Professional Documents
Culture Documents
Table of Content
TABLE OF CONTENT..................................................................................................................1
1 INTRODUCTION:.....................................................................................................4
1.1 EXECUTIVE SUMMARY: ...................................................................................................4
1.2 OBJECTIVES OF STUDYING THE ORGANIZATION........................................................4
3 ORGANIZATIONAL STRUCTURE........................................................................15
3.1 MAIN OFFICES.................................................................................................................15
1
4.4.8 AGRICULTURE FINANCING.............................................................................................17
5 CRITICAL ANALYSIS............................................................................................17
5.1 CRITICAL ANALYSIS OF THE PRACTICAL EXPOSURE RELATING TO THEORETICAL
CONCEPTS.................................................................................................................17
5.1.1 COMPUTER SYSTEM........................................................................................................18
5.1.2 RIGHT PERSON FOR RIGHT JOB....................................................................................18
5.1.3 CUSTOMER PROBLEM.....................................................................................................18
5.1.4 DEFICIENCY IN MANAGEMENT.......................................................................................18
5.2 FINANCIAL ANALYSIS.....................................................................................................19
5.2.1 INTRODUCTION AND IMPORTANCE OF FINANCIAL ANALYSIS..................................19
5.2.2 FINANCIAL STATEMENTS (2006-07)...............................................................................19
5.2.3 COMMON SIZE ANALYSIS................................................................................................22
5.2.4 RATIO ANALYSIS..............................................................................................................24
5.3 ORGANIZATIONAL ANALYSIS .......................................................................................29
5.3.1 HIERARCHICAL FLOW......................................................................................................29
5.3.2 INTRODUCTION (SWOT ANALYSIS)................................................................................30
5.3.3 STRENGTH.......................................................................................................................30
5.3.4 WEAKNESSES...................................................................................................................30
5.3.5 OPPORTUNITIES ..............................................................................................................31
5.3.6 THREATS...........................................................................................................................31
5.4 FUTURE PROSPECTS.....................................................................................................31
5.4.1 FINANCIAL VALUATIONS AND THE FUTURE PROSPECT OF BOP..............................31
6 INDUSTRIAL ANALYSIS.......................................................................................32
6.1 OVERVIEW ON THE MAJOR PLAYERS OF BANK INDUSTRY.....................................32
6.2 COMPARISON OF THE BANK INDUSTRY MAJOR VS MEDIUM VS SMALL BANKS. . .33
8 CONCLUSIONS.....................................................................................................40
9 REFERENCES.......................................................................................................40
1 Introduction:
• Inform customer of essential conditions under which the account will be operated.
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:
• Cash paid stamps (with dates) are duly affixed in case of cash cheques and in case of clearing
stamps is affixed.
Then another task for me was “issuing of cheques books”. It is one of the most interesting works that I
have learnt in the bank. Cheques 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.
4. Study the facilities provided by the organization to common public in various forms.
5. To study the terms & conditions for fringe benefits provided to employees of the organization at the
age of superannuation.
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
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
It was only the Habib bank, which transferred its office from Bombay to Karachi Austral Asia bank
was another bank, which was in existence in the Pakistan territory at the time of independence. Despite of best
efforts on the part of government of Pakistan, no heady way could be made on this behalf and reserve bank of
India was in no mood to help the new country. Imperial bank of India, agent of the reserve bank of India also
etc, also Pakistan’s share of Rs.75 billion in cash balance was with held by bank, causing hardships to the
newly born state. In view of these hopeless state affairs it was agreed between the two countries that reserve
bank would serve as monetary authority in Pakistan only up to 30th June 1948.
The principle of nationalization of banks is to stream line the operation of commercial banks in such a
way that it may be conductive to the development activities in process in the country.
Since the commercial banks were owned controlled by big business groups of the country it was
feared that these banks would not maintain uniformity in their operational and would be instrumental to
1. To form uniformity in the policy of the commercial banks so they may serve the best national interest.
2. To make the operation of commercial banks highly sensitive and responsive to the policy of the
3. To make the credit policy of the commercial banks more purpose full and effective especially in the
development of economic sectors of the country. It acts as an agent of the State Bank of Pakistan
4. To make the best use of the funds available at the disposal of these banks for the economic
6. To development strong money banks market in the country so that the value of currency may be
maintained at stable level both in national facilities to exporter and agriculturists which have not been
CITI Bank
Oman Bank
Rupali Bank
Source: http://www.bop.com.pk/
Source: http://www.bop.com.pk/
Source: http://www.bop.com.pk/
Business Volume in terms of Investment, Current & Fixed Assets, Share Capital, Revenues, Deposits,
Advances, Income, and EPS for the last 5 years is as under:
4 00 ,00 0
3 50 ,00 0 1 0,65 9 1 9 1 ,9 6 8
3 00 ,00 0
2 50 ,00 0 6,777 1 3 7 ,7 2 8
Rs. (M)
2 00 ,00 0
4,42 0 8 8 ,4 6 5
1 50 ,00 0 3052 2 3 4 ,9 7 4
1 00 ,00 0 54,724
1 6 4 ,8 5 5
34,938 1 11,154
50,000 66,320
43,621
0
2003 2004 2005 2006 2007
Imcome Statement Overview
T o t a l A s s e tDs e p o s it sS h a re h o ld e r's E q u it y
30,000
25,000
20,000
Rs (M)
15,000
10,000
2,353
5,000
10,912
18,603
5,488
4,769
4,846
26562
1,736
3,675
3,804
3,165
1,368
4,446
1,002
831
0 Source: http://www.bop.com.pk/
2003 2004 2005 2006 2007
Staff Strength
The total number of employees in the organization is 3859. Which is increasing. Regular hiring’s are taking
place.
Board of Directors (BOP)
CHAIRMAN
01 MR. JAVED MAHMOOD
SECRETARY
01 MR. RAZA SAEED
TO THE BOARD
Total number of employees in Khanewal Road branch where I did my internship is eleven. The branch was
headed by Branch manager Mr Manzoor Hussain Maher. The flow of responsibilities and designations are
shown in management’s hierarchy.
Branch
Manager
Operational
Manager
Account Opening
Credit Remittances Advances Foreign Trade
Short-term
Import
loans
Mortgage
Export
Loans
2.2.5 Products
CONSUMER PRODUCTS
1. Saving Accounts
2. Current or demand accounts
3. Fixed accounts
1. SAVING ACCOUNTS(PLS)
These types of accounts are designed to encourage the saving habit of the customer and
lead to long term or invest relationship. Bank saving account are in the nature of deposit accounts and are not
normally available for drawings.
Rates of interest are typically ahead, by a small margin. Savings accounts with the banking sector represent a
very small proportion of total deposits. Customer can make withdrawals from this type of account. The cash
reserve ratio is typically low then the current account because the withdrawals against this account are very
low.
These are those deposits, which can be drawn by the depositor at any time by representing a
cheque to the bank. People deposits their money in this account they gave a ready command on their account in
developed countries of world, a very significant part of money is kept under current or demand account. On this
type of account of interest transfer of cash or by at sight. The cash reserve ratio for his account is very high.
The operating cost for the handling of this type of account is very regular.
3. FIXED OR TERMS ACCOUNT
Fixed accounts are those which are deposited for a fixed period of time and repayable
after the expiry of stipulated time to the customer. Those people who have surplus funds and want to have save
investment deposit the amount in the fixed account.
The rate of interest given to depositor varies with the length of deposit, i-e. It is higher for longer
period and lower for shorter period.
The rate of this type of deposits is higher the saving bank accounts. The cash reserve against this deposit are
vary low because there no fear of with draw of a month before the stipulated of time.
FINANCE PRODUCTS
1. Agriculture Schemes
2. Business Promotion Finance Schemes
1. Agriculture Schemes
Such type of schemes provides farmers a real plate form to accelerate. Some facilities given by Kissan Dost
Agricultural finance scheme are:
- Purpose
Provision of financial facility to farmers for purchase of inputs (Seed, fertilizer, pesticides, fungicides etc).
- Amount
Maximum of Rs.500000 according to per acre limit of the crop.
- Security
Charge on Agriculture Land through Agriculture Pass Book.
- Insurance
The borrower will have to arrange life assurance under the Bank’s charge.
- Mark-up
9% mark-up per Annum.
BOP car loan is a demand financing facility to purchase brand new locally manufactured/Assembled cars for
personal use. This facility can be availed by salaried person of different nature and by the business persons. All
must have the holdings of NIC.
BOP Aasaish loan is demand finance facility for purchase of consumer durable goods like TV, Refrigerators,
Mobiles, Microwave Oven, Fans, Audio/Video system etc with no down payment, in addition with the free
home delivery. The financing tenure of this product is max 36 months. The nature of employment should be
salaried or the business man.
2.3 SERVICES
3 Organizational Structure
3.1 Main Offices
Head Office and the main branch of BOP is in Gulberg 3, Lahore & Egerton, Lahore Respectively.
The Bank has been divided into seven regions
Each consisting a number of branches.
• Lahore Region
• Faisialabad Region
• Gujranwala Region
• Rawalpindi Region
• Karachi/Quetta Region
• Multan Region
• Peshawar Region
Rest are the branches working under these regions. Which are almost 270 in all over Pakistan.
The distribution of funds to these departments are Banks internal matter and they avoid to disclose.
Through Financial Statements it is only possible to analyze long term and short term financing.
4.4.4 E-Banking
The bank has a centralized database that is web-enabled. All the services that the bank has permitted on
the internet are displayed in menu. Any service can be selected and further interaction is dictated by the nature
of service.
4.4.6 Lockers
Commission charged on lockers provided by bank for customers, is also a source of inflow for the
bank.
5 Critical Analysis
5.1 Critical Analysis of the practical exposure relating to theoretical concepts
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.
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.
Balance Sheet
Balance Sheet
As of DEC 31, 2007
2006 2007
Rupees in ‘000
Assets
Cash and balances with treasury banks 14,054,859 14210302
Balances with other banks 3,722,089 1927662
Lendings to financial institutions 11,846,823 2450000
Investments 28,233,211 73461695
Advances 101,319,954 133893585
Operating fixed assets 2,068,744 3252759
Deferred tax assets - -
Other assets 3,609,457 5778192
164,855,137 234974195
Liabilities
Bills payable 856,448 937647
Borrowings 6,989,424 17842915
Deposits and other accounts 137,727,606 191968909
Sub-ordinated loans - -
Liabilities against assets subject to finance lease 40,988 40321
Deferred tax liabilities 298,616 2205530
Other liabilities 2,816,341 2983079
148,729,423 215978401
Net Assets 16,125,714 18995794
Represented By
Share capital 2,902,490 4230379
Reserves 4,537,232 7427232
Unappropriated profit 3,219,246 3452842
10,658,968 15110453
Surplus on revaluation of assets - net 5,466,746 3885341
16125714 18995794
Income Statement
Income Statement
As of the year ended Dec 31, 2007
2006 2007
Rupees in ‘000
Mark-up/return/interest earned 11,579,036 17,539,094
Mark-up/return/interest expensed 7,508,795 13,939,377
Net mark-up/ interest income 4,070,241 3,599,717
Provision against non-performing loans and advances 340,626 1,616,421
Provision for diminution in the value of investments 33,000 24,479
Bad debts written off directly 100 246,869
373,726 1,887,769
Net mark-up/ interest income after provisions 3,696,515 1,711,948
Non Mark-up/interest Income
Fee, commission and brokerage income 473,212 653,512
Dividend income 1,385,875 1,804,878
Income from dealing in foreign currencies 239,804 377,233
Gain on sale and redemption of securities 389,063 2,039,535
Unrealized gain / (Loss) on revaluation of investments
classified as held for trading
Other income 466,435 547,635
Total non-markup/interest income 2,954,389 5,422,793
6,650,904 7,134,741
Non Mark-up/interest Expenses
Administrative expenses 1,751,970 2,250,777
Provision against lending to financial institutions 130,000 -
Provision against off balance sheet items 175 292
Other charges 38 37,950
Total non-markup/interest expenses 1,882,183 2,289,019
4,768,721 4,845,722
Extra ordinary/unusual items - -
Profit Before Taxation 4,768,721 4,845,722
Taxation - Current 880,997 169,252
- Prior years’ (19,921) -
- Deferred 83,469 250,772
964,466 400,103
Profit After Taxation 3,804,255 4,445,619
Unappropriated profit brought forward 169,817 3,219,246
Transfer from surplus on revaluation of fixed assets -
net of tax 6,174 5,866
175,991 3,225,112
Profit available for appropriation 3,980,246 7,670,731
Basic Earnings per share - Rupees 9.01 10.51
Diluted Earnings per share - Rupees 9.01 10.51
Balance Sheet
164,85
Total Assets Rs in m 43,621 66,320 111,154 5 234,974
101,32
Advances (net) Rs in m 18,344 39,439 63,624 0 133,894
Investments Rs in m 11,458 16,198 18,026 28,233 73,462
Shareholders Equity Rs in m 3,052 4,420 6,777 10,659 15,110
Revaluation Reserve Rs in m 2,155 3,419 6,893 5,467 3,885
137,72
Deposits Rs in m 34,938 54,724 88,465 8 191,969
Borrowings from FIs Rs in m 2,684 2,832 6,791 6,989 17,843
Operating Results
0
2003 2004 2005 2006 2007
Total Income/ Revenues Total Expenses Net profit before tax Net profit after tax
5.2.2.3.2 Graphical Representation of Financial Summary (Balance Sheet)
Balance Sheet
250,000
200,000
Rs in Millions
150,000
100,000
50,000
0
2003 2004 2005 2006 2007
• Deposits are almost rose upto around 300% in last 5 years.
• As last 5 years were really good for banking sector. Assets of the banks are risen upto 400%
particularly in 2007 just because of crescent towers.
Horizontal Analysis
This type of analysis represents the percent change in specific line item of the Income statement or the balance
sheet from the last year. This analysis is used to comment on the growth of specific line item in the industry or
the firm.
• Total earnings mark-up & non mark-up were rising 33% from last year. As deposits and the lendings
of the banks are rising up.
Income Statement
Percentage
percent profit from last year. 100.00
80.00
60.00
40.00
Sheet) 0.00
2003 2004 2005 2006 2007
Total Earnings (Markup/Non Markup) Total Expense Net profit after tax
40.00
• As bank increase their paid up capital
35.00
because of which SOE increase at the end of
2006. 30.00
25.00
Percentage
10.00
5.00
0.00
2003 2004 2005 2006 2007
year. 90.00
80.00
• Net profit before and after tax is decreased 70.00
because of huge rise up in the admin 60.00
expenses. 50.00
%age
40.00
30.00
20.00
10.00
0.00
20 21
10
0
2003 2004 2005 2006 2007
80
• The main reasons for reduction in the
profitability were additional provision
against NPL due to the elimination of
benefit of FSV and downturn in consumer and individual banking.
70
covered from the total income of a firm or a
5.15 5.08
bank. 5
up to the depositors.. 3
2.79
0
2003 2004 2005 2006 2007
60
Profit after tax to total income
P rofit af ter tax to total income
0.02
0
2003 2004 2005 2006 2007
2.5 2.49
2.22
1.5
0
2003 2004 2005 2006 2007
12
0
2003 2004 2005 2006 2007
80
Rs. Per Share
65.9
60
40
34.95
20 13.14
9.08 10.01 10.51
6.86
2.5 4 5.2 3.25
3.5
0
2003 2004 2005 2006 2007
18
16
15. 5
• Capital adequacy ratio informs lending up to a 14
0
2003 2004 2005 2006 2007
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2003 2004 2005 2006 2007
1 Return on equity
21.90%
• The decrease was mainly due to increased equity 20.00%
21.00%
5.00%
0.00%
2003 2004 2005 2006 2007
60.00%
RoE
50.00% 49.80%
2 Cost/Income
40.00%
38.10%
10.00%
0.00%
2003 2004 2005 2006 2007
• Operating cost includes all expenses charged to arrive at profit before tax excluding cost of funds,
provisions and head office expenses. Head office expenses are not considered since all banks do not
account for head office expenses in their financial statements.
• Operating income means funded and non-funded revenue less cost of funds and provisions.
• As administrative costs are increased because of which results decrease in the cost to Income ratio.
BOARD OF DIRECTORS
PRESIDENT
REGIONAL HEADS
BRANCH
BRANCH
5.3.2 INTRODUCTION (SWOT Analysis)
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats SWOT analysis is
careful evaluation of an organization’s internal strengths and weakness as well as its environment opportunities
and threats.
“SWOT analysis is a situational which includes strengths, weaknesses, opportunities and threats that affect
organizational performance.”
“The overall evaluation of a company strengths, weaknesses, opportunities and threats is called SWOT
analysis.”
2. Neutralizing it threats.
SWOT analysis is one of the most important steps in formulating strategy using the organization mission as a
context; managers assess internal strengths distinctive competencies and weakness and external opportunities
and threats. The goal is to then develop good strategies and exploit opportunities and strengths neutralize
threats and avoid weaknesses.
5.3.3 STRENGTH
The Bank officers of BOP are considered as one of the most able professionals in the banking
world (some belong to BCCI). However, they have added some local flavour in accordance with
their targeted segmented. In my observation that they interact with their clients as if they are their
personal friends and discuss about their problems as their own.
As a result of the compassionate and personalized services of the officers, the clients’
perception for BOP is very high. They have trust and feel themselves to be secure while dealing
with BOP.
BOP has opened all its branches at commercial areas so that the customers or clients face no
problems in reaching to the bank. For example, Khanewal Road Branch is being situated in
business and commercial hub of Multan as big volume in trade.
BOP has got a reliable and easy to use internal computer system. Every information
regarding the transactions in customers’ deposits has been computerized. Data are properly
maintained.
Good security system
Not excellent but good facilities are given to employees
5.3.4 WEAKNESSES
Lack of proper internal controls is one of the major weakness of BOP. It is also pointed by
the auditor in his review.
BOP has formulized a lot of products and services for its customers, even more than other
commercial banks, but any advertisement on electronic media has not been seen.
I observed during my internship that some of the employees were burdened with over work.
So I think that the work should be distributed according to their post and capabilities.
Biased selection of employees.
5.3.5 OPPORTUNITIES
Satisfy dynamic consumer needs, BOP has made significant in roads in its entire service
spectrum. A lot of products have been introduced especially in Retail Banking (Agriculture side)
and people are increasingly becoming loyal to the bank and because of feasible transactions.
Optimum pricing and branding strategies of the bank are helping to make customer feel secure
and convenient.
All the opportunities of the 21st century are to be availed in the information technology.
Information technology is the future of this dynamic world. Therefore BOP should emphasize
much on IT, especially on E-Banking. Bank can design a universal account like other foreign
banks, to enhance online facilities.
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
5.3.6 THREATS
Despite the difficult circumstances that confronted the banking sector in particular and the
country in general, BOP has been still highly profitable. But, the facts can’t be denied and there
might be an adverse impact of such situation.
BOP is facing a strong competition by its competitors, Business of all these Banks are growing at
very high pace.
7.5%. 80
65.9
60
• A100bp change in loan growth
estimates for 2007, 2008, and 2009 40
34.95
would cause a 20
0
2003 2004 2005 2006 2007 E 2008
6 Industrial Analysis
900,000 900,000
Cash & bank
800,000 800,000
Advances
SubOrdinated Loans
400,000 400,000 Other Liabilities
Op Fixed Assets &
300,000 Intangible Assets 300,000 Equity
Other assets Total
200,000 200,000
Total
100,000 100,000
0 0
NBP HBL UBL MCB BAF ABL SCB BOP
L
P
P
L
CB
UB
BA
HB
AB
SC
BO
NB
• As graphical shows NBP (National Bank of Pakistan) is the key player and the leader in the industry
with total assets and liabilities of RS. 764,609. While BOP is RS. 234,991.
• Major Player Includes NBP, HBL, UBL, BAF, ABL, SCB and BOP.
• Total Assets of the major players in the industry are RS. 3,561,195 (M).
• BOP is considered as one of the major banks in Pakistan by assets.
• Like major Player NBP has the largest Profit before and after Tax i.e., 28,452(M) and 19,405 (M)
respectively. While BOP has PBT RS. 4,856 (M) and PAT RS. 4,454 (M) only
• The total Profit before and after tax of the major players are RS. 99,835 (M) and RS. 70,045 (M)
respectively.
Income Comparison
50,000
45,000 Spread
40,000 Provision
35,000
Non Markup Interst
30,000 Income
Rs In Million
Operating Income
25,000
15,000
PBT
10,000
Tax
5,000
4000000 4,000,000
3500000 3,500,000
3,000,000
3000000
2,500,000
Rs. In Millions
500000 0
l
0
ta
y
s
s
uit
s it
Bo ble
s
ng
To
s
itie
he o an
Eq
po
wi
ya
Total
bil
Investments
Advances
Lendin To
Cash &
Op Fixed
Assets &
rr o
De
Financial
Other
Pa
assets
ia
bank
d
rL
te
ls
ina
Bi
Ot
rd
bO
• Major Players in the Medium category of the Banking industry are AB, NIB, ABN, Citi, SB BAH,
Su
FB.
• Total Assets and liabilities of this level comprised on RS. 1,091,083(M)
• Net Income of this level is RS. 9,567 (M)
• This level is giving a tough competition to the major players and trying to grab there share.
• Few mergers are taking place and in future it is expected to be more because to maintain SB Standard
reserve ratio.
200,000
150,000
Major Players
Rs in Million
100,000
Medium Players
50,000 Small Players
x
ad
Ta
PB
ax
e
es
-50,000
s
m
om
re
al
rT
co
ns
rs
Sp
nc
In
pe
ve
te
tI
af
g
Ex
Re
tin
rs
it
of
g
te
ra
/
ion
tin
Pr
In
pe
ra
p/
is
pe
ku
ov
ar
Pr
O
M
n
No
• Major Players in the Small category of the Banking industry are ATLAS KASB, JS etc.
• Total Assets and liabilities of this level comprised on RS. 411,077 (M)
• Net Income of this level is RS. (2,176) (M)
• These Banks are going in loss overall in 2007. Since they are new players in Pakistani Market. It is
expected that they will give return in future.
7 Weaknesses and their Recommendations (Financial &
Administrative Aspects)
To me the major and the most important flaw in the BOP is lack of internal controls and inter communication
between different branches of the bank. As far as financial aspect is concerned there is no proper system is
configured that’s why there is always a risk of big frauds with in the bank. I during my internship also pointed
out that point but no one bothered. To me the bank should install some proper resource planning and
controlling systems like other banks do i.e., oracle financials etc.
BOP staff lacks professionalism. They lack the necessary training to do the job efficiently and properly.
Although staff colleges are in all major cities of the Punjab but they are not performing well. For this purpose
these staff colleges should be reorganized and their syllabus should be made in such a way which can help the
employee understand the ever-changing global economic scenario.
Banking council of Pakistan should also initiate some programs to equip the staff with much needed
professional training.
Employees of the bank should be given a task and authority and they should be asked for their responsibility.
The sense responsibility in employees mind is one of the most important factors in the success of any
organization.
During Internship I felt that there is no or very less appraisal of any ones cool performance. The manager
should strictly monitor the performance of every staff member. All of them should be awarded according to
their performance and result in the shape of bonuses to motivated and incite them to work more efficiently.
In the critical analysis this, problem is discussed. To overcome this problem it is suggested that a special
section should be made inside the branch. Which should only handle the treasury function, salaries and
pensions of federal personnel or the bank should do these functions in the evening time. Also management
should purchase more furniture and arrange them in such a way which provides maximum space and
convenient especially in deposit department and there should also be convenient sitting place for customers.
7.1.6 Transfer
Transfer is not properly carried out. Some of the employees are continually serving at the same post. They are
simply rotated at the same branch. Therefore it is recommended that evenly rotation of every employee should
take place after every three years in different braches of the bank.
There should not be any abrupt policies change by the upper management, as this practice hurts the customer
confidences in the bank. Government should make long-term policies
Required, qualified staff should be provided to branch in order to improve the functioning of the branch.
Especially a telephone operator should be appointed.
Bank gets Rs. 2 to 3 to processes a utility bill, and it is very tire, tough and hard job despite this working
resulting in a loss to then Rs 3 to5 per transaction. These charges should be increased to RS 10 per bill to
enable the branch to cover their handling costs and make some profit.
100 major branches of BOP should established a direct link with the, head quarter in Lahore, through Internet
or Intranet. This will make the functions and decision making of the management easier and convenient.
Though management has a plan to connect all branches via WIMAX technology. Which would really bring a
great future aspects.
BOP should start its operation in credit card. These cards are very helpful for the ordinary customer in general
and the business people in particular. To make it mores secure and to eliminate the misuse of it, the
management is required to keep proper security against the card.
Clean loan or clean overdraft is the credit facility extended to the customers to the customers without any
security. These types of small term loans should not be extended to anybody, because sometime these loans are
provided to blue-eyed people of the management and they become a part of bad debts.
In this mode of financing the amount of credit not utilized by the borrower is remained tax-free. It is
recommended that a small amount of interest should be charged on this amount as well because the bank gas
kept-aside the amount for that borrower and can not advance it anywhere.
As mentioned earlier, BOP is very conservative in advances and loans policy. It reduces the investment
opportunities. Also loans should be given to the small businessmen and the other businesses on large scale like
in agriculture sector at the low mark-up rate. It should adopt flexible credit policy while giving credit to the
agriculture sector.
I would like to suggest that at least all the main branches of BOP should be fully computerized in order to
expedite the dealing process among bankers and their customers. Every department should be provided a
computer with adequate training (especially Advances, Deposits and Foreign Exchange departments). Daily
records should be entered directly into these computers, (instead entering the overall daily transactions after the
banking hours). It will not only reduce transaction time, will increase accuracy but will also be efficient as well.
Not only it will be economical but will also reduce the extra burden of work of the bank. It will also help in
reducing the use of excessive paper work.
Good relationship among staff member leads to the peak performances in any organization. I observed that the
staff relationship was normal other wise but some time I noticed that there exists little conformity among the
staff members. Another syndrome from which the staff suffered was that all of them considered themselves
more important than others. Some of the officers used to say that if I am absent for a day the bank would stop
working. So this sort of attitude is not good because it mars bank image and juniors’ willingness learn and work
hard and in the end will hurt the whole team.
Proper distribution of work leads to success in every organization. Proper distribution of work prevents the
employee from over and under work situation. So for a smooth running of an organization proper distribution
of work is the hint to be followed.
During my internship I observed that there was no proper distribution of work in the bank. I saw that some of
the employee worked like ants other sat idle staring here and there. So this created a lot of over work situation
for while relaxation for other.
In the Main branch during my internship I saw that when some of the employees are transfer to other places,
due to their relation with influential people and with top management they can cancel their transfer in few
weeks, when they are unsatisfied at that place.
So I suggest that in the organization there should be no favouritism, nepotism and politics and their transfer and
promotion should be made on merit and according to the rules and regulations of the bank and provided
favourable environment to the employee to show their performances.
7.1.20 Inter Departmental Transfer
I watched during my internship that, there employees who have worked on one seat for many a year. It can
have negative effects motivation of employee who is hard working and intelligent. Take the example of
advances section. In advance section if the employee is transfer after sixth month or seven month, how can he
be able to show his performances and how can he be able to know the bank customer in a short period of time.
The branch should adopt various marketing strategy and promotion strategy to promote the bank and its
product.
The most important in my opinion is personal marketing; it is the most effective of all when you think in term
of branch level. But on the whole organization level, they should arrange the seminar with in the bank and
outside the bank. They should introduce various prizing schemes just like Allied Bank. Karamad Scheme, Bank
Al-Fallah (monthly income earning scheme) and various others.
They should do more advertising through newspaper and media and through channel of personal contacts.
There should be an information desk to provide the information and to receive the complaints of the customer
in the bank.
There is no complaint box available in the branch and not any person appointed to hear the complaints.
Every person cannot go to the manager for the complaint because most of the people are hesitant. So I suggest
management to install a compliant box in the branch, and recruit a special person for that guidance of the
customer when they are unable to manage some difficulties in banking matters.
It is suggested that employees working on daily wages basis should be given some benefits, which the other
employees are getting. Their salaries must increase according to efficiency, performance and service this will
increase there commitment to the organization.
The credit department of the bank should carry out vigilant credit monitoring. They should ensure the proper
payment of instalments and the mark-up by the borrower.
The staff members who have done all the paper work of the loan extension should perform the monitoring, as
he/she will be having more information about the borrower.
The banking hours may be extended up to six, as being practiced by UBL opposite to it. Some of the business
community due to law and order situation are now reluctant to keep the fund in their premises and would want
to depart with it. Therefore, Main Branch may extend the night banking to cater to demand of this business
community. The branch could also be opened to cater the requirements of this business community
7.1.26 Housing and House Hold Goods Loans
Bank should initiate these loans because most of bank’s customers are middle class and they cannot afford to
buy house or household goods at once by their own.
Great care should be taking while extending the loan. Loans should be awarded against reasonable securities,
where market value should be equal to the loan granted.
Policies should be crafted in a way to ensure that no loan is extended on political pressure. SBP regulation for
loan approval should be strictly followed. According to which the current ration of borrower’s business must be
1:1 and the debt to equity ratio should be 60:40, means the liquidity position of business should be healthy.
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:
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.
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.
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.
8 Conclusions
By analyzing the financial statements of the bank, I came across to know that it is one of the most growing
bank in the subcontinent. Now they should carry on with the present management which too k 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 hirings and between colleagues should be
removed.
9 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