Bank Punjab Final

Internship Report The Bank Of Punjab
TABLE OF CONTENTS
Chapter 1 Introduction
 Executive summary------------------------------------------------03
 Preface---------------------------------------------------------------04
 Acknowledgement--------------------------------------------------05
 College permission letter------------------------------------------05
 Internship Certificate----------------------------------------------06
 Introduction to the Report----------------------------------------07
 Introduction to Banking sector----------------------------------08
 Functions of the Banks-------------------------------------------09
 Vision and Mission statement------------------------------------10
 History & Background of BOP----------------------------------12
 Branch Network---------------------------------------------------13
 Management of Bank of Punjab--------------------------------16
 Division management---------------------------------------------18
• Organizational Structure
• Profile of the company
• Policy Formulation Process
• Communication Patterns
 Chapter 2 Activities of internship programme
 Account Department----------------------------------------------24
 Nature of account
 Opening new account
 Cash Department--------------------------------------------------31
 Cash counter
 Cash payment
 Cash received
 Cash book balance
 Token book
 Inter-bank accounts
 Clearing Department----------------------------------------------38
Hailey College of Commerce 1

 Outward clearing
 Inward clearing
 Local remittances
 Credit Department---------------------------------------------46
 Lending operations
 Advances
 Chapter 3 Financial Analysis
 Balance sheet----------------------------------------------------69
 Ratio Calculations----------------------------------------------70
 Income statement-----------------------------------------------74
 Chapter 4 SWOT Analysis

 Strengths----------------------------------------------------------76
 Weaknesses-------------------------------------------------------77
 Opportunities-----------------------------------------------------78
 Threats------------------------------------------------------------78
 Chapter 5
 Problems-----------------------------------------------------80
 Recommendations------------------------------------------81
 Conclusion---------------------------------------------------82

EXECUTIVE SUMMARY
The objective behind this report is to have every thing in writing, which I have learnt
from my internship at The bank of Punjab. This report will definitely help me and all
those who are having limited exposure about The bank of Punjab. I believe the
preparation of this report will be my first step towards never ending learning process.
The first chapter is comprised of introduction and management of the bank. Second
chapter purely discusses activities of internship program. Here I describe all the activities,
which I learnt over there. Chapter three related with financial analysis. Chapter four
focuses on SWOT analysis. Chapter five deals with Problems, recommendations and
Conclusion.

PREFACE
The pre-requisite of internship program is to make the students of B.Com(Hons.),

aware of the practical expertise and to acquaint them with the real management process.
With an intention of grooming the best executives of the future, the department of
management science has organized a comprehensive internship-training program. All of
us were placed in leading organizations of business arena to gain first hand knowledge
and insight into their management and working. So, when I was given the chance of
selecting an organization, I opted for The Bank of Punjab.
Getting a chance of working in Bank of Punjab proved to be very beneficial for

me. I think that I gained comprehensive insight into the working of a bank. But nothing
could have been possible without the co-operation and guidance of the officers of BOP.
After the completion of internship program, internship report has been prepared
just in accordance with the practical exposure. It has been my endeavor to stipulate my
experience in a way that the reader may clearly understand the core concepts.

ACKNOWLEDGEMENT
I bow my head in infinite humanity before God who gave me the courage and strength to
complete this dissertation. All praise for Almighty Allah whose uniqueness oneness and
wholeness is unchallengeable, guided me in different circumstances. All respects are for
his holly prophet Hazrat Mohammad (p.b.u.h) enable us to recognize the oneness of my
creator.
Preparing the manuscript for this report has been an unusually enjoyable and exciting
experience for me. Perhaps the most memorable aspects of the project has been the
opportunity to know better a number of people who have provided information for
various portion of the work in the course of the research, I became the object of a number
of individuals but only a few of them can be mentioned here. My thanks go first to my
parents who gave me permission to move to and fro easily. I am thankful to my Brother
who helped me in many ways. Special regards to my Brother Mohsin Baig who helped
me at every moment especially in typing and in editing this report with wonderful
efficiency and dispatch.
After giving homage to my blood relations first of all I would appreciate myself that I
worked hard for the completion of this project but I was nothing without the help of
others who encouraged me and help me in many ways.
I am obliged to Prof. Hassan Mubeen Alam who has contributed a lot by way of
improving the text and presentation of this report.
I started to collect data from the very first day of my internship and the first person to
whom I will like to give my regards is the operational manager of the branch Mr.Rana
Nawaz Ahmed. I am also deeply indebted to OG ll, Mr. Jahanzeb Khan and OG lll, Mr.
Abdullah who gave me very useful tips and information for one of the portion of the
report.
I want to acknowledge my deep thanks to my friend Yasir Waheed, who helped me to

give the final touch to my report.

DEDICATION
Dedicated to my loving parents, teachers and those who remember me in prayers

INTRODUCTION TO THE REPORT
The basic purpose behind the preparation of an internship report is to make the student jot
down the experiences of the internship and discuss the understanding of the operations of
the organization.
The following pages discuss my experiences at Bank of Punjab, Wahdat Road Branch
Lahore. Before I proceed, I would like to mention that the experience of working in a
small, established branch was in itself a treat. All the employees were extremely
cooperative and accommodating. All the employees under whom I worked were very
qualified and experience person.

INTRODUCTION TO
BANKING STRUCTURE IN PAKISTAN
At the time of independence of Pakistan, the total numbers of commercial banks were 38.
Out of those, Pakistani banks were only two. There were 3496 branches of Indian
scheduled bank in the subcontinent at the time of independence, out of which Pakistan
has 631 branches. 126 branches were located in former East Pakistan and 487 were in
West Pakistan. The situation further deteriorated when 409 branches were abruptly closed
after independence and on first July 1948 the number of branches declined to 195 and out
of Pakistan banks most of these were newly born and had limited business. Development
and growth of banking in Pakistan started with the establishment of State Bank of
Pakistan on 1st July 1948 and national Bank Of Pakistan in 1949. Despite separation of
East Pakistan, Banking marches ahead at rapid pace. In 1952 the NBP was assumed as an
agent of SBP. SBP also restricted the foreign banks to major cities only and for rest of
country local banks were encouraged to open branches.In 1973 National Development
Finance corporation (NDFC) was established for providing short-term loans to small
business.
By the end of 1973 commercial banks numbered 13 with 3442 branches. The success
achieved by the banking system was indeed spectacular. However the banks failed to play
effective role in ensuring a wide and equitable concentration of credit in big accounts and
urban areas and unethical practices had creep into banking.
As a result on 1st January 1977 the Govt of Pakistan nationalized all banks in Pakistan
and all banks were brought under five names.
National bank of Pakistan (NBP)
United Bank Ltd. (UBL)
Habib Bank Ltd. (HBL)
Allied bank Limited. (ABL)
Muslim Commercial Bank Limited. (MCB)
The share of Pakistani banks in total branch deposits and credits has increased manifold.
The share of Pakistani bank branches which was 12% in 1948 increased to 99% in 1991
and share in total deposits increased from 29% in 1948 to 88% in 1991. This shows a
rapid progress of banking system in Pakistan. At present State Bank of Pakistan is
functioning as State Bank and there are seventeen commercial banks, National Bank of
Pakistan, Habib Bank Ltd, United Bank Ltd, Muslim Commercial Bank, Allied Bank Ltd,
Askari bank Ltd, Soneri Bank, The Bank of Punjab Ltd, Prime Commercial bank, Union

Bank, Saudi Pak Bank, Faysal bank Ltd, Bank Al-Habib, The Bank of Khyber, Standard
Chartered, ABN-AMRO, KASB Bank
Functions
Primary Or Basic Functions Secondary Or Subsidiary Functions
Making Loans & Agency Functions

Accepting Deposits Utility Functions
Advances & Services
Collection of
Fixed or time Purchasing and Foreign exchange
checks, bills,
deposits discounting of bills business
interest etc
Execution of
standing Orders,
Saving deposits Drafts Act as referee
payment of Orders,
payment of
Purchase and sale of Issuance of travelers

Current deposits Cash credits
securities checks
Supply of trade
- Loans Transfer of funds
information
- - Acting as trustee Export promotion

THE BANK OF PUNJAB
VISION STATEMENT
“T o b e a c u s t o m e r f o c u s b a n k w i t h s e r v i c e e x c e l l e n c e ”
MISSION STATEMENT
‘T o e x c e e d t h e e x p e c t a t i o n s o f o u r s t a k e h o l d e r s b y
leveraging our relationship with the Government of
Punjab and delivering a complete range of professionals
solutions with a focus on program driven products &
services in the Agriculture and Middle Tier Markets
through a motivated team’

CORE VALUES
 Our Customer is our first priority.

 Recognition and Reward for Talented and High performing Employees.
 Integrity in our dealing in all affairs.
 Respect for everyone whom ever contact with us
 Excellence in every thing we do.
 Profitability for our Stake holders
 Corporate Social Responsibility is to work for the welfare of society
OBJECTIVES OF THE BANK OF PUNJAB
• Follow the rules, regulations and policies of the State Bank of

Pakistan.
• To carry on the business of a “banking company” as defined by the
Banking Companies Ordinance, 1962.
• Acting as “Modarba Company” under the provision of Modarba
Companies and Modarba Ordinance, 1980.
• Acquiring and undertaking the whole or any part of the business of
any person or company, when such is of a nature enumerated or
described in section 7 of the Banking Companies Ordinance 1962.
• The providing of finance as defined in Banking Tribunals
Ordinance, 1984.
• Contracting for public and private loans and negotiating and
issuing the same.
• The effecting, insuring, guaranteeing, underwriting, participating
in managing and carrying out of any issue, public or private,
Government, municipal or other loans or of shares, stock,
debenture stock or other securities of any company, corporation or
association and lending of money for the purpose of any such
issue.
• The collecting and transmitting of money and securities.
• The providing of safe deposit values.
• The purchasing and selling of bonds, scrip’s or other form of
securities, participation term certificate, term finance certificate,
musharika certificates, modarba certificates and such other
instrument as may be approved by the State Bank of Pakistan
participation on behalf of constituents or others.

• Acting as agent for any Government or local authority or any other

person or persons.
• The buying and selling of foreign exchange including foreign bank
notes
• The negotiating of loans and advances.
• The borrowing, raising or taking up of money.
• The lending or advancing of money either upon or without
security.
• The granting and issuing of letters of credit, traveler’s cheques and
circular notes.
• The receiving of all kinds of bonds, scrip’s, valuables on deposit or
for safe custody or otherwise.
• Undertaking and executing trusts.
• Managing, selling and realizing any property, which may come
into the possession of the Bank in satisfaction or part of
satisfaction of any of its claims
• Carrying on and transacting every kind of guarantee and indemnity
business.
• Selling, improving, managing, developing, exchanging, leasing,
mortgaging, disposing of or turning into account or otherwise
dealing with all or any part of the property and rights of the Bank.
• Subscribing to or guaranteeing moneys for charitable or benevolent
objects or for any exhibition or for any public, general or useful
object.
• Granting pensions and allowances and making payments towards
insurance.
• Undertaking the administration of estates as executor, trustee or
otherwise.
• Doing all such other things as are incidental or conductive to the
promotion or advancement of the business of the Bank.
His to ry
The Bank of Punjab was established in pursuance of The Bank of Punjab Act, 1989
The scheduled bank status was given by the State Bank of Pakistan on September 19,
1994.
The bank is listed on Lahore, Karachi & Islamabad Stock Exchanges.
The majority shares of the bank are held by Government of the Province of the Punjab.
The Bank has fully owned subsidiary M/s Punjab Modaraba Services (Pvt) Ltd, which is
profitably managing a modaraba company.
Recognize the role of technology in effective/efficient operations of financial sector. The

Bank has computerized all its branches which are inter connected vide online real time
system. Bank’s’ customers are facilitated by shared network of on line ATM in all major
cites of Pakistan.

Bank enjoys substantial shares in economic growth, especially of agricultural and SME
sectors. Penetration into Agri-economic was made possible through strategic positioning
of braches and introduction of a number of Agri-based financing schemes allowing the
bank to play a pivotal role in strengthening this sector of our economy.
Branches network
The Bank of Punjab has 266 branches at all major business centers of the city throughout
the Pakistan, and 246 of them are online and interconnected with each other. The Bank of
Punjab has increased the banking time i.e. from 9 to 5.
Regional Network
Lahore 67 Branches
Faisalabad 43 Branches

Gujranwala 45 Branches
Karachi 05 Branches
Multan 63 Branches
Peshawar 06 Branches
Rawalpindi 37 Branches
The Bank of Punjab can also be divided into six segments according to its banking
functions:
Branch Banking
Consumer Banking
Corporate Banking
Retail Banking
Small Medium Enterprises
Special Asset Recovery Management
Online Banking
The Bank of Punjab first time introduce Online Banking in Pakistan , with the help of
online banking the customers of The Bank of Punjab can transfer their funds for one
branch to another branch and to transfer their funds to other accounts holders from 9 to
5’o clock.
Ro le in National E conomy
The Bank of Punjab plays a vital role in the national economy through
• Mobilization of hitherto untapped local res ources

• P romoting savings and providing funds for investments.
• A ttractive rated of profit on all types of deposits
• Opening of Foreign C urrency A ccounts
• H andling of Foreign Exchange bus ines s such as Imports, Exports
and Remittances , F inancing, Trade
• Industry for working capital requirements
• Money M arket operations
C redit Rating of Bank of Pun jab
M /S PAC RA has aw arded the B ank with the credit rating

F or Long term AA -
F or Short term A1+
On the basis of bank financial results for the year ended as on 31st
D ecember 2005.
L en ding policy of Bank
The lending policy of Bank is not only cautions and cons tructive but
als o bas ed on principles of prudent lending with maximum emphasis on
s ecur ity. As agriculture is considered as backbone of our economy the
B an k of Punjab has Introduced “K is an Dost A griculture Finance
S ch eme” to s mall farmers .
The Bank of Punjab has indeed entered a new era of s cience to the
n atio n under experience and professional hands of its management.
S ervice Provided By th e B ank .
The Bank provides following types of banking s ervices
• D eposit in Local Currency

• C lient Deposit in Foreign C urrency
• R emittances
• Ad vances to Bus ines s
• Trade
• I nd ustry
• Ag riculture .
Awards and Achievements
Best Corporate Report Awards
The Joint Committee of the ICAP and ICMAP selected the BOP for winning 3rd position
for The Best Corporate Report Award 2004 for the financial sector.
Merit Award by South Asian Federation of Accountants (SAFA)
On the bases of evaluation of the Annual Report 2004, the South Asian Federation of
Accounts (SAFA) adjudged the Bank of Punjab as the recipient of Merit Award under the
Banking Sector subject to prudential Supervision category.

2nd Kisan Time Awards
The Bank was adjudged as Best Agri Loan Bank and has been awarded 2nd Kisan Time
Award.
15th Bolan Excellence Award
The Bank was awarded Best Bank Award under 15th Bolan Excellence Awards
distribution in 2005
Achievement Award
The Lahore Chamber of Commerce & Industry rated Bank as Best Performing Bank in
year 2005.
Management of Bank of Punjab
President Secretariat
M r . Na e e m - ud - D i n. President
Information Technology Division
M r . Fa i s a l Az m a t General Manager
M r . Ri z w a n Al i Chief Manager
Human Resource Division
M r . Na ve e d Ha f e e z S ha i kh General Manager
M r . Ri a z A kh t a r E. O. C. / Ch i e f M a n a g e r
Law Department
M ohs a n Ra nj ha Legal Head
M r . Ka m r a n In-charge
O pe r at i o n Di vi s i on
M r . Sh e r j e a l M a s u d General Manager
M r . At ha r Az i z D og a r Chief Manager

1. Corporate Banking Head

M r . Ha f e e z u d D i n C o u n t r y C o r p o r a t e He a d
2. Trade Processing Centre
M r . A a m i r Ha m e e d
3. Compliance Cell
M uha m m a d La t i f E. O. C. / Ch i e f Co m p l i a n c e O f f i c e r
D. Finance Division
M r . Na de e m A m i r O f f i c i a t i n g Ge n e r a l M a n a g e r
M r . Ra s hi d M e h bo ob Financial Analyst
International & Treasury Division
M r . M u ha m m a d S a l i m M i r z a General Manager
M r s . S a ba Fa r r u kh A . V . P/ Ch i e f De a l e r
Audit & Inspection Division

M r . M u ha m m a d H a n i f Head
Credit Risk Management Division

M r . No um a n Ah m a d General Manager
M r . Ta r i q J a v e d But t V.P
Agriculture Credit Department

M r . M oa z z a m M a hm o od M a n e k a Head Agri
Shares Department
M r . M u ha m m a d I qba l A . V . P. / As s i s t a n t Se c r e t a r y
H. Special Asset Management Division

M r . Sh a h e e n Na z a r Q ur e s hi E. V. P / Ge n e r a l M a n a g e r
M r . Bi l a l H us na i n C ha nd a n E. O. C
I. Liability & Consumer Products Development Division
M r . M a h m o od Sa di q Kh a n E. O. C. / Ge n e r a l M a n a g
M r . Ha j i M uha m m a d As l a m V.P
1. Products / SME Division

M r . S. M . At i f . General Manager
Officer’s Training Institute
M r . Ta r i q M a hm oo d M ug ha l A.V.P
Head Office

1 0- B- E/ I I , G UL BE RG - I I I , LA HO RE . ( Pa k i s t an )
T el : ( 0 42 ) 5 78 37 00 - 10
F ax : ( 04 2) 57 83 79 5
Main Branch, Lahore (Pakistan)
C hi ef M an ag er
T el : ( 0 42 ) 9 20 04 19 , 92 00 18 7
F ax : ( 04 2) 92 00 35 1
BOP Division
Finance Division 042-5783700-10, 5783794

Comm Assets Division 042-9203705
Marketing Division 042-9203820
Special Assets Management Division 042-9200421-28
Treasury & Intl Division 021-2412114-6
Operations Division 042-9200165
Information Technology Division 042-6315362, 6310799
Liability Division 042-5783720, 5783700-10
Products/SME Division 042-9200421-28
HR Division 042-5783700-10, 5783792
A & I Division 042-5783700-10, 5783734
Credit Risk Management Division 042-9200421-28
Credit Policy Division 042-5783700-10
Training, Research, Communication
042-9200178
& Publication Division
Organogram of Bank of Punjab
(WAHDAT ROAD BRANCH)
Sheikh M.Tahir Manager
Rana Nawaz Ahmed OG-Ι Operational Manager
Jahanzeb Khan OG – II Salary Administrator
Miss.Asma OG- II Remittance Incharge
Abdullah Javed OG- III BSA/Operation Officer

Abid Zaheer Cash Officer
M.Fayyaz Utility Bill Collector
M.Ahmed Assistant Administrator
M.Nisar Office Boy
ORGANIZATIONAL STRUCTURE
FUNCTIONAL STRUCTURE
In a functional structure activities are grouped together by common function from the
bottom to top of the organization. Bank of Punjab has high functional structure. They
strictly follow the rules, regulations and polices in carrying its day-to-day business.
• Tasks allocated to each employees according to their experience and specialization.

• Well defined authority.
• Promotion is based on performance
Organizational bureaucracy and control
Bureaucratic Structure
Bank of Punjab has a strong bureaucratic structure.

• In BOP there are strict rules, regulations and polices in carrying its day-to-day
business. In BOP most of its work consists of routine, repetitive tasks.
• Employee do the same work which was explained to him in the job description
provided when he joins the bank.
• In BOP employees are technically qualified person.
• In BOP there is high Hierarchy of Authority.
• In BOP there is a written communications and record.
• Tasks allocated to employees according to their experience and specialization
STRUCTURAL DIMENSIONS OF THE BOP
Structural dimension provides label to describe the internal characteristics of an

organization.
FORMALIZATION

In Bank of Punjab there is written rules and procedure. Documents include procedures,
job description, regulations and policy manuals.
SPECIALIZATION
Specialization is the degree to which organizational tasks are subdivided into separate
jobs. Specialization is low in Bank of Punjab so that the employee performs a wide range
of tasks in their jobs.
HIERACHY OF AUTHORITY
Hierarchy of Authority describes who repots to whom and the span of control for each
manager. In Bank of Punjab span of control differ from department to department
according to task and requirement.
PERSONAL RATIO
Personnel Ratio refers to the deployment of employees to various functions and

departments. In the BOP it is according to requirement that includes administrative ratio,
clerical ratio, and professional staff.
CENTRALIZATION
Centralization refers t the hierarchical level that has the authority to make a decision.
When decision making is kept at the top level, the organization is centralized. In BOP
decision making is mostly made at the top so it is highly centralized organization.
PROFESSIONILISM
Work staff is highly educated and experience according to their post or job title. Staff has
both formal education and job experience
CONTEXTUAL DIMENSIONS OF THE BOP
Contextual dimensions characterize the whole organization which includes size,

technology, environment and goals.
SIZE
Size is the organization’s magnitude as reflected in the number of people in the

organization. There are 266 branches of BOP in which a large number of employees,
administrative staff, clerical staff and others are performing different functions
accordingly.

ENVIRONMENT
It includes all the elements present outside the BOP like customer, government, suppliers
and financial community. They all have an influence on BOP and the management wants
to satisfy entire community.
GOALS AND STRATEGIES
Organization’s goal and strategy define the purpose and competitive techniques that set it
apart from other organization. BOP has goals and strategies to have an edge on its
competitors.
ORGANIZATIONAL CULTURE
A culture is the underlying set of key values, beliefs, understandings and norms shared by
the employees. BOP has a good corporate culture.
INTER-CONECTIVITY AMONG THE DEPARTMENTS
There is a “pooled interdependence” in which each department is the part of the

organization and contributes to the common good of the organization but works
independently. In BOP inter connectivity among department is very high each and every
department contribute for the wellbeing of BOP.
COMMUNICATIOON AND COORDINATION
Communication activity and frequency increases as task variety increases. Frequent

problems require more information sharing to solve problems and ensure proper
completion of activities. The direction of communication in Bank of Punjab is both
horizontal and vertical. If task is highly analyzable, statically and written forms of
communication is used such as reports, memos and rules. If the task is less analyzable
information is conveyed through mails, telephone or in small meetings
PORTER’S COMPETITIVE SRATEGY
COMPETITIVE ADVANTAGE
LOW COST UNIQUENESS

Low Cost Leadership Differentiation
BROAD
BOP
COMPETITIVE Focused Low Cost Focused Differentiation
SCOPE leadership

NARROW
The BOP is placed in Low Cost Leadership strategy because it increase market share by
emphasize Low Cost as compared to competitors. With this strategy BOP seeks efficient
facilities, cost reduction and use tight control to work more efficiently than its
competitors.
MILES AND SNOW STRATEGY TYPOLOGY
In “MILES AND SNOW STRATEGY TYPOLOGY” BOP is in analyzer. It tries to

maintain a stable business while innovating on periphery. It is a midway between
prospector and defender. Some products were targeted towards stable environment in
which an efficiency strategy designed to keep current customer is used, other will
targeted towards stable environment where growth is possible.
ORGANIZATION CULTURE
ENVIRONMENT
UNSTABLE STABLE
Entrepreneurial Mission
External
Strategic Focus Clan Bureaucratic
Internal BOP
BOP has a bureaucratic culture. There are strict rules & regulations, it has a stable
working environment and main focus of organization is internal operations.

BOP culture is
• All the employees should reach at 8.50 at the bank

• All the mail employees should wear formal dressing and wear tie also.
• All the employees should be at the bank till the work is finished.
• Bank timing should be till 5.00p.m
• Bank will not be closed before 5.00 p.m.
ORGANIZATIO LIFE CYCLE & CINTROL
BOP is large size organization and it is bureaucratic in nature therefore there are strict
rules & regulations and procedures, communication is less frequent. The main emphasize
on internal stability, market expansion and customer satisfaction. So company is placed
in formalization stage according to the organization life cycle theory.
BOP obtains internal stability through morale building of their employees and control
structure.
BOP builds customer satisfaction through positive image of Bp through advertisement on

different Medias.
BOP achieve market expansion goal by increasing the branches in whole country so they
are increasing their market share.

MY ACTIVITIES IN BOP
1st WEAK
ACCOUNTS DEPARTMENT
The account-opening department is run by who is always very eager to open an account
for you, if you visit him for any purpose?
Nature of Accounts
• Customer can open

• Current account
• Profit & loss Saving account
• Fixed deposit account
• Basic banking account
• Saving plus account
• Corporate premier Account
• Foreign currency current account
• Foreign currency saving account
Categorization: These accounts can be categorized as follows
• Individuals
• Firm
• Company
• Trust
• Staff
• Partnership accounts
• Limited companies
• Others

Basic Banking Account (BBA)
The minimum initial deposit will be Rs.1000. No profit will be Payable. No fee (service
charges) for maintaining such accounts will be charged. There will be no limit for
maintain minimum balance. In the cases, there balance in BBA's remain "NIL" for a
continuous 6 month period, such accounts will be closed. Account holder will be allowed
a maximum of deposit transactions and
• 2 checking withdrawals, free of charge either through cash/through clearing per

month otherwise service charges of a regular banking account shall be applicable
for that month as per Bank's Schedule of Charges. Unlimited free of charge ATM
withdrawals from Ban's own ATM's will be allowed. In case of withdrawals from
BBA though the ATM Machine of other Banks, the Charges of these Banks shall
be applicable for such transaction.
PROFIT & LOSS SHARING ACCOUNT
PLS Saving Accounts
These accounts are special type of deposit account which is intended primary for small
savers. The rate of profit on Saving accounts is usually a little lower than then on Term
(Fixed) deposits. The rate on PLS fairly remains static, it does not vary with easy change
in base rate except a fractional change which is declared after the end of each half year by
the bank. The rate of profit is 6% on PLS saving accounts as declared by the bank for the
half year ended June 30, 2000. Zakat is deducted every year @ 2.50 % .It is only
applicable on PLS accounts. There is exemption for Fiqua sect, non Muslims and non
Pakistani.
CURRENT ACCOUNT
Current Account can be classified as business account and are specially designed for
persons who need their money back at any time from the bank. Therefore the bank cannot
invest the money so there is no interest paid on these rather service chares are deducted
for the safe custody and other service provided by the bank. For opening a Current
Account bank standard form is to be completed by applicant by the office attending him.
The introducer details (name and account number) and signature are included on the
specimen signature card in the space provided.
Procedures and rules applied for opening account are almost same as for saving account
except minimum limit of balance requirement.
Minimum Balance
Minimum balance requirement for current account is Rs. 500. If any account goes below
this limit account holder is intimated to bring balance at required level.

ZAKAT
There is no deduction of Zakat on Current Account
FOREIGN ACCOUNT
The Bank of Punjab is currently dealing in the following foreign currencies.
• US DOLLARS ($)
• POUND STERLING
• JAPANESE YEN
According to new rules and regulations of the Govt. everybody can open the foreign
currency account.
As earlier discussed PLS and current accounts the same types of accounts can be opened
in the foreign currency.
Corporate premier Account
• The minimum initial deposit will be Rs. One Crore.

• No limit on deposit transaction and checks withdrawals.
• Statement of account will be issued every time you want.
• (Charges of statement of account is Rs.50 for one month & above is Rs.70)
• FOREIGN SAVING ACCOUNTS

• FOREIGN CURRENT ACCOUNTS
• FOREIGN TERM DEPOSITS
Opening new account
Documents required for opening an account
Individuals
• Attested copy of National Identity Card or Passport of the individual.

• In case of salaried person attested copy of his service card.

• In case of illiterate person a passport size of the account holder besides taking his
right and left thumb impression on SS card
Partnership
• Attested copy of National Identity Card of all partners.

• Attested copy of “Partnership deed” duly signed by all partners of the firm.
• Attested copy of Registration Certificate with Registrar of firm.
• Authority letter in favor of person authorized to operate on the account of the
firm.
Club/society/association
• Certificate of registration
• Certified copy of partnership deed
• Certified copy of rules
• Certified copy of resolution
• Copy by-laws
• Copy of NTN certificate
•
Trust Account
• Attested copy of Certificate of Registration.

• Attested copy of NIC of all the trustees.
• Certificate copies of Instrument of Trust.
Joint Stock /Companies
• List Of all Directors

• Memorandum Of Association
• Article Of Association
• Certificate Of Incorporation(In case of Public Ltd company)
• Certificate To Commence Business
• NIC Copies Of all Directors

Account Opening Process
Introduction & Preliminary Investigation
Before a bank office opens a new account he should ascertain whether or not the person
desirous of opening an account is desirable customer. The officer will also determine the
prospective.Customer’s integrity, respectability, occupation and the nature of the business
by the introductory reference given at the account opening. Negligence in this informal
preliminary investigation may result in serious consequence not only for the officer
concerned directly by but also for other officer of the bank and the general public who
may be affected indirectly.
The following steps are taken for opening an account;
• Customer must personally visit the branch so the officer gets the knowledge of the
customer.
• Maximum information relating to the means, line and place of the customer
should be obtained.
• Completion of Account Opening Form
• Signature on the account opening forms as well as on SS card must be attested.
• Introduction of the person who has any account with the Bank of Punjab
• Computerized NIC in original shall be scrutinized and compare with its
photocopy.
• In case of joint account the following information must be obtained
• Who shall operate an account?
• To whom the balance shall be paid in case of death of any partner.
• Account may be opened with cash only.
• The account opener shall put his sign. on the account opening form.
• At the end of the day the account opening form shall be pasted on the account
opening form file.
• Letter of thanks must be sent to every new account holder, letter shall also be sent
to the introducer.
Rules for opening an Account
Accounts shall be opened upon submission of duly filled-in Bank’s prescribed Account
Opening Form properly introduced and all the documents related to the Account Opening
procedure.
Bank has the right to refuse to open an account without assigning any reason.
Account shall be opened with an initial/minimum deposit as stipulated by bank.
A distinct no. shall be given to every account.

SPECIMEN SIGNATURES
When an account is opened with bank the customer gives the bank a specimen of the
form of signature, which would appear on his cheque drawn on his bank. This specimen
is taken generally on a card specially designed for the purpose. And rules for the
customers full name, and account number are entered on it. If the bank officer has reason
to doubt genuineness of a signature, he should either get it conformed from his
satisfaction or return the cheque with the remark “Signature differs”.
VERISYS
Verification of NIC. By NADRA. This is obtained by bank from NADRA on the behalf
of its customer.
DEPOSITING THE CASH
After all the documents have been filled, then officer will make entry in the account
opening registered allot the new account number to the customer. The customer will fill
in the deposit slip and deposit cash in his account. This amount is also written on the
account opening form against the column initial deposit.
ISSUANCE OF CHEQUE BOOK
After opening an A/C with the bank, the A/C holder once again makes a request in the
name of bank for the issuance of a cheque book. The A/C holder mentions title of A/C,
A/C number, sign it properly and mentions the no of leaves he requires. Normally BAL
issues a cheque book having at least 25 leaves. Every cheque book also contains one leaf
that is used for another issue of a cheque book.
Entry Of A cheque book:
Before issuance of a cheque book, the employee performs certain functions. They
include:
• Stamping every leaf with specific A/C number.

• Enters it in the cheque book issue register.
• Check whether or not a senior officer has verified the signatures, if no then first
he gets them verified.
After entry in the manual register, the employee issues the cheque book to the A/C holder
after his/her signature on the register.
Charges of a Cheque Book

• For PLS saving account with 25 leaves charges is Rs. 75.

• For PLS saving account with 50 leaves charges is Rs.100.
• For Current account with 25 leaves charges is Rs. 100.
• For Current account with 50 leaves charges is Rs. 125.
Letter of Thanks
Bank prepares two ‘LETTER OF THANKS’ one for the new customer and the other for
his introducer. This act promotes good will between the customer and the introducer.
Procedure Followed In Order To Close An Account
The procedure followed for the purpose of closure of an account is described in the
following steps
• The client who wishes to close an account first has to give an application, duly
signed on the pre-printed application of the bank. The client has to attach this
application with the liability form (explained below). The client can also give an
application on a plain paper, but correct signatures are very necessary.
• Then it has to be made sure that if the account to be closed is a Saving, Current
Account then the account balance before closing should be zero. If a client wishes
to close an account then the bank also charge some money at the time of closing
the account.
Along with the application to close the account client’s Cheque book is also received
from him and then it is destroyed in order to prevent any misuse in the future.
Other Types Of Accounts
Term Deposit Accounts:
Term deposit account is essentially a fixed deposit account. It is opened if a customer is

willing to deposit his funds with the bank for a period within which he cannot withdraw
his money. In case a customer withdraws his amount then he is given no interest at all on
the principal. Normally people tend to fix their deposits with the bank for a relatively
longer period of time (3 years, 5 years etc.) although the facility of opening a term
deposit account is also offered for short tenors like 7 days, 30 days etc. reason being that
as there is a positive relationship between the tenor and the rate of interest i.e. longer the
tenor higher would be the rate of interest. Customers benefit by opening a fixed/term
deposit account as they earn a higher rate of interest which cannot be earned if you are

operating, say for example a savings account. At this point one thing must be taken into
immediate consideration that only those people will fix their money that do not face any
problem regarding liquidity, people having one would feel contend with a lower rate of
interest but would certainly go for some other account like royal profit or savings
account. Banks benefit by opening a term deposit account as funds are placed with them
for a longer period of time and the bank can earn a lot by advancing these funds more
than once, specifically if the advancing is short or medium term.
CALL DEPOSIT RECEIPT:
Issuance of call deposit receipts is basically a free of cost facility offered by Bank Alfalah
Limited not only to its own customer’s but also to walk in clients. When government
organizations, or for that matter non government organizations float tenders for execution
of a particular task, they require that the organizations who are participating in that tender
i.e. organizations who have applied for the tender should, along with other documents,
also submit a monetary guarantee certifying that they will definitely perform the required
task upon acceptance of their offer. This requirement is basically put forth in order to
safeguard the government organization from facing a situation in which the participants
show inability or inadequacy to perform the required task after acceptance is granted in
their favor. Such a situation generally is not desirable as the government organizations
have to under go the procedural steps of floating and accepting the offers and in the
process they have to incur additional costs. For this purpose the call deposit receipts is
issued which is a monetary guarantee that if the organization does not work as per the
tender requirements the government organization can en-cash the call deposit receipt
and recover its losses.
Cash Department:
2nd WEAK
CASH COUNTER
The department deals with cash payments and cash receipts. The cash counter maintains
the following ledger of accounts.
• Cash payment vouchers

• Cash receipt vouchers
• Cash balance book
• Token register

Manual registers are maintained in cash department. All the daily transactions are
recorded in these registers and ledgers. Different staff member like checking officer,
accountant, cashier and clerk maintain these ledgers.
CASH PAYMENTS
When a party comes to the bank to withdraw money, he presents the Cheque to the clerk.
The clerk performs different verifications like
• Verify signature
• Posting of cheque on Computer
• Authentication of Cheque
• Payment of Cash
•
If the clerk finds any fault regarding with that Cheque, he returns the cheque to the
customer for rectification.
After a careful inspection, the clerk sends this cheque to the officer for the issuance of
token no.
Signature Verification:
• After issuance of the token next step is to verify the signature of the customer
• Customer must have two signatures on the back of the cheque and one signature
on the front of the cheque. The officer matches the signature of the customer
through SS Card.
• In case of illiterate person officer shall take the thumb impression of the customer
one on front side of the cheque and two on the back of the cheque. After it the
officer must match the photo of the customer.
• Officer put the verified signature stamp and initial of the officer on that stamp.
Posting of cheque on Computer
• After the cheque is verified the Assistant Administrator post the cheque on
computer on which he write the
• Account number
• Cheque number
• Account Dr
• Cheque Amount
• After posting computer gave the number which is written on the cheque.

• While posting on the computer the Assistant Administrator check whether the
account has sufficient balance or not. So that the customer can draw money from
bank
• He also checks whether the stop payment instructions are received from account-
holder or not in case of account holder not come.
Authentication of Cheque
After posting on the computer the cheque is authenticated by the Officer.
• The Cheque is verified by only one officer if the cheque up to Rs.50, 000
• The Cheque is verified by officer and branch manager if the cheque exceeds the
amount of Rs.50, 000.
• Payment of Cash
• After posting the cheque the officer send the cheque to the cashier.
• After receiving the cheque cashier enter the following things in the “Cash
payment Register”
• The cashier enters the cheque number.
• The cashier enters the account number.
• The cashier enters the token number.
• Then the cashier enters the amount.
After follow such steps then cashier call the token number and pay to the person who has
that token number.
CASH RECEIVED
Cash is the key component of banking operation handled by the first desk. The cash
dealing staff and infrastructure provided as must be presentable and major emphasis must
include quality service to the customer. In this department Mr. Hassan Saif help me
understand all this.
State Bank requires that “Cash Department” deals in the following things.
• Cash Receipt
• Utility Bills Collection
• Prize Bond sold and purchased

In our bank one person for Utility Bills Collection and one person deals in other things.
Cashier maintain the following register
• Cash Receipt Register

• Cash Payment Register
• Prize Bond sold and purchased Register
• Vault Register
• Total Balance Register
• Cash Sorting Register
Cash Receipt Register:
In this register all receipts receive from the customer is written. All the receipts are
through deposit slip in which the customers write the account number, name, amount and
depositor put the signature on the deposit slip. After stamping of cash received stamp the
half slip return to the customer and one slip cashier put himself.
The cashier writes the following things in Cash Receipt Register
• Account number
• Name of the Account Holder
• Amount
Cashier sum the amount of Cash Receipt Register and match with the computer receipt
payment.
Posting of Deposit slip:
Cashier gives all the receipt to the officer to be posted on the computer. Officer must
write the account number and credit the customer account. After posting computer give
the computer number which is written on the deposit slip.
Authentication of Deposit Slip
After posting on the computer the deposit is authenticated by the Officer.
• The Deposit is verified by only one officer if the deposit up to Rs.5000

• The Deposit is verified by officer and branch manager if the deposit exceeds the
amount of Rs.5000
Prize Bond sold and purchased Register:

• Cashier also maintains the Prize Bond sold and purchased Register.
• Cashier writes the Prize Bond number whenever it is sale or purchase
Total Balance Register
Cashier also maintains Total Balance Register on the daily basis. He writes the total
amount and the denomination of Rs and also coin.
Format of Total Balance Register is
Today Opening balance
+Receipt
Grand Total
-Payment
Closing Balance
Next Day Opening Balance (Previous Closing Balance)
+Receipt
Grand Total
-Payment
Closing Balance
Denomination
Rupees
1000* # 500* # 100*# 50*# 20*# 10*#
Coins 5*# 2*# 1*#

Cash Sorting Register
• The duty of the cash register is to maintain the Cash Sorting Register on the daily
basis and separate the sorting and non-sorting notes.
Format of Cash Sorting Register is
Date Denomination Amount Sorting Sorting Unsorted

Issuable Non
Issuable
• The duty of the cashier is to sort the defective and non-defective notes daily and
give the customer only sorted non-defective notes because it is the requirement of
State Bank of Pakistan.
• As a matter of policy once a packet of bank notes is sorted the sorting
bank/branch shall clearly stamp on the wrapper of the packet as sorted along with
the name of the bank/branch and date of sorting.
• Special teams constituted at SBP BSC Officers will pay surprise visits to bank
branches periodically to examine whether the banks are maintaining the cash
sorting register.
• Banks are required to maintain on a daily basis minimum surplus cash balance in
Sorted Re-Issuable balance of at least One day average requirement for the
proceeding month. However following banks are exempted from this condition:
• Branches making an average daily payment of less than Rs.0.50
million.
•
• Branches having immediate access to Re-Issuable good quality
• Currency notes such as withdrawal facility from SBP BSC (Bank) local
officers/NBP Chests.
Vault Register
The duty of the cashier is to maintain Vault Register on the daily basis; this register is
placed in the safe. When the cashier put and takes out the money from safe he notes the
amount, time and denomination of the rupees in the vault register. The cashier wants to
maintain the cash balance.
There our two parts of the Vault Register

In and Out
In: If the packet of rupees increases from the previous day then it means packet of rupees
increase of the specific denomination (100,500 etc)
Out: If the packet of rupees decreases from the previous day then it means packet of
rupees decrease of the specific denomination (100,500 etc).
Utility Bills Collection
In this department Mr. Nisar Ahmad help me understand all this.
Infrastructure
Following infrastructure shall be provided at each branch to facilitate the Utility Bills
depositors.
• Timing for collection of bill from 9.00 am to 5.00 am

• Drinking water arrangements will be provided at each location.
• Appropriate sheds conducive to whether will be provided.
• Separate queues shall be made to accommodate senior citizen and ladies for
paying their Utility Bills.
Operation Procedure
• Bill up to Rs.5000 will be received under single signature by utility bill collection
officer.
• Bill above Rs.5000 will be received under joint signature of utility bill collection
officer and other officer.
• Funds collected in each account shall be transferred as per instructions of the
concerned Utility organization.
• A separate scroll will be prepared for each collection account.
• 3 Scrolls of LESCO Bills
• 3 Scrolls of SUI Bills
• 3 Scrolls of WASA Bills
• 4 Scrolls of PTCL Bills
LESCO Scrolls
Two copies of LESCO scrolls in LESCO office and one is the office copy.
SUI Scrolls

One copy in SUI office, one copy in Empire Center branch one day after and one is office
copy.
WASA Scrolls
Two scrolls of bills shall be sent to Empire Center branch one day
after and one is office copy.
PTCL Scrolls
One copy in PTCL office, two copies in Empire Center branch one day after and one is
office copy.
TOKEN BOOK
Token book is maintained to issue token no. to each payment voucher. Cheque no.
amount, date and token no. is recorded in the token book. For more than 10000 and less
than 10000, different token no. are issued.
After the issuance of token no. the cheque goes to an officer, who checks the balance of
that particular account.
He verifies, whether the amount mentioned on the cheque falls within the balance range
or it exceeds the range. If the amount exceeds, he returns the cheque to the customer. If
the amount falls in the range then he posts the entries in the ledger by debiting the
account of the customer. After that he signs this particular cheque and puts the ledger no
and folio on the cheque.
Now the cheque is given to the customer and is asked to take it to the cashier. Cashier
checks whether the token no., signature of the officer, ledger no, folio are present or not.
If they are present, it means that cheque has been properly posted in the ledger. Now the
cashier make payment to the customer and record this entry in the cash payment register,
which he maintains at the counter. With the help of this payment register, he prepares the
final cash balance of the branch at daily basis.
INTER-BANK ACCOUNTS
Like inter-branch accounts of a bank, different banks have correspondent accounts with
each other. Main branches of banks in a city maintain these inter-bank accounts. So,
money is transferred from one branch of a bank to another bank’s branch through these
inter-bank and inter-branch accounts.
CLEARING Department:

3rd and 4th WEAK
As we know that, one of the basic economic function of commercial banks is to receive
deposits and to honor cheques drawn upon them. So, cheque is a most commonly used
instrument for making payments by account holders. Along with the cheques, there are
some other negotiable instruments like PO, DD,TC, PS, CDR etc. (discussed in the next
part), that are used for making payments and are drawn upon a bank.
The question arises that how these cheques & other negotiable instruments drawn on one
bank are deposited in other banks and money is transferred from one bank to another.
Clearing House has provided this facility. Clearing house facilitates different banks, in
one city, to get their cheques drawn upon other banks to be cleared.
Cheques lodged in clearing constitute two types of clearing:
• Outward Clearing
• Inward Clearing
OUTWARD CLEARING
When cheques, TC’s and other negotiable instruments drawn upon other banks like
MCB, ABN-AMRO of the same city(as Lahore) are presented in Bank of Punjab. to
deposit them in the respective payee’s accounts, these instruments are lodged in outward
clearing (o/w clg) of Bank of Punjab.
STAMPS PUT ON THE CHEQUES:
When the cheques are presented in BAL to be deposited in their respective payee’s
accounts, different stamps are put on cheques before their lodgment in outward clearing.
i) CROSSING THE CHEQUES:
Crossing means two parallel transverse lines, drawn across the face of the cheques with
or without words written in between them.
Crossing may be general or special. In clearing cheques are crossed specially. Cheques
are stamped with bank’s name between two transverse parallel lines to constitute special
crossing.
After the cheques have been crossed specially, the holder cannot receive payment
except through the banker named on the cheque. Basic advantage of crossing is to save
the instrument to go it from illegal hands. If, a crossed cheque is lost or stolen, there is no

risk of wrong payment. So it is an effective means of minimizing the risk of loss or

forgery.
ii) CLEARING STAMP:
After the cheques have been crossed specially, clearing stamp is put on the cheques and
other instruments, with the following day’s date, as these cheques would have to be
presented in their concerned drawee banks on the subsequent day.
iii) ENDORSEMENT STAMP:
The word endorsement is derived from Latin word ‘indorsum’ which means ‘on the
back’. Ordinarily, it means anything written or printed upon the back of an instrument.
So, at the end, the cheques are endorsed in full (endorsed specially) by putting the stamp
with words describing “ Payee’s account Credited in BOP Wahdat road, Lahore”.
After putting these three stamps on cheques & other negotiable instruments, they are sent
to NIFT (National Institutional Facilitation Authority) with Add List. NIFT after
segregating the cheques of different banks delivers them to their concerned banks, which
constitute the inward clearing for those (drawee) banks.
ACCOUNTING PROCEDURE:
After lodgment of all cheques in outward clearing, Payee’s accounts are credited by the
amount of their vouchers. Drawee banks will debit the drawer’s accounts in their inward
clearing (discussed later).
As main branch Lhr. of bop deals with other banks through inter-bank accounts
and we deal with our main branch. So, we (BAL Circular road) debit our main br.
account, maintained with us, by the total amount of outward clearing and an IBDA (inter
branch debit advise) with a debit voucher is sent to main branch Lhr.
Account Titles Debit Credit

Local Clearing Main branch
Payee’s Accounts
RETURN IN OUTWARD CLEARING:
Some of the cheques lodged in o/w clearing are dishonored by the concerned branches
due to some deficiencies and returned back through NIFT. This process is carried out
under main branch’s governance.

Either, these cheques are again lodged in outward clearing or returned to customers by
canceling bank’s all stamps, based on the reasons.
Now, the accounting entries opposite to first are passed i.e. Payee’s accounts are debited
& main branch’s account is credited.
INWARD CLEARING
Cheques and other negotiable instruments (PO, DD, PS, CDR etc.) drawn on
Bank Alfalah Circular Road, sent by other banks, constitute the inward clearing of BAL.
After having all the stamps and dates of cheques confirmed, the concerned drawer’s
accounts are debited (in BAL Circular Road) and main branch’s account is credited by
the total amount.

Drawer’s Accounts
RETURN IN INWARD CLEARING:
In case of cheques dishonored (returned) due to some deficiencies, the main branch’s
account is debited by the amount of cheques returned. As,

Drawer’s Accounts

COLLECTION

When cheques, TC’s and other negotiable instruments drawn upon other banks
outside the city (Lhr.) are presented in BOP (Circular Road) to deposit in payee’s
accounts, then instead of clearing, these instruments are lodged in collection and
constitute OBC’s (outward bills for collection).
Cheques of cities, where BOP,s branch exists (e.g. Faisalabad), are sent to that
branch where these cheques are lodged in outward clearing. Otherwise, they are directly
sent to the drawee bank. Postage & other charges are deducted on account of payee
according to SOC (Schedule of Charges).
i) When a Cheque is lodged in OBC:

Customer’s Liability on OBC
Banker’s Liability on OBC
ii) On Realization of OBC:
when this cheque is got cleared (through outward clearing) in the concerned BAL branch
(e.g. Faisalabad Br.), then IBCA is sent to our branch and thus an outstation cheque is
deposited in payee’s account. So,

Banker’s Liability on OBC
Customer’s Liability on OBC
&
Concerned BAL br.’s Account
Payee’s Account

LOCAL REMITTANCES
(Negotiable Instruments)
Besides cheques, banker’s also handle Promissory Note, Bill of Exchange (will be
discussed in later part), Bank Drafts, Pay Orders, Traveler Cheques, Pay Slips, Call
Deposit Receipts; as negotiable instruments. Here, I have tried to describe PO, DD, PS &
CDR and their processing in accordance with my observation, during first two weeks.
1) PAY ORDER (PO):
“Pay Order is a negotiable instrument made by the bank, on account of a customer, to pay
on order the specified amount to the directed person (payee)”.
Pay Orders are used to make payment or to transfer money, with in the same city. Pay
Order is always drawn on the bank that has issued it.
MAKING OFA PO:
When a person requires a Pay Order (made by BAL Circular Road, Lhr.), he is asked to
complete the prescribed application form in which the amount of pay order is to be stated.
Certain amount of commission and advance tax is charged on issuance of pay order
(according to SOC).
After having the total amount deposited in the bank (in cash or through cheque, in case of
account holder), pay order is issued in the favour of payee.
Like cheques, when pay orders issued by BOP McLeod Road, are presented in other
banks to get them deposited in the payee’s accounts, they constitute the outward clearing
for those banks and inward clearing for BOP Wahdat Road
i) When a Pay Order is issued, cash department debits cash account & Pay Order issued
account is credited as:
Cash Deposits
PO Issued
Commission on Remittances
Tax on PO & DD

ii) When Pay Order is received in inward clearing:

PO Issued
Cash Deposits
2) DEMAND DRAFT (DD):
“A Demand Draft is a negotiable instrument issued by the bank, on account of a person,

and drawn on its own branch in a specific city or on the branch of another bank in that
city (in case bank doesn’t have any branch there), requesting it to pay the specified
amount to the person named on it”.
Demand Drafts are used to make outstation payments or to transfer money, out of the
city. Therefore, a DD is always made for a particular city.
MAKING OFA DD:
When a customer requests his banker to provide him a DD made on his account for a
particular city like Faisalabad. Then, after having the total amount (including commission
and advance tax) to be deposited with application form, demand draft is issued in favor of
the specified person in Faisalabad (supposed) and is drawn on BAL Faisalabad Branch.
So, when this demand draft is presented by payee in any bank, it constitute the inward
clearing of BOP Fsd. Branch.
i) When BOP mcload road issues a Demand Draft drawn on BOP Faisalabad Br.
Then, an IBCA with DD advice is sent to Faisalabad Br. (letter is also sent for DD’s
amounting more than Rs.100, 000)
ii) Upon receipt of advice in Faisalabad Br. they will credit DD Payable a/c.
iii) DD Payable Account is debited (in Faisalabad Br.) when DD is presented in

inward clearing.
In case, advice is not received by BOP Faisalabad Br. and DD is presented first,
then instead of DD Payable, Suspense account is debited to make payment.
Similar is the process for demand drafts drawn on BAL Circular Road Branch.

3) CALL DEPOSIT RECEIPT (CDR):
BOP also issues Call Deposit Receipts (CDR). “It is an instrument like cheque issued by
the bank on account of a customer & in favour of a person, to pay the specified amount”.
CDR’s are issued to make payments, especially when a company goes for some tenders
or for purchase of government securities. The bank enjoys the benefit of keeping funds
deposited until the payment is not made. During this time, the bank uses the deposit and
earns income on that.
4) PAY SLIP (PS):
“It is a negotiable instrument like cheque issued by the bank on its own account to pay a
specified amount to the directed person”.
Pay Slips are used to make payment by the bank itself against certain expenses incurred;
like furniture purchased by bank, charges of Mucaddams etc.
Instead of writing the issuing date on pay slip, date of encashment (realization) is written
when it is presented in bank.
CANCELLATION OF PO, DD & CDR
After issuance of Pay Order, Demand Draft or Call Deposit Receipt by BAL Circular
Road, when any one of these has to be cancelled by the customer and it is returned in the
bank. Then, after deducting the cancellation charges Rs.100, the remaining (net) amount
is paid to the customer through Cash Payment Voucher. Suppose a demand draft
amounting Rs.5,000 has to be cancelled, then

DD Issued 5,000
Cash 4,900
Misc. Earning 100
ADVANCE TAX AGAINST REMITTANCES
Advance Tax is deducted on issuance of PO & DD ( when customers don’t have tax
exemption form) and credited in Tax on PO & DD account (discussed earlier).

Tax deducted has to be paid to State Bank of Pakistan (SBP) with in one week of
issuance of these instruments. So to pay this tax, Pay Order in favour or SBP Lahore is
made, with a challan form. And,
Tax on PO & DD
PO Issued
CREDITS
5th and 6th WEAK
After working for two weeks in Trade Finance Department, I was moved on to the
Credit Department. Mr. Farrukh, Incharge Credits, welcomed me in his department. For
him, I would just say, that I did not find such a lenient and cooperative person in my
career.
In Credit department, I worked for the last two weeks of my internship program.
One major difference that I observed in credit department and other departments was the
difference in the nature of work. After working in credit department, I realized the
importance of lending operations for a bank. Here, I have tried to describe my experience
and observation in credit department
LENDING OPERATIONS
Since, the basic function of a bank is to receive deposits (at low rate of return) and
to lend money (at high rate of return). So, the lending operations of a bank constitute the
most vital part of its business.
Bank’s funds comprise mainly of money borrowed from numerous customers on various
accounts such as saving accounts, current accounts, fixed deposits and notice deposits
etc. whereas, the major part of total income of a bank is generated through the utilization
of these funds. So, a banker
KINDS OF CREDIT
Bank provides credit facilities to its customers for a specific maturity. This
maturity or duration of credit is not an independent factor; it depends upon the purpose of
the loan.

According to the maturity of credit, it has three basic kinds.
1. Short Term Credit

2. Medium Term Credit
3. Long Term Credit
SHORT TERM CREDIT:
The period of a short-term credit is generally less than or equal to one year. This
credit is used for the creation of current assets e.g. for the purchase of raw material and to
meet the working capital requirements.
MEDIUM TERM CREDIT:
Medium term credit is normally issued for one to three years. It is used for the
purchase of machinery, furniture etc. by the firms.
LONG TERM CREDIT:
Credit facilities sanctioned for 3 to 5 years is considered as the long-term credit.

Long-term credit is required for capital expenditures, such as purchase of building and
heavy machinery.
Loan To Customer
Bank of Punjab offer following types of loan to customer
• Consumer Aasaish Loan

• Green Tractor Scheme
• Consumer Vehicle Loan
• Consumer HOUSE Demand
• BOP SME LOAN
• Chief Minister Green Punjab Rickshaw Scheme
• Kisan Dost Scheme
Consumer Aasaish Loan
There is a contract between BOP with LG and PEL.

0% Mark-Up (12 months)
0% Down Payment( 12 months)
FREE Home Delivery
Financing Tenures of 18, 24 & 36 months are also available with nominal markup

Easily Affordable & Flexible Installments

Quick Processing
No Hidden Cost
No Insurance cost
Product
BOP Aasaish Loan is Demand finance facility for purchase of consumer durable goods
TV, Refrigerators, Mobiles, Microwave Ovens, Fans, Audio/Video system AC, Split unit
etc.
Eligibility Criteria
Salaried Person:
Confirmed permanent employee with one year experience
Salary is routed through a bank account.
Private Employees:
• In addition to the above mentioned conditions:

• Having age between 25 and 59 years OR date of retirement, whichever is earlier.
• Having minimum basic salary of Rs.10, 000/month.
Self-employed business / Professional
• In addition to condition # 1 & 2:

• Having age between 25 and 57 years (57 Years at maturity of facility)
• Minimum 2 years in current business.
• Having minimum Net Income of Rs.15, 000/month.
Documentation required for processing
• Application form
• Copy of NIC
• Customer Consent Form, if loan is Rs. 50,000/- OR above
• The Govt. employees will submit the following two
• A. Latest Salary Slip B. Employer Certificate on letterhead
Additional requirements for private employees
• The Private employees will submit the following three documents in addition to
documents mentioned in Serial # 1, 2, 3, A & B.
• Bank Statement for last 3 months
• Latest Copy of utility bills (Electricity & phone)
• Income Tax Return/Wealth Statement

Additional requirements for self-employed professional/business persons
The Self-employed Professional/Businesspersons will submit the following

documents in addition to documents mentioned in Serial # 1, 2 & 3
Bank Statement for last 6 months
Latest Copy of utility bills (Electricity & phone) of residence
Consumer Vehicle Loan
Easily Affordable & Flexible Installments

Quick Processing
Minimum Down Payment
Minimum Insurance
Product
BOP car loan is a Demand Finance Facility to Purchase Brand new locally manufactured/
Assembled Cars for Personal Use
1. Salaried Person: Permanent employee of selected organizations with at least 3 years

of service experience with a minimum salary of Rs.15, 000.
2. Govt. Employees: Net salary of Rs. 12,000/-

3.Self-employed: Business person and professional having minimum 3 years
in current business
- Holder of computerized national identity card
- Between 25 and 57 years of age
Loan facility you can avail

Minimum amount is Rs.200, 000 and maximum amount is Rs. 1,000,000
Tenure of the loan:
Loan is available for a period of minimum 3 years and maximum 5 years.
Mark up rate charged:
Most competitive rate available in the market
Other Charges
Non refundable fee Rs.450/-

Processing Fee/ Documentation charges Rs. 3,750/-

Registration Charges Actual
Initial down payment:

Down payment is 10 to 20% of value of the car.
Car insurance:
BOP has arranged insurance facility from its approved list of companies at discount rates
for the convenience of its customers. Insurance premium for the first year will be paid in
full up front with down payment and for subsequent years along with installment.
Tenor of Loan Pricing Factor

3 Years 0.03111
4 Years 0.02418
5 Years 0.02004
Your loan amount x pricing = monthly (excluding
installment insurance)
Your loan amount x pricing = monthly installment (excluding insurance)
Documents are required
For salaried individuals:
• Copy of NIC
• 2 Recent Photographs
• Latest Salary Slip / Certificates on Comp. Letterhead
• Bank Statement for last 6 months
• Latest Copy of Utility Bills
For self employed business persons/professionals:
• Copy of CNIC
• Two recent photographs
•
Bank statement for the last I year of business account
• If not banking with us

•
Banking certificate from branch manager stating Title, Account number, Business
entity,
• Maintained since, Authorized signatory
• Copy of Latest utility bills
Business Related Documents:
• Documentary evidence in business or in profession for the last 3 years

•
Income Tax return / wealth tax statement
• Proprietorship/Partnership Deed
• Articles & Memorandum of Association
• Latest copy of paid utility bills (Phone & Electricity) of current business address
• Membership/payment receipts of Chamber of Commerce/Trade
Association/Anjuman-e-Tajiran, if available
Consumer House Loan
Product
BOP house loan is long term finance facility for purchase of house/flat or construction of
house on self-owned plot or for renovation/ home improvement.
Eligibility Criteria:
Salaried Person: Permanent employees of selected organizations with a minimum take

home salary of Rs.20, 000
Self-employed: Business person and professional having minimum 5 years in current

business
-Holder of computerized National Identity Card
- Between 25 and 60 years of age
Loan facility available:

Minimum Maximum
Purpose Bank Rate
Amount Amount
Bank
financing up
Purchase of House/Flat&
Rs. 300.000/- Rs. 7,500,000/- to 70% of
Construction
assessed
value
Home Improvement/ Rs. 300.000/- Rs. 3,000,000/-

Bank
financing up
Renovation / Addition to 20 % of
assessed
value
Income of spouse can also be considered in determining the debt paying capacity &
hence loan amount.
Tenure of the loan

Minimu
Purpose Maximum
n
Purchase of House/ flat 3 years 15 years
Construction 3 years 15 years with maximum 12 months grace period.
Home improvement 3 years 05 years
Mark up rate charged
Most Competitive rate in the market, which will be calculated on daily product basis
(For each year new amortization schedule will be provided to the customer in case of any
change in mark up.)
Other Charges
Non-refundable fee Rs.450/-
Processing Fee Rs. 2,950/-
Valuation charges, legal charges Stamp duties, levies etc Actual
Loan repayment
Loan will be repaid in equal monthly installments through postdated cheques. Total
monthly installment includes principal, mark up and insurance amount.
Monthly installment can easily be calculated for e.g. .if, you take a loan for Rs. 1,000,000
for 15 years. Simply multiply the 15-year factor by your amount Rs. 1,000,000 * 0.00985
= Rs. 9850 will be your monthly installment payable excluding insurance(Life &
Property).
Financing period Pricing Factor
3 0.03157

4 0.02465
5 0.02052
6 0.01778
7 0.01584
8 0.01439
9 0.01328
10 0.01240
11 0.01169
12 0.01110
13 0.01061
14 0.01020
15 0.00985
(Insurance premium for the first year will be paid in full up front with down payment and
for subsequent years along with installments.)
Security of the loan
• House/flat purchased
• Plot on which construction is to be carried out
• House on which renovation is to be carried out
Documents Required
• Copy of CNIC
• Two recent photographs
• Last three Salary slips/ salary certificate on company's letter head with joining
date Current designation, length of service, gross salary & certificate from HR
department for perks.(for salaried individuals)
• Bank statement for last six months for salaried individuals and for the last I year
incase of self-employed businessperson
• Copy of utility bills
• Fee slip of children if applicable
• Income tax return / wealth statement
• Copy of Rent agreement if living in rented house
BOP SME LOAN

Product
BOP SME loan is a running finance facility to meet working capital requirements or to
expand existing business against owner occupied residential/commercial property.
The facility is available for
Businesspersons & self-employed professionals

Holders of computerized national identity card
Between 25 and 55 years of age
Have minimum 3 years in current business / practice
Assessed net monthly income Rs. 36,000/-*
Member of trade body or chamber of commerce or anjuman-e-Tajran for at
least 3 years
Loan facility available

Minimum amount is Rs.1, 000,000/- and maximum amount is Rs. 7,500,000/-
Tenure of the loan
Loan is available for a period of 1 year, which can be renewed subject to satisfactory
conduct of account, business health & value of property.
Other Charges
Non refundable fee Rs.450/-
Rs.4, 950 for loans up to
Processing fee
3,000,000
Valuation Charges, All stamp duties Legal and Rs.8, 950 for loans over
documentation charges Actual 3,000,000
Insurance
Property insurance is mandatory from bank's approved companies
(List will be provided)
Loan repayment
Loan will be repaid on demand / lump sum, whereas mark up is to be paid monthly by the
10th. of every month
Documents required
Copy of CNIC
Two recent photographs
Copy of paid utility bills showing bills for last 12 months

Income tax return / wealth statement
Banking relationship information, if not banking with us

Last "1" year bank statement of business account
Bank certificate from Branch manger stating
- Title -Account number
- Constitution with name(s) of proprietor/partner/directors
- Maintained Since
- Authorized signatory
Chief Minister Green Punjab Rickshaw Scheme
Purpose:
Provision of financial facility to people for purchase of rickshaw for the fullment of their
desire.
Three types of rickshaw BOP is offering
PAK HERO Rs. 115,000
SAZGAR Rs. 125,000
STAR ASIA Rs. 110,000
ADVANCE on each Rickshaw is 40,000
Installment on
PAK HERO Rs. 2500/ month
SAZGAR Rs. 2600/ month
STAR ASIA Rs. 2300/ month
Terms & Conditions
• The delivery to the borrower will be made only after issuance of delivery of
delivery order by BOP.

• The delivery order will be issued after getting rickshaw registered, insured and
completion of bank’s documents.
Documents Require
• Original file of Rickshaw

• Engine & chassis no. of rickshaw
• Date when rickshaw delivered at point of delivery
• Point of delivery (name of designated dealer, address, contact#)
• Guarantor who has shop or house
• License of LTV
• ID card of a person
• This refers to tri-party MOU signed between
• Dept. of transport
• Govt. of Punjab
• The Bank of Punjab & your company
Kisan Dost Scheme
Kisan dost agriculture finance scheme
Purpose:
Provision of financial facility to farmers for purchase of inputs (Seed, fertilizers,
pesticides, fungicides e.t.c.).
Eligibility:
Resident Self Cultivator having Agriculture maximum 50 acres
Owner-cum tenant having minimum land 5 acres under cultivation

Tenant having valid lease agreement for reasonable tenure (minimum area of subsistence
land holding) .
Amount:
Maximum Rs.500, 000/- according to per acre limit of the crop.
Security:
Charge on Agriculture Land through Agri. Pass Book.
OR
Registered / Equitable mortgage of urban property assessed by PBA's approved surveyor
and cleared by Bank's legal counsel.

OR
Liquid security in the shape Bank's Fixed Deposited Receipts/DSC/NSC or Regular
Income Certificates
One person guarantee of reputable person. ACO along with Regional Chief can waive
this condition if they deem the borrower to be very credit worthy. Two written
satisfactory market checking reports must be obtained before disbursement.
Margin on Security:
• 50% Margin on Agri land or Urban property.

• 25% margin on liquid security.
Insurance:
The borrower will have to arrange life assurance under the Bank 's charge.
Mark-up:
9% per annum.
Repayment:
Once in a year along with mark up.
Renewal:
Automatic renewal upon adjustment of entire principal with full markup within one year.
Fresh documents will be obtained after three
KISAN DOST TRACTOR FINANCE SCHEME
Purpose:
Provision of financial facility to the farmers and non farmers (those who provide tractors
to farmers on rental basis for various tractor related operations), for purchase of Tractor
on Lease Finance Basis.
Eligibility:
Resident Self Cultivator having Agriculture Land minimum 5 acres and maximum 50
acres OR Persons providing their tractors to farmers on rental basis for their various
Agriculture and Farming activities.
The persons who are related with the business of providing services for tractor related
farming practices to the farmers on rental Basis.
Amount:
Maximum Rs.500,000/-.

Equity:
10% to 20% of the cost of Tractor will be paid by the borrower on case to case basis.
Security:
Farmers:
Lease Tractor (to be registered in the name of Bank)
Charge on Agriculture Land through Agri. Pass Book
One personal guarantee of reputable person.. ACO along with Regional Chief can waive
satisfactory market checking reports must be obtained before disbursement
Non Farmers:
Lease Tractor (to be registered in the name of Bank)
Charge on urban immovable property through equitable/registered mortgage

One personal guarantee of reputable person. ACO along with Regional Chief can waive
satisfactory market checking reports must be obtained before disbursement.
Insurance:
The Lessee will arrange comprehensive insurance of tractor life assurance of lessee under
the Bank's charge.
Mark-up:
11% per annum.
Repayment:
10 equal half yearly installments (within five years).
KISAN DOST AABIARI SCHEME
Purpose
Provision of financial facility to the farmers for purchase of Tube well
Eligibility
acres.
Amount

Equity
20% of the cost of project will be paid by the borrower.
Security:
Farmers
Lease Assets i.e. Engine, Tube well and other related implements (The vendor will issue
receipt in the name of Bank)
One personal guarantee of reputable person.ACO along with Regional Chief can waive
Insurance
The Lessee will arrange comprehensive insurance of implements/assets life assurance of
lessee under the Bank's charge.
Mark-up
11% per annum.
Repayment
8-10 equal half yearly (within four to five years)
KISAN DOST MECHANIZATIONS SUPPOR SCHEME
Purpose:
Provision of financial facility to the farmers for purchase of Agricultural Implements e.g.
Trolley, thresher, plough, richer etc.
Eligibility:
Resident Self Cultivator having Agriculture Land measuring 5 acres to maximum 50
acres.
Amount:
Equity:
20% of the cost of machinery, tool and implements.

Security:
Farmers:
Lease Assets/implements (The vendor will issue receipt in the name of Bank)
One personal guarantee of reputable person.. ACO along with Regional Chief can waive
Insurance:
The Lessee will arrange comprehensive insurance of assets life assurance of lessee under
the Bank's charge.
Mark-up:
11% per annum.
Repayment:
8 equal half yearly installments (within four years).
KISAN DOST FARM TRASPORT SCHEME
Purpose:
Provision of financial facility to the farmers for purchase of Farm Transport Vehicles e.g.
Small Pickups, VP/Vans and small chillers.
Eligibility:
acres.
Amount:
Equity:
20% of the cost of Vehicle will be paid by the borrower.

Security:
Farmers:
Leased Vehicle (to be registered in the name of Bank)
Charge on Agriculture Land through Agri. Pass Book. One personal guarantee of
reputable person. ACO along with Regional Chief can waive this condition if they deem
the borrower to be very credit worthy. Two written satisfactory market checking reports
must be obtained before disbursement.
Insurance:
The Lessee will arrange comprehensive insurance of Vehicle life assurance of lessee
under the Bank's charge.
Mark-up:
11% per annum.
Repayment:
10 equal half yearly installments (within five years).
KISAN DOST ESLAH-E- ARAZI SCHEME
Purpose:
Provision of financial facility to the farmers for development of their non productive
lands into productive ones by conductive on farm works of Land leveling, laser leveling,
and land improvement clearance of jungle and land reclamation.
Eligibility:
acres.
Amount:
Maximum Rs.500,000/-
Equity:
Borrower will pay 20% cost of the project.

Security:
Farmers:
On person guarantee of reputable person. ACO along with Regional Chief can waive this
condition if they deem the borrower to be very credit worthy. Two written satisfactory
market checking reports must be obtained before disbursement
Insurance:
Life assurance of lessee under the Bank's charge.
Mark-up:
11% per annum.
Repayment:
8-10 equal half yearly installments (within four to five years).
KISAN DOST LIVE STOCK DEVELOPMENT SCHEME
Purpose:
Provision of financial facility for purchase of animals (Milk & meat production, cattle
farming, Poultry Farming and Fish farming) to the farmers and non farmers (those who
have their own live stock farm/fish farm for commercial purposes).
Eligibility:
Sufficient experience to handle Dairy Farm, Cattle Farm, Goat Farm, Poultry and Fish
Farming. The persons who have their self owned Dairy Farms for production of milk on
commercial basis).The applicant should be having adequate arrangements to sell out the
products properly e.g. supply contract with milk processing company.
Amount:
80% of cost of animals (Maximum facility can be granted upto 50% of forced sale value
of property).

Security:
Leased Animals (receipt will be issued in the name of Bank)
OR
Charge on urban immovable property through equitable/registered mortgage. The
property will be cleared by Bank's approved legal counsel and will be assessed by Bank's
and PBA's approved surveyor.
Liquid security in the shape Bank's Fixed Deposited Receipts/DSC/NSC or Regular
Income Certificates
Margin on Security:
• 50% margin on landed property (Agri/Urban).

• 25% margin in case of liquid security
Insurance:
The Lessee will arrange comprehensive insurance of Animals. In case of Poultry and Fish
farming Borrower will have to arrange comprehensive insurance of poultry and fish stock
himself form Bank's approved A rated company life assurance of lessee under the Bank's
charge.
Mark-up:
Average 6 month's KIBOR + 600bps with floor of 11% per annum.
In case of written assurance for recovery from DCO/Nazim mark-up will be KIBOR +
6% with floor of 8%.
Period:
5 years (including one year dry period).
Repayment:
16 equal quarterly installments within four years excluding one year dry period.
KISAN DOST LIVE STOCK SCHEME
Finance for live Stock breed improvement through village veterinary workers
Purpose:
Provision of financial facility to the Village Veterinary Workers (trained by Live Stock
and Dairy Development Department) for purchase of Artificial Insemination kits on lease
finance basis
Eligibility:

Village Veterinary Workers having diploma certificate and recommendations from Live
Stock and Dairy Development Department Govt. of Punjab)
Amount:
Maximum Rs.45, 000/- or 90% of purchase price of kit and bicycle.
Security:
1. Lease Assets (Receipt will be issued in the name of Bank).

2. Two personal guarantees of reputable persons having fixed assets equivalent or
more to value of advance.
Insurance:
Comprehensive Insurance of Leased Assets life assurance of lessee under the Bank's
charge
Mark-up:
11% per annum
Repayment:
Equal monthly or quarterly installments (within five years)
KISAN DOST COMMERCIAL AGRO SERVICE FINANCE SCHEME
Purpose:
Provision of financial facility to the commercially viable entities with immaculate track
record for acquisition of Agri implements and equipments i.e. tractor trolleys, harvesters
e.t.c. for providing agri services to farmers
Eligibility:
Commercially viable entities with immaculate track record with the Bank/Other financial
institutions
Amount:
To be decided on case to case basis keeping in view the financial/commercial viability of

the transaction. Not to exceed 80% of the value of equipments/implements.

Mode of Finance
It shall be demand finance/lease finance.
Security:
1. Lease Assets (Vehicles/Tractors will be registered in the name of Bank or Receipt

of equipments will be issued in the name of Bank)
2. Bank charge on Agri Land through Agri Pass Book Or Bank's Charge on urban
property through registered and equitable mortgage
3. One personal guarantee of reputable person. ACO along with Regional Chief can
waive this condition if they deem the borrower to be very credit worthy. Two
written satisfactory market checking reports must be obtained before
disbursement
Insurance:
Comprehensive Insurance of Leased Assets life assurance of lessee under the Bank's
charge
Mark-up:
9% per annum
Repayment:
Equal quarterly installments (within five years)
KISAN DOST AGRI MALL FINANCE SCHEME
Purpose of Finance:
Four renowned companies of the country such as M/S Ali Akbar Group, Millat Tractors,
PSO and Angro Services have established a joint venture company in the name of the
Agrimall (Pvt) Ltd to provide agro services under one roof through its Franchisees.
The Agrimall (Pvt) Ltd has approached our Bank to provide financial help to their
franchisees to establish and run these Agrimalls under their specialized management
through out the country.
We have launched a Kissan Dost Agrimall Finance Scheme. All facilities required by the
Franchisees of the Agrimall (Pvt) Ltd will be provided through this scheme. The farmers
who will be the clients of Franchisees, will also be provided production loans through
Bank's Kisan Dost Agriculture Finance Scheme (For purchase of inputs).
Amount of Finance:
The amount of Finance will be 9.5 (M) maximum for all package of facilities mainly as

under:
Demand Finance:
Maximum Rs.2.5 (M) for construction of site.
Lease Finance:
Maximum Rs.1.50 (M) for purchase of tractors and machinery.
Running Finance:
Maximum Rs.3.0 (M) for stocks of seed, fertilizers, pesticides and oil etc.
L/C Limit:
Maximum Rs.2.5 (M) for import of pre-engineered construction material for construction
of site one time transaction.
RATE OF INTEREST:
Rate of interest against these advances vary according to the duration. Shorter is
the period of loan; greater is the rate of interest because, in long-term credits, there is less
risk of idle cost of funds.
In BOP Wahdat Road, only the short-term credit facilities are being provided.
Advances
SECURITIES FOR ADVANCES
No doubt, the advancing of credit involves a great risk for the bank. Therefore, to
cover this risk, the bank keeps different tangible and non-tangible securities, before
sanctioning the credit facility to a customer. The bankers prefer such securities that carry
less risk of depreciation due to market fluctuations and are easily saleable, even under
changing market conditions.
Common securities against banker advances are as under:
PLEDGE
Pledge is the actual delivery of the movable & tangible property to the lender, as a
security for a credit. In a pledge, the possession of movable assets is with bank but the
ownership remains with the client. Pledge is against short-term finances and is considered

to be the best security for the bank. The commodities that are pledged include generally,
raw material, consumables, finished goods and in certain cases work in process (WIP).
MARGIN:
For every credit, the bank needs security with margin or cushion. Similar is the case with
pledge. For example, if, there is 25% margin requirement then to obtain loan of Rs.1
million, the security that is to be pledged should be of worth Rs. 1.25 million.
Since, in pledge, the possession of the goods is with bank, so bank keeps these goods in
the godowns under the custody of Mucaddams.
MUCADDAMS:
People who look after the pledged goods for bank are called Mucaddam. If cotton
(raw material) is to be pledged by the bank, it doesn’t mean that this cotton will be kept
in bank; such type of goods is kept in the godowns of the company. So, to make these
goods secure, the bank appoints its own men called Mucaddams to take care of stock.
PRECAUTIONS:
There are certain factors that a banker must take into consideration before advancing
against pledge.
1) Client:
In case of pledge, godowns are in the premises of the clients under the custody of
Mucaddams, whose honesty can be bought at any time. Therefore greater risk is imposed
by the client. So, the must be satisfied with the honesty and credibility of the client.
2) Nature of Commodity:
The banker must be aware of the nature of the property i.e. whether the commodity is a
perishable item like sugar. Also the commodity being pledged should be easily saleable,
so that in case of default of client, bank can easily sell it in the market.
3) Market Awareness:
A banker must have market awareness e.g.. Fluctuation in prices. Such commodities
should not be pledged that might have low demand in the market and have many
associated risks.

4) Suitability of Godown:
Suitability of godown depends upon the nature of the commodity. Banker must be fully
satisfies with the appropriation of godown. Like in case of medicines to be pledged, the
godown should have clean environment and proper mechanism of cooling, to maintain
the temperature.
5) Proper Valuation:
Whenever goods are pledged, the banker should be aware of the true cost of the product
as the client always overvalues his products. Sales taxes, excise duties are also paid on
the
FINANCIAL ANALYSIS
Finance can be defined as the science and art of managing resources especially money.
Virtually all the organizations earn or raise money and spend or invest money. But this
area is extremely important in context of the banking concerns.
Body of information describing even the smallest firm is enormous, spanning the
company’s internal operations and its relations with the outside world. Financial
statement analysis is very helpful in this respect because it highlights company’s
strengths and weaknesses.
Compliance With The Laws Applicable
All the financial statements have been prepared in accordance with the laws applicable in
Pakistan;
• Companies Ordinances 1984

• International Accounting Standards

As per circular No. 36, dated October 1, 2001 by BSD, State Bank Of Pakistan, all the
financial statements have been reclassified.
All the figures presented in the financial statements are comparable.
I am presenting trend analysis of a few selected items from balance sheet on account of
non-availability of the required financial information
TREND ANALYSIS
BANK OF PUNJAB
BALANCE SHEET
2005-2007
Particulars 2005 2006 2007

Assets % % %
Cash 52.09 133.84 21.20
Balances with other banks 536.93 200.69 54.88
Money at call & short notice (38.11) 59.70 789.96
Investments 1.68 46.28 (40.02)
Advances- net of provision 59.98 33.11 4.91
Opening fixed assets 50.40 337.26 6.96
Other assets 26.21 3.84 (12.51)
Total Assets 34.81 46.79 31.21
Liabilities
Deposits & other accounts 31.71 33.22 29.50
Borrowing from other banks, agents etc.
Bills payable 144.01 120.02 56.21
Other liabilities (19.81) 133.64 (12.01)
Deferred liabilities 5.69 111.09 67.70
Total liabilities (24.49) (6.90) (2.87)
Net Assets 37.20 43.31 34.06
20.38 101.01 (0.46)

Presented by
Share capital - - -
Reserve fund, other reserves 130.11 12.31 4.54
Unappropriated profit 53.39 140.60 (86.44)
Shareholder’s equity 20.38 4.25 0.60
Total 20.38 101.01 (0.46)
RATIOS CALCULATION:
1. Current ratio: 2007 2006
Current assets 51,855,289
Current liabilities 58,422,188
=0.89 =0.99
Analysis/comment: Good but same as last year.
2. Quick Ratio:
Current assets – (stock+ prepaid expenses)
Current liabilities
2007 2006
51,855,289
58,422,188
=0.89 =0.99
3. Gross Profit Ratio: 2007 2006

Gross profit*100 1,788,904*100
Net sales 2,555,039
=70% 70.4%
=

5. Net Profit Ratio: 2007 2006

Net Profit*100 1,368,174*100
Interest earned 2,555,039
=53.55% =41.41%
Analysis/comment: Good but highly improved as compared to last year.
6. Return on Equity: 2007 2006

Net Profit*100 1,368,174*100
Common Equity 7,839,083
=17.45% =13.23%
7. Earning per Share: 2007 2006
Net Profit available for ordinary shares
1,368,174
Total # of outstanding shares 150,623
=Rs.9.08 =Rs.4.58
9. Debt Equity Ratio: 2007 2006

Total long term Debt 519,140
Shareholders equity 7,839,083
=0.0075 =0.0067
Analysis/comment: Increased as compared to last year.
15. Total Assets Turnover: 2007 2006

Total Income 2,555,039
Total Assets 66,320,411
=0.039 times =0.039 times
Analysis/comment: Good and highly improved as compared to last year due to
increments both in total assets and total income as well.
18. Net Working Capital: 2007 2006

Current Assets – Current Liabilities
51,855,289-58,422,188
=Rs. (6,566,899) =Rs.(201,118)
Analysis/comment: Increased and better as compared to last year.
21. Return on Total Assets: 2007 2006

Net profit after Tax 1,368,174*100
=2.06 = 1.58

Analysis/comment: Increased and better as compared to last year.
22. Debt Ratio: 2007 2006

Total liabilities 5,8481,328
=0.88 =0.88
Analysis/comment: Increased and not so much better as compared to last year.
COMMENTS
ASSETS
1. The level of cash has increased by 53% in 1998, 134% in 2006, and 21.2% in 2007
and the reasons behind increase in cash in 2005 were the opening of five new branches in
Karachi, Lahore & Sialkot, and the recovery of non-performing loans. he placement and
the cash in hand in local currency increase, and took the level of cash up with them. In
2007, there is a normal increase in cash, which is because of expansion in branch network
of the bank.
2. Balances with other banks have increased by 53.7% in 2005, 200.7% in 2006and
54.9% in 2007. Bank balances have increased drastically in 2006, due to the drastic
increase in bank balances outside Pakistan.
3. Money at call has decreased in 2005 by 36%, increased by 59.7% in 2006 and has
increased tremendously by 79% in 2007. Call money is a highly valuable account and its
increase or decrease does not signify much. According to balance sheet, call money
increased to 38% in 2005 and increased by 79% in 2007. This does not portray the true
picture as the level of call money at the date of preparation of the statements might be
zero but that situation could have changed ever in the next day.
4. Investment has increased in 2005 by 1.7%, in 2006 increase is 46.3% and in 2007 it
has decreased to 40%. The increase in 2006 by 46.3% is due to the heavy investment in
Federal Investment Bureau and Treasury Bills of Government.

5. Advances have increased to 60% in 2005, 33.1% in 2006 and 4.91% in 2007. Some
negotiations have been held with almost all the borrowers and number of accounts has
been revived for non-performing loans converted into profit generating assets. So
increase in advances in 2005& 06 is mainly due to this reason.
6. Total Assets increase by 35.99% in 2005, 46.79% in 2006, which signifies a

tremendous increase in business of bank.
LIABILITIES
1. Deposits have increased in 2005 by 31.7%, in 2006 increase is 33.2% and in 2007
the increase is 29.5%. This increase is due to the expansion of branch network of
the bank and this increasing trend is very encouraging for the bank.
2. Borrowing from other banks is increasing but following a decreasing trend, which
shows that the bank is gaining control over its borrowings and is emphasizing
more on deposits. This shows better management policies of bank in order to
decrease cost of funds.
3. Although the bank is on its way to expansion and for the purpose of expansion it
needs to have borrowing. Therefore increase in total liabilities is not that much
alarming.

TREND ANALYSIS
BANK OF PUNJAB
INCOME STATEMENT
2005-2007
% % %
Markup/interest & discount earned 53.8 17.2 18.5
Less: cost/return on deposits etc. 40.6 12.2 16.9
154.9 38.6 23.8
Fees, commissions & brokerage (19.9) 47.2 78.8
Profit from investment securities 100 (97.1) 43.1
Other operating income (4.8) (36.0) 21.6
Total (7.11) (8.98) 45.8
Net Revenue 59.1 22.02 30.5
Operating expenses:
Administration expenses 44.7 19.3 25.0
Provisions against non-performing

advances – net
27.2 (243.6) (23.6)
Total operating expenses
46.5 (38.3) 52.6
Operating profit
633.7 613.4 13.7
Other income
57.3 68.6 (60.1)
Profit before tax
910.1 423.5 12.97
Profit after tax
- 7.63 37.58

COMMENTS
Mark-Up
There is a continuous increase in mark up because the bank has increase its advances due
to which mark up recovered have increased. Also there is an expansion in business.
Cost /Return on Deposits
Cost on deposits is continuously increasing because the bank deposits are increasing. The
increase in revenue has been in higher percentage as compared to cost, which is
encouraging feature.
Administrative Expenses
The administrative expenses have been on a consistent rise. This is not a bad sign and
shows the expansion in the business, but only if the deposits have also been increasing
along with expanses, which is true in case of BOP.
Total Operating Expenses
Total operating expenses increase by 40.5% in 2005, but decrease in 2006 by 38.3% and
again increase in 2007 by 32.6%. The decrease in 2006 is due to recovery of loans, which
has resulted in decrease in provisions against non-performing advances.
Profit Before Tax
The bank was going in loss in 2004 in respect of operating profit, which was in negative
figures, but the whole situation changed in 2005 and BAL recovered its profitability.
In 2006, operating expanses have decreased tremendously which has resulted in increase
in profit before tax.
Total Equity
Total equity has increased in 2005-06 from 20.38% to 114.98%, which is a tremendous
increase. This increase is due to the increase profitability of the bank and surplus on
revaluation of fixes assets but in 2007 a small decrease has been observed, which is only
due to the deficit in revaluation of fixed assets.

SWOT ANALYSIS
An analysis indicating towards the organizations strengths, weaknesses, opportunities and

threat is termed as SWOT Analysis. Such an analysis is very important for the
management in retaining the strength, overcoming the weaknesses, capitalizing over the
emerging market opportunities, and carving ways to successfully tackle with the threats
and ultimately converting them in the strengths for the organization.
During EIGHT weeks of my stay, I have come across the following SWOT analysis of
the bank.
STRENGTHS
Leading semi-Government Bank
The bank of Punjab commercial bank is the leading private sector bank. In the banking
network in Pakistan with many of them online branches in major cities of the country
AUTOMATIC OPERATIONS:
The operations performed by the bank are highly automated that result in assurance for
the customers that their transactions are completed reliably, efficiently and securely.
FULL DAY BANKING
One can avail the benefit of the services provided at the bank till 5:00 P.m. which is
highly useful for those customers who find it difficult to leave their officers in the
morning..
ATM NETWORK
The bank has the largest ATM Network cross the country. The customers of BOP
withdraw access their funds any time at all the ATM Sites with BOPCASH Logo.
CUSTOMIZED SOLUTIONS
The management of the bank believes in customer focused banking rather than the
product oriented banking. The products and services designed by the bank are
specifically tailored to the individual needs of its customers.
CUSTOMER ORIENTED BANKING
The priority banking centers of the bank offer an unmatched where the customer receives
highly privileged services in a highly elegant environment. It gives the chance of
experiencing new standards in banking. Designed specially for those who appreciate only

the finest things in life, Priority Banking offers the very highest levels of personalized
banking to match customer’s unique status.
ELECTRONIC BANKING
The revolution in the banking in the form of electronic banking operations have opened
avenues of excellent, efficient and quick services saving the time and costs of the
customers and fortunately BOP is among those few banks who are already reaping the
benefits of electronic transactions.
ELECTRONIC FUNDS TRANSFER
BOP management is quite prepared to adopt the latest advancements in technology

resulting in revolution in the banking operations such as check clearing process,
computer based teller equipment, automatic teller machines, and electronic funds
transfers among the others.
ETHICAL CONCERNS AND PUBLIC IMAGE
The organizations showing concern for the people, ethics, and environment enjoy good
public reputation and are able to reap the benefits in the long run. ACBL management is
quite sensitive to this issue.
WEAKNESSES
NOT HIGHLY AUTOMATED
The bank has still some of the traditional ways of operations in this advanced
technological environment.
MANUAL BOOKKEEPING
Although the bank has computerized accounting system but, still the bankers use to make
their entries in the accounting register.
LOW JOB SATISFACTION
Understanding and the effective management of the human resources is the most difficult
challenge faced not only by the bank but by all the organizations. Even though the people
have been sacrificed in the new organizational developments, it is becoming clear that the
true lasting competitive advantage comes through human resources and how they are
managed. BOP seems to not focusing on this highly critical issue, as the job satisfaction
level of the employees working at BOP, was quite low.

LACK OF SPECIALISATION
This famous and useful concept given by Adam Smith in 1776 seems to be missing in the
bank. The employees are constantly rotated from one job to another job of totally
different characteristic in the view of giving them the know-how of the working in all the
departments. But I think this is not a very good tactics used by the management.
Otherwise the situation might be like this ‘Jack of all and master of none.’
CENTRALIZATION
There is a high degree of centralization in the bank. Almost all the decision-making is in
the hands of the upper management. But centralization is effective up to a certain level
otherwise it becomes inefficient and at times costly too. I personally observed that delay
occurred in the operations of the employees only due to the fact that they had not got any
instructions from the head office.
LACK OF TRAINING FACILITIES
Presently there is no specific training program arranged for the new recruiters. They have
to learn based on their observations and also their mistakes. It takes a bit time for the
fresh one to learn the banking the result is huge amount of blunders, mistakes etc.
resulting in monetary and non-monetary losses for the bank. There is pressure not only on
the new learner but also on the person placed upon with this responsibility.
OPPORTUNITIES
SUPPORT FROM GOVT OF PUNJAB
The bank has the support from the Govt of Punjab and has good financial position in the
market therefore having a good position to expand their business.
THREATS
HIGH EMPLOYEES TURNOVER
As discussed above, the job satisfaction level of the employee is very low resulting in
high turnover which is bad for any organization as there are huge monetary and non-
monetary costs involved in the fresh recruitments.
HIGH CHARGES
The schedules of charges indicate that the fees charged by the bank on the various
services it provides are extremely high. It may result in decrease in the number of its
exiting customers. Further more, this could be very alarming situation for the bank in
case some of the competitors grasped the opportunity and lowered its rates. The result

would be either the lost of market share or decrease in the charges resulting in lowering
the bank’s income.
LESS ATTRACTIVE RATE OF RETURN
Commercial banks face considerable competition in attracting deposits from individuals

or small investors. In contrast, the Govt. of Pakistan national saving scheme offers
attractive rates of return (approx. 16 to 18 percent annually) on 10-15 year fixed
accounts, which banks find difficult to match.
COMPETITION
BOP is currently facing strict competition from the other banks.
LESS EXPERIENCED STAFF
Owing to huge turnover of the employees, the no. of experienced and well trained staff is
very low. Majority of the staff working in the bank branches is quite young and
inexperienced. If the bank failed to bring down its high employees turnover, then it would
be lacking the most important resources of any organization i.e. the experienced staff.

PROBLEMS
There are some discrepancies due to which the name of the bank of Punjab is not taken as
a leading bank in Pakistan. If this discrepancies are removed one day the bank become
the leading bank in Pakistan..
• Branches have limited functional operations.

• Branches are not properly maintained.
• More employees in a branch than required in a department.

• No proper advertisements.
• Bonuses to the employees is once a year.
• No ATM’s facilities at all branches.
• No lockers facility at all branches.
• No proper rotation of the employees from department to
department.
• Discouraging behavior of the seniors with their subordinates
• Token system is still working in some of the branches.
• It take lot of time of customer when payment of cheque.
• Business promotional scheme are not good.
• There are no women branches in different regions so that the females
easily participate and solve the problem of those female workers who
feel themselves misfit by working in an environment with the males.
• There is no participation in social welfare activities with in the
country for the public in order to build public relations.
• Employees are not satisfied with the performance appraisal,
feedback, transfer and promotion policies of the bank.
• Over burdens on a single employee.
• Promotion is very slow.

RECOMMENDATIONS
Following are the recommendations to overcome the weaknesses of The Bank of Punjab
• Customer appealing and attracting strategies should be formulated.

• A pleased employee work more for the betterment of the organization.
• The Bank of Punjab should conduct its financial analysis and compare it with that
of other banks for improvement.
• BOP also introduces the simplest and flexible method of granting loans for small
businesses rather than a complicated process. so, it become very easy to start &
enhance the new business for a common person.
• The bank must also provide pleasant response to fresh graduates and internees as
well, which is personally observed by me as not satisfactory.
• They must appoint and increase the number of those who possess degrees in
business fields specially.
• BOP should keep up the consistency by providing same working environment in
the busy branches at different regions through the employment of technology and
resources properly.
• BOP must continue to establish and introduce new schemes in shape of different
products/accounts with good incentives to the customers in order to compete
efficiently and improve its position.
• BOP must increase and improve its ATM network by expending 24 hours cash
facilities to other cities of the country.
• The research cell should continuously try to gather information about the present
actions of its competitors and the expected future actions. So in this way more
effective strategies can be formulated.
• No one can deny the importance of advertisement; so The Bank of Punjab should
start more advertisement on electronic media.
• More commitment toward the employees is necessary because they are the most
reliable assets of a company.
• By realizing the need and potential of leasing in Pakistan, BOP is suggested to
diversify its attention towards the leasing business.
• BOP should open its women branches in different regions to provide the females
to participate easily and also to solve the problem of those female workers who
feel themselves misfit by working in an environment with the males.
• This in turn will also increase job opportunities for females.
• Overseas prospects should be targeted well through improving the domestic as
well as the foreign operation and must be provided with security and incentives in
order to maintain their confidence on bank.

CONCLUSION
Bank of Punjab should adopt the characteristics of the organization who can work under
fast changing environment, because the bank is so wide branches. The bank should
improve the service like they introduced like e-banking, online and other facilities which
is a good sign and there is visible improvement in customer satisfaction they must take
care of their employees and should be clear on that human capital is very much important
than the other capital. Adoption of new strategies to satisfy their customer, Bank of
Punjab keeping this view is also working for a customer satisfaction. There are some
discrepancies in BOP but management are now removing those discrepancies to make the
BOP one of the leading bank in Pakistan .In other words Bank of Punjab is going towards
a road of success.

Bank Punjab Final

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Internship Report The Bank Of Punjab

 Chapter 2 Activities of internship programme

Hailey College of Commerce 1

 Chapter 3 Financial Analysis

 Chapter 4 SWOT Analysis

Hailey College of Commerce 2

Hailey College of Commerce 3

The pre-requisite of internship program is to make the students of B.Com(Hons.),

Getting a chance of working in Bank of Punjab proved to be very beneficial for

Hailey College of Commerce 4

I want to acknowledge my deep thanks to my friend Yasir Waheed, who helped me to

Hailey College of Commerce 5

Dedicated to my loving parents, teachers and those who remember me in prayers

Hailey College of Commerce 6

INTRODUCTION TO THE REPORT

Hailey College of Commerce 7

BANKING STRUCTURE IN PAKISTAN

National bank of Pakistan (NBP)

United Bank Ltd. (UBL)

Habib Bank Ltd. (HBL)

Allied bank Limited. (ABL)

Muslim Commercial Bank Limited. (MCB)

Hailey College of Commerce 8

Primary Or Basic Functions Secondary Or Subsidiary Functions

Making Loans & Agency Functions

Purchase and sale of Issuance of travelers

- - Acting as trustee Export promotion

Hailey College of Commerce 9

THE BANK OF PUNJAB

Hailey College of Commerce 10

 Our Customer is our first priority.

OBJECTIVES OF THE BANK OF PUNJAB

• Follow the rules, regulations and policies of the State Bank of

Hailey College of Commerce 11

• Acting as agent for any Government or local authority or any other

Recognize the role of technology in effective/efficient operations of financial sector. The

Hailey College of Commerce 12

Hailey College of Commerce 13

• Mobilization of hitherto untapped local res ources

C redit Rating of Bank of Pun jab

M /S PAC RA has aw arded the B ank with the credit rating

Hailey College of Commerce 14

S ervice Provided By th e B ank .

The Bank provides following types of banking s ervices

• D eposit in Local Currency

Awards and Achievements

Best Corporate Report Awards

Merit Award by South Asian Federation of Accountants (SAFA)

Hailey College of Commerce 15

2nd Kisan Time Awards

15th Bolan Excellence Award

Management of Bank of Punjab

Information Technology Division

Human Resource Division

Hailey College of Commerce 16

1. Corporate Banking Head

2. Trade Processing Centre

Audit & Inspection Division

Credit Risk Management Division

Agriculture Credit Department

H. Special Asset Management Division

I. Liability & Consumer Products Development Division

1. Products / SME Division