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INTERNSHIP REPORT

The Bank of Azad Jammu & Kashmir

Murad Ahmed

(MUST/FA19-K01 -027/AJK)

Session 2019-2023

Department of Commerce

Mirpur University of Science and Technology (MUST),

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Mirpur AJK Pakistan

Acknowledgement

No one can say that I’m absolutely must recognize that without the help of God
and his people, a man cannot get anything, so I bow to God Almighty with
gratitude.
First of all I would like to thanks ALLAH Almighty, the most merciful and
beneficent who gave me sound health and co-operative people who helped me to
achieve my goal.

I would like to express gratitude to my advisor, for his excellent guidance. I’m
today submitting my internship report, at the end of my first pragmatic experience
and I’m glad to have it with Bank of AJ&K. I had a new, challenging, yet a perfect
environment to learn. I would like to extend thanks to the many people, who so
generously contributed to work presented in this report. Also hugely appreciative
to staff of the Branch. Special mention goes to my parents for almost unbelievable
support. They are the most important people in my world and I dedicate this to
them.

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Preface

Practical training is a privilege, which is provided to the students of BS (hons)

with an objective to help them in pursuance of sound career in future. Practical
training program for students is the important and beneficial part of the course.
While availing this compulsory facility students not only enjoy this opportunity to
test the accuracy of theoretical knowledge but also learn how the practical behaves
as well as how they can put their best to earn a place in their ever growing world.
The field of banking has always been a source of inspiration for me during my
entire academic career. To work in a Bank, to acquaint with its working
mechanism was always a point of golden opportunity to complete my internship at
AJK Bank area branch bratlah kotli, Azad Kashmir. Where I learnt enough
knowledge from my seniors. Who really supported me to gain a
Professional know how about the functionality of commercial Bank.

In this report, I have tried to provide valuable information about the services
provided by the Bank of Azad Jammu & Kashmir under certain areas namely
consumer banking, financial services and corporate finance.

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i. Dedication:

At first dedicating this work to Almighty Allah, without his mercy and sympathy I was not able to
accomplish this work. Almighty ALLAH gave me power and confidence to done my
internship and also HOLY PROPHET HAZRAT MUHAMMAD (peace be upon him)
who is a light for humanity. I also dedicate this work to my lovely parents whom I love
from core of my heart.

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ii. Executive Summary:

This report is the result of 6 weeks internship. During the internship it was required to
study the organization, department of the organization and critically relate the theoretical
aspects of the organization to the practical situation. I got an opportunity of getting
practical knowledge about the Banking system in Azad Kashmir. So to quench the thirst of
practical exposure and for getting the basic knowledge about Bank I joined BAJK branch
bratlah (0020) during six week in bank I gather all necessary information about AJK
BANK.

Efforts have been made to compile this report in such a way that activities its salient
features not only for students but also for the layman. I have divided this report into
different chapters.

First chapter is: overview of the Organization

Second Chapter: is Overview of Branch, introduction of different department and products

& services offered.

Third chapter is: latest financial statements, cash flow statement, income statement,
statement of retain earning and balance sheet.

Fourth chapter is: SWOT & RATIO Analysis, critical analysis.

Fifth chapter is: Conclusion, Recommendation and References.

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Table of Contents

Contents Page No.

Acknowledgement ……………………………………………………………… 02

Preface…………………………………………………………………………... 03

Dedication……………………………………………………………………….. 04

Executive Summary……………………………………………………………... 05

Chapter 01

Overview of the Organization

Study background………………………………………………………………… 07

History of BAJ&K ……………………………………………………………….. 07

Organization structure……………………………………………………………. 09

Journal activities …………………………………………………………………. 10

Chapter 02

Overview of branch………………………………………………………… 12

Branch organogram………………………………………………………………. 13

Branch departments ……………………………………………………………… 13

Products Services………………………………………………………………… 14

01. Liability products

I. Current account ………………………………………………… 14
II. PLS Savings account ………………………………………….... 15
III. Deposit account ……………………………………………….... 15
IV. (BMBA)………………………………………………………..... 15
02. Asset products
I. Consumer Finance……………………………………………….. 16

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II. Commercial/ SME finance………………………………………. 18

III. Agriculture finance ……………………………………………… 18
IV. Micro finance ……………………………………………………. 19

Chapter 03

Financial Statement…………………………………………………………….. 20

Cash Flow Statement …………………………………………………………... 22

Cash Equity Statement …………………………………………………………. 24

Income Statement ………………………………………………………………. 25

Balance Sheet …………………………………………………………………… 26

Chapter 04

SWOT & Ratios Analysis ……………………………………………………….. 27

1. Strengths …………………………………………………………………. 28
2. Weaknesses ………………………………………………………………. 29
3. Opportunities …………………………………………………………….. 30
4. Threats …………………………………………………………………… 32

Horizontal analysis of balance sheet……………………………………………....36

Horizontal analysis of profit & loss account ……………………………………....37

Vertical analysis of profit & loss account …………………………………………38

Vertical analysis of balance sheet ………………………………………………....39

Chapter 05

Findings ……………………………………..……………………………………. 40

Recommendations …………………………..……………………………………. 41

Conclusion ………………………………..………………………………………. 42

References ………………………………..……………………………………….. 43

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CHAPTER #1

Overview of the Organization

Study Background
Today, banks are the most important financial institutions which play a vital
Role Throughout the world’s economic system.
Because most of the sectors like Industries, Commerce and Agriculture need financial
Assistance, it is the banks which carefully entertain them.
There are different views about the origin of the word “Bank”. Some authors opine
Thatthe word “Bank” is derived from the word “Bancus” or “Banque”which means a
“Bench”.
They support this origin by the argument that Jews merchants in Lombardy transacted
their business of money exchange on the benches in marketplaces.
If the money of any businessman failed his bench was destroyed by the people.
Due to this practice the word “Bankrupt” Was also used.
On the other hand some people say that the word “Bank” is derived from Germanword
“Back” which means joint stock fund. Later on, when the Germans occupied
Major part of Italy, the word “Back” was Italianized into Bank.
An opportunity was created to understand the practical banking operationsduring job i
nThe Bank of Azad Jammu & Kashmir. This report is about the general
Workings of the branch.

History of Bank of Azad Jammu & Kashmir

Keeping in view the long desire of the people of Azad State of Jammu & Kashmir
Having afinancial institution with in the state, the Government of Azad Jammu &
Kashmir startedworking for establishment a financial institution in 1974; however,
The idea could not begrownup. However, in 2005, then the Government started
Working on the idea with great zeal.For the purpose, expertise of Mr. Muhammad
Ahsan, former chairman of Pakistan BankingCouncil and Mr. Masaud Ahmed Sheikh
(Late), former Deputy Chief Executive, The Bank ofPunjab was hired who started
Working on the project.Gnawed nationally and globally as a house hold name for
Market competitive products andefficient as well friendly services.
The bank has a dedicated team of professionals fully capable to provide services with
energy, zeal and commitment. The bank attaches top priority to service delivery,

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therefore investing considerably in IT and Human Capital to evolve a powerful brand,

which is competitive, sustainable and trusted by its customers. The bank also offers
conventional banking services such as safe custody and safe deposit facilities on
competitive rates. The bank also offers cash management services to its corporate
customers on need basis. The bank serves all segments of the society particularly the
women and senior citizens are being served as priority customers.

To facilitate its customers in routing their payments/funds in Pakistan, the bank has
standing arrangements with other commercial banks whereby banker cheques drawn
by BAJK branches are payable at all such branches in Pakistan. Besides this, the bank
has correspondent arrangements with major scheduled banks to facilitate inter-bank
settlements on account of customers.
VISION
To act as a premier financial institution, fostering socio-economic development of the
people of AJK.

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 ORGANIZATIONAL STRUCTURE

President

Muzaffarabad Rawalakot Mirpur Kotli

Region Region Region Region

Branches (22) Branches (20) Branches (22) Branches (18)

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 JOURNAL OF ACTIVITIES
WEEK DAY,DATE ACTIVITIES PERFORMED
ONE Mon, 3 Oct Just short intro of departments
2022
Tue, 4 Oct Challan form filled
2022
Wed, 5 Oct Bank slips
2022
Thu, 6 Oct Examination form FEES
2022
Fri, 7 Oct Same process in this day
2022
02 Mon,10 Oct Account opening form has to be filled with the
2022 brief introduction of the customer
Tue,11 Oct I learned procedure of verification of
2022 customer`s documents
Wed,12 Oct Check book issuing procedure
2022
Thu,13 Oct Ledger posting
2022
Fri,14 Oct Vouchers filling
2022
03 Mon,17 Oct I’m in leave
2022
Tue,18 Oct Form fills for the loan process
2022
Wed.19 Oct Maintain accounts by depositing money and
2022 cheque

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Thu, 20 Oct Help to prepare daily report

2022
Fri, 21 Oct Check accounts
2022
04 Mon,24 Oct HOLYDAY
2022
Tue,25 Oct Electricity bills scroll
2022
Wed,26 Oct Nothing do special
2022
Thu,27 Oct LADGER BALANCE
2022
Fri,28 Oct I learn about procedure of bills clearance
2022
05 Mon,31 Oct Deposit slips
2022
Tue,01 Nov New account opening form filling
2022
Wed,02 Cheques received
Nov 2022
Thu,03 Add amount in ledger book
2022
Fri,04 Nov Nothing do
2022
06 Mon,07 I repeat account opening procedure
Nov 2022
Tue,08 Nov Overview about daily work
2022
Wed,09 HOLYDAY
Nov 2022
Thu,10 Nov NOTHING TO DO, BECAUSE IT’S MY
2022 LAST DAY IN BRANCH.

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CHEPTER # 02
OVERVIEW OF BRANCH/ORGANIZATION

Brief introduction of branch

I did my Internship at Bank of Azad Jammu& Kashmir Bratlah Branch district Kotli.
Starting and Ending Date of Internship
I worked in the BAJK Bratlah Branch (0020) for six weeks from October 3, 2022 to
November 11, 2022.
Number of employees:
The number of employees in the BAJK of Bratlah Branch is 04 including bank
managers. These are:
 Manager of the branch
 Operational manager
 Cashier
 Security guard
 messenger

Branch Organogram

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BRANCH
MANAGER

(01)

OPERATIONS
MANAGER

SECURITY CASH CREDIT MASSANGER

GUARD OFFICER OFFICER (01)
(01) (01)
(01)

Branch Departments
 Operations Department
 Credit Department
 Remittance Department

Remittances:
The bank has made adequate arrangements with major scheduled banks for the
purpose of inter bank settlements and outward remittances. Under an arrangement with
HBL all Banker cheques issued by BAJK branches are payable on all branches of
HBL.
Home Remittance Facility
MoneyGram
MoneyGram is a global provider of innovation money transfer services and is
recognized worldwide as a financial connection to friends and families. The company
has approximately 350,000 agent locations in more than 200 counties and territories
around the world. Our valuable customers can receive home remittances from all the
branches of the Bank. To find nearest MoneyGram location across the globe.

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Operations Department:
The branch operations officer is based out of individual branches and assists in things
like cash handling, opening and closing the branch, scheduling visits, handling couriers
etc. essentially everything that is necessary to the efficient working of the bank branch
may be assigned to an operations specialist manager there.
Credit department:
The function of selecting and vetting borrowers is the role of the credit department
of the bank. Managing the entire credit process.

2.3Products and Services offered

A product is defined as, “A good, service, or idea consisting of a bundle of tangible
Andintangible attributes that satisfied consumer and is received in exchange for
Money or other unit of value”.
01. Liability Products
Deposit Accounts
I. Current account
Eligibility:
Individuals, business people, Business entities Sole Proprietors, Companies,
Partnership Firms, Govt. Departments Local Bodies and Corporations, Trust Clubs,
Associations, Societies, NGOs, Public Sectors Corporations/Autonomous Bodies
Silent Features:
 Chequing account
 Can be opened singly on one name or jointly in two or more names.
 Initial/minimum deposit requirement is Rs. 1000/-
 No withdrawal limit.
 No ZAKAT limit.
 Free cheque Book and other Services as per applicable schedule of charges for
account holders having average balance of Rs.25000/- and above.
 Free pf charge locker facility for account holders having average balance of Rs.
50,000/- and above.

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II. PLS Savings Account

Eligibility:
Individuals, singly or jointly can open their savings accounts.
Business/Government entities can open savings accounts for placing funds of
provident and benevolent nature.
Features:
 Profit earning chequing account
 Initial deposit/minimum balance requirement of Rs. 500/.
 Accounts can be opened singly in one name or jointly in two or more
names.
 Free cheque Book and other Services as per applicable schedule of charges
for account holders having average balance of Rs. 100,000/- and above.
 No limit on withdrawals.
 Half yearly profit payment.
 ZAKAT applicable as per law.

III. Deposit accounts

 No withdrawal limit.
 Individuals, corporation, organization and government departments can
Open Accounts under the scheme.
 This is an opening/cheque account
 This account can be opened in individual or joints names.
 Free services as per applicable schedule of charges for all customers having
average balance of Rs. 100,000/- or above.
 Profit is paid on daily product bases.
 Profit payment on half yearly bases on daily product basis.
Bemisaal Mahana Bachat accounts (BMBA)
The Bank of AJK has launched a New & Unique deposit scheme with value added
Features the details of the new scheme are as under
 Minimum Deposit Limit for profit is Rs. 25,000/however, the account can be
Opened with Rs.1, 000/-.

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 Maximum two withdrawals allowed between 6th and last day of month for
profit qualification.
 Profit payment on monthly basis.
 Free locker facility for customers having average balance of Rs. 50,000/-.
 Up to 95% quick financing facility available on low mark up.

Bemisaal term deposit

The Bank of AJK also offers Bemisal Term Deposits 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 on nominal rate of mark-up.
 The deduction of Zakat and withholding tax will be applicable as per law.
PLS Term Deposit
Eligibility: Individuals, Business People, Business Entities Govt. Departments,
Local bodies and Corporations, trusts, Clubs, Associations, Societies, NGOs,
Public Sector Corporations/Autonomous Bodies.
Features
 Tenure 03 Months to 05 years.
 Zakat application as per rules.
 Profit payment on maturity.
 Compatible rates of profit.
 Up to 95% quick financing facility available on low mark-up.
02. Asset Products
There are four types of asset products.
Consumer Finances
1) Car Loan Scheme
The Bank of Azad Jammu and Kashmir offers you the most convenient and
Affordable CarFinance Scheme “The Bank of Azad Jammu and Kashmir Car Loan
Scheme”, empowers you tohave your dream car in a simple and a quick manner.
Purpose:

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Enjoy a comfortable traveling with your family. Facilitate pick and drop of your kids.
BAJK offers purchase of brand new cars for domestic and personal use.
Eligibility:
 Must be AJK/Pakistan National
 Permanent Employee of the Government Departments/Autonomous
Corporations of theGovernment of AJK with at least 3 years of service.
 Professional/Self Employed/ Businessmen having established business for last
three years.
Loan limit:
Maximum up to Rs. 25, 00,000/-
2) Advance Salary scheme
Eligibility:
The bank of Azad Jammu and Kashmir offers “the Bank of Azad Jammu and
Kashmiradvance Salary Programmed” for Permanent Employee of Government
Or semi Government Departments/Autonomous corporations with at least 01 year
service.

Purpose:
Don’t worry about your urgent domestic/ personal/ family needs like education of kids, marriage of
children and medical requirements. BAJK provides you a hassle free finance against your salary.

3) Motorcycle Finance
The Bank of Azad Jammu and Kashmir Motorcycle Loan Scheme is lease facility for
Purchasing brand new locally manufactured/assembled Motorcycle for personal use.
Product benefits & Feature
 Hassle-free processing
 Personalized service
 Low Down payment
 Early Settlement Option without charges
 No hidden charges
 Lowest Mark-up rate.

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 The Flexible Financing tenure maximum up

to 36 months with our financing up to 90%of Motorcycle cost.
 Competitive Insurance rates. Insurance will be mandatory where first year`s insura
ncewill be taken un front.
 Processing fee will be 1% of finance Amount.

Terms & conditions

 Registration cost, CVT (Capital Value Tax) and other costs (if any) will be borne b
y the customer.
 All rentals will be paid in advance and on the first day of every month.
 Insurance of the Vehicles will be mandatory and first year`s Insurance will be
Taken Upfront
 Postdated cheque at the commencement of lease facility each having e value of
Monthly rental.
 Disbursement will have made after completion of the entire legal document.
 We reserve the right to disapprove financing request, without assigning any
Reason whatsoever.

Insurance:
Comprehensive insurance of Motorcycle.
02 Commercial/ SME Finance:
1) Running finance
2) Auto finance
3) Demand finance
4) Construction finance
5) Health care services finance
6) Promotion of tourism finance
7) Small Business finance
03 Agriculture finances:
1) Agriculture production loan
2) Agriculture development loan

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04 Micro finances:
1) Micro Enterprise Loan
2) Desi Murghbani Loan
Services:
i. Home Remittance
ii. Lockers
iii. Utility bills
iv. Services for AJK PSC
2.4 Core Values
 Commitment
 Excellence in services
 Trust
 Quality
 Responsibility
 People
 Integrity
 Innovation and growth
 Team work

2.5 Revenue sources of Bank

a) Saving, current and fixed deposit account
b) Advancing of loans (Running finance, car loans, mortgage finance)
c) Payments of cheque
d) Salary management of different Government Institutions.

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CHEPTER #03
THE BANK OF AZAD JAMMU AND KASHMIR
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT SEPTEMBER 30, 2022
(Un-audited) (Audited)
September December 31
30, 2022 2021
Assets
Cash and balance with treasury bank 6,394,913 4,447,089
Balance with other banks 15,799,672 14,447,633
Lending’s to financial institutions - -
Investments 164,613 183,775
Advances 3,106,285 2,815,313
Fixed assets 319,372 253,886
Intangible assets - -
Deferred tax assets 38,022 30,011
Other assets 1,862,908 1,046,611
Total assets 27,683,785 23,551,318
Liabilities
Bills payable 14,676 158,180
Borrowings - -
Deposits and other accounts 20,652,106 17,270,623
Liability against assets subject to finance lease 131,052 138,110
Subordinated debt - - -
Deferred tax liabilities - -
Other liabilities 1,152,096 563,110
Total liabilities 21,949,930 18,130,432
Net Assets 5,735,855 5,420,866

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Represented By
Share capital 5,142,903 5,142,903
Reserves 269,037 269,037
Deficit on revaluation of assets (26,251) (13,797)
Unappropriated profit 350,166 22,743
5,735,855 5,420,886

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The bank of Azad Jammu and Kashmir

Condensed interim cash flow statement (un-Audited)
For the nine months ended September 30, 2022

January to January to
September 2022 September 2021
CASH FLOW FROM OPERATING
ACTIVITIES

Profit before taxation 646,377 341,959

Less; dividend income 9,096 7,244

637,281 334,715

Adjustments:

Depreciation 23,872 16,419

Depreciation on right of use assets 19,959 18,139

Mark-up / return on right of use assets 16,122 11,445

Provision and write-offs 22,066 21,157

(Gain) on sale of fixed assets - -

82,019 67,160

719,300 401,875

(Increase) / Decrease in operating assets:

Advances (365,254) (406,626)

Others assets (excluding current taxation) (816,297) (347,048)

(1,181,551 (753,674)

Increase / (Decrease) in operating liabilities

Bills payable (143,504) 42,661

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Deposits 3,381,483 3,933,696

Other liabilities (excluding current taxation) 398,915 51,765

3,636,894 4,028,122

Income tax paid (130,186) (85,063)

Net cash flow generated from operating activities 3,044,457 3,591,260

Cash flow from investing activities

Net investments in available for sale securities - -

Dividends received 9,096 7,244

Investments in operating fixed assets (58,347) (13,068)

Proceeds from sale of fixed assets - 174

Net cash flow (used in) investing activities (49,251) (5,650)

Cash flow from financing activities

Issue of share capital - 2,800,000

Payments of lease liability against right of use assets (22,343) (29,584)

Dividend paid - -

Net cash flow from (used in) financing activities (22,343) 2,770,416

Increase/ (Decrease) in cash and cash equivalents 2,972,863 6,356,026

Cash and cash equivalents at beginning of the period 19,221,722 13,280,356

Cash and cash equivalents at end of the period 22,194,585 19,636,382

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Statement of retain earning

Share Deficit on Unappropriated Reserve Total
capital revaluation Profit
of invest…

Balance as at December 31,2020 2,129,911 (12,450) 267,130 2,384,591

Profit after taxation for the nine 197,812 197,812

months ended - -
September 30,2021
Other comprehensive income- net of - - - -
tax
(1,346)

Transactions with owners,

recorded directly in equity

Issue of bonus shares 2,800,000 2,800,000

Balance as at September30,2021 4,929,911 (13,796) 464,942 5,381,057

Profit after taxation for the quarter - - 39,830 39,830

ended December 31,2021

Other comprehensive income-net of - - - -

tax
Transactions with owners,
recorded directly in equity

Issue of shares against cash - - - -

Issue of bonus shares 212,992 - (212,992) -

Transfer to reserve (269,037) 269,037 -

Balance as at December 31, 2021 5,142,903 (13,796) 22,743 269,037 5,420,887

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Profit /(loss) after taxation for the 327,423 327,423

current period other comprehensive (12,455) (12,455)
income-net of tax
Balance as at September 30, 2022 5,142,903 (26,251) 350,166 269,037 5,735,855

The Bank of Azad Jammu and Kashmir

Condensed interim statement of comprehensive income

For the nine months ended September 30, 2022

January to January to

September 2022 Sep, 2021

Profit after taxation for the period 327,423 197,812

Other comprehensive income

Items that may be reclassified to profit and

Loss account in subsequent periods:

Movement in surplus / (define) on revaluation of

Investments-net of tax (12,455) (857)

Total comprehensive income 314,968 196,955

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Balance Sheet
As at September 30-2022
Retail Commercial Payment Agency Total
banking banking and services
settlement
Cash &bank - 22,194,585 - - 22,194,585
balances
Investments - 164,613 - - 164,613
Advances- 2,761,001 410,484 - - 3,171,485
performing
Nonperforming 48,013 149,154 - - 197,167
Provision (121,904) (88,248) - - (210,152)
Operating Fixed 43,209 273,565 1,751 847 319,372
assets
Deferred Tax 5,143 32,569 208 101 38,021
Asset
Others 1,568,401 293,918 398 193 1,862,910

Total Assets 4,303,863 23,430,640 2,357 1,141 27,738,001

Bills payable - 14676 - - 14676
Deposits &other - 20,652,106 - - 20,652,106
accounts
Others 134,717 1,147.052 783 379 1,283,931

Total liabilities 134,717 21,814,052 783 379 21,949,931

Equity 4,169,146 1,616,588 1,574 762 5,788,070

Total equity & 4,303,863 23,430,640 2,357 1,141 27,738,001

liabilities

CHEPTER #04

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SWOT & Ratio Analysis

In every organization efficient managers analyse the workings of their organization

through different tools &techniques. One such tool in management is known as SWOT
Analysis. It is a combination of four words that is

Stands for Strengths.

Stands for Weaknesses.

Stands for Opportunities.

Stands for Threats.

In this combination strengths & weaknesses are the internal appraisal while opportunities
&threats are the external appraisal of an organization.

The purpose of a strengths & weaknesses analysis is to express, quantitatively or

qualitatively which areas of the business have

 Strengths that should be exploited by suitable strategies;

 Weaknesses for which strategies should be developed to improve them.

The purpose of an external appraisal (opportunities & threats) is to identify profit

Making opportunities which can be exploited by the organization’s strengths and also to
anticipate environmental threats which will affect competitors and the organization as
well. Thus internal and external appraisals are brought together in a SWOT Analysis.

Through this type of an analysis a bank can easily gauge its level of performance and pin
point its weakness, strength, threats & opportunities in order to improve the existing
condition in competition to its rivals.

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This helps to formulate such strategies which help in profit maximization and achievement
of organizational goals & objectives.

1. Strengths

 Positive characteristics and advantages of the situation, issue, product, service,

individual, or technique

 Being the first commercial bank of AJK, this Bank has great advantage on all other
banks working in this region. It is identified as a financial national asset for the
people of AJK. Thus is an initiative step towards economic progress of this small
state.
 High Potential for Growth

Although AJK has no as such developed industrial sector, the government is taking keen
interest in its development. A large number of Kashmiris are working in Britain and other
foreign countries. They are a big source of earning of foreign exchange. The capital
contributed by the Government of Azad Jammu & Kashmir and AKLASC towards the
Bank equity would certainly grow at an accelerating pace in the days to come. By keeping
in view these facts AJK bank high potential for growth.

 Highly Experienced and Motivated Management

The people working at High level posts are very experienced and motivated. They are
showing keen interest in development of this new born institute and want to see it on
the top, inner future. All the decisions are made through mutual understanding of all
the members of board of directors.

 Qualified Staff

The staff’s members are no doubt highly qualified. They have not only acquired
degrees from world's recognized institutes but also have practical experience. Many
members of management team had performed their duties as an active participant in
top rated national institutes of Pakistan.

 Spirit of Cooperation among the Team Members

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Members have great regard for each other. They have ability to understand the philosophy
to work as an effective team.

Emotional affiliation of the people of Azad Jammu and Kashmir as there.

National institute:

 One of the biggest strength of the bank of Azad Jammu & Kashmir is that it is a
national institute. People living in this region want to see it on the top, in future.
 Rigorous Risk Management Policy:

Bank has adopted a rigorous and robust risk management policy to ensure a sound credit
portfolio as well as meet the standards laid down by the regulatory agencies.

 Well Designed System of Internal Control

A Well Designed system of internal control is in placed in the Bank. Without

exaggeration, the system is effectively implemented and a team of high calibre
professionals monitor it, thus contributing to build, maintain and

Develop a high sense of depositor’s confidence.

 Great Regards for Customer

The dealing of the bank staff towards their customer is excellent. They have great honour

And regard for them. They try their best to facilitate each and every customer in time.

2. Weaknesses

“Negative characteristics and disadvantages of the situation, issues, products, services

individual or technique”

 Un-scheduled Bank

To be scheduled its paid up capital must be up to 10 billion but unfortunately due to anew
born institute it is still far behind this limit.

 Unlisted

It is not still listed in stock exchange. As a result, the confidence level of investor is very
low.

 Limited Branch Network

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Although the bank is trying to establish new branches in every area of this region, still the
branch network is limited to some specific areas.

 Limited acceptance of instrument

As the bank is unlisted, unscheduled and have no foreign branches, neither giving facility
of online banking the acceptance of instrument like DD, is very much limited.

 Manual banking

Banking has manual system that is insecure and time taking, it is difficult to find and
rectify errors in time. There is huge dump of manual records, it is difficult to maintain and
keep it up the date.

 No Online Banking System

Today is the world of information technology. To keep pace with the modern world usage
of computer based technology is essential. While talking to finance manager about this
problem, he revealed the fact that due to Lack of adequate capital and slow
implementation of management decision, The BOAJK bank is still unable to provide
online banking facility to its customers. This is one of the greatest disadvantages for this
bank and a hurdle to compete with other banks working in this region.

 High Turnover rate

Turnover rate among the employees is very high. There is a sense of job dissatisfaction
among them. They have a feeling that their efforts are not being utilized fully. They also
feel that career building and growth opportunity is very much limited. Employees have
developed a psychology that promotion criteria & Procedures of the Human Resource
Department of the bank are not justified.

3. Opportunities

“Door knocks twice; insider asks: who is there? Answer: it is me opportunity. Insider: you
are wrong because opportunity never knocks twice. “Opportunities are the factors, or
circumstances that can benefit, enhance or improve the situation, issue, product, service,
individual, or technique”

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 Globalization

Globalization is a basic threat for the bank of AJK. All the banks especially HBL, UBL,
ABL and Askari commercial bank are using globalize strategies to penetrate into the
market. They are offering innovative services and products to their customers. While the
bank of AJK is still behind due to lack of modern technology and is still using traditional
methods of banking.

 New Entrance

By seeing high potential market for growth, the banks already working here are opening
new branches whereas many foreign banks are trying to pave their path in order to get
market share. These competitors having offensive strategies are basic threat for this small
institute.

 Increased Competition

Increase in number of banks is a threat for The Bank of Azad Jammu & Kashmir.
Numbers of private banks (commercial and private) are operating their business. Most of
them are online, scheduled, listed and equipped with modern technology. They are a
symbol of threat for this new born institute.

 Political Instability

AJK is a developing state political instability is the basic reason of lack of confidence of
investor in this region. Cast discrimination is also at its peak. Due to political crisis,
Governments usually don’t complete its terms that’s why the projects cannot be completed
in time, Policies change with the change in government.

 Uncertainty in Recognition of Potential Markets

Research and development department is facing lack of financial resources. Assessment of

data gathered is very technical task, but due to lack of modern technology, it has limited
grip on information available. Uncertainty in recognition of potential market is a serious
threat for this institute.

 Increasing Role of Information Technology

It has been estimated that the world’s stock of knowledge is doubling every ten years
without the aid of a formal plan information technology executive can no longer know all

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that they must know to solve the complex problems they face. Global planning process
provides an order mean for assembling, analysing and distilling the information required
for sound decisions. The practical implementation of this technology is very much limited
in this bank and proves to be greatest threat in its survival.

 Type of Banking

Modern and computerized banking is required to fulfil the customer’s need. But maximum
branches of The BOAJK are working in old traditional ways.

 Lack of Skilled Employees at Low Level

Highly skilled people and management required to meet the new standard of banking. In
The BOAJK some employees at low level are totally irresponsible and lack of complete
knowledge of banking system. So these employees are creating continuous problems in the
system of AJK.

4. Threats

 Advanced Technology of Other Banks

The technology of the other banks is advanced from the BOAJK because of the online
banking system and ATM facilities. The BOAJK does not have these facilities.

 Recovery of Loans

As it is the bank of the provincial government so most of the politicians take loans from
the bank. The recovery becomes impossible from such politicians due to which the bank
faces problems of bad debts and the bank incurs major loss.

 Foreign Banks

The number of foreign banks is increasing day by day in Pakistan. They also provide good
quality services at the same cost as the BOAJK provides to their clients. Thus this too is a
potential threat for the BOAJK

 Interference of Government

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As the political situation is always unstable, that is why the government does not give
proper attention to the performance of the BOAJK. Beside this, the AJK government.

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i. Horizontal analysis of balance sheet

Year 2020 2021 2022

Assets
Cash and balance with banks 100% 128.7% 185%
Balance with other banks 100% 150% 160.8%
Net investments 100% 98.8% 88.5%
Net advances 100% 125% 138%
Operating fixed assets 100% 110% 138.8%
Deferred tax assets 100% 133.6% 143.9%
Other assets 100% 123% 219%
Total assets 100% 140% 164.6%
Liabilities
Bills payable 100% 234.6% 21.7%
Deposits and other accounts 100% 126% 150.7%
Liabilities against assets subject to finance 100% 104% 98.6%
lease
Other liabilities 100% 105% 215.6%
Total liabilities 100% 125.6% 152%
Equity
Share capital 100% 241% 241%
Reserves - 100% 100%
Unappropriated profit 100% 8.5% 131%
Surplus on revaluation of assets 100% 110.8% 210.8%
Total equity 100% 227% 240.5%
Net assets 100% 227% 240.5%

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Horizontal analysis of profit & loss account

Year 2020 2021 2022

Interest earned 100% 110.6% 147%
Interest expensed 100% 90.6% 133%
Net interest income 100% 129.6% 161%
Non mark-up / interest income
Fee & commission income 100% 128% 99%
Dividend income 100% 69.7% 91.5%
Other income 100% 84% 80%
Total interest income 100% 103.9% 93.9%
Total income 100% 128.6% 158%
Non mark-up / interest expenses
Operating expenses 100% 115.5% 117.6%
Total non-mark-up / interest expenses 100% 115.5% 117.6%
Profit before provisions 100% 152% 231%
Provisions and write offs net 100% 117.7% 70%
Profit before taxation 100% 156% 250.7%
Taxation 100% 157% 303%
Profit after taxation 100% 155.6% 214%

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Vertical analysis of profit and loss account

Interest earned are as base

Year 2020% 2021% 2022%

Interest earned 100 100 100
Interest expensed 48.7 39.9 44
Net interest income 51 60 55.9
Non mark-up / interest income
Fee & commission income 1.23 1.43 0.83
Dividend income 0.65 0.41 0.40
Other income 0.37 0.28 0.20
Total interest income 2.26 2.13 1.44
Total income 53 62 57
Non mark-up / interest expenses
Operating expenses 34 35.8 27
Total non-mark-up / interest expenses 34 35.8 27
Profit before provisions 19 26 29.9
Provisions and write offs net 2.07 2.20 0.99
Profit before taxation 17 24 29
Taxation 6.95 9.87 14
Profit after taxation 10 14 14.6

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Vertical analysis of balance sheet

Total assets are as base

Year 2020% 2021% 2022%

Assets
Cash and balances with banks 20.5 18.8 23
Balance with other banks 58 62.7 57
Net investments 1.10 0.78 0.59
Net advances 13 11.95 11.21
Operating fixed assets 1.36 1.07 1.15
Deferred tax assets 0.15 0.12 0.13
Other assets 5.05 4.44 6.72
Total assets 100 100 100
Liabilities
Bills payable 0.40 0.67 0.05
Deposits& other accounts 81.45 73 74.5
Liabilities against assets subject to finance lease 0.79 0.58 0.47
Other liabilities 3.17 2.39 4.16
Total liabilities 85.82 76.98 79.28
Net asset 14.17 23.01 20.71
Equity
Share capital 12.66 21.83 18.57
Reserves - 1.14 0.97
Unappropriated profit 1.58 0.096 1.26
Surplus on revaluation of assets 0.074 0.058 0.094
Total equity 14.17 23.01 20.71

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CHEPTER #05

Findings & Recommendations

There is no single professional organization in the world, which is “perfect”. There

are always
Some flaws within organizations which need to be revamped from time to time.
For this purpose, either the same organization has to make researches and analyses
for rectification of such flaws or some other agencies play its role to introduce
means for removing problems from professional organizations. During my
internship at BAJK Bratlah Branch Kotli, I felt that the branch was lacking some
facilities that must be provided.

5.1Findings of the Overall Branch:

 It is observed that the branch suffer from space shortage. The seating arrangement
is not sufficient as compared to the number of employees and customers.

 Promotion is one of the major motivational tools. The promotional policy of the
BAJK is very slow. The opportunities for upward advancement are very few. The
salary packages of employs are also very low. More salary should be provided to
employees and the opportunities of promotion must be provided to increase
employee’s morale and motivation.

 The level of motivation among employees was very low. As the employees of the
branch needs to communicate to their online database every time. Sometimes there
was a break down in the internet connection, which interrupt their work and
somehow customer suffer from this.

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 During my internship I noticed that this branch lacks the basic facilities which
must be provided to the internees as well as to the employees of the branch.
Insufficient stationery is one of them. There are not enough pens and other
stationery in the branch to allow the employees to perform their work smoothly.
 Although there was a guard present at the branch, but the employees of the branch
sends the guard away i.e. to complete the other works of the branch.
 There is no separation of activities e.g. clearing of cheques. This is partially done
in the deposit department and partially in accounts. This creates confusion and
conflicts.

 During my internship I noticed that the internees are not guided properly. Due to a
lot of work load, employees don’t guide the internees well.
 It has been noted that the Bank’s officers usually neglect the rules and regulations
either intentionally or unintentionally; because these have not properly
communicated to them.

5.2 Recommendation for the Branch

 More space should be provided to handle the growing number of customers. They
need to buy a new and bigger building, which can handle the increasing number of
customers.
 More salary should be provided to employees and the opportunities of promotion
must be provided to increase employee’s morale and motivation.
 Management needs to encourage employees for their work to increase the
employee’s morale and motivation.
 Fast internet connection must be used to reduce the internet break downs.
 Basic stationery must be provided to internees as well as to employees.
 The guard must be assigned his specific duty to provide safety to employees and to
the customers as well.
 In order to avoid mishaps, there should be complete separation of activities.
 Internees must be guided properly.
 Their prompt communication must be ensured and the employees must be
informed about the penalties in case of negligence.

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5.3 Conclusion:

During my internship at BAJK Branch Bratlah I learnt so many things there &my work
experience was great. Especially the exposure to professional world was great.

The staff members were very friendly and they teach me a lot about the working of the
bank. They helped me a lot at every stage and I get detailed know how about how the
banking sector working and how it operates.

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References

Bank of azad Jammu & Kashmir - Search (bing.com)

www.boajk/Management.com.Pk - Search (bing.com)
www.boajk/financial reviews.com.pk - Search (bing.com)
www.banknetwork.bankajk./overall/annual report 2021 - Search (bing.com)
www.bankorganogramboajk.com - Search (bing.com)

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