Вы находитесь на странице: 1из 49

The Bank of Punjab

INTERNSHIP REPORT ON

The Bank of Punjab

SUBMITTED BY:

Muhammad Waqas

Roll No. 3711

MBA

(2014-18)

DEPARTMENT OF BUSINESS ADMINISTRATION

University of Education Lahore

(Multan Campus)
The Bank of Punjab

DEDICATION

TO MY BELOVED

PARENTS

Who always wishing and praying for my success in every sphere of life I pray to Almighty
Allah to enable me to serve them so well and kindly as they did in my life especially in my
childhood.

Aamin!

2
The Bank of Punjab

Acknowledgement
First of all, I thank to ALMIGHTY ALLAH who enable me to reach this stage and ability to
accomplish this task.

I wish to express deep sense of gratitude to all my teachers for teaching and their kind
guidance.

I am immensely thankful to all staff of The Bank of Punjab who helped me a lot in
completion of this report.

I am also thankful to my parents whom I owe everything, whose heartfelt prayers and
appreciation has always been an asset and a great source of inspiration to me. Without their
shadow of love, perhaps, it could be difficult for me to achieve this target.

3
The Bank of Punjab

Preface
Prerequisite of MBA study is to undergo internship. I got the opportunity to join the bank of
Punjab Rohillan Wali branch for the said purpose for a period of 08 weeks.
Practical involvement was a great experience as interactions both with the experienced
executives and clients cemented the base of knowledge I have been acquiring in the
classroom.

This internship report includes the material about BOP and different departments along with
their working procedure.

For the completion of this project I met the various persons of these organizations. As far as
my knowledge and hard work is concerned this report will provide a good in sight of BOP.

I have special thanks for following persons who have encouraged & guide me lot. I learned
very much under their guidance.

4
The Bank of Punjab

5. Executive Summary
As we know that Department of Business Administration sends their students for internship
purpose in different organizations for having practical experience in the respective
organization by utilizing the knowledge which they gain from their Bachelor/Master Degree
programs. For the internship purpose I was sent to the Bank of Punjab, Rohillanwali Branch
Tehsil & District Muzaffargarh.
I joined BOP on June 28, 2017 and I spent Eight (08) weeks there. During this period, I
was visited different departments of the bank where I observed working there and also
participated in few departments as well.
Before I joined the Bank, first I was appeared before The Branch Manager for a formal
interview then I was selected for Internship Program.
Next day I was introduced about the departments and made me sit in the account-opening
department. In this department I learnt how to open the accounts and also open account as
a customer myself. Along with I also learnt how to issue a Cheque Book and how to fill
deposit and on-line slips.
After account opening the next remittance department was visited. In this department I
learnt how to transfer money. I was visited advances and loan department.
In this section I learnt about different kinds of loans and their procedure.
After this I was visited collections/clearing section. In this section, I learnt about different
ways of transferring funds from one place to another or from one person to another either
among branches of the different banks in different cities or among the branches of the
same city. Last I learnt about the consumer banking only about the car financing and
ATM cards. For the purpose of financial analysis, I requested the manager to provide me
the annual reports of BOP. This is all the summary of my Eight weeks’ internship. From
this program, I had come to know the working, functioning and activities involved in the
banking fields.

5
The Bank of Punjab

Table of Content:
1. Title Page…………….………………………………………............................01
2. Internship Completion Certificate……………………………........................01
3. Dedication……………………………………………………............................02
4. Acknowledgement………………………………………………………….…..03
5. Executive Summary……………………………………………………….…...05
6. Table of Contents……………………………………………............................06
7. Overview of an Organization………………………………………….……....08
7.1 History of BOP……………………………………….……………….……......08
7.2 Mission Statement……………………………………………….......................10
7.3 Vision Statement……………………………………………….........................11
7.4 Major clients……………………………………………………........................12
7.5 Business volume……………………………………………….……….…...….12
7.6 Product & Services…..........................................................................................13
7.7 List of Main competitor………………………………………...........................20
8. Organizational Structure…………………………………………..….……….20
8.1 Hierarchical view…………………………………………………..…………..20
8.2 Main Offices………….…………………………….…………..........................21
8.3 Board of Director……………………………………………………………….22
8.4 List of employees ……………………………….……...……....………………23
8.1.1 Introduction of all the department……….……...…………………………23
8.1.2 Operation Department……………………..…...…………..............................23
8.1.3 Remittance Department……………………...………………..........................23
8.1.4 Cash Department……………………………………………….......................25
8.1.5 Comments on Organizational Structure ……..………………………….........25
8.1.6 Departmentalization……………………..…………………………................25
8.1.7 Chain of Command…………………..…………………………......................25
8.1.8 Span of Control………………………………………………..........................25
8.1.9 Centralization & Decentralization…….………………………........................26
9. Plan of your internship program…..………………………...…………………26
10. Training program………………...……………………………….……………26
11. Structure of the Finance Department……...………………………….............28
11.1 Marketing Department…………………………………………….....................29

6
The Bank of Punjab

11.2 Finance & Accounting Operation……….……………………………………...29


12. Structure of the finance department…………………………………………...29
12.1 Accounting system of the organization…………………………..........................30
12.2 Finance system of the organization………………………………………………30
12.3 Use of electronic data in decision making……………………………..…………30
12.4. Mobilization of funds…………………………………………….………………30
12.5 Generation of funds………………………………………….……………………31
12.6 Sources of funds………………………………………….……………………….31
12.7 Allocation of funds…………………………………..……………………………32
12.1.1 Financial Analysis……………………………...………………………………32
12.1.1 Profitability Analysis……………….…………………………….….. ................32
12.1.2 Liquidity Analysis…………………………..….…………………….…………..34
12.1.3 Long term debt paying ability analysis…….……………………….....................36
12.1.4 Analysis for investor…………………….………………………………………..37
12.1.5 Vertical and horizontal analysis…...…………………………………………...38
13. Critical analysis……………………………………………………………………..42
14. SWOT Analysis……………………..……………………………............................43
15. Recommendations and Suggestions…………………………………….………….46
16. Conclusion………………………………………………….………………………..48
17. References……………………………………..……………………………………..49

7
The Bank of Punjab

7. Overview of Organization
7.1 History of Banking in Pakistan
Pakistan came into being on 14th August, 1947; sufficient banking services were available in
the areas forming Pakistan. Out of the total branches of the nearly 3,500 in the undivided
India, as many as about 1,500 branches were existing in these areas.
It was agreed between the two countries that reserve bank of India shall continue to function
in the Pakistan territory until 30th September 1948 and that Indian notes would continue to be
legal tender at Pakistan until 30th September 1948. Unfortunately, relationship between the
two countries became most strained immediately after independence; banking was mostly in
the lands of Hindus who immediately started transferring their offices and assets into
India. As a result, most of the banks in Pakistan were closed down and even those which
were open were not doing any effective business.
The number of banking office in Pakistan came down to about 200 on 30th June 1948.
Branches of some European banks were also functioning in a limited manner, financing in
export of crops, and their number was limited to about 20.
It was only the Habib Bank, which transferred its office from Bombay to Karachi AustralAsia
Bank was another bank, which was in existence in the Pakistan territory at the time of
independence. Despite of best efforts on the part of government of Pakistan, no heady way
could be made on this behalf and reserve bank of India was in no mood to help the new
country. Imperial bank of India, agent of the reserve bank of India also started closing down
its branches in Pakistan. Reserve bank also refused to advance money to Pakistan to make
essential payments such as salaries etc., also Pakistan’s share of Rs.75 billion in cash balance
was withheld by bank, causing hardships to the newly born state. In view of these hopeless
state affairs it was agreed between the two countries that reserve bank would serve as
monetary authority in Pakistan only up to 30th June 1948.

Public Sector Commercial Banks


• National Bank NBP
• First Women Bank Limited FWB
• The Bank of Khyber KB
• The Bank of Punjab BOP

8
The Bank of Punjab

Private Banks
• Askari Commercial Bank Limited
• Bank Al-Falah Limited
• Bank Al Habib Limited
• Meezan Bank Limited
• Faysal Bank Limited
• Silk Bank Limited
• Soneri Bank Limited
• Muslim Commercial Bank Limited
• Allied Bank of Pakistan
• Union Bank Limited
• ABN Amro Bank
• CITI Bank
• Standard Chartered Bank.
Specialized Banks
• Zari Tarqiati Bank Ltd.
• The Industrial Development Bank of Pakistan
• The Punjab Provincial Cooperative Bank Limited

It has not so far been decided as to how the word ‘Bank’ originated. Some author’s opinion is
that, this word is derived from the word ‘Bancus’ or ‘Banque’, which means a bench. Others
authors hold the opinion that the word ‘Bank’ is derived from the German word ‘Back’,
which means joint stock fund. It is therefore so much difficult to decide as to which opinion
Is correct. Banking in fact is primitive as human society, forever since man came to realize
the importance of money as a medium of exchange, the necessity of a controlling or
regulating agency or institution was naturally felt. Perhaps it was the Babylonians who
developed banking system as early as 2000bc. It is evident that the temples of the
Babylon were used as ‘Banks’ because of the prevalent respect and confidence at the clergy.
At the time of independence there were 631 offices of the scheduled banks in Pakistan, of
which 487 were located in West Pakistan alone. As a new country with resources it was very
difficult for Pakistan to run its own banking system immediately. Therefore, the
expertcommittee recommended that the Reserve Bank of India should continue to function in
Pakistan until 30, September 1948, so that problems of time and demand liability, coinage

9
The Bank of Punjab

currencies, exchange etc, could be settled between India and Pakistan. The non-Muslims
started transferring their funds and accounts to India. By the end of June 1948, the number
of officers of scheduled banks in Pakistan declined from 631 to 255. Pakistan,
while there were only two Pakistani institutions, Habib Bank, and Australasia Bank, thecusto
mers of the banks are not satisfied with the uncertain condition of banking. Similarly, the
Reserve Bank of India was not in the favor of Govt. of Pakistan. The Govt. of Pakistan
decided to establish a full-fledge central bank. Consequently the Governor General of
Pakistan Quaid-e-Azam inaugurated the State Bank of Pakistan on July 1,1948 Thus a
landmark was made in the history of banking when the State Bank of Pakistan assumed full
control of banking and currency in Pakistan.

History & Nature of BOP


The Bank of Punjab was established in 1989 and was given the status of scheduled bank in
1994.The Bank of Punjab is working as a scheduled commercial bank with a network of
almost 374 Conventional 27 Islamic branches at all over major locations in Pakistan. 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.

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

7.2 Mission Statement

“To exceed the expectations of our stakeholders by leveraging our relationship with the
government of Punjab and delivering a complete range of professional solutions with a focus
on program driven products and services in the agriculture and middle tire markets through a
motivated team.”

10
The Bank of Punjab

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

7.3 Vision Statement

“To be a customer focused bank with service excellence.”

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

11
The Bank of Punjab

7.4 Major clients of Bop


Some of the major customers of Bank of Punjab are:
1. Punjab education foundation

2. Educational Institutes

3. Agriculturists

4. Pakistan Telecommunication Private Limited

5. WAPDA

6. WASA

7. Town Municipal Committees and local governing bodies

7.5 Business Volume


Business Volume in terms of Investment, Current & Fixed Assets, Share Capital, Deposits,
Advances, Income, and EPS for the last 5 years is as under:

Balance Criteria 2016 2015 2014 2013 2012


Total assets RS(M) 545,214 472,284 420,374 352,698 332,111
Shareholder's
Equity RS (M) 24,248 19,397 15,256 12,577 10,733
Investment RS (M) 199,742 176,043 154,875 123,956 129,519
Deposits RS (M) 453,220 374,961 342,291 306,561 266,056
Advances (net) RS (M) 262,062 219,399 170,313 157,286 149,605
Income RS (M) 4,858 4,748 2,787 1,938 1,634
EPS (Rs/share) Rs 3.12 3.05 1.94 2.34 2.63

7.6 Products and Services


The BOP is providing a range of products to its customers and corporate clients, offering
attractive rates on customer’s investments and extending loans to individuals , consumers,
corporate , SME’s., Industrials and Agricultural sectors. The different product lines viz
Deposits, Advances/Loans, Remittances and Miscellaneous are described in detail as
following.

12
The Bank of Punjab

1. Deposits
2. Advances
3. Remittances
4. Other Facilities
1. Deposits
The customers invest their savings in different deposit schemes which offer attractive rates on
different terms and conditions. Some of the most important deposit schemes are described
below.
1.1 Profit and loss sharing saving scheme
It is ordinary profit and loss sharing saving account on which profit is given to each customer
on half year irrespective of their balances. The rate of profit applied in last half year ended in
Dec.31, 2016 was 4 %. There is no restriction on minimum balance amount. The customer
can deposit and withdraw money at his own discretion. The profit is calculated monthly at
minimum balance retained during the month. The profit accrued at each month is paid in each
half year after final declaration of profit rate.
1.2 Special notice term deposit -30 Days scheme
It is similar to above mentioned scheme in operation except the difference of 30 days. The
customer who with draw money before 30 days will earn profit proportionate to number of
days passed. The profit rate lastly announced i.e. in Dec. 2016 on this scheme was 4%. Per
annum.
1.3 Term Deposit Receipt (TDR)
On these schemes the profit is given according to different terms and conditions agreed
between the customers and the Bank. The customers are issued different certificates for
different terms and are en-cashed on their request.
1. 4 BOP Munafa Hi Munafa scheme
It is again a term deposit which is placed for five years and profit is paid after six months.
The current rate of profit being paid on such type of deposit is Rs.11%. In case of premature
encashment, the profit will be paid on normal rate of profit for lower term i.e. of four years,
three years, two years and one year etc.

13
The Bank of Punjab

2. Advances
Advances provided by bank are of the following two types.
1. Funded
2. Non-Funded
2.1 Funded
In fund based bank contributes a large amount of the fund based on clarified as follows.
• Demand Finance
• Term Finance
• Running Finance
• Cash Finance
• Agriculture Finance
• Consumer Finance
• Consumer Finance
• Staff Finance
They are provided primarily to fulfill mandatory credit targets assigned by the State Bank of
Pakistan or in return for refinance provided by the S.B.P. The details are as under.
2.1.1 Consumer Finance Schemes
The important consumer finance schemes of BOP are briefly introduced hereunder.
2.1.2 Car Loan Schemes
This loan is given usually to individuals who are salaried persons, self-employed
professionals and businessmen having monthly income exceeding Rs: 10,000/-, Rs: 15000/-
and Rs: 20,000/- respectively and is extended for seven years. Mark up is charged @ KIBOR
+ basis points .Monthly schedule of installments is given to borrower to appropriate the loan .
2.1.3 Quick Cash Schemes
It is extended to salaried persons to purchase consumer durables for one year and is
renewable each year subject to satisfactory operation in the account. The Mark up is charged
@ KIBOR + Basis points. The cash is provided on purchase invoices of consumer items and
these items are insured from Bank’s authorized insurance company.

14
The Bank of Punjab

2.1.4 SME / Commercial Financing Schemes


Under this scheme loans are given to individuals, business firms, small and medium
enterprises for working capital or to purchase fixed assets for promotion and establishment of
business respectively. The loans sanctioned under this scheme vary from
1.00 (M) to 75.00 (M).
2.1.5 Karobar Barhao Schemes
Under this scheme the loans are extended to business firms for increasing their business.
These loans are sanctioned for one year and are renewable each year subject to satisfactory
operation in the account. The security of loan is mortgage of property. No business stocks are
required for this type of loan. Mark up is charged @ KIBOR+ basis points.
2.1.6 Corporate Financing
The loans under this scheme are sanctioned greater than 75.00 (M). These loans are extended
to large business groups and corporate firms and SME for commercial use. These are small
and long term loans extended to each sector of economy viz. Textiles, Pesticides,
manufacturing industries, to importers and exporters for fund based and non-fund based
facilities( such as Letter of Credit (L/C) and Letter of Guarantee (L/G). On fund based
facilities Markup is charged @ KIBOR + Basis points during the quarter. While in case of
non-fund based facilities commission is charged according to Bank’s schedule of charges. All
these loans are sanction by Central Credit Committee (CCM) or Executive credit Committee
(ECM) according to their sanctioning powers defined by Board of Directors.
2.1.7 Agricultural Financing Schemes
Bank has invested a huge amount in this sector; the loans are given to small and big
landholders for Agri Inputs, Agri Development schemes such as land reforming, installation
of water resources, purchase of Agri equipment etc. Some important schemes under this are
as under.
2.1.8 Kissan Dost Agri Finance Scheme (KDS)
It is an agricultural loan given to small farmers for purchase of inputs such as pesticides,
fertilizer, seed against security of Zarai Pass Book, which determine the criteria of loan
According to average sale value and holdings. The loan is extended up to 75 % of average
sale value of land. The minimum Land requirement is 5 Acres. These loans are extended for
one year and are renewable for next term automatically subject to satisfactory operation in the
account. Mark up is charged on debit balance and profit is given on credit balance in the KDS

15
The Bank of Punjab

account. Mark up is charged @ 6 Month KIBOR + 350 bps with floor of 8.5 % per annum.
The loan is also secured through life and crop insurance of borrower.
2.1.9 Live Stock Development Scheme
Again it is given to small farmers for breeding of animals, their feed, for fish Farming, for
cattle and Goat farming. The animals are being insured from bank’s authorized insurance
company. The mark up on the account is charged @ KIBOR+ 450 bps. These are short and
long term loans.
3. Others Financing Schemes
The Bank’s other financing schemes are described below.
3.1 Auto Rickshaw Scheme
It is financing facility under consumer finance sponsored by Govt. of Punjab for providing
employment facilities to unemployed individuals for purchase of Auto Rickshaw. The
applicant must have driving license and he has to deposit 20% down payment. The remaining
80% is advanced by the Bank according to the cost of Rickshaw. It is long term loan and
repayment is scheduled on monthly installments. The insurance of borrower and motor is get
done from bank's authorized insurance company, the Rickshaw is registered with sole name
of the bank and will be transferred to borrower at full payment of the loan along with mark
up.
3.2 Fertilizer Development Scheme
It is the financing facility provided to authorized dealers /franchise of the company for
working capital requirements such as for the purchase of seeds, pesticides spray machines
and fertilizers. It is sanctioned for one year and is renewable subject to satisfactory conduct of
account. The securities are Hyp. Of stocks and pledge of stocks. The collateral securities are
Residential House, flat / commercial plot and Agri Land. The margin on securities is 25% of
forced sale value of property. Mark up is charged at the rate of six months KIBOR +350 basis
points. Repayment depends on the payment capacity of the borrower either monthly or
quarterly.
3.3 Foreign Remittances
Foreign remittance is two types. These are under,
• IN WARDS
• OUT WARD

16
The Bank of Punjab

3.3.1 IN WARD
Foreign exchange coming into Pakistan from Pakistani residing abroad or from foreigners is
called in ward foreign exchange.
3.3.2 OUT WARD
Foreign exchange going out from Pakistan by Pakistani residing in the country is called out
ward foreign exchange. All the foreign exchange is done with the help of DD's, Tic’s, to
Tot’s.
3.4 Demand Draft (DD)
Demand draft also known as DD. A person who wishes to remit money to some one other
country. If he does not send his own Cheques, obtain from his banker a draft on demand
payable to the person who is to be paid the money. It may be drawn upon one of the banker
own branches or upon some other bank where an arrangement exists from draft to drawn.
3.5 Remittance of Money
The Bank of Punjab, like other Commercial Banks undertakes to remit or transfer money
from one place to any part of the country and outside the country. The money is remitted by
means of:
1- Demand Draft (DD)
2- Mail Transfers (MT)
3- Telegraphic Transfers (TT)
4- On line Transfer.
4.1 Demand Drafts (DD)
The most common means of remittance in the bank is Demand Draft. When a person wants to
transfer his money to another person having account with any other bank, he can do so by
obtaining a Demand Draft. The purpose of DD is to secure the amount which we have. DD is
a very secure method of transferring the money from, one place to another.
4.2 Mail Transfer (MT)
To transfer money from one place to another through a bank the second means of remittance
is Mail Transfer generally called MT. Money is Transferred through MT mainly because the
transferor, unlike in case of DD does not want to obtain and take care of any instrument like
DD and, of course, to present it at the Drawee Bank. So in order to avoid above mentioned
risks, which may contribute to the loss or delay on the part of both the banker and the DD
holder, the money transferor resorts to the MT.

17
The Bank of Punjab

4.3 Telegraphic Transfer (TT)


The quickest means of remittance in The Bank of Punjab is Telegraphic Transfer normally
called TT. The application procedure involved in the TT is almost the same as is in the case
of MT. In fact in The Bank of Punjab the Application form for DD, MT, and TT is the same.
The applicant only has to point out which of these means of remittance he wants to opt. The
charges of TT is more than the charges of DD and MT. Originating branch fax TT Message
to the Drawee branch with secret Test Number applied to it. The Drawee branch after getting
the Test Number agreed respond the TT firstly crediting the Bills payable TT payable
Account and debiting the originating branch and then by crediting the account number of the
payee and debiting the Bills payable TT payable Account. So in this way money can be
transferred from one place to another within 24 hours.
4.4 Online Banking Facility
According to this facility the customer can make remittances and draw amount from their
account through network of branches with in the country from BOP owns branches. It is real
time on line transaction facility. Nominal commission is charged on these transactions
keeping in view the amount remitted or withdrawn.
The following schedule of charges is being applied on all remittance for domestic banking.
This schedule of charges is compulsory for each bank to circulate at the end of each half year
as to comply with SBP instructions. The schedule of charges is displayed at prominent place
of the bank for the study of clients. The schedule of charges being applied on all types of
remittances is as follows
Up to Rs.10, 000/-commission is charged at the rate 0.15 %, Minimum Rs.50/-

From Rs.10, 001 to Rs. 100,000/- 0.10% Rs.100/-


From Rs.100, 001 to Rs. 500,000/- 0.06% Rs.200/-
From Rs.500, 001 to Rs. 10, 00,000/- 0.05% Rs.300/-
Over Rs. 10, 00,000/- 0.04% Rs.500/-

4.5 Debit Card Facility


It facilitates the customers for transacting in their account if there is balance available in their
account. It can be operated round the clock and nominal charges are recovered from
customers for each transaction according to bank’s schedule of charges.

18
The Bank of Punjab

4.6 Pay Order


Pay order is a guaranteed document issued by the bank, the payment of which is made by the
same branch issuing this pay order. Pay order is used to transfer the funds within the city
while Demand Draft used to transfer the funds between the cities.
4.7 Lockers
Provision of lockers is safe custody service that the bank of Punjab provides to their
customers for keeping jewelry, important documents and other valuables.
4.8 Custodian
The bank is called the “Custodian”.
4.9 Licensee
The customer who is permitted by the bank to use the locker is called the
“Licensee”.

Characteristics
1- Locker’s Size
There are four sizes of lockers:
a. Extra-large its annual rent is Rs.3000/-
b. Large Size: - its annual rent is RS. 2000/-
c. Medium: - its annual rent is RS. 1200/-
d. Small Size: - its annual rent is RS. 1000/-
e. RS. 3000 is also charged as key deposit money which is flat for all sizes and is refundable.

2- Locker’s Security
Security of all lockers is Equivalent to two years Rent for respective locker. Late payment fee
5% per month of annual rent or Max of 25% of the annual rent. The breaking charges are
actual or Rs.2000/- whichever is higher.

19
The Bank of Punjab

7.7 List of Main Competitors

1. Bank AL Habib limited

2. United Bank limited

3. Habib Bank limited

4. Askari Bank limited

5. Snoheri Bank limited

6. Meezan Bank limited

8. Organizational Structure:
8.1 Hierarchical View of Management:

20
The Bank of Punjab

8.2 Main Offices


Head Office and the main branch of BOP are in 7-Egerton Road and Gulberg-III Lahore
respectively.
The Bank has been divided into Ten regions
Each consisting a number of branches.
• Lahore Region

• Faisalabad Region

• Gujranwala Region

• Rawalpindi Region

• Karachi/Quetta Region

• Multan Region

• Peshawar Region

Rests are the branches working under these regions. Which are almost 520 in all over
Pakistan.
Branch Network:
The Bank of Punjab is working as a scheduled commercial bank with its network of 520
branches at all major business centers in the country.

21
The Bank of Punjab

Corporate Heads

There is one corporate head in each Region who monitors the activities of branches who are
maintaining the corporate accounts. The proposals relating to corporate clients are forwarded
to Head office by the corporate Head. Increasing business volume in corporate sector is
responsibility of the Head. There are four offices of corporate Heads in the Pakistan which
are as under.

1. Corporate Head (Lahore)

2. Corporate Head (Faisal Abad, Multan)

3. Corporate Head (Rawalpindi)

4. Corporate Head (Karachi)

8.3 Management:
Board of Directors:
• Dr. Pervez Tahir Chairman
• Mr. Naeemuddin Khan President / CEO
• Mr. Mohammad Jehanzeb Khan Director
• Mr. Hamed Yaqoob Sheikh Director
• Dr. Umar Saif Director
• Syed Maratib Ali Director
• Dr. Muhammad Amjad Saqib Director
• Mr. Mohammed Afzaal Bhatti Director
• Khawaja Farooq Saeed Director
• Mr. Saeed Anwar Director
• Mr. Omar Saeed Director
• Mr. Raza Saeed Secretary to the Board

22
The Bank of Punjab

8.4 List of Employees

Mr. Zawar Hussain Branch Manager.

Mr. Ahmad Raza Manager operation.

Mr. Muzaffar Iqbal Account Deptt. / OG-I

Ms. Nadia Manzoor ATM,LBC ,OBC / OG-IV

Mr. Aman Ullah Foreign remittances / OG-III

Mr. Abdul Ghaffar Cash Deptt./ OG-III

Mr. Farooq Cash Dealing Officer

Mr. Muhammad Irfan Cash Dealing Officer

8.1.1 Introduction of all Departments


8.1.2 Operation Department
Operations department manages all departments of bank except credit department. Operations
Manager is responsible for all operations of cash department, remittance department and
clearing department. Opening of new accounts, closing of zero balance accounts, updating all
operational records etc. is done in operations department.
8.1.3 Remittance Department
Remittance department transfers funds from one branch of bank to another branch of same
bank. This is an important service which bank provides to its customers.
Types of Remittance:
1. Demand Draft
2. Payment Order
3. Mail Transfer
4. Telegraphic Transfer
5. Online Transfer
Demand Draft (DD)
(Section 85-A of Negotiable Instrument Act, 1881.)
Bank Draft is an order to pay money drawn by one office of a bank upon another office of
same bank outside the city for sum of money payable to order on demand. In The Bank of

23
The Bank of Punjab

Punjab, DD is used to transfer of funds from one branch of bank to another branch of same
bank.
Payment Order
Payment Order is an order instrument payable to a certain person which is issued by a branch
and drawn on a same branch. In payment order, the drawer and drawee is one and the same
branch. In short, payment order is used to transfer of funds in same city from one office of
bank to another office of same bank.
Mail Transfer
Under such method, transfer of funds is made through day. Under such transfer, one office of
bank sends advice to another office of same bank for payment. Such advice is called IBCA
(INTER BRANCH CREDIT ADVICE).
Telegraphic Transfer
It deals with transfer of funds by telephone.
Online Transfer
It is modern technique for transfer of funds. The modern concept of only banking has given it
a new dimension through which money is transferred from one place to another within no
time, even one country to another country; it takes hardly a few minutes.
Remittance & Bill for Collection (Inland)
Remittance department perform the function of sent and receive of money. Following
instruments are used for this purpose.
Cash order or payment order
The branches do local fund transaction by mean of cash orders payment orders issued on
behalf of the purchaser desirous of effecting payment in this way or by the branches for
settling their obligations. Separate registers are maintained for all these transactions, where
send and receive of all these documents are recorded.
Day end
Day end is a document maintained by the bank. It contains the record of each day transaction.
Every small to large transaction is recorded in it. The bank maintains this record in form of
printout and sends it in a cassette to the head office. This is done on daily basis.

24
The Bank of Punjab

8.1.4 Cash Department


Cash department deals with
1. Cash Receipts
2. Cash Payments
3. Utility Bills Collection
Cash department is the backbone of the bank. As all banking business is based on cash. Cash
receipts include customer deposits, payments include cash withdrawals and utility bills
include telephone, gas, electricity and other bills collection.

8.1.6 Departmentalization
Similar sort of activities is group and performed under particular departments. Now it is to be
decided that what types of activities organization is involved in, and according to that
departments are created. There are various factors on the basis of which organizations may
create their departments in their organizational structure. They may create Functional
departments like marketing, finance, HR, IT etc.

8.1.7 Chain of Command


Chain of command describes the line of authority in the organization and answers the
question that who reports to whom? This element of organizational structure defines lines of
authority and represents that how much authority is delegated down the line. Upper
management empowers employees so they can take decisions. It helps employees identifying
that whom they are answerable and from where orders would come.

8.1.8 Span of Control


Span of control defines that how many employees are working less than one manager. It also
identifies the levels of management in organizational structure. Based on the number of
employees under one manager, span of control can be termed as narrow or wider. In narrow
span of control manager has less number of employees to supervise. It brings closer
supervision but increases the cost since company has to hire number of managers with high
salaries. Whereas in wider span of control, there is large number of employees under one
manager, in this case efficiency is improved and cost is reduced. Wider span of control is best
suitable in situation when managers are experienced and skilled, workers are skilled too and
organization is not geographically dispersed.

25
The Bank of Punjab

8.1.9 Centralization/Decentralization
These elements of organizational design decide on how much decision making authority is to
be delegated down the line into the hierarchy. Centralization refers to that decision making is
done at the higher levels of organization. In such organizational structure, top management
considers it wiser to be decision maker rather authorizing employees to do this.
Decentralization is opposite of it as it allows giving authority to the employees to make
decisions in different scenarios. This helps workers be more efficient and respond to queries
and problems immediately.

9. Introduction of the Branch where I did my Internship:


The Bank of Punjab (Rohillan wali) Branch is the oldest branch in the district. The Branch is
situated in the most competitive and commercial area of the city (Rohillan wali) where other
banks like Habib Bank, Al Habib Bank, National Bank and United Bank (LTD) are situated
so creating a rivalry among competitors.
Its major customers are Govt. and semi govt. institutions like vocational institutes, schools
and colleges etc.
In the said branch is consist of 8 clerical and 4 non clerical staff

There the 9 branches in the District and the Bank of Punjab (0224) are on the 1st in respect of
its investment more than 625 million. In the region it is on the 1st number. At present ATM
has been installed during the period of my internship and this provide an advantage to the
branch.

Starting and ending date of internship:


28-06-2017 to 31-08-2017 (inclusive___ both)
Name of Departments Where I got Training/ Duration of Training:
Deposit department, Clearing department, Cash department, Cheque book issue department
and Foreign Remittance Department. The duration of my internship was eight weeks.

10. Training Program


Detailed Description of the operations
1. Operation Department:
I have worked in Deposit department which is under the control of operation department or
sub department of operation department.

26
The Bank of Punjab

Operations department manages all departments of bank except credit department. Operations
Manager is responsible for all operations of cash department, remittance department and
clearing department. Opening of new accounts, closing of zero balance accounts, updating all
operational records etc. is done in operations department.
Beside these foreign payments to customers via online transactions is also the function of
deposit department. For this purpose, NIC of the customer is verified on NADRA web site
www.verisys.com to make sure that payment is being made to the right person. The branch
credits the Head Office account when makes online payment to customer. They people
working abroad send money to their home viva express money which is deposited in bank of
Punjab head office so HO account debited while making payment HO account credited. In
closing HO credits all the branch accounts online with respective amount of payments.
Issuing the cheque books and making entries on computers for the authentication of cheque
books, filling deposit slips and cheques all are the functions of operation department.
2. Work/Assignments done by me during Internship
I have done my internship at The Bank of Punjab, Rohillan wali Branch. There are four
departments in the branch, and I worked as an assistant in that branch. For the first 4 weeks I
worked in deposit department under the supervision of Mr. Aslam (OG 3), where I have to
perform following tasks:
• I did the duty of Opening New Accounts.
• Providing help and assistance to newly come customers.
• As I have the knowledge of MS Office so frequently typed documents in Ms
Word and Excel as demanded by the manager.
• I also did the duty of taking signatures from customers who came to open new
accounts.
• Entering information in KYC (know your customer) forms well as on the
computer which was allowed to me for that job.

• I also verified the NIC of the customers on the www.verysis.com.pk , and


NADRA charges Rs.80 per verification.

• Scanning and arranging specimen signature cards.

• Inform customer of essential conditions under which the account will be operated.

• Filling the deposit slips and cheques for many customers.

27
The Bank of Punjab

3. Voucher checking:

Afterwards I have learnt about vouchers, checking of vouchers is essential to confirm that
correct calculation has been done. Vouchers are properly bind sealed, and checking by the
manager. I have checked the following things:
• The check should not be post-dated/anti-dated.

• Amount in words and figures tallies.

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

• Cutting/over writings are duly authenticated by the account holder, etc

4. Issuing of Cheque Books


Then another task for me was “issuing of cheque books”. It is one of the most interesting
works that I have learnt in the bank. Cheque books should be issued only after all the
formalities of the account opening forms, which have been checked by the branch manager.
• Maintaining Dispatch register and Inward Mailing register was also included
in duties assigned to me. I also used to help different employees in their work.
My work timings were from 9am to 5pm, five days in a week.
5. Entry of Cheque Book
Before issuance of a Cheque book the bank officer pastes a stamp on the leaf and the account
number of the customer is entered on the cheque book register and on the software on
computer. Then the cheque book is issued to the customer after taking his signature on the
register that ensures that the customer has received the cheque book.

11. Structure of the Finance Department


11.1 Number of Employees working in the marketing Department

Number of employees working in the marketing department of BOP is eighty (80).

Group Chief Marketing Officer 1


Country Head 1
Regional Manager 9
Assistant Manager 19
OG-111 38
Operational Staff 22

28
The Bank of Punjab

11.2 Marketing operations

Take the deposit and provide them services. Relationship Manager do this activity

11.3 Finance & Accounting Operations

All accounting operations are being done at branch/ unit level. It is computer based
accounting operation system as there are large numbers of transactions, which are not
possible in manual accounting system. Professionally skilled personnel are doing these
operations, computer equipment and computer generated reports, which provide various
information for classifying and summarizing the data.

12. Functions of Finance Department


The main functions of Finance Department in the BOP are summarizing the business
transactions recorded and classified by the branches and communicate the information
contained in the system to decision makers. It formulates the annual budgets such as capital
budget, cash budget etc. It provides information about economic resources, claims to
resources and changes in resources and claims. It provides information useful in assessing
amount, timing and uncertainty of future cash flows. It provides information useful in making
decisions to all functional departments of the Bank such as Administration Department to
recruit staff at low cost, to Operation division to minimize the operational cost of the
organization, to Marketing department to market low cost deposit and sell the products which
give more return and similarly to all other departments which play pivotal role in achieving
organizational goals.
We can summarize the functions of finance Department of The Bank of Punjab as under:
• Prepare policy regarding investment of the Bank funds in different sectors.
• To guide the credit dept. regarding the fixation of markup rates for different types of
borrowers and loan schemes.
• To determine profit rates while keeping in mind the total profit of the Bank.
Competitors rates of profit and market factors.
• To decide about the profit distribution among shareholders to satisfy them and to keep
the benefit of the bank at the same time.
• To make decision to set aside the different reserves from annual profit.
• To decide about the total lending volume of the Bank keeping in view the State Bank
of Pakistan and The Bank of Punjab policy.

29
The Bank of Punjab

• To fix the budgetary limits for the branches for expenses.


• To guide all the departments regarding their financial requirements and to meet them
in best possible way.

Structure of the Finance Department


12.1 Accounting system of the organization
The accounting system of the organization includes expert professional personnel, computer
equipment’s and electronically generated reports from which accounting data is gathered
from all the branches of the Bank.
12.2 Finance system of the organization
From the accounting information, the finance department makes decisions to invest the funds
generated. These investments are in corporate sector, in capital and money markets. The
treasury department and shares department makes decisions about investment of funds
generated.
12.3 Use of electronic data in decision making
The Bank has comprehensive Management information system (MIS) from where the
management takes data to control and make decisions about business i.e. to observe daily
fluctuations in deposits, advances, number of accounts and borrowers at particular point of
time. The data is updated daily automatically on the site. The management can take corrective
measures plus controls the business strategy. The business promotion and enhancement
decisions are taken by the use of electronic data from use of electronic sources such as e-
mails, faxes, internet etc. The LINUX, UNIX AND COBOL, software is being used in the
Bank. The Bank has an information Technology division who are providing IT services to the
branches. The data from branches is transferred through on line to Head Office through
executing Day End steps which have given to all branches who performing successfully. The
computer generated reports are then forwarded to each division for their study and necessary
action.
12.4 Mobilization of funds
The bank mobilizes the funds by introducing various profit and losses sharing saving
schemes. The funds mobilized are from following sources.
Individuals (self-employed, salaried persons and other private individuals) from corporate
bodies, Govt. enterprises and departments, autonomous bodies, corporations, commercials

30
The Bank of Punjab

banks and non-bank’s financial institutions. The comparative figures of deposit mobilized for
last 5 years are mentioned below.

Year Amount (M)


2016 137,728
2015 88,645
2014 54,724

2013 34,938

2012 23,767

The deposit figures show a 5 times increase as compared to base year of 2012 and 56 %
increase resulted in year 2016 as compared to year 2015.
12.5 Generation of funds
The funds are generated from investment in different sectors of economy such as corporate
investment in shares, NIT units, Mutual Funds, Ordinary Shares of listed
Companies and Modarbas, Pakistan Market Treasury bills, Pakistan Investment Bonds, TFC,
WAPDA Bonds and Punjab Modarbas. The investment made in last 5 Years is mentioned
below.

Year Amount (M)


2016 28,233
2015 18,062
2014 16,198

2013 11,458

2012 8,295

The results show that the investments increased 57% in year 2016 as compared to year 2015
and three times than in base year of 2012. The major revenue to the bank was from NIT units
and Mutual funds.
12.6 Sources of Funds
The sources of funds in The Bank of Punjab are share capital, Reserves and liabilities created
from deposits collected from customers and borrowing from financial institutions. The last
Five years figures are given as under.

31
The Bank of Punjab

Criteria 2016 2015 2014 2013 2012


Capital 2,902 2,350 1,506 1,004 1,004
Reserves 4,537 2,940 2,770 1,946 1,357
Borrowings 6,989 6,791 2,832 2,684 1,289
Deposit 137,728 88,465 54,724 34,938
23,767
accounts

12.7 Allocation of funds


Bank has invested funds in SME’s, Agricultural, fertilizer, pesticides, textiles and
manufacturing industries, commodity, consumer, corporate and others sectors of economy.
The growth in the assets of the Bank can be compared from the following figures.

Particulars 2016 2015 2014 2013 2012


Cash & balance with other 17,776 17,154 7,697 6,815 5,984
Lending
banks to financial institutions 11,847 7,594 1,019 5,662 7,480
Investments 28,233 18,026 16,197 11,458 8,294
Advances 101,920 63,624 39,439 18,344 6,620

12.1.1 Financial analysis

To analyze the financial position of BOP, different tools are use, which includes Ratio
Analysis, Common size Analysis.

12.1.1 Profitability Ratios


Net Profit Margin:
Net Profit margin = Net Profit / Sales x 100

Year 2016 2015


Net Profit 122,443,34 110,672,9
Sales 296,744,88 312,664,27
Net Profit Margin 41% 35%

32
The Bank of Punjab

Interpretation
This ratio shows that how much bank is earning through its income or revenue. The
relationship between the net profit and total income of the bank. Reason behind this profit is
that income of the bank is increasing with greater margin than the marginal increase in the
bank’s profit. In 2016 bank’s profit is high that is why this ratio is high from previous year.
This profit due to the bank’s increasing income.
Administrative expense ratio
Administrative expense ratio=Administrative expense/net sale*100
Year 2016 2015
Administrative 834,6001 738,959,1
expense
Net sale 296,744,88 312,664,27
Debt ratio 28.12% 23.63%
Expense ratio shows what percentage of sales is an individual expense or a group of
expenses. A lower ratio means more profitability and a higher ratio means less
profitability. The ratio is helpful in controlling and estimating future expenses.
Operating Income Margin
Operating income margin= (EBIT/Net Sale)*100

Year 2016 2015


EBIT 154,359,21 138,488,07
Net Sales 296,744,88 312664,27
Operating i Margin 52.01% 44.29%

Interpretation
The operating income margin is increasing and it is useful for the bank because as the
percentage increases then the ability of the bank will also increase to distribute the income
among the shareholders. Operating margin can be used to compare a company with its
competitors and with its past performance. It is best to analyze the changes of operating
margin over time and to compare company's figure to those of its competitors.
Here the percentage of 2016 is increasing.

33
The Bank of Punjab

Return on Total Equity = Profit after taxation x 100


Total Equity

Year 2016 2015


Net income 4,858,354 4,748,321
Total Equity 278,544,98 226,783,40
ROE 17.44% 20.93%

Interpretation
Return on equity indicates the net income by the total equity of the owners. In the year of
2015, the total equity is increasing than previous years and net income is also increasing. It
means that generally, the owners gain profit. Return on equity is an important measure of the
profitability of a company. Higher values are generally favorable meaning that the company
is efficient in generating income on new investment. Investors should compare the ROE of
different companies and also check the trend in ROE over time.

12.1.2 Liquidity Ratio


Current Ratio
Current assets divided by current liabilities. It shows a firm’s ability to cover its current
liabilities with its current assets. Liquidity ratios measure a firm’s ability to meet short-term
obligations and pay back the contractual obligations on the due date.
Current ratio = Current assets / Current liabilities

Year 2016 2015


Current asset 510,840,24 368,157,76
Current liability 170,653,922 155,077,362
Current ratio 0.29 0.23

The current ratio of 2015 and 2016 is quite acceptable.

It means that bank is meeting its short term obligations.

Interpretation
Acceptable current ratio values vary from industry to industry. Generally, a current ratio of
2:1 is considered to be acceptable. The higher the current ratio is, the more capable the firm is
to pay its obligations. Current ratio is also affected by seasonality.

34
The Bank of Punjab

If current ratio is below 1 (current liabilities exceed current assets), then the firm may have
problems paying its bills on time. However, low values do not indicate a critical problem but
should concern the management. Current ratio gives an idea of bank’s operating efficiency. A
high ratio indicates "safe" liquidity, but also it can be a signal that the bank has problems
getting paid on its receivable or have long inventory turnover, both symptoms that the bank
may not be efficiently using its current assets.
Total Asset Turnover
Net Sale / Total asset
Year 2016 2015
Net sale 296,744,88 312,664,27
Total asset 545,214,131 472,283,654
Total asset turnover 0.0544 0.0662

Interpretation
Total Assets Turnover measures the activity of the assets and the ability of the firm to
generate sales through the use of the assets. TAT is increasing which shows that company is
increasing the usage of assets to generate sales. This ratio measures how efficiently a firm
uses its assets to generate sales, so a higher ratio is always more favorable. Higher turnover
ratios mean the company is using its assets more efficiently. Lower ratios mean that the
company isn't using its assets efficiently and most likely have management or production
problems.

Acid-Test Ratio
Current assets less inventories divided by current liabilities. It shows a firm’s ability to meet
current ability to meet current liabilities with its most liquid asset.

Acid-test ratio = Current assets - Inventories / Current liabilities

Liquidity Ratio 2016 2015

Acid-test ratio 0.29 0.23

35
The Bank of Punjab

BOP’s current ratio for the year 2015 is 0.23 and for the year 2016 is 0.29, which shows the
increase of 0.01. It means the organization is going towards in profitable direction. The
current ratio of years shows that the organization in stable position.
12.1.3 Long term debt paying ability analysis
Debt ratio
The ratio is calculated by following formula
Debt ratio = Total liabilities / Total assets
Year 2016 2015
Total liabilities 517,359,633 449,605,314
Total asset 545,214,131 472,283,654
Debt ratio 0.94 0.95

Interpretation
These values indicate that the firm has financed more than of its assets with debt. The higher
this ratio, the greater the firm’s degree of indebtedness and the more financial leverage it
has. The debt ratio is shown in decimal format because it calculates total liabilities as a
percentage of total assets. As with many solvency ratios, a lower ratio is more favorable than
a higher ratio.
A lower debt ratio usually implies a more stable business with the potential of longevity
because a company with lower ratio also has lower overall debt. Each industry has its own
benchmarks for debt, but .5 is reasonable ratio.
Debit-to-Equity Ratio
The debt-to-equity ratio is computed by simply dividing the total debt of the firm (including
current liabilities) by its shareholders’ equity. The lower the ratio, the higher the level of the
firm’s financing that is being provided by shareholders and the larger the creditor cushion in
the event of shrinking asset values or outright losses.
Debit-to-Equity ratio = Total debt / Shareholders’ equity

Year 2016 2015

Total debt 517,359,633 449,605,314


Shareholder equity 278,544,98 226,783,40
Debt to equity ratio 18.57 19.82

36
The Bank of Punjab

12.1.4 Analysis for investor


Earnings per share:
Year 2016 2015
EPS 3.12 3.05

Interpretation
EPS is measure for good profitability when compared with other similar business. Here EPS
increase in 2016 so the price of share also increase.

Dividend payout ratio


Divident payout =Divident /Net income
The dividend payout ratio is the ratio of the total amount of dividends paid out to
shareholders relative to the net income of the company. It is the percentage of earnings paid
to shareholders in dividends.
Year 2016 2015
Dividents 616,77 508,43
Net income 122,443,34 110,676,29
Divident payout ratio 0.50% 0.45%
Interpretation
Ratio is increasing year by year shareholder amount is increasing in 2016 then 2015.

37
The Bank of Punjab

12.1.5 Horizental analysis


Balance Sheet

In thousands of Pak rupees

Assets 2014 2015 2016 2014% 2015% 2016%

Cash and balances with 236,224,11 261,904,81 357,562,04 4.33 6.23 7.57
treasury banks

Balances with other 223,917,0 451,203,3 376,586,7 0.41 1.07 0.79


banks

Lending’s to financial 327,486,23 611,326,2 115,621,33 6.006 1.45 2.44


institutions - net

Investments – net 154,874,757 176,043,046 199,741,990 28.40 41.87 42.29

Advances net 170,312,593 219,398,631 262,067,744 31.23 52.19 55.4

Operating fixed assets 549,012,1 648,431,2 769,267,5 1.00 1.54 1.62

Deferred tax assets –net 9845426 7905981 648,025,6 1.80 1.88 1.37

Other assets 21237087 25635908 181,472,62 3.89 6.09 3.84

Total assets 420,370,188 472,283,654 545,214,131 77.10 112.34 115.44

Liabilities

Bills payable 172,773,1 188,743,2 418,348,0 0.33 0.47 0.93

Borrowings 447,426,24 552,364,29 398,291,34 8.64 13.77 8.85

Deposits and other 342,290,763 374,961,096 453,219,740 66.16 93.49 100.80


accounts

Sub-ordinate Loans

Liabilities against assets 200,000,0 200,000,0 450,000,0 0.38 0.49 1.00


subject to finance lease

Deferred tax Liabilities

38
The Bank of Punjab

Other liabilities 102,823,63 155,203,57 156,272,79 1.98 3.86 3.47

Total liabilities 401,043,481 449,605,314 517,359,633 77.51 112.10 115.06

Interpretation

Horizental analysis shows that Cash & Balances with treasury Banks decreases in 2014 that is
because of current assets decreases. Balances with other banks decreases gradually with
passing year. Lending to financial institutions increases in 2015 that because of more
issuance of loans. Investments net increases and advances net reduces. Operating fixed assets
increase and others assets are also increase. Bills payable and borrowing are increased. Assets
are also increased. Deposits are increased, that is a good sign. That’s why 2016 is favorable

39
The Bank of Punjab

Vertical analysis
Income Statement

Currency: In Thousands of Pakistan Rupees

income 2016 2015 2016 2015

Mark up earned 29,674,488 312,664,27 100% 100%

Mark up expense (174,301,54) (201,987,98) (58.90%) (64.6%)

Mark up 122,443,34 110,676,29 41.10% 35.4%


income

Provisions 922,236 343,145,1 3.10% 11%


against non
performing
advances

Provision for 102,632 648,15 0.34% 0.20%


diminution in
value of
investment

Total provision (102,486,8) (349,626,6) (3.45%) (11.18%)

Net Markup 112,194,66 757,136,3 38% 24.2%


Income

Non markup
income

Fee, commission 974,703 824,126 3.28% 3%


and brokerage

Dividend income 617,74 508,43 0.20% 0.16%

Income dealing 752,48 109,280 0.25% 0.34%

40
The Bank of Punjab

in foreign
currencies

Gain on sale and 252,557,2 501,354,6 8.51% 16.03%


redemption of
securities

Unrealized loss 117,6 (852,2) .003% (0.02%)


gain on
revaluation

Other income 1658,309 163,506,8 5.6% 5.22%

Total non-mark 529,443,0 762,434,1 18% 24.38%


up income

Total 165,138,96 151,957,04 56% 48.60%

Expenses

Admin expenses 834,600,1 738,959,1 28.12% 24%

Provision against 569,923 224,383 2.00% 0.71%


other assets

Write offs 485,668 322,74 2.00% 0.10%

Other charges 336,99 1995,8 0.11% 0.06%

Total non-mark (846,395,5) (766,620,5) 29%) (24.51%)


up expenses

Profit before 804,994,1 752,949,9 27.12% 24.08%


Taxation

Tax- Current 960,820 388,908 3.23% 3.07%

Prior years (364,259) 143,953 (1.22%) 0.46%

41
The Bank of Punjab

Deferred (186,650,8) (224,831,7) (6.28%) (7.19%)

Total Tax 319,158,7 2781,178 (0.10%) (8, 89%)


Adjustment

Profit after Tax 485,835,4 474,832,1 16.37% 15.18%

Interpretation
In vertical analysis of income statement Net markup/Interest income is decreasing in 2015.
Otherwise it is increasing 2016. In 2015 this was 24% and in 2016 it was increasing to
38%.profit also increasing, which is very good, and show that how much Bank of Punjab is
improving with every year.

13. Critical Analysis


During my Six weeks internship at the Bank of Punjab rohillanwali Muzaffargarh, my
observation and interviewing the staff members and the manager of the branch the
Information that I got is not sufficient as of such a big organization. I have pointed out some
of the shortcomings, which I observed during my internship. The shortcomings, which are
present in the rohillanwali, may or may not present in the other branches.

Problem at the Branch Level


Communication Problem
Bank staff uses peon and the clerical staff to communicate with each other. It automatically
creates a lot of problem and disturbance in the branch. The flow of communication is very
slow and creates gap between various counters and branch departments. And the peon does
verification of any sign or balance, which is not a skilled person and time consuming.

Limited Staff
In the branch the staff is limited and the customers wait for a long time Bank of Punjab also
deals with most of the government affairs, federal and provincial pension’s salaries and taxes.
Handling these people are very difficult and at the beginning of the month large no of
customer wait for their turn. But the staff is low to handle such large no of customers.

42
The Bank of Punjab

Non-Availability of Computer Expert


In the modern era of computer the usefulness of computer is ignored it increases the
efficiency and all the work is done manually. There is lack of properly trained staff to operate
the computer properly.
Customers Satisfaction
In the Bank of Punjab customer dealing is not so much good during the hours of rush the
customers had to wait for their turn. The staff is not able to handle large no of customers.
This creates a lot of tension and dissatisfaction in the mind of the customer and the staff and
there is a chance of error, which might be very harmful. The bank should provide more
satisfaction to its customer.
Proper Record Management
The record which are kept for the future use of the bank is not properly managed the record
of the bank is not kept properly in any kind of order chronological or serial etc. if any record
is needed the staff has to struggle to find the record and waste a lot of time.
Unequal Distribution of Workload
Distribution of workload is not properly managed. Some of the employees are setting ideal all
the day without having work and on the other hand some don’t find time to relax for a,
moment. So this creates a lot of over work situation for some while relaxation for others.

14. SWOT Analysis

The SWOT analysis consists of analyzing organizational strengths and weaknesses, and its
environmental opportunities and threat. It helps to identify a strategic niche that the
organization might exploit. SWOT analysis of The Bank of Punjab is as follows.
Strength
• BOP has got a well reputed online system in most of its branches.
• Remittance department is working very efficiently in transferring the funds to peoples
due to this system
• The bank also has started ATM facility in its many branches.
• Management is well organized.
• Services provided by the branches are very good.
• The bank has stable growth in deposits since its emergence.

43
The Bank of Punjab

• BOP has financial strength as they are gaining profit from the advances that they
provide to the organizations.
• BOP is providing lot of services to its customers like incase of remittances they have
services like online services.
• The Management has changed; employees which are useless are fired and new
experienced graduates are hiring to enhance the operations of the banks & the
employees which are efficient they are getting promoted.
• Certain training programs are arranged outside the working environment to train and
refresh them or entertain them.
Weakness:
• The human resource department is not performing well in the organization.
• Bank is not introducing new products these days, so bank should boost the product
development and increase the range of facilities offered for customers. And the rates
of interest on its various products have been reduced.
• Shortage of ATM machines in different branches of the bank.
• Bank is under staff so absence of members create problem.
• All the branches are not computerized.
• The general outlook and interior layout of branches are not as required according to
modern banking.
• BOP is centralized. It means authority is not delegated to branch level. Manager
cannot take initiative regarding different decisions such that for giving finance.
• The majority of people are not well aware about the products of BOP it is due to their
very low services of promotional activity.
• There is lack of advertising like sponsoring of any festival or any event.
• The bank has not powerful marketing campaigns.
• There is low level of motivation in the employees of the bank
• BOP Management has adopted reactive approach they respond to the market very
slow and are reluctant to take initiative before the problem arises.
• There is lack of advertising like sponsoring of any festival or any event.

44
The Bank of Punjab

Opportunities
• Government is taking very bold steps to promote IT in Pakistan. BOP has an
opportunity to improve in IT stock exchange is very volatile and takes immediate
effect so in times of crises conservative investors turns to saving deposits.
• The support of the Government of Punjab with the Bank of Punjab that makes the
customers satisfied to deal with the bank.
• The bank has the support of Punjab agro Marketing Company that will expand the
agricultural loan portfolio.
• Mobile banking is a concept that has started to find its roots in the banking sector. So
it is a big opportunity for BOP to avail this chance at big level.
• Opportunities exist for expansion of BOP chains in the International Arena; Particular
Invention must be given to the individual country’s customs and cultural practices to
be successful.
• BOP should organize trade shows for the promotion of export for that they should
finance the companies those who wanted to internationalize and wanted to introduce
their product and services outside Pakistan.
• Threats:
• BOP has many competitors who are continuously increasing their products and
marketing aggressively it may cause its customer to shift to its competitors.
• The rapidly changing environment in the banking sector and the quick response of the
other banks to these changes can be a threat for BOP.
• The falling markup rate scenario as a result of built up competitive pressure is a threat
to the bank's profits.
• What customer really wants is a difficult thing to identify as to identify the customer
perception and its behavior is complex procedure. So the changing needs of the
customer can be a threat for the banks.
• Changing Governmental Policies and instability in Politics can be seen as a threat for
the banking sector.
• The banking sector is expanding in Pakistan so competition can be the greatest threat
for the BOP. As old banks have started changes and many new banks are emerging as
a strong entity so BOP will face a strong threat from this competition unless adopt
proactive approach to handle these threats.

45
The Bank of Punjab

• Restrictions applied from SBP on the banks are a threat to the expansion of bank's
business.

15. Recommendations & Suggestions


In the light of the Knowledge obtained during internship and studying the organization, the
following recommendations may prove to be successful to the bank.

• In order to capture a considerable share in the banking sector of the country, the prime
objective should be awareness in the general public. For this it should launch a well-
planned advertising campaign in the general public.

• Salaries of the officers must be compatible to other private banks so that the BOP can
attract professionals, intelligent persons.

• The bank should come up with new and innovative products. It would be advisable to
make these products while keeping in mind the gap between what people want and
what their banks are providing them.

• The bank should come up with such products or services in which the customers
would not have to come to the bank at any stage i.e. Telephone Banking etc.

• The authority should be delegated to the manager level.

• MIS should be improved by connecting all regional offices and branches to the head
office through a network for timely delivery of information.

• Management of Bank of Punjab should try to avoid the political influences and should
give loans on merit.

• The Bank of Punjab should give some extra credit to concern to professional
qualifications such as MBA (IT)’s, M.B.A’s, C.A’s A.C.M.A’s at the time of
recruitment and selection.

• Interview should be conducted while recruiting personnel, to consider the personality


characters, communications skills and sociability.

• The bank should adopt a policy to accommodate and facilitate the research scholars
who want to study the banking affairs. The universities and other institutions can help
to launch the studies regarding banking business.

• All possible efforts should be made to protect the bank from the interruption of
Provincial government.

46
The Bank of Punjab

• There should be an association of employees to convey the voice of the employees to


the administration.

Recommendation for students


In this section some recommendations for those students who are planning for an internship
at BOP particularly and in any other bank generally. The most important of all is the
difference between what we learn from the books i.e. the theory and what actually is done i.e.
in practice. This difference is described in detail below:

Working in different departments

During my internship I observed that other internees in the bank use to stick with one
department only. An internee with specialization in Finance was of the view that he
should be in Finance department same was the case with other specialized Internees.
But I would suggest that one must work in every department for some time to gain a
hand on experience of all the departments. As in real working environment employee
have to coordinate with other departments, so he/she must know what the other
departments operations are and how they work.

Relationship between Theory and Practice


This part of report is the essence of the internship, as this will help other students to better
understand the working environment of the bank by finding the relationship between what is
written in the books and what is actually going on in fields. The theory written in the books in
cases is not implemented as it is. In some cases theory is implemented with a little
modification but in other cases theory has nothing to do with practice. In accounting, banks
don’t prepare worksheet, but part of worksheet is prepared like trial balance, but little
differences, theory and practice has substantial relationship. The securities for the loans are
handled in the same way as theory says like mortgage, pledge, hypothecation, advances
against insurance policies or liquidation procedure is the same. The difference is there in the
case of loans. Theory talks about four or five terms of loans that is cash finance, overdraft,
loans etc., but in practice there are some more terms used like running finance, demand
finance etc. All other concepts of remittances, bills, foreign exchange deposits, letters of
credit are in accordance with theory almost. So for a internee it is more important to learn
new things which he/she has never heard about in his/her course book.

47
The Bank of Punjab

To me, Theory gives you the direction to understand the processes and the terminologies
going across the World using best business practices in a broader view covering each and
every aspect of possible business scenarios. On the contrary practical life is specific, enclosed
in a jar. In practical professionalism and firm’s environment is each and every thing.
Professional life only builds on the knowledge based on books even though it may only use
1% of the theoretical knowledge.

16: Conclusions
The Bank of Punjab is contributing a lot towards the industrial development and capital
formation in the country. As it is exhibit from the data regarding the bank’s financial
performance as shows in the financial performance as shows in the financial analysis, that
bank is sharing major banking business of the country. Furthermore the policies and schemes
as are introduced and carried on by the bank are of great source of help in its trading and non-
trading growth they facilitate trade both inside and outside the country. The Bank if Punjab
has endeavored to remain in the forefront of modern financial institutions and has
consistently shows tremendous growth in all area of its activity. However after scheduling,
due to its emphasis on consolidation and controlled lending, the growth of profit has
somewhat declined. But the ban’s performances are in line with its set goals.

The policies of the bank are uniform and going very smoothly. The employees are given all
the possible facilities and generous compensation. In return employees are stressed for their
best efficiency. Merit policy prevails in all the activities of the bank.

Administration has studied the administration of all other banks, and all their problems and
drawbacks are planned to be avoided. Therefore, the policies of the management are
progressive and proper. The progressive approach and trend towards progress and prosperity
reflects that bank will touch the zenith of development and progress. The dedicated,
enthusiastic and motivated employees can bring that time even earlier.

By analyzing the financial statements of the bank, I came across to know that it is one of the
most growing banks in the subcontinent. Now they should carry on with the present
management which took it from one of the ordinary bank to this level. No doubt
professionalism and internal controls of the bank are one of the major issues which may
results some major losses to the bank. Bias in hiring’s and between colleagues should be
removed.

48
The Bank of Punjab

17. References
Reference material used for compiling this report is gathered from these sites.
• www.bop.com.pk

• www.jpmorgan.com

• www.kpmg.com.pk

• www.sbp.gov.pk

• www.globalbanking.com

49

Вам также может понравиться