Professional Documents
Culture Documents
Wa0003.
Wa0003.
Part # 01
History of banking
• Definition of Bank
• Stages of Bank
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The Bank
“Bank is a pipeline through which currency moves into and out of circulation.” Bank
accepts deposits and repays cash to its customers on their demand. The Bank borrows
money at a lesser rate of interest and lends it to the borrower at higher rate. It is thus a
profit-lending concern. Bank cannot lend all the money that has been deposited with it. It
has to keep a certain portion of the total deposit in cash with them in order to meet the
cash requirements of the individuals and business concern.
Stages of banking:
Word Bank is said to be derived from the words Banc us or Banque or Bank. The history
of banking is traced to as early as 200 BC. The priest in Greece used to keep money and
valuables of the people in temples. These priests thus acted as financial agents. The origin
of banking is also trace to early goldsmiths. They used to keep strong safes for storing the
money and valuables of the people. The persons who had surplus money found it safe and
convenient to deposit their valuables with them.
In the development of modern banking, thus, was the accepting of deposits of cash from
those persons who had surplus money with them, by issuing receipts for the money
deposited wit h them. These receipts began to pass from hand to hand in settlement of
transactions. When it was found that these receipts were drawn in entitles any holder to
claim the specified amount of money from goldsmiths. A depositor who is to make the
payments may now get the money in cash from goldsmit hs or pay over the receipt to the
creditor. These receipts were the earlier bank notes.
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They also found that most of the money deposited with was lying idle. At the same time,
they found that they were being constantly requested for loan on good security. They
thought it profitable to lend at least some of the money deposited wit h them t o the needy
persons. They instead of charging interest from the depositors began to give them int
erest on the money deposited with them.
Third stage:
By Experience the banks come to know that could keep the small portion of the total
deposits for meeting the demands of customers for cash and the rest they could easily
lend. They allowed the depositors to draw over and above the money actually standing to
their credit. In Economics terminology we can say that they allowed the overdraft
facilities to their depositors.
Fourth stage:
T h e banks in order to earn profits could not keep adequate reserves for meet ing the
demands of the customers for cash. The failures on the part of the bankers to return
money caused widespread distress among the peoples. In order to create confidence
among the people, a conference was held in Nuremberg in 1548.
It was decided that a bank should be set up by the state, which should stream line the
banking organization and technique. The first central bank was formed in Geneva in
1578. Bank of England was established in 1694. The responsibility of issuing of notes is
now entrusted to a central bank of each country.
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Part # 02
Introduction of BOP
• Introduction of BOP
• Scope of BOP
• Awards & Achievements of BOP
• Nature of BOP
• Present status of BOP
• Business volume of BOP
• Subsidies & sponsorship of BOP
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Introduction of BOP:
The bank of Punjab was established in 16 November 1989 under banking act 1989 with
the inauguration of its first branch of 7-Egerton road Lahore and was given the status of a
retail bank in 1994.
The Bank of Punjab was founded by Tajammal Hussain .BOP functions as a scheduled
commercial bank with a network of 371 branches in all over the country. The Bank of
Punjab is the seventh largest commercial bank of country. The number of employees at
BOP are approximately 6092 most of them are master degree holder they are highly
qualified and have capability to do work in most complicated situations.
BOP services are reachable to public; government and business sectors.BOP also operate
the treasury operations of Government of Pakistan as a representative for the state bank
of Pakistan. As it is Government bank it follows the rules regulation and policies
implemented by SBP. It provides a wide range of banking services including deposit in
local currency; client deposit in foreign currency; remittances; and advances to business,
trade, industry and agriculture. First Punjab Modaraba (FPM), a wholly owned subsidiary
of the bank, was established in 1992, and is being managed by Punjab Modaraba Services
(Pvt) Ltd.
The Bank of Punjab has entered into a new era of science to the nation under the
experienced and professional hands of its management. The Bank of Punjab has played a
vital role in the national economy through mobilization of untapped local resources,
promoting savings and providing funds for investments. The bank of Punjab by grace of
ALLAH has privileged to discharge its responsibilities to national progress and playing a
major role in achieving desire level of economic growth.
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Being a commercial bank, The Bank of Punjab performs all such functions as are
attributed to commercial banking institution both in the area of resource mobilization,
loans, and investment. The Bank is thus providing all type of advances to business, trade,
and industry on seasonal and annual basis, and is ensuring, through the prudent policy,
the safety and protection of its loan portfolios, as the resources base of the bank expands,
project financing will also be brought into its fold.
Emblem
The sun rising over the five wavy lines symbolizes the dawn of new era of progress and
prosperity for the land of five rivers and hence for Pakistan. Furthermore the main
objectives of the inclusion of cotton flowers and the spikes of wheat in the emblem is
firstly to represent the fact that the economy of the Punjab stands on its agriculture
produces especially cotton and wheat and secondly to highlight the emphasis which the
bank is to place on development of agro-based industry.
Awards
The Central Board of Revenue presented "Excellence Award" to the Bank of Punjab in
recognition of the contribution made by the bank towards Government exchequer.
Due to more development and growth in agricultural sector by the BOP, the Bank
awarded with "Top Bank for Agriculture Loans" and "Best Bank Crop Insurance" under
3rd Kissan Time Awards year 2006.
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The Annual Report of the Bank for the year 2005 won 5th position due to best and
perfect annual report so it Corporate Report Award" for the Financial sector, adjudicated
jointly by the Institute of Chartered Accountants of Pakistan and the Institute of Cost and
Management Accountants of Pakistan.
The Bank was awarded Best Bank Award under 15th Bolan Excellence Awards
distributed in 2006.
• Achievement Award:
The Lahore Chamber of Commerce & Industry (LCCI) awarded the Bank "LCCI
Achievement Award" 2006.
It is principally engaged in commercial banking and related services with its registered
office at BOP Tower, 10-B, Block E-2, Main Boulevard, Gulberg III, Lahore. The Bank
has 364 branches in Pakistan and Azad Jammu and Kashmir at the year end. The Bank is
listed on Lahore, Karachi and Islamabad Stock Exchanges. The majority shares of the
Banker held by the Government of Punjab. Punjab Modaraba Services (Private) Limited
is a wholly owned subsidiary of The Bank of Punjab and is primarily engaged in the
business of floating and managing Modaraba.
It is also engaged in the buying, selling of foreign exchange including foreign bank notes,
the acquiring ,holding, issuing on commission , underwriting and dealing in stocks,
funds, shares, debentures, the negotiating of loans and advances , the receiving of all
kinds of bonds, valuables on deposit or for safe custody. The providing of safe deposit
vaults the collecting, and transmitting of money and securities.
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Different business have their separate nature, the nature of the organization where I have
done the internship is banking sector (BOP). Banking sector has a vital role economy of
any country. And the banking sectors are included in the major types of business. It is
impossible that the economy of a country show prosperity with out to running the
banking sectors. The BOP is under the power of Govt. same like as National bank. And
the 51 % shares of BOP are governing by the Govt. Being a service industry of Pakistan,
BOP (commercial bank) has involving the different nature of functions like borrowing
the money, lending and advancing of money dealing in bills of exchange, promissory
notes, drafts, bills of lading, receipts, warrants, making, accepting, discounting buying,
selling, collecting Debentures, certificates and the drawing etc.
The Bank of Punjab is also dealing in the buying, selling of foreign exchange including
Foreign bank notes, the acquiring, holding, issuing on commission, underwriting And
dealing in stocks, funds, shares, debentures, the negotiating of loans and Advances, the
receiving of all kinds of bonds, valuables on deposit or for safe Custody. The providing
of safe deposit vaults the collecting, and transmitting of money and securities in these
days the BOP is a competent bank and striving to fulfill the customized products. And it
is providing the wide variety like ATM and specifically in Agriculture scheme like
Kissan dost tractor scheme, Kissan dost agrimall scheme and second hand tractor lease
finance scheme etc.
The Bank has started Islamic banking operations in the year ended December 31, 2013.
As at close of the December 31, 2014, 37 Islamic banking branches were operating
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Number of Employees
Currently 6092 employees are working in bank of Punjab.89% are male and 11% are
women. The Bank has been divided into seven regions each consisting of number of
branches.
• Lahore Region
• Faisalabad Region
• Gujranwala Region
• Rawalpindi Region
• Karachi/Quetta Region
• Multan Region
• Peshawar Region
A number of online branches are working under these regions. There are 364 branches of
BOP in all over the Pakistan.
Business volume
The Bank of Punjab has the privilege to discharge its responsibilities towards national
progress and prosperity. Within couple of years of its scheduling, the bank has not only
carved out for itself prominent niche in the main stream banking of the country but in
certain areas it has the distinction of taking the lead.
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In the short span of time the Bank has been able to evolve as a distinct corporate culture
of its owned-based policies, which are realistic and are on highly professional footings.
The bank is one of the sponsors of Trust Management Services Pvt. Limited besides
being a co-sponsor of Trust Modaraba company incorporated in Pakistan under the
Modaraba companies And Modaraba (Floatation and control) Ordinance,1980. The Bank
is one of the sponsors of Trust Leasing Corporation Limited a public limited company
established under the Companies Ordinances,1984. Authorized paid-up capital of the
company is Rs.250 million and Rs.100 million respectively. First Punjab Modaraba
Services (Pvt) Ltd. Established in Pakistan under Companies Ordinance,1984 and register
under Moderate Companies and Modaraba(Flotation and Control) Ordinance,1980 is
wholly owned subsidiary of the bank. Authorized fund of this Modaraba is Rs.500
million whereas paid-up fund is Rs.200 million.
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Part # 03
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Financial Goals
Marketing Goals
• Build awareness
• Grow market share
• Launch new products or services
• Target new customers
• Enter new markets internationally or locally
• Enhance customer relationships
• Improve internal communications
• Increase clientele
HR goals
The main focus of the Human Resources Department is to implement strategies and
practices to develop our employees.
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The Bank selects and appoints staff with appropriate academic qualifications, talent,
skills and/or experience through a methodical selection process, free from discriminatory
bias and based soundly on the principle of EOE Equal Opportunity Employment).
Career development programs are designed to prepare employees to meet the challenges
of the workplace. All employees have an opportunity to take benefit from such programs
which are offered at all levels to meet the specific needs of the staff & organization.
The Bank has well defined Human Resource policies to ensure staff career progression
and growth through staff evaluation, job rotation, job enrichment, promotions and
succession planning.
Passion Reborn
Passion Reborn “The Bank of Punjab” has overcome formidable odds to rise and set new
goals for the future. Our hard work and sheer commitment has paid off and today the
Bank is poised to achieve new heights. The challenges are formidable but in the BOP the
spirit is to take these and convert them into opportunities.
Credit Rating
Long Term: AA
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Vision;
Mission;
Core Values
Recognition & Reward For the talented and high performing employees excellence in
everything we do
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• Community Marketing
Banks range in size and capabilities. Small banks may only have one or two branch
offices whereas large commercial banks may have thousands of branches across the
nation. Regardless of the size of the bank, each branch needs to tailor local marketing
strategies to serve the immediate community. Consumers bank in a place where they feel
safe and comfortable. This means tellers and account representatives who speak English
as well as any prominent language in the community. By having branch managers look at
the local community needs, the bank can attract a larger percentage of the target market.
• Product Bundling
A successful strategy employed by all banks is product bundling, such as offering a free
checking account for those who open a savings account. Because this has become
common practice, successful strategies implement creative bundling solutions. An
automatic home line of credit with a mortgage refinance might be a solution when
interest rates are low or the community has a large percentage of consumers looking to
consolidate debt.
• Pre-Approved Products
Consumers are more likely to say yes to something when they already know they are
approved for it. Banks can review existing accounts to determine positive banking and
credit trends in customers. Those identified with positive trends and credit history is sent
"pre-approval" letters for credit cards, lines of credit or mortgages.
• Teller Referrals
Bank tellers interact with the majority of the bank clientele. Tellers perform the day-to-
day transactions, such as cashing cheques, making deposits or transferring money.
Successful banks consistently train tellers to look for opportunities to cross-sell bank
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products and refer customers to the right person. The teller may see a high savings
balance and suggest a higher -earning time certificate. Smart banks reward top referring
tellers to entice them to take the time to suggest a new product or service.
• Premier Services
Premier services are designed to attract high net worth bank clientele. High net worth
clients often have different needs as well as expectations. By offering a select set of
private bankers to personally handle all transactions and account reviews, client trust
increases.
Competitive Strategy
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Part # 04
• Social Development
• Financial Assistance to Flood Victims
• Culture, Sports & Heritage
• Environment Protection & Energy Saving
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The Bank of Punjab is fully aware of its obligations toward the society and acknowledges
the fact that the growth of any organization depends upon its contribution toward the
uplift of under privileged communities of society.
Accordingly, the Bank takes pride in development of programs specially designed and
tailored to meet the requirements of under privileged communities across the country.
Besides focusing the areas of education, sports ,art & culture, health care and social
welfare under its Corporate Social Responsibility (CSR) initiatives, special emphasis is
given on women empowerment through specially designed products and services.
While expanding branch network and developing new products and services, every
possible effort has been made to expand the Bank’s outreach to un-banked areas of the
country. The easy access to banking services in under developed areas shall go a long
way in improving social life of the residents. Further, through specially designed credit
lines of BOP, Agriculture and SME sectors in these areas shall get much needed boost.
The Bank fully acknowledges the role of women in the economic and social life of the
country. Besides offering equal opportunity to women in all dealings of the Bank,
specially designed products and services are also offered to encourage women
empowerment. In order to inculcate habit of savings among the children and housewives,
products like Young Lions Saving Scheme and Gharayloo Saving Scheme have been
introduced. Women’s Entrepreneur Finance Scheme (WEFS) has been specifically
designed for empowering women and help them to contribute toward national economy.
The Bank of Punjab has played an instrumental role in supporting Government of Punjab
(GoPb) initiative for providing vehicles for commercial use to educated unemployed
youth. Accordingly, process for financing 50,000 vehicles under GOP youth initiative has
been started which will not only provide source of income to educated unemployed youth
but also improve transportation services in the country.
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The devastating flood in year 2014 had completely destroyed the social and economic
lives of thousands of fellow countrymen across Punjab. In order to rehabilitate and help
them to re-organize their lost social and economic lives, a gigantic task to provide
financial assistance to them, under initiative of Government of the Punjab, through the
branch network of The Bank of Punjab was successfully completed in a very short period
of time and in a fully transparent manner.
The Bank fully recognizes the importance of culture, sports and heritage in the social life
of the peoples. Accordingly, Bank generously supports the activities promoting the
culture, sports and heritage in the country. Besides sponsoring different sports events
across the country, the Bank also extends financial support to the cultural events at the
Regional levels.
The persistent energy crisis in the country has made it obligatory for every individual and
organization to play its role in preserving energy. The Bank also realizes the financing
needs to help produce alternative energy. Besides facilitating large scale projects, the
Bank has introduced Solar Penal financing scheme with an objective to reduce energy
woes of common man and help produce low cost environment friendly energy.
Besides offering personalized and priority services to the senior citizens, the Bank
ensures hazard free services to the special persons visiting the Bank. Separate counters
have been established for senior citizens in line with the directives of Government of
Pakistan and State Bank of Pakistan.
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Part # 05
BOP Management System
• Organizational Structure of BOP
• Managerial Policies at BOP
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The functional hierarchy represents the reporting order in the hierarchy of BOP. The
hierarchy has president and directors at top management level and officers Grade I, II and
Grade III at the lower level management of BOP. The middle level management consists
of regional general Manager and Regional Controller of Operations. Any person in the
hierarchy above the branch manager can be appointed as RGM and controller operations.
Board of Director
Head of Departments
Branch Manager
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At the level of decision- making and implementation, senior management of the bank is
drawn from highly accomplished bankers with rich experience in the banking profession
both domestic and international. The entire responsibilities of policy formulation and
management have been placed, under the law, with the Board of Director. Furthermore it
will be heartening to know that Mr. Nawaz Sharif, during his chief Minister ship of The
province of Punjab issued special instructions to the political and executives 'echelons not
to interfere in The Bank of Punjab, there by ousting the possibility any pressure which
may be put on the management of the bank in respect of recruitment of staff or provision
of credit. These instructions have become an essential part of the culture of the bank. The
Bank of Punjab being a commercial bank performs all those function as are attributed to
such banking institutions both in the areas of resources mobilization and investment. It is
providing funds for commerce, trade, industry, and agriculture but its main emphasis is
on accelerated development of agro-based industry.
Board of Directors:
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Registered Office
Website www.bop.com.pk
Management:
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• Managerial policies followed by bank have direct contribution in its success. The
Board and Management of the Bank have implemented strategies and policies to
carve a distinct position for the Bank in the market place. The management of
BOP is taking strategic steps to enable the bank to emerge as a strong and
progressive institution.
• It is continuing to make efforts to refine its products and operations to make them
more compatible.
• New deposit schemes have been introduced and an action plan to maintain revenue
growth in future.
• As the business and economic conditions remain uncertain, BOP continues to
develop the new products like it has been doing in past.
• BOP reduces the political influence to regain the public trust and make prudent
lending.
The following new initiatives/projects are in progress and are expected to be made
operational during year 2015:
• Branchless Banking
• Prepaid Cards
• Internet Banking
• Mobile Banking
Policies at Bank:
By the grace of almighty, BOP has moved rapidly in expanding its branch network and
deposit base, along with making profitable advances and increasing its range of products
and services. Managerial policies followed by the bank have a direct contribution in its
success. The Board and Management of the Bank have implemented strategies and
policies to carve a distinct position for the Bank in the market place.
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• Consumer-Banking Policies:
BOP policy regarding consumer-banking policies includes the development through the
electronic consumer banking operations. Likewise, Bank has created a niche for itself in
the marketplace. It has introduced new consumer products like credit cards, e-banking
etc.
• Lending Policy:
BOP pursues a conservative yet dynamic credit policy. This strategy has enabled the bank
to have a high quality risk portfolio. Bank prefers to finance exporters because of less risk
involved. BOP manages the credit risk, liquidity risk, market risk and other operational
risks very efficiently.
• Credit Facility:
In this service the loans are provided to the customers by the bank to meet revenue
shortfalls.
It is one of the most important services provided by the bank to its clients. In case the
account holder has lost his/her cheque he can issue the stop payment instructions to the
bank. The bank till further instructions will not honor the cheque.
• Deposits:
The bank offers different types of Deposits to its account holders PLS Saving Bank
Account, Current Account, and BOP tijarat account.
These are the facilities that the bank offers its customers and, at times, to the people who
do not maintain an account with the bank, that is, ordinary people. For offering these
services the bank charges commission besides the government taxes and duties.
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BOP focus is on “Foreign Trade” as its primary market of business. It maintains high
emphasis on enlarging its Correspondent Banking network besides aiming to enhance the
scope and level of cooperation with existing correspondents. The Trade finance
department has efficiently done management of the changing trade policies by the central
bank over there.
• Marketing Policy:
The marketing department of the Bank of Punjab is doing wonderful job. Because of
competition in market there are many other Bank is exiting in the market at that time
Bank of Punjab also run a marketing campaign specially in cotton balt for limit from
Ginner & Oil Miller.
Bank of Punjab uses a marketing strategy with different way and different scheme.
• Utility services:
Keeping in view the difficulties faced by the general public BOP has taken the initiative
to provide service for collection /receipt of utility bills on behalf of WAPDA, Sui Gas,
Paktel, Instaphone and WASA from 9.00am 4.00 p.m. all the branches throughout the
countries are observing this practice to ease the long queues lined –up at the counters of
banks.
Bank hires officers in range 1. Then depending upon their job performance they are
promoted to next range. More facilities and increments are given along with promotion.
The bank gives a car facility to the officers of range 5. Bank’s policy is to give cash
rewards and salary increments for increasing the employees’ satisfaction.
• Accounting Policies:
BOP has adopted almost the same accounting procedures that other financial institutions
are adopting at this time. These accounting procedures or Accounting policies are made
according to Generally Accepted Accounting Principles, the GAAP. The process flow
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and the usage of the policies in the day wise routine are mandatory for all the employees
working in the specified departments at the branch.
• Growth Policy:
BOP emphasizes on growth along with providing best quality customer service. Bank’s
policy is to maximize the synergies of branch network through optimal allocation of
financial, human and other resources to compete in the marketplace.
• Investments Policies:
BOP investment policies are based on federal and provincial securities, debentures, and
participation term certificates treasury bills and blue chip share of joint stock companies.
• Job Satisfaction:
Job satisfaction is the major important factor to be considered while evaluating any
organization. During my internship program, I observed being in touch with most of the
employees over there, that all the employees are working with devotion that is the basis
for job satisfaction. In addition all the employees are satisfied with the working
ambiance, with the salaries and with the increments and promotions.
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Part # 06
Branch under Consideration
• Information about Branch
• Hierarchy of Branch
• Designation of Employees
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Branch Management
Branch Manager Mr.Malik Amjad Hussain
Operation Manager Mr.Khurram Shehzad
Operation Staff Ms.Sumeera Noreen
Operation Staff Mr.Ehtisham Ahsan
Operation Staff Mr. Zulqarnain Ali
Customer Service Officer Mr. Sufiyan Ahmad
Cash Officer Mr.Akram Chaudhary
Cashier Mr. Sohail Tariq
Cashier Mr. Zeeshan Wajid
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Branch hierarchy:
Branch
ManageR
Operations CSR
Manager
Employees in Departments
Branch Manager
Qualification: MPHIL
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Operation Department
Operation Manager
Qualification: MBA
Career Ladder: Can be promoted to Branch Manager then Area manager and then
Regional Manager
Operation Officer
Qualification: BSC
Career Ladder: Can be promoted to Operation Manager and then Branch Manager
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Operation Officer
Qualification: BCOM
Career Ladder: Can be promoted to Operation Manager and then Branch Manager
Operation Officer
Qualification: BCOM
Qualification: BA
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Cash Department
Qualification: BSC
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Part # 07
Administrative & Leadership style
• Administrative & Management Styles
• Impact of different styles on Morale & Efficiency
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Administrative style
Management at BOP is focused towards maintaining the cooperative culture within the
organization and also with the clients of the bank. The way managers treat the employees is
unique. This is the reason why each and every employee is pretty much satisfied with the job.
Management Styles
Management must have to adopt some administrative style to get all the activities to be done
effectively and efficiently. As far as the management styles are concerned, there is
centralization. Management refers to the universal process of effectively and efficiently
getting activities completed with and through other people. It is a process by which certain
basic functions that are planning, organizing, leading and controlling are performed to achieve
the desired objectives of the organization.
Managerial level
Branch Manager is authoritative. The implementation of strategies and getting all the activities
to be done properly with an organized environment, unity of command was the requirement of
the time and administration. When he was not present, I observed the environment of
uncertainty and deregulation in the bank to a little extent.
Department level
Operations of the department are assigned to the department heads. Subordinates are consulted
by the Department managers before asking the solution of a problem from the Branch
Manager. Thus, employees are satisfied.
Operational/Staff level
As employees are satisfied to the work assigned and authority structure, so management at
this level is obligatory to the decisions of the department heads level.
• Finance department .
• Human resource depart ment .
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• Marketing department.
• Services department.
• Advance department.
Chain of command of HR
• President
• Chief Executive HR
• Senior Executive Vice President HR
• Vice President
• G.M HR
• Director
• Senior Manager
Division of Labor
The structure of the Bank of Punjab is divided into division and these divisions are further
divided into departments. This type of structure helps the management in controlling the
operations of the bank effectively. Each division is responsible for its respective duties.
Span of Control
Span of control among hierarchical structure is clearly defined. Each department reports to
the central department and then this central department reports to the head office.
Communication
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• Absenteeism
• Irresponsible behavior
• Coordination
• Reporting time delays
• Turnover
Motivation:
The term motive implies action to satisfy a need. Motivation can be defined as a willingness to
expend energy to achieve a goal or a reward. The management styles adopted by the bank
affect greatly, and employees are motivated in order to enhance their performance and achieve
the derived goals.
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Part # 08
Situational Analysis
• SWOT Analysis
• Environmental Scanning
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Situational Analysis:
SWOT Analysis
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.
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.
Strengths:
• Firstly BOP is Supported or funded by the Punjab Government, people have trust on it.
• The bank of the Punjab is rated among top six banks in Pakistan in perspective of
remittance business as compare other province banks.
• BOP is playing positive role in economic progress of country as compare to other
banks.
• BOP is striving hard to satisfy its customers by formulating such policies which
maximize the shares value.
• Chief Minister self employment scheme for unemployed educated youth is also being
managed by BOP.
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• To meet the needs of customers BOP has a huge network of branches in commercial
area as well as in remote areas.
• BOP has lack of staff members but its performance level is high because of its
effective job design.
• In BOP Dina large number of business accounts and Governments accounts are being
opened.
• Staff of branch is friendly to its customers and with their colleges as well to keep the
healthy environment.
• In Dina branch computerize system for all operation is being used which have
increased the performance.
• BOP is following rules and regulation very strictly which received from Punjab
Government, so it makes the environment in disciplined.
• Comprehensive risk management policies for credit, operational and market risks are
being implemented. Necessary steps have been taken to ensure effective monitoring of
risks and to observe compliance all risk mitigation policies and procedures.
• Employees are provided good facilities.
• Day by day performance of branch is increasing which is helpful in strengthening
financial position of Bank.
• 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 flavor 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.
• Good security system, diversification of investments, foreign reserves.
Weakness:
• In BOP employees are less trained about customer dealing as compare to private
banks. BOP is not conducting extensive training to their employees.
• As each staff member performs many duties in one time so this capture extra time
which can slows down the performance.
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• 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.
• In BOP Dina there is no trade and credit department. Customers of bank need to move
to district branch for credit issues.
• Lack of proper internal controls is one of the major weaknesses of BOP. It is also
pointed by the auditor in his review.
Opportunity:
• Due to huge Government Deposit BOP has the opportunity to expand its network in
remote areas.
• The BOP management have been improved by the new management, now there is
opportunity to considered adequate effectively implemented and monitored
• BOP has opportunity it is earning commission on Government Transaction
• Due to huge revenue, BOP has opportunity to introduce new scheme related to
Consumers finance, in Retail banking, and in Agriculture loan scheme to obtained
maximum market share
• BOP Trust and reliability due to supported by Punjab Government create opportunity
to increase the deposit and profitability through expanding their products and services
to the peoples
• Due to increasing in deposit BOP could increase its investment and financing in
banking sector.
• BOP has introduced a number of financial schemes including special ‘Deposit
Accounts’. These accounts have their unique features. During the last three years, BOP
deposits have been increasing @ 40%, which is a very healthy sign. Therefore, with
the commencement of new schemes there can even be a greater increase in its deposits.
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Threats:
• Inflation is big causes, Modern type of banking, these are the big threats for BOP, it
leads to reduce the deposit by reducing the consumers as well as working condition.
• Political instability, changing or up and down in Politician parities also a big threat for
BOP, new candidate will come with new policies.
• Modern marketing concept, efficient service adopt by the competitors are also threat to
BOP.
• Muslim community don’t like the consumers banking, it is also threat for BOP.
• Currently The Bank of Punjab is facing major threat in Pakistan that is private
businessmen do not prefer the Bank of Punjab due to the standard as compare to
private bank.
• BOP is facing a strong competition by its competitors, Business of all these Banks are
growing at very high pace.
• Low security, economic and political instability.
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Environmental Scanning
Political-Legal:
• There is persistent change of rules and regulation by GOVT. so it disturbs the
performance of the organization.
• Agriculture contributes to poverty reduction for vast majority of the poor live in rural
areas. Government has taken initiatives in agriculture and rural development.
• The fluctuation in the rules of monetary policy is also the reason of bad condition of any
economy.
• Government of Pakistan through SBP has provided backing to the banking industry by
reducing cash reserve requirements (CRR) to 6% from 8%. This has provided liquidity
to banks worth Rs. 180 Billion.
• Improvement in law and order and elimination of political unrest are very much
imperative for the Government in order to provide investment conducive environment to
both local and foreign investors.
Economic:
• Energy crisis is looming in the country, because of an increase in demand and a rather
slow improvement in supply.
• Economic instability spreading in worldwide financial markets & investors are losing
their confidence in banks.
• The budget is also relates with the economic factor of any country. If the Budget is
encouraged then there will be more deposits for bank so that the bank can lend money to
the agriculture and industrial sectors. Then there should be boom condition and vice
versa.
• If the interest rate is decreases then there shall not be any healthy sign for the BOP.
• If there is inflation then the purchasing power of customers shall be reduced.
• The life style of people also impacts on banking products they want more advancement
in the products.
• The population is also increasing with the passage of time. But there are low resources
to accommodate them.
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Socio cultural:
• The shifting of the Younger Generation to a separate place after the marriage. So they
want House hold products like freezer, car, television and bike. For this they have need
money in such situation they shall borrow the money from the bank.
• The changing in life style is also a positive sign for the Bank. Now everyone wants that
he have a full furnished house. For this if he shall not in situation to purchase then he
cannot achieve his life style. This is when he has no enough money for this he shall feel
the need of loan from the bank.
• The illiterate people feel hesitation to put their money in the banks. So, this impact
negatively on banks banking filed. But there is also positive side of this that is illiterate
people trust more on banks to deposit their money; without having any information
about the bank.
• Visible implementation in society is very important. Because it can be help full to
promote the people to take out their investments &valuables from banks as there are
huge chances of banks’ liquidation.
• The huge culture of opening bank accounts, investment making, and credit & debit cards
now seems to moving towards declining phase.
Technological:
• Latest computerized control system
• Strategic plan 2005-10 of SBP for all Pakistani banks ensures technological
advancements in the whole banking sector.
• Latest developments in terms of technology in computer and telecommunication have
encouraged the bankers to change the concept of branch banking to anywhere banking.
• Adoption of E- Banking because due to this the advertisement of Bank of Punjab can be
increased quickly.
• Core banking is a centralize banking platform by which is a bank can control its entire
operation the adoption of core banking solution will help bank to find out the which type
of new products and services are demanding in the Market
• In these days the banks are also using mobile banking by sending SMS.
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Part # 09
Product Line & Departments
Products & Services Offered by BOP
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Retail Finance Division is handling consumer financing and other projects such as Self
Employment Scheme for Educated Youth (SESEUY), Aashiana etc. Our strategy is to
aggressively grow in consumer assets and to enhance share of consumer portfolio in overall
RFD portfolio. The products being offered by Retail Finance include:
• Aasaish Loan
• Quick Cash
• Car Lease
• House Loan
• Smart Cash
• Personal Loan
• Motorcycle Lease Scheme
• Caravan Fleet Financing
• Current Account
The Bank accepts deposits from its customers on the basis of Qarde-e-Hasna. These account
holders do not participate/share in profit and loss and can withdraw their funds any time
without any prior notice to the Bank whereas Bank is liable to pay them on demand.
The Bank accepts deposits from the customers on the basis of Mudaraba. PLS Saving
Accounts are maintained on the basis of profit/ loss sharing and are free of Riba. Profit is
distributed to customers periodically and calculated on daily product basis.
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The Bank issues these certificates on the basis of Mudaraba. Principles of these certificates
will be the same as principles of PLS Account. i.e bank accepts deposits from customers
and issues Riba Free Certificates. However deposit will be received for a fixed tenor. On
the basis of tenor and profit/loss distribution, certificates will be classified into different
categories. Details can be obtained from the branch manager.
This is a chequing account deposit product especially designed to cater the needs of
business Individuals as well as Business entities including Partnerships, Limited /
Unlimited Companies, Not for Profit organizations, Trusts and any other business oriented
government / Semi government entity.
Salient Features
• This is a Nonprofit bearing account with many value added features on maintaining
monthly average balance of Rs.25,000/- and over.
• Free online, IBFT Facility.
• ATM/Over the Counter Cash Withdrawal Insurance up to Rs.25, 000/- per day .
• Business Assets Insurance up to Rs.1 million
• Free ATM/Debit Card (issuance & subsequent renewals).
• Free issuance of DD/PO/CDR.
• Free Collection of OBC up to thrice of last month’s average balance.
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Salient Features
This is a current chequing account deposit product available for individuals with a Free
of Cost Life Insurance Cover.
Salient Features
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• Free of cost Life Insurance cover which is equivalent to three times of last three
months average balance of account with an upper limit of Rs 2.0 Million.
Salient Features
This is a PLS Saving Bank deposit product for general public, government/semi government
organizations, companies, business entities etc who are eligible to open account as per bank’s
criteria.
Salient Features
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This is a PLS Saving Bank deposit product which provides a disciplined method of savings to
all the children. The account will be opened with Parent/Guardian.
Salient Features
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This is a chequing account deposit product especially designed to cater the day to day needs of
individuals as well as business entities.
Salient Features
This is a PLS Saving Bank deposit product available for all females who are eligible to open
a saving account as per Bank’s criteria. The account can be opened singly or jointly with
husband. A customer can open only one BOP Gharayloo Saving Account singly or jointly
with husband regardless of the branch.
Salient Features
Debit Card:
The Bank of Punjab Debit Card - backed by the power of MasterCard and designed for
your convenience. The BOP Debit MasterCard makes it easy to use your current or
saving account to pay for purchases or withdraw cash from ATMs. Accepted at
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thousands of ATMs and retail outlets in Pakistan and millions more around the world,
this is truly the only card you will ever need.
Car Financing:
CARGAR Scheme assists you in leasing car on easy repayment terms. It has minimum
documentation requirement and is flexible to meet your individual needs. A Salaried Person,
Businessman and Professional maintaining salary/business account with any bank and
qualify eligibility criteria can avail car lease facility. Lease facility is Minimum Rs.100,
000/- Maximum Rs.7, 500,000/- Monthly Installment(s) should not exceed 50% of
disposable income.
Documents Required:
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Our Home is the centre of our world. A place where we find peace. We understand your
desire to make your house truly your home. Our House Financing Product ensures this
happens;
Apna Ghar House Finance scheme is a long term finance facility for
• Purchase of House/Flat
• Construction of house on self-owned plot
• Purchase of plot & construction thereon
• Renovation/Home improvement
Documents Required:
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Consumer Finance
• Quick cash
Bop quick cash is running finance facility provided to the salaried persons through their bank
accounts. Customers can with draw between Rs. 50,000 to 500, 000 based on their salary. An
eligibility criterion for customers as well as customers is minimum Rs. 15000 take home
salary.
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• House loan
Salaried persons with maintaining account with bank can avail this facility with minimum
Take home salary Rs.15000 per month.
Govt. or private employees, business men and professionals can avail the Bop car loan
facility. They can avail loan amount from 200,000 to 50, 00000 and duration of tenure is from
1 to 5 years.
Services
• ATM Facility
• Pay Order
• On-Line Banking
• E-Banking
• Debit Card
• Consumer Financing
• Agriculture Financing
• Commission free Remittance
• 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.25, 000 per
day. Annual charges of ATM is Rs.350/- per card.
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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.
Lockers
It is one of the utility services that BOP provides to their customers for keeping jewellery,
important documents and other valuables.
Demand Drafts
BOP provides safe, speedy and reliable way to transfer money at very reasonable rates. Any
person whether an account holder of the bank or not, can purchase a Demand Draft from a
bank branch.
Pay Order
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.
Mail Transfer
Move the money safely and quickly with 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.
Agricultural Finance
It help farmers utilize funds efficiently to further develop and achieve better production.
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Account Opening:
Account opening department is also called deposit department. Where funds are being deposit
in the bank. Banks are unable to run smoothly without customer’s deposit because these
deposits are capital of bank which is much greater than banks own capital fund. Customers
prefers to do saving rather than their current consumptions to earn profit in future from that
savings. Bank than make portfolio investment from that fund in different organizations gives
credit loans to customer and earn profit.
• Individual Account
• Joint Accounts
• Sole proprietorship
• Partnership
• Trust companies
• Accounts of club , society & Association
• Limited companies
• Govt accounts , Local Bodies & autonomous Bodies
Opening an Account:
For new customers who want to open an account at BOP has to fill a “Relationship
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1. Title of Account.
2. Personal information of applicant
3. Next of Kin
By this thing the account holders specifies and provide the information and data of the
person who will be the owner of his/her money after his/her death or any serious incident with
him/her. If account holder leaves it blank then bank will be the owner of his/her money.
Basic Requisites for Opening an Account for individuals/self employed persons are as
follows
• Article of Association
• Directors CNIC
• Memorandum of Association
• NTN certificate (optional)
• Company Letterhead
Account closing:
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Some are the basic reasons of the account closing. These are
Cash Department
The main purpose of cash department is to deal with money that’s why it is also consider as
risky department. The employees required for this department must be active, competent and
vigilant. The effectiveness of Bank is also related to cash department it must be strong and
busy in cash department. Cash department major focus is on branch cash balance, safe custody
of keys, Security measures as well as on sorting of notes and coins.
Cashier will receive the cash from customer on a printed form known as pay-in-slip. The
receipt side deals in
• Collection of funds
• Collection of utility bills
• Acceptance of deposits
Cashier will make cash payments to presenter of valid cheques/instruments after making
necessaries formalities. Payment side deals in
• Payment of cheques
• Remittance
Basic Task
• Issuance of token
• Receiving of cash
• Making cash payments
• Receiving school fee & utility bills
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Clearing Department:
Cheque clearing process is defined as moving a cheque from a bank where it was deposited to
the bank where it was drawn. Clearing department function is to make suitable arrangements
for collecting cheques.
Types of clearing
• Inward Clearing
• Outward Clearing
Inward Clearing:
Inward clearing means to the cheques of our branch is represented in front of other bank.
In the inward clearing process the branch which cheques are represented to other bank is
working as payee or paying banker. In the inward clearing process when cheques are
represented to the other bank they collect the cheque from customer and gave a receipt a
customer for the collecting of cheque. Other bank sent the cheque to the NIFT for the
further procedure to clearing the amounts to transfer. NIFT send the cheque to the specific
branch for the debit the account of the customer and credit the account of the NIFT. After
receiving the cheque from NIFT the branch check the account of customer and debit it and
credit the account of the NIFT. Then NIFT credit the account of the other bank and debit
own account. In which NIFT charge his fee according to the agreement.
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CLEARING PROCESS:
CLEARING
Inward Outward
Cheques Deposited
Stamping
Posting
Separate Deposit Slips and Cheques Make Bundle of 50 Cheques per List
Bundle Cover
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Return of cheques:
Sometimes cheques are return to the branch where the cheques are represented for the
payment. It’s due to the some mistakes. Some of them are given below:
• Overwriting on instruments
• Instruments are not cleared or having no stamps of clearing
• Instruments having no stamps for crossing
Outward clearing:
Outward clearing words explain that the cheques or the instruments from the other branches or
other banks. Like the instruments from the Habib bank or any other bank is represented in
BOP for the payment. In this process the BOP account is going to credit from the Habib bank
and the Habib bank account is debit. This process is also complete through the NIFT. BOP
send the cheque to the NIFT and NIFT send it to the particular branch for the clearing after
returning the cheque from particular branch and cleared from the branch then the transaction
is occur and payment transfer to the customer account. Here the sequence procedure of the
Outward Clearing.
• Check the name of the branch which is appears on the face of the cheque
• Cheque or any instruments should not be post-dated
• Check the amount written on the cheque in figures and amount
• Drawer signature must be appear on the face of the instruments
• Instruments is not Mutilated
• No material alteration should, it should be properly authenticated
• If the cheque approved successfully and the last endorsee’s account being credit
• Approval is accordance with the crossing if any.
• The amount written on cheque and slips is same
• Payee’s title of account should be on the paying-in-slip
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Stamps on Instruments/cheque:
The cheque/instruments which are represent in the other branch they affixed with two
stamps on front and on the back. In the front of the Two stamps are affixed, one is the pay’s
account with red color and the second one is the branch where cheque/instruments are
represent. On the back stamp is affixed in which said that the cheque/instruments will be
credit if it clear. After the NIFT procedure cheque will present in front of the bank and here
they check the account and if money then make two stamps, one have is clearing and other
one is round stamps of the branch name.
Operations Department
Remittance
Remittance is known as a process of transferring money from one branch to second branch of
same bank. This is an important service which bank provides to its customers.
Types of remittances
• Demand Draft
• Payment Order
• Mail Transfer
• Telegraphic Transfer
• Online Transfer
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Demand draft is an instruments through which the banks send the on the request of the
customer. This instrument is issues for the branches of the every city branch and for every
bank. When customer come to the bank and request for the sending of the Demand Draft.
Bank will charges some amount against the activity performed by bank on the requesting of
customer. Charges of the banks against service of Demand Draft are change after 6 month.
Demand Draft issues by two ways
Process:
When a person come to the bank for requesting the Demand Draft he gave the information and
gave the money including the charges of the banks. When the bank receive the DD then bank
debit the account of head office and credit the DD payable account. And if send the DD then
debit the remitter account and credit the head office account.
Payment order
Payment Order is an order instrument payable to a certain person which is issued by a branch
and drawn on a same branch. In payment order, the drawer and drawee is one and the same
branch. In short, payment order is used to transfer of funds in same city from one office of
bank to another office of same bank. It is remittance instruments like cheque and issued by the
bank. Banks issues it on his own account to pay certain amount. Pay order is issues for
sending money to other branches or sending it to the same branch.
Mail transfer
Under such method, transfer of funds is made through courier. Under such transfer, one office
of bank sends advice to another office of same bank for payment. Such advice is called IBCA
(INTER BRANCH CREDIT ADVICE).
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Telegraphic transfer
Online transfer
It is modern technique for transfer of funds. The modern concept of only banking has given it
a new dimension through which money is transferred from one place to another within no
time, even one country to another country; it takes hardly a few minutes.
Online inter branch transaction is a facility whereby customers maintaining accounts in Online
branches would be able to operate their accounts from any of the online branches across the
country. The online service is being called IBR-Inter Branch transaction. Specifically, an
online branch will offer the following transactions to account holders of other online branches:
• Balance enquiry.
• Cash deposit/withdrawal
• Transfer of fund.
• Statement of A/C (display/print)
Locker’s Department
It deals to safe the proceedings of customers. Locker is also called Safe Deposit Vault.
Currently BOP is providing Extra Insurance cover to customers. Customer is fully responsible
for his/her locker’s proceeds. Bank is only custodian for these proceedings.
Foreign Remittance:
Transfer of money from one country to other country mostly foreign workers transfer money
to their families in home countries. Different types of remittances are being offered at BOP.
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• Xpress Money
• Aftab Exchange
• BOP Easy Pay
• Al-Habib Exchange
• Western Union
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Part # 10
Financial Analysis for years 2012-2014
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• Vertical Analysis
• Horizontal Analysis
VERTICLE ANALYSIS:
Vertical analysis compares each amount with a base amount selected from the same year.
Simply, we compare the items of balance sheet or income statement vertically by taking one
item as 100%.For profit and loss account taking Markup/return/ interest earned as a base for
calculation.
Taxation
For the year –Current 139,284 278,239 323,121 0.5 1.1 1.09
-Deferred ---- --- ---- 0 0 0
For prior year –Current (722,971) -- --- (2.9) 0 0
-Deferred 353,738 785,036 1,196,093 1.4 3.2 4.05
(229,949) 1,063,275 1,519,214 (0.93) 4.3 5.14
PROFIT AFTER 1,633,841 1,938,007 2,787,449 6.6 7.9 9.44
TAXATION
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Interpretation
Interest expenses have decreased from 91.3% (2012) to 69.5% in 2014 which shows
management efficiency to control expenses. The gross profit which increased from 8.6% to
30.4% in a span of two years i.e. from 2012 to 2014. Non-markup interest income has
increased from 12.% in 2012 to 14.8% in 2013 but in 2014 it decreased to 9.2%. The total
non-markup interest expenses have increased from 18.4% to 21% during 2012 to 2014. Net
profit (Profit after Taxation) of the bank has greatly increased from 6.6% to 9.4% in the two
years i.e. 2012 to 2014 which shows management efficiency.
ASSETS:
Cash and Balances with 17,298,251 23,820,864 23,622,411 5.2% 6.7% 5.6%
treasury Banks
Balances with other 3,101,170 4,265,296 2,239,170 0.93% 1.20% 0.53%
Banks
Lending's to financial 1,562,946 11,407,448 32,748,623 0.47% 3.2% 7.8%
Institutions
Investments 129,518,999 123,956,143 154,874,757 38.9% 35.1% 36.8%
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LIABILITIES
Represented By:
Interpretation
Vertical analysis of balance sheet shows that the bank’s cash and reserve with the treasury
bank has slightly increased in 2013 as compared to 2012 (5.2% to 6.7%) but in 2014 it again
decreased to 5.6%. The bank’s balance with other banks also increased from 0.93% to 1.2% in
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two years (2012 to 2013) but again decreased to 0.53% in 2014. Similarly the bank’s lending
to financial institutions has increased in three selective years (0.4%, 3.2%, 7.8%) respectively.
The net investments decreased from 38.9% to 35.1% in 2013 but in 2014 it has been slightly
increased to 36.8%. The advances rate showed a slight decrease in 2012 and 2013 (45% to
44%) and in 2013 again decreases to 40%.
On the liability side the bills payable of the bank decreased from (0.45% to 0.41%) from 2012
to 2014. The banks borrowings decreased from 13.4% in 2012 to 6.4% in 2013 but increased
to 10.6% in 2014. The Bank’s deposits increased from 80.1% to 87% (2012-2013) but
decreased to 81.4% in 2014.Share capital of the Bank increased from 1.59% to 2.9% and 3.6%
respectively. Reserves of the Bank increased from 0.35% to 0.49%. The Inappropriate profit
increased from (3.8%) in 2012 to (2.1) in 2014.Surplus on revaluation of assets decreases
from 0.49% to 0.25% but in 2014 it increased to 0.96%.
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foreign currencies
Gain on Sale of Securities 1,449,814 1,391,874 667,322 (3.9%) (52%)
Unrealized Gain / Loss on 8,620 (4,296) (654) (149%) (84%)
Revaluation of Investments
classified as held for trading
Other income 585,856 1,148,097 1,000,180 95.9% (13%)
Total non mark- 3,190,745 3,596,226 2,790,430 12.7% (22%)
up/interest income
Taxation
For the year –Current 139,284 278,239 323,121 31.6% 16.1%
-Deferred ---- --- ---- --- ---
For prior year –Current (722,971) -- --- --- ---
-Deferred 353,738 785,036 1,196,093 122% 52.3%
(229,949) 1,063,275 1,519,214 (562%) 42.8%
PROFIT AFTER 1,633,841 1,938,007 2,787,449 18.6% 44%
TAXATION
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Interpretation
Interest expenses have increased to 1.57% in 2014 based with year 2013 this shows that the
management has no control over the financial cost. The gross profit increased marginally in
year 2014, recorded 123% (2013 base year) from 87.5% in 2013 by taking 2012 as base year
which shows good performance. Non-markup interest income decreased to (22%) in 2014
from 12.7% in 2013. The total non mark-up interest expenses have increased from 15.8% in
2013 to 18.5% showing inefficiency of management. Net profit (Profit after Taxation) of the
bank has increased from 18.9% in 2013 to 44% in 2014 which leads to banks good
performance.
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LIABILITIES
Represented By:
Share Capital 5,287,974 10,551,132 15,551,132 99.5% 47%
Discount on issue of shares ---- (263,158) (263,158) --- 0%
Reserves 1,187,433 1,539,659 2,081,243 29.6% 35%
Interpretation
Horizontal analysis of balance sheet shows decrease of bank’s reserve with treasury i.e. 37%
in 2013 to (0.8%) in 2014. But the balance with other banks also decreased 37.5% in 2013 to
(48%) in 2014. The bank’s lending to other financial institutions recorded 630% in year 2013
decreased in year 2014 to 187%. The net investments increased from -4.29% in 2013 to 25%
in 2014. Similarly the bank’s net advances also increased from 5.1% in 2013 to 8.5% in 2014.
On the liability side the banks payable bills increased from 0.37% in 2013 to 14.6% in 2014.
Bank’s borrowing also increased from -48.9% in 2013 to 95% in 2014. The total owners‟
equity increased from 8.9% to 47% in 2014.
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Ratio Analysis
Liquidity Ratios
Liquidity ratios means to measure short term solvency of the company. It shows the ability of
the company to pay off its short term debt. Following ratios are calculated in order to measure
the short term solvency of the company
• Current Ratio
• Acid Test Ratio
• Working Capital
Current Ratio
Current Assets = Cash and Balance with Treasury Banks + Balance with other Banks
+Lending to Financial Institution + Short Investment + Short Advances + Other Assets
Current Liabilities = Bill Payables + Short Borrowing + Short Deposit + Other Liabilities
Explanation:
The standard of this ratio is 2:1, means current assets are twice the current liabilities. But
Bank of Punjab has a lower current ratio to the standard rate. In 2012 it is 0.98, in 2013 it is
0.99 and in 2014 it is 1.01 which is better than from previous two years.
Current Assets = Cash and Balance with Treasury Banks + Balance with other Banks
+Lending to Financial Institution + Short Investment + Short Advances + Other Assets
Current Liabilities = Bill Payables + Short Borrowing + Short Deposit + Other Liabilities
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Explanation:
As the Acid test ratio from year 2012 to 2014 is: Rs.0.98, Rs. 0.99 and Rs 1.01 respectively. In
first two years acid test ratio is slight less than is standard ratio. It must be 1:1 in order to
proof the short term solvency of the bank to pay off its short term expenses.
Working capital
Explanation:
The working capital of BOP is negative in first two selected years because liabilities are more
than its assets. In 2014 assets are more than its liabilities so; working capital of BOP shows
positive sign.
Leverage Ratios
These ratios show the capital structure of the firm. Through these ratios we find that how the
firm finance their activities. It is more important for the lender to assess that the firm can
repay the loan amount or not. Increasing debt increases the likelihood of bankruptcy of the
firm. Following ratios falls under this category,
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Time Interest Earned = Profit before tax + Interest Expense (EBIT) / Interest Expense
Explanation:
The Time Interest Earned Ratio of BOP is not better, but in 2014 it has been increased from
previous years from 0.06% to 0.21%.
Debt Ratio
Total Debt = Bills Payable + Borrowings from financial institutions + Deposits & other
accounts + Subordinate Loans + Liabilities against assets subject to finance lease + deferred
tax liabilities+ Other liabilities
Explanation: Debt ratio is measure of debt with the total assets. The debt ratio is almost
constant that indicates the dependence on debt is constant for these three years. In 2014 the
total Debt was the almost 95.4% of Total Assets.
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Total Debt = Bills Payable + Borrowings from financial institutions + Deposits & other
accounts + Subordinate Loans + Liabilities against assets subject to finance lease + deferred
tax liabilities+ Other liabilities
Total Equity = Share Capital + Reserves + Un-appropriated Profit (-loss)+ Discount on issue
of share + share deposit money + surplus on revelation of fixed assets
Explanation:
Debt to equity ratio is high in first two years but it has been decreased in 2014 to 20.75.
Long Term Debt = Deposit and other account + Liabilities against assets subject to
finance lease + Deferred tax liabilities + other liabilities
Explanation:
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The total capitalization ratio compares the total debt with the sum of debt and equity. The low
capitalization ratio indicates the financial fitness of the firm. According to the calculation, I
can see that the ratio in 2014 is lower.
Profitability Ratios
Profitability ratios measure the earning ability of the firm. Following ratios are calculated:
• Net Profit Margin
• Return on Assets
• DuPont Return on Assets
• Operating Income Margin
• Return on operating Assets
• Return on Total Equity
• Gross Profit Margin
Net Profit Margin
Explanation:
The net profit margin is increasing from 2012 to 2014. In 2012 the net profit margin is 6.62%
which is lower in selected three years. After this it start to increase and in 2013 it is 7.99% and
in 2014 it is 9.44%.
Return on Assets
Explanation:
It is simple Return on Assets, which calculate through net income, and total assets but the
result is same as in Du-Pont ROA. It is showing the consistent increase in the return on
Assets.
Du-Pont ROA = (Net Income / Total Revenue) x (Total Revenue / Total Assets)
Explanation:
DuPont ROA Analysis is the approach to calculate the Return on Assets by taking Net
Income, Total Revenue and Total Assets. It shows the effect of revenue on the net income and
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the total assets. When we calculate the DuPont ROA of BOP, we find consistently the increase
in the return on assets. In 2014 it is at higher level.
Operating Income Margin = Earnings Before tax + interest expenses / Total Revenue
Explanation:
Ratio shows a increasing in the revenues. BOP continuously increasing operating income
margin and recovering its position in financial market after financial crisis of 2008.Operatin
income is high in 2014.
Explanation:
As the Return on Operating Assets from year 2012 to 2014 is: 0.8%, 1.49% and 1.83%
respectively. As for as index analysis concern return on operating assets has been increasing
from 2012 to 2014.
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Explanation:
Return on Owner’s Equity in the year 2012 is 13.2% and in the year 2014 it is 14.4% which
shows an increase trend from year on year basis.
Explanation:
This ratio also shows the increase in revenue of BOP. In 2012 it is 8.68%, in 2013 it is 16.58%
and in 2014 it is 30.4%. Because the revenue of the BOP is increasing so the Gross Profit
automatically increases.
Activity Ratios
Activity ratios measure a firm’s ability to convert different accounts within their balance
sheets into cash or sales.
• Total Assets Turnover
• Fixed Assets Turnover
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Explanation:
Total Asset turnover ratio measures the firm’s effectiveness in generating the revenue from its
investments in total assets. The high ratio shows the high revenue generation from its assets.
Explanation:
The fixed asset turnover ratio measures the company's effectiveness in generating sales from
its investment in fixed assets. The ratio shows the decrease in fixed assets turnover in 2014. It
means that the generation of revenue on the fixed assets decreased in 2014.
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Chapter # 11
Work done as an internee
• Training Program
• Day to Day activities
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The Bank of Punjab Dina Branch (0163) is the single branch in city. The Branch is located at
G.T Road Dina. Its major customers are Govt. and semi govt. institutions vocational institutes,
schools and colleges etc like most of Govt. employees are BOP customers.
In the said branch is consist of 8 clerical and 4 non clerical staff.ATM facility is available at
branch. Locker facility is also available. Branch is secured with CCTV cameras to avoid any
mismanagement with in branch and security guards are well equipped with security weapons.
Operations Department
I have worked in Deposit department which is under the control of operation department or
sub department of operation department. Operations department manages all departments of
branch. Operations Manager is responsible for all operations of cash department, remittance
department and clearing department. Opening of new accounts, closing of zero balance
accounts, updating all operational records etc. is done in operations department.
Beside these foreign payments to customers via online transactions is also the function of
deposit department. For this purpose NIC of the customer is verified on NADRA web site
www.verisys.com to make sure that payment is being made to the right person. The branch
credits the Head Office account when makes online payment to customer. They people
working abroad send money to their home viva express money which is deposited in bank of
Punjab head office so HO account debited while making payment HO account credited. In
closing HO credits all the branch accounts online with respective amount of payments. If in 30
days remittance through Express money and western union are more than 600 employees of
branch get incentives.
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Issuing the cheque books and making entries on computers for the authentication of cheque
books, filling deposit slips, ATM requests and cheques all are the functions of operation
department.
I have done my internship at The Bank of Punjab, Dina Branch. There are four departments in
the branch, and I worked as an assistant in that branch. For the first week I worked in deposit
department under the supervision of Mr. Khurram Shehzad, where I have to perform
following tasks:
Account Opening:
Voucher checking
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
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Remittance
I have worked in remittance department, during my internship period it was most busy
department because of Ramadan Kareem many of overseas were sending money to their
beloved ones.
Clearing:
I have learned about inward and outward clearing. Clearing department operates for five days
in a week. I have learned how to affixes the clearing stamps.
Locker:
I have learned how to operate a locker, How to close the locker of customer on his request
after clearing locker rent by customer and maintaining Locker register.
In the internship duration I also issue the cheque books to the newly customer for issuing the
cheque book check the account no. and verification of the account holder see the original ID
card and match the signatures of the account holder.
If the third person is collecting for the cheque book, 1 st ensure that the person is authorized by
the account holder and match the signature of third person and do clear and take the receiving
from the third person.
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If the third person is illiterate then take the receiving as the thumb impression in place of the
signatures. Take the thumb impression and affixed the stamp of the authorization. Before the
affixed stamp check the original ID card of the person, so that we can confirm the person and
take him/her the cheque book.
Application acceptance:
• Accepting fresh cash request by customer for Eid ul Fiter by filling form slips.
• Accepting request for new ATM issuance.
• Accepting request for new cheque book issuance.
• Receiving the cheque books, delivering them to customers before specified
date, after 2 months of issuance of cheque book is been disposed off.
Maintaining record of all this process.
Cheques:
• I have learned that how cheque is been posted in system. Signatures on cheque
are first matched to SSCard (signature specimen card).
• I have learned how bank statement is issued to requesting customers.
Customer Dealing:
My work timings were from 9am to 2:00pm during Ramadan Kareem and 9:00am to 5:00pm,
six days in a week.
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Duration of internship:
Week 1#
Week#2
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Week 3#
Week 4#
Week 5#
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Week 6#
Week #7
Week #8
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Part #12
Recommendations & Conclusion
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Recommendations:
Some of the recommendations that I would recommend to some of the weakness discussed in
the above section, that might increase the efficiency of both the operations and employees of
Bank of Punjab are as follows
Internal Controls
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 within
the bank. To me the bank should install some proper resource planning and controlling
systems like other banks do i.e., oracle financials etc.
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.
Delegation of Authority
Employees of the bank should be given a task and authority and they should be asked for their
responsibility. The sense responsibility in employees mind is one of the most important
factors in the success of any organization.
Performance Appraisal
During Internship I felt that there is no or very less appraisal of any ones cool performance.
The manager should strictly monitor the performance of every staff member. All of them
should be awarded according to their performance and result in the shape of bonuses to
motivated and incite them to work more efficiently.
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Required, qualified staff should be provided to branch in order to improve the functioning of
the branch. Especially a telephone operator should be appointed.
The lower staff employed at BOP should also be given a chance to succeed in life by training
them in different simple jobs at the bank.
Incentives:
Incentive schemes should be developed for the employees that can help motivate them, which
might include:
• Personal loans and car financing facilities for all ranks of employees.
• Scholarship programs for all employees.
• Introducing employee awards at branch and regional levels.
• Job rotation programs to enhance the skills of employees.
Technological Advancement
I would like to suggest that at least all the branches of BOP should be fully computerized in
order to expedite the dealing process among bankers and their customers. Computers must be
updated wit latest software which would help the employees to work efficiently. 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.
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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.
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.
Innovative Products:
New and innovative products should be introduced by bank of Punjab, like other bank such as
citibank and standard chartered bank develops for their customer. For this purpose, special
teams should be developed that include professional from all departments of the banks to
come with ideas. This process will increase the number of ideas generated and even produce
innovative products for the bank that might give them the edge.
Job design:
There are some departments in the bank that do not have enough employees, while some have
more than needed. All this creates inefficiencies and so the operations manager should look at
the department of the branch and see where inefficiencies lie, in consultation of with the heads
of the departments and hire individuals where there are less employees or rotate employees
from other departments.
Marketing Campaigns:
BOP should increase the efficiency and effectiveness of marketing campaigns. Develop
advance marketing strategies to attract more customers. BOP should increase advertisement
through electronic media.
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Conclusion:
The Bank of Punjab is contributing a lot towards industrial development and capital formation
of the country. Financial position analyzed by financial analysis of The Bank of Punjab we
came to know that bank is sharing major banking business of the country. Furthermore
policies and schemes introduced by bank are great source to help for trading and non trading
growth.
It has been twenty five years since the establishment of Bank of Punjab, and since its
establishment it has aimed to become the leading bank of Pakistan by that provides
outstanding services to its customers. The policies of bank are uniform and going very
smoothly. Employees are given all possible facilities and generous compensations. In return
employees are stressed for best efficiency. Management policies are formed to avoid failures
and designed to avoid drawbacks.
The top management of the bank is always developing strategies that cope with unexpected
challenges to deliver products and services more efficiently Furthermore, as the bank is
growing, the number of employees at Bank of Punjab are increasing, which shows that Bank
of Punjab is being considered as a an employer, that provides its employees with a challenging
environment to work in, where they can harness their full potential and shows confidence as
an employer by the employees of the bank.
Te progressive approach and trend towards progress and prosperity reflects that bank will
touch the zenith of development and progress. The dedicated, motivated enthusiastic
employees can bring the time even earlier.
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References
http://www.bop.com.pk/
http://www.sbp.org.pk/stats/Balance/2014/Bank-of-Punjab.pdf
http://www.bop.com.pk/Financials/Annual%20Accounts/AFS2013.pdf
https://en.wikipedia.org/wiki/Bank_of_Punjab
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