INTERNSHIP REPORT

Submitted by: Muhammad Usman

Submitted to: Ms Ruhma Khan
Roll No: MBE-18-64
Session: 2018-2022 (MBA 3.5 Evening)

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 Dedication

First and foremost, I am grateful to the Almighty, Who blesses us and without whom we would not be
able to think of learning by breathing. I am proudly dedicating my report to my adoring parents for all
of their love and wisdom, which helped me grow into the person I am today. Furthermore, I dedicate
my words to my instructor and internship advisor, who, through his good manners and potential
training, instilled in me the confidence, devotion, and awareness to take the best possible path.

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 Acknowledgement
pay tribute to Almighty Allah, the Most Gracious, the Most Merciful, and to his Holy Prophet
Muhammad ‫ ﷺ‬who will always remain a beacon of help and enlightenment for all of kindness.Mr.
Abdul Rehman Khan Dasti, manager of The Bank of Punjab Multan Road Branch Muzaffargarh, My
appreciation for enabling me to carry out my internship and for providing the necessary support and
direction. I'm also thankful to the bank's department heads, particularly those in charge of the sales
department. I express my heartfelt and sincere feelings for the esteemed people, Mr. Mohammad
Raza. Under his able supervision, expert suggestions and useful criticism, this work got its present
form. I thank my dear parents, and brother, who helped ethically and lead me to the higher ideals of
life. I also thank every one who helped me in any way in preparing this study.

MUHAMMAD USMAN

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 Executive Summary
This summary gives a brief about my internship experience of 06 weeks at The Bank of Punjab (BOP). I
worked as an Internee under the supervision of Mr. Muhammad Raza In fractional fulfillment of the
requirements of the degree of Master of Business Administrator. The intention of this internship is to
see how hypothetical knowledge can be applied in practice and can review the financial activities of an
organization and identify its opportunities and problems. This internship must gain self-confidence and
be familiar with an organization's procedures.

Bank of Punjab started its work on November 15, 1989 with the opening ceremony of its first branch in
Lahore. In 1994, Bank of Punjab was given the status of Scheduled Bank and now it is working as a
commercial bank with 273 branches in Punjab. Its main function is to accept people's reserves and lend
to those who need finance to start and grow their business. It also deals with remittance, trade,
industry and agriculture segments, foreign exchange, to offer better banking services to its customers

My practical experience, which includes office work, observing sales activities, is explained on a weekly
basis in order to gain knowledge, problems and skills required to perform in the sales department as
well as groups in other departments.

The SWOT analysis in which the internal strengths like Technology & Development, digital monitoring
tools etc and organizational weaknesses like lack of technical education, ineffective use of technology
etc are described. In addition to this, the opportunities and threats for BOP which I have written on the
basis of external scanning are also described in this chapter.

The last chapter is about the conclusion which gives an overview of what I have learned throughout my
internship experience. Moreover, I gave recommendations in the last after getting complete
observations and findings from the organizational internal and external scanning for the betterment
and to make its working efficient and effective.

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 Table of Contents
Dedication.............................................................................................................................................4

Acknowledgement............................................................................................................................5

Executive Summary.........................................................................................................................6

Brief introduction to the industry:.........................................................................................9

Chapter 1: Overview of the Organization.........................................................................10

1.1 Brief history of the Organization:.......................................................................................10

1.2 VISION:........................................................................................................................................11

1.3 MISSION:.....................................................................................................................................11

1.4 Introduction of the organization:.......................................................................................11

1.5 Corporate objective:...............................................................................................................12

1.6 Policies of the BOP:.................................................................................................................12

1.7 Competitors:.............................................................................................................................14

1.8 Business Volume:...................................................................................................................15

1.9 Product Line..............................................................................................................................15

1.9.1 Deposits:.................................................................................................................................16

Chapter 2: Organizational Structure...............................................................................17

2.1. Organizational Hierarchy chart.........................................................................................17

2.2. Board of Directors:.................................................................................................................18

2.3. Number of employees:.........................................................................................................18

2.4. Main office:...............................................................................................................................19

2.5. Departments:...........................................................................................................................19

2.5.1 Sales Department:...............................................................................................................19

2.5.2 Operation Department:.....................................................................................................20

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Chapter 3: Internship program...............................................................................................21

Meeting with My Supervisor Mr. Muhammad Raza:........................................................................21

3.1. 1st Week:....................................................................................................................................21

3.1.1. Stamping, Arrange documents and deposit slip:....................................................21

3.2. 2nd Week:...................................................................................................................................22

3.2.1 Screening and biases:........................................................................................................22

3.3. 3rd Week:....................................................................................................................................22

3.3.1. OPENING AN ACCOUNT....................................................................................................22

3.3.2. TYPES OF ACCOUNT...........................................................................................................23

3.4. 4th week: Data Enrichment Project:.................................................................................25

3.5. 5th Week: ODD and EDD Form:......................................................................................25

3.5.1 Ongoing Due Diligence: (ODD Form)............................................................................25

3.5.2 Enhance Due Diligence Form (EDD).............................................................................26

3.6. 6th Week: Issuing Cheque Book and ATM:..............................................................26

3.6.1 ISSUANCCE OF CHEQUE BOOK........................................................................................26

3.6.2 Receive cheque book.....................................................................................................26

3.6.3 Delivery of cheque book to customer......................................................................27

3.6.4 Recovery of cheque book to the representative......................................................27

3.6.4 ATM Issuance....................................................................................................................27

3.6.5 ATM Cards cannot be issued in following cases...................................................28

3.6.7 STANDING INSTRUCTIONS................................................................................................28

3.8 Structure of your concerned specialization department:...............................29

3.8.1 Department hierarchy:......................................................................................................29

3.8.2 Number of employees in BOP Brach:............................................................................29

3.8.3 Sub department:..................................................................................................................29

Chapter 4: Marketing Functions............................................................................................31

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4.1 BOP MARKETING MIX:..........................................................................................................31

Chapter 5: Ratio Analysis:.........................................................................................................32

5.1 Horizontal and Vertical Analysis.................................................................................................32

5.2 LIQUIDITY RATIO......................................................................................................................36

5.2.1 CURRENT RATIO...................................................................................................................36

5.2.2 ABSOLUTE LIQUID RATIO..................................................................................................36

5.3 PROFITABILITY RATIO..........................................................................................................36

5.3.1 RETURN ON EQUITY............................................................................................................36

5.3.2 RETURN ON ASSET..............................................................................................................37

5.3.3 RETURN ON OPERATING FIXED ASSET.........................................................................37

5.4.1 Debt ratio................................................................................................................................37

5.4.2 Equity ratio.............................................................................................................................37

5.4.3 Debt to equity.......................................................................................................................38

5.4.4 Fixed asset ratio...................................................................................................................38

Chapter 6: SWOT Analysis.........................................................................................................38

6.1 STRENGTH:................................................................................................................................38

6.2 WEAKNESS:................................................................................................................................39

6.3 OPPORTUNITIES:......................................................................................................................39

6.4 THREATS:....................................................................................................................................40

Chapter 7: Conclusion & Recommendation:....................................................................40

7.1 Conclusion..................................................................................................................................40

7.2 Recommendation....................................................................................................................41

References:........................................................................................................................................42

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Brief introduction to the industry:

BOP listed in Pakistan stock exchange. The Punjab government owned Fifty-one percent 51% shares of
bank of Punjab and the remaining 49% shareholders are Pakistani individuals, firm and foreigners. The
bank aspires to be a first-class financial organization with cutting-edge technology. Its goal is to provide
the global economy's financial markets with a one-of-a-kind system that will transform the morals &
value system of modern society's economic situation. BOP (commercial bank) is a unit of the Pakistani
service industry that deals in lending, borrowing, and advancing money, as well as drawing, making,
accepting, discounting, buying, selling, collecting, and dealing in bills of exchange, promissory notes,
draughts, bills of lading, receipts, warrants, debentures, and certificates. It also buys and sells foreign
currency, including foreign bank notes, as well as acquiring, keeping, and issuing on commission stocks,
funds, shares, and debentures, negotiating loans and advances, and receiving all types of bonds and
valuables on deposit or for safe custody. The provision of safe deposit vaults, as well as the receipt and
transmission of money and securities. The primary purpose of a bank is to receive deposits from
customers who have extra cash and lend it to people who need it for their businesses. As a scheduled
and commercial bank in Pakistan, the Bank of Punjab fulfils all of the responsibilities that commercial
banks do. It carries out its responsibilities in the fields of resource mobilisation, lending, and
investment. It is also giving advances on favourable conditions to businesses, trade, industry,
agriculture, and seasonal businesses in order to improve their performance. Senior management of the
bank makes critical decisions about human resources and other important matters at the decision-
making level. Senior management has extensive experience in both domestic and international
banking. The law and the board of directors have been given complete control over the design of
management policies. The bank offers favourable profit rates on all sorts of deposits, as well as the
opening of foreign currency accounts and the processing of foreign exchange transactions such as
import and export, remittance, and financing trade and industry for working capital needs, as well as
money market operations. The bank's lending policy is not just cautious and constructive, but also
based on sensible lending principles with a strong emphasis on security.

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Chapter 1: Overview of the Organization
1.1 Brief history of the Organization:

The Bank of Punjab began operations on November 15, 1989, when its first branch in Lahore opened.
In 1994, the Punjab Bank was designated as a scheduled bank, and it presently operates as a
commercial bank with over 273 branches across the province. Its main functions are to take people's
deposits and lend them to others who need money to start or expand their businesses. To give better
banking services to its clients, it also deals with foreign currency, remittance, commerce, industrial, and
agriculture departments. Bank of Punjab provides competitive rates and rate of return on all types of deposits,
investments, opening of foreign currency accounts, and matters related to foreign exchange business such as
imports, exports, and remittances, as well as financing, trade.

1.2 VISION:

The vision of the bank of Punjab is to to contribute more to the prosperity of Pakistan with a sense of
pride and innovation in who we are.

1.3 MISSION:

Bank of Punjab aims to provide services that help individuals and companies reach new heights,
understand their goals and achieve the best that life has to offer. With our customer expertise and
perception, we are motivated to be a truly customer-driven organisation. We are dedicated to
providing excellent customer service, developing business ethics, and instilling pride in our employees.

1.4 Introduction of the organization:

Multan Road Branch, Muzaffargarh is where I was assigned for my internship. This is a great
opportunity for the branch to do business with such people, But it also creates a very competitive
environment, which is not easy to deal with because all of the large banks have branches in the same
area. The branch had a huge number of employees at the time of my internship. It employs over 13
people, ranging from branch managers to operations managers. There are six other personnel,
including two guards, two sweepers, and one messenger, in addition to these officials.

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1.5 Corporate objective:

The Objective of BOP are Following:

 Our Customers:

As our first priority

 Profitability:

For the benefit of our stakeholder which allows us to continuously invest, improve and succeed.

 Corporate Social Responsibility:

To improve the lives of the community where we work.

 Recognition and Reward:

For the talented and high performing employees

 Excellence:

In everything we do

 Respect:

For our customers and each other

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1.6 Policies of the BOP:

The policies of BOP are

1.6.1 Information Security Policy:

Information Security ("IS") ensures that information is kept confidential, that its reliability is intact, and
that it is accessible when needed. The goal of this document is to establish the guidelines that all
workers must follow when handling or coming into contact with BOP-owned or entrusted information
in any form.

1.6.2 IT Policy:

The primary purpose of using information technology within the Bank is to support the Bank's strategic
business plan, improve customer service, and give effective control over Bank operations through
automation and MIS. The IT Policy establishes the guidelines to be followed in order to achieve the
above-mentioned general goals. Specific implementation strategies and procedures, on the other
hand, need be devised individually in order to fulfil these objectives.

1.6.3 Internal Control Policy:

The purpose of this document is to guarantee that The Bank of Punjab (Bop) has an efficient internal
control system that is dependable with the nature, difficulty, and risks associated with its on and off
balance sheet activities, and that adjusts to changes in the bank's environment and conditions.

1.6.4 Fraud Risk Management Policy:

This policy is designed to provide necessary guidelines for BOP employees so that they can prevent
fraud, forgery, robbery, theft, etc., and all lawful rules for their finding or attempted actions and their
reporting. And fulfill with the required minimum standards of SBP and BOP. Applicable policies and
procedures

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1.7 Competitors:

1.7.1 Allied Bank

The Allied Bank was founded in 1942. The bank's operations include Corporate and Investment
Banking, Trading and Sales (Treasury), Commercial, and Retail Banking, and it employs roughly 11,500
people in Lahore.There are 1,400 branches and 1,558 ATMs in Pakistan.

Net income: PKR 18.38 billion (2020)

Total assets: PKR 1.73 trillion (3/2021)

1.7.2 MCB Bank

MCB Bank was founded in 1947 and serves Pakistan, South Asia, the Middle East, and Eurasia with
commercial banking and related products and services. It is headquartered in Lahore City and employs
roughly 14,000 people. In Pakistan, it has roughly 1,400 branches and 1,400 ATMs, as well as 11
overseas branches.

Net income: PKR 29.80 billion (2020)

Total assets: PKR 1.91 trillion (3/2021)

1.7.3 Askari Bank

Askaris Bank is based in Rawalpindi and primarily serves individuals and businesses in Pakistan and the
Middle East. Corporate Finance, Trading, and Sales; Retail Banking; Commercial Banking; Payment and
Settlement; Agency Services; Retail Brokerage; and Asset Management are the company's segments.
The bank, which opened its doors in 1991, now has 537 locations and 7,013 employees.

Net income: PKR 10.85 billion (2020)

Total assets: PKR 1.00 trillion (3/2021)

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1.7.4 United Bank Limited

United Bank Limited, founded in 1959, is one of Pakistan's largest privately owned banks. It is based in
Karachi and employs approximately 12,000 people.

In Pakistan, the bank has around 1,370 branches, including 100 Islamic banking branches and two
banks in the Karachi Export Processing Zone, as well as 14 international branches.

Net income: PKR 20.94 billion (2020)

Total assets: PKR 2.33 billion (3/2021)

1.7.5 Meezan Bank

Net income: PKR 22.40 billion (2020)

Total assets: PKR 1.55 trillion (3/2021)

1.8 Business Volume:

The Bank of Punjab (Multan Road Branch Muzaffargarh) has a total business volume of 300 million
rupees. The current account balance is 180 million dollars, and the savings account balance is 120
million dollars. Meezan Bank is a Pakistani commercial bank that offers Islamic services. It was
established in 1997.It operates in the areas of corporate finance, trading and sales, retail banking,
corporate and commercial banking, agency services, and payment and settlement. Over 10,200 people
work for the Karachi-based bank, which has 815 branches in 146 Pakistani cities.

1.9 Product Line:

Any tangible commodity, service, or idea that can satisfy requirements is a product, according to the
most specific definition. A product is something that can be provided in the market to meet a need or
wants. Personal accounts, credit cards, loans, investment goods, treasury products, and other consumer
banking products are available.

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1.9.1 Deposits:
The Bank of Punjab provides a variety of Deposit Schemes to its customers, each with personalised
services and attractive interest rates. At any of its strategically positioned branches around Pakistan, any
Pakistani citizen can open an account for any deposit scheme.

Chapter 2: Organizational Structure

2.1. Organizational Hierarchy chart

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2.2. Board of Directors:

Sr.No NAME ROLE

1. Zafar Masud President Chief
Executive Officer

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 2. Mr. Mohammad Jehanzeb Director
Khan
3. Mr. lftikhar Ali Sahoo Director
4. Dr. Muhammad Amjad Saqib Director
5. Khawaja Farooq Saeed Director
6. Mr. Saeed Anwar Director
7. Mr. Shaharyar Ahmad Director
8. Syed Ghazanfar Abbas Director
9. Mr. Kamran Hafeez Secretary to the Board

2.3. Number of employees:

It introduced business technology and skills to the country and provided direct or indirect employment
to an estimated 6,092 people. Along with its production capacity Oregano also exports its products
nationwide to meet the needs of its key customers.

2.4. Main offices:

Chapter 3: Internship program

Meeting with Branch Manager:

After my internship letter was issued by the department, on my very first day
dated 1thjuly, 2021, I met the Manager of the Bank of Punjab (Multan road branch
Muzaffargarh).Abdul Rehman Khan Dasti for his approval to place me as an
Internee. During the meeting, I was interviewed and questions were asked
regarding personal details. After the successful meeting with the Branch Manager,
he appreciated my urge towards choosing Bank of Punjab for doing internship. He
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gave me approval and assigned Mr. Muhammad Raza to be my supervisor
throughout this internship period.

Meeting with My Supervisor Mr. Muhammad Raza:

Afterwards, I met with my supervisor. He prepared a week-wise internship
plan for working as well as learning purpose so that I would be able to maximize
my learning. The week-wise internship plan is given below:

3.1. 1st Week:

3.1.1. Stamping, Arrange documents and deposit slip:

First week Mr. Muhammad Raza Bhutta tells me about how to stamping on
the documents when new account is create and tell me about the right way to
arrange the documents of new account

 Specimen Signature (SS Card)

 ID card Copy of Account Holder
 ID card Copy of NOK (Next of Kin)
 CPU (Initial Deposit Slip)
 Biases
 Account Opening Form (AOF)
 Debit Card Form
 Common Reporting Standard (CRS)
 KFS ( Key Fact statement)
 Screening
 Annexure (PEP)
 EDD ( For High Risk)
 Check Lists

And also tells me about how to fill deposit slip and cheque book.

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3.2. 2nd Week:

3.2.1 Screening and biases:

Second week of my internship I learn about the screening and biases

Screening:

Screening tells about the person who is opening new account is or nor involves in any illegal activity
like

 PEP (Political Expose Person)

 Nationality in other country etc

Biases:

Biases are the NDRA identification of person.

3.3. 3rd Week:

3.3.1. OPENING AN ACCOUNT

Filling out the account opening form is the first step in opening an account. First and foremost, the
customer will provide the address of the branch where he will open his account. After that, he will say
the account title, followed by his name. Then he must decide which account to open.

 Individual account

 Joint, sole proprietorship

 Partnership

Then he will state his type of account which he is going to open

 Saving, current

 Term deposit

Then he will state the suffix that is the number of the PKR currency.

AOF includes such clauses as,

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Name, father's name, mother's maiden name, marital status, date of birth, gender, NTN No (optional),
occupation, employer's name, job title, employer's address, country of residency, nationality, CNIC No,
current residential address, permanent address, Email Id, Fax No, Tel No, Mobile No, and so on.

Specimen Signature Card

Customer is required to fill two specimen signature cards. Each specimen signature card has four blocks.
Customer will give his signatures two times on each card..

3.3.2. TYPES OF ACCOUNT

 Individual account:

Salaried person account:

Staff of its corporate customers, as well as employees of other organisations with BOP account
agreements, may be forced to open accounts at branches. Branches must make reasonable steps to
confirm an applicant's employment details in each circumstance. A single account is one that is managed
by a single individual. The following sorts of documentation are necessary to open an account:

 CNIC

 Salary Slip

Student Account

This is the account that the student is using. The following documents are required:

 Fresh copy of latest ID card of institute

 Letter from an institute.

Retired person account

He must have

 CNIC

 Proof of retirement

 Joint accounts
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Accounts of two or more individuals who are not partners, executors, administrators, or trustees. A
husband and wife joint account is a common type of joint account. The signing authority to administer
the account must be explicitly stated.

Sole proprietorship account

This is the account for a businessman who is the company's lone and exclusive owner. Profits and losses
are exclusively the account holder's responsibility.

This account will need the following documents:

 CNIC of sole proprietor

 Sole proprietors declaration on personal capacity

Partnership account

It is a sort of business in which a group of people invest in a company and share earnings and losses in a
proportionate manner. Partnership deed including information is one of the documents necessary.

 Name of all partners

 Partner’s power to instruct bank on financial matters & operation of bank accounts.

 Dissolution of partnership

 Death of a partner

 AOF signed by all partners

 Authority letter in favor of person to operate the account

 CNIC of all partner’s

 Attested copy of registration from registrar of firm

3.4. 4th week: Data Enrichment Project:

The project data enrichment assign by the Head office of BOP to full fill the
discrepancies of the exits accounts. Before 2020 at the time of new account
opening there is no need of CNIC copy of next of kin. Now the Polices of BOP are
Changed so it’s necessary for new account to attach CNIC copy of next of kin with
the account opening form.

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Calls:

We calls to the customers of BOP to provide the CNIC copy of NOK or missing
documents.

Missing Documents:

 ID card expire
 Missing ID card copy of NOK
 Signature Issue

3.5. 5th Week: ODD and EDD Form:

3.5.1 Ongoing Due Diligence: (ODD Form)

It is the Periodic review of the profile of all the customers of BOP to check out
the

 Total amount of cash withdraw

 Use of Locker
 Flog amount of transaction

And also attach PEP form (Political Expose Person) and KYC (Know Your Customer).

3.5.2 Enhance Due Diligence Form (EDD)

EDD form attaches with high risk account holder documents.

Low Risk High Risk

ODD Form ODD

PEP PEP

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 KYC KYC

EDD

3.6. 6th Week: Issuing Cheque Book and ATM:

3.6.1 ISSUANCCE OF CHEQUE BOOK

We request for the issuance of cheque book from the customer in person or through customer’s
representatives. For new accounts cheque book requests are to be obtained for record date on
requisition slip.
 Verify the customer’s signature and sign as evidence on CRS.

 Check and ensure that there is no restriction on account that prevents the issuance of cheque
book.

3.6.2 Receive cheque book

 Receive cheque book along with the “cheque serial range report” from CBPC in sealed envelop

 Count each and every leaf of the cheque book and insure that none is missing and the serial num-
ber is in order

 Verify the details from the cheque range report with the cheque requisition. Any discrepancy
must be immediately reported to CBPC with the copy to head of centralized operations

 Cheque range report with the requisition slip will be filed at branch end in order

 Copy of cheque range will also be used as cheque book delivery register

3.6.3 Delivery of cheque book to customer

 Customer signature must be verified on acknowledgement slip and on range report against cus-
tomer detail before delivery of cheque book

 Deliver the cheque book to customer after obtaining their signatures on cheque book record as
acknowledgement of receipt

 Update cheque boom delivery record i.e date of delivery to the customers.

 Officer delivery the cheque books sign as evidence of delivery

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3.6.4 Recovery of cheque book to the representative
Receive request letter signed by the customer with the details of representatives like name CNIC
number or specimen signature duly attested by the customer to deliver the cheque book

 Verify the customer signature on request

 Verify the CNIC details/ signature of representative

 Obtain signature on the delivery record (range report) against relevant customer’s record

 Verify signature from the signature on authority letter

 Attach authority letter with cheque range report and file in date order at branch end

 Deliver cheque book

 Officer delivering the cheque book will sign as evidence of delivery

3.6.4 ATM Issuance

 ATM cards will be issued to saving ,current and other specific products accounts

 ATM cards should only be linked to the account types/products like savings, current, khazana,
Azadi accounts.

 ATM cards can also be issued to the joint account holders having either survivor condition.

 ATM cards can also be issued to the accounts held by sole Proprietors by giving the owners
name as card title.

 ATM cards can only be issued to the Pak Rupee accounts.

3.6.5 ATM Cards cannot be issued in following cases

 Any non personal account (companies, organization)

 Dormant, inoperative, blocked, restricted accounts

 Partnership accounts

 Non residence accounts

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  Jointly operated accounts

 Mandate holders

3.6.7 STANDING INSTRUCTIONS

 Bank also acts as an agent on behalf of the customer and provides various services.

 Instructions containing full details will be received in writing on the bank standard format annex-
ure SI.

 Standing instructions handled by the bank will be subject to the charges if any, prescribed in the
schedule of charges.

 Bank shall maintain the record of standing instructions received.

 The customer’s signature should be duly verified from the signature of AOF.

 Standing instructions must be maintained in SI diary showing complete record.

 Improper handling of standing instructions can adversely affect the banks reputation.

 For all manual SI following card format is used and details are recorded in it.

3.8 Structure of your concerned specialization department:

3.8.1 Department hierarchy:

BOP BRANCH

Branch Manager

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 Operation Manager Sales Manager

PBO

CR GBO CM CO CSO

3.8.2 Number of employees in BOP Brach:

It has more than 13 employees ranking from branch manager and Operation Manager. Other than these
officers there are six employees, 2 guards, 2 sweepers and 1 messenger.

3.8.3 Sub department:

There are two departments

Sales Department
The work of sales department is dealing with customers and capture maximum customers to increase the
business volume of the organization.

Sales staff performs following activities are:

ACCOUNT OPENING:
The first step in establishing a professional connection between the consumer and the bank is to open an
account. The Punjab Bank primarily offers two types of accounts:

 Current Deposit Account

 Saving Account

 Profit & Loss Sharing Account

The initial requirement for a consumer who wishes to create an account with the Punjab Bank is an
introduction, which should preferably come from one of the bank's executives or a current account
holder. The various types of accounts that are available are listed below.

 Individual account

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  Joint Account

 Partnership Account

Operation Department:

Work of operation department is:

Cash Dealing Department:

The BOP cash section is in charge of all cash receipts and disbursements as a result of transactions, as
well as foreign currencies and near-cash products.

Remittance Section:

A remittance is a payment paid in exchange for something. For their customers, this department handles
money transfers from one bank to another bank or from one branch to another branch.

Main modes of remittance are:

 Pay order

 Mail Transfer

 Demand Draft Telegraphic Transfer.

Chapter 4: Marketing Functions

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BOP has lack of promotional activities due to which marketing department is very weak.

But recently print media advertising is started which will increase customer base and helps in
developing BOP's reliability.

4.1 BOP MARKETING MIX:

1. Product:

Products involved are Finance, customers, & agriculture.

2. Price:

Due to economic crisis price charged is high and the lending rate ranges from 18-19%. The whole
banking system is under the influence of price factor. So it is very important.

3. Promotion:

BOP is cutting down its cost by cutting off its advertising expenditures.

4. Place:

BOP does not involve middleman and sellers as it is selling its services and products through its
branches that are spread across the country.

Chapter 5: Ratio Analysis:

5.1 Horizontal and Vertical Analysis
Vertical Analysis
Year Ended 2018 2019 2020
Revenue 100.0% 100.0% 100.0%

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 Cost of revenue -91.3% -88.1% -88.1%

Gross profit 8.7% 11.9% 11.9%

Operating expenses

Administrative expenses -0.9% -0.9% -0.9%

Other expenses -0.4% -0.6% -1.4%

Total operating expenses -2.2% -2.1% -3.3%

Other Income 1.7% 1.9% 1.6%

EBIT 8.3% 11.7% 10.2%

Interest expense -3.7% -5.2% -7.4%

EBT 4.6% 6.5% 2.8%

Income tax expense (benefit) -0.7% -2.3% -1.6%

Net income 3.9% 4.2% 1.2%

Trend Analysis
2018 2019 2020

Revenue -% 16.1% -5.3%

Cost of revenue -% 12.1% -5.3%

Gross profit -% 58.7% -5.6%

Operating expenses

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 Administrative expenses -% 12.6% -3.6%

Other expenses -% 78.6% 116.9%

Total operating expenses -% 11.2% 46.4%

Other Income -% 26.6% -20.2%

EBIT -% 64.7% -17.3%

Interest expense -% 65.6% 35.1%

EBT -% 64.0% -59.3%

Income tax expense (benefit) -% 272.7% -33.8%

Net income -% 24.9% -73.6%

Vertical Analysis of Balance Sheet

2018 2019 2020

Rupees Rupees Rupees

ASSETS

Non-current assets

Property, plant and equipment 51.70% 48.32% 48.61%

Long term loan and advances 3.79% 4.90% 6.32%

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 Long term deposits 0.06% 0.05% 0.05%

Total Non-Current Assets 64.21% 60.50% 61.79%

Current assets

Stores, spares and loose tools 1.16% 1.34% 1.25%

Stock-in-trade 18.81% 22.03% 22.92%

Trade debts 11.21% 10.94% 9.34%

Loans and advances 0.33% 1.14% 2.28%

Deposits, prepayments and other receivables 1.25% 0.71% 0.86%

Mark-up accrued 0.32% 0.59% 0.26%

Tax refunds due from the Government - net 2.09% 2.07% 0.50%

Cash and bank balances 0.16% 0.32% 0.48%

Total Current Assets 35.79% 39.50% 38.21%

Total Assets 100.00% 100.00% 100.00%

Trend Analysis of Balance Sheet

2018 2019 2020
Rupees Rupees Rupees
ASSETS
Non-current assets
Property, plant and equipment -% 7.47% 4.64%
Long term investments -% -4.06% -1.94%

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 Long term loan and advances -% 48.77% 34.03%
Long term deposits -% 0.00% 0.24%
Total Non-Current Assets -% 8.35% 6.23%
Current assets
Stores, spares and loose tools -% 33.15% -3.12%
Loans and advances -% 299.54% 107.17%
Deposits, prepayments and other
receivables -% -34.58% 26.38%

Mark-up accrued -% 109.90% -54.51%

Short term investment -% -7.87% -10.45%
Tax refunds due from
the Government - net -% 13.41% -74.69%

Cash and bank balances -% 136.27% 55.45%

Total Current Assets -% 26.94% 0.62%
Total Assets -% 15.00% 4.01%

5.2 LIQUIDITY RATIO

“Liquidity ratios measure the ability of the unit to meet its short term obligations.”

Name of ratios Result for 2019 Result for 2020 Favorable/

unfavorable
Current ratio 94% 96% Unfavorable

Absolute current ratio 49% 46% Unfavorable

5.2.1 CURRENT RATIO

Current ratio is also known as working capital ratio. It is unfavorable for BOP because there are not
sufficient assets available to meet the current liabilities according to the rule thumb for current ratio . It
shows the poor management of utilization of resources.
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5.2.2 ABSOLUTE LIQUID RATIO
Absolute liquid ratio relates to the cash, bank, and, marketable securities available to meet the current
liabilities. This ratio is also unfavorable for BOP. As it says, that minimum 50% of these current assets
should be there to meet the short term liabilities. As a result, the absolute liquid ratio establishes a highly
strict and exacting criterion of liquidity; the acceptable norm for this ratio is 50%.

5.3 PROFITABILITY RATIO

“It shows the overall effectiveness of management to utilize its resources to generate profit.”

5.3.1 RETURN ON EQUITY

Return on equity for BOP is unfavorable because of loss in previous year. Moreover, equity of BOP is
increasing in current year. This is the reason of its decrease.

Name of ratios Result for 2019 Result for 2020 Favorable/

unfavorable

Return on Equity 3.23% 3.20% Unfavorable

Return on asset 0.53% 0.50% Unfavorable

Return on operating 47% 10% Unfavorable
fixed asset

5.3.2 RETURN ON ASSET

Return on asset has decreased for BOP which is unfavorable. With the increase in assets of the bank, the
relevant profit should also be increased but it did not so. Instead of profit there was loss and that is the
reason for decrease in return on asset.

5.3.3 RETURN ON OPERATING FIXED ASSET

Return on operating fixed assets has also been decreased because there is loss in year 2011. On the other
hand, there should be relevant increase in profit with the increase in operating fixed asset. Only increase
in asset is not enough. It shows the poor management of utilization of resources to generate profit.

5.4 Long-term debt paying

Name of ratios Result of 2011 Result of 2012 Favorable/

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 unfavorable
Debt ratio 0.96 times 0.95 times Favorable

Equity ratio 0.04 times 0.05 times Favorable

Debt to equity ratio 25.11 times 25.06 times Favorable

Fixed asset ratio 7.10 times 5.75 times Unfavorable

5.4.1 Debt ratio

Debt ratio tells about the assets invested by the outsiders. So, decrease in this ratio is favorable
which shows the amount contributed by the outsiders is being decreased, which is a positive trend as
it decreases the institute’s degree of indebtedness.

5.4.2 Equity ratio

Equity ratio for BOP is increasing. This is favorable for shareholders as equity increases, their share
of profit and dividend also increases. This ratio provides a cushion against using debt and leverage.

5.4.3 Debt to equity

Debt to equity ratio is being decreased which shows the positive trend for BOP. As increase in debt
is less than the increase in equity. The higher ratio gives satisfaction to shareholder but reduce the
satisfaction of investors.

5.4.4 Fixed asset ratio

This ratio established the association among the long term funds and fixed assets. Its shows the negative
trend because the net fixed asset are not enough available to meet long term obligations.

Chapter 6: SWOT Analysis

SWOT analysis

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It is an analysis of inner strengths and weakness of an organization over and above external
opportunities and threats. SWOT analysis affects the managerial presentation. The overall evaluation of
a company strengths, weakness, opportunities and threats is called SWOT analysis. An organization's
mission is accomplished by best strategies in SWOT analysis by:

 Taking advantage of organizations opportunities and strengths.

 Reducing effect of threats.

 By avoiding the weaknesses.

Organizations missions are used as a context and SWOT analysis is one of the most important steps in
formulating strategy; managers avoid weaknesses and assess internal strengths.

6.1 STRENGTH:
 BOP bank officials are regarded as among the industry's most capable employees. BOP officers,
in my experience, treat clients as if they were personal friends and handle their problems as if
they were their own.

 The branches of BOP are opened in commercial areas in order to save customers from facing
problems to reach the bank.

 The security system is very good in BOP.

 Employees are given with good facilities.

 Internal computer system in BOP is very reliable and easy to use. Every information is comput -
erized.

 There is properly maintained data.

 BOP is 51% owned by Punjab government.

 BOP is adopting measures to monitor and minimize risks that are related to banking industry.

6.2 WEAKNESS:
 The BOP lacks proper internal control, which the auditor pointed out in his review.

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  During my internship, I noticed that the workload on the employees is very high. The work
should be evenly distributed among the employees on the basis of their abilities and rank.

 Employee selection must be fair..

 There is a lot of concern of SBP on the bank's control that is the weakness of BOP.

 Due to the greater influence of the government, the staff has a negative attitude towards the cus-
tomer.

 Staffs are not motivated by reasonable rewards or low pay.

 Lack of proper internal control.

6.3 OPPORTUNITIES:
 As a state-owned bank BOP, there is wide scope in the economic market.

 Trust and confidence creates opportunities to increase deposits and

profits.

 Raising awareness about Islamic financial services.

 Rising local and international Islamic banking market.

 I.T and HR are vital factor for expansion in any organization. The BOP will

continue to strive to achieve this goal.

6.4 THREATS:
 BOP is facing a strong competition by other banks as business is growing at very high speed.

 Customers are lacking trust in BOP due to which deposit growth

 Its staff switching over to other private banks due to more facilities.

 High number of the complaints regarding staff behavior.

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Chapter 7: Conclusion & Recommendation:

7.1 Conclusion
BOP is contributing more in the industrial progress and capital formation in the whole country. As
shown in financial analysis, it is revealed from the data that bank is sharing major banking business of
the country which is concerned with bank's financial performance.

In addition, the schemes and policies are of great importance for the bank which helps in trading & non
trading growth.

Trade is facilitated by BOP both inside and outside of the country. BOP is constantly showing incredible
growth in all areas of the country and is remain on the front position of modern financial institutions.
However its growth of profit is reduced due to stress on consolidation and controlled providing of loans.
BOP has uniform policies and going on efficiently. The employees are awarded with compensation and
other possible facilities for their hard work and best efficiency. In all activities, BOP adopts merit
policy. Administration planned to avoid all issues, drawbacks and problems by comparing it with other
banks. BOP has proper and progressive management policies.

The devoted, motivated & passionate employees will soon bring the time when the bank will touch the
peak of success, progress & development.

7.2 Recommendation
Following are the recommendations that may be prove successful to the bank by studying the
organization and during internship.

 The main aim should be to create awareness among the people and launch a planned advertising
campaign to gain a significant share in the banking sector of the country.

 The bank should have physical facilities for its clients such as furniture, parking facilities as
these facilities play an important role in enhancing the image of the bank.

 BOP can attract intelligent and capable individuals and professionals by adjusting the salaries
and pay of officers to suit other private banks.

 Expenses should be minimized by BOP.

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  Special awards should be given to hard working employees who have shown exceptional perfor-
mance in their work.

 BOPs keep in mind what people want to achieve and what banks are actually providing, innovate
and launch new products.

 There should be more focus on development than investment.

 Services and products should be launched through BOP in which customers do not have to come
to the bank like telephone banking.

 Successful banks are those that provide quality, accurate and fast service to the product and de-
liver credit to the customers. Therefore BOP should use the latest and advanced technology like
fax and computerization.

 Authority should be given to management.

References:

Websites

www.google.com.pk

www.answer.com

www.bop.com.pk

Books consulted:

Principle of managerial finance

Financial management by Gitman

Brochures and pamphlets provided by bank

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