow statement
and balance sheet of the borrower should be closely studied and analyzed, to see whether the
borrowed funds will be repaid in lump sum or installments.
78
5.
DURATION OF LOAN
Whether a short term or long term be advanced to the borrower? Usually short term loans are
preferred by the bank because their recovery is relatively easy.
6.
EXPECTED BUSINESS
What business shall the borrower will bring to the bank in future.
TYPES OF SECURITIES
Securities offered against the loan amount by a borrower can be:
TANGIBLE ASSETS
Immovable and movable assets e.g. land, building, machinery, cash, accounts receivables,
inventory stocks etc are offered as security.
DOCUMENTS OF TITLE OF GOODS

For example airway bill, bill of lading, railway receipt, go down receipt etc
SECURITIES
Shares
Bonds
TFCs
NIT units
DSCs and SSCs etc.
Following principles must be kept in mind while accepting a security:
Transferability
Ascertain ability and stability
Marketability
Storability
Transportability
MODES OF CREATING CHARGE ON SECURITY

LIEN
79
Right of a person to retain the property of another person till the debt due from that person is
repaid.
HYPOTHECATION
\
An agreement to give charge on goods or documents of title to these goods without conferring
possession to the lender. Title document is surrendered with the bank and the possession remains
with the borrower. If raw materials are hypothecated then the finished goods produced from that
raw material will automatically be hypothecated.
PLEDGE
The bailment of delivery of goods from one person to another for some specific purpose. Title
document and the possession are with the bank and the borrower can get the possession of
goods only if he repays the loan in full or installments.
MORTGAGE
Transfer of a specific right in an immovable property for securing a payment of money or to be
advanced as loan or for the performance of an agreement or for settling a future liability. The
original ownership documents e.g. sale deeds are kept with the bank and the charge is marked
with the registrar of rights and ownership.
STEPS INVOLVED IN PREPARATION OF CREDIT LINE PROPOSAL
STEP 1:
Knowing the market place

Risks inherent in lending like marketability risk, default risk, earnings fluctuation risk etc.
Visits to the borrower's place
Plan visit and filling the visit report
Group accounts and bank exposure
Determine facility wise borrowing
STEP 2:
INVESTIGATING PROCESS
CONSIDERATION FOR LENDING
Projected earnings from funding facility

Anticipated business related to this funding facility
STEP 3:
PURPOSE OF LOAN
80
Reasonable
Manageable
STEP 4:
Identification of sources of repayment
STEP 5:
SECURITIES
Bank deposits
Govt. securities
Property etc.
STEP 6:
REPAYMENT (SOURCES)
VALUATION OF SECURITIES
By valuators
Prime Bank hires the services of a lawyer and gets a legal opinion from him about any
security.
STEP 7:
Value of existing charges

Residual left after satisfying the existing charges.
STEP 8:
EXISTING CHARGES
NEGATIVE COVENANTS
Restrictions on loan agreement.
SECURITY DOCUMENTS
Agreement for R/F term of short term on mark-up basis

Agreement for D/F 85 T/F of s/m/1 term on mark up basis
Memo of confirmation of sale and buy back
Letter of set off
Letter of lien
Letter of lien authority to marketable securities
Instrument of pledge
Trust receipt
Letter of continuity
Promissory note
Installment letter
Agreement of hypothecation
Letter of agreement/undertaking
Authority to debit accrued mark-up
81
BOP HOUSE LOAN

BOP house loan is long term finance facility for purchase of house /flat or construction of house on
self owned plot or for renovation/ home improvement.
You can avail this facility if you are:
Salaried Person; Permanent employee of selected organization with a minimum take home salary
of Rs 20,000
Self-employed: Business person and professional having minimum 5 years in current business
Holder of computerized National Identity Card
Between 25 and 60 years of age
How much loan facility can you avail?
Purpose
Purchase of
House /Flat
Construction
Home
Improvement
/Renovation
/Addition
Minimum Amount
Rs 300.000
Maximum Amount
Rs
7500,000
RS 300,000
Rs 3,000,000
Bank Rate
Bank financing up
to 70%of
assessed value
Bank financing up
to 20% of
assessed value
BOP HOUSE LOAN
What will be the tenure of the loan?
Purpose
Purchase of House/flat
Construction
Minimum
3 years
3 years
Maximum
20 years
20 years with maximum
12 months grace period
82
Home improvement
3 years
05 years
What will be the bank mark up rate charged?

Mark up will be calculated on daily product basis (Fir each year new amortization schedule will be
provided to the customer in the case of any change in mark up)
Other Charges
Non refundable fee
Processing Fee
Valuation charges , legal charges
Stamp duties .levies etc
Rs 450
Rs 2,950
Actual
BOP HOUSE LOAN

What is the security of the loan?
House /flat purchased

Plot on which construction is to be carried out
House on which renovation is to be carried out
What documents are required?
Copy of CNIC
Two recent photography
Last three Salary slips /salary certificate on company ,s letter head with joining date Current
designation , length of service ,gross salary &certificate from HR department for perks( for
salaried individual)
Bank statement for last six months for salaried individuals and for the last 1 year incase of
self- employed businessperson
Copy of utility bills
Fee slips of children if applicable
Income tax return /wealth statement
Copy of report agreement if living indented house
Business proof (fir a business person
Agriculture Finance Scheme
83
The Bank of Punjab offers the following agriculture financial schemes
Kissan Dost Agricultural Finance Scheme
Kissan Dost Tractor Finance Scheme
Kissan Dost Aabiari Scheme
Kissan Dost Mechanization Support Scheme
Kissan Dost farm Transport Scheme
Kissan Dost Eslah-e-arazi Scheme
Kissan Dost Live Stock Development Scheme
Kissan Dost commercial Agro Service Finance Scheme
Kissan Dost agric Finance Scheme

KISSAN DOST AGRICULTURE FINANCE SCHEME
PURPOSE
Provision of financial to farmer for purchase of inputs (Seed, fertilizer, pesticides, fungicides etc)
ELIGIBLILITY:
Resident Self Cultivator having Agriculture maximum 50 acres
Owner cum tenant having minimum land 5 acres under cultivation
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.
84
Security:
Charge on Agriculture Land through Agri.Pass Book
OR
Registered /Equitable mortgage of urban property assessed by PBAs approved surveyor and
cleared by Banks legal counsel.
OR
Liquid security in the shape Banks fixed Deposited Receipt? 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 Banks charge.
Mark up:
9% per annum
Repayment:
Once in a year along with mark up.
NON-FUND BASED FINANCING FACILITIES

These include guarantees of payment or performance of a contract, on behalf of the customer.
Examples are
Letters of credit
Letters of guarantees
The procedures adopted by a bank while advancing a loan are discussed on the next page
TERM LOAN CHECK LIST

In the case of ter5m loans, a check list should be prepared at least quarterly to measure progress
during the year. The purpose of the checklist is to measure whether the terms, condition, and
covenants of the term loan agreement are being complied with, and whether an event of default
has occurred. The review includes comparing actual financial numbers with projections made prior
to gathering then loan. Significant deviations should be explained in the annual revision.
85
CALL PROGRAM
In organized and documented call program is central to normal process management. Additional,
updated information is obtained through continual contact with the customer, and should be
documented in writing.
ACCOUNT PLANS
Account plans are an outline of the banks present situation with a customer, where the bank wants
to go with the customer, and how it plans to go there. This important element of the credit
management process reinforces the target market approach by continually focusing on the
appropriateness of each customer with the credit portfolio. It identifies a customer who no longer
satisfies the acceptance criteria established by the credit unit and spells out the action to be taken
with the account .It also identifies what additional bank products may be offered to provide greater
customer satisfaction and increase account profits.
ACCOUNT PROFITABILITY
Every credit in the portfolio should be justified in terms of risk and in terms of real or potential
profitability .The bank's credit resources are limited and should be channeled in an effective and
productive manner.
CREDIT INQUIRIES, INVESTIGATIONS AND REPORTS

Handling credit references is an important part of credit administration Care must be taken to
comply with written and unwritten conventions for exchanging this type of information .References
are important and should be obtained from creditors and suppliers for each customer.
COLLATERAL
Collateral should be monitored on a timely basis and continuously evaluated from control,
marketability and margin standpoints.
PORTFOLIO REPORT
Compilation of formal and informal portfolio reports for senior management is another important
credit department function. The information may vary depending on what senior management
wants. Typical information to be compiled is the amounts of outstanding by sector and business
unit, how these compare to budget, total past due obligations, cash basis loans, and classified
credits.
ADMINISTRATIVE FOLLOW-UPS
Credit administration support people track certain items on a monthly basis to be sure that
appropriate action is taken. However, the RM is responsible for the account administration .Items
typically tracked include:
Coming annual revisions,
86
Financial statements due,

Various certifications due,
Appraisals to be made,
Inspections of assets taken as collateral, and
Maturing insurance coverage on collateral assets.
CREDIT FILES
The administrative process is centralized in the customer's credit file. This file should contain all
information necessary to justify the extension of credit and support the credit relationship. The file
should be divided into sections and updated periodically by removing unnecessary material .The
credit files should be appropriately safeguarded. The following sections should be included with in
the credit file. The placement of these may be optional.
Credit and product approvals.
Credit analysis memos (including term loan reviews , account plans , and account
profitability reports)
Financial spreads and projections
Basic customer information
Credit references
Important memos (photocopies of key documents)
Classified loan management reports (CLMR)
Audited financial statements
PROBLEM RECOGNITION MANAGEMENT

INFORMATION
This aspect of the process involves detecting problem credits and anticipating which credits might
easily deteriorate into problem situations. Certain management information provides the data for
this step of the process. These include:
Portfolio review / credit evaluations,
Reports on overdrafts (daily),
Maturity reports (weekly)
Reports on interest earned not collected (IENC weekly)
Reports on past due obligations (PDO-daily)
Reports on cash basis out standings to detect if a problem situation may have deteriorated,
and
Other reports, such as listings of out standings against facilities available for drawing.
EARLY WARNING SYSTEM

Early problem recognition is a front-end function whereby relationship managers and risk
managers are jointly responsible An early warning system would be hopefully provide more lead
time in which to investigate alternatives and prevent a deterioration of key risk relationships.
87
As informal list of "caution flag" would denote adverse or potentially adverse developments with in
a specified risk situation .These items can be gleaned from the credit experiences of the senior
staff and could be very beneficial to junior officers. Examples of "caution flag" situations include:
Slowing economic growth,
Increasing inflation ,
Devaluation,
Change in regulatory climate,
Late financial statements ,
A change in auditor,
Unexplained buildups in receivables or inventory,
Out-of-phase seasonal borrowing,
Lack of effective financial and management information systems,
One man shows,
Highly authoritative senior management,
Speculative management tendencies,
Lack of firm strategic direction from senior management,
Absentee owners,
Key managers continually traveling,
Lack of customer or product diversification ,
And lack of supplier diversification
These situations may indicate potential problems. If the situation is sufficiently severe, it may
indicate that a problem already exists and that a classification may be appropriate.
PERIODIC PORTFOLIO REVIEWS

Another element of problem recognition is the function of credit or risk audits. Periodic portfolio
reviews help identify potential problems by bringing in a fresh, independent view point. However,
the fundamental responsibility for problem recognition is with the relationship manager.
REMEDIAL MANAGEMENT
The remedial management process is aimed at credits that have been identified as having a
higher than-normal degree of risk. In this phase of the credit process, the extent of the problem is
defined and an action plan is developed.
ADVERSE LOAN CLASSIFICATION INDICATE

DEGREES OF RISK
88
The classification degrees are listed below with some examples of the types of problems they
include. These categories are almost universally applied and serve to indicate differing degrees of
risk with in the bank's credit portfolio
OTHER ASSETS ESPECIALLY

MENTIONED (OAEM)
o
o
o
o
Evidence of financial .managerial, or operational weakness

Unrealistic payment schedule
Collateral shortfalls
Adverse regulatory, political, or economic environment
SUBSTANDARD
o
o
o
o
o
o
Serious financial problems

Deteriorated liquidity
Trade credit frozen
Debt restructuring
Significant shortfalls in collateral
Negative working capital / net worth
DOUBTFUL
o
o
o
o
o
Mandatory non-accrual
Some expected loss of interest and/or principal
Major losses o Reduced net worth
Bankruptcy, but there is valid collateral
Loss is foreseen but not yet quantifiable o Past due obligation (PDO)
LOSS
o Credits regarded as uncollectible
o Bankruptcy, with no collateral
o Reserve or write-off
REMEDIAL MANAGEMENT OPERATIONAL

REPORTS
The remedial management process includes operational reports, such as:
Past due obligations (PDO) listings, to measure the extent of delinquency;
Cash basis report, depicting loans not accruing interest; and

Quarterly Classified Loan Management Reports (CLMR) for credits classified OAEM and
monthly CLMR for credits classified substandard or worse, detailing the status of classified
loans.
89
ACTION PLANS
IDENTIFY APPROPRIATE STRATEGIES
The action plan that is defined for each problem credit is the most important aspect of remedial
management .These plans should clearly identify appropriate strategies for each specific situation,
and should list target dates and progress milestones. The recuperation percentage of problem
credits will ultimately reflect the effectiveness of these strategies. If the amount of problem credits
in the bank or branch is with in acceptable parameters, they are usually managed by the same
units that are initiated the relationships. There is a certain amount of justice in this, and the
experiences are invaluable for the credit staff.
TRANSITION MANAGEMENT
But, if the situation is one where a high percentage of the portfolio is affected (e.g. after a major
devaluation or as a result of a significant recession), it may be more effective to establish a
recovery or special asset management unit. This unit should be staffed with experienced credit
people who have, or can quickly develop, specialized expertise for dealing with these
relationships. The steps or formulating and implementing an action plan are:
1. EVALUATE THE PROBLEM

For the action plan to be meaningful and the target dates realistic, we take the following
immediate steps to evaluate the problem;
Review documentation.
Inspect collateral / value assessment.
Consult with legal counsel.
Obtain new projections (be realistic on assumptions).
Determine quality of financial data (get accountants and auditors involved).
Reanalyze the credit.
Determine liquidation value.
Keep demands reasonable.
Get client's cooperation.
Reevaluate management quality.
2. DEVELOP A STRATEGY
Armed with this information, and any other we think is necessary based on the circumstances, we
can formulate a strategy and establish a plan for managing the account. For this action plan to be
successful, we assign responsibility for remedial management of account to the best talent
available in our unit for the specific task.
3.
PREPARE AND IMPLEMENT THE

ACTION PLAN
There are many alternatives for corrective action. Selecting the most appropriate action can
determine the difference between success and failure. It would be impractical to list all the
possible alternatives for a given situation, but here are some actions to consider.
90
ACTIONS TO CONSIDER
Correct documentation discrepancies, if any, as soon as possible, as long as it does not

jeopardize your position as creditor (consult legal counsel).
Obtain additional collateral (consult legal counsel).
Verify that the funds are used for the purpose intended and approved.
Renegotiate terms and/or facilities; many times a new repayment schedule will give the
borrower the needed time to correct the situation.
If you restructure the transaction, be sure to improve your position. Get something in return
for longer tenor besides increased pricing (for example, additional guarantees and /or
collateral).
Always confirm results of meeting and conversations and new arrangement with the client
in writing.
Place the account on offering basis - no lines of credit or commitments outstanding.
Analyze and negotiate each takedown as an independent credit arrangement.
Monitor inter-company flows, receivables, etc, if applicable.
Sell the collateral.
Collect receivables.
Sell the business.
Exercise (call) the guarantees.
Advance new funds. In a few instances, a new loan may help improve the potential for
recovery, but this should be considered very carefully and only as a least attractive
alternative.
If additional money is required, make sure you see the best
financing alternative available.
91
Clearing department
5) CLEARING DEPARTMENT
The banker's clearing is supervised by State Bank of Pakistan. At places where there is no branch
of SBP, this function is performed by National Bank of Pakistan. Clearing arrangements are made
so that banks exchange and settle for local cheques, drafts and other banking instruments drawn
on each other deposited by their customers or received for collection or clearance.
Clearing is a system by which banks exchange cheques and other negotiable instruments
drawn on each other within specified areas and thereby secure payment for their clients
through clearing house at specified time.
MECHANISM OF CLEARING
92
The mechanism of clearing takes place as follows:
Every member bank is required to maintain an account with clearing house, through which final
indebtedness on a particular day is settled through a book entry. The member banks receive
cheques and other instruments form their customers, other branches and banks. Process them in
their books and present them in the clearing house through their representatives each day at a
stipulated time. All such instruments are exchanged by the members and final settlement is made
by the book entry in the clearing house. Either the account of the member is debited or credited
through this book entry. The cheques so exchanged are taken by the drawee banks to their
branches. These cheques are then checked and returned if there is any discrepancy in them. The
reason is mentioned in the cheque returning memo. The cheque is then returned in the leering
house in the afternoon for delivery to the presenting bank. Thus in the end the clearing house
finally advises the
members to debit or credit their accounts. If, on a certain day, a bank delivers cheques worth more
than the total amount of the cheques received, then its account will be credited with the excess
amount. And if the total amount of cheques and instruments drawn on a certain bank is more than
the total amount receivable, then the difference is debited. Indebtedness arising from presentation
of cheques is settled through the account and any shortfall on a particular day is arranged by the
bank concerned, by transfer of funds to the clearing house. Clearing can be distinguished into two
categories Outward clearing Inward clearing
PROCESSING OF OUTWARD CLEARING

Cheques are received from the clients. These cheques are received along with a deposit slip. One
part of the deposit slip is returned to the customer with a clearing stamp on it. The date of clearing
is one day ahead of the current day, because it takes one day for a cheque to get clearance. The
cheques are then sort out as local and outstation. The details of the cheque i.e. the amount,
cheque number, the account number and the name of the drawee bank are entered into the
register. These cheques are then prepared to be sent to the clearing house. The Bank Of Punjab
sends the cheques through NIFT. A slip and a sheet are along with the cheques to ensure that all
the cheques are being entered and sent.
PROCESSING OF INWARD CLEARING

Exchange and settlement of cheques and other instruments is done in the clearing house. These
cheques are received and then sort out. The process of sorting out includes checking of all the
necessary and required particulars. The signatures are also verified.
PROCESSING OF RETURN CLEARING

If there is any particular missing in the cheques, then these are returned back to the clearing
house along with the memo.
PROCESSING OF CHEQUES RETURNED
93
The cheques of the customers that are being returned by the drawee banks due to any reason
stated in the cheque returning memo are given back to the presenting back in the clearing house.
These cheques are returned to the customers and charges of Rs.200 are collected for it. If there
are more than one cheques of the same customer then he is only charged Rs.200.
ADVANTAGES OF CLEARING
Clearing is useful in the following ways:
It dispenses the need of physical transfer of currency from one bank to another and thus
saves a lot of time, cost and risk.
Enables clients to secure cash quickly against cheques.
Avoid unnecessary blocking up of large sums of cash. The bank can meet the clearing
demands of other banks with a small cash reserve.
94
Foreign Remittances
6)
FOREIGN REMITTANCES DEPARTMENT
For foreign remittances the bank has a direct contact with American Express. All the remittances
are carried out through Demand Draft (DD) and Telex transfer (TT).
FOREIGN DEMAND DRAFT : ( FDD)

If anybody wants to send a draft then he has to deposit a check equal to the amount being
transferred. Application for the FDD is to be filled out which includes the following information.
Name & Address of Beneficiary
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Name and Address of Applicant

Amount in foreign currency
Amount converted in to Rupees (Figures & Words)
After the applicant has filled out the form then it is entered into FDD register. Dollar amounts are
written separately while the other currencies are entered in the other section. A voucher is also
prepared which shows that the transaction is authenticated.
It must be ensured that the applicant has enough cash in his account so as to debit his account
with the amount being transferred plus the
Commission of the bank.
$5 are debited from the customer's account as FDD charges.
FOREIGN TELEX TRANSFER: (FTT)

FTT is almost similar to FDD as same procedure is followed except the fact that a when a Telex is
sent a Test is applied on it. It is a precautionary measure, taken by the banks to ensure the safety
of transactions between banks.
$10 is charged as a commission on remittance.
Telex charges Rs.300 = $ bank rate
FOREIGN CHEQUES FOR COLLECTION (FCC)

These are out of country cheques and lodged through AMEX. When these are lodged then liability
is booked.
Realization charges after 15 days
If drawn on AMEX then $1 = Rs.100
TYPES OF TELEX TRANSFERS
When a bank belonging to a foreign country says that credit this account by this much amount
(from outside) and they themselves debit the party account with the stated amount and the TT
charges. On the other hand the beneficiary's account is credited with the concerned amount.
Outward TT
In outward TT the bank debits the party account with the amount being sent, along with the
charges deducted (the party sending the amount) and asks the other bank to credit their account.
This in turn credits the beneficiary's account
TT is much faster mode of payment as compared to DD.
if the transaction is:
96
in Dollars then it is drawn upon AMEX

in Pounds then it is drawn upon NAT WEST
97
COMPLIANCE DEPARTMENT
7)
COMPLIANCE DEPARTMENT
The compliance officer is responsible for all the branch/ unit compliance. There are various
functions that are being performed in this department on daily, weekly, monthly, quarterly, biannually and annually. It is a very important department because it keeps a check on all the
internal and external activities of the branch. It ensures that all the documentation requirements
for each transaction have been fulfilled. In this regard the compliance or audit department of the
branch has the following functions:
FUNCTIONS OF COMPLIANCE DEPARTMENT
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DAILY FUNCTIONS
Collect the audit copies lying with Remittance departments in charge. [Of all outgoing
payments, which are made by means of numbered forms (pay orders drafts and remittance
orders etc.)
Prepare daily Audit Sheet (MISC-310) to list various categories of commission/charges,
sold and unsold payment instruments held with Remittance Section and Tellers.
Use the stubs and audit copies of payment instruments to check if the payment(s) have
been posted to the proper GL accounts and their numerical sequence of the forms has
been followed.
Use the daily Audit Sheet (MISC-310) to check and balance the commission and charges
earned, to the appropriate "Profit &Loss" GL accounts.
Check that the call back functions of the computer generated daily activity report" is performed
and signed by two people.
99
ANALYTICAL
RATIO
TOOLS
ANALYSIS
SWOT ANALYSIS
RATIOANALYSIS
LIQUIDITY RATIO
100
The liquidity position of a bank is like a reservoir. It may be adequate, although nearly depleted,
just before the start of the rainy season. Or it may be inadequate, although three quarters full just
before the summer drought.
Liquidity can be defined as the banks ability not only to meet possible deposit withdrawals but
also to provide for the legitimate needs of the economy as well.
CURRENT RATIO
Formula
Current Assets
Current liabilities
2008
18,972,649
= 1.05
18,062,831
2007
21,943,061
= 1.0
21,790360
Calculations:
Current Assets
Cash and balances with treasury banks
Balances with other banks
Other Assets
Total Current Assets
2008
Rs. in 000
14,210,302
10,685,057
1,927,662
2,178,455
5,805,097
6,109,137
21,943,061
18,972,649
Current Liabilities
2008
Bills payable
Burrowing from financial institutions
Other liabilities
Total Current Liabilities
2007
2007
Rs. in 000
1,219,801 937467
12,278,773
17,842,915
4,564,257
3,009,984
18,062,831
21,790,366
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INTERPRETATION:
In case of The bank Of Punjab, we witness quite a strong current ratio in 2008 and 2007. It
indicates that the bank has substantial capacity to solicit more deposits.
There is an increase in almost all the current assets of the bank except for investments. On the
other hand, the bills payables and borrowing from the financial institutions have decreased
resulting in a strong current ratio. Although deposit have increased as compared with the previous
years figure, but the increase in the current assets of the bank is more than the increase in the
deposits creation.
As a result, we observe more liquidity which means greater ability to meet the credit demands that
may be made on the bank from time to time. If we go through the notes, we find out that the bank
was charged penalty for not meeting the liquidity statutory requirement. These charges have
decreased to a greater extent in the current year indicating the focus of management activeness,
attention and concern for improvement in the liquidity position of the bank. That is why the banks
liquidity position has increased in the current year
ADVANCES TO DEPOSITS RATIO
Formula
Advances
Total Deposits
2008
= 131,731,158
80.29%
69.74%
164,072,532
2007
133,893,585
191,968,909
INTERPRETATION:
It demonstrate the degree to which bank has already used up its available resources to
accommodate the credit needs of its customers.
102
This ratio, a comparison of funds generation and its funds mobilization, indicates the total loans
sanctioned by the bank in relation to total amount of money deposited with the bank stands at
69.74% as compared with the last year figure of 73.56%. This shows that the bank has greater
potential to advance additional loans. Total loanable funds roughly measured by the deposits are
sufficient to enable the bank to make additional loans without recourse to more or less continuous
borrowing. At present, the bank has got a relatively small amount of advances as compared with
its deposits raised. One reason for fewer advances is the cautious and selective approach on the
part of the management while deciding upon credit proposals.
QUICK ASSETS TO DEPOSITS RATIO

Formula
Quick Assets
Total Deposits
2008
35,575,492
0.47 %
164,072,532
2007 =
89,599,659
3.34 %
191,968,909
Calculations:
Quick Assets
Cash and balances with the treasury
Balances with other banks
Investments
Total Quick Assets
2008
2007
Rs. in 000
10,685,057
14,210,302
2,178,455
1,927,662
22,711,980
73,461,695
35,575,492
89,599,659
103
INTERPRETATION:
The ratio of advances to total deposits reveals little, however the banks other assets available for
conversion into the funds with which to meet withdrawals or make additional loans. The ratio of
quick assets to deposits is more significant for this purpose.
The banks quick assets constitute 0.5% of its deposits, which means the bank has the ability to
accommodate the withdrawals of deposits up to 5% of its total deposits (a situation which hardly
happens). It also indicates that the bank has not great potential to meet the demand for new credit
approvals. The liquidity position is not quite sound in view of not only the deposit withdrawal
impossibility but also unforeseen cash/funds demands faced by the bank in the future.
FINANCING TO DEPOSITS & BORROWED FUNDS

Formula
Total Financing
Total Deposits
2008
132,364,491
80.67%
164,072,532
2007
136,343,585
71.02 %
191,968,909
Financing
Lending to Financial Institutions
Advances
Total Financing
Interpretation
2007
2008
Rs. in 000
2,450,000
633,333
133,893,585 131,731,158
136,343,585 132,364,491
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This ratio highlights the relationship between the deposits raised by the bank and their obligations
in the form of advances and loans to financial institutions.
As indicated above, this ratio for the bank has decreased from 80% to 71% in the current year. Again the
reason is the same; the desire of the banks management to attain high/good liquidity to safeguard the
interest of the depositors. It also indicates low level of advancements being made by the bank in the current
year. Although it sounds ineffective to held cash today the funds needed to make loans two years from now.
But this is the demand of the economy today. As our economy is passing through rough patches, the
advancements made by the banks are less, as these are insecure. However the bank has adopted a more
secure means of utilizing the funds raised through deposits and this source is heavy lending to the financial
institutions with less chance of becoming bad. Although the financial institutions pay less rate of mark up as
compared to the ordinary borrower, but for a bank, liquidity is overrides the profitability aspects.
GEARING RATIO
Gearing ratios show the extent of debt in the banks resources.
Debt to Total Assets Ratio
Formula
2007
2008
Total Debt
Total Assets
215,978,767
234,990,675
180,946,194 =
185,909,120
91.91 %
97.33 %
INTERPRETATION:
.
This ratio indicates the banks strategic risk of financial failure i.e. how much company owes in
relation to its size. The above given ratio indicates that SCB is utilizing nearly 92% of the external
funds in its business operations. For a banking concern, this ratio is quite acceptable as the whole
structure of banking is based on the funds provided by the depositors.
If we consider the banks liabilities excluding the depositors funds, the situation would be like this;
2007
24,009,858
234,990,675
10.22 %
105
2008
16,873,662
185,909,120
9.08 %
It shows the true picture of the gearing. Excluding the banks core function i.e. Deposits Creation,
the bank seems to be relying less on the borrowings to support its operations. In the year 2007,
this figure stood at10.22% but the bank has further increased this ratio to 9.08% in the year 2008.
This shows the inefficiency of the banks management.
COVERAGE RATIO
Coverage ratio measure the capacity of the bank to cover its interest charges, which are the main
obligations on the bank.
Interest Coverage Ratio
Formula
Earning before int. & Tax

Interest Exp.
2007
17,529.538
1.26 times
1.43 times
13,939,377
2008
11,579,633
7,508,795
INTERPRETATION:
It shows whether the bank is earning enough profit before mark up charges to be paid to the
financiers and the taxation obligations due to the government in order to remain solvent.
The above figure shows the less capacity on the part of the bank to cover its interest payments. It
has declined as compared with the last year. The bank cannot afford it to decline further as it
would mean no benefit for the capital providers. But this is a short term perspective of the banks
financial position. In view of the long run financial perspective, this ratio is good for the bank.
PROFITABILITY RATIO
Profitability ratios are a measure of reasonable rate of return and adequate profits turnover.
Return on Capital Funds
Formula
Net mark up Received

Capital Funds
106
2008
4,956,217
(1.00) %
34.50 %
3,468,956
2007
3,920,240
3,226,961
INTERPRETATION
This ratio relates the net profits to the amount of capital funds that have been employed in making
that profit.
The above given ratios suggest that the profitability of the bank has increase very sharply in the
year 2007 indicating less profitable operations of the bank. . However, the situation is not as
intense as revealed by the above given ratios.
CAPITAL ADEQUACY RATIOS

Capital Adequacy/Leverage ratios indicate banks capacity to meet its short and long term
obligations.
Capital adequacy is very important as the banks depositors as well as the supervisors as his
representative, favor maximum amount of capital as protection against the risk inherent in the
banking operations.
Capital Funds to Deposits Ratio
Formula
Capital Funds
Total Deposits
2007
3,468,956
9.69 %
1.92%
191,968,909
2008
5,287,974
164,072,532
107
INTERPRETATION
This is the first and widely used ratio to measure the capital adequacy of a bank. Ideally this ratio
should fall near 1.81 %. So the bank is quite up to the mark as far as the protection of the
depositors is concerned. However the bank has decreased it from 2.34% in the year 2006 to
1.81% in the year 2007 keeping in view the short range profit maximization to operate with as
much of capital funds as is sufficient in order to gain average leverage in earnings from the
employment of the depositors funds but still it is not in conflict with the interest of the depositors.
The banks management is quite concerned about its public images i.e. the capital providers to
assume more risk. In this regard the banks management is efficient in combining the profitability
and safety because in the longer run, their investment will become more profitable only if the bank
stays in business. In order to maintain the confidence of the public (depositors current and
potential), the bank has tried to hang around 2% as public trust and confidence is vital ingredient
in the success of a bank.
Capital Funds to Total Assets Ratio

Formula
Capital Funds
Total Assets
2008
3,468,956
(0.60) times
9.31 times
234,990,675
2007
3,226,961
164,862,861
INTERPRETATION
108
This ratio indicates the extent of the funds employed by the bank in the total resources as shown
in the balance sheet. It shows that for ever rupee invested in the assets, 15 paisa is attributable to
the owners. Although this ratio has decreased in the current year, but still it is good enough to
satisfy the general public
SWOT ANALYSES OF THE BANK OF PUNJAB.

The bank of Punjab one of the leading banks of Pakistan 1have attended two months internship at
its head office and at garhi shahu branch. As it is a government base bank and has its own
strengths and weakness. Being a developing bank is has also many opportunities and obviously
there are also threats in his way of progress. Following is the SWOT analyses about the bank of
Punjab.
STRENGHTS:
1: The major strength of BOP is that it is Government Bank holding 51% of its shares.
2: The main strength of any entity is its staff so the bank of Punjab has a very efficient devoted
staff.
3: The Bank officers of BOP are considered as one of the most able professionals in the banking
world. However, they have added some local flavour in accordance with their targeted segmented.
4: All of the staff members are very honest customer friendly and devoted towards there duty.
They are not only expert of their fields but also have enough understanding about other
departments of the bank so in the case of absent of the person they are able to handle matters of
that concerned department.
5: As a result of the compassionate and personalized services of the officers, the clients
perception for BOP is very high. They have trust and feel themselves to be secure while dealing
with BOP.
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6: BOP has got a reliable and easy to use internal computer system. The record of customer is
maintained manually as well as in computers. They keep their record in both hard and soft form.
7: BOP has opened all its branches at commercial areas so that the customers or clients face no
problems in reaching to the bank.
8: Good security system.
WEAKNESSES:
1: Lack of proper internal controls is one of the major weakness of BOP. It is also pointed by the
auditor in his review.
2: BOP has formulized a lot of products and services for its customers, even more than other
commercial banks, but any advertisement on electronic media has not been seen.
3: The employees have very little knowledge related to human resource .No training is given to
them.
4: Appearance and the atmosphere always matters. Although the bank of Punjab has very good
staff but conditions of most of the branches are not up to the standard they have outdated
furniture, outdated equipment due to which some customers who are conscious of healthy
environment avoid visiting. So the management should give attention in making there branches
appearance and atmosphere good and attractive.
5: No token system is use; customers have to wait for longer time they dont know when there turn
will come.
OPPORTUNITIES:
As the bank of Punjab is a growing bank and is making its share in the market rapidly. There are
still many opportunities which are on the way to become the leading bank.
1: Quality training and development of specialized human resources.
2: Satisfy dynamic consumer needs, BOP has made significant in roads in its entire service
spectrum. A lot of products have been introduced especially in Retail Banking (Agriculture side)
and people are increasingly becoming loyal to the bank and because of feasible transactions.
110
Optimum pricing and branding strategies of the bank are helping to make customer feel secure
and convenient.
3: All the opportunities of the 21st century are to be availed in the information technology.
Information technology is the future of this dynamic world. Therefore BOP should emphasize
much on IT, especially on E-Banking. Bank can design a universal account like other foreign
banks, to enhance online facilities.
4: BOP has introduced a number of financial schemes including special Deposit Accounts. These
accounts have their unique features. During the last three years, BOP deposits have been
increasing @ 40%, which is a very healthy sign. Therefore, with the commencement of new
schemes there can even be a greater increase in its deposits
5: The Bank of Punjab didnt offer any credit card facility which is a common need of every person
in these days. So if it starts offering it own credit cards it will in return increase its shares and
profits.
More over there still many areas in which there is a need of improvement.
THREATS:
1: Inconsistency in government policies and instability in political setup.
2: The new government imposes its own policies is own management due to which there is
disturbance among their staff as well as higher management.
3: BOP is facing a strong competition by its competitors, Business of all these Banks are growing
at very high pace.
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MY INTERNSHIP
EXPERIENCE
MY INTERNSHIP EXPERIENCE
One of the most important aims of the student life is to express himself / herself correctly and
adequately. This was the believe in my mind when I first decided to go to The Bank Of Punjab to
complete my internship program.
112
Determined, Confident and Persistent in the pursuit of knowledge and learning, I was on my way
to The Bank Of Punjab , Garhi Shahu Branch in the early morning of July 20, 2009. Normally I
wanted rest and recreation after the tiring exams of 8 th semester but this time I was anxiously
waiting for the start of my internship.
I stepped up the branch with the passion for learning and full commitment. The first thing that
impressed me was the layout of the branch. . Apart from me, a number of other internees have
also joined the bank for internship .I had my first introduction with the manager. who assigned me.
The first task he assigned to me was a study of all the products and services offered by the bank
and based on that study, the preparation of a comprehensive promotional letter for The Bank Of
Punjab showing the world class portfolio and services offered by the bank. The letter prepared by
me has been attached at the end of this term paper. After the preparation of this letter, the next
step was to mail merge it to 800 or more advertising concerns in Lahore and outside Lahore.
I performed a no. of different tasks there as Account opening process, Know your customers
(KYC), issuance of bank statements, and so on.
After working with the personal financial consultant, the next department I moved in was the Govt.
sec. Firstly I was not so eager to work there but now after having done my internship there, near
me it is the department I have enjoyed working a lot. I was fortune enough to have learned from
highly experienced and qualified people.
After spending one and a half week in the Govt. Securities Department, I joined the BSU (Banking
Service Unit). There I spend one week learning about the various funds transfer processes such
as demand drafts, pay orders etc.
The last week of my internship was spent in the credit / lending department. I performed a no. of
tasks..
. This tremendous experience composed of six weeks has further elevated my desire of working in
a bank I really enjoyed working in such a dynamic environment and will always cherish those
moments spend in the bank through out my life.
.
STARTING AND ENDING DATE OF MY INTERNSHIP

I started my internship on 20th July, 2009 and it ends on 20th Sept, 2009.
DEPARTMENTS IN WHICH I GOT TRAINING
113
Human resource department
2 Weeks
Clearing department
4 days
Bills department
5 days
Foreign department
10 days
Foreign remittances department 2 days

Compliance department
1 week
Cash and management department
10 days
Advances and Credit department
4 days
OBSERVATION OF ANY DELIMMA

Now at the end., when I am almost done with my internship report, I am going to tell about the
problems I encountered during my internship as well as while preparing my internship report.
The first problem I encountered with was getting the annual financial statements of the bank.
Since a foreign bank, its annual report was not available with the branch I was working in. For this,
I am thankful to the Floor Manager of the bank, who provided us with a copy of the financial
statements of the bank.
Getting the report prepared was the hardest thing I have done in my life. When I have almost
completed my internship report just a few days before the dead line, the hard disk me computer
went corrupt resulting in a dismal situation for me. Fortunately, I had sent almost 80% of the report
in my e-mail accounts as a security measure. I am thankful to my friends who gave this brilliant
idea of saving the material in the e-mail account. Now it was the most embarrassing moment for
me, as I forget to checked my mailing account that it contains the data sent by me. Fortunately
every thing was secure in my account. I have to complete the rest of the report in just two days.
And I know what I have to do in giving this final touch to the report.
Anyhow, it was a very learning experience for me that I will never in my entire life.
114
RECOMMENDATIONS FOR IMPROVEMENT
The bank pays high profit to its customers and provides excellent services but there is a
lack of publicity of its services on part of its clients.
The pay of BOP employees is less than other banks, which is an indication of
discouragement among employees.
The employees have no direct access to higher authority and a large hierarchy of persons
is involved. This creates frustration in employees in solving their problems.
In most branches there is no facility of fax machines, which results in late delivery of
messages and dealings.
The size of almost all branches of The bank of Punjab is very small. It creates difficulty for
the customers as well staff members for proper dealings, which always gives congested
atmosphere.
The grading system of the bank is not fair and the criteria for grading system are not
mentioned. Due to unfair grading the employees of the bank are not happy.
The HRM setup needs careful attention for betterment and improvements.
The HR practices and activities are not fully implemented.
115
CONCLUSION
As we know nothing is perfect, there is always a room for improvement; following are my
suggestions for the betterment of BOP:
BOP is in the process of providing the services of Automated Teller Machine. In order to
compete with other banks ATM services must be provided throughout the country as this
service is becoming very popular in customer focus banks.
The bank is also in process of computerizing its records which is good sign but it is going
on with small progress Computerization must be done on early basis. This will help in
increasing efficiency of work done, customers satisfaction, decrease the stationary cost
and resultantly it will increase profits.
In past BOP has always being suffered bad Government policies. Government intervention
should be avoided completely.
Employees Training programme must be introduced on continuous basis so that employees

get updated with latest developments and innovations especially related to customers.
Bank should introduce incentive plans for employees on regular basis so that employees
may work whole heartedly for the welfare of their organization. While giving incentives
qualification, work, experience, hard work and such other factors must be consider.
Mismanagement of resources must be avoided as much as possible as it decreases profit

but also discourage hard workers and honest employees.
Fresh graduates must be recruited. As the combination of Experienced and fresh people
can produce better results and it will improve the efficiency of management.
BOP is going towards mobile banking but the problem is that a common client has no idea
of its usage due to lack of marketing. I think that a proper marketing programme must be
launched for clients awareness.
Bank should help the society by providing interest free loans to talented students.
There is a great need of proper training of employee.
The behavior with the customers should be improved.
The employees way of dealing should be improved.
116
The bank should take step to monitor the implementation of HR activities.

The HRM department of BOP is not so good as compared to other well known
organization. They have made separate sections within HRM department each section is
assigned with different task. The implementation of HR activities is very low.
The Hr staff is friendly and cooperative.
Some employees in the department just do the same job, they become master of
practicing job but they know almost nothing and are losing their knowledge about their jobs.
They keep there data confidential I face great difficulty in collecting data related to HR
department of BOP.
The Bank of Punjab is using its own software which is not so good. The features of the
system are not so advance it needs some modification.
Another important factor which can be considered as a short fall is, that most of the
employees are not aware with the advance studies related to their fields this can also effect
their job performance.
The procedure for evaluating the performance of employees is not fair and rational.
117
REFERENCE AND SOURCES USED

REFERENCE:
1: Mr. Atta ur Rahman
Exesecutive
Bank of Punjab at
Regional Office, Muslim Town
Lahore
2: Staff member of BOP.
SOURCES:
http://www.bop.com.pk
www.google.com
Annual report
Personal observation
Brouches provided by the bank
ANNEXES
bank payment voucher
broachers of Punjab bank issued by branch
application forms issued by branch
annual report (available on bop website)
BILLING OFFICER
Mr. REHMAN
OPERATIONAL MANAGER
MS.BUSHRA
OPERATIONAL MANAGER
MR. MUMTAZ
OPERATIONAL MANAGER
Mr. FARID
Board HR committee
118

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1

THE BANK OF PUNJAB

I DEDICATE THIS REPORT TO MY FAMILY AND FRIENDS.

Nature of the Organization

Plan of MY Internship Program ---------------------------------------------

Introduction of the Branch

Conclusion-----------------------------------------------------References & Sources Used -------------------------------------------------------

THE BANK OF PUNJAB CORPORATE INFORMATION

Mr. RAZA SAEED

Secretary to the Board

THE VISION STATEMENT:

THE MISSION STATEMENT:

To be fast, focused, and determined.

HOW WILL WE DELIVER THE CHALLENGE?

PUNJAB GOVERNMENT MESSAGE

as our first priority

for the prosperity of our stakeholders that allows us to

Corporate Social Responsibility

to Enrich the Lives of community where we operate

Recognition and Reward

for the talented and high performing employees

in all our dealings

for our customers and each other

Share Capital= Rs. 5,287974

CODE OF BUSINESS PRINCIPLE OF

Act with honesty and integrity including ethical

PRODUCTS AND SERVICES OF THE

HEAD AUDIT AND RAR

3. SHAHID WAQAR MAHMOOD

HEAD RETAIL BANKING

HEAD SPECAIL ASSET MANAGEMENT

5. ASEER AHMAD KHAN

COUNTRY COMMERCIAL HEAD

6. AZHAR HUSSAIN DILAWARI

HEAD INFORMATION TECHNOLOGY

HEAD CORPORATE AND INVESTMENT BANKING

CHIEF FINANCIAL OFFICER

HEAD CONSUMER BANKING

HEAD CONTROL & COMPLIANCE

COUNTRY RISK MANAGER

NAVEED HAFIZ SHIEKH

HEAD HUMAN RESOURCE

ORGANIZATIONAL HIERARCHY CHART

Head of risk & credit policy

Head of Audit &

Head of operations &

BOP BRANCH NETWORK

MAIN BRANCH, LAHORE

10-B, block E-II, Main Boulevard

7 Egerton Road Lahore

BOP has following departments:

1. Account Opening Department

ACCOUNTS OPENING DEPARTMENT

FUNCTIONS OF ACCOUNT OPENING DEPARTMENT

LIMITED COMPANIES ACCOUNT

CLUB, SOCIETY OR ASSOCIATION

Desirability of the customer

FOR ILLITERATE PERSON

Copies of CN.I.C of partners

LIMITED COMPANY ACCOUNT

CLUB. SOCIETY OR ASSOCIATION

JOINT STOCK COMPANY