Professional Documents
Culture Documents
Internship Report
On
Bank of Khyber
Vehari Road Branch Multan
SUBMITTED TO:
Bank of Khyber Vehari Road Branch Multan
SUBMITTED BY:
Amreena Riaz
BBA( Hons.)
Roll # 2915
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EXECUTIVE SUMMARY
I have done my internship in Bank of Khyber , (Islamic Bank Limited). The main purpose of
internship was to learn, by working in practical environment and to apply the knowledge
acquired during the studies. There was only one department named as general banking. I had
worked in Remittance, where I filled Online transfer, Call Deposit Receipt forms. I did all type
of clearing named as Normal Clearing, Same Day Clearing, and Intercity Clearing. I have
opened new account for new customer. I successfully completed the entire tasks that were
assigned to me.
During the six week time period of my internship I learned about different things that how the
Operation Manager deals with the customers and Staff. I learned that what kinds of documents
are required for different kinds of financing activities or opening new account etc. Those things
which I have mentioned above have been discussed in detail and all the procedures have been
describe thoroughly. In this report there detail back ground, vision and mission statement and
business operation ,organization Structure, Competitive , Business Process Analysis and some
relative material of Bank of Khyber ( BOK ).
I have done my best I hope to ALLAH that this report will provide a complete and clear image of
Islamic Bank Limited.
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Acknowledgement
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TABLE OF CONTENT
Executive Summery
Acknowledgement
Background
Awards
Values
Business Operation
Organizational Structure
Board of Directors
Products & Services
Financial Statements
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Plan of internship program
Account opening department
i. Current account
ii. Saving Account
iii. Term deposit account
Clearing department
i. Outward clearing
ii. Inward clearing
Remittances department
i. Banker Cheque
ii. Online transfer
iii. Deposit slip
Cash department
References
Annexes
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Vision Statement
To be the Premier Islamic Bank providing innovative Financial Services, based on the Principles
of Shariah.
Mission Statement
To translate true Islamic economic principles in to practice, with firm beliefs to establish an
economic system based on the Final Revelation. By partnering with our customers in Halal
earnings with employing best business practices, the latest financial services technologies and
placing our trust in Allah we are confident of our success in achieving constant economic
growth, creation of job opportunities and poverty alleviation.
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Overview of the organization
History.
The Bank of Khyber is one such bank, which came into being after the passing of a Resolution in
the Provincial Assembly of NWFP in 1991. The focus point for the establishment of this bank is
to provide employment opportunities for the man power of this province & to provide financial
assistance to the people of NWFP, who are engaged in small, medium and large scale businesses.
Most of the nationalized commercial banks have their Head Offices in provinces other than
NWFP, which is the main hindrance to availing loan in time from these banks. The banks have to
take formal approval from their H/O in order to advance loans to their customer or to make some
transactions within the branches. Therefore, it was felt that there was a great need to have a bank
which has its Head Office in the same province also, so that there could be no time delay,
communication gap or provisioning of documents to advance loans expeditiously. Initially, the
Bank of Khyber had agency arrangements with ABL and MCB for clearing and collecting
cheques from other banks, but with the grace of Almighty Allah and the hard work of its
management, it became a scheduled bank. It started its operation in SBP and to have a clearing
officer of its own for clearing purposes and tackling of other matters with SBP. Presently, this
bank has started to work as an agent for all its branches in Peshawar and other cities where SBP
arrangements are not possible. In 1995, the BOk availed an opportunity for a Foreign Exchange
license and its corporate main branch became the first authorized dealer to deal in foreign
exchange business and trade services/finance. Now, other than its branches in the NWFP, The
Bank is providing loans to private as well as public sector organizations, not only for the
prosperity of the people but also for the development of NWFP. In this way, job opportunities
surface in different sectors, mainly for the people of NWFP, which may help the country get out
of the clutches of unemployment and related poverty problems.
Besides, the Running Finance & Demand Finance facilities, it has also started loaning for small
clusters, which has a separate controlling department called the Micro Finance Department.
MFD has been introduced to cover the businesses, which are on a small scale either in the shape
of shops, small projects or home- level projects of ladies, like “embroidery, & stitching centers.
This level of loans may be advanced to customers, after they provide two guarantors to The BOk.
The SBP has recently allowed the opening of banks and branches based on a pure Islamic
Banking System in the country. For the said purpose an Islamic Banking Department has been
established by the SBP to provide necessary guidance to the banks and concerned staff. They
have also instructed all the banks to introduce necessary steps for promotion of Islamic banking.
In pursuance of the SBP instructions an Islamic Banking Division has been established by the
Bank of Khyber to evaluate and implement policy and procedural matters to cater to the Islamic
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banking demand of our valued customers. The recruitment of suitable staff for Islamic banking
operations and their necessary training arrangements are under process.
Managing Directors
Executive Directors
Group Heads
Divisional Heads
Departmental Incharge
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Product lines and services of the organization
Deposit Schemes
Khyber Friendly Munafa Scheme ,Current Benefit Account , Be-Baha Mahana Amadani ,Cent
CASA Plus Account , Foriegn Currency Deposit
Advances
Financing Options , Corporate Financing , Commercial Financing , SME Financing , Consumer
Financing , Micro Financing , Agriculture Financing , Project Financing , Products,Cash Finance
, Running Finance , Demand Finance , Trade Finance , Export Refinance , House / Auto / Salary
Loans , Letter of Credit , Letter of Guarantee
Islamic Banking
Murabaha , Musharaka , Mudaraba , Ijarah wa Iqtana , Istisna , Deposit Schemes , Bill collection
under Wakala
Online Banking
The Bank of Khyber offers Online, Banking Facility to its customers at branches all over
Pakistan.
SMS Alerts
On Deposits and withdrawals’
Competitors
Bank of Khyber competitors in current situation in market are Summit bank, bank al
baraka,Bank islami , Dubai bank, Finca Bank and many other banks .
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Brief introduction of all the departments
The BOK’s H/O is located in Peshawar, and it has complete control over administrative matters
and operations as well as other areas of the BOK.
Treasury Division
Treasury Division is involved in the investments in shares market, bonds debentures, placement
of the funds & reconciliation of Nastro accounts (foreign currency Accounts maintained in the
foreign countries in the respective currencies) The settlement of trade finances, inward and out
ward remittances, through Nastro accounts is made possible by the treasury division.
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Credit Division
This division is engaged in providing fund based & non fund based facilities to customers of
different branches. They receive proposals & recommendation from their branches along with
application requests of their customers. Then they prepare aggregate proposals for further
submission to the Credit Committee, where these proposals are discussed thoroughly and final
decisions are made by the competent authority. This sanction loans proposals and forward the
same to the relevant branches with instructions to retain proper security, offerd by the customer
and retain all legal documents to safeguard the bank’s position. Any activity related to facilities
may also be altered by this division.
I.T Department:
The Bok has appointed some qualified software and hardware engineers in the BOK IT
department. The senior most is deputed as “in –charge” of IT department. Software
engineers/programmers are not only responsible for application development in the BOK , to
fulfill requirements of the bank, installation of the hardware in the also act like trouble shooters,
whereas, installation of the hardware in the branch set up is the responsibility of the hardware
engineers, in the each branch, they have assigned a systems administrator to look after jobs
related to the computing system. Proper trainings have been provided to the system administrator
in this effect.
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Consumer Finance Department:
This department facilitates the common masses in getting all kinds of electrical household items,
like television, microwaves, oven, air conditioners, tape machines, music system and
refrigerators. This facility may be allowed against a personal guarantee of a single individual.
Marketing Department:
Banks are aware of the fact that marketing and advertising are very important for the healthy
growth of all organizations including banks. Advertisements are meant to get the attention of a
segment of the society which is the bank’s target. This is done through the following
1) News papers/ periodical/ journals
2) Radio & T .V
3) Outdoor boards / sign boards
4) Gift with the bank’s name printed on them like key chains or wall clocks.
the more general term is expected not only to avoid interest-based transactions, prohibited in the
Islamic Shariah, but also to avoid unethical practices and participate actively in achieving the
goals and objectives of an Islamic economy.
Ijarah
Ijarah-wal-iqtina
Musawamah
ISTISNA A
MUDARABAH
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MUSHARAKAH
The Bank of Khyber Islamic banking branch vehari road Multan I does my internship at this
branch. This Islamic banking branch (0142) started operation fully on December 2013. now that
branch has in good position .that branch has the products consumer financing , corporate
financing ,and has Islamic financing musharika , murabaha , diminishing musharika financing ,
muzariba, and many other Islamic deposit services, that branch has ATM facility and online
facility for customers. Through these operation till to date branch has deposited 100million and
has financing of 150 millions.
There are different types of accounts in BOK which are offered to its customers. Different
accounts has different benefits different charges different minimum balance requirement and
different purposes.
There are three types of account.
1. Current account
2. Saving account
3. Term deposit account
Current Account:
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BOK offers a variety of current accounts to provide to the everyday transactional needs
of various customers. These accounts ensure ease and freedom to bank from any of the branches
across the country.
The different accounts include:
i. Normal Current Account that has 10,000 rupees minimum balance requirement.
ii. Business Account that has 50,000 rupees minimum balance requirement. It is offering
free online transactions, Banker Cheques ATM Card & lots more to meet the day to day
business requirements
iii. Current Life Account which offers the security of life insurance free of cost and for all
others, the conventional Current Account.
Saving Account:
MCB Bank offers a wide array of savings products that suit short term growth &
transactional needs. Our savings accounts offer attractive profit rates as well as flexibility to
transact.
i. PLS Saving Account has no minimum balance requirement and it offer profit rate on
semi annually balance.
BOK Term Deposit offer attractive short to mid-term investment options with flexibility,
convenience and security. With various tenor options available, customers can choose one that
suits their needs. This is combined with different profit payout options and the added facility of
being able to avail credit facility against their deposits.
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To open term deposit account the minimum balance requirement is one lac rupees. Term deposit
account can be opened for one month, three month, six month, one year, three year, and five
year. The account will be closed after the term then new account will be open on the demand of
customer.
BOK is offering some other types of account these are mention below.
Certified copies of
Resolution of board of directors for opening of account specifying the person or person’s
authorized to operate the company account.
Memorandum and Article of Association
Certificate of incorporation
Certificate of commencement of business
Attested photo of Computerized National Identity Card of all Directors.
List of Directors in from-29 issued for the Register Joint Stock Companies.
For Partnership Account
Attested photocopy of computerize National Identity Card
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Attested copy of “ Partnership Deed” or “letter of Partnership”
Attested copy of Registration Certificate with Registrar of the firm. In case of Partnership
is unregistered, this fact should be clearly mentioned on the Customer Relationship form.
Authority Letter in original, in favor of the person or other person who is authorized by
the partners.
Account Opening Form is filled and necessary documents are attached with this Form and are
sent to main Branch. After verification the main branch send mail of verification then the new is
activated.
2. Clearing department
I have worked two weeks (2nd & 3rd ) in clearing department. I learned the functions and
work which are performed by this department. This is the important department of any bank.
General banking officer (GBO) taught me about clearing. He told me that it is a process in
which the banker settle their mutual account by claiming the arising account of various
instruments presented by one bank drawn on the other bank either the bank is in the same city or
out of city.
In clearing we deal with the cheques of other banks or other branches of BOK. The clearing
is done with the help of NIFT (National Institutional Facilitation Technologies). It is the institute
which the state bank has hired for the collection of clearing cheques of each branch and it plays
middle man role between each branch with State Bank of Pakistan.
He told me that clearing are of two types
Outward clearing
Inward clearing
Outward clearing
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Outward clearing is that the settle of claims of our branch of BOK but drawn on other branches
of BOK or on other banks .These cheques are deposited by our customer in our BOK branch and
then our BOK bank branch present it in out ward clearing.
GBO told me that there are three types of out ward clearing.
i. Normal clearing
ii. Same day clearing
iii. Intercity clearing
These are the following detail are required in Clearing Register.
1. Serial No.
2. Account no. of the depositor
3. Depositor name
4. Drawer
5. Drawee
6. Cheque No.
7. Amount of the cheque
Normal clearing
Normal clearing is made at afternoon which would be present on next day. Two
stamps are stamped. One on front of clearing date stamp and one on back manager stamp that
payee account will be credited with signature. It deals with in city. Time limit of this type of
clearing is two days. Return on paid charges deducted from the depositor account is case of
retire of cheque.
Same day clearing
Same day is made initial working hours and are presented on the same day. Two
stamps are stamped. One on front of the cheque and one on back of the cheque. On front
side, one stamp of Same day clearing and second stamp of clearing date on which cheque has
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to present. On back side, manger stamp that payee account will be credited, and manager
signature also. Its charges deducted from the account of holder account.
Intercity clearing
Where there is State Bank of Pakistan then the clearing is done by NIFT and if not
then another institute is worked so CC ( cheque collection ) is made. Three stamps are
stamped two on front side and one on back side.
On front side one stamp of intercity clearing and other is clearing date on which it has to present.
On back side manager stamp that payee account will be credited and manger signature also.
In case of normal clearing, detail information is recorded the detail in ledger. A clearing
schedule slip is arranged with the branch code stamp, total amount and number of instruments
and add list is also attached with clearing schedule slip then a plastic seal number is required
which is written on the seal.
After matching the detail of clearing Register with clearing schedule slip all the instruments,
add list, outline page are putted in an envelope and packed in NIFT bag and that NIFT bag is
closed with that plastic seal. This is to ensure additional safety. When the seal is opened then the
bank will not receive that bag., If the seal number on the bag and on the bundle cover does not
match in this case it is a suggestion that some sort of changes has been made the strict action are
taken by NIFT and the Bank consequently.
The procedure is same for same day clearing and intercity clearing.
Inward clearing
In inward clearing other banks or other branches of BOK also settle their account by claiming
the instruments which are drawn by the other bank customers or other branches of BOK. This is
inward clearing other banks sent instrument to our branch which are drawn on us.
There are few things which are included in inward clearing.
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a. The cheques should be cross cheques or there should be cross stamp on face side of the
cheque.
b. Clearing stamp on the front side of the instruments.
c. The clearing stamp dated should be of the next working day
d. Manger stamp that Payees account is credited on the bake of the instruments and
signature on the stamp
e. The signature is to be verified before entering into computer and then the cheque is
posted and drafted.
3. Remittance Department
I have worked two weeks (4th and 5th ) In Remittance Department. We deal with
different functions and different instruments in this department.
Those instruments and function are:
1. Banker Cheque
2. Online transfer or internal transfer
1. Banker Cheque
It is a cheque (or check) where the funds are taken directly from the financial institution
rather than the individual drawer's account. A normal cheque represents an instruction to
transfer a sum of money from the drawer's account to the payee's account. When the payee
deposits the cheque into their account, the cheque is verified as genuine (or 'cleared', a
process typically taking several days) and the transfer is performed (usually via a clearing
house or similar system). Any individual or company operating a current account (or
checking account) has authority to draw cheques against the funds stored in that account.
2. Online Transfer
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The amount can be transfer from one account to another account either the account is of
that branch or any branch of BOK in any city.
If the amount is being transferred through cheque then online charges are different.
If amount exceed from Rs.25000 then the taxes is also applied due to this total charges also
changed.
Information required for online
Beneficiary Details
Beneficiary Name
Bank or Branch Name and address
Purpose of remittance
Applicant Detail
Name or Title off account
Account number
CNIC or Passport No.(for Non Account Holder)
Signature of Applicant
1. Cash department
In cash department, cash transactions takes place. Cash deposit and cash withdrawal
takes place.
In my last week (6th) of internship period I have collected the information related to my
internship. This was the worked that I had learned from BOK. I have used great effort to learn
about banking sector hoped that this effort will provide me opportunities. It is great edge for me
in the job market. It gave a lot of confidence that to deal the customers. It will create positive
impact on my future.
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with boosting up the confidence and also find some hierarchies as like to government sector
.there are some weakness about the staff ,middle and lower level staff is not play the role as like
motivational and in increasing the whole organization as well as branch level performance. so
they must adopt the strategies of the organizational development .
Ratio analysis
We can use Ratio analysis to check out how profitable a business is, we can use it to check out how much
enough money a business has to pay its bill and we can even tell whether its shareholders should be
happy. Ratio analysis can also help us to check whether a business is doing better this year that it was last
year.
1 Spread ratio
Spread ratio = interest earned / interest expenses
2015 2014
10869473/6441550 9750676/621111
= 1.69% = 1.56%
Graphical representation
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1.8
1.6
1.4
1.2
1
Column1
0.8 2015
0.6
0.4
0.2
0
2015 2014
Interpretation
This graph is showing that the spread ratio of BOK for year 2014 ,2015 is 1.56,1.69% times
respectively. it showing that the spread ratio of BOK is not constant and increasing year by year. it
showing that interest expenses less than the interest earned and positive for the growth of BOK.
2015 2014
2958632/1789214 1900523/1309240
= 1.65% = 1.45%
Graphical representation
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1.8
1.6
1.4
1.2
1
Column1
0.8 2015
0.6
0.4
0.2
0
2015 2014
Interpretation
This graph is showing that the non interest income to total income ratio for the year 2014 and 2015 is 1.45
and 1.65 % respectively .it showing that the this ratio of BOK is increasing year by year but in 2015 this
ratio is less than 2014 .it indicates that non mark up income is going to less increasing in compare to total
income.
3 Return on asset
Return on assets = Net profit / total assets *100
2015 2014
1789214/155158733 1309240/126106255
= 0.01% = 0.01%
Graphical representation
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0.01
0.01
0.01
0.01 Column1
2015
0
0
2015 2014
Interpretation
The graph show that in 2014 and 2015 the percentage of return on assets is 0.01 , 0.01 . Both the
years have same return of assets there is no change in the return of assets in both years .
4 Debt Ratio
Debt Ratio = Total debt / Total Assets *100
2015 2014
139241157/15917576 111186683/14919572
= 8.74% = 7.45%
Graphical representation
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10
9
8
7
6
5 Column1
4 2015
3
2
1
0
2015 2014
Interpretation
This graph of the debt ratio for the year 2014 and 2015 is ,8.74 and 7.45% respectively .this graphical
representation shows that debt ratio is increasing year by year. this means that BOK use more debt to
finance it assets.BOK needs to decrease its debt ratio because high debt shows the high risk of default.
2015 2014
2958630/169418 1900532/591103
= 17.46% = 3.21%
Graphical representation
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20
18
16
14
12
10 Column1
8 2015
6
4
2
0
2015 2014
Interpretation.
This graph is indicating that times interest earned ratio of BOK for the years 2014 ,2015 is 3.21,17.46 0%
respectively. its showing that times interest earned ratio of BOK is not constant.and have the mix trend
increasing and decreasing time to time. BOK has the ability to cover its interest expenses with its EBIT
in all over the years. This ratio is high in 2015 but it is decreasing in 2014 due to increase in interest
expenses.
2015 2014
24578335/139241157 29039497/111186683
= 0.17% = 0.26%
Graphical representation
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0.3
0.25
0.2
0.15 Column1
2015
0.1
0.05
0
2015 2014
Interpretation.
This graph is showing that operating cash flow ratio of the BOK for years 2014 and 2015 is 0.26 and 0.17
times respectively. this ratio is also showing the decreasing trends. This ratio less than 1 is showing that
the BOK is not generating much OCF to cover its current liabilities. So BOK need to improve liquidity by
increasing the assets.
2015 2014
1789214/10002524 1309420/10002524
= 0.18% = 0.13%
Graphical representation
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0.2
0.18
0.16
0.14
0.12
0.1 Column1
0.08 2015
0.06
0.04
0.02
0
2015 2014
Interpretation.
This graph is indicating that the earning per share ration of BOK for the years 2014 and 2015 is 0.18, 0.13
per share respectively. it shows that earning per share ratio of BOK is increasing by pervious year due to
increasing its net income.
1. www.bok.com.pk
2. www.bok.com.pk/fianacial
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5. Bank diaries.
Annexes
All the material used in this report is obtained from website of BOK. All financial statements are
downloaded from annual report of www.bok.com.pk. Financial reports are present in Annual
reports. I took all the data from the financial statements of 2014 and 2015 for the preparation of
this report.
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