During my internship I work in different departments of the bank of Punjab.

I work in

Clearing Department, Remittance Department, Cash Department, Cash Department, and

Account Opening Department. Where I see how to work practically. I learn how to issue a

check book, how to fill the Demand Draft or Call Deposit form.

5.1 First Week

First week I work in the account department and where I learn how to open an account, how

to fill the account opening form, how to fill the check book form and how to issue a check

book.

The procedure of account opening is as under follows.

The general banking department performs various functions among them the first and most

important function is Account Opening. The bank reserves the right to open any account,

which in its opinion is suitable as a customer.

The process of opening an account is very simple and any body that would like to open his

account could do it easily without any difficulty.

The person would like to open his account is required to meet with the manager or second

officer, who will give him an Application form specifically used for account opening. Along

with the form a card for specimen signature is also supplied to the customer. Manager has

every right not to accept this contract if he is not satisfied with the details provided by the
customer. But in case the contract is acceptable to both, the next step is official account

opening.

This begins with the Account Opening Register which can be thought as a customer’s master

file. The manager records the necessary details into this register and allots an “Account

Number” from this account opening register. This register is maintained for each type of

accounts and the account numbers are allotted serially. After opening the account every

applicant’s date is entered in the computer to maintain the safe record and application form is

also safely put off, so that it can be available whenever it is needed. Checking officer is

responsible to tally the manual data with computerized account opening file. For fix deposit

only the application form is needed, which is prepared manually, because most of the

procedures of fix deposit is done manually. Signature specimen card contains three

signatures of the applicant, applicant account number, account type, branch code, and title of

account. It will be attached with the account opening form. Banker uses this card when he

receives the cheque, he compares signature on the cheque with the Specimen card, for

avoiding the frauds.

5.1.1 Manual Functions of Accounts Department

Accountant prepares vouchers for all daily activities of different departments. Checking

officer checks and tallies these vouchers with their daily transactions and posts their entries

under proper heads.

5.1.2 Types of Vouchers

• Debit Voucher

• Credit Voucher

These two types of vouchers are again classified under following types:

• Cash voucher

• Transfer voucher

• Clearing voucher

All the daily transaction in cash, transfer and clearing is done through these vouchers. A sheet

is prepared on which all the vouchers passed during one day are consolidated and

summarized. This sheet is called supplementary sheet. There are two types of supplementary

sheet.

• Daily paid voucher sheet

• Daily receipt voucher sheet

Paid sheet is used for all debit vouchers and receipt sheet is used for all credit vouchers.

5.1.3 Cash Book

Cash book is prepared daily to keep the record of daily paid vouchers. Cash book contains the

opening balance and the closing balance of a working day. Before writing and balance the

cash book firstly there is needed to properly arrange all the vouchers of that day.

5.1.4 Maintaining & Updating Ledgers

One of the functions of accounts department is to maintain and update the term deposit

ledgers and books manually. Term deposit receipt or TDR ledger is updated after every

month for estimating profit on customer’s accounts. Accountant prepares different ledger for
all schemes of term deposit. With the help of TDR ledger accountant prepares “provisional

ledger”. From this ledger accountant calculate the monthly product of each account and

estimate the profit for a half-year. The semiannual profit on each account will be the expenses

of branch.

5.1.5 Computerized Functions of Accounts Department

Most of the daily working is done through ledgers. In BOP all the daily transaction in deposit,

cash, clearing, transfer, remittance and advance are performed these daily ledgers; accounts

department receives the following output of general ledger.

• Daily general ledger expense

• Daily general ledger income

• Daily general ledger assets

• Daily general ledger liability

• Daily general ledger circle expense

• Daily general ledger audit expense

The formats of all these ledgers are same. They contain the following head account no.

description, previous balance. Codes are assigned to all these items.

Income will be credited in the branch account and expenses will be debited the branch at the

month end. All the expenses of circle, regional, audit, inspection office is debited in the head

office account, because it is the responsibility of the head office to bear the expenses of its

offices. For all the heads of general ledger there is closing balance and opening balance.

These ledgers are helpful in preparing the daily, monthly, semiannually and yearly

statements. Some of these statements are prepare for the purpose of record keeping of
branches and some are prepared to send to the circle office, head office and state bank of

Pakistan.

Some of these statements are

• Statement of provisional income

• Statement of provisional expense

• Statement of head office account

• Summary of income and expense

• Statement of profit and loss on PLS account

• Balance confirmation report

• Statement of affairs

5.2 Second Week

In the second week I work in clearing department where I learn about different functions of

clearing. In the clearing I learn about the following things.

Any instruments which drawn on BOP branches and other banks in same city that’s

instruments are called clearing. A clearing and date stamp is a fixed on these instruments

these are two types of clearing!

• Outward Clearing

• Inward Clearing

Inward clearing means the cheque drawn on BOP and outward clearing means the Cheques

drawn on others.
5.2.1 Outward Clearing

The instrument collected or stored bank wise and a schedules is prepared separately for each

bank mentioning the total number of instruments and the amount of the instruments. Then

these are recorded in a register called “OUTWARD CLEARING REGISTER” then a main

schedule is prepared showing the total number of cheque and their aggregate amount being

presented in the clearing.

The cheque/instruments are handed over the clearing branch. Central clearing branch issue

CREDIT ADVICE to the branch for passing credit to its customer immediately. The branch

on receiving credit advice debits the clearing account and credits the respective customer

accounts.

5.2.2 Inward Clearing

On receiving cheque/instruments from central clearing branch, the incharge checks the

number and amount of cheque received in clearing must tally with the main schedule

received from central clearing branch.

These cheques/instruments are entered in “INWARD CLEARING REGISTER” for the

cheque/instrument passed in clearing is a credit advice for the aggregate amount of cheque

passed in clearing is prepared, drawn on central clearing branch.

5.3 Third & Fourth Week

In third and fourth week I in the Remittance department. Where I learn how to fill a Demand

Draft form and how to issue Demand Draft. I also learn how to make a Call Deposit.

Remittance department perform different functions which are given below.

5.3.1 Types of Remittance

The Bank of Punjab deals with the following type of remittances

• Demand Draft (DD)

• Mail Transfer (MT)

• Telegraphic Transfer (TT)

• Pay Order

5.3.1.1 Procedure of Demand Draft

1) A draft voucher is filled which contains the following information

• Name of the parties involved

• Date

• Amount to be sent

2) A credit voucher is filled in order to get the excise duty and exchange commission.

3) The sender deposits the total amount of the two vouchers i.e. the debit and credit

vouchers.

4) Then the cashier sends the cash receipt voucher to the accounts department and the

account records the amount paid in his cash scroll.

5) Accountant gives the DD leaf along with the DD voucher to his assistant who records

the sender’s name, amount and receiver’s name. After writing all the information in the

DD register he gives it to the officer along with the DD for authentication.

6) After authentication the DD is handed over to the sender and bank sends the advice to

the concerned branch. So when the party presents the DD in the concerned branch its

payment could be made.

Parties Involved

The following parties are involved in demand draft;

1) Purchaser or Sender

The purchaser is the person who sends the money to a particular person payable at a certain

branch.

2) Issuing or Drawing Branch

The branch from where the demand draft is issued to another branch of the same bank.

3) Drawer Branch

Branch in which the draft has drawn and called upon to pay the amount.

4) Payee

The person who is entitled to receive the amount after presenting the demand draft in the

bank.

5.3.1.2 Procedure of Mail Transfer

1) First a voucher is filled in whish the sender writes the amount to be sent, name, account

number of the receiving person with the branch name and date.

2) A credit voucher is filled in order to deduct exchange, postage charges according to the

amount of the mail transfer.

3) The sender deposits the total amount in the cash department.

4) The cash officer gives the vouchers to the officer after affixing received cash stamp and

writing the amount in red ink.

5) Then the officer writes the amount paid in the cash scroll and gives the MT to his assistant.
MT leaf is filled according to the information provided in credit voucher. He also writes the

same information in the MT register. Then he gives the MT leaf and MT register to the

officer for authentication.

5.3.1.3 Procedure of Telegraphic Transfer

For sending the TT the manager and officer apply a test. In the test the manager and officer

uses a coding technique. They write their own code numbers, which is allotted, to them as the

bank branch code. After making all the conformation the concerned branch makes the

payment to the receiver. If the sender wants to convey the same message through telephone

then he has to pay the charges of telephone along with the TT charges. First the person

deposit the TT amount along with the charges through the credit voucher then his TT sent to

the relevant branch.

5.3.1.4 Procedure of Pay Order

The procedure of a pay order varies with the nature of the purpose. If the work is of huge

amount then first the manager writes a letter to the Zonal Chief in order to get sanction of the

work. Then the advertisement of the work is given in the newspaper in order to invite the

contractors. But if the work is small then the branch manager has discretionary power to

select the party whose rate is lowest. After finishing the work the contractor submits the bill

of work on his stamp pad. Then the bank issues a pay order, against the pay order the

contactor gets the amount from the issuing branch.

5.4 Fifth Week

In the fourth week I work in the bills department where I learn about inward and outward

bills for collection. I also learn how to make an advice. The working of bill department is

given below.

5.4.1 Outward Bills for Collection

Bills department receive cheque or other of bills from its clients whose account must be

opened in that branch. The branch forwards the check with schedule or covering letter to that

branch on which bills is drawn. The checking officer of bills department will cross the cheque

with special bank stamp before forwarding the cheque.

OBC register is also maintained for proper record keeping of outward bills. This register is

updated two times once at the time of receiving bill from clients and the other when the

confirmation advice of this cheque is received from the payable branch.

5.4.2 Inward Bills for Collection

The branches which receive bill have to verify these bills for payment. The party account

must be opened in that branch. The responsibility of this branch is to verify the bills for

collection with in three days and send the advice to the originating branch.

In case of verification of bills is approved, banks debit the account of the respective account

holder and send a debit advice to the originating branch and at the same time credit the head

office account for inward bills IBC register is maintaining for keeping the proper record of

the bills.
5.5 Sixth Week

In the sixth week I work in the credit department where I learn how to issue loan and which

things should be kept in mind while advancing. The procedure of loan is given below.

5.5.1 Principles While Advancing

Basically there are five principles that must be duly observed while advancing money to

borrowers.

• Safety

• Liquidity

• Disposal

• Remuneration

• Suitability

5.5.2 Forms of Lending

There are two types of advances:

• Short-term (maturity within one year)

• Long term (maturity with the period of more than one year)

However they are further classified as:

• Running Finance

• Demand Finance

• Cash Finance

• Letter of Guarantee
5.5.2.1 Running Finance

This form of finance was previously known as “overdraft”. When a customer requires the

temporary accommodation, his bank allows withdrawal his account in excess of credit

balance, which the customer has in its account, a running finance occurs. The accommodation

is thus allowed collateral security. When it is against collateral securities, it is called a

“Secured Running Finance” and when the customer cannot offer any collateral security

except his personal security, accommodation is called a “Clean Running Finance.” The

customer is in advantageous position in running finance because he has to pay the mark-up

only the balance outstanding against him on daily product basis.

5.5.2.2 Demand Finance

This is common form of financing to commercial and industrial concerns and is mad

available either against pledge or hypothecation of goods produce or merchandise. In

Demand Finance the party is financed up to a certain limit either at once or as and when

required. The party due to facility of paying mark-up only on the amount it actually utilizes

prefers this form of financing

 CHAPTER NO.6

LEARNING FROM EXPERIENCE

6.0 LEARNING

During my internship period I work in the different departments of The Bank of Punjab

and where I learned the following things practically.

6.1 Punctuality

During my internship I learned the punctuality. The entire staff member reached in the

bank in time and left the bank after completing all the daily activities of the bank. Every

one was responsible his work that is why they did every thing with full responsibility. All

the staff was regular.

6.2 Rules and Regulations

I learn to follow the rules and regulations of any organization. All the staff members

followed the rules of the bank. They did not do any work against the rules of the bank.

Before doing anything they always keep in mind the rules of The Bank of Punjab. They

implement the rules of the Bank of Punjab in their daily routine working. Every member

performed his duty according to the rules and regulations.

6.3 Boss Respect

I learn the boss respect from my internship experience. I learn how to talk with the boss

and how to present a document to boss. All the employees of the bank obey the orders of

the manger and they did not do any work against his orders.

6.4 Team Work

I learn how to work in a team practically. Every employee is answerable to another

employee. They also do each other’s work. When one employee is not free the other

employee performs his duty. At the end of the day they help one another and try to

complete their daily activities as early as possible.

6.5 Time Management

I learn how to manage time. All the staff members did their work with responsibility and

in a proper time. Every one tried to complete his work as early as possible. That is why

we mostly leave the bank at 5 o’clock.

6.6 Cooperativeness

I learn cooperativeness during my internship period. All the staff was very cooperative

with one another and was also very cooperative with their customers. All the staff was

cooperative with me. They tell me all the tools of bank in a very easy way .They treated

me as just like a brother.

6.7 Behavior with Customers

I learn how to behave with customers. All the staff was behave with their customers in a

proper manner. They consider their customers, their asset. They always tried to provide

their

customers each and every facility. They told their customers about the new policies of the

bank and provided each and every kind of information to their customers. They even told

their customers balance on phone. Some time they deposit money after banking hours

from their special customers.

6.8 Customer Satisfaction

I learn how to satisfy a customer. All the staff behaved with their customers in a well

organized manner and tried to satisfy their customers. They served some of their

customers with coffee and biscuits. They convince their customers that we will provide

better services.

6.9 Relationship between Staff Members

All the staff worked as just like a family. They respect each other and followed orders of

their superiors. They always ignored their disasters .So I learn how to work in an

organization.

6.10 Practical Knowledge

I learn the practical knowledge of banking sector. I learn how to open an account, how to

issue a check book, how to make demand draft, pay order or CDR.