Submitted by: Sajid imran

Roll no: 58/s

Student ID: MCOF08E058

Session: 2008-2010 M.COM 4th semester

Internship duration: 14 June to 31st July 2010

Final report date: 20-09-2010

University of Sargodha

The Punjab Provincial Cooperative Bank Ltd. , Sargodha Zone.

Tiwana Park, Opp: Excise & Taxation Office, Mela Mandi Road, Sargodha 048-9230074
Internship letter

Attach the Photocopy of your Internship Letter . bring your Internship letter in Viva
 Preface:

Learning in practical side is somewhat that cannot be compared with books knowledge.m.com program is
designed in such a way that students are required to do projects and researches then give their
recommendation and conclusion. It also Provide student an opportunity to apply this knowledge in
practical field.

Now to fulfill the practical requirement of this course, I successfully completed an internship report on
the Govt. provincial cooperative bank Sargodha. It was great opportunity for me to apply theoretical
knowledge and get practical exposure. I have visited almost all the department and studied function of
each department.

The purpose of the report is to elaborate on my experience about Bank. I have tried to present the
overview of the company and its operations and the task that are carried out during my stay in bank.
Although 6 week is a small time to completely understand the processes and philosophy of a company,
but at least one gets a good overview about it, and I have tried to write all that grasped during this short
time, in this report. This report includes bank working way out, information about their departments
function and working.

I have analyzed their working and have given certain recommendations on the basis of my observation. I
have tried my level best to give real look about bank while writing this report .

May ALLAH succeed me while evaluation of this report.

INTRODUCTION OF BANKING

“Bank is a pipeline through which currency moves into and out of circulation.”

Bank accepts deposits and repays cash to its customers on their demand. The Bank borrows money at a
lesser rate of interest and lends it to the borrowers at a higher rate. It is thus a profit-lending concern.
Bank cannot lend all the money that has been deposited with it. It has to keep a certain portion of the
total deposits in cash with them in order to meet the cash requirements of the individuals and business
concern.

Definition of bank: -

“A financial institution that is licensed to deal with money and its substitutes by accepting time and
demand deposits, making loans, and investing in securities. The bank generates profits from the
difference in the interest rates charged and paid”.

”An institution where one can place and borrow money and take care of financial affairs”.

Welcome to Punjab Provincial Cooperative Bank Ltd.:-

The Punjab Provincial Cooperative Bank Ltd. was established in 1924 as an Apex Bank to meet funding
requirements of cooperative societies. It is engaged in all types of banking & credit business with
societies and individuals. The PPCBL gained the status of Scheduled Bank in 1955.
PPCBL was organized and being managed on the principal of voluntary and open membership,
democratic member control, member economic participation, autonomy, independence, self-help and
mutual cooperation.
History of organization:-

The Punjab provincial cooperative bank was established in 1924 and was given the status of scheduled
bank in 1995. The Punjab provincial cooperative bank plays a vital role in the national economy through
mobilization of hitherto untapped local resources, promoting savings and providing funds for
investments. The bank offers attractive rates of profit on all deposits, opening of foreign currency
accounts and handling of foreign exchange business for example imports, exports and remittances,
financing, trade and industry for working capital requirements and money market operations. The lending
policy of bank is not only cautious and constructive but also based on principles of prudent lending with
maximum emphasis on security.

Nature of the organization:-

Entering of the Punjab Provincial Cooperative Bank Ltd. (PPCBL) into arena of e-banking.
The website of the bank has been launched and now the customers are a click away from
the solution of their queries. The bank is catering the needs of small farmers of Punjab
Province since 1924. In 1955 it was declared as scheduled bank. It is a matter of pride for
us to be able to offer one of the widest arrays of products to our customers through our
extensive branch network throughout the Punjab. In addition to its traditional lending to
small farmer members of cooperative societies, recently new products for individual farmers
launched, which are getting enormous response. The PPCBL is distinct from other banks in
that it has a nonprofit and service oriented motive, which we able to achieve through
continuing support of the State Bank of Pakistan and the Government of the Punjab.

.
Vision Statement:-
To be a customer focused bank with 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 program driven products
and services in the agriculture and middle tire markets through a motivated team.
Mr. Liaqat Durrani
President/CEO:-

In line with the directions of State Bank of Pakistan and policy of the Government of the Punjab, the
PPCBL is entering the arena of e-banking facilities for their clients. Much awaited task is near completion
after that PPCBL will serve its clients in a better way. The PPCBL would be able to achieve said mission
with untiring support of the Information Technology Department Government of the Punjab and we have
no words to pay our gratitude. In addition website of the Bank has been launched and now the customers
are a click away from the solution of their queries

Business volume:-
The Punjab provincial cooperative bank limited is a scheduled bank, at present, having 161
branches at district, Tehsil headquarters and important Mandi towns. Over 38000 cooperative
societies are affiliated with the Bank. The paid up share capital of the bank amounts to Rs. 112.518
million, out of which the Provincial government subscribes shares worth Rs. 16.235 million.the
authorized share capital of bank consists of unlimited number of shares of Rs. 100 each.

A member cooperative society, which has to borrow loan from the bank for its members, has to
purchase at least shares equal to 2 % of MCL of the society fixed with the bank.

Objectives of the bank:-

The main objects of the bank are as under:

• To afford financial assistance to members societies in such manner as may be necessary.

• To carry on banking and credit business.

• To inspect, supervise and estimate credit of member societies.

• To help the growth of the cooperative movement.

Functional department of the bank:-
There are six functional department of the bank.

• Credit and recovery

• Audit and inspection

• Board and properties affairs

• Finance

• Human resources

• Law and Advisory

Objectives of studying the organization:-

• To review the human resources departments.

• Analysis of the functionalities of human resources department.

• To do a comparative analysis of the organization with the other in the same business
and capacity.

• Finding out the weaknesses, short comings, strengths and beauties of the human
resource department.

• To put some suggestions & recommendations for the development and polishing of
the human resource department.
Nature of the business:-
The Punjab Provincial Cooperative Bank Ltd. Is one of the famous and well known organization in
the banking sector. Its services have won good will and the bank is considered credible throughout
its area of operation and range of business.

It gives loan to the cooperative socities and to the individuals too. More over it also offers services in
the normal banking of daily life.

Product lines of the Bank:-

The oldest scheduled bank of Pakistan gives the following services to the customer.

1) A leading bank for providing the agriculture loans to the low scaled formers by its Punjab
wide 161 branches.

2) The availabilities of productive loans to the formers of co-operative societies for seeds,
pesticides and fertilizers on easy conditions.

3) Mid term loan for the purchase of tractors in a co-operative societies.

4) Agriculture machine and tube well loans.

5) The loan up to 5 lac for co-operative societies for the increment in the industrial production.

6) Females may also benefit themselves by same facilities.

7) Availabilities of the loan for the development of information technology.

8) The launching of gold loan for general public and agriculture purposes at tehsil level.

Profile of the Bank

Establishment:
 Cooperation is an International Movement of enriched history spread over
decades. It has proved as an effective system for socio-economic growth and
community development of the rural masses. This movement is very strong in
 many countries like India, China, Malaysia, Europe, Japan, Philippines etc.
 Initially, Cooperative Banking was organized in the Indo-Pak Subcontinent in
three tiers: Primary Societies were at the base, Central Bank / Banking Union
were at the secondary level; and Provincial Bank / Apex Society was at the top.
 The Central Cooperative Banks (CCB) were established at each District / Tehsil
and Punjab Provincial Cooperative Bank Ltd. in 1924 as an Apex Bank to meet
funding requirements of cooperative societies and Central Cooperative Banks,
respectively. Punjab Provincial Cooperative Bank Ltd / Central Cooperative Banks
were engaged in all types of banking & credit business with societies and
individuals who were their members.
 The PPCBL gained the status of Scheduled Bank in 1955.
 PPCBL was organized and being managed on the principal of voluntary and open
membership, democratic member control, member economic participation,
autonomy, independence, self-help and mutual cooperation.
Major Objectives
 Promote growth of the Cooperative movement.
 Carry on banking and credit business to facilitate working of the member
Cooperative Societies.
 Inspect, supervise and assess credit requirements of member societies.
Governing Body:
 The supreme authority of the Bank is General Body represented by all the
shareholders through 660 delegates, elected at the rate of 1 per 50
shareholders. The general management of the Bank is subject to the control of
elected Board of Directors.
Ownership:
 PPCBL has a unique status being a ‘peoples’ bank and is owned by around
33,000 cooperative societies, mostly the agricultural thrift and credit cooperative
societies (Shareholding pattern: GoPb 3% and Cooperative Societies 97%).
Banking Functions:
 It is performing all the main banking functions of deposit mobilization, supply of
credit and provision of remittance facilities with limited banking products and
functionally specialists in agriculture related products. PPCBL, as a principle,
does not pursue the goal of profit maximization.
 It has strong linkages with rural agricultural economy. There exists strong nexus
between Bank and Cooperative Movement / Department. Thus PPCBL has been
the main pillar of Cooperative Movement having a history of over 80 years
playing a pivotal role with its service oriented approach.
Source of Funding:
 In 1976, Federal Bank for Cooperatives (FBC) was established through a central
enactment whereby all the Central Cooperative Banks dissolved and merged into
PPCBL. Thereafter, the FBC provided funding to meet the crop loan requirements
 of the small farmers on service charge basis ranging between 2-3% only.
 In the year 2002, Federal Bank for Cooperatives was placed under liquidation.
After that the State Bank of Pakistan (SBP) started providing funding support to
PPCBL through its Agricultural Credit Portfolio. The funding remunerated at
GOP T. Bills Rate ranging between 8-9%. However, the funding support was
withdrawn by the SBP w.e.f. 01.07.2007 due to change in its monetary policy.
Thereafter, the Bank is managing its business operations through refinancing of
recoveries from own sources.
Branch Network:
 The Bank has an extensive network of 159 branches servicing the small farmers.
It is the only surviving Cooperative Bank in the four Provinces being a
Specialized Scheduled Cooperative Bank.
Regulation & Control:
 Being Scheduled Bank, PPCBL falls under the regulatory control of SBP and
bound to follow SBP Prudential Regulations to the extent applicable. Being
Cooperative Bank, it functions under the supervision of Registrar
Cooperative, Societies, Punjab.
Current Challenges:
 Liquidity problems due to withdrawal of credit line by SBP
 Rightsizing of Board of Directors
 Weak system and procedures
 Lack of I.T. infrastructure
 Recovery of overdue loans
 Sustaining operating losses mainly due to high cost debt servicing to SBP
 HR Development issues
Restructuring:
 Currently, an extensive restructuring exercise has been undertaken to make the
PPCBL a viable and self sustained Bank for rural masses. For this purpose, a 5-
Years Restructuring Plan was prepared and submitted to State Bank of Pakistan
(copy attached). Reform initiatives taken so far as under:
• Organizational Structure revamped
• A full time Managing Director / COO appointed
• Board of Directors right-sized (now consists of 7 members instead of 40)
• Credit, Audit, Operations and Risk Management Manuals prepared
• Audit & Inspection Cells at Zonal Offices Shifted to Head Office and
reorganized in 4 Teams
• Automation of systems & procedures initiated
• Surplus staff lay off and induction of qualified professionals – process
initiated.
Market Positioning:
 Strong clientele base earned over 85-years.
 Deep rooted penetration / bearing in agriculture community.
 Extensive Branch Network at grass root level.
 Catering to financial requirements of around 0.3 million small farmers of
members societies and individual borrowers in a year.
 Lending products launched without large scale publicity–immediately responded
by the target group.
Allocated funds often fall short in meeting demands of the borrowers

Board of directors:-
Following members constitute the board of directors for general management of the bank.

Registrar, cooperative, Punjab Ex- officio President

Chief auditor, cooperative, Punjab ex- officio president

34 duly elected members, one from each Distt. Member

Three nominated members by the registrar member

The board of directors has 39 members. A nominee of the federal bank for cooperative attends the
meetings of the board of directors as observer. The board of directors elect a vice president from amongst
its members. The board of directors may delegate all or any of the powers for proper and efficient
conduct of the business of the bank to the president, vice president, general manager, any other
responsible officer of the bank or a sub committee appointed by board of directors.

Core Values:-
 • Integrity

• Excellence in Service

• High Performance

• Innovation and Growth

Competitors:-

• Industrial Development Bank

• Zarai Taraqiati Bank Limited

• SME Bank
• Muslim commercial bank ltd.
• Habib bank ltd.
• Foreign banks like city bank
• Standard charted bank ltd. ETC.

Organizational structure:
Branch Hierarchical Flow
Punjab Provincial Cooperative Bank Ltd :
 Branches 159Branches in 2008

Employees 6500 in 2008

Legal Adviser Khan ilyas

Mian safdar mehmood

Rab nawaz malik

Auditors Ilyas saeed

Midsnell group international.

Shares Register Technology Trade (Pvt.) Ltd

Central Office Non-Quoted Public Company

Bank Sq., Shahrah-e-Quaid-e-Azam, The Mall,
Lahore, , Pakistan
()92 042 9921 1432, 92 042 9921 1442 fax,
http://ppcbl.punjab.gov.pk

Operational zones:-
Lahore Zone RawalPinidi Zone

Sargodha Zone Faisalabad Zone Multan Zone

 Bahawal Pur Zone D.G Khan Zone

Total Number of Branches:

Region No. of branches

Rawalpindi 17
Lahore 25
Gujranwala 19
Faisalabad 18
Multan 28
Sargodha 16
Bahwalpur 17
DG khan 19

Work done by internee:-

This branch has following departments where I workrd:

1 Account Opening Department

2 Clearing Department
3 Collection Department
4 Remittance Department
 The detail of these departments is as follows:

1. Account Opening Department:

It’s mean cash and deposit department. The jobs of this department are
following:

i. Account Opening
ii. Account Closing
iii. Cheque Book Issuing
iv. Types of Account

i. Account Opening Procedure:

When a customer wants to open an a/c he comes in this department of the bank, and submits an
application for opening an a/c. The officer of this department gives him an application form. This
application form is useful for all accounts.

i. Individual Account
ii. Joint Account
iii. Proprietorship
iv. Limited Company
v. Partnership/Firms
vi. Club, Society, Association of Persons Trust
Necessary information, which a bank requires;

a. Name
b. Address
c. Telephone #
d. Currency of Account (local or foreign)
e. Nature of Business
f. Country of Residence
g. Special Instruction Regarding the Account
h. Signature of the Applicant
i. Operating Instructions
j. Zakat Deduction
k. Details of other Banks Accounts
l. Introducer

Documents to be attached:
1. Attested Photo Copy of NIC/Passport of account holder, Proprietor, Partner,
Directors and Office Bearers as the Case may be.

2. Certified true copy of the certificate of incorporation or registration (in case of

companies and registered bodied only).
3. Certified True Copy of the Certificate of Commencement of Business (in case of
public limited companies only).
4. Certified True Copy of the Memorandum and Articles of Association (in case of
limited companies).
5. Certified True Copy of Rules and Regulations or By-Laws (in case of limited
companies).
6. Certified True Copy of the Resolution of the Board of Director/Managing
Committee/Governing Body regarding conduct of the account.
7. List containing names and signatures of the Director/Office Bearer duly certified by
Registration Authority.
8. Letter of partnership or Certified Copy of Partnership dead (in case of partnership).
9. Trust deed and Board Resolutions, for Trust accounts.

SPECIMEN SIGNATURE CARD:

When an account is opened with account opening form a specimen signature card is
given to the customer, which contains;

a. Branch Code
b. Date
c. Account No.
d. Title of A/c
e. Special Instructions
f. Names
g. Signatures
h. Approved By
The customer fills this card and returns it to bank officer. For illiterate persons
thumb impressions are taken and two latest passport photographs shall be taken. This
specimen signature card is scanned in the computer system. So that whenever the
account holder cheque will come the bank officer will verify his signature to the
computer.

Cheque Book Issuing:

A chequebook contains a number of cheques, which enables the customer to make
withdrawal from his account or make payment by issue of cheque. After account
opening a chequebook requisition, which is infact, a request to acquire a chequebook.
This requisition form is given just for first time getting chequebook or for new a/c
holders. When the a/c holder is old then a chequebook slip is already in his chequebook
before 10 leaves of the chequebook. So when the account holder reaches to this slip after
issuing the first cheques, he fills this slip and presents it to the bank. This slip contains:

a. Title of the Account

b. Date (in 2 places)
c. Account #
d. Cheque Book from_____to_____
e. Signature of Account Holder
When the new or old customer presents the requisition form or cheque slip the bank
officer fills a bank chequebook slip. In this cheque book he fills the;

a. Date
b. S.No.
c. No. Of the leaves
d. A/c #
e. Title of the A/c (in block letters)
 After this he makes a debit voucher and credit voucher.

Credit Voucher:
Credit vouchers show the income of the bank, which are charges of the issued
chequebook.

Debit Voucher:
Debit voucher is made to debit the customer account.

The amount of debit and credit vouchers depends upon the no. of the leaves of
chequebook. For one leaf bank charges 5 rupees. For PLS and current account
chequebook can be of 25, 50, 100 leaves. The bank officer sends the bank chequebook
to NIFT. And keeps voucher along with him.

Next day or in incoming days NIFT will issue the cheque book printed with:

a. Name of the Bank

b. Date
c. A/c #
d. Cheque #
e. Name
f. Title of Account
g. Amount in words & figures
NIFT keeps the record of these issued chequebooks. These cheques are sent to the
bank. NIFT also sends a summary of these cheques books containing the account
numbers and title of accounts. The bank also keeps records of these cheque books. The
bank officer receives these cheque books with clearing. He writes the title of account and
number of account at the first page. He brings out the cheque books slips and vouchers.

He fills the cheque book slips by seeing the numbers of cheque book leaves. He
enters these cheque books in computer system. He files the summary of the cheque book
in a separate file. However, big mills or companies who a number of cheque books at a
time need may present the more cheque book slips.
Presentation of Cheque:-
When cheque is presented to cash, bank officer checks that the cheque is duly filled,

a. Signatures of account holders are there

b. Amount in word and figures is same
c. No cutting, if any cutting then counter signature is there
d. Date
e. Signature on the back of the Cheque
f. Cheque should not be damaged
g. Funds must be sufficiently available
h. No legal Prohibiting

Then after seeing this bank officer verifies the customer’s signature in computer by
S.S.C. and sees the credit balance of account holder. If he has more balance than the
presented cheque, he will pass it. The account holder will present it on the counter and the
cashier will again check the signature. It is the duty of the paying cashier to make payment to
that person.

Kinds of Cheque:-

There are three kinds of cheque.

i. Bearer Cheque

ii. Orders Cheque

iii. Crossed Cheque

i. Bearer Cheque:-

It is one on which the bearer is written after the name of the payee. It is payable to
the bearer/holder i.e. anyone who may present it at the bank. The bank is under no
ascertained that the payment is made to the right person.

ii. Order Cheque:-

It is cheque made payable to a certain person. It is the cheque on which the order is
written after the name of the payee. If a cheque is made payable to a certain person
without the addition of the word bearer or order thereto, it is regarded as an order cheque.
Only endorsement and delivery can transfer it.

iii. Crossed cheque:-

When two parallel lines are drawn across the face of a cheque, it cannot be encashed at the
counter. It is only debited or credited through collection in the bank.

Loose Cheque:-
If any customer forgets or leaves his cheque book at his home which is far away from the bank or
whatever the case may be, the customer applies to the bank for the issuance of loose cheque as he
does not have his cheque book with him and the money is urgently required, then this cheque is
called loose cheque. Bank keeps the cheque book labelled as loosed and issues a loose cheque to
the customer. The cheque is issued on written requisition.

If a Cheque Book is lost:-

 If the cheque book is lost by the customer, he should immediately contact to the bank and inform
the bank about the lost cheque book. All the lost cheques are canceled by the bank and entered
into the cheque stop report. A new cheque book is issued after the instructions through proper
channel.
Letter of Thanks
I to customer
II To Introducer
I. To Customer
When a new customer has opened his account in the bank, the bank writes a letter of thanks for
account opening and posts it to the customer.

Introduction of the bank:-

CURRENT ACCOUNT:

Non interest bearing checking account.

Minimum account opening requirement of Rs. 5000 only.
No restriction on number of withdrawals and on number of deposits

PLS SAVINGS ACCOUNT:

Profit & Loss Sharing Saving Bank Account.

Minimum account opening requirement of Rs. 5,000 only.

No restriction on number of withdrawals and number of deposits.

Profit on saving accounts is credited to the customer account on half-yearly basis.

PLS TDR A/C from 3 months to 5 years with different profit rates.

BASIC BANKING ACCOUNT:

Initial deposit for account opening is Rs. 500 with no minimum balance requirement.

Non interest bearing checking account.

Maximum 2 deposits & 2 withdrawals through cheque is allowed.

Most branches of Punjab corporative Bank offer lockers for lease, in a variety of sizes at very competitive
rentals. Locker facility is available to all customers maintaining minimum balance requirements in their
respective account categories. Lockers are placed in a secure environment with pleasant custodians to
assist customers.

Lockers rents are as under:

Size of Lockers Annual Rent Key Deposit Breaking Charges

Small Rs.1000/- Equivalent to two Actual or Rs.2,000/-
Medium Rs.1200/- Years Rent for whichever is higher
Large Rs.2000/- Respective Locker
Extra Large Rs.3000/-

Business related Rent Free Locker Facility may be allowed to the following CD A/C Holders.

1. An A/c Holder maintaining Min. Credit balance of Rs.0.3 M for the last one quarter - Small Locker

2. An A/c Holder maintaining Min. Credit balance of Rs.0.5 M for the last one quarter - Medium Locker

3. An A/c Holder maintaining Min. Credit balance of Rs.1.0 M for the last one quarter - Large Locker
Subject to availability in the branch where the A/c is maintained. Key Deposit and breaking charges to be
recovered provided however, that A/c holder is not availing

Trade Finane:-

Product and services:

COOPERATIVE LOANS:-

• Agricultural Production
• Development Loans
• Pledge of Gold for Agriculture
• Information Technology
• Livestock Micro-Financing
• Livestock Project Financing
• DSCs / SSCs for Agriculture Purposes
• Women Cooperative Societies
• Auto Financing
• Other Schemes

STAFF LOANS:-

• Home Loan (For Staff Only)

• Car/MotorCycle Loan (For Staff Only)
Agricultural Production Loans (Short Term):-

• It was being disbursed on the funding of State Bank of Pakistan (SBP) and on the guarantee of
Government of Punjab. The SBP was sanctioning an annual credit line to be remunerated on GOP
T-bills rate. For the financial year 2007-08, SBP has not sanctioned annual credit line of
Rs.8,000 million due to which we are accommodating the small farmers from our own sources.
The current lending rate is 16% p.a.17% in case of default

• The loaning is being made as under:

• The loaning facility provided for sowing of Rabi (Oct –Jan) and Kharif (April- June) crops for a
period ranging from 8 to 10 months.
• Society to be registered under Section 10 of the Cooperative Societies Act, 1925 by the
Cooperatives Department.
• Maximum Credit Limit of the Society to be fixed by the Cooperatives Department as per Rule 7
& 8 and approved by the Bank.
• Society to submit credit demand statement of its members along with other loan documents
(Demand Promissory Note, Agreement, Audit Note, etc.) duly recommended by Field Staff of the
Cooperative Department, with the affiliated Branch of the Bank.
• Loan documents of the Society scrutinized by the Branch Manager and advance disbursed after
getting signatures or thumb impressions of the Managing Committee in person before him.
• Resolution of the Society for obtaining crop loan to be recommended by the Cooperatives Field
Staff.
• Credit Demand Statement.
• Managing Committee list bearing attested signatures.
• Land Ownership Certificate of Managing Committee issued by the Inspector, Coop: Societies to
be got verified from the Revenue Deptt: after every 3-years.
• Resolution regarding Custodian of Society Books.
• Latest Audit Note of the Society.
• Loan Agreement between the Bank and Society.
• Demand Promissory Note.
• Financing facility provided 100% in cash as per policy and convenience of the Borrower to get
inputs of his choice from the Market.
 • The society in its turn disburses loan to its members as per their demand statement and submits
credit disbursement statement within 7-days to the concerned Branch for end-use verification of
Coop: Department and Bank Officers.
• The society required to clear the loan with mark-up accrued thereon after two months of the
harvest of crop to become eligible for next crop loaning.

Development Loans for Members for Purchase of Tractors,Etc

(Medium Term):-

This was earlier granted on the funding of Federal Bank for Cooperatives (under liquidation) and thereafter
from SBP funding and now from own resoruces. The salient features / procedure of the finance are as under:
-

For purchase of Agricultural Implements (Tractor-Actual Price, Thrashers. 150000/-, Rotavetor, Rs.70,000,
Discherro,50000,Trolley, Rs.100000/- , Meat & Milch Cattle, Livestock and for installation of Tube
well/Turbine.

Period of Finance upto 5 years repayable in half yearly instalments with Mark-up @ 18% p.a in case of
defualt 20% p.a.

Loaning provided to a Member through respective affiliated registered Cooperative Society on fixation of
Special MCL for the purpose by the Coop: Department duly approved by the Bank Management as well as
special MCL fixed by the society itself for incurring outside liability upto a maximum of Rs.5.00 lacs.

Borrowing member required to deposit margin money @ 20% of the loan demand, with the Bank.

Loan advanced against Security of immovable property / agri. Land having value double the amount of loan
demand either through registered Mortgage Deed or Aarh Rehan or Agri. Pass Book System under the Law
of Land.Minumum Security 40 Kanals of AgriLandd irrigation or 100 kanals of barrani Land.
Complete Loan Documents with quotations, on the choice of Borrower, to be provided with the Loan
Application duly recommended by the field staff of the Coop: Department.

Sanction of loan Branch Level and after having CIB Report from the SBP.

Loan cases to be processed and finalized within 15 days.

Delivery of Tractor through Local Dealer approved by the company and for implements, etc., Issuance of
Pay Order in favour of the supplier.

Tractor/implements required to be got comprehensively insured from any of the approved Insurance
Company on the panal of Bank for the five year at time of issuance of finance and delivery of tractor.

For the convenience of small farmers a Booklet (in “Urdu”) containing Procedure and relevant loan
documents available in all Branches.

MTF for members of Cooperative Societies up tp Rs.20,00,000/- @ Rs.5,00,000 per borrower under
General Permission of MCL of RCS for a period of 5 years repayable in 10 equal installments against 5
acre per borrower.
Development Loans for non-member Agriculturists:

On the emphasis of Government of Punjab for liberal financing towards agricultural sector, PPCBL
introduced this scheme for individuals (non-members). The salient features are: -

Admissible to Individual farmer for purchase of Farm Machinery, viz. Tractor, Tubewell, Thresher,
Trolley, etc. and Transport for carriage from farm to market (agri. purpose).

Net amount of finance upto actual cost of Tractor @ 18%.

Equity participation – minimum 10%.

Period of Finance upto 5 years.

Repayable in quarterly or half yearly instalments, as per choice of borrower.

Security through Agricultural Pass Book system or registered mortgage of immoveable property (rural or
urban). Minmum Security 40 Kanals
Disbursement within 15-days.

Loans against Pledge of Gold/Gold Ornaments for Agriculture

Purposes (Short Term):-

On the directions of SBP, the Bank is providing micro-financing facility against pledge of Gold / Gold
Ornaments preferably for agricultural purposes to non-members individuals on easy terms. The salient
features are: -

Loaning facility provided for agricultural/personal needs/ purposes to any Individual against pledge of
Gold/Gold Ornaments upto 60% of the value duly assessed by the registered Shroof/Goldsmith.

Period of advance is upto 6 months at mark-up rate of 16%. Mark-up payable at the end of each half year.

Branch Manager and Acro (Credit Commitee) has a sanctioning power upto Rs.30,000/-,
Comperehensive Insurance of Net Value of Gold from any of the approved insurance company on the
panel of the Bank

INFORMATION TECHNOLOGY LOAN:-

As per directives of the State Bank of Pakistan, the Bank is extending micro-financing for Promotion of
Information Technology.
The salient features are:

Citizen of Pakistan & resident of Punjab and permanent employee of Govt. Departments / Organizations
(selected).

Period of finance up to three years.

Limit of finance up to Rs.25,000/- @ 16% p.a.

Repayable in 36 equal monthly installments

Sanction of Fianance by the Branch Manager

Livestock Micro-Financing for Purchase of Meat & Milk Cattle and

Goat & Sheep (Short Term):-

Live Stock Revoling Credit to Societies (Revolving Credit)

The net maximum amount of finance Rs.8,00,000/- per society and Rs.1,00,000/- per borrower.
Margin money 10% of the purchase price of cattle.
Period of finance three years @ mark-up of 13% p.a.
One time documentation for three years.
The society/beneficiary entitled for any number of withdrawals and repayments (multiple operation),
within the limit during three years with annual clean up from the date of first withdrawal, on a date
mutually settled.

Individuals:-
The Net Maximum amount of finance Goat Sheep & Cattle Rs. 200,00/- per borrower of two acres
security , in case of one acre Rs.100,000/-
Peroid of finance one year
Mark up Rate: 15.80%
Repayment in half yearly or quarterly equeal installments or culture and with in the one year as per choice
of borrower in case of Meat and Milch Cattle.
The Security double the value of net finance either in the shape of agriculture land through Agriculture
Pass Book System or Urban property through registered mortgage. However, the borrowers of rural areas
must be the owner of 1-2 acres of agriculture land.
Case processing fee Rs 500/-

Live Stock Project Finance (Short Term):-

• During the 2004 the Bank signed a Memorandum of Understanding with Livestock &
Dairy Development Department, Government of Punjab in presence of the Chief
Minister, Punjab. The scheme aims at extending loans to farmers for the development of
Livestock and Dairy Development Projects in the Punjab. Under this arrangement,
District Officer (Livestock) would act as Focal Person who would not only provide
feasibilities free of cost but would also provide animal health coverage before and after
the implementation of the project. Both members of cooperative societies and individuals
can borrow funds from this scheme for specified projects.

• The salient features of this product are: -

• Cooperative Societies
• Net amount of finance, Rs.5 laks per borrower – 8 members can avail loan.
• Margin money 10%.
• Period of finance 5 years, recoverable in 10 equal half yearly installments including
mark-up accrued thereon.
• Rate of mark-up 13%.
• Case processing fee Rs.1,000/-.
• Security of loan at least double the value of net finance in shape of agriculture land not
less than 5 acre per borrower through Agriculture Pass Book system or urban property
through registered mortgage.
• Individuals
• Maximum amount Rs.5 Laks in case of group of persons Rs.10.00 laks.
 • Margin money 20%.
• Period of finance 5 years, recoverable in 10 equal half yearly installments including
mark-up accrued thereon.
• Rate of mark-up 13%.
• Case processing fee Rs.1,000/-.
• Minim agriculture land requirement 5 acre per borrower valuing double the amount of
loan. In case security not sufficient, borrower can give urban property. In case of blood
relation , accumulate land of 5 acres of two borrowers is acceptable.

LOANS AGAINST DSCs / SSCs:-

The salient features are: -

• Finance limit – Rs.1.00 lac.

• Mark-up rate – 16% p.a.

• Repayment period – 1 year.

• Security – lien mark on DSCs / SSCs.

• Net Finance up-to 75% of face value of DSCs/SSCs.

WOMEN COOPERATIVE SOCIETIES LOAN:-

For the sake of supplementing the income of women for their economic uplift and
Poverty alleviation, a new scheme has been recently launched.

The salient features of the policy are:

Finance limit – Rs.2.00 laks.

Mark-up rate – 11%.

Repayment period – 3 years with 6 months grace period.

Security – mortgage of property rural or Urban

AUTO FINANCING LOAN:-

Auto Financing (Medium / Long Term)

This is the latest financial product.

The salient features are:

Eligibility criteria – Permanent Govt. of Punjab employees and Autonomous Bodies and
Financial Institutions having good rating in BPS-16 & above or equivalent & above.

Finance limit – Rs.4 to 9 lacs as per entitlement at mark-up rate of 12%.

Margin requirement – 10% of the value of vehicle.

Repayment period – 5 years through monthly installments.

Security – joint registration of vehicle and lien mark on funds

Rate of Markup 14% P.a

LOANS FOR OTHER SCHEMES:-

The Bank is also providing loans to Non-Agricultural / Industrial Societies, the biggest venture in
industrial loaning is the Pakistan Cycle Industrial Cooperative Society Ltd., the manufacturer of
Rustam & Sohrab Cycle / Motorcycle.

. Eligibility
You may apply for PPCBL Home Loan.

If you are a Pakistani National.

If your age is between 23 and 60 years at the time of application. (Subject to maximum age of 65 at
the time of maturity).

If you are in continuous employment in a permanent position for the last 2 years or more.
OR
If you have existing 3 years (or more) of business or professional experience.

If your gross annual income is Rs: 240,000/ — or more [Your spouse’s income (up to 50%) can also
be combined with yours].

If you require a financing requirement starting from at least Rs: 500,000/-

You may apply for PPCBL Home loan for a minimum period of 3 years and a maximum
repayment 20 years. (conditions applied)

Salaried Persons

• Maximum 48 times monthly gross income

• Latest salary certificate
• Certificate from the employer regarding leftover service
• Estimates and other related approved documents
• 30% take home pay.

Housing Loans for Business & Self-employed persons

• 4 times the gross annual income

• Income Tax Returns
• Auditor Certificate
• Estimates and other related approved documents

2. Documents
Basic Documents:

• 2 recent passport size photographs.

• Copy of Computerized National Identity Card. (Original to be shown at branch)

• Copies of complete chain of title documents of the property being offered (If identified)

• Processing Fee Cheque favoring by PPCBL.

 • Letter of Understanding.

Benefit & Features:-

• Hassle-free processing
• Personalized service
• Low Down payment (as low as 10%)
• Flexible tenors - up to 5 years
• Competitive Insurance rates
• Advance Booking Facility
• Early Settlement Option (Nominal Charges apply)
• Co-Borrower Facility
• No hidden charges
• Lowest down payment in town.

At PPCBL we believe in sharing the joy of our customers by giving them benefits,
which are aimed at making customer’s car buying experience an exciting event.

Our highly trained executives will take care of your financing requirements.
The only thing you need to worry about is choosing the car and its colour.

2. Eligibility:-

You may apply for PPCBL Car Loan to purchase a brand new car:
 • Pakistani National Identity Card holder.
• Over 20 years of age (Maximum 60 years in case of salaried.
• Salaried , of Punjab Govt. Employees.

3. Documents:-
• 2 recent passport size photographs.
• Copy of Computerized National Identity Card.
• Last six months bank statement
• Most recent Salary Slip/ Copy of Registration with respective body (if applicable)
• NTN certificate (in case of advance payments).
• Salary certificate (for salaried individual).
• Co-borrower’s NIC copy (if the car is to be in the name of the co-borrower
 Financial analysis of organization:
Balance Sheet
INCOME STATEMENT
Assets 2008 2007
Cash and balances with treasury banks 10,685,057 14,210,302
Balances with other banks 2,178,455 1,927,662
Lendings to financial institutions 633,333 2,450,000
Investments 22,711,980 73,461,695
Advances 131,731,158 133,893,585
Operating fixed assets 3,471,838 3,252,759
Deferred tax assets 8,388,162 -
Other assets 6,109,137 5,805,097

185,909,120 235,001,100

Liabilities

Bills payable 1,219,801 937,647

Borrowings 12,278,773 17,842,915
Deposits and other accounts 164,072,532 191,968,909
Sub-ordinated loans -- -
Liabilities against assets subject to finance lease 30,632 40,321
Deferred tax liabilities - 2,205,530
Other liabilities 4,564,257 3,009,984
182,165,995 216,005,306

Net Assets 3,743,125 18,995,794

Represented By
5,287,974 4,230,379

Reserves 7,427,232 7,427,232

(Accumulated loss) / Un-appropriated profit 3,452,842

5,056,520 15,110,453

(Deficit) / Surplus on revaluation of assets - net (1,313,395) 3,885,341

3,743,125 18,995,794

Contingencies and Commitments

2008 2007
(Rupees in ‘000)

Mark-up/return/interest expensed 16,614,000 13,939,377

Net mark-up/ interest income 1,138,969 3,599,717
Provision against non-performing loans and advances 18,863,580 1,616,421
Provision for diminution in the value of investments 366,387 24,479
 Bad debts written off directly - 246,869
19,229,967 1,887,769
Net mark-up/ interest income after provisions (18,090,998) 1,711,948
Non Mark-up/interest Income
Fee, commission and brokerage income 577,630 653,512
Dividend income 2,020,896 1,804,878
Income from dealing in foreign currencies 324,328 377,233
Gain on sale and redemption of securities 733,787 2,039,535
Unrealized gain / (Loss) on revaluation of investments
- -

Other income 526,185 547,635

Total non-markup/interest income 4,182,826 5,422,793
(13,908,172) 7,134,741
Non Mark-up/interest Expenses
Administrative expenses 2,799,933 2,250,777
Provision against other assets 10,101 -
Provision against off balance sheet items - 292
Other charges 114,700 37,950
Total non-markup/interest expenses 2,924,734 2,289,019
(16,832,906) 4,845,722
Extra ordinary/unusual items - -
(Loss) / Profit Before Taxation (16,832,906) 4,845,722

Taxation – Current 207,600 169,252

- Prior years 1,052,000 (19,921)
- Deferred (8,033,001) 250,772
(6,773,401) 400,103
(Loss) / Profit After Taxation (10,059,505) 4,445,619
Unappropriated profit brought forward 3,452,842 3,219,246
Transfer from surplus on revaluation of fixed assets - net of tax 5,572 5,866
3,458,414 3,225,112
(Accumulated loss) / profit available for appropriation (6,601,091) 7,670,731

Basic (loss) / earnings per share (after tax) - Rupees (19.02) 8.41
Diluted (loss) / earnings per share (after tax) - Rupees (19.02) 8.41

FINANCIAL BUSINESS SUMMARY

2004 2005 2006 2007

 2008

Operating Results

Markup/ return/ interest earned Rs in m 2,555 6,125 11,579 17,539 17,753

Markup/ return/ interest expenses Rs in m 719 2,669 7,509 13,939 16,614

Net markup income Rs in m 1,836 3,456 4,070 3,600 1,139

Non-markup based Income Rs in m 1,097 1,331 2,954 5,423 4,183

Non-markup based expenses Rs in m 1,150 1,291 1,882 2,289 2,925

Provision against NPLs Rs in m 47 331 374 1,888 18,864

Net profit before tax Rs in m 1,736 3,165 4,769 4,846 (16,833)

Net profit after tax Rs in m 1,368 2,353 3,804 4,446 (10,060)

Balance Sheet

Total Assets Rs in m 66,320 111,154 164,855 234,974 185,909

Advances (net) Rs in m 39,439 63,624 101,320 133,894 131,731

Investments Rs in m 16,198 18,026 28,233 73,462 22,712

Shareholders Equity Rs in m 4,420 6,777 10,659 15,110 5,057

Revaluation Reserve Rs in m 3,419 6,893 5,467 3,885 (1,313)

Deposits Rs in m 54,724 88,465 137,728 191,969 164,073

Borrowings from FIs Rs in m 2,832 6,791 6,989 17,843 12,279

RATIO ANALYSIS:

Ratio analysis is used to calculate the profitability, liquidity/leverage etc. of the firm. From ratio
analysis it is possible to predict future variances.
Following ratios of PPCBL has been calculated:

Ratios 2004 2005 2006 2007 2008

Gross spread ratio % 72 56 35 21 6.42

Profit before tax to total income % 59.19 66.11 67.89 53.71 (316.29)

Markup/ Interest cover ratio times 5.08 2.79 1.94 1.65 1.32

Profit after tax to total income % 46.65 49.16 54.16 49.27 (189.03)

Total assets turnover times 0.06 0.07 0.09 0.1 0.12

Return on avg total assets (after

tax) % 2.49 2.65 2.76 2.22 (0.05)

Price earning ratio times 7.25 10.23 7.71 9.31 (0.60)

EPS (Non dilutive) Rs./share 9.08 10.01 13.14 10.51 (19.02)

Dividend per share Rs./share 4 5.2 3.25 3.5 -

Market value per share Rs./share 65.9 102.45 101.25 97.8 11.50

Capital adequacy Ratio % 12.83 12.78 10.09 9.69 1.92

GROSS SPREAD RATIO

Gross spread ratio defines the total spread of interest between borrowing and
lending.Spread: Difference between funded revenue as a percentage of average earning assets
and the cost of funds as a percentage of average paying funds.
The higher the spread the higher will be the profit margin.
GSR= Rev/CGS
GSR= (Mark-up earned – Mark-up Expense)/Mark-up earned
GSR is 2nd highest all over the globe in Pakistan.
GSR of the bank is decreasing because of the decrease in margin, a SBP rise up the interest rates
on the deposits.

80
70 72

60
56
50
40 %
35
30
20 21
10
6.42
0
2004 2005 2006 2007 2008

PROFIT BEFORE TAX TO TOTAL INCOME

 Operating income less operating cost (profit before tax).
This ratio tells what percent of total income is earned before paying all the taxes.
PPCBL has a high value of profit before tax to total income and they are decreasing after 2006
because of increase in admin expenses and righting off the bad debts.
The main reasons for reduction in the profitability were additional provision against NPL due to
the elimination of benefit of FSV and downturn in consumer and individual banking

100
59.19 66.11 67.89 53.71
50
0
-50 2004 2005 2006 2007 2008
-100
%
-150
-200
-250
-300
-316.29
-350

INTEREST COVERAGE RATIO

MP/Interest cover ratio= EBIT/Mark-up

This ratio tells what percent of interest is covered from the total income of a firm or a bank.It
tells the ability of a bank to pay its mark-up to the depositors..
 times

5 5.08

3 2.79 times

2 1.94
1.65
1.32
1

0
2004 2005 2006 2007 2008

PROFIT AFTER TAX TO TOTAL INCOME

This ratio analysis tells profitability of a firm after paying all the taxes to total income.
Profitability of PPCBL is increased because of decrease in the tax paid to the govt and of high
spread ratio.
PPCBL negotiated their taxes with the government and only paid 20% tax in 2006 and only 8%
in 2007 instead of 35%
 %

100

50 46.65 49.16 54.16 49.27

0
2004 2005 2006 2007 2008
-50
%
-100

-150

-200 -189.03

-250

TOTAL ASSET TURNOVER

Asset turnover= Net Income/ Total assets
This ratio tells the turnover of the asset to generate income.
This ratio is increased during last few years which represent increase in the turnover by assets.
times

0.14
0.12 0.12
0.1 0.1
0.09
0.08
0.07 tim es
0.06 0.06
0.04

0.02
0
2004 2005 2006 2007 2008

RETURN ON TOTAL ASSET

This ratio gives an idea of returning net profit generated by the bank in comparison with
assets.
Return on assets= Profit after tax / Total Assets
This ratio is decreasing in the last year because of decrease in Profit as expenses raised up.The
decrease was mainly due to increased equity as a result of increase in minimum capital
requirements and additional provision due to withdrawal of benefit of FSV for most types of
advances.

3
2.65 2.76
2.5 2.49
2.22
2

1.5
%
1

0.5

0 -0.05
2004 2005 2006 2007 2008
-0.5

PRICE EARNING RATIO

Price Earning Ratio= Market price of a share/ EPS
From this ratio it is analyzed what % of EPS is the part of MPS. What percent earned from a
share equivalent to the worth of 1 RS MPS by the bank or a firm

times

12

10 10.23
9.31
8 7.71
7.25
6
times
4

0
-0.6
2004 2005 2006 2007 2008
-2

EARNING PER SHARE

EPS = Net Income/ total shares
Through this ratio it can be analyzed what percent of 1RS share is earned.
 120

100 102.45 101.25 97.8

80
65.9
60
EPS
40 DIVIDENT
VALUE
20
9.08 10.01 13.14 10.51 11.5
4 5.2 3.25 3.5
0 0
2004 2005 2006 2007 2008
-20 -19.02

-40

CAPITAL ADEQUACY RATIO

Capital adequacy ratio informs lending up to a certain ratio of equity.
This ratio is set by the State Bank of Pakistan.

C.A

14
12.83 12.78
12
10 10.09 9.69
8
C.A
6
4
2 1.92
0
2004 2005 2006 2007 2008
SWOT Analysis (Introduction)

SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats SWOT
analysis is careful evaluation of an organization’s internal strengths and weakness as well as its
environment opportunities and threats. “SWOT analysis is a situational which includes strengths,
weaknesses, opportunities and threats that affect organizational performance.”“The overall evaluation of a
company strengths, weaknesses, opportunities and threats is called SWOT analysis.”

In SWOT analysis the best strategies accomplish an organization’s mission by:

1. Exploiting an organizations opportunities and strength.

2. Neutralizing it threats.

3. Avoiding or correcting its weakness.

SWOT analysis is one of the most important steps in formulating strategy using the organization mission
as a context; managers assess internal strengths distinctive competencies and weakness and external
opportunities and threats. The goal is to then develop good strategies and exploit opportunities and
strengths neutralize threats and avoid weaknesses.

i. Strenght

Larger branch Net work in commercial areas.

Strong capital structure.
Public confidence and interact as personal friends.
Experience of Operation.
Good security system.
Easy use of internal computer system.
Easy access to the customer.
 Not excellent but good facilities are given to employeess

ii. Weaknesses

o Poor performance of the workers.

o More products and services but not proper advertisment.
o Biased selection of employees.
o Untrained staff and weak customer handling.
o Favoritism and Nepotism.
o Lack of coordination .
o Unpleasant working enviornement.
o Traditional approach.
o Lack of it infrastrcture and less no of online Branches.

iii. Opportunities
o Net work in foreign countries.
o Leasing Business.
o Gain Econmic of scale.
o E- Banking.

iv. Threats

o Golbalization.
o Increase in competition.
o Political instability in the country .
o Lack of consistency in Government Ploicies.

Conclusion:

At present there is no such organization in the world that is free from problem and challenges. Every
concern has to strive and struggle a lot to be more profitable and to get more competitive edge.

The management of PPCBL is taking strategic steps to enable the bank to emerge as a strong and
progressive institution. It is continuing to make efforts to refine its products and operations to make them
more compatible. New deposit schemes have been introduced and an action plan to maintain revenue
growth in future.

As the business and economic conditions remain uncertain, PPCBL continues to develop the new
products like it has been doing in past.

Recommendations:

Recommendations

After doing internship of two months in PPCB Limited, I have analyzed some problem in the Bank.
Following are my recommendations:

 Web Site:
Punjab provincial cooperative bank limited has the web site, which has not been updated. The web site is
very less informative and it won’t leave a good impression on the visitor. So I suggest that it should be
updated to meet the requirements of the visitors.

 Misdistribution of work:
In Bank of Punjab, there is misdistribution of work; some people are over burdened with the work. So I
suggest that there should be fair distribution of work in all the departments.

 Participative management:
Participative management concept should be adopted, where ideas from the employees should also be
taken, not only for developing products but also on service, efficiency, employee morale etc. in order to
improve them.

 Split Units:
Bank of Punjab is a very well established bank, but the number of air conditioners they have in the whole
bank is very less. Bank should increase the number of its Split units, because summer stays longer in
Lahore.

 Training programs

BOP should introduce more training programs for their employees. It will help less educated and less
experienced staff to grow and be a valuable part of the bank.
Biblography:
www.ppcbl.com.pk

www.google.com

www.yahoo.com
PPCBL makes Rs1.92b recovery
Lahore—Punjab Provincial Cooperation Bank Limited (PPCBL) has made recovery of over Rs 1.92 billion of Rabi Crop 2009-10
till July 12 with the cooperation of Cooperative department. PPCBL sources said the bank is issuing loan of Rs 3 billion for the
Kharif Crop 2010.

Registrar Cooperatives Punjab/ Chairman Bank Board of Director Maqsood Qadir Shah has directed the field staff of the bank
and cooperative department to achieve the target of issuance loan and recovery so that maximum number of farmers could get

benefit from this facility.—APP