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The Bank of Punjab

Name of Internship Assessor

Signature of Internship Assessor

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To our Loving Parents whose prayers make us able to complete this task.

To my affectionate teachers who have encouraged and supported me in the

field of study, and every other field of life and to my friends who has helped
me a lot.

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We are living in a time of extraordinary change. The ecological and
economic threat is looming large on the entire sphere of Pakistanis
economy. Pakistani firms must design and make better products and
services and should find better ways to market them. What was once
regarded enough is no longer competitive. What were once limitless
resources are now to be used more efficiently. Today an organization is on
the leading edge, or it is on the bleeding edge.
I have learned the lessons perhaps the hardest way, that is, though my
mistakes. I have tried my best to peep into the generic as well as real
cumulative problems faced by the pioneer of banking industry in Pakistan but
that degree of objective analysis proved to be of little use since this bank is
firmly entrenched in the laws of red royal bureaucracy.
Several chapters have been inducted in the report but they seem to be
very conventional in nature giving supplementary justification to the fact that
BOP is the most conventional of the conventional bank.
This report is an upshot of my internship in BOP branch Wazirabad. BOP
posses an imperative and historical importance in the banking sector of
Pakistan. It always remains the center of hustles in business activities. It
always endows with great covenant of rally round in terms of funds and
services at all epochs of its dynamism.

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All praises to Allah, the most Merciful, the most beneficent, the most
forgiving, the most generous, the controller of the hearts and gazes and allknowing of what that is open and what is hidden. I praise Him with the praise
that is eternal throughout the night and the day.
The path and teachings of the prophet Muhammad (Salal-a-ho Alai hi
wasalam) induced enthusiasm and blessed me positive thinking.
It is will of Allah that my honorable teachers have guided us to get training
about banking technicalities and complete our tasks.
Consequently I have taken upon my unworthy shoulders the responsibility of
preparing Internship Report.
I feel highly indebted and grateful and consider it my duty to pay my thanks
ALLAH ALMIGHTY: for the guidance, strength and courage emanating from
Him, in accomplishment of this job.


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Executive summary. ..2

Chapter 1
1.0 Introduction.
1.7 Summary

2.0 Introduction
2.1 Banking sector of Pakistan.
2.2 Role of BOP in Pakistan.
2.3 Functions of BOP.
2.3.3 BOP CAR LOAN...............................
2.3.4 BOP Aasaish Loan
2.4 Organization in which once you are working..
2.5 Summary
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Chapter 3:
3.0 Introduction:.
3.1.1 Brief history of BOP:
3.1.2 Relationship of head office to the branch office.
3.1.3 Number of departments
3.1.4 Regional offices and branches
3.2 Current staff..
3.2.3 Workload
3.2.4 Salary structure
3.2.5 Promotion system..
3.2.6 Incentives and motivation
3.2.7 Responsibilities and duties performed.
3.3 Critical analysis of branch.
3.3.1 Communication
3.3.2 Recruitment of the Staff
3.3.3 Morale of the employees.
3.3.4 Physical facilities..
3.4 Performance..
3.5 Summary

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4.1 Introductions
4.2 Policies
4.3 Strategies..
4.4 Successes..
4.5 Summary
5.1 Introduction..
5.3 Porter model
5.4 Summary..

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1.0 Introduction:
This chapter gives the information about the background of the study. This
tells us what the purpose behind this internship report is and why we are
undertaking internship followed by comprehensive report writing. The
scope of the study is also illustrated in this chapter. The relevant areas
discussed in this report are its scope. Apart from the main objective sub
objective are also elaborated in this chapter. Sub objectives may vary
person to person but the main objective remains the same. This chapter is
all about why and how we have done internship and why it is followed by
comprehensive report writing. In this chapter the methodology of the
report and the data collection techniques are also explained. Primary and
secondary data tools are discussed separately. At the end of the chapter the
introduction of the organization is also given in which the internship has
been undertaken/.this chapter is basically is an introduction of the study.
The banking sector was the only one which was offering internship
program on lenient bases. I also grab this opportunity with both hands and
got my internship from a very well known organization BOP. The basic
inspiration behind selecting BOP is its goodwill and adaptability to
change. BOP also has a very charming outlook and wholesome physical
facilities which also urged me to be an internee of BOP.
The purpose of the study is to implement the knowledge of banking sector
which I learnt and to observe the working environment in the bank.

1.3 SCOPE:

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This study is confined to the banking operations and critical analysis of the
branch. An effort has been made to collect financial data and statistics of the
bank to analyze the performance of the bank and its operations.
In the context of the purpose of the study there are following objectives of the
To analyze banking operations.
To suggest recommendations.
To improve report writing skills.
To enhance interpersonal skills.
To evaluate the application of knowledge learnt.
Both primary data and secondary data are used in the preparation of this
internship report. Tools used for collecting data are as followed.
Primary data
o Observation
o Discussion with the bank personnels.
Secondary data
o Brochures
o Annual reports
o Internet
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o Previous literature and reports on BOP.

The Bank of Punjab was established in 1989 and was given the status of
scheduled bank in 1994.
The Bank of Punjab is working as a scheduled commercial bank with a
network of almost 280 branches at all over major locations in the Punjab. The
Bank provides all types of banking services such as Deposits in Local
Currency and client foreign currency, remittances, and advances to business,
trade, industry and agriculture. The Bank of Punjab has indeed entered a new
era of science to the nation under experience and professional hands of its
management. The Bank of Punjab plays a vital role in the national economy
through mobilization of hitherto untapped local resources, promoting savings
and providing funds for investments. The bank offers attractive rates of profit
on all deposits, opening of foreign currency accounts and handling of foreign
exchange business for example imports, exports and remittances, financing,
trade and industry for working capital requirements and money market
operations. The lending policy of bank is not only cautious and constructive
but also based on principles of prudent lending with maximum emphasis on
Scope of The Bank of Punjab
Being a commercial bank, The Bank of Punjab performs all such functions as
are attributed to commercial banking institution both in the area of resources
mobilization, loans and investment. The bank is thus providing all types of
advances to business, trade and commerce on seasonal and annual basis, and is
ensuring, through the product policy, the safety and protection of its loan
portfolios, as the resources base of the bank expands, projects financing will
also be brought into its fold.
Hierarchical View of Management Shah dula road branch

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Total number of employees in Shah dula road Road branch where I did my
internship is eleven. The branch was headed by Branch manager Mr syed
tassawar haider shah. The flow of responsibilities and designations are shown
in managements hierarchy.









The top most authority in a branch is the branch manager the rest of the staff
come under his span of control. Then comes the operational manager then
operational grade 1, operational grade 2, operation grade 3 and then clerical
staff like cash officer and junior cash officer.
The hierarchy according to the responsibilities performed is also classified as
The services in The Bank of Punjab are classified in different categories.

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Category A

Category B


Officer Grade I Clerical Staff


Category C Category D
Non-Clerical Staff


president (EVP)
Officer Grade II ..
vice president
Vice President (VP)


Officer Grade III Guards

Cash Officer
Gate Keepers

Assistant vice president


.. ..................

Tea Boys

Vision statement
"To be a customer focused bank with service excellence"
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.
1.7 Summary:
In this chapter we have described the background of the study which explain
why we do internship and why it is important for the students of MBA. The
purposes of this internship is to give an idea to the student that how the
knowledge is being implemented in the real life working environment. The
banking sector and functions of the bank are considered to be the scope of the
study. Both primary and secondary data are used in the complilation of this
report. An overview of the organization is also given in which this internship
has under taken.

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2.0 Introduction:
In this chapter we will explain the overall banking sector of Pakistan and
contribution made by the banking sector in the economy of the country. The
whole banking sector and its history will also going to be a part of this chapter.
The different phases through which our banking system has been undergone
since 1947 .The role of BOP will also be explained in this section of the
report. How is creating value for the people of the country. The role of BOP
towards industrial and agricultural sectors will be discussed later in this
chapter. The functions of BOP will be explained in detail in this chapter. The
functions will include the core business activities performed by the BOP.
Functions are the activities through which organization achieve its
organization goals. The products and services offered by BOP will also be a
part of this section. Products launched for different sectors of the economy
such as industry and agriculture and household customer.
2.1 Banking sector of Pakistan:
Banks play very important role in the economy of a country and Pakistan is no
exemption. Banks in Pakistan account for 95% of the financial sector. Pakistan

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has a well-developed banking system, which consists of a wide variety of

institutions ranging from a central bank to commercial banks and to
specialized agencies to cater for special requirements of specific sectors. The
country started without any worthwhile banking network in 1947 but
witnessed phenomenal growth in the first two decades.
Pakistan came into being on 14th August, 1947; sufficient banking services
were available in the areas forming Pakistan. Out of the total branches of the
nearly 3,500 in the undivided India, as many as about 1,500 branches were
existing in these areas.
It was agreed between the two countries that reserve bank of India shall
continue to function in the Pakistan territory until 30th September 1948 and
that Indian notes would continue to be legal tender at Pakistan until 30th
September 1948. Unfortunately, relationship between the two countries
became most strained immediately after independence; banking was mostly in
the lands of Hindus who immediately started transferring their offices and
assets into India. As a result most of the banks in Pakistan were closed down
and even those which were open were not doing any effective business.
The number of banking office in Pakistan came down to about 200 on 30th
June 1948. Branches of some European banks were also functioning in a
limited manner, financing in export of crops, and their number was limited to
about 20.
It was only the Habib bank, which transferred its office from Bombay to
Karachi Austral Asia bank was another bank, which was in existence in the
Pakistan territory at the time of independence. Despite of best efforts on the
part of government of Pakistan, no heady way could be made on this behalf
and reserve bank of India was in no mood to help the new country. Imperial
bank of India, agent of the reserve bank of India also started closing down its
branches in Pakistan.
Reserve bank also refused to advance money to Pakistan to make essential
payments such as salaries etc, also Pakistans share of Rs.75 billion in cash
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balance was with held by bank, causing hardships to the newly born state. In
view of these hopeless state affairs it was agreed between the two countries
that reserve bank would serve as monetary authority in Pakistan only up to 30 th
June 1948. The era of 90s was the climax of privatization, deregulation and
restructuring in the domestic banking industry and financial institutions. The
Government only owns the National Bank but 80% of bank assets are in
private sector. Banking assets rose three-folds over the last five years and the
industry size are reaching Rs 4 trillion. The contribution of banking sector to
GDP ratio is 55.6%. Pakistan has been ranked 2nd in performance and
efficiency indicators among the South Asian countries by the World Bank.
There are 68 scheduled banks of which the top five have 50% of the market
share. Banking industry, in Pakistan, is currently under a wave of Mergers and
Acquisitions (M & As).
Government owned banks

Privatized Banks:

Zarai Taraqiati Bank Limited




Allied Bank Limited


Habib Bank Limited

First Women Bank Limited

MCB Bank Limited

Khushhali Bank Limited

United Bank Limited

National Bank of Pakistan

Development financial institution

The Bank of Khyber





SME Bank Limited

House Building Finance Corporation

The Bank of Punjab

National Investment Trust Limited

The Punjab Provincial Cooperative Pak Brunei Investment Company

Bank Limited


Private banks

Pak Iran Joint Investment Company


Bank AL Habib Limited

Pak Kuwait Investment Company

Meezan Bank Limited

Pak Libya Holding Company (Pvt.)


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KASB Bank Limited

Foreign Banks:

Habib Metropolitan Bank Limited

Oman International Bank S.O.A.G.,


Faysal Bank Limited

HSBC Bank Middle East Limited,





Bank Citibank N.A., Pakistan

Dubai Islamic Bank Pakistan Limited

Deutsche Bank AG, Pakistan

Dawood Islamic Bank Limited

Private banks and development


Arif Habib Bank Limited

Bank of Tokyo Mitsubishi UFJ

Limited, Pakistan

Barclays Bank PLC, Pakistan

Rozgar Micro Finance Bank Limited

Askari Bank Limited

Tameer Micro Finance Bank Limited

Atlas Bank Limited





Bank Alfalah Limited






NIB Bank Limited


The Royal Bank of Scotland





Standard Chartered Bank (Pakistan) KASHF Microfinance Bank Limited
Silkbank Limited Formerly Saudi Soneri Bank Limited
Pak Commercial Bank Limited
mybank Limited





Crescent Commercial Bank Limited

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2.2 Role of BOP in Pakistan:

BOP creating employment opportunities by increasing its number of branches
and extending its reach to far off areas of Punjab.
BOP is playing very positive role in the economy by mobilizing the resources
and channelizing the funds.
Agriculture is the backbone of our countrys economy. BOP is facilitating the
agriculture sector by providing a number kisan dost schemes which are
helping the lower and middle class of our villagers.
BOP is committed to provide excellent services to the customer at very
reasonable cost.
BOP is playing a critical role in increasing the GDP.
BOP is providing different types of loans to the industrial sector which are
also helping the countrys output to increase
The foreign exchange trade department is functioning very efficiently which is
facilitating the businesses to import and export the merchandise.
BOP financing the ideas of female entrepreneur which is producing fruitful
results. Those women who have the abilities and skills but do not have the
resources are availing this opportunity and using their talent to their best
The BOP is also providing loans to the mille class people by providing loans
to the people for their shops and offices.
2.3 Functions of BOP:
The Bank of Punjab being a commercial bank performs all those function as
are attributed to such banking institutions both in the areas of resources
mobilization and investment. It is providing funds for commerce, trade,
industry, and agriculture but its main emphasis is on accelerated development
of agro-based industry. So the main objective of the bank is to channelize the
resources into sectors, which have suffered from neglect.
Banks perform their functions through their products and services provided to
the customer. The major products of BOP are as follows.

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a) Saving Accounts
b) Current or demand accounts
c) Fixed accounts
These types of accounts are designed to encourage the saving habit of the
customer and lead to long term or invest relationship. Bank saving account are
in the nature of deposit accounts and are not normally available for drawings.
Rates of interest are typically ahead, by a small margin. Savings accounts with
the banking sector represent a very small proportion of total deposits.
Customer can make withdrawals from this type of account. The cash reserve
ratio is typically low then the current account because the withdrawals against
this account are very low.
These are those deposits, which can be drawn by the depositor at any time by
representing a cheque to the bank. People deposits their money in this account
they gave a ready command on their account in developed countries of world,
a very significant part of money is kept under current or demand account. On
this type of account of interest transfer of cash or by at sight. The cash reserve
ratio for his account is very high. The operating cost for the handling of this
type of account is very regular.
Fixed accounts are those which are deposited for a fixed period of time and
repayable after the expiry of stipulated time to the customer. Those people
who have surplus funds and want to have save investment deposit the amount
in the fixed account.
The rate of interest given to depositor varies with the length of deposit, i-e. It is
higher for longer period and lower for shorter period.

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The rate of this type of deposits is higher the saving bank accounts. The cash
reserve against this deposit are vary low because there no fear of with draw of
a month before the stipulated of time.
a) Agriculture Schemes
b) Business Promotion Finance Schemes
a) Agriculture Schemes
There are many agriculture promotion schemes provided by BOP.

Kissan Dost Agricultural Finance Scheme

Kissan Dost Tractor Finance scheme
Kissan Dost Aabiari Scheme
Kissan Dost Mechanization Support Scheme
Kissan Dost Farm Transport Scheme
Kissan Dost Eslah-E-Arazi Scheme
Kissan Dost Live Stock Development Scheme
Kissan Dost Live Stock Scheme

Such type of schemes provides farmers a real plate form to accelerate. Some
facilities given by Kissan Dost Agricultural finance scheme are:
b) Business Promotion Finance Schemes

BOP Quick Cash

BOP Car Loan

BOP House Loan


BOP Assaish Loan

BOP House Loan For Federal Govt


BOP car loan is a demand financing facility to purchase brand new locally
manufactured/Assembled cars for personal use. This facility can be availed by
salaried person of different nature and by the business persons. All must have
the holdings of NIC.

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2.3.4 BOP Aasaish Loan

BOP Aasaish loan is demand finance facility for purchase of consumer durable
goods like TV, Refrigerators, Mobiles, Microwave Oven, Fans, Audio/Video
system etc with no down payment, in addition with the free home delivery.
The financing tenure of this product is max 36 months. The nature of
employment should be salaried or the business man.
These are the services provided by the BOP.

ATM Facility
Letter of Credit
Pay Order
On-Line Banking
Debit Card
Consumer Financing
Agriculture Financing
Corporate Financing
Commission free Remittance
Demand Drafts
Collection of Utility bills
Lockers Facility
Automated Teller Machine (ATM)

Through the ATMs Customers have access to the various services such as
withdrawal, balance enquiry and mini statement? Complete security is ensured
because access to the account is only possible by entering a four digit personal
identification number (PIN) known only to the account holder. Cash
withdrawal limit is up to Rs.20, 000 per day. Annual charges of ATM is
Rs.250/- per card.
Online Banking
BOP is currently offering window-based online banking to its customers,
which gives access to information on their accounts and the liability to act on
the latest information received over the net.
b) Lockers

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It is one of the utility services that BOP provides to their customers for
keeping jewellery important documents and other valuables.
c) Demand Drafts
BOP provides safe, speedy and reliable way to transfer money at vary
reasonable rates. Any person whether an account holder of the bank or not, can
purchase a Demand Draft from a bank branch.
d) Letters of Credit
BOP is offering its business customers the widest range of option in the area of
money transfer. BOPs letter of credit service is with competitive rates,
security, and ease of transaction, BOP Letter of credit is the best way to do the
business transactions.
e) Pay Order
BOP provides transfer of money using different facilities. Its pay orders are a
secure and easy way to move the money from one place to another. The
charges for this service are extremely competitive.
f) Mail Transfer
Moves money safely and quickly from BOP Mail Transfer service. The rates
for this service is quiet impressive as compare to the market.

g) Short Term Investment

BOP offers excellent rates of profit on all its short term investment accounts.
The packages are starting from 3 months. BOPs rates of profit are extremely
attractive, along with the security and service only BOP can provide.
h) Agricultural Finance
It help farmers utilize funds efficiently to further develop and achieve better
production. Provides farmers an integrated package of credit with supplies of
essential inputs, technical knowledge, and supervision of farming.
2.4 Organization in which once you are working:

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I have done my internship in shah dula road branch of BOP. It is situated in the
heart of the city. It covers almost all the circular road area which is a trade
centre in Gujrat. This branch has a very good outlook. It is an online branch. It
is also one of those branches which are proving profitable and meeting their
2.5 Summary:
Pakistan has a very dynamic banking system. It has a great potential and it
covers the 70 percent of the whole financial sector. The banking sector is a
mix of private and state owned banks. Specializes and development banks are
also a part of the banking sector. The banking system helps in mobilizing the
resources of the country.BOP is also working in the interest of the country by
channelizing the funds and providing the safe and sound cash transfer from
one place to another. BOP performs all the functions of a commercial bank
such lending accepting deposits and acting as an agent on behalf of its
customers. The role of the BOP is to facilitate the household and business
community. BOP has launched a number of products and services through
which it performs all the functions of a commercial bank. Currently the
banking sector is going under a depression. High regulations are applied from
the SBP.

3.0 Introduction:
This chapter is all about the branch in which I have done my internship. The
introduction of the current staff and their qualification and their experience
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will also be discussed. The responsibilities performed by the employees and

the promotion system are a matter of concern of this section. In this section of
the report the brief history of the organization will be explained. How old the
organization is? And for what purposes it was established will be explained in
this chapter. The communication system of the head office and branch will
also be discussed in this portion. The number of departments and their
functioning in the branch will be discussed in detail. The salary structure of
the employees and incentives for their motivation are also elaborated in this
chapter. The physical facilities of the branch and its critical analysis are also
done in the coming pages. The workload of the employees and the
performance of the branch are also included in the topics and discussed
briefly. The level of customer satisfaction and the hierarchy of the branch are a
part of this chapter.
3.1.1 Brief history of BOP:
The Bank of Punjab was established in 1989 and was given the status of
scheduled bank in 1994.
The Bank of Punjab is working as a scheduled commercial bank with a
network of almost 280 branches at all over major locations in the Punjab. The
Bank provides all types of banking services such as Deposits in Local
Currency and client foreign currency, remittances, and advances to business,
trade, industry and agriculture. The Bank of Punjab has indeed entered a new
era of science to the nation under experience and professional hands of its
management. The Bank of Punjab plays a vital role in the national economy
through mobilization of hitherto untapped local resources, promoting savings
and providing funds for investments. The bank offers attractive rates of profit
on all deposits, opening of foreign currency accounts and handling of foreign
exchange business for example imports, exports and remittances, financing,
trade and industry for working capital requirements and money market
operations. The lending policy of bank is not only cautious and constructive
but also based on principles of prudent lending with maximum emphasis on
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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 program driven products and services in
the agriculture and middle tire markets through a motivated team.
Vision Statement
To be a customer focused bank with service excellence.
Core values:
Our customer as our first priority.
Profitability for the prosperity of stakeholders that allows us to constantly
invest, improve and success.
In everything we do.
Integrity In all our dealings.
Respect in our customer and each other.
3.1.2 Relationship of head office to the branch office:
The relationship of head office to the branch office is also termed as the
management of hierarchy. There is a certain method of communication
between head office and branch office. If head office want communicate it will
first communicate with the regional office, the regional office will
communicate with the area branch office and than the area branch office will
finally communicate with branch office.
Head office

regional office

area branch

branch office

3.1.3 Number of departments:


Account Opening Department

Clearing department
Collection department
Remittance department
Account opening department:

Its mean cash and deposit department. The jobs of this department are
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a) Account Opening
b) Account Closing
c) Cheque Book Issuing
a) Account Opening Procedure
When a customer wants to open an a/c he comes in this department of the
bank, and submits an application for opening an a/c. The officer of this
department gives him an application form. This application form is useful for
all accounts opening e.g. PLS CD etc. The requirements of application form
are those information which bank wants to know. Following are in the bank:
Types of accounts
Individual Account
Joint Account
Club, Society, Association of Persons Trust
Limited Company

Necessary information, which a bank requires


Operating Instructions



Telephone #

Country of residence

Zakat Deduction

Nature of Business

Signature of the Applicant


Special Instruction Regarding






the Account

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Documents to be attached
Attested Photo Copy of NIC/Passport of account holder, Proprietor, Partner,
Directors and Office Bearers as the Case may be.
Certified true copy of the certificate of incorporation or registration (in case
of companies and registered bodied only).
Certified True Copy of the Certificate of Commencement of Business (in
case of public limited companies only).
Certified True Copy of the Memorandum and Articles of Association (in
case of limited companies).
Certified True Copy of Rules and Regulations or By-Laws (in case of
limited companies).
Certified True Copy of the Resolution of the Board of Director/Managing
Committee/Governing Body regarding conduct of the account.
List containing names and signatures of the Director/Office Bearer duly
certified by Registration Authority.
Letter of partnership or Certified Copy of Partnership dead (in case of
Trust deed and Board Resolutions, for Trust accounts.
When an account is opened with account opening form a specimen signature
card is given to the customer, which contains;

Branch Code
Account No.
Title of A/c
Special Instructions

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Approved By
The customer fills this card and returns it to bank officer. For illiterate persons
thumb impressions are taken and two latest passport photographs shall be
taken. This specimen signature card is scanned in the computer system. So
that whenever the account holder cheque will come the bank officer will verify
his signature to the computer.
b) Cheque Book Issuing:
A chequebook contains a number of cheques, which enables the customer to
make withdrawal from his account or make payment by issue of cheque. After
account opening a chequebook requisition, which is infact, a request to acquire
a chequebook.

This requisition form is given just for first time getting

chequebook or for new a/c holders. When the a/c holder is old then a
chequebook slip is already in his chequebook before 10 leaves of the
chequebook. So when the account holder reaches to this slip after issuing the
first cheques, he fills this slip and presents it to the bank. This slip contains:
Title of the Account
Date (in 2 places)
Account #
Cheque Book from_____to_____
Signature of Account Holder
When the new or old customer presents the requisition form or cheque slip the
bank officer fills a bank chequebook slip. In this cheque book he fills the;
NIFT keeps the record of these issued chequebooks. These cheques are sent to
the bank. NIFT also sends a summary of these cheques books containing the
account numbers and title of accounts. The bank also keeps records of these
cheque books. The bank officer receives these cheque books with clearing.
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He writes the title of account and number of account at the first page. He
brings out the cheque books slips and vouchers.
He fills the cheque book slips by seeing the numbers of cheque book leaves.
He enters these cheque books in computer system. He files the summary of
the cheque book in a separate file. However, big mills or companies who a
number of cheque books at a time need may present the more cheque book
c) Closing of Account
d) The customer can close his account by submitting an application form. The
account is closed and balance is paid after deducting the closing charges and
application is filed in account closing file. Cheque book is returned to the
bank. The bank officer cancels all the cheques.
e) Dormant Account
f) When any customer does not operate his account for 6 months, then computer,
automatically, includes that account holder in inactive account.

This is

dormant account. Now account holder cannot operate his account. Bank
informs him that your account is now inactive.
g) Activation of a Dormant Account
h) For activating a dormant account the account holder submits an application
that he wants to activate his inactive account, with N.I.D. copy. Then the bank
officer fills an account, which is Account Activating form. The bank manager
signs on the stamp of Allowed to operate. Now account holder can operate
his account but for activating his account, he has to pay some charges.

2. Clearing Department
3. As implied from the name that this department is for clearing the cheque,
which are drawn on the bank or drawn on another bank.
There are three types of clearing:
a) Inward Clearing
b) Outward Clearing
c) Within Bank Clearing
a) Inward Clearing
Inward clearing means the cheques which are to be honored by the bank but
which are received through other banks representatives. These are the cheque,
which BOP account holder gives to such account holders who have their

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accounts in other banks other than BOP. So those banks submit their cheque
books to NIFT.
NIFT-National Institutional Facilitation Technologies (Pvt) Ltd.
The facility of clearing is provided by SBP. Each bank collects the cheque on
behalf of their customers of other banks and hands over this cheque to NIFT.
When NIFT collects the cheque in the evening from every bank, then at night
all cheque are sorted according to their banks and then according to their
branches. Then cheques of one branch e.g. of BOP shah dula road are kept in
one bag with the detail summary of cheques e.g. number of cheques, total
number of cheques and amount. This bag is locked with the special plastic
Next day before bank starts its work the NIFT representative gives this bag to
clearing department head and returns. Clearing department head sorts these
cheques according to PLS, CD, PO, DD and counts that cheques number are
equal to summary cheque number.
Reason of Returning
After all this the bank officer enters these cheques in inward clearing register
regardless of returned cheques. Then these cheques total is matched with
NIFT summary. Then these cheques are entered in computer and debited the
accounts of those account holders who issued these cheques. In posting when
the officer finds that account holder has not sufficient fund or signature are not
verified by SSC then he returns these cheques with memorandum.
After doing all these cheques are again kept in that bag which is locked with
special plastic key. With returning cheques a pink colour slip is attached
which has the title Clearing Return. After half an hour NIFT representative
comes back and takes this bag back and goes away. The officer circles with
red pen in register those cheques which are returned and writes R. Then he
prepares an IBCA.
b) Outward Clearing.
Outward Clearing means the collection of cheques on behalf of customers.
These cheques are those, which are drawn on other banks. This clearing can
be local or out station. When customer brings such cheque, he fills the deposit
slip. He keeps counterfoil and the remaining part is stapled with the cheque.

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The bank officer stamps the crossing stamp. He also stamps the clearing
stamp of next day and endorsement stamp. In this clearing the bank receives
the cheque whole day and enters those cheques in outward clearing register
c) Within bank Transfer
If the cheques are drawn on same bank or on other branches of this
bank then it is called clearing within bank. Such Cheques are marked with
transfer bank.
4. Collection Department:
5. The collection of cheques and other instruments has become very important
services that commercial banks render to their clients. While collecting
cheques and other instruments, a bank acts as an agent of its customer.
Therefore the banker customer relationship changes in this case from debtors
and creditors to the agent and principal besides the we commission. It
increases the interaction between the bank and the business community.
6. Bills of Collection
7. There are two types:
a. OBC (Outward Bills for Collection)
Cheques and other instruments drawn on other bank in other cities are known
as Outward Bills for Collection. In this case instrument goes out and funds
come in. Therefore it is favorable cheque. Our branch sends the instruments to
other branch in that city that branch receives payment from the other bank and
credits our branch and we credit our customer a/c.
b. IBC (Inward Bills for Collection.)
Bank receives cheques, draft and other instruments for collection from
branches of other banks, which are not included in local clearing house
arrangements. They are Inward Bills For Collection. In it, instruments come
and funds go out. Therefore it is unfavorable.
Other branches send cheques and schedule to us and we send an advice to the
Drawee branch.
This department has following remittances:
a) Demand draft(D.D)
b) Pay order
c) SDR
a) Demand draft:
Thats an order to pay money. It is drawn by one branch of bank upon another
branch of the bank for a sum of money payable to order or demand purpose to
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be endorsed by or on behalf of the payee. The bank is discharged by payment

in due course.
b) Pay order (P.O)
It is an instrument, which is payable on demand and only presentable within
the city. Pay order is also called the bankers cheque, drawn upon the issuing
branch itself. Though, an order instrument, which means transferable, it is not
negotiable and therefore bankers tend to cross the instrument Payees A/C
only to avoid the possibility of dealing with instrument with forged
endorsement. The dept of the bank, for making payment on presentation of
P.O. the bank is liable to pay the amount to customer.
c) SDR (Security Deposit Receipt) :
When any company wants to participate in any tender that orders for an SDR.
If he wins the tender then its ok. But in case when he does not win the tender
then tender, making company will cross it and write on it Released. Before
it many companies made just one SDR and would use it for many tenders. So
for avoiding such deeds that tender making company crosses it. And that
person can encash it from the bank.
3.1.4 Regional offices and branches:
Regional office

No. of branches

1. Faisalabad


2. Lahore


3. Gujranwala


4. Multan


5. Karachi


6. Rawalpindi


7. Peshawar


The total number of braches of BOP is 272 in the whole country. It has no
branch in foreign countries.

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3.2 Current staff:

There are 7 employees in the branch. They are very much qualified and have
a reasonable knowledge of general banking. There is a proper hirarchy in the
branch and every employee knows his responsibilities.
3.2.1Current staff according to qualification and experience:
Syed.Tassawar shah
Rehmat ullah bashir
Ikram ullah
Umair ansir

MSC Physics
MSC Physics

11 years
07 years
09 years
02 years

Tahir mehmood


03 years

3.2.2Training received by no. of employees:


Off the job training

There is a special department of BOP which trains every new recruits of BOP.
This department is called Officers training institute. It is situated on upper
Mall Lahore. Every newly hired employee of BOP is sent to Lahore for 5
weeks training in this institute.

On the job training

Job rotation is one of the most common method of on the job training.
Employees are rotated and their job descriptions are also altered to prepare the
bank up for every post in the branch.
3.2.3 Workload
The official timing of all the employees is 9:00 am to 5:00 pm.
The average workload is 8 hours a day but mostly employees have to work for
more than one hour without any extra benefit. The average workload is 10
hours a day.

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3.2.4 Salary structure:

BOP is offering handsome salary packages to its employees. Its salary
structure is as follows.
Cash officer
Officer Grade 3
Officer Grade 2
Officer Grade 1

Starting salary in rupees


Apart from the salary the other incentives are also provided.
3.2.5 Promotion system:

e. There are

Employees are promoted on the basis of performance and their commitment

towards their jobs.
Employees are also promoted on the basis of their experience and
The highest rank in a branch is OG 1.
The performance is evaluated on the basis of working as well as the number
of deposits brought by that employee. If any employee is extracting huge
number of deposits in his branch there is a bright chance of his promotion.

3.2.6 Incentives and motivation:

Two bonuses on Eid ul Azha and Eid ul fitr. Each bonus is equal to one
basic salary.
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Performance bonus at the end of the year based on the performance.

Provident fund
Medical allowance
Employees are motivated through benefits and salary
Employees are motivated when their hard work is recognized.
The staff of the branch is also motivated due to the success of their branch
and organization.
There is no separate room for the manager of the branch
The environment of the branch is very congested.
The sitting place for clients is
3.2.7 Responsibilities and duties performed:
Jobs performed
Syed Tassawar
Overall affairs of the branch.

Checking and ensure effectiveness of

Branch manager

control system and working procedures.

Meeting existing and New Customers.
Marketing business/deposit development
and public relations.

Performance evaluation of reporting staff.

Develop objectives for reporting staff.

Conduct periodical meeting of the staff.

Liaison with controlling offices.

Follow-up for recovery of Non performing




Officer manager

Collection of bills
On-line banking
Supervision and authentication of cheques and


Handle the affairs of ATM department

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Branch care taker. He also handle all the

maintenance of the branch
Also deals the affair of foreign remittance with
Aftab exchange and Habib Express.
Ikram ullah

Supervision of all assigned operation


Operation manager

Ensure check and control systems are in

Create cordial and customer friendly

atmosphere in branch.
Ensure continuous satisfactory service to

the customers.
Ensure compliance of bank/SBP and local


Approval of opening of new accounts.






delegated authority
Develop duty list for all branch operation


Develop objectives for operation staff

Cross-training to the staff

Management of staff attendance and


Umair ansir

Conduct periodical meetings of operation

Entry and supervision of cheques and deposit
Issue of cheque books
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Operation manager Clearing of bills

Collection of bills
Ensure continuous satisfactory service to the
Review of daily activity reports.
Ensure compliance of bank/SBP and local
Tahir mehmood Receive cash
Payment of cash
Tally the cash in hand with the vouchers
Cash officer

3.3 Critical analysis of branch:

The branch is situated on circular road which is the most busiest place of
Gujrat. The trading activities are on the rise where the branch is located so
there is a huge potential for the branch to increase its deposits and improve

its market share.

The number of deposits is increasing day by day.
The attitude of the staff towards their customer is very polite.
The online banking facility is very quick and responsive.
The security system of the branch is not satisfactory. Security lapses may

occur at times
Employees are not well dressed
There budget for employee entertainment is very low
Employees are highly trained
The salary package of the employees is not as attractive as compare to other

No refreshment is provided after the meeting
The latest computer systems are provided to the employees
3.3.1 Communication:
The communication between employees is not very good. Employees interact
with each other through loud voices. There is no intercom system in the
branch. The employees interact with each other in Punjabi. The employees
also communicate with customers in a very informal way. The overall
communication is not very good as per todays banking system.

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3.3.2 Recruitment of the Staff

Recruiting is the discovery of potential skills of the employees to fulfill
organizational needs or we can say that it is the linking activity for bringing
together employees with skills to fill the vacancies. The recruitment procedure
has following steps:
a) Short- listing of the Application
In this step, thousands of candidates apply for limited posts available. The
candidates are scrutinized and the test calls are sent to them. The calls are sent
by the Head Office to only those candidates who fulfill the requirement of the
job advertised.
b) Tests
NBP under the supervision of the Institute Of Bankers In Pakistan conducts
test. After the tests the applicants are further short-listed.
c) Interviews
For the interviews only those candidates are called who qualify the written
tests. Different types of questions are asked from the candidates by the
interviewing board. Interview questions include,
a. Questions about the personal background, extracurricular activities during
education and about personal contacts.
b. About the role of banking in current situation of economy.
c. Role of foreign enterprise in public economy etc
Apart from these questions, the candidates personal interests are also
discussed and an effort is made to have an understanding of the individuals
personality. After these questions, an evaluation is made about whether the
candidates will prove himself as a valuable asset to the organization or not.
d) Merit List
After the final result, the successful candidates are sent the appointment letter
and they are asked to sign the agreement with the bank.
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3.3.3 Morale of the employees:

Morale of some of the employees is very high. Some of the employees are not
as much dedicated as others. Most of the employees are committed to their
jobs and they look very involved in there work. Overall the staff of the branch
is very motivated and they want to excel in their respective fields.
3.3.4 Physical facilities:
Overall physical facilities in the branch are very good.
All the general banking operations are done through manually supported
computer system
High speed branded computers are provided to the employees so that they
can perform their duties quickly.
Airs conditioned are installed to provide comfort to the employees and the
clients of BOP.
The branch is decorated with comfortable furniture. Good looking and
durable furniture is provided.
Cash officers cabin is well guarded to avoid any undesirable event.
The branch is also privileged with the facility of generator in case of load
Fax machine and laser printer are also provided.
It is an online branch so internet connectivity is provided with throughout
the working hours
3.4 Performance:
The performance of the branch has improved to a great extent. this can be by
the number of deposits and the degree of the satisfaction of the customers.
Performance in terms of customer satisfaction:
The customers are very much satisfied as I observed during my internship.
There is a good relationship between employees and clients. The staff of the
branch is very quick to respond to the queries of the customers.
Performance in terms of number of deposits:

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The performance of the branch can be measured from the number of deposits.
Currently the performance of the branch is very good. The number of deposits
is increasing. The average numbers of new accounts opened in a day are 5 to
6. This shows a very good performance of the branch.
3.5 Summary:
the BOP is an re emerging bank and providing the services to the clients. It
was established in 1989. It has regional offices as well as branches in far off
areas. BOP has all \the departments in its each branch which needed to
facilitate the clients. The staff of the branch where I have done internship is
very much qualified and experienced. The employees are heavily loaded with
work. Salary and incentives are given to the employees for motivation. They
performed their duties assigned to them. The branch is very congested.

4.1 Introductions:
The BOP has its policies of compliance with the regulations of the SBP. It has
formulated the policies to avoid irregularities. The broad guidelines are laid
down for its day to day activities. The branch has laid down the stratigies to
achieve the goals. The branch has the policy to increase deposit and decrease
lending. It has enjoyed the ever number of increasing deposits.
4.2 Policies:
Know your customer policy and Anti money laundering policy:
In order to achieve desired KYC standards & prevent the Bank of Punjab from
being used for money laundering, terrorist financing, transfer or induction of
illegal / ill-gotten money in to the banking system, the KYC Policy has been
Page 39


developed & implemented. In the present scenario of international as well as

local banking the importance of Know Your Customer (KYC) / customer due
diligence has been increased to many folds. The KYC Policy has been
developed to ensure / obtain the proper / verifiable answer to the following
a) Do you know who you are dealing with?
b) Do you know what your customers needs and circumstances are?
c) Can your customer be engaged in money laundering??
Implementation of KYC policy, on one hand provides protection against
unforeseen events / money laundering to the bank and satisfaction / protection
to branch management / staff on the other.
Obtaining maximum realistic information about the customers is the basic
principal of good KYC policy. Branch officers / staff should prudently ensure
that at the time of account
The Know Your Customer (KYC) and Anti Money laundering (AML) policy
of The Bank Of Punjab (BOP) has been formulated to ensure that Bank is
performing its business in conformity with the regulatory requirements issued
by the SBP & Controlling agencies at One hand and international KYC / AML
policies & standards on other.
Purpose of the policy
The purpose of the KYC / AML policy is to:
Adhere to Know Your Customer (KYC) policies & procedures.
Comply with all applicable money laundering laws and regulations and
internal policies and procedures
Protect the Bank from being used as a channel for illegal transactions
arising from money laundering activity.
Protect the reputation of the bank and clearly disassociate from the
increasing danger of organized criminal activity and money laundering.
On detection of suspicious activity, take appropriate action at management
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Ensure that all detected suspicious activities are appropriately reported to

the regulatory authorities in accordance with applicable laws.
Accounting policies:
Foreign currencies:
Transactions in foreign currency are translated to Rupees at the exchange rates
prevailing on the date of transaction. Forward exchange contracts and foreign
bills purchased are valued at forward rates applicable to their respective
maturities. All exchange differences are charged to income.
Provisions are recorded when the Bank has a present obligation as a result of a
past event which it is probable will result in an outflow of economic benefits
and a reliable estimate can be made of the amount of the obligation.
Dividend distribution and appropriations:
Dividend distributions and appropriation to reserves are recognized as a
liability in the financial statements in the period in which these are approved.
Transfer to statutory reserve and any of the mandatory appropriations as may
be required by law are recognized in the period to which they relate
The carrying amounts of assets are reviewed at each balance sheet date for
impairment whenever events or changes in circumstances indicate that the
carrying amounts of the assets may not be recoverable. If such indication
exists, and where the carrying value exceeds the estimated recoverable
amount, assets are written down to their recoverable
The resulting impairment loss is taken to the profit and loss account except for
impairment loss on revalued assets, which is adjusted against the related
revaluation surplus to the extent that the impairment loss does not exceed the
surplus on revaluation of that asset.

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4.3 Strategies:
Increase deposits through self marketing and quick responsive services to
the customers.
Decrease advances and lending to reduce the number of non-performing
Capture the market share in the area.
Provide loans to the retailers against their inventory.
Regaining the trust of the customers.

4.4 Successes:

BOP has able to regain the trust of the people.

The number of accounts and number of deposits has been increasing
The number of non-performing loans has reduced.
Customers are very much satisfied with working of the branch.

4.5 Summary:
The policies and strategies are proving fruitful for the bank and it has achieved
its objectives through the strategies. The broad guidelines laid down by the
SBP are strictly followed by the BOP.

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5.1 Introduction:
In this chapter analysis of the organization has been done. The swot analysis
and porter model has been used to analyzed the external and internal
environment. BOP

has certain strengths and weaknesses. The external

environment forcing the bank to change its policies.

BOP is one of the fastest growing banks in Pakistan. In the light of these
situations we can make an analysis.
The major shares of BOP is owned by the Govt. of the Punjab, so it can
develop a good image & trust among it customers.
Personal selling has key role in banking service. The officers of the Bank
of Punjab go to the potential customers to develop the business. By the
relationship with customers, they achieve the deposit targets.
The promotion criteria of the bank are on the basis of the efficiency and
passing the diploma examination of Pakistan Institute of Bankers.

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It is the policy of the management that requirements are made according to

the principles of merit. The bank to train them in gives the staff banking.
The past percentage of the candidates of Bank of Punjab is the highest
among the entire commercial every year.
People have trust in the Bank of Punjab because govt. of Punjab 52%
shares of the bank.
There is no union in the Bank of Punjab.
Working environment is good. Officers and managers work together as a
team. They are very cooperative with each other.
Higher management is experienced.
BOP has got a reliable and easy to use internal computer system. Every
information regarding the transactions in customers deposits has been
computerized. Data are properly maintained.
Low cost than other major banks
Increasing the number of branches in the country
Successfully launching new Product Lines
Although the bank is growing fastly but it has some weaknesses which it
should remove to make itself further strong.
The staff is not satisfied with the salary structure
Gives its staff less benefits
Lack of proper internal controls is one of the major weakness of BOP. It is
also pointed by the auditor in his review.
BOP has formulized a lot of products and services for its customers, even
more than other commercial banks, but any advertisement on electronic
media has not been seen.
I observed during my internship that some of the employees were
burdened with over work. So I think that the work should be distributed
according to their post and capabilities.
Biased selection of employees.
Corrupt former management has shattered the trust of the people. Now
BOP regaining the trust of the people.

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Political influence is very high.

Loans issued in the era of Hamesh khan are mostly non performing loans.
Weak security system in the branches of south Punjab.
The Bank of Punjab has very less staff in the branches of South Punjab as
compared to Upper Punjab. This creates the problem employees have to
spent most of their time in the bank to complete even their daily routine
work. They have to sit till 7:00 to 8:00 PM before going back to their
homes. For this reason their normal life is disturbing which create the
irritation in the behavior of employees.
Although commercial banks have launched many products but a gap exist
between the customers want and what the banks are providing. This is an
opportunity for the Bank of Punjab to move in and fill the gap between the
ideal bank and the current service offerings by aggressive advertising,
consumer friendly attitude products and service for attracting customers.
The Bank has opportunity to expand the branch network all over the
country, and it would be able to develop business and can start many other
schemes for investment.
The Bank has opportunity to use latest technology for providing good s
There is an opportunity for more businesses if the BOP opens its branches
in foreign countries.
There is an opportunity for more businesses if the BOP offered credit
Different multinational are establishing their businesses in Pakistan. So
there is a lot of potential for future businesses.
Uncertain economic conditions
Action taken by competitors

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Despite the difficult circumstances that confronted the banking sector in

particular and the country in general, BOP has been still highly profitable.
But, the facts cant be denied and there might be an adverse impact of such
BOP is facing a strong competition by its competitors, Business of all these
Banks are growing at very high pace.

5.3 Porter model:

1. Entry barriers (high)
The Pakistani market is highly regulated by the government and also by
central bank. A lot of decision such as regularization of interest on loans and
deposits as well as money supply is controlled by the state bank of Pakistan
2. Rivalry among the existing competitors (high)
When it comes to the banking sector in the country we could include in whole
lot of public as well as private banks along with NBFCs and micro finance
institutes widely spread in the country. The banking sector of the country has
56 banking institutions which include public sector, Islamic banks, foreign
banks, development financial institution, specialized banks, and micro fianc
3. Bargaining power of suppliers (medium)
The supplier of banks is people from whom the bank raises funds. So the
major source funds come from their customer (depositor), who becomes the
supplier in this case
4. Bargaining power of the customers (medium)
The customers and the depositors have a high bargaining power in the market.
Any bank giving the higher rate of interest would attract a large number of

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customers. Because there are number of banks operating in the market which
offer similar service.
5. Threat from substitutes (high)
There are number of substitutes in retail fianc industry such as money lender,
NBFCs, micro finance and also the insurance companies. Banks are seeing the
competition rise from unconventional companies. Markets like Pakistan
customer have high propensity towards switching to other substitutes

5.4 Summary:
BOP has certain weaknesses and strengths. The external environment has a
great influence on the performance of the bank. The regulations are very high
the environment is very competitive.

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Page 48


In the light of the Knowledge obtained during internship and studying the
organization, the following recommendations may prove to be successful to
the bank.

In order to capture a considerable share in the banking sector of the

country, the prime objective should be awareness in the general public. For
this it should launch a well-planned advertising campaign in the general
Physical facilities in a bank also play their role in enhancing its grade and
sound image. The bank should keep these facilities like furniture, parking
facilities for the customer.
Salaries of the officers must be compatible to other private banks so that
the BOP can attract professionals, intelligent persons.
The Bank of Punjab should minimize its expenses.
Special awards should be given to the hardworking employees who
performed extra-ordinary in the bank.
The bank should come up with new and innovative products. It would be
advisable to make these products while keeping in mind the gap between
what people want and what their banks are providing them.

Page 49


The Bank of Punjab should concentrate more on advances than on

The bank should come up with such products or services in which the
customers would not have to come to the bank at any stage i.e. Telephone
Banking etc.
The Bank of Punjab should use the latest technology because the bank
which can provide speedy, accurate and standard services in the delivery of
products, loans etc. to the customers will be successful e.g.
computerization, fax installation.
The authority should be delegated to the manager level.
MIS should be improved by connecting all regional offices and branches
to the head office through a network for timely delivery of information.
Management of Bank of Punjab should try to avoid the political influences
and should give loans on merit.
The bank should make a plan to gear up its recovery function on war
fooling and recognize the recovery function.
The Bank of Punjab should give some extra credit to concern to
professional qualifications such as MBA(IT)s, M.B.As, C.As A.C.M.As
at the time of recruitment and selection.
Interview should be conducted while recruiting personnel, to consider the
personality characters, communications skills and sociability.
The bank should adopt a policy to accommodate and facilitate the research
scholars who want to study the banking affairs. The universities and other
institutions can help to launch the studies regarding banking business.
All possible efforts should be made to protect the bank from the
interruption of Provincial government.

Page 50


There should be an association of employees to convey the voice of the

employees to the administration.
Participative management concept should be adopted, where ideas from
the employees should also be taken, not only for developing products but
also on service, efficiency, employee morale etc. in order to improve them.
Bank of Punjab is a very well established bank, but the number of air
conditioners they have in the whole bank is very less. Bank should
increase the number of its Split units, because summer stays longer in
The number of Fax machines and photocopying machine in the bank are
also less than they are needed. For photocopying one has to go downstairs.
So there should be more machines and also their placement should be at
the right place.
BOP should introduce more training programs for their employees. It will
help less educated and less experienced staff to grow and be a valuable
part of the bank.
At present there is no such organization in the world that is free from problem
and challenges. Every concern has to strive and struggle a lot to be more
profitable and to get more competitive edge.
The management of BOP is taking strategic steps to enable the bank to emerge
as a strong and progressive institution. It is continuing to make efforts to
refine its products and operations to make them more compatible.


deposit schemes have been introduced and an action plan to maintain revenue
growth in future.
As the business and economic conditions remain uncertain, BOP continues to
develop the new products like it has been doing in past.
BOP must reduce the political influence to regain the public trust and make
prudent lending.

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