Report on the Bank of Khyber

CONTENTS:

 Organization’s mission and vision

 Organizational hierarchy
 Formulation of organizational plans and schedules
 Deployment of organizational resources
 Leadership styles
 Monitoring and controlling
 Importance of team building and handling of conflicts
 Organizational functions

 THE BANK OF KHYBER :

 Executive summary
 Mission Statement
 Vision
 History
 Introduction
 Organizational Structure and Departmentalization
 Planning Process
 Organizing procedure
 Leadership style
 Controlling function
 Assurance
 SWOT Analysis
 Suggestions and Recommendations
 Conclusions
 References
MISSION STATEMENT
Mission, broadly stating, is the purpose for which an organization exists and why should
it compete in certain sectors and industries. Within mission, sometimes stated as purpose,
the organization addresses itself to what it intends to accomplish both in the long and
short run. Mission is a very broad statement of organizational direction, and is normally
summarized and documented in a mission statement.
In simple words, mission statement is a formal summary of the aims and values of an
organization.
VISION

(1) The faculty or state of being able to see

(2) The ability to think about or plan the future with imagination or wisdom

(3) An experience of seeing something.

DESCRIBE THE ORGANIZATIONAL HIERARCHY?

An organizational chart/hierarchy is a diagram that depicts the structure of an

organization in terms of relationships among personnel or departments. An organizational
chart also represents lines of authority and responsibility. Generally, an organizational
chart is a horizontal or vertical tree that contains geometric shapes to represent staff or
divisions. The lines that connect the shapes indicate relationships between the positions.
An organizational chart indicates the formal structure of a business or company.

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HOW DOES THE ORGANIZATION FORMULATE PLANS AND
SCHEDULES

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The organizations make quarterly, half and yearly planning for execution of desires goals
and objectives through the branch network. The planning's included
­ Strategic planning for deposits mobilizations.

­ Strategic planning for deposits utilizations.

­ Strategic planning for branch/bank profitability.

­ Strategic planning for reduction in nonperforming loan.

­ Strategic planning for adherence to rules and regulations.

­ Strategic planning for proper reporting and disclosure.

Strategic planning is an organization's process of defining its strategy, or direction, and

making decisions on allocating its resources to pursue this strategy, including its capital
and people. Various business analysis techniques can be used in strategic planning,
including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ), PEST
analysis (Political, Economic, Social, and Technological), STEER analysis (Socio-
cultural, Technological, Economic, Ecological, and Regulatory factors), and EPISTEL
(Environment, Political, Informatic, Social, Technological, Economic and Legal).

Strategic planning is the formal consideration of an organization's future course. All

strategic planning deals with at least one of three key questions:

1. "What do we do?"
2. "For whom do we do it?"
3. "How do we excel?"

In business strategic planning, the third question is better phrased "How can we beat or
avoid competition?". (Bradford and Duncan, page 1).

In many organizations, this is viewed as a process for determining where an organization

is going over the next year or more -typically 3 to 5 years, although some extend their
vision to 20 years.

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In order to determine where it is going, the organization needs to know exactly where it
stands, then determine where it wants to go and how it will get there. The resulting
document is called the "strategic plan."

It is also true that strategic planning may be a tool for effectively plotting the direction of
a company; however, strategic planning itself cannot foretell exactly how the market will
evolve and what issues will surface in the coming days in order to plan your
organizational strategy. Therefore, strategic innovation and tinkering with the 'strategic
plan' have to be a cornerstone strategy for an organization to survive the turbulent
business climate.

HOW ARE THE RESOURCES CONSUMED IN THE

ORGANIATION AND HOW ARE THEY ORGANIZED
The resources are utilized for providing quality services to the consumers/customers. The
resources are consumed through proper utilization of human resources. FOR EXAMPLE
 Job descriptions/duty list
 Team work
 Job rotation
 Proper training and development
 Proper appraisal
 Right man at the right place and at the right time

WHAT LEADERSHIP STYLE IS USED BY THE MANAGEMENT

There are four leadership styles which are used by the management
1. Consultative
2. Participative
3. Democratic
4. Autocratic

CITE SPECIFIC MEANS USED BY THE ADMINISTRATION TO

ENSURE MONITORING AND CONTROL OVER THEIR
EMPLOYEES
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The administration or manager used the following tools to control their employees
1. Physical control
2. Password control
3. Teamwork
4. Pro-active control
5. Detective control
6. Proper training
7. Refresher courses on different banking products

WHAT IMPORTANCE DOES TEAM BUILDING HAS IN THE

ORGANIZATION? HOW ARE CONFLICTS HANDLED BY THE
MANAGEMENT
In banking organization, the employees play an important role for the achievements
of desired objectives. Therefore, it is the responsibility of branch management/banks
to hire caliber competent professionally sound human resources for
 Making quick and timely decision to coordinate and to create confidence
 To make plan wisely

Conflicts are handled through consultation with higher management

 State bank of Pakistan prudential regulation
 Shariah complines
 Teamwork and proper solution of the complaint/conflict
 The conflicts are also settled through banking mohtasib

HOW ARE THE ORGANIZATIONAL FUNCTIONS ASSURED TO

BE FUNCTIONING EFFECTIVELY
The organization functions are manage through
 Products
 Quality
 Productivity
 Speed
 Innovations

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THE BANK
OF KHYBER

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EXECUTIVE SUMMARY

The Bank of Khyber (the Bank) is a Pakistan-based company. The Bank is engaged in the
business of commercial, investment and development banking. As of December 31, 2009,
the Bank operated 41 branches. The Bank’s investment portfolio includes Federal
Government securities, term finance certificates, mutual funds and other investments,
which include National Investment Trust Units, Sukuk certificates and bonds. The Bank
offers deposits which include fixed deposits, savings deposits, current accounts, call
deposits and margin and sundry deposits.

MISSION STATEMENT
Mission, broadly stating, is the purpose for which an organization exists and why should
it compete in certain sectors and industries. Within mission, sometimes stated as purpose,
the organization addresses itself to what it intends to accomplish both in the long and
short run. Mission is a very broad statement of organizational direction, and is normally
summarized and documented in a mission statement. In same way, the Bank of Khyber
being an organization, has a mission statement, as follow:
“To excel as a quality service provider, in a supportive environment with a special focus
on micro-business and to exploit the indigenous resources, while maintaining a highly
motivated staff”.

VISION

To become a leading Bank providing efficient and Dynamic Banking Services in both
Islamic and Conventional Sectors.

HISTORY AND INTRODUCTION

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The Bank of Khyber (BOK) was established in 1991 under the act of the NWFP assembly
its objectives included promotion of savings and investment in the NWFP. In 1994 it
acquired the status of a scheduled bank that allowed it to open branches outside NWFP,
become a member of the clearing house ,and engage in trade finance activity. Advantages
of scheduling have had a positive impact on the Bank after adjustments to State Bank of
Pakistan (SBP) requirements during 1995. BoK’s microfinance operations started in
1995, aimed at the provision of microcredit to small and medium enterprises. In 1997
BoK extended its operations to rural areas, providing smaller loans to micro-enterprises
and individual clients through its cooperation with NGOs and Rural Support Programs
(RSP). In 1999 BoK created its Microfinance Unit as a separate profit centre, developing
specific products and BoK knowledge of microfinance practices. BoK is the first formal
and structured initiative by a commercial bank in Pakistan to broaden its client base and
reach the micro-enterprise market.
The bank has a paid up capital of Rs. 750 million out of which Rs. 652.5 million has been
provided by the government of NWFP, while the remaining Rs. 97 .50 million has been
contributed by DEG, a German Development Bank.
BOK is distinguished by the fact that it is not only a schooled commercial bank but it also
plays a role of a development agent, through systematic long-term lending, specially to
small and medium size business. Separate project financing departments namely, long-
term projects department and Micro Finance Unit has been set up for this purpose.
Several line of credit from international agencies have been arranged by BOK for
meeting the funding requirements of development projects in NWFP.
BOK has 29 branches with 23 in NWFP and 2 at Karachi, one each at Islamabad, Quetta,
Lahore, and Muzzaffarabad, (Azad Jammu and Kashmir). The Bank has 346 well
qualified officers, and it places great importance on their professional achievements.

MAIN OBJECTIVES OF THE BOK

Objectives are the ends towards which activities are aimed. In fact these are the results to
be achieved. The bank of Khyber has certain objectives, which are as follows;2
a. To mobilize private savings and public funds for diverting the same into
productive channels and ensure their availability.

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b. To promote industrial, agricultural and socio economic processes through the
active participation of private and public sector in the province.
c. Help under develop areas and create employment opportunities, specially in the
rural areas of the province. Further, to guide and assist the people of NWFP
serving overseas to effectively and profitably invest their foreign savings in the
province as well as the other parts of Pakistan.
d. Create a diversified and sound portfolio for utilization of idle funds and their
investment in the existing and new ventures specially in the pioneering of high-
tech agro based export oriented and engineering projects to ensure maximum
returns.
e. Participate and seek the share of the province in the capital market of Pakistan by
way of subscription through locally pooled resources in the leading stock
exchanges of the country and eventually paving the way for establishing a stock
market in the province.

ORGANIZATIONAL STRUCTURE AND DEPARTMENTALIATION

ORGANIZATIONAL STRUCTURE
“Organizational structure” is the frame work that defines the boundaries of the formal
organization and within which the organization operates”:3
The organizational structure of BOK is also aimed at achieving specific corporate
objectives. All the activities and functions of BOK are controlled by the Board of
Directors.

Organizational Chart

The BOK is a centralized organization in which little authority is given to the lower
levels of management.
The head office of BOK is divided into two divisions and each division has its own set of
departments, these two are:
 Banking operation division
 Personnel and establishment division
There are also two other independent departments.

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  Long term projects
 Audit department
Long term projects (LTP) handles the investment proposals of huge industrial and
agricultural projects whereas the audit department is responsible for having an internal
control.

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DEPARTMENTALIZATION
Departmentalization means to divide an organization into departments, especially as a
policy or to an excessive degree.

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PLANNING PROCESS
The organizations make quarterly, half and yearly planning for execution of desires goals
and objectives through the branch network. The planning's included
 Strategic planning for deposits mobilizations
 Strategic planning for deposits utilizations
 Strategic planning for branch/bank profitability
 Strategic planning for reduction in non performing loan
 Strategic planning for adherence to rules and regulations
 Strategic planning for proper reporting and disclosure

ORGANIZATION PROCEDURE
Organization procedures are prescribed by State Bank of Pakistan, Bank management and
other regulatory authority. The procedure included
 Risk management
 Know your customer
 Customer due diligence
 Money londering
 Foreign exchange
 Schedule of charges
 Product development
 Accounting standards
 Auditing standards

LEADERSHIP STYLES
There are four leadership styles of management
1) Consultative
2) Participative
3) Democratic
4) Autocratic

In banking, we are using consultative and participative styles of management.

CONTROLLING FUNCTION

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Controlling function are perform through delegation of authority, duty list, teamwork and
job description.
ASSURANCE
Assurance are obtained through
 Cost audit
 Management audit
 Internal audit
 External audit
 Shariah complines
 Shariah audit

SWOT ANALYSIS

SWOT is an acronym for an organization’s Strengths, Weaknesses, Opportunities and

Threats. SWOT analysis consists of a firm’s internal strengths and weaknesses and its
external opportunities and threats. It is a tool to get a quick overview of firm’s strategic
situation. In the following lines are the “SWOT” analysis of Bank of Khyber.

SWOT is an acronym for an organization’s Strengths, Weaknesses, Opportunities and

Threats. SWOT analyses consist of a firm’s internal strengths and weaknesses and its
external opportunities and threats. It is a tool to get a quick overview of firm’s strategic
situation. In the following lines are the “SWOT” analyses of Bank of Khyber.

STRENGTH

 Has market leadership in providing products and services to the

customers over the year.

 Have more branches and therefore accessible to more potential

customers than any other Bank.

 Have product innovation skills and resources.

 Bank of Khyber has the ability to cope with pressure of competition

and has several times come out of competition successful.

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  It has modern technology and resources provided to its customer.

 Staff is young and rich in experience and working skills.

 Bank of Khyber has to good will of the people and it is also an asset to
it.

 Has access to all part of the world, thus also providing services to
Pakistanis outside the country.

 Offer attractive schemes and more saving for customers from time to
time.

 Bank’s management has the motivation to make it best bank of the

country.

WEAKNESS

 Marketing skills of the bank are good but they have

little presence at different media.

 The lower level management lacks clear direction and is not having the
managerial depth.

 Employees are lacking motivation.

 They also fear of downsizing.

 Bank is not limits and thus reducing the efficiency.

 Problems of internal unionism from employees.

 Maximum number of branches, affecting the maintenance of

consistency and some working atmosphere at everywhere.

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  Branch’s internal environment do not presents smart image of the bank
in most of cases.

 Communication gap between different levels of management.

OPPORTUNITIES

 Bank should take interest in the new market segments like I.T
business, software business etc.

 Extending banking hours and providing more branches facilities to

customers.

 Increasing credit facilities to lower income groups, thus reducing the

risk of loss and also improving the image of the bank.

 If new schemes are introduced for the overseas Pakistanis can get the
business of remittances more than any other bank or “Hundi business”.

 A new service to its product line.

THREATS

 Increasing number of private/foreign banks in the country.

 Global technological advancement.

 Politic, economical situation of the country.

 Reduction in the business activities in the country.

 Reducing the rates of savings in different segments of people.

 Deteriorating confidence of people in bank uncertainties of the

investors.

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  Provisions of better services by private bank.

For “SWOT” analysis we can conclude that the management of the bank should adopt
systematic planning for the bank growth, talking with them all management levels of the
banks, discover new segments of the customers, offering new schemes for its customers.
Similarly Bank of Khyber has more customers as compared to the other banks; if they
give proper attention to every customer and their needs then it will become again one of
the leading and comprehensive banks.

SUGGESTIONS AND RECOMMENDATIONS

 Training of the staff

 Improve quality of products and services
 Increase rate of profit on deposits
 Reduce rate of interest on financing
 Reduce ethical problems
 Provide latest technology
 Provision of ATM machine
 Introduction of E-mail culture in the bank
 Increase branch network
 Control leakage of income
 Reduction in non performing loan
 Provision of quality finances
 Revision of legal framework
 Revision of regulatory framework
 Proper accomtibility in the banks
 Avoid political interference in the bank
 Introduced merit oriented culture
 Maintain proper records of the transactions
 Proper rotation among the employees
 Introduction of honesty, integrity, technical standards, professional behavior and
professional competency at the branch level
 Proper division of the branches on the basis of proper market segmentations
 Introduction of new products for Islamic banking according to Quran and Sunnah

CONCLUSION

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Keeping in view quality of products and services, The Bank of Khyber will be a leading
bank in the near future. The bank of Khyber and their management have recently started
foree cash products under the Pakistan remittance initiative under the supervision of State
Bank of Pakistan and ministry of finance, Government of Pakistan. The Bank of Khyber
have achieved tremendous results, so for we have inked four agency agreement with
exchange companies which included western union, Malik exchange express, money
transfer and Tlacid NK corporation for quick in land home remittance. The Bank of
Khyber is in process of introduction of new Shariah complines products with the support
of Govt of Khyber Pukhtoon Khwa and State bank of Pakistan. We hope that all the
desired results will be achieved.

REFERENCES
SAMI UR REHMAN
(Assistant Vice President/Manager of BOK, Islamic Banking Branch, NOWSHEHRA)
Web site: http://www.bok.com.pk/

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