Beruflich Dokumente
Kultur Dokumente
AN INTERNSHIP REPORT
ON
Submitted to:
Submitted by:
Faiz Miran
Reg #2008-ag-238
M. COM. (Accounting)
Contents
HISTORY OF THE ORGANIZATION ............................................................................. 5
DIVISIONS....................................................................................................................... 10
PERSONNEL DEPARTMENT........................................................................................ 14
Recommendations ............................................................................................................. 44
C K N O W L E D G E M E N T
ACKNOWLEDGEMENT
All praise to Allah, the most merciful, kind and beneficent, and the source
of all knowledge, wisdom within and beyond my comprehension. He is the
only God, who can help us in every field of life. All respect and possible
tributes goes to my Holy Prophet Mohammad (SAW), who is forever
guidance and knowledge for all human beings on this earth.
I am proud to say that I am very grateful to my family whose kind prayers and
cooperation helped me at every step of my work. Special thanks go to my parents
for their cooperation for the sake of my knowledge.
X E C U T I V E U M M A R Y
EXECUTIVE S UMMARY
To interpret my skills and educational knowledge of Accounting I done my
internship in Bank of Punjab Faisalabad and to know how I will work in financial
institutions and among various types of people have different attitude.
The objective of this Internship was to explore the issues relating to Finance and to
find out problems regarding the theoretical concepts with practical experience
working in an organization during the internship and study the system of Bank of
Punjab . There are many possible improvements, which we can make positive
changes in the system.
The report is based on my two months internship program in Bank of Punjab . The
methodology reported for collection of data is primary as well as secondary data.
The biggest source of information is my personal observation while working with
staff and having discussion with them.
Finally, for any all too fallible errors, omissions and shortcomings in the writing of
the report only I am responsible for which I hope that all concerning regards of
this report will forgive us.
Faiz Miran
M.COM 4th
The act provided the foundation on which edifice of the bank was
created. The entire responsibility of policy formulation and management has
been placed, under the act, with the board of directors.
The bank comprises ten directors, out of which six directors are
appointed by the government (three of civil service and three prominent
personalities from the Industry, Agriculture, and Commerce etc.) The
remaining four directors are elected amongst shareholders, the criteria for
which have already been laid down in the act.
CAPITAL STRUCTURE
AUTHORIZED CAPITAL
At the time of establishment 1989, the authorized capital was Rs.200, 000,
000 divided in to 20,000,000shares of Rs.10 each. Paid up capital was
Rs.851, 880, 000 shares of Rs.10 each.
Reserve Funds
Total reserves Rs.971049000
Board of Directors
Mr. Kamran Rasool Chairman
Mr. Hamesh Khan Managing Director
Mr. Salman Siddique Director
Sheikh Muhammad asif Director
Mr. Mumtaz Khan Director
Mr. Sikandar Mustafa Director
Mian Muhammad Latif Director
Mr. M. Shahis Abdullah Director
Mr.Shahzad Ali Malik Director
Mr. Gohar Ejaz Director
Mr. M. Shahzad Sadiq Secretary to the Board
Audit Committee
Mr. Muhammad Shahid Abdullah
Sheikh Muhammad Asif
Mr. Gohar Ejaz Mr. Shahzad Ali Malik
A.F Ferguson & co. Chartered Accountants Auditors
BRANCH NETWORK
The bank of Punjab has opened 247 branches as on 31-8-2003. the branches
are well located in commercial and some residential areas, thus catering to
the needs of business community and private individuals. All branches are
air conditioned, well-furnished and equipped with modern facilities to
provide services in a congenial atmosphere.
DIVISIONS
As for working is concerned the BOP is divided in to various divisions
which are further divided in to departments. The major divisions are as
follows:
Operation
Credit
Finance
Business development
Administration
1) Operation Division
It 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 is then rectified and suggest for
correction by this division. The decisions like commissions, technical
procedures involved usually taken by this department.
2) Credit Division
This division controls over all credit operations like sanction of
loans, IBP (Inland Bill Purchased) and also keep check over securities,
mortgage, hypothecation or pledge. It also fix the rate of markup and other
decisions concerning with credit.
3) Finance Division
It controls the routine financial matters, the permission of special
expenditures incurred in the branches and other such cases, The Daily
position and HO extracts and daily send to this division by all the branches.
This division not only estimates the\e profit and loss of every branch but also
prepares over all 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.
6) Administration
It controls the administration problems like recruitment. Training
and internal transfers, leave procedures and certain other problems of staff. It
organizes recruitment with the help of Officers Training Institute. It also
controls over any problem arise during working in the branch, the internal
conflict among employees in certain rare cases.
Various Departments
1. O & M (Organization and Management)
2. Computer
3. Officer Training Institute
4. Shares
Different chiefs control these all departments.
PERSONNEL DEPARTMENT
The Main Personnel Department of The Bank of Punjab is in
Lahore that is in the head office and it is called the administrative division.
In the Administrative division. In the Administrative division all the record
to the office are kept .The duty of the administrative division or the
personnel department in head office is to make assessment for the
requirement in head office is to make assessment for the requirement of
manpower in each branch of the bank. The administrative division also
decides whether the employees are selected within the bank or outside the
bank. The general policy for employee’s welfare is also made the
Administrative department.
Recruitment
The selection of the employee is very important decagon the
management has taken. Bank recurrent policy is very strict, and mostly
depends upon the ability of the candidate and personal observation of the
top-level management. There is no quote system exist in the bank. Whenever
vacancies fall vacant bank makes advertisement in the newspapers and asked
for vacant bank makes advertisement in the newspapers and asks for the
application.
All persons have fulfilling the following requirement are directly
appointed as Office Grade III.
1. First Division in graduation
2. One first division in Inter or matriculation
3. Written test base only, no interview
4. Age not more then 25 years
Training
The newly hired employees generally starts as a clean slate on
which nothing has yes been written. Good training is an art. The training
policy of the personnel department is different for the
New employee
Existing staff
For the newly selected candidates it is compulsory for them to get
training . There is a separate acad3emy of the bank in Lahore, the Mall
Branch which is called the training institute, the following procedure is
adopt in the training program,
Performance Review
The primary value of the job descriptions evolution is to serve as
the basic for the review of the individual performance in each job, each
employee understands that what is expected from him.
Personnel department may review of the officers by analyzing
that.
1. The task assigned to the officer is completed or not.
2. The task completed with in the given time.
3. The result of that task is favorable.
4. Performance is comparable with the standard of the organization.
5. What is the achievement of the employee for meeting the assigned
task.
6. What methods are used for the completion of the task.
All the above-mentioned tool are used for performance review.
The management takes action in favour of the officer in case of the
completion of the task, in shape of
FIELD OF ACTIVITIES
A) Deposit Department
1. OPENING OF NEW ACCOUNT
The opening of a new account is the establishment of customer
banker relationship. By opening an account at bank, a person becomes a
customer of the bank.
Before a banker opens a new account , he should ascertain
whether or not the person desirous of opening the account is a desirable
customer. The banker should determine the prospective customer’s integrity,
responsibility, occupation and the nature of the business by the introductory
reference given at the account opening. Negligence in this informal
preliminary investigation may result in serious consequences not only for
banker concerned directly, but also for other bankers and the general public
who may be affected indirectly.
book on the next day a cheque book is given to the customer, now a
customer can handle his account freely.
SPECIMEN SIGNATURE
When an account is opened with a banker, the customer gives the
banker a specimen of the form of signature which would appear on all his
cheques to express the authority for the payment of cheque drawn on his
banker. This specimen is taken generally on a card specially designed for
this purpose and rules for the customer’s full name and account number are
entered on it. If the banker has reasons to doubt the genuineness of a
signature, he should either get it confirmed for his satisfaction or return the
cheque with the remark “signature differ”.
PROBLEM IN INDIVIDUAL’S ACCOUNT
a) Death of the customer
b) Lunacy of the customer
c) Insolvency of the customer
JIONT ACCOUNT
There are the accounts of two or more persons who are neither
partners nor trustees. When such account is opened, it is necessary that the
banker should obtain clear directions as to whether one or more of them
shell operate upon the account.
PARTNERSHIP ACCOUNT
This account is to operated according to instruction given at the
time of opening the account. Every partner in a firm has an implied power to
bind his co-partners by drawing and endorsing of cheques, the drawing,
accepting and endorsing to bills of exchange and making and endorsing of
promissory notes. A partner has an implied authority to countermand
payment of any cheque drawn on the firm’s account and the banker is bound
to comply with the instruction issued by that partner. In addition the account
opening form duly signed by all the partners, and the specimen signature
card containing the specimen signatures of the persons authorized to operate
the account, a partnership letter, duly signed by all the partners in their
personal capacity is also obtained, wherein all the partners assumes the
liability of the firm to the bank as joint and several. This letter is obtained
from both registered and non-registered firms, and is not a substitute for the
partnership deed in a registered firm.
COMPANY’S ACCOUNT
The account of the company is opened on the resolution of Board of
Directors which nominates the persons authorized to operate upon the
account. The banker must take the specimen signature of the authorized
persons and allowed the operation o0n the account under that signature as
long as the authority is not terminated. When banker received a notice of
death retirement or dismissal of the authorized person he should stop the
operation on the account and wait for a fresh resolution authorizing another
person. however the cheques signed by the authorized person before death
,retirement or dismissal should be honoured by the banker, because they
were valid instruments before the termination of his authority, any doubt or
suspicion should be referred to the company. The banker may open the
account of newly floated public limited company without certification of
commencement of business in order to receive the amount of issued capital
from the prospective share holder but should not allow any withdrawal from
the account till the certification of commencement of business copy is
submitted to him. failure to obtain this certificate necessities the refund of
the amount to the prospective shareholders by the promoters.
Types Of Deposits
The following types of deposits are offered to the general public in
“The Bank of Punjab”
A. PLS saving bank deposits
B. PLS term deposits
C. Current deposits
D. Short notice term deposits
E. Special deposits
3 months 1.25%
6 months 1.50%
1 year 1.75%
5 years 2.5%
C. CURRENT DEPOSITS
Business community keeps their deposits in current accounts. They can
withdraw any amount standing to their credit in current deposits by cheques
without serving any notice to the bank. Current deposit are also known as
demand deposits. The bank does not pay any profit on such accounts but it
recovers incidental charges if a balance in the current account is below the
desired level. Minimum amount to open account is Rs. 1000/-
D. SHORT NOTICE TERM DEPOSITS (SNTD)
The period of this deposit range from 7 to 29 days and over. The profit is
calculated on daily product basis. Likewise PLS, TDR, Zakat is deducted @
2.5%. If fall within Zakat period and withholding tax is deducted @10% on
profit paid.
PAYMENT OF CHEQUES
The primary function of a banker is to receive deposits from
public on different accounts with the obligation to repay them either on
demand or after the expiry of a fixed period. For with drawals from current,
savings, bank RF and CF accounts constituents draw cheques, which are
presented for payment in one of the following ways:
1. Over the counter for cash payment.
2. Through the clearing where clearing arrangements exist.
3. Over the counter for credit to another person’s account with the
bank.
As paying banker can claim protection only when they make the
payment of cheque drawn upon them in due course are:
1. FORM CHEQUES
The instrument should be drawn in accordance with the legal
definition o a cheque. It should be dated and fulfill the following requisites:
1 Unconditional order
1. On a specific banker only
2. A certain sum of money only
3. Payee to be certain.
4. Payable on demand.
5. Signed by the drawer or by his authorized person
2. DATE
The cheque presented for payment should not be a postdated of
STALE one. A postdated cheque is one dated later than the date of issue. It
should not be paid for the following reasons:
1. The customer may stop payment before the due date of the cheque.
2. The banker has no right to debit customer’s account before its due
date.
3. If banker pays a postdated cheque in case the customer dies or
becomes insane or insolvent before the cheque is due for payment
then he shall have to bear away loss that may arise out to his
action.
4. The banker will lose the statutory protection granted to him for
payment in due course.
3. SUFFICIENCY OF FUNDS
Sufficient funds must be available in the account to meet the
withdrawal
4. AMOUNT
The amount should be stated in words and figures on the faces of
a cheque. If there is any difference between the two, a banker can pay the
amount given in words. But it is upon the banker either he offers the smaller
amount in some instances or returns the cheque with the remarks “amount in
words and figures differs”.
5. MUTILATED CHEQUE
A cheque torn or worn not by the customer in such a way as to
give sufficient evidence of his intention to cancel, it is called a mutilated
cheque. Such a cheque should be returned unpaid by the banker marked
mutilated cheque.
6. MATERIAL ALTERATION
Cheque presented for payment should not have any material alteration, if
there is any that should be duly confirmed by the drawer, because any
material alteration made without his consent makes the cheque void. If the
banker pay such a cheque he does so at his own risk.
7. NO LEGAL BAR
The cheque should not be legally barred for payment in any case.
his authority and may be liable for any damages suffered by his customer as
the result.
CLEARING DEPARTMENT
“All banks collect cheques on behalf of their customers and
system of collecting cheques is called clearing of banks. A clearing house is
a place where representative of all banks of the city get together and settle
the receipt & payment of cheques drawn on each other”.
3. CLEARING CHEQUES
The collecting bank can receive the amount of cheque from the
paying bank from the clearing house on the behalf of the customer’s
account.
REMITTANCE DEPARTMENT
It is very important department of the bank. “Remittance is a
transfer of funds from one place to another or from one person to another or
to the same person.”
2. TELEGRAPHIC TRANSFER
It is another mode of transfer. In demand Draft payment is made
on the presentation of that draft. It is time consuming procedure. In case of
T.T. no such requirement is required by paying bank. The customer must
have account in paying branch. When the issuing bank receives the payment
for remitter, bank makes telegraphic message through fax or telephone
message. It is called coded or tested message. This message is decoded and
then payment is made to remitter.
In case of T.T, there is only code no. these control no. are called
T.T. numbers.
3. MAIL TRANSFER
It is also one of the mode of remittance and is used foe
transferring money from one place to another.
The person desirous to remit money through MT shall fill an
application form called MT application form. The applicant shall provide all
the necessary information to the bank. The remitter of the funds signs this
application form. The officer gets all the bank charges and amount from the
customer and issues M.T. in this case no instruction is handed over to the
remitter. The message for the payment is conveyed to the paying branch
through inter branch credit advice, payment is made to customer.
4. TRAVELLER CHEQUE
It is just a shape of demand draft. The difference is that it is not
drawn on specified branch. It can be drawn on any branch of same bank.
The paying bank has to be verified the signature and after
verification payment is made.
5. PAY ORDER
It is used to secure the payment. In case of payorder issuing and
paying branches are same.
Payorder can be endorsed if it is not crossed. The amount of
payorder together with bank’s charges is paid by the purchaser in cash or by
cheque or on the letter of authority. Payorder may be presented for payment
by the payee either over the counter for cash payment or the payee may
transfer credit to his account.
The person who make the payorder cannot stop payment. The
person in whose favour the pay order is made can release payment of
payorder. Payorder is valid for six months.
6. CALL DEPOSIT
ISSUANCE OF CDR
The following is the procedure for the issuance of a call deposit
receipt:
1. Deposit is acceptable in cash or through cheque and processed in
the books of the bank accordingly.
2. Depositor / purchaser is required to make a written request for the
issuance of a CDR on bank’s prescribed form.
3. In addition to the amount of the call deposit commission at a flt
rate or Rs. 10 is also to be received from non-account holder.
4. After the receipt of that amount CDR is to be issued. The receipt
also contains the following information:
a) Name of issuing branch
b) Printed serial number of the receipt.
c) Date of issue.
ADVANCES
Different types of advances have been listed hereunder:
1. Demand Finance
2. Staff Finance
3. Cash finance
4. Running Finance
5. Small Finance
6. Finance Against Imported Merchandise
7. Agriculture Finance
8. PLS Trust Receipt
9. Housing Finance
10. Inland Bills Purchased
11. Musharika
12. Modaraba
Running Finance
Running finance is normally advanced to small business men and
the small income people for their day to day business requirements. This
loan is granted against mortgage of immovable property and hypothecation
of stocks in trade. The rate of mark up on this loan is 46 PS/DAY/ 1000 or
flexible as per party credit worthiness.
The account of this finance is opened like current account and
cheque book is issued to the client. Deposits and withdrawals are allowed
in like manner. This loan is disbursed normally for one year with the
provision of renewal at the time of expiry of one year.
Cash Finance
Cash finance is given to big industrial concerns. Mainly seasonal
loans are disbursed to agricultural input consuming industries like sugar
mills, cotton ginning factories, rice hushing and oil mills etc.
This loan is given against the mortgage of immovable property
and pledge of raw and finished goods. The term of loans is fixed according
to the season of a particular commodity.
Agricultural Finance
The essence of the scheme was to over come the traditional
difficulties being faced by the small framers in availing credit from the
financial institutions &banks. The bank credit operation includes selections
on merit prudent leading, vigilant supervision and regular coordination
between the bank and the borrowers.
Mode Of Finance
The selected farmers who qualify for the scheme and are
approved for the purpose of finance will be given a special chequebook of
Kisan Dost Account, along with a letter for the maximum amount he can
draw from this account.
MARK UP
All finances will be allowed at commercial mark up rate of
financing i.e. 0.46 to 0.23 paisa. It has double edge benefits i.e. all times
availability of credit to the farmers and their motivation for developing their
saving habits through bank.
PURPOSE
All loans given by the BOP to farmers for meeting their short
term agriculture production requirements specified below would be treated
as agriculture finance under the scheme.
a) Seed
b) Fertilizer
c) Pesticides
The account of client is treated as current demand account.
Regional chief approved the finance with the help of branch manager.
TRAINING PROGRAMME
Branch Introduction
Personnel Of Branch
On the first day of joining the branch, I was introduced with the
staff members of the branch, with whom I had to work.
These staff members are;
OTHER STAFF
(Including Security guards,
Peon and messenger)
Total no. Of employees 10
throughout the organization and cooperate among themselves and with their
subordinates as a group.
Opening An Account
In order to open an account, first of all the customer has to fill a
form prescribed by the bank. The person is required to bring some reference
or introduction for opening the account. Introducer may be the person who
has any account with BOP.
Deposits
The procedure undertaken upon receiving deposits from the customer
is as follows:
i. Examining the deposit slip to ensure that the name and the account
numbers are clearly indicated.
ii. Counting the cash/cheques and agree the total with the total with the
amount on the deposit slip.
iii. After that the pay-in-slip is validated for cash
transaction/transfer/clearing transfer as appropriate before the
counterfoil is handed over to the customer.
iv. Cheques signed by directors, partners or employees of a company,
drawn in favour of themselves and credited in their account in the
bank are to be scrutinized.
Withdrawals
Cheques can withdraw amount. The withdrawals can be made
only at the branch where the account is maintained.
Clearing Department
In this department, I have worked for two weeks and prepared the
clearing myself. My responsibility was to receive all the clearing cheques
and to make a schedule of these cheques after making an entry in the inward
or outward clearing registers and then to submit these schedules along with
the cheques schedules along with the cheques to the main branch. Main
branch receives the cheques from all of its branches and makes the lots of
these cheques again. Main branch send these cheques to the State Bank of
Pakistan where a clearinghouse exists. In this clearinghouse the
representatives receive their cheques and go back to their bank’s main
branch. Then main branch sends these cheques to their relevant branches
where the validity of these cheques are verified and the accounts of the
relevant clients are affected.
Then an advice is sent to the issuing bank that the cheque is
honored. In case, if the cheque is dishonored a memorandum is issued to the
bank on which various reasons of dishonor are printed and one or more
reasons are marked due to which the cheque is dishonored.
The statement of clearing was submitted before 1.00 P.M. daily.
The whole procedure of clearing is completed within 2 days.
Types Of Clearing
Clearing department deals with the two types of clearance.
1. INWARD CLEARING
When the cheques of other banks are deposited in our bank these
cheques are verified from the issuing bank first after due verification these
are credited into the account holder’s account. This is called inward clearing.
2.OUTWARD CLEARING
When the cheques of our banks are deposited in other banks and
those banks are send these cheques to us for verification. It is called outward
clearing. After due verification we debit the account of client with same
amount.
REMITTANCES DEPARTMENT
I worked in this department for one week. This department deals
in transfer of money from one place to another or country by:
1. Demand Drafts
2. Mail transfer
3. Telegraphic Transfer
In this department internees are advised only to observe the
working of transfer of money from one place to another place or country by
the above modes of transferring money.
During my stay in department, I observed that how demand draft
was issued. The procedure is as follow.
First the bank receives a written request from the customer to
issue a bank draft. The written request is either in banks standard form or
separate paper signed by the applicant enclosed with cash or cheque
covering the amount of the draft and other charges of the bank.
While issuing a bank draft it is necessary that the draft should be
free from alternations. All the details must be written clearly in ink. After
issuance a demand draft it is handed over to the applicant and its advice
containing the particulars of the draft is sent to drawer branch with its
necessary information and payment of the draft is made on its presentation.
Findings
During internship training period, I had found the following weaknesses:
B) Some employees in the bank just do the same job, they become the
master of practicing job but they know almost nothing or lose their
knowledge about other jobs.
C) The bank pays high profits to its customers and provides excellent
services but there is lack of publicity of its services on the part of
the clients.
D) The pay scale of The Bank of Punjab employees is less than other
banks which is an indication of discouragement among employees.
E) The employees have not access to higher authorities and a large
hierarchy of persons is involved. This creates frustration in
employees in solving their problems.
F) The size of almost all branches of The Bank of Punjab is very small.
It create difficulty for the customers as well as staff members for
proper dealings which always gives a congested atmosphere.
Recommendations
It was a interesting experience to do internship in “The Bank of Punjab”.
The staff was highly cooperative and due to their help I learned big deal
about modern banking.