Internship report on Bank of Azad Jammu &

Kashmir

Submitted by
Bilal Shahnawaz
(2018-UMDB_005560)

BBA 4 Years

Session (2018-2022)
DEPARTMENT OF MANAGEMENT SCIENCES

The University of Azad Jammu & Kashmir

Muzaffarabad

September 2022

i
 Internship report on Bank of Azad Jammu &
Kashmir

Submitted by
Bilal Shahnawaz
(2018-UMDB_005560)

BBA 4 Years

Session (2018-2022)
This internship report is submitted in partial fulfilment of the requirements for
the degree of bachelor of business studies awarded by the University Azad
Jammu & Kashmir, Muzaffarabad

DEPARTMENT OF MANAGEMENT SCIENCES

The University of Azad Jammu & Kashmir

Muzaffarabad

ii
 September 2022

DEPARTMENT OF MANAGEMENT SCIENCES

The University of Azad Jammu & Kashmir

Muzaffarabad

Approval Sheet

1. Evaluator
Mr. /Ms. Signature

2. Chairman
Mr. /Ms. Signature

iii
 Student’s Declaration

I declare that this material, which I now submit for assessment, is entirely my own work and
has not been taken from the work of others, save and to the extent that such work has been
cited and acknowledged within the text of my work. I understand that plagiarism, collusion,
and copying are grave and serious offences in the university and accept the penalties that
would be imposed should I engage in plagiarism, collusion or copying. I have read and
understood the assignment regulations set out in the module documentation. I have identified
and included the source of all facts, ideas, opinions, and viewpoints of others in the
assignment references. Direct quotations from books, journal entries, internet sources,
module text or any other source whatsoever are acknowledge and the source cited are
identified in the assignment references. This assignment or any part of it, has not been
previously submitted by me or any other person for assessment on this or any other course of
study.

I have read and understood the referencing guidelines as recommended in the report
guidelines.

Signature: Bilal Shahnawaz

Roll no: 45

iv
 DEDICATION

I dedicate this report to my parents who have constantly given me moral support and
encourage me throughout studies. Theygave me mental strength to fight and deal with the
hurdles of daily routine which I faced during my studies. At this stage I can say that today
what I am and where I stand is just because of them. Secondly I would like to dedicate this
report to my teachers who guided me to overcome my flaws and enhanced my abilities to
bring up the best in me.

I am thankful to Mr. Babar Iqbal (Manager) who helped me guided me to complete this
tough task. I am also indebted to Mr. Waseem, (Manager Operations), Mamoon Riaz
(Credit Manager),Mr. Mukhtar Ahmed, Rizwan Nazir, Ch Aslam, and other personnel
who provide information and permitted to go through publications for use in the completion
of this report. May ALLAH ALMIGHTY shower blessings on those associate me in any
way during completion of this report. (Ameen)

v
 ACKNOWLEDGEMENT

Innumerable thanks to Almighty ALLAH, whose unlimited and unpredictable sources

Help made me able to win honors of life. I also pay all my respect to last Holy Prophet
Muhammad (PBUH) who is a beacon to well wishes of mankind and his faithful
Companions, who are forever a true torch of guidance for humanity as a whole.

The internship reported in his manuscript was conducted under the kind supervision
Prof. Khurram Ejaz, the University of Azad Jammu & Kashmir Muzaffarabad
Most grateful to acknowledgment his help, cooperation, valuable suggestions and
Sympathetic attitude throughout the course of this research work.

I am also thankful to the Manager Mr. Babar Iqbal, Mr. Ishfaq Sheikh and other staff
members of The Bank of Azad Jammu & Kashmir District Complex branch muzaffarabad

I would feel it incomplete without saying thanks to my parents and other family member who
supported me and encouraged me throughout my educational career.

Ultimately I am on board because of the honorable lecturers of my faculty, my class

And well-wishers.

Bilal Shahnawaz

BBA

vi
 LIST OF ABBREVIATION/ACRONYMS

Abbreviations Meanings

AJK Azad Jammu & Kashmir

ATM Automatic Teller Machine

CD Current Deposit

DD Demand Draft

FC Foreign Currency

HO Head Office

IBC Inwards Bills for Collections

IC Inward Clearing

LBC Local Bills For Collections

LCY Local Currency

MT Male Transfers

OBC Outwards Bills for Collection

PLS Profit And Loss Saving Account

RF Running Finance

SBP State Bank of Pakistan

SDA Special Deposit Account

SNTD Short Notice Term Deposit

SVP Senior Vice President

TDR Term Deposit Receipts

TT Telegraphic Transfers

vii
BC Banker Cheque

SWOT Strength, Weakness, Opportunity, Threat

EXECUTIVE SUMMERY

In the name of ALLAH, the Gracious and the Merciful who guides us in thedarkness and
helps in difficulties and all praises to him and respects are for his Holly Prophet (PBUH).

It is and academic requirement of the students of management sciences to undergo six weeks
of internship program for the award of master degree. The aim of this report is to analyze the
operational working and overall performance of the Bank of Azad Jammu & Kashmir
Muzaffarabad District Complex branch Muzaffarabad

In particular. Practical training is a privilege, which is provided to the students of masters,

objectively to help them in pursuance of sound carrier in future. While availing this
compulsory facility student not only enjoy this opportunity to test the accuracy of their
theoretical knowledge but also to learn as how they can put their best to earn a place in their
ever growing world.

I already know that member of standard banks in Pakistan are very limited due to different
circumstances, so I feel proud that I got an opportunity to work with the esteemed
organizations “The Bank of Azad Jammu & Kashmir” which is considered as the leading
bank, a sleeping grant in economy of Pakistan. I would like to mention here that I got a
marvelous experience at BOAJK which opened my mind and eyes. During my job
Experience what I have seen, what I have learned, what I have observed, what I have
perceived and what finally I have achieved. You can find all this in this report. I feel pleasure
to submit this report to the Department. In the end I wish to say thanks to all those who
helped me in learning at BOAJK and in preparing my internship report.

viii
 TABLE OF CONTENTS

1 INTRODUCTION TO THE REPORT..............................................................................1

1.1 Introduction.................................................................................................................1
1.2 Background of study....................................................................................................1
1.3 Purpose of the study....................................................................................................1
1.4 Scope of the study.......................................................................................................1
1.5 Limitations of the Study..............................................................................................2
1.6 Significance of the Study.............................................................................................2
1.7 Methodology of Study.................................................................................................2
1.7.1 Primary Data........................................................................................................2
1.7.2 Secondary data.....................................................................................................2
1.8 Structure of report........................................................................................................3
2 Introduction of the bank.....................................................................................................4
2.1 Introduction.................................................................................................................4
2.2 Vision Statement.........................................................................................................4
2.3 Mission Statement.......................................................................................................4
2.4 Core Values.................................................................................................................5
2.5 CORPORATE OBJECTIVES.....................................................................................5
2.6 PRODUCTS................................................................................................................6
2.7 Services........................................................................................................................9
2.8 Organization structure & hierarchy...........................................................................10
2.9 BRANCH PROFILE.................................................................................................11
2.10 Organization Hierarchy Chart................................................................................12
3 JOB DESCRIPTION........................................................................................................13
3.1 MODEL OF JOB DESCRIPTION............................................................................13
3.2 AJK BANK DESTRICT COMPLEX BRANCH HIERARCHY.............................14
3.3 Financial Performance of BOAJK.............................................................................15

ix
 3.4 05 YEARS AT A GLANCE......................................................................................16
3.4.1 AS AT DECEMBER 31, 2019...........................................................................17
3.4.2 FOR THE YEAR ENDED DECEMBER 31, 2019...........................................18
3.4.3 SWOT ANALYSIS…………………………………………………………………...19
3.4.3.1 strength……………………………………………………………………….19
3.4.3.2 Weakness……………………………………………………………………..19
3.4.3.3 Opportunities..…………………………………………………………...…..19
3.4.3.5 Threats…..…………………………………………………………………………20
3.5 Ratio analysis.............................................................................................................21
3.5.1 Current ratio.......................................................................................................21
3.5.2 Debt to total asset ratio.......................................................................................21
3.5.3 Debt to equity ratio.............................................................................................21
3.5.4 Total asset turnover ratio....................................................................................21
3.5.5 Net profit margin ratio.......................................................................................21
3.5.6 Earnings per share ratio......................................................................................22
3.5.7 Return on asset ratio...........................................................................................22
4 Findings in AJK Bank......................................................................................................23
4.1 Findings.....................................................................................................................23
4.2 Recommendations.....................................................................................................23
5 BIBLIOGRAPHY............................................................................................................25
5.1 BANK REPORTS.....................................................................................................25
5.2 ONLINE REFERENCE............................................................................................25

x
xi
 Chapter 1

1 INTRODUCTION TO THE REPORT

1.1 Introduction

This is an essential academic requirement to complete an internship program of six weeks in

reputed organizations. Report writing that is an integral part in fulfilment of requirements
follows the internship for degree of BS. A report encompasses the experience of the internee,
his learning and analysis in light of which recommendations are made. The report is then
submitted to the research and development division of University Of AJK. This internship
report has been written on “Bank of Azad Jammu & Kashmir” District Complex Branch
Muzaffarabad

1.2 Background of study

Money runs like blood in the veins of an economy and the hearts, which pump the blood, are
the bank. Bank plays significant roles in mobilizing savings thus taking great part I capital
formation process. Their role in developing of country has increased with the advent of
modern technology.

1.3 Purpose of the study

This report is based on study carried out the fulfilment of the degree requirement of the
Master in Management Sciences at the University of Azad Jammu and Kashmir.

The purpose of the study is to do practical work in field and apply the knowledge of
classroom lectures to the real life situations.

 To understand the various operations of the bank.

 To make possible recommendations in the light of the analysis.
 To improve long report writing skills.

1.4 Scope of the study

This report may help students in future to understand banking practices in our country. It
would also attempt to evaluate the overall performance of the bank of AJ&K through &
detailed analysis of its daily working.

1
1.5 Limitations of the Study

No matter how the efficiently a study is considered, it cannot be perfect in all aspects.
This study was conducted in accordance with the objectives of the study. The study may not
include broad explanation of facts and figures due to the nature of study. Secondly the
limitations that affects the study is the restriction on mentioning every fact of the bank due to
the problem of secrecy of the bank. Also the availability of required data was a problem as all
the problem of secrecy and files are kept strictly under lock and key due totheir confidential
nature. Thirdly, the problem of short time period also makes the analysis restricted as one
cannot properly understand thus analyze all the operations of the bank just in six weeks

1.6 Significance of the Study

The study done will be benefit the finance students In particular and banking students
in general because the financial analysis sections of this report comprehensively encompasses
all aspects of financial analysis. Furthermore, the Bank of Azad Jammu & Kashmir
Muzaffarabad District Complex Branch Muzaffarabad

may also benefit from the recommendations made at the end of the report.

1.7 Methodology of Study

For the purpose of writing this report the following methods of collecting information
have been used.

1.7.1 Primary Data

Data collected for the first time is called primary data. The method used to collect
such data include:

 Personal Observations
 Discussion with staff of the Branch

1.7.2 Secondary data

The data collected either by someone else and which they gone through mathematical
and statistical techniques after its collection, is called secondary data. Methods used to collect
secondary data include:
 Bank of Azad Jammu & Kashmir annual reports
 Bank of Azad Jammu & Kashmir broachers

2
1.8 Structure of report
This report is divided into four chapters
Chapter 1
Introduction of the report includes backgrounds, scope, significance and methodology.
Chapter 2
Introduction of the organization includes introduction of AJK Bank, vision, mission, core,
values, corporate objectives, business model and hierarchy of branch office of AJK Bank.
Chapter 3
Financial analysis horizontal analysis, vertical analysis of balance sheet and profit and loss
accounts ratio analysis. SWOT Analysis
Chapter 4
Findings, Recommendations, Bibliography, and Conclusion.

3
 Chapter 2
2 INTRODUCTION OF THE BANK
2.1 Introduction
The bank of state of Jammu & Kashmir was established under the bank of the state of Jammu
& Kashmir act 2005 and is principally engaged in commercial banking and related services as
a non-schedule bank of Azad Jammu & Kashmir. In the wake of an age long desire of the
people of the state of Jammu & Kashmir, the Azad Government of the state has since
established the Bank of Azad Jammu & Kashmir. The bank in legal parlance took its birth
through an enactment passed by the legislative assembly of state Azad Jammu and Kashmir
in the year 2005. The bill passed by the assembly was finally assented by the president of
Azad Kashmir. As per the enactment, the authorized capital of the bank is two billion rupees
divided into two hundred million ordinary shares of ten rupees each. However the initial paid
up capital of the bank is five hundred million rupees. Further, the state government at all time
has to maintain equity contribution of not less than 51%. For remaining part of the equity,
participation from the private sector shall be sought. In this concern we are receiving a good
response and on our way to accept subscription from such parties who have strong
presentation in the private sector.
Effective November 01, 2006 the bank started functioning as a non-scheduled commercial
bank. To date, the bank has network of 36 branches all over the state of Azad Jammu and
Kashmir. As the time goes on, the bank is flourishing and marching towards its destination
for locating a better standing in the banking arena. Further, the government intends to get the
bank scheduled with the State Bank of Pakistan in the shortest possible time.

2.2 Vision Statement

To emerge as a premier financial institution foresting socio-economic development of the
people of AJK.

2.3 Mission Statement

To acquire market leadership through quality banking services, customized products,
business practices, merit and performance culture and participation in development of the
state for the well-being of its people.

4
2.4 Core Values
 Innovation
 Honesty
 Responsibility
 Quality
 Trust
 Growth

2.5 CORPORATE OBJECTIVES

. As mandated by the statute of its establishment, the Bank is required to achieve the
following objectives:
 To mobilize private savings and public funds for diverting the same to productive
channels and ensure their availability.
 To promote industrial, agricultural rural micro financing and other socio-economic
processes through the active participation of private as well as public sectors and the
state.
 To help under-developed areas and create employment opportunities especially in the
rural areas of the state
 Further, to guide and assist the people of Azad Jammu & Kashmir serving overseas to
effectively and profitably invest their foreign savings in the state.
To create a diversified and sound port-folio for utilization of the otherwise idle funds and
other investment in the existing as well as new ventures specially in the pioneering of high
tech, agro-based ,export oriented and engineering projects to ensure maximum returns.

5
Business Model
2.6 PRODUCTS
Deposit Schemes
Current Account
 Free to individuals, corporation, organizations and government departments can open
accounts under the scheme.
 The accounts may be opened singly in one name or jointly in two or more names.
 The accounts shall be opened within an initial deposit of minimum 500/-
 There is No withdrawal limit for customers.
 No profit will be paid on current account.
 No Zakat will be deducted on current Account.
PLS Savings Accounts
 The accounts shall be opened within an initial deposit of Rs. 100/-
 The may be opened singly in one name or jointly in two or more names.
 No withdrawal limit.
 Profit will be paid on six monthly basis.
 Withholding Tax will be deducted out of profits payable to the Account Holders.
 ZAKAT is available on deposit if zakat Exemption Certificate (CZ-50) is not
provided.
Special Deposit Accounts (SDA)
 Free to investors.
 No withdrawal limit.
 Individuals, corporation, organizations and government departments can open
accounts under the scheme.
 This is operating/checking account.
 The accounts can be opened in individual or joint names.
 The deduction of Zakat and withholding tax will be applicable as per law of land.
 Profit is paid on daily product basis.
 Profit payable on half yearly basis.

6
BemisalMahanaBachat Account ( BMBA)
The bank of AJK has launched a New and unique deposit scheme with value added features.
The details of the new scheme are as under
 Free to investors.
 Minimum deposit limit for profit is Rs. 25,000/-, however, the account can be opened
with Rs. 1,000/-
 Customer can conduct maximum of two debit transactions between 6th and the last
day of month. However, withdrawal before 6th of month will not be treated as
deviation.
 Profit @ 7.00% p.a. payable on monthly basis.
 Free lockers facility will be offered to clients having minimum balance of RS 1.00 M.
Term Deposit Account (TDA)
The bank of AJK also offers Bemisal Term Deposit Scheme with salient features as under:-
 Minimum deposit requirement (0.1M for individual & 1.0M for Corporate
customers).
 No profit to be paid in case of encashment before completion of 03 months.
 Short term financing would be available with 10% margin.
 The deduction of Zakat and withholding tax will be applicable as per law of the land.
Provisional profit for the period of July 01, 2020 to December 31, 2020
 For PSL saving deposit is 5.50%.
 For BMBA is 5.50%.
 For SDA (from 0.05M to RS. 50M) is 5.50%.
 7 days’ notice deposit is 5.50% and 5 year TDR is 5.90%
General Term Deposit Accounts
 The bank of AJK also offers term deposit Accounts where deposits are accepted on
usance basis with different maturities from 03 Months to 05 Years.
 The deduction of Zakat and withholding tax will be applicable as per law of the land.

7
Aasaish Loan Scheme
Commercials
The bank of Azad Jammu And Kashmir Aasaish Loan Scheme is the Demand Finance
facility for employees of the Government/Semi Government Departments/Autonomous
corporations of Government of AJK.
Product Benefits & Features
 Hassle-free personalized service
 Low Down Payment
 Early settlement option without charges
 No hidden charges
 Lowest mark-up rate
 The flexible financing period can be 12, 24, 36 months with over financing up to 90%
of the vehicle cost.
 Competitive insurance rates. Insurance rates will be mandatory where first year’s
insurance will be taken up front.
 Processing fee will be 1% of finance amount.
Terms & Conditions
 All rentals will be paid in advance and on the first day of every month.
 Post-dated cheques at the commencement of lease facility each having a value of
monthly rental.
 Disbursement will be made after completion of all legal documents.
 We reserve the right to disapprove financing request, without assigning any reason
whatsoever.

8
2.7 Services
Remittance
Demand Draft
Clients of the bank of AJK are also facilitated by issuance of demand drafts. If the client
intends to transfer funds within the state, the same is done by issuing DD on BAJK branches
where as in case the funds are remitted outside the state, 5he same is done through UBL as
the Bank of AJK is having agency arrangements with United Bank Limited.

Mail transfer
Within the State of AJK, remittances are also carried out through Mail Transfer between
different branches.

Payment Order
For payment within the city, Payment Orders are also issued by all the branches.

Call Deposit Receipts

Call Deposit Receipts are also issued to the customers of the Bank as well as the general
public.

No charges are recovered on issuance of CDRs

Utility Bills
All the branches of the bank are authorized to collect water & Electricity Bulls, collection of
Telephone bills will be started very soon.

9
Lockers
Lockers facility is available in the main branches in three different sizes, small, medium and
large on annually fee with one time security deposit respectively to the size of locker. Locker
holders need to have an account in the bank.

Services to Public service commission (PSC)

Designated branches of the bank collect application fee of public service commission from
the candidates and issue application forms. These branches are

 Main branch Muzaffarabad

 Main branch Mirpur
 Rawlakot branch
 Kotli branch
 Athmuqam branch
 Bagh branch

2.8 Organization structure & hierarchy

Organization makes management easier, effective and result oriented. An organization
designed and structured on planning lines promotes collaboration and negotiation among
individuals in a group and this improves the effectiveness and efficiency of communication
within the organization. This function creates clear cut lines of authority and responsibility in
the organization.

The word “Organization” has two meanings, firstly it means an institution or structure, viz. a
bank is an institution with its organizational structure of Head Office, local office, district
offices and branches. Secondly, it means a process of an ongoing activity i.e., the process of
organizing, locating and bringing about relationships among men, money and services. In
fact, organization establishes relationships among the people so that they collectively
contribute to the attainment of organizational goals effectively. Thus organization is a means
to an end. It is also an important part of management.

10
2.9 BRANCH PROFILE
Name of Branch Bank Of Azad Jammu & Kashmir District
Complex Branch Muzaffarabad

Branch Code 0040

Address District Courts

Name of Manager Mr. Babbar iqbal

Name of Operation Manager Mr. Waseem

Total number of Employees 10

The Position of this Branch 04

Total Number of Account 7080

Number of Borrower 5070

11
2.10 Organization Hierarchy Chart

12
 CHAPTER 03

3 JOB DESCRIPTION
During the session of six weeks I work in different sections on weekly basis which proves me
very beneficial and able to get basic concept of banking operations.

3.1 MODEL OF JOB DESCRIPTION

WEEKS JOB FUNCTIONS SUPERVISION

1st week to 2nd week Cash dealing section I entered the cash Asad Choudhary
amount, cheques and
account numbers in
manually and on
computerized system.

3rd to 4th week Account opening I perform the Ms. Tayyaba & Mr.
section and issuance following functions waseem
of letter of thanks about opening of
accounts and issuance
of cheque books to
customers and
attachment of letter of
thanks in customer
accounts files.;2
5th week to 6th week Loan issuance/ credit I write the entries of Mr. Mahmood Riaz
section loan transactions on
system of customers
and separate the case
files.

13
3.2 AJK BANK DISTRICT COMPLEX BRANCH HIERARCHY
Mr. Babar Iqbal Branch Manager

Mr.Waseem Operation Manager

Mr. Mahmood Riaz Credit Manager
Mr. Rizwan Daar Operation Officer
Mr. Mukhtiar Abbasi Credit Officer
Mr. Aslam Gillani Cash Officer/Assistant
Ms. Tayyaba BSO

Financial analysis

Financial analysis is very important for any organization to know its position and value. The
purpose is to evaluate themselves to make decisions regarding their capital structure, Assets,
liabilities etc. for this purpose I will use three types of financial analysis to have
comprehensive information regarding the uses of finances and how to recover them by
keeping in view ;8Government regulations and orders.

Vertical analysis

It is a technique for identifying relationship between items in the same financial statement by
expressing all amount as the percentage of the total amount taken as 100. It is often useful to
express balance sheet and income statement items as percentages. The evaluation of trends in
financial statement percentages over time gives analyst the insight into the underlying
improvement or deterioration 8n financial condition and performance.

Horizontal Analysis (Trend Analysis)

Horizontal Analysis is done by computing the increase or decrease in percentage terms of

each items from the prior year. It uses one’s year worth of entries as a baseline while every
other year represents differences in terms of to that baseline. The evaluation of trends in
financial statement percentages over time gives analyst the insight into the underlying
improvement or deterioration in financial condition and performance.

14
Ratio Analysis

All financial ratios and measures uses information from the balance sheet and/or income
statement. Many of the organization use either an average, or a significant subtotal, such
ascurrent assets, quick assets or current liabilities. Here I'll use different ratios to do ratio
analysis which can be helpful in planning actions to improve firm’s future performance.

3.3 Financial Performance of BOAJK

RS. In Million
Particulars Dec 31, 2020 Dec 31, 2021
Deposits 11,873 11,064
Advances (net of provision) 2,037 2,029
Total assets 13,566 12,411
Capital and Reserve 1,227 1,154
Non-Performing loans 216253
Remittances (No of Transaction) 11,2647793
Interest income 1,279 936
Deposit cost 703 385
Net interest income 576 551
Non-Markup interest income 27 22
Total income 604 573
Admin expenses 470 422
Operating Profit 134151
Provisioning 9 (22)
Profit before tax 125173
Taxation 53 73
Profit after tax 72 100
Earnings per share (RS.) 0.70 0.97

15
3.4 05 YEARS AT A GLANCE

Balance Sheet 2021 2020 2019 2018 2017

Total Assets 13,566,335.00 12,411,342 10,840,659 8,936,321 8,455,430

Advance (net) 2,036,826.00 2,028,938 2,407,853 2,609,430 2,833,606
Investment 178,401.00 175,869 339,791 604,748 1,105,465
Equity 1,227,063.00 1,153,588 1,063,234 949,321 880,496
Deposits 11,873,535.00 11,063,203 9,547,215 7,845,625 7,440,877
Operating
Results
Mark-up / return 1,279,455.00 935,967 842,870 808,798 794,704
/ interest earned
Mark-up/return/ 702,719.00 385,101 327,143 333,382 375,948
interest
expensed
Net mark-up 576,736.00 550,866 515,727 475,416 418,756
based income
Non mark-up 27,392.00 21,689 51,502 50,738 38,962
based income
Non mark-up 40,061.00 421,995 363,02 324,969 285,260
based expenses
Operating profit 134,066.00 150,560 204,15 201,185 12,458
Provision 8,665.00 (22,053) (63,016) 111,5 4,018
Net profit/(loss) 125,401.00 12,613 26,13 89,608 125,440
before tax
Net profit/(loss) 1,830.00 99,893 15,084 50,699 80,010
after tax
Other
information
Earnings per 0.70 1.07 1.68 0.65 0.89
share
Number of 70 70 68 65 64
branches

16
THE BANK OF AZAD JAMMU AND KASHMIR
STATEMENT OF FINANCIAL POSITION
3.4.1 AS AT DECEMBER 31, 2020

2020 2021
Rupeesin ‘000…
ASSETS
Cash and balances with 3,005,671 2,305,588
treasury banks
Balances with other banks 7,308,508 7,101,069
Leadings to financial - -
institutions
Investments 178,401 175,869
Advances 2,036,826 2,028,938
Fixed assets 238,881 130,195
Intangible assets - -
Deferred tax assets 22,426 20930
Other assets 775,623 648,651
13,566,33512,411,342

LIABILITIES
Bills payable 21,148 19,582
Borrowings - -
Deposits and other accounts 11,873,535 11,063,203
Liabilities against right of use 122,388 -
assets
Subordinated debt - -
Deferred tax liabilities - -
Other liabilities 322,201 174,969
12,339,272 11,257, 754
NET ASSETS 1,227,0631,153,588
REPRESENTEDBY
Share capital 1,027,192 933,811
Reserves - -
Deficit on revaluation of assets (17,289) (18,935)
Unappropriated profit 217,161 238, 712
1,227,063 1,153,588

17
THE BANK OF AZAD JAMMU AND KASHMIR
PROFIT AND LOSS ACCOUNT
3.4.2 FOR THE YEAR ENDED DECEMBER 31, 2020

18
3.4.3 SWOT Analysis of District Complex Branch
3.4.3.1 Strengths
The main strength of the district complex branch is its location it is located near district
courts where it receives healthy amount of deposit every year additionally the branch has a
very qualified staff. as most of the costumers are in government sector due to branch location
it mostly deals in government accounts which are a good source of earning for a bank
3.4.3.2 Weakness
Along with the strength of this branch it also has many weaknesses which are not good and
cause hurdles in the operation of the bank. Some of its weaknesses are as follows
High cost deposit:
The branch has a very high cost deposit ratio this mean that majority of the customers of this
branch have opened a savings account. The more the number of saving accounts in the branch
the profit branch has to pay its customer. This is because many of the customers try to
unprofitable on their savings.
Slow internet service:
The city of muzaffarabad its self has a connectivity issue. The bank suffer due to this cause
more often. The district complex branch is also facing the internet issue due to which the
customer some time have to wait a long periods of time for getting their queries solved by the
bank.
No ATM & debit card:
The AJK bank does not have any of its own ATM and debit card. This lack of facility
prevents many of the new customers in Muzaffarabad to seek services from AJK bank.
3.4.3.3 Opportunities
Offer Better Services To Government Employees:
Due to branch location it has a good opportunity to provide the government employees a
good service to the employees which will eventually result in more deposit to the branch the
employees
Trainings Programs
Comprehensive trainings programs can be develop to upgrade the core skills of the existing
staff as well as integrate high quality hiring of the new employees
Merit - Based Culture
To improve the motivation of staff a merit based culture has to promote. Secondly the branch
can increase its efficiency by introducing incentives to its employees for good work
3.4.3.4 Threats
Following are the major threats which the branch is facing:

19
Competitors
The major threat for the district complex branch of the AJK bank is its competitors Mezan
Bank branch which is also located near district courts. The mezan banks branch provides
more convenient services as compared to the AJK bank because Mezan bank is scheduled
bank which also deals in the Islamic banking.
Secondly, mezan bank offers debits and credit cards which provides its customers in edge of
accessing their money at any place and time by just using an ATM machine

20
THE BANK OF AZAD JAMMU AND KASHMIR
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2020

2020 2021
Profit after taxation for the year 71,830 99,893
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit and loss account in
subsequent period
Movement in surplus/(deficit) on revaluation of investments-net 2,532 (14,675)
Related deferred tax (expense)/credit (866) 5,136
1,646 (9,539)
Total comprehensive income 73,475 90,354

21
THE BANK OF AZAD JAMMU AND KASHMIR
CASH FLOW STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020

CASH FLOW FROM OPERATING ACTIVITIES 2020 2021

Profit before taxation 125,401 172,613
Less: dividend income (8,107) (3,939)
117,294 168,674
Adjustments:
Depreciation 56,269 24,789
Provision and write offs 11,665 (22,053)
Interest expense on lease liability (14,919) -
Gain on sale of fixed assets (22) (9)
52,993 2,727
170,288 171,401
Increase / decrease in operating assets
Advances (19,553) 385,27
Other assets (excluding advance taxation) (140,357) (199,819)
(159,910) 185,508
Increase/ decrease in operating liabilities
bills payable 1,566 (12,26)
Deposits 810,332 1,515,988
Other liabilities (excluding current taxation) 155,714 7,897
967,612 1,511,659
977,990 1,868,568
interest paid on lease liability 14,919
Income tax paid (64,436) (81,369)
Net cash generated from operating activities 928,473 1,787,209

Cash flow from investing activities

Net investments in available for sale securities - (50,000)
Net investments in held to maturity securities - 199,247
Net proceeds from placement with bank (2,983,777) (1,525,100)
Dividend income received 8,107 3,939
Investments in operating fixed assets (13,589) (38,019)
Proceeds from sale of fixed assets 22 104
Net cash generated from investing activities (2,989,237) (1,412,829)

Cash flow from financing activities

Issue of share capital - -
Principle paid against lease liability (15,493) -
dividend paid - -
Net cash used in financing activities (15,493) -
Decrease in each cash equivalents (2,076,258) 374,380
Cash and cash equivalent at beginning of the year 3,921,559 3,547,179
Cash and cash equivalents at the end of the year 1,845,301 3,921,559

22
3.5 Ratio analysis
3.5.1 Current ratio
Current ratio is a measure of liquidity position of an organization. It compares the current
assets with current liabilities of a business organization.
Current ratio = current assets/ current liabilities
Year 2017 20182019 2020 2021
Ratio% 0.54 0.66 0.78 0.851.01
3.5.2 Debt to total asset ratio
This ratio serves a similar purpose to the debt-to-equity. It highlights the relative importance
of debt financing to the bank by showing the percentage of assets that is supported by the
debt financing. The higher this ratio the greater the financial risk the lower the ratio the lower
the risk of finance.
Debt to total asset ratio = Total liabilities / Total assets
Year 2017 2018 2019 2020 2021
Ratio 0.8948 0.8937 0.90 0.907 0.909
3.5.3 Debt to equity ratio
Debt to equity ratio is used to assess the extent to which the organization is using borrowed
money. This ratio in banks on the higher side as compared to the other businesses, because of
the nature of banking business, which is to take deposits and then lend it to customers.
Debt to equity ratio= Total Liabilities/ Shareholder equity
Year 2017 2018 2019 2020 2021
Ratio 9.63 10.2 11.52 12.0610.05
3.5.4 Total asset turnover ratio
The amount of sales generated for every dollars’ worth of assets. It is calculated by dividing
sales in dollars by assets in dollars.
Tot asset turnover ratio =Net sales/Total assets
Year 2017 2018 2019 2020 2021
Ratio % 0.049 0.05 0.052 0.046 0.056
3.5.5 Net profit margin ratio
A ratio of profitability calculated as net income divided by revenues, or net profits divided by
sales. It measures how much out of every dollar of sales a company actually keeps in
earnings.
Profit margin is very useful when comparing companies in similar industries. A higher profit
margin indicates a more profitable company that has better control over its costs compared to
its competitors.
23
Net profit Margin Ratio = Net profit/ Net sales × 100
Year 2017 20182019 2020 2021
Ratio % 30.5 20.1 47.1 30.1526.39
3.5.6 Earnings per share ratio
Earnings per share are important financial measures, which indicate the profitability of a
company. It is calculated by dividing the company net income with its total number of
outstanding shares. It is considered to be a more expanded version of the basic earnings per
share ratio.
Earnings per share ratio =Total earnings/ Total No. of Shares
Years 2017 20182019 2020 2021
Ratio % 0.89 0.65 1.68 1.07 0.70
3.5.7 Return on asset ratio
Return on asset ratio is a financial ratio that shows the percentage of a profit a company earns
in relation to its overall resources.
Return on asset ratio = Net income after taxes/ Total assets
Years 2017 2018 2019 2020 2021
Ratio% 0.089 0.065 0.185 0.1070.09

24
CHAPTER 04
4 FINDINGS IN AJK BANK
4.1 Findings
Although AJK bank is government bank but like other organizations and banks, it face many
problems which need to be solved. During my internship I find many problems in AJK bank
and also discussed in SWOT analysis. These problems are discuss below and also give
recommendations for solving these problems.
In the branch there is unequal distribution of wealth. The work is not properly distributed in
all staff members. Some employee work all the day and some other have nothing to do all the
day.
There is not proper decision making system. All decisions are depend on head office, without
the permission of head office the branch cannot take any decision.
There is no ATM facility for customers and due to this customers face problems in cash
withdrawal.
Records are not properly maintained. When certain record is needed the staff require more
time for finding data.
Number of accounts are opened in daily basis for withdrawal of cash but the depositors are
less that’s why face cash problem branch many times.
Half of the staff is not well trained for solving problems when arises. Because no proper
training sessions are organized.
There is absence of job rotation in AJK Bank and many members do same job for long time
period.
Another very important thing which is ignored by bank is appreciation if employees on their
good performance.

4.2 Recommendations
Following are some of the suggestions and recommendations that I want to give on the basis
of shortfalls or weaknesses found in the bank. Study of the branch helped mw evaluate the
organization in comparison to its future and competitors
 The data obtained from the analysis of its present and future in combination with my
professional studies resulted in some suggestions and implementation plans, which
can help to increase the profitability and operational success of the district complex
branch domail, some of the major findings suggestions are discussed.
 The branch should emphasis on the organization of effective training and
development programs for its new as well as existing employees so that these are
gradually updated regarding the recent developments in the field of banking.
 The lighting system must be improved and all the out of use lights must be replaced.
 Cleaning and shining system is boring at all. Should be improved.
 Automatic generators and AVR (automatic voltage regulator) should be made
available to the branch to minimize the disruptions due to power failure.

25
  Newspaper should be provided to the customers to avoid the pain of waiting long.
 A cash counting machine can help reduce the time spent in counting cash
 The branch needs a research, which should be engaged in evaluating and interpreting
the ways in which the bank can flourish more and more.
 Bank should plants to expand overseas and add branches and employees at home even
as economic growth slows after the worst floods in the nation’s history.
 The branch should develop strategy, employs the policy and emphasized to increase
deposits reserves that enable to reduce borrowings. Therefore this branch must a clear
plan for increasing the number of accounts.
 The branch should be fully prepared in its management of financial crises and its
business continuity planning, within the standing committee framework, and should
work with others to strengthen national crises management preparations.
 Every depositor should be given equal importance and there should be no
differentiation between customers so that every customer feels himself as much
important as the other customer.
 Attitude of staff should be friendly to all customers. The customers should be taken to
the concerned person or guided friendly if the concerned persons is not available. The
attitude of that’s not my job should not exist anymore.
 Personal contacts with the customers can help in providing information to the
customers. All the customers must be provided a chance to get the desired information
by personal contact with the bank staff.
 Complaint and suggestion box should be maintained at the door of the bank where the
customers can point out drawbacks in the customer's services and put forwards their
suggestions on his improvement of the services quality of the bank.
 The financial audit of the branch is conducted on regular basis both as a surprise and
routine audit. However, the performance and system audits are completely ignored
which, otherwise should have been a compulsory part of the auditing services of the
bank.
 They should increase customer ratio through efficient marketing.
 The bank must hire efficient marketing professionals.
Conclusion
 As this was not an easy task to execute successfully this study. But with the grace of
Allah Almighty, it become not so difficult for me and I successfully executed the task.
AJK bank id one of the great name in the banking sector of AJK. Its mission and
vision policies and procedures, objectives and strategies, performances and it is
current market position obviously denotes its strengths and soundness. It is playing a
vital role in the economic growth of the state and country.
 During my internship period at AJK bank, I got the opportunity to learn the complex
banking system. During this period, after analyzing the working of the bank, some
comings are also focused which are discussed as recommendations. In order to build
on image, Public relation department should also be well established and well
organized.
 In short after through study and analysis of AJK the overall situation, it is market
position its internal soundness and its capable management can be green signal for
AJK's management.

26
5 BIBLIOGRAPHY
5.1 BANK REPORTS
 Annual report of the bank of AJK 2017.
 Annual report of the bank of AJK 2018.
 Annual report of the bank of AJK 2019.
 Fundamentals of financial management.

5.2 REFERENCE
 Mr Mahmoon Riaz 0345855655
 Mr.Aslam 03466700996
 Mr Baber Iqbal 03061101877

27
28