Internship report

On

Bank of Punjab

SESSION 2012-2014

AHMER JAMAL JATOI

L4F12MCOM2118

SECTION (EC4)

MASTERS OF COMMERCE

1
 Punjab College of Commerce

University of Central Punjab

Lahore, Pakistan

2
 DECLARATION BY THE INTERN

I, the under-mentioned,solemnly declare that this internship report on BANK OF PUNJAB is my original
work.i further declare that I have strictly observed reporting ethics and duly discharged copy-right
obligation and properly referred outsourcing of materials used in this report and nothing is confidentian
in this report in respect of the company of my internship.i take the responsibility for all legal and ethical
requirements regarding this report .

Signature:______________________

Name: Ahmer Jamal Jaitoi

Registration No: L4f12mcom2118

3
4
 DEDICATION

I dedicate this report to my parents. I am thankful to Allah, who is the most Gracious
and Merciful, Who blessed me with courage and knowledge to complete this task in due time. I
completed my report successfully because of blessings of Allah and prayers and support of my parents,
teachers and friends. I am grateful to my father who helped me in preparation of this report

5
 ACKNOWLEDGEMENT
Praise be to Almighty Allah, the Most Merciful and Magnificent and to his Holy Prophet Muhammad
(Peace Be Upon Him) who is forever a torch of guidance and knowledge for humanity as a whole.

I feel deep sense of gratitude to Mr.Amjad Ali manager of The Bank of Punjab Kutchery road
Branch(branch code 0083) for allowing to me to do my internship and also providing me necessary

6
assistant and guidance. I am also highly grateful to Mr. Muhammad Asim (operation Manager) & Mr.
Sohail Choudhary (OG III),Miss Benish Iqbal (OG III) and Mr. Malik Raheel who helped me during my
training while performing complex tasks as well as the departmental heads of the bank especially
operations related department.

​I owe depth of gratitude to my affectionate parents, and campus in charge Mr. Azeem Naz (Principal)
who supported me morally and inspired me to the higher ideas of life.

My gratitude also goes to all those friends who provided me any assistance in what so ever manner in
the preparation of this study.

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 EXECUTIVE SUMMARY
I have presented my report into 3 main chapters. In the 1st chapter I have described the introduction,
nature and history of BOP. Details of products and services, introduction of all departments and the
branch where I did my internship and the task done by me during my training.swot analysis is also
included in this chapter.

In the 2nd chapter I’ve given the departments/division of bank. also the number of employees and also
the comparison of work and theory.

In the 3rd chapter have suggested some recommendations in the light of ratios and SWOT analysis. Major
responsibilities taken by me in bank, skills I have learned from this internship and how these skills would
be helpful to me in my practical life is also included in this chapter.

Since the incorporation the Bank has grown manifold showing remarkable growth in all aspects.
Especially, after the current management took over the affairs of the bank in 2010 there has been
tremendous growth in all its facets of operations as a result of application of prudent and pragmatic

8
policies with futuristic approach. Owing to its significant performance, profitability, financial standing
and market penetration the Bank has attained reputation of a responsible corporate citizen playing a
pivotal role in economic and social development of the country.

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of
The Bank of Punjab (BOP) at 'AA-'(Double A minus) and'A1+'(A one plus), respectively. The ratings denote
a very low expectation of credit risk and indicate very strong capacity for timely payment of financial
commitments.

LIST OF TABLES

Table Page
Table 1.1 7

9
Table 1.2 8
Table 1.3 9
Table 1.4 11
Table 1.5 12
Table 1.6 14
Table 1.7 33
Table 1.8 33
Table 1.9 34
Table 1.10 34
Table 1.11 34
Table 1.12 35
Table 1.13 35
Table 1.14 36
Table 1.15 36
Table 1.16 36
Table 1.17 37
Table 1.18 37
Table 1.19 37
Table 1.20 38

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Table 1.21 38
Table 1.22 39
Table 1.23 39
Table 1.24 40
Table 1.25 40
Table 1.26 40
Table 1.27 41
Table 1.28 41
Table 1.29 42
Table 1.30 42
Table 1.31 43
Table 1.32 43
Table 1.33 44
Table 1.34 44
Table 1.35 44
Table 1.36 45
Table 1.37 45
Table 1.38 46
Table 1.39 50

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Table 1.40 54
Table 1.41 58
Table 2.1 64

12
 LIST OF FIGURES

Figures Page
Figure 1.1 10
Figure 1.2 11
Figure 1.3 11
Figure 1.4 23
Figure 1.5 24
Figure 1.6 27
Figure 1.7 29
Scanned Copies of BOP’s Broachers 73

13
TABLE OF CONTENTS

Title Page

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Internship completion certificate i
Declaration by the intern ii
Acceptance certificate iii

Dedication iv

Acknowledgement v
Executive summary vi

List of tables vii

List of figures ix
Table of contents x

Chapter 1
Introduction of the company
Brief introduction of the organizational business sector 1

Corporate information 1
Board of directors 1

Product lines 3

Organization chart of company 23

Functions performed by different departments 25

Financial analysis 33

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Horizontal analysis 46
Vertical analysis 54

Swot analysis 62

Chapter 2
Internship activities
Name of training department and duration for each task 64
Training program 64

Account opening department 65

Clearing department 67
Remittance department 68

Chapter 3
Internship assessment and recommendations
Recommendations: 70
Conclusion 72
Annexes 73
References: 76

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17
Chapter 1

INTRODUCTION OF THE COMPANY

Brief Introduction of the Organizational Business Sector

Bank of Punjab is a commercial bank competing in the banking sector of Pakistan successfully.
Established in 1989, in pursuance of The Bank of Punjab Act 1989 and was given the status of
scheduled bank in 1994. The Bank of Punjab is working as a scheduled commercial bank with its
network of 272 branches at all major business centres in the country.

The Bank provides all types of banking services such as Deposit in Local Currency, Client
Deposit in Foreign Currency, Remittances, Advances to Business, Trade, Industry and
Agriculture A wholly owned subsidiary of BOP First Punjab Modaraba (Islamic mode of
financing) was established in 1992 and is being managed by Punjab Modaraba Services (Pvt)
Ltd.

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CORPORATE INFORMATION

BOARD OF DIRECTORS
Mr. Ghafoor Mirza ​ ​ ​ Chairman

Mr. Naeemuddin Khan ​ ​ President

Mr. Tariq Mahmood Pasha ​ ​ Director

Mr. Tariq Bajwa ​ ​ ​ Director

Mr. Junaid Ashraf Khawaja ​ ​ Director

Mr. Farooq Ahmed Awan ​ ​ Director

Mr. Raza Saeed ​ ​ ​ Secretary to the Board​​ ​ ​ ​

Audit Committee

Mr. Ghafoor Mirza ​ ​ ​ Chairman

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Mr. M. Naveed Masud ​ ​ Member

Mr. Junaid Ashraf Khawaja ​ ​ Member

Auditors

Earnt & Young Ford Rhodes Sidat Hyder, Chartered Accountants.

Registered Office:

BOP Tower, 10-B, Block-E-ІІ

Main Boulevard, Gulberg ІІІ

Lahore.

Website:

www.bop.com.pk

UAN: 111-200-100

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 PRODUCT LINES
CURRENT ACCOUNT

The Accounts shall be opened upon submission of duly filled-in Bank’s prescribed Account
Opening Form properly introduced in the manner provided and on submitting all such documents
as may be revised by the Bank. The Bank reserves the right to demand such relevant documents
even after opening of account as deemed necessary.

The Accounts shall be opened with an initial/minimum deposit as stipulated by the Bank from
time to time unless specifically exempted.

21
The Accounts may be opened singly in one name or jointly in two or more names.

Withdrawals will not be allowed against postdated (payable on any future date) and stale (06
months after issuance date) Cheques and against un-cleared funds.

FOR NEW CUSTOMER

All CD accounts which are not operated upon by the account holders for a period of one year
will be classified as dormant. After passing one year in the dormant status, that is, no operation
in the account for a continuous period of two years, the account shall be classified as inoperative.

FOR EXISTING ACCOUNT HOLDERS:

The period of conversion of a normal CD account to dormant has been enhanced from 06 months
to one year, since last operation in the account, with effect from January 2008.

Withholding Tax at the rate notified by the Government of Pakistan from time to time will be
deducted out of profits payable to the Account Holders.

The branches shall ensure completion of all the formalities required by State Bank of Pakistan
vide Prudential Regulation No.M-1with regard to KNOW YOUR CUSTOMER.

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BASIC BANKING ACCOUNT

The minimum initial deposit will be Rs.1000.

No profit will be Payable.

No fee (service charges) for maintaining such accounts will be charged.

There will be no limit for maintain minimum balance. In the cases, there balance in BBA's
remain "NIL" for a continuous 6 month period, such accounts will be closed.

Unlimited free of charge ATM withdrawals from Ban's own ATM's will be allowed. In case of
withdrawals from BBA though the ATM Machine of other Banks, the Charges of these Banks
shall be applicable for such transaction.

SAVING ACCOUNTS

PROFIT AND LOSS SHARING:

❖​ PLS Saving account

❖​ Senior citizen saving account
❖​ Ghareloo saving account

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 ❖​ Ziada Munafa saving account
❖​ PLS Saving Profit Plus account
❖​ Corporate premium account
❖​ Corporate premium term account
❖​ Munafa hi Munafa term account
❖​ BOP PLS supreme saving account
❖​ BOP FCY supreme saving account
❖​ BOP FCY supreme current account
❖​ Pehle Munafa Deposit scheme

LOAN PRODUCTS:

1.​ COMMERCIAL LOAN

●​ Running Finance
●​ Demand Finance
●​ Cash Finance
2.​ CONSUMER LOAN
▪​ Aasaish Loan
▪​ Quick Loan

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▪​ House Loan
▪​ Personal Loan

3.​ SME LOAN

▪​ CNG Filling Station scheme
▪​ Lady Entrepreneur Financing Scheme
▪​ Auto Lease Finance
▪​ Karobar Berhao Scheme
▪​ Fertilizer dealer financing
▪​ Atlas Honda Authorized Dealer Finance scheme
▪​ Purchase of office/ shop scheme

4.​ AGRICULTURE CREDIT

▪​ Agri Finance Branches (New)
▪​ Agricultural Finance Scheme
▪​ Kissan Dost Tractor Scheme
▪​ Second hand Tractor lease finance scheme

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▪​ Kissan dost Aabiari scheme
▪​ Kissan dost Mechanization scheme
▪​ Kissan dost Farm transport scheme
▪​ Kissan dost Eslah-E-Arzi scheme
▪​ Kiisan dost live stock development scheme
▪​ Livestock breed improvement trough VVW
▪​ Kissan dost commercial Agro Services
▪​ Kissan dost Agri Mall Finance Scheme
▪​ Corporate Farming Finance scheme
▪​ Commercial lease finance Tractor scheme
▪​ Demand Finance-Sheds Construction and Civil works
▪​ Landless People for purchase of of Buffaloes
▪​ Lease finance-Livestock/Poultry and Fish Farms
▪​ Kissan dost Model Dairy Farms
▪​ Kissan Dost Model Milk Collection Centre
▪​ Financing for Potato Grower
▪​ Kissan Dost Green House Finance Facility
▪​ Kissan Dost Cold Sterage Finance Facility

26
 ▪​ Green Tractor Scheme 2008-2009
1) PLS Account

The Accounts shall be opened upon submission of duly filled-in Bank’s prescribed Account
Opening Form properly introduced in the manner provided and on submitting all such documents
as may be revised by the Bank. The Bank reserves the right to demand such relevant documents
even after opening of account as deemed necessary

The Accounts may be opened singly in one name or jointly in two or more names.

Profit payable or Loss recoverable on PLS Saving Accounts to be credited or debited will be
determined by the Bank at its sole discretion on the basis of its net working results at the end of
each half-year within the time prescribed by SBP from the date of the close of the half-yearly
books of accounts of the Bank. The rates of profits may vary from period to period viz January to
June/July to December each year.

The branches shall ensure completion of all the formalities required by State Bank of Pakistan
vide Prudential Regulation No.M-1with regard to KNOW YOUR CUSTOMER.

2) Senior Citizens Saving Account

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This is a saving bank product available for all senior citizens i.e. persons of 60 years and above
who are eligible to open a saving account as per our Bank’s criteria. The account can be opened
singly or preferably jointly (husband & wife) provided either of them is of 60 years or
above.This product is designed to attract procure deposit/savings of senior citizens by offering
attractive, innovative incentives and higher rate of profit to senior citizens.

The Main Features are:

A customer can open only one BOP Senior Citizens Saving Account singly or jointly regardless
of the branch. In case it is found out that more than one account exists under this category, the
Bank reserves the right to recover & forfeit the profits paid or not to give any profit.

The account can be opened with a minimum initial deposit of Rs.10,000/-. However in case
average deposit during the month falls below Rs.10,000/-, account maintaining charges shall be
levied as per Bank’s Schedule of Charges.

The profit slab is as follows:

Minimum Monthly Balance * Expected rate of profit

Rs. 0 upto 10,000/- Normal PLS SB rate

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 Rs.10,001 upto 200,000/- 5 % p.a.

Rs.200,001 upto 400,000/- 7 % p.a.

Rs.400,001 upto 500,000/- 8 % p.a.

*This product is governed under PLS rule of Profit & Loss sharing system. The rates mentioned
are expected and the Bank reserves the right to review/revise the profit rates quarterly.

Maximum profit @ 8.0 % p.a. as per different slabs shall be paid on minimum monthly deposit
upto Rs.500,000/-. Deposit can exceed Rs.500,000/- but no profit will be paid on amount over
and above Rs.500,000.

The profit will be calculated on monthly basis based on the minimum monthly balance
maintained by the customer during that particular month.

The profit will be credited on monthly basis in the respective account.

Profit once disbursed will not be recovered in case of decrease in rate at the time of
announcement of Half Yearly profit rates. However in case of rise in profit rate the difference
amount will be paid.

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Gharayloo Saving Account

This is a saving bank product available for all females who are eligible to open a saving account
as per our Bank’s criteria. The account can be opened singly or jointly with husband. This
product is designed to attract procure deposit/savings of ladies particularly housewives of
expatriates ​

The Main Features are:

A customer can open only one BOP Gharayloo Saving Account singly or jointly regardless of
the branch. In case it is found out that more than one account exists under this category, the Bank
reserves the right to recover & forfeit the profits paid or not to give any profit.

The account can be opened with a minimum initial deposit of Rs.10,000/-. However in case
average deposit during the month falls below Rs.10,000/-, account maintaining charges shall be
levied as per Bank’s Schedule of Charges

The profit slab is as follows:

Minimum monthly balance * Expected rate of profit

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Rs. 0 upto 10,000/- Normal PLS SB declared
rate

Rs. 10,001 upto 250,000/- 7.25 % p.a.

* This product is governed under PLS rule of Profit & Loss sharing system. The rates mentioned
are expected and the Bank reserves the right to review/revise the profit rates quarterly.

Maximum profit @ 7.25 % p.la. shall be paid on minimum monthly deposit upto Rs.250,000/-
but over Rs.10,000/-. Deposit can exceed Rs.250,000/- but no profit will be paid on balance over
and above Rs.250,000.

The profit will be calculated on monthly basis based on the minimum monthly balance
maintained by the customer during that particular month.

The profit will be credited on monthly basis in the respective account.

Ziada Munafa saving Account

This is a saving bank product available for general public i.e. persons who are eligible to open a
saving account as per our Bank’s criteria. The account can be opened singly or jointly. This

31
product is designed to attract procure deposit/savings of general public particularly salaried and
small investors.

A customer can open only one BOP Ziada Munafa Saving Account singly or jointly regardless of
the branch. In case it is found out that more than one account exists under this category, the Bank
reserves the right to recover & forfeit the profits paid or not to give any profit.

The account can be opened with a minimum initial deposit of Rs.10,000/-. However in case
average deposit during the month falls below Rs.10,000/-, account maintaining charges shall be
levied as per Bank’s Schedule of Charges.

The profit slab is as follows:

Minimum monthly balance * Expected rate of profit

Rs 0 upto 10,000/- Normal PLS SB rate

Rs.10,001 upto 200,000/- 4.0 % p.a.

Rs.200,001 upto 400,000/- 5.0 % p.a.

Rs.400,001 upto 500,000/- 7.5 % p.a.

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*This product is governed under PLS rule of Profit & Loss sharing system. The rates mentioned
are expected and the Bank reserves the right to review/revise the profit rates quarterly.

Maximum profit @ 7.5 % p.a. as per different slabs shall be paid on minimum monthly deposit
upto Rs.500,000/-. Deposit can exceed Rs.500,000/- but no profit will be paid on amount over
and above Rs.500,000.

The profit will be calculated on monthly basis based on the minimum monthly balance
maintained by the customer during that particular month.

PLS-Saving Profit Plus Account

Individuals, corporations, organizations and various provincial / federal government departments

can open accounts under the scheme.

This is an operating/checquing 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 the land.

Average balance during a calendar month will be taken to determine the deposit slabs and
applicable profit rate for that month for the purpose of creating provisons. However, in case the

33
average balance in any month falls below Rs. 1(M) being the minimum slab, the account for that
particular month will be treated as an ordinary Pls-sb account and profit will be calculated on
minimum balance during the month at the normal rate declared for Pls- sb account.

Profit payable on half yearly basis.

Corporate Premier Account

This account has been introduced for corporate clients. This is an operating/chequing account.
Profit on the account will be calculated on daily product basis by determining the slab on the

34
basis of average balance maintained in the account. The deduction of Zakat and Withholding tax
will be applicable as per law of the land. Profit payable on monthly basis.

Corporate Premier Term Account

This account has been introduced for corporate clients. This is non operating/chequing account.
Minimum amount of investment is Rs.500(M). The deduction of Zakat and Withholding tax will

35
 be applicable as per law of the land.Profit payable at maturity

Munafa Hi Munafa

This is a term deposit product. The term is from 1 month o 5 years and theprofit is paid on
monthly basis. The minimum amount of deposit is Rs.100,000/-. The rate of profit is from 8.0 %
p.a. to 12 % p.a. depending on the tenure which is higher than Bank’s normal term deposits as
follows:

Term Expected Profit Minimum Profit payment on monthly

Rates p.a. amount of basis (With Holding Tax to
Deposit Rs. be deducted)

3 month 10.00 % 100,000/- Rs.833

6 months 10.5 % 100,000/- Rs.875

36
1 year 12.00 % 100,000/- Rs.1000

5 year 11.00 % 100,000/- Rs.1112

​
* This product is governed under PLS rule i.e. the rates mentioned are expected and the Bank
reserves the right to revise the rates and terms & conditions of profit under Profit & Loss sharing
system.

PLS Supreme Saving Account

INCENTIVE Average Balance Average Balance Average Balance from

from Rs.300,000 from Rs.1,000,001 Rs.5,000,001 & OVER
To Rs.1,000,000/- To Rs.5,000,000/-

Free Free – unlimited Free – unlimited Free – unlimited

Inter-city/within-cit transaction transaction transaction
y
deposit/withdrawal

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Free Issuance of One Card One Card One Card
ATM/Debit Card

Free Renewal of Allowed Allowed Allowed

ATM/Debit Card

Free Issuance of One 25 leaves per Two 25 leaves per Free – No limit
Cheque Book month month

Free Issuance of
Duplicate A/c
1 per month 2 per month Free – No limit
Statement

Free Rental One Small subject One Medium subject

Charges for to availability to availability
NONE
Lockers
(small/medium)

38
No key deposit for No Key deposit No Key deposit No Key deposit
lockers equivalent of small equivalent of small equivalent of medium
locker locker locker

Commission free Free – unlimited Free – unlimited Free – unlimited

issuance of transaction transaction transaction
PO/DD/MT/TT

Free/reduction in Free - on equal to Free - on equal to Free - on equal to three

Outward Bills for last month’s twice of last times of last month’s
Collection charges average balance month’s average average balance and
and above this balance and above above this amount
amount reduced this amount reduced commission @
commission @ reduced 0.25%
0.32% commission @
0.28%

No Cheque return
charges for cheques
3 per month 5 per month Free – No limit
presented in

39
clearing as
collecting banker.

CONSUMER FINANCING

Reduction in
processing charges
upto 10% upto 25% Upto 50%
from 10 to 50 %

Reduction in rate
of markup upto 50
upto 25 bps upto 40 bps Upto 50 bps
bps

​
1) The rent free locker facility will be allowed on availability of locker and after maintaining
average balance for six months.

2) The reduction in rate of markup on Consumer finance will be on loan amount equal to twice
of last months average balance.

40
3) In order to further facilitate the managers in targeting customers, it will be at the discretion of
the manager to offer the incentive package from day one. However it will be the responsibility of
the branch ensure that customer completes the criteria as per above table otherwise recover the
charges waived.

4) The incentive package will be reviewed on quarterly basis. The Bank reserves the right to
change, modify the package.

5) The rate of profit will be same as per Bank’s declared rate of PLS SB

BOP TIJARAT ACCOUNT (LCY)

INCENTIVE Average Balance Average Balance Average Balance

from Rs.100,000 To from Rs.500,001 To from Rs.1,000,001
Rs.500,000/- Rs.1,000,000/- & Over

Free Free – unlimited Free – unlimited Free – unlimited

Inter-city/within-city transaction transaction transaction
deposit/withdrawal

41
Free Issuance of One Card One Card One Card
ATM/Debit Card

Free Renewal of Allowed Allowed Allowed

ATM/Debit Card

Free Issuance of One 50 leaves per Two 50 leaves per Free – No limit
Cheque Book month month

Free Issuance of
Duplicate A/c
1 per month 2 per month Free – No limit
Statement

Free Rental Charges One Small subject to One Medium

for Lockers availability subject to
NONE
(small/medium) availability

No key deposit for No Key deposit No Key deposit No Key deposit

lockers equivalent of small equivalent of small equivalent of
locker locker medium locker

42
Commission free Free – unlimited Free – unlimited Free – unlimited
issuance of transaction transaction transaction
PO/DD/MT/TT

Free/reduction in Free - on equal to Free - on equal to Free - on equal to

Outward Bills for last month’s average twice of last month three times of last
Collection charges balance and above average balance and month’s average
this amount reduced above this amount balance and above
commission @ reduced commission this amount reduced
0.32% @ 0.28% commission @
0.25%

No Cheque return
charges for cheques
3 per month 5 per month Free – No limit
presented in clearing
as collecting banker.

Free Call Deposit No charges, if in No charges, if in No charges, if in

Receipt own name or in own name or in own name or in
favour of deptt on favour of deptt on favour of deptt on

43
 a/c holders behalf a/c holders or on a/c holders or on
for earnest/bid other contractor’s other contractor’s
money by debiting behalf for behalf for
own account earnest/bid money earnest/bid money
by debiting own by debiting own
account account

CONSUMER FINANCING

Reduction in
processing charges
upto 10% upto 25% upto 50%
from 10 to 50 %

Reduction in rate of
markup upto 50 bps
upto 25 bps upto 40 bps upto 50 bps

​
1) The rent free locker facility will be allowed on availability of locker and after maintaining
average balance for six months.

44
2) The reduction in rate of markup on Consumer finance will be on loan amount equal to twice
of last months average balance.

3) In order to further facilitate the managers in targeting customers, it will be at the discretion of
the manager to offer the incentive package from day one. However it will be the responsibility of
the branch ensure that customer completes the criteria as per above table otherwise recover the
charges waived

4) The incentive package will be reviewed on quarterly basis and on the deposit procured
vis-à-vis cost benefit, package can be revised downward.

LOAN PRODUCTS

1) COMMERCIAL FINANCE

1)​ Running Finance

a)​ against pledge of shares
b)​ against government securities

45
 c)​ against hypothecation of stocks
2)​ Demand Finance
Credit facilities extended against registered mortgage of property (i.e, land/buildings constructed
or to be constructed) is by nature classified as a Secured Advance. A formal charge on the
property is established and recorded with the Registrar Land and Property termed as registered
mortgage. Advances are also made against equitable mortgage of property, whereby the original
title Deeds, are deposited with the Bank as Security and the charge is registered with the
Registrar SECP.​
In case the Finance is allowed to Limited Companies, where the original title documents of
Land/Building and other Fixed Assets are held by the senior charge holders, our charge
(Pari-Pasu or ranking) as approved by Credit Committee, shall be recorded with the Registrar
Securities & Exchange Commission of Pakistan (SECP). However,

3) Cash Finance

This facility is generally provided against pledge of goods. Under this type of financial
accommodation the facility amount is disbursed in specially opened account for the purpose. The
pledged goods are released to the borrower against cash payment only. In case the goods pledged

46
are seasonal in nature, the customer would be required to adjust the facility before the season
ends. Rollover shall not be allowed.

2) CONSUMER FINANCE

a)​ 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 to500,000 based on their
salary. An eligibility criterion for customers as well as customers is minimum Rs. 15000
take home salary.
b)​ House loan
Salaried persons with maintaining account with bank can avail this facility with minimum
take home salary Rs.15000 per month.

c)​ Bop car loan

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.

d)​ Smart cash personal loan

47
 Facility for bank’s target market for meeting their personal needs repayable through monthly
installments. Maximum limit of loan is Rs 500,000 which is equal to 25 take home monthly
salaries. Maximum duration of tenure is 5 years.

LEASE FINANCE FACILITY FOR PURCHASE OF TRACTOR

UNDER GREEN TRACTOR Scheme 2008-2009

In the wake of Chief Minister, Punjab's agenda for promotion of Agriculture Sector, Government
of Punjab has decided to provide 10000 Tractors to small farmers on subsidized rates. A subsidy
of RS: 200,000/- per tractor will be provided to the farmers declared successful through
computerized balloting. The scheme has been titled as "Green Tractor Scheme 2008-09". In
order to facilitate farmers and to grasp maximum business, our Management has approved a
special product titled as "LEASE FINANCE FACILITY FOR PURCHASE OF TRACTOR
UNDER GREEN TRACTOR SCHEME 2008-09" with following terms & conditions: ​
​
ELIGIBILITY ​
All Farmers who have been declared successful through computerized balloting.​
The applicant should be a resident, owner/self cultivator of minimum 05 Acres of agri-land free

48
from all encumbrances. Existing BOP borrowers having land under Bank's charge are also
eligible under this scheme. The applicant should not be a defaulter of any Financial Institution.

KISAN DOST TRACTOR FINANCE SCHEME​

​
Purpose:​ ​
Provision of financial facility to the farmers and non farmers (those who provide tractors to
farmers on rental basis for various tractor related operations), for purchase of Tractor on Lease.

Finance Basis.

Eligibility:​

Resident Self Cultivator having

Amount:​ Maximum Rs. 750,000/-.

Equity:​

10% to 20% of the cost of Tractor will be paid by the borrower on case to case basis.

Security:​

49
 1.​ Lease Tractor (to be registered in the name of Bank)
2.​ Charge on Agriculture Land through Agri. Pass Book.
3.​ One personal guarantee of reputable person. Two written satisfactory market
checking reports.

Mark-up:​ 15% per annum.

Repayment:​ 10 equal half yearly installments (within five years).

CLEAN COMMUNITY/GROUP FINANCING (PRODUCTION /DEVELOPMENTS ​

LOANS) TO SMALL FARMERS GROUP UNDER KISSAN DOST SCHEMES

The said scheme will be group based financing scheme for small farmers who do not have
tangible security to offer to banks as collateral. The scheme has been structured on group based
lending approach wherein banks can finance to individuals through Small Farmer Groups. With
the success stories of innovative lending techniques like Group basedLending (Grameen Model),
Self Help Groups (Indian Model), Solidarity Group (LatinAmerica Model), Community based
Organization (Village Banking) and other approaches; there is paradigm shift in the lending

50
methodologies to the smallfarmers/borrowers. The Grameen of Bangladesh, Bank for
Agriculture and Agricultural Cooperatives (BAAC), Thailand and Bank Rakyat Indonesia (BRI),
have proved to be most successful agri/rural sustainable financial institutions serving mostly to
small farmers. The success of these financial institutions has broken the myth that people without
tangible assets can neither pay the real cost of credit, nor save, and in general are poor credit
risks.

PURPOSE

The scheme will target farming community involved in small agri related activities i-e livestock,
dairy, poultry, fisheries, horticulture etc.

SERVICES

These are the services provided by the BOP.

●​ ATM Facility

●​ Letter of Credit

●​ Pay Order

●​ On-Line Banking

51
 ●​ E-Banking

●​ Debit Card

●​ Consumer Financing

●​ Agriculture Financing

●​ Corporate Financing

●​ Commission free Remittance

●​ Demand Drafts

●​ Collection of Utility

●​ Lockers Facility

AUTOMATED TELLER MACHINE (ATM)

Through the ATM’s Customers have access to the various services such as withdrawal, balance
enquiry and mini statement? Complete security is ensured because access to the account is only
possible by entering a four digit personal identification number (PIN) known only to the account
holder. Cash withdrawal limit is up to Rs.20, 000 per day. Annual charges of ATM is Rs.250/-
per card.

52
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 vary reasonable rates. Any
person whether an account holder of the bank or not, can purchase a Demand Draft from a bank
branch.

LETTERS OF CREDIT

BOP is offering its business customers the widest range of option in the area of money transfer.
BOP’s letter of credit service is with competitive rates, security, and ease of transaction, BOP
Letter of credit is the best way to do the business transactions.

PAY ORDER

53
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

Moves money safely and quickly from BOP Mail Transfer service. The rates for this service is
quiet impressive as compare to the market.

SHORT TERM INVESTMENT

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. Provides
farmers an integrated package of credit with supplies of essential inputs, technical knowledge,
and supervision of farming

COMMERCIAL BANKING

54
The Commercial Banking Group has been formed to cater the needs of small & medium size
customers for increasing Bank’s business significantly with clear focus, repositioning of
resources and active marketing to improve Bank’s profitability. Commercial Banking will deal
with customers having sales turnover and aggregate credit exposure as per benchmarks
prescribed in the SBP’s Prudential Regulations.

CORPORATE BANKING

The BOP Corporate Banking endeavors to market new clients and retain the existing
relationships and build market share through offering superior services, competitive pricing and
wide product range to valued corporate clients including Multi National Companies. BOP works
on some of the local markets largest and most complex transactions and infrastructure projects of
our corporate clients.

ORGANIZATION CHART OF COMPANY

55
56
57
​

Comments on Organization Structure.

In BOP the flow of designations and power is well arranged and from top to bottom

FUNCTIONS PERFORMED BY DIFFERENT DEPARTMENTS

INTRODUCTION OF ALL DEPARTMENTS

OPERATIONS DEPARTMENT:

Operations department manages all departments of bank except credit department. Operations
Manager is responsible for all operations of cash department, remittance department and clearing

58
department. Opening of new accounts, closing of zero balance accounts, updating all operational
records etc. is done in operations department.

REMITTANCE DEPARTMENT:

Remittance department transfers funds from one branch of bank to another 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

DEMAND DRAFT (DD):

Bank Draft is an order to pay money drawn by one office of a bank upon another office of same
bank outside the city for sum of money payable to order on demand.

59
In The Bank of Punjab, DD is used to transfer of funds from one branch of bank to another
branch of same bank.

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 are 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.

MAIL TRANSFER:

60
Under such method, transfer of funds is made through dak. 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).

TELEGRAPHIC TRANSFER:

It deals with transfer of funds by telephone.

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.

61
Clearing Department

In clearing department the cheques of BOP and other banks are presented for clearing through
NIFT. The bank collects money on behalf of its customer and deposits it in its customer account.
A separate clearing register is maintained on daily basis to record all the transactions.

PROCESS OF CLEARING

OUT WARD CLEARING

Other branch

NIFT NIFT

62
 BOP Branch
INWARD CLEARING

Other branch

NIFT NIFT

TYPES OF CLEARING:

●​ Same day clearing

●​ Intercity clearing

63
 ●​ In ward clearing
●​ Out ward clearing

SAME DAY CLEARING:

In same day clearing cheques of other branches are presented by the account holder of the BOP.
the bank clear those cheques through NIFT on behalf of his customer. All the process is
completed with in a day. Cheque of more than Rs.500,000 is presented for clearing in same day.

INTERCITY CLEARING

In intercity clearing cheques of other cities are presented for clearing.

IN WARD CLEARING:

In inward clearing the cheques of BOP is presented in other bank and it is received by the BOP
through NIFT for clearing.

OUT WARD CLEARING:

64
In out ward clearing the cheques of other banks are presented in the BOP by its customer for
clearing.

REMITTENCE & BILL FOR COLLECTION (INLAND):

Remittance department perform the function of sent and receive of money. Following
instruments are used for this purpose.

CASH ORDER OR PAYMENT ORDER:

The branches do local fund transaction by mean of cash orders payment orders issued on behalf
of the purchaser desirous of effecting payment in this way or by the branches for settling their
obligations. The application for purchase of cash order by cash as well as by the cheques.
Separate registers are maintained for all these transactions, where send and receive of all these
documents are recorded.

ONLINE INTER BRANCH TRANSACTIONS PROCEDURE:

INTRODUCTION:

65
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)
In addition, online branches will also be able to issue ATM Cards to their own account holders.
A special option has been made available in the computer system in Online Branches to accept
transactions meant for another Online Branch.

LOCAL BRANCH REMOTE BRANCH

66
Customer Receives Balance equity

Customer Deposits withdraws Funds

& Transfers

Customer Receives A/C Statement

DAY END:

Day end is a document maintained by the bank. It contains the record of each day transaction.
Every small to large transaction is recorded in it. The bank maintains this record in form of
printout and sends it in a cassette to the head office. This is done on daily basis.

CASH DEPARTMENT

Cash department deals with

❖​ Cash Receipts
❖​ Cash Payments
❖​ Utility Bills Collection

67
Cash department is the backbone of the bank. As all banking business is based on cash. Cash
receipts include customer deposits, payments include cash withdrawals and utility bills include
telephone, gas, electricity and other bills collection.

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.

CREDIT DEPARTMENT:

It deals with

❖​ Commercial loan
❖​ Consumer loan
❖​ SME loan
MARKETING DEPARTMENT

The marketing department of the Bank of Punjab doing wonderful job. Because of competition
in market there are may other Bank is exiting inthe market at that time Bank of Punjab also run a

68
marketing campaignspecially in cotton balt for limit from Ginner & Oil Miller.Bank of Punjab
use a marketing strategy with different way anddifferent scheme.

UTILITY SERVICES
Keeping in view the difficulties faced by the general public BOP hastaken the initiative to
provide service for collection /receipt of utility bills on behalf of WAPDA, Sui Gas ,Paktel
,Instaphone and WASA from 9.00am4.00 p.m. all the branches through out the countries are
observing this practice to ease the long queues lined –up at the counters of banks.

COMPUTERIZATION/MODERNIZATION
In order to keep up with the pace of innovation the informationindustry; the bank has launched
its Web site. Readers can view our web pageand covers with the management and can also send
their queries /suggestionon the E-mail at the address given on the last page .

COMPETITORS OF BANK OF PUNJAB

1.​ SPECIALIZED BANKS:

69
✓​ The Punjab Provincial Cooperative Bank Ltd
✓​ Industrial Development Bank of Pakistan
✓​ SME Bank Limited
✓​ Zarai Taraqiati Bank Limited
2.​ PRIVATE BANKS:
✓​ Allied Bank Limited​ ​ ​
✓​ Askari Bank Limited
✓​ Bank Alfalah Limited
✓​ Bank Al Habib Limited
✓​ Faysal Bank Limited
✓​ Habib Bank Limited
✓​ Habib Metropolitan Bank Limited
✓​ JS Bank Limited
✓​ KASB Bank Limited​
✓​ MCB Bank Limited
✓​ NIB Bank Limited
✓​ SAMBA Bank Limited
✓​ SILK Bank Limited

70
✓​ Soneri Bank Limited
✓​ Standard Chartered Bank (Pakistan) Limited
✓​ Summit Bank Limited​
✓​ United Bank Limited
3.​ MICRO FINANCE BANKS:
✓​ KASHF Microfinance Bank Limited​​
✓​ Khushhali Bank Limited
✓​ NRSP Microfinance Bank Limited
✓​ APNA Microfinance Bank Limited
✓​ Pak Oman Microfinance Bank Limited
✓​ Rozgar Microfinance Bank Limited
✓​ The First Micro Finance Bank Limited
✓​ Tameer Micro Finance Bank Limited
✓​ Waseela Microfinance Bank Limited

71
FINANCIAL ANALYSIS :

RATIO ANALYSIS

(The amounts have been presented in millions of Pakistan rupees.)

72
A) LIQUIDITY RATIOS

Liquidity ratios measure a firm’s ability to meet its short term (current) obligations. These
include:

CURRENT RATIO:

Current Ratio = Current Assets / Current Liabilities

This ratio indicates the firm’s ability to pay its short term liabilities by those assets expected to
be converted to cash in the near future.

Year 2010 2011 2012

Current Assets 33027.5 24325.5 21822.8
Current Liabilities 148076.2 213412.2 181406.3
Current ratio 0.22 0.11 0.12

73
ACID TEST RATIO

Absolute liquid assets = cash & restricted cash, marketable securities

Year 2010 2011 2012

Current Assets 91980 17138 12864

Current Liabilities 148076.2 213412.2 181406.3
Current ratio 0.22 0.11 .12

SALES TO WORKING CAPITAL:

Sales to Working Capital = Sales / Working Capital

Sales to working capital give an indication of the turnover in working capital per year. A low
working capital indicates an unprofitable use of working capital.
Year 2010 2011 2012

Sales 14837 23501 22307.16

74
Working Capital -115048.5 -189087 -159583
Sales to Working
-0.12 --0.12 -0.14
Capital

Due to inappropriate use of working capital sales figure gives the negative ratio. In recent year
there is a a gross and net loss.

WORKING CAPITAL:

Working Capital = Current Assets – Current Liabilities

A measure of both a company's efficiency and its short-term financial health. Positive working
capital means that the company is able to pay off its short-term liabilities​
Also known as "net working capital", or the "working capital ratio".

Year 2010 2011 2012

Current Assets 33027.5 24325.5 21822.8

75
Current Liabilities 148076.2 213412.2 181406.3
Working Capital -115048.5 -189087 -159583

B) LEVERAGE RATIOS:

By using a combination of assets, debt, equity, and interest payments, leverage ratio's are used to
understand a company's ability to meet it long term financial obligations.

DEBT RATIO:

​ Debt Ratio = Total Debt / Total Assets​

The ratio of total debt to total assets, generally called the debt ratio, measures the percentage of
funds provided by the creditors.

Year 2010 2011 2012

Total debt 144743 209821 176362

76
Total Assets 164863 235018 185893
Debt Ratio 0.87 0.89 0.95

DEBT TO EQUITY RATIO:

Debt to Equity Ratio = Long term debt / Total Equity

This ratio describes the capital structures of the company.

Total debt = short term borrowing + long term debt.

Year 2010 2011 2012

Debt 18 10 11
Total Equity 16133 19012 3728
Debt To Equity Ratio 0.001 .0005 0.003

77
CURRENT WORTH / NET WORTH RATIO:

Current Worth to Net worth Ratio= Current Worth / Net worth Ratio

We can calculate current worth and net worth by using following formulas:

Current Worth = Total Current Assets – Total Current Liabilities

Net Worth = Total Assets - Total Liabilities

Year 2010 2011 2012

Current Worth -115048.5 -189087 -159583
Net worth Ratio 16134 19012 3728

Ratio -7.1 -10 -42

The ratio gives negative values because its current assets are insufficient to meet current
liabilities. In recent year instead of improving the ratio is unsatisfactory which not a good sign is.

TOTAL CAPITALIZATION RATIO:

78
Total Capitalization Ratio = Long-term debt / long-term debt + shareholders' equity

The capitalization ratio measures the debt component of a company's capital structure, or
capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to support a
company's operations and growth.

Year 2010 2011 2012

Long Term debt 18 10 11
Long term debt + Equity 1615 19022 3738
Capitalization Ratio 0.0005 0.003
0.011
worth Ratio

79
LONG TERM ASSETS VERSUS LONG TERM DEBT

Long term Assets versus Long term Debt= Long Term Assets/ Long Term Debts

Year 2010 2011 2012

Long Term Assets 131308 210667 164051
Long term debt 18 10 11
L.T Assets /L.T Debts 21067 14914
7295
Debt:worth Ratio

DEBT COVERAGE RATIO:

Debt Coverage Ratio​ = Net Operating Income / Total Debt

The ratio shows the capacity of a firm to meet its total debt (Short+long term debts) by its
operating income.​ ​

Year 2010 2011 2012

Net Operating Income 4771 4856 (16858)

80
Total Debt
144743 209821 176362

Debt Coverage Ratio 0.023 -0.1

0.033
Debt:worth Ratio

EQUITY RATIO

Equity Ratio = Total Equity/Total Assets

Year 2010 2011 2012

Total Equity 16133.4 19012 3728
Total Assets 164863 235018 185893
Debt Ratio 0.87 0.89 0.95

81
c)PROFITABILITY RATIOS:

Profitability is the net result of a number of policies and decisions. This section discusses the
different measures of corporate profitability and financial performance.

NET PROFIT MARGIN:

Net Profit margin = Net Profit / Sales x 100
Net Profit Margin gives us the net profit that the business is earning per dollar of sales.

Year 2010 2011 2012

Net Profit 3804 4454 (10085)

Sales 14837 23501 22307.16
Net Profit Margin 25.6 19 -45.2

Therefore, the Net Profit Margin was 58.3% in 2010, increases to 62.3% in 2011 and there is a
net loss in year 2012.
OPERATING INCOME MARGIN:

82
Operating Income Margin = Operating Income x 100

Net Sales

OPERATING INCOME MARGIN

Operating income is obtained subtracting selling & administrating expenses from the gross profit

Year 2010 2011 2012

Operating Income 4771 4856 (16858)
Net Sales
14837 23501 22307.16

O.I. Margin 32.16 21 -76

Operating income margin has been decrease in 2011 an there is a loss in the year 2012.

RETURN ON
ASSETS:

83
Return on Assets (ROA) = Profit after Taxation x 100

​ ​ ​ ​ ​ Total assets

ROA, A measure of a company's profitability, divided by its total assets, expressed as a

percentage. This is an important ratio for companies deciding whether or not to initiate a new
project. The basis of this ratio is that if a company is going to start a project they expect to earn a
return on it, ROA is the return they would receive. Simply put, if ROA is above the rate that the
company borrows at then the project should be accepted, if not then it is rejected.

Year 2010 2011 2012

Net income 3804 4454 (10085)
Total Average assets 164863 235018 185893
ROA 2.3 1.9 -5.4

84
​
RETURN ON EQUITY (ROE):

Return on Total Equity = Profit after taxation x 100

Total Equity

Return on Equity measures the amount of Net Income earned by utilizing each dollar of Total
common equity. It is the most important of the “Bottom line” ratio. By this, we can find out how
much the shareholders are going to get for their shares. This ratio indicates how profitable a
company is by comparing its net income to its average shareholders' equity.

Year 2010 2011 2012

Net income 3804 4454 (10085)
Total Equity 16133.4 19012 3728
ROE 23.5 23.4 -270

85
The Return on Equity is same in 2010 and 11 but as there is a business loss in year 2012 so ratio
gives very high negative value. In 2010,11 ratio is satisfactory.

DUPONT RETURN ON ASSETS:

DuPont Return on Assets = ​Profit after taxation x 100

Total Assets

Year 2010 2011 2012

Net Profit 3804 4454 (10085)
Total assets 164863 235018 185893
DuPont ROA 2.3 1.9 -5.4

86
Ratio is satisfactory in year 2010 but deceases in 2011 and comes down to negative due to loss in
year 2012.

OPERATING ASSETS TURNOVER:

Operating Assets Turnover = Operating Assets x 100

Net Sales

Operating Assets includes, Cash and balances with treasury banks, Balances with other banks &
Operating fixed assets.

Year 2010 2011 2012

Operating Assets 20314 16335 19390
Net Sales
14837 23501 22307.16

Operating Assets
136 70 0.87
Turnover Margin

87
Bop has few sales than its competitors and made investment in fixed assets rather than current
assets.

RETURN ON OPERATING ASSETS:

Return on Operating Assets = Profit after Taxation x 100

Operating assets

Year 2010 2011 2012

Net Profit 3804 4454 (10085)
Operating Assets 20314 16335 19390
Return on Operating Assets 18 27.3 -52
In year 2012 there is a loss on revaluation of assets, while in it year 2011 return on assets has
been increased by 9% and decreased to 80% in 2012.

SALES TO FIXED ASSETS:

88
This ratio is indicates that how much sales are contributed by investment in fixed Assets.

Sales to Fixed Assets = Net Sales / Fixed Assets

Year 2010 2011 2012

Net Sales 14837 23501 22307.16
Fixed Assets 2038 3253 3472
6.4
Sales to Fixed Assets 7.22 7.22

Sales are decreasing in comparison with investment in fixed assets in 2012.

GROSS PROFIT MARGIN

Gross Profit Margin =​ Gross Profit*100

​ ​ ​ ​ Net sales

Year 2010 2011 2012

Gross Profit 6490 7110 (13974)
Net sales 14837 23501 22307.16

89
Gross Profit Margin 44 30 -63

In the recent year there is a gross loss on sales.

D) ACTIVITY RATIOS

Activity ratio are sometimes are called efficiency ratios. Activity ratios are concerned with how
efficiency the assets of the firm are managed. These ratios express relationship between level of
sales and the investment in various assets inventories, receivables, fixed assets etc.

TOTAL ASSET TURNOVER

Total Asset Turnover = Total Sales / Total Assets

Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue -

Year 2010 2011 2012

Total Sales 14837 23501 22307.16

90
Total Assets 164863 235018 185893
Total Asset Turnover 0.09 0.10 0.12

INVENTORY TURNOVER RATIO

Inventory Turnover Ratio = cost of goods sold

Avg.Inventory

Year 2010 2011 2012

Cost of goods sold 36 37 50
Avg. inventory 25 50 27
Ratio 1.44 0.74 1.85

91
As Bop has no a/c’s receivable so a/c receivable ratio can not be calculated. Similarly I m
analyzing the ratios for banking company so the activities ratios does not of much more concern
and usually use for manaufactring business.

E) MARKET RATIO:

Dividend per Share – DPS:

Dividend per Share = Total amount of Dividend

Number of outstanding shares

Per share capital = 10 per share

Or

No. of shares outstanding = share capital / 10

Year 2010 2011 2012

Total amount of Dividend 943309.25 1480633 0
Number of Shares
290249 423038 528797

92
Dividend per Share 3.25 3.50 0

As no dividend was paid in 2012 due to impairment loss.

EARNING PER SHARE- EPS:

Earning Per Share ​ = ​ Profit after Taxation

Number of Shares

The portion of a company's profit allocated to each outstanding share of common stock. Earnings
per share serve as an indicator of a company's profitability. Earnings per share are generally
considered to be the single most important variable in determining a share's price. It is also a
major component used to calculate the price-to-earnings valuation ratio.

Year 2010 2011 2012

Profit after Taxation 3804300 4454018 (10084940)
Number of Shares
290249 423038 528797

Earning Per Share 13.1 10.5 (19.1)

93
EPS has been decreasing gradually, because the number of shares issued is increasing and 2012is
the loss year so there is a loss of Rs.1.91 per share.

MARKET PRICE / EARNING RATIO:

Price / Earning Ratio = ​ Stock Price per Share

EARNING PER SHARES

The Price-Earnings Ratio is calculated by dividing the current market price per share of the stock
by earnings per share (EPS). (Earnings per share are calculated by dividing net income by the
number of shares outstanding.)

Year 2010 2011 2012

Stock price per share 101.25 97.80 11.50
EPS 13.1 10.5 (19.1)

94
Price / Earning Ratio 7.72 9.31 -7.6

the P/E ratio was 7.7 times in 2010 and increased to 9.3 in 2011. However, in 2012it is decreased
to -5.23 which is a danger to growth investor.

BOOK VALUE PER SHARE:

Book Value per Share​ =​ Shareholders’ Equity

Share Capital

This is defined as the Common Shareholder's Equity divided by the Shares Outstanding at the
end of the most recent fiscal quarter.. Comparing the market value to the book value can indicate
whether or not the stock in overvalued or undervalued.

Year 2010 2011 2012

Equity 16133.4 19012 3728

95
Share Capital
2903 4230.4 5288

Book Value per Share 5.56 4.49 0.7

DIVIDEND PAYOUT RATIO:

Dividend Payout Ratio = Dividend per Share

Earning per Share

This ratio identifies the percentage of earnings (net income) per common share allocated to
paying cash dividends to shareholders. The dividend payout ratio is an indicator of how well
earnings support the dividend payment.

Year 2010 2011 2012

DPS 3.25 3.50 0

96
EPS 13.1 10.5 (19.1)
Dividend Payout Ratio 25% 33% 0
Dividend Yield = Dividend per Share

Share Price

Financial ratio that shows how much a company pays out in dividends each year relative to its
share price

Year 2010 2011 2012

DPS 3.25 3.50 0
Share Price(PV)
101.25 97.80 11.50

Dividend Yield 3.21% 3.58% 0

97
f) STATEMENT OF CASH FLOW:

Cash flow ratios indicate liquidity, borrowing capacity or profitability. This section of the
financial ratio looks at cash flow indicators, which focus on the cash being generated in terms of
how much is being generated and the safety net that it provides to the company. These
ratios can give users another look at the financial health and performance of a company.

OPERATING CASH FLOW TO TOTAL DEBT:

Operating Cash Flow to Total Debt = Operating Cash Flow/Total Debt

This coverage ratio compares a company's operating cash flow to its total debt, which, for
purposes of this ratio, is defined as the sum of short-term borrowings, the current portion of
long-term debt and long-term deb

Year 2010 2011 2012

Operating Cash flow 39265.4 40561 (48390)
Total Debts 144743 209821 176362
Operating Cash Flow to T.Debt 0.27 0.19 -0.27
In year 2007 has cash inflow and in 2006 and 2007 cash has been used in instead of generation.

98
Operating Cash Flow per Share:

Operating Cash Flow per Share = Operating cash flow / Total Shares

Year 2010 2011 2012

Operating Cash flow 39265400 40560478 (48390287)
Total Shares 2902490 4230379 5287974
Operating Cash Flow per Share 13.53 9.59 -9.15

Operating Cash Flow to Current maturities of long term debt and a/c’s payables

= Operating cash flow / long term debt repaid + Notes payables

Year 2010 2011 2012

Operating Cash flow (39265.4) 40561 (48390)
Current maturities of long term
137757 191970 164081
debt +AC’s payables

99
Ratio -0.28 0.21 -0.29

2. Common Size Analysis (Vertical and Horizontal):

The term "trend analysis" refers to the concept of collecting information and attempting to spot a
pattern, or trend, in the information. In some fields of study, the term "trend analysis" has
more formally-defined meanings. Although trend analysis is often used to predict future events,
it could be used to estimate uncertain events in the past.

a) HORIZONTAL ANALYSIS

100
 Methods of financial statement analysis generally involve comparing certain information. The
horizontal analysis compares specific items over a number of accounting periods.

Here I have selected 2010 as a base year for comparison.

HORIZONTAL ANALYSIS

BANK OF PUNJAB

BALANCE SHEET

AS ON DEC 31 2012, 2011 & 2010

(Rupees in ‘000’) Horizontal Analysis

2010 2011 2012

ASSETS 2010 2011 2012

Cash and balances

with treasury 14210302 10685058 100 101 76
banks
14,054,859

101
Balances with 3,722,089
1927662 2178455 100 51.7 58.5
other banks

Lending to
financial 11,846,823 2450000 633333 100 20.7 5.34
institutions

Investments 28,233,211 73461693 22689606 100 260 80.4

Advances 101,319,954 133899143 131724113 100 132 130

102
Other assets 3,609,457 5816021 6122406 100 161 170

Operating fixed
3252759 3471838 100 157 106
assets 2,068,744

Deferred tax asset 11222444 - 8388162 100 0 75

TOTAL ASSETS 164,855,137 235,017,580 185,892,973 100 142.5 113

856,448
Bills payable 937647 1219801 100 109 142

6,989,424
Borrowings 17842915 12278773 100 255 175

Deposits and other 137,727,606 191968377 164071732 100 139 119

accounts

103
Sub-ordinate loans - - - 0 0 0

Liabilities against 40,988

assets subject to 40321 30632 100 98 75
finance lease

Other liabilities 2,816,341 3010882 4564481 100 107 162

Deferred tax 298,616

2205530 - 100 738 0
liability

TOTAL
148,729,423 216,005,672 182,165,419 100 145 122.5
LIABILITIES

NET ASSETS 16,125,714 19,011,908 3,727,554 100 118 23.17

REPRESENTED BY

104
Shareholders Equity

Share capital 2,902,490 4230379 5287974 100 145 182

Reserves 4,537,232 7427232 7427232 100 163 163

Unappropriated
3,219,246 3468956 7674257 100 107 238
profit

(Deficit) / Surplus
on revaluation of 5,466,746 3885341 (1313395) 100 71 (24)
assets - net of tax

TOTAL EQUITY 16,125,714 19011908 3727554 100 118 23

105
106
 HORIZONTAL ANALYSIS

BANK OF PUNJAB

CONSOLIDATED PROFIT & LOSS ACCOUNT

AS ON DEC 31 2012, 2011 & 2010

2010 2011 2012 Horizontal Analysis

(Rupees in ‘000’) 2010 2011 2012

Mark-up / return /
11,579,036 17539538 17752652 100 151.4 153.3
interest earned

107
Mark-up / return / 7,508,795
13939377 16614000 100 186 221
interest expensed

Net mark-up / 4,070,241

interest income 3600161 1138652 100 88 28

Provision against
non-performing 340,626
1616421 18863580 100 474 5538
loans and
advances - net

Bad debts written 100

off directly 246869 - 100 246869 0

373,726 1887769 19252337

Net mark-up / (490)

interest income 3,696,515 1712392 (18113685) 100 46
after provisions

108
Fee, commission 473,212
and brokerage 659488 579520 100 139 122
income

Dividend income 1,385,875

1812870 2025160 100 131 146

Income from
dealing in foreign 239,804 377233 324327 100 157 135
currencies

Gain on sale of
redemption of 389,063 2039535 733787 100 524 188
securities

Other income 466,435 547635 526186 100 117 113

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Total
non-mark-up / 2,954,389 5436761 4188980 100 184 142
interest income

6,650,904 7149153 (13924705) 100 107 (209)

None mark up /interest expenses

Administrative 1,751,970
expenses 2255342 2808835 100 129 160

Provisions against
130,000 - 10101 100 0 8
other assets

Provisions against
of balance sheet 175 292 - 100 167 0
items

Other charges 38 37950 114700 100 99868 3081

110
Total non mark-up
1,882,183 2293584 2933636 100
/ interest expenses

4,768,721 4855569 (16858341) 100 102 353

Extra ordinary
- - -
unusual items

Profit(Loss)
4,768,721 4855569 (16858341) 100 102 353
before taxation

Taxation

- Current 964,466 170700 207600

- Prior years - (19921) 1052000

- Deferred - 250772 (8033001)

964,466 401551 6773401 100 42 702

(Loss) Profit
3,804,255 4454108 (10084940) 100 117 (265)
after taxation

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Unappropriated 169,817
profit brought 3226961 3468956 100 1900 2042
forward

Reversal of excess -
management fee - (6250) 100 0 0
accrued last year

Transfer from
surplus on
6,174 5866 5572 100 95 90
revaluation of
fixed assets

175,991 3232827 3468278 100 1836 1970

(Loss)/Profit
available for 32,499,998 7686845 (6616662) 100 24 (20)
appropriation

112
Basic and diluted
13.14 8.14 (19.07) 100 62 (145)
earnings per share

113
B) VERTICAL ANALYSIS

it is a method of financial statement analysis in which each entry for each of the three major
categories of accounts (assets, liabilities and equities) in a balance sheet is represented as a
proportion of the total account. The main advantages of analyzing a balance sheet in this manner
are that the balance sheets of businesses of all sizes can easily be compared. It also makes it easy
to see relative annual changes in one business.

VERTICAL ANALYSIS

BANK OF PUNJAB

BALANCE SHEET

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 AS ON DEC 31 2012, 2011 & 2010

(Rupees in ‘000’) Vertical analysis

2010 0211 2012

ASSETS 2010 2011 2012

Cash and balances

with treasury 14,054,859 14210302 10685058 8.5 6 5.7
banks

Balances with 3,722,089

1927662 2178455 2.26 0.820 1.17
other banks

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Lending to
financial 11,846,823 2450000 633333 7.17 1.04 0.34
institutions

Investments 28,233,211 73461693 22689606 17.12 31.26 12.2

Advances 101,319,954 133899143 131724113 61.45 57 71

Other assets 3,609,457 5816021 6122406 2.2 2.5 3.3

Operating fixed
3252759 3471838 1.25 1.38 1.89
assets 2,068,744

Deferred tax asset 11222444 - 8388162 6.80 0 4.51

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TOTAL ASSETS 164,855,137 235,017,580 185,892,973 100 100 100

Bills payable 856,448 937647 1219801 0.52 0.4 0.66

Borrowings 6,989,424 17842915 12278773 4.24 7.5 6.6

Deposits and other 137,727,606 191968377 83.55 81.68 88.26

accounts

Sub-ordinate loans - - -

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Liabilities against 40,988
assets subject to 40321 30632 0.025 0.017 0.016
finance lease

Other liabilities 2,816,341 3010882 4564481 1.7 1.28 2.46

Deferred tax 298,616

2205530 - 0.18 1.19 0
liability

TOTAL
148,729,423 216,005,672 182,165,419 90.128 91.911 98
LIABILITIES

NET ASSETS 16,125,714 19,011,908 3,727,554 9.872 8.089 2

REPRESENTED BY

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Shareholders Equity

Share capital 2,902,490 4230379 5287974 1.8 1.8 2.8

Reserves 4,537,232 7427232 7427232 2.75 3.2 4.0

Unappropriated
3,219,246 3468956 (674257) 1.95 1.47 (4.13)
profit/Loss

(Deficit) / Surplus
on revaluation of 5,466,746 3885341 (1313395) 3.40 1.65 (0.71)
assets - net of tax

TOTAL EQUITY 16,125,714 19011908 3727554 9.872 8.089 2

119
120
 VERTICAL ANALYSIS

BANK OF PUNJAB

CONSOLIDATED PROFIT & LOSS ACCOUNT

AS ON DEC 31 2012, 2011 & 2010

2010 2011 2012 Vertical Analysis

(Rupees in ‘000’) 2010 2011 2012

Mark-up / return /
11,579,036 17539538 17752652 100 100 100
interest earned

121
Mark-up / return / 7,508,795
13939377 16614000 35 79 93
interest expensed

Net mark-up / 4,070,241

interest income 3600161 1138652 35 21 6.41

Provision against
non-performing 340,626
1616421 18863580 2.93 9 106
loans and
advances - net

Bad debts written 100

off directly 246869 - .00086 1.4 0

373,726 1887769 19252337 3 10.41 106

Net mark-up /
interest income 3,696,515 1712392 (18113685) 32 9.76 (102)
after provisions

122
Fee, commission 473,212
and brokerage 659488 579520 4.01 3.8 3.3
income

Dividend income 1,385,875

1812870 2025160 12 10.33 11.4

Income from
dealing in foreign 239,804 377233 324327 2.07 2.15 1.83
currencies

Gain on sale of
redemption of 389,063 2039535 733787 3.4 11.62 4.13
securities

Other income 466,435 547635 526186 4 3.12 2.7

Total
non-mark-up / 2,954,389 5436761 4188980 25.51 30 23
interest income

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 6,650,904 7149153 (13924705) 57.43 40.7 (78.43)

None mark up /interest expenses

Administrative 1,751,970
expenses 2255342 2808835 15.13 12.86 15.82

Provisions against
130,000 - 10101 1.12 0 .06
other assets

Provisions against
of balance sheet 175 292 - .0001 .002 0
items

Other charges 38 37950 114700 .0003 0.22 0.65

Total non mark-up

1,882,183 2293584 2933636 16.25 13 16.53
/ interest expenses

4,768,721 4855569 (16858341) 41.18 27.6 (95)

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Extra ordinary
- - - 0 0 0
unusual items

Profit(Loss)
4,768,721 4855569 (16858341) 41.18 27.6 (95)
before taxation

Taxation

- Current 964,466 170700 207600

- Prior years - (19921) 1052000

- Deferred - 250772 (8033001)

964,466 401551 6773401 8.33 2.28 38.15

(Loss) Profit
3,804,255 4454108 (10084940) 32.85 25.39 (56.8)
after taxation

Unappropriated 169,817
profit brought 3226961 3468956 1.47 18.39 19.54
forward

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Reversal of excess -
management fee - (6250) 0 0 (.035)
accrued last year

Transfer from
surplus on
6,174 5866 5572 .05 .03 .031
revaluation of
fixed assets

175,991 3232827 3468278 1.52 18.43 19.53

(Loss)/Profit
available for 3980246 7686845 (6616662) 34.37 43.8 37.27
appropriation

Basic and diluted

13.14 8.14 (19.07)
earnings per share

126
127
 SWOT ANALYSIS

STRENGTH:

➢​ As a result of the compassionate and personalized services of the officers, the clients’
perception for BOP is very high. They have trust and feel themselves to be secure while
dealing with BOP.
➢​ BOP has opened all its branches at commercial areas so that the customers or clients face
no problems in reaching to the bank
➢​ The Bank of Punjab is 4th largest branch in region according to investment (more than
600 Million) as there are 46 branches in region.
➢​ There is also improvement in corporate loans and consumer loans.
➢​ All staff members treat their account holders/general public with well behavior.
➢​ Bank has higher level of deposits if we compare with other banks. Deposit wise its
number is 6th in Pakistani Industry.

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 ➢​ As it is business wise busy branch so its profit after tax has become 17% higher than
previous year.
➢​ The management feels confident that all internal controls procedures are adequate to
effectively and efficiently meet the operational requirements.
➢​ Not excellent but good facilities are given to employees.

WEAKNESS:

➢​ Level of bad debts is improving at higher level.

➢​ There is yet no ATM machine in Punjab bank T.T.Singh Branch.
➢​ There is also lack of workplace in the Bank.
➢​ Lack of proper internal controls is one of the major weakness of BOP. It is also pointed
by the auditor in his review.
➢​ I observed during my internship that some of the employees were burdened with over
work. So I think that the work should be distributed according to their post and
capabilities.

129
 ➢​ As each staff member performs many duties in one time so this capture extra time which
can slows down the performance.
➢​ Due to lack of workplace, staff members as well as the general public face disturbance in
the bank.
➢​ Biased selection of employees.

EXTERNAL ASSESSMENT:

ENVIRONMENTAL OPPORTUNITY:

The Bank of Punjab compete its competitors by encouraging agriculture loans. So in

such a way it plays an important role for promotion of agriculture sector.
➢​ Management of the bank is committed to continue its efforts for outstanding
performance. Improvement in stakeholders’ value shall be ensured through progressive
but cautious business expansion with strategic branch network extension and introduction
of innovative products in all areas of business.
➢​ Great opportunity of starting Islamic banking system.

130
ENVIRONMENTAL THREAT:

➢​ 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.

Chapter 2
INTERNSHIP ACTIVITIES

STARTING AND ENDING DATE OF INTERNSHIP:

131
I started my training program on 24th september 2013 which ended on 24th november 2013.

NAME AND DESIGNATION OF SUPERVISOR:

Mr.muhammad ali khan was my supervisor (OG III).

NAME OF TRAINING DEPARTMENT AND DURATION FOR EACH TASK:

First of all worked in Account Opening Department for two weeks

Secondly, I have worked in Clearing Department for three weeks. It was a great opportunity for
me. Here I learnt Normal Clearing, Intercity City Clearing .I was taught about Centralize and
Decentralize Banks.

Then I worked in Remittance Department for two weeks. I learnt about Foreign Remittances and
Local Remittances as well. In Local Remittances I learnt about Pay Order, Demand Draft and
Bop Online.

TRAINING PROGRAM
On the first day of my training program into the bank the Manager Operation (Mr. Aftab Ahmad
Chattha ) told me about the rules and regulation of the bank and also gave introduction of the all

132
staff of the branch. I went to different department during the training session. I got training in
following department.

Department Name Duration

Account opening department 3 weeks
Clearing department 2 weeks
Remittance department 2 weeks

1.​ ACCOUNT OPENING DEPARTMENT

​ I worked three weeks in Account Opening Department. Mr. Mirza Muhammad Babir
Yousaf guided me about the duties in the account department. He told me about the different
types of the account that were used in the bank of Punjab. I have done following duties in the
account opening department.

OPENING AN ACCOUNT:

133
For the purpose of opening an account first of all check the original CNIC of the customers and
then check the NADRA Verysis of the customers and match the both information provided by
the customers and NADRA Verysis. Customer name should be check in nab and OFAC lists.

Account Opening form is to be filled as per information provided by the customer. First write
title of the account mostly same the name of the customers and the type of the account. Then the
customer name and his/her father/husband name. The name of his/her mother and the place of
birth, CNIC no. date of birth and the expiry date of the CNIC should also be mentioned which
should be in accordance of data collected from the customer and NADRA Verysis. Write the
permanent address of the customers and also correspondent address of the customers after that
write the source of the income and then ZAKAT applicability portion is to be filled according to
customer wish. If joint account is to be opened than repeat the steps for other person otherwise
cross the second portion of the form.

In second page of account opening form write maximum amount in per transaction which will be
made by customer and maximum no. of transaction in a month. Then collect a copy of CNIC of
customer’s blood relation and write information into the next of kin box and after that if there is
any introducer of the customer writes his name and collect maximum information of the
customers. After that take the sign/thumbs of the customers on every page (rules and regulation)

134
of the account opening form and then specimen signature card (SSC) is to be filled in accordance
and KYC should be up developed. This is most important part of the account opening.

After the completion of the form give customer a pay in slip for the payment minimum deposit
for account opening.

When all steps are done then enter the data into the computer and send form to the branch
manager for the authentication of the account. After the authentication write account no. on the
form and give the account no.to the customer. Upload the specimen signature card (SSC) for the
purpose of online verification. After that make the letter of thanks and send it to the customer
address for the purpose of address confirmation and send the cheque book request to NIFT -
National Institutional Facilitation Technologies (Pvt.) Limited.

✓​ CHEQUE BOOK ISSUANCE

​ After the opening an account sends the request of the cheque book to the concerned
department. First cheque book are 25 leaves after that you can claim for cheque book containing
more leaves that are 50 or 100 leaves. When cheque book are ready and reached in the branch,
enter it into stock register of the cheque books and checque book should be issued to the account
holder only or to the person authorize by the account holder. If customer does not collect the

135
cheque book, send him/her a reminder letter for the collection of the check book. If he/she does
not collect the cheque book within 60 days of its arrival then destroy the cheque book.

✓​ CLOSING AN ACCOUNT:
​ If the customer wants the closing an account than collect the application from the customer
and close the account and also draw back specimen signature card (SSC) and attach with closed
account form.

✓​ ATM REQUISITION FORM:

In the account opening department, I also performed the task of filling the ATM card
requisition form. After the filling form, send the request of the ATM to the head office. Head
office send ATM card into branch and PIN code send to the customers address.

✓​ ASSIGNMENT BY SBP:
As per instruction of State Bank of Pakistan CRA’s of all account opened before the year
2009 should be revised. Hence during my internship period there was an assignment on hand
which polished my Account Opening knowledge. This assignment provided me a good
knowledge of Account Opening. In this assignment ODD, EDD and KYC of stated accounts
were revised.

136
 ✓​ DEPOSITS SLIP:
​ In the account opening department I also filled the deposit slips and cheques of walk in
customers.

2.​ CLEARING DEPARTMENT

I worked in clearing department for two weeks under the supervision of Mr. Waqas Ali
and Mr. Zaighum Abbas Kazmi. He told me about different duties which he performs in the
clearing department. I learnt different duties in the clearing department which were as follows;

▪​ Inward Clearing
▪​ Outward Clearing
▪​ Inward Intercity
▪​ Outward Intercity
▪​ OBC
✓​ INWARD CLEARING:
Inward clearing means cheques presented by other banks to our branch for clearing into our
bank. Clearing is done by a third party named as NIFT, which is authorized by SBP to perform
this task. In inward clearing, check the signature of the customer and balance of the customer. In

137
case of any doubt implement call back procedure to the customer. The procedure should also be
followed if amount increase from 0.5 million.

✓​ OUTWARD CLEARING:
Outward clearing means the cheques of other banks deposit by our customers are send to
NIFT which is the clearing department of the SBP. They make the entries into the computer and
then these cheques are sent to the banks. If the cheques are valid, drawee bank credits our HO
account and HO credits customer account.

✓​ INWARD INTERCITY CLEARING:

Inward Intercity clearing means cheques of our customers are presented by out of city
banks through NIFT for clearing purpose. If the accounts are valid, credit those banks account
otherwise return the cheques.

✓​ OUTWARD INTERCITY CLEARING:

​ Outward Intercity clearing means the cheques given to our customers by customers of the
out of city bank are sent to the relevant branch for the purpose of the clearing of the cheques
through NIFT.

138
 3.​ REMITTANCE DEPARTMENT:
Remittances are the movement or transfer of money from one place to another within or outside
the city. For remittances I worked under the supervision of Mr. Alim Hussain Bhatti. Here I
learnt every aspect of remittance.

Remittances can be done by any of the followings method;

▪​ BOP Online
▪​ Payment Order
▪​ Demand Draft
▪​ CDR (Call Deposit Receipt)
▪​ SNTD (short Notice Term Deposit Receipt)
▪​ Home Remittance
✓​ BOP ONLINE:
​ ​ Bop online means transfer the funds from one branch to another branch of the Bop. In
Bop online you can easily send cash from any branch of the Bop. You can also deposit the cash
into your account from any branch.

✓​ PAY ORDER:

139
​ ​ Pay Order is a payment instrument which is used by the banks to settle payment
obligations on behalf of their customers. It is a negotiable instrument which instructs the payer’s
bank to pay a certain sum of money to third party within the city.

✓​ DEMAND DRAFT:
​ ​ The instrument which is made on the demand of the customer and payment will be made
at any city on the demand of customer. This is a sort of order given to the concerned branch
whose name is written on it to pay the amount written on instrument to the person named on it.
The instrument can be made in favor of the customer and also for third party.

CDR (CALL DEPOSIT RECEIPT):

​ This is made in favor of the client or third party. Through this the payment will be made on
call. This instrument is free of cost.

✓​ SNTD (SHORT NOTICE TERM DEPOSIT RECEIPT):

​ This instrument is made in favor of the client and it is made for 7 days, 15 days, one month,
three months and six months. Cash payment is not made on this instrument. Only amount

140
transferred to the account. This is the only instrument on which profit is paid at minimum rate of
8%.

✓​ HOME REMITTANCE:
​ Miss Assia has also extra duty of home remittance and she told me about the home
remittance. In home remittance there are various types of the remittance, but two types are
commonly used one of them is Western Union and second is Express money. Both are used for
the collection of money which an overseas Pakistani sends to his family.

141
Chapter 3

INTERNSHIP ASSESSMENT AND RECOMMENDATIONS

my overall experience at bank of Punjab is good and worth larning.i learned a lot there which
will surely helps me in my future and practical life.

RECOMMENDATIONS:

Here I am putting some suggestions which will be helpful for the Bank of Punjab to compete
with other banks.

➢​ Internal Controls

142
 The major and the most important flaw in the BOP is lack of internal controls and inter
communication between different branches of the bank.

➢​ 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.

➢​ To Over Come Problem of Space and Furniture

Management should purchase more furniture and arrange them in such a way which
provides maximum space and convenient especially in deposit department and there
should also be convenient sitting place for customers.

➢​ Need of Qualified Staff

143
 Required, qualified staff should be provided to branch in order to improve the functioning
of the branch. Especially a telephone operator should be appointed.

➢​ Credit Card

BOP should start its operation in credit card. These cards are very helpful for the ordinary
customer in general and the business people in particular. To make it mores secure and to
eliminate the misuse of it, the management is required to keep proper security against the
card.

➢​ Decreasing Administrative Expenses

Bank should decrease their administrative expenses. The branches that are not much used
could also be closed. That will give positive results in the future.

➢​ Technological Advancement

I would like to suggest that at least all the main branches of BOP should be fully
computerized in order to expedite the dealing process among bankers and their
customers. It will not only reduce transaction time, will increase accuracy but will also be
efficient as well.

144
➢​ Staff Relationship

Good relationship among staff member leads to the peak performances in any
organization. Another syndrome from which the staff suffered was that all of them
considered themselves more important than others.

➢​ Improper Distribution of Work

Proper distribution of work leads to success in every organization. Proper distribution of

work prevents the employee from over and under work situation. So for a smooth running
of an organization proper distribution of work is the hint to be followed.

➢​ Organizational Commitment

It is suggested that employees working on daily wages basis should be given some
benefits, which the other employees are getting. Their salaries must increase according to
efficiency, performance and service this will increase there commitment to the
organization.

➢​ Credit Monitoring

145
 The credit department of the bank should carry out vigilant credit monitoring. They
should ensure the proper payment of installments and the mark-up by the borrower.

The staff members who have done all the paper work of the loan extension should
perform the monitoring, as he/she will be having more information about the borrower.

➢​ Housing and House Hold Goods Loans

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.

CONCLUSION

➢​ Bank of Punjab is a good organization in the way that anybody can join it for his/her long
term career. Overall working environment is comfortable. Management of branch cares a
lot of its employees and considers them as the asset of bank. Behavior of senior executive
of bank is very polite and they are caring about the individual’s career and their growth
➢​ However management is very demanding about the targets but the compensation and
reward system is not up to the mark.

146
➢​ Employees at bank of Punjab are quite efficient. Its employees are trying to bring Bop
among the list of prestigious banks. Therefore, they work more than their working hours.
It shows their loyalty and commitment to organization.
➢​ Employees are given the benefits like bonus, gratuity funds, loans, increments and
medical.
➢​ All the customers are entertained individually. Same kind of behavior and attention is
given to every customer. Getting ideas for improvement from customers is a good idea
and it is working very well in Bank of Punjab.

147
ANNEXES

Scanned Copies of BOP’s Broachers.

148
149
150
151
152
REFERENCES:

www.bop.com.pk

www.pacra.com

Much oral information was provided by Mr. Sohail Choudhary (OGIII).

153
154