The bank of punjab internship report

INTERNSHIP REPORT
THE BANK OF PUNJAB
Program:
BS.Commerce
Session:
2012-2016
Submitted to:
Sir Azhar Sheikh Sb
Submitted by:
Muhammad Irfan Iqbal
Roll no:
O4
Email address:
irfaniqbal734@yahoo.com
Contact:
03030639085
Date of submission:
10-9-2015
DEPARTMENT OF COMMERCE

Preface
Internship is the one of part of BS (commerce) programmed and this provide
the practical knowledge of what students read about business on their
books. Internship report is prepared to full fledge analysis of an
organization. As this the only field experiences those students before
entering practically into market.
I have completed my internship in The Bank Of Punjab in Hasilpur Branch.
During my internship I had been rotated different department of bank.
This movement and working provide a completely knowledge of their
working to me, they also explained each and every concept to make me
clear. This knowledge and practical experience was the thing, which help
I have completed the internship report.
This report include a complete introduction of BOP and banking sector, their
hierarchy their complete functioning and performance, SWOT analysis
and Financial of their statement. In the end, the conclusion of whole
report is written certain suggestions for the organization.

The Bank Of Punjab
Dedication
This Report is dedicated to my beloved parents
whose prayers I am growing and keep moving towards
Success.
And also to all my respectable teachers who play
vita role in the insertion of knowledge and polishing my
skills to face the challenges of dynamic world.
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The Bank Of Punjab
CHAPTER NO. 1
Introdution to Internship Report
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The Bank Of Punjab
List of Contents
Chapter No. 01 5
Acknowledgement
7
Exective summary 8
Internship Supervisor Details 9
Photo of Main Entrance & with Manager & Supervisor 10
Chapter No. 02 11
History of BOP 12
Constitutional base 14
Scope of the bank 15
Management of the bank 15
Objective of the bank 16
year 2015 and future outlook 16
Vision mission core value 17
Organizational Structure 18
Categories of services 19
Division and department 20
Regional network 21
Function of divisions 22
Activities I performed in the bank 28
Services provided to customer 29
Deposit section 30
Departments of the bank 32
Performance of the pumjab bank 41
Chapter No. 03 44
Financial analysis 46
Ratio analysis 60
SWOT analysis 66
PEST analysis 70
Chapter No. 4 78
Suggestion and recommendations 79
Conclusion 81
Reference and Sources 82
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The Bank Of Punjab
Acknowledgement
First of all a great thanks to Almighty Allah, Who enable me to complete this
task and then I am thankful to my Respected Teachers Especially our
department Internship program Incharge (Mr. Azhar Sheikh Sb ) for providing
such a friendly atmosphere and guideline during our four year remarkable
experiences.
It was such a pleasant Experience to Work in THE BANK OF PUNJAB I own
my gratitude and thankful to all those who helped me in preparing this
internship Report by sharing there best of knowledge.
It is due to endless efforts of my friends ,fellow members and especially THE
BANK OF PUNJAB employees who provided me every favor and I am really
very thankful to my beloved parents who have always been a source of
inspection for me.
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The Bank Of Punjab
Executive Summary
I have done my internship at The Bank of Punjab Hasilpur Baranch 0130. There
are four departments in the branch, and I worked as an assistant in that branch.
For the first Three weeks I worked in Account Opening department under the
supervision of Mr.Muhammad Shakeel Ahmad, where I have to perform
following tasks:
• How to account open and what are the requirement of account
opening.
• Types of account
• How to account open.
• How to put information in Know Your Customer (KYC) form.
Afterwards I have learnt about vouchers, checking of vouchers is essential to
confirm that correct posting of instruments has been done. Vouchers are properly
bind sealed, and checking by the operation manager. I have checked the
following things:
• The cheque should not be post-dated/anti-dated.
• Amount in words and figures tallies.
• Cash paid stamps (with dates) are duly affixed in case of cheques
paid in cash and Clearing stamps (with dates) are duly affixed in case
of in case of cheques paid in clearing.
• Cutting/over writings are duly authenticated by the account holder, etc
Then another task for me was “issuing of cheques books”. It is one of the most
interesting works that I have learnt in the bank. Cheques books should be issued
only after all the formalities that duty is performed by Mr. Sajad Hussain
Hashami.Maintaining Dispatch register and Inward Mailing register was also
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The Bank Of Punjab
included in duties assigned to me. I also used to help different employees in their
work. My work timings were from 9am to 5pm, Five days in a week.
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The Bank Of Punjab
Internship Supervisor Details
Name:
Muhammad Shakeel Ahmad
Designation:
Branch Operational Manager (B OM)
Education:
M.com (Accounting)
Institution of
Education:
The Islamia University of
Bahawalpur
Contact Office: 062-2442891
Cell No: 03006800442
E-Mail Address:
shakeelahmad@bop.com.pk
The Bank Of Punjab Main Baldia Road Hasilpur
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The Bank Of Punjab
Photo of Main Entrance & with Manager & Internship
Supervisor
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The Bank Of Punjab
CHAPTER No. 2
Review
13

The Bank Of Punjab
History
The Bank of Punjab started functioning with the inauguration of its first branch
of 7-Egerton Road, Lahore on November 15, 1989. The architect of the bank Mr.
Nawaz Sharif then, the Chief Minister of Punjab, performed the inauguration.
In Pakistan, over long periods of time the gap in saving and investment and
balance of trade deficit has posed serious threat to the target levels of growth The
ailments related to the budgetary deficit and public debt, both foreign and
domestic are in addition. Interestingly even such adverse circumstances growth
of real sector during the preceding year registered a favorable change, which
speaks of hidden potential and strength of economy.
Fortunately, the banking sector of the country has the well organized and
properly institutionalized system, which is the major vehicle not only for
mobilization of resources to finance trade, agriculture, and industry but also for
the effective conduct of monetary policy.
The emergence of new bank on the national scene in the early 1990s has done
two important services to the nation.
 The saving base of the economy has effectively enlarged and hence the
investment opportunities have increased.
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The Bank Of Punjab
 The services of the banks in the fact of severe competition have improved
considerably so that now consumer are left with extensive choice to do or
undo their business relations with these banks keeping in view quality of
their services.
The Bank of Punjab is working as a scheduled commercial bank with its
network of 364 branches at all major business centers in the country. The
Bank provides all types of banking services such as Deposit in Local
Currency,
Client Deposit in Foreign Currency, Remittances, and Advances to Business,
Trade, Industry and Agriculture. The Bank of Punjab has indeed entered a
new era of science to the nation under experience and professional hands of
its management. The Bank of Punjab plays an important role in different
projects that are stat in different areas of the country.
Attractive rates of profit on all types of deposits, opening of Foreign
Currency Accounts and handling of Foreign Exchange business such as
Imports, Exports and Remittances, Financing, Trade and Industry for working
capital requirements and money market operations are some facilities being
provided by the Bank.. As agriculture is considered as backbone of our
economy the Bank of Punjab has introduced "Kissan Dost Agriculture
Finance Scheme" to small farmers.
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The Bank Of Punjab
Constitutional Base
The Bank of Punjab was established under the provisions of Section 28 of
Federal List included in the 4th schedule of the Constitution of the Islamic
Republic of Pakistan 1973. The Bank was established under the Act of Punjab
Assembly viz. The Bank of Punjab Act 1989. The Bill to this effect was passed
by the Provincial Assembly on July 3, 1989 and was passed to, by Governor
Punjab in accordance with the Provisions of the Constitution on July 26, 1989.
The Act provided for the foundation on which the edifice of the bank was eected.
It also included and provided for various modalities concerning the structure, the
organization and scope of the bank laying down its objective share capital and
principle of lending. The Act defines rules for the following.
1. Short title, extent, and commencement.
2. Establishment and incorporation of the Bank.
3. Share Capital.
4. Register of Shareholders.
5. Qualification of Shareholders.
6. Government to be shareholders.
7. Head Office of the Bank.
8. Board of Director.
9. Managing Director.
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The Bank Of Punjab
10. Qualification and disqualification of the directors.
11. Removal of Directors.
12. Terms of office of directors.
Scope Of The Bank
Being a commercial Bank, The Bank of Punjab performs all such functions as are
attributed to commercial banking institution both in the area of resource
mobilization, loans, and investment. The Bank is thus providing all type of
advances to business, trade, and industry on seasonal and annual basis, and is
ensuring, through the prudent policy, the safety and protection of its loan
portfolios, as the resources base of the bank expands, project financing will also
be brought into its fold.
Management of the bank
At the level of Decision-making and implementation, senior management of
the bank is drawn from highly accomplished bankers with rich experience in
the banking profession both domestic and international.
The entire responsibilities of policy formulation and management have been
placed, under the law, with the Board of Director. Furthermore it will be
heartening to know that Mr. Nawaz Sharif, during his chief Minister ship of
The province of Punjab issued special instructions to the political and
executives’ echelons not to interfere in The Bank of Punjab, thereby ousting
the possibility any pressure which may be put on the management of the bank
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The Bank Of Punjab
in respect of recruitment of staff or provision of credit. These instructions
have become an essential part of the culture of the bank.
Objectives
The Bank of Punjab being a commercial bank performs all those function as
are attributed to such banking institutions both in the areas of resources
mobilization and investment. It is providing funds for commerce, trade,
industry, and agriculture but its main emphasis is on accelerated development
of agro-based industry. So the main objective of the bank is to channelize the
resources into sectors, which have suffered from neglect.
Year 2015 and future outlook
The newly elected Government has pledged to continue economic reforms and
policies of the previous regime resulting in the Government’s enhanced ability to
engineer its economic future, which reinforces the confidence that has emerged
during 2013. The success and growth, however, largely depends on the degree to
which the Government can deliver on its political agenda and how smoothly the
transition of power can work towards bringing about a greater degree of
optimism amongst investors and the business community.
The mission to transform The Bank of Punjab into a modernized business
oriented institution is sailing smoothly and in this direction by now
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The Bank Of Punjab
computerization of 364 branches has been completed successfully that are
conneted through internet with each other. Now a day mostly BOP branches have
their ATM machines.
Vision statement:
To be the customer Focused Bank with service Excellence.
Mission Statement:
To exceed the expectation of our stakeholder by leveraging our relationship with
the Government of Punjab and delivering a complete range of professional
solution with a focus on progamme driven products and services in the
agriculture and middle tier markets through a motivated team.
Core Values
 Our customer as our first priorot
 Profitablity for the prosperity of stakeholders that
allows us to constantly invest, improve and success
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The Bank Of Punjab
 Excellence I every thing we do
 Integrity I all our dealings
 Respect in our customer and each other
Organazational structure:
Management Hierarchy:
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BOARD OF DIRECTORS
CHAIRMAN
SENIOR EXECUTIVE VICE PRESIDENT
EXECUTIVE VICE PRESIDENT
ASSISTANT VICE PRESIDENT
VICE PRESIDENT

The Bank Of Punjab
Categories of Services:
The services in The Bank of Punjab are classified in different categories.
Category A:
♦ President
♦ Executive Vice President (EVP)
♦ Senior Vice President (SVP)
♦ Vice President (VP)
♦ Assistant Vice President (AVP)
Category B:
♦ Officer Grade I
♦ Officer Grade II
♦ Officer Grade III
♦ Cash Officer
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OFFICER GRADE-III
OFFICER GRADE-II
OFFICER GRADE-I
CASH OFFICER

The Bank Of Punjab
Category C:
♦ Clerical Staff
Category D:
♦ Non-Clerical Staff
♦ Driver
♦ Guards
♦ Gate Keepers
♦ Tea Boy
Division and department
DIVISION DEPARTMENTS
♦ ADMINISTRATION
♦ OPERATIONS
♦ BUSINESS DEVELOPMENT
♦ CREDIT
♦ INTERNATIONAL
♦ FINANCE
♦ RECOVERY
♦ AUDIT & INSPECTION
♦ TREASURY
♦ ORGANIZATION & METHODS
♦ INFORMATIONAL &
TECHNOLOGY
♦ OFFICERS TRAINING
INSTITUTE
♦ SHARES
♦ LAW
♦ STATIONERY
♦ PLANNING RESERCH &
PUBLICATion
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The Bank Of Punjab
HEADED BY: -
GENERAL MANAGER
HEADED BY:
CHIEF MANAGER
Regional Network
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REGIONAL CHIEFS
BRANCH NETWORK (364)

The Bank Of Punjab
Functions of Divisions
Administration and human resource devision
G.M
This division deals with the problems relates to the staff administration. The main
function of this department is to arrange a
comprehensive training program for recruited staff. Others function includes:
♦ Recruitment
♦ Staff remuneration
♦ Placing the staff
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Admin &Establishment Officer’s Training
Institute

The Bank Of Punjab
♦ Providing and defining the opportunities for career development
and growth
♦ Devising and implementing services rules.
♦ Promotion and demotion
♦ Suspension and termination
♦ Transportation
.
Operations Divisions
G. M
This Division is concerned with the operational working in general banking,
which is concerned with the routine working of the bank. Any problem or
ambiguity arise in any branch working are rectified and suggested for correction
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Computer Dept:
Stationary Dept:
Maintenance Dept:
O & M Department

The Bank Of Punjab
by this division. This Division usually takes technical procedures involved the
decisions like commissions. And also,
♦ The maintenance of the existing building owned by the bank.
♦ Opening new branches and their maintenance.
♦ It also deals with the stationery problems of the bank.
Business Development Devision
G.M
It is the other name of the marketing division. It promotes the bank cause i.e.
deposits and work for the over all development of the bank. Deposits are the
lifeblood of any bank. Without deposits bank cannot perform any function of
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Marketing
Cell
PRP
Department

The Bank Of Punjab
banking. This division fixes the deposits target of every branch by keeping and
eye over the potential customers in the area.
It gives motivation to branches to achieve their targets through different
campaigns and schemes like cash prizes and special increments. It publishes a
bulletin in which those branches are encouraged who achieves their monthly
targets. The main function is to develop and attract the customers and depositors.
It also manages:
♦ Advertising policy
♦ Sales promotion.
♦ Schemes offered by the bank.
Credit Devision
G.M
This division control over all credit operations like sanction of loans, Inland Bill
Purchased (IBP) and also keeps check over securities mortgage, hypothecating or
pledge. It also fix the rate of mark-up and other decisions concerning with the
credit.
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Agriculture Credit

The Bank Of Punjab
There is a credit committee, which consists of senior officers; Branches
send the credit proposal to head office credit division. Credit committee approves
it after making a through analysis. It also
♦ Prepare the policies regarding the sanctioning loan
♦ Monitor loans and credit
♦ Look after the portfolio of the bank
♦ Define credit limits against specified securities.
.
Finance Division
G.M
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Balance Sheet
Results Monitoring
SBP affairs and
Compliance
Shares Dept.

The Bank Of Punjab
It controls the routine financial matters. The permission of special expenditure
incurred in the branches, and other such cases. The daily position and HO
Extracts are daily sent to this division by all the branches. This division not only
estimates the profit and loss of every branch but also prepare overall income
statement and balance sheet of the complete bank. It also keeps record of total
deposits of the bank and then their classification in the form of loans into
different sectors of economy. The basic functions are:
♦ Monitoring the fiscal and financial policies of the bank.
♦ Deals in exploring means for investing surplus bank funds.
♦ Maintenance and investment of Gratuity.
Recovery Devision
Audit and Inspection Division
G.M
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Audit of
Branches
Rectification
and
Persuasion

The Bank Of Punjab
This department ensures appropriate system of checks and balances. It checks all
the irregularities, errors and forgeries if any, under the rules and regulations
formed by the Government of Punjab. For this purpose it doesn’t only keep and
eye on the branches in their vicinity but also conduct surprise and comprehensive
audits of the branches. This strategy has improved working at the branch level. It
not only points out the discrepancies but also tries to solve it. Surprise audit
maintain a good check on the over all working of the branch especially of the
side of finance.
Activities I performed in THE BANK OF PUNJAB
during my internship:
♦ On the very first day our manager Mr. Hasnain sajid guides me about the
rules and regulations of the bank.
♦ After this the bank baranch operational manager Mr. Muhammad Shakeel
Ahmad guides me about the deposit clip to fill. And also guides me about the
use of deposit clip. After this guidness I starts the deposit clips to fill of
different customers.
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The Bank Of Punjab
♦ Then I get the information about the account open in the bank from the bank
officer Mr.Sajad Hashami. But I cannot perform it because it was not
allowed to the internees in the bank.
♦ I also get the information about the process to issue the Demand Draft. And
fill the form of Demand Draft for the related customers.
♦ I also get performed the activity to fill the performa of Bank of punjab on
line.
♦ I also made the collections of the branch from different branches of the other
bank.
♦ I also issued the cheque books to the customers.
Services Provided to Customers
The following are the services being provided to the claims.
♦ Granting of loans
♦ Transaction Foreign Exchange Services
♦ Remittance – Collection
♦ Lockers facility
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The Bank Of Punjab
♦ Utility Services
♦ Acceptance of deposits
Deposit Section
These deposits are lent out to different parties. The larger the difference between
the rate at which the deposits are borrowed and the rate at which they are lent the
greater of the profit margin of the bank. Furthermore, the larger the deposit the
larger will be the funds available for employment; larger the funds lent out the
greater will be the profit of the bank.
To receive the deposit is the basic function of all commercial banks. The bank
does not receive these deposits for save keeping purpose only, but they accept
deposits as debts. When banks receive deposit from a customer, the relationship
of a debtor and creditor is established where by the customer become the creditor
and the bank a debtor.
When the bank receives amount of deposit as a debtor, it becomes the owner of
it. It may, therefore use it as deems appropriate. But there is an implicit
agreement that the amount owned would be paid back by the bank to the
depositor after a specified period.
Nature of Deposits:
♦ CURRENT DEPOSITS
♦ PROFIT AND LOSS SHARING ACCOUNT
♦ SHORT NOTICE TERM DEPOSITS
♦ CALL DEPOSIT
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The Bank Of Punjab
♦ TERM DEPOSIT RECEIPTS (TDR).
CURRENT DEPOSITS
In this type of account the client to allowed to deposit or withdraw money as and
when he likes. Because of their nature, these deposits are treated
as the current liabilities of the bank. There is not profit on such deposits. Usually
this type of account is opened by the business.
PROFIT AND LOSS SHARING ACCOUNT
This type of accounts is one step towards the Islamization of banking system in
Pakistan. There are two types of PLS Accounts.
♦ PLS Saving Account
♦ PLS-TDR (Profit & Loss Sharing Term Deposit Receipts).
PLS saving accounts can be opened with the minimum sum of Rs. 100 and PLS-
TDR account can be opened for a sum of Rs. 1000 or above. Profit is paid on
both types of the PLS account on half yearly basis.
Under PLS saving account the depositor undertakes to share profit or loss on the
deposits earned or sustained by the bank. Secondly the bank is at the liberty to
invest the funds of the deposits in any avenue, it deems fit. The PLS deposits are
invested in non-interested channels.
SHORT NOTICE TERM DEPOSITS:
This kind of deposit is for a short period. The depositor may withdraw his deposit
at any time by giving seven days notice to the bank. This type of deposit
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The Bank Of Punjab
facilitates the depositor to withdrawn his amount with interest of the deposited
period.
CALL DEPOSIT:
Call deposits are the sorts of deposits, which are deposited with the banker
against any tender. This is without interest deposit. This may be with interest
provided the depositor has agreed to keep this amount with the bank for some
fixed period.
TERM DEPOSIT RECEIPTS (TDR):
Term deposit receipt (TDR) is same as the short notice term deposit (SNTD). The
difference is that SNTD is for short period (7- 30 days) while TDR is for long
period (1 month up to 5 years).
Departments of the bank
Account Opening Section
Account opening is the first step towards establishing a relationship between the
customer and the bank. The Bank of Punjab is offering basically two types of
accounts:
♦ CURRENT DEPOSIT ACCOUNT
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The Bank Of Punjab
♦ PROFIT & LOSS SHARING ACCOUNT
♦ Business transation Account
♦ Asaan Account
♦ Basic Banking Account
♦ Salary Plus Account
The necessary condition for a customer, who wants to open an account with the
bank, is introduction, which is preferably by the bank officers or any account
holder of the bank. The different categories of accounts that are available are as
under.
♦ Indiviual account
♦ Joint Account
♦ Partnership Account
♦ Limited Company Account
♦ Clubs, Society, Association, or Trust Account
♦ Short Notice Term Deposit
Clearing Department
Clearing is the most important department of the bank performing various
functions.
Clearing House:
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The Bank Of Punjab
A clearinghouse is an organization of the member banks, working under SBP and
which is for the purposes of setting inter banks claim resulting from transmission
of funds from one bank to another. The branch cheque/instruments are credited
into the account of the customer. The clearing can be:
♦ Outward
♦ Inward
Outward Clearing:
The instrument collected or stored bank wise and a schedules is prepared
separately for each bank mentioning the total number of instruments and the
amount of the instruments. Then these are recorded in a
register called “OUTWARD CLEARING REGISTER” then a main schedule is
prepared
showing the total number of cheque and their aggregate amount being presented
in the clearing.
The cheque/instruments are handed over the clearing branch. Central
clearing branch issue CREDIT ADVICE to the branch for passing credit to its
customer immediately. The branch on receiving credit advice debits the clearing
account and credits the respective customer accounts.
Inward Clearing:
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The Bank Of Punjab
On receiving cheque/instruments from central clearing branch, the in charge
checks the number and amount of cheque received in clearing must tally with the
main schedule received from central clearing branch.
These cheque/instrument are entered in “INWARD CLEARING
REGISTER” for the cheque/instrument passed in clearing is a credit advice for
the aggregate amount of cheque passed in clearing is prepared, drawn on central
clearing branch.
Reserves at State Bank:
Deposit held by bank at SBP serves as check clearing and collection balances.
Rather than physically transferring funds between banks, check
clearing and collection can be done by simply debiting or crediting a bank’s
account at SBP.
Remittance Department
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The Bank Of Punjab
Remittance is a major function of the bank. It is the transfer of money from one
place to another place. The need for remittance is commonly felt in commercial
life particularly and in everyday life generally.By proving this service to the
customers the Bank of Punjab earns a lot of income in the form of service
charges.
The Bank of Punjab deals with the following type of remittances: -
 Demand Draft (DD)
 Mail Transfer (MT)
 Telegraphic Transfer (TT)
 Pay Order
Now we discuss all these in detail: -
Demand Draft:
Demand draft is a written order given by the one branch of a bank on behalf of
customer to another branch of the same bank to a certain amount to the certain
person.
Procedure for Prepare Demand Draft:
1. A draft voucher is filled which contains the following information
♦ Name of the parties involved
♦ Date
♦ Amount to be sent
♦ Account number (if DD is crossed)
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The Bank Of Punjab
2. A credit voucher is filled in order to get the excise duty and exchange
commission.
3. The sender deposits the total amount of the two vouchers i.e. the debit
and credit vouchers.
4. Then the cashier sends the cash receipt voucher to the accounts
department and the account records the amount paid in his cash scroll.
5. After authentication the DD is handed over to the sender and bank
sends the advice to the concerned branch. So when the party presents
the DD in the concerned branch its payment could be made.
Mail Transfer:
It is the transfer of money from one branch to another branch of the same bank
through mail service. In mail transfer there is no need of advice as the amount is
directly credited to the receiver’s account.
Procedure:
1. First a voucher is filled in whish the sender writes the amount to be sent,
name, account number of the receiving person with the branch name and
date.
2. A credit voucher is filled in order to deduct exchange, postage charges
according to the amount of the mail transfer.
3. The sender deposits the total amount in the cash department.
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The Bank Of Punjab
4. The cash officer gives the vouchers to the officer after affixing received
cash stamp and writing the amount in red ink.
5. Then the officer writes the amount paid in the cash scroll and gives the
MT to his assistant.
6. MT leaf is filled according to the information provided in credit voucher.
He also writes the same information in the MT register. Then he gives the
MT leaf and MT register to the officer for authentication.
Telegraphic Transfer:
This is the most urgent method of remitting the money from one place to
another place. This method is used when the sender desires to send urgently, in
this case the sender request the manager of the branch to issue TT.
Procedure:
For sending the TT the manager and officer apply a test. In the test the
manager and officer uses a coding technique. They write their own code
numbers, which is allotted, to them as the bank branch code. After making all the
conformation the concerned branch makes the payment to the receiver. If the
sender wants to convey the same message through telephone then he has to
pay the charges of telephone along with the TT charges. First the person deposit
the TT amount along with the charges through the credit voucher then his TT
sent to the relevant branch.
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The Bank Of Punjab
Pay Order:
A pay order is a written order issued by the bank on its own branch, drawn upon
and payable by itself to pay a specified sum of money to the person. The purpose
of a pay order is to transfer the fund from one place to another. It is usually not
issued in favor of the parties of other cities. Usually the pay order is issued for
the local transfer of money from one person to another or from the person to any
other department. It is used for different purposes. The purpose may be the
repairs of the branch or renovation of the branch.
Procedure:
The procedure of a pay order varies with the nature of the purpose. If the work is
of huge amount then first the manager writes a letter to the Zonal Chief in order
to get sanction of the work. Then the advertisement of the work is given in the
newspaper in order to invite the contractors. But if the work is small then the
branch manager has discretionary power to select the party whose rate is lowest.
pad. Then the bank issues a pay order, against the pay order the contactor gets the
amount from the issuing branch.
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The Bank Of Punjab
Agriculture and Economy
Availability of adequate flows of credit for industry and agriculture are a sine
qua non for the growth and development of an economy. This acquires
added importance when agriculture is the mainstay of the economy as also the
sector where the bulk of the poor are concentrated. Growth and productivity in
Pakistan's agriculture has slowed down in recent years and is, therefore, of
serious concern given its importance for the economic prosperity of the country.
Apart from various other weaknesses in the infrastructural support of the
agricultural sector, inadequacy and lack of efficacy of credit, flows to support
agriculture related activities has been a major constraining factor.
Agriculture is the largest sector of the economy. It contributes 25 percent to
GDP, provides raw materials to 80 percent of industry and employment to over
50 percent of the population. This is a sector that has the
Shortest gestation period for investments and, therefore, a remarkable capacity to
bring about a turn around in the economy .This important sector in Pakistan is
suffering from a number of maladies and is consequently witnessing stagnation in
productivity.
Due to policy and administrative exigencies, the savings in the agriculture sector
remain low and, therefore, the sector has perpetually remained capital starved.
The pricing of input and output in agriculture over the
years has forced the majority of farmers in Pakistan to plough back their incomes
into agriculture and non-institutional credit, and has more often than not served to
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The Bank Of Punjab
sap their potential earnings. Needless to say, that shortage of savings and lack of
availability of capital is one of the major reasons for poverty in the country. The
agricultural and rural sectors in Pakistan in general and in Punjab in particular
are, therefore, suffering from severe under-development. Under a desirable
development model, Punjab can:
♦ Increase agricultural production to meet the country's requirement of
essential foods items and industrial raw materials.
♦ Develop agro-based industry in the rural sector for economic value
addition;
♦ Generate additional employment opportunities in rural as well as adjacent
small towns/cities;
♦ Control massive migration to the urban centers that in turn is causing a
number of social, administrative (i.e. law and order) and economic
problems for the urban areas.
♦ Elevate poverty and improve the income generating capacity of the agri-
based population.
Never before in the history of Pakistan, has the development of the agricultural
and food sectors been as critical as at this juncture and appropriate short and long
term measures are necessary for its revival, sustenance and stability. Supply of
credit by Financial Institutions for meeting the specific needs of agriculture and
rural sectors are essential components for improvement in both short and long-
term development of the country. This has assumed even greater importance in
43

The Bank Of Punjab
the present situation of declining water availability. Per acre, production is
plummeting.
Performance of The Bank Of Punjab
Deposits
44
Years
Deposits (Rs in
Millions)
2010 208177
2011 237897
2012 266056
2013 306561
2014 342291

The Bank Of Punjab
Advances
Investment
Year Deposits (Rs. In
million
2010 56403
2011 92581
2012 129519
2013 123956
2014 154875
Capital and Reserve
45
Years Deposits (Rs in Millions)
2010 120818
2011 127130
2012 149605
2013 157286
2014 170313

The Bank Of Punjab
Total Asset
46
2010 110069
2011 129867
2012 154746
2013 179671
2014 222079

The Bank Of Punjab
Profit before Tax
47
Year Deposits (Rs in Millions)
2010 229190
2011 280998
2012 332111
2013 352698
2014 420370

The Bank Of Punjab
48
2010 (6186)
2011 523
2012 1404
2013 3001
2014 4307

The Bank Of Punjab
CHAPTER No. 3
Analysis
49

The Bank Of Punjab
FINANCIAL ANALYSIS
To analyse the financial position of BOP, different tools are use, which includes
Ratio Analysis, Common size Analysis of the last five years. Importance of
Financial Analysis
IMPORTANCE OF FINANCIAL ANALYSIS
Financial analysis involves the use of various financial statements. These
statements do several things. First the balance sheet and the second is income
statement. The balance sheet summarizes the assets, liabilities, and owner’s
equity of a business at a point in time, while the income statement summarizes
revenues and expenses of a firm over a particular period of time. A conceptual
framework for financial analysis provides the analyst with an interlocking means
for structuring the analysis
51

The Bank Of Punjab
CNSOLIDATED PROFIT AND LOSS STATMANT
2011-2014
As at
December.31
2011 2012 2013 2014
Mark up
/interest /earned
20,685,011 24,666,024 24195203 29521719
Less cost
/Expensed
21,073,271 22,522,918 20176169 20525783
Net Mark up (388,260) 2,143,106 4019034 8995936
Provision (3164234) (965,430) (673081) 1118605
Provision for
diminution in
investment
531654 337040 6643 110881
Bad Debts witten
off directly
- - 241 -
(2632580) (628390) (666197) 1229486
Net Mark up 2244320 2771496 4685231 7766450
Non Mark
Up
Income
Fees commission
and brokerage
724499 762490 775622 906494
Dividend Income 286375 220985 137512 33258
Income from
dealing in foreign
currencies
160089 162980 147417 183830
Gain on sale 330025 1449814 1391874 667322
Unrealized loss on
investment
(5383) 8620 (4296) (654)
Other Income 494103 585856 1148097 1000180
Total Non Mark
up
1989708 3190745 3596226 2790430
4234028 5962241 8281457 10556880
Non Mark up Interest Expense
Administrative
expanses
3954066 4430520 5199782 6215031
Provision against
other Assets
1121 168419 32945 (2416)
Provision againist
off balance sheet
(244111) - 325 17875
Other Charges 205 (40590) 47123 19727
52

The Bank Of Punjab
Total 3711281 4558349 5280175 6250217
522747 1403892 3001281 4306663
Extra ordinary
Items
- - - -
Profit Before
Taxation
522747 1403892 3001281 4306663
Current Year - 139284 278239 323121
Prior Years - (722971) - -
Deferred 174774 353738 785036 1196093
174774 (2299491) 1063275 1519214
Profit After
Taxation
347973 1633841 1938007 2787449
Accumulated
losses B/F
(14352989) (14067841) (12742364) (11250885)
Transfer of
Surplus on Fixed
Assets(Net of
Tax)
6770 11604 10352 9858
Transfer of
Surplus on Fixed
Assets on
disposal
- 6801 814 (980)
Transfer of
statutory reserve
(69595) (326769) (387601) (557490)
Actual gains - - 8391 2514
Right shares issue
cost
- - (78484) (103620)
(14415814) (14376205) (13188892) (11900603)
Accumulated
losses carried
forward
(14067841) (12742364) (11250885) (9113154)
Basic earning
per share
0.66 3.09 2.34 1.94
53

The Bank Of Punjab
COMPERITIVE PROFIT AND LOSS STATMANT
2011-2012
As at
December.31
2011 2012 +/- in Rs. +/- in %
Mark up
/interest /earned
20,685,011 24,666,024
3981013 16.13966
Less cost
/Expensed
21,073,271 22,522,918
1449647 6.43632
Net Mark up (388,260) 2,143,106 2531366 118.1167
Provision (3164234) (965,430) 2198804 -227.754
Provision for
diminution in
investment
531654 337040
-194614 -57.7421
Bad Debts witten off
directly
- -
(2632580) (628390) 2004190 -318.94
Net Mark up 2244320 2771496 527176 19.02135
Non Mark Up Income
Fees commission
and brokerage
724499 762490
37991 4.982492
Dividend Income 286375 220985 -65390 -29.5902
Income from
dealing in foreign
currencies
160089 162980
2891 1.773837
Gain on sale 330025 1449814 1119789 77.23674
Unrealized loss on
investment
(5383) 8620
14003 162.4478
Other Income 494103 585856 91753 15.66136
Total Non
Mark up 1989708 3190745 1201037 37.64127
4234028 5962241 1728213 28.98596
Non Mark up Interest Expense
Administrative
expanses
3954066 4430520
476454 10.75391
Provision against
other Assets
1121 168419
167298 99.3344
Provision againist - -
54

The Bank Of Punjab
off balance sheet (244111) -
Other Charges 205 (40590) -40795 100.5051
Total
3711281 4558349 847068 18.58278
Extra ordinary - - - -
Profit Before
Taxation
522747 1403892 881145 62.76444
Current Year - 139284
Prior Years - (722971)
Deferred 174774 353738 178964 50.59225
174774 (2299491) -2474265 107.6006
Profit After
Taxation
347973 1633841 1285868 78.70215
55

The Bank Of Punjab
COMPERATIVE PROFIT AND LOSS STATMENT
2012-2013
56

The Bank Of Punjab
57
As at
December.31
2012 2013 +/- in Rs. +/- in %
Mark up /interest
/earned 24,666,024 24195203 -470821 -1.94
Less cost
/Expensed 22,522,918 20176169 -2346749 -11.63
Net Mark up 2,143,106 4019034 1,875,928 46.67
Provision (965,430) (673081) 292,349 -43.43
Provision for
diminution in
investment 337040 6643 -330,397 -4973.61132
Bad Debts witten
off directly
- 241
- -
(628390) (666197) -37,807 5.675048071
Net Mark up 2771496 4685231 1,913,735 40.84611837
Non Mark Up
Fees commission
and brokerage 762490 775622 13,132 1.693092769
Dividend Income
220985 137512 -83,473 -60.7023387
Income from
dealing in
foreign
currencies 162980 147417 -15,563 -10.55712706
Gain on sale 1449814 1391874 -57,940 -4.162733121
Unrealized loss
on investment 8620 (4296) -12,916 300.6517691
Other Income 585856 1148097 562,241 48.97155902
Total Non Mark
up 3190745 3596226 405,481 11.27518126
5962241 8281457 2319216 28.00492715
Non Mark up Expense
Administrative
expanses 4430520 5199782 769,262 14.79412022
Provision against
other Assets
168419 32945 -135,474 -411.2126271
Provision
againist off
balance sheet - 325 - -
Other Charges (40590) 47123 87,713 186.1362816
Total
4558349 5280175 721,826 13.67049388
1403892 3001281 1,597,389 53.22357353
Extra ordinary
Items - - - -
Profit Before
Taxation
1403892 3001281 1,597,389 53.22357353
Current Year 139284 278239 138,955 49.94087817
Prior Years (722971) - - -
Deferred 353738 785036 431,298 54.93990085
(2299491) 1063275 3,362,766 316.2649362

The Bank Of Punjab
COMPERITIVE PROFIT AND LOSS STATMANT
2013-2014
As at
December.31
2013 2014 +/- in Rs. +/- in %
Mark up
/interest /earned 24195203 29521719 5326516 30.47226
Less cost
/Expensed 20176169 20525783 349614 56.17251
Net Mark up 4019034 8995936 4976902 87.56544
Provision (673081) 1118605 1791686 90.08756
Provision for
diminution in
investment 6643 110881 104238 94.00889
Bad Debts witten off
directly 241 - - -
(666197) 1229486 1895683 -531.683
Net Mark up 4685231 7766450 3081219 39.67345
Non Mark Up
58

The Bank Of Punjab
Fees commission
and brokerage 775622 906494 130872 96.33114
Dividend Income 137512 33258 -104254 -452.739
Income from
dealing in foreign
currencies 147417 183830 36413 -263.01
Gain on sale 1391874 667322 -724552 100.098
Unrealized loss on
investment (4296) (654) 3642 153032.7
Other Income 1148097 1000180 -147917 -178.993
Total Non
Mark up 3596226 2790430 -805796 -278.324
8281457 10556880 2275423 21.55393
Non Mark up
Administrative
expanses 5199782 6215031 1015249 100.0389
Provision against
other Assets 32945 (2416) -35361 839.8593
Provision againist
off balance sheet 325 17875 17550 -10.3608
Other Charges 47123 19727 -27396 -31583.6
Total 5280175 6250217 970042 31.09578
3001281 4306663 1305382 30.31075
Extra ordinary
Items
- -
- -
Profit Before
Taxation
3001281 4306663 1305382 92.49718
Current Year 278239 323121 44882 13.89015
Prior Years - - - -
Deferred 785036 1196093 411057 -27.0147
1063275 1519214 455939 -83.4797
Profit After
Taxation
1938007 2787449 849442 30.47381
59

The Bank Of Punjab
Balance Sheet The Punjab of bank
YEAR 2011-2014
61

The Bank Of Punjab
Particulars 2011 2012 2013 2014
Cash 16,698,333 17,298,251 23820864 23622411
Balances with other
banks
3,607,107 3,101,170 4265296 2239170
Lending to financial
institutions
7,447,375 1,562,946 11407448 32748623
Investments 92,581,306 129,518,999 123956143 154874757
Advances 127,129,501 149,605,002 157285598 170312593
Operating fixed assets 3,597,483 3,473,491 3514801 5490121
Deferred tax assets 13,886,769 13,070,614 12627352 9845426
Other Assets 16,049,657 14,480,581 15820643 21237087
TOTAL ASSETS 280997531 332111054 352698145 420370188
LIABILITIES
Bill payable 850,569 1,500,709 1506335 1727731
Borrowing from financial
institutions
24,963,566 44,683,826 22802482 44742624
Deposits Other Accounts 237,896,700 266,055,781 306560767 342290763
Sub-ordinated loan - - - 2000000
Liabilities againist Assest 7,831 3,601 2386 1128
Deferred tax liabilities - - - -
Other liabilities 6,506,275 7,495,634 8344877 10281235
Total liabilities 270,224,941 319,739,551 339216847 401043481
62

The Bank Of Punjab
Net Assets 10,772,590 12,371,503 13481298 19326707
Presented by
Share Capital 5,287,974 5,287,974 10551132 15551132
Discount on Issue of
share
- - (263158) (263158)
Capital Reserve fund 1,914,956 1,187,433 1539659 2081243
Share deposit money 17,000,000 17,000,000 12000000 7000000
Accumulated losses (14,067841) (12,742364) (11250885) (9113154)
Total 10,135,089 10,733,043 12576748 15256063
Surplus on rvaluation of
Assets
637,501 1,638,460 904550 4070644
10,772,590 12,371,503 13481298 19326707
COMPARIOTVE ANASLYSIS OF BALANCE SHEET
63

The Bank Of Punjab
YEAR 2011-2012
64
Particulars 2011 2012 +/- in Rs. +/- in %
Cash 16,698,333 17,298,251 599,918 3.468085
Balances with other banks 3,607,107 3,101,170 -505,937 -16.3144
institutions
7,447,375 1,562,946
-5,884,429 -376.496
Investments 92,581,306 129,518,99
9 36,937,693 28.51913
Advances 127,129,50
1
149,605,00
2 22,475,501 15.02323
Operating fixed assets 3,597,483 3,473,491 -123,992 -3.56967
Deferred tax assets 13,886,769 13,070,614 -816,155 -6.2442
Other Assets 16,049,657 14,480,581 -1,569,076 -10.8357
TOTAL ASSETS 280997531 332111054 51,113,523 15.39049
Liabilities
Bill payable 850,569 1,500,709 650,140 43.32219
institutions 24,963,566 44,683,826 19,720,260 44.13288
Deposits n Other Accounts 237896700 266055781 28,159,081 10.5839
Sub-ordinated loan - - - -
Liabilities againist Assest 7,831 3,601 -4,230 -117.467
Other liabilities 6,506,275 7,495,634 989,359 13.19914
Total liabilities 270224941 319739551 49,514,610 15.48592
Net Assets 10,772,590 12,371,503
1,598,913 12.92416
Presented by
Share Capital 5,287,974 5,287,974
Discount on Issue of share - - - -
Capital Reserve fund 1,914,956 1,187,433 -727,523 -61.2686
Share deposit money 17,000,000 17,000,000 0 0
Accumulated losses (14067841) (12742364) 1,325,477 -10.4021
Total
10,135,089 10,733,043
597,954 5.571151
Assets
637,501 1,638,460
1,000,959 61.09145
10,772,590 12,371,503 1,598,913 12.92416

The Bank Of Punjab
YEAR 2012-2013
65
Cash 17,298,251 23820864 6,522,613 27.38193291
Balances with other banks 3,101,170 4265296 1,164,126 27.29297099
institutions
1,562,946 11407448
9,844,502 86.29889875
Investments 129518999 123956143 -5,562,856 -4.48776145
Advances 149605002 157285598 7,680,596 4.883216326
Operating fixed assets 3,473,491 3514801 41,310 1.175315473
Deferred tax assets 13,070,614 12627352 -443,262 -3.51033217
Other Assets 14,480,581 15820643 1,340,062 8.470338405
TOTAL ASSETS 332111054
352698145 20,587,091 5.837028431
Liabilities
Bill payable 1,500,709 1506335 5,626 0.373489297
institutions 44683826 22802482 -21,881,344 -95.9603608
Deposits n Other Accounts 266055781 306560767 40,504,986 13.21271029
Sub-ordinated loan - - - -
Liabilities againist Assest 3,601 2386 -1,215 -50.9220453
Other liabilities 7,495,634 8344877 849,243 10.17681866
Total liabilities 319739551
339216847 19,477,296 5.741842179
Net Assets 12,371,503
13481298 1,109,795 8.232107917
Presented by
Share Capital 5,287,974 10551132 5,263,158 49.88240124
Discount on Issue of share - (263158) - -
Capital Reserve fund 1,187,433 1539659 352,226 22.87688378
Share deposit money 17000,000 12000000 -5,000,000 -41.6666667
Accumulated losses (12742364) (11250885) 1,491,479 -13.2565483
Total 10,733,043 12576748 1,843,705 14.6596322
Assets
1,638,460 904550 -733,910 -81.13537118
12,371,503 13481298 1,109,795
8.232107917

The Bank Of Punjab
YEAR 2013-2014
Cash 23820864 23622411 -198453 -0.8401
Balances with other banks 4265296 2239170 -2026126 -90.4856
institutions
11407448 32748623
21341175 65.16663
Investments 123956143 154874757 30918614 19.96362
Advances 157285598 170312593 13026995 7.648874
Operating fixed assets 3514801 5490121 1975320 35.97953
Deferred tax assets 12627352 9845426 -2781926 -28.256
Other Assets 15820643 21237087 5416444 25.50465
TOTAL ASSETS 352698145 420370188 67672043 16.0982
Liabilities
Bill payable 1506335 1727731 221396 12.81426
institutions
22802482 44742624
21940142 49.03633
Deposits n Other
Accounts
306560767 342290763
35729996 10.43849
Sub-ordinated loan - 2000000 - -
Liabilities againist Assest 2386 1128 -1258 -111.525
Other liabilities 8344877 10281235 1936358 18.8339
Total liabilities 339216847 401043481 61826634 15.41644
Net Assets 13481298 19326707 5845409 30.24524
Presented by
Share Capital 10551132 15551132 5000000 32.152
Discount on Issue of share (263158) (263158) - -
Capital Reserve fund 1539659 2081243 541584 26.02214
Share deposit money 12000000 7000000 -5000000 -71.4286
Accumulated losses (11250885) (9113154) 2137731 -23.4576
Total 12576748 15256063 2679315 17.5623
Assets 904550 4070644 3166094 77.7787
13481298 19326707 5845409 30.24524
66

The Bank Of Punjab
RATIO ANALYSIS
CASH TO DEPOSIT RATIO
YEARS
Particulars 2011 2012 2013 2014
Cash
16,698,333 17,298,251 23820864 23622411
Deposit
237,896,700 266,055,781 306560767 342290763
Ratio
7.01
6.50 7.77 6.90
Cash to deposit ratio=cash/deposit *100
67

The Bank Of Punjab
EQUITY TO ASSEST RATIO
Years
Particulars 2011 2012 2013 2014
Equity
10,135,089 10,733,043 12576748 15256063
Assets
280997531 332111054 352698145 420370188
Ratio 3.6 3.23 3.56 3.62
Equity to asset ratio=total equity/total assets *100
68

The Bank Of Punjab
EQUITY TO DEPOSIT RATIO
Years
Equity to deposit ratio=total equity/total deposits *100
69
Particulars 2011 2012 2013 2014
Equity
10,135,089 10,733,043 12576748 15256063
Deposits
237,896,700 266,055,781 306560767 342290763
Ratio
4.26
4.03 4.10 4.45

The Bank Of Punjab
ADVANCES TO DEPOSIT RATIO
YEARS
Advances to deposit ratio=total advances/total deposits
*100
70
Particulars 2011 2012 2013 2014
Advances
127,129,501 149,605,002 157285598 170312593
Deposits
237,896,700 266,055,781 306560767 342290763
Ratio 53.43
56.23
51.30 49.75

The Bank Of Punjab
EARNING PER SHARE
Years
Earning per share=Total earning/no of shares *100
71
Particulars 2011 2012 2013 2014
Basic earning per
share
0.66 3.09 2.34 1.94

The Bank Of Punjab
RETURN ON ASSAEST
YEARS
Particulars 2011 2012 2013 2014
Profit After taxes 347973 1633841 1938007 2787449
Assets
280997531 332111054 352698145 420370188
Ratio 0.12
0.49
0.54 0.66
72

The Bank Of Punjab
Swot Analysis
STRENGTHS
♦ The major shares of BOP is owned by the Govt. of the Punjab, so
it can develop a good image & trust among it customers.
♦ Stability of Bank is strength of any bank. The Bank of Punjab has
stable growth since its establishment.
♦ The Bank provides the loan facility on sound basis that is very
crucial for any bank to recover the loan. The Bank of Punjab has
conservative policy for advances. So there are very less bad debts.
♦ Personal selling has key role in banking service. The officers of
the Bank of Punjab go to the potential customers to develop the
business. By the relationship with customers, they achieve the
deposit targets. The promotion criteria of the bank are on the basis
of the efficiency and passing the diploma examination of Pakistan
Institute of Bankers.
♦ Entry in gains book if world record, rapid growth in expansion in
short span of time, 364 branches in Pakistan.
♦ It is the policy of the management that requirements are made
according to the principles of merit. The bank to train them in
gives the staff banking. The past percentage of the candidates of
73

The Bank Of Punjab
Bank of Punjab is the highest among the entire commercial every
year.
♦ People have trust in the Bank of Punjab because govt. of Punjab
52% shares of the bank.
♦ There is no union in the Bank of Punjab.
♦ Working environment is good. Officers and managers work
together as a team. They are very cooperative with each other.
♦ The bank has very good branch network in Punjab and now after
scheduling the bank is opening its more branches in other
provinces.
♦ Higher management is experienced.
♦ The management style of the management is flexible.
♦ Profit rate is high as comparative to other banks.
WEAKNESS
♦ The Bank of Punjab is centralized organization. The authority is
not given to the branch level. Managers have to take permission
from the Regional office or Head office for credit. Manager had to
get permission if they have to given more rate of profit to the
customers. So the customers have to wait for days, which may
cause the change of customers. Managers cannot negotiate with
customers without the permission of head office.
74

The Bank Of Punjab
♦ Salaries of the officers are less as compared to other private banks.
♦ The Bank of Punjab has very less promotional activities. Their
advertising campaign is very low. They only use personal selling.
♦ The Bank of Punjab has very less staff in the branches of South
Punjab as compared to Upper Punjab. This creates the problem
employees have to spent most of their time in the bank to
complete even their daily routine work. They have to sit till 7:00
to 8:00 PM before going back to their homes. For this reason their
normal life is disturbing which create the irritation in the behavior
of employees.
♦ The bank’s expenses are increasing at very high rate.
♦ The Bank of Punjab has less interest in foreign exchanges. And
BOP has less number of expert officers in the foreign exchange
business.
♦ Mostly small branches are going in loss.
♦ The Bank of Punjab has only six regional office in whole
Pakistan. It is very difficult to control all branches in one region.
♦ The Bank of Punjab is deviating from the basic banking
principles, because the basic function of bank is to accept the
deposit and advance loans. But analysis of financial statement of
BOP shows that advances are less as compared to investment.
75

The Bank Of Punjab
♦ BOP is not taking keen interest in the marketing of traveler cheque
than others bank. BOP is loosing its share due to the less interest.
OPPORTUNITIES
♦ Although commercial banks have launched many products but a gap exist
between the customer’s want and what the banks are providing. This is an
opportunity for the Bank of Punjab to move in and fill the gap between
the ideal bank and the current service offerings by aggressive advertising,
consumer friendly attitude products and service for attracting customers.
♦ The Bank has opportunity to expand the branch network all over the
country, and it would be able to develop business and can start many
other schemes for investment.
♦ The Bank has opportunity to use latest technology for providing good
services to customers.
♦ There is an opportunity for more businesses if the BOP opens its branches
in foreign countries.
♦ There is an opportunity for more businesses if the BOP offered credit
cards.
♦ Different multinational are establishing their businesses in Pakistan. So
there is a lot of potential for future businesses.
THREATS
76

The Bank Of Punjab
♦ The salaries of the officers of the Bank of Punjab are less as compared to
other private banks. It may cause transfer of the experts from the Bank
of Punjab to other banks.
♦ Expansion of newly establishment banks like, Union Bank, Al-Falah Bank,
Askari Commercial Bank etc. and their better performance may cause
loss of the marker share of the BOP.
♦ The Bank of Punjab is also forced to give loans on potential basis. Due to this
the recovery of such loans may become very difficult.
PEST ANALYSIS
PEST analysis of any industry investigates the important factors that affect the
industry and influence the companies operating in the sector. PEST stands for
Political, Economic, Social and Technological analysis. The PEST Analysis is a
tool to analyze the forces that drive the industry and how those factors can
influence the industry.
 POLITICAL
 ECONOMICAL
 SOCIO CULTURAL
 TECHNOLOGICAL
77

The Bank Of Punjab
78
ECONOMICAL
• GDP
• MONSOON
• INFLATION
• SAVINGS &
ACCOUNTS
• AGRICULTURE
CREDIT
• INTEREST RATES
• RAISING LIVING
STANDRED
• DISPOSABLE
INCOME

The Bank Of Punjab
POLITICAL FACTORS
Government policies affect the banking sector. Sometimes looking into the
political advantage of a particular party, the Government declares some measures
to their benefits like waiver of short-term agricultural loans, to attract the
farmer’s votes. By doing so the profits of the bank get affected. Various banks in
the cooperative sector are open and run by the politicians. They exploit these
banks for their benefits. Sometimes the government appoints various chairmen of
the banks. Various policies are framed by the SBP looking at the present situation
of the country for better control over the banks
FOCUS ON REGULATIONS OF GOVERNMENT
Government affects the performance of banking sector most by legislature and
framing policy .government through its budget affects the banking activities
securitization act has given more power to banking sector against defaulting
borrowers.
MONETARY POLICY
Bank Rate : The Bank Rate has been retained unchanged
Repo Rate: It has been reduced under the Liquidity Adjustment Facility (LAF)
Reverse Repo Rate : It has been reduced under LAF by 25 basis points from
3.5% to 3.25% with immediate effect. RBI has retained the option to conduct
79
SOCIOCULTURAL
• CHANGES IN LIFE
STYLE
• LITERACY RATE
• DEMOGRAPHIC
OF LARGE
POPULATION
• SHIFT TOWARDS
THE NUCLEAR
FAMILY
POLITICAL
• GOVERNME
NT POLICY
& BUDGECT
• BUDJECT
MEASURES
• MONATORY
POLICY
• FDI LIMIT

The Bank Of Punjab
overnight or longer term repo/reverse repo under the LAF depending on market
conditions and other relevant factors.
FDI LIMIT
The move to increase Foreign Direct Investment FDI limits to 49 percent from 20
percent during the first quarter of this fiscal came as a welcome announcement to
foreign players wanting to get a foot hold in the Indian Markets by investing in
willing Indian partners who are starved of net worth to meet CAR norms. Ceiling
for FII investment in companies was also increased from 24.0 percent to 49.0
percent and have been included within the ambit of FDI investment
ECONOMIC FACTORS
Banking is as old as authentic history and the modern commercial banking are
traceable to ancient times., banking has existed in one form or the other from
time to time. Every year SBP declares its 6 monthly policy and accordingly the
various measures and rates are implemented which has an impact on the banking
sector. Also the Union budget affects the banking sector to boost the economy by
giving certain concessions or facilities. If in the Budget savings are encouraged,
then more deposits will be attracted towards the banks and in turn they can lend
more money to the agricultural sector and industrial sector, therefore, booming
the economy. If the FDI limits are relaxed, then more FDI are brought in India
through banking channels
GROWING ECONOMY / GDP
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The Bank Of Punjab
It is great news that today the service sector is contributing more than half of the
Indian GDP. It takes PAKISTAN one step closer to the developed economies of
the world. Earlier it was agriculture which mainly contributed to the GDP. The
Pakistani government is still looking up to improve the GDP of the country and
so several steps have been taken to boost the economy. Policies of FDI
INFLATION RATES
Inflation represents a rise in general level of prices of goods and services over a
period of time. It leads to erosion in the purchasing power of money. Resultantly,
each unit of currency buys fewer goods and services. Different fiscal and
monetary policies have curbed the Inflation rate. To fight against the slowdown
of the Economy, Government of Pakistan & SBP took many fiscal as well as
monetary actions. Clubbed with fiscal & monetary actions, decreasing
commodity prices, decreasing crude prices and lowering interest rate, we expect
that Indian Economy could again register a robust growth rate in the year 2013-
14
SAVINGS AND ACCOUNTS
As stated earlier Pakistan continues to remain one of the high savings economies
among the emerging market economies. Gross Domestic Savings (GDS) of the
Pakistan economy constitutes savings of public, private corporate and household
sectors. In the recent period the high growth performance of the Pakistan
economy is driven by rise in savings
SOCIO CULTUREAL FACTORS
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The Bank Of Punjab
Socio culture factors also affect the business. They show in which people behave
in country. Socio-cultural factors like taboos, customs, traditions, tastes,
preferences, buying and consumption habit of people, their language, beliefs and
values affect the business. Banking industry is also operates under this social
environment and it is also affect by this factor.
These factor are changing continuously people’s life style, their behavior,
consumption pattern etc. is changing and also creating opportunities and threat
for banking industry. There are some socio-culture factors that affect banking in
India have been analyzed below.
SHIFT TOWARDS NUCLEAR FAMILY
Attitude of people of Pakistan is changing. Now, younger generation wants to
remain separate from their parents after they get married. Joint families are
breaking up. There are many reasons behind that. But banking sector is positively
affected by this trend. A family need home consumer durables like freeze,
washing machine, television, bike, car, etc. so, they demand for these products
and borrow from banks. Recently there is boost in housing finance and vehicle
loans. As they do not have money they go for installments. So, banks satisfy
nuclear families wants.
CHANGE IN LIFE STYLE
Life style of Pakistan is changing rapidly. They are demanding high class
products. They have become more advanced. People want everything car,
mobile, etc.. what their fore father had dreamed for. Now teenagers also have
82

The Bank Of Punjab
mobile and vehicle. Even middle class people also want to have well furnished
home, television, mobile, vehicle and this has opened opportunities for banking
secter to tap this change. Every thing is available so it has become easy to
purchase anything if you do not have lump sum.
POPULATION
Increase in population is one of the important factor, which affect the private
sector banks. Banks would open their branches after looking into the population
demographics of the area. Percentage of deposit in any branches of banks
depends upon the population demographic of that area. About 70% of population
is below 35 years of age. They are in the prime earning stage and this increase the
earning of the banks. Deposits showed a subdued growth during 2004-05.Income
distributions also affects the operations and overall business of private sector
banks.
LITERACY RATE
Literacy rate in Pakistan is very low compared to developed countries. Illiterate
people hesitate to transact with banks. So, this impacts negatively on banks. But
there is positive side of this as well i.e. illiterate people trust more on banks to
deposit their money; they do not have market information. Opportunities in
stocks or mutual funds. So, they look bank as their sole and safe alternative
TECHNOLOGICAL FACTORS
83

The Bank Of Punjab
TECHNOLOGY IN BANKS
Technology plays a very important role in bank’s internal control mechanisms as
well as services offered by them. It has in fact given new dimensions to the banks
as well as services that they cater to and the banks are enthusiastically adopting
new technological innovations for devising new products and services.
ATM The latest developments in terms of technology in computer and
telecommunication have encouraged the bankers to change the concept of branch
banking to anywhere banking. The use of ATM and Internet banking has allowed
‘anytime, anywhere banking’ facilities. Automatic voice recorders now answer
simple queries, currency accounting machines makes the job easier and self-
service counters are now encouraged. Credit card facility has encouraged an era
of cashless society. Today MasterCard and Visa card are the two most popular
cards used world over. The banks have now started issuing smartcards or debit
cards to be used for making payments. These are also called as electronic purse.
Some of the banks have also started home banking through telecommunication
facilities and computer technology by using terminals installed at customers
home and they can make the balance inquiry, get the statement of accounts, give
instructions for fund transfers, etc.
Human Resource Department:
This Department does all the activities related to Human Resources (Hr) and
Personnel Management like job Analysis, Job Design, job Description, job
Redesign, job Specification, Recruitment (is the process of finding and attracting
84

The Bank Of Punjab
capable applicants for employment through Advertising, Employee referrals,
Private Placement Agencies etc.), Selection by written tests and interviews,
Orientation, Training, Career Planning, Performance Appraisal (employee
performance and accountability), Compensation and Protection, Union-
Management Relations etc. It also involves in the following activities:
 Transfers & Postings
 Mandatory Leaves and its observance.
 Staff leaves and other related staff matters
 Goals of all Staff
 Monthly Statement of Staff
 Disciplinary Action Cases
 Cases Retired employees & its Correspondence
 Complaints and its correspondence
CHAPTER No. 4
Conclusion & Recmentations
85

The Bank Of Punjab
Suggestions And Recommendations
In the light of the Knowledge obtained during internship and studying the
organization, the following recommendations may prove to be successful to the
bank.
♦ In order to capture a considerable share in the banking sector of the
country, the prime objective should be awareness in the general public.
For this it should launch a well-planned advertising campaign in the
general public.
♦ Physical facilities in a bank also play their role in enhancing its grade and
sound image. The bank should keep these facilities like furniture, parking
facilities for the customer.
♦ Salaries of the officers must be compatible to other private banks so that
the BOP can attract professionals, intelligent persons.
♦ The Bank of Punjab should minimize its expenses.
86

The Bank Of Punjab
♦ Special awards should be given to the hardworking employees who
performed extra-ordinary in the bank.
♦ The bank should come up with new and innovative products. It would be
advisable to make these products while keeping in mind the gap between
what people want and what their banks are providing them.
♦ The Bank of Punjab should concentrate more on advances than on
investments
♦ The bank should come up with such products or services in which the
customers would not have to come to the bank at any stage i.e. Telephone
Banking etc.
♦ The Bank of Punjab should use the latest technology because the bank
which can provide speedy, accurate and standard services in the delivery
of products, loans etc. to the customers will be successful e.g.
computerization, fax installation.
♦ The authority should be delegated to the manager level.
♦ MIS should be improved by connecting all regional offices and branches
to the head office through a network for timely delivery of information.
♦ Management of Bank of Punjab should try to avoid the political
influences and should give loans on merit.
♦ The bank should make a plan to gear up its recovery function on war
fooling and recognize the recovery function.
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The Bank Of Punjab
Conclusion
The Bank of Punjab is contributing a lot towards the industrial development and
capital formation in the country. As it is exhibit from the data regarding the
bank’s financial performance as shows in the financial performance as shows in
the financial analysis, that bank is sharing major banking business of the country.
Further more the policies and schemes as are introduced and carried on by the
bank are of great source of help in its trading and non-trading growth.
They facilitate trade both inside and outside the country. The Bank if Punjab has
endeavored to remain in the forefront of modern financial institutions and has
consistently shows tremendous growth in all area of its activity. However after
scheduling, due to its emphasis on consolidation and controlled lending, the
growth of profit has somewhat declined. But the ban’s performances are in line
with its set goals.
The policies of the bank are uniform and going very smoothly. The employees
are given all the possible facilities and generous compensation. In return
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The Bank Of Punjab
employees are stressed for their best efficiency. Merit policy prevails in all the
activities of the bank. Administration has studied the administration of all other
banks, and all their problems and drawbacks are planned to be avoided.
Therefore, the policies of the management are progressive and proper.
Reference and Sources
 BANK MANAGER
 BARANCH OPERATIONAL MANAGER
 BANK EMPLOYEES
 WWW.BOP.COM
 WWW.GOOGLE.COM
89

The bank of punjab internship report

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