Professional Documents
Culture Documents
I have done my internship at The Bank of Punjab, Jauharabad Branch. There are four departments in
the branch, and I worked as an assistant in that branch. For the first two weeks I worked in deposit
department under the supervision of Muhammad Faisal, where I have to perform following tasks:
• Inform customer of essential conditions under which the account will be operated.
Afterwards I have learnt about vouchers, checking of vouchers is essential to confirm that correct
calculation has been done. Vouchers are properly bind sealed, and checking by the manager. I have
checked the following things:
• Cash paid stamps (with dates) are duly affixed in case of cash cheques and in case of clearing
stamps is affixed.
Then another task for me was “issuing of cheques books”. It is one of the most interesting works
that I have learnt in the bank. Cheques books should be issued only after all the formalities of the
account opening forms, which have been checked by the branch manager.
Maintaining Dispatch register and Inward Mailing register was also included in duties assigned to
me. I also used to help different employees in their work.
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2. Comparison of the assets of organization with other organizations.
4. Study the facilities provided by the organization to common public in various forms.
5. To study the terms & conditions for fringe benefits provided to employees of the organization at
the age of superannuation.
Pakistan came into being on 14th August, 1947; sufficient banking services were available in the
areas forming Pakistan. Out of the total branches of the nearly 3,500 in the undivided India, as many
as about 1,500 branches were existing in these areas.
It was agreed between the two countries that reserve bank of India shall continue to function in the
Pakistan territory until 30th September 1948 and that Indian notes would continue to be legal
tender at Pakistan until 30th September 1948. Unfortunately, relationship between the two
countries became most strained immediately after independence; banking was mostly in the lands
of Hindus who immediately started transferring their offices and assets into India. As a result most of
the banks in Pakistan were closed down and even those which were open were not doing any
effective business.
The number of banking office in Pakistan came down to about 200 on 30th June 1948. Branches of
some European banks were also functioning in a limited manner, financing in export of crops, and
their number was limited to about 20.
It was only the Habib bank, which transferred its office from Bombay to Karachi Austral Asia bank
was another bank, which was in existence in the Pakistan territory at the time of independence.
Despite of best efforts on the part of government of Pakistan, no heady way could be made on this
behalf and reserve bank of India was in no mood to help the new country. Imperial bank of India,
agent of the reserve bank of India also started closing down its branches in Pakistan.
Reserve bank also refused to advance money to Pakistan to make essential payments such as
salaries etc, also Pakistan’s share of Rs.75 billion in cash balance was with held by bank, causing
hardships to the newly born state. In view of these hopeless state affairs it was agreed between the
two countries that reserve bank would serve as monetary authority in Pakistan only up to 30th June
1948.
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The principle of nationalization of banks is to stream line the operation of commercial banks in such
a way that it may be conductive to the development activities in process in the country.
Since the commercial banks were owned controlled by big business groups of the country it was
feared that these banks would not maintain uniformity in their operational and would be
instrumental to inflationary pressure. However, the considerations behind nationalization are
1. To form uniformity in the policy of the commercial banks so they may serve the best national
interest.
2. To make the operation of commercial banks highly sensitive and responsive to the policy of the
government relation to financial matters.
3. To make the credit policy of the commercial banks more purpose full and effective especially in
the development of economic sectors of the country. It acts as an agent of the State Bank of
Pakistan
4. To make the best use of the funds available at the disposal of these banks for the economic
development of the country.
6. To development strong money banks market in the country so that the value of currency may be
maintained at stable level both in national facilities to exporter and agriculturists which have not
been satisfactory in the past years.
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Bolan Bank Limited
CITI Bank
Oman Bank
Rupali Bank
The Bank of Punjab was established in 1989 and was given the status of scheduled bank in 1994.
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The Bank of Punjab is working as a scheduled commercial bank with a network of almost 280
branches at all over major locations in the Punjab. The Bank provides all types of banking services
such as Deposits in Local Currency and client foreign currency, remittances, and advances to
business, trade, industry and agriculture. The Bank of Punjab has indeed entered a new era of
science to the nation under experience and professional hands of its management. The Bank of
Punjab plays a vital role in the national economy through mobilization of hitherto untapped local
resources, promoting savings and providing funds for investments. The bank offers attractive rates of
profit on all deposits, opening of foreign currency accounts and handling of foreign exchange
business for example imports, exports and remittances, financing, trade and industry for working
capital requirements and money market operations. The lending policy of bank is not only cautious
and constructive but also based on principles of prudent lending with maximum emphasis on
security.
Source: http://www.bop.com.pk/
“To exceed the expectations of our stakeholders by leveraging our relationship with the government
of Punjab and delivering a complete range of professional solutions with a focus on program driven
products and services in the agriculture and middle tire markets through a motivated team.”
Source: http://www.bop.com.pk/
Source: http://www.bop.com.pk/
These are the quick facts of the business in October 2007. At that instant BOP’s business volume is
as under.
Business Volume in terms of Investment, Current & Fixed Assets, Share Capital, Revenues, Deposits,
Advances, Income, and EPS for the last 5 years is as under:
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Total assets RS (M) 43,621 66,320 111,154 164,855 234,974
ROI % 7 8 13 13 6
• Over last five years, Pakistan economy grown with real pace. Because of which record growth in
Banking sector.
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Source: http://www.bop.com.pk/
The total number of employees in the organization is 3859. Which is increasing. Regular hiring’s are
taking place.
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06 MR. SHAFQAT ELLAHI DIRECTOR
TO THE BOARD
Total number of employees in Khanewal Road branch where I did my internship is eleven. The
branch was headed by Branch manager Mr Manzoor Hussain Maher. The flow of responsibilities and
designations are shown in management’s hierarchy.
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2.2.5 Products
1. Saving Accounts
3. Fixed accounts
1. SAVING ACCOUNTS(PLS)
These types of accounts are designed to encourage the saving habit of the customer and lead to long
term or invest relationship. Bank saving account are in the nature of deposit accounts and are not
normally available for drawings.
Rates of interest are typically ahead, by a small margin. Savings accounts with the banking sector
represent a very small proportion of total deposits. Customer can make withdrawals from this type
of account. The cash reserve ratio is typically low then the current account because the withdrawals
against this account are very low.
These are those deposits, which can be drawn by the depositor at any time by representing a cheque
to the bank. People deposits their money in this account they gave a ready command on their
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account in developed countries of world, a very significant part of money is kept under current or
demand account. On this type of account of interest transfer of cash or by at sight. The cash reserve
ratio for his account is very high. The operating cost for the handling of this type of account is very
regular.
3. FIXED OR TERMS ACCOUNT
Fixed accounts are those which are deposited for a fixed period of time and repayable after the
expiry of stipulated time to the customer. Those people who have surplus funds and want to have
save investment deposit the amount in the fixed account.
The rate of interest given to depositor varies with the length of deposit, i-e. It is higher for longer
period and lower for shorter period.
The rate of this type of deposits is higher the saving bank accounts. The cash reserve against this
deposit are vary low because there no fear of with draw of a month before the stipulated of time.
1. Agriculture Schemes
1. Agriculture Schemes
Such type of schemes provides farmers a real plate form to accelerate. Some facilities given by
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Kissan Dost Agricultural finance scheme are:
- Purpose
Provision of financial facility to farmers for purchase of inputs (Seed, fertilizer, pesticides, fungicides
etc).
- Amount
- Security
- Insurance
The borrower will have to arrange life assurance under the Bank’s charge.
- Mark-up
BOP car loan is a demand financing facility to purchase brand new locally manufactured/Assembled
cars for personal use. This facility can be availed by salaried person of different nature and by the
business persons. All must have the holdings of NIC.
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BOP Aasaish loan is demand finance facility for purchase of consumer durable goods like TV,
Refrigerators, Mobiles, Microwave Oven, Fans, Audio/Video system etc with no down payment, in
addition with the free home delivery. The financing tenure of this product is max 36 months. The
nature of employment should be salaried or the business man.
2.3 SERVICES
• ATM Facility
• Letter of Credit
• Pay Order
• On-Line Banking
• E-Banking
• Debit Card
• Consumer Financing
• Agriculture Financing
• Corporate Financing
• Demand Drafts
• Collection of Utility
• Lockers Facility
Through the ATM’s Customers have access to the various services such as withdrawal, balance
enquiry and mini statement? Complete security is ensured because access to the account is only
possible by entering a four digit personal identification number (PIN) known only to the account
holder. Cash withdrawal limit is up to Rs.20, 000 per day. Annual charges of ATM is Rs.250/- per
card.
BOP is currently offering window-based online banking to its customers, which gives access to
information on their accounts and the liability to act on the latest information received over the net.
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3.3. Lockers
It is one of the utility services that BOP provides to their customers for keeping jewellery, important
documents and other valuables.
BOP is offering its business customers the widest range of option in the area of money transfer.
BOP’s letter of credit service is with competitive rates, security, and ease of transaction, BOP Letter
of credit is the best way to do the business transactions.
BOP provides transfer of money using different facilities. Its pay orders are a secure and easy way to
move the money from one place to another. The charges for this service are extremely competitive.
Moves money safely and quickly from BOP Mail Transfer service. The rates for this service is quiet
impressive as compare to the market.
BOP offers excellent rates of profit on all its short term investment accounts. The packages are
starting from 3 months. BOP’s rates of profit are extremely attractive, along with the security and
service only BOP can provide.
It help farmers utilize funds efficiently to further develop and achieve better production. Provides
farmers an integrated package of credit with supplies of essential inputs, technical knowledge, and
supervision of farming.
• Educational Institutes
• Agriculturists
• WAPDA
• Pharmaceutical Companies
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• WASA
• MDA
3 Organizational Structure
3.1 Main Offices
Head Office and the main branch of BOP is in Gulberg 3, Lahore & Egerton, Lahore Respectively.
• Lahore Region
• Faisialabad Region
• Gujranwala Region
• Rawalpindi Region
• Karachi/Quetta Region
• Multan Region
• Peshawar Region
Rest are the branches working under these regions. Which are almost 270 in all over Pakistan.
The management of BOP comprises of two types i.e. Chairman’s Secretariat & President Secretariat.
Chairman’s secretariat deals with finance division. Mr Nadeem Amir is general manager of finance
division of mentioned secretariat. The financial analyst related to BOP matters of chairman’s
secretariat is Mr. Masroor Zaigham. The manager of finance division is Mr. Muhammad Ijaz Aziz. Mr.
Muhammad Arshad is the head of finance division of BOP. The finance department deals in
authenticity of cheques, proper utilization of funds, preparation of day end statements, online
banking, collection of mails, opening & closing account of customers & companies etc.
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Electronic data gives exact values and figures which top level management required. Because of
electronic data they came across to know those minute things which impacts a lot on final place.
Through this they can measure exact profit and loss accounts, assets and liabilities up to a branch
level from where they can decide which should be kept and which should not.
Through this top level management is able to decide which product should be taken into course for
further level or which should stop.
Electronic data make management able to take decision at any point of time.
• Public Source
As the largest regional bank of Pakistan according to asset base with specialized in Agriculture has a
large deposits with 80% from the rural areas of the Punjab. The Banks major source of funds is from
the Public.
• Money Market
Figurative expression for the informal network of dealers and investors over which short-term debt
securities are purchased and sold. Money market securities generally are highly liquid securities that
mature in less than one year, typically in less than ninety days.
Corporate sector is one of the major sources of funds in all types of Banking. All major organisations,
financial institutions and government & private organisations are the major sources of the funds e.g.,
WAPDA.
BOP’s funds are allocated to the following departments. The banks major focus is on short term
financing. Major allocation of funds are on these divisions.
Short term financing includes period less than one year. The banks major focus is on short term
financing.
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1. SME Division
2. Agriculture financing
3. Consumer financing
4. Corporate financing
The distribution of funds to these departments are Banks internal matter and they avoid to disclose.
Through Financial Statements it is only possible to analyze long term and short term financing.
The bank provides adequate and timely financial assistance to the farmers to improve production
potential of agriculture sector. Insurance of leased assets, animals, crops and life assurance of
borrowers are all source of money for the bank.
4.4.4 E-Banking
The bank has a centralized database that is web-enabled. All the services that the bank has
permitted on the internet are displayed in menu. Any service can be selected and further interaction
is dictated by the nature of service.
The bank also makes possible the payment of electricity, gas and telephone bills for its customers
charging some commission on each payment.
4.4.6 Lockers
Commission charged on lockers provided by bank for customers, is also a source of inflow for the
bank.
Personal Finance, mortgage finance, business finance, smart cash, auto financing and travelers
cheques are all sources of funds for the bank. The bank finances all these loans and facilities on
competitive mark up rates.
The bank provides adequate and timely financial assistance to the farmers to improve production
potential of agriculture sector. Insurance of leased assets, animals, crops and life assurance of
borrowers are all source of money for the bank.
5 Critical Analysis
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5.1 Critical Analysis of the practical exposure relating to theoretical concepts
This part of report is the essence of the internship, as this will help other students to better
understand the working environment of the bank by finding the relationship between what is
written in the books and what is actually going on in fields. The theory written in the books in cases
is not implemented as it is. In some cases theory is implemented with a little modification but in
other cases theory has nothing to do with practice. In accounting, banks don’t prepare worksheet,
but part of worksheet is prepared like trial balance, but little differences, theory and practice has
substantial relationship. The securities for the loans are handled in the same way as theory says like
mortgage, pledge, hypothecation, advances against insurance policies or liquidation procedure is the
same. The difference is there in the case of loans. Theory talks about four or five terms of loans that
is cash finance, overdraft, loans etc., but in practice there are some more terms used like running
finance, demand finance etc. All other concepts of remittances, bills, foreign exchange deposits,
letters of credit are in accordance with theory almost. So for a internee it is more important to learn
new things which he/she has never heard about in his/her course book.
To me, Theory gives you the direction to understand the processes and the terminologies going
across the World using best business practices in a broader view covering each and every aspect of
possible business scenarios. On the contrary practical life is specific, enclosed in a jar. In practical
professionalism and firm’s environment is each and every thing. Professional life only builds on the
knowledge based on books even though it may only use 1% of the theoretical knowledge.
The system has not totally shifted on computer. Manual procedure is still there hence computer
facility is not fully availed. There should be a system at each counter for quick processing.
During my internship I have observed the person who has came as customer Relationship Officer
was acting as Cashier. It should not be like this. The person should be posted according to his
qualification, profession skills and experience.
People have to wait for en-cashing their cheques for about 10-20 minutes, which is not good for the
reputation of bank, the delay is due to manual work. Therefore I suggest that computers and other
electronic machines should be installed in bank so that time could be saved.
I felt at some places the BOP need to have employees, because a lot of work is to be done by a single
employee that will result in work overload and employee might not perform his/her job with full
devotion.
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5.2 Financial Analysis
To analyse the financial position of BOP, different tools are use, which includes Ratio Analysis,
Common size Analysis of the last five years.
5.2.1 Introduction and Importance of Financial Analysis
Financial analysis involves the use of various financial statements. These statements do several
things. First the balance sheet and the second is income statement.
The balance sheet summarizes the assets, liabilities, and owner’s equity of a business at a point in
time, while the income statement summarizes revenues and expenses of a firm over a particular
period of time. A conceptual framework for financial analysis provides the analyst with an
interlocking means for structuring the analysis.
Balance Sheet
2006 2007
Rupees in ‘000
Assets
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164,855,137 234974195
Liabilities
Sub-ordinated loans - -
148,729,423 215978401
Represented By
10,658,968 15110453
16125714 18995794
Income Statement
2006 2007
Rupees in ‘000
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Mark-up/return/interest expensed 7,508,795 13,939,377
373,726 1,887,769
6,650,904 7,134,741
4,768,721 4,845,722
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- Prior years’ (19,921) -
964,466 400,103
Profit After Taxation 3,804,255 4,445,619
Transfer from surplus on revaluation of fixed assets - net of tax 6,174 5,866
175,991 3,225,112
Operating Results
Balance Sheet
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Investments Rs in m 11,458 16,198 18,026 28,233 73,462
• BOP’s income statement for the last five years represents a high growth in it.
• Its all due to the increase in equity , and increase in the deposits of the bank.
• Rise in the Markup Interest earning income results rise up in the profit of bank represents increase
in lending by the bank.
• As last 5 years were really good for banking sector. Assets of the banks are risen upto 400%
particularly in 2007 just because of crescent towers.
This type of analysis represents the percent change in specific line item of the Income statement or
the balance sheet from the last year. This analysis is used to comment on the growth of specific line
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item in the industry or the firm.
Balance Sheet
• Total earnings mark-up & non mark-up were rising 33% from last year. As deposits and the
lendings of the banks are rising up.
• Administrative expenses are increased with a great pace in last few years because of high rate of
inflation.
• Rise in expenses results decrease in the 22% percent profit from last year.
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5.2.3.1.2 Graphical Representation (Balance Sheet)
• Total assets were increased in last few years. 22% increase in the assets from the last year
represents growth in the Bank.
• As bank increase their paid up capital because of which SOE increase at the end of 2006.
• BOP is grabbing the confidence of their customers results increase in the deposits.
It represents the percent of a line item (expenses, tax, interests, dividends) impacts on total
revenues.
• Markup interest earned is increased because of increase in 30% lendings from the last year.
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• Net profit before and after tax is decreased because of huge rise up in the admin expenses.
5.2.4 Ratio Analysis
Ratio analysis is used to calculate the profitability, liquidity/leverage etc. of the firm. From ratio
analysis it is possible to predict future variances.
Profit before tax to total income % 49.8 59.19 66.11 67.89 53.71
Markup/ Interest cover ratio times 5.15 5.08 2.79 1.94 1.65
Profit after tax to total income % 34.26 46.65 49.16 54.16 49.27
Return on avg total assets (after tax) % 1.88 2.49 2.65 2.76 2.22
Market value per share Rs./share 34.95 65.9 102.45 101.25 97.8
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Cost/Income % 49.80% 38.10% 26.90% 26.40% 24.70%
• Spread: Difference between funded revenue as a percentage of average earning assets and the
cost of funds as a percentage of average paying funds.
• The higher the spread the higher will be the profit margin.
• GSR= Rev/CGS
• GSR of the bank is decreasing because of the decrease in margin, a SBP rise up the interest rates on
the deposits.
• This ratio tells what percent of total income is earned before paying all the taxes.
• BOP has a high value of profit before tax to total income and they are decreasing after 2006
because of increase in admin expenses and righting off the bad debts.
• The main reasons for reduction in the profitability were additional provision against NPL due to the
elimination of benefit of FSV and downturn in consumer and individual banking.
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• This ratio tells what percent of interest is covered from the total income of a firm or a bank.
• This ratio analysis tells profitability of a firm after paying all the taxes to total income.
• Profitability of BOP is increased because of decrease in the tax paid to the govt and of high spread
ratio.
• BOP negotiated their taxes with the government and only paid 20% tax in 2006 and only 8% in
2007 instead of 35%
• This ratio is increased during last few years which represent increase in the turnover by assets.
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5.2.4.6 Return on Total assets (after tax)
• This ratio gives an idea of returning net profit generated by the bank in comparison with assets.
• This ratio is decreasing in the last year because of decrease in Profit as expenses raised up.
• The decrease was mainly due to increased equity as a result of increase in minimum capital
requirements and additional provision due to withdrawal of benefit of FSV for most types of
advances.
• From this ratio it is analyzed what % of EPS is the part of MPS. What percent earned from a share
equivalent to the worth of 1 RS MPS by the bank or a firm.
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• EPS = Net Income/ total shares
• Through this ratio it can be analyzed what percent of 1RS share is earned.
5.2.4.9 Capital adequacy Ratio
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5.2.4.10 Net Interest Income
• Difference between funded revenue as a percentage of average earning assets and the cost of
funds as a percentage of average paying funds.
5.2.4.11 Return on equity
• The decrease was mainly due to increased equity as a result of increase in minimum capital
requirements and additional provision due to withdrawal of benefit of FSV for most types of
advances.
5.2.4.12 Cost/Income
• Operating cost includes all expenses charged to arrive at profit before tax excluding cost of funds,
provisions and head office expenses. Head office expenses are not considered since all banks do not
account for head office expenses in their financial statements.
• Operating income means funded and non-funded revenue less cost of funds and provisions.
• As administrative costs are increased because of which results decrease in the cost to Income
ratio.
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5.3 Organizational Analysis
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats SWOT
analysis is careful evaluation of an organization’s internal strengths and weakness as well as its
environment opportunities and threats.
“SWOT analysis is a situational which includes strengths, weaknesses, opportunities and threats that
affect organizational performance.”
“The overall evaluation of a company strengths, weaknesses, opportunities and threats is called
SWOT analysis.”
2. Neutralizing it threats.
SWOT analysis is one of the most important steps in formulating strategy using the organization
mission as a context; managers assess internal strengths distinctive competencies and weakness and
external opportunities and threats. The goal is to then develop good strategies and exploit
opportunities and strengths neutralize threats and avoid weaknesses.
5.3.3 STRENGTH
The Bank officers of BOP are considered as one of the most able professionals in the banking world
(some belong to BCCI). However, they have added some local flavour in accordance with their
targeted segmented. In my observation that they interact with their clients as if they are their
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personal friends and discuss about their problems as their own.
As a result of the compassionate and personalized services of the officers, the clients’ perception
for BOP is very high. They have trust and feel themselves to be secure while dealing with BOP.
BOP has opened all its branches at commercial areas so that the customers or clients face no
problems in reaching to the bank. For example, Khanewal Road Branch is being situated in business
and commercial hub of Multan as big volume in trade.
BOP has got a reliable and easy to use internal computer system. Every information regarding the
transactions in customers’ deposits has been computerized. Data are properly maintained.
5.3.4 WEAKNESSES
Lack of proper internal controls is one of the major weakness of BOP. It is also pointed by the
auditor in his review.
BOP has formulized a lot of products and services for its customers, even more than other
commercial banks, but any advertisement on electronic media has not been seen.
I observed during my internship that some of the employees were burdened with over work. So I
think that the work should be distributed according to their post and capabilities.
5.3.5 OPPORTUNITIES
Satisfy dynamic consumer needs, BOP has made significant in roads in its entire service spectrum.
A lot of products have been introduced especially in Retail Banking (Agriculture side) and people are
increasingly becoming loyal to the bank and because of feasible transactions. Optimum pricing and
branding strategies of the bank are helping to make customer feel secure and convenient.
All the opportunities of the 21st century are to be availed in the information technology.
Information technology is the future of this dynamic world. Therefore BOP should emphasize much
on IT, especially on E-Banking. Bank can design a universal account like other foreign banks, to
enhance online facilities.
BOP has introduced a number of financial schemes including special ‘Deposit Accounts’. These
accounts have their unique features. During the last three years, BOP deposits have been increasing
@ 40%, which is a very healthy sign. Therefore, with the commencement of new schemes there can
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even be a greater increase in its deposits
5.3.6 THREATS
Despite the difficult circumstances that confronted the banking sector in particular and the country
in general, BOP has been still highly profitable. But, the facts can’t be denied and there might be an
adverse impact of such situation.
BOP is facing a strong competition by its competitors, Business of all these Banks are growing at
very high pace.
BOP’s share is currently trading at PKR 97.80 (On closing of fiscal year at 30th June, 2007). And by
looking at the growth track of BOP it can be analyzed that it will real grow up. Through different
estimations and by viewing remarks of analysts it is expected that it would grow up to PKR 125 by
DEC. It shows real future profit.
• With every 10% change in credit costs, fair value would change by 3.3%.
• For every 10% change in NIM, BOP’s fair value would change by 7.5%.
• A100bp change in loan growth estimates for 2007, 2008, and 2009 would cause a
The calculations made in sensitivity of changes in the cost of equity and the
Terminal growth rate. The cost of equity is based on a 10.2% risk free rate, a 6%
growth assumption implies a dividend payout ratio of 25%. For every 50% change in
the cost of equity, and the terminal growth rate the bank’s fair value
It can be confirmed by looking at share price performance. BOP’s share price has performed well in
the last year. It is up 31.2% in the past 12 months, and is up 21.1% YTD. The stock has outperformed
the local benchmark KSE-100 by 5.0%. Performance is quiet amazing.
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6 Industrial Analysis
6.1 Overview on the Major Players of Bank Industry
The brief overview on the bank industry and the major players involved on it. The combined values
of all major players are collected from their financial statements of 2007.
• As graphical shows NBP (National Bank of Pakistan) is the key player and the leader in the industry
with total assets and liabilities of RS. 764,609. While BOP is RS. 234,991.
• Major Player Includes NBP, HBL, UBL, BAF, ABL, SCB and BOP.
• Total Assets of the major players in the industry are RS. 3,561,195 (M).
• Like major Player NBP has the largest Profit before and after Tax i.e., 28,452(M) and 19,405 (M)
respectively. While BOP has PBT RS. 4,856 (M) and PAT RS. 4,454 (M) only
• The total Profit before and after tax of the major players are RS. 99,835 (M) and RS. 70,045 (M)
respectively.
• Major Players in the Medium category of the Banking industry are AB, NIB, ABN, Citi, SB BAH, FB.
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• This level is giving a tough competition to the major players and trying to grab there share.
• Few mergers are taking place and in future it is expected to be more because to maintain SB
Standard reserve ratio.
• Major Players in the Small category of the Banking industry are ATLAS KASB, JS etc.
• Total Assets and liabilities of this level comprised on RS. 411,077 (M)
• These Banks are going in loss overall in 2007. Since they are new players in Pakistani Market. It is
expected that they will give return in future.
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To me the major and the most important flaw in the BOP is lack of internal controls and inter
communication between different branches of the bank. As far as financial aspect is concerned there
is no proper system is configured that’s why there is always a risk of big frauds with in the bank. I
during my internship also pointed out that point but no one bothered. To me the bank should install
some proper resource planning and controlling systems like other banks do i.e., oracle financials etc.
BOP staff lacks professionalism. They lack the necessary training to do the job efficiently and
properly. Although staff colleges are in all major cities of the Punjab but they are not performing
well. For this purpose these staff colleges should be reorganized and their syllabus should be made
in such a way which can help the employee understand the ever-changing global economic scenario.
Banking council of Pakistan should also initiate some programs to equip the staff with much needed
professional training.
Employees of the bank should be given a task and authority and they should be asked for their
responsibility. The sense responsibility in employees mind is one of the most important factors in the
success of any organization.
During Internship I felt that there is no or very less appraisal of any ones cool performance. The
manager should strictly monitor the performance of every staff member. All of them should be
awarded according to their performance and result in the shape of bonuses to motivated and incite
them to work more efficiently.
In the critical analysis this, problem is discussed. To overcome this problem it is suggested that a
special section should be made inside the branch. Which should only handle the treasury function,
salaries and pensions of federal personnel or the bank should do these functions in the evening time.
Also management should purchase more furniture and arrange them in such a way which provides
maximum space and convenient especially in deposit department and there should also be
convenient sitting place for customers.
7.1.6 Transfer
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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.
7.1.7 Changes in Policies
There should not be any abrupt policies change by the upper management, as this practice hurts the
customer confidences in the bank. Government should make long-term policies
Required, qualified staff should be provided to branch in order to improve the functioning of the
branch. Especially a telephone operator should be appointed.
Bank gets Rs. 2 to 3 to processes a utility bill, and it is very tire, tough and hard job despite this
working resulting in a loss to then Rs 3 to5 per transaction. These charges should be increased to RS
10 per bill to enable the branch to cover their handling costs and make some profit.
100 major branches of BOP should established a direct link with the, head quarter in Lahore, through
Internet or Intranet. This will make the functions and decision making of the management easier and
convenient. Though management has a plan to connect all branches via WIMAX technology. Which
would really bring a great future aspects.
BOP should start its operation in credit card. These cards are very helpful for the ordinary customer
in general and the business people in particular. To make it mores secure and to eliminate the
misuse of it, the management is required to keep proper security against the card.
Clean loan or clean overdraft is the credit facility extended to the customers to the customers
without any security. These types of small term loans should not be extended to anybody, because
sometime these loans are provided to blue-eyed people of the management and they become a part
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of bad debts.
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.
As mentioned earlier, BOP is very conservative in advances and loans policy. It reduces the
investment opportunities. Also loans should be given to the small businessmen and the other
businesses on large scale like in agriculture sector at the low mark-up rate. It should adopt flexible
credit policy while giving credit to the agriculture sector.
I would like to suggest that at least all the main branches of BOP should be fully computerized in
order to expedite the dealing process among bankers and their customers. Every department should
be provided a computer with adequate training (especially Advances, Deposits and Foreign Exchange
departments). Daily records should be entered directly into these computers, (instead entering the
overall daily transactions after the banking hours). It will not only reduce transaction time, will
increase accuracy but will also be efficient as well.
Not only it will be economical but will also reduce the extra burden of work of the bank. It will also
help in reducing the use of excessive paper work.
Good relationship among staff member leads to the peak performances in any organization. I
observed that the staff relationship was normal other wise but some time I noticed that there exists
little conformity among the staff members. Another syndrome from which the staff suffered was
that all of them considered themselves more important than others. Some of the officers used to say
that if I am absent for a day the bank would stop working. So this sort of attitude is not good
because it mars bank image and juniors’ willingness learn and work hard and in the end will hurt the
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whole team.
During my internship I observed that there was no proper distribution of work in the bank. I saw that
some of the employee worked like ants other sat idle staring here and there. So this created a lot of
over work situation for while relaxation for other.
In the Main branch during my internship I saw that when some of the employees are transfer to
other places, due to their relation with influential people and with top management they can cancel
their transfer in few weeks, when they are unsatisfied at that place.
So I suggest that in the organization there should be no favouritism, nepotism and politics and their
transfer and promotion should be made on merit and according to the rules and regulations of the
bank and provided favourable environment to the employee to show their performances.
I watched during my internship that, there employees who have worked on one seat for many a
year. It can have negative effects motivation of employee who is hard working and intelligent. Take
the example of advances section. In advance section if the employee is transfer after sixth month or
seven month, how can he be able to show his performances and how can he be able to know the
bank customer in a short period of time.
The branch should adopt various marketing strategy and promotion strategy to promote the bank
and its product.
The most important in my opinion is personal marketing; it is the most effective of all when you
think in term of branch level. But on the whole organization level, they should arrange the seminar
with in the bank and outside the bank. They should introduce various prizing schemes just like Allied
Bank. Karamad Scheme, Bank Al-Fallah (monthly income earning scheme) and various others.
They should do more advertising through newspaper and media and through channel of personal
contacts.
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7.1.22 Complaints of Customer
There should be an information desk to provide the information and to receive the complaints of the
customer in the bank.
There is no complaint box available in the branch and not any person appointed to hear the
complaints.
Every person cannot go to the manager for the complaint because most of the people are hesitant.
So I suggest management to install a compliant box in the branch, and recruit a special person for
that guidance of the customer when they are unable to manage some difficulties in banking matters.
It is suggested that employees working on daily wages basis should be given some benefits, which
the other employees are getting. Their salaries must increase according to efficiency, performance
and service this will increase there commitment to the organization.
The credit department of the bank should carry out vigilant credit monitoring. They should ensure
the proper payment of instalments and the mark-up by the borrower.
The staff members who have done all the paper work of the loan extension should perform the
monitoring, as he/she will be having more information about the borrower.
The banking hours may be extended up to six, as being practiced by UBL opposite to it. Some of the
business community due to law and order situation are now reluctant to keep the fund in their
premises and would want to depart with it. Therefore, Main Branch may extend the night banking to
cater to demand of this business community. The branch could also be opened to cater the
requirements of this business community
Bank should initiate these loans because most of bank’s customers are middle class and they cannot
afford to buy house or household goods at once by their own.
In this section some recommendations for those students who are planning for an internship at BOP
particularly and in any other bank generally. The most important of all is the difference between
what we learn from the books i.e. the theory and what actually is done i.e. in practice. This
difference is described in detail below:
During my internship I observed that other internees in the bank use to stick with one department
only. An internee with specialization in Finance was of the view that he should be in Finance
department same was the case with other specialized Internees. But I would suggest that one must
work in every department for some time to gain a hand on experience of all the departments. As in
real working environment employee have to coordinate with other departments, so he/she must
know what the other departments operations are and how they work.
This part of report is the essence of the internship, as this will help other students to better
understand the working environment of the bank by finding the relationship between what is
written in the books and what is actually going on in fields. The theory written in the books in cases
is not implemented as it is. In some cases theory is implemented with a little modification but in
other cases theory has nothing to do with practice. In accounting, banks don’t prepare worksheet,
but part of worksheet is prepared like trial balance, but little differences, theory and practice has
substantial relationship. The securities for the loans are handled in the same way as theory says like
mortgage, pledge, hypothecation, advances against insurance policies or liquidation procedure is the
same. The difference is there in the case of loans. Theory talks about four or five terms of loans that
is cash finance, overdraft, loans etc., but in practice there are some more terms used like running
finance, demand finance etc. All other concepts of remittances, bills, foreign exchange deposits,
letters of credit are in accordance with theory almost. So for a internee it is more important to learn
new things which he/she has never heard about in his/her course book.
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To me, Theory gives you the direction to understand the processes and the terminologies going
across the World using best business practices in a broader view covering each and every aspect of
possible business scenarios. On the contrary practical life is specific, enclosed in a jar. In practical
professionalism and firm’s environment is each and every thing. Professional life only builds on the
knowledge based on books even though it may only use 1% of the theoretical knowledge.
8 Conclusions
By analyzing the financial statements of the bank, I came across to know that it is one of the most
growing bank in the subcontinent. Now they should carry on with the present management which
too k it from one of the ordinary bank to this level. No doubt professionalism and internal controls of
the bank are one of the major issues which may results some major losses to the bank. Bias in hirings
and between colleagues should be removed
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