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The Bank Of Punjab
Executive summary------------------------------------------------03 Preface---------------------------------------------------------------04 Acknowledgement--------------------------------------------------05 College permission letter------------------------------------------05 Internship Certificate----------------------------------------------06 Introduction to the Report----------------------------------------07 Introduction to Banking sector----------------------------------08 Functions of the Banks-------------------------------------------09 Vision and Mission statement------------------------------------10 History & Background of BOP----------------------------------12 Branch Network---------------------------------------------------13 Management of Bank of Punjab--------------------------------16 Division management---------------------------------------------18 • • • • Organizational Structure Profile of the company Policy Formulation Process Communication Patterns
Activities of internship programme
Account Department----------------------------------------------24 Nature of account Opening new account
Cash Department--------------------------------------------------31 Cash counter Cash payment Cash received Cash book balance Token book Inter-bank accounts
Hailey College of Commerce
Internship Report Outward clearing Inward clearing Local remittances
The Bank Of Punjab
Credit Department---------------------------------------------46 Lending operations Advances Financial Analysis
Balance sheet----------------------------------------------------69 Ratio Calculations----------------------------------------------70 Income statement-----------------------------------------------74 Chapter 4 SWOT Analysis Strengths----------------------------------------------------------76 Weaknesses-------------------------------------------------------77 Opportunities-----------------------------------------------------78 Threats------------------------------------------------------------78
Chapter 5 Problems-----------------------------------------------------80 Recommendations------------------------------------------81 Conclusion---------------------------------------------------82
Hailey College of Commerce
The Bank Of Punjab
The objective behind this report is to have every thing in writing, which I have learnt from my internship at The bank of Punjab. This report will definitely help me and all those who are having limited exposure about The bank of Punjab. I believe the preparation of this report will be my first step towards never ending learning process. The first chapter is comprised of introduction and management of the bank. Second chapter purely discusses activities of internship program. Here I describe all the activities, which I learnt over there. Chapter three related with financial analysis. Chapter four focuses on SWOT analysis. Chapter five deals with Problems, recommendations and Conclusion.
Hailey College of Commerce
The Bank Of Punjab
PREFACE The pre-requisite of internship program is to make the students of B.Com(Hons.), aware of the practical expertise and to acquaint them with the real management process. With an intention of grooming the best executives of the future, the department of management science has organized a comprehensive internship-training program. All of us were placed in leading organizations of business arena to gain first hand knowledge and insight into their management and working. So, when I was given the chance of selecting an organization, I opted for The Bank of Punjab. Getting a chance of working in Bank of Punjab proved to be very beneficial for me. I think that I gained comprehensive insight into the working of a bank. But nothing could have been possible without the co-operation and guidance of the officers of BOP. After the completion of internship program, internship report has been prepared just in accordance with the practical exposure. It has been my endeavor to stipulate my experience in a way that the reader may clearly understand the core concepts.
Hailey College of Commerce
Rana Nawaz Ahmed. All praise for Almighty Allah whose uniqueness oneness and wholeness is unchallengeable. Mr. I want to acknowledge my deep thanks to my friend Yasir Waheed.b. I became the object of a number of individuals but only a few of them can be mentioned here. who helped me to give the final touch to my report. Special regards to my Brother Mohsin Baig who helped me at every moment especially in typing and in editing this report with wonderful efficiency and dispatch. Mr. Hailey College of Commerce 5 . guided me in different circumstances. All respects are for his holly prophet Hazrat Mohammad (p.u.h) enable us to recognize the oneness of my creator. I am obliged to Prof. I am thankful to my Brother who helped me in many ways. I am also deeply indebted to OG ll. Preparing the manuscript for this report has been an unusually enjoyable and exciting experience for me. Abdullah who gave me very useful tips and information for one of the portion of the report. I started to collect data from the very first day of my internship and the first person to whom I will like to give my regards is the operational manager of the branch Mr. Perhaps the most memorable aspects of the project has been the opportunity to know better a number of people who have provided information for various portion of the work in the course of the research. Hassan Mubeen Alam who has contributed a lot by way of improving the text and presentation of this report. My thanks go first to my parents who gave me permission to move to and fro easily. Jahanzeb Khan and OG lll. After giving homage to my blood relations first of all I would appreciate myself that I worked hard for the completion of this project but I was nothing without the help of others who encouraged me and help me in many ways.Internship Report The Bank Of Punjab ACKNOWLEDGEMENT I bow my head in infinite humanity before God who gave me the courage and strength to complete this dissertation.
Internship Report The Bank Of Punjab DEDICATION Dedicated to my loving parents. teachers and those who remember me in prayers Hailey College of Commerce 6 .
Internship Report The Bank Of Punjab INTRODUCTION TO THE REPORT The basic purpose behind the preparation of an internship report is to make the student jot down the experiences of the internship and discuss the understanding of the operations of the organization. I would like to mention that the experience of working in a small. All the employees were extremely cooperative and accommodating. Hailey College of Commerce 7 . established branch was in itself a treat. Before I proceed. The following pages discuss my experiences at Bank of Punjab. All the employees under whom I worked were very qualified and experience person. Wahdat Road Branch Lahore.
However the banks failed to play effective role in ensuring a wide and equitable concentration of credit in big accounts and urban areas and unethical practices had creep into banking. Prime Commercial bank. Muslim Commercial Bank. 126 branches were located in former East Pakistan and 487 were in West Pakistan. Development and growth of banking in Pakistan started with the establishment of State Bank of Pakistan on 1st July 1948 and national Bank Of Pakistan in 1949. Allied Bank Ltd. National Bank of Pakistan. (MCB) The share of Pakistani banks in total branch deposits and credits has increased manifold. In 1952 the NBP was assumed as an agent of SBP. The success achieved by the banking system was indeed spectacular. (UBL) Habib Bank Ltd.In 1973 National Development Finance corporation (NDFC) was established for providing short-term loans to small business. Despite separation of East Pakistan.Internship Report INTRODUCTION TO BANKING STRUCTURE IN PAKISTAN The Bank Of Punjab At the time of independence of Pakistan. This shows a rapid progress of banking system in Pakistan. National bank of Pakistan (NBP) United Bank Ltd. (HBL) Allied bank Limited. There were 3496 branches of Indian scheduled bank in the subcontinent at the time of independence. The share of Pakistani bank branches which was 12% in 1948 increased to 99% in 1991 and share in total deposits increased from 29% in 1948 to 88% in 1991. United Bank Ltd. the total numbers of commercial banks were 38. Banking marches ahead at rapid pace. Habib Bank Ltd. Soneri Bank. out of which Pakistan has 631 branches. SBP also restricted the foreign banks to major cities only and for rest of country local banks were encouraged to open branches. The Bank of Punjab Ltd. The situation further deteriorated when 409 branches were abruptly closed after independence and on first July 1948 the number of branches declined to 195 and out of Pakistan banks most of these were newly born and had limited business. Out of those. Union Hailey College of Commerce 8 . Askari bank Ltd. (ABL) Muslim Commercial Bank Limited. As a result on 1st January 1977 the Govt of Pakistan nationalized all banks in Pakistan and all banks were brought under five names. At present State Bank of Pakistan is functioning as State Bank and there are seventeen commercial banks. Pakistani banks were only two. By the end of 1973 commercial banks numbered 13 with 3442 branches.
Faysal bank Ltd. Standard Chartered. Act as referee payment of Orders. Saudi Pak Bank. payment of Purchase and sale of Issuance of travelers securities checks Current deposits Cash credits - Loans Transfer of funds Supply of information trade - - Acting as trustee Export promotion Hailey College of Commerce 9 . business Fixed or deposits Collection time Purchasing and checks. discounting of bills interest etc exchange Saving deposits Drafts Execution of standing Orders. KASB Bank Functions Primary Or Basic Functions Secondary Or Subsidiary Functions Accepting Deposits Making Loans Advances & Agency Functions Utility Functions & Services of Foreign bills. ABN-AMRO.Internship Report The Bank Of Punjab Bank. The Bank of Khyber. Bank Al-Habib.
Internship Report The Bank Of Punjab THE BANK OF PUNJAB VISION STATEMENT “T o b e a c u s t o m e r f o c u s b a n k w i t h s e r v i c e e x c e l l e n c e ” MISSION STATEMENT ‘T o e x c e e d t h e e x p e c t a t i o n s o f o u r s t a k e h o l d e r s b y leveraging our relationship with the Government of Punjab and delivering a complete range of professionals solutions with a focus on program driven products & services in the Agriculture and Middle Tier Markets through a motivated team’ Hailey College of Commerce 10 .
public or private. • • • Hailey College of Commerce 11 . insuring. 1962. participation term certificate. 1980. Integrity in our dealing in all affairs. stock. modarba certificates and such other instrument as may be approved by the State Bank of Pakistan participation on behalf of constituents or others.Internship Report The Bank Of Punjab CORE VALUES Our Customer is our first priority. guaranteeing. underwriting. The purchasing and selling of bonds. To carry on the business of a “banking company” as defined by the Banking Companies Ordinance. participating in managing and carrying out of any issue. 1984. term finance certificate. Respect for everyone whom ever contact with us Excellence in every thing we do. The providing of safe deposit values. Acting as “Modarba Company” under the provision of Modarba Companies and Modarba Ordinance. Government. when such is of a nature enumerated or described in section 7 of the Banking Companies Ordinance 1962. regulations and policies of the State Bank of Pakistan. Acquiring and undertaking the whole or any part of the business of any person or company. debenture stock or other securities of any company. scrip’s or other form of securities. Profitability for our Stake holders Corporate Social Responsibility is to work for the welfare of society OBJECTIVES OF THE BANK OF PUNJAB • • • • • • • Follow the rules. musharika certificates. The effecting. The collecting and transmitting of money and securities. The providing of finance as defined in Banking Tribunals Ordinance. Contracting for public and private loans and negotiating and issuing the same. corporation or association and lending of money for the purpose of any such issue. Recognition and Reward for Talented and High performing Employees. municipal or other loans or of shares.
developing. leasing.Internship Report • • • • • • • • • • • • • • • The Bank Of Punjab Acting as agent for any Government or local authority or any other person or persons. The lending or advancing of money either upon or without security. The Bank has computerized all its branches which are inter connected vide online real time system. Karachi & Islamabad Stock Exchanges. Recognize the role of technology in effective/efficient operations of financial sector. scrip’s. The Bank has fully owned subsidiary M/s Punjab Modaraba Services (Pvt) Ltd. 1994. valuables on deposit or for safe custody or otherwise. The borrowing. which may come into the possession of the Bank in satisfaction or part of satisfaction of any of its claims Carrying on and transacting every kind of guarantee and indemnity business. His to ry The Bank of Punjab was established in pursuance of The Bank of Punjab Act. which is profitably managing a modaraba company. Bank’s’ customers are facilitated by shared network of on line ATM in all major cites of Pakistan. disposing of or turning into account or otherwise dealing with all or any part of the property and rights of the Bank. Undertaking the administration of estates as executor. Selling. Subscribing to or guaranteeing moneys for charitable or benevolent objects or for any exhibition or for any public. Hailey College of Commerce 12 . The bank is listed on Lahore. improving. selling and realizing any property. Doing all such other things as are incidental or conductive to the promotion or advancement of the business of the Bank. The majority shares of the bank are held by Government of the Province of the Punjab. trustee or otherwise. managing. The receiving of all kinds of bonds. The granting and issuing of letters of credit. Undertaking and executing trusts. Granting pensions and allowances and making payments towards insurance. Managing. 1989 The scheduled bank status was given by the State Bank of Pakistan on September 19. traveler’s cheques and circular notes. raising or taking up of money. exchanging. The buying and selling of foreign exchange including foreign bank notes The negotiating of loans and advances. mortgaging. general or useful object.
Penetration into Agri-economic was made possible through strategic positioning of braches and introduction of a number of Agri-based financing schemes allowing the bank to play a pivotal role in strengthening this sector of our economy.e. The Bank of Punjab has increased the banking time i. from 9 to 5.Internship Report The Bank Of Punjab Bank enjoys substantial shares in economic growth. especially of agricultural and SME sectors. and 246 of them are online and interconnected with each other. Regional Network Lahore Faisalabad 67 Branches 43 Branches 13 Hailey College of Commerce . Branches network The Bank of Punjab has 266 branches at all major business centers of the city throughout the Pakistan.
F inancing. Ro le in National E conomy The Bank of Punjab plays a vital role in the national economy through • • • • • • • Mobilization of hitherto untapped local res ources P romoting savings and providing funds for investments. Exports and Remittances . A ttractive rated of profit on all types of deposits Opening of Foreign C urrency A ccounts H andling of Foreign Exchange bus ines s such as Imports. with the help of online banking the customers of The Bank of Punjab can transfer their funds for one branch to another branch and to transfer their funds to other accounts holders from 9 to 5’o clock.Internship Report Gujranwala Karachi Multan Peshawar Rawalpindi 45 Branches 05 Branches 63 Branches 06 Branches 37 Branches The Bank Of Punjab The Bank of Punjab can also be divided into six segments according to its banking functions: Branch Banking Consumer Banking Corporate Banking Retail Banking Small Medium Enterprises Special Asset Recovery Management Online Banking The Bank of Punjab first time introduce Online Banking in Pakistan . Trade Industry for working capital requirements Money M arket operations C redit Rating of Bank of Pun jab M /S PAC RA has aw arded the B ank with the credit rating Hailey College of Commerce 14 .
Merit Award by South Asian Federation of Accountants (SAFA) On the bases of evaluation of the Annual Report 2004. Hailey College of Commerce 15 . The Bank provides following types of banking s ervices • • • • • • • D eposit in Local Currency C lient Deposit in Foreign C urrency R emittances Ad vances to Bus ines s Trade I nd ustry Ag riculture . the South Asian Federation of Accounts (SAFA) adjudged the Bank of Punjab as the recipient of Merit Award under the Banking Sector subject to prudential Supervision category. S ervice Provided By th e B ank . As agriculture is considered as backbone of our economy the B an k of Punjab has Introduced “K is an Dost A griculture Finance S ch eme” to s mall farmers . Awards and Achievements Best Corporate Report Awards The Joint Committee of the ICAP and ICMAP selected the BOP for winning 3rd position for The Best Corporate Report Award 2004 for the financial sector.Internship Report F or Long term F or Short term D ecember 2005. The Bank of Punjab has indeed entered a new era of s cience to the n atio n under experience and professional hands of its management. L en ding policy of Bank AA A1+ The Bank Of Punjab On the basis of bank financial results for the year ended as on 31st The lending policy of Bank is not only cautions and cons tructive but als o bas ed on principles of prudent lending with maximum emphasis on s ecur ity.
C. Ri a z A kh t a r Law Department M ohs a n Ra nj ha M r . Information Technology Division M r . Sh e r j e a l M a s u d M r . Na ve e d Ha f e e z S ha i kh M r .D i n. O. 15th Bolan Excellence Award The Bank was awarded Best Bank Award under 15th Bolan Excellence Awards distribution in 2005 Achievement Award The Lahore Chamber of Commerce & Industry rated Bank as Best Performing Bank in year 2005. Na e e m .ud . Ka m r a n O pe r at i o n Di vi s i on M r .Internship Report 2nd Kisan Time Awards The Bank Of Punjab The Bank was adjudged as Best Agri Loan Bank and has been awarded 2nd Kisan Time Award. Fa i s a l Az m a t M r . At ha r Az i z D og a r General Manager Chief Manager General Manager E. Ri z w a n Al i Human Resource Division M r . / Ch i e f M a n a g e r Legal Head In-charge General Manager Chief Manager President Hailey College of Commerce 16 . Management of Bank of Punjab President Secretariat M r .
Liability & Consumer Products Development Division M r . S a ba Fa r r u kh Audit & Inspection Division M r . M a h m o od Sa di q Kh a n M r . V . Compliance Cell M uha m m a d La t i f D. V . Products / SME Division M r . O. V. Ha f e e z u d D i n 2. Ta r i q J a v e d But t Agriculture Credit Department M r . / As s i s t a n t Se c r e t a r y E. Corporate Banking Head M r . Ra s hi d M e h bo ob International & Treasury Division M r . Officer’s Training Institute M r . Ha j i M uha m m a d As l a m 1. S. M . Bi l a l H us na i n C ha nd a n The Bank Of Punjab C o u n t r y C o r p o r a t e He a d E. Sh a h e e n Na z a r Q ur e s hi M r . C I. Trade Processing Centre M r . / Ge n e r a l M a n a g V. Finance Division M r . C. P/ Ch i e f De a l e r Head General Manager V. Ta r i q M a hm oo d M ug ha l Head Office E.P General Manager A. / Ch i e f Co m p l i a n c e O f f i c e r O f f i c i a t i n g Ge n e r a l M a n a g e r Financial Analyst General Manager A . At i f . A a m i r Ha m e e d 3. O. C. O. M u ha m m a d I qba l H. P / Ge n e r a l M a n a g e r E. M oa z z a m M a hm o od M a n e k a Shares Department M r .P Head Agri A . M u ha m m a d S a l i m M i r z a M r s .Internship Report 1.V. Special Asset Management Division M r . No um a n Ah m a d M r . M u ha m m a d H a n i f Credit Risk Management Division M r . P.P Hailey College of Commerce 17 . Na de e m A m i r M r .
10 F ax : ( 04 2) 57 83 79 5 Main Branch.Asma Abdullah Javed Hailey College of Commerce Manager OG-Ι Operational Manager OG – II Salary Administrator OG.I I I . 5783792 A & I Division 042-5783700-10. 6310799 Liability Division 042-5783720. G UL BE RG . Lahore (Pakistan) C hi ef M an ag er T el : ( 0 42 ) 9 20 04 19 . 5783700-10 Products/SME Division 042-9200421-28 HR Division 042-5783700-10. LA HO RE .E/ I I . ( Pa k i s t an ) T el : ( 0 42 ) 5 78 37 00 .B. Communication 042-9200178 & Publication Division Organogram of Bank of Punjab (WAHDAT ROAD BRANCH) Sheikh M.II Remittance Incharge OG.III BSA/Operation Officer 18 . 5783794 Comm Assets Division 042-9203705 Marketing Division 042-9203820 Special Assets Management Division 042-9200421-28 Treasury & Intl Division 021-2412114-6 Operations Division 042-9200165 Information Technology Division 042-6315362.Internship Report 1 0. 92 00 18 7 F ax : ( 04 2) 92 00 35 1 The Bank Of Punjab BOP Division Finance Division 042-5783700-10.Tahir Rana Nawaz Ahmed Jahanzeb Khan Miss. Research. 5783734 Credit Risk Management Division 042-9200421-28 Credit Policy Division 042-5783700-10 Training.
regulations and polices in carrying its day-to-day business. regulations and polices in carrying its day-to-day business.Ahmed M. Promotion is based on performance Organizational bureaucracy and control Bureaucratic Structure Bank of Punjab has a strong bureaucratic structure. • Employee do the same work which was explained to him in the job description provided when he joins the bank. • In BOP there is a written communications and record. Bank of Punjab has high functional structure. repetitive tasks. They strictly follow the rules.Internship Report Abid Zaheer M. • • • Tasks allocated to each employees according to their experience and specialization. Well defined authority.Nisar ORGANIZATIONAL STRUCTURE FUNCTIONAL STRUCTURE Cash Officer The Bank Of Punjab Utility Bill Collector Assistant Administrator Office Boy In a functional structure activities are grouped together by common function from the bottom to top of the organization. • In BOP there is high Hierarchy of Authority. • In BOP there are strict rules. • In BOP employees are technically qualified person. In BOP most of its work consists of routine. FORMALIZATION Hailey College of Commerce 19 . • Tasks allocated to employees according to their experience and specialization STRUCTURAL DIMENSIONS OF THE BOP Structural dimension provides label to describe the internal characteristics of an organization.Fayyaz M.
clerical ratio. CENTRALIZATION Centralization refers t the hierarchical level that has the authority to make a decision. When decision making is kept at the top level. clerical staff and others are performing different functions accordingly.Internship Report The Bank Of Punjab In Bank of Punjab there is written rules and procedure. administrative staff. regulations and policy manuals. In Bank of Punjab span of control differ from department to department according to task and requirement. SIZE Size is the organization’s magnitude as reflected in the number of people in the organization. Hailey College of Commerce 20 . PERSONAL RATIO Personnel Ratio refers to the deployment of employees to various functions and departments. In the BOP it is according to requirement that includes administrative ratio. HIERACHY OF AUTHORITY Hierarchy of Authority describes who repots to whom and the span of control for each manager. In BOP decision making is mostly made at the top so it is highly centralized organization. environment and goals. PROFESSIONILISM Work staff is highly educated and experience according to their post or job title. job description. technology. and professional staff. Staff has both formal education and job experience CONTEXTUAL DIMENSIONS OF THE BOP Contextual dimensions characterize the whole organization which includes size. the organization is centralized. There are 266 branches of BOP in which a large number of employees. Specialization is low in Bank of Punjab so that the employee performs a wide range of tasks in their jobs. Documents include procedures. SPECIALIZATION Specialization is the degree to which organizational tasks are subdivided into separate jobs.
In BOP inter connectivity among department is very high each and every department contribute for the wellbeing of BOP. INTER-CONECTIVITY AMONG THE DEPARTMENTS There is a “pooled interdependence” in which each department is the part of the organization and contributes to the common good of the organization but works independently. government. statically and written forms of communication is used such as reports. COMMUNICATIOON AND COORDINATION Communication activity and frequency increases as task variety increases. If the task is less analyzable information is conveyed through mails.Internship Report ENVIRONMENT The Bank Of Punjab It includes all the elements present outside the BOP like customer. BOP has goals and strategies to have an edge on its competitors. The direction of communication in Bank of Punjab is both horizontal and vertical. If task is highly analyzable. telephone or in small meetings PORTER’S COMPETITIVE SRATEGY COMPETITIVE ADVANTAGE LOW COST BROAD Low Cost Leadership UNIQUENESS Differentiation COMPETITIVE SCOPE BOP Focused Low leadership Cost Focused Differentiation 21 Hailey College of Commerce . GOALS AND STRATEGIES Organization’s goal and strategy define the purpose and competitive techniques that set it apart from other organization. understandings and norms shared by the employees. suppliers and financial community. BOP has a good corporate culture. Frequent problems require more information sharing to solve problems and ensure proper completion of activities. They all have an influence on BOP and the management wants to satisfy entire community. ORGANIZATIONAL CULTURE A culture is the underlying set of key values. beliefs. memos and rules.
Internship Report The Bank Of Punjab NARROW The BOP is placed in Low Cost Leadership strategy because it increase market share by emphasize Low Cost as compared to competitors. MILES AND SNOW STRATEGY TYPOLOGY In “MILES AND SNOW STRATEGY TYPOLOGY” BOP is in analyzer. With this strategy BOP seeks efficient facilities. it has a stable working environment and main focus of organization is internal operations. It tries to maintain a stable business while innovating on periphery. There are strict rules & regulations. Hailey College of Commerce 22 . It is a midway between prospector and defender. Some products were targeted towards stable environment in which an efficiency strategy designed to keep current customer is used. ORGANIZATION CULTURE ENVIRONMENT UNSTABLE External Entrepreneurial STABLE Mission Strategic Focus Clan Bureaucratic Internal BOP BOP has a bureaucratic culture. other will targeted towards stable environment where growth is possible. cost reduction and use tight control to work more efficiently than its competitors.
BOP builds customer satisfaction through positive image of Bp through advertisement on different Medias. All the employees should be at the bank till the work is finished. The main emphasize on internal stability. Hailey College of Commerce 23 .m Bank will not be closed before 5. BOP obtains internal stability through morale building of their employees and control structure. ORGANIZATIO LIFE CYCLE & CINTROL BOP is large size organization and it is bureaucratic in nature therefore there are strict rules & regulations and procedures. market expansion and customer satisfaction.00 p. BOP achieve market expansion goal by increasing the branches in whole country so they are increasing their market share.Internship Report BOP culture is • • • • • The Bank Of Punjab All the employees should reach at 8. communication is less frequent.50 at the bank All the mail employees should wear formal dressing and wear tie also. Bank timing should be till 5. So company is placed in formalization stage according to the organization life cycle theory.m.00p.
Internship Report The Bank Of Punjab MY ACTIVITIES IN BOP 1st WEAK ACCOUNTS DEPARTMENT The account-opening department is run by who is always very eager to open an account for you. if you visit him for any purpose? Nature of Accounts • • • • • • • • • Customer can open Current account Profit & loss Saving account Fixed deposit account Basic banking account Saving plus account Corporate premier Account Foreign currency current account Foreign currency saving account Categorization: These accounts can be categorized as follows • • • • • • • • Individuals Firm Company Trust Staff Partnership accounts Limited companies Others Hailey College of Commerce 24 .
it does not vary with easy change in base rate except a fractional change which is declared after the end of each half year by the bank.50 % . In the cases. such accounts will be closed. The rate of profit is 6% on PLS saving accounts as declared by the bank for the half year ended June 30. Hailey College of Commerce 25 . The introducer details (name and account number) and signature are included on the specimen signature card in the space provided.It is only applicable on PLS accounts. Therefore the bank cannot invest the money so there is no interest paid on these rather service chares are deducted for the safe custody and other service provided by the bank. Unlimited free of charge ATM withdrawals from Ban's own ATM's will be allowed. 500. Zakat is deducted every year @ 2. 2000. 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. Procedures and rules applied for opening account are almost same as for saving account except minimum limit of balance requirement. The rate on PLS fairly remains static. No fee (service charges) for maintaining such accounts will be charged. In case of withdrawals from BBA though the ATM Machine of other Banks. Account holder will be allowed a maximum of deposit transactions and • 2 checking withdrawals. CURRENT ACCOUNT Current Account can be classified as business account and are specially designed for persons who need their money back at any time from the bank. there balance in BBA's remain "NIL" for a continuous 6 month period. There is exemption for Fiqua sect. There will be no limit for maintain minimum balance. If any account goes below this limit account holder is intimated to bring balance at required level.Internship Report Basic Banking Account (BBA) The Bank Of Punjab The minimum initial deposit will be Rs. Minimum Balance Minimum balance requirement for current account is Rs.1000. No profit will be Payable. For opening a Current Account bank standard form is to be completed by applicant by the office attending him. PROFIT & LOSS SHARING ACCOUNT PLS Saving Accounts These accounts are special type of deposit account which is intended primary for small savers. non Muslims and non Pakistani. The rate of profit on Saving accounts is usually a little lower than then on Term (Fixed) deposits. the Charges of these Banks shall be applicable for such transaction.
Internship Report ZAKAT There is no deduction of Zakat on Current Account FOREIGN ACCOUNT The Bank Of Punjab The Bank of Punjab is currently dealing in the following foreign currencies.70) FOREIGN SAVING ACCOUNTS FOREIGN CURRENT ACCOUNTS FOREIGN TERM DEPOSITS Opening new account Documents required for opening an account Individuals • • Attested copy of National Identity Card or Passport of the individual. Corporate premier Account • • • • • • • The minimum initial deposit will be Rs. • • • US DOLLARS ($) POUND STERLING JAPANESE YEN According to new rules and regulations of the Govt. everybody can open the foreign currency account. (Charges of statement of account is Rs. No limit on deposit transaction and checks withdrawals. As earlier discussed PLS and current accounts the same types of accounts can be opened in the foreign currency. Hailey College of Commerce 26 .50 for one month & above is Rs. Statement of account will be issued every time you want. In case of salaried person attested copy of his service card. One Crore.
Club/society/association • • • • • • • Certificate of registration Certified copy of partnership deed Certified copy of rules Certified copy of resolution Copy by-laws Copy of NTN certificate Trust Account • • • Attested copy of Certificate of Registration. Joint Stock /Companies • • • • • • List Of all Directors Memorandum Of Association Article Of Association Certificate Of Incorporation(In case of Public Ltd company) Certificate To Commence Business NIC Copies Of all Directors Hailey College of Commerce 27 . Attested copy of Registration Certificate with Registrar of firm. Authority letter in favor of person authorized to operate on the account of the firm. Attested copy of NIC of all the trustees. Attested copy of “Partnership deed” duly signed by all partners of the firm. Certificate copies of Instrument of Trust.Internship Report • The Bank Of Punjab In case of illiterate person a passport size of the account holder besides taking his right and left thumb impression on SS card Partnership • • • • Attested copy of National Identity Card of all partners.
Internship Report Account Opening Process Introduction & Preliminary Investigation
The Bank Of Punjab
Before a bank office opens a new account he should ascertain whether or not the person desirous of opening an account is desirable customer. The officer will also determine the prospective.Customer’s integrity, respectability, occupation and the nature of the business by the introductory reference given at the account opening. Negligence in this informal preliminary investigation may result in serious consequence not only for the officer concerned directly by but also for other officer of the bank and the general public who may be affected indirectly. The following steps are taken for opening an account; • • • • • • • • • • • • • Customer must personally visit the branch so the officer gets the knowledge of the customer. Maximum information relating to the means, line and place of the customer should be obtained. Completion of Account Opening Form Signature on the account opening forms as well as on SS card must be attested. Introduction of the person who has any account with the Bank of Punjab Computerized NIC in original shall be scrutinized and compare with its photocopy. In case of joint account the following information must be obtained Who shall operate an account? To whom the balance shall be paid in case of death of any partner. Account may be opened with cash only. The account opener shall put his sign. on the account opening form. At the end of the day the account opening form shall be pasted on the account opening form file. Letter of thanks must be sent to every new account holder, letter shall also be sent to the introducer.
Rules for opening an Account Accounts shall be opened upon submission of duly filled-in Bank’s prescribed Account Opening Form properly introduced and all the documents related to the Account Opening procedure. Bank has the right to refuse to open an account without assigning any reason. Account shall be opened with an initial/minimum deposit as stipulated by bank. A distinct no. shall be given to every account. Hailey College of Commerce 28
Internship Report SPECIMEN SIGNATURES
The Bank Of Punjab
When an account is opened with bank the customer gives the bank a specimen of the form of signature, which would appear on his cheque drawn on his bank. This specimen is taken generally on a card specially designed for the purpose. And rules for the customers full name, and account number are entered on it. If the bank officer has reason to doubt genuineness of a signature, he should either get it conformed from his satisfaction or return the cheque with the remark “Signature differs”. VERISYS Verification of NIC. By NADRA. This is obtained by bank from NADRA on the behalf of its customer. DEPOSITING THE CASH After all the documents have been filled, then officer will make entry in the account opening registered allot the new account number to the customer. The customer will fill in the deposit slip and deposit cash in his account. This amount is also written on the account opening form against the column initial deposit. ISSUANCE OF CHEQUE BOOK After opening an A/C with the bank, the A/C holder once again makes a request in the name of bank for the issuance of a cheque book. The A/C holder mentions title of A/C, A/C number, sign it properly and mentions the no of leaves he requires. Normally BAL issues a cheque book having at least 25 leaves. Every cheque book also contains one leaf that is used for another issue of a cheque book. Entry Of A cheque book: Before issuance of a cheque book, the employee performs certain functions. They include: • • • Stamping every leaf with specific A/C number. Enters it in the cheque book issue register. Check whether or not a senior officer has verified the signatures, if no then first he gets them verified.
After entry in the manual register, the employee issues the cheque book to the A/C holder after his/her signature on the register. Charges of a Cheque Book
Hailey College of Commerce
Internship Report • • • •
The Bank Of Punjab
For PLS saving account with 25 leaves charges is Rs. 75. For PLS saving account with 50 leaves charges is Rs.100. For Current account with 25 leaves charges is Rs. 100. For Current account with 50 leaves charges is Rs. 125.
Letter of Thanks Bank prepares two ‘LETTER OF THANKS’ one for the new customer and the other for his introducer. This act promotes good will between the customer and the introducer. Procedure Followed In Order To Close An Account The procedure followed for the purpose of closure of an account is described in the following steps • The client who wishes to close an account first has to give an application, duly signed on the pre-printed application of the bank. The client has to attach this application with the liability form (explained below). The client can also give an application on a plain paper, but correct signatures are very necessary. Then it has to be made sure that if the account to be closed is a Saving, Current Account then the account balance before closing should be zero. If a client wishes to close an account then the bank also charge some money at the time of closing the account.
Along with the application to close the account client’s Cheque book is also received from him and then it is destroyed in order to prevent any misuse in the future. Other Types Of Accounts Term Deposit Accounts: Term deposit account is essentially a fixed deposit account. It is opened if a customer is willing to deposit his funds with the bank for a period within which he cannot withdraw his money. In case a customer withdraws his amount then he is given no interest at all on the principal. Normally people tend to fix their deposits with the bank for a relatively longer period of time (3 years, 5 years etc.) although the facility of opening a term deposit account is also offered for short tenors like 7 days, 30 days etc. reason being that as there is a positive relationship between the tenor and the rate of interest i.e. longer the tenor higher would be the rate of interest. Customers benefit by opening a fixed/term deposit account as they earn a higher rate of interest which cannot be earned if you are Hailey College of Commerce 30
The Bank Of Punjab
operating, say for example a savings account. At this point one thing must be taken into immediate consideration that only those people will fix their money that do not face any problem regarding liquidity, people having one would feel contend with a lower rate of interest but would certainly go for some other account like royal profit or savings account. Banks benefit by opening a term deposit account as funds are placed with them for a longer period of time and the bank can earn a lot by advancing these funds more than once, specifically if the advancing is short or medium term.
CALL DEPOSIT RECEIPT: Issuance of call deposit receipts is basically a free of cost facility offered by Bank Alfalah Limited not only to its own customer’s but also to walk in clients. When government organizations, or for that matter non government organizations float tenders for execution of a particular task, they require that the organizations who are participating in that tender i.e. organizations who have applied for the tender should, along with other documents, also submit a monetary guarantee certifying that they will definitely perform the required task upon acceptance of their offer. This requirement is basically put forth in order to safeguard the government organization from facing a situation in which the participants show inability or inadequacy to perform the required task after acceptance is granted in their favor. Such a situation generally is not desirable as the government organizations have to under go the procedural steps of floating and accepting the offers and in the process they have to incur additional costs. For this purpose the call deposit receipts is issued which is a monetary guarantee that if the organization does not work as per the tender requirements the government organization can en-cash the call deposit receipt and recover its losses. Cash Department: 2nd WEAK
CASH COUNTER The department deals with cash payments and cash receipts. The cash counter maintains the following ledger of accounts. • • • • Cash payment vouchers Cash receipt vouchers Cash balance book Token register
Hailey College of Commerce
cashier and clerk maintain these ledgers. In case of illiterate person officer shall take the thumb impression of the customer one on front side of the cheque and two on the back of the cheque. The clerk performs different verifications like • • • • • Verify signature Posting of cheque on Computer Authentication of Cheque Payment of Cash If the clerk finds any fault regarding with that Cheque. Officer put the verified signature stamp and initial of the officer on that stamp. The officer matches the signature of the customer through SS Card. Different staff member like checking officer. Posting of cheque on Computer • • • • • • After the cheque is verified the Assistant Administrator post the cheque on computer on which he write the Account number Cheque number Account Dr Cheque Amount After posting computer gave the number which is written on the cheque.Internship Report The Bank Of Punjab Manual registers are maintained in cash department. Hailey College of Commerce 32 . After it the officer must match the photo of the customer. he presents the Cheque to the clerk. Signature Verification: • • • • After issuance of the token next step is to verify the signature of the customer Customer must have two signatures on the back of the cheque and one signature on the front of the cheque. he returns the cheque to the customer for rectification. accountant. the clerk sends this cheque to the officer for the issuance of token no. All the daily transactions are recorded in these registers and ledgers. CASH PAYMENTS When a party comes to the bank to withdraw money. After a careful inspection.
The cash dealing staff and infrastructure provided as must be presentable and major emphasis must include quality service to the customer. The cashier enters the token number. After receiving the cheque cashier enter the following things in the “Cash payment Register” The cashier enters the cheque number. • • • • • • • • • The Cheque is verified by only one officer if the cheque up to Rs. In this department Mr. Then the cashier enters the amount. Payment of Cash After posting the cheque the officer send the cheque to the cashier.50. After follow such steps then cashier call the token number and pay to the person who has that token number. 000 The Cheque is verified by officer and branch manager if the cheque exceeds the amount of Rs. Authentication of Cheque After posting on the computer the cheque is authenticated by the Officer. State Bank requires that “Cash Department” deals in the following things. The cashier enters the account number.Internship Report • • The Bank Of Punjab While posting on the computer the Assistant Administrator check whether the account has sufficient balance or not. CASH RECEIVED Cash is the key component of banking operation handled by the first desk. So that the customer can draw money from bank He also checks whether the stop payment instructions are received from accountholder or not in case of account holder not come. Hassan Saif help me understand all this.50. • • • Cash Receipt Utility Bills Collection Prize Bond sold and purchased Hailey College of Commerce 33 . 000.
amount and depositor put the signature on the deposit slip. Authentication of Deposit Slip After posting on the computer the deposit is authenticated by the Officer. name.5000 The Deposit is verified by officer and branch manager if the deposit exceeds the amount of Rs. • • The Deposit is verified by only one officer if the deposit up to Rs. The cashier writes the following things in Cash Receipt Register • • • Account number Name of the Account Holder Amount Cashier sum the amount of Cash Receipt Register and match with the computer receipt payment.5000 Prize Bond sold and purchased Register: Hailey College of Commerce 34 . After posting computer give the computer number which is written on the deposit slip. Posting of Deposit slip: Cashier gives all the receipt to the officer to be posted on the computer. All the receipts are through deposit slip in which the customers write the account number. Cashier maintain the following register • • • • • • Cash Receipt Register Cash Payment Register Prize Bond sold and purchased Register Vault Register Total Balance Register Cash Sorting Register Cash Receipt Register: In this register all receipts receive from the customer is written.Internship Report The Bank Of Punjab In our bank one person for Utility Bills Collection and one person deals in other things. Officer must write the account number and credit the customer account. After stamping of cash received stamp the half slip return to the customer and one slip cashier put himself.
Cashier writes the Prize Bond number whenever it is sale or purchase Total Balance Register Cashier also maintains Total Balance Register on the daily basis.Internship Report • • The Bank Of Punjab Cashier also maintains the Prize Bond sold and purchased Register. Format of Total Balance Register is Today +Receipt Grand Total -Payment Opening balance Closing Balance Next Day +Receipt Grand Total -Payment Closing Balance Denomination Rupees 1000* # Coins 500* # 5*# 100*# 2*# 50*# 1*# 20*# 10*# Opening Balance (Previous Closing Balance) Hailey College of Commerce 35 . He writes the total amount and the denomination of Rs and also coin.
There our two parts of the Vault Register Hailey College of Commerce 36 . time and denomination of the rupees in the vault register. As a matter of policy once a packet of bank notes is sorted the sorting bank/branch shall clearly stamp on the wrapper of the packet as sorted along with the name of the bank/branch and date of sorting. Banks are required to maintain on a daily basis minimum surplus cash balance in Sorted Re-Issuable balance of at least One day average requirement for the proceeding month. Format of Cash Sorting Register is Date Denomination Amount Sorting Issuable Sorting Non Issuable Unsorted • • • • • • • • The duty of the cashier is to sort the defective and non-defective notes daily and give the customer only sorted non-defective notes because it is the requirement of State Bank of Pakistan. When the cashier put and takes out the money from safe he notes the amount.0.Internship Report Cash Sorting Register • The Bank Of Punjab The duty of the cash register is to maintain the Cash Sorting Register on the daily basis and separate the sorting and non-sorting notes. Vault Register The duty of the cashier is to maintain Vault Register on the daily basis. The cashier wants to maintain the cash balance. this register is placed in the safe. Special teams constituted at SBP BSC Officers will pay surprise visits to bank branches periodically to examine whether the banks are maintaining the cash sorting register. However following banks are exempted from this condition: Branches making an average daily payment of less than Rs. Branches having immediate access to Re-Issuable good quality Currency notes such as withdrawal facility from SBP BSC (Bank) local officers/NBP Chests.50 million.
00 am to 5. Operation Procedure • • • • • • • • Bill up to Rs. Utility Bills Collection In this department Mr. Bill above Rs.Internship Report In and Out The Bank Of Punjab In: If the packet of rupees increases from the previous day then it means packet of rupees increase of the specific denomination (100. Separate queues shall be made to accommodate senior citizen and ladies for paying their Utility Bills. A separate scroll will be prepared for each collection account.500 etc).5000 will be received under joint signature of utility bill collection officer and other officer. SUI Scrolls Hailey College of Commerce 37 .5000 will be received under single signature by utility bill collection officer. 3 Scrolls of LESCO Bills 3 Scrolls of SUI Bills 3 Scrolls of WASA Bills 4 Scrolls of PTCL Bills LESCO Scrolls Two copies of LESCO scrolls in LESCO office and one is the office copy. Appropriate sheds conducive to whether will be provided. • • • • facilitate the Utility Bills Timing for collection of bill from 9. Infrastructure Following infrastructure shall be provided at each branch to depositors. Funds collected in each account shall be transferred as per instructions of the concerned Utility organization.00 am Drinking water arrangements will be provided at each location. Nisar Ahmad help me understand all this.500 etc) Out: If the packet of rupees decreases from the previous day then it means packet of rupees decrease of the specific denomination (100.
Main branches of banks in a city maintain these inter-bank accounts. money is transferred from one branch of a bank to another bank’s branch through these inter-bank and inter-branch accounts. one copy in Empire Center branch one day after and one is office copy. After that he signs this particular cheque and puts the ledger no and folio on the cheque.Internship Report The Bank Of Punjab One copy in SUI office. it means that cheque has been properly posted in the ledger. CLEARING Department: Hailey College of Commerce 38 . INTER-BANK ACCOUNTS Like inter-branch accounts of a bank. So. If they are present. are issued. ledger no. TOKEN BOOK Token book is maintained to issue token no. whether the amount mentioned on the cheque falls within the balance range or it exceeds the range. Now the cashier make payment to the customer and record this entry in the cash payment register. who checks the balance of that particular account. If the amount falls in the range then he posts the entries in the ledger by debiting the account of the customer. PTCL Scrolls One copy in PTCL office. Cheque no. amount. If the amount exceeds. which he maintains at the counter. he prepares the final cash balance of the branch at daily basis. two copies in Empire Center branch one day after and one is office copy. is recorded in the token book. to each payment voucher. Cashier checks whether the token no. With the help of this payment register. folio are present or not. different banks have correspondent accounts with each other. After the issuance of token no. WASA Scrolls Two scrolls of bills shall be sent to Empire Center branch one day after and one is office copy. different token no. he returns the cheque to the customer. signature of the officer. date and token no. For more than 10000 and less than 10000.. Now the cheque is given to the customer and is asked to take it to the cashier. the cheque goes to an officer. He verifies.
Crossing may be general or special. Basic advantage of crossing is to save the instrument to go it from illegal hands. cheque is a most commonly used instrument for making payments by account holders. Along with the cheques.Internship Report 3rd and 4th WEAK The Bank Of Punjab As we know that. STAMPS PUT ON THE CHEQUES: When the cheques are presented in BAL to be deposited in their respective payee’s accounts. to deposit them in the respective payee’s accounts. a crossed cheque is lost or stolen. the holder cannot receive payment except through the banker named on the cheque. drawn across the face of the cheques with or without words written in between them. DD. in one city. So. Clearing house facilitates different banks. After the cheques have been crossed specially. PS. In clearing cheques are crossed specially. Clearing House has provided this facility. CDR etc. If. different stamps are put on cheques before their lodgment in outward clearing. that are used for making payments and are drawn upon a bank. ABN-AMRO of the same city(as Lahore) are presented in Bank of Punjab. there is no Hailey College of Commerce 39 . Cheques lodged in clearing constitute two types of clearing: • • Outward Clearing Inward Clearing OUTWARD CLEARING When cheques. to get their cheques drawn upon other banks to be cleared. (discussed in the next part). TC’s and other negotiable instruments drawn upon other banks like MCB. i) CROSSING THE CHEQUES: Crossing means two parallel transverse lines.TC. these instruments are lodged in outward clearing (o/w clg) of Bank of Punjab. there are some other negotiable instruments like PO. Cheques are stamped with bank’s name between two transverse parallel lines to constitute special crossing. one of the basic economic function of commercial banks is to receive deposits and to honor cheques drawn upon them. The question arises that how these cheques & other negotiable instruments drawn on one bank are deposited in other banks and money is transferred from one bank to another.
we (BAL Circular road) debit our main br. as these cheques would have to be presented in their concerned drawee banks on the subsequent day. So. NIFT after segregating the cheques of different banks delivers them to their concerned banks. Payee’s accounts are credited by the amount of their vouchers. This process is carried out under main branch’s governance. Drawee banks will debit the drawer’s accounts in their inward clearing (discussed later). iii) ENDORSEMENT STAMP: The word endorsement is derived from Latin word ‘indorsum’ which means ‘on the back’. by the total amount of outward clearing and an IBDA (inter branch debit advise) with a debit voucher is sent to main branch Lhr. they are sent to NIFT (National Institutional Facilitation Authority) with Add List. As main branch Lhr. Ordinarily. it means anything written or printed upon the back of an instrument. account. the cheques are endorsed in full (endorsed specially) by putting the stamp with words describing “ Payee’s account Credited in BOP Wahdat road. Lahore”. at the end. So.Internship Report The Bank Of Punjab risk of wrong payment. After putting these three stamps on cheques & other negotiable instruments. of bop deals with other banks through inter-bank accounts and we deal with our main branch. with the following day’s date. maintained with us. Hailey College of Commerce 40 . So it is an effective means of minimizing the risk of loss or forgery. which constitute the inward clearing for those (drawee) banks. ii) CLEARING STAMP: After the cheques have been crossed specially. Account Titles Local Clearing Main branch Payee’s Accounts Debit Credit RETURN IN OUTWARD CLEARING: Some of the cheques lodged in o/w clearing are dishonored by the concerned branches due to some deficiencies and returned back through NIFT. clearing stamp is put on the cheques and other instruments. ACCOUNTING PROCEDURE: After lodgment of all cheques in outward clearing.
Payee’s accounts are debited & main branch’s account is credited. DD. the main branch’s account is debited by the amount of cheques returned. Now. the accounting entries opposite to first are passed i. CDR etc. Account Titles Drawer’s Accounts Local Clearing Main branch RETURN IN INWARD CLEARING: In case of cheques dishonored (returned) due to some deficiencies.e.Internship Report The Bank Of Punjab Either.) drawn on Bank Alfalah Circular Road. PS. As. the concerned drawer’s accounts are debited (in BAL Circular Road) and main branch’s account is credited by the total amount. sent by other banks. Account Titles Drawer’s Accounts Local Clearing Main branch Local Clearing Main branch Debit Credit Debit Credit COLLECTION Hailey College of Commerce 41 . these cheques are again lodged in outward clearing or returned to customers by canceling bank’s all stamps. After having all the stamps and dates of cheques confirmed. based on the reasons. INWARD CLEARING Cheques and other negotiable instruments (PO. constitute the inward clearing of BAL.
Internship Report The Bank Of Punjab When cheques. ACCOUNTING PROCEDURE: i) When a Cheque is lodged in OBC: Account Titles Customer’s Liability on OBC Banker’s Liability on OBC Debit Credit ii) On Realization of OBC: when this cheque is got cleared (through outward clearing) in the concerned BAL branch (e.g. Faisalabad Br.). then IBCA is sent to our branch and thus an outstation cheque is deposited in payee’s account.g. TC’s and other negotiable instruments drawn upon other banks outside the city (Lhr. So. these instruments are lodged in collection and constitute OBC’s (outward bills for collection). Otherwise. where BOP.) are presented in BOP (Circular Road) to deposit in payee’s accounts. Cheques of cities. Postage & other charges are deducted on account of payee according to SOC (Schedule of Charges). Faisalabad). they are directly sent to the drawee bank.’s Account Payee’s Account Debit Credit Hailey College of Commerce 42 . are sent to that branch where these cheques are lodged in outward clearing. then instead of clearing.s branch exists (e. Account Titles Banker’s Liability on OBC Customer’s Liability on OBC Debit Credit & Account Titles Concerned BAL br.
they constitute the outward clearing for those banks and inward clearing for BOP Wahdat Road ACCOUNTING PROCEDURE: i) When a Pay Order is issued. PS & CDR and their processing in accordance with my observation. with in the same city. in case of account holder). Traveler Cheques. to pay on order the specified amount to the directed person (payee)”. pay order is issued in the favour of payee. he is asked to complete the prescribed application form in which the amount of pay order is to be stated. on account of a customer. Pay Slips. banker’s also handle Promissory Note. Call Deposit Receipts. Pay Orders. MAKING OFA PO: When a person requires a Pay Order (made by BAL Circular Road. cash department debits cash account & Pay Order issued account is credited as: Account Titles Debit Credit Cash Deposits PO Issued Commission on Remittances Tax on PO & DD Hailey College of Commerce 43 .). as negotiable instruments. Bill of Exchange (will be discussed in later part). Pay Order is always drawn on the bank that has issued it. Pay Orders are used to make payment or to transfer money. DD. Here. After having the total amount deposited in the bank (in cash or through cheque. 1) PAY ORDER (PO): “Pay Order is a negotiable instrument made by the bank. Lhr. during first two weeks. when pay orders issued by BOP McLeod Road. Like cheques.Internship Report LOCAL REMITTANCES (Negotiable Instruments) The Bank Of Punjab Besides cheques. Bank Drafts. Certain amount of commission and advance tax is charged on issuance of pay order (according to SOC). I have tried to describe PO. are presented in other banks to get them deposited in the payee’s accounts.
then instead of DD Payable. iii) DD Payable Account is debited (in Faisalabad Br. Then. (letter is also sent for DD’s amounting more than Rs.100. Similar is the process for demand drafts drawn on BAL Circular Road Branch. on account of a person. when this demand draft is presented by payee in any bank. Hailey College of Commerce 44 . Suspense account is debited to make payment.) when DD is presented in inward clearing. a DD is always made for a particular city. Branch. demand draft is issued in favor of the specified person in Faisalabad (supposed) and is drawn on BAL Faisalabad Branch. out of the city. advice is not received by BOP Faisalabad Br. So. and DD is presented first. 000) ii) Upon receipt of advice in Faisalabad Br. In case. Demand Drafts are used to make outstation payments or to transfer money. requesting it to pay the specified amount to the person named on it”. and drawn on its own branch in a specific city or on the branch of another bank in that city (in case bank doesn’t have any branch there). they will credit DD Payable a/c. it constitute the inward clearing of BOP Fsd. ACCOUNTING PROCEDURE: i) When BOP mcload road issues a Demand Draft drawn on BOP Faisalabad Br. MAKING OFA DD: When a customer requests his banker to provide him a DD made on his account for a particular city like Faisalabad. an IBCA with DD advice is sent to Faisalabad Br. Then. after having the total amount (including commission and advance tax) to be deposited with application form.Internship Report ii) When Pay Order is received in inward clearing: Account Titles PO Issued Cash Deposits The Bank Of Punjab Debit Credit 2) DEMAND DRAFT (DD): “A Demand Draft is a negotiable instrument issued by the bank. Therefore.
like furniture purchased by bank. The bank enjoys the benefit of keeping funds deposited until the payment is not made. During this time. “It is an instrument like cheque issued by the bank on account of a customer & in favour of a person.900 100 . the bank uses the deposit and earns income on that. DD & CDR After issuance of Pay Order. after deducting the cancellation charges Rs. to pay the specified amount”. Hailey College of Commerce 45 Debit 5. CDR’s are issued to make payments. Earning ADVANCE TAX AGAINST REMITTANCES Advance Tax is deducted on issuance of PO & DD ( when customers don’t have tax exemption form) and credited in Tax on PO & DD account (discussed earlier). date of encashment (realization) is written when it is presented in bank. Then. Suppose a demand draft amounting Rs. charges of Mucaddams etc.000 has to be cancelled. Pay Slips are used to make payment by the bank itself against certain expenses incurred. the remaining (net) amount is paid to the customer through Cash Payment Voucher.5. CANCELLATION OF PO. Instead of writing the issuing date on pay slip.100. when any one of these has to be cancelled by the customer and it is returned in the bank.Internship Report 3) CALL DEPOSIT RECEIPT (CDR): The Bank Of Punjab BOP also issues Call Deposit Receipts (CDR).000 Credit 4. then Account Titles DD Issued Cash Misc. 4) PAY SLIP (PS): “It is a negotiable instrument like cheque issued by the bank on its own account to pay a specified amount to the directed person”. especially when a company goes for some tenders or for purchase of government securities. Demand Draft or Call Deposit Receipt by BAL Circular Road.
Incharge Credits.Internship Report The Bank Of Punjab Tax deducted has to be paid to State Bank of Pakistan (SBP) with in one week of issuance of these instruments. And. I have tried to describe my experience and observation in credit department LENDING OPERATIONS Since. Mr. Farrukh. Bank’s funds comprise mainly of money borrowed from numerous customers on various accounts such as saving accounts. This maturity or duration of credit is not an independent factor. So. Pay Order in favour or SBP Lahore is made. One major difference that I observed in credit department and other departments was the difference in the nature of work. I was moved on to the Credit Department. welcomed me in his department. the basic function of a bank is to receive deposits (at low rate of return) and to lend money (at high rate of return). I worked for the last two weeks of my internship program. a banker KINDS OF CREDIT Bank provides credit facilities to its customers for a specific maturity. Account Titles Debit Credit Tax on PO & DD PO Issued CREDITS 5th and 6th WEAK After working for two weeks in Trade Finance Department. Here. with a challan form. the major part of total income of a bank is generated through the utilization of these funds. For him. After working in credit department. fixed deposits and notice deposits etc. So. it depends upon the purpose of the loan. In Credit department. So to pay this tax. I realized the importance of lending operations for a bank. that I did not find such a lenient and cooperative person in my career. whereas. current accounts. Hailey College of Commerce 46 . the lending operations of a bank constitute the most vital part of its business. I would just say.
Loan To Customer Bank of Punjab offer following types of loan to customer • • • • • • • Consumer Aasaish Loan Green Tractor Scheme Consumer Vehicle Loan Consumer HOUSE Demand BOP SME LOAN Chief Minister Green Punjab Rickshaw Scheme Kisan Dost Scheme Consumer Aasaish Loan There is a contract between BOP with LG and PEL.Internship Report According to the maturity of credit. 24 & 36 months are also available with nominal markup Hailey College of Commerce 47 . Medium Term Credit 3. LONG TERM CREDIT: Credit facilities sanctioned for 3 to 5 years is considered as the long-term credit.g. 0% Mark-Up (12 months) 0% Down Payment( 12 months) FREE Home Delivery Financing Tenures of 18. it has three basic kinds. This credit is used for the creation of current assets e. 1. furniture etc. such as purchase of building and heavy machinery. Short Term Credit 2. Long Term Credit SHORT TERM CREDIT: The Bank Of Punjab The period of a short-term credit is generally less than or equal to one year. for the purchase of raw material and to meet the working capital requirements. Long-term credit is required for capital expenditures. It is used for the purchase of machinery. by the firms. MEDIUM TERM CREDIT: Medium term credit is normally issued for one to three years.
employees will submit the following two A. Having minimum Net Income of Rs.OR above The Govt.Internship Report The Bank Of Punjab Easily Affordable & Flexible Installments Quick Processing No Hidden Cost No Insurance cost Product BOP Aasaish Loan is Demand finance facility for purchase of consumer durable goods TV.15. Self-employed business / Professional • • • • In addition to condition # 1 & 2: Having age between 25 and 57 years (57 Years at maturity of facility) Minimum 2 years in current business. Fans. 2. 000/month. Having minimum basic salary of Rs. Documentation required for processing • • • • • Application form Copy of NIC Customer Consent Form. Mobiles. Split unit etc. Audio/Video system AC.000/. Microwave Ovens. Refrigerators. A & B. Eligibility Criteria Salaried Person: Confirmed permanent employee with one year experience Salary is routed through a bank account. Employer Certificate on letterhead Additional requirements for private employees • • • • The Private employees will submit the following three documents in addition to documents mentioned in Serial # 1. if loan is Rs. whichever is earlier. Private Employees: • • • In addition to the above mentioned conditions: Having age between 25 and 59 years OR date of retirement.10. Latest Salary Slip B. 50. 3. Bank Statement for last 3 months Latest Copy of utility bills (Electricity & phone) Income Tax Return/Wealth Statement Hailey College of Commerce 48 . 000/month.
15.200.Self-employed: Business person and professional having minimum 3 years in current business . 000 and maximum amount is Rs.000 Tenure of the loan: Loan is available for a period of minimum 3 years and maximum 5 years. 12. Employees: Net salary of Rs. 000. 2 & 3 Bank Statement for last 6 months Latest Copy of utility bills (Electricity & phone) of residence Consumer Vehicle Loan Easily Affordable & Flexible Installments Quick Processing Minimum Down Payment Minimum Insurance Product BOP car loan is a Demand Finance Facility to Purchase Brand new locally manufactured/ Assembled Cars for Personal Use Eligibility Criteria 1. Govt. 1. Salaried Person: Permanent employee of selected organizations with at least 3 years of service experience with a minimum salary of Rs.000. Mark up rate charged: Most competitive rate available in the market Other Charges Non refundable fee Hailey College of Commerce Rs.450/49 .Between 25 and 57 years of age Loan facility you can avail Minimum amount is Rs.Holder of computerized national identity card . 2.Internship Report The Bank Of Punjab Additional requirements for self-employed professional/business persons The Self-employed Professional/Businesspersons will submit the following documents in addition to documents mentioned in Serial # 1.000/3.
Car insurance: The Bank Of Punjab Rs. Tenor of Loan Pricing Factor 3 Years 0. Insurance premium for the first year will be paid in full up front with down payment and for subsequent years along with installment.Internship Report Processing Fee/ Documentation charges Registration Charges Initial down Down payment is 10 to 20% of value of the car.750/Actual payment: BOP has arranged insurance facility from its approved list of companies at discount rates for the convenience of its customers.02418 5 Years 0. 3.03111 4 Years 0. Letterhead Bank Statement for last 6 months Latest Copy of Utility Bills For self employed business persons/professionals: • • • • Copy of CNIC Two recent photographs Bank statement for the last I year of business account If not banking with us Hailey College of Commerce 50 .02004 Your loan amount x pricing = monthly (excluding installment insurance) Your loan amount x pricing = monthly installment (excluding insurance) Documents are required For salaried individuals: • • • • • Copy of NIC 2 Recent Photographs Latest Salary Slip / Certificates on Comp.
000/- Improvement/ Rs. 000 Self-employed: Business person and professional having minimum 5 years in current business -Holder of computerized National Identity Card .000/- Rs.500.Internship Report • • • The Bank Of Punjab Banking certificate from branch manager stating Title. 300. 7. Business entity.Between 25 and 60 years of age Loan facility available: Purpose Minimum Amount House/Flat& Maximum Amount Bank Rate Bank financing up to 70% of assessed value Purchase of Construction Home Rs. Authorized signatory Copy of Latest utility bills Business Related Documents: • • • • • • Documentary evidence in business or in profession for the last 3 years Income Tax return / wealth tax statement Proprietorship/Partnership Deed Articles & Memorandum of Association Latest copy of paid utility bills (Phone & Electricity) of current business address Membership/payment receipts of Chamber of Commerce/Trade Association/Anjuman-e-Tajiran.20.000/Hailey College of Commerce Rs.000/51 . Eligibility Criteria: Salaried Person: Permanent employees of selected organizations with a minimum take home salary of Rs. Maintained since. 3. Account number. if available Consumer House Loan Product BOP house loan is long term finance facility for purchase of house/flat or construction of house on self-owned plot or for renovation/ home improvement.000. 300.
9850 will be your monthly installment payable excluding insurance(Life & Property). which will be calculated on daily product basis (For each year new amortization schedule will be provided to the customer in case of any change in mark up.000 for 15 years. levies etc Rs. legal charges Stamp duties. 1. 1.450/Rs. mark up and insurance amount.000. you take a loan for Rs.g.000. .00985 = Rs. Total monthly installment includes principal.950/Actual Loan repayment Loan will be repaid in equal monthly installments through postdated cheques.Internship Report The Bank Of Punjab Bank financing up to 20 % of assessed value Renovation / Addition Income of spouse can also be considered in determining the debt paying capacity & hence loan amount.000 * 0. Monthly installment can easily be calculated for e. 2. 05 years Mark up rate charged Most Competitive rate in the market. Tenure of the loan Minimu n Purchase of House/ flat 3 years Construction 3 years Home improvement 3 years Purpose Maximum 15 years 15 years with maximum 12 months grace period. Simply multiply the 15-year factor by your amount Rs. Financing period Pricing Factor 3 0.03157 Hailey College of Commerce 52 .if.) Other Charges Non-refundable fee Processing Fee Valuation charges.
01439 0.01778 0.01061 0.Internship Report 4 5 6 7 8 9 10 11 12 13 14 15 0. gross salary & certificate from HR department for perks. length of service.(for salaried individuals) Bank statement for last six months for salaried individuals and for the last I year incase of self-employed businessperson Copy of utility bills Fee slip of children if applicable Income tax return / wealth statement Copy of Rent agreement if living in rented house BOP SME LOAN Hailey College of Commerce 53 .01020 0.01110 0.02465 0.01328 0.00985 The Bank Of Punjab (Insurance premium for the first year will be paid in full up front with down payment and for subsequent years along with installments.01169 0.01584 0.02052 0.) Security of the loan • • • House/flat purchased Plot on which construction is to be carried out House on which renovation is to be carried out Documents Required • • • • • • • • Copy of CNIC Two recent photographs Last three Salary slips/ salary certificate on company's letter head with joining date Current designation.01240 0.
500. 950 for loans up to Processing fee 3. 000.000.and maximum amount is Rs.000.000 Valuation Charges. of every month Documents required Copy of CNIC Two recent photographs Copy of paid utility bills showing bills for last 12 months Hailey College of Commerce 54 .1. 36.000/Tenure of the loan Loan is available for a period of 1 year.000/-* Member of trade body or chamber of commerce or anjuman-e-Tajran for at least 3 years Loan facility available Minimum amount is Rs. Other Charges Non refundable fee Rs. 7.4.000/. whereas mark up is to be paid monthly by the 10th. All stamp duties Legal and Rs.450/Rs.8. business health & value of property. which can be renewed subject to satisfactory conduct of account.000 Insurance Property insurance is mandatory from bank's approved companies (List will be provided) Loan repayment Loan will be repaid on demand / lump sum. 950 for loans over documentation charges Actual 3. Eligibility Criteria The facility is available for Businesspersons & self-employed professionals Holders of computerized national identity card Between 25 and 55 years of age Have minimum 3 years in current business / practice Assessed net monthly income Rs.Internship Report The Bank Of Punjab Product BOP SME loan is a running finance facility to meet working capital requirements or to expand existing business against owner occupied residential/commercial property.
2500/ month Rs. Hailey College of Commerce 55 . 2300/ month Terms & Conditions • The delivery to the borrower will be made only after issuance of delivery of delivery order by BOP. if not banking with us Last "1" year bank statement of business account Bank certificate from Branch manger stating . 115.Maintained Since .Authorized signatory Chief Minister Green Punjab Rickshaw Scheme The Bank Of Punjab Purpose: Provision of financial facility to people for purchase of rickshaw for the fullment of their desire. Three types of rickshaw BOP is offering PAK HERO SAZGAR STAR ASIA Rs. 125.Internship Report Income tax return / wealth statement Banking relationship information.000 Rs. 110.Title -Account number .000 Rs.000 Installment on PAK HERO SAZGAR STAR ASIA Rs. 2600/ month Rs.Constitution with name(s) of proprietor/partner/directors .000 ADVANCE on each Rickshaw is 40.
of rickshaw Date when rickshaw delivered at point of delivery Point of delivery (name of designated dealer.according to per acre limit of the crop.). fertilizers. 000/. contact#) Guarantor who has shop or house License of LTV ID card of a person This refers to tri-party MOU signed between Dept. Documents Require • • • • • • • • • • • Original file of Rickshaw Engine & chassis no. Hailey College of Commerce 56 . pesticides. Amount: Maximum Rs.c. of Punjab The Bank of Punjab & your company Kisan Dost Scheme Kisan dost agriculture finance scheme Purpose: Provision of financial facility to farmers for purchase of inputs (Seed.Internship Report • The Bank Of Punjab The delivery order will be issued after getting rickshaw registered. Pass Book. insured and completion of bank’s documents. Security: Charge on Agriculture Land through Agri.t.500. fungicides e. address. Eligibility: Resident Self Cultivator having Agriculture maximum 50 acres Owner-cum tenant having minimum land 5 acres under cultivation Tenant having valid lease agreement for reasonable tenure (minimum area of subsistence land holding) . of transport Govt. OR Registered / Equitable mortgage of urban property assessed by PBA's approved surveyor and cleared by Bank's legal counsel.
500. 25% margin on liquid security.Internship Report The Bank Of Punjab OR Liquid security in the shape Bank's Fixed Deposited Receipts/DSC/NSC or Regular Income Certificates One person guarantee of reputable person. Eligibility: Resident Self Cultivator having Agriculture Land minimum 5 acres and maximum 50 acres OR Persons providing their tractors to farmers on rental basis for their various Agriculture and Farming activities. for purchase of Tractor on Lease Finance Basis. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Fresh documents will be obtained after three KISAN DOST TRACTOR FINANCE SCHEME Purpose: Provision of financial facility to the farmers and non farmers (those who provide tractors to farmers on rental basis for various tractor related operations).000/-. Amount: Maximum Rs. Margin on Security: • • 50% Margin on Agri land or Urban property. Repayment: Once in a year along with mark up. Two written satisfactory market checking reports must be obtained before disbursement. Renewal: Automatic renewal upon adjustment of entire principal with full markup within one year. The persons who are related with the business of providing services for tractor related farming practices to the farmers on rental Basis. Insurance: The borrower will have to arrange life assurance under the Bank 's charge. Hailey College of Commerce 57 . Mark-up: 9% per annum.
ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Amount Maximum Rs.000/-. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Pass Book One personal guarantee of reputable person.. Two written satisfactory market checking reports must be obtained before disbursement Non Farmers: Lease Tractor (to be registered in the name of Bank) Charge on urban immovable property through equitable/registered mortgage One personal guarantee of reputable person. Mark-up: 11% per annum. Hailey College of Commerce 58 .500.Internship Report The Bank Of Punjab Equity: 10% to 20% of the cost of Tractor will be paid by the borrower on case to case basis. Insurance: The Lessee will arrange comprehensive insurance of tractor life assurance of lessee under the Bank's charge. Two written satisfactory market checking reports must be obtained before disbursement. Security: Farmers: Lease Tractor (to be registered in the name of Bank) Charge on Agriculture Land through Agri. KISAN DOST AABIARI SCHEME Purpose Provision of financial facility to the farmers for purchase of Tube well Eligibility Resident Self Cultivator having Agriculture Land minimum 5 acres and maximum 50 acres. Repayment: 10 equal half yearly installments (within five years).
tool and implements. Tube well and other related implements (The vendor will issue receipt in the name of Bank) Charge on Agriculture Land through Agri. Engine. plough. richer etc. Mark-up 11% per annum. Pass Book One personal guarantee of reputable person. thresher.500. Equity: 20% of the cost of machinery.g.e. Two written satisfactory market checking reports must be obtained before disbursement Insurance The Lessee will arrange comprehensive insurance of implements/assets life assurance of lessee under the Bank's charge. Trolley.Internship Report Equity 20% of the cost of project will be paid by the borrower. Eligibility: Resident Self Cultivator having Agriculture Land measuring 5 acres to maximum 50 acres. Repayment 8-10 equal half yearly (within four to five years) KISAN DOST MECHANIZATIONS SUPPOR SCHEME Purpose: Provision of financial facility to the farmers for purchase of Agricultural Implements e. Hailey College of Commerce 59 . Security: Farmers The Bank Of Punjab Lease Assets i. Amount: Maximum Rs.ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy.000/-.
Hailey College of Commerce 60 . Equity: 20% of the cost of Vehicle will be paid by the borrower. KISAN DOST FARM TRASPORT SCHEME Purpose: Provision of financial facility to the farmers for purchase of Farm Transport Vehicles e. Small Pickups. Pass Book One personal guarantee of reputable person. Two written satisfactory market checking reports must be obtained before disbursement Insurance: The Lessee will arrange comprehensive insurance of assets life assurance of lessee under the Bank's charge.Internship Report The Bank Of Punjab Security: Farmers: Lease Assets/implements (The vendor will issue receipt in the name of Bank) Charge on Agriculture Land through Agri.000/-. Amount: Maximum Rs. Mark-up: 11% per annum.g. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Repayment: 8 equal half yearly installments (within four years). VP/Vans and small chillers.500. Eligibility: Resident Self Cultivator having Agriculture Land minimum 5 acres and maximum 50 acres..
500. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy.000/Equity: Borrower will pay 20% cost of the project. Pass Book. Eligibility: Resident Self Cultivator having Agriculture Land minimum 5 acres and maximum 50 acres. and land improvement clearance of jungle and land reclamation. One personal guarantee of reputable person. Two written satisfactory market checking reports must be obtained before disbursement. laser leveling.Internship Report Security: Farmers: Leased Vehicle (to be registered in the name of Bank) The Bank Of Punjab Charge on Agriculture Land through Agri. Mark-up: 11% per annum. Repayment: 10 equal half yearly installments (within five years). Amount: Maximum Rs. KISAN DOST ESLAH-E. Hailey College of Commerce 61 . Insurance: The Lessee will arrange comprehensive insurance of Vehicle life assurance of lessee under the Bank's charge.ARAZI SCHEME Purpose: Provision of financial facility to the farmers for development of their non productive lands into productive ones by conductive on farm works of Land leveling.
The applicant should be having adequate arrangements to sell out the products properly e. Pass Book The Bank Of Punjab On person guarantee of reputable person. Hailey College of Commerce 62 . ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Mark-up: 11% per annum. Goat Farm. Amount: 80% of cost of animals (Maximum facility can be granted upto 50% of forced sale value of property). Two written satisfactory market checking reports must be obtained before disbursement Insurance: Life assurance of lessee under the Bank's charge.g. Poultry and Fish Farming. KISAN DOST LIVE STOCK DEVELOPMENT SCHEME Purpose: Provision of financial facility for purchase of animals (Milk & meat production. Eligibility: Sufficient experience to handle Dairy Farm. supply contract with milk processing company. Poultry Farming and Fish farming) to the farmers and non farmers (those who have their own live stock farm/fish farm for commercial purposes). Repayment: 8-10 equal half yearly installments (within four to five years). cattle farming. The persons who have their self owned Dairy Farms for production of milk on commercial basis). Cattle Farm.Internship Report Security: Farmers: Charge on Agriculture Land through Agri.
Internship Report Security: Leased Animals (receipt will be issued in Charge on Agriculture Land through Agri. Pass Book The Bank Of Punjab the name of Bank) 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). 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. 25% margin in case of liquid security Insurance: The Lessee will arrange comprehensive insurance of Animals. KISAN DOST LIVE STOCK SCHEME Finance for live Stock breed improvement through village veterinary workers Purpose: Provision of financial facility to the Village Veterinary Workers (trained by Live Stock and Dairy Development Department) for purchase of Artificial Insemination kits on lease finance basis Eligibility: Hailey College of Commerce 63 . Repayment: 16 equal quarterly installments within four years excluding one year dry period. In case of written assurance for recovery from DCO/Nazim mark-up will be KIBOR + 6% with floor of 8%. Mark-up: Average 6 month's KIBOR + 600bps with floor of 11% per annum. Period: 5 years (including one year dry period).
tractor trolleys.or 90% of purchase price of kit and bicycle. for providing agri services to farmers Eligibility: Commercially viable entities with immaculate track record with the Bank/Other financial institutions Amount: To be decided on case to case basis keeping in view the financial/commercial viability of the transaction. Lease Assets (Receipt will be issued in the name of Bank). 2. Insurance: Comprehensive Insurance of Leased Assets life assurance of lessee under the Bank's charge Mark-up: 11% per annum Repayment: Equal monthly or quarterly installments (within five years) KISAN DOST COMMERCIAL AGRO SERVICE FINANCE SCHEME Purpose: Provision of financial facility to the commercially viable entities with immaculate track record for acquisition of Agri implements and equipments i.Internship Report The Bank Of Punjab Village Veterinary Workers having diploma certificate and recommendations from Live Stock and Dairy Development Department Govt. 000/. Hailey College of Commerce 64 . of Punjab) Amount: Maximum Rs.e. Security: 1. Not to exceed 80% of the value of equipments/implements.c.t. harvesters e. Two personal guarantees of reputable persons having fixed assets equivalent or more to value of advance.45.
All facilities required by the Franchisees of the Agrimall (Pvt) Ltd will be provided through this scheme. Millat Tractors. Two written satisfactory market checking reports must be obtained before disbursement Insurance: Comprehensive Insurance of Leased Assets life assurance of lessee under the Bank's charge Mark-up: 9% per annum Repayment: Equal quarterly installments (within five years) KISAN DOST AGRI MALL FINANCE SCHEME Purpose of Finance: Four renowned companies of the country such as M/S Ali Akbar Group. Lease Assets (Vehicles/Tractors will be registered in the name of Bank or Receipt of equipments will be issued in the name of Bank) 2. The farmers who will be the clients of Franchisees. Bank charge on Agri Land through Agri Pass Book Or Bank's Charge on urban property through registered and equitable mortgage 3. Amount of Finance: The amount of Finance will be 9. The Agrimall (Pvt) Ltd has approached our Bank to provide financial help to their franchisees to establish and run these Agrimalls under their specialized management through out the country. We have launched a Kissan Dost Agrimall Finance Scheme.5 (M) maximum for all package of facilities mainly as Hailey College of Commerce 65 . One personal guarantee of reputable person. ACO along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. PSO and Angro Services have established a joint venture company in the name of the Agrimall (Pvt) Ltd to provide agro services under one roof through its Franchisees. will also be provided production loans through Bank's Kisan Dost Agriculture Finance Scheme (For purchase of inputs).Internship Report Mode of Finance It shall be demand finance/lease finance. Security: The Bank Of Punjab 1.
RATE OF INTEREST: Rate of interest against these advances vary according to the duration. only the short-term credit facilities are being provided. In a pledge. In BOP Wahdat Road.5 (M) for construction of site. Advances SECURITIES FOR ADVANCES No doubt. as a security for a credit.Internship Report under: Demand Finance: Maximum Rs. there is less risk of idle cost of funds.50 (M) for purchase of tractors and machinery. L/C Limit: Maximum Rs. the advancing of credit involves a great risk for the bank. Therefore.0 (M) for stocks of seed. to cover this risk. the possession of movable assets is with bank but the ownership remains with the client. The Bank Of Punjab Lease Finance: Maximum Rs.2.1. Shorter is the period of loan. Common securities against banker advances are as under: PLEDGE Pledge is the actual delivery of the movable & tangible property to the lender.2. in long-term credits. greater is the rate of interest because. fertilizers. even under changing market conditions. Pledge is against short-term finances and is considered Hailey College of Commerce 66 . before sanctioning the credit facility to a customer. the bank keeps different tangible and non-tangible securities. pesticides and oil etc. Running Finance: Maximum Rs. The bankers prefer such securities that carry less risk of depreciation due to market fluctuations and are easily saleable.3.5 (M) for import of pre-engineered construction material for construction of site one time transaction.
The commodities that are pledged include generally. so bank keeps these goods in the godowns under the custody of Mucaddams.g. 1) Client: In case of pledge. MUCADDAMS: People who look after the pledged goods for bank are called Mucaddam. bank can easily sell it in the market. the bank needs security with margin or cushion. Hailey College of Commerce 67 . 1. Also the commodity being pledged should be easily saleable. So. such type of goods is kept in the godowns of the company. the security that is to be pledged should be of worth Rs. 3) Market Awareness: A banker must have market awareness e. the must be satisfied with the honesty and credibility of the client.1 million. 2) Nature of Commodity: The banker must be aware of the nature of the property i. consumables. the bank appoints its own men called Mucaddams to take care of stock.e. finished goods and in certain cases work in process (WIP). Fluctuation in prices. it doesn’t mean that this cotton will be kept in bank. godowns are in the premises of the clients under the custody of Mucaddams.. so that in case of default of client. whether the commodity is a perishable item like sugar. Such commodities should not be pledged that might have low demand in the market and have many associated risks. in pledge. if.25 million.Internship Report The Bank Of Punjab to be the best security for the bank. For example. Therefore greater risk is imposed by the client. whose honesty can be bought at any time. the possession of the goods is with bank. PRECAUTIONS: There are certain factors that a banker must take into consideration before advancing against pledge. Since. to make these goods secure. So. there is 25% margin requirement then to obtain loan of Rs. raw material. Similar is the case with pledge. MARGIN: For every credit. If cotton (raw material) is to be pledged by the bank.
Body of information describing even the smallest firm is enormous. But this area is extremely important in context of the banking concerns. spanning the company’s internal operations and its relations with the outside world. Virtually all the organizations earn or raise money and spend or invest money. 5) Proper Valuation: Whenever goods are pledged. Like in case of medicines to be pledged. the banker should be aware of the true cost of the product as the client always overvalues his products. to maintain the temperature. Compliance With The Laws Applicable All the financial statements have been prepared in accordance with the laws applicable in Pakistan. Financial statement analysis is very helpful in this respect because it highlights company’s strengths and weaknesses. the godown should have clean environment and proper mechanism of cooling. Sales taxes.Internship Report 4) Suitability of Godown: The Bank Of Punjab Suitability of godown depends upon the nature of the commodity. • • Companies Ordinances 1984 International Accounting Standards Hailey College of Commerce 68 . excise duties are also paid on the FINANCIAL ANALYSIS Finance can be defined as the science and art of managing resources especially money. Banker must be fully satisfies with the appropriation of godown.
2001 by BSD. All the figures presented in the financial statements are comparable. dated October 1.Internship Report The Bank Of Punjab As per circular No. all the financial statements have been reclassified. I am presenting trend analysis of a few selected items from balance sheet on account of non-availability of the required financial information TREND ANALYSIS BANK OF PUNJAB BALANCE SHEET 2005-2007 Particulars 2005 2006 2007 Hailey College of Commerce 69 . 36. State Bank Of Pakistan.
agents etc.20 54.70 46.50 120.49) 37.06 (0.69 59.21 (12.21 34.96 (12.20 20.22 29.11 337.26 3.81) 5.91 6.84 46.09 (6.68 59.88 789.96 (40.01) 67.40 26.11) 1.01 56.46) Hailey College of Commerce 70 .69 (24.09 536.38 31.90) 43.87) 34.net of provision Opening fixed assets Other assets Total Assets Liabilities Deposits & other accounts Borrowing from other banks.84 200.28 33.93 (38.21 33.02) 4.98 50. Bills payable Other liabilities Deferred liabilities Total liabilities Net Assets 144.70 (2.31 101.64 111.79 % 21.81 The Bank Of Punjab % 133.02 133.01 (19.Internship Report Assets Cash Balances with other banks Money at call & short notice Investments Advances.51) 31.71 % 52.
Internship Report Particulars 1998 The Bank Of Punjab 1999 2000 Presented by Share capital Reserve fund.289 58.855.60 (0.01 4.39 20. Gross Profit Ratio: Gross profit*100 Net sales 2007 1.44) 0.289 58.555.99 =0.422.855.46) RATIOS CALCULATION: 1. Hailey College of Commerce =0.89 Analysis/comment: Good but same as last year.54 (86.89 Analysis/comment: Good but same as last year.188 2006 =0.422.38 20.11 53.039 =70% Analysis/comment: Good but same as last year.99 2006 70.4% = 71 . 2.788.60 4.904*100 2. Current ratio: Current assets Current liabilities 2007 51.25 101. 3.31 140. other reserves Unappropriated profit Shareholder’s equity Total 130.188 =0.38 12. Quick Ratio: Current assets – (stock+ prepaid expenses) Current liabilities 2007 2006 51.
174*100 66.174 150.188 =Rs.174*100 2.58 72 2006 . 9.Internship Report 5.411 =2.368. 7.083 =0.839. Debt Equity Ratio: Total long term Debt Shareholders equity 2007 519.368.039 times =0.039 =53.368.555.289-58.899) =Rs.(201. (6.140 7.039 times Analysis/comment: Good and highly improved as compared to last year due to increments both in total assets and total income as well. 21.0067 2007 2006 2.839.039 66. 18.23% Analysis/comment: Good but highly improved as compared to last year.174*100 7. 15.06 Hailey College of Commerce = 1.0075 Analysis/comment: Increased as compared to last year. 6.41% Analysis/comment: Good but highly improved as compared to last year.45% =13. Return on Total Assets: Net profit after Tax Total Assets 2007 1.55% =41. Net Profit Ratio: Net Profit*100 Interest earned The Bank Of Punjab 2007 2006 1. Net Working Capital: Current Assets – Current Liabilities 2007 2006 51.320.4.08 =Rs.083 =17.411 =0.118) Analysis/comment: Increased and better as compared to last year.320. Total Assets Turnover: Total Income Total Assets 2006 =0. Earning per Share: Net Profit available for ordinary shares Total # of outstanding shares 2007 2006 1.58 Analysis/comment: Good but highly improved as compared to last year.9. Return on Equity: Net Profit*100 Common Equity 2007 2006 1.566.422.368.855.623 =Rs.555.
and took the level of cash up with them.88 =0.3% is due to the heavy investment in Federal Investment Bureau and Treasury Bills of Government. The increase in 2006 by 46. there is a normal increase in cash.9% in 2007.3% and in 2007 it has decreased to 40%. Money at call has decreased in 2005 by 36%. in 2006 increase is 46. Hailey College of Commerce 73 .2% in 2007 and the reasons behind increase in cash in 2005 were the opening of five new branches in Karachi.320. 200. 2. call money increased to 38% in 2005 and increased by 79% in 2007. which is because of expansion in branch network of the bank. 4. and the recovery of non-performing loans. Call money is a highly valuable account and its increase or decrease does not signify much. This does not portray the true picture as the level of call money at the date of preparation of the statements might be zero but that situation could have changed ever in the next day. COMMENTS ASSETS 1. The level of cash has increased by 53% in 1998. Lahore & Sialkot. increased by 59.Internship Report The Bank Of Punjab Analysis/comment: Increased and better as compared to last year. 134% in 2006. In 2007.7% in 2005. Bank balances have increased drastically in 2006.328 66. due to the drastic increase in bank balances outside Pakistan. Investment has increased in 2005 by 1. Balances with other banks have increased by 53.7%. 3. According to balance sheet. he placement and the cash in hand in local currency increase.8481.7% in 2006 and has increased tremendously by 79% in 2007.88 2006 Analysis/comment: Increased and not so much better as compared to last year.7% in 2006and 54. Debt Ratio: Total liabilities Total Assets 2007 5. and 21. 22.411 =0.
Borrowing from other banks is increasing but following a decreasing trend. So increase in advances in 2005& 06 is mainly due to this reason. Therefore increase in total liabilities is not that much alarming.7%. Deposits have increased in 2005 by 31. 2. 46. Advances have increased to 60% in 2005.99% in 2005. 3.79% in 2006. in 2006 increase is 33. which signifies a tremendous increase in business of bank. This increase is due to the expansion of branch network of the bank and this increasing trend is very encouraging for the bank. which shows that the bank is gaining control over its borrowings and is emphasizing more on deposits. Some negotiations have been held with almost all the borrowers and number of accounts has been revived for non-performing loans converted into profit generating assets. 33.91% in 2007. Hailey College of Commerce 74 . Although the bank is on its way to expansion and for the purpose of expansion it needs to have borrowing.Internship Report The Bank Of Punjab 5.1% in 2006 and 4.2% and in 2007 the increase is 29. This shows better management policies of bank in order to decrease cost of funds. Total Assets increase by 35. 6.5%. LIABILITIES 1.
8 30.8 40.8 78.8 43.1) 12.2 12. commissions & brokerage Profit from investment securities Other operating income Total Net Revenue Operating expenses: Administration expenses Provisions against advances – net Total operating expenses non-performing (19.9) 100 (4.2 (97.3) 613.0 27.6) (38.6 154.98) 22.3 Profit before tax 910.1 44.6 423.9 23.3 25.6 13.63 (23.8) (7.6 45.1) (36. 53.1 Profit after tax - (243.58 Hailey College of Commerce 75 .0) (8.5 Markup/interest & discount earned Less: cost/return on deposits etc.02 2007 % 18.6) 52.6 47.97 37.2 46.11) 59.7 Other income 57.7 (60.4 68.5 Operating profit 633.5 16.7 19.1 21.5 7.9 Fees.Internship Report TREND ANALYSIS BANK OF PUNJAB INCOME STATEMENT 2005-2007 Particulars The Bank Of Punjab 2005 % 2006 % 17.2 38.
which is only due to the deficit in revaluation of fixed assets. The increase in revenue has been in higher percentage as compared to cost. which has resulted in decrease in provisions against non-performing advances.6%. which is true in case of BOP. which is a tremendous increase. Profit Before Tax The bank was going in loss in 2004 in respect of operating profit. Total Operating Expenses Total operating expenses increase by 40. but the whole situation changed in 2005 and BAL recovered its profitability.3% and again increase in 2007 by 32. Hailey College of Commerce 76 . Also there is an expansion in business. Total Equity Total equity has increased in 2005-06 from 20. The decrease in 2006 is due to recovery of loans. Administrative Expenses The administrative expenses have been on a consistent rise. This is not a bad sign and shows the expansion in the business.38% to 114.5% in 2005. operating expanses have decreased tremendously which has resulted in increase in profit before tax. Cost /Return on Deposits Cost on deposits is continuously increasing because the bank deposits are increasing. but only if the deposits have also been increasing along with expanses. This increase is due to the increase profitability of the bank and surplus on revaluation of fixes assets but in 2007 a small decrease has been observed. but decrease in 2006 by 38. which is encouraging feature.Internship Report The Bank Of Punjab COMMENTS Mark-Up There is a continuous increase in mark up because the bank has increase its advances due to which mark up recovered have increased.98%. which was in negative figures. In 2006.
It gives the chance of experiencing new standards in banking. The products and services designed by the bank are specifically tailored to the individual needs of its customers.m. ATM NETWORK The bank has the largest ATM Network cross the country. FULL DAY BANKING One can avail the benefit of the services provided at the bank till 5:00 P. The customers of BOP withdraw access their funds any time at all the ATM Sites with BOPCASH Logo. Designed specially for those who appreciate only Hailey College of Commerce 77 . CUSTOMIZED SOLUTIONS The management of the bank believes in customer focused banking rather than the product oriented banking.. In the banking network in Pakistan with many of them online branches in major cities of the country AUTOMATIC OPERATIONS: The operations performed by the bank are highly automated that result in assurance for the customers that their transactions are completed reliably. CUSTOMER ORIENTED BANKING The priority banking centers of the bank offer an unmatched where the customer receives highly privileged services in a highly elegant environment. efficiently and securely.Internship Report SWOT ANALYSIS The Bank Of Punjab An analysis indicating towards the organizations strengths. overcoming the weaknesses. Such an analysis is very important for the management in retaining the strength. I have come across the following SWOT analysis of the bank. and carving ways to successfully tackle with the threats and ultimately converting them in the strengths for the organization. which is highly useful for those customers who find it difficult to leave their officers in the morning. STRENGTHS Leading semi-Government Bank The bank of Punjab commercial bank is the leading private sector bank. weaknesses. capitalizing over the emerging market opportunities. During EIGHT weeks of my stay. opportunities and threat is termed as SWOT Analysis.
WEAKNESSES NOT HIGHLY AUTOMATED The bank has still some of the traditional ways of operations in this advanced technological environment. Priority Banking offers the very highest levels of personalized banking to match customer’s unique status. efficient and quick services saving the time and costs of the customers and fortunately BOP is among those few banks who are already reaping the benefits of electronic transactions.Internship Report The Bank Of Punjab the finest things in life. ELECTRONIC BANKING The revolution in the banking in the form of electronic banking operations have opened avenues of excellent. ETHICAL CONCERNS AND PUBLIC IMAGE The organizations showing concern for the people. and environment enjoy good public reputation and are able to reap the benefits in the long run. was quite low. BOP seems to not focusing on this highly critical issue. Even though the people have been sacrificed in the new organizational developments. it is becoming clear that the true lasting competitive advantage comes through human resources and how they are managed. as the job satisfaction level of the employees working at BOP. Hailey College of Commerce 78 . MANUAL BOOKKEEPING Although the bank has computerized accounting system but. ELECTRONIC FUNDS TRANSFER BOP management is quite prepared to adopt the latest advancements in technology resulting in revolution in the banking operations such as check clearing process. ethics. ACBL management is quite sensitive to this issue. LOW JOB SATISFACTION Understanding and the effective management of the human resources is the most difficult challenge faced not only by the bank but by all the organizations. computer based teller equipment. still the bankers use to make their entries in the accounting register. automatic teller machines. and electronic funds transfers among the others.
’ CENTRALIZATION There is a high degree of centralization in the bank. the job satisfaction level of the employee is very low resulting in high turnover which is bad for any organization as there are huge monetary and nonmonetary costs involved in the fresh recruitments. HIGH CHARGES The schedules of charges indicate that the fees charged by the bank on the various services it provides are extremely high. mistakes etc. It may result in decrease in the number of its exiting customers. They have to learn based on their observations and also their mistakes. LACK OF TRAINING FACILITIES Presently there is no specific training program arranged for the new recruiters. OPPORTUNITIES SUPPORT FROM GOVT OF PUNJAB The bank has the support from the Govt of Punjab and has good financial position in the market therefore having a good position to expand their business.Internship Report LACK OF SPECIALISATION The Bank Of Punjab This famous and useful concept given by Adam Smith in 1776 seems to be missing in the bank. resulting in monetary and non-monetary losses for the bank. The employees are constantly rotated from one job to another job of totally different characteristic in the view of giving them the know-how of the working in all the departments. It takes a bit time for the fresh one to learn the banking the result is huge amount of blunders. There is pressure not only on the new learner but also on the person placed upon with this responsibility. Otherwise the situation might be like this ‘Jack of all and master of none. I personally observed that delay occurred in the operations of the employees only due to the fact that they had not got any instructions from the head office. Further more. But centralization is effective up to a certain level otherwise it becomes inefficient and at times costly too. THREATS HIGH EMPLOYEES TURNOVER As discussed above. Almost all the decision-making is in the hands of the upper management. this could be very alarming situation for the bank in case some of the competitors grasped the opportunity and lowered its rates. But I think this is not a very good tactics used by the management. The result Hailey College of Commerce 79 .
LESS ATTRACTIVE RATE OF RETURN Commercial banks face considerable competition in attracting deposits from individuals or small investors. LESS EXPERIENCED STAFF Owing to huge turnover of the employees. of Pakistan national saving scheme offers attractive rates of return (approx.e. the experienced staff. of experienced and well trained staff is very low. then it would be lacking the most important resources of any organization i. the no. Hailey College of Commerce 80 .Internship Report The Bank Of Punjab would be either the lost of market share or decrease in the charges resulting in lowering the bank’s income. 16 to 18 percent annually) on 10-15 year fixed accounts. In contrast. the Govt. which banks find difficult to match. Majority of the staff working in the bank branches is quite young and inexperienced. COMPETITION BOP is currently facing strict competition from the other banks. If the bank failed to bring down its high employees turnover.
. Hailey College of Commerce 81 . It take lot of time of customer when payment of cheque. Bonuses to the employees is once a year. If this discrepancies are removed one day the bank become the leading bank in Pakistan. transfer and promotion policies of the bank. There is no participation in social welfare activities with in the country for the public in order to build public relations. Business promotional scheme are not good. There are no women branches in different regions so that the females easily participate and solve the problem of those female workers who feel themselves misfit by working in an environment with the males. No ATM’s facilities at all branches. No proper advertisements. • • Branches have limited functional operations. Promotion is very slow. Employees are not satisfied with the performance appraisal.Internship Report PROBLEMS The Bank Of Punjab There are some discrepancies due to which the name of the bank of Punjab is not taken as a leading bank in Pakistan. Discouraging behavior of the seniors with their subordinates Token system is still working in some of the branches. No proper rotation of the employees from department to department. No lockers facility at all branches. feedback. Over burdens on a single employee. • • • • • • • • • • • • • • • More employees in a branch than required in a department. Branches are not properly maintained.
The Bank of Punjab should conduct its financial analysis and compare it with that of other banks for improvement. it become very easy to start & enhance the new business for a common person. so. So in this way more effective strategies can be formulated. Overseas prospects should be targeted well through improving the domestic as well as the foreign operation and must be provided with security and incentives in order to maintain their confidence on bank. which is personally observed by me as not satisfactory. More commitment toward the employees is necessary because they are the most reliable assets of a company.Internship Report The Bank Of Punjab RECOMMENDATIONS Following are the recommendations to overcome the weaknesses of The Bank of Punjab • • • • • • • • • • • • • • • • Customer appealing and attracting strategies should be formulated. BOP is suggested to diversify its attention towards the leasing business. BOP should keep up the consistency by providing same working environment in the busy branches at different regions through the employment of technology and resources properly. No one can deny the importance of advertisement. The bank must also provide pleasant response to fresh graduates and internees as well. By realizing the need and potential of leasing in Pakistan. BOP also introduces the simplest and flexible method of granting loans for small businesses rather than a complicated process. Hailey College of Commerce 82 . They must appoint and increase the number of those who possess degrees in business fields specially. A pleased employee work more for the betterment of the organization. The research cell should continuously try to gather information about the present actions of its competitors and the expected future actions. BOP must increase and improve its ATM network by expending 24 hours cash facilities to other cities of the country. so The Bank of Punjab should start more advertisement on electronic media. BOP should open its women branches in different regions to provide the females to participate easily and also to solve the problem of those female workers who feel themselves misfit by working in an environment with the males. BOP must continue to establish and introduce new schemes in shape of different products/accounts with good incentives to the customers in order to compete efficiently and improve its position. This in turn will also increase job opportunities for females.
Internship Report The Bank Of Punjab CONCLUSION Bank of Punjab should adopt the characteristics of the organization who can work under fast changing environment. Bank of Punjab keeping this view is also working for a customer satisfaction. The bank should improve the service like they introduced like e-banking. because the bank is so wide branches.In other words Bank of Punjab is going towards a road of success. Adoption of new strategies to satisfy their customer. online and other facilities which is a good sign and there is visible improvement in customer satisfaction they must take care of their employees and should be clear on that human capital is very much important than the other capital. Hailey College of Commerce 83 . There are some discrepancies in BOP but management are now removing those discrepancies to make the BOP one of the leading bank in Pakistan .
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