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1.

INTRODUCTION

Formal Definition of Bank

Bank is an institution, which receives money from one party and lends to another party.

There are large numbers of definitions which are offered by the different authors keeping

view the various definitions we may define the bank in the following words.

“A Bank is reliable financial institution which receives the money from one group of

people and lends to other group of people. So bank performs the duty of financial

intermediary among the people and creates the credit money.

These are the following types of banks

 Central Bank

 Commercial Bank

 Industrial Bank

 Exchange Bank

 Saving Bank

EVOLUTION OF BANKING

Bank Origin. There are different views about origin of the world “Bank”. According to

some people the word “Bank” is derived from the world “Bancus” which means a

“Bench”. They argue their point by this transacted their business of money exchange on

the benches. If the business of any businessman failed, his bench was destroyed by the

people. Due to this practice the word “Bankrupt” was also used.

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On the other hand some people say that the world “Bank” is derived from German time

the word “Bank” was replaced by the word “Bank” which is called “Banco” in

Italian language.

History of Banking

The history of banking evolution is very interesting. In the early ages human like and

wealth was not secure. Due to fear of loot-mar and theft people buried their wealth under

land but this method was not satisfied. People started to search the custodians of wealth.

The evolution of banking started and it has crossed the following stages.

 First Stage of Evolution

 Second Stage of Evolution

 Third stage of Evolution

 Fourth Stag of Evolution

In the present age bank is modernized shape of those institutions. But to earn more profit

every bank started issuing overdraft facility without maintaining adequate cash reserves

to meet the demands of the depositors. This inability created the financial crises. Now to

maintain the good will of the banks perform their duties. All the commercial banks

perform their duties keeping in view the instructions of the Central Bank.

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GROWTH OF BANKING IN PAKISTAN

The entire banking business was controlled buy the non-Muslims before the partition of

the sub-continent. When Hindus became sure about the divisions of the sub continent,

they secretly began to transfer their capital to the safe places in India. The funds and

other valuables were transferred to India.

Establishment of State Bank.

The state bank was established soon after the independence of Pakistan as a central bank

which will govern the all other banks and financial institutions. It will make rules and

regulations and implement them. It also issues currencies.

To remove the financial difficulties and to establish sound banking system Govt.

established the State Bank on Ist July 1948, in the development, to banking system it

played very important role as a Central bank of the country.

Specialized Financial Institutions

Government of Pakistan established the specialized financial institutions like ADBP,

IDBP NDFC, PICIC, HBFC. These financial institutions financed the particular sectors

like agriculture, industry and housing.

Development of Commercial bank

Commercial banks are companies “which transact business of banking in Pakistan.

Commercial banks have constituted the most important source of institutional credit in

the economy of Pakistan.

New branches were opened in the country with the development of banking system.

These banks also extended their braches to foreign countries.

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COMMERCIAL BANKING SCENARIO IN PAKISTAN

At the time of independence in 1947, there were 38 scheduled banks with 195 offices in

"Pakistan. But by December 31, 1973 there were 14 scheduled Pakistani Commercial

Banks with 3,233 offices all over Pakistan and 74 offices in the foreign countries.

Nationalization of Banks was not done 1st January, 1974 under the Nationalization Act

1974 due to certain objectives. But it had negative effects on the efficiency of the banking

sector.

INTRODUCTION OF THE BANK OF PUNJAB

The Bank Of Punjab owes its existence to an act of provincial assembly, the bank of

Punjab act 1989; it commenced its operations, under the purview enshrined, as far back

as October 1989 with up capital 60.00 million. BOP is an alluring symbiotic epitome,

worth-emulation, of public and private partnership. The bank has earned a relevant

recognition and abundant accolades for its stellar growth and phenomenal progress;

posting historic results in all facets of its operation. Ranked as country’s premier financial

activity and honored with some of the most prestigious awards. Nurtured, nourished and

looked after with steadfast resilience yet doting tenderness against odds and obstacles, the

sapling in a span of a little over one and half a decade, has grown into a towering tree

with verdant foliage, blossoms; its balmy bower, soothing shade and shelter provide

solace and calmness as the preferred choice of thousands who bank on and repose trust in

ambience, courteous prompt and personalized service excellence to mutually beneficial

advantage.

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BOP Awards & Achievements
Excellence Award by the Central Board of Revenue

The Central Board of Revenue presented "Excellence Award" to the Bank of Punjab in

recognition of the contribution made by the bank towards Government exchequer.

3rd Kissan Time Awards

In recognition of Bank's contribution in development and growth of agricultural sector,

the Bank honored with "Top Bank for Agriculture Loans" and "Best Bank Crop

Insurance" under 3rd Kissan Time Awards year 2006.

Best Corporate Report Award

Annual Report of the Bank for the year 2005 won 5th position for "The Best Corporate

Report Award" for the financial sector, adjudicated jointly by the Institute of Chartered

Accountants of Pakistan and the Institute of Cost and Management Accountants of

Pakistan.

16th Bolan Excellence Award

The Bank was awarded Best Bank Award under 15th Bolan Excellence Awards

distributed in 2006.

Achievement Award

The Lahore Chamber of Commerce & Industry (LCCI) awarded the Bank "LCCI

Achievement Award" 2006.

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2. OBJECTIVES OF STUDYING THE ORGANIZATION

As I completed my MBA (Marketing) and my internship report is to study the functions

of the marketing department and to relate the theoretical concepts to practical

experiences. Following are objectives of studying the organization. “The Bank of

Punjab”

• The Bank of Punjab is one of the government commercial bank in the

country.

• I had been there many times before internship, there working environment

always attract me that’s also the reason to choose BOP.

• BOP provides opportunity to its staff members to learn more and more by

rotating work assignment creating team building and cross function

concepts.

• BOP has large and wide range of product line so the opportunity of

learning about maximum numbers of product.

• BOP always supportive to formers, it provides agree loan so great

opportunity to learn about agricultural finance.

• To understand the structure of the Marketing Management Department.

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3. OVERVIEW OF THE ORGANIZATION

3.1 Brief History

The Bank of Punjab, established under The Bank of

Punjab Act, 1989, was given status of scheduled

bank on September 19, 1994. The Bank is listed on

Lahore, Karachi & Islamabad Stock Exchanges.

The Government of Punjab is the major

shareholder. The Bank has fully owned subsidiary

M/s Punjab Modaraba Services (Pvt.) Ltd, which is

profitably managing a modaraba company.

Since its incorporation the Bank has grown manifold showing remarkable growth in all

aspects. Especially, after the current management took over the affairs of the bank in

2003 there has been tremendous growth in all its facets of operations as a result of

application of prudent and pragmatic policies with futuristic approach. Owing to its

significant performance, profitability, financial standing and market penetration the Bank

has attained reputation of a responsible corporate citizen playing a pivotal role in

economic and social development of the country.

Currently, the Bank of Punjab is regarded as one of the most profitable banks of the

country both in absolute & real terms. Branch network of the bank consists of 273

branches, which is sixth largest network in Pakistan.

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Sound financial footing, improved profitability and competent management are the key

factors taken into consideration by PACRA, the credit rating agency, while assigning to

the Bank highly credible ratings of AA for long-term and A1+ for short-term which is the

highest rating in this category.

Recognizing the role of technology in effective/ efficient operations of financial sector

BOP has computerized all its branches, which are inter connected vide online system on

real time basis. Bank's customers are facilitated by shared network of on line ATMs in all

major cities of Pakistan.

Bank's share in economic growth, especially agricultural and SME sectors cannot be

undermined. Penetration into Agri-economic was made possible through strategic

positioning of branches and introduction of a number of Agri-based financing schemes

allowing the bank to play a pivotal role in strengthening this neglected sector of our

economy.

3.2 Nature of the Organization

The Bank of Punjab was established under the act of Punjab Assembly, viz .The Bank of

Punjab act, 1989. The bill to this effect was passed by government of Punjab in

accordance with the provision of the constitutions on July 26, 1989 and later on was

given the status of scheduled bank in 1994.

The act provided the foundation on which edifice of the bank was created. The entire

responsibility of policy formulation and management has been placed, under the act, with

the board of directors.

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The Bank of Punjab is working as a scheduled commercial bank with its network of 273

branches at all major business centers in the country. The Bank provides all types of

banking services such as Deposit in Local Currency, Client Deposit in Foreign Currency,

Remittances, and Advances to Business, Trade, Industry and Agriculture. The Bank of

Punjab has indeed entered a new era of science to the nation under experience and

professional hands of its management. The Bank of Punjab plays a vital role in the

national economy through mobilization of hitherto untapped local resources, promoting

savings and providing funds for investments. Attractive rates of profit on all types of

deposits, opening of Foreign Currency Accounts and handling of Foreign Exchange

business such as Imports, Exports and Remittances, Financing, Trade and Industry for

working capital requirements and money market operations are some facilities being

provided by the Bank. The lending policy of Bank is not only cautious and constructive

but also based on principles of prudent lending with maximum emphasis on security. As

agriculture is considered as backbone of our economy the Bank of Punjab has introduced

"Kissan Dost Agriculture Finance Scheme" to small farmers.

Vision statement

To be customer focused bank with the service excellence.

Mission statement

To exceed the expectations of our stakeholders by leveraging our relationship with the
Government of Punjab and delivering a complete range of professional solutions with a
focus on programme driven products & services in the Agriculture and Middle Tier
Markets through a motivated team.

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Core values

Our customers as our first priority

Profitability for the prosperity of our stakeholders that allows us

constantly invest, improve and succeed

Corporate social

Responsibility to enrich the lives of community where we operate

Recognition and reward for the talented and high performing employees

Excellence in every thing we do

Integrity in our dealings

Respect for our customers and each other

Punjab Government Shows Faith in Bank of Punjab

Punjab Government wishes to state that being the major stake holder in the Bank of

Punjab it has full faith in the new management and operations of the Bank. The

government further pledges its unequivocal support to the Bank and firmly believes that

the affairs of the Bank are sound and its financial health robust.

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Social and Economic Commitment of the Organization

The banks provide various products & services to its customer to cater their need of

Investments and other social or business requirements. BOP is now leading the way to

the most modern and dynamic banking in the country.

Being a Banking company BOP is performing normal Banking transactions as well as

providing many job opportunities. As a govt. bank perform many social and economic

functions e.g. payment of pensions, receipts & payments of govt. funds, special services

to farmers.

3.3 Business Volume

Financial Performance

Financial highlights for the past five years ended May 31st 2009. are presented along with
key performance indicators.

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Year Wise Growth

Year Close Income Close Expense Profit Loss Growth(%)


2002 1,615,550,270.94 -1,173,946,907.82 441,603,363.12 BASE LINE
2003 1,632,667,268.55 -1,097,946,012.40 534,721,256.15 21%
1,192,378,466.9
2004 2,869,338,029.73 -1,676,959,562.82 1 123%
3,377,629,465.3
2005 7,840,303,996.67 -4,462,674,531.28 9 183%
5,884,239,145.5
2006 17,835,532,927.95 -11,951,293,782.43 2 74%
6,749,316,274.2
2007 28,518,593,936.67 -21,769,277,662.42 5 15%
2008 35,041,452,374.16 -29,691,225,055.73 5,350,227,318.4 -21%

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3
-107% Till
2009 14,691,276,785.95 -15,062,093,781.04 -370,816,995.09 May 2009

3.4 Profile of Employees

BOP Management

Mr. Naveed Hafeez Shaikh General Manager HR


Mr. Nadeem Amir General Manager Finance
Mr. Sharjeal Masud General Manager Operations
Mr. S. M. Atif Addl. General Manager
Mr. Muhammad Salim Mirza General Manager Treasury
Mr. Shaheen N. Qureshi General Manager Special Assets
Mr. Mahmood Sadiq General Manager I&PSL (LDD)
General Manager Broad Base
Mr. Zalmai Azam Durrani
Liability
General Manager T.R.C.& P
Dr. Shahid A. Zia
Division
Mr. Feisal Azmat Khan General Manager IT
Mr. Mohammad Nauman Acting Country Risk Manager
General Manager Audit &
Mr. Abdul Rehman
Inspection
Mr. Salman Saeed Head Credit Policy
Mr. Hafeez ud Din Acting Country Head C&IBG
Mr. Aseer Ahmad Khan Acting Country Commercial Head
Head Agriculture Credit
Mr. Moazzam M Maneka
Department

BOARD OF DIRECTOR

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0 Chairman
Mr. Safdar Javaid Syed
1
0
Mr. Naeemuddin Khan President
2
0 Director
Mr. Tariq Mahmood Pasha
3
0 Director
Mr. Shafqat Ellahi
4
0 Director
Mr. Azhar Hamid
5
0
Mr. Shafqat Mahmood Director
6
0
Mr. Muhammad Naveed Masud Director
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08 Mr. Waqar Ahmed Khan Director

Secretary
09 Mr. Raza Saeed
To The Board

AUDIT COMMITTEE

01 Mr. Waqar Ahmed Khan Director

02 Mr. Azhar Hamid Director

3.5 BOP Product Lines

1. BOP Deposit Products

2. BOP Loan Products

3. BOP Finance Schemes

4. Remittance of Money

5. BOP Term Deposit Receipt

6. BOP Services

BOP Deposit Products

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Current Deposit Schemes

(i) Current Account

(ii) Basic Banking Account

(iii) BOP Tijarat Account

Current Account

• The Accounts shall be opened upon submission of duly filled-in Bank’s

prescribed Account Opening Form properly introduced in the manner provided

and on submitting all such documents as may be revised by the Bank. The Bank

reserves the right to demand such relevant documents even after opening of

account as deemed necessary.

The minimum initial deposit will be Rs.100.

• No profit will be Payable.

• Services Charges Rs. 50/- will be deducted if blow the monthly balance

Rs.10000/-

• The Accounts may be opened singly in one name or jointly in two or more names.

ZAKAT is leviable on the assets as described in the Zakat & Ushr Ordinance

1980 (as amended from time to time)

Basic Banking Account

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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 2 deposit transactions and 2 checking

withdrawals, free of charge either through cash/through clearing per month.

BOP Tijarat Account (BTA)

The rent free locker facility will be allowed on availability of locker and after

maintaining average balance for six months.

The reduction in rate of mark up on Consumer finance will be on loan amount equal to

twice of last months average balance.

The incentive package will be reviewed on quarterly basis and on the deposit procured.

Profit & Loss Sharing Schemes

(i) PLS Account

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(ii) Pehlay Munafa Scheme

(iii) Senior Citizens Saving Account

(iv) Gharalyoo Saving Account

(v) Ziada Munafa Saving Account

(vi) PLS-Saving Profit Plus Account

(vii) Corporate Premium Account

(viii) Munafa hi Muanafa Account

PLS Accounts

PLS Savings Accounts may also be opened by charitable institutions, for Provident

Funds and other funds of Benevolent nature by Local Bodies, Autonomous

Corporations, Companies, Associations, Societies, Educational Institutions, Firms etc.

and in all other cases where such accounts are required to be opened under the orders

of Competent Court of Law

The rates of profits may vary from period to period viz January to June/July to

December each year. Calculation of Profit on PLS Saving Accounts will be made for

each calendar month on the lowest credit balance of an account between the close of

the 6th day and the last day of the month.

Pehlay Munafa Scheme

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Recently this scheme is introduced to attract investors. According to this scheme profit is

paid in advance which can be reinvested. Profit rate charge is multiplier e.g. more you

invest and more the rate will apply. Period for this scheme is three, six, nine, twelve and

eighteen months.

Senior Citizens Saving Account

This is a saving bank product available for all senior citizens i.e. persons of 60 years

and above who are eligible to open a saving account as per our Bank’s criteria. The

account can be opened singly or preferably jointly (husband & wife) provided either

of them is of 60 years or above. This product is designed to attract procure

deposit/savings of senior citizens by offering attractive, innovative incentives and

higher rate of profit to senior citizens.

Gharayloo Saving Account

This is a saving bank product available for all females who are eligible to open a saving

account as per our Bank’s criteria. The account can be opened singly or jointly with

husband. This product is designed to attract procure deposit/savings of ladies particularly

housewives of expatriates & students.

Ziada Munafa saving Account

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This is a saving bank product available for general public i.e. persons who are eligible to

open a saving account as per our Bank’s criteria. The account can be opened singly or

jointly. This product is designed to attract procure deposit/savings of general public

particularly salaried and small investors.

PLS-Saving Profit Plus Account

• Individuals, corporations, organizations and various provincial / federal

government departments can open accounts under the scheme.

• This is an operating account

• The accounts can be opened in individual or joint names.

• The deduction of Zakat and Withholding tax will be applicable as per law of the

land.

• Average balance during a calendar month will be taken to determine the deposit

slabs and applicable profit rate for that month for the purpose of creating

provisions.

Munafa Hi Munafa - III

This is a term deposit product. The term is from 1 month to 5 years and the profit is paid

on monthly basis. The minimum amount of deposit is Rs.80,000/-. The rate of profit is

from 6.0 % p.a. to 8.50 % p.a. depending on the tenure which is higher than Bank’s

normal term deposits.

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This product is governed under PLS rule i.e. the rates mentioned are expected and the

Bank reserves the right to revise the rates and terms & conditions of profit under Profit &

Loss sharing system.

Commercial Loan

(i) Running Finance

(ii) Corporate Finance

Running Finance

Running finance facility provided by the bank to its selective customers for business

purpose only. A limit of amount is sanctioned to borrower keeping in view the financial

worth of his business. Customer has drawing power equal to loan sanctioned by bank and

only mark up will be charged on amount withdrawal for business need not on sanctioned

amount.

The loan is sanctioned against three modes.

1. Against Pledge of Shares

2. Against Government Securities

3. Against Hypothecation of Stocks

Pledge of Shares

This facility is generally extended to companies or individuals on selective basis against

pledge of tangible securities such as Shares. The facility is required to be adjusted

periodically or within the period as specified in the Sanction Advice/DAC.

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Government Securities

Government Securities include Defense Saving Certificates (DSCs), Special Saving

Certificates (SSCs), Regular Income Certificates (RICs), Behbood Certificates, US Dollar

Bonds & NIT Units etc, issued by National Saving Centre Government of the

Pakistan/National Investment Trust.

Hypothecation of Stocks

Banks in such cases although do not have a physical custody of the goods, however have

a legal Charge/Lien established, thereon, providing a legal recourse to the Bank to take

custody of the stocks, in the event the borrowers default to repay the loan or fail to meet

their obligations, as agreed. Criteria to merit this facility is provided in the Banks Credit

Policy Manual, which is care fully assessed by Risk Managers, while recommending a

credit proposal to credit committee.

Corporate & Investment Banking

This group performs its function through its following two units.

1- Corporate Banking

2- Investment Banking

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Corporate Bank

The Corporate Banking shall endeavor to market new clients and retain the existing

relationships and build market share through offering superior services, competitive

pricing and wide product range to valued corporate clients including the Multi National

Companies (MNCs). This Unit taking advantage of tremendous growth potentials of

corporate accounts will continue its endeavor to remain a major contributor to Bank’s

earnings.

Investment Banking

Investment Banking Unit offers full spectrum of services, which include TFCs,

Syndicated Finances, Structured Finances, Leveraged Buyouts, Project Finance, Quasi-

Equity Products, Independent Advice, Equity Placements, IPO’s, Equity Underwriting,

Mergers, Corporate Restructuring, Acquisitions and other products. IBU shall also work

on and come up with providing Fund Management Facilities.

BOP Financing Schemes

SME Finance

Clean Pakistan CNG filling Scheme

BOP is providing finance for the establishment of CNG filling stations.

Lady Entrepreneur Scheme

Females are encouraged through micro finance schemes to start business with lower

fiancé.

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Auto Lease Financing Scheme

BOP as also lease auto mobiles to fulfill the need of society.

Car Dealer Financing Scheme

Finance is provided to dealers especially to car dealers at term and conditions keeping in

view the need of business.

Karobar Bharao Scheme

This scheme is introduced to expend the running business.

Fertilizer Dealer Financing Scheme

Loans are offered in rural areas to farmers to purchase of fertilizer periodically.

Ali Akbar Group Franchise Financing Scheme

According to agreement with Ali Akbar Group fiancé will be provided for its franchises.

Atlas Honda Limited-Authorized Dealer Financing Scheme

An agreement is made with Atlas Honda Ltd. for financing.

Agriculture Credit

Kisan Dost Agree Finance Schemes

Provision of financial facility to farmers for purchase of inputs (Seed, fertilizers,

pesticides, fungicides etc).

Resident Self Cultivator having maximum 50 acres.

Amount: Maximum Rs.500,000/- according to per acre limit of the crop. It is useful as

Lease Finance Facility for Purchase of Tractor under Green Tractor

Scheme 2008-2009

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Facility For Purchase Of Tractor Under Green Tractor Scheme 2008-

09"

All Farmers who have been declared successful through computerized balloting. The

applicant should be a resident, owner/self cultivator of minimum 05 Acres of agriculture

land free from all encumbrances. Existing BOP borrowers having land under Bank's

charge are also eligible under this scheme.

Kisan Dost Tractor Finance Scheme

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

Amount: Maximum Rs. 750,000/-

Live Stock Development Scheme

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) Installments are 16 equal quarterly installments

within four years excluding one year dry period

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Commercial Agro Services Finance Scheme

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.g. for providing agri services to farmers.

Commercially viable entities with immaculate track record with the Bank/Other

financial institutions.

Running Finance Facility for Livestock / Poultry and Fish Farms

Running Finance Facility for purchase of animals, cost of feed, medicines and other

running expenses of the Farm. Running Finance Facility will be provided for the type

of Live stock Farming:

1. Calves Fattening Farms 2. Broilers Farming. 3. Layer Farming.

4. Fish Farming. 5. Semen Production Unit.

Landless People for Purchase of Buffaloes for Life Sustenance

Lease Financial Facility for purchase of Milk producing Animals for landless people.

The applicant should be having space to keep animal domestically.

Maximum limit is Rs.50,000/- against only one personal guarantee.

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Consumer Finance

About Scheme

A personal loan facility for the purchase of consumer durable goods (like TV,

Refrigerator, Cooking Oven, for their personal use, repayable on easy installments.

Target Market

All serving Personnel of Armed Forces irrespective of ranks including civilian

employees.

• Govt./Semi Govt. Organizations/ Autonomous Bodies

• Armed Forces, BOP Employees

• Limited Companies/ Multinational/Educational Institutions

• Registered Firms/Financial Institutions etc.

• Self Employed Professionals (SEP)

• Doctors, Chartered Accountants, Architects, Engineers

Products Available

TVs, Refrigerator, ACs, Washing Machine, Computer Notebook/Laptop Bicycles,

Mobiles, Vacuum Cleaners and many more products of all renowned brands.

Down Payment
0%

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Tenure/Loan Amount/ Mark-up Rate

Tenure Minimum Loan Mark-Up


Amount
06 Months Rs. 4,000/- 0%
12 Months Rs. 6,000/- 0%
18 Months Rs. 8,000/- 09%
24 Months Rs. 12,000/- 12%
36 Months Rs. 15,000/- 18%

Eligibility Criteria

1. Age between 21 and 59 Years or retirement date; whichever is earlier

(59 Years at maturity of facility)

2. Minimum Take Home Salary is Rs. 5000/-

3. Permanent Employee with Minimum 01 Year of service with Army.

4. Have valid CNIC

Experience:

Permanent Employ: 2 years in current business

Valid CNIC

Documents Required

1. Application From

2. Copy of valid CNIC

3. Latest Salary Slip/ Employee Certificate on organization’s letter head or on

letter duly stamped. ( Specimens of certificates for (a) Salary received through

BANK ACCOUNT & (b) Salary received in CASH are enclosed herewith)

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Security

1. Life insurance of Borrower.

2. undertaking by Employee & Concerned of concerned Army Unit (specimen

enclosed)

3. Hypothecation of Asset itself.

4. One Un-dated cheque of Marked up Amount.

Payment Mode

In monthly installments

BOP Aasaish Loan Scheme

Nature: Personal Loan Facility for purchase of consumer durable goods from

Asaish Partners for personal use, repayable on easy installments.

The maximum financing amount Rs. 5,00,000/-, No mark up for tenure up to 12 months.

Consumer Demand Finance Scheme (CDC)

A personal Demand Finance facility for meeting their personal needs & repayable

through monthly installments.

Minimum Loan Amount Rs. 50,000/-

Maximum Loan Amount Rs. 5,00,000/-

Tenure:

Minimum Tenure: 01 Year

Maximum Tenure: 05 year

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Quick Cash

A Personal running finance facility for meeting the personal needs.

Loan Amount

Minimum loan amount Rs. 50,000/-

Maximum Loan amount Rs. 5, 00,000/-

Tenure:

01 Year (Renewable)

BOP Car Loan

Demand finance facility to purchase brand new locally manufactured / assembled cars /

imported cars, Chevrolet & for personal use only.

Finance Amount

Rs. 2,00,000/- to Rs. 50,00,000/-

Down Payment

10% for Govt. and 15% for Pvt.

Tenure

1 to 5 years

Payment Mode

In monthly installments

BOP Motorcycle Loan

Salary requirement (10000/- govt. Rs. 15000/- Pvt. Employees)

3 Years job experience and valid driving license & age 25-58 years

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Period of loan, 1-3 years

Amount of facility, Rs. 20,000/- to 2, 00,000/-

Down Payment, 10%

BOP House Loan Scheme

It is a long term facility for purchase of house, flat, construction of house on self owned

plot or for renovation / improvement of home.

Who can avail:

1. Salaried persons

2. Self-employed professional (SEP) [Chartered Accounts, Engineers,

Architects & Doctors / Dentists]

3. Self-employed business persons(SEB)

Finance Amount

Purchase of house/flat Minimum Maximum


construction of house/flat Rs.3 lac No limit*
Additional/Improvement Minimum Maximum
Renovation of house Rs.3 lac. No limit*

Tenure

Purpose Minimum Maximum


Purchase of House/flat 3 years 20 years
Purchase of plot & construction thereon 3 years 20 years with 01 year grace
or construction only period*
Renovation/ improvement 3 years 10 years

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Smart Cash Loan

BOP ATM / Debit Card

BOP Apna Cash Card is an ATM plus Debit Card.

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Service

The BOP Debit Card holders will be able to transact at any of the 1000 +

Merchants across the country. The following services can be utilized at the

Point of Sale (POS) terminals:

Purchasing

Your BOP Debit Card can be used in place of cash at all outlets where the M-

Net logo is displayed. This is a service which lets you pay directly from your

account without using cash. When a payment is made through the debit card,

your account is directly debited.

Remittance of Money

The Bank of Punjab, like other Commercial Banks undertakes to remit or transfer money

from one place to any part of the country and outside the country. The money is remitted

by means of:

1. Demand Draft (DD)

2. Pay Order (PO)

3. Mail Transfers (MT)

4. Telegraphic Transfers (TT)

5. On line Transfer

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Demand Drafts (DD)

The most common means of remittance in the bank is Demand Draft. When a person

wants to transfer his money to anther person having account with any other bank, he can

do so by obtaining a Demand Draft. The purpose of DD is to secure the amount which we

have. DD is a very secure method of transferring the money from, one place to another.

Pay Order

Pay order is a guaranteed document issued by the bank, the payment of which is made by

the same branch issuing this pay order. Pay order is used to transfer the funds within the

city while Demand Draft used to transfer the funds between the cities.

Mail Transfer (MT)

To transfer money from one place to another through a bank the second means of

remittance is Mail Transfer generally called MT. Money is Transferred through MT

mainly because the transferor, unlike in case of DD does not want to obtain and take care

of any instrument like DD and, of course, to present it at the Drawee Bank. So in order to

avoid above mentioned risks, which may contribute to the loss or delay on the part of

both the banker and the DD holder, the money transferor resorts to the MT.

Telegraphic Transfer (TT)

The quickest means of remittance in The Bank of Punjab is Telegraphic Transfer

normally called TT. The application procedure involved in the TT is almost the same as

is in the case of MT. In fact in The Bank of Punjab the Application form for DD, MT,

and TT is the same.

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On Line Banking Facility

According to this facility the customer can make remittances and draw amount from their

account through network of branches with in the country from BOP owns branches. It is

real time on line transaction facility. Nominal commission is charged on these

transactions keeping in view the amount remitted or withdrawn.

BOP ONLINE Banking

With BOP’s state of the art online banking, you can access your account from

more than 272 branches located in 93 cities across Pakistan.

Now BOP enables you to do all the following transactions in minutes through

designated ONLINE Branches.

Salient features of online banking are:

• Cash Deposit

• Cheque Encashment

• Stop Payment

• Account Statement

• Funds Transfer (Account to account / IBCA)

Term Deposit Receipt

1. SNTDR-7 Days

2. SNTDR-30 Days

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3. TDR -1 & Above Years

4. MIS

Special Notice Term Deposit -7 Days Scheme (Sntd-7 Days)

Under this scheme, the rate of profit is given on retention of deposit for minimum 7 days.

After lapse of seven days, the customers will earn profit on same rate .The rate of profit

paid in last half year i.e. in December 2008 was 0.5 % per annum. For this purpose the

customers are issued certificate of different denomination as required by them. On their

encashment principal amount along with their profit is paid to customers through their

account maintained with the concerned branch

3. Special Notice Term Deposit -30 Days Scheme (Sntd-30 Days)

It is similar to above mentioned scheme in operation except the difference of 30 days.

The customer who with draw money before 30 days will earn profit proportionate to

number of days passed. The profit rate lastly announced i.e. in Dec. 2008 on this scheme

was 1%. per annum.

4. Term Deposit Receipt (TDR)

On these schemes the profit is given according to different terms and conditions agreed

between the customers and the Bank. The customers are issued different certificates for

different terms and are en-cashed on their request.

5. Monthly Income Scheme. (MIS)

35
This is a term deposit which is placed for 5 years and profit is payable on monthly basis.

The certificates are issued in denomination of ten thousands and multiple of 10

thousands. The rate of profit currently being paid is 11% per annum.

BOP Services

1. Utility Bill Collection

2. BOP Locker Facility

Utility Bill Collection

• BOP has over 272 branches collecting electricity, gas, telephone and WASA,

and other utility bills like demand notice for telephone connection during

business hours.

• Almost all the branches have special utility bills collection counters with sun-

shelters and drinking water.

• Separate booths for utility bill collection are available at all major cities for the

convenience of the public.

• Branches in all major cities have electronic bill collection machines. And now-

a-days BOP management is trying to launch on-line banking system in all over

the Pakistan. For this purpose some of the branches have been equipped with

this on-line facility.

• For the customers’ convenience, BOP accepts cheques for payment of utility

bills.

36
BOP Lockers

Provision of lockers is safe custody service that the bank of Punjab provides to their

customers for keeping jewelry, important documents and other valuables.

1. Custodian

The bank is called the “Custodian”.

Licensee

The customer who is permitted by the bank to use the locker is called the

“Licensee”..

2- Locker’s Security

Security of all lockers is Equivalent to two years Rent for respective locker. Late

payment fee 5% per month of annual rent or Max of 25% of the annual rent. The

breaking charges are actual or Rs.2000/- which ever is higher.

4. ORGANIZATIONAL STRUCTURE

BOP Hierarchy Structure

37
President
Mr.
Directors Naeemuddi
Mr.Tariq n Khan
Mehamood Chairman
Mr. Shafqat
Elahi Mr. Safdar
Mr. Javaid
Azhar Syed
Ahmid

G.M. HRM G.M. sa G


Finance G.M. G.M. S
Mr. Naveed Treasury
Mr. Operation G.M. A
Hafeez G.M. I.T
Mr.Sarjeal T.R.C. & P Mr. Saleem
Sheikh Nadeem Sha
Masud Mirza
Amir Qu

Chief
Chief Chief Chief Chief
Manager
Manager Manager Manager Manager

Desk Desk Desk Desk Desk


Officer Officer Officer Officer Officer

HIERARCHY AT BRANCH LEVEL

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Regional Chief, Regional
Operational Head

Internal Branch Manager, Credit


Audit Operational Manager Committee

Customer
Cash & Bills & Accounts Consumer
Deposit Advances
Clearing Remitt Finance

Foreign
I .T
Exchange

NON-CLERICAL STAFF

4.1 Main Offices

39
Registered Office/BOP Head Office

10-B, Block E-II, Main Boulevard

Gulberg III,lahore.

Tel: (042) 5783700-10

Main Branch

7 Egerton Road Lahore

Tel: (042) 9200419,9200187

Fax: (042) 9200351

Branch Network

40
The bank of Punjab has opened 273 branches. All the branches are well located in

commercial and some residential areas, thus entering to the need business community and

private individuals. All branches are air-conditioned, well furnished, and equipped with

modern facilities to, provide services in congenial atmosphere.

CITIES NO.OF BRANCHES

Faisalabad 44

Gujranwala 45

Karachi/Quetta 08

Lahore 67

Multan 63

Peshawar 08

Rawalpindi 38

Total branches 273

REGIONAL OFFICES

The network of the branches of BOP is divided in to seven Regions in all Pakistan. The
administrate control, operational control and increasing business volume is the
responsibility of the Regional chief. The following Region has been established
up till now.

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1. Regional Office Lahore.

2. Regional Office Rawalpindi.

3. Regional Office Gujranwala.

4. Regional Office Faisal Abad.

5. Regional Office Multan.

6. Regional Office Karachi / Quetta.

7. Regional Office Peshawar.

5. STRUCTURE OF THE MARKETING DEPARTMENT

5.1 Numbers of employees working in the Marketing Department

42
There are 4982 employees working in The Bank Of Punjab:

1. Total numbers of regular employees are 2839

2. Total numbers of contractual employees are 2143

3. Total numbers of executives are 487

4. Total numbers of officers are 3213

5. Total numbers of non clerical staff are 1282

HIERARCHY OF MARKETING DEPARTMENT

General Manager
SME Product

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Chief Manager
Marketing &
Development

Head Auto Head Aasaish


Head House Head Demand Head
Loan Facility Loan
Facility Finance Facility Recovery

Desk Desk Desk Desk Desk Desk


Officer 1 Officer 2 Officer 3 Officer 4 Officer 5 Officer 6

5.2 Marketing Operations

Sales and marketing is the most important department of any financial institution now a

days, To maximize the sales and profit, this department should be proper planed and

managed.

Marketing Development

The first and the most basic job of the sales and marketing department is to plan develop

and make targets. And also to make strategies to achieve those targets and develop the

market.

The Bank Of Punjab use tactical analysis & routine planning of market strategies:

• Checking of the designated area, its sales, its volume and growth

• Calculation of share and product and package wise

• Calculation of daily deposit achievements on monthly target basis

44
• Location of the poor performance factors and analyzing their cause

• Finding their solution and getting the approval for its execution

• Planning for a schedule for the designated area

• Visiting the area according to the plan and reporting it to the higher managements

BOP Asasish Loan Scheme Operations

• Asaish Partners

• Memorandum Of Understanding

• Discounts

• Spending Campaign

Aasaish Partners

Our aasaish partners provide aasaish products, which is financed by BOP.

1. PEL

2. LG.

3. Waives

Public Departments

Following are the public sector departments who officials are facilitated to get aasaish

products.

45
• MEPCO

• TMA

• Public Health Department

• Irrigations Department

• Pak Army

• Education

• PTCL

• NGPS

Private Departments

• Mobile phone Companies

• Consumer Products Companies

• Manufacture Companies

• Sales & Distribution Companies

• Business Trading Organizations

• Insurance

• Hospitals

• School & Collages

• Banks

6. Functions of the Marketing Department

46
Concept of the Marketing Department.

A process of planning and executing the conception, pricing, promotion, and distribution

of ideas, goods, and services (products) to create mutually beneficial exchanges.

The analysis, planning, organization, implementation and control of the marketing

activities of the firm.

6.1 Marketing Strategy

Marketing strategy is the practical application of marketing techniques. It is the analysis,

planning, implementation, and control of programs designed to create, build, and

maintain mutually beneficial exchanges with target market.

Marketing strategy of The Bank of Punjab is overall focus on Small Customers.

• BOP new strategy is focus on consumer finance market.

• Focus on commercial & cooperate market

• Focus on Government market.

• Understanding the economic structure of the industry

• Do marketing research to develop profiles (demographic, psycho graphic, and

behavioral) of the core customers

• Understand the competitor and their products

• Establish environmental scanning, mechanisms to detect opportunities and threats

• Audit the customers’ experience of the organization product in full

47
• Understand where the organization to be in the future, and write marketing plan

on a regular basis to help organization get there.

• Setup feedback systems to help you monitor and adjust the process

6.2 Product Planning, development & management- Consumer

Credit Facility

The Product SME Division is responsible for product planning, development &

management. SME Division works together for developing of new products and

managing the existing products.

The new-product development process starts with the search for ideas. Top managers

should define the product and market scope and the new product’s objectives. They

should state how much effort should be devoted to developing breakthrough products,

modifying existing products and coping competitors’ products. New-product ideas can

come from many sources customers, scientists, competitors, employees, channel

members, and top management. The marketing concept holds that customer needs and

wants are the logical place to start the search for ideas. BOP has developed different

products for different segments depending on their business need and saving purposes.

The existing products are modifying by changing its features or product name etc. Mark

up rate on loan and interest rate on deposits always variables. In this regard circulars are

issued by Product SME Division BOP HO Lahore.

BOP aasaish scheme is successfully passing through the introductory stage and entering

into the growth stage. BOP people develop the products after identifying the core

consumer needs that the product will satisfy. They introduce the product after careful

48
segmentation and identifying the target market, Since their target market as they know is

going towards the aasaish loan, so BOP has introduced its aasaish loan scheme which is a

blend of modern scientific research.

6.3 Pricing Strategy

Pricing is one of the flexible elements of marketing mix. Usually the companies reduce

their prices to increase sales rather than convincing buyers that their product is worth a

price.

The function BOP is not only to set the price but there is a whole pricing structure that

changes over time as product move through their life cycles. Bank usually adjusts

products prices to reflect changes in cost and demand and to account variations in

environment.

The Bank Of Punjab changes its prices to meet the competition but only at that time when

the mark up of competitors change because of national changes in prices. Every customer

has to pay the same amount to buy the products of BOP aasaish products in Pakistan. It

means the company is following uniform delivered pricing strategy for all its products.

BOP aasaish loan first adopt market skimming price in the initial stage of the product, but

the changing occur in the market, now BOP aasaish loan scheme following the market

penetration pricing. In market penetration pricing a relatively low initial price is

established.

Normally BOP focuses on small customers and set low prices for its products. Its charges

are low for its services comparatively other banks. Charges go to vary by HO order or by

SBP instructions. In this regard a schedule of charges is issued.

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6.4 Distribution Strategy

The process of making the product available to customers to right customers at right

places.

BOP aasaish loan product is using second level of distribution to make its products

available to final customers.

BOP Aasaish Loan Products Delivery Channel

Producer

Asaish Partner

Customers

Producer is PEL company manufacture home appliances then move to PLE (SAMD) sale

and marketing development department called aasaish partner as BOP finances aasaish

products are delivered to borrowers/customers

Distribution channel always keep in touch with the target customer and competitors as

well. They provide all the information to the organization, which contains problems and

competitors actions.

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The distribution set up of aasaish scheme is very simple. The company after

manufacturing its products hand them over to the agents, which ultimately delivers then

to the final customers.

In banking services there are no efforts required to distribute its products and services at

customer locations. Because all the purchasing & selling or receipts & payments are done

at POP or POS, called BOP cash counter, available cash officer to serve walking

customers in banking hours.

BOP aasaish loan products have relatively low prices as compared to the other market

player like city bank and standredcharted. One reason for this low price is the short

distribution channel. BOP aasaish loan scheme uses intensive distribution strategy.

6.5 Promotional Strategy

To move their products through the distribution channel from the point of mafucture to

the point of consumption, marketers employ two types of strategies:

Push Strategies are primarily defensive tactics designed to secure the cooperation of

retailers, gain shelf space, and protect the product against competitors. Trade promotion

and sales promotions aimed at numbers of the distribution channel are one of the

principal tactics marketers use to push products through the distribution pipeline and gain

shelf space. Pull Strategies on the other hand, are offensive tactics designed to attract

customers and increase demand for the product. Consumer advertising and consumer

sales promotions are examples of the pull strategies because they are designed to induce

consumers to seek out or ask for the product, in effect pulling product through the

pipeline.

51
BOP Personal Selling Techniques

Personal selling is the interpersonal communication process by which as Relationship

Manager (R.M ) ascertains and then satisfies the needs of a borrower, to the mutual, long-

term benefits of both parties. The task of personal selling is a lot more than just making a

sale. The objective of personal selling is to build a relationship, a partnership that will

provide long-term befits to both the buyer and seller. In branches level Branch Manager

(BM) are responsible to visit daily or weekly visits the market to sell deposits and loan

products. In this regard BOP Head Office a format is issued to enter daily activity report

e. g. number of new accounts opened and depositing figure data on daily bases.

BOP Advertisement Techniques

Advertising is the structured and composed non-personal communication of information,

usually paid for and usually persuasive in nature, about products (goods, services, and

ideas) by identified sponsors through various media. BOP uses both advertising media

printed and electronic media.

BOP promotes its product and services in two ways:

1. Advertising and Sales Promotional Materials

2. Using Professional Excellency Concepts

It also uses promotional material:

 Adds in New-paper & TV

 Displays Material like banner, broachers, stick yards, cards etc.

52
 Door to Door Services

 Discounts, Rebates & Special profit rates

 Gifts material like pens, clocks, rings, annual diaries etc.

 Decorate & Attractiveness

 Publicity by customers & members

It provide elite environment to its customers:

 First-class Dressing

 Excellency in Communication

 Smart Working

 Error free working

 Good Look branches

Role of Promotion to Achieve Desired Goal

The techniques of sales promotion are using in the BOP to motivate salesperson to

improve their performance and to induce consumers to purchase goods and services.

Although sales promotion works most closely with advertising, it is also related to other

elements of marketing: product & services, price, promotion and distribution.

7. Critical Analysis of Theoretical Concept Related to Practical

experience

53
7.1 Successfulness of Product

There is a product call “Pehlay Munafa Scheme” which is introduced recently by BOP

management. This scheme got popularity due to its unique attributes.

Features

 Advanced Profit

 Maximum Profit Rate

 Facility to reinvest the profit gained

 Withdrawal amount at anytime

 Convertible to other scheme

Failure of Product

New Product Business Trading Account called “BTA” became failure due to some

reasons:

 Low market share in business market.

 Condition apply of average balance minimum Rs. 1,00,000/- per day for free

services.

 Other banks are offering free services without average balance condition.

 Lack of good campaign.

 Lower interest by business community

7.2 Major Competitors of the Organization

54
Following are the major competitor s of consumers banking sectors:

• National Bank of Pakistan

• Allied Bank Limited

• United Bank Limited

• Habib Bank Limited

• MCB Bank Limited

• City Bank Limited

• Standard Chartered Bank

7.3 Future Prospects

BOP expects its strong customer focus to drive the bank’s future business strategy. On

the domestic side bank has already launched its consumer banking business

The consumer banking is a key partner with other financial institution to meet the overall

needs in the most appropriate way. The words that sum up importance and urgency of the

work that consumer banking is doing “The consumer is waiting “. The high spending in R

& D reflects not only the long term commitment of the consumer banking in maintaining

a strong and competitive base world, but also the growing intensity of R & D in

consumer banking sector. The continuing consumer banking revolution will generate a

wide rang of even more effective products for many conditions which today are very

famous in the financial institution. The Bank of Punjab has a long standing in consumer

banking business and very bright future. It has along list of products in pipeline, which

are in different stages of development.

55
8. SHORTFALL/WEAKNESS OF THE MARKSTING

DEPARMENT

Although the finance department is working well yet it has to improve in some areas. The

main weaknesses of the department are as under:

1. Amount of loans is increased very rapidly year by year (almost doubled

every year). This portfolio should be closely monitored to avoid non performing

loans and selected persons should given loan.

2. Provision against non performing loans is too low as compare to total

volume of loans. It should be according to the loan amount.

3. Cost of deposit is very high as compare to the other Banks which

ultimately decreases the profit of The Bank.

4. Administration cost is increasing constantly which is affecting on the net

profit of the organization.

5. The Bank is depending on Govt. Deposit mainly which is 46% of total of

its deposits. If Govt. decides to withdraw its deposit from The Bank, it will be

collapsed.

6. Each type of expenses is increasing year by year which must be curtailed

to increase the profit of The Bank.

7. Although Deposits, Advances and assets of The Bank has been increased

more than all other Banks but its profit has not been increased with the same

ratio.

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8.1 Marketing Operation Analysis Which Need to be Improved

In the banking industry, marketing operations consists:

1. Deposit Development

2. Advances

3. Recovery

Deposit Development

Deposit is as import for a bank as blood is to life. Deposit is the main source of growth.

In the BOP there is separate deposit development department at head office and its

implementation is through Regional offices.

Regional Chief is held responsible for deposit mobilization. At branches Branch

Managers are responsible to procure deposit targets. There is no other person is deputed

for deposit development from the market. Only manager is designated for deposit

procurement.

Whereas many other banks depute Relationship Managers (RMs’) at branch levels to do

the best in market competition. Combined efforts are required regarding deposit

development. So this is weakness of marketing department in BOP.

Secondly main source of deposit is govt. funds e.g. Provincial govt. departments. Fewer

efforts are exercised in private sectors while campaign of deposits.

57
Advances

There are different types of loan that a bank advances in the market.

Concerning officer are held responsible to go through all operations regarding marketing,

processing and recovering etc. There is no sales and marketing department separately.

This is why wholly market can not be benefited. BOP always prefers to govt. officials

rather private public peoples.

Recovery

The main purpose of all operation is to earn profit instead losses. There may be

possibility to go default. Very hard efforts are required to recover default amount. In the

BOP there is no recovery department separately or other extra staff is hired for recovery

purpose in any way. Even concerning officer is not facilitated with recovery cost or

allowances. When loans are advanced in bulk quantity e. g. in BOP different kinds of

loans like aasaish, auto, house, RF, and cash loans are advanced. There must be a

recovery department independently, responsible to achieve recovery goal.

58
8.2 SWOT ANALYSIS

Internal Strength

• The bank has stable growth in deposits since its emergence. Its 20 years long

existence it is the trustworthy bank in Pakistan.

• The loan facility provided by the bank is on sound basis. They have many checks

and documentation that secure their money after advancing. With their strategy

there are very less chances of non-recovery from the debtor.

• Because of its 100 Domestic and 1 Overseas Branches they have very good

infrastructure and are prevailing now all over the country.

• The Bank Of Punjab has launched their products and varied services with

particulars brand names. Their popular bands are BOP (ATM Card), BOP (Car

financing), Kisan Dost Scheme, BOP (On-line Banking Service), etc

• Another very important aspect of The Bank Of Punjab is its fast service. Every

thing goes very quickly. Like other banks customer do not have to wait for the

long time.

• The Bank Of Punjab has financial strength as they are gaining profit from the

advances that they provide to the organizations.

• The Bank Of Punjab is providing lot of services. BOP is providing commercial

services like electricity, wasa and gass bills, etc. The Bank Of Punjab as a

59
government bank provides many extra services like payment of salaries, pensions,

receipt of vouchers, govt. dealings etc.

Internal Weaknesses:

• The Bank Of Punjab is centralized. It means authority is not delegated to branch

level. Manager can’t take initiative regarding different decisions such that for

giving finance and waiver of mark up etc.

• The majority of people are not well aware about the products of the BOP.

Promotional activity of their services is very low.

• The Bank Of Punjab Management lacks innovation they introduce the same

products that are already existent in the market.

• The Bank Of Punjab officer’s salaries are low as compared to other private banks.

• There is low level of motivation in the employees of the bank

• The Bank Of Punjab management has opted reactive approach they respond to the

market very slow and are reluctant to take initiative before the problem arise.

External Opportunities:

The Bank Of Punjab is established under Punjab Government Act in 1989. The purpose

of establishment of this bank is to manage government funds and dealing into the public

sectors departments. So it builds a great going concern trust to govt. officials,

businessmen and general public etc.

Punjab government always makes policies which support to the bank.

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External Threats

• The rapidly changing environment in the banking sector and the quick response of

the other banks to these changes can be a threat for The Bank Of Punjab.

• What customer really wants is a difficult thing to identify as to identify the

customer perception and its behavior is complex procedure. So the changing

needs of the customer can be a threat for the banks.

• As the name is The Bank Of Punjab, so it creates the concept that it is the bank

just operating in the Punjab province. Its more than 90% branches are in Punjab

province

• Competition can be the greatest threat for the The Bank Of Punjab. As new comer

banks are emerging as a strong entity and old banks have adopted invention so

The Bank Of Punjab will face a strong threat from this competition unless they

adopt pro-active approach to handle these threats.

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9. Conclusion:

The overall analyses of the organization reveals that the organization has not very strong

financial strength it is leading five big commercial banks in the market but growth of its

assets, deposits, advances and profit is some low. The new management is trying to give

U turn to financial results that have grown almost more times then base year 2008 and

since inspection of the current management. It is the best avenue for the investors,

shareholders and government as it is giving high return to their investments and

contributing in revenue of the government of the Punjab each year. It has also contributed

in the growth of economy of the country by investing its funds in different sectors of

economy i.e. Agricultural, Industrial, Textile, manufacturing, automobiles, transportation

and communication etc.

It has the best rating in credit AA in long term and A1+ in short term credits.

In nut shell, in future it will be the top commercial bank of the country.

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10. Recommendation for Overall Improvement of The Bank i.e.

“The Bank of Punjab”

The Bank of Punjab is performing well. Its deposits are growing day-by-day and so

its profitability. The controlling body is responsible for the productive performance of

the bank.

Following are my observations and suggestion to improve the efficiency for the

development of the bank.

To Closely Monitor The Loan Portfolio

1. Strict screening is not done while giving loans to the borrowers.

2. Borrowers are not closely monitored regularly to avoid non performing loans.

To Adopt Strict Loan Policy


1. Should invest more in spite of giving loans.

2. Should diversify its products to different sectors.

3. Should concentrate mainly on small borrowers instead of big ones.

4. Should train its staff regarding lending to corporate customers.

To Make Proper Provision against Non Performing Loans

As the loan portfolio of The Bank of Punjab is increasing, although its provision for

non performing loans is increasing but ratio of provision to total loans is decreasing.

63
The loan portfolio of The Bank should be scanned and more provision should be

made to meet any odd circumstances.

To Reduce the Cost of Deposit

Bank is accepting deposits at very high rate and its ratio of current deposit is low as

compare to other Banks.

The Bank should immediately adopt some strategy to inject low cost especially

current deposit in its total deposit portfolio to lower its cost of deposit.

To Lower the Administration Expenses

Another factor which is evident from the balance sheet is the Admin. Expenses of the

Bank became almost double in 5 years. It must be deceased to increase the profit of

The Bank.

To Attract Private Deposit Instead Of Govt. Deposit

At this time the share of Govt. Deposit is about 46% of the total deposit of The Bank

of Punjab.

While this is a big advantage to The Bank, it is also a main threat to The Bank.

If govt. changes its policy and shifts its funds to State Bank of Pakistan, then it will

be very difficult for the Bank to survive.

Therefore, it is suggested that the Bank should adopt such polices to attract private

deposit also.

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Introduction of Various Profitable Schemes

The people motivated to save money by offering the highest interest rates through

various investment schemes. The rate of profit should decrease 2% or 4 % more than

the other banks and it would be profitable step for bank.

Training of Staff

Staff turnover particularly of trained staff result in financial and other losses. The

amount spent by the bank on employment, induction and training of an outgoing

officer constitutes to beat till another officer should ready prove his work. The exodus

of bank officers in the past has worsened the situation.

Change the Nature of Work

Most of the bank employees are sticking to one seat only with the result that they

become master of one particular job and loose their grip on other banking operation.

In my opinion all the employees should have regular job experience all out-look

towards banking. Their promotion policy should be adjusted accordingly.

Refresher Courses

Refresher courses for the staff are most important in any international organization.

All the employees should have these courses according to their requirement. Foreign

experts can also be called for this purpose.

Special Training Abroad

Every year some of the employees should be sent for training to other countries and

employees from other branches should be brought here. Some more reading material

65
should be provided the purpose should be to educate the employees with the advance

studies in their field. The employee should be provided the opportunities to attend and

participate in seminars and lectures on banking.

Incentive to Employees

Bank should give some more incentive to its employees in order to remove the

conflict between lower and higher officers and should try to improve the working

condition of the bank.

Computer System

Though The Bank of Punjab installed computer yet the system has not totally shifted

on computer. Manual procedure is still there hence computer facility is not fully

availed. It should be fully availed and system should be fully computerized.

Reward and Punishment

It is human nature one goes behind reward and incentives while and try to avoid from

punishment. Like wise in commercial institution like bank this system should be

introduced with full force means achieve smart, educated skilled, self spoken and well

versed staff personal, should be reward and appreciated, while on the other hand lazy,

lethargic, heard, rough-dealers and ill mannered must be warned penalized and

punished but this all should be on merit and considering the policy of honesty is the

best policy and not due to some personal liking, disliking prejudice and patrimonial.

It is therefore suggested certain schemes and checks may be introduced in banks to

increase efficiency through reward and punishment.

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11. REFERENCES & SOURCES USED

• Market Management by Stephen P.Robbins & Mary Coulter

• Advertising by William F. Arens.

• Practice and Law of Banking in Pakistan by Israr H. Siddiqui

• Financial Reports of the Bank of Punjab for the Years

2005,2006,2007,2008,2009

• Mr. Ghulam Shabbir AVP. (ICCU) 0300-6337803

• www.bop.com.pk

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