Financial Project 0168

Department Of Management
Sciences
Financial Project
Adamjee Insurance Company
Submitted By:
Ahmad Raza (171-6)

Program: BBA(H)
Semester: 8th
Session: 2006-2010
Submitted To: Rai Imtiaz Hussain
University of Education Lahore

(Okara Campus)
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DEDICATED
I dedicate this project to
Almighty Allah, The Creator of worlds
And
Hazrat Muhammad (P.B.U.P), the cause of
The creation of the Universe
And
To my parents,
To the persons who loved me, persons whom
I loved and for all those who prayed for me.

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ACKNOWLEDGEMENTS
Almighty ALLAH never spoils the effort. We consider it as our foremost duty
to acknowledge the omnipresent, kindness and love of Almighty ALLAH who
made it possible for me to complete this financial project.
Then we consider it our utmost duty to express gratitude and respect to Holy
Prophet (PBUH), who is forever a torch of guidance and knowledge for
humanity as a whole.
We have no appropriate words that fully convey the sense of immense

indebtedness and deep gratitude that we owe to our worthy supervisor Sir
Rai Imtiaz Hussain for his dynamic supervision, valuable suggestions,
scholastic attitude, brotherly behavior & constructive criticism during the
course of this project and thesis.
We pay our full regards and heartiest appreciation to all our teachers, who
taught me at any stage of our education career.
We regard the cooperation of management of University of Education, Okara

that makes possible for us to conduct the financial project.
We greatly extend my zealous, sincerest and warmest thanks to all our dear
friends for their cooperation, beautiful moments of friendship and with whom
we have passed memorable events of life.
May Allah the Almighty bless our mother and father & well wishers with good
health & prosperous long lives (Aamin!).
Ahmad Raza
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Message of the Punjab Government:
“Punjab Government wishes to state that being the major stake holder in the
Bank of Punjab it has full faith in the new management and operations of the
Bank. The government further pledges its unequivocal support to the Bank and
firmly believes that the affairs of the Bank are sound and its financial health
robust.”
Finance Department
Government of the Punjab.
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Message of the President:
It is deemed both opportune and appropriate as well as pertinent to provide a

synoptic, but succinct account of the circumstances attendant at assumption
of office, salient of decisions taken and key indicators of policies/plans
contemplated for days ahead as a backdrop to the accompanying results for
the year ending December 31, 2008 to facilitate a clearer perspective and
afford better comprehension/understanding.
The present management took over in the concluding quarter of the year
under review when the Bank was passing through a restructuring phase and
the negative media hype had affected patrons’ confidence. Accordingly,
imperative pragmatic and result oriented measures were warranted in utmost
expedition to salvage the institution from the imbroglio it was mired in and
also to restore and augment much needed order, balance and cohesion in the
work and service environment.
The Government of the Punjab, as the major stakeholder, has expressed its
unflinching faith in the management as well as operations of the Bank and
further pledged its unequivocal backing and abiding support. There is thus,
no cause, reason, occasion or room for even the slightest doubt,
apprehension, alarm or concern. The transition was rendered more difficult
on account of the impediments posed by the slow-down in our economy in
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the wake of global recession. The management remains cognizant of and

fully alive to ever changing market dynamics, compulsions of intensely
competitive environment and complexities of significantly heightened
consciousness about service quality, efficient delivery, innovative product
suite, cost effective pricing, comfort and ease. These considerations
necessitated infusion of competent, versatile and seasoned professionals
having varied and diverse experience in key positions. The cardinal and
determining benchmark was their market compatible skills and expertise.
Fresh inductions ha also to be made in middle, line and lower cadres, where
considered compelling, to galvanize and fortify the work force.
A proactive approach to marketing and resource mobilization constitutes a

vital ingredient. Appropriate trade, commerce and industry segments have to
be targeted to project the comparative advantage and better value offered
by our products and services. This will trigger a ‘Domino Effect’ to multiply
the thousands of satisfied customers, whose preferred choice, BOP has been.
Identification of existing niches in middle tier and SME sector has been
intensified and programmed/structured products for specific segments shall
soon be launched. As the mainstay of our economy and the most plausible
fulcrum for poverty alleviation/employment generation, Agriculture shall
remain a priority. Kissan Dost Financing Schemes shall be fine tuned and
more schemes catering to almost all needs of agrarians are in the offing. A
wider range of avenues and opportunities are being tapped to buttress
product mix and generate consistent revenue streams to lessen volatility in
earnings. Fee based non funded facilities, trade products and cash
management services are being reinvigorated. Diversity in business will not
only enhance profitability but also lend substantial stability.
Recognizing the need for and importance of good corporate governance,

efficacious measures have been taken to ensure compliance with SBP/SECP
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guidelines and best international practices. The efforts will continue.

Particular emphasis has been laid on strengthening internal controls and
revamping internal audit functions to focus risk centric methodology. IT audit
capabilities in line with technological progress shall also be addressed in
earnest.
We stand committed to ensure that merit and professionalism thrive. Training

and Human Resources Development is an immediate concern and not a
standalone administrative function. An elaborate system for manpower
planning is being designed. Performance management and objective
appraisal regime will link employees’ functioning to organizational goals.
Investment in Human Capital formation has to be stepped up. Training is
being attuned to more effective and efficient skill-orientated environment
integrated with individual requirement through on going TNA. The sooner we
shed our inherent weaknesses and inadequacies to capitalize on potential
strengths, the better will it be. We shall persist with meaningful and
constructive changes/adjustments to consolidate our gains, leverage our
accomplishments and sustain growth momentum to buffet our balance sheet.
Diversification, deepening of relationship and harvesting large volumes shall,
definitely, enable us to prosper under volatile market transformations.
Financial strength, however, needs to be protected with discipline enabling us
to take calculated risk commensurate with rewards to explore, capture and
capitalize lucrative openings and opportunity. We must also keep a close
watch all over head cost but exhibit ready willingness to spend and invest
prudently in value adding/yielding paraphernalia and infrastructure
technology.
Our country wide branch network affords enormous flexibility to provide

access to a larger section of populace who have not as yet benefited from our
services or may be sparing in their usage. We must harness the advantage of
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size without getting bogged down by the baggage. We shall be yet stronger,
more stable and more profitable for our share holders to own, a more fulfilling
and enabling environment to work in and for our peers competitor worth
reckoning. Salutary outcome of the measures so far implemented has started
to surface. More beneficial results that accrue shall manifest themselves
vividly in the near future to validate the efficacy of the decisions. We must
strive together to ensure that the impact is enduring.
We are at cross roads where devotion to duty, professional ability, integrity

and dynamism is required more than ever to turnaround BOP into a value
driven stable and vibrant premier financial institution dedicated to the
country’s progress and prosperity. A bright and promising future waits. It is
for all of us to grab and preserve for posterity.
Naeemuddin Khan
TABLE OF CONTENTS
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Message of the Punjab Government:................................................................5
Message of the President:................................................................................6
VISION STATEMENT:.......................................................................................13
MISSION STATEMENT:.....................................................................................13
Core Values:...................................................................................................14
Branch Networks:...........................................................................................15
Total Number of Branches:.............................................................................17
Banking History:.............................................................................................18
History of Banking in Pakistan:.......................................................................21
Functions of Commercial Banks & their Role in the Development of an

Economy:....................................................................................................... 22
History of The Bank of Punjab:.......................................................................26
PRODUCTS & SERVICES: ................................................................................29
Deposits: ...................................................................................................29
Portfolio Sharing: ........................................................................................34
Loan Products: ...........................................................................................47
SERVICES: .....................................................................................................81
Commercial Banking:..................................................................................81
Corporate & Investment Banking: ..............................................................81
SWOT ANALYSIS.............................................................................................83
Strengths:................................................................................................... 84
Weaknesses:...............................................................................................84
Opportunities:.............................................................................................84
Threats:.......................................................................................................85
PEST Analysis.................................................................................................85
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Political Factors...........................................................................................87
Economic Factors........................................................................................88
SOCIO CULTURAL FACTORS........................................................................91
Technological Factors..................................................................................93
BALANCE SHEET.............................................................................................94
TREND ANALYSIS OF BALANCE SHEET............................................................96
VERTICAL ANALYSIS OF BALANCE SHEET.......................................................97
PROFIT AND LOSS ACOOUNT..........................................................................98
TREND ANALYSIS OF PROFIT AND LOSS ACCOUNT.........................................99
VERTICAL ANALYSIS OF PROFIT AND LOSS ACCOUNT..................................100
RATIO ANALYSIS:..........................................................................................101
a) Liquidity Ratios.........................................................................................102
Current Ratio:............................................................................................103
Sales to Working Capital:..........................................................................104
b) Leverage Ratios:......................................................................................105
Time Interest Earned:................................................................................105
Debt Ratio:................................................................................................106
Debt to Equity Ratio:.................................................................................107
Current Worth / Net worth Ratio:...............................................................108
Total Capitalization Ratio:.........................................................................109
c) Profitability Ratios:...................................................................................110
Net Profit Margin:......................................................................................110
Operating Income Margin:.........................................................................111
Return on Assets:......................................................................................112
Return on Equity (ROE):............................................................................113
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d) Activity Ratios:.........................................................................................115
Total Asset Turnover:................................................................................115
Sales to Fixed Assets:................................................................................116
d)Market Ratio:.............................................................................................117
Earning Per Share- EPS:............................................................................117
Price / Earning Ratio:.................................................................................119
Book Value per Share:...............................................................................120
Recommendation.........................................................................................121
INTERNAL CONTROL..................................................................................121
PROFESSIONAL TRAINING..........................................................................122
DELEGATION OF AUTHORITY.....................................................................122
PERFORMANCE APPRAISAL........................................................................122
TRANSFERS...............................................................................................123
NEED OF QUALIFIED STAFF.......................................................................123
CREDIT CARD FACILITY..............................................................................123
DECREASING ADMINISTRATIVE EXPENSE..................................................123
SHOULD BE AGGRESSIVE IN CREDIT POLICY.............................................124
TECHNOLOGICAL IMPROVEMENT...............................................................124
STAFF RELATIOSHIP...................................................................................124
FAVOURITISM & NIPOTISM.........................................................................125
MARKETING POLICY...................................................................................125
AVOIDING BAD DEBTS...............................................................................126
Conclusion....................................................................................................126
References...................................................................................................127
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VISION STATEMENT:
"To be a customer focused bank with service excellence"
MISSION STATEMENT:
“To exceed the expectations of our stakeholders by leveraging our
relationship with the Government of Punjab and delivering a complete range
of professional solutions with a focus on programme driven products &
services in the Agriculture and Middle Tier Markets through a motivated
team.”
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Core Values:
Our Customer As our first priority
For the prosperity of our stakeholders that

Profitability allows us to constantly invest, improve and
succeed.
Corporate
To Enrich the Lives of community where we
Social
operate.
Responsibility
Recognition
For the talented and high performing
and
employees.
Reward
Excellence In everything we do.
Integrity In all our dealings.
Respect For our customers and each other.
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Branch Networks:
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Total Number of Branches:
Region No. of branches

Rawalpindi 38
Lahore 67
Gujranwala 45
Faisalabad 44
Multan 64
Peshawar 07
Karachi 06
Quetta 01
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Banking History:
Banks are financial institutions that accept deposits and make loans.
Included in the term banks are firms such as commercial banks, saving
and loan associations, mutual savings banks and credit unions. Banks
are the financial intermediaries that an average person deals with
most frequently. A person who needs a loan to buy a house or a car
usually gets it from a local bank. Most citizens’ keep a large proportion
of their financial wealth in banks in the form of checking accounts,
saving accounts, or other type of bank deposits. Because banks are the
largest financial intermediaries in any economy, they deserve the most
careful study.
Word Bank is said to be derived from the words Banc us or Banque.

The history of banking is traced to as early as 200 BC. The priests in
Greece used to keep money and valuables of the people in temples.
These priests thus acted as financial agents. The origin of banking is
also traced to early goldsmiths. They used to keep strong safes for
storing the money and valuables of the people. The persons who had
surplus money found it safe and convenient to deposit their valuables
with them.
The First Stage in the development of modern banking, thus, was the
accepting of deposits of cash from those persons who had surplus
money with them.The goldsmiths used to issue receipts for the money
deposited with them. These receipts began to pass from hand to hand
in settlement of transactions because people had confidence in the
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integrity and solvency of goldsmiths. When it was found that these

receipts were drawn in such a way that it entitles any holder to claim
the specified amount of money from goldsmiths. A depositor who is to
make the payments may now get the money in cash from goldsmiths
or pay over the receipt to the creditor. These receipts were the earlier
bank notes.
The Second Stage in development of banking thus was the issue of

bank notes. The goldsmiths soon discovered that all the people who
had deposited money with them did not come to withdraw their funds
in cash. They found that only a few persons presented the receipt for
encashment during a given period of time. They also found that most
of the money deposited with was lying idle. At the same time, they
found that they were being constantly requested for loan on good
security. They thought it profitable to lend at least some of the money
deposited with them to the needy persons. This proved quite a
profitable business for the goldsmiths. They instead of charging
interest from the depositors began to give them interest on the money
deposited with them.
This was the Third Stage, in the development of banking. By

experience the banks came to know that they could keep a small
proportion of the total deposits for meeting the demands of customers
for cash and the rest they could easily lend. They allowed the
depositors to draw over and above the money actually standing to
their credit. In Economics terminology we can say that they allowed
the overdraft facilities to their depositors.
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This was the Fourth Stage, in development of banking. When every

bank issues receipts and most of them allowed the overdraft facilities,
there was then too much confusion in the banking system. The banks
in order to earn profits could not keep adequate reserves for meeting
the demands of the customers for cash. The failures on the part of the
bankers to return money caused widespread distress among the
peoples. In order to create confidence among the people; steps were
taken to regulate the banking organization. A conference was held in
Nuremberg in 1548.
It was decided that a bank should be set up by the state, which should
streamline the banking organization and technique. The first central
bank was formed in Geneva in 1578. Bank of England was established
in 1694. The responsibility of issuing of notes is now entrusted to a
central bank of each country.
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History of Banking in Pakistan:
At the time of partition total number of Banks were 38 only. Out of

these Banks the Pakistani Banks were only 2, Indian Banks 29 &
Exchange Banks were 7. The total of deposits of Pakistani Banks was
Rs.880 Million. & advances were Rs: 198 Million. According to banking
companies ordinance Banks are the companies, which transacts the
business of banking in Pakistan. Commercial Banks have constituted
the most important [part of the intuitional credit in the economy of
Pakistan. Being the largest source of credits, Banking Industry is a
pivot of whole the economic activities in Pakistan.
Section 37(2A) of State Bank of Pakistan Act 1965 lays down that the
Banks must have paid-up capital & reserve of not less than Rs: 5 Lac &
fulfilling certain other requirements for declaring as “Scheduled Bank”.
At the time of independence Bank services was badly affected. But
with the passage of time these are improving. The government of
Pakistan nationalized all Banks in early 1974. This act was done to
minimize control of few hands over banking. But this step was proved e
futile for the Banking in Pakistan. So the Govt. had to revise its
decision in1990. Two Banks (Allied Bank of Pakistan Limited & Muslim
commercial Bank Of Pakistan Limited has been denationalized. Since
then Banks were working well.
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Now slogan of the Banks is to serve their customers in the best

possible manner.
It can be said that it is a pipeline thorough which currency moves into

& outside the circle. Banks accept deposited of money and repay it on
demand. Bank borrows money at lesser rate of interest & lends it at
higher rate of interest. In this way Banks earn money. Bank do not lend
all money they collect, they keep certain portion of it as reserve to
meet the uncertain demand of the customer.
Functions of Commercial Banks & their Role in

the Development of an Economy:
In general terms the functions of a commercial bank can be classified

under the following main heads:
Accepting Deposits Some people have excess money and they want
to deposits it to some honest man or an institution which can give
them some profit. So the first function of commercial bank is to receive
deposit there are three types of deposits.
Demand Deposits or Current Deposits: Some people deposit their

excess money in the current accounts and they can withdraw their
money deposited in this account at any time during the banking hours,
so bank is not ready to give interest on it.
Fixed Deposits: These deposits are fixed for a particular period.

Commercial banks also pay an interest on these accounts. An
important thing related to it is the varying interest rates for the
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different period deposits. Interest rate increases with the increase in

the fixed deposit period
Saving Deposits: To create the habit of savings, bank accepts the

saving deposits and pays an interest on these deposits. And this rate
of interest is greater than the demand deposits.
Advancing Loans: Bank also advances the loans to the merchants

and charges the interest. It is the major source of its income. It also
issues the loan for short term, medium term and for long term. And
bank receives the higher interest from the borrower for the long term
loans offered.
Discounting of Bills: Commercial banks also discount the bills and

facilitate the business; for example one businessman purchases
anything from another person and promises to pay after one month.
The seller will write a bill to the buyer and there will be an order that
after one month the buyer will pay the amount to the seller. Buyer will
sign on the bill. In other words buyer will accept the responsibility of
that amount. If seller is in need of money, he will take it to the bank
and will receive the money by discounting the bills. The commercial
bank also may rediscount it from the central bank.
Cheap Medium of Exchange: By issuing cheques and drafts bank

provides cheap, medium of exchange.
Money Transfer: The commercial bank is very helpful in transferring

the money from one place to another by issuing the drafts. This is very
popular concept in the modern world and widely used in the business
community.
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Custodian of Precious Items: Banks also provide lockers for the

safety of precious articles. So now everyone can secure his precious
metals like gold, silver, etc., and bank charges a very nominal charge
for this facility.
Agency Services: Commercial Banks also perform the duty of an

agent. It collects and pays on the behalf of the customers.
Investment: On behalf of the customers all the banks also make an

investment in different companies and industries. And banks receive
nominal charge from the customers.
Creation of Credit: It also creates and extends the volume of credit.
Facilitating Trade Activities: It also provides the finance to the

foreign trade. Letter of credits are issued by the commercial banks for
the foreign payments.
Sale and Purchase of Securities: The commercial bank purchases

and sells the securities, for itself and sometimes on the behalf of the
costumes.
Acting as a Trustee: If a client directs his bank to act as a trustee in

the administration of a business, the bank performs this responsibility.
Role of the banking sector can be judged by the following facts:
Saving Mobilization: The commercial Banks namely United Bank

Limited Pakistan, Habib Bank Ltd, Allied Bank Of Pakistan Ltd. &
National Bank has opened Branches in urban areas & rural areas to
mobilize savings of people.
Financing of Development Projects: Banks & other financial

institutions like ADBP, IDBP, and PICIC etc. Advances short & medium
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terms loans for financing of the development projects both in the

private & public sectors .So they helping to accelerate the rate of
progress (Economic) in the country.
Enhancing Trade Activities: The credit institutions collect the

savings of people & make them available for facilitating the trade
activities both inside & outside the country.
Creating Climate for Capital Formation: A developed baking

system stimulates the growth of economy by creating favorable
climate for capital formation in the Country.
Help of State Bank of Pakistan in achieving Monetary

Publishes: Commercial Banks under the supervision & guidance of
the S.B.P help in implementing & achieving the objective of monetary
policy, which vary from time to time.
Assist in Planned Development: Commercial Banks are profit-

seeking enterprises. In order to maximize profit they have the
incentive from S.B.P to maximize the limit of finance. An organized
Banking system keeps balance between the liquidity profitability, thus
assists in the planned development of the Country.
Profit Sharing Scheme: Commercial Banks receive surplus balance

of the households and business & pay interest on the deposit of client.
The depositors instead of having a fixed return on the deposit will
share in the profit & loss of the Bank. The profit & loss scheme
arrangement is the alternative to interest, under an Islamic economic
system, which is since on the experimental basis in Pakistan.
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History of The Bank of Punjab:

Established in 1989, in pursuance of The Bank of Punjab Act 1989 and
was given the status of scheduled bank in 1994.The Bank of Punjab is
working as a scheduled commercial bank with its network of 272
branches at all major business centers in the country. The Bank
provides all types of banking services such as Deposit in Local
Currency, Client Deposit in Foreign Currency, Remittances, Advances
to Business, Trade, Industry and Agriculture A wholly owned subsidiary
of BOP First Punjab Modaraba (FPM) was established in 1992 and is
being managed by Punjab Modaraba Services (Pvt) Ltd.
First Punjab Modaraba (FPM) was established in the year 1992 and is
being managed by Punjab Modaraba Services (Pvt) Ltd, a wholly owned
subsidiary of The Bank of Punjab.
The net assets of the subsidiary stood at Rs. 149.4 million as at the
year end as against Rs. 181.1 million, last year.
Lending under Islamic mode of finance, main vehicles are Morabaha,

Ijarah & Musharika to encompass requirements of corporate,
commercial and individual customers. Liability generation through
COM’s (Certificate of Musharika ) and offer attractive returns
individuals and institutional depositors for fixed tenure instruments.
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FPM is working to introduce new and innovative products to enhance

its range of services.
In the beginning the main area of procurement of deposits were the

government – based organizations. The reason being that, it was
opened to support the government of Punjab. It quickly expanded its
operations in the city of Punjab by opening branches through out the
province. Approximately one branch was opened a day. The strength of
branches in the province of Punjab is 237. In 19th Sept 1994 the Bank
of Punjab was converted into a scheduled bank, The permission being
given by the Government of Punjab. After being converted into
scheduled bank it opened its first branch in the city of Islamabad (Blue
Area) on the date 19th Sept 1994. Now the total number of branches is
272. Towards the roads of prosperity and establishment BOP expanded
its network throughout the country the details of branches are as
under.
Macroeconomic management is the major concern of an economy. In

Pakistan over a long period of time, the gaps in saving and investment
and balance of trade deficit have become the serious problem to
achieve the desire level of growth. The Bank of Punjab has the
privilege to discharge its responsibilities to words national progress
and prosperity within the little period if it’s scheduling.
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GOALS:
 Ensure that its performance in all facets of its operations
more than matches that of its competitors.
 Maintains a comprehensive range of domestic and
international activities.
 Maximize contributions from its key sources of personal
machines brands representation and capital.
 Be innovative progressive and the need of its customers
within the frame work of operational and prudent risk
taker.
 Act as a reputable efficient and responsible organization.
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 Pursue personal policies which recognize the aspirations
and performance of individual and which are suited to the
devise levels of skills.
PRODUCTS & SERVICES:
Deposits:
A deposit account is a current account, savings account, or other

type of bank account, at a banking institution that allows money to
be deposited and withdrawn by the account holder. These
transactions are recorded on the bank's books, and the resulting
balance is recorded as a liability for the bank, and represent the
amount owed by the bank to the customer. Some banks charge a
fee for this service, while others may pay the customer interest on
the funds deposited.
Types of Deposits:
• Checking accounts: A deposit account held at a bank or other

financial institution, for the purpose of securely and quickly
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providing frequent access to funds on demand, through a variety

of different channels. Because money is available on demand
these accounts are also referred to as demand accounts or
demand deposit accounts.
• Savings accounts: Accounts maintained by retail banks that pay

interest but cannot be used directly as money (for example, by
writing a cheque). Although not as convenient to use as checking
accounts, these accounts let customers keep liquid assets while
still earning a monetary return.
• Money market deposit account: A deposit account with a

relatively high rate of interest, and short notice (or no notice)
required for withdrawals. In the United States, it is a style of
instant access deposit subject to federal savings account
regulations, such as a monthly transaction limit.
• Time deposit: A money deposit at a banking institution that

cannot be withdrawn for a preset fixed 'term' or period of time.
When the term is over it can be withdrawn or it can be rolled
over for another term. Generally speaking, the longer the term
the better the yield on the money.
• Basic Banking Account: A Basic Banking Account is a low cost
account that helps customers who find it hard to afford regular
checking account fees and who do not make many transactions
each month.
The Bank of Punjab offers the following types of deposits:
• Current Deposit:
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The following are the criteria for opening a current account at

the Bank of Punjab:
o The Accounts shall be opened upon submission of duly filled-

in Bank’s prescribed Account Opening Form properly
introduced in the manner provided and on submitting all such
documents as may be revised by the Bank. The Bank reserves
the right to demand such relevant documents even after
opening of account as deemed necessary.
o The Bank has the right to refuse to open an Account without
assigning any reason.
o The Accounts shall be opened with an initial/minimum deposit
as stipulated by the Bank from time to time unless specifically
exempted.
o A distinctive number shall be allotted to every account and
this number should be quoted in all correspondence relating
to the account and at the time of making a deposit or
withdrawal. The Bank reserves the right to change the
Account Number or any part of it in order to meet its book
keeping/administration requirement. However, intimation of
change in the account number shall be sent to the account
holder.
o (a) Account for the recipient of Zakat or recipient of grants
from Bait-ul-Mall, may be opened with an initial deposit of
Rs.100/-
o The Accounts may be opened singly in one name or jointly in
two or more names.
o Deposit may be accepted from minors provided the account is
opened and operated through a guardian. The Account thus
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opened will continue to be operated upon by the guardian

even if the minor attains the age of majority. The necessary
consent to this effect will be obtained at the time of opening
of the account. The orders of the court will, however, be
followed in case the guardian is appointed by the court.
o All monies/instruments to be deposited in an account should
be accompanied by a pay-in-slip showing the title and number
of the account. The entry of transaction shall be authenticated
by putting Bank’s stamp under the joint signatures of two
officers of the Bank on the pay-in-slip and counterfoil thereof.
However in case of branches where teller system has been
introduced, teller only shell authenticate the transactions up
to the prescribed limits.
o Withdrawals will not be allowed against postdated (payable on
any future date) and stale (06 months after issuance date)
Cheques and against un-cleared funds.
o Where any account is not conducted to the satisfaction of the
Bank, the account may be closed without any notice and the
balance will be remitted to the depositor at the address given
by the Account Holder(s).
o Withholding Tax at the rate notified by the Government of
Pakistan from time to time will be deducted out of profits
payable to the Account Holders.
o ZAKAT is leviable on the assets as described in the Zakat &
Ushr Ordinance 1980 (as amended from time to time) on
balances which will fall within the definition of zakatable
assets as notified by the Government of Pakistan on valuation
date each year, provided Declaration (original/attested
photocopy) for exemption from compulsory deduction of zakat
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is filed on the prescribed proforma (CZ-50) in the prescribed

manner one month preceding the valuation date except in the
case of newly opened accounts.
The branches shall ensure completion of all the formalities required

by State Bank of Pakistan vide Prudential Regulation No.M-1with
regard to KNOW YOUR CUSTOMER.
Basic Banking Account (BBA) :
The following are the criteria for opening a current account at the
Bank of Punjab:
o The minimum initial deposit will be Rs.1000.

o No profit will be Payable.
o No fee (service charges) for maintaining such accounts will be
charged.
o There will be no limit for maintain minimum balance. In the
cases, there balance in BBA's remain "NIL" for a continuous 6
month period, such accounts will be closed.
o Account holder will be allowed a maximum of 2 deposit
transactions and 2 checking withdrawals, free of charge either
through cash/through clearing per month otherwise service
charges of a regular banking account shall be applicable for
that month as per Bank's Schedule of Charges.
o Unlimited free of charge ATM withdrawals from Ban's own
ATM's will be allowed. In case of withdrawals from BBA though
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the ATM Machine of other Banks, the Charges of these Banks

shall be applicable for such transaction.
Note
If any existing customer desire to get his regular banking
account converted into Basic Banking Account, he / she may
kindly contact the branch where his / her account is being
maintained. The facility for conversion into BBA will be provided
free of charge.
Portfolio Sharing:
The following are the portfolio products offered by The Bank of Punjab
to its clients:
• PLS Account:
The following are the terms and conditions for the opening of a
PLS Account for a client of The Bank of Punjab:
o The Accounts shall be opened upon submission of duly filled-

in Bank’s prescribed Account Opening Form properly
introduced in the manner provided and on submitting all such
documents as may be revised by the Bank. The Bank reserves
the right to demand such relevant documents even after
opening of account as deemed necessary
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o The Bank has the right to refuse to open an Account without

assigning any reason.
o The Accounts shall be opened with an initial/minimum deposit
as stipulated by the Bank from time to time unless specifically
exempted.
o A distinctive number shall be allotted to every account and
this number should be quoted in all correspondence relating
to the account and at the time of making a deposit or
withdrawal. The Bank reserves the right to change the
Account Number or any part of it in order to meet its book
keeping/administration requirement. However, intimation of
change in the account number shall be sent to the account
holder.
o (a) Account for the recipient of Zakat or recipient of grants
from Bait-ul-Mall, maybe opened with an initial deposit of
Rs.100/-
o The Accounts may be opened singly in one name or jointly in
two or more names.
o Deposit may be accepted from minors provided the account is
opened and operated through a guardian. The Account thus
opened will continue to be operated upon by the guardian
even if the minor attains the age of majority. The necessary
consent to this effect will be obtained at the time of opening
of the account. The orders of the court will, however, be
followed in case the guardian is appointed by the court.
o All monies/instruments to be deposited in an account should
be accompanied by a pay-in-slip showing the title and number
of the account. The entry of transaction shall be authenticated
by putting Bank’s stamp under the joint signatures of two
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officers of the Bank on the pay-in-slip and counterfoil thereof.

However in case of branches where teller system has been
introduced, teller only shell authenticate the transactions up
to the prescribed limits.
o Withdrawals will not be allowed against postdated (payable on
any future date) and stale (06 months after issuance date)
Cheques and against un-cleared funds.
o Where any account is not conducted to the satisfaction of the
Bank, the account may be closed without any notice and the
balance will be remitted to the depositor at the address given
by the Account Holder(s).
o PLS Savings Accounts may also be opened by charitable
institutions, for Provident Funds and other funds of
Benevolent nature by Local Bodies, Autonomous Corporations,
Companies, Associations, Societies, Educational Institutions,
Firms etc. and in all other cases where such accounts are
required to be opened under the orders of Competent Court of
Law
o Not more than one PLS Savings Account may be opened at a
branch in any one name except in the name of a parent or
guardian for more than one child or for keeping funds of
specified nature category by an entity, with the Bank’s prior
approval.
o Profit payable or Loss recoverable on PLS Saving Accounts to
be credited or debited will be determined by the Bank at its
sole discretion on the basis of its net working results at the
end of each half-year within the time prescribed by SBP from
the date of the close of the half-yearly books of accounts of
the Bank. The rates of profits may vary from period to period
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viz January to June/July to December each year. Calculation of

Profit on PLS Saving Accounts will be made for each calendar
month on the lowest credit balance of an account between
the close of the 6th day and the last day of the month.
However, profit accrued even for Re. 1/- after deducting
withholding tax will be payable to all Account Holders. When
an account is CLOSED before declaration of profit rates, the
accrued profit will be first credited in the account at the profit
rates previously declared by the Bank. However, no recovery
or payment of profit as a result of increase/decrease in the
rate of profit will be affected upon such A/C holders after
announcement of half-yearly profit rates by the Bank.
o Withholding Tax at the rate notified by the Government of
Pakistan from time to time will be deducted out of profits
payable to the Account Holders.
o ZAKAT is leviable on the assets as described in the Zakat &
Ushr Ordinance 1980 (as amended from time to time) on
balances which will fall within the definition of zakatable
assets as notified by the Government of Pakistan on valuation
date each year, provided Declaration (original/attested
photocopy) for exemption from compulsory deduction of zakat
is filed on the prescribed proforma (CZ-50) in the prescribed
manner one month preceding the valuation date except in the
case of newly opened accounts.
o The branches shall ensure completion of all the formalities
required by State Bank of Pakistan vide Prudential Regulation
No.M-1with regard to KNOW YOUR CUSTOMER
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• Senior Citizen Savings Account:
This is a saving bank product available for all senior citizens i.e.
persons of 60 years and above who are eligible to open a saving
account as per our Bank’s criteria. The account can be opened
singly or preferably jointly (husband & wife) provided either of
them is of 60 years or above. This product is designed to attract
procure deposit/savings of senior citizens by offering attractive,
innovative incentives and higher rates of profit to senior citizens.
The Main Features are:
o A customer can open only one BOP Senior Citizens Saving

Account singly or jointly regardless of the branch. In case it is
found out that more than one account exists under this
category, the Bank reserves the right to recover & forfeit the
profits paid or not to give any profit.
o The account can be opened with a minimum initial deposit of
Rs.10,000/-. However in case average deposit during the
month falls below Rs.10,000/-, account maintaining charges
shall be levied as per Bank’s Schedule of Charges.
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Minimum Monthly Expected rate of

Balance profit
Rs. 0 upto 10,000/- Normal PLS SB rate
Rs.10,001 upto 200,000/- 5 % p.a.
Rs.200,001 upto 7 % p.a.
400,000/-
Rs.400,001 upto 8 % p.a.
500,000/-
o This product is governed under PLS rule of Profit & Loss

sharing system. The rates mentioned are expected and the
Bank reserves the right to review/revise the profit rates
quarterly.
o Maximum profit @ 8.0 % p.a. as per different slabs shall be
paid on minimum monthly deposit upto Rs.500,000/-. Deposit
can exceed Rs.500,000/- but no profit will be paid on amount
over and above Rs.500,000.
o The profit will be calculated on monthly basis based on the
minimum monthly balance maintained by the customer during
that particular month.
o The profit will be credited on monthly basis in the respective
account.
o Profit once disbursed will not be recovered in case of decrease
in rate at the time of announcement of Half Yearly profit rates.
However in case of rise in profit rate the difference amount
will be paid.
o Existing senior citizen account holders can also open account
under this scheme.
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o In case they wish to close their existing PLS or other account,

same may be allowed without deducting account closure
charges
o Zakat will be deducted as per law like any other saving/profit
bearing account.
o Withholding tax will be deducted from the profit as per law in
force
o Preferably PLS SB joint a/c should be opened with special
instructions of “Either or Survivor” which must be jointly
authenticated under full signatures of the Joint A/c holders.
o Unlimited transaction (debit/credit)
o Free complimentary issuance of first ATM/Debit Card
o Free complimentary issuance of first Cheque Book of 25
leaves
o 25 % reduction in rental charges of small or medium locker
subject to availability.
o Priority banking especially in utility bills payment, counter
service etc
o The product carries all characteristics/conditions pertaining to
PLS SB account i.e. issuance of DD/TT/MT/PO etc as per Bank’s
Schedule of Charges except payment of profit which shall be
paid on monthly basis on minimum monthly deposit upto
Rs.500,000/- only as per admissible rates shown against each
minimum monthly balance.
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• Gharayloo Saving Account:
This is a saving bank product available for all females who are
eligible to open a saving account as per our Bank’s criteria. The
account can be opened singly or jointly with husband. This
product is designed to attract procure deposit/savings of ladies
particularly housewives of expatriates & students.
The Main Features are:
o A customer can open only one BOP Gharayloo Saving Account

singly or jointly regardless of the branch. In case it is found
out that more than one account exists under this category,
the Bank reserves the right to recover & forfeit the profits
paid or not to give any profit.
shall be levied as per Bank’s Schedule of Charges
o The profit slab is as follows:
Minimum monthly * Expected rate of

balance profit
Rs. 0 upto 10,000/- Normal PLS SB declared
rate
Rs. 10,001 upto 250,000/- 7.25 % p.a.
This product is governed under PLS rule of Profit & Loss sharing
system. The rates mentioned are expected and the Bank reserves the
right to review/revise the profit rates quarterly.
o Maximum profit @ 7.25 % p.la. shall be paid on minimum

monthly deposit upto Rs.250,000/- but over Rs.10,000/-.
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Deposit can exceed Rs.250,000/- but no profit will be paid on

balance over and above Rs.250,000.
o The profit will be credited on monthly basis in the respective
account.
o Profit once disbursed will not be recovered in case of decrease
in rate at the time of announcement of Half Yearly profit rates.
However in case of rise in profit rate the difference amount
will be paid.
o Existing females account holders can also open account under
this scheme.
charges
bearing account.
force.
o Unlimited transaction (debit/credit).
o Free complimentary issuance of first ATM/Debit Card
o 25 % reduction in rental charges of small or medium locker
subject to availability
o Priority banking especially in utility bills payment, counter
service etc
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o The product carries all characteristics/conditions pertaining to

PLS SB account i.e. issuance of DD/TT/MT/PO etc as per Bank’s
Schedule of Charges except payment of profit which shall be
paid on monthly basis on minimum monthly deposit upto
Rs.250,000/- only as per admissible rates shown against each
minimum monthly balance
• Ziyada Munafa Savings Account:
This is a saving bank product available for general public i.e.

persons who are eligible to open a saving account as per our
Bank’s criteria. The account can be opened singly or jointly. This
product is designed to attract procure deposit/savings of general
public particularly salaried and small investors.
A customer can open only one BOP Ziada Munafa Saving Account
single jointly regardless of the branch. In case it is found out that more
than one account exists under this category, the Bank reserves the
right to recover & forfeit the profits paid or not to give any profit.

shall be levied as per Bank’s Schedule of Charges.
o The profit slab is as follows:
Minimum monthly Expected rate of profit

balance
Rs. 0 upto 10,000/- Normal PLS SB rate
Rs.10,001 upto 200,000/- 4.0 % p.a.
Rs.200,001 upto 400,000/- 5.0 % p.a.
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Rs.400,001 upto 500,000/- 7.5 % p.a.
This product is governed under PLS rule of Profit & Loss sharing
system. The rates mentioned are expected and the Bank reserves the
right to review/revise the profit rates quarterly.
o Maximum profit @ 7.5 % p.a. as per different slabs shall be

paid on minimum monthly deposit upto Rs.500,000/-. Deposit
can exceed Rs.500,000/- but no profit will be paid on amount
over and above Rs.500,000.
o The profit will be credited on half yearly basis in the
respective account as per rules of PLS SB.
o Existing account holders can also open account under this
scheme
charges
bearing account.
force.
o Unlimited transaction (debit/credit)
o Free complimentary issuance of first ATM/Debit Card.
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• The product carries all characteristics/conditions pertaining to

PLS SB account including payment of profit on half yearly
basis i.e. issuance of DD/TT/MT/PO etc as per Bank’s Schedule
of Charges on minimum monthly deposit upto Rs.500,000/-
only as per admissible rates shown against each minimum
monthly balance.
Pahlay Munafa Deposit Scheme:
This is a fixed deposit product. The following are its salient features:
o Available to all types of customers.

o Payment of provisional profit in advance, i.e. at the time of
making the investment.
o Deposit may be placed for a period of three months only.
o Free ATM/Debit card.
o Minimum deposit is Rs.50000.
o No maximum deposit limit.
• PLS-Saving Profit Plus Account:
Provisions of The Bank of Punjab regarding this are:
o Individuals, corporations, organizations and various

provincial / federal government departments can open
accounts under the scheme.
o This is an operating/checquing account
o The accounts can be opened in individual or joint names.
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o The deduction of Zakat and Withholding tax will be applicable

as per law of the land.
o Average balance during a calendar month will be taken to
determine the deposit slabs and applicable profit rate for that
month for the purpose of creating provisons. However, in case
the average balance in any month falls below Rs. 1(M) being
the minimum slab, the account for that particular month will
be treated as an ordinary Pls-sb account and profit will be
calculated on minimum balance during the month at the
normal rate declared for Pls- sb account.
o Profit payable on half yearly basis.
• Corporate Premier Account:
o This account has been introduced for corporate clients.

o This is an operating/checquing account
o Profit on the account will be calculated on daily product basis
by determining the slab on the basis of average balance
maintained in the account.
as per law of the land
o Profit payable on monthly basis
• Corporate Premier Term Account:
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o This account has been introduced for corporate clients.

o This is non operating/checquing account
o Minimum amount of investment is Rs.500(M).
as per law of the land.
o Profit payable at maturity
• Munafa Hi Munafa :
This is a term deposit product. The term is from 1 month to 1 years

and the profit is paid on monthly basis. The minimum amount of
deposit is Rs.100,000/-. The rate of profit is from 8.0 % p.a. to 12 %
p.a. depending on the tenure which is higher than Bank’s normal term
deposits.
Loan Products:
A loan is a type of debt. Like all debt instruments, a loan entails the
redistribution of financial assets over time, between the lender and
the borrower.In a loan, the borrower initially receives or borrows an
amount of money, called the principal, from the lender, and is
obligated to pay back or repay an equal amount of money to the
lender at a later time. Typically, the money is paid back in regular
installments, or partial repayments; in an annuity, each installment
is the same amount. The loan is generally provided at a cost,
referred to as interest on the debt, which provides an incentive for
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the lender to engage in the loan. In a legal loan, each of these

obligations and restrictions is enforced by contract, which can also
place the borrower under additional restrictions known as loan
covenants. Although this article focuses on monetary loans, in
practice any material object might be lent. Acting as a provider of
loans is one of the principal tasks for financial institutions. For other
institutions, issuing of debt contracts such as bonds is a typical
source of funding.
The following are different loan products offered by The Bank of

Punjab:
Commercial Finance:
Commercial finance is of three types 1) Running finance, 2)

Demand Finance and 3) cash Finance.
1) Running Finance: Running finance is the advance which is

given by allowing the customer to withdraw more money from
his current account than he has in it. Running finance at The
Bank of Punjab can be against pledge of Shares, Government
Securities, and Hypothecation of Stock:
Pledge of Shares: This facility is generally extended to companies

or individuals on selective basis against pledge of tangible
securities such as Shares. Such financing is supportive to
secondary Capital Market concept. The facility is required to be
adjusted periodically or within the period as specified in the
Sanction Advice/DAC. Given that Stock Market in Pakistan is
volatile, banks are required to refrain from extending loans to
the market players who are engaged in speculations for short
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term “Gains”, which quite often they fail to make, consequently

rendering the facility to non-performing ultimately.
Minimum Marin Requirement: Exposure against Shares of

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

Defence Saving Certificates (DSCs), Special Saving Certificates
(SSCs), Regular Income Certificates (RICs), Behbood Certificates,
US Dollar Bonds & NIT Units etc, issued by National Saving
Centre Government of Pakistan/National Investment Trust. Large
amount of funds representing “Provident Fund”, Benevolent Fund
collections are invested in the Government Securities, which are
yielding better return compared to placements with Commercial
Banks. Banks also extend credit facilities against pledge of
“Deposit Certificates” or other instruments of value issued in the
name of Individuals, Joint Holders Public Bodies, and Firms,
issued by various Government regulated Investment/Saving
Organizations, which at the moment are restricted to Maximum
of Rupees One Million and are subject to change.
Hypothecation of Stocks: Industrial organizations have to

invest a large sum of money to build stocks of raw material to up
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keep their manufacturing line. This is apt to create liquidity

constraints in the Financial Balance Sheet of the customer. To
manage such financial gaps/shortfall in their cash flow they
usually resort to borrowings from Banks against Hypothecation of
raw material/semi or finished goods held by them in their stocks.
Banks in such cases although do not have a physical custody of
the goods, however have a legal Charge/Lien established,
thereon, providing a legal recourse to the Bank to take custody
of the stocks, in the event the borrowers default to repay the
loan or fail to meet their obligations, as agreed. Criteria to merit
this facility is provided in the Banks Credit Policy Manual, which
is carefully assessed by Risk Managers, while recommending a
credit proposal to credit committee. Some of the basic
requirements are as follows which are included for general
understanding of the Processing Officers at Branches/CAD:-
o It shall be ensured that the borrowers have absolute title to the

goods and the same are not encumbered or previously
hypothecated to any other Bank.
o Formal charge (First/Second/Pari Passu) is created in the name of
the Bank.
o Goods offered are not perishable, or have short expiry period and
do not warrant special storing.
o Stocks offered for hypothecation are easily marketable and its
price is not highly fluctuating, otherwise the Bank retains higher
margin.
o Stocks under hypothecation are not restricted by
SBP/Government as a policy to maintain market supply.
2) Demand Finance: Credit facilities extended against

registered mortgage of property (i.e, land/buildings
constructed or to be constructed) is by nature classified as a
Secured Advance. A formal charge on the property is
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established and recorded with the Registrar Land and

Property termed as registered mortgage. Advances are also
made against equitable mortgage of property, whereby the
original Title Deed, are deposited with the Bank as Security
and the charge is registered with the Registrar SECP.
In case the Finance is allowed to Limited Companies, where

the original title documents of Land/Building and other Fixed
Assets are held by the senior charge holders, our charge (Pari-
Pasu or ranking) as approved by Credit Committee, shall be
recorded with the Registrar Securities & Exchange
Commission of Pakistan (SECP). However, in case of Pari-Pasu
Charge, NOCs from the senior Charge Holders shall be
obtained before registration of charge with SECP. In case of
borrower’s failure to liquidate the obligation, or on
classification of the advance to “Non-Performing” the Bank
has a legal recourse to apply for a decree in a court of law, to
sell off the mortgaged property through auction as ordered by
the court.
3) Cash Finance: This facility is generally provided against

pledge of goods. Under this type of financial accommodation
the facility amount is disbursed in specially opened account
for the purpose. The pledged goods are released to the
borrower against cash payment only. In case the goods
pledged are seasonal in nature, the customer would be
required to adjust the facility before the season ends. Rollover
shall not be allowed.
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a) Consumer Loan: The Bank of Punjab offers a

number of consumer loan products to its clients:
• BOP Aasiash Loan:
It is a personal loan facility offered to the clients of The Bank of Punjab

to its clients to buy consumer durable products of selected brands
namely:
 Sony
 LG
 Samsung
 PEL
 Intel
 Raffles Computer system
 Daikin
 Daikool
 Hisence, etc
• Quick Cash:
You are thinking of sending your child abroad for higher education or a
daughter’s wedding perhaps. However, you do not see to fulfill them as
you do not have money. Don’t get troubled as Bank of Punjab has the
answer to this in the form of Quick Cash.
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It is a running finance facility provided to salaried individuals through

their bank accounts. You can get upto 50,000 and 500,000, base on
your income.
BOP Car Loan:
If you are a government employee, you are in private

employment, businessman or a professional, you can avail the
facility of a locally manufactured, brand new car for personal use
and light commercial vehicle.
Minimum loan facility in this regard in Rs. 200,000 and maximum

is Rs. 5,000,000. Minimum tenure for which loan can be given is
1 year and maximum is 5 years. With floating interest rate.
• House Loan:
If you are a government employee, you are in private employment,

businessman or a professional, you can avail this facility.
The amount of loan that can be availed
 For the purpose of purchase of house flat or construction of

house the minimum loan is Rs.100,000 and the maximum
depends on the amount of debt. Debt/equity should be
70:30
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 For house improvement and renovation the minimum

amount is Rs. 25,000 and the maximum depends on the
amount of debt. Debt/equity should be 20% of assessed
value.
• Smart Cash Personal Loan:
Bop smart cash personal loan scheme is personal demand

finance facility for bank’s target market, for meeting their
personal needs, repayable through monthly installments.
You can take upto 25% net salary income. Maximum limit for this
facility is Rs. 500,000. With floating mark-up rate.
• Bop Furniture & Crockery Loan:
Bop furniture and crockery financing scheme is a financing

scheme for the purchase of furniture and crockery.
All leading/renowned brands of your choice are available. You

can obtain upto Rs. 500,000. Payment will be through easy
monthly installments and subject to floating interest rates.
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b) Consumer Banking:
1. Lady Entrepreneur Financing Scheme:
Lady Entrepreneur financing facility is a running finance

facility for lady entrepreneurs to meet their working capital
requirements.
A minimum of Rs. 100,000 and a maximum of Rs. 500,000

can be availed. The business must 3 years in the current
business. Interest rates are to be paid on quarterly basis and
subject to floating interest rates. Loan can be renewed if
wanted.
2. CNG Filling Station:
This facility is available for the purpose of both working

capital requirements and project financing. A minimum
amount of Rs. 2,000,000 and a maximum of Rs. 30,000,000
can be availed, depending on the size of the business. It will
be subject to floating interest rates.
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3. Auto Lease Financing scheme:
Auto lease financing scheme provides lease facility to

business concerns and individuals for the purchase of light
commercial vehicles, commercial vehicles, trucks, buses,
vans, loaders, lifters, etc through branch networks. A
minimum of Rs. 250,000 and maximum limit will be
available as per State Bank requirements. Facility will be
available for a minimum of 1 year and a maximum of 7
years.
4. Car Dealers:
The purpose of this facility is finance the working capital

requirement through running finance facility and,
construction or renovation of show room through demand
finance. A minimum of Rs. 1,000,000 and a maximum of
Rs. 50,000,000 can be availed.
5. Karobar Barhao:
Demand finance/running finance facility to meet the

working apital requirements. Minimum of Rs. 200,000 and
a maximum of Rs. 50,000,000, subject to floating interest
rates will be available.
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6. Fertilizer Dealer:
Dealer/fertilizer financing scheme. Running finance facility

for the purpose of working capital requirements. Minimum
of Rs. 200,000 and a maximum of Rs. 20,000,000, subject
to floating interest rates will be available.
7. ALI AKBAR GROUP FRANCHISE FINANCING

SCHEME: Running finance facility for the purpose of
working capital requirements. Minimum of Rs. 200,000
and a maximum of Rs. 15,000,000, subject to floating
interest rates will be available.
8. ATLAS honda ltd-authorized dealers

financing scheme: Motorcycle Dealer Financing
Scheme. To meet the working capital requirements.
Minimum of Rs. 200,000 and a maximum of Rs.
50,000,000, subject to floating interest rates will be
available.
9. Office / Shops Purchase: For the purpose of

purchase of a shop / office. It is a demand finance
facility. Minimum of Rs. 500,000 and a maximum of Rs.
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20,000,000, subject to floating interest rates will be

available.
c) Agricultural Credit:
The following are the various products offered under the

agricultural credit scheme.
1. Lease Finance Facility For Purchase of Tractor

under
Green Tractor Scheme 2008-2009:
In the wake of Chief Minister, Punjab's agenda for promotion of

Agriculture Sector, Government of Punjab has decided to provide
10000 Tractors to small farmers on subsidized rates. A subsidy of
RS: 200,000/- per tractor will be provided to the farmers declared
successful through computerized balloting. The scheme has been
titled as "Green Tractor Scheme 2008-09". In order to facilitate
farmers and to grasp maximum business, our Management has
approved a special product titled as "LEASE FINANCE FACILITY FOR
PURCHASE OF TRACTOR UNDER GREEN TRACTOR SCHEME 2008-09"
with following terms & conditions:
 All Farmers who have been declared successful through

computerized balloting. The applicant should be a resident,
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owner/self cultivator of minimum 05 Acres of agri land free

from all encumbrances. Existing BOP borrowers having
land under Bank's charge are also eligible under this
scheme. The applicant should not be a defaulter of any
Financial Institution.
 The price of Green Tractor would be less by RS: 200,000/-
from market price of tractor. Subsidy of RS: 200,000/- will
be provided by Govt. Of Punjab directly to Tractor
Manufacturers.
 Government of Punjab has approved M/s Millat Tractors
(Pvt.) Ltd. and Al-Ghazi Tractors Limited as Local
Manufacturers of tractors for the scheme.
 The amount of finance will be equal to the price of locally
manufactured tractor less subsidy amount of RS: 200,000/-
to be provided by the Government of Punjab. However,
maximum amount of facility will not exceed the ex -
factory price of tractor.
 No Equity for Tractors having price up to RS: 500,000
10% equity of Subsidized Price (actual price - subsidy
amount) for all Tractors having price above RS: 500,000/-
 Leased Asset (Tractor) itself (Tractor will be registered
solely in the name of The Bank of Punjab). Charge on
Agriculture Land through Agri. Pass Book. • Two written
satisfactory market checking reports.
 25% margin on three years Ost Bai of Agri Land as
assessed by Revenue Officials. • 50% margin on FSV of
Agri Land as evaluated by Bank's approved surveyor (s).
 Asset Insurance and Life assurance of the Borrower
(assigned to BOP) as per Bank's policy. (Insurance,
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Registration and evaluation charges (if any) etc shall be

borne by the farmer. MARK-UP 15% Per Annum.
 05 Years from the date of disbursement.
 10 Equal Half Yearly Installments (Principal + Mark up).
Kisan Dost Tractor Finance Scheme:
Provision of financial facility to the farmers and non farmers (those who
provide tractors to farmers on rental basis for various tractor related
operations), for purchase of Tractor on Lease Finance Basis.
 Resident Self Cultivator having Agriculture Land minimum

5 acres and maximum 50 acres.
 The persons who are related with the business of providing
services for tractor related farming practices to the farmers
on rental Basis.
 Maximum Rs. 750,000/-.
 10% to 20% of the cost of Tractor will be paid by the
borrower on case to case basis.
 Lease Tractor (to be registered in the name of Bank);
Charge on Agriculture Land through Agri. Pass Book; One
personal guarantee of reputable person. Two written
 50% Margin on Agri land assessed by PBA’s Approved
Surveyor; 25% Agri land as per value in revenue record;
The maximum amount of Finance will be allowed upto 75%
of the Oast Bai Value of land (Oast Bai is verified by
Revenue Officer)
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 10 equal half yearly installments (within five years).
Second Hand Tractor Leasing Finance Scheme:
Leasing out Used/Second hand tractors to farmers. The Tractor would

be unencumbered and should not be more than three years old
maintaining good condition.
 Resident Self Cultivator having Agriculture Land minimum of 5

acres and maximum 50 acres.
 Maximum Rs.400, 000/-.
 10% to 20% of the forced sale value assessed by banks and
PBA approved surveyor. Market and forced sale value of the
tractor will also be verified by the Branch Manager and ACO.
 Lease Tractor (to be registered in the name of the Bank);
Charge on Agriculture Land through Agri. Pass Book. One
personal guarantee of reputable person of the area. ACO
along with Regional Chief can waive this condition if they
deem the borrower to be very credit worthy. Two written
satisfactory market checking reports must be obtained before
disbursement.
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 The Lessee will arrange comprehensive insurance of

tractor and his own Life assurance under Bank’s mortgage
clause as per Bank’s arrangement
 15% per annum.
 Maximum three years.
 Half yearly installments. (Minimum two and maximum six half
yearly installments).
 Registration Charges and Insurance premium of the tractor
will be borne by the lessee. Corporate Farmers will also be
accommodated to purchase second hand tractors under
Kissan dost corporate farming finance scheme. The said
Scheme will be a part of Kissan Dost Tractor Scheme
Kisan Dost Aabrari Scheme:
Provision of financial facility to the farmers for installation of Tube well,

turbines etc.

 Maximum Rs 500,000/-.
 20% of the cost of project will be paid by the borrower.
 Lease Assets i.e. Engine, Tube well and other related
implements (The vendor will issue receipt in the name of
Bank). Charge on Agriculture Land through Agri. Pass Book.
One personal guarantee of reputable person acceptable to
Bank. Two written satisfactory market checking reports.
 50% Margin on Agri land assessed by Surveyor.
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 25% margin Agri land as per value in revenue record.

 The maximum amount of Finance will be allowed upto 75%
of the Oast Bai Value of land (Oast Bai is verified by
Revenue Officer).
implements/assets. Life assurance of lessee under the
Bank’s charge.
 15% per annum.
 8-10 equal half yearly (within four to five years).
Mechanization Support Scheme:
Provision of financial facility to the farmers for purchase of Agricultural

Implements e.g. Trolley, thresher, plough, richer etc.
 Resident Self Cultivator having Agriculture Land measuring

5 acres to maximum 50 acres.
 Maximum Rs.500,000/-.
 20% of the cost of machinery, tool and implements.
 Lease Assets/implements (The vendor will issue receipt in
the name of Bank). Charge on Agriculture Land through
Agri. Pass Book. One personal guarantee of reputable
person. Two written satisfactory market checking reports.
 50% Margin on Agri land assessed by Surveyor.25% margin
on Agri land as per value in revenue record. The maximum
amount of Finance will be allowed upto 75% of the Oast Bai
Value of land (Oast Bai is verified by Revenue Officer).
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assets. Life assurance of lesse under the Bank’s
charge.
 15% per annum.
 8 equal half yearly installments (within four years).
Farm Transport Scheme:
Provision of financial facility to the farmers for purchase of Farm

Transport Vehicles e.g. Small Pickups, Vans and small chillers.

 Maximum Rs.500,000/-.
 20% of the cost of Vehicle will be paid by the borrower.
 Leased Vehicle (to be registered in the name of Bank).
Charge on Agriculture Land through Agri. Pass Book. One
 50% Margin on Agri land assessed by Surveyor.25% margin
Agri land as per value in revenue record. The maximum
amount of Finance will be allowed upto 75% of the Oast Bai
Value of land (Oast Bai is verified by Revenue Officer)
Vehicle. Life assurance of lessee under the Bank’s
charge.
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 15% per annum.

 10 equal half yearly installments (within five years).
Islah-E-Arazi Scheme:
Provision of financial facility to the farmers for development of their

non productive lands into productive ones by conductive on farm
works of Land leveling, laser leveling, and land improvement,
clearance of jungle and land reclamation.

 Maximum Rs.500,000/-.
 Borrower will pay 20% cost of the project.
 Charge on Agriculture Land through Agri. Pass Book. One
 50% Margin on Agri land assessed by Surveyor. 25% Agri
land as per value in revenue record. The maximum amount
of Finance will be allowed upto 75% of the Oast Bai Value
of land (Oast Bai is verified by Revenue Officer)
 Life assurance of lessee under the Bank’s charge.
 15% per annum.
 8-10 equal half yearly installments (within four to five
years).
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Live Stock Development Scheme:
Provision of financial facility for purchase of animals (Milk & meat

production, cattle farming, Poultry Farming and Fish farming) to the
farmers and non farmers (those who have their own live stock
farm/fish farm for commercial purposes).
 Sufficient experience to handle Dairy Farm, Cattle Farm,

Goat Farm, Poultry and Fish Farming. The persons who
have their self owned Dairy Farms for production of milk on
commercial basis).The applicant should be having
adequate arrangements to sell out the products properly
e.g. supply contract with milk processing company.
 80% of cost of animals (Maximum facility can be granted
upto 50% of forced sale value of property).
Live Stock Scheme:
Provision of financial facility to the Village Veterinary Workers (trained

by Live Stock and Dairy Development Department) for purchase of
Artificial Insemination kits on lease finance basis.
 Village Veterinary Workers having diploma certificate and

recommendations from Live Stock and Dairy Development
Department, Govt. of Punjab.
 Maximum Rs.45,000/- or 90% of purchase price of kit and
bicycle.
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 Leased Assets (Receipt will be issued in the name of

Bank).Two personal guarantees of reputable persons
having fixed assets equivalent or more to value of
advance.
 Comprehensive Insurance of Leased Assets Life assurance
of lessee under the Bank’s charge.
 15% per annum.
 Equal monthly or quarterly installments (within five years).
Commercial Agro Services Finance Scheme:
Provision of financial facility to the commercially viable entities with

immaculate track record for acquisition of Agri implements and
equipments i.e. tractor trolleys, harvesters e.t.c. for providing agri
services to farmers.
 Commercially viable entities with immaculate track record

with the Bank/Other financial institutions.
 To be decided on case to case basis keeping in view the
financial/commercial viability of the transaction. Not to
exceed 80% of the value of equipments / implements.
 It shall be lease finance.
 Leased Assets (Vehicles/Tractors will be registered in the
name of Bank or Receipt of equipments will be issued in
the name of Bank). Bank charge on Agri Land through
Agri Pass Book OR Bank’s Charge on urban property
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through registered and equitable mortgage. One personal

guarantee of reputable person. Two written satisfactory
market checking.
 50% Margin on Agri land or Urban property if assessed by
Surveyor.25% Margin on Agri land if assessed on revenue
record. The maximum amount of Finance will be allowed
upto 75% of the Oast Bai Value of land (Oast Bai is verified
by Revenue Officer)
 Comprehensive Insurance of Leased Assets. Life assurance
 Comprehensive Insurance of Leased Assets. Life assurance
 15% per annum.
 Equal quarterly installments (within five years).
Agri Mall Finance Scheme:

Four renowned companies of the country such as M/S Ali Akbar Group,
Millat Tractors, PSO and Engro Services have established a joint
venture company in the name of the Agrimall (Pvt) Ltd to provide agro
services under one roof through its Franchisees. The Agrimall (Pvt) Ltd
has approached our Bank to provide financial help to their franchisees
to establish and run these Agrimalls under their specialized
management through out the country. We have launched a Kissan
Dost Agrimall Finance Scheme. All facilities required by the
Franchisees of the Agrimall (Pvt) Ltd will be provided through this
scheme. The farmers who will be the clients of Franchisees, will also be
provided production loans through Bank’s Kissan Dost Agriculture
Finance Scheme (For purchase of inputs).
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Corporate Farming Finance Scheme:
FUND BASED FACILITIES

Following fund based facilities can be provided under this scheme.
 Agricultural Finance Facility (Purchase of crop inputs i.e. seed,
fertilizer, pesticides,fungicides etc.)
 Tractor Finance Facility (For purchase of maximum two
tractors on lease finance basis).
 Finance for Farm Mechanization (For purchase of Farm
Mechanization Machinery, Tools andimplements on lease
finance basis).
 Finance for Farm Aabiari (For installation of tube wells and
adoption of modern irrigation systems on lease finance basis).
 Finance for Farm Transport (For purchase of Small pick-ups
and loader for Farm Transportation).
 Finance for Live Stock Development (Purchase of animals for
Dairy Farms, Poultry Farms and Fish Farms).
 Finance for Islah-e-Arazi (Land development, improvement
and reclamation)
NON FUND BASED FACILITY
 Opening of Letters of credit for import of farm related
agriculture goods for corporate farming e.g. inputs,
machinery, tools, implements and Vehicles etc.
 Issuance of Bank guarantee for purchase of farm related
commodities e.g. inputs, machinery, tools, implements, and
Vehicles etc.
Commercial Lease Finance Tractor Scheme:
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For Purchase of Tractors to be used in Agri related activities. The terms

and conditions will be according to the structure of Lease Companies.
 Farmers, self-employed
persons/firms/companies/institutions related directly or
indirectly related with Agri Business.
 The amount of finance will be 80% of purchase price of the
Tractor and lessee/borrower will contribute 20% equity
towards the purchase price of Tractor.
 Tractor itself which will be Registered in the name of Bank.
Two personal guarantees of the persons having good
market reputation and acceptable to the Bank. The
guarantors should be having sufficient assets to cover the
amount of finance. The Manager and ACO will verify the
worth and market reputation of client and guarantors.
Comprehensive insurance of the assets (with Bank
mortgage clause) and life assurance of the borrower.
 Average Six months KIBOR + 500bps (5.00%) with floor of
10% per annum.
 In five years 60 monthly installments (Principal + Markup).
The installment will start from the month of delivery of
tractor. Sixty post dated cheques equal to the amount of
installment (Principal + Markup) will be obtained from the
borrower at the time of disbursement.
Demand Finance for Construction of Sheds and other

Civil Works:
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Demand Finance Facility for construction of Sheds and other Civil

Works for Livestock Farms. The applicant should be having suitable
land for construction of Dairy Farms.
 70% of total cost of construction assessed by the Banks

and PBA’s approved Surveyors.
 30% of total cost of construction assessed by the Banks
and PBA’s approved Surveyors.
 Leased assets in the name of Bank (if any).
 Charge on Agriculture Land through Agri. Pass Book OR
Charge on urban immovable property through
equitable/registered mortgage. OR security in the shape
Bank’s Fixed Deposited Receipts or certificates of National
Saving Certificates.
 25% to 50% margin on landed property (Agri/Urban). &
25% margin in case of liquid security.
 15% per annum.
 Five years from the date of disbursement with first year as
grace period.
 16 equal quarterly installments (Principal and Mark-up)
after first year of grace period
Landless People for Purchase of Buffaloes for Life

Sustenance:
Lease Financial Facility for purchase of Milk producing Animals for

landless people.
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 The applicant should be having space to keep animal

domestically.
 Comprehensive Insurance of the Leased animal. Life
assurance of borrower under the Bank’s charge.
 15% per annum
 Five years
 20 equal quarterly installments (Principal and Mark-up) in
five years.
Lease Finance Facility to Dairy Farmers for Purchase of Milch

Animals:
Lease Finance Facility for purchase of Milk producing animals for Dairy
Farming.
 The applicant should be well experienced and having its

own well constructed Live Stock Farm, Semen Production
Unit.
 In case of Lease Finance 80% of cost of assets
(animals/equipment/vehicle/machinery) (Maximum Facility
can be granted upto 50% of forced sale value of property)
 Leased assets in the name of Bank.
 Charge on Agriculture Land through Agri. Pass Book OR
Charge on urban immovableproperty through
equitable/registered mortgage OR Liquid security in the
shape Bank’s Fixed Deposited Receipts/DSC/NSC or
Regular Income Certificates. One personal guarantee of
reputable person. ACO along with Regional Chief can waive
this condition.
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 50%-25 margin on landed property (Agri/Urban). & 25%

margin in case of liquid security.The maximum amount of
Finance will be allowed upto 75% of the Oast Bai Value of
land (Oast Bai is verified by Revenue Officer)
 Comprehensive Insurance of the Lease/Hypothecated stock
at borrower’s cost. Life assurance of borrower under the
Bank’s charge.
 15% per annum.
Running Finance Facility for Livestock / Poultry and Fish

Farms: Running Finance facility for the purchase of animals, cost of
feed, medicines and other running expenses of the farm. Running
finance facility will be provided for the following type of livestock
farming:
 Calves Fattening Farms
 Broilers Farming.
 Layer Farming.
 Fish Farming.
 Semen Production Unit.
Terms and conditions for this scheme are:
 The applicant should be well experienced and having its

own well constructed Live Stock Farm, Semen Production
Unit.
 In case of Running Finance, upto 70% of total running
expenses.
 Primary Security: Leased assets in the name of Bank;
Hypothecation of Stocks.
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Collateral Security: Charge on Agriculture Land through Agri. Pass

Book. OR Charge on urban immovable property through
equitable/registered mortgage. OR Liquid security in the shape Bank’s
Fixed Deposited Receipts/DSC/NSC or Regular Income Certificates; One
personal guarantee of reputable person. ACO along with Regional Chief
can waive this condition.
 Average 6 month’s KIBOR + 450 bps with floor of 10% per

annum.
 Full adjustment of entire principal along with markup on

expiry of the term.
Model Dairy Farms (PDDC): Lease Finance Facility to purchase Dairy

Farm Machinery for up gradation of Farm infrastructure.
Following items will be permissible.
 Farm cooling tanks.
 Fodder harvesters.
 Hay bailers.
 Animal cooling systems.
 Any other machinery/equipment advised by PDDC that is
necessary for
 Farm up-gradation.
Following are the terms and conditions of the scheme:
 The applicant should be having his owned/leased Dairy

Farm. Recommended by PDDC.
 Bank will provide Lease Finance between 70% to 90% of
the cost of assets ( on case to case basis).
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 From 10% to 30% of the cost of Equipment ( on case to

case basis).
Primary Security:
Leased assets in the name of the Bank (Cash Memo/Invoice in the

name of Bank).Hypothecation of stocks (if any).
Collateral Security:
Charge on Agriculture Land through Agri. Pass Book/Registered and

Equitable Mortgage of Urban Immovable property/Lien on liquid
security (Bank’s Term Deposit Receipts/National Saving Certificated)
 25% to 50% margin on FSV of immoveable security (Agri

land /urban property). & 10% margin on liquid security.The
maximum amount of Finance will be allowed upto 75% of
the Oast Bai Value of land (Oast Bai is verified by Revenue
Officer.
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 Comprehensive Insurance of the Leased assets at the

borrower’s cost. Life assurance of the borrower, assigned
to BOP.
 Average 6 month’s KIBOR + 250 bps to 495 bps with floor
of 10% per annum to be paid by PDDC according to the
repayment schedule of the principal amount.
 Upto five years in case of Lease Finance Facility.
 Equal monthly/quarterly installments (Principal only).
d) Non-Fund Based Products:
Documentary Letter of Credit:
 Letters of Credit:
A Letter of Credit (LC) is one of the most widely used

modes of settling international trade debts. It is also
convenient and common method of obtaining short term
finances from the banks.
LCs are broadly classified as follows:
I. Sight Letters of Credit (DP)
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II. Usance Letters of Credit (DA)

In case of Sight LC, the draft is drawn at sight
and the relevant documents are held by the
importing bank until retired (released) by the
customers. In the case of Usance LCs, the draft
is drawn for a certain period (number of days)
clearly mentioning in the LC, payable by the
customer on due date.
 Third Party LC:
Documentary Letters of Credit established on behalf of

third parties (parties other than the principal obligor)
represent an additional element of risk. Therefore, if
imports on behalf of third parties are anticipated, the line
description should clearly state. Additionally, the customer
should clearly state on the LC Application, “the LC is issued
at customer’s risk and liability”.
 Deferred Payment Credits:
Normally the terms of a documentary credit will include an

instruction to the beneficiary to draw bills of exchange, and
issuing bank will guarantee that such bills will be
honoured, provided all the other terms of the credit are
met. However, in deferred payment credits, there is no
need for the exporter to draw a bill of exchange. The
issuing bank simply undertakes that payment will be made
on a fixed or determinable future date, provided the other
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conditions have been fulfilled. Although the exporter does

not draw a bill of exchange, in all respects these credits
are identical to other documentary credits and some
banks, in practice, will negotiate the documents providing
they are entirely satisfied with the standing of the issuing
bank. One benefit of deferred credits is that they avoid the
need for payment of stamp duty on bills of exchange. All
credits must clearly indicate whether they are available by
sight payment, by acceptance or by deferred payment.
 Shipping Guarantees:
a) Policy The issuance of shipping guarantees to cover
missing documents under our own documentary
Letters of Credit and documentary collections will be
subject to the requirement set forth in this section.
Issuance of shipping guarantee will require a sub-
limit under LC.
b) Customer Documentation In all cases involving
shipping guarantees, the customer will sign our
standard shipping guarantee application, which
includes an irrevocable undertaking that the
customer will accept the relative documents when
received, regardless of discrepancies.
c) Security Shipping guarantees related to sight/Usance
documents under LCs and collection will be issued
against cash collateral. Cash collateral should be
kept in local currency unless requested by the
customer, since it will be refunded as soon as the
shipping guarantee is received back by the Bank.
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d) Missing Invoices In case of documentary collections

when the invoices are not available with the Bank the
value of merchandise for issuance of shipping
guarantees will be established on the basis of
supporting documents relating to price along with an
undertaking to indemnify the Bank in case of any
fluctuation in price resulting in a shortfall in value. In
such cases approval of appropriate authority will be
required.
e) Open Ended The requirement for a fixed expiry date
will be considered as waived in all cases since
carriers and Customs Department do not accept
shipping guarantees with a stated expiration date.
f) Decontrol Shipping guarantees can be decontrolled
after settlement of documents in the following
scenarios:
On settlement of documents related to Airway Bills.
When original Bill of Lading (B/L) is with us, and
provided two follow-ups have been sent to the
importer with an interval of 2 weeks each.
g) The original B/L should be kept in the file to serve as
an evidence in the eventthe shipping agent inquire
or call on the shipping guarantee. Credit Committee
approval for the amount of the transaction should be
taken.
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Standby Letter of Credit: An alternative to the bond is a Stand-by

Letter of Credit issued in favour of the beneficiary, promising to pay
a given amount against specified documents, usually a formal
default claim. There are various types of SBLCs, the main ones
being linked to the various types of obligations covered by bonds.
Thus the main stand-by credits are called:
a) Bid/tender bonds standby credits.

b) Counter stand-by.
c) Performance stand-by.
d) Advanced payment stand-by.
As a generalisation, the applicant of such a credit would be the

equivalent of the person who applied for a bond/guarantee and the
beneficiary would be the same as the beneficiary of a bond/
guarantee. Thus in the equivalent of a bid, counter and performance
bond situation, the applicant would be the exporter/seller and the
beneficiary would be the importer/buyer. However, the use of SBLCs
is not necessarily restricted to the above situations and there are
many instances where a documentary credit promising to pay a
given amount against specified documents such as a formal default
claim woud be appropriate. From a bank’s point of view an SBLC is
better than a bond because it will be subject either to Uniform
Customs and Practice for Documentary Credit (1993 revision), or to
the International Standby Practices 1998, instead of being subject
to complex legalities. In addition, an SBLC will always have a
definite expiry date which can overcome one of the main problems
for issuers of bonds. It is anticipated that the bulk of SBLCs in future
will be drawn subject to ISP 1998, since these rules are more
appropriate than the traditional UCP for a bond type situation. The
new rules make SBLCs even more attractive as an alternative to
bonds.
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SERVICES:
Commercial Banking:
The Commercial Banking Group has been formed to cater the

needs of small & medium size customers for increasing Bank’s
business significantly with clear focus, repositioning of
resources and active marketing to improve Bank’s
profitability. Commercial Banking will deal with customers
having sales turnover and aggregate credit exposure as per
benchmarks prescribed in the SBP’s Prudential Regulations.
This Group’s emphasis will be to meet necessary business

needs of customers which are numerous as compared to CIB
clients but their individual credit requirements are relatively
much smaller. In view of this peculiar nature of this business
segment that involves a higher turn over a much wider
network is needed. The SME will concentrate on rebuilding its
set up which suits to its peculiar needs on all locations.
Corporate & Investment Banking:

 Corporate Banking:
The Corporate Banking shall endeavour to market new clients and

retain the existing relationships and build market share through
offering superior services, competitive pricing and wide product
range to valued corporate clients including the Multi National
Companies (MNCs). This Unit taking advantage of tremendous
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growth potentials of corporate accounts will continue its endeavour

to remain a major contributor to Bank’s earnings.
The human resources of CIB shall be beefed up by inducting adequate

number of professionals and approval process streamlined by installing
credit committees of various tiers at all Regional locations. The
benchmark for Corporate Banking clients would be as per criteria laid
down in the SBP’s Prudential Regulations.
 Investment Banking:
IBG specialises in providing innovative and unique advice to its

clients to assist them in meeting challenges in an ever-changing
market. The Unit shall be equipped with experienced professionals.
IBU will either lead or participate in the major TFCs in the market.
Investment Banking Unit offers full spectrum of services, which

include TFCs, Syndicated Finances, Structured Finances, Leveraged
Buyouts, Project Finance, Quasi-Equity Products, Independent
Advice, Equity Placements, IPOs, Equity Underwriting, Mergers,
Corporate Restructuring, Acquisitions and other products. IBU shall
also work on and come up with providing Fund Management
Facilities
1) Cash Management Service:

Cash Management is a process of collections & payments on
behalf of the Customers using the Bank Network.The objective
is to faciliate organizations with multiple collection points in
gathering Cash / Funds and making them available in the
customer operating Account. Similarly it facilitates
disbursement of frequent and or Bulk payment to multiple
locations.
This should be accomplished with minimal supervision by the
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customer, supported by an automated system to provide

timely and requisite MIS / Reconciliation under agreed Service
Levels.
2) Utility Bills:
The bank collects all kinds of utility Bills including Electricity,
Gas and Telephone from customer. All Branches of the Bank
collect Utility Bills during banking hours which are paid
through cash and cross checks
3) BOP Locker:
The Bank of Punjab Lockers are available in three different sizes
Small, Medium and Large on an annually fee with one time Security
Deposit respectively to the size of locker. Locker holders need
to have an account in the Bank
SWOT ANALYSIS
BOP is one of the fastest growing banks in Pakistan. In the light of these
situations we can make an analysis.
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Strengths:
 Bank is in its growing stages so there is good financial position.

 Professional and Committed workforce
 Low cost than other major banks
 Increasing the number of branches in the country
 Successfully launching new Product Lines
 Well experienced and quality staff
 Efficient internal communication system
 Each department in the bank is fully allowed to take adequate
decisions of its own, saving the time and help in achieving the
objectives
Weaknesses:
Although the bank is growing fastly but it has some weaknesses which it
should remove to make itself further strong.
 Less Advertisement
 Slow in introducing new products
 The staff is not satisfied with the salary structure
 Gives its staff less benefits
Opportunities:
 Extension of International network of the branches

 Introduction of innovative products
 Growing market
 ATM facility for all customers
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Threats:
 Uncertain economic conditions

 Action taken by competitors
PEST Analysis
PEST analysis of any industry investigates the important factors that

affect the industry and influence the companies operating in the sector.
PEST stands for Political, Economic, Social and Technological analysis. The
PEST Analysis is a tool to analyze the forces that drive the industry and how
those factors can influence the industry.
 POLITICAL
 ECONOMICAL
 SOCIO CULTURAL
 TECHNOLOGICAL
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ECONOMICAL
Gdp
monsoon
inflation
savings & accounts
agriculture credit
interest rates
raising living
Standred
disposable incomE
SOCIOCULTURAL
POLITICAL
changes in life style
literacy rate
Government demographic of
policy & budgect Organizatio large population
budject measures n shift towards the
monatory policy nuclear family
fdi limit
TECHNICAL
technology in banks
core banking
solutions
ATM
internate
i.t serves and mobile
banking
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Political Factors
Government policies affect the banking sector. Sometimes looking into

the political advantage of a particular party, the Government declares some
measures to their benefits like waiver of short-term agricultural loans, to
attract the farmer’s votes. By doing so the profits of the bank get affected.
Various banks in the cooperative sector are open and run by the politicians.
They exploit these banks for their benefits. Sometimes the government
appoints various chairmen of the banks. Various policies are framed by the
SBP looking at the present situation of the country for better control over the
banks
Focus on Regulations of government
Government affects the performance of banking sector most by

legislature and framing policy .government through its budget affects the
banking activities securitization act has given more power to banking sector
against defaulting borrowers.
Monetary policy
Bank Rate: The Bank Rate has been retained unchanged
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Repo Rate It has been reduced under the Liquidity Adjustment Facility (LAF)
Reverse Repo Rate : It has been reduced under LAF by 25 basis points from
3.5% to 3.25% with immediate effect. RBI has retained the option to conduct
overnight or longer term repo/reverse repo under the LAF depending on
market conditions and other relevant factors.
FDI LIMIT
The move to increase Foreign Direct Investment FDI limits to 49

percent from 20 percent during the first quarter of this fiscal came as a
welcome announcement to foreign players wanting to get a foot hold in the
Indian Markets by investing in willing Indian partners who are starved of net
worth to meet CAR norms. Ceiling for FII investment in companies was also
increased from 24.0 percent to 49.0 percent and have been included within
the ambit of FDI investment
Economic Factors
Banking is as old as authentic history and the modern commercial

banking are traceable to ancient times., banking has existed in one form or
the other from time to time. Every year SBP declares its 6 monthly policy and
accordingly the various measures and rates are implemented which has an
impact on the banking sector. Also the Union budget affects the banking
sector to boost the economy by giving certain concessions or facilities. If in
the Budget savings are encouraged, then more deposits will be attracted
towards the banks and in turn they can lend more money to the agricultural
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sector and industrial sector, therefore, booming the economy. If the FDI limits
are relaxed, then more FDI are brought in India through banking channels
Growing Economy / GDP
It is great news that today the service sector is contributing more than
half of the Indian GDP. It takes PAKISTAN one step closer to the developed
economies of the world. Earlier it was agriculture which mainly contributed to
the GDP. The Pakistani government is still looking up to improve the GDP of
the country and so several steps have been taken to boost the economy.
Policies of FDI
Low Interest Rates
SBP controls the Interest rate, which is based on several monetary

policies. Recently SBP has reduced the interest rate which stimulates the
growth rate of banking industry. Call money rates (borrowing & lending) were
in the range of 1.50/3.47 per cent as compared with 5.25/11.00 per cent on
the corresponding date of last year
Inflation Rates
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Inflation represents a rise in general level of prices of goods and

services over a period of time. It leads to erosion in the purchasing power of
money. Resultantly, each unit of currency buys fewer goods and services
Different fiscal and monetary policies have curbed the Inflation rate. To fight
against the slowdown of the Economy, Government of Pakistan & SBP took
many fiscal as well as monetary actions. Clubbed with fiscal & monetary
actions, decreasing commodity prices, decreasing crude prices and lowering
interest rate, we expect that Indian Economy could again register a robust
growth rate in the year 2009-10
SAVINGS AND ACCOUNTS
As stated earlier Pakistan continues to remain one of the high savings

economies among the emerging market economies. Gross Domestic Savings
(GDS) of the Pakistan economy constitutes savings of public, private
corporate and household sectors. In the recent period the high growth
performance of the Pakistan economy is driven by rise in savings
AGRICULTURE CREDIT
Agriculture has been the mainstay of our economy with 70% of our
population deriving their sustenance from it. In the recent past, the sector
has recorded a growth of about 4% per annum with substantial increase in
plan allocations and capital formation in the sector. The target for agriculture
credit flow for the year 2009-10 is being set at Rs.3,25,000 crore. To achieve
this, I propose to continue the interest subvention scheme for short term crop
loans to farmers for loans upto Rs.3 lakh per farmer at the interest rate of 7%
per annum. For this year, the government shall pay an additional subvention
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of 1% as an incentive to those farmers who repay their short term crop loans
on schedule
SOCIO CULTURAL FACTORS
Socio culture factors also affect the business. They show in which
people behave in country. Socio-cultural factors like taboos, customs,
traditions, tastes, preferences, buying and consumption habit of people, their
language, beliefs and values affect the business. Banking industry is also
operates under this social environment and it is also affect by this factor.
These factor are changing continuously people’s life style, their behavior,
consumption pattern etc. is changing and also creating opportunities and
threat for banking industry. There are some socio-culture factors that affect
banking in India have been analyzed below.
SHIFT TOWARDS NUCLEAR FAMILY
Attitude of people of Pakistan is changing. Now, younger generation

wants to remain separate from their parents after they get married. Joint
families are breaking up. There are many reasons behind that. But banking
sector is positively affected by this trend. A family need home consumer
durables like freeze, washing machine, television, bike, car, etc. so, they
demand for these products and borrow from banks. Recently there is boost in
housing finance and vehicle loans. As they do not have money they go for
installments. So, banks satisfy nuclear families wants.
CHANGE IN LIFE STYLE
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Life style of Pakistan is changing rapidly. They are demanding high

class products. They have become more advanced. People want everything
car, mobile, etc.. what their fore father had dreamed for. Now teenagers also
have mobile and vehicle. Even middle class people also want to have well
furnished home, television, mobile, vehicle and this has opened opportunities
for banking sector to tap this change. Every thing is available so it has
become easy to purchase anything if you do not have lump sum.
POPULATION
Increase in population is one of the important factor, which affect the

private sector banks. Banks would open their branches after looking into the
population demographics of the area. Percentage of deposit in any branches
of banks depends upon the population demographic of that area. About 70%
of population is below 35 years of age. They are in the prime earning stage
and this increase the earning of the banks. Deposits showed a subdued
growth during 2004-05.Income distributions also affects the operations and
overall business of private sector banks.
LITERACY RATE
Literacy rate in Pakistan is very low compared to developed countries.

Illiterate people hesitate to transact with banks. So, this impacts negatively
on banks. But there is positive side of this as well i.e. illiterate people trust
more on banks to deposit their money; they do not have market information.
Opportunities in stocks or mutual funds. So, they look bank as their sole and
safe alternative
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Technological Factors
TECHNOLOGY IN BANKS
Technology plays a very important role in bank’s internal control

mechanisms as well as services offered by them. It has in fact given new
dimensions to the banks as well as services that they cater to and the banks
are enthusiastically adopting new technological innovations for devising new
products and services.
ATM
The latest developments in terms of technology in computer and

telecommunication have encouraged the bankers to change the concept of
branch banking to anywhere banking. The use of ATM and Internet banking
has allowed ‘anytime, anywhere banking’ facilities. Automatic voice recorders
now answer simple
queries, currency accounting machines makes the job easier and self-service
counters are now encouraged.
Credit card facility has encouraged an era of cashless society. Today

MasterCard and Visa card are the two most popular cards used world over.
The banks have now started issuing smartcards or debit cards to be used for
making payments. These are also called as electronic purse. Some of the
banks have also started home banking through telecommunication facilities
and computer technology by using terminals installed at customers home
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and they can make the balance inquiry, get the statement of accounts, give
instructions for fund transfers, etc.
IT Services & Mobile Banking
Today banks are also using SMS and Internet as major tool of
promotions and giving great utility to its customers. For example SMS
functions through simple text messages sent from your mobile. The
messages are then recognized by the bank to provide you with the required
information. All these technological changes have forced the bankers to
adopt customer-based approach instead of product-based approach.
Technology advancement has changed the face of traditional banking
systems. Technology advancement has offer 24X7 banking even giving faster
and secured service.
Core banking solutions
It is the buzzword today and every bank is trying to adopt it is the

centralize banking platform through which a bank can control its entire
operation the adoption of core banking solution will help bank to roll out new
product and services.
BALANCE SHEET
The Bank of Punjab
Balance Sheet
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As at 31.dec 2005,06,07,08
ASSETS 2004 2005 2006 2007 2008
CURRENT ASSETS
Cash and balance with treasury banks 5579566 8787387 14054859 14210302 10685058
Balance with other banks 2118242 9367595 3722089 1927662 2178455
Lendings to finnacial instituions 1019488 7593681 11846823 2450000 633333
Investments 16197505 18026181 28233211 73461693 22689608
Advances 39438923 63623705 101324443 133899143 131724113
other Assets 1277201 2040568 3612692 5789116 6122406
TOTAL CURRENT ASSETS 65630925 109439117 162794117 231737916 174032973
NON CURRENT ASSETS

Operating fixed assets 689486 1715061 2068744 3252759 3471838
Deferred tax assets 0 0 0 0 8388162
TOTAL NON CURRENT ASSETS 689486 1715061 2068744 3252759 11860000
TOTAL ASSETS 66320411 111154178 164862861 234990675 185892973
LIABILITIES
CURRENT LIABILITIES
Bills payable 267113 478001 856448 937647 1219801
Deposits and other accounts 54724311 88465051 137727544 191968377 164071732
Liabilities against asset subject to finance lease 81795 55403 40988 40321 30632
Deferred tax liabilities 567540 1474425 298616 2205530 0
other liabilities 8964 220177 2816412 2983977 4564481
TOTAL CURRENT LIABILITIES 55649723 90693057 141740008 198135852 169886646
NON CURRENT LIABILITIES
Borrowings 2831605 6791007 6989424 17842915 12278773
Sub-ordinated loans - - - - -
TOTAL NON CURRENT LIABILITIES 2831605 6791007 6989424 17842915 12278773
TOTAL LIABILITIES 58481328 97484064 148729432 215978767 182165419
REPRESENTED BY
share capital 1506230 2349719 2902490 4230379 5287974
Reserves 2770645 4257337 4537232 7427232 7427232
Unappropriated profit 143590 169817 3226961 3468956 -7674257
4420465 6776873 10666683 15126567 5040949
surplus on revalution of assets - net 3418618 6893241 5466746 3885341 -1313395
7839083 13670114 16133429 19011908 3727554
Total liabilities & SHE 66320411 111154178 164862861 234990675 185892973
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TREND ANALYSIS OF BALANCE SHEET

The Bank of Punjab
Balance Sheet
As at 31.dec 2005,06,07,08
200
ASSETS 4 2005 2006 2007 2008
CURRENT ASSETS
Cash and balance with treasury banks 100 157.49 251.90 254.68 191.50
Balance with other banks 100 442.23 175.72 91.00 102.84
Lendings to finnacial instituions 100 744.85 1162.04 240.32 62.12
Investments 100 111.29 174.31 453.54 140.08
Advances 100 161.32 256.91 339.51 334.00
other Assets 100 159.77 282.86 453.27 479.36
TOTAL CURRENT ASSETS 100 166.75 248.04 353.09 265.17
NON CURRENT ASSETS

Operating fixed assets 100 248.74 300.04 471.77 503.54
Deferred tax assets
TOTAL NON CURRENT ASSETS 100 248.74 300.04 471.77 1720.12
TOTAL ASSETS 100 167.60 248.59 354.33 280.30
LIABILITIES
CURRENT LIABILITIES
Bills payable 100 178.95 320.63 351.03 456.66
Deposits and other accounts 100 161.66 251.68 350.79 299.82
Liabilities against asset subject to finance lease 100 67.73 50.11 49.30 37.45
Deferred tax liabilities 100 259.79 52.62 388.61 0.00
other liabilities 100 2456.24 31419.14 33288.45 50920.14
TOTAL CURRENT LIABILITIES 100 162.97 254.70 356.04 305.28
NON CURRENT LIABILITIES
Borrowings 100 239.83 246.84 630.13 433.63
Sub-ordinated loans
TOTAL NON CURRENT LIABILITIES 100 239.83 246.84 630.13 433.63
TOTAL LIABILITIES 100 166.69 254.32 369.31 311.49
REPRESENTED BY
share capital 100 156.00 192.70 280.86 351.07
Reserves 100 153.66 163.76 268.07 268.07
Unappropriated profit 100 118.27 2247.34 2415.88 -5344.56
100 153.31 241.30 342.19 114.04
surplus on revalution of assets - net 100 201.64 159.91 113.65 -38.42
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100 174.38 205.81 242.53 47.55

Total liabilities & SHE 100 167.60 248.59 354.33 280.30
VERTICAL ANALYSIS OF BALANCE SHEET

The Bank of Punjab
Balance Sheet
As at 31.dec 2005,06,07,08
ASSETS 2004 2005 2006 2007 2008
CURRENT ASSETS
Cash and balance with treasury banks 8.41 7.91 8.53 6.05 5.75
Balance with other banks 3.19 8.43 2.26 0.82 1.17
Lendings to finnacial instituions 1.54 6.83 7.19 1.04 0.34
Investments 24.42 16.22 17.13 31.26 12.21
Advances 59.47 57.24 61.46 56.98 70.86
other Assets 1.93 1.84 2.19 2.46 3.29
TOTAL CURRENT ASSETS 98.96 98.46 98.75 98.62 93.62
0.00 0.00 0.00 0.00 0.00
NON CURRENT ASSETS 0.00 0.00 0.00 0.00 0.00
Operating fixed assets 1.04 1.54 1.25 1.38 1.87
Deferred tax assets 0.00 0.00 0.00 0.00 4.51
TOTAL NON CURRENT ASSETS 1.04 1.54 1.25 1.38 6.38
0.00 0.00 0.00 0.00 0.00
TOTAL ASSETS 100.00 100.00 100.00 100.00 100.00
LIABILITIES
CURRENT LIABILITIES
Bills payable 0.40 0.43 0.52 0.40 0.66
Deposits and other accounts 82.52 79.59 83.54 81.69 88.26
Liabilities against asset subject to finance lease 0.12 0.05 0.02 0.02 0.02
Deferred tax liabilities 0.86 1.33 0.18 0.94 0.00
other liabilities 0.01 0.20 1.71 1.27 2.46
TOTAL CURRENT LIABILITIES 83.91 81.59 85.97 84.32 91.39
NON CURRENT LIABILITIES 0.00 0.00 0.00 0.00 0.00
Borrowings 4.27 6.11 4.24 7.59 6.61
Sub-ordinated loans
TOTAL NON CURRENT LIABILITIES 4.27 6.11 4.24 7.59 6.61
0.00 0.00 0.00 0.00 0.00
TOTAL LIABILITIES 88.18 87.70 90.21 91.91 97.99
0.00 0.00 0.00 0.00 0.00
NET ASSETS 0.00 0.00 0.00 0.00 0.00
REPRESENTED BY 0.00 0.00 0.00 0.00 0.00
share capital 2.27 2.11 1.76 1.80 2.84
Reserves 4.18 3.83 2.75 3.16 4.00
Unappropriated profit 0.22 0.15 1.96 1.48 -4.13
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6.67 6.10 6.47 6.44 2.71

surplus on revalution of assets - net 5.15 6.20 3.32 1.65 -0.71
11.82 12.30 9.79 8.09 2.01
Total liabilities & SHE 100.00 100.00 100.00 100.00 100.00
PROFIT AND LOSS ACOOUNT

The Bank of Punjab
Profit and Loss Acoount
For the year ended december 31,2005,06,07,08
2004 2005 2006 2007 2008
2,555,03 6,125,09
Mark-up/return/interest earned 9 3 11,579,633 17,539,538 17,752,652
2,668,73
Mark-up/return/interest expensed 719,074 9 7,508,795 13,939,377 16,614,000
1,835,96 3,456,35
Net mark-up/ interst income 5 4 4,070,838 3,600,161 1,138,652
Provision against non-performing loans and advances 46,940 327,373 340,626 1,616,421 18,863,580
Provision for diminution in the value of investments 0 0 33,000 24,479 388,757
Bad debts written off directly 121 3,623 100 246,869
47,061 330,996 373,726 1,887,769 19,252,337
1,788,90 3,125,35
Net mark-up/ interst income after provision 4 8 3,697,112 1,712,392 (18,113,685)
NON MARK-UP/ INTERST INCOME

Fee, commission and brokerage income 172,873 255,149 479,505 659,488 579,520
Dividend income 554,218 753,669 1,383,856 1,812,870 2,025,160
income from dealing in foreign currencies 41,311 93,208 239,804 377,233 324,327
Unrealized gain/ (Loss) on revaluation of investments 0 0 389,063 2,039,535 733,787
classified as held for trading 0 0 0 0 0
Other incomes 328,361 228,749 466,435 547,635 526,186
1,096,76 1,330,77
3 5 2,958,663 5,436,761 4,188,980
2,885,66 4,456,13
Total non mark-up/ interest expenses 7 3 6,655,775 7,149,153 (13,924,705)
NON MARK-UP/ INTEREST EXPENSES

1,116,09 1,274,97
Administrative expenses 7 1 1,754,665 2,255,342 2,808,835
Provision against lending to financial institutions 364 0 130,000 0 10,101
Provision against off balance sheet itemsother charges 32,046 4,744 175 292 0
total non mark-up/interest expenses 1,217 11,461 38 37,950 114,700
1,149,72 1,291,17
4 6 1,884,878 2,293,584 2,933,636
1,735,94 3,164,95
3 7 4,770,897 4,855,569 (16,858,341)
Extra ordinanry/unsual items
1,735,94 3,164,95
PROFIT BEFORE TAXATION 3 7 4,770,897 4,855,569 (16,858,341)
Taxation - Current 225,916 668,700 883,757 170,700 207,600
- Prior years (19,921) 1,052,000
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- Deferred 141,853 143,015 83,469 250,772 (8,033,001)

367,769 811,715 967,226 401,551 (6,773,401)
1,368,17 2,353,24
PROFIT AFTER TAXATION 4 2 3,803,671 4,454,018 (10,084,940)
Unappropriated profit brought forward 101,699 143,590 178,116 3,226,961 3,468,956

Transfer from surplus on revaluation of fixed assets - net of tax 3,166 6,174 5,866 (6,250)
101,699 146,756 184,290 3,232,827 3,462,706
1,469,87 2,499,99
Profit available for appropriation 3 8 3,987,961 7,686,845 (6,622,234)
Basic Earinings per share - Rupees 5.82 10.01 9.01 10.53 19.07
Diluted Earning per share- Rupees 5.82 10.01 9.01 10.53 19.07
TREND ANALYSIS OF PROFIT AND LOSS

ACCOUNT
The Bank of Punjab
10
Mark-up/return/interest earned 0 239.73 453.21 686.47 694.81
10
Mark-up/return/interest expensed 0 371.14 1044.23 1938.52 2310.47
10
Net mark-up/ interst income 0 188.26 221.73 196.09 62.02
10
Provision against non-performing loans and advances 0 697.43 725.66 3443.59 40186.58
Provision for diminution in the value of investments
10 2994.2 204023.9
Bad debts written off directly 0 1 82.64 7 0.00
10
0 703.33 794.13 4011.32 40909.32
10
Net mark-up/ interst income after provision 0 174.71 206.67 95.72 -1012.56

10
Fee, commission and brokerage income 0 147.59 277.37 381.49 335.23
10
Dividend income 0 135.99 249.70 327.10 365.41
10
income from dealing in foreign currencies 0 225.63 580.48 913.15 785.09
Unrealized gain/ (Loss) on revaluation of investments
classified as held for trading
10
Other incomes 0 69.66 142.05 166.78 160.25
10
0 121.34 269.76 495.71 381.94
Total non mark-up/ interest expenses 10 154.42 230.65 247.75 -482.55
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10
Administrative expenses 0 114.23 157.21 202.07 251.67
10 35714.2
Provision against lending to financial institutions 0 0.00 9 0.00 2775.00
10
Provision against off balance sheet itemsother charges 0 14.80 0.55 0.91 0.00
10
total non mark-up/interest expenses 0 941.74 3.12 3118.32 9424.82
10
0 112.30 163.94 199.49 255.16
10
0 182.32 274.83 279.71 -971.13
10
PROFIT BEFORE TAXATION 0 182.32 274.83 279.71 -971.13
10
Taxation - Current 0 295.99 391.19 75.56 91.89
- Prior years
10
- Deferred 0 100.82 58.84 176.78 -5662.91
10
0 220.71 263.00 109.19 -1841.75
10
PROFIT AFTER TAXATION 0 172.00 278.01 325.54 -737.11
10
Unappropriated profit brought forward 0 141.19 175.14 3173.05 3411.00
Transfer from surplus on revaluation of fixed assets - net of tax
10
0 144.30 181.21 3178.82 3404.86
10
Profit available for appropriation 0 170.08 271.31 522.96 -450.53
10
Basic Earinings per share - Rupees 0 171.99 154.81 180.93 327.66
10
Diluted Earning per share- Rupees 0 171.99 154.81 180.93 327.66
VERTICAL ANALYSIS OF PROFIT AND LOSS ACCOUNT

The Bank of Punjab
2004 2005 2006 2007 2008

Mark-up/return/interest earned 100 100 100 100 100
Mark-up/return/interest expensed 28.14 43.57 64.84 79.47 93.59
Net mark-up/ interst income 71.86 56.43 35.16 20.53 6.41
Provision against non-performing loans and advances 1.84 5.34 2.94 9.22 106.26
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Provision for diminution in the value of investments 0.00 0.00 0.28 0.14 2.19
Bad debts written off directly 0.00 0.06 0.00 1.41 0.00
1.84 5.40 3.23 10.76 108.45
Net mark-up/ interst income after provision 70.01 51.03 31.93 9.76 -102.03

Fee, commission and brokerage income 6.77 4.17 4.14 3.76 3.26
Dividend income 21.69 12.30 11.95 10.34 11.41
income from dealing in foreign currencies 1.62 1.52 2.07 2.15 1.83
Unrealized gain/ (Loss) on revaluation of investments 0.00 0.00 3.36 11.63 4.13
classified as held for trading
Other incomes 12.85 3.73 4.03 3.12 2.96
42.93 21.73 25.55 31.00 23.60
112.9
Total non mark-up/ interest expenses 4 72.75 57.48 40.76 -78.44

Administrative expenses 43.68 20.82 15.15 12.86 15.82
Provision against lending to financial institutions 0.01 0.00 1.12 0.00 0.06
Provision against off balance sheet itemsother charges 1.25 0.08 0.00 0.00 0.00
total non mark-up/interest expenses 0.05 0.19 0.00 0.22 0.65
45.00 21.08 16.28 13.08 16.53
67.94 51.67 41.20 27.68 -94.96
PROFIT BEFORE TAXATION 67.94 51.67 41.20 27.68 -94.96
Taxation - Current 8.84 10.92 7.63 0.97 1.17
- Prior years 0.00 0.00 0.00 -0.11 5.93
- Deferred 5.55 2.33 0.72 1.43 -45.25
14.39 13.25 8.35 2.29 -38.15
PROFIT AFTER TAXATION 53.55 38.42 32.85 25.39 -56.81
Unappropriated profit brought forward 3.98 2.34 1.54 18.40 19.54

Transfer from surplus on revaluation of fixed assets - net of tax 0.00 0.05 0.05 0.03 -0.04
3.98 2.40 1.59 18.43 19.51
Profit available for appropriation 57.53 40.82 34.44 43.83 -37.30
RATIO ANALYSIS:
Financial ratios are useful indicators of a firm's performance and

financial situation. Financial ratios can be used to analyze trends and
to compare the firm's financials to those of other firms. Ratio analysis
is the calculation and comparison of ratios which are derived from the
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information in a company's financial statements. Financial ratios are

usually expressed as a percent or as times per period. Ratio analysis is
a widely used tool of financial analysis. It is defined as the systematic
use of ratio to interpret the financial statements so that the strength
and weaknesses of a firm as well as its historical performance and
current financial condition can be determined. The term ratio refers to
the numerical or quantitative relationship between two variables. With
the help of ratio analysis conclusion can be drawn regarding several
aspects such as financial health, profitability and operational efficiency
of the undertaking. Ratio points out the operating efficiency of the firm
i.e. whether the management has utilized the firm’s assets correctly, to
increase the investor’s wealth. It ensures a fair return to its owners and
secures optimum utilization of firm’s assets. Ratio analysis helps in
inter-firm comparison by providing necessary data. An inter firm
comparison indicates relative position. It provides the relevant data for
the comparison of the performance of different departments. If
comparison shows a variance, the possible reasons of variations may
be identified and if results are negative, the action may be initiated
immediately to bring them in line. Yet another dimension of usefulness
or ratio analysis, relevant from the View point of management is that it
throws light on the degree efficiency in the various activity ratios
measures this kind of operational efficiency.
a) Liquidity Ratios
b) Leverage Ratios
c) Profitability Ratios
d) Activity Ratios
e) Market Ratios
a) Liquidity Ratios
Liquidity ratios measure a firm’s ability to meet its current obligations.
These include:
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Current Ratio:
Current Ratio = Current Assets / Current Liabilities
This ratio indicates the extent to which current liabilities are covered
by those assets expected to be converted to cash in the near future.
Current assets normally include cash, marketable securities, accounts
receivables, and inventories. Current liabilities consist of accounts
payable, short-term notes payable, current maturities of long-term
debt, accrued taxes, and other accrued expenses. Current assets are
important to businesses because they are the assets that are used to
fund day-to-day operations and pay ongoing expenses.
Year 2004 2005 2006 2007 2008

1094391 16279411 2317379 1740329
Current Assets 65630925 17 7 16 73
9087305 14174000 1981358 1698866
Current Liabilities 55649723 7 8 52 46
Current ratio 1.18 1.20 1.15 1.17 1.02
Current Ratio
1.25
1.20
1.20 1.18 1.17
1.15
1.15
Ratio
1.10
1.05 1.02
1.00
0.95
0.90
2004 2005 2006 2007 2008
Years
Interpretation:
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Current Ratio of the company was quite good in 2004 and 2007 but
then current liabilities of the company increased in 2005, 2006 and
2007. Over all although the current ratio is decreasing yet it is showing
the good ability of firm to pay its current liabilities from current assets.
Sales to Working Capital:
Sales to Working Capital = Sales / Working Capital
Sales to working capital give an indication of the turnover in working

capital per year. A low working capital indicates an unprofitable use of
working capital.
Year 2004 2005 2006 2007 2008

6,125,09 11,579,63 17,539,5 17,752,6
Sales 2,555,039 3 3 38 52
18,566,0 21,054,10 33,602,0 4,146,32
Working Capital 9,981,202 60 9 64 7
Sales to Working
Capital ratio 0.26 0.33 0.55 0.52 4.28
Sales to Working Capital ratio
4.50
4.00
3.50
3.00
Ratio
2.50
2.00 4.28
1.50
1.00
0.50
0.26 0.33 0.55 0.52
0.00
1 2 3 4 5
Years
Interpretation:
Sale to working capital ratio of company is showing increasing trend. It is

slightly decrease in2007 but it rapidly increase in 2008. it is indication of
profitable use of working capital.
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b) Leverage Ratios:
By using a combination of assets, debt, equity, and interest payments,
leverage ratio's are used to understand a company's ability to meet it
long term financial obligations.
Leverage ratios measure the degree of protection of suppliers of long
term funds. The level of leverage depends on a lot of factors such as
availability of collateral, strength of operating cash flow and tax
treatments. Thus, investors should be careful about comparing
financial leverage between companies from different industries. For
example companies in the banking industry naturally operates with a
high leverage as collateral their assets are easily collateralized.
These include:
Time Interest Earned:
TIE Ratio = EBIT / Interest Charges
The interest coverage ratio tells us how easily a company is able to pay
interest expenses associated to the debt they currently have. The ratio
is designed to understand the amount of interest due as a function of
company’s earnings before interest and taxes (EBIT). This ratio
measures the extent to which operating income can decline before the
firm is unable to meet its annual interest cost.
Year 2004 2005 2006 2007 2008

5,833,69 12,279,69 18,794,9
EBIT 2,455,017 6 2 46 -244,341
2,668,73 13,939,3 16,614,0
Interest Charges 719,074 9 7,508,795 77 00
TIE Ratio 3.41 2.19 1.64 1.35 -0.01
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Time Interest Earned:
4.00
3.50
3.00
2.50
Ratio
2.00
3.41
1.50
1.00 2.19
1.64 1.35
0.50
0.00 -0.01
-0.50 1 2 3 4 5
Years
Interpretation:
The times interest earned ratio of the company showing decreasing

trend. It is because of the increase in the interest expenses of the
company. But in 2008 it decrease rapidly, company is unable to
generate expense of interest from its operations.
Debt Ratio:
Debt Ratio = Total Debt / Total Assets

The ratio of total debt to total assets, generally called the debt ratio,
measures the percentage of funds provided by the creditors. The
proportion of a firm's total assets that are being financed with
borrowed funds. The debt ratio is calculated by dividing total long-term
and short-term liabilities by total assets. The higher the ratio, the more
leverage the company is using and the more risk it is assuming. Assets
and liabilities are found on a company's balance sheet.
Year 2004 2005 2006 2007 2008

9766406 14872943 2159787 1821654
Total Debt 58481328 4 2 67 19
Total Assets 66320411 1111541 16486286 2349906 1858929
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78 1 75 73
Debt Ratio 0.88 0.88 0.90 0.92 0.98
Debt Ratio
1.00
0.98
0.96
0.94
Ratio
0.92
0.90 0.98
0.88
0.92
0.86 0.90
0.88 0.88
0.84
0.82
1 2 3 4 5
Years
Debt to Equity Ratio:
Debt to Equity Ratio = Total debt / Total Equity

The debt to equity ratio is the most popular leverage ratio and it
provides detail around the amount of leverage (liabilities assumed)
that a company has in relation to the monies provided by shareholders.
As you can see through the formula below, the lower the number, the
less leverage that a company is using. The debt to equity ratio gives
the proportion of a company (or person's) assets that are financed by
debt versus equity. It is a common measure of the long-term viability
of a company's business and, along with current ratio, a measure of its
liquidity, or its ability to cover its expenses. As a result, debt to equity
calculations often only includes long-term debt rather than a
company's total liabilities. A high debt to equity ratio implies that the
company has been aggressively financing its activities through debt
and therefore must pay interest on this financing
Year 2004 2005 2006 2007 2008
9766406 14872943 2159787 1821654
Total debt 58481328 4 2 67 19
1512656
Total Equity 4420465 6776873 10666683 7 5040949
Debt to Equity Ratio 13.23 14.41 13.94 14.28 36.14
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Debt to Equity Ratio
40.00
35.00
30.00
25.00
Ratio
20.00 36.14
15.00
10.00
13.23 14.41 13.94 14.28
5.00
0.00
1 2 3 4 5
Years
Interpretation:
Debt ratio of the company is showing random trend. It reached its

highest of 36.14 in 2008. It is all because of a massive increase in the
liabilities of the company. In previous years debt ratio increase or
decreased slightly which is reasonable.
Current Worth / Net worth Ratio:
Current Worth to Net worth Ratio= Current Worth / Net worth Ratio
We can calculate current worth and net worth by using following
formulas:
Current Worth = Total Current Assets – Total Current Liabilities
Net Worth = Total Assets - Total Liabilities
Year 2004 2005 2006 2007 2008
1856606 3360206
Current Worth 9981202 0 21054109 4 4146327
1349011 1901190
Net Worth 7839083 4 16133429 8 3727554
Current Worth to Net
worth Ratio 1.27 1.38 1.30 1.77 1.11
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Current Worth / Net worth Ratio:
2.00
1.50
Ratio
1.00
1.77
1.27 1.38 1.30
0.50 1.11
0.00
1 2 3 4 5
Years
Interpretation:
Current worth to net worth of company show random trend. In 2007,

ratio is highest and in 2008, ration decrease due to massive increase in
total liabilities.
Total Capitalization Ratio:
Total Capitalization Ratio =

Long-term debt / long-term debt + shareholders'
equity
The capitalization ratio measures the debt component of a company's

capital structure, or capitalization (i.e., the sum of long-term debt
liabilities and shareholders' equity) to support a company's operations
and growth. Long-term debt is divided by the sum of long-term debt
and shareholders' equity. This ratio is considered to be one of the more
meaningful of the "debt" ratios - it delivers the key insight into a
company's use of leverage.
Year 2004 2005 2006 2007 2008
1784291 1227877
Long-term debt 2831605 6791007 6989424 5 3
long-term debt 1356788 3296948 1731972
+ shareholders' equity 7252070 0 17656107 2 2
Total Capitalization
Ratio 0.39 0.50 0.40 0.54 0.71
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Total Capitalization Ratio:
0.80
0.70
0.60
0.50
Ratio
0.40
0.71
0.30 0.54
0.50
0.20 0.39 0.40
0.10
0.00
1 2 3 4 5
Years
Interpretation
Total capitalize ratio of company show increasing trend except in 2006. it decrease
due to increase in shareholders’ equity
c) Profitability Ratios:
Profitability is the net result of a number of policies and decisions. This
section of the discusses the different measures of corporate
profitability and financial performance. These ratios, much like the
operational performance ratios, give users a good understanding of
how well the company utilized its resources in generating profit and
shareholder value. The long-term profitability of a company is vital for
both the survivability of the company as well as the benefit received by
shareholders. It is these ratios that can give insight into the all
important "profit". Profitability ratios show the combined effects of
liquidity, asset management and debt on operating results. These
ratios examine the profit made by the firm and compare these figures
with the size of the firm, the assets employed by the firm or its level of
sales. There are four important profitability ratios that I am going to
analyze:
Net Profit Margin:
Net Profit margin = Net Profit / Sales x 100
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Net Profit Margin gives us the net profit that the business is earning
per dollar of sales. This margin indicates the profit after all the costs
have been incurred it shows that what % of turnover is represented by
the net profit. An increase in the ratios indicates that a firm is
producing higher net profit of sales than before.
Year 2004 2005 2006 2007 2008

2,499,99 7,686,84 (6,622,23
Net Profit 1,469,873 8 3,987,961 5 4)
6,125,09 11,579,63 17,539,5 17,752,65
Sales 2,555,039 3 3 38 2
Net Profit margin 57.53% 40.82% 34.44% 43.83% -37.30%
Net Profit Margin:
80.00%
60.00%
40.00%
57.53%
20.00% 40.82% 43.83%
Ratio
34.44%
0.00%
-20.00% 1 2 3 4 5
-37.30%
-40.00%
-60.00%
Years
Interpretation
Net profit margin of company shows irregular trend. It decreases from 2004
to 2006 an then increase in 2007. In 2008 net profit margin massively
decrease to word negative. It is due to loss in net profit.
Operating Income Margin:
Operating Income Margin = Operating Income / Net Sales x 100
Operating Income Margin =Net mark-up / interest income after provisions + Mark-
up / return / interest expensed -
Total non mark-up / interest expenses
Year 2004 2005 2006 2007 2008
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Operating Income 1,735,943 3,164,957 4,770,897 4,855,569 -16,858,341

11,579,63 17,539,53
Net Sales 2,555,039 6,125,093 3 8 17,752,652
Operating Income Margin 67.94% 51.67% 41.20% 27.68% -94.96%
Operating Income Margin:
80.00%
60.00%
40.00% 67.94%
20.00% 51.67% 41.20% 27.68%
0.00%
Ratio
-20.00% 1 2 3 4 5
-40.00% -94.96%
-60.00%
-80.00%
-100.00%
-120.00%
Years
Interpretation:
Operating income margin of company shows decreasing trend. It is due

to operating income Is not increase rapidly as net sale increase. In
2008 operating income massively decrease toward loss and operating
income margin goes to negative 94.96%.
Return on Assets:
Return on Assets (ROA) = Profit after Taxation / Average Total assets x

100
ROA, A measure of a company's profitability, equal to year's earnings
divided by its total assets, expressed as a percentage. This is an
important ratio for companies deciding whether or not to initiate a new
project. The basis of this ratio is that if a company is going to start a
project they expect to earn a return on it, ROA is the return they would
receive. Simply put, if ROA is above the rate that the company borrows
at then the project should be accepted, if not then it is rejected.
Year 2004 2005 2006 2007 2008

Profit after Taxation 1,368,17 2,353,242 3,803,671 4,454,01 -
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10,084,94
4 8 0
88737294 138008519 1999267 21044182
Average Total assets .5 .5 68 4
Return on Assets 0 2.65% 2.76% 2.23% -4.79%
Return on Assets:
0.04
0.03
0.02
2.65% 2.76% 2.23%
0.01
0 0
Ratio
-0.01 1 2 3 4 5
-0.02
-4.79%
-0.03
-0.04
-0.05
-0.06
Years
Interpretation:
A random trend can be seen in this ratio. There is significant decrease

in return in 2008. it is due to massive loss after tax. Return on assets
goes toward negative. Heavy loss on ROA was bear by company in
2008.
Return on Equity (ROE):
Return on Total Equity = Profit after taxation / Total Equity x 100
Return on Equity measures the amount of Net Income earned by

utilizing each dollar of Total common equity. It is the most important of
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the “Bottom line” ratio. By this, we can find out how much the
shareholders are going to get for their shares. This ratio indicates how
profitable a company is by comparing its net income to its average
shareholders' equity. The return on equity ratio (ROE) measures how
much the shareholders earned for their investment in the company.
The higher the ratio percentage, the more efficient management is in
utilizing its equity base and the better return is to investors
Year 2004 2005 2006 2007 2008

-
1008494
Profit after Taxation 1368174 2353242 3803671 4454018 0
1512656
Total Equity 4420465 6776873 10666683 7 5040949
-
Return on Total Equity 30.95% 34.72% 35.66% 29.45% 200.06%
Return on Equity (ROE):
50.00%
30.95% 34.72% 35.66% 29.45%
0.00%
1 2 3 4 5
-50.00%
Ratio
-100.00% -200.06%
-150.00%
-200.00%
-250.00%
Years
Interpretation:
In 2004, 2005 and 2006 ROE increase slightly but it decrease in 2007
and 2008. In 2008 massive decrease in ROE. It is due to heavy loss in
profit after taxation. Company bears heavy loss on ROE about 200%.
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d) Activity Ratios:
Activity ratio are sometimes are called efficiency ratios. Activity ratios
are concerned
with how efficiency the assets of the firm are managed. These ratios
express relationship
between level of sales and the investment in various assets
inventories, receivables, fixed
assets etc.
Total Asset Turnover:
Total Asset Turnover = Total Sales / Total Assets

The amount of sales generated for every dollar's worth of assets. It is
calculated by dividing sales in dollars by assets in dollars. Asset
turnover measures a firm's efficiency at using its assets in generating
sales or revenue - the higher the number the better. It also indicates
pricing strategy: companies with low profit margins tend to have high
asset turnover, while those with high profit margins have low asset
turnover.
Year 2004 2005 2006 2007 2008

6,125,09 11,579,63 17,539,5 17,752,6
Total Sales 2,555,039 3 3 38 52
1111541 16486286 2349906 1858929
Total Assets 66320411 78 1 75 73
Total Asset Turnover 0.04 0.06 0.07 0.07 0.10
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Total Asset Turnover:
0.12
0.10
0.08
Ratio
0.06
0.10
0.04 0.07 0.07
0.06
0.02 0.04
0.00
1 2 3 4 5
Years
Interpretation:
An increasing trend can be seen. A good increase in turnover can be

seen in 2008. Company show improvement in total Asset turnover.
Sales to Fixed Assets:
This ratio is indicates that how much sales are contributed by

investment in fixed Assets.
Sales to Fixed Assets = Net Sales / Fixed Assets
Year 2004 2005 2006 2007 2008
6,125,09 11,579,63 17,539,5 17,752,6
Net Sales 2,555,039 3 3 38 52
Fixed Assets 689486 1715061 2068744 3252759 3471838
Sales to Fixed Assets 3.71 3.57 5.60 5.39 5.11
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Sales to Fixed Assets:
6.00
5.00
4.00
Ratio
3.00 5.60 5.39 5.11

2.00 3.71 3.57
1.00
0.00
1 2 3 4 5
Years
Interpretation
An irregular trend can be seen in sale to fixed asset ratio. In 2006 ratio was
5.60 due more contribution of fixed asset to sale but it gradually decrease in
2007 and 2008.
d)Market Ratio:
Market Value Ratios relate an observable market value, the stock
price, to book values obtained from the firm's financial statements.
Earning Per Share- EPS:
Earning Per Share = Profit after Taxation/Number of Shares
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The portion of a company's profit allocated to each outstanding share

of common
stock. Earnings per share serve as an indicator of a company's
profitability. Earnings per share are generally considered to be the
single most important variable in determining a share's price. It is also
a major component used to calculate the price-to-earnings valuation
ratio.
Year 2004 2005 2006 2007 2008

-
2,353,24 4,454,01 10,084,9
Profit after Taxation 1,368,174 2 3,803,671 8 40
234971. 423037.
Number of Shares 150623 9 290249 9 528797.4
Earning Per Share 9.08 10.01 13.10 10.53 -19.07
Earning Per Share- EPS:
15.00
10.00
13.10 10.53
5.00 9.08 10.01
0.00
Ratio
-5.00 1 2 3 4 5
-10.00 -19.07
-15.00
-20.00
-25.00
Years
Interpretation:
EPS of company show positive trend from 2004 to 2007 but it show
massive decrease in 2008. EPS in 2008 shows 19.07 loss which is due
to heavy loss in profit after tax. Investment in share of company is
containing heavy risk.
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Price / Earning Ratio:
Price / Earning Ratio = Stock Price Per Share/Earning Per Shares
The Price-Earnings Ratio is calculated by dividing the current market

price per share of the stock by earnings per share (EPS). (Earnings per
share are calculated by dividing net income by the number of shares
outstanding.)
The P/E Ratio indicates how much investors are willing to pay per dollar
of current earnings. As such, high P/E Ratios are associated with
growth stocks. (Investors who are willing to pay a high price for a dollar
of current earnings obviously expect high earnings in the future.) In
this manner, the P/E Ratio also indicates how expensive a particular
stock is. This ratio is not meaningful, however, if the firm has very little
or negative earnings. The Price-Earnings Ratio is calculated by dividing
the current market price per share of the stock by earnings per share
(EPS). (Earnings per share are calculated by dividing net income by the
number of shares outstanding.) The P/E Ratio indicates how much
investors are willing to pay per dollar of current earnings. As such, high
P/E Ratios are associated with growth stocks. (Investors who are willing
to pay a high price for a dollar of current earnings obviously expect
high earnings in the future.) In this manner, the P/E Ratio also indicates
how expensive a particular stock is. This ratio is not meaningful,
however, if the firm has very little or negative earnings.
Year 2004 2005 2006 2007 2008

Stock Price Per Share 10 10 10 10 10
Earning Per Shares 9.08 10.01 13.10 10.53 -19.07
Price / Earning Ratio 1.10 1.00 0.76 0.95 -0.52
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Price / Earning Ratio:
1.20
1.00
0.80
0.60 1.10 1.00 0.95
0.40 0.76
Ratio
0.20
0.00
-0.20 1 2 3 4 5
-0.52
-0.40
-0.60
-0.80
Years
Interpretation:
The price/earring ratio of company shows decreasing trend. In 2008 it

significantly decrease to ward negative. It is not favorable for
investment. Negative price / Earning ratio in 2008 is due to heavy loss
in earning per share. Loss is about Rs. 19 per share.
Book Value per Share:
Book Value per Share = Shareholders’ Equity/Share Capital
This is defined as the Common Shareholder's Equity divided by the

Shares Outstanding at the end of the most recent fiscal quarter. It is
the Indication of the net worth of the corporation. Somewhat similar to
the earnings per share, but it relates the stockholder's equity to the
number of shares outstanding, giving the shares a raw value.
Comparing the market value to the book value can indicate whether or
not the stock in overvalued or undervalued.
Year 2004 2005 2006 2007 2008
1512656
Shareholders’ Equity 4420465 6776873 10666683 7 5040949
Share Capital 1506230 2349719 2902490 4230379 5287974
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Book Value per Share 2.93 2.88 3.68 3.58 0.95

Book Value per Share:
4.00
3.50
3.00
2.50
Ratio
2.00 3.68 3.58

1.50 2.93 2.88
1.00
0.50 0.95
0.00
1 2 3 4 5
Years
Interpretation
Book value per share of company show random trend. In 2004, it is 2.93 and
it decrease in 2005 to 2.88. In 2006 book value per share increase to 3.68
and in 2007 it goes negative to 3.58. In 2008 it decrease significantly to 0.95.
Recommendation
INTERNAL CONTROL
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.
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PROFESSIONAL TRAINING
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.
DELEGATION OF AUTHORITY
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.
PERFORMANCE APPRAISAL
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.
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TRANSFERS
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.
NEED OF QUALIFIED STAFF
Required, qualified staff should be provided to branch in order to

improve the functioning of the branch. Especially a telephone operator should
be appointed
CREDIT CARD FACILITY
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.
DECREASING ADMINISTRATIVE EXPENSE
Bank should decrease their administrative expenses. This was Rs

2.25 billion in the year 2007. That can be done by lying off the surplus
pool of employee with golden hand shakes scheme. The branches that
are not much used could also be closed. That will give positive results
in the future
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SHOULD BE AGGRESSIVE IN CREDIT POLICY
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.
TECHNOLOGICAL IMPROVEMENT
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.
STAFF RELATIOSHIP
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
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the staff suffered was that all of them considered themselves more
important than others.
FAVOURITISM & NIPOTISM
In the 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 favoritism,
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 favorable
environment to the employee to show their performances.
MARKETING POLICY
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 do
more advertising through newspaper and media and through channel
of personal contacts.
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AVOIDING BAD DEBTS
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.
Conclusion
At present there is no such organization in the world that is free from

problem and challenges. Every concern has to strive and struggle a lot to be
more profitable and to get more competitive edge.
The management of BOP is taking strategic steps to enable the bank to

emerge as a strong and progressive institution. It is continuing to make
efforts to refine its products and operations to make them more compatible.
New deposit schemes have been introduced and an action plan to maintain
revenue growth in future.
As the business and economic conditions remain uncertain, BOP

continues to develop the new products like it has been doing in past.
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
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of the country. Further more 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.
References
http://www.bop.com.pk
http://www.scribd.com
http://www.wikipedia.com
http://www.sbp.gov.pk
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Department Of Management

Ahmad Raza (171-6)

Submitted To: Rai Imtiaz Hussain

University of Education Lahore

Almighty Allah, The Creator of worlds

Hazrat Muhammad (P.B.U.P), the cause of

The creation of the Universe

To the persons who loved me, persons whom

I loved and for all those who prayed for me.

We have no appropriate words that fully convey the sense of immense

We regard the cooperation of management of University of Education, Okara

Message of the Punjab Government:

Government of the Punjab.

Message of the President:

It is deemed both opportune and appropriate as well as pertinent to provide a

the wake of global recession. The management remains cognizant of and

A proactive approach to marketing and resource mobilization constitutes a

Recognizing the need for and importance of good corporate governance,

guidelines and best international practices. The efforts will continue.

We stand committed to ensure that merit and professionalism thrive. Training

Our country wide branch network affords enormous flexibility to provide

We are at cross roads where devotion to duty, professional ability, integrity

Message of the Punjab Government:................................................................5

Message of the President:................................................................................6

Total Number of Branches:.............................................................................17

History of Banking in Pakistan:.......................................................................21

Functions of Commercial Banks & their Role in the Development of an

History of The Bank of Punjab:.......................................................................26

PRODUCTS & SERVICES: ................................................................................29

Portfolio Sharing: ........................................................................................34

Loan Products: ...........................................................................................47

Corporate & Investment Banking: ..............................................................81

SOCIO CULTURAL FACTORS........................................................................91

TREND ANALYSIS OF BALANCE SHEET............................................................96

VERTICAL ANALYSIS OF BALANCE SHEET.......................................................97

PROFIT AND LOSS ACOOUNT..........................................................................98

TREND ANALYSIS OF PROFIT AND LOSS ACCOUNT.........................................99

VERTICAL ANALYSIS OF PROFIT AND LOSS ACCOUNT..................................100

Sales to Working Capital:..........................................................................104

Time Interest Earned:................................................................................105

Debt to Equity Ratio:.................................................................................107

Current Worth / Net worth Ratio:...............................................................108

Total Capitalization Ratio:.........................................................................109

Net Profit Margin:......................................................................................110

Operating Income Margin:.........................................................................111

Return on Equity (ROE):............................................................................113

Total Asset Turnover:................................................................................115

Sales to Fixed Assets:................................................................................116

Earning Per Share- EPS:............................................................................117

Price / Earning Ratio:.................................................................................119

Book Value per Share:...............................................................................120

NEED OF QUALIFIED STAFF.......................................................................123

CREDIT CARD FACILITY..............................................................................123

DECREASING ADMINISTRATIVE EXPENSE..................................................123

SHOULD BE AGGRESSIVE IN CREDIT POLICY.............................................124

FAVOURITISM & NIPOTISM.........................................................................125

AVOIDING BAD DEBTS...............................................................................126

Our Customer As our first priority

For the prosperity of our stakeholders that

Excellence In everything we do.

Integrity In all our dealings.

Respect For our customers and each other.

Total Number of Branches: