CHAPTER # 1

INTRODUCTION & HISTORY OF

THE BANK OF PUNJAB

1. BRIEF INTRODUCTION OF ORGANIZATION’S BUSINESS

SECTOR:
EVOLUTION OF BANKS IN PAKISTAN:-

There are different opinions that how the word ‘Bank’ originated. Some of the
author’s opinion that this word is derived from the word ‘Bancus’ or Banque’, which means a
bench. The explanation of this origin is attributed to the fact that the Jews in Lombard
transacted the business of money exchange on benches in the market place; and when the
business failed, the people destroyed the ‘bench’. Incidentally the word ‘Bankrupt’s said to
have evolved from this practice.

Some of the authors are of opinion that the word ‘Bank’ is derived from the German word
back, which means ‘joint stock fund’. Later on when the German occupied major part of the
Italy the word ‘Back’ was italicized into ‘Back’.

In fact human left the need of bank when it begins to realize the importance of money as a
medium of exchange. Perhaps it where the Babylonian who developed banking system as
early as 2000 BC. At that time temples were used as banks because of their prevalent respect.
During the rule of king Hamurabi (1788 – 1686 BC) the founder of Babylonians Empire,
loans were started being granted for interest. The borrower has to provide guarantee or he had
to pledge his goods or valuables. King Hamurabi drew up a code wherein he laid down
standards rules for procedures for banking operations by temples and great landowners. Also
in Greece, the temples were used as banks, where the people deposited their money and other
valuables for safe custody and security. In Europe with the ‘revival of civilization’
(Renaissance) in the middle of twelve century, trade and commerce started expanding and
this development compelled the business community to borrow the money from the Hebrew
money lenders on high rates of interest and usury. Seeing the great demand, these
moneylenders started organizing themselves and bank started up at the principle seaports of
southern Europe. Soon Venice and Geneva became the most important money markets of the

1
time and banking though different from its present form, flourished. What we know as
‘modern banking’ originated in the 14th century in Barcelona.1

2
1.1 Definitions of Bank:-

“Bank”

"A financial institution which deals with money and credit”

It accepts Deposits from individuals, firms and companies at a lower rate of

Interest and gives at higher rate of interest to those who need them.”2

A financial establishment which uses money deposited by customers for investment, pays it
out when required, makes loan at interest, exchanges currency, etc.

J.W Gilbert in his principles and practice banking defines a banker in these words:

“A banker is dealer in capital or more properly, a dealer in money. He is intermediate party

between the borrower and the lender. He borrows of one and lends to another”.3

Sir John Paget defines banker in these terms:

“That no person or body, corporate or otherwise, can be a banker who does not

 Take deposits accounts.

 Take current accounts,

 Issue and pay Cheques and

 Collect Cheques crossed and uncrossed for his customers”4 (The law of Banking
by Sir John Paged, page 51).

The American defined the term banker in a very broad sense as under:

“By banking, we mean the business of dealing in credits and by a ‘Bank’ we include
every person, firm or company having a place of business where credits are opened by
deposits of collection of money or currency. Subjects to be paid or remitted on Cheques or
order, money is advanced or loaned on stocks, bonds, bullion, bill of exchange, promissory
notes are received for discount or sale”.

3
1.2 Banking Growth during (1948-1970):-

In this tense situation, a committee was immediately setup to formulate a scheme of central
banking legislation for Pakistan. Many specialists were of the opinion that in view of the
acute shortage of trained staff, any idea of establishing a central bank was I impractical and
the best that could be attempted was the setting up of a currency board until such times as
sufficient staff could be organize to operate a central bank.

The questions as to whether the institution should be only a currency board or a full-fledged
central bank had exercised the mind of the Pakistan government since independence.
Through, it was realized that the shortage of trained personal to run the central bank would
present serious difficulty in view of the tangible advantages that a central bank enjoyed over
currency board, the government ultimately decided to take the bold step of setting up a full
fledged central banking authority. Among other factors, which led to this decision, there was
the fact the banking facilities in the country had been totally disrupted and there was an
urgent need for their rehabilitation, which a central ban alone could meet. As there was
hardly any time to pass as Act, an order was drafted, known as the state bank of Pakistan
order, which was promulgated by the government of Pakistan on 12th may 1948. The state
bank declared open on July 1, 1948 by the father of the nation.

One of the first tasks of the state bank was to arrange for the replacement of the Reserve bank
of India notes, which had continued to circulate in Pakistan during the transitional period, by
Pakistan currency.

The first Pakistan notes were issued in October 1948 in the denominations of Rs. 5, 10 &
100.

An equally urgent task, which the new central bank had to address itself, was the creation of a
national banking system. To this end, while extending every help and encouragement to
Habib Bank to expand its organization, the state bank recommended the setting up of a new
banking institution to serve both as an agent to the state bank recommended the setting up of
a new banking institution to serve both as an agent of the state bank as well as the spearhead
of its credit polices.

With a view to broadening the institutional framework of the financial system, the state bank
also sponsored the establishment of specialized credit institutions in the filed of agriculture
and industry. Banking companies (control) act was passed in December 1948 specifically
empowering the state bank to control the operations of banking companies in Pakistan.

Moreover realizing that the most serious limitation on the expansion of banking services in
Pakistan was the lack of trained personal, the state bank sponsored a banking training
scheme, which was repeated after year and turned out a large number of bankers.

4
As the Commercial Banking facilities continued to expand, a new Pakistani bank, the
National Commercial Bank was established and registered as a scheduled bank. In the filed of
industrial finance a new institution known as the industrial credit and investment cooperation
was set up.

1.3 Banking Reforms 1972:-

After the assumption of office by a new government in 1971, may 1972 different reforms
were introduced to make the banks more responsive to the requirements of economics growth
with social justice. The reforms aimed at bringing about a more purposeful and equitable
distribution of bank credit, improving the soundness and efficiency of the banks, and securing
greater social accountability of the banking system as a whole.

The role of the banking system had been truly spectacular in mobilizing savings of the
community and meeting the credit needs of the economy. But at the same time, the banks had
generally neglected their role in promoting social justice and had failed to play an effective
role in ensuring a wider and more equitable dispersal of the benefits of economic growth. In
particular the inter locking of ownership with commercial and industrial interests had led to
the misuse of bank resources. There was a heavy concentration of credit in big accounts and
in urban area. Credit facilities for agriculture, small business, newly emerging exports and
housing had remained obviously inadequate while the banks indulged in capital financing in
few selected business sectors and issued guarantees on behalf of favored clients, term clients,
term financing facilities for industry were wholly absent.

The bank reforms also brought about the establishment of new institutions to achieve new
objectives.

A national credit consultative was setup under the supervise of the state bank with
representation from the government and the private sector. It was assigned the task of
determining of economy’s annual credit needs within the safe limits of monetary and credit
expansion with reference to the annual development plan. Such a credit plan was to cover the
public and private sectors. Alongside the National credit council and Agricultural Advisory
Committee was formed to allocate agriculture credit for various purposes, to coordinate the
operation or the agriculture credit agencies and to oversee the flow of credit to the designated
targets. A standing committee on exports in general and the new emerging exports in
particular, was also established. With a view to encourage the banks to extend credit to small
borrowers, a credit guarantee scheme was introduced under which the state bank under took
to share any bonfire losses incurred by the commercial banks in case of small loans of
advances to agriculture.

At the same time two financing institutions were established. The people’s Finance
Corporation was designed to provide finance to people of small means while the National
Development Finance Corporation was setup of finance public sector owned and managed
industries and enterprises.8

5
1.4 Islamization of Banking:-

Another major development in the history of Pakistan Banking System was the introduced of
interest free banking in selected Commercial Banks with effect form Jan1, 1981. This
followed the effort to eliminated interest from the operation of Nation investment trust, the
House Building Finance Corporation of Pakistan. Certain amendments were made in banking
and other laws with the object of ushering in a new system of banking, which would confirm
of Sharia. A new law Modaraba Companies Ordinance 1980 was promulgated. Separate
interest free counters began to operate in all the nationalized commercial banks free counters
began to operate in all the nationalized commercial banks. The state bank provides finance
against participation term certificate and also against promissory notes supported by
Modaraba certificate.

In order to cover interest free transactions certain banking definitions such as creditors,
debtor, and advances credits and deposits were revised. Stipulations concerning form of
business in which banking companies may engage may also have been modified schemes
were introduced to provide interest free loans to formers and deserving students.

A private Limited Company named as Bankers Equity limited was incorporated in 1979 to
provide financial assistance to the industrial sector primarily on interest free basis.

A scheme to extend interest free productive loans to farmers and fisherman has also been
introduced. Instead of interest, a system based on mark-up in price, exchange rate differential,
and profit and loss sharing accounts were introduced.

Different financial schemes introduced in the Islamization process are: 2

♦ Musharika Financing.

♦ Hire Purchase Financing.

♦ Modaraba Financing.

♦ Specific Purpose Modaraba.

1.5 Dis-Investment and Deregulation of Banking – 1991

When it was realized that the role of public sector in the economy is over extended and the
banking sector has more earning potential in the private sector the process of privatization
banking sector restarted in 1991 by the Muslim League Government. Muslim Commercial
Bank was Dis-invested in to two phases while ABL was sold to its employees. Since then
allot of investment is being made in the banking sector and several new banks were
established and still the process is going on. Now only NBP is government bank other than
SBP. The performance of this bank will be analyzed and judged in the following chapters.

1.6 Overview of the organization:

6
Brief history:

The Bank of Punjab was established in 16 November, 1989 under. The Bank of
Punjab act 1989. The first Branch which opened was the Main Branch Lahore. In 1989 BOP
was mended as a non – scheduled bank on in the province of Punjab.
In beginning the main deposits were the government because it was opened to support the
government of Punjab.

In 1994 the BOP was converted into a scheduled Bank it opened its Branches in all over the
country.

Today they established 251 Branches all over the country as:

CITES NO. OF BRANCHES

Province in Punjab 237

Islamabad 2

Queta 3

Karachi 3

A.J. Kashmir 3

Peshawar 3

Total Branches: - 251

The total numbers of staff of BOP is approx.

4000 most of the employees are master degree holder and are highly qualified and has
working.

In the beginning the main area of procurement of deposits was the government – based
organizations. The reason being that, it was opened to support the government of Punjab It
quickly expanded its operations in the city of Punjab by opening branches through out the
province. Approximately one branch was opened a day. The strength of branches in the
province of Punjab is 237.In 19th Sept 1994 the Bank of Punjab was converted into a
scheduled bank,

7
The permission being given by the Government of Punjab After being converted into
scheduled bank it opened its first branch in the city of Islamabad (Blue Area) on the date 19th
Sept 1994. Now the total number of branches is 252. Being towards the roads of prosperity
and establishment BOP expanded its network throughout the country the details of branches
are as under.

The total number of staff of BOP is approx. 4000. The staff of BOP is highly qualified and
hard working. Most of the employees are Master degree holder. If we highlight the fact of
network BOP is the 6th largest among both the local & foreign banks, in the last year’s ratings
it was at 7th position among the top ten banks in Pakistan.

Bank earned a pre – Tax profit of Rs. 124.739 million and the deposits of the Bank Rs.
15,014.100 million as on 31-12-1999.

The Bank’s paid-up capital in 1999 Rs. 851.880 million

Macro economic management is the major concern of an economy. In Pakistan over a long
period of time, the gaps in saving and investment and balance of trade deficit have become
the serious problem to achieve the desire level of growth.

The Bank of Punjab by the grace of ALLAH has the privilege to discharge its responsibilities
to words national progress and prosperity within the little period if it’s scheduling.

1.7 Nature of the Organization:

Mission statement

To exceed the expectations of our stakeholders by leveraging our relationship with the
Government of Punjab and delivering a complete range of professional solutions with a focus
on programme driven products & services in the Agriculture and Middle Tier Markets
through a motivated team.

GOALS

To achieve this objective the bank aims to:

 Ensure that its performance in all facts of its operations more than matches that of its
competitors.
 Maintains a comprehensive range of domestic and international activities.
 Maximize contributions from its key sources of personal machines brands representation
and capital.
 Be innovative progressive and the need of its customers with in the frame work of
operational and prudent risk taker.
 Act as a reputable efficient and responsible organization.

8
 Pursue personal policies which recognize the aspirations and performance of individual
and which are suited to the devise levels of skills.

Core Values

Our Customer as our first priority

For the prosperity of our stakeholders that allows us to
Profitability
constantly invest, improve and succeed.
Corporate Social
to Enrich the Lives of community where we operate
Responsibility
Recognition and
for the talented and high performing employees
Reward
Excellence in every thing we do
Integrity in all our dealings
Respect for our customers and each other

1.8 FIELD OF ACTIVITIES

Banking Groups
1) Corporate banking and financial institutions group
2) Retail banking group
3) Operations and credit group.

This Group is responsible for serving the needs of large corporate clients in public and
private sector, managing correspondent banking relationships and undertaking money market
transactions. The Group is organized in three divisions namely

 Corporate and Merchant Banking Division,

 International Division
 And Treasury.

CORPORATE AND MERCHANT BANKING DIVISION

This Division is engaged in provision of financing facilities to large corporate clients

including multinationals. Principal activities include syndicated loans, guarantees, and
working capital finance, underwriting and advisory services. The Division has played an
9
important role in providing development finance for the modernization and expansion of the
country's core industries. Credit risk is well diversified with exposures in sectors like fuel &
energy, chemicals, textiles and fertilizers. Three units have been set-up at Karachi, Lahore
and Rawalpindi for sales and operations, which are supported by centralized marketing from
the Head Office.

1.9 INTERNATIONAL DIVISION

Mainly responsible for managing correspondent banking relationships and planning
overseas operations, the Division plays a vital role in extending foreign trade transactions
support to the branches. The Bank became a member of SWIFT in the Year 2000 and is also
a contributor to the equity of Pakistan Export Finance Guarantee Agency Ltd With a network
of 167 correspondents spread over 95 countries worldwide; the Bank continued to reinforce
its leadership position in trade finance, transacting business of over Rs. 70 billion, during this
year. Through the concerted efforts of this Division, we are a participating Bank under the
"Pakistan Trade Enhancement.

Facility" of the International Finance Corporation and our customers are entitled to avail of
the "Political Risk Guarantees Scheme" extended by the Asian Development Bank.

TREASURY

Responsible for managing Bank’s liquidity and foreign exchange transactions, our
Treasury in one of the most active in the market. Through reported transactions, purchase of
Government paper and foreign exchange trading, the Division adds substantially to the
Bank's sustained earnings.

RETAIL BANKING GROUP

Retail banking group was formed in 2000, this group is responsible for serving the needs
of the retail market. Focusing on individual consumers and small and medium size
enterprises, for purpose of product differentiation, the group is managed in three business
arms.

 Investments products unit,

 Asset products unit,
 And the credit cards division.

1.10 INVESTMENT PRODUCTS UNIT

Responsible for developing and managing brands which serve the investment needs of the
consumer market, this unit focuses on deposit mobilization, provision of value added services
based on modern technology and undertaking the centralized marketing and advertising for
the Bank. This unit is also actively involved in the acquisition business and has signed-up

10
over 300 merchants nation-wide which offers shopping discounts to the Bank's Privilege
Card members.

BOP's Value Plus is a unique deposits account, which offers handsome monthly profits,
accidental insurance cover, partial liquidity on all time deposits and free Privilege Card
membership. The Unit is also administering the sales and distribution, including arrangement
for strategic partnership alliances for BOP- i-Net Banking, the first internet banking in
Pakistan, which allows routine banking transactions from anywhere in the World, round the
clock, over the internet.

1.11 ASSET PRODUCTS UNIT

This Unit is engaged in the development and management of retail credit schemes. The
consumer market in Pakistan has not only grows exponentially over the last decade or so, but
the needs of this segment have become extremely diverse. In order to sustain competition, it
is but imperative to continue offering innovative consumer credit schemes. With the launch
of BOP Bank's Personal Finance an (auto-loans), this unit is emerging as a significant
contributor to the Bank's loan growth. The unit also administers the first e-commerce banking
solution in Pakistan, under the brand name BOP-IBL online. This is a b2b automated credit
transaction module, offering merchandise credit to retailers on goods purchased form one of
the largest distributor’s n the country. Strong collection and prudent risk management
policies have restricted delinquencies to very low levels.

1.12 CREDIT CARDS DIVISION

This Division manages BOP Master Card brand and is headquartered at Karachi. With a new
fully automated transaction processing system, the brand was re-launched in 2001, supported
by an aggressive advertising campaign and strong sales team network. The product now has
portfolio of nearly 20,000 cards, in less than one year. The brand is accepted worldwide and
over 3,000 locations in Pakistan.

1.13 OPERATIONS AND CREDIT GROUP

A support function group mainly responsible for development of systems and procedures,
process re-engineering, automation and credit management. The group is organized in three
divisions,

 System and operations division

 Electronic technology divisions
 And the credit division
SYSTEM AND OPERATIONS DIVISIONS

This group has been instrumental in development of procedures and manuals for various
operating requirements of the bank. After careful mapping of the existing process flows, the
division recommends automation and re-engineering requirements. To improve transaction
efficiencies the division is active in providing equipment procurement support and
11
development of new branches. The protection of fixed assets of the bank is also managed by
the by this division, as directs function. During year 2001, the division has proposed several
cost cutting initiatives based upon improvement of our existing procedures and
documentation reduction. Seven new branches have been opened during this year. The
division successfully implements the model branch concept during 2001, which has been
proved to be a milestone towards improving our customer service standards and achieving
process uniformity with optimum resource utilization.

1.14 ELECTRONIC TECHNOLOGY DIVISION

This division operates as the backbone for all operational functions in the bank. Responsible
primarily for the development of banking software and provision of computer hardware to all
business units, the division also engaged in the development of technology based value added
customer service products. The division has helped the bank in playing the pioneering role in
offering Internet banking service e-commerce solution and on-line banking. The division
provides online real time branch connectivity and has full-automated transaction processing
support programmers in the place. The division is focusing on use of data-warehousing
technology to enhance the relationship management program of the bank.

1.15 CREDIT DIVISION

Providing extensive support to branches for credit administration, control and monitoring, the
division has played a pivotal role in helping the bank achieve a remarkable loan

Growth of 31%, with well diversified risk exposures, Most of the loans are of shot -term
trade financing on a secure and self-liquidating basis. The division has a special assert
management team, which is responsible for ensuring low ratio of bad debts, effective
monitoring of delinquent advances and close follow-up of recoveries. Bank's head office
credit committee, reviews the credit quality and pricing on regular basis not only to ensure
healthy credit growth but also the management of bank's risk assets in almost prudent and
profitable manner

Taking into account the expanding branch network and the increasing customer base, credit
administration was strengthened by decentralizing the delegation of lending authorities at the
regional and area management level.

The decentralization has benefited the bank and its customer tremendously as the new
arrangements now provide for faster credit delivery, focused credit development, and more
effective monitoring and controls. Further steps are being taken to streamline credit appraisal
procedures and training to credit officers at all levels.

1.16 Business Volume:

SEGMENTATION ANALYSIS

12
 Dividing a market into different geographical units such as nations, states, regions,
countries, cities;
The bank of Punjab also segments the geographical in Pakistan especially by sector and by
business and agricultural community.

ANALYSIS

Geographically segmentation Pakistan in 1999 as:

Profit before tax Rs. 124.739(M)

Total Assets employed Rs. 18214.154(M)

13
Segment by business class and agriculture;
Bank of Punjab specially target to the business commodity and agriculture because the
mostly business based on agriculture so they are related to one an other.

SEGMENT BY CLASS & BUSINESS

S. No. Class of Business Deposits % Advances %

1. Agri Forestry & Fishing 0.56 11.39

2. Chemical 0.05 2.54

3. Food Industry 0.37 1.37

4. Insurance 0.07 0.00

5. Cement 0.09 8.70

6. Textile 0.23 22.88

7. Mining 0.07 0.00

8. Manufacturing Industries 0.60 9.72

9. Real Estate Dealers 2.17 0.00

10. Services 1.20 0.00

11. Transport 2.78 2.98

12. Wholesaler & Retailer 4.92 8.22

13. Financial Institute 4.53 5.74

14. Electricity 0.78 4.64

15. Construction 0.57 1.94

16. Trust 1.19 0.00

17. Others 79.82 19.92

TOTAL 100.00 100.00

14
SEGMENT BY SECTOR
Bank of Punjab segment the moral the sector to Inc the range and share of the market
and they divided into two sector p

S. No. Sector Deposits % age Advances %age

1. Public Investment 33.77% 5.42%

2. Private Investment 66.23% 94.58%

Total 100.00% 100.00%

1.17 SOURCE OF BANK

The bank of Punjab release funds for the purpose of his business from the following
sources.

1. Capital
2. Reserves
3. Liquid Assets
4. International Bank
5. Enter Bank

1. Capital: -
The main source of fund realization of the BOP is its own capital. The bank uses its
capital for the purpose of investment, lending and other activities to earn profit.

2. Reserve Fund: -
It is the rule of the BOP that when they earn profit. He does divided whole the trading
profit some portion of such profit which are undivided profit are keep as reserve by bank.

3. Liquid Assets: -
The bank required to maintain liquid assets as instruction by State Bank of Pakistan
percentage. So this amount also use as funds.

4. International Banks: -
The bank of Punjab also borrows money or realizes funds from international banks to
meet their requirements.
15
5. Enter Bank: -
The Bank of Punjab also deal or release funds from other banks like.

 Habib Bank Ltd.

 Muslim Commercial Bank Ltd.
 UBL
 NBP
 Premier Bank Ltd. Etc.

1.18 FINANCIAL POSITION

i) Total Assets: -

Total assets employed RS. 18214.154 million As on 31 December 1999 as compare to

1998 RS. 19886 million.

ii) Advance: -

Of Rs. 39.273 million for the year 1998 The clearly indicates the improved
performance of the Bank during the year 1999

Advances stand at RS .6150. 648 million showing an increase of 10% over the year
1998

iii) Investments: -

Investments were at RS.4990.619 million at end of year 1999. Of which 6581 million
as shown in 1998

OPERATION
As the year ended December 31, 1999.the banks pre-division and pretax profit was
RS.205.96 million as against a profit

16
CHAPTER # 2

PRODUCTS AND SERVICES

2. Product Lines:
Deposit Products:
1. 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 Bank has the right to refuse to open an Account without assigning any reason.
 The Accounts shall be opened with an initial/minimum deposit as stipulated by the Bank
from time to time unless specifically exempted.
 A distinctive number shall be allotted to every account and this number should be quoted in
all correspondence relating to the account and at the time of making a deposit or withdrawal.
The Bank reserves the right to change the Account Number or any part of it in order to meet
its book keeping/administration requirement. However, intimation of change in the account
number shall be sent to the account holder.
 Account for the recipient of Zakat or recipient of grants from Bait-ul-Mall,
maybe opened with an initial deposit of Rs.100/- (introduced vide Inst
Cir#97/129 dated 25.11.1997 & Inst Cir 98/53 dated 03.06.1998)
 The Accounts may be opened singly in one name or jointly in two or more names.
 Deposit may be accepted from minors provided the account is opened and operated through
a guardian. The Account thus opened will continue to be operated upon by the guardian
even if the minor attains the age of majority. The necessary consent to this effect will be
obtained at the time of opening of the account..
 All monies/instruments to be deposited in an account should be accompanied by a pay-in-
slip showing the title and number of the account. The entry of transaction shall be
authenticated by putting Bank’s stamp under the joint signatures of two officers of the Bank
on the pay-in-slip and counterfoil thereof. However in case of branches where teller system
has been introduced, teller only shell authenticate the transactions up to the prescribed
limits.
 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.
 Where any account is not conducted to the satisfaction of the Bank, the account may be
closed without any notice and the balance will be remitted to the depositor at the address
given by the Account Holder(s).
 Withholding Tax at the rate notified by the Government of Pakistan from time to time will

17
 be deducted out of profits payable to the Account Holders.
 ZAKAT is leviable on the assets as described in the Zakat & Ushr Ordinance 1980 (as
amended from time to time) on balances which will fall within the definition of zakatable
assets as notified by the Government of Pakistan on valuation date each year, provided
Declaration (original/attested photocopy) for exemption from compulsory deduction of zakat
is filed on the prescribed proforma (CZ-50) in the prescribed manner one month preceding
the valuation date except in the case of newly opened accounts.
 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. Basic Banking Account

18
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
2.3 UTILITY SERVICES
remaining "NIL" for a continuous 6 month period, such accounts will be closed.
 Account holder will be allowed a maximum of 2 deposit transactions and 2 checking
withdrawals, free of charge either through cash/through clearing per month otherwise service
charges of a regular banking account shall be applicable for that month as per Bank's
Schedule of Charges.
 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.

1. Profit and loss sharing

 BOP Pehlay Munafa Scheme

 PLS Saving Account
 Senior Citizen Saving Account
 Gharaloo Saving Account
 Ziada Munafa Saving Account
 PLS-Saving Profit Plus Account
 Corporate Premier Account
 Corporate Premier Term Account
 Munafa he Munafa Term Acconut-3
 BOP Tijarat Account (LCY)
 BOP PLS Supreme Saving Account
 BOP FCY Supreme Current Account
 BOP FCY Supreme Saving Account

2. Loan Products

Commercial Finance

 Running Finance
 Demand Finance
 Cash Finance

Consumer Finance

 Asaish Loan
 Quick Cash
 Car Loan
 House Loan
 Smart Cash Personal Loan

Consumer Banking
19
 Clean Pakistan – CNG Filling Station Scheme
Lady Entrepreneur Finance Scheme
Auto Lease Finance Scheme
Car Dealers Finance Scheme
 Keeping in view the difficulties faced by the general public BOP has taken the
initiative to provide service for collection /receipt of utility bills on behalf of WAPDA, Sui
Gas, Paktel , Instaphone and WASA from 9.00am 4.00 p.m. all the branches through out the
countries are observing this practice to ease the long queues lined –up at the counters of
banks.

2.4 HUMAN RESOURCES AND TRAINING ACTIVITIES

The Bank of Punjab avails a rich and diverse human resource potential. In addressing
the need for upgrading the academic and professional expertise of staff up to the current
day’s requirements, the Bank’s training institute has played an important role. During 1997,
training was imparted to 74 officers; management and other miscellaneous courses were
organized for 62 officers and refresher courses were arranged for 408 cash officers.

Keeping in view the importance of foreign exchange business and dearth of expertise
in the field of Forex Banking, we have redoubled our emphasis on education and training in
the field of foreign exchange. In the year 1997, a series of courses were arranged to impart
necessary skills and expertise to the staff under the supervision of senior executives.

20
PLS SCHEME

Monthly Income Scheme 12% PA

Prize saving scheme on O/S balance 5% PA

SAVING PLUS ACCOUNTS

Rs. 5000 (m) above but between 10000 7.75%

10000 – 50000 8.50

50000 - 100000 9.25

100000 – 250000 9.75

250000 above 10.50

2.5 ONLINE BANKING

Online banking means that the customer of BOP can deposit / withdraw funds in / from other
branches of BOP. BOP bank provides online facility to all its branches.

ONLINE CHARGES

Amount of Deposits Charges ( Rs)

25,000 or below 50

25,000 - 200,000 100

200,001 - 500,000 250

500,001 - 2000,000 500

Above 2000,000 750

2.6 LOKERS
BOP offers facility of lockers to its customers.
21
There are three sizes of lockers available:

CHARGES

Size of lockers Rent of locker (Rs) p.a.

Large 2500

Medium 1500

Small 1000

Comments on the organizational structure

BOP employees receive almost all of their compensation from traditional salary. BOP
employees are, however, eligible for bonus pay for exceptional service. It would be
interesting to know how this individually based bonus system affects organizational
commitment, especially in comparison to more collectively based schemes.

The finding that BOP commitment and institutional commitment have approximately the
same effect on turnover also requires clarification. While the results from factor analysis (not
reported here) suggest that these are indeed two separate components of organizational
commitment, they certainly behave similarly when turnover is the object of examination. It
would be interesting to examine if they behave similarly if other outcome measures, such as
performance or use of sick leave, are examined.

Given the findings of this study on organizational commitment, there would seem to be no
reason to encourage the development of one form of organizational commitment among
employees over the other. Historically, though, the BOP has tended to discourage too much
attachment to individual facilities in an effort to broaden the scope of their managers and to
thwart any tendencies toward empire building.

The results found for the organizational variables, which are intended to measure contextual
effects of the work environment, are somewhat surprising. The simplistic notion that high
security institutions are associated with less satisfying working conditions which in turn lead
to turnover is simply not supported. It is necessary to refine the theory surrounding working
conditions at institutions of different security levels to understand what the effects might be
on outcomes like turnover. As noted previously, some aspects of the work load at maximum
security institutions (especially processing inmates in and out) are lower. Likewise, why there
should be any regional effects needs to be investigated.

The effects of organizational tenure and age need to be better conceptualized. The surprising
finding for income, where higher income produces greater risk of turnover, needs to be
examined in greater detail. Since higher paid individuals are typically those with the most

22
experience and skills, the finding for income may reflect unmeasured aspects of these
variables.
None of the topics for further research, though, is more deserving of further investigation
than the differences between males and females concerning the hazard of turnover. The
factors influencing turnover may differ substantially for females and males. It is also likely
that models for turnover need to consider more carefully and consistently variables linked to
processes outside of the work environment. For example, family obligations are probably
significantly related to turnover decisions, especially for females who continue to bear the
brunt of responsibility for household and child care tasks in contemporary U.S. society.

23
CHAPTER # 3

Departments of BOP

3. CLEARING DEPARTMENT

MEANING OF CLEARING

The word clearing has been derived from the word “Clear” and is defined as “ a system by
which banks exchange cheques and other negotiable instruments drawn on each other within
a specific area and thereby secure payment for their clients through the Clearing House At
specified time” in an efficient way”.

CLEARING HOUSE

It is a place where representatives of all banks sit together and interchange their claims
against each other with the help of controlling staff of State Bank of Pakistan And where
there is no branch of State Bank of Pakistan the designated branch of National Bank of
Pakistan act as controlling member instead of State Bank of Pakistan

MEMBERSHIP CEASES

 It ceases to be a scheduled Bank.

 It is not able to meet its liabilities.
 State Bank of Pakistan or Central Govt. prohibits it to receive fresh deposits.

RULES AND REGULATIONS HAVE CLEARING HOUSE:

 Timing:(Monday through Saturday)

i. 1st Clearing at 10:00 a.m.

ii. 2nd Clearing at 2.30 p.m.

 Each bank will send competent representative to exchange the cheques.

 Each bank is required to insure that all cheques and other negotiable instruments are
properly stamped and suitably discharged
 An objection memo must accompany each and every cheque when return unpaid duly
initialed.

24
  Each bank is required to maintain sufficient funds in the principal account with SBP
to meet the payment obligations.
 The State Bank of Pakistan debit the account of each member of the clearinghouse
with the proportionate working expenses incurred on the operation of clearing house.
These expenses are very nominal.

OUTWARD CLEARING AT THE BRANCH:

The following points are to be taken into consideration while an instrument is accepted at the
counter to be presented in outward clearing:

If an instrument is in order than our bank special crossing stamp is affixed across the face of
the instrument. Clearing stamp is affixed on the face of the instruments, paying-in-slip and
counterfoil (The stamp is affixed in such a manner that half appears on counterfoil and
paying-in-slip). The instrument is suitably discharged, where a bearer cheque does not require
any discharge and also an instrument in favor a bank not need be discharged.

The instrument along with pay-in-slip is retained while the counterfoil is given to the
customer duly signed. Then the following steps are to be taken:

1. The particulars of the instrument and the pay-in-slip or credit voucher are entered in
the outward clearing register.

2. Serial no. is given to each voucher.

3. The register is balanced; the credit vouchers are balanced from the instruments and
are released to the respective departments against acknowledgement in the register.

4. The instruments are arranged bank wise.

5. The schedules are prepared in triplicate, two copies which are attached with the
relevant instrument and the third is kept as office copy.

6. The house page is prepared from schedules in triplicate.

7. The schedules and house pages are signed by the house in charge with branch stamp.

8. The grand total of the house page is taken and agreed with that of the outward
clearing register.

9. The instrument along with duplicate schedule and house page are sent to the main
office.

However the amount is kept in float till final status of various instruments is known from
respective paying banks in second dealing.

The entry of the instrument returned unpaid is made in Cheques returned Register. If the
instrument is not to be presented again in clearing then a covering memo is prepared. The

25
covering memo along with returned instrument and objection memo is sent to the customer
who sent the same to his account.

INWARD CLEARING OF THE BRANCH:

1. The particulars of the instruments are compared with the list.

2. The instruments are detached and sort out department wise.

3. The entry is made in the inward clearing register (serial no. Instrument no. Account
no. is written).

4. The instruments are sent top the respective departments

5. The instruments are scrutinized in each respect before honoring the same.

OUTWARD CHEQUES RETURNED UNPAID:

These are the cheque returned unpaid by us in inward clearing. due to some objections.

INWARD CHEQUES RETAINED UNPAID:

These are the cheques retained unpaid to us which were lodged by us in Outward Clearing.

RETURN OF CHEQUES AFTER CLEARING HOUSE:

Suppose all cheques received in the inward clearing are passed and later on it is found that a
cheque should have been returned, in such cases, we contact the collecting branch and request
them not to make payment against the proceeds of the cheque which was not returned unpaid
by us in due time. the cheque with objection memo along with a covering letter is sent to the
collecting branch, making request to issue a payment order in favour to balance the Cash-
cum-day book we may debit suspense account sundry debtors with the approval of the
manager. When the payment order is received, it is lodged in clearing and suspense account,
sundry debtors is adjusted accordingly.

SPECIAL CLEARING:

In addition to the normal clearing function at Clearing house it is mutually agreed to hold an
extra clearing at the clearing house on the particular day and time which is known as “special
clearing” it is arranged due to the rush of work arising out of say, more Holidays declared by
the Central Govt. at a time, but normally special clearing is he4ld on last working day of our
half yearly and yearly closing i.e. 30th June and 31st Dec. every year.

3.1 ACCOUNTS DEPARTMENT

26
IT- DEPARTMENT

ACCOUNT OPENING DEPARTMENT

Account Opening In-

charge

Officer Office
r

3.2 REMITTANCE DEPARTMENT

Functions of remittances department

The functions of remittance departments are to handle with the following instruments:

 Pay Order
 Demand Draft
 Pay slip
 Telegraphic Transfer
 Payment of Remittances
 Cancellation of pay order & demand draft

The remittance department deals with the transfer of money from one place to another.

This department deals with the local currency transfer only. ACBL provides these services to
both customers & non-customers

Remittance can be made through:

Instrument transfer
Electronic transfer
Mail transfer

3.3 CREDIT DEPARTMENT

27
FOREX DEPARTMENT

 Import department
 Export department
 Foreign currency department

ISSUING OF L/G
Bank issues guaranties on behalf of its customers, whenever customer’s wants to
complete a project.

PRODUCER OF ISSUING OF L/G

When a limit of L/G is approved by the bank authority counter guarantees from I-B
30 is signed by the party. On the next stage the bank kept cash margin on various percentage.
Or on the requirement of party T.D.R. are issued equal to cash margin on the requirement of
the party. However commission the rate of 0.40% per quarterly are kept oat bank. Or on the
approved rate of commission by the authority is recovered from the party.

3.4 CUSTOMER SERVICE DEPARTMENT

Working: -

1. Receipt of Cheques from customers.

2. Preparation of transfer delivery /clearing.
3. Maintenance of clearing proceed account.
4. Preparation and realization of OBC
5. DD payable advises posting and vouchering.
6. Early settlement of DD-II entries.
7. Balancing of DD payable.
8. Payment of DD/TT/MT’s & vouchering.
9. Pak account reconciliation
10. Correspondence relating department

3.5 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 in the market at that time Bank of
Punjab also run a marketing campaign specially in cotton belt for limit from Ginner & Oil
Miller. Bank of Punjab uses a marketing strategy with different way and different scheme.

3.6 Departmentalization

Departmentalization refers to the process of grouping activities into departments.

28
Division of labor creates specialists who need coordination. This coordination is facilitated
by grouping specialists together in departments.

Departmentalization of a personal administration

 Functional departmentalization in BOP - Grouping activities by functions

performed. Activities can be grouped according to function (work being done) to
pursue economies of scale by placing employees with shared skills and knowledge
into departments for example Human Resources, IT, Accounting, Manufacturing,
Logistics, Marketing, and Engineering. Functional departmentalization can be
used in all types of organizations.
 Product departmentalization in BOP - Grouping activities by product line.
Tasks can also be grouped according to a specific product or service, thus placing
all activities related to the product or the service under one manager. Each major
product area in the corporation is under the authority of a senior manager who is
specialist in, and is responsible for, everything related to the product line. LA
Gear is an example of company that uses product departmentalization. Its
structure is based on its varied product lines which include women’s footwear,
children’s footwear and men’s’ footwear.
 Customer departmentalization in BOP - Grouping activities on the basis of
common customers or types of customers. Jobs may be grouped according to the
type of customer served by the organization. The assumption is that customers in
each department have a common set of problems and needs that can best be met
by specialists. The sales activities in an office supply firm can be broken down
into three departments that serve retail, wholesale and government accounts.
 Geographic departmentalization in BOP - Grouping activities on the basis of
territory. If an organization's customers are geographically dispersed, it can group
jobs based on geography. For example, the organization structure of Coca-Cola
has reflected the company’s operation in two broad geographic areas – the North
American sector and the international sector, which includes the Pacific Rim, the
European Community, Northeast Europe, Africa and Latin America groups.

Process departmentalization in BOP: - Grouping activities on the basis of product or

service or customer flow. Because each process requires different skills, process
departmentalization allows homogenous activities to be categorized. For example, the
applicants might need to go through several departments namely validation, licensing and
treasury, before receiving the driver’s license.

CHAPTER # 4

Internship Experience
29
 4. Plan of Internship Program:
MY CONTRIBUTION IN BOP

In the Bank of Punjab, I really enjoyed working with the staff and having a wish to be
employee of BOP. It was almost impossible to work in the entire departments within that limited
time. But on my request, the staff of the branch provided me the opportunity to work in the different
departments for the sake of practical knowledge. I took my internship as simulation of my future
jobs. From my internship, I focused on those points, which can create problems in future. Practical
involvement was a great experience.

4.1 Training Program

a. Introduction of all departments

GENERAL BANKING DEPARTMENT

 Account opening department
 Remittances department
 Cash department
 Clearing department
 Deposit Department
 Advance Department
 Customer Service Department
 Marketing Department

PRIVILEGE BANKING DEPARTMENT

 Online banking
 Lockers

30
4.2 Functions of Account Opening Department

 Providing account opening form according to the customer's requirements,

 Guide the customer about the requirements of the account opening and form filling,
 Check the forms whether they are correctly completed or not,
 Preparing checklist,
 Stamping on the form,
 Maintaining account opening register,
 Pasting of forms in register after release from general banking in charge,
 Issuance of cheque books,
 Issuance of accounts maintenance certificate,
 Closure of account
 Verification of signature in case of cheque presented before releasing of account
opening from SS card is not yet scanned

FOR A\C OPENING

Introductory references As soon as a person opens an account with the bank, the banker
customer relationship is established. In such situation this is advisable the banker should not
open new accounts of unknown persons unless references regarding the integrity and
responsibility of the purposed persons are obtained from respectable parties.
Failure to exercise this care may result in serious consequences not only for the banker
concerned but also for the other bankers and general public. It is not sufficient to obtain the
reference but its genuineness must also be verified. Omission of this may have serious
consequences.
In practice we see that there is tough competition among bankers for procurement of deposits,
so to press a prospective new customer to find the desired reference may offend him, yet he is
to be welcomed by the banker as a source of fresh deposits. But these practical difficulties
have to be handled tactfully because the risk involved carrying out this requirement partially
or wholly may lead to undesirable results.

PRECAUTIONS TO AVOID FRAUD

If preliminary necessary inquiries mentioned above are not made and account is opened, it is
possible that an undesirable person is provided with a cheque book to defraud innocent
people or the person being an undercharged bankrupt may put the banker in difficult
situation.

31
 INQURIES ABOUT CUSTOMERS

Have all necessary information with him regarding his generally a banker is asked by another
banker to give his opinion about his customer’s financial position. Therefore, it is beneficial
for the both that the banker should customers.

KNOW YOUR CUSTOMERS

The objective of knowing a customer is to have a fair idea about the identity, financial
resources, and general information about the customer at the time when the relationship is
established. A banker must have following information about the customer:

 Customer name:
Enter complete name as mentioned in original ID card /other business documents.

Nature of business /profession: if customer is of salaried class enter his employer name. If the
customer is a businessman, trader, sole proprietor, enters the business name, for example
“Jamil Traders”etc.also enters the customer’s title/position and address of the
business/employer. Address with P.O.BOX is not acceptable. Similarly remarks like

“Private Service”, “business” are not acceptable, rather specify what type of
company/business the customer is associated with for example Manager Philips Electrical
Company.

 Address:
Enter the complete business/residential address. With in the brackets you may also provide
prominent address identification marks for ease of physically locating the address.

 Contact Numbers:
Enter home, official, mobile, fax number and e-mail address (if available). Banker can verify
the number by giving the customer a courtesy call or by sending him an e-mail.

 Other/ secondary/ mailing address:

Some customer may volunteer their parents or siblings’ addressor second home address or a
mailing address other than a permanent address.

 Special instructions:
Clear-cut special instructions must be obtained from customers. If the customer has not given
any special instruction specified column must be cancelled by drawing a line, as this column
must not be left blank in any circumstance.

 Existing/other bankers:
32
 Almost most all the bankers usually have a banking relationship with another bank. In case of
customer who does not have an existing banking relationship, or does not want to disclose the
existing relationship, then it is strongly recommended that at least for some time this
particular account must be kept under observation.

4.3 TYPES OF ACCOUNTS

1) ACCOUNTS OF GENERAL CUSTOMERS

 Minor account
 Illiterate person account
 Joint account

2) ACCOUNT OF SPECIAL PERSONS

 Proprietorship account
 Partnership account
 Limited company’s account
 Accounts of club societies and associations
 Agent’s accounts
 Trust account
 Liquidator’s account executer’s and administrator’s account

4.4 Detailed description of the departments I worked in.

First week

Duties

In my first week in Bank of the Punjab, they assigned me work in Account Opening
Department. Mr.Waheed trained me very nicely and I learned lot of things in this department.
He told me different accounts names and their codes. How to open the account?

 New Computerized national identity card is must for opening of new account.
 For current account 10,000 and for saving 5,000 are required.
 What are the necessary requirements of different accounts to be opened?

Other activities are

 How to fill the deposit Slip if anyone wants to transfer cash in the account or online
transfer
 How to fill the different accounts Form
 How to fill the voucher for issuing of the Cheque Book for the first time
 How to fill the requisition slip for the second time issuance
33
  How to issue the Cheque Book
 How to enter it in the register
 What are the procedures for the ATM card

Accomplishments

I m fully trained in this job how to open the different accounts ,how to issue the cheque
book and enter it in the register and how to transfer the amount through cash or cheque to an
account and how to issue a Debit Card.

Second Week

In the Second Week they assigned me work in Clearing Department. Mr. Eatasam Hayat
trained me very nicely and I learned lot of things in this department.

Duties

There are two types of clearing.

1. I/W (Inward clearing)

2. O/W (Outward clearing)

In this week I entered the cheques lodged for inward clearing in clearing register as their
cheque number account holder name, cheque amount and bank name amount to be paid.

Secondly in this week I prepared (O/W) clearing for next day. Same as entered cheque
number account holder name amount and Bank name.

In this week I also entered cheque return in cheque return register and put cheque return slip
on cheque.

Accomplishments

I am full trained now in this particular job. How to fill cheque return slip? How to
enter in I/W ,O/W clearing register.

Third Week

Duties

In third week I perform following tasks relating to the banking system.

1. IBC (Inter bills clearing)

2. OBC

In this week I worked for IBC (Inter bills clearing). IBC mean cheques lodged for clearing
from other city. I entered these cheques in IBC register if it is BOP cheque then Mr. Shehzad

34
cleared or return this cheque and if it is cheque of other bank then it is again entered in O/W
clearing registered and lodged next day for clearing.

Secondly in this week I prepared OBC, filling of OBC slip as cheque number their amount
OBC number and branch name.

Accomplishments

In this week I repeatedly performed this job and now I am fully trained in this job.

Fourth Week

In Fourth week they assign me work for Remittances Demand draft and Pay order
preparation.

Duties

Demand draft is for payment outside of city and pay order for local payment. It is a secure
source of payment.

There are no charges for Pay order while other banks charge for this service so it is an
advantage going to BOP bank to attract customers.

Accomplishments

In this week I repeatedly perform the jobs and I am fully trained in such type of operations
i.e. to make the DD,Pay order and mark the Charges if Customer is not account holder of the
Bank then 255 Rs commission of the Bank.

Fifth Week

Duties

In this week I worked in Accounts and Cash Department.

In fifth week they assign me work in cash department.

In cash department I learned about Receipts and Payments and about how to receipt cash and
how to enter it in computer.

In Accounts Department I understood of how to sort the Vouchers and preparation of

Salaries.

Accomplishments

I am fully trained in this job i.e. to check that all the vouchers are scrutinized and matched
with the activity

Sixth Week
35
Duties

In Sixth Week I worked in Foreign Exchange and in Credit Department.

They told me brief introduction about import and Export. Necessary Requirement about the
Letter of Credit .What Documents are required for Import and Export

Secondly in this week I learned about Advances from credit manager Mr. Usman Masood
and Mr. Rana Sajjad What are requirements for loan? It is a procedure that takes many days.

Accomplishments:

In this week I m fully trained in these jobs.

36
CHAPTER # 5

Financial Strategies and Procedure of BOP

5. ORGANIZATIONS CURRENT STRATEGIES
A. Financial strategies
B. Procurement strategies
C. Marketing strategies
D. Promotional strategies
E. Lending strategies
F. Personal strategies

FINANCIAL STRAGEGIES

The financial policies of any bank are the most important policies through which the whole
banking activity is conducted. These policies are primarily conducted on:

 Source of funds
 Use of funds

SOURCE OF FUNDS:

The bank finance policy is acquiring funds from the following sources:

 Deposits of account holders.

 Interest on advances and loans granted to the borrowers.
 Income and commission from the services provided by the bank.
 Bank opens various types of accounts for its customers Services are provided for
earning.
 Interest income and commission bank providing the services to its customer.

USE OF FUNDS:

After the acquisition of the funds their acquisition becomes necessary. The bank seeks the
best way for making investment to get more profit with the maximum security. The bank
has an investment portfolio in which it allocate its funds for crediting to borrowers,
investment in the stock market, investment in the real estate property etc. for allocation of
funds a bank has to follow some banking policies and the prudential regulations of SBP
these are:

37
 A bank has to maintain liquidity with central bank, i.e. 25 %of its total deposits.

A bank cannot invest all of its funds otherwise it will be difficult to meet urgent needs.

A substantial part of funds is received from interest on loans and advances. Before granting a
loan the bank analyzes and observes the borrower and conduct a complete ratio analysis.
Bank prepares credit line for this purpose the major thing is granting an advance is the
security offered by the borrower and its actual market value.

PROCUREMENT STRATEGIES
Procurement strategies are more concerned with manufacturing organizations. In bank industry
that is service industry procurement means the procurement of funds from various sources such
as deposits. It involves attracting and holding the funds of the depositors. After the acquisition
of funds, the bank invest the acquire funds. One alternative is to lend its money and earned
interest markup or invest in govt. securities etc. as already mentioned in the above paragraph
the major sources of funds for a bank are the deposit of the general and the other sources of
income includes interest or markup charges received for various services offered by the bank to
its clients.
A bank tries to attract maximum no. Of accounts so that it can increase it’s deposits and these
lending ability. In order to get maximum no. of accounts the staff of the bank must be
efficient as compared to the other banks and the manager of the branch must take personal
interest in attracting deposits. Good quality of the service is the key to success.

MARKETING STRATEGIES

Marketing strategies are also one of the most important policies because they are related to
the growth of the organization. Marketing for a bank would mean:

1. Creation of new product and services.

2. The bank marketing must be consumer oriented.

Following are the marketing policies of the BOP.

a. Keeping the track of latest development in the world and incorporating the
latest and most modern equipment to make the banking procedures simple and easy
for the customers.
b. Development of products for the customers.
c. Giving good services and maintaining good relations with the customers.

38
These policies can be implemented by providing the right product and service to the customer
at the right place, at the right time, at the right price.

It is necessary for the managers to keep in touch with consumers, observe their needs and
develop products, which meet their needs.

PROMOTIONAL STRATEGIES

Public relation and advertising has assumed a great importance in the modern banking
business. As for as promotional activities are concerned, the main objective of the bank is to
inform the existing clients and other people about its new products and change in the existing
services. BOP establishes its purpose through:

1. Direct contact with customers.

2. Relation with business organizations.
3. Community relations.

LENDING STRATEGIES

Every bank has its own lending strategies except for those, which are common for all the
banks, i.e. the policies, which are imposed on all the commercial banks by the SBP, are
known as prudential regulations. The lending policies of BOP are as follows:

1. The bank only invests in those sound and viable projects, which have good rate of
return.
2. Bank prefers to advance loan to their account holders.
3. Loan is given to reliable person only.
4. No political loan is sanctioned by bank.
5. Any account holder can apply for running finance or demand finance. The manger
sappraises the past record of account holder and his credit worthiness. If he finds any
thing wrong he can refuse to sanction the amount.
6. The bank while taking security prefers govt. Securities to shares.
7. It also advances working capital loans.

PERSONAL STRATEGIES

Personal strategies have an important role in the success of any organization. BOP has its
proper personal policies. Good personal strategies motivate the employees towards
hardworking.

Following are the main personal strategies of BOP:

1. Selection of employees on merit

2. Selection of capable employees.
39
 3. Attractive salary package for motivation of employees.
4. To train and develop the future management of the bank.
5. Every employee must have certain set of clearly defined duties
6. Effective communication at al levels of the organization.

5.1 ORGANIZING
Organizing is establishing the internal organizational structure of the organization. The focus
is on division, coordination, and control of tasks and the flow of information within the
organization. It is in this function that managers distribute authority to job holders.

5.2 MAIN OFFICE

Head Office 10 – Block E – 2 main Boulevard Gulberg 3 Lahore.

Tel. 042-5783700-10

NUMBER OF EMPLOYEES

4000

40
CHAPTER # 6

SWOT ANALYSIS, CONCLUSION & RECOMMENDATIONS

6. SWOT ANALYSIS

Strength
 BOP has got a well reputed on –line system in most of its branches. Remittance
department is working very efficiently in transferring the funds to peoples due to
this system
 The bank also has started ATM facility in most of the branches 24 hours banking
is now the trend in Pakistan.
 Bank is providing quick credit services to all the customers at all branches.
Because the credit manager cooperates with the borrowers while making a loan
request to the bank.

Weaknesses
 The human resource department is not performing well in the organization.
Selection process is not done on the merit due to which many competent persons
can’t get job in BOP.
 Bank is not introducing new products these days, so bank should boost the
product development and increase the range of facilities offered for customers.
And the rates of interest on its various products have been reduced.

Opportunities
 Government is taking very bold steps to promote IT in Pakistan BOP has an
opportunity to improve in IT stock exchange is very volatile and takes immediate
effect so in times of crises conservative investors turns to saving deposits.
 BOP is surrounded by many competitors it has an opportunity to aggressive
marketing to increase its business.
Threats

 BOP has many competitors who are continuously increasing their products and
marketing aggressively it may cause its customer to shift to its competitors.

41
6.1 Conclusion

The main source of the economic development in every developed and developing country is
the commercial banks. Especially for the developing country like Pakistan, banks prove to be
a backbone of the economy. As for as BOP is concerned, its story is a part of the struggle for
economic development.

The Bank of Punjab is performing all those functions that a commercial bank performs. It is
providing agency services, general utility services and customized product. Being one of the
oldest banks of the country, it has a wide network of branches operating inside and outside
Pakistan. Therefore, it is enjoying patronage and protection of government.

During my internship at The Bank of Punjab, I have got working experience in a prominent
organization.

I have worked in the different department of bank such a clearing department, cash
department, sales department, bills collection department, marketing department etc, under
the sympathetic supervision of the branch personnel. I worked for a specific period of time in
the above-mentioned department and practically gain the knowledge about the working of the
several departments. These departments are well-organized and esteemed institutions.

I found that the branch personnel are very cooperative and almost satisfied with their jobs.
They assigned me various tasks which I have satisfactorily accomplished in the given time
period. However during my work I observed that the staff members are very punctual and
regular in performing their duties.

6.2 RECOMMENDATIONS:

Basically my suggestions focus on customer service that how a bank can maintain its
commitment to customer service while still moving to the highest technological level.

• Mostly people un-aware about bank products, brushers /banners are placed for
publicity, which will attract customers to the bank.

42
 • There should be a Customer Support Officer who solve the problems of customers at
front desk. (e.g) Account Opening information, any other information required by the
customers.

• Branch environment is not up to the mark; branch renovation will be proved fruitful to
overcome this factor.

• Human resource activities are also performed in the branch, so there should be
properly established department of HR.
• There should only be a Debit Card, used as ATM and also for shopping purpose;
instead of a Credit Card. It will be easy to handle and it will also reduce the weight of
customers’ wallets.
• It is mostly observed that there are walk through gates on Telecommunication’s
Franchises but not at the gate of Banks.

END NOTE

Overall experience of internship was very good. The whole faculty of BOP Kahuta is
hardworking and cooperative. They taught me important things related to bank and I m very thankful
to all of them for their support and cooperation and for the confidence they showed on me.

Appendices:
43
HEAD Office Structure

Board of Directors

Support Staff Chairman Co. Secretary

Legal Managing Director Co. Affairs

GM Marketing

Sale Deptt.

Advertisement Deptt.

Area Affairs

44
Organizational Structure

REGIONAL CHIEF EXECUTIVE

GM GM GM GM GM

Account Audit Finance M.I.S Dept. R&D

ZONE
Zonal Chief

Staff Manager Staff officer

BRANCH

Manager

Sub. Manager

Cashier Guard Assistant

BRANCH NETWORK
45
46
References:

• Annual Report of BOP Ltd(2007-2009)

• Ferris, A.S. (2002). Managerial finance. (13th edition) New York: MC
Graw Hill.
• Bender, B. (1995). Corporate Finance. (10th edition) New York:
American Book Co.
• William, C.V. (1997). Corporate Finance (7th edition). Chicago.
University of Chicago Press.

Online Reference:

• http://www.bop.com.pk
• http://www.bop.financed.gov.pk/survey
• http://www.sbp.org.pk

47