The check should not be post-dated/anti-dated. Amount in words and figures tallies. Cash paid stamps (with dates) are duly affixed in case of cash cheques and in case of clearing stamps is affixed. Cutting/over writings are duly authenticated by the account holder, etc. Then another task for me was issuing of cheques books. It is one of the most interesting works that I have learnt in the bank. Cheques books should be issued only after all the formalities of the account opening forms, which have been checked by the branch manager.
Maintaining Dispatch register and Inward Mailing register was also included in duties assigned to me. I also used to help different employees 3 9
in their work. My work timings were from 9am to 5pm, five days in a week.
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the part of government of Pakistan, no heady way could be made on this behalf and reserve bank of India was in no mood to help the new country. Imperial bank of India, agent of the reserve bank of India also started closing down its branches in Pakistan. Reserve bank also refused to advance money to Pakistan to make essential payments such as salaries etc.; also Pakistans share of Rs.75 billion in cash balance was withheld by bank, causing hardships to the newly born state. In view of these hopeless state affairs it was agreed between the two countries that reserve bank would serve as monetary authority in Pakistan only up to 30th June 1948.
To make the credit policy of the commercial banks more purpose full and effective especially in the development of economic sectors of the country. It acts as an agent of the State Bank of Pakistan.
To make the best use of the funds available at the disposal of these banks for the economic development of the country.
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To development strong money banks market in the country so that the value of currency may be maintained at stable level both in national facilities to exporter and agriculturists which have not been satisfactory in the past years.
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.
Recognition and Reward For the talented and high performing employees. Excellence In everything we do. Integrity In all our dealings. Respect For our customers and each other.
2006
66,320 111,154
Revenue RS (M)
3,675
5,488
10,912 3 9
18,603
11,458
16,198
18,026
34,938
54,724
88,465
18,344
39,439
63,624
831
1,368
6.86
9.08
Over last five years, Pakistan economy grown with real pace, Because of which there is record growth in banking sector.
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3. FIXED OR TERMS ACCOUNT Fixed accounts are those which are deposited for a fixed period of time and repayable after the expiry of stipulated time to the customer. Those people who have surplus funds and want to have save investment deposit the amount in the fixed account. The rate of interest given to depositor varies with the length of deposit, ie. It is higher for longer period and lower for shorter period. The rate of this type of deposits is higher the saving bank accounts. The cash reserve against this deposit are very low because there no fear of with draw of a month before the stipulated of time.
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Such type of schemes provides farmers a real plate form to accelerate. Some facilities given by Kissan Dost Agricultural finance scheme are: - Purpose Provision of financial facility to farmers for purchase of inputs (Seed, fertilizer, pesticides, fungicides etc). - Amount Maximum of Rs.500000 according to per acre limit of the crop. - Security Charge on Agriculture Land through Agriculture Pass Book. - Insurance The borrower will have to arrange life assurance under the Banks charge. - Mark-up 9% mark-up per Annum. 2. Business Promotion Finance Schemes: BOP Quick Cash BOP Car Loan BOP House Loan BOP SME Loan BOP Assaish Loan BOP House Loan for Federal Govt
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BOP car loan is a demand financing facility to purchase brand new locally manufactured/Assembled cars for personal use. This facility can be availed by salaried person of different nature and by the business persons. All must have the holdings of NIC. 2.2. BOP Aasaish Loan: BOP Aasaish loan is demand finance facility for purchase of consumer durable goods like TV, Refrigerators, Mobiles, Microwave Oven, Fans, Audio/Video system etc with no down payment, in addition with the free home delivery. The financing tenure of this product is max 36 months. The nature of employment should be salaried or the business man.
2.3 SERVICES: These are the services provided by the BOP. ATM Facility Letter of Credit Pay Order On-Line Banking E-Banking Debit Card Consumer Financing Agriculture Financing Corporate Financing Commission free Remittance Demand Drafts Collection of Utility Lockers Facility
Through the ATMs Customers has access to the various services such as withdrawal, balance enquiry and mini statement. Complete security is ensured because access to the account is only possible by entering a four digit personal identification number (PIN) known only to the account holder. Cash withdrawal limit is up to Rs.20, 000 per day. Annual charges of ATM is Rs.250/- per card. 2.3.2. Online Banking: BOP is currently offering window-based online banking to its customers, which gives access to information on their accounts and the liability to act on the latest information received over the net. 2.3.3. Lockers: It is one of the utility services that BOP provides to their customers for keeping jewellery, important documents and other valuables. 2.3.4. Demand Drafts: BOP provides safe, speedy and reliable way to transfer money at vary reasonable rates. Any person whether an account holder of the bank or not, can purchase a Demand Draft from a bank branch. 2.3.5. Letters of Credit: BOP is offering its business customers the widest range of option in the area of money transfer. BOPs letter of credit service is with competitive rates, security, and ease of transaction, BOP Letter of credit is the best way to do the business transactions.
BOP provides transfer of money using different facilities. Its pay orders are a secure and easy way to move the money from one place to another. The charges for this service are extremely competitive. 2.3.7. Mail Transfer: Moves money safely and quickly from BOP Mail Transfer service. The rates for this service is quiet impressive as compare to the market. 2.3.8. Short Term Investment: BOP offers excellent rates of profit on all its short term investment accounts. The packages are starting from 3 months. BOPs rates of profit are extremely attractive, along with the security and service only BOP can provide. 2.3.9. Agricultural Finance: It helps farmers utilize funds efficiently to further develop and achieves better production. Provides farmers an integrated package of credit with supplies of essential inputs, technical knowledge, and supervision of farming. 2.4 Major Customers of BOP: Some of the major customers of Bank of Punjab are: Educational Institutes Agriculturists Pakistan Telecommunication Private Limited WAPDA Pharmaceutical Companies WASA MDA
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3) Organizational Structure
3.1 - Main Offices:
Head Office of BOP is in 10-B, Block E-II, Main Boulevard, Gulberg III, Lahore. The Bank has been divided into seven regions each consisting a number of branches. Lahore Region Faisialabad Region Gujranwala Region Rawalpindi Region Karachi/Quetta Region Multan Region Peshawar Region Rest are the branches working under these regions. Which are almost 270 in all over Pakistan.
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Corporate sector is one of the major sources of funds in all types of Banking. All major organisations, financial institutions and government & private organisations are the major sources of the funds e.g., WAPDA.
assets, animals, crops and life assurance of borrowers are all source of money for the bank.
4.4.4: E-Banking:
The bank has a centralized database that is web-enabled. All the services that the bank has permitted on the internet are displayed in menu. Any service can be selected and further interaction is dictated by the nature of service.
4.4.6: Lockers:
Commission charged on lockers provided by bank for customers is also a source of inflow for the bank.
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5) SWOT Analyses
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats. SWOT analysis is careful evaluation of an organizations 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. In SWOT analysis the best strategies accomplish an organizations 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.
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5.1 - STRENGTHS:
The Bank officers of BOP are considered as one of the most able professionals in the banking world. However, they have added some local flavour in accordance with their targeted segmented. In my observation that they interact with their clients as if they are their personal friends and discuss about their problems as their own. As a result of the compassionate and personalized services of the officers, the clients perception for BOP is very high. They have trust and feel themselves to be secure while dealing with BOP. BOP has opened all its branches at commercial areas so that the customers or clients face no problems in reaching to the bank. For example, McLeod Road Branch is being situated in business and commercial hub of Lahore as big volume in trade. BOP has got a reliable and easy to use internal computer system. Every information regarding the transactions in customers deposits has been computerized. Data are properly maintained. Good security system Not excellent but good facilities are given to employees 3 9
5.2 - WEAKNESSES:
Lack of proper internal controls is one of the major weaknesses of BOP. It is also pointed by the auditor in his review. BOP has formulized a lot of products and services for its customers, even more than other commercial banks, but any advertisement on electronic media has not been seen. I observed during my internship that some of the employees were burdened with over work. So I think that the work should be distributed according to their post and capabilities.
5.3 - OPPORTUNITIES:
Satisfy dynamic consumer needs, BOP has made significant inroads in its entire service spectrum. A lot of products have been introduced especially in Retail Banking (Agriculture side) and people are increasingly becoming loyal to the bank and because of feasible transactions. Optimum pricing and branding strategies of the bank are helping to make customer feel secure and convenient. All the opportunities of the 21st century are to be availed in the information technology. Information technology is the future of this dynamic world. Therefore BOP should emphasize much on IT, especially on E-Banking. Bank can design a universal account like other foreign banks, to enhance online facilities. BOP has introduced a number of financial schemes including special Deposit Accounts. These accounts have their unique features. During the last three years, BOP deposits have been increasing @ 40%, which is a very healthy sign. 3 9
Therefore, with the commencement of new schemes there can even be a greater increase in its deposits.
5.4 THREATS:
Despite the difficult circumstances that confronted the banking sector in particular and the country in general, BOP has been still highly profitable. But, the facts cant be denied and there might be an adverse impact of such situation. BOP is facing a strong competition by its competitors, Business of all the Banks is growing at a very high pace.
6) Internship Activities:
6.1 - ACCOUNT OPENING DEPARTMENT:
In account opening department I worked with Mr. Farid. He was very cooperative person. He guided me and helps me learning things very quickly. I also completed the account opening forms of customers in all aspects including stamping, verification of documents and filing of forms sequentially. This helped me a lot in understanding all the matters related to account opening. I also checked and verified all the account opening forms with the help of check list provided to me by Mr. Farid. I also worked with Mr. Haroon in account opening. He issues cheque books to customers after fulfilling all the requirements. This also made me learn how to issue cheque books and all related matters. 3 9
Following Six categories of Account Opening are facilitated in The Bank of Punjab as:
Individual Joint Sole Proprietorship Partnership Private Limited Company Public limited Company
In the next segment the documents necessary for opening the account are illustrated:
Individual Account:
Signature vary on AOF and CNIC Change in Address as per CNIC and AOF Having business card only as a proof of business
Joint Account:
Mandate is signed from both the partners that either single account holder will operate the account or both collectively.
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Sole Proprietorship:
CNIC Copy Account Opening Request On Letter Head Sole Proprietorship Declaration On Letter Head Photocopy Of NTN Certificate
Partnership:
Copies Of CNICs Of All Partners Account Opening Request Letter On Firms Letter Head Partnership Deed (Certified Copy) Acknowledgement Of Registration Of Firm(Copy) Copy Of NTN Certificate Letter Of Authority & Mandate
Limited Company:
Copy Of Certificate Of Incorporation Copy Of Certificate Of Commencement Of Business(For Public Company Only) Memorandum & Article Of Association Copies Of CNICs Of All Directors/Signatories Board Resolution List Of Directors Latest Copy Of Certified Form-29
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Cheques may be returned due to the following reasons and charges are deducted only when the reason is insufficient funds.
Insufficient Funds Post Dated Cheque Nothing Is Written In Pay Section Of Cheque Cheque Payment Is Stopped By The Drawer Difference In Figure & Word Amount
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Difference In Signature As Compare To Signature Specimen Card (SS Card) Absence Of Clearing Stamp\Bank Stamp Cheque Is Stale Cheque Is Mutilated Alteration In Date, Figure And Amount Require Full Signature Dormant Account Etc.
Charges Deduction Entry: Entry is passed only if cheque is returned because of insufficient funds:
A cheque return memo is attached with returned cheques and packed in a bundle cover provided by NIFT. In this way inward clearing is completed.
Outward Clearing: Outward clearing means payments received by the Bank of Punjab on behalf of their customers from other banks through NIFT. Next working day clearing stamp is posted on the face of the cheque and if cheque is 3 9
cleared, amount is credited to customers account next working day otherwise amount that is in pipeline is reversed.
On Outward Return:
RTGS__________ Credit
RTGS__________ Debit
*RTGS stands for (Real Time Gross Settlement) Any shortage or surplus is settled at Head Offices of the two respective banks. Outward Bills for Collection (OBC): Cheques that are sent for clearing on locations where NIFT services are not available are OBC clearing. There are two cases in OBC:
1) When The Bank of Punjab has a branch in that Area:
In this case the receiving branch of The Bank of Punjab will send cheque to destination bank through local clearing and will credit NOSTRO account of sending branch of The Bank of 3 9
Punjab and Sending branch will debit NOSTRO account of receiving The Bank of Punjab branch.
*Sending Branch (The Bank of Punjab e.g. Lahore) *Receiving Branch (The Bank of Punjab in other city/location) *Destination Bank (On whom Cheque is drawn other than The Bank of Punjab)
In that case cheque is sent through normal mail and it will take approximately five days to clear the cheque.
The bank on which cheque is drawn for OBC makes a DD(Demand Draft) and sends it to The Bank of Punjab respective branch that is sent again through normal clearing for clearance. 3 9
Charges are deducted from customer account. Two copies of pay order are made; one after customer signature is kept by the bank while other copy is given to the customer for his record. Acknowledgement for issuance of pay order is also taken on P.O. Issuance Register. Payment of Pay Order: As pay order of The Bank of Punjab is universally accepted so payment can be made by any branch. When it is presented to any bank other than BOP it is sent for clearing by NIFT. After clearing payment is made to the party in whose favor pay order is issued by that bank. On payment of pay order following entry is passed. Payment Instructions Other__________ Debit Account Holder__________ Credit
Suspense Account__________ Credit Cancellation of Pay Order: When the customer wants to cancel the pay order, the bank will not cancel the pay order until it is realized by the party in whose favor it is issued. Realized stamp will be posted by the party in whose favor pay order issued on back of pay order. On cancellation of pay order following entry will be passed.
Payments to TCS Service: Bank makes payment to TCS (pvt) limited courier services through pay order. In that case payment is realized only if it is presented in the bank by authorized representative of respective companies. Following adjustments are made in the system:
Call Deposit Receipt (CDR): CDR (Call Deposit Receipt) is same like pay order the only difference is: It is presented to the same branch that has issued it It is presentable within the city only Instead of writing pay to on instrument like pay order, received from is written
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Cash Payment: In order to withdraw the cash, customer needs to properly fill the cheque and present it to cash counter for encashment. Cashier after due verification will honor the cheque. Cheque (Debit Instrument): A cheque requires following information from customer that is: 3 9
Cheque Date Party To Whom Pay (Open Cheque, Order Cheque, General Crossing, Restricted Crossing) Amount In Words & Figure Should Be Same Customer Signature Should Match With SS Card Business Stamp In Case Of Business Account With Authorized Signature
7) Recommendations
7.1 - Internal Controls:
To me the major and the most important flaw in the BOP is lack of internal controls and inter communication between different branches of the bank. As far as financial aspect is concerned no proper system is configured thats why there is always a risk of big frauds with in the bank. I during my internship also pointed out that point but no one bothered. To me the bank should install some proper resource planning and controlling systems like other banks do i.e., oracle financials etc.
7.4 - Transfer:
Transfer is not properly carried out. Some of the employees are continually serving at the same post. They are simply rotated at the same branch. Therefore it is recommended that evenly rotation of every employee should take place after every three years in different branches of the bank.
There should not be any abrupt policies change by the upper management, as this practice hurts the customer confidences in the bank. Government should make long-term policies.
Not only it will be economical but will also reduce the extra burden of work of the bank. It will also help in reducing the use of excessive paper work.
organization level, they should arrange the seminar with in the bank and outside the bank. They should introduce various prizing schemes just like Allied Bank. Karamad Scheme, Bank Al-Fallah (monthly income earning scheme) and various others. They should do more advertising through newspaper and media and through channel of personal contacts.
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The staff members who have done all the paper work of the loan extension should perform the monitoring, as he/she will be having more information about the borrower.
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The securities for the loans are handled in the same way as theory says like mortgage, pledge, hypothecation, advances against insurance policies or liquidation procedure is the same. The difference is there in the case of loans. Theory talks about four or five terms of loans that is cash finance, overdraft, loans etc., but in practice there are some more terms used like running finance, demand finance etc. All other concepts of remittances, bills, foreign exchange deposits, letters of credit are in accordance with theory almost. So for an internee it is more important to learn new things which he/she has never heard about in his/her course book. To me, Theory gives you the direction to understand the processes and the terminologies going across the World using best business practices in a broader view covering each and every aspect of possible business scenarios. On the contrary practical life is specific, enclosed in a jar.
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In practical, professionalism and firms environment is each and every thing. Professional life only builds on the knowledge based on books even though it may only use 1% of the theoretical knowledge.
8.3 Conclusions:
By analysing the financial statements of the bank, I came across to know that it is one of the most growing bank in Pakistan. Now they should carry on with the present management which took it from one of the ordinary bank to this level. No doubt professionalism and internal controls of the bank are one of the major issues which may results some major losses to the bank.
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