1) Introduction

1.1 - Executive Summary:

I have done my internship at The Bank of Punjab, McLeod Road Branch. There are five departments in the branch, and I worked as an Internee in that branch. For the first two weeks I worked in account opening department under the supervision of Syed Farid Ahmed, where I have to perform following tasks: Entering information in account opening forms. Stamping and Verification of Documents. 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:

The check should not be post-dated/anti-dated. Amount in words and figures tallies. Cash paid stamps (with dates) are duly affixed in case of cash cheques and in case of clearing stamps is affixed. Cutting/over writings are duly authenticated by the account holder, etc. 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 3 9

in their work. My work timings were from 9am to 5pm, five days in a week.

1.2 - Objectives of Studying the Organization:

Major objectives to study this organization are: To get awareness about the business development & financial techniques. Comparison of the assets of organization with other organizations. Policies followed by the organization enforced through laws of SBP. Study the facilities provided by the organization to common public in various forms. To study the terms & conditions for fringe benefits provided to employees of the organization at the age of superannuation.

To get BBIT (Bachelors in Business and Information Technology) degree.

To apply theoretical concepts in practical aspects.

3 9

2) Overview of the Organization

2.1 - HISTORY OF BANKING IN PAKISTAN:
Pakistan came into being on 14th August, 1947; sufficient banking services were available in the areas forming Pakistan. Out of the total branches of the nearly 3,500 in the undivided India, as many as about 1,500 branches were existing in these areas. It was agreed between the two countries that reserve bank of India shall continue to function in the Pakistan territory until 30th September 1948 and that Indian notes would continue to be legal tender at Pakistan until 30th September 1948. Unfortunately, relationship between the two countries became most strained immediately after independence; banking was mostly in the lands of Hindus who immediately started transferring their offices and assets into India. As a result most of the banks in Pakistan were closed down and even those which were open were not doing any effective business. The number of banking office in Pakistan came down to about 200 on 30th June 1948. Branches of some European banks were also functioning in a limited manner, financing in export of crops, and their number was limited to about 20. It was only the Habib bank, which transferred its office from Bombay to Karachi Austral Asia bank was another bank, which was in existence in the Pakistan territory at the time of independence. Despite of best efforts on 3 9

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 Pakistans share of Rs.75 billion in cash balance was withheld by bank, causing hardships to the newly born state. In view of these hopeless state affairs it was agreed between the two countries that reserve bank would serve as monetary authority in Pakistan only up to 30th June 1948.

2.1.1: Nationalization of Banks:

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: To form uniformity in the policy of the commercial banks so they may serve the best national interest. To make the operation of commercial banks highly sensitive and responsive to the policy of the government relation to financial matters.

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.

To make the best use of the funds available at the disposal of these banks for the economic development of the country.

3 9

To eliminate unhealthy and uneconomic competition among commercial banks.

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.

2.1.2: Public Sector Commercial Banks:

Askari Bank (ASKARI BANK) First Women Bank Limited (FWB) The Bank of Khyber (KB) The Bank of Punjab (BOP)

2.1.3: Local Private Banks:

Askari Commercial Bank Limited Bank Al-Falah Limited Bank Al Habib Limited Bolan Bank Limited Faysal Bank Limited Saudi Pak Commercial Bank Ltd Soneri Bank Limited Union Bank Limited Muslim Commercial Bank Limited Allied Bank of Pakistan 3 9

Union Bank Limited

2.1.4: Foreign Banks:

ABN Amro Bank CITI Bank Habib Bank A. G. Zurich Mashreq Bank PJSC Oman Bank Rupali Bank Standard Chartered Bank

2.1.5: Specialized Banks:

Zari Tarqiati Bank Ltd. Industrial Development Bank of Pakistan Punjab Provincial Cooperative Bank Limited

2.2 - History & Nature of BOP:

The Bank of Punjab was established in 1989 and was given the status of scheduled bank in 1994. The Bank of Punjab is working as a scheduled commercial bank with a network of almost 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. 3 9

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.

2.2.1: Mission Statement:

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

2.2.2: Vision Statement:

To be a customer focused bank with service excellence.

2.2.3: Core Values:

Our Customer As our first priority. Profitability For the prosperity of our stakeholders that allows us to constantly invest, improve and succeed. Corporate Social Responsibility to Enrich the Lives of community where we operate. 3 9

Recognition and Reward For the talented and high performing employees. Excellence In everything we do. Integrity In all our dealings. Respect For our customers and each other.

2.2.4: Business Volume:

These are the quick facts of the business in October 2009. At that instant BOPs business volume is as under: Assets (Current + Fixed): US $2.7 Billion (PKR 164.7 Billion) Loans: US $1.7 Billion (PKR 103.7 Billion) Deposits: US $2.3 Billion (PKR 140.3 Billion) 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:

2005 2007 2008 2009 43,621

2006

Total assets RS (M) 164,855 234,974

66,320 111,154

Revenue RS (M)

3,675

5,488

10,912 3 9

18,603

26562 3052 4,420 6,777

Shareholder's Equity RS (M) 10,659 15,110

Investment RS (M) 28,233 73,462

11,458

16,198

18,026

Deposits RS (M) 137,728 191,968

34,938

54,724

88,465

Advances (net) RS (M) 101,320 133,894

18,344

39,439

63,624

Income RS (M) 2,353 3,804 4,446

831

1,368

EPS (Rs/share) 10.01 ROI % 13 13 6 13.14 10.51

6.86

9.08

Over last five years, Pakistan economy grown with real pace, Because of which there is record growth in banking sector.

2.2.5: BOPs, Management and Employees: 2.2.5.1: Staff Strength:

The total number of employees in the organization is 3859. This is increasing. Regular hirings taking place.

2.2.5.2: Board of Directors (BOP):

3 9

2.2.5.3: BOP Top Level Management:

3 9

3 9

3 9

3 9

3 9

2.2.6: PRODUCTS: 2.2.6.1: CONSUMER PRODUCTS:

1. Saving Accounts 2. Current or demand accounts 3. Fixed accounts 1. SAVING ACCOUNTS (PLS) These types of accounts are designed to encourage the saving habit of the customer and lead to long term or invest relationship. Bank saving account are in the nature of deposit accounts and are not normally available for drawings. Rates of interest are typically ahead, by a small margin. Savings accounts with the banking sector represent a very small proportion of total deposits. Customer can make withdrawals from this type of account. The cash reserve ratio is typically low then the current account because the withdrawals against this account are very low. 2. CURRENT OR DEMAND ACCOUNT These are those deposits, which can be drawn by the depositor at any time by representing a cheque to the bank. People deposits their money in this account they gave a ready command on their account in developed countries of world, a very significant part of money is kept under current or demand account. On this type of account of interest transfer of cash or by at sight. The cash reserve ratio for his account is very high. The operating cost for the handling of this type of account is very regular.

3 9

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, ie. 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 very low because there no fear of with draw of a month before the stipulated of time.

2.2.6.2: FINANCE PRODUCTS:

1. Agriculture Schemes 2. Business Promotion Finance Schemes 1. Agriculture Schemes: There are many agriculture promotion schemes provided by BOP. Kissan Dost Agricultural Finance Scheme Kissan Dost Tractor Finance scheme Kissan Dost Aabiari Scheme Kissan Dost Mechanization Support Scheme Kissan Dost Farm Transport Scheme Kissan Dost Eslah-E-Arazi Scheme Kissan Dost Live Stock Development Scheme Kissan Dost Live Stock Scheme

3 9

Such type of schemes provides farmers a real plate form to accelerate. Some facilities given by Kissan Dost Agricultural finance scheme are: - Purpose Provision of financial facility to farmers for purchase of inputs (Seed, fertilizer, pesticides, fungicides etc). - Amount Maximum of Rs.500000 according to per acre limit of the crop. - Security Charge on Agriculture Land through Agriculture Pass Book. - Insurance The borrower will have to arrange life assurance under the Banks charge. - Mark-up 9% mark-up per Annum. 2. Business Promotion Finance Schemes: BOP Quick Cash BOP Car Loan BOP House Loan BOP SME Loan BOP Assaish Loan BOP House Loan for Federal Govt

2.1. BOP CAR LOAN:

3 9

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. 2.2. BOP Aasaish Loan: 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: These are the services provided by the BOP. ATM Facility Letter of Credit Pay Order On-Line Banking E-Banking Debit Card Consumer Financing Agriculture Financing Corporate Financing Commission free Remittance Demand Drafts Collection of Utility Lockers Facility

2.3.1. Automated Teller Machine (ATM): 3 9

Through the ATMs Customers has 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. 2.3.2. Online Banking: 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. 2.3.3. Lockers: It is one of the utility services that BOP provides to their customers for keeping jewellery, important documents and other valuables. 2.3.4. Demand Drafts: BOP provides safe, speedy and reliable way to transfer money at vary reasonable rates. Any person whether an account holder of the bank or not, can purchase a Demand Draft from a bank branch. 2.3.5. Letters of Credit: BOP is offering its business customers the widest range of option in the area of money transfer. BOPs 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.

2.3.6. Pay Order: 3 9

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. 2.3.7. Mail Transfer: Moves money safely and quickly from BOP Mail Transfer service. The rates for this service is quiet impressive as compare to the market. 2.3.8. Short Term Investment: BOP offers excellent rates of profit on all its short term investment accounts. The packages are starting from 3 months. BOPs rates of profit are extremely attractive, along with the security and service only BOP can provide. 2.3.9. Agricultural Finance: It helps farmers utilize funds efficiently to further develop and achieves better production. Provides farmers an integrated package of credit with supplies of essential inputs, technical knowledge, and supervision of farming. 2.4 Major Customers of BOP: Some of the major customers of Bank of Punjab are: Educational Institutes Agriculturists Pakistan Telecommunication Private Limited WAPDA Pharmaceutical Companies WASA MDA

3 9

3) Organizational Structure
3.1 - Main Offices:
Head Office of BOP is in 10-B, Block E-II, Main Boulevard, Gulberg III, Lahore. The Bank has been divided into seven regions each consisting a number of branches. Lahore Region Faisialabad Region Gujranwala Region Rawalpindi Region Karachi/Quetta Region Multan Region Peshawar Region Rest are the branches working under these regions. Which are almost 270 in all over Pakistan.

4) Structure & Functions of the Accounts/Finance/Audit Department

4.1 - Structure and functions of Finance Department:
The management of BOP comprises of two types i.e. Chairmans Secretariat & President Secretariat. Chairmans secretariat deals with finance division. Mr Nadeem Amir is general manager of finance division of mentioned secretariat. Mr. Muhammad Iqbal Shahzad 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.

3 9

4.2 - Use of electronic data in decision making:

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 impact 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.

4.3 - Sources of Funds trend:

The major sources of funds are: Public Source As the largest regional bank of Pakistan according to asset base with specialized in Agriculture has 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 treasuries and Government Institutions

3 9

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.

4.4 - Allocation of Funds trend:

BOPs funds are allocated to the following departments. The banks major focus is on short term financing. Major allocation of funds is on these divisions.

4.4.1: Long Term Financing:

Long term financing includes tenure more than one year.

4.4.2: Short Term Financing:

Short term financing includes period less than one year. The banks major focus is on short term financing. From the above it is further sub distributed to: 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 disclosing. Through Financial Statements it is only possible to analyze long term and short term financing.

4.4.3: Agriculture financing:

The bank provides adequate and timely financial assistance to the farmers to improve production potential of agriculture sector. Insurance of leased 3 9

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.

4.4.5: Utility bills:

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.

4.4.7: Consumer financing:

Personal Finance, mortgage finance, business finance, smart cash, auto financing and travellers cheques are all sources of funds for the bank. The bank finances all these loans and facilities on competitive mark-up rates.

3 9

5) SWOT Analyses
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats. SWOT analysis is careful evaluation of an organizations 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. In SWOT analysis the best strategies accomplish an organizations mission by: 1. Exploiting an organizations opportunities and strength. 2. Neutralizing it threats. 3. Avoiding or correcting its weakness. 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.

3 9

5.1 - STRENGTHS:
The Bank officers of BOP are considered as one of the most able professionals in the banking world. However, they have added some local flavour in accordance with their targeted segmented. In my observation that they interact with their clients as if they are their personal friends and discuss about their problems as their own. As a result of the compassionate and personalized services of the officers, the clients perception for BOP is very high. They have trust and feel themselves to be secure while dealing with BOP. BOP has opened all its branches at commercial areas so that the customers or clients face no problems in reaching to the bank. For example, McLeod Road Branch is being situated in business and commercial hub of Lahore as big volume in trade. BOP has got a reliable and easy to use internal computer system. Every information regarding the transactions in customers deposits has been computerized. Data are properly maintained. Good security system Not excellent but good facilities are given to employees 3 9

5.2 - WEAKNESSES:
Lack of proper internal controls is one of the major weaknesses 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 - OPPORTUNITIES:
Satisfy dynamic consumer needs, BOP has made significant inroads 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. 3 9

Therefore, with the commencement of new schemes there can even be a greater increase in its deposits.

5.4 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 cant be denied and there might be an adverse impact of such situation. BOP is facing a strong competition by its competitors, Business of all the Banks is growing at a very high pace.

6) Internship Activities:
6.1 - ACCOUNT OPENING DEPARTMENT:
In account opening department I worked with Mr. Farid. He was very cooperative person. He guided me and helps me learning things very quickly. I also completed the account opening forms of customers in all aspects including stamping, verification of documents and filing of forms sequentially. This helped me a lot in understanding all the matters related to account opening. I also checked and verified all the account opening forms with the help of check list provided to me by Mr. Farid. I also worked with Mr. Haroon in account opening. He issues cheque books to customers after fulfilling all the requirements. This also made me learn how to issue cheque books and all related matters. 3 9

Following Six categories of Account Opening are facilitated in The Bank of Punjab as:

Individual Joint Sole Proprietorship Partnership Private Limited Company Public limited Company

In the next segment the documents necessary for opening the account are illustrated:

Individual Account:

CNIC Copy Any Proof Of Employment/Business

Undertaking: In the following cases undertaking is signed by the customer

Signature vary on AOF and CNIC Change in Address as per CNIC and AOF Having business card only as a proof of business

Joint Account:

Copy Of CNIC Of Both Applicants Proof Of Income Of Both Applicants

Mandate is signed from both the partners that either single account holder will operate the account or both collectively.

3 9

Sole Proprietorship:

CNIC Copy Account Opening Request On Letter Head Sole Proprietorship Declaration On Letter Head Photocopy Of NTN Certificate

Partnership:

Copies Of CNICs Of All Partners Account Opening Request Letter On Firms Letter Head Partnership Deed (Certified Copy) Acknowledgement Of Registration Of Firm(Copy) Copy Of NTN Certificate Letter Of Authority & Mandate

Limited Company:

Copy Of Certificate Of Incorporation Copy Of Certificate Of Commencement Of Business(For Public Company Only) Memorandum & Article Of Association Copies Of CNICs Of All Directors/Signatories Board Resolution List Of Directors Latest Copy Of Certified Form-29

3 9

6.2 - CLEARING DEPARTMENT:

In clearing department I worked with Mr. Syed Qasim Raza. He was very cooperative and friendly with me and taught me things very personally. I learnt what inward clearing, outward clearing, is and outwards bill for collection. I used to check all the cheques for inward and outward clearing and matched these cheques with the list provided me on daily basis. I also did all the tasks related to clearing including entries in the inward and outward register and how to deal with outward bill for collection. Inward Clearing: Inward clearing means payment made by the Bank of Punjab for cheques drawn on other than Bank of Punjab. NIFT provides service for clearing of cheques. Following entry is passed on clearing of cheques:

Account Holder__________ Debit Suspense Account__________ Credit

Cheques may be returned due to the following reasons and charges are deducted only when the reason is insufficient funds.

Insufficient Funds Post Dated Cheque Nothing Is Written In Pay Section Of Cheque Cheque Payment Is Stopped By The Drawer Difference In Figure & Word Amount

3 9

Difference In Signature As Compare To Signature Specimen Card (SS Card) Absence Of Clearing Stamp\Bank Stamp Cheque Is Stale Cheque Is Mutilated Alteration In Date, Figure And Amount Require Full Signature Dormant Account Etc.

Following entry is passed on return of cheque:

Suspense Account__________ Debit Account Holder__________ Credit

Charges Deduction Entry: Entry is passed only if cheque is returned because of insufficient funds:

Account Holder__________ Debit Cheque Return Charges__________ Credit

A cheque return memo is attached with returned cheques and packed in a bundle cover provided by NIFT. In this way inward clearing is completed.

Outward Clearing: Outward clearing means payments received by the Bank of Punjab on behalf of their customers from other banks through NIFT. Next working day clearing stamp is posted on the face of the cheque and if cheque is 3 9

cleared, amount is credited to customers account next working day otherwise amount that is in pipeline is reversed.

Following entry is passed in outward clearing:

Suspense Account__________ Debit Account Holder__________ Credit

On Outward Return:

Account Holder__________ Debit Suspense Account__________ Credit

At Day End: Following entries are passed at the day end:

1) If inwards are more than Outwards then:

Suspense Account__________ Debit

RTGS__________ Credit

Account Holder__________ Debit 3 9

Suspense Account__________ Credit

2) If outwards are more than Inwards then:

RTGS__________ Debit

Suspense Account__________ Credit

Suspense Account__________ Debit

Account Holder__________ Credit

*RTGS stands for (Real Time Gross Settlement) Any shortage or surplus is settled at Head Offices of the two respective banks. Outward Bills for Collection (OBC): Cheques that are sent for clearing on locations where NIFT services are not available are OBC clearing. There are two cases in OBC:
1) When The Bank of Punjab has a branch in that Area:

In this case the receiving branch of The Bank of Punjab will send cheque to destination bank through local clearing and will credit NOSTRO account of sending branch of The Bank of 3 9

Punjab and Sending branch will debit NOSTRO account of receiving The Bank of Punjab branch.

*Sending Branch (The Bank of Punjab e.g. Lahore) *Receiving Branch (The Bank of Punjab in other city/location) *Destination Bank (On whom Cheque is drawn other than The Bank of Punjab)

2) When The Bank of Punjab Has Not A branch In That Area:

In that case cheque is sent through normal mail and it will take approximately five days to clear the cheque.

Following entry is passed in this case:

Cheque for Collection__________ Debit

Account Holder__________ Credit

Account Holder____________________ Debit

Cheque for Collection_______________ Credit

The bank on which cheque is drawn for OBC makes a DD(Demand Draft) and sends it to The Bank of Punjab respective branch that is sent again through normal clearing for clearance. 3 9

6.3 - LOCAL REMITTANCES:

In remittance department I worked with Mr. Farid. He was very cooperative with me. I learnt issuance; payment and cancellation of pay order and how call deposit receipt process works. Issuance of Pay Order: The Bank of Punjab pay order is universally accepted. The Bank of Punjab issues pay order only for those who have an account with BOP. The customer who wants to issue a pay order writes a cheque in favor of third party and gives it to bank officer along with pay order issuance form. The bank officer after due verification of amount and signature, issues a pay order in favor of third party that is mentioned on written cheque. On issuance of pay order following entry is passed in the system. Account Holder__________ Debit Payment Instructions Other__________ Credit

Charges are deducted from customer account. Two copies of pay order are made; one after customer signature is kept by the bank while other copy is given to the customer for his record. Acknowledgement for issuance of pay order is also taken on P.O. Issuance Register. Payment of Pay Order: As pay order of The Bank of Punjab is universally accepted so payment can be made by any branch. When it is presented to any bank other than BOP it is sent for clearing by NIFT. After clearing payment is made to the party in whose favor pay order is issued by that bank. On payment of pay order following entry is passed. Payment Instructions Other__________ Debit Account Holder__________ Credit

When it is sent for clearing then following entry is passed by BOP.

Payment Instructions-Other__________ Debit 3 9

Suspense Account__________ Credit Cancellation of Pay Order: When the customer wants to cancel the pay order, the bank will not cancel the pay order until it is realized by the party in whose favor it is issued. Realized stamp will be posted by the party in whose favor pay order issued on back of pay order. On cancellation of pay order following entry will be passed.

Payment Instructions-Other__________ Debit Account Holder___________ Credit

Cancellation charges are deducted from customer account.

Payments to TCS Service: Bank makes payment to TCS (pvt) limited courier services through pay order. In that case payment is realized only if it is presented in the bank by authorized representative of respective companies. Following adjustments are made in the system:

TCS (pvt) limited_________________ Debit Payment Instructions Other__________ Credit

On presentation of pay order following adjustment is made:

Payment Instructions Other__________ Debit Remittances Payable__________ Credit

*Remittances Payable is a remittance head that is used to meet branch expenses. 3 9

Call Deposit Receipt (CDR): CDR (Call Deposit Receipt) is same like pay order the only difference is: It is presented to the same branch that has issued it It is presentable within the city only Instead of writing pay to on instrument like pay order, received from is written

On issuance following entry is passed:

Account Holder________________ Debit Call Deposit Receipt (CDR) ____________Credit

On presentation following adjustment will be made:

Call Deposit Receipt (CDR)__________ Debit Account Holder__________ Credit

3 9

6.4 - CASH DEPARTMENT:

In cash department I worked with Mr. Haroon. He was very cooperative with me and taught me things very personally. I learnt receipts and payments of Cash and receipt of Utility Bills etc. Cash Deposit: Customer needs to fill in the deposit slip and present it on cash counter. Cashier after making satisfactory identification will credit the customer account with deposited amount. Deposit Slip (Credit Instrument): Following information are demanded to fill in deposit slip: Date Of Deposit Title Of Account Branch Code Account Number Mode Of Deposit (Cash, Cheque, Demand Draft, Pay Order, Out Station Cheque, Overseas Cheque) Cheque No (In Case Of Cheque Deposit) Denomination Of Deposited Amount Customer Signature Authorized Signature

Cash Payment: In order to withdraw the cash, customer needs to properly fill the cheque and present it to cash counter for encashment. Cashier after due verification will honor the cheque. Cheque (Debit Instrument): A cheque requires following information from customer that is: 3 9

Cheque Date Party To Whom Pay (Open Cheque, Order Cheque, General Crossing, Restricted Crossing) Amount In Words & Figure Should Be Same Customer Signature Should Match With SS Card Business Stamp In Case Of Business Account With Authorized Signature

6.5 - MARKETING DEPARTMENT:

In marketing department i worked with Mr Khalid. Who helped me in gaining market exposure of BOP. The marketing department of The Bank of Punjab is doing wonderful job. Bank of Punjab uses a marketing strategy with different way and different scheme. Utility Services: Keeping in view the difficulties faced by general public BOP has taken the initiative to provide service for collection / receipt of utility bills on behalf of WAPDA, Sui Gas, PTCL, and WASA from 9.00 am to 5.00 pm in all the branches throughout country to ease the long queues lined-up at the bank counters. Human Resource and Training Activities: The Bank of Punjab avails rich and diverse human resource potential. In addressing the need for upgrading the academic and professional expertise of staff up to the current days requirements, the Banks training institute has played an important role. Keeping in view the foreign exchange business and dearth of expertise in the field of Forex Banking, BOP has redoubled their emphasis on education and training in the field of foreign exchange. 3 9

7) Recommendations
7.1 - Internal Controls:
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 no proper system is configured thats 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.

7.2 - 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.

7.3 - 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.

7.4 - Transfer:
Transfer is not properly carried out. Some of the employees are continually serving at the same post. They are simply rotated at the same branch. Therefore it is recommended that evenly rotation of every employee should take place after every three years in different branches of the bank.

7.5 - Changes in Policies:

3 9

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.

7.6 - 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.

7.7 - Link with the Head Quarter:

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. This would really bring great future aspects.

7.8 - Credit Card:

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 more secure and to eliminate the misuse of it, the management is required to keep proper security against the card.

7.9 - Technological Advancement:

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. 3 9

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.

7.10 - Improper Distribution of Work:

Proper distribution of work leads to success in every organization. Proper distribution of work prevents the employee from over and under work situation. So for a smooth running of an organization proper distribution of work is the hint to be followed. During my internship I observed that there was no proper distribution of work in the bank. I saw that some of the employee worked like ants other sat idle staring here and there. So this created a lot of over work situation for while relaxation for other.

7.11 - Favouritism and Nepotism:

In the branch during my internship I saw that when some of the employees are transfered to other places, due to their relation with influential people and with top management they can cancel their transfer in few weeks, when they are unsatisfied at that place. So I suggest that in the organization there should be no favouritism, nepotism and politics and their transfer and promotion should be made on merit and according to the rules and regulations of the bank and provided favourable environment to the employee to show their performances.

7.12 - 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 3 9

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.

7.13 - 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 no 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.

7.14 - Organizational Commitment:

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 their commitment to the organization.

7.15 - Credit Monitoring:

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.

3 9

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.

7.16 - Housing and House Hold Goods Loans:

Bank should initiate these loans because most of banks customers are middle class and they cannot afford to buy house or household goods at once by their own.

7.17 - Computer system:

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.

7.18 - Right person for right job:

During my internship I have observed the person who has come 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.

3 9

8) RECOMMENDATIONS FOR STUDENTS

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

8.1 - Working in different departments:

During my internship I observed that other internees in the bank use to stick with one department only. An internee with specialization in Marketing was of the view that he should be in Marketing 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.

3 9

8.2 - Relationship between Theory and Practice:

This part of report is the essence of the internship, as this will help other students to better understand the working environment of the bank by finding the relationship between what is written in the books and what is actually going on in fields. The theory written in the books in cases is not implemented as it is. In some cases theory is implemented with a little modification but in other cases theory has nothing to do with practice. In accounting, banks dont 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 an 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.

3 9

In practical, professionalism and firms 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.

8.3 Conclusions:
By analysing the financial statements of the bank, I came across to know that it is one of the most growing bank in Pakistan. Now they should carry on with the present management which took it from one of the ordinary bank to this level. No doubt professionalism and internal controls of the bank are one of the major issues which may results some major losses to the bank.

3 9