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Internship Report

The Bank of Punjab

Submitted by
Syed Hasnain Haider
BBA-F14-40(M)

Session 2014-2018 (Morning)

Submitted to
Mr. Usman Ahmed
Lecturer Marketing
Internship Report Supervisor

University of the Punjab


Jhelum Campus

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Executive Summary:

It is compulsory for every student of Business Administration to do 6 to 8 week


internship in a reputed organization
I have done 6 week internship at The Bank of Punjab, Jhelum Cantt branch that was
the main branch of the city & frequently rushed by the people.
I tried my best to follow the rules & regulations & give my best during this 6 week
duration. My main task was to observe the staff working & asking questions related
to their work. I remained disciplined & worked with positive attitude so I can show
the positive image of my esteem institution i.e. PUJC
I would like to thank Mr. Usman Ahmed who supervised me & make me
understand the important concepts in this report.

This internship opportunity has enabled be to be more confident, more


knowledgeable & above all more committed to succeed & committed to win.

In preparing this report I have put all of my best efforts & tried my best to give
maximum knowledge.

The branch consisted of 12 people & I worked under the supervision of Mr. Awais
who is the Manager operation Mr. Qasim (OG-III) & Mr. Abdul Razzaq who is
account opening officer & Ms. Tamseela who is CSO
I keenly observed their work & experienced how to work in a professional
environment & how to deal with general public.
The overall internship experience was full of learning & most important it allowed
me to experience the working environment that I only studied in my degree
It enabled me to apply subject knowledge into an organization

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Letter of Transmittal

Mr. Usman Ahmed

Internship Supervisor

Lecturer Business Administration

University of the Punjab

Jhelum Campus

Dear Sir,

With prayers of my parents & your support, it became possible for me to formulate this
report. I am also thankful to my other respected teachers who provided me enough knowledge
& confidence that now I have successful completed this task.

I had a comprehensive learning experience with this report formulation. With my knowledge
at this level, I have put all my efforts to summarize my learning & experience in this report,
to make it comprehensive & meet your expectations.

The staff of BOP had been very cooperative with me in providing information regarding the
procedures & processes in practice

Yours Sincerely
Syed Hasnain Haider
BBA-F14-40(M)
Business Administration
Session 2014-2018(M)

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Table of Contents

Contents Page number


Executive Summary 2
Letter of Transmittal 3
Introduction of BOP 7
Banking History 8
Nationalization of Banks 10
History of BOP 12
Branch Network 14
Board of Directors 16
Scope of BOP 20
Vision & Mission 21
Objectives 23
Goals 23
Core Values 24
Awards & Honors 25
Various Departments in 29
BOP

Human Resource 33
Department

Swot Analysis of HR 36
Department

Strategy Implementation 37
Marketing Mix 38

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Account Types with 53
Details

3c Analysis 61
3c Analysis (Company) 63
PEST Analysis 65
Porter 5 Forces Analysis 75
BCG Matrix 77
Competitor 77
Customer 81
Additional Services 82
Activities performed by me

Week 1 87
Week 2 88
Week 3 89
Week 4 90
Week 5 91
Week 6 92
Limitations in Bank as 93
Internee

Branch Information 93
Branch Management 93
Financial Analysis 94
Vertical Analysis of 94
Income Statement

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Vertical Analysis of 96
Balance Sheet

Horizontal Analysis of 98
Income Statement

Horizontal Analysis of 101


Balance Sheet

Financial Ratio Analysis 103


Pros & Cons of working in 110
banks

Recommendation 111
Appendix I 113
Appendix II 120-145

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Introduction of BOP
The Bank of Punjab started functioning with the inauguration of its first branch of 7-Egerton
Road, Lahore on November 15, 1989. In Pakistan, over long periods of time the gap in saving
and investment and balance of trade deficit has posed serious threat to the target levels of
growth the ailments related to the budgetary deficit and public debt, both foreign and
domestic are in addition. Interestingly even such adverse circumstances growth of real sector
during the preceding year registered a favorable change, which speaks of hidden potential and
strength of economy. The Bank of Punjab is a Pakistani bank headquartered at BOP Tower,
Main Boulevard, Gulberg, and Lahore in Pakistan. It serves Pakistan and functions as an
international bank and is one of the prominent financial institutions of the country holding
AA ratings from PACRA. The Bank of Punjab was founded by Tajammal Hussain and it
functions as a scheduled commercial bank, with a network of 534 branches in major business
centers throughout the country. It is the fifth largest commercial bank of the Country. It
provides a wide range of banking services including deposit in local currency; client deposit
in foreign currency; remittances; and advances to business, trade, industry and agriculture.
Being the first priority, recovery of inherited non-performing loans always remained the
corner stone of the strategy of the Management. In this regard, all possible measures have
been taken, including legal battles both in courts of the country and abroad to recover every
penny of public money and I assure that the Management shall always remain resolute in this
respect. While implementing restructuring and image building strategies side by side, the
Management also remained fully focused on revamping and effective implementation of the
business strategies. On the behest of conscious efforts of the Management to take the BOP
brand name to every corner of the country to ensure provision of banking services to every
citizen, a well chalked out expansion plan has been put in place in earnest with a view to
expand the Bank’s outreach, especially in un-banked areas of the country. Besides equipping
the branches with latest technology and backup connectivity support, ATM network has been
substantially enhanced to meet 24/7 banking requirements of the clients. Debit MasterCard
has also been launched with features of Point of Sale (POS) transactions and withdrawal
through local and international ATMs. With the services of utility bills collections through
ATMs, SMS Banking and Phone Banking successfully rolledout, the Bank would be
launching Branchless Banking services, shortly. The Bank whole heartedly supports the
initiatives taken by the Government of the Punjab (GOP) to uplift the under privileged
segments of the society. Besides playing a pivotal role in wheat procurement for GOP

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Throughout the past several years, the Bank stood shoulder to shoulder with GOP and
dedicated its resources in fastest disbursement of financial assistance to the flood victims in
most transparent manner. In recognition of sizeable contributions of foreign remittances in
country’s exchequer, personalized services are being offered to the beneficiaries of
remittances under the Government of Pakistan Remittance Initiative.

Definition of bank
An establishment authorized by a government to accept deposits, pay interest, clear
checks, make loans, act as an intermediary in financial transactions, and provide other
financial services to its customers.

Banking history

The history of banking refers to the development of banks and banking throughout
history,with banking defined by contemporary sources as an organization which provides
facilitiesfor acceptance of deposits and provision of loans.
The history begins with the first prototype banks of merchants of the ancient world,
whichmade grain loans to farmers and traders who carried goods between cities. This began
around 2000 BC in Assyria and Babylonia. Later, in ancient Greece and during the Roman
Empire,lenders based in temples made loans and added two important innovations: they
accepted deposits and changed money. Many histories position the crucial historical
development of a banking system to medieval and Renaissance Italy and particularly the
affluent cities of Florence, Venice and Genoa. The Bardi and Peruzzi families dominated
banking in 14thcentury Florence, establishing branches in many other parts of Europe. The
most famous Italian bank was the Medici bank, established by Giovanni Medici in 1397. The

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oldest bank still in existence is Banca Monte die Paschi di Siena, headquartered in Siena,
Italy, which has been operating continuously since 1472.
The development of banking spread from northern Italy throughout the Roman Empire, and
in the 15th and 16th century to northern Europe. This was followed by a number of important
innovations that took place in Amsterdam during the Dutch Republic in the 17th century and
in London in the 18th century. During the 20th century, developments in telecommunications
and computing caused major changes to banks' operations and let banks dramatically increase
in size and geographic spread. The financial crisis of 2007–2008 caused many bank failures,
including some of the world's largest banks, and provoked much debate about bank
regulation.

History of Banking in Pakistan


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 3500 in the
undivided India, as many as about 1500 branches were existing in the 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 banks in Pakistan came down to about 200 on 30thJune 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 Pakistani 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 Pakistan’s share of Rs.75 billion in cash 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 30th June 1948.

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Nationalization of Banks
The principle of nationalization of banks is to stream line the operation of commercial banks
in such a way that it may be conductive to the development activities in process in the
country.
Since the commercial banks were owned controlled by big business groups of the country it
was feared that these banks would not maintain uniformity in their operation and would be
instrumental to inflationary pressure. However, theconsiderations behind nationalization are
 To form uniformity in the policy of the commercial banks so they may serve thebest
national interest.
 To make the operation of commercial banks highly sensitive and responsive to the
policy of the government relation to financial matters.
 To make the credit policy of the commercial banks more purpose full and effective
especially in the development of economic sectors of the country. It acts as an agent
of the State Bank of Pakistan
 To make the best use of the funds available at the disposal of these banks for the
economic development of the country.
 To eliminate unhealthy and uneconomic competition among commercial banks.
 To development strong money banks market in the country so that the value of
currency may be maintained at stable level both in national facilities to exporter and
agriculturists which have not been satisfactory in the past years.

Public Sector Commercial Banks


1. National Bank NBP
2. First Women Bank Limited FWB
3. The Bank of Khyber KB
4. The Bank of Punjab BOP

Local Private Banks


1. Askari Commercial Bank Limited
2. Bank Al-Falah Limite
3. Bank Al Habib Limited
4. Meezan Bank Limited
5. Faysal Bank Limited
6. Silk Bank Limited
7. Soneri Bank Limited
8. Union Bank Limited

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9. Muslim Commercial Bank Limited
10. Allied Bank of Pakistan

Foreign Banks
1. ABN Amro Bank
2. CITI Bank
3. Habib Bank A. G. Zurich
4. Mashreq Bank PJSC
5. Oman Bank
6. Barclays Bank
7. Standard Chartered Bank

Specialized Banks
1. ZariTarqiati Bank Ltd.
2. Industrial Development Bank of Pakistan
3. Punjab Provincial Cooperative Bank Limited

It has not so far been decided as to how the word ‘Bank’ originated. Some author’s
opinion is that, this word is derived from the word ‘Bancus’ or ‘Banque’, which means a
bench. Others authors hold the opinion that the word ‘Bank’ is derived from the German
word ‘Back’, which means joint stock fund. It is therefore so much difficult to decide as to
which opinion is correct.
Banking in fact is primitive as human society, forever since man came to realize the
importance of money as a medium of exchange, the necessity of a controlling or regulating
agency or institution was naturally felt. Perhaps it was the Babylonians who developed
banking system as early as 2000bc. It is evident that the temples of the Babylon were used as
‘Banks’ because of the prevalent respect and confidence at the clergy.
At the time of independence there were 631 offices of the scheduled banks in Pakistan, of
which 487 were located in West Pakistan alone. As a new country with resources it was very
difficult for Pakistan to run its own banking system immediately.
Therefore the expert committee recommended that the Reserve Bank of India should
continue to function in Pakistan until 30, September 1948, so that problems of time and
demand liability, coinage currencies, exchange etc., could be settled between India and
Pakistan. The non-Muslims started transferring their funds and accounts to India. By the end
of June 1948, the number of officers of scheduled banks in Pakistan declined from 631 to
255. There were 19 foreign banks with the status of small branch offices that were engaged

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solely in export crop from Pakistan, while there were only two Pakistani institutions, Habib
Bank, and Australasia Bank, the customers of the banksare not satisfied with the uncertain
condition of banking. Similarly the Reserve Bank of
India was not in the favor of Govt. of Pakistan. The Govt. of Pakistan decided to establish a
full-fledge central bank.
Consequently the Governor General of Pakistan
Quaid-e-Azam inaugurated the State Bank of
Pakistan on July 1, 1948 thus a landmark was made
in the history of banking when the State Bank of
Pakistan assumed full control of banking and
currency in Pakistan.

History of BOP
The Bank of Punjab was established in November 1989, the first branch which
opened was the Main Branch Lahore. In 1989 BOP was mended as a non-scheduled Bank in
the province of Punjab. The Bank of Punjab started functioning with the inauguration of its
first branch of 7-Egerton Road, Lahore.

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. There are 534 branches of BOP in the whole country and
now management plan to open 46 new branches of BOP.. Functionally the bank of Punjab is
divided in the division and the each division is headed by the general managers.

The government of the Punjab holds the majority of the shares in BOP. It is doing business in
commercial banking and the retail banking. Corporate banking treasury and investment and
trade finance. The shares of BOP are traded in all three stock Exchanges of the Pakistan. The
strength of its branches in province of Punjab is 237.

The bank provides all types of banking services such as Deposit in Local currency, Client
Deposits in Foreign currency, Remittances and Advances to businesses, trade, industry and
agriculture. The Bank of Punjab has entered into a new era of science to the nation under the
experienced and professional hands of its management. The Bank of Punjab has played a
vital role in the national economy through mobilization of untapped local resources,
promoting savings and providing funds for investments.

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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
and foreign banks, in the last year ratings it was at 5th position among the top ten banks in
Pakistan.

The Bank of Punjab has the privilege to discharge its responsibilities towards national
prosperity and progress. Within the couple of years of its scheduling, the bank has not
only carved out for itself prominent niche in the mainstream banking of the country but
in certain areas it has the distinction of taking the lead. In short span of time the Bank
has been able to evolve a distinct corporate culture through of its owned-based policies,
which are realistic and are on highly professional footings.

Branch network

Conventional Branches 466 


Islamic branches 68 

 D.G.Khan:44  Lahore-B:29
 Faisalabad:39  Multan:42
 Gujranwala-R:45  Peshawar:36
 Gujranwala-U:39  PSDD:8
 Islamabad:38  Sahiwal:44
 Karachi:17  Sargodha:42
 Lahore-A:33  WSB: 10

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ATM (Onsite/Offsite)425
 D.G.Khan:32
 Faisalabad:29
 Gujranwala-R:24
 Gujranwala-U:35
 Islamabad:35
 Islamic Banking:48
 Karachi:13
 Lahore-A:23
 Lahore-B:20
 Multan:35
 Peshawar:29
 PSDD:6
 Sahiwal:35
 Sargodha:25
 WSB:10
 Off-Site:26

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Board of Directors

The Bank of Punjab, Head Office BOP Tower, 10-


Dr. Pervez Tahir Chairman B, Block-E-II, Main Boulevard, Gulberg-III,
Lahore.

The Bank of Punjab, Head Office BOP Tower, 10-


President &
Mr. Naeemuddin Khan B, Block-E-II, Main Boulevard, Gulberg-III,
CEO
Lahore.

Mr. Mohammad Chairman P&D, P&D Department, Govt. of Punjab,


Director
Jehanzeb Khan Civil Secretariat, Lahore.

Mr. HamedYaqoob Finance Secretary, Finance Department,


Director
Sheikh Government of Punjab, Civil Secretariat, Lahore.

Chairman, Punjab Information Technology Board


Dr. Umar Saif Director (PITB), Arfa Software Technology Park, 11th Floor,
346-B, Ferozepur Road, Lahore

Shahdab House, 34-Aziz Avenue, Gulberg-V,


Syed Maratib Ali Director
Lahore

Dr. Muhammad Founding Chairman/Executive Director, Akhuwat,


Director
AmjadSaqib 19-Civic Centre, Sector A-2, Township, Lahore

Mr. Mohammed Commissioner, Overseas Pakistani Commission


Director
AfzaalBhatti Punjab, 01-Club Road, GOR-I, Lahore

KhawajaFarooqSaeed Director 403-Sadiq Plaza Shahrah-e-Quaid-e-Azam Lahore

Mr. Saeed Anwar Director 108-A, Block-E/I, Hali Road Gulberg-III, Lahore

Secretary to The Bank of Punjab, Head Office BOP Tower, 10-


Mr. RazaSaeed
the Board B, Block-E-II, Main Boulevard, Gulberg-III, Lahore

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Central Audit Committee (CAC)
Khawaja Farooq Saeed Chairman

Mr. Mohammed Afzaal Bhatti Member

Mr. Saeed Anwar Member

Mr. Omar Saeed Member

Board Risk Management Committee (BRMC)


Syed Maratib Ali Chairman

Mr. Saeed Anwar Member

Mr. Omar Saeed Member

Human Resource & Remuneration Committee (HR&RC)


Mr. Mohammad Jehanzeb Khan Chairman

Syed Maratib Ali Member

Mr. Mohammed Afzaal Bhatti Member

Mr. Naeemuddin Khan Ex-officio Member

Auditors
Deloitte Yousuf Adil Chartered Accountants

Registered Office
BOP Tower, 10-B, Block-E-II, Main Boulevard, Gulberg-III, Lahore.

Website
www.bop.com.pk

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HEIRARHICAL FLOW

Management of the Bank.


At the level of Decision-making and implementation, senior management of the bank
is drawn from highly accomplished bankers with rich experience in the banking
profession both domestic and international. The entire responsibilities of policy
formulation and management have been placed, under the law, with the Board of
Director. Furthermore it will be heartening to know that Mr. Nawaz Sharif, during his
chief Minister ship of The province of Punjab issued special instructions to the political
and executives’ echelons not to interfere in The Bank of Punjab, thereby ousting the
possibility any pressure which may be put on the management of the bank in respect of

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recruitment of staff or provision of credit. These instructions have become an essential
part of the culture of the bank.

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. Other objectives included.
1. To provide speedier services to the common man.
2. To provide the highest rate of return to the shareholders by achieving good
profitable growth.
3. To enter into financing contracts and to mobilize resources in local and now in
foreign currencies consistent with the objects of the bank

Category A:
 President
 Executive Vice President (EVP)
 Senior Vice President (SVP)
 Vice President (VP)
 Assistant Vice President (AVP)

Category B:
 Officer Grade I
 Officer Grade II
 Officer Grade III
 Cash Officer

Category C:
 Clerical Staff

Category D:
 Non-Clerical Staff
 Driver
 Guards

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Scope of BOP:

Being a commercial Bank, The Bank of Punjab performs all such functions as are
attributed to commercial banking institution both in the area of resource mobilization, loans, and
investment. The Bank is thus providing all type of advances to business, trade, and industry on
seasonal and annual basis, and is ensuring, through the prudent policy, the safety and protection
of its loan portfolios, as the resources base of the bank expands, project financing will also be
brought into its fold.
Bop Careers
The Bank selects and appoints staff with appropriate academic qualifications, talent, skills and/or
experience through a methodical selection process, free from discriminatory bias and based
soundly on the principle of EOE Equal Opportunity Employment).

Career development programs are designed to prepare employees to meet the challenges of the
workplace. All employees have an opportunity to take benefit from such programs which are
offered at all levels to meet the specific needs of the staff & organization.

The Bank has well defined Human Resource policies to ensure staff career progression and
growth through staff evaluation, job rotation, job enrichment, promotions and succession
planning.

The Bank also pursues a compensation philosophy of establishing and maintaining consistency
and equity within the organization as well as aligning its overall remuneration packages with the
marketplace.

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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
programmed driven products & services in the Agriculture and Middle Tier Markets through a
motivated team.

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Analysis of Vision statement

The vision statement of BOP is focusing on customers. BOP is only looking to build their
customers and for that they using different types of strategies. Likewise launching schemes,
provide interest on saving accounts. BOP has understood one thing that to be on the top they
should have more customer as compare to their competitors. So when BOP look in the future
they think themselves as market leader and to reach their BOP is focusing on the services which
they going to provide to their customer. BOP believes in the best so they are always looking to
provide excellence services to their customer.

Analysis of Mission statement

The mission statement of BOP is totally base on their stake holder, government,
customer, professional, agriculture department and investing on individuals to starts their own
business. As we can see in last year BOP have launch different schemes like yellow cabs and
Women Entrepreneur's Finance Scheme. This shows the organization is help societies to improve
themselves. BOP is the semi government bank so in Punjab this bank is support by Punjab
government. If there is any work happening in Punjab the BOP will be involve in the projects.
This is the only bank which also supporting the agriculture sector in Pakistan. As we all know
that Pakistan is the agriculture country and BOP is the only bank that supports this department
and never the less BOP claim to provide all kinds of the solution for professional.

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Objectives

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. Other objectives
included.
 To provide speedier services to the common man.
 To provide the highest rate of return to the shareholders by achieving good profitable
growth.
 To enter into financing contracts and to mobilize resources in local and now in foreign
currencies consistent with the objects of the bank.

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. Other
objectives included.

 To provide speedier services to the common man.


 To provide the highest rate of return to the shareholders by achieving good
profitable growth.
 To enter into financing contracts and to mobilize resources in local and now in
foreign currencies consistent with the objects of the bank.

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.

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 Maximize contributions from its key sources of personal machines brands
representation and capital.
 Be innovative progressive and the need of its customers within the frame work of
operational and prudent risk taker.
 Act as a reputable efficient and responsible organization.
 Pursue personal policies which recognize the aspirations and performance of
individual and which are suited to the devise levels of skills.

CORE values

OUR CUSTOMERS
as our first priority
PROFITABILITY
for the prosperity of our stakeholders that allows us to constantly invest, improve and succeed
CORPORATE SOCIAL RESPONSIBILITY
to enrich the lives of community where we operate
RECOGNITION AND REWARD
for the talented and high performing employees
EXCELLENCE
in everything we do
INTEGRITY
in all our dealings
RESPECT
for our customers and each other

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Excellence Award by the Federal Board of Revenue
The Central Board of Revenue now known as Federal Board of Revenue FBR presented
"Excellence Award" to the Bank of Punjab
in recognition of the contribution made by the bank towards Government exchequer.
3rd Kissan Time Awards
In recognition of Bank's contribution in development and growth of agricultural
sector, the Bank honoured with "Top Bank for Agriculture Loans" and "Best Bank
Crop Insurance" under 3rd Kissan Time Awards year 2006.
Best Corporate Report Award
Annual Report of the Bank for the year 2005 won 5th position for "The Best
Corporate Report Award" for the Financial sector, adjudicated jointly by the Institute
of Chartered Accountants of Pakistan and the Institute of Cost and Management
Accountants of Pakistan.
16th Bolan Excellence Award
The Bank was awarded Best Bank Award under 15th Bolan Excellence Awards
distributed in 2006.
Achievement Award
The Lahore Chamber of Commerce & Industry (LCCI) awarded the Bank "LCCI
Achievement Award" 2006.
MAJOR CUSTOMERS OF BOP
Some of the major customers of Bank of Punjab are:
 Educational Institutes
 Agriculturists
 Pakistan Telecommunication Private Limited
 WAPDA
 Pharmaceutical Companies
 WASA

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 MDA
PUNJAB GOVERNMENT SHOWS FAITH IN BOP
Punjab Government wishes to state that being the major stake holder in the
Bank of Punjab it has full faith in the new management and operations of the Bank.
The government further pledges its unequivocal support to the Bank and firmly
believes that the affairs of the Bank are sound and its financial health robust.
Finance Department
Government of the Punjab.
Strategic management of bank of Punjab:
The Bank of Punjab is working as a programmed commercial bank with a setup of almost
284 branches at all over main locations in the Punjab. BOP offers 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 in fact entered
a new age of technology to the nation under skilful and specialized hands of its management.
The bank of Punjab plays an essential role in the economy through enlistment of local
resources, promoting savings and providing funds for investments. Decision making at BOP
is decentralized due to its operations at different regions so they all are doing their own
planning’s but all the vital decisions must be approved by higher management at Head office
directors at bop have worked with the best organization in the world. So they have put in a
cognisant effort to inculcate a tradition which has centralization only to the need where it
requires. BOP decentralized system motivates the employees a lot as they get the sensation of
being a part of organizational decision making. There are 8 major divisions in BOP which
includes Audit and Inspection Recovery Division responsible for checking and reporting on
the management compliance with the policies and directives. Finance Division Prepare the
policies regarding the sanctioning loan and define credit limits against specified securities
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International division which is providing important services to the bank regarding the
matters
of International Trade, Import, Export Letters of Credit, Travelers cheque etc. Credit Division
which is concerned with the operational working in general banking, which is concerned with
the routine working of the bank Business Development Division It promotes the bank basis
i.e. deposits and work for the overall development of the bank and Human Resource Division
which includes recruitment, staff training and evaluation Operations Division.
Bank of Punjab believes that people are their most important assets so one of the strategic

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objectives of organization is to hire best individual for the organization that’s why
recruitment department have stressed on the quality of people. BOP recruitment procedure
includes screening of CV and evaluation based on fixed criteria. After selection the
employee’s serves probation period of three months after its completion the board evaluates
the employees and grant him the letter of confirmation.
Corporate Social Responsibility:
The Bank of Punjab is fully aware of its obligations toward the society and acknowledges
the fact that the growth of any organization depends upon its contribution toward the uplift of
under privileged communities of society.
Accordingly, the Bank takes pride in development of programs specially designed and tailored to
meet the requirements of under privileged communities across the country. Besides focusing the
areas of education, sports, art& culture, health care and social welfare under its Corporate Social
Responsibility (CSR) initiatives, special emphasis is given on women empowerment through
specially designed products and services.

Social Development through Banking Services:


While expanding branch network and developing new products and services, every possible
effort has been made to expand the Bank’s outreach to un-banked areas of the country. The easy
access to banking services in under developed areas shall go a long way in improving social life
of the residents. Further, through specially designed credit lines of BOP, Agriculture and SME
sectors in these areas shall get much needed boost.
The Bank fully acknowledges the role of women in the economic and social life of the country.
Besides offering equal opportunity to women in all dealings of the Bank, specially designed
products and services are also offered to encourage women empowerment. In order to inculcate
habit of savings among the children and housewives, products like Young Lions Saving Scheme
and Gharayloo Saving Scheme have been introduced. Women’s Entrepreneur Finance Scheme
(WEFS) has been specifically designed for empowering women and help them to contribute
toward national economy.
The Bank of Punjab has played an instrumental role in supporting Government of Punjab
(GoPb) initiative for providing vehicles for commercial use to educated unemployed youth.
Accordingly, process for financing 50,000 vehicles under GOP youth initiative has been started
which will not only provide source of income to educated unemployed youth but also improve
transportation services in the country.
Disbursement of Financial Assistance to Flood Victims:

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The devastating flood in year 2014 had completely destroyed the social and economic lives of
thousands of fellow countrymen across Punjab. In order to rehabilitate and help them to re-

organize their lost social and economic lives, a gigantic task to provide financial assistance to
them, under initiative of Government of the Punjab, through the branch network of The Bank of
Punjab was successfully completed in a very short period of time and in a fully transparent
manner.

Culture, Sports and Heritage:

The Bank fully recognizes the importance of culture, sports and heritage in the social life
of the peoples. Accordingly, Bank generously supports the activities promoting the culture,
sports and heritage in the country. Besides sponsoring different sports events across the country,
the Bank also extends financial support to the cultural events at the Regional levels.
Environment Protection and Energy Conservation:
The persistent energy crisis in the country has made it obligatory for every individual and
organization to play its role in preserving energy. The Bank also realizes the financing needs to
help produce alternative energy. Besides facilitating large scale projects, the Bank has introduced
Solar Penal financing scheme with an objective to reduce energy woes of common man and help
produce low cost environment friendly energy.
Special Care for Special Persons:
Besides offering personalized and priority services to the senior citizens, the Bank
ensures hazard free services to the special persons visiting the Bank. Separate counters have been
established for senior citizens in line with the directives of Government of Pakistan and State
Bank of Pakistan.
Community Marketing
Banks range in size and capabilities. Small banks may only have one or two branch
offices
whereas large commercial banks may have thousands of branches across the nation.
Regardless of the size of the bank, each branch needs to tailor local marketing strategies to
serve the immediate community. Consumers bank in a place where they feel safe and
comfortable. This means tellers and account representatives who speak English as well as any
26
prominent language in the community. By having branch managers look at the local
community needs, the bank can attract a larger percentage of the target market.

27
Product Bundling
A successful strategy employed by all banks is product bundling, such as offering a free
checking account for those who open a savings account. Because this has become common
practice, successful strategies implement creative bundling solutions. An automatic home line
of credit with a mortgage refinance might be a solution when interest rates are low or the
community has a large percentage of consumers looking to consolidate debt.
Pre-Approved Products
Consumers are more likely to say yes to something when they already know they are
approved for it. Banks can review existing accounts to determine positive banking and credit
trends in customers. Those identified with positive trends and credit history is sent "preapproval"
letters for credit cards, lines of credit or mortgages.
Premier Services
Premier services are designed to attract high net worth bank clientele. High net worth
clients
often have different needs as well as expectations. By offering a select set of private bankers
to personally handle all transactions and account reviews, client trust increases.

Various Departments In BOP

Account Opening Department


This department is basically known as “Deposit Department.” Deposit of funds from
outside people is one of the most important functions of this system. Banking system is based on
such deposits without these deposits it is difficult for the bank to run effectively. Deposits are
capital of bank and it is more than bank own capital fund. This deposit is a form of borrowing
for bank. Bank then uses these deposits by lent out it other parties that generate profits and bank
is shared as well in such profit as well. Such deposit formation is done through opening an
account in the bank account opening department.
Basic Tasks
Responsible for processing request of account opening/closing.
Customer queries
Statement printing and other customer related transactions (this position is also responsible for
signature capturing).
NDRA verification of CNICs before account opening.

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Issuance of checkbook as per laid down procedure and preparation of periodical MIS related to
client service area.

Cash Department
This department is considered as most likely to risk in any bank. The requirement to
work in this department is that the very careful, capable, competent and alert are required.
Balance of payments actually has a diligent staff with considerable skills and to work. There is a
department of box in which the head of the department of housing and deeply controlling all the
money on their activities
Basic Tasks
Issuance of Token.
Receiving of cash/payment.
Receiving of utility, credit card bills.
Receiving of school fee.
Handling and keeping records of said department.
Marketing for branch deposit.
Alternate of Cash Officer on Alternate Saturday.
Any other duty will be assigned by the Manage at any time
Clearing Department
The function of this department is to make the arrangements for collection of
bank cheques. But in the traditional banking system it is not the legal obligation of the banker to
collect cheques drawn upon other bank for a customer. But, in today banking system scenario
through modern banking practices it is now easy the collection of cheques and bills on behalf of
the customer.
Remittance Department
Transfer of money or equivalent to money from one branch to another branch of the same
bank is called remittance. This service is specially provides to the regular customer of the bank.
The main function of this department is transfer of funds. Fundamental function of this
department is under below
Demand Draft.
Travellers Cheque
Telegraphic transfer.
Mail transfer.

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Pay order.

Credit Department
Credit department is also one of the most important departments of the bank. It's called
the brain bank. This department controls the relations of the bank or finance-related loans. The
credit department of the balance of payments also performs the functions of connecting to the
credit management and credit accounts. Skilled professionals offer modern corporate banking
services in personal behavior. The commitment to maintain steady long-term relationships and
long term relationships with our customers, the Bank's balance of payments services change
combined with the technological capacity to offer banking solutions complicated.

30
G.M

Admin Officer’s Training

Institute
&Establishment

BOP is the employer of choice. The whole BOP family comprises of committed
and dedicated members with passion to serve in their respective functional
areas. The Bank has challenging work environment where merit and
performance help the individuals to explore their true potential. As a caring
employer the Bank enables the employees to excel and grow in highly
congenial employment conditions and culture. The career path is full of
challenges and opportunities. The Bank has absolutely open culture where
members share and communicate freely.
Our Values (as described in BOPs website)
We believe that;

 People make the organization


 People collectively yield results
 People have ambitions and aspirations to be distinguished and rewarded
 People form the human capital to be developed and invested in.

This division deals with the problems relates to the staff administration. The main function of
this department is to arrange a comprehensive training program for recruited staff. Others
function includes:
 Recruitment
 Staff remuneration

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 Placing the staff
 Providing and defining the opportunities for career development and growth
 Devising and implementing services rules.
 Promotion and demotion
 Transfer and termination
 Transportation
 Security, health and benefits.
BOP‘s Human Resource Management is based on a strategic and coherent approach for
management of the Bank‘s most valued asset-its people, who individually and collectively
contribute to the achievement of objectives of the Bank. The Bank strongly recognizes that its
future success is dependent on the ability to attract, motivate and retain highly talented
people. The Bank has put an effective Human Resource Management system in place, based
on the principles of merit, with a view to maximize the potential of its human resources. The
Bank provides a healthy and challenging working environment thus encouraging the staff to
unleash their talent. Besides conducting regular training sessions at Bank’s Learning and
Development Centre, participation of staff in different training courses and seminars is
ensured to equip them with latest tools of trade. Bank’s performance appraisal system has
been designed in a manner to evaluate the performance objectively and ensure fairness.
Hr goals:
● Bank HR strives towards achieving excellence in the management of the Bank’s
most valuable assets are its people.
● To recruit the best human resource from around the country, and developing the
continuously to become experienced and seasoned bankers.
The main focus of the Human Resources Department is to implement strategies and practices
to develop our employees.
Other Tasks of HR are

 Mandatory Leaves and its observance.

 Staff leaves and other related staff matters

 Goals of all Staff

 Monthly Statement of Staff

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 Disciplinary Action Cases
 Cases Retired employees & its Correspondence
 Complaints and its correspondence

Departmental Procedure Adapted


Following is a list of important things that are considered by HR department in promotio
 BOP uses time duration as a primary mode for promotion
 It encourages employees to enhance their academic skills
 The most important factor in promotion is achieving targets in terms of deposits
 Usually Branch Managers/ Area Managers are given main targets related to deposits they
further divide the tasks into branches
 Like all other banks the employees get permanent when they achieve their given targets
 The method assigning targets related to deposits has some advantages & some

Advantages of this process

 Employees use their references to boost deposit


 The bank has to do less promotion as their work is done by the employees
 It reduces the cost
 Somehow it makes a sense of commitment

Disadvantages of this Process

 Now a days people usually don’t want to join bank as an employee due to difficulties in
achieving targets
 Branch Manger pressurizes the staff to boost deposits
 Lower level officers face difficulties in getting the huge accounts
 Area Manager & Head office send the employees emails & letters to remind them to
generate more accounts
 This situation has made bank employees a permanent patient of anxiety
 The long bank timings are also very difficult to manage

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 Employees are not compensated well

Due to immense pressure from the top people show less job satisfaction & continuously search
for the other job this reduces the chances to retain experienced workers

SWOT Analysis of HR Department:

Strengths
 Executive leadership who support and promote HR strategic development
 HR staff strong knowledge and expertise because they are the employees ultimately
responsible for carrying out tactical duties
 Easily understandable rules and regulation
 Well working system on each level
 Strong HRD
 Shaping ideas quickly
 Aligning teams and building team spirit

Weaknesses:
 Following/implementing old policies
 Budget constraints and cuts are conditions that HR often has to deal with, primarily
because HR isn't a revenue-producing department
 HR has to rely on sound justification to fund investments in HR activities
 Low employee morale and high turnover can disrupt HR
 Gender/disability sensitivity
 Recruitment process (strengthen and need based)

Opportunities:
 New methods, trainings and policies to tackle workforce
 Improving employee morale and lowering turnover can lead to success
 Workforce growth, due to increased demand for the products and services
 Improving employee relations
 Evading layoffs by cutting down on costs

Threats:
 Declining sales
 Potential layoffs

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 Competitors in industry
 Use of external consultants

Strategy Implementation

(Brief process of implementation)

Once we have implemented the strategy we need to carefully analyze and evaluate our
implemented strategy, whether we have achieved the objectives or not. In order to do so we will
take help from control charts, statistical tool used to monitor and evaluate the progress. We will
measure the actual performance and compare it with the prescribed performance standards, based
on our objectives mentioned earlier. If we feel we are meeting the standards we will continue the
existing strategy as it is to maintain the status quo. However if any discrepancy occur we will try
to identify the root cause and change the structure, system or strategy to make sure we meet the
standards defined by our objectives.

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Marketing Mix

“The set of marketing tools that the firm uses to pursue its marketing objectives in the
target market”.

FOUR P‟s OF MARKETING MIX

Marketing Mix is a Combination of Four P’s. Product, price,


promotion and place.

1) Product/ Service Provided by Bank


2) Price Commission and Bank Charges Received
3) Promotion Promotion of Services
4) Place Placement of Services i.e. Network of its Branches

PRODUCTS / SERVICES

Due to trend setting and innovative banking, Punjab Bank presents a range of quality
products with revolutionary perks and convenience. BOP provides a wide range of
products/ services to its customers, which can be compared with any foreign, or national
bank in terms of quality and reliability.

Here is an overview of different products and services formulated by Punjab Bank.

Products Offered By Bank of Punjab

36
(Terms & Conditions in Appendix)

House Loan CarGar Car Financing

Aasaish Loan

37
(See Appendix for Explanation)
PersonalLoan
BOP Lockers

Online Banking

When a customer wants deposit the money or encash the cheque or to transmit the money
from account in one city branch to another city branch he use the online banking facility.
The client has to be relevant for this particular array between branches and that will make
him capable to transmit his money very fast. Ideally this transfer should take only 5 to 10
minutes but practically it takes about half an hour or so. Bank charge a amount on Rs 300
if the amount of deposit or withdraw is less than 100,000 and if the amount exceeds
100,000 the bank don’t charge any amount.

Many types of Bank Accounts Mentioned with detail later in the report

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39
BOP Apna Cash Card is an ATM plus Debit Card.
1. The front of the card will have the following matter on it:

 Card Holder’s Name


 International Bin Number (6 Digits - XXXXXX)
 Card Number (YYYYYYYYYY) (total IMD+CARD num has to be = 16

2. The back of the card will have:

 Magnetic Strip
 Signature Panel
 Conditions of Usage
 M-Net and M-Net logo

1. Service

The BOP Debit Card holders will be able to transact at any of the 1000 + Merchants
across the country. The following services can be utilized at the Point of Sale (POS)
terminals:

1.1.Purchasing

Your BOP Debit Card can be used in place of cash at all outlets where the M -Net
logo is displayed. This is a service which lets you pay directly from your account without
using cash. When a payment is made through the debit card, your account is directly
debited.

1.2.BOPance Enquiry

The Point of Sale (POS) terminal also lets you view your BOPance of all the linked
accounts to your card.

2. Sites

BOP Debit Card Holders can transact at any of M Net merchant locations country
wide. These POS terminals are available at Shopping Malls to Petrol Stations. The list of
country-wide merchants is attached as Annexure I. All merchants who display the M-Net
logo will accept the BOP Debit Card.

3. Plastic with M-Net logo

All new plastic that will be ordered from now on will bear the M -Net logo. The
existing plastic will be used for customers who want the debit card facility, as the cost of
the wastage of scrapping our existing stock is too high. Merchants will have to be
informed to accept all BOP plastic, irrespective of M-Net logo. New order of plastic will
bear M-Net logo.

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4. Customer Eligibility

The ATM Card will be issued to Savings and Current Account holders who maintain
their accounts with the bank and in terms of the account opening documentation are
authorized to operate the account singly or jointly.

For Joint Accounts, which are operated on the signature of any one of the account
holders, ATM / Debit card can be issued. The joint accountholders will be jointly &
severally liable for any transactions processed by the use of the cards and the terms and
conditions as laid down shall be jointly & severally binding on all account holders.

Cards will not be issued on the following accounts:

i. Any non-personal account i.e. Companies, Organizations, Trust Account,


 Government account and Collection account etc.
ii. Dormant, inoperative, blocked or restricted accounts.
iii. Accounts with “NIL” balance.
iv. Term Deposit Accounts.
v. NIDF Accounts. (Non Interest Demand Finance Accounts)
vi. Accounts requiring thumb / photo for operation (illiterate accounts) ·
note
ATM/Debit cards can only be issued on local currency accounts.

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KarobarBarhao Scheme

42
43
Live Stock Development Scheme
Purpose
Provision of financial facility for
purchase of animals (Milk & meat
production, cattle farming, Poultry
Farming and Fish farming) to the farmers
and non farmers (those who have their
own live stock farm/fish farm for
commercial purposes)
Eligibility:
Sufficient experience to handle Dairy Farm, Cattle Farm, Goat Farm, Poultry and
Fish Farming. The persons who have their self owned Dairy Farms for production of milk on
commercial basis).The applicant should be having adequate arrangements to sell out the
products properly e.g. supply contract with milk processing company.
Amount:
80% of cost of animals (Maximum facility can be granted upto 50% of forced sale
value of property).
Security:
Leased Animals (receipt will be issued in the name of Bank).Charge on Agriculture

Land through Agri Pass Book OR Charge on urban immovable property through

equitable/registered mortgage. The property will be cleared by Bank's approved legal

counsel and will be assessed by Bank's and PBA's approved surveyor. Liquid security in

the shape Bank's Fixed Deposited Receipts/DSC/NSC or Regular Income Certificates.

Margin on Security:

50% margin on landed property (Agri/Urban). 25% margin in case of liquid security

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Insurance:

The Lessee will arrange comprehensive insurance of Animals. In case of Poultry and

Fish farming Borrower will have to arrange comprehensive insurance of poultry and fish

stock himself form Bank's approved A rated company life assurance of lessee under the

Bank's charge.

Mark-up:
18% Per Annum

Period:
5 Years

Repayment:

20 equal quarterly installments (within five years).

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Kissan Dost Green House Finance Facility
At present, the agriculture business is the most rewarding avenue of the Bank of Punjab.
Due to the increasing demand of off seasoned vegetables, we are rolling out a special scheme
by the name of “GREEN HOUSE FINANCE FACILITY” for farmers who intend to
establish Green House to grow off seasoned vegetables.
Purpose
The purpose of this loan is to encourage the farmers to establish green houses. This
will also curtail the shortage of vegetables. Moreover the rate of vegetables will also decrease
when they are in abundance in the markets.
Types of Green House
There are two types of green houses i-e Metallic Construction & Bamboo Construction
Eligibility
The applicant should be a genuine grower and should have a suitable land to establish
a Green house. The applicant should not be a defaulter of any other Bank and the land under
cultivation should be free from any encumbrance.
Nature & Amount of Facilities
MEDIUM TERM DEMAND FINANCE FACILITY
For Metallic Tunnels: For purchase of iron/steel, cement, concrete, polythene,
mulching shopper, green net For Bamboo Tunnels:
For purchase of bamboo, cement, concrete, polythene, mulching shopper, green net

MEDIUM TERM LEASE FINANCE FACILITY


For installation of Drip Irrigation System for both Metallic & Bamboo Tunnels:
SHORT TERM FINANCE FOR RUNNING EXPENSES
Running finance facility for the purpose of purchasing seed/inputs and other running
expenses such as farm power, labor etc.

Disbursement:

In case of Medium Term Demand Finance Facility the loan will be disbursed as 30%
for base structure & for purchase of raw material, 40% for construction of green
house/tunnels and rest of 30% for finishing purpose. Each tranche will be released after

46
proper verification by Executive Incharge Agriculture & respective ACO of the Branch.
In case of Medium Term Lease Finance

Facility the payment will be made directly to the vendor after proper verification of
leased asset. In case of Short Term running Finance Facility the initial disbursement will
be made as and when required by the applicant.

Amount
70% of the cost of construction assessed by Bank’s approved surveyor according to
the proposed plan of construction In case of lease finance 80% of the purchase price of leased
assets. In case of Running Finance, up to 80% of total running expenses.

Security

I. PRIMARY ·

Leased assets in case of lease finance facility (receipt will be issued in the name of
bank). · Hypothecation of vegetables, equipment etc. in case of running finances facility.

II COLLATERAL

Charge on agriculture land through Agri. Pass book. OR · Charge on urban


immovable property through equitable/registered mortgage. the property should be
cleared by the banks approved legal counsel and will assessed by the Banks and PBAs
approved surveyor. OR · Liquid security in the shape of Banks Fixed Deposited
Receipt/DSC/NSC or Regular Income Certificates.

III One personal guarantee of a reputable person. ACO along with Regional Chief can
waive this condition if they deem the borrower to be credit worthy.

Margin on Security

IN CASE OF OAST BAI:

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The maximum amount of Finance will be allowed upto 75% of the Oast Value of land
(Oast is verified by Revenue Officer)

IN CASE OF THE FORCED SALE VALUE IF EVALUATED BY PBA /BANK’S


APPROVED SURVEYOR

Maximum Amount of Finance will Be 50% Of The Forced Sale Value, Evaluated By
PBA/Bank’s Approved Surveyor.
Insurance
Comprehensive Insurance of the Leased/Hypothecated stock at borrowers cost assigned to
BOP.
Life assurance of the borrower under the bank’s charge assigned to BOP.
Mark up
For Demand Finance 18% Per Annum
For Lease Finance 18% Per Annum
For Running Finance 18% Per Annum

Recovery of Mark up
In case of lease finance & Demand Finance the mark up will be recovered along with
the installment on quarterly basis. In case of Running Finance Facility, the mark up will be
recovered on quarterly basis.
Validity
Running Finance to be settled in One Year along with mark up from the date of initial
disbursement of Running Finance. Five years in case of Lease Finance Facility. Five years in
case of Demand Finance Facility.
Repayment
20 equal quarterly installments (Principal and Mark up) in case of Lease/Demand
Finance Facility. Running Finance to be settled once a year along with total mark up.

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PRICE

“The amount of money the customers pay for the product of a company”.

BOP provides different products and services to its customers, that have been discussed in
previous section. Pricing of products means the commission to be paid by the customer in
return of services provided by the bank. The commission paid for the services mainly
includes:

 Mark up/ interest


 Bank charges
 Fees and bank commission etc.

These charges and commissions are prescribed on Schedule of Bank Charges (SOC) that
keeps on changing time-to-time, and issued by the bank periodically (generally after six
months).

There has been a lot of controversy regarding the price of banking companies. Some
scholars argue that the mark up received by the bank is rent for capital that is used by others.
On the contrary, some call it purely Riba. This however is a very controversial and sensitive
issue

PROMOTION

“All activities that a company undertakes to communicate and promote its products”.
This is an age of competition. Numerous organizations are providing financial
services to the customer. These days everyone is facing pressure of competitors. In this world
of growing competition, the only way to survive and grow, for an organization, in the market
place is the proper marketing and promotion of its products. Same is the case with banking
companies. There is large number of foreign and local banks working in the country and it
has been noticed that they are emphasizing much on their marketing strategies. In this
scenario, the key for a bank to succeed and attract its customers is adequate promotion of its
products &services. The bank can attract and retain its customers through:

49
 Sales Promotion
 Advertisement
 Direct Marketing
 Public Relations

The most prominent and important way to attract a large number of customers is the
advertisement of bank and its products/services. Punjab Bank has adopted different
approaches for the accomplishment of this purpose. Due to Punjab Bank’s assistance for the
construction of fountain in Liberty Market Square, it is named as Punjab Bank Square. BOP
Square, for being situated in such a business and commercial area has its unusual importance
and has resulted into bank’s promotion.

Development of Islamic branches in main cities is going to be the revolutionary step


for BOP. It would not serve just as a traditioinal branch only, but it would also be a great
source of ever growing marking and promotion of bank.
BOP issued its own rupee travellers cheques with highest denomination during the course of
my internship. I have seen some colored advertisements of
However, one drawback or shortcoming is that, 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. Since, BOP s major competitor United Bank Limited has
started large media campaign, so keeping in view these threats, Punjab Bank should
emphasize more on its advertisement.
Along with the advertisement, the bank is providing personal services to its clients with
maximum security as other banks provide. Bank also encourages the public relation policy of
marketing.
Some brochures and promotional material has been printed but it is distributed mainly
through the clients who visit the branch for their day-to-day business or through the
customers who come to get information about new schemes launched by the bank.

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PLACEMENT

EVERYTHING WE DO IS FOR YOU

“The activities a bank undertakes to make products and services easily available or
accessible to the customers”.
Bank of Punjab objective has been to expand its branch network to meet clients
needs. Bank is well positioned and geographically poised, to cater for increased business
demands, from its existing potential clientele. During last year under review, BOP opened
60+ new branches and presently it has 500+ branches, spread all over Punjab covering major
business centers and principle cities. Bank plans to add more branches to his growing
network in the ensuing years.

At present, BOP has opened all its branches at commercial and business areas or near
to commercial areas so that the customers or clients face no problem in reaching the bank.
Head Office of BOP is situated in Lahore.

Additional Services Provided by the bank

Account types

BOP ASAAN Current Account

Opening of a bank account is not an easy task nowadays. A long list of formalities is
required to open a bank account. The Bank of Punjab is now introducing a simplified account
"BOP Asaan Current Account". This is a current chequing account for low risk common
people/individuals who face difficulties in account opening due to strict
requirements/formalities. These segments of society may include but are not limited to self
employed, pensioners, students, farmers, women/housewives, young adult population, work
force etc.

Salient Features

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 This is a nonprofit bearing account with value added features.

 Account can be opened with minimum of Rs.100/- as initial amount.

 Account can be opened as individual, joint or minor type.

 Account can be opened with minimum formalities and on one pager account opening form.

 There is no minimum balance requirement.

 There are no Service Charges.

 The account will preferably be ATM/Debit Card based. However; cheque book may be issued
as per choice of the customer.

 Master Debit Card at subsidized rate of Rs.250 per annum for both issuance and renewals.

 1st cheque book of 25 leaves is Free.

 Online – within city/ Intercity (Cash and Transfer Both) facility is available as per SOC of
corresponding period.

 SMS Alert service is available at subsidized rate of RS. 35/- per month for Flexcube Branches
and for BOP2001 branches @ Rs. 420/- per annum.

 Per Month Total Debit Limit is Rs.500,000/-

 Total Credit Balance limit is Rs.500,000/-

 Account can be converted into normal current account after completion of remaining formalities
if later on, accountholder requires financial services for higher amounts than the above specified
limits.

 Existing Basic Banking Accounts (BBA) can be converted into BOP Asaan Current Account as
per terms & conditions.

 Free e-banking facility to view account balance and statement of account is available.

 Free of Cost Utility Bills Deposit Facility through BOP ATM Network, BOP Phone Banking
and self service IVR system is available.

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BOP ASAAN Saving Account

Opening of a bank account is not an easy task nowadays. A long list of formalities is required to
open a bank account. The Bank of Punjab is now introducing a simplified account "BOP Asaan
Saving Account". This is a saving chequing account for low risk common people/individuals
who face difficulties in account opening due to strict requirements/formalities. These segments
of society may include but are not limited to self employed, pensioners, students, farmers,
women/housewives, young adult population, work force etc.

Salient Features

 This is a profit bearing account (normal PLS Saving Bank profit rate as declared from time to
time) with value added features.

 Account can be opened with minimum of Rs.100/- as initial amount.

 Account can be opened as individual, joint or minor type.

 Account can be opened with minimum formalities and on one pager account opening form.

 There is no minimum balance requirement.

 There are no Service Charges.

 The account will preferably be ATM/Debit Card based. However; cheque book may be issued
as per choice of the customer.

 Master Debit Card is subsidized at Rs.250/- (plus taxes) per annum for both issuance and
renewals.

 Online facility (within city/ Intercity) available as per SOC.

 Per Month Total Debit Limit is Rs.500,000/-

 Total Credit Balance limit is Rs.500,000/-

 Account can be converted into normal saving account after completion of remaining formalities
if later on, accountholder requires financial services for higher amounts than the above specified
limits.

 Free e-banking facility to view account balance and statement of account is available.

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 Free of Cost Utility Bills Deposit Facility through BOP ATM Network, BOP Phone Banking
and self service IVR system is available.

Basic Banking Accounts

Salient Features

 This is a Non profit bearing chequing account product.

 The deposit product is available especially for customers like students, mustehkeen-e-zakat,
salary accounts of government and semi government employees, pensioners, widows and
children of deceased employees eligible for family pension/benevolent fund grant.

 The Account can be opened with an initial/minimum deposit of Rs.1,000/-

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

 There is no limit for maintaining minimum balance in the account. However; if balance in BBA
account remain "NIL" for continuous (06) months period, such accounts will be closed by the
bank.

 Account holder will be allowed a maximum of 2 deposit transactions and 2 chequing


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 Bank's own ATM's will be allowed.

 Free e-banking facility to view account balance and statement of account is available.

 SMS Alert facility is available subject to payment of annual charges as per bank’s schedule of
charges.

 Free of Cost Utility Bills Deposit Facility through BOP ATM Network, BOP Phone Banking
and self service IVR system is available.

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BOP Current Account

This is a chequing account deposit product especially designed to cater the day to day needs of
individuals as well as business entities.

Salient Features

 This is a Non profit bearing chequing account.

 The deposit product is available for all types of general public including individuals,
partnership, Public / Private Limited Companies, Trust, Not for profit organizations, government
and semi government organizations and any type of business entities.

 No limit for debit / credit transactions.

 Free e-banking facility to view account balance and statement of account is available.

 SMS Alert facility is available subject to payment of annual charges as per bank’s schedule of
charges.

 Free of Cost Utility Bills Deposit Facility through BOP ATM Network, BOP Phone Banking
and self service IVR system is available.

PLS Saving Bank Account

Salient Features

 This is a profit bearing chequing account product.

 The deposit product is available for all types of general public, govt/semi govt organizations,
companies, business entities etc who are eligible to open account as per bank’s criteria.

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

 Calculation of profit is on monthly average balance method.

 Payment of profit is on half yearly basis.

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 Free e-banking facility to view account balance and statement of account is available.

 SMS Alert facility is available subject to payment of annual charges as per bank’s schedule of
charges.

 Free of Cost Utility Bills Deposit Facility through BOP ATM Network, BOP Phone Banking
and self service IVR system is available.

BOP Salary Plus Account

This is a current chequing account product which can be opened by any salaried individual who
is working for an organization that is maintaining its salary disbursement account with BOP.

Salient Features

 The main focus is on employees of govt/semi govt organizations, their allied corporations,
autonomous bodies and private sector entities

 This is a Non profit bearing account

 Free Issuance of 1st ATM/Master Debit Card

 Free Online Transfer Facility (upto 3 Gross Salaries in a Month)

 Free Collection of Outstation Cheques (upto 3 Gross Salaries in a Month)

 Free Life Insurance of Rs.500,000/- on maintaining Minimum Monthly Balance of Rs.50,000/-


(terms, conditions & exclusions of insurance company will apply)

 Consumer Loan Facility on Attractive Terms.

 Option to avail salary loan (terms and conditions apply)

 Free e-banking facility to view account balance and statement of account is available.

 SMS Alert facility is available subject to payment of annual charges as per bank’s schedule of
charges.

 Free of Cost Utility Bills Deposit Facility through BOP ATM Network, BOP Phone Banking
and self service IVR system is available.

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BOP Youth Education Account

This is a current chequing account product especially designed for young students studying in
schools, colleges and universities with additional feature of Free of Cost Education Insurance
Coverage on maintaining Minimum Monthly Average Balance of Rs.100,000/-.

Salient Features

 The product is especially designed for students attending any kind of educational institution.

 This is a Non profit bearing account.

 Students upto age of 30 years will be allowed to open the account in this scheme. If the age of
student is below 18 years, minor/guardian account will be opened and new/normal YEA
account will be opened upon submission of CNIC of the student, as per existing procedure.

 Account can only be opened in Minor/Guardian and Student categories. Joint Accounts are not
permitted.

 There is no minimum balance limit hence account maintaining charges will not be applicable.

 Free of cost ATM/Master Debit Card (issuance & subsequent renewals).

 Issuance of free of charges Payment Orders/ Demand Drafts favouring any Educational
Institution.

 The Student qualifying for education cover must be an account holder for atleast One Calendar
Month.

 Student will be provided Insurance cover as long as he/she is less than 30 years of age or his/her
parent/guardian is in the age band of 18-60 years. Frequently Asked Questions

 Bank will provide free of cost education insurance cover to student amounting Rs.20,000/- per
month for 24 months in case of Natural Death and Permanent Total Disability of
Parent/Guardian (one person only), whose name has been reported to the bank at the time of
account opening.

 In case of Accidental Death, the insurance cover will be doubled to Rs.40,000/- per month for
24 months. Terms, conditions & exclusions of insurance company will apply.

 Free e-banking facility to view account balance and statement of account is available.

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 SMS Alert facility is available subject to payment of annual charges as per bank’s schedule of
charges.

 Free of Cost Utility Bills Deposit Facility through BOP ATM Network, BOP Phone Banking
and self service IVR system is available.

BOP Young Lions Saving Account

This is a PLS Saving Bank deposit product which provides a disciplined method of savings to all
the children. The account will be opened with Parent/Guardian.

Salient Features

 This is a chequing account product.

 It is available for all children less than the age of 18 years.

 Account will be opened as Minor account with Child (M)/Parent or Guardian (G).

 Calculation of profit is on monthly average balance basis.

 Payment of profit is on monthly basis.

 Free complimentary issuance of first Cheque Book of 25 leaves.

 Free complimentary issuance of first ATM/Debit Card.

 Free e-banking facility to view account balance and statement of account is available.

 SMS Alert facility is available subject to payment of annual charges as per bank’s schedule of
charges.

 Free of Cost Utility Bills Deposit Facility through BOP ATM Network, BOP Phone Banking
and self service IVR system is available.

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3C Analysis

 Company
 Competitor
 Customer

Company
1st C in 3c Analysis

Swot Analysis

STRENGTHS

 Service quality standards are designed & monitored to ensure a consistent and
convenient customer experience.

 Products & services are as diverse as market segments. Bank has


structured and syndicated financing arrangements, working capital
finance, financing of international trade, consumer credit, small
business loans, credit cards and ATM cards.

 The human resource philosophy at BOP focuses on multi talented


hiring, professional grooming, requisite training and merit based
reward system.

 Staff welfare has always been a priority. New initiatives like


hospitalization plan, home loan insurance have added new dimensions
to the staff-care policy and motivated them to out-perform competitors.

 Bank enjoys a strategic competitive advantage over all domestic players by


virtue of its leadership in technological innovations.

 Bank has fully automated transaction-processing systems for back-


office support.

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 Bank's branch network is connected on-line real-time and customers
have access to off-site as well as on-site ATMs, all over Pakistan.
 Bank also is pioneer in e-commerce venture in Pakistan through a
major retail distributor.
 From a humble beginning with just 10 branches in 1993, today bank
enjoys a network of 500+ outlets, spread across the country. A
network of self-service ATMs supports these outlets.

WEAKNESSES

 Bank is providing credit facilities only to the urban areas not too

much attention is paid to the rural areas.

 As Pakistan is agriculture country but no special schemes for the agri- loans.

 Bank is not giving emphasis on the small-scale businesses, which are

large in number in Pakistan.

 There is enormous difference between the bank-lending rate and

return on deposits.

 The procedure and documentation while sanction loan is thorny, which

is a barrier for advances.

 Bank gives targets to employees for deposits due to this reason they pay

more attention to fulfil these targets to save their jobs. This distracts

their attention from their duties.

 No job security is there for the employees, and no union exits to secure them.

 BOP has only agency arrangements with the foreign banks, no branch

exists outside the Pakistan, while their main competitors have their

own branch network outside the Pakistan.

 To improve the services and to remove the problems of customer

the bank has no customer complaint department.

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 Limited locker facility is there, which does not fulfill the

requirements of customer and charges of lockers are also very high.

OPPORTUNITIES
 Bank has a small branch network so The Bank of Punjab can increase

its turnover though increase the number of branches.

 Bank has no foreign branches so it should open its branches outside

the country especially in U.K, U.S.A and in U.A.E.

 Facilities like financing of housing should also be offered to general

public especially in the urban areas.

 In cities like Rahim Yar Khan there is a potential for giving

credit facilities to farmers.

 To increase its advances bank should focus small scale industries

and choose one among them and then a special scheme of lending

should be introduced for that particular small scale industry.

THREATS
 Law and order situation in Pakistan is faulty that is why people are not

confident to invest anywhere.

 The markets rates are now at extremely low levels, with very little chance

of their going up during the rest of the year. The low interest rate means

low profits for the banks.

 Saving rate in Pakistan is very low i.e.15% as compared to 30% in

China and 40% in Malaysia.

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 As the banking procedures are complicated that is why general

public takes interest into other options of investments like in

shares of companies and in Term Finance Certificates.

 Now the world is a global village so competitors may rise

from anywhere in the world at anytime.

 In near future the world is going to be free trade zone so the concept of "survival of

the fittest" will be in action.

 After the 11 September incident and due to terrorist activities in

Pakistan the economy is moving very slow. It means less investment

and as a result low loan demands.

 High rate of taxes on banking companies.

 SBP have a heavy penalty on banks for violating the Prudential

Regulation. So it requires greater care while advancing.

 Increasing ATM trend among the banks also requires attention of

the management to this side.

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PEST analysis of any industry investigates the important factors that affect the industry and
influence the companies operating in the sector. PEST stands for Political, Economic, Social
and Technological analysis. The PEST Analysis is a tool to analyze the forces that drive the
industry and how those factors can influence the industry.

 POLITICAL

 ECONOMICAL

 SOCIO CULTURAL

 TECHNOLOGICAL

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PEST analysis at a Glance

64
POLITICAL FACTORS

Government policies affect the banking sector. Sometimes looking into the
political advantage of a particular party, the Government declares some measures to their
benefits like waiver of short-term agricultural loans, to attract the farmer’s votes. By
doing so the profits of the bank get affected. Various banks in the cooperative sector are
open and run by the politicians. They exploit these banks for their benefits. Sometimes
the government appoints various chairmen of the banks. Various policies are framed by
the SBP looking at the present situation of the country for better control over the banks

FOCUS ON REGULATIONS OF GOVERNMENT

Government affects the performance of banking sector most by legislature and


framing policy government through its budget affects the banking activities securitization
act has given more power to banking sector against defaulting borrowers.

MONETARY POLICY

Bank Rate: The Bank Rate has been retained unchanged (Bank rate is the rate charged by the
central bank for lending funds to commercial banks.
Repo Rate It has been reduced under the Liquidity Adjustment Facility (LAF)

Repo Rate : (Repo rate is the rate at which the central bank of a country (Reserve Bank of
India in case of India) lends money to commercial banks in the event of any shortfall of
funds. Repo rate is used by monetary authorities to control inflation.) from 3.5% to 3.25%
with immediate effect

FDI LIMIT
The move to increase Foreign Direct Investment FDI limits to 49 percent from 20
percent during the first quarter of this fiscal came as a welcome announcement to foreign
players wanting to get a foot hold in the Indian Markets by investing in willing Indian
partners who are starved of net

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worth to meet CAR norms. Ceiling for FII investment in companies was also increased
from 24.0 percent to 49.0 percent and have been included within the ambit of FDI
investment
ECONOMIC FACTORS
Banking is as old as authentic history and the modern commercial banking are
traceable to ancient times., banking has existed in one form or the other from time to
time. Every year SBP declares its 6 monthly policy and accordingly the various measures
and rates are implemented which has an impact on the banking sector. Also the budget
affects the banking sector to boost the economy by giving certain concessions or
facilities. If in the Budget savings are encouraged, then more deposits will be attracted
towards the banks and in turn they can lend more money to the agricultural sector and
industrial sector, therefore, booming the economy. If the FDI limits are relaxed, then
more FDI are brought in Pakistan through banking channels

GROWING ECONOMY / GDP

It is great news that today the service sector is contributing more than half of the
GDP. It takes PAKISTAN one step closer to the developed economies of the world.
Earlier it was agriculture which mainly contributed to the GDP. The Pakistani
government is still looking up to improve the GDP of the country and so several steps
have been taken to boost the economy.

LOW INTEREST RATES

SBP controls the Interest rate, which is based on several monetary policies.
Recently SBP has reduced the interest rate which stimulates the growth rate of banking
industry. Call money rates (borrowing & lending) were in the range of 1.50-3.47 per cent
as compared with 5.25-11.00 per cent on the corresponding date of last year

INFLATION RATES

Inflation represents a rise in general level of prices of goods and services over a
period of time. It leads to erosion in the purchasing power of money. Resultantly, each
unit of currency buys fewer goods and services

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Different fiscal and monetary policies have curbed the Inflation rate. To fight against the
slowdown of the Economy, Government of Pakistan & SBP took many fiscal as well as
monetary actions. Clubbed with fiscal & monetary actions, decreasing commodity prices,
decreasing crude prices and lowering interest rate, we expect that economy could again
register a robust growth rate in the year 2018-19

SAVINGS AND ACCOUNTS


As stated earlier Pakistan continues to remain one of the high savings economies among
the emerging market economies. Gross Domestic Savings (GDS) of the Pakistan economy
constitutes savings of public, private corporate and household sectors. In the recent period
the high growth performance of the Pakistan economy is driven by rise in savings

AGRICULTURE CREDIT
Agriculture has been the mainstay of our economy with 70% of our population deriving
their sustenance from it. In the recent past, the sector has recorded a growth of about 4% per
annum with substantial increase in plan allocations and capital formation in the sector. The
target for agriculture credit flow for the year 2018-19 is being set at Rs.4,25,000crore. To
achieve this, I propose to continue the interest subvention scheme for short term crop loans to
farmers for loans upto Rs.5 lakh per farmer at the interest rate of 7% per annum. For this
year, the government shall pay an additional subvention of 1% as an incentive to those
farmers who repay their short term crop loans on schedule

SOCIO CULTUREAL FACTORS


Socio culture factors also affect the business. They show in which people behave in
country. Socio-cultural factors like taboos, customs, traditions, tastes, preferences, buying
and consumption habit of people, their language, beliefs and values affect the business.
Banking industry is also operates under this social environment and it is also affect by this
factor.
These factor are changing continuously people’s life style, their behavior, consumption
pattern etc. is changing and also creating opportunities and threat for banking industry. There
are some socio-culture factors that affect banking in Pakistan have been analyzed below.

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SHIFT TOWARDS NUCLEAR FAMILY

Attitude of people of Pakistan is changing. Now, younger generation wants to remain


separate from their parents after they get married. Joint families are breaking up. There are
many reasons behind that. But banking sector is positively affected by this trend. A family
need home consumer durables like refrigerator, washing machine, television, bike, car, etc.
so, they demand for these products and borrow from banks. Recently there is boost in
housing finance and vehicle loans. As they do not have money they go for installments. So,
banks satisfy nuclear families wants.

CHANGE IN LIFE STYLE

Life style of Pakistan is changing rapidly. They are demanding high class products. They
have become more advanced. People want everything car, mobile, etc. what their fore father had
dreamed for. Now teenagers also have mobile phones and vehicle. Even middle class people also
want to have well furnished home, television, mobile, vehicle and this has opened opportunities
for banking sector to tap this change. Everything is available so it has become easy to purchase
anything if you do not have lump sum.

POPULATION

Increase in population is one of the important factor, which affect the private sector
banks. Banks would open their branches after looking into the population demographics of
the area. Percentage of deposit in any branches of banks depends upon the population
demographic of that area. About 70% of population is below 35 years of age. They are in the
prime earning stage and this increase the earning of the banks. Deposits showed a subdued
growth during 2017-18.Income distributions also affects the operations and overall business
of private sector banks.

LITERACY RATE

Literacy rate in Pakistan is very low compared to developed countries. Illiterate


people hesitate to transact with banks. So, this impacts negatively on banks. But there is

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positive side of this as well i.e. illiterate people trust more on banks to deposit their money;
they do not have market information. Opportunities in stocks or mutual funds. So, they look
bank as their sole and safe alternative

69
TECHNOLOGICAL FACTORS
TECHNOLOGY IN BANKS

Technology plays a very important role in bank’s internal control mechanisms as well
as services offered by them. It has in fact given new dimensions to the banks as well as
services that they cater to and the banks are enthusiastically adopting new technological
innovations for devising new products and services.

ATM
The latest developments in terms of technology in computer and telecommunication have
encouraged the bankers to change the concept of branch banking to anywhere banking. The use
of ATM and Internet banking has allowed ‘anytime, anywhere banking’ facilities. Automatic
voice recorders now answer simple queries, currency counting machines makes the job easier
and self-service counters are now encouraged. Credit card facility has encouraged an era of
cashless society. Today MasterCard and Visa card are the two most popular cards used world
over. The banks have now started issuing smartcards or debit cards to be used for making
payments. These are also called as electronic purse. Some of the banks have also started home
banking through telecommunication facilities and computer technology by using smart phone
applications and they can make the balance inquiry, get the statement of accounts, give
instructions for fund transfers, etc.

IT SERVICES & MOBILE BANKING

Today banks are also using SMS and Internet as major tool of promotions and giving
great utility to its customers. For example SMS functions through simple text messages sent
from your mobile. The messages are then recognized by the bank to provide you with the
required information. All these technological changes have forced the bankers to adopt
customer-based approach instead of product-based approach. Technology advancement has
changed the face of traditional banking systems. Technology advancement has offered 24X7
banking even giving faster and secured service.

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CORE BANKING SOLUTIONS

It is the buzzword today and every bank is trying to adopt it is the centralize banking
platform through which a bank can control its entire operation the adoption of core banking
solution will help bank to roll out new product and services.

Porter five force model


Entry barriers
The Pakistani market is highly regulated by the government and also by the central bank.
A lot of decisions such as regularization of interest on loans and deposits as well as money
supply Is controlled by the state bank of Pakistan.
Therefore barrier to entry is high.
Rivalry among the existing competitor
When it comes to the banking sector in the country we could include in whole lot of
public as well as private banks along 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 finance
institutions.
Rivalry is high among competitors.
Bargaining power of suppliers
The supplier of banks is the people from who bank raise funds. So major sources funds
come from their customer who becomes the supplier in this case.
Bop and other commercial banks face high supplier power.
Bargaining power of the customer
The customer and the depositors have a high bargaining power in the markets. Any bank
giving the higher rate of interest would effects the large number of customer, because there are
number of banks operating in the market which offer similar services.
Threat from substitutes
There are number of substitutes in retail finance industry such as money lender micro
finance and also the insurance companies. Banks are seeing their competition rising from
unconventional companies. In markets like Pakistan customer have high propensity towards
switching to other substitutes.

71
SWOT Matrix
Strength Weakness
1. BOP 51% share by 1. Losing the customer trust due
the government of Pun to scam.
jab.
2. Able to swift business 2. Lacking of internal controls
environment. 3. No
3. Bank work under advertisement on electronic m
superior management edia.
4. The State Bank of Pakistan
4. Fully committed to control is weak
follower road map.
5. BOP work fairly with
their customer.
Opportunities OS OW
1. BOP support
(S1,O1) since the bank of (O2,W1) BOP wants to build
agriculture and
Punjab is hold by the customer relationship but they are not
industry sector. government of Punjab and we able to do because of all the scam
2. BOP focus is on all know Punjab is the which has happened in the BOP have
customer satisfaction.agriculture land so different effect the reputation of the Bank.
3. Focus on e-banking. kind of finance package
4. Punjab schemes are should be launch for the
supported by BOP. famers.
5. Adopting new
(S5,O2) since bank of Punjab
technology. want to build customer
relationship so they work hard
and provide satisfaction to
them
Threats TS TW
1. Economic growth (T1,S2) BOP always swift (T2,W1) people are not trusting the
slow. with the business environment BOP and the reason for that is because
2. Lacking of trust in but the economic growth is there are huge scams in the BOP
BOP slow not many new business cause SBOP control is weak on BOP.
3. Facing strong are starting.
competitor

72
Boston Consultant Group Matrix (BCG) Model

73
Competitor
(3c Continuation)

SWOT Analysis of National Bank of Pakistan

Strengths

Custodian of Govt
N.B.P is a Custodian of government capital and Govt. Business owner as well as custodian of public
money
Agent of State Bank
N.B.P work as agent of State Bank of Pakistan
Old and sound Financial institution
N.B.P is old and Sound financial institution among other banks and high profitability and it is the
lender of govt. agencies.
Western union facility
National Bank of Pakistanis only one bank which provides the facility of Western union to their
customer. Through western union money is transfer in Pakistan from aboard.
Vast Network
N.B.P is the first bank which has huge operational network all over the Pakistanas well as abroad
Job Security
Employee Job security, benefit and recognition hard work of staff through incentives
Customer Satisfaction:
Due to govt. bank, Customers feels secure their money in N.B.P and enjoy the satisfaction
Online Banking:
Online Banking is also strength of N.B.P because it has more then 150 branches is online. It helps
the fast service to the customers and we also check the balances and daily transactions just at one
key press.
Highest Rating and Receive awarded
N.B.P highest credit rating bank in the Pakistan among all other banks and received many awards
locally and internationally due to its efficiency.
Product and Services
N.B.P launch many products and services to their customer so N.B.P try to improved the quality
of life our customer

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Rules and Regulation
Employees of N.B.P are strict follow the rules and regulation impose by the bank. In this way
the output of the bank is enhances.
More Deposit
N.B.P has a lot of deposit of the customer among the other bank in the market.

Weaknesses

Poor Dealing
Employees of the bank know that their job is secure so their behavior with customer is not
professional.N.B.P Employees rudely behave with customers and as well as with each other.
Lack of Computerized Network
Lack of computerized network which cause the more time consume, energy and mental stress in
rush face the employee. The bank lacks the modern equipment, outdated systems and procedures
Political pressure
Being Govt. bank political pressure affects the negative way and provides the loan to the
customer under pressure which creates the negative affect on bank employee.
Lack of online Branches
Online work in now day is become very popular but N.B.P has limited online branches
Lack of Advertisement of Product
Lack of modern financial/banking product, the bank falls far behind when innovative and new
schemes are considered. There are no proper system for advertisement & marketing of products
Lack of IT infrastructure
Lack of IT infrastructure and some time IT system is hanged so bank could not provide the
information to their customer on time.
Favoritism
The promotion and bonuses are powered by senior favoritism will and decision which affect the
employee’s performance negatively. That is why, Condition of Bank branches is very poor and
service to the clients is slow
Decision making
Resistance to change and decision making process are slow.

Opportunities
Growing Banking System

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Nowadays banking system is growing rapidly so N.B.P have opportunities to apply advance
standard and more contribute into the market.
Trust Due to Govt Bank
N.B.P more trustable due to government bank so it has opportunity to improve itself and increase
market share among other banks
Economic Activities
Now a day economic and business activities are increasing, N.B.P play roll in trade and
commerce for the benefit of their customer. N.B.P has vast opportunity to introduce new products
and services because its branches spread all over the Pakistan and it has large number of
customer.
Electronic Banking
Now a day, a world becomes a global village due to advancement of technology particularly in
computer field. So N.B.P introduce new technology to provide the good service of their customer.
Marketing Plan
Develop organize the aggressive marketing plan for promotion the bank and its products. Can
lunch a marketing strategy and offer new and innovative products to capture the business from
other banks.
Increase Business

N,B,P has ability to become number one bank in Pakistan due to vast operational network, large
number of customer area and government of bank. With proper planning can hunt more and
more business from the public and private sector as people still trust over it.

Threats

Number of Commercial Bank


Number of commercial bank are opened, operating their business and provide same facilities
and product to the customer which provide N.B.P so It is threat for N.B.P.
Competition with other Banks
Competition with foreign bank because they offer many service to their customer are totally free
or minimum prices.
Political Influence
Political influence is also threat for N.B.P because it is a government bank and political pressure
affects the performance of it.

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Customer Satisfaction
Customer satisfaction is very important for business but in N.B.P there are no proper systems
to remove the customer complaints for its satisfaction.
High Interest Rates
N.B.P receive high interest rate when other banks offer lower interest rates. Interest rates
offered by N.B.P like interest on loan, extra higher service charges.

Customer
3c Continuation

Swot Analysis of Customers

Strengths
 More options to choose
 More than ever branches available
 Increasing Competition in Banks
 Select the bank of his/her choice on utility basis
 Use of internet to search for the best alternative
Weaknesses
 A lot of data is available on internet but there is difficult for general public to get knowledge
 Misjudge/Misinterpret information
 BDOs (Business Development Managers/Officers) can use their special tactics &
experience to change the perception of people about specific bank
 Online development & advancement made easier to do frauds if someone is doesn’t has
knowledge of online banking
Opportunities
 Can select the best option for him/her by doing little effort
 Aware himself/herself with latest technology adapted by banks
 can switch towards a better alternative easily

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 select from a wide range of accounts available
 can use the option of flexible loan/installment options
Threats
 Little knowledge of bank charges
 Scammed by the bank employees
 Computer Hacking & ATM frauds
 Profit ratio of depositing is continuously decreasing

Additional services offered by BOP

The Bank of Punjab is providing subsidized motorcycles for women. The aim of this
project is to empower women and make their day to day travelling easy and on the go

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The Bank of Punjab is now offering eBank Statement so a customer can collect his/her
statement without any inconvenience

The official application of State Bank of Pakistan for increasing awareness about security
features of Pakistani Banknotes.
The app will help you to identify and check the security features of Pakistani Banknotes
and save yourself from the risk of counterfeit notes. Simply select the desired banknote
image and know the security features of Pakistani banknotes.
The App contains information about Pakistani Banknotes in English as well as in Urdu
language.
Bop has adapted the application & promoting it further

The Bank of Punjab is offering Car Finance with a creative name (CarGar) & completing
the paper formalities in 24 hours

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With the help of Punjab Government The Bank of Punjab has financed 50000 vehicles & provided
thousands of people a reasonable job opportunity.

The Bank of Punjab is offering special loans for businesses for their logistics support &
helping them strengthening their supply chain.

The Bank of Punjab is playing its role in awaring the people with fake investment
opportunities & illegal amount transfer mediums.

80
All branches of BOP are offering E- Stamping facility. People now can get their required
stamp papers quickly.

BOP is offering a special discount offer by upto 30% discount on famous brands like
Macdonald’s &Firdous

81
Through BOP mobile application customers can transfer funds – check their account balance
– manage their transactions and much more

82
Activities I performed In THE BANK OF PUNJAB During My Internship. (Jhelum
Cantt Branch)

Introduction & started learning generally about the working of branch


Week1
 On the very first day the branch manager Mr. Malik Amjad Hussain introduced me
with the staff & asked several questions about my degree.
 After introduction Mr. Awais Naveed (Manager Operations) told me the rules &
regulations of the bank. He also told me my limitations in the branch
 The bank officer Mr. Qasim Naveed guided me about the deposit slip and told me
about the use of deposit slip. After this I started filling the deposit slips of different
customers throughout.

 I learnt to fill the account opening form the bank officer Ms. Tamseela.
o She told me the correct way to fill it, necessary documents that are to be attached,
the stamping process & the online sending of data of new account holders to the
head office

 During week 1 I learned to issue the cheque books to the customers.

 I helped the account opening officer Mr. Abdul Razaq to maintain the necessary
papers of different account holders during the account opening procedure.
 I daily performed the activity to maintain the Signature Specimen card.

83
Week 2
Account opening & CSO

 On the 1st day of 2nd week I was given the task to arrange the cheque book requisition
slips date wise. This was a hectic task and took 3 full days to complete.

 I learnt the process of applying the new cheuqe book of existing customers
 What to do if the customer loses his/her cheque book
 What to do if the cheque book is finished

 I learnt the process of applying ATM card


 And procedures to apply the new one and block the older one if the card gets lost.

 The branch Manager Mr. Amjad allowed me to see the process of filling the ATM
machine with cash (I was not allowed to touch anything)
 This was the technical one

 Mr. Qasim told me the techniques to trouble shoot ATM machine if it is not working or if
the card gets stuck.

 During the 2nd week the branch was visited by Area Manager and he briefly discussed the
targets ahead with staff.

84
Week 3
E-Stamping & Record Keeping

 Mr. Qasim told me about the e-stamping facility at the branch


 He told me the procedure to issue the stamp paper, the necessary documents that are to be
attached. I was not authorized to issue the stamp paper my task was only to observe the
procedure

 I was given the task to differentiate the cheuqe books in two groups so that expired
cheque books can be destroyed (according to BOP policy if the customer does not collect
his/her cheque book within 60 days the bank is authorized to destroy it)

 I was given a cheque book record maintaining register and my task was to balance the
cheque books daily with the online record & with the no of cheque books that are
currently present in the branch

 During the third week there was a meeting between the Managers of the bank of Punjab
(Civil Lines branch- Dina Branch & Jhelum Cantt branch) My task was to listen the
discussion & learn the professional way to attend the meeting.

 My duty was to guide the people about the current offers of the bank

 Mr. Qasim showed me the server room & told me about the internal network of branch

85
Week 4

 At the start of week 4 there was almost end of Ramzan and govt of Punjab directed the
BOP to pay the advance salaries of government employees before Eid Holidays
 Due to this the bank was rushed with customers & my task was to fill the cheques of
people who are unable to fill them & tell them their account balance

 Additionally I was ordered by the Manger to assist any person of staff who has more
work to do

 During week 4 I was fully able to issue cheque book, request a new one & learnt to apply
for ATM card without any guidance. I completed the process and after closing the papers
were signed by the concerning officer.

 I also fully learnt to fill & stamp the account opening form. I filled it & stamped with
care, attached documents & at last singned by the manager

 Mr. Qasim took me to the District account office to submit the record of e-stampimg. I
also visited the District Accounts Office and met with Accounts Officer. He briefly
explained the purpose of account office and their daily activities.

86
Week 5
Assignment from Regional Office
Personally observed employee hiring procedure through interview

 The account opening officer was given the task by the head office to check the
validity of CNICs of all account holders through NADRAs website of the branch. The
MS Excel file was attached in the Email and account opening officer handed over this
task to me

 That was a huge Excel file containing the name, account numbers & CNIC numbers
of the account holders

 My task was to individually check the CNIC expiry of each account holder on
NADRAs website (I was provided with the special login) and write the expiry date on
the required place in that Excel file

 After checking & writing the expiry date I had to print that webpage through
NADRAs website and place it in the required bank record file.
 This was a lengthy task and took almost a week to complete due to rush of customers
in the bank & my other activitied that I had to perform

 During this week I had the opportunity to see the employee hiring process in the bank
 The interview was conducted by HR department & Mr. Amjad who is the manger &
currently Vice president at BOP
 This opportunity allowed me to observe the interview process & I learned how to
tackle the tricky questions. I also observed the mistakes done by the candidates.

87
Week 6
CSO & Account Opening

 This was my last week at the bank & other internee joined in. My task was to explain
him the tasks I learnt & guiding him the things I learnt

 I was allowed by the Manager to accompany cash officer to the main branch in
receiving fresh cash from National bank main branch. I met the manger National
Bank & visited that branch. I observed the procedure to collect fresh cash from the
bank & assisted cash officer in counting the amount and handed over it to the Askari
Guards
 The procedure was:
 Present the cheque
 Go the Main cash centre at National Bank (only authorized people can go
there)
 Count the cash
 Take a special sack & put all the money in it in the presence of bank officials.
 Seal the sack with special seal
 Note the seal number
 Fill the undertaking receipt (provided the Askari Guards) it includes the
branch details , officer details & the destination of cash
 Hand over that sack to the guards & take that undertaking receipt back to the
branch.
 After some time the cash arrives & cash officer matches the seal number with
the receipt.

 This was the 1st time in my life to see the high tech security systems & advance cash
management procedures. I also seen the huge cash sorting facility at the Naional Bank
main Branch

 Just before few days to Eid I was frequently sent by the manager to collect cash form
Al Barka bank (through sms service introduced by the Govt. maximum amount was
Rs18000 on one CNIC)

88
 I continued the tasks that are mentioned above

 After completing internship I visited the branch & collected my internship letter that
is attached with this report.

My Limitations in the Bank

 The work on the computers of the bank was not allowed to me. I have to seek
permission from the concerning officer
 Work on the cash counter was not allowed to me.
 Disclose the personal information about someone or something related to bank
was prohibited during my internship.
 Issuance of cheque book / ATM card without the signature of concerning officer
was not allowed to me.
 Show bad behavior with any customer of the bank.
 Misguide any customer about the bank system.
 It was mandatory for me to follow the bank timings & maintain the proper dress code

Feed Back of the Branch Manager is written in the letter attached with this report.

Branch Information:
Branch Name Bank of Punjab (Jhelum Cantt)
Branch Code 0033
Address Bank of Punjab, Jhelum Cantt.
Phone 0544-629292, 0544-9270196
District Jhelum
Province Punjab

Branch Management:
Branch Manager Mr. Malik Amjad Hussain (Vice President)
Operation Manager Mr. Muhammad Awais Munir
Operation Staff Ms. Zainab Sohail
Operation Staff Ms. Shumaila Hussain
Customer Service Officer Ms.Tamseela Kausar
Cash Officer Mr. Noman Javed

89
Cash Officer Mr. Qasim Naveed Dar
Account Opening Officer Mr. Abdul Razzaq

Financial Analysis
Vertical Analysis of income Statement
2014 2015 2016 2014 2015 2016

Rs.(000) Rs.(000) Rs.(000) % % %

Markup/return/interest
29,521,719 31,266,427 29,674,488 100 100 100
earned
Markup/return/ interest
20,525,783 20,198,798 17,430,154 69.53 64.60 58.74
expensed

Net markup/interest
8,995,936 11,067,629 12,244,334 30.47 35.40 41.26
income
Provision against non-
performing loans and -1,118,605 -3431451 922,236 -3.79 -10.97 3.11
advances-net
Provision for
diminution in the value 110,881 64,815 102,632 0.38 0.21 0.35
of investments
Bad debts written off
---- --- ---- ----
directly

1,229,486 3,496,266 1,024,868 4.16 11.18 3.45


Net markup/interest
income after 7,766,450 7,571,363 11,219,466 26.31 24.22 37.81
provisions
NON MARK-UP/

Fee, commission and


906,494 824,126 974,703 3.07 2.64 3.28
brokerage income
Dividend income 33,258 50,843 61,774 0.11 0.16 0.21

Income from dealing in


183,830 109,280 75,248 0.62 0.35 0.25
foreign currencies
Gain on Sale of
667,322 5,013,546 2,525,572 2.26 16.03 8.51
Securities
Loss on Revaluation
-654 -8522 -1,176 0.00 -0.03 0.00
of Investments

Other income 1,000,180 1,635,068 1,658,309 3.39 5.23 5.59

90
Total interest income 2,790,430 7,624,341 5,294,430 9.45 24.39 17.84

10,556,880 15195704 16,513,896 35.76 48.60 55.65

INTEREST
EXPENSES

Administrative
6,215,031 7,389,591 8,346,001 21.05 23.63 28.13
expenses

Provision against other


-2,416 224382 569,923 -0.01 0.72 1.92
assets

Provision against off


17,875 32274 -485,668
Balance Sheet Items
0.06 0.10 -1.64

Provision against
--- --- ---
receivable from NIT

Other charges 19,727 19958 33699 0.07 0.06 0.11

Total interest
6,250,217 7666205 8,463,955 21.17 24.52 28.52
expenses

4,306,663 7,529,499 8,049,941 14.59 24.08 27.13

Extraordinary /unusual
------ ------- ------
items

PROFIT BEFORE
4,306,663 7,529,499 8,049,941 14.59 24.08 27.13
TAXATION

Taxation

For the year –Current 323,121 388908 960,820 1.09 1.24 3.24

For prior year –Current --- 1431953 364,259 ----- 4.58 1.23

Deferred 1,196,093 15,488,31 1,866,508 4.05 4.95 6.29

1,519,214 2781178 3191587 5.15 8.90 10.76

91
PROFIT AFTER
2,787,449 4748321 4,858,354 9.44 15.19 16.37
TAXATION

- -
Un-appropriate loss b/f -11,250,885 -9113154 -5,220,276 -29.15
38.11 17.59

Transfer to statutory
-557,490 -949664 -971,672 -1.89 -3.04 -3.27
reserve
Transfer from Fixed
-980 7133 2,513 0.00 0.02 0.01
assets disposal

Transfer from Fixed


9,858 57738 54,639 0.03 0.18 0.18
assets – net of tax
Actuarial gains on re
measurement 2,514 29354 -64,620 0.28 3.56 -6.63
recognized
- -
-11,900,603 9968597 -4,199,416 31.88
40.31 14.15
Accumulated loss -
carried forward -9,113,154 -5220276 658,938 -16.70 2.22
Hasnain Haider-BBA-F14-40-M
30.87

Vertical Analysis Of Balance Sheet

2014 2015 2016 2014 2015 2016

Rs.(000) Rs.(000) Rs.(000) % % %

ASSETS:

Cash and Balances


with treasury 23,622,411 26,190,481 35,756,024 5.62% 5.55% 6.56%
Banks

Balances with other


2,239,170 4,512,033 3,765,867 0.53% 0.96% 0.69%
Banks

Lending's to
financial 32,748,623 6,113,262 11,562,133 7.79% 1.29% 2.12%
institutions

92
Investments 154,874,757 176,043,046 199,741,990 36.84% 37.27% 36.64%

Advances 170,312,593 219,398,631 262,067,924 40.51% 46.45% 48.07%

Other assets 21,237,087 25,635,908 18,147,262 5.05% 5.43% 3.33%

Operating fixed
5,490,121 6,484,312 7,692,675 1.31% 1.37% 1.41%
assets

Deferred Tax assets 9,845,426 7,905,981 6,480,256 2.34% 1.67% 1.19%

Total Assets 420,370,188 472,283,654 545,214,131 100.00% 100.00% 100.00%

LIABILITIES

Bills payable 1,727,731 1,887,432 4,183,480 0.43% 0.42% 0.81%

Borrowings from
financial 44,742,624 55,236,429 39,829,134 11.16% 12.29% 7.70%
institutions

Deposits and Other


342,290,763 374,961,096 453,219,740 85.35% 83.40% 87.60%
accounts

Subordinated
2,000,000 2,000,000 4,500,000 0.50% 0.44% 0.87%
Loans

Liabilities against
1,128 ------- ------- 0.00% ------ -------
assets

Other liabilities 10,281,235 15,520,357 15,627,279 2.56% 3.45% 3.02%

Deferred Tax
------ ------- ------- ------- ---- ----
liabilities

Total Liabilities 401,043,481 449,605,314 517,359,633 100.00% 100.00% 100.00%

Net Assets 19,326,707 22,678,340 27,854,498 4.60% 4.80% 5.11%

93
Represented By:

Share Capital 15,551,132 15,551,132 15,551,132 3.70% 3.29% 2.85%

Discount on issue of
-263,158 -263,158 -263,158 -0.06% -0.06% -0.05%
shares

Reserves 2,081,243 2,329,001 1,300,673 0.50% 0.49% 0.24%

Accumulated loss -9,113,154 -5,220,276 658,938 -2.17% -1.11% 0.12%

8256063 19396699 24247585 1.96% 4.11% 4.45%

Share deposit
7,000,000 7,000,000 7,000,000 1.67% 1.48% 1.28%
money

15,256,063 19,396,699 24,247,585 3.63% 4.11% 4.45%

Surplus on
revaluation of 4,070,644 3,281,641 3,606,913 0.97% 0.69% 0.66%
assets
Total Equity
Hasnain Haider-BBA-F14-40- 19,326,707 22,678,340 27,854,498 4.60% 4.80% 5.11%
M

Horizontal Analysis
of Income
Statement:

2014-
2014 2015 2016 2015-2016
2015
Rs.(000) Rs.(000) Rs.(000) % %
Markup/return/interest
29,521,719 31,266,427 29,674,488 5.91 -5.09
earned
Markup/return/ interest
20,525,783 20,198,798 17,430,154 -1.59 -13.71
expensed
Net markup/interest
8,995,936 11,067,629 12,244,334 23.03 10.63
income

94
Provision against non-
performing loans and -1,118,605 -3431451 922,236 206.76 -126.88
advances-net
Provision for diminution
in the value of 110,881 64,815 102,632 -41.55 58.35
investments
Bad debts written off
---- --- ---- ---- ----
directly

1,229,486 3,496,266 1,024,868 184.37 -70.69

Net markup/interest
7,766,450 7,571,363 11,219,466 -2.51 48.18
income after provisions

NON MARK-UP/

Fee, commission and


906,494 824,126 974,703 -9.09 18.27
brokerage income

Dividend income 33,258 50,843 61,774 52.87 21.50

Income from dealing in


183,830 109,280 75,248 -40.55 -31.14
foreign currencies
Gain on Sale of Securities 667,322 5,013,546 2,525,572 651.29 -49.63
Loss on Revaluation of
-654 -8522 -1,176 1,203.06 -86.20
Investments

Other income 1,000,180 1,635,068 1,658,309 63.48 1.42

Total interest income 2,790,430 7,624,341 5,294,430 173.23 -30.56

10,556,880 15195704 16,513,896 43.94 8.67

INTEREST EXPENSES

Administrative expenses 6,215,031 7,389,591 8,346,001 18.90 12.94


Provision against other
-2,416 224382 569,923 -9,387.33 154.00
assets
Provision against off
17,875 32274 -485,668 80.55 -1,604.83
Balance Sheet Items
Provision against
--- --- --- --- ---
receivable from NIT

Other charges 19,727 19958 33699 1.17 68.85

95
Total interest expenses 6,250,217 7666205 8,463,955 22.66 10.41

4,306,663 7,529,499 8,049,941 74.83 6.91

Extraordinary /unusual
------ ------- ------ ------ -------
items
PROFIT BEFORE
4,306,663 7,529,499 8,049,941 74.83 6.91
TAXATION

Taxation

For the year –Current 323,121 388908 960,820 20.36 147.06

For prior year –Current --- 1431953 364,259 ------ -74.56

Deferred 1,196,093 15,488,31 1,866,508 29.50 20.51

1,519,214 2781178 3191587 83.07 14.76

PROFIT AFTER
2,787,449 4748321 4,858,354 70.35 2.32
TAXATION
-
Un-appropriate loss b/f -9113154 -5,220,276 -19.00 -42.72
11,250,885

Transfer to statutory
-557,490 -949664 -971,672 70.35 2.32
reserve
Transfer from Fixed
-980 7133 2,513 -827.86 -64.77
assets disposal
Transfer from Fixed
9,858 57738 54,639 485.70 -5.37
assets – net of tax
Actuarial gains on re
2,514 29354 -64,620 1,067.62 -320.14
measurement recognized
-
9968597 -4,199,416 -183.77 -142.13
11,900,603
Accumulated loss
carried forward Hasnain -9,113,154 -5220276 658,938 -42.72 -112.62
Haider-BBA-F14-40-M

96
Horizontal Analysis of Balance sheet:

2014- 2015-
2014 2015 2016
2015 2016
Rs.(000) Rs.(000) Rs.(000) % %
ASSETS:
Cash and Balances with
23,622,411 26,190,481 35,756,024 10.87% 36.52%
treasury Banks
Balances with other Banks 2,239,170 4,512,033 3,765,867 101.50% -16.54%
Lending's to financial
32,748,623 6,113,262 11,562,133 -81.33% 89.13%
institutions
Investments 154,874,757 176,043,046 199,741,990 13.67% 13.46%
Advances 170,312,593 219,398,631 262,067,924 28.82% 19.45%
Other assets 21,237,087 25,635,908 18,147,262 20.71% -29.21%
Operating fixed assets 5,490,121 6,484,312 7,692,675 18.11% 18.64%
Deferred Tax assets 9,845,426 7,905,981 6,480,256 -19.70% -18.03%
Total Assets 420,370,188 472,283,654 545,214,131 12.35% 15.44%
LIABILITIES
Bills payable 1,727,731 1,887,432 4,183,480 9.24% 121.65%
Borrowings from financial
44,742,624 55,236,429 39,829,134 23.45% -27.89%
institutions
Deposits and Other accounts 342,290,763 374,961,096 453,219,740 9.54% 20.87%
Subordinated Loans 2,000,000 2,000,000 4,500,000 0.00% 125.00%
Liabilities against assets 1,128 ------- -------
Other liabilities 10,281,235 15,520,357 15,627,279 50.96% 0.69%
Deferred Tax liabilities ------ ------- -------
Total Liabilities 401,043,481 449,605,314 517,359,633 12.11% 15.07%
Net Assets 19,326,707 22,678,340 27,854,498 17.34% 22.82%
Represented By:
Share Capital 15,551,132 15,551,132 15,551,132 0.00% 0.00%
Discount on issue of shares -263,158 -263,158 -263,158 0.00% 0.00%
Reserves 2,081,243 2,329,001 1,300,673 11.90% -44.15%
-
Accumulated loss -9,113,154 -5,220,276 658,938 -42.72%
112.62%
8256063 19396699 24247585 134.94% 25.01%
Share deposit money 7,000,000 7,000,000 7,000,000 0.00% 0.00%
15,256,063 19,396,699 24,247,585 27.14% 25.01%
Surplus on revaluation of
4,070,644 3,281,641 3,606,913 -19.38% 9.91%
assets
Total Equity Hasnain Haider-BBA- 19,326,707 22,678,340 27,854,498 17.34% 22.82%
F14-40-M

97
Ratio Analysis
Liquidity Ratios
Liquidity ratios means to measure short term solvency of the company. It shows the ability of
the company to pay off its short term debt. Following ratios are calculated in order to
measure the short term solvency of the company
 Current Ratio
 Acid Test Ratio
 Working Capital

Current Ratio
Current Assets = Cash and Balance with Treasury Banks + Balance with other Banks
+Lending to Financial Institution + Short Investment + Short Advances + Other Assets
Current Liabilities = Bill Payables + Short Borrowing + Short Deposit + Other Liabilities

Current Ratio = Current Assets / Current liabilities


Year 2016 Year 2015 Year 2014
=545214131/517359633 =45689361/447605314 =405034641/399042353
=1.05 =1.02 =1.01

Explanation:
The standard of this ratio is 2:1, means current assets are twice the current liabilities. But
Bank of Punjab has a lower current ratio to the standard rate. In 2013 it is 0.99, in 2014 it is
1.01 and in 2016 it is 1.05 which is better than from previous two years.
Acid Test Ratio
Current Assets = Cash and Balance with Treasury Banks + Balance with other Banks
+Lending to Financial Institution + Short Investment + Short Advances + Other Assets
Current Liabilities = Bill Payables + Short Borrowing + Short Deposit + Other Liabilities
Prepaid expenses = Advances, deposits, advance rent and other prepayments

Acid Test Ratio = Current Assets – (Inventories + prepayments) / Current liabilities


Year 2016 Year 2015 Year 2014
=(545214131-186,816)/ =(456893361- =(405034641-268,302)/
517359633
307198)/447605314 399042353
=315380133/319735947
=1.06 =456586163/477605314 =404766339/399042353
=1.02 =1.01

98
Explanation:
As the Acid test ratio from year 2014 to 2016 is: Rs.0.99, Rs. 1.01 and Rs 1.06 respectively.
In first two years acid test ratio is slight less than is standard ratio.It must be 1:1 in order to
proof the short term solvency of the bank to pay off its short term expenses.
Working capital
Working Capital = Current Assets – Current Liabilities
Year 2016 Year 2015 Year 2014
=545214131-517359633 456893361-447605314 =405034641-399042353
=(27854498)
=9288047 =5992288

Explanation:
The working capital of BOP is negative in first two selected years becauseliabilities are more
than its assets. In 2016 assets are more than its liabilities so; working capital of BOP shows
positive sign.
Leverage Ratios
These ratios show the capital structure of the firm. Through these ratios we find that how the
firm finance their activities. It is more important for the lender to assess that the firm can
repay the loan amount or not. Increasing debt increases the likelihood of bankruptcy of the
firm. Following ratios falls under this category,

Time Interest Earned


 Debt Ratio
 Debt to Equity Ratio
 Total Capitalization Ratio

Time Interest Earned Ratio:


Time Interest Earned = Profit before tax + Interest Expense (EBIT) / Interest Expense
Year 2016 Year 2015 Year 2014
=Rs.8049941/8463955 =7529499+7666205/766620 =4306663/20525783
=0.95 5 =0.21
=1.98%

Explanation:
The Time Interest Earned Ratio of BOP is not better, in 2016 it has been decreased from
previous years from 1.98% to 0.95%.

99
Debt Ratio
Total Debt = Bills Payable + Borrowings from financial institutions + Deposits & other
accounts + Subordinate Loans + Liabilities against assets subject to finance lease + deferred
tax liabilities+ Other liabilities
Total Assets = Given in the Balance Sheet

Debt Ratio = (Total Debt / Total Assets) * 100


Year 2016 Year 2015 Year 2014
=512859633/545214131*100 =449605314/472283654*100 =401,043,481/420,370,188*100
=94.50 =95.0% =95.40

Explanation:Debt ratio is measure of debt with the total assets. The debt ratio is almost
constant that indicates the dependence on debt is constant for these three years. In 2016 the
total Debt was the almost 94.50% of Total Assets.

Debt / Equity Ratio


Total Debt = Bills Payable + Borrowings from financial institutions + Deposits & other
accounts + Subordinate Loans + Liabilities against assets subject to finance lease + deferred
tax liabilities+ Other liabilities
Total Equity = Share Capital + Reserves + Un-appropriated Profit (-loss)+ Discount on
issue of share + share deposit money + surplus on revelation of fixed assets

Debt to Equity Ratio = Total Debt / Total Equity


Year 2016 Year 2015 Year 2014
=512859633/27854498 =449605314/22678340 =401,043,481/19,326,707
=18.41 =19.82% =20.75

Explanation:
Debt to equity ratio is high in first two years but it has been decreased in 2016 to 18.41.75.
Total capitalization Ratio
Long Term Debt = Deposit and other account + Liabilities against assets subject to
finance lease + Deferred tax liabilities + other liabilities

100
Long Term Debt
Total Capitalization Ratio =
Long Term Debt + Shareholder's Equity

Year 2016 Year 2015 Year 2014

=Rs.468847019/ 470402151 =390481453/413159793 =Rs.352573126/371899833


=0.99Times =0.945 Times =0.94 Times

Explanation:
The total capitalization ratio compares the total debt with the sum of debt and equity. The low
capitalization ratio indicates the financial fitness of the firm. According to the calculation, I
can see that the ratio in 2016 is high.

Profitability Ratios
Profitability ratios measure the earning ability of the firm. Following ratios are calculated:
 Net Profit Margin
 Return on Assets
 DuPont Return on Assets
 Operating Income Margin
 Return on operating Assets
 Return on Total Equity
 Gross Profit Margin
Net Profit Margin
Net Profit = Profit after Taxation
Total Revenue = Markup/ return/interest earned
Net Profit Margin = Net Profit / Total Revenue
Year 2016 Year 2015 Year 2014

=Rs.4858354/29674488 =4748321/31266427 =2,787,449/29,521,719


=16.37% =15% =9.44%

Explanation:
The net profit margin is increasing from 2013 to 2014. In 2013 the net profit margin is 7.99%
which is lower in selected three years. After this it start to increase and in 2014 it is 9.44%
and in 2016 it is 16.37.44%.

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Return on Assets
Net Profit = Profit after Taxation
Total Assets = Given in the Balance Sheet
ROA = Net Income / Total Assets
Year 2016 Year 2015 Year 2014
=4858354/545214131 =4748321/472283654 =2,787,449/420,370,188
=0.89% =1.00% =0.66%

Explanation:
It is simple Return on Assets, which calculate through net income, and total assets but the
result is same as in Du-Pont ROA. It is showing the consistent increase in the return on
Assets.
DuPont Return on Assets Ratio
Net Profit = Profit after Taxation
Total Revenue = Markup/ return/interest earned
Total Assets = Given in the Balance Sheet

Du-Pont ROA = (Net Income / Total Revenue) x (Total Revenue / Total Assets)
Year 2016 Year 2013 Year 2014
=(4858354/29674488)* =(1,938,007/24,227,721)*(24,227,721/35 =(2,787,449/29,521,
(29674488/545214131) 2198645) 719)*
=0.16377215779*0.05442 =0.07999*0.0687 (29,521,719/420,370
72173 =0.549% ,188)
=0.89% =0.09*0.07
=0.63%

Explanation:
DuPont ROA Analysis is the approach to calculate the Return on Assets by taking Net
Income, Total Revenue and Total Assets. It shows the effect of revenue on the net income
and the total assets. When we calculate the DuPont ROA of BOP, we find consistently the
increase in the return on assets. In 2016 it is at higher level.

Operating Income Margin

Operating Income Margin = Earnings Before tax + interest expenses / Total Revenue

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Year 2016 Year 2015 Year 2014
=Rs.16513896/Rs.29674488 =Rs.7529499/31266427 =Rs.4,306,663/Rs.29,521,719
=55.6% =16.5% =14.5%

Explanation:
Ratio shows a increasing in the revenues. BOP continuously increasing operating income
margin and recovering its position in financial market after financial crisis of 2008.Operatin
income is high in 2016.

Return on Operating Assets


Operating Assets = Cash and Balance with Treasury Banks + Balance with other Banks
+Lending to Financial Institution + Advances + Operating fixed Assets
Return on Operating Assets = EBIT / Operating Assets
Year 2016 Year 2015 Year 2014
=Rs. 8049941/320844628 =Rs.7529499/261698719 =Rs.4,306,663/234412918
= 2.91% =2.87% =1.83%

Explanation:
As the Return on Operating Assets from year 2014 to 2015 is: 1.83%, 2.87% and 2.91%
respectively. As for as index analysis concern return on operating assets has been increasing
from 2013 to 2016.

Return in Total Equity


Average Stockholder Equity = Share Capital + Reserves + Un-appropriated Profit (-loss)+
Discount on issue of share + share deposit money + surplus on revelation of fixed assets

ROE = (Net Income / Average Stockholder Equity) * 100

Year 2016 Year 2013 Year 2014

=Rs. 4858354/283080814 = Rs. 1,938,007/13,481,298 =Rs.2,787,449/19,326,707


= 13.2%ya krwana a = 14.3% =14.4%

Explanation:

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Return on Owner’s Equityin the year 2012 is 13.2% and in the year 2014 it is 14.4% which
shows an increase trend from year on year basis.
Gross Profit Margin
Gross Profit Margin = (Gross Profit / Total Revenue) * 100
Year 2016 Year 2015 Year 2014
=Rs.12244334/Rs. 29674488 =Rs.11067629/31266427 =Rs.8,995,936/Rs.29,521,719
=41.26% =35.39% =30.4%

Explanation:
This ratio also shows the increase in revenue of BOP. In 2015it is 35.39% and in 2016 it is
41.26%. Because the revenue of the BOP is increasing so the Gross Profit automatically
increases.

Activity Ratios
Activity ratios measure a firm’s ability to convert different accounts within their balance
sheets into cash or sales.
 Total Assets Turnover
 Fixed Assets Turnover

Total Assets Turnover


Total Assets Turnover Ratio = Interest or Markup / Total Assets
Year 2016 Year 2015 Year 2013
=Rs.29674488/Rs. 545214131 =Rs.31266427/472283654 =Rs.29,521,719/Rs.420,370,188
= 0.0544 times =0.06 Times =0.0702 times

Explanation:
Total Asset turnover ratio measures the firm’s effectiveness in generating the revenue from
its investments in total assets. The high ratioshows the high revenue generationfrom its
assets.
Fixed Assets Turnover
Fixed Assets Turnover Ratio = Interest or Markup / Fixed Assets
Year 2016 Year 2015 Year 2014
=Rs. 29674488/Rs.7692675 =Rs.31266427/6484312 =Rs.29,521,719/Rs.5,490,121
=3.85 times =4.82% =5.37 times

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Explanation:
The fixed asset turnover ratio measures the company's effectiveness in generating sales
from its investment in fixed assets. The ratio shows the decrease in fixed assets turnover in
2016. It means that the generation of revenue on the fixed assets decreased in 2016.

Pros & Cons of Working in Banks

Public Sector employees are more or less very satisfied with job and work life balance. They
only have one tension or discussion at work i.e. when will they have next pay scale revision
and how much increment they will get.

there are pros and cons of working in Banks:

Pros:

 Getting private jobs is relatively easier in comparison with government or public


sector jobs.
 Employees get fair salary in comparison with other private sector employees also
there is very limited scope for corruption in private jobs.
 People at high rank get extremely higher salary in comparison with
government/public sector employees
Cons:

 Poor work life balance


 Very high pressure job
 Higher job risk and low job security
 Limited career growth

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Recommendation

This is very important aspect of business and especially in banking industry. BOP
should consider taking employee relations very seriously as employees are part and parcel of
the organization success or failure. New innovative ideas should be brought forward so that
business process and practice could be made simple thus improving organization
performance.

Employee relationship management in collaboration with human resource they should


come up with ways that will resolve dispute in more modern way even without involvement
of trade unions. The management should assess employee relation future trend and research
on the potential findings that can be practically applied. The influence of technology should
not be left untouched as technology will play a big part in the future employee relation
success. The employee relation view should be much flexible to tackle issues that have not
been resolved yet with management.

Employee relation should help in avoiding unnecessary problems such poor working
condition. These are problems that union is working to abolish them but on the other hand
they problems that increase unnecessary cost than if they had been tackled beforehand. BOPs
top management should engage employee in activities or even during decision making
process so that they can be more motivated and very loyal to the organization.

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