EXECUTIVE SUMMARY

Bankers mean a person transacting the business of accepting money for the purpose of lending or
investment, of deposits of money from the public, repayable on demand or other wise and
withdraw able by cheques, drafts or otherwise and includes any Post Office Saving banks. Bank
play with the money of other peoples by taking money from people at lower interest rate and
lending it to investors at a higher rate of interest and the difference between these two interest
rates are the bank profit.

Bank of Khyber maintains its position as Pakistan's premier bank determined to set higher
standards of achievements. It is the major business partner for the Government of Pakistan with
special emphasis on fostering Pakistan's economic growth through aggressive and balanced
lending policies, technologically oriented products and services offered through its large network
of branches locally, internationally and representative offices.

The purpose of this report is to analyse the performance activities of The Bank of Khyber
university road branch and BOK overall performance and its financial position and
organizational structure as well. According to my knowledge BOK chain of command is
chairman of BOK is the upper most position and there are many directors under that chairman
then chief executive then five senior executive vice president and this hierarchy is going to end at
non clerical staff.

In this report we analyse different departments of Bank Of Khyber including Cash department,
Accounts opening department, Clearance department, Advances / Credit department, Remittance
department, Foreign Exchange department and after analysing these department we have certain
findings and recommendation for that.

INTRODUCTION TO STUDY
“BOK’s
Chapter-1
1.1 OBJECTIVE OF THE STUDY
For completing the Master degree of MBA, each student is required to make a
project report on a recognized organization. The students are required to work
according to their own field in which they are doing their specialization.
Main purpose of this program is to make students familiar with the practical work,
as there is great difference between what they have learnt during their course and
how the job is practically done.
Another important aspect of making a project report is to implement the
knowledge so far one has acquired.
1.2 SCOPE OF THE STUDY
1). It is a compulsory requirement for the award of Master degree.
2). It will help the present and prospective students of the department in making
assignments and writing reports on the BOK, evolution of banking, importance of
banking and different operations.
3). It can also provide help to BOK’s management in identifying their Strengths,
Weaknesses, Opportunities and Threats.
4). It can also provide assistance to students about the banking system and is
management practices.
1.3 IMPORTANCE OF STUDY
Banks play a central and very important role in the economic life of a country,
that’s why they are considered as the lifeblood of modern economy. Today no one
can deny the importance of banking in the economy. They facilitate and expedite
trade and commerce and provide a variety of services that one can’t imagine with
out banks.
We have chosen the Bank Of Khyber for our mini project because it has all the
departments a bank could have and is the largest network nationwide.
Besides this, BOK plays an important role in the economic development of
Pakistan.
1.4 RESEARCH METHODOLOGY
The methodology that we adopted for this research project is based on both the
primary as well as secondary data. The sources of primary data were:
1 Formally arranged interview/ discussions with Management, Director and Joint
Directors.
2 Personal observations.
3 The sources of secondary data were;
4 Annual reports
5 Over view of the BOK
6 Relevant books.
7 Internet
1.5 BACKGROUND OF STUDY:
The socio economic growth of any developing country depends mainly on the
health of its monetary based institutions. The banking sector is one such example,
which plays a vital role in the development of the economy. Its involvement in the
industrial sector, trade and commerce of the country makes it an integral organ of
the over all development of the county.
Bank Of Khyber was established under the ordinance 1949. The primary objective
of the setting of BOK was the purchase of jute from the growers in the former East
Pakistan and also to perform the commercial banking
The bank is also authorized to act as an agent and trustee of State bank where the
State bank of Pakistan (SBP) has no branches. The bank therefore performs dual
responsibility, one as commercial bank in its own right and at the same time a
trustee of business finance.
1.6 PURPOSE OF STUDY:
The purpose of this study is to fulfill an important requirement of MBA course that
is to write an internship report. The main focus of this study is on retail banking.
Apart from this there are other purposes such as:
a) To get practical knowledge about the working of the bank, i.e. the procedures
followed for the retail banking.
b) To get used to the working conditions of an organization.
c) To analyze the weaknesses of the said organization and give some solutions to
overcome these weaknesses.
d) To have a working experience.
1.7 PROBLEM STATEMENT:
The following problems are in the university road branch of BOK are as under.
a)The ATM Machine facility are not used in this branch.
b)The proper space is not for the bank .The seating arrangement is not sufficient as
compared to the number of employees and customers.
c)The bank hires new employees from the external sources. in case where the Bank
has competent and experienced officers the vacancies are filled with internal
employees. There are certain posts in the Bank for which internal as well as
external recruitment sources are used.
d) like all the other charges, the bank charges are higher rate of markup on the
short-term loans in comparison to other.
e) It is obersved that there are some deficiencies in the branch setup which creats
extra disturbance and excessive movement. This in turnn affects the efficiency of
employees and thus that of whole organization.

1.8 Methodology Of Report:

The methodology that I have adopted in preparing this research report is based on
both primary as well as secondary data.
Primary data is gathered by using different techniques such as:
a) Interviews
b) Discussions with staff
c) Personal observation
The main sources of the secondary data are:
a) Annual report
b) BOK brouchers
c) Leaflets, newsletter
d) Internship reports
During this process I observed that enough material regarding my topic was not
available in the books so I had to count on my personal observation and interviews
for writing this report.
I have spent 8 weeks in the branch; during my stay I interviewed few officers of
the bank and held discussions with others. As such most of the data used is primary
in nature.

Chapter-2
2.1 HISTORY OF BANK OF KHYBER
The Bank of Khyber is one of such bank which came in to being after passing of a
Resolution in the provincial Assembly of KPK in 1991. The focus on point for the
establishment of the bank is to provide employment opportunities for the man and
the power of this province & to provide financial assisstance to the people of
KPK , who are engaged in the small, medium and large scale bussiness.most if the
nationalized commercial bank have their head offices in the province other then
KPK ,which is the main hindrance to availing loan in time from these banks.The
bank have to take formal approval from their H/O in order to advance loans to their
customer or to make some transactions within the branches.therefore it was felt
that there was a great need to have a bank which has its Head Office in the same
province also, so that there could be time delay, communication gap or
provisioning of documents to have advance loans expenditiously,intially,the bank
of Khyber had agency arrangements with ABL and MCB for clearing and
collecting cheques from other banks, but with the grace of Almighty Allah and the
hard work of its management, it become a scheduled bank .it started its operation
in SBP and to have a clearing officer of its own for clearing purposes and tackling
of other matter with SBP.presently,this bank has started to work as an agent for all
its corporate main branch became the first authorized dealer to deal in foreign
exchange business and trade services/finance. The BOK corporate main branch
also provided its services to its different branches, which had import/export
businesses but were not authorized for such business, the licenses were also availed
for The Bank Of Khyber GT Road University road branch and other branches in
KPK , the Bank of Khyber has its network of branches in Islamabad, Lahore,
Muzzaffarabad, Rawalpindi Karachi also. The bank of Khyber is providing loans to
the private as well as public organization, not only for the prosperity of the people
but also the development of KPK in this way, job opportunities surface in different
sectors, mainly for the people of KPK , which may help the country get out of
cultures’ of unemployment and related poverty problems.
Besides, the running Finance & Demand Finance facilities, it has started loaning
for small clusters, which has a separate controlling department called the Micro
Finance Department .MFD has been introduced to cover the businesses, which are
on a small scale either in the shape of shops, small projects or home level projects
of ladies, like “embroidery” beauty parlors’ & stitching centers. After they provide
two guarantors to the BOK.
The SBP has recently allowed the opening of banks and branches based on pure
Islamic Banking System in the country. For the said purpose an Islamic Banking
Department has been established by the SBP to provide necessary guidance to the
bank and concerned staff. They have also instructed all the banks to introduce
necessary steps for promotion of Islamic banking division has been established by
the Bank of Khyber to evaluate and implement policy and procedural matters to
cater to Islamic banking demand of our valued customers. The recruitment of
suitable staff for Islamic banking operation and their necessary training
arrangement are as under process.1
2.2 VISION STATEMENT
“Human Capital – The Way Forward”
MISSION STATEMENT
“To be recognized in the market place by Institutionalizing a merit & performance
culture, Creating a powerful & distinctive brand identity, Achieving top-tier
financial performance, and Adopting & living out our core values”.
Objectives of BOK :
The Bank of Khyber is also a commercial organization and its main objective is
profit maximization. This is achieved in two ways:
1. By increasing its deposits.
2. By charging interest on loans provided to the people due to increased deposits
These are explained as:
2.2.1 Increase in Deposits:
Competition in banking is intense and every bank whether it is Pakistani, foreign,
private or nationalized tries to increase its deposits by providing better facilities to
its customers. By increasing its deposits a bank can extend greater amount of loan
and hence achieves higher profit. BOK is also improving its facilities and services
to attract customers with higher volume of deposits. There are two main factors
involved in increasing the deposits. These factors are improving the services and
courtesy. BOK is continuously working on these two factors to increase its
deposits.
2.2.2 Extension of Loans:
The profitability of a bank largely depends on the amount given to people as loan
and the type of people to whom credit is given i.e. the credit worthiness of the
borrowers. This strategy has worked quite well for BOK. Deposits are collected
from the people and invested in different projects. BOK prefers to give loans to
financially sound and reliable parties, after securing the collators. BOK has an
extremely well organized section. The staff is trained and educated and competent.
They carry out extensive financial analysis before deciding on the loan. Interest
charged on the loans potentially contributes to higher profits.
Some of the other objectives of BOK are:
a) Improve customer services.
b) Quick disposal of credit.
c) Better cooperation.
d) Operation and advisory services for foreign exchange accounts activities.
e) To earn an adequate and sustainable profit for the shareholders and for the sack
of own smooth operations.
f) To supply or provide employment opportunities to the people.
g) To help in the development and industrialization of the country.
2.3 Functions of BOK:
Since BOk is a commercial bank, it performs a variety of functions. Like other
commercial banks, BOk is engaged in financing international trade. Its other major
functions include receiving deposits, advancing loans and discounting of exchange.
The functions performed by BOK are:
2.3.1 Accepting Deposits:
This function is important because banks largely depend on the funds deposited
with them by its customers. Deposits are of many types.
i. Current Deposits:
Current deposits are also called demand liability on current deposits. BOK pays
practically no interest on current deposits. Businessmen usually open current
accounts. In BOK current account can be opened with a minimum amount of
Rs.2000/-.
ii. PLS Saving Deposits:
Profit and loss sharing deposits (PLS) are also called checking accounts. One can
deposit and draw money easily. Profit on PLS is calculated every month but paid
after six months. PLS account can be opened with a minimum amount of Rs.2000/-
iii. PLS Term Deposits:
Fixed term deposits are deposits with the bank for certain fixed period before the
expiry of which they cannot be withdrawn unless giving due notice. In this case the
rates of profit will be different depending upon the time period.
2.3.2. Discounting Bills Of Exchange:
Discounting of bill is practically speaking lending for exchange at their market
worth i.e. it pays to holder of the bill an amount equal to the face value after
deducting interest at the current market rate for the period. This bill has to be
mature. This is the common way used for keeping a part of assets of the bank in a
liquid form.
2.3.3. Agency Service:
BOK also provides best and unique service to its valued customers. BOk provide
the following agency services to the customers:
i. Collection of Dividends:
As BOK deals with the purchase and sale of various types of securities, therefore
BOK also provide dividend or interest earned on share or bonds or invested money.
Collection of Cheques:
The collection and payment of Cheques, bills and promissory notes etc. Bank of
Khyber acts as an agent for its customers.
iii. Acting as an Agent:
BOK also acts as an agent correspondent or representative for its customer at home
or abroad.
iv. General Utility Services:
Utilities provided by BOK are as follows:
a) Clearance of Utility Bills:
BOK provides the service of clearing the utility bills i.e. electricity, gas and
telephone bills of its customers. For this purpose it also provides evening banking
services.
b) Lockers Facility:
The Bank of Khyber also provides locker facilities to its customers to keep their
valuable assets in it. The charges of different size of lockers are different.
c) Acts As A Referee:
BOK provides useful services to its customers by acting as a referee to their credit
worthiness.
d) Supply Of Information:
BOK provides operational and advisory service for foreign exchange
accounts/activities.

Chapter-3
ORGANIZATIONAL DEPARTMENTATION CHART
THE BANK OF KHYBER
DEPARTMENTATION
Departmentation is the logical process of grouping of activities, or the process of
grouping jobs in the logical arrangement through which the organizational goals or
objectives can be achieved. It is also the process of division of work into various
sections or department or divisions, over which a manager has authority and
responsibility for performance of specified activities. Basically there are four ways
for organizational Department.
1) Deparmentation by function
2) Departmentation by product
3) Departmentation by geography
4) Departmentation by customer
The deparmentation in the BOK has been done purely on functional basis, in the
following manner:
3.1 DEPARTMENTATION OF THE HEAD OFFICE LEVEL
The BOK’s H/O is located in Peshawar, and it has complete control over
administrative matters and operations as well as other areas of the BOK.
3.1.1 Personal, training & establishment Division
This division performs the following tasks:
Recruitment & selection
Training
Supervision
Postings
Promotion
Leave and other staff matters
Motivation
Termination
While the Establishment Division deals with procurement, repair/renovation and
disposal of real assets of the bank, the purchases are made against demands of
various departments through open building .The contracts are given to an agency,
which provides the best quality products at the competitive rates and the delivery is
made according to the schedule. if the assets is depreciated according to the set
percentage and it is no longer feasible to use it, then the Establishment division
deals with building , furniture/ fixtures, vehicles, computer and many other items,
which are related to the bank or juts staff.
3.1.2 Banking Operation Division
This division is constitutes.
Teller’s operation
Cash management
Remittances
Bills
Consolidation & statement.
Hajj operation
Special
Deposit Scheme
Travellers Cheques Credits Cards etc.
3.1.3 Treasury Division
Treasury Division is involved in the investments in the shares market, bonds
debentures, placement of the funds & reconciliation of Nastro accounts (foreign
currency Accounts maintained in the foreign countries in the respective currencies)
The settlement of trade finances, inward and out ward remittances, through Nastro
accounts is made possible by the treasury division.
3.1.4 Audit & Inspection Division:
This division is known as the eyes and ears of the top executives of the bank. it
keeps them informed of any contraventation of bank regulations by any
branch/department or staff and also proposes remedial measures to set it right. in
the BOK there are three types of Auditing, i.e. internal Audit , External Audit. And
SBP Audit. Auditors are assigned to make comprehensive audit on yearly basis of
all branches. A separate team of audit Division is deputed to make sure the
compliance of all irregularities, pointed their inspection..
The board of Directors of the BOK has appointed External Auditors for
comprehensive audit of all branches on the yearly basis. The board of BOK has to
appoint any chartered Accountants from the list of the SPB. Since they are External
auditors and approved for SPB, therefore they prepare all the financial statements
of the BOK.
Since SBP is the central bank of the country and it has a right to carefully monitor
all the activities of all banks therefore they also conduct their audit in the BOK on
yearly basis. In case any bank violates “Prudential Rules & Regulation” of the
SBP, SBP reverse the right to panalize such banks .in case of any major violation ,
they may dissolve the management of any bank .the compliance of irregularities
are made sure by them as well.
3.1.5 Credit Division
This division is engaged in providing fund based & non fund based facilities to
customers of different branches. They receive proposals & recommendation from
their branches along with application requests of their customers. Then they
prepare aggregate proposals for further submission to the Credit Committee, where
these proposals are discussed thoroughly and final decisions are made by the
competent authority. This sanction loans proposals and forward the same to the
relevant branches with instructions to retain proper security, offerd by the customer
and retain all legal documents to safeguard the bank’s position. Any activity related
to facilities may also be altered by this division.
3.1.6 Computer Department:
The Bok has appointed some qualified software and hardware engineers in the
BOK IT department. The senior most is deputed as “in –charge” of IT department.
Software engineers/programmers are not only responsible for application
development in the BOK , to fulfill requirements of the bank, installation of the
hardware in the also act like trouble shooters, whereas, installation of the hardware
in the branch set up is the responsibility of the hardware engineers, in the each
branch, they have assigned a systems administrator to look after jobs related to the
computing system. Proper trainings have been provided to the system administrator
in this effect.
3.1.7 Micro Finance Division:
The Micro Finance department at the branch level are watched carefully by this
division.MFD is exclusively designed to approve loans on a small scale to small
units like, toy shops, garment shops, and stitching centers run by women.
3.1.8 Public Relations Department:
It establishes a liaison between public sector organizations and corporate customers
with the bank on the behalf of the management of the bank.
3.1.9 International Banking Department:
This department carefully looks after the business transactions and activities of all
the branches which are authorized in the Foreign Exchange Business, like Trade
services and Finance, foreign Currency accounts, Remittances, Travellers Cheques
issues and FOBC (Foreign outwards Bills for collection) the details will be
discussed in analyses section of the report.
3.1.10 Islamic banking division:
This division looks after PLS banking and other Islamic modes of financing. This
department does research in Islamic Banking and conducts training courses for the
staff.
3.1.11 Consumer Finance Department:
This department facilities the common masses in getting all kinds of electrical
house holds items, like television , microwaves, oven, air conditioners, tape
machines, music system and refrigerators. This facility may be allowed against a
personal guarantee of a single individual.
3.1.12 Marketing Department:
Banks are aware of the fact that marketing and advertising are very important for
the healthy growth of all organizations including banks. Advertisements are meant
to get the attention of a segment of the society which is the bank’s target. This is
done through the following
1) News papers/ periodical/ journals
2) Radio & T .V
3) Out door boards / sign boards
4) Gift with the bank’s name printed on them like key chains or wall clocks.
3.1.13 BOK ‘s ORGANIZATIONAL CHART
The graphical representation of an organization structure is known as an
organizational chart.
The organizational chart is a formal document, which shows the chain of command
and titles, which have been given to the managers and other members of the
organization.
THE BANK OF KHYBER ORGANIZATIONAL CHART :

3.1.14 THE BOK ‘S BRANCH NETWOR:

Branches The Bank Of Khyber has the totle 34 branches in the different cities. all
the branches are inter
related with each other.
THE BANK OF KHYBER BRANCHES
SERIAL NO BRANCHES

1 CORPORATE MAIN BRANCH (PESH)

2 UNIVERSITY ROAD BRANCH (PESH)
3 HAYATABAD BRANCH, (PESH)
4 G.T ROAD BRANCH (PESH)
5 SADDAR ROAD BRANCH, (PESH)
6 SECTERAIT BRANCH (PESH)
7 KHYBER BAZAR BRANCH, (PESH)
8 KOHAT BRANCH , KOHAT
9 ASHRAF ROAD BRANCH , (PESH)
10 D.I.KHAN BRANCH ,D.I .KHAN
11 ABBOTABAD BRANCH , ABBOTABAD
12 BANNU BRANCH, BANUU
13 MARDAN BRANCH , MARDAN
15 HATTAR BRANCH , HATTAR
16 NOWSHERA BRANCH, NOWSHERA
17 MINGORA BRANCH , MINGORA
18 MANSHERA BRANCH, MANSHERA
19 HANGU BRANCH, HANGU
20 UNIVERSITY ROAD BRANCH,
UNIVERSITY ROAD
21 CHARSADDA BRANCH , CHARSADDA
22 TANK BRANCH BRANCH , TANK
23 MUZZAFFARABAD BRANCH ,
 MUZAFFARABAD
24 ISLAMABAD BRANCH, ISLAMABAD
25 LAHORE BRANCH , LAHORE
26 KARACHI “1” BRANCH , KARACHI
27 KARACHI “2” BRANCH KARACHI
28 QUETTA BRANCH , QUETTA
29 CHITRAL BRANCH , CHITRL
30 SWABI BRANCH ,SWABI
31 RAWALPINDI BRANCH 1” RAWALPINDI
32 RAWALPINDI BRANCH 2” RAWALPINDI
33 MULTAN BRANCH , MULTAN
34 LAHORE BRANCH “2” LAHORE

REFERENCE:
Rose peters (1991) commercial Bank Management. Boston: Donnelly & son
Company. P. 253

Chapter-4
4.1 Important Financial Products and Services of BOK:
Few of the important products and services are:
4.1.1 Current Deposits Account (Rupee)
“The BOK rupee current deposits account allows the facility if ultimate
withdrawals up to the extent of the balance in account. there will be no tax
deducted on the funds that some one chooses to keep in these accounts”
(A) balance in current accounts are payable on demand .any amount can be with
drawn prior notice. Similarly there are no restrictions on number of transactions
during the day.
(B) All individuals including foreigners, firms and corporate bodies are entitled to
open and maintain current accounts
(C) No profit will be paid on the current accounts
(D) overdrafts are allowed on this accounts.
4.1.2 Saving Deposit account(rupee)
The Bank of Khyber rupee saving deposit account allows the facility of multiple
withdrawals up to the credit balance, with accruing profit on the deposits”
4.1.3 TYPES OF SAVING ACCOUNT
Profit and loss sharing account (PLS)
Special Deposit Account (SDA)
PLS 7 days Notice Deposit.
PLS 30Days Notice Deposit.
Profit is paid bi-annually on the minimum monthly balance (Jan-June & July-dec)
which is announanced in the July and January respectively.
Gernally, withdrawals from this account are allowed on demand i.e. without any
prior notice of withdrawals.
Over draft is not allowed on this account.
4.1.4 Term Deposit Account (rupee)
“The BOK Rupee term deposits Account offers the dual benefit of attractive
returns with highly liquidity. Option to take profit monthly, quarterly, bi annually,
annually or at maturity. profit is accured on the daily basis. There is no penality for
premature encashment.however ,in case of any encashment the rate of the previous
tender will be applied. The option of partial liquidity is allowed i.e withdrawals to
a certain percentage from the fixed deposits without disturbing the remaining
deposit is allowed”.
Term of fixed deposit are accepted by BOK, mature between one to five year.
Profit on fixed deposit is paid on the maturity of deposits
Each fix deposit account is considered as a separate contract.
4.1.5 Khyber monthly Scheme (KMS)
On KMS the BOK gives monthly interest on amount deposited with the bank . This
is a sort of fixed deposit and the customers will have to keep the deposit for the
five years.
4.1.6 Security deposit Receipt (SDR’S)
This is a receipt by the bank, at the instruction of the depositor, confirming that
amount of SDR is held by the bank to be paid whenever called upon to do so by
the beneficiary named in the SDR
A: A SDR is non – negotiable instrument. SDR;s are generally used to make
advanced payment are as earnest money or security deposit etc
B: SDR can be re paid to a named beneficiary or the purchaser/depositor upon
proper identification.
C: Non-profit is paid on called deposits
4.1.7 Khyber Rupee Traveller Cheque:
The generally issued for the convince of persons travelling abroad, but some
Pakistani banks issue them in Pakistanis currency, for use within the country as
well.
Before issuing the banker received the amount equal to the face value of the
cheque, and also charged a small commission. The traveller cheque are far fixed
amount and are treated as order cheque payable only to the purchaser whose
specimen signature appear on the traveller’s cheque itself, Foreign currency
traveler cheque are issued and en cashed an accordance with provision of the
exchange control regulation act 1947”
“Khyber Rupee traveler cheque (KRTC), is a negotiable, which can be remittances
funds and as alternative to cash”
4.1.8 CONSUMER FINANCING
(a) Fund Based Facilities:
“Fund base facilities are those which involved a cash disbursement at the time of
allowing the facility”
Running Finance
This is a working of capital finance facilities available for the one year and
renewed subject to satisfactory utilization there of Mark up is to changed on out
standing balance.
It is a term loan disbursed in lump sum
And repayable in two year in the form monthly or quarterly installment.
Advance against salaries
This facility is available to Govt. and semi Govt. employees up to five gross
salaries.
(b) Non- fund Based facilities:
The non-fund Based facilities are those in which the bank doesnot invest its own
funds rather it commitment is involved against which the bank charges a certain
amount in the shape of commission these facilities are available in the form of
letter of credit and letter of guarantees.
4.1.9 Letter Of Credit(LC)
Letter of credit is required in the settlement of international trade, some time local
transaction are also done through the letter of credit which are termed as in the land
L/Cs. usually there are four parties involved in L/Cs:
A: Importer
B: Exporter
C: importer’s bank
D: exporter’s bank
L/C may be on the sight or issuance’s basis .in sight based L/Cs, the importer has
to pay the amount upon payment of value. In case of issuance L/Cs, the exporter
extends credit to importer. The document are handed over to the importer against
his acceptance of bill and assurance of payment of the maturity date of acceptance.
4.1.10 Letter Of Guarantee (L/G)
The bank provide assurance to beneficiary of the guarantee about the satisfactory
performance of certain act by the application of the guarantee.
In the letter of guarantee, there parties are involved i.e.
A: Bank (provide of guarantee)
B: Application of the guarantee (Bank customer on whose behalf the banks issue a
guarantee)
C: Beneficiary (in whose favor the guarantee is issued)
The bank at request of application issues the guarantee and charges commission for
it commitment from the application at exposure is secured against some security.
4.2 BOK Performance at a Glance:
THE BANK OF KHYBER has performed well over the years. The performance of
the bank for last five years is:

BOK Performance at a Glance:

(Rs. Bn)
Items 2005 2006 2007 2008 2009
Income 28.2 34.2 34.5 35.3 33.7
Expenditure 29.5 33.2 32.4 34.8 32.7
Pre-tax (1.26) .995 2.14 .52 1.03
profit/(loss)
Total assets 274.1 310.6 325.9 350.4 370.7
Deposits 235.9 254.9 273.4 294.8 316.5
Advances 85.9 105.6 109.5 122.6 140.3
Investments 108.2 109.5 102.9 91.5 80.4
Employees 1500 1800 1850 1890 1911

Chapter-5
“BOK’S CREDIT / FINANCING”
5.1 INTRODUCTION
The progress of a countries performance, especially a developing country is
heavily dependent upon the dynamic growth of its industries, trade and commerce,
as well as agriculture. BOK plays a pivotal role in ensuring the proper employment
and distribution of funds for rapid, sustained growth in all these sectors of vital
importance. Also, the indicators which mainly reflect the high quality of BOK’s
management are its prudent financing decisions, proper control of financing and
prompt recovery of bank’s dues, as per borrower’s commitment / repayment
schedule.
Keeping in view all these factors, SBP lays down the regulation / guidelines of
credit policy and within this broad framework, BOK develops its own individual
financing strategies and policies.
5.2 PRINCIPLES OF FINANCING
Basically, there are six principles, which must be duly observed while advancing
money to borrowers.
Safety:
It covers the elements of character, capacity, capital, collateral and condition. It
means taking all the risky factors into consideration and trying to hedge the bank
from any possible financial loss.
Liquidity:
Covering the element of capability to liquidate or repay on maturity and also prior
to the maturity, in case of need. It is an utmost important duty of a banker to assess
the financial position of the burrower i.e. if the party/client is financially sound or
will be completely dependant on the finances of the bank because a party/client
with a shaky financial position can be a greater risk to the bank.
Term or Period of the Finance:
The facilities granted should be for a predetermined period of time, which would
depend on whether the bank is offering short, medium, or long term facility
depending upon the purpose of financing.
Dispersal:
The lending portfolio should be as wide-based and diversified as possible in order
to spread the risk.
Remuneration:
Pricing the loan according to the risk undertaken and the ancillary business income
committed is very important in order to ensure that optimum revenue is generated
from the advances.
Suitability:
Purpose for which credit is extended should be lawful, and conform to the policies
and imperatives of the bank, as outlined in its credit policy guidelines.
The 5c’s that are a must to be assessed before considering a customer are explained
as follows:
1 CHARACTER
The loan officer must be convinced that the customer has a well defined purpose
for requesting the bank credit, and has a serious intention to repay.
In character the banker looks for the Customer’s Integrity, Purpose of loan,
Customer’s obedience to law, Credit rating, his loyalty to nation, his environment,
Intention to repay, Customer’s personal habits, Customer’s business code of ethics,
his keeping of words. When a loan officer is satisfied with these above conditions,
he recommends the loan after giving due consideration to certain other factors
addressed below.
2 CAPACITY
The loan officer must be sure that the customer requesting credit has the authority
to request a loan and the legal standing to sign a binding agreement. The customer
characteristic is known as the capacity (authority) to borrow money. The banker
here checks the customer’s past payment record, experience of other lenders with
this customer, purpose of loan, customer’s track record in forecasting, credit rating,
presence of consignors or guarantors of the proposed loan.
3. CAPITAL
Does the borrower have enough available cash (capital) to repay the loan? The loan
officer satisfies himself in respect of the loan applicant’s past earnings, dividends
and sales record, Adequacy of projected cash flow, Availability of liquid reserves,
Turnover of payables, receivables and inventory, Capital structure and leverage,
Expense controls, Coverage ratios, Recent performance of borrower’s stock and
P/E ratio, Management quality, Content of auditor’s report and statement footnotes,
Recent accounting changes
4 COLLATERAL
In assessing the Collateral aspect of a loan request, the loan officer must ask about
the ownership of assets, age of assets, vulnerability of assets to obsolescence,
liquidation value, degree of specialization in assets, liens, encumbrances, and
restrictions, leases and mortgages issued, Insurance coverage, Guarantees and
warranties issued, Bank’s relative position as creditor, Lawsuits and tax situation,
Probable future financing needs.
5 CONDITION
The loan officer while assessing a loan request must also take into account those
aspects which come under the environmental conditions head like Customer’s
position in industry and expected market share, Customer’s performance vis-à-vis
comparable firms in the industry, Competitive climate for customer’s products,
Sensitivity of customer and industry to business cycles and changes in technology,
Labour market conditions, Impact of inflation on customer’s balance sheet and
cash flow, Long run industry outlook, Regulations, political and environmental
factors.
5.3 TYPES OF CREDIT
On the basis of funds involved credit can be categorized as fund, and non-fund
based. Fund based financing involves immediate disbursement and out flow of
funds. Here the funds are provided to the customers upon sanction of the respective
credit lines by the bank and fulfilment of bank’s conditional ties and formalities,
while the non-fund based facilities are contingent facilities such as letter of credits,
and letter of guarantee. Credits extended to the clients are also classified on the
basis of duration of facility as follows.
1 Short term – Up to 1 year duration.
2 Medium Term – Up to 3 years
3 Long Term – Above 3 years
TYPES OF ADVANCES
LOANS, ADVANCES & FINANCES
Non-Fund Based Finances
Running finance Letter of Credits
Demand finance Letter of Guarantees
Cash finance
5.4 TYPES OF ADVANCES OFFERED BY THE BANK OF KHYBER
BOK Credit department deals with all the advances, which are made to the
customers. Advances are important for the banking business because it gives the
bank interest on the amount loaned. BOK is also very active in advancing loans to
customers, thus helping the economy of the country in its development. It provides
the following finances:
5.4.1 RUNNING FINANCE
This is a type of Finance which meets the day to day financial requirements of the
business. The amount is transferred to the debtor’s current account and can be
withdrawn through cheques. The limit for this type of finance is Rs. 35,000 and the
maximum period which it is extended is one year, and can be renewed by a new
sanction. Repayment is on discretion of the customer to repay in lump sum or in
periodic instalments.
5.4.2 SECURED RUNNING FINANCE
It is also called overdraft. In such type of finance a customer is authorized to
borrow up to an agreed amount in excess of his bank balance. The BOK usually
provides this facility to its customers. The time period for this type of finance is
less than one year. The mark up is paid on monthly basis and the principal amount
is repaid at an agreed date(s).
5.4.3 CASH FINANCE
Cash finance is also called working capital finance. It is a short-term credit facility.
Probably the most popular form of providing funds to the clients in the banking
sector is the Cash Finance system or traditionally known as Cash Credit. In this,
the bank lends money to borrowers against tangible security. The total amount of
loan, which is granted, is not paid in one instalment. The borrowers have to pay
mark-up on the amount borrowed.
a. Hypothecation of stock: When goods are not physically handed over to the bank
as security for loan advanced, but the bank has a lien over the goods through the
letter of hypothecation.
b. Pledge: When goods are physically handed over to the bank as security for loan
advanced.
Borrowers prefer this type of facility because they have to pay on amounts actually
utilized. The time period for this type of finance is normally one year but also
depends on the manufacturing cycle of the organization.
5.4.4 DOCUMENTS REQUIRED UNDER CASH FINANCE
Against Pledge
Application/agreement with the customer for opening cash finance account.
· IB 6 (revised)
· IB 26
· IB 12 (Appendix )
1 Letter from customer authorizing the bank to debit salaries of go down staff,
insurance premium and other incidental charges to his account.
Insurance cover together with premium paid receipt.
Against Hypothecation and Third Party Guarantee
§ Application/agreement with the customer for opening cash finance account.
§ IB 6 (revised)
§ IB 12
§ IB 29
§ Letter from customer authorizing the bank to debit salaries of godown staff,
insurance premium and other incidental charges to his account.
§ Insurance cover together with receipt of premium paid.
§ Letter of hypothecation
The controlling officer may also require the client to submit other documents.
5.4.5 DEMAND FINANCE
Initially they were called “Loan ordinary”. When a customer borrows from a
banker a fixed amount repayable either in periodic installments or in lumps sum at
a fixed future times, the amount of loan is placed at the borrower disposal in lump
sum for the period agreed upon, and the borrowing customer has to pay interest on
the entire amount. The borrower gets a fixed amount of money for his use, while
the banker feel satisfied in lending money in fixed amounts for definite short
period against a satisfactory security.
5.4.6 Demand Financing Against Gold Ornaments
Gold finance/loan is a type of demand finance being offered by BOK to a large
number of customers. Demand financing against the security of gold ornaments
under State Bank of Pakistan scheme for Financing Small Business/Industry or
otherwise may be made to borrowers known or introduced to the Bank by
constituents, in multiples of Rs. 100/- with a minimum of Rs. 1000/-.reference The
rate of valuation of gold and the gold ornaments will be advised to the branches by
Head Office from time to time keeping in view the rise or fall in the market price
of gold after providing for the necessary margin. The valuation of the gold
ornaments must be based on the weight and fineness of the gold contents only. The
rate per 10 grams will be regulated by the fineness of the gold and will be
expressed to the nearest rupee. It must not exceed the maximum rates laid down
from time to time by the Head Office.
Documentation for Financing against Gold Ornaments:
· IB 6A
· IB 12
· IB 26
5.4.7 Industrial Small Finance
This Type of Finance is for industrial owners only, and is usually for expansion
purpose. The limit of this type of finance is up to 3,000,000/- Securities demanded
against this type of finance are immovable properties or against stock of raw
material and finished goods. The time period for this type of finance is up to five
years. This amount is repaid in instalments determined by the bank. High rate of
mark up is charged against this type of finance.
5.4.8 Agricultural Credit:
The agricultural financing strategy of BOK is aimed at three main objectives:-
· Providing reliable infrastructure for agricultural customers
· Help farmers utilize funds efficiently to further develop and achieve better
production
· Provide farmers an integrated package of credit with supplies of essential inputs,
technical knowledge, and supervision of farming.
5.4.9 Agricultural Credit (Medium Term):
· Production and development
· Watercourse improvement
· Wells
· Farm power
· Development loans for tea plantation
· Fencing
· Solar energy
· Equipment for sprinklers
5.4.10 Farm Credit:
BOK also provides the following sub sized loans for a period ranging from 3
months to 1 year on a renewal basis.
· Operating loans
· Land improvement loans
· Equipment loans for purchase of tractors, farm implements or any other
equipment
· Livestock loans for the purchase, care, and feeding of livestock
In case of Farm Credit BOK charges 14% to 16% Mark-up on both Short Term and
Medium/Long Term credit. While for Non-Farm Credit the rate of Mark up is 16%
p.a.
5.4.11 Production Loans:
Production loans are meant for basic inputs of the farm and are short term in
nature. Seeds, fertilizers, sprayers, etc are all covered under this scheme.
5.4.12 Consumer Finance
BOK has launched a scheme for the all types of Electronics. Customer will get a
TV set ,microwave oven , air conditions, tape recorder and all house hold items.
and will have to pay monthly instalments to the bank.
5.4.13 Foreign Bills Purchased (FBP) (Documentary / Clean)
This is a post-shipment finance facility provided within the sanction limit and is
provided against export documents under collection. Banks normally prefer
holding collateral security in such cases.
5.4.14 Foreign Bills Purchased – against L/C (FBP)
Under this arrangement foreign documentary bills are negotiated/ discounted at
prevailing exchange rate. The Bank ensures that documents are compliant with the
L/C terms, and reimbursement instructions are carefully studied.
5.4.16 Payment against Documents – Under Sight L/C
Import documents if compliant are lodged in PAD and released upon payment from
the party. The amount of bill plus charges, if any, claimed by the negotiating bank
would be converted into Pak Rupees at the exchange rate prevailing on the date of
lodgement or at the booked rate where forward booking was done at the time of
opening of L/C.
5.4.17 Inward Foreign Documentary Bills for Collection under Usance LC
Such documents are lodged in IFDBC and are released against acceptance or trust
Receipt or pledge of imported goods. In the later case goods are cleared through
the bank’s approved clearing and forwarding agents and delivery orders issued
against cash receipts.
5.4.18 Finance against Trust Receipt (FATR)
This facility is extended to valuable customers to enable them to obtain delivery of
the goods received under L/C or against bills under collection and shall retire the
documents out of the sale proceeds of goods or from other sources. The borrower
will sign a standard Trust Receipt form and related security documents covering
hypothecation of goods.
5.4.19 Finance against Imported Merchandise (FIM)
Under the import L/C either at party’s request, or due to the importer’s inability to
discharge liability immediately FIM facility for a period not exceeding 90 days
against pledge of the imported goods on mark- up basis is extended.
5.4.20 Inland Bills Purchased (Documentary / Clean)
This facility is allowed to customers against documentary bills and other
negotiable instruments. In case of dishonour the related party’s a/c is debited, and
the drawer is asked to arrange for sufficient funds in his a/c for adjustment
thereafter. Besides the above mentioned products BOK is providing various fund /
non–fund based facilities such as, overdrafts, loan against salary, LMM etc.
Amongst these facilities which are governed under the rules/.regulations of SBP,
are allowed by BOK if clients fulfil the criteria determined by the SBP.
5.4.21 Staff Finance
BOK is also serving its employees along with its customers. It gives loans to its
employees for the purchase of a car, house, and motorcycle and for the marriage
ceremonies of their sons/daughters. BOK provides the following loans to its staff:
5.4.22 House Building Finance
The employee having served for 5 years or more in the bank, either in the capacity
of a clerk or an officer will be granted 15 basic pays as a loan for building a house.
If the loan availed exceeds Rs. 160,000, then 10% interest rate will be charged on
the amount exceeding Rs. 160,000/-.
5.4.23 Motor Cycle, Car, and Personal Vehicle Finance
The car loan may be granted to those employees whose minimum basic pay is at
least Rs. 10,000 and have served for at least 3 years. The employee will be granted
18 basic pays as loan. If the amount is exceeding Rs. 160,000 the 10% interest rate
will be charged. The maximum Motor Cycle Loan is 56,000.
5.5 Procedure for Applying for Finance
Any customer who applies for finance should have an account (usually current
account) with the concerned BOK branch, which should be in a running position.
First of all the customer or company has to submit a feasibility report which is sent
to the higher authorities for recommendation. Following this, the recommending
authority prepares its own feasibility report of the customer/company’s project and
then hands over these to the sanctioning authority which finally approves whether
finances should be released or not.
Sanction or approval is granted by the bank by specifying the terms and conditions
of the credit to the party concerned. The bank does not advance 100% finance,
rather a 30% margin is deducted from all finances.
A charge form is signed by the party before receiving the credit facility. If the
borrower becomes insolvent, the bank can use it for recovering the amount
advanced through the court of law.
5.5.1 LOAN PROCESS
Pakistani banks have similar procedure for advancing loans. The process for
granting loans to the clients is described in detail:
1. Establishment of Relationship:
The opening of a current or saving account by the customer with the bank results in
the establishment of banker-customer relationship between the two. This
relationship enables the banker to develop understanding of the customer’s
corporate status, nature and place of his business, age, major stakeholders, and
ultimately the genuineness of the customer.
2. CREDIT INVESTIGATION:
It involves the following steps:
Preliminary enquiries:
The banker approaches other banks functioning in the same area and gathers
information about the track record and creditworthiness of its specific customer.
Bank can also take information from the SBP credit information bureau or credit
rating agencies where available.
3. Credit Analysis: WHAT MAKES A GOOD LOAN?
Credit analysis refers to the process through which qualitative and quantitative
factors having direct bearing on the business of the customer are analyzed. This
effort can help in making a lending decision, positive or negative. The analysis
must be based on facts and should encompass all the relevant aspects of the credit
deal. Findings of the analysis must be logically drawn and supported by relevant
documents and reports. The division of the bank responsible for analyzing and
making recommendations on the fate of most loan applications is the Credit
Department. Experience has shown that this department must ask and satisfactorily
answer the following question regarding each loan application:
4. Is the Borrower Creditworthy?
The question that must be dealt with before any other is whether or not the
customer can service the loan i.e. repay the credit when due, with a comfortable
margin for error. This usually involves a detailed study of five aspects of the loan
application known as 5 Cs-Character, Capacity, Capital, Collateral, and Conditions.
All must be satisfactory for the loan to be good one from the lender’s point of
view.
5. Qualitative Analysis:
It is carried out to ensure that the credit is extended to a genuine borrower who has
the capacity to borrow and good intention to repay. Following points are taken into
consideration like:
Ownership of business, track record, market reputation etc.
Personal traits of owner and qualification.
Experience and management qualities.
6. Quantitative Analysis:
For quantitative analysis, financial statements provided by the borrower are
thoroughly examined. The focus of financial analysis is on key figures in the
financial statements and the significant relationship that exist between them.
Ratio analysis enables the analyst to carry out comparison of the following:
Trend Ratios: Involve the comparison of ratios of a firm over a period of time i.e.
present ratios are compared with past ratios for the same firm.
Inter firms Comparison: Involve comparison of the ratios of a firm with those in
the same line of business for the industry as a whole reflecting its performance in
relation to its competitors.
5.6 Market Appraisal / COMMERCAIL FINANCE:
Market appraisal becomes imperative when credit facilities are desired by a
customer desirous to establish a new manufacturing unit. In order to determine the
extent of demand for the products of the proposed industrial unit, the banker must
apprise himself of the ground situation with regard to the following:
Demand and supply situation.
Major producers and local distribution channels.
Price and credit terms availed by the retailers
5.6.1 Evaluation of Feasibility Reports:
The projections and forecasting contained in the feasibility reports need to be
checked and adjusted by using varied standards. As a result of this exercise, the
banker is in a position to determine the break-even quantities, revenues and profit
and loss of the firm at different operating capacities.
5.6.2 Credit Reports:
Credit reports obtained from other banks and the CIB report provide a base for the
lending decision of a banker.
5.6.3 Problem Identification:
The main objective of credit analysis is to avoid problems that may crop up due to
lack of good judgment with regard to the following:
Negative Macro Indicators Including:
a) Unfavourable change in the government policies.
b) Excessive and negative competition.
c) Change in consumer’s tastes, fashion, income and spending.
d) Labour unrest or deteriorating law and order situation.
Negative Business Factors Including:
Inconsistent business structure and Ineffective business plan.
Inadequate market share and unplanned expansion.
Plant and machinery obsolescence and loss of stakeholders’ confidence.
III. Negative Management Factors Including:
Change in ownership and unnecessary centralization.
Evasive style and lavish spending behaviour.
Unsatisfactory past performance.
IV. Negative Financial Indicators Including:
Change in auditors, and accounting policy.
Late submission of statements.
Climbing up debt-equity ratio and abnormal reduction in fixed assets.
5.6.4 Processing of Credit Proposal:
Normally standard formats designed by the banks are used for this purpose
wherein all relevant information and recommendations for grant of credit are
recorded.
Necessary documents are attached with proposal like request letter, financial
statements, resolution of the Board of directors, letter of partnership etc.
5.6.5 Sanction of Credit:
Credits are sanctioned either at the branch level or by the competent authority at
the controlling offices. At the controlling office the credit proposal are assessed and
approved on the basis of accuracy of credit analysis and other considerations as
recommended by the branch management. Sanction advice is issued which is
important and essential to ensure proper record of the terms and conditions of a
credit, for legal purpose, execution of the required security documents, monitoring
recoveries, timely renewal, and audit purpose.
5.6.6 Security Documentation:
After sanction but before disbursement of a loan, the credit administration
department must ensure that charge documents are obtained from the borrower in
accordance with the nature of credit facility, terms of credit and nature of approved
security. The charge documents must be properly filled in, signed by the customer
and designated officer and two witnesses where required. In case of mortgage
registration is effected by the Registrar of Assurances before disbursement is done.
In case of a limited company, charge is to be created on the assets of limited
company with the Securities & Exchange Commission within 21 days. In case of
partnership firm, authorized officials of the borrowing firm must sign the
documents in their official capacity and affix their stamp thereon. In the meanwhile
facility letter is issued wherein the terms and conditions of the loan are intimated to
seek his acceptance thereto.
5.6.7 Disbursement:
Disbursement of the credit facility is made through either of the following method
i.e. Running finance/Cash finance/Term finance.
5.6.8 Monitoring and Periodic Evaluation:
The credit administration department is responsible to ensure that the borrowing
customers:
Maintain their accounts regularly with the bank and pay amounts due in time.
Pay the mark up accrued on their accounts within a reasonable period.
Pay instalments on due date.
Adjust their liability accounts as per stipulation of the loan agreement.
5.6.9 Recovery and Follow Up of Advances
This is the most critical activity of the credit administration department. Default
puts a bank in an embarrassing situation as not only its funds are tied up for
indefinite period, but in most of the cases involve it in circuitous litigation
entailing high cost. The following steps are involved in the recovery process:
Verbal and written reminders to the customer for the payment of overdue amounts.
To serve of legal notice, in case of ignoring reminders issued.
Making preparations for taking legal action.
Filing of recovery suit and follow up of legal process.
Tracing out the assets of the defaulters and putting the same to auction through the
court, and making efforts to make recovery from the proceeds of assets auctioned.

Chapter-6
“DEPOSITS”
INTRODUCTION
Deposits are the foundation out of which the bank grows and thrives. They are
unique items on a bank’s balance sheet that certainly distinguishes it from other
types of business firms. Deposits provide the means for bank loans and thus,
represent the ultimate source of bank profits and growth. Bankers who fail to stay
abreast of changes in their competitors’ deposit pricing and marketing programs
stand to lose both customers and profits.
Deposits/Products offered by BOK:
BOK maintains its position as Pakistan’s premier Bank determined to set higher
standards of achievements. It is the major business partner for the Government of
Pakistan with special emphasis on fostering Pakistan’s economic growth through
aggressive and balanced lending policies, technologically oriented products and
services offered through its large network of its branches.
It classifies deposits on the basis of duration and purpose for which these are kept
with the bank. They are as follows:
PLS (Saving Deposits)
PLS means Profit and Loss sharing Account. Here the bank shares with the
customer the profit or loss resulting from investment of customer’s funds along
with the bank’s pool of funds.

Salient Features
This account can be opened with Rs.2000/-
Profit is declared by the head office of BOK at the end of each half year accounting
period, and the profit is distributed through all the branches.
Profit is calculated @ 4.10% p.a.
For profit the minimum balance is Rs.5,000.
Profit or return is paid bi-annually on minimum monthly balance (Jan-June & July-
Dec.) which is announced in July and January respectively.
Generally withdrawals from PLS saving accounts are allowed on demand, i.e.
without any prior notice of withdrawal.
All cheques and other instruments should be crossed, before they are deposited for
credit into account.
Zakat @2.5% is deducted from the balance outstanding on the first day of every
valuation date i.e. 1st Ramadan.
Overdraft/CF is not allowed in PLS saving accounts.
Withholding tax @ 10% on the profit amount is to be recovered whenever profit is
paid on deposit account.

PLS (Term Deposits)

The PLS Term Deposit is non-interest bearing account. It is also called time
liability because it is kept for a certain period of time by the bank. Initially this
type of deposit was called as fixed deposits but after the islamization of banking
system.
Salient Features
The deposits are accepted for a minimum duration of three months.
b. The maturity dates are 5 years, 4 years, 3, 2, 1 year, 6 months and 3 months.
c. Every six months the profit rates are changed.
d The PLS term depositors are eligible for sharing profit/loses with the bank at the
rate determined by the bank.
f. The profits and losses are distributed on half yearly basis.
g. On the maturity, the depositor has the option to withdraw the deposit along with
his profit share if any, or renew the deposit.
Current Deposits
A current account is that account which is payable on demand. A holder can
withdraw the money on any working day during working hours of the bank without
giving any prior notice. That is why the bank has to keep sufficient funds to meet
the withdrawals of the current account holders.
Salient Features
The account holder is expected to maintain a minimum balance of Rs.500/- in his
account or whatever the minimum amount is prescribed for the purpose.
No profit or return is paid on current accounts.
The deposits and withdrawals can be made through cheques, demand drafts, pay
orders etc. drawn on the branch.
These accounts are completely exempted from withholding tax and Zakat
deduction.
Call Deposit Account
A Call Deposit Receipt is issued by the bank for the amount received from the
customer. The amount can be withdrawn at any time by presenting the receipt
issued by the bank. The purpose of these deposits is to serve as a guarantee
provided by bank to any department either public or private in taking or giving
tenders. This type of account is to participate in tender bid; contractors are required
to deposit a certain amount or percentage of the tender amount along with the
tender documents for which Call Deposit Receipt are issued by Banks. Call deposit
does not bear or earn any interest. When a contractor requires such a receipt, he has
to approach the bank for the issuance of Call Deposit Receipt.
ACCOUNT OPENING PROCEDURE
The opening of an account is the establishment of banker customer relationship.
Before a banker open a new account, the banker should determine the prospective
customer’s integrity, respectability, occupation and the nature of business by the
introductory references given at the time of account opening. Preliminary
investigation is necessary because of the following reasons.
Avoiding frauds
Safeguard against unintended overdraft.
Negligence.
Inquiries about clients.
FORMAL APPLICATION:
The customers are to fill in an account opening form. It is a formal request by a
customer to the bank to allow him to have and operate upon the account.
OBTAINING INTRODUCTION:
Before opening an account the banker requires introduction of the customer from
an old customer.

SPECIMEN SIGNATURE:
The customer gives the banker specimen signatures generally taken on a card
supplied by the bank which is specially designed for the purpose. Operating
instructions from the customer, title of account, and account number are entered on
it. It expresses customers’ authority for the payment of cheques drawn on his
banker.
MINIMUM INITIAL DEPOSIT:
The customer must have to maintain at all times not less than the minimum
required balance according to the requirements by the bank.
OPERATING THE ACCOUNT:
After opening an account the banker gives to the customer
Pay-in-slip book
Cheque book, with the account number assigned to the customer.
QUALIFICATIONS OF A CUSTOMER:
The relation of the banker and the customer is purely a contractual one. For
keeping an account he/she must have the following basic qualifications
He must not be a minor.
He must be of sound mind.
He must not be disqualified by law to open an account..
The agreement should be made for lawful object, which create legal relationship.
Not expressly declared void.
NATURE OF ACCOUNTS
The different types of accounts being generally opened by a bank are as follows:
INDIVIDUAL ACCOUNTS
The accounts opened in the name of persons are called individual or personal
accounts. While opening the individual account, the details about following
columns should be taken carefully:
Occupation
Address
Special instructions
Next of kin
Copy of N.I.C.
PARTNERSHIP FIRMS ACCOUNT:
“Partnership is the relation between persons who have agreed to share the profits of
the business, carried on by all or any of them acting for all”.
A partner is the agent of the firm having powers to execute transactions for the
purpose of the business of the firm. A retiring partner has no liability so far as the
transactions after his/her retirement are concerned, if a notice of such retirement
has been given to the bank. Otherwise, the retiring partner continues to be liable,
even for finances made after his/her retirement.
In case of the death of a partner, the firm will be dissolved. The account should
therefore, be closed and a new account will be opened with the remaining partners.
The following procedure and documents should be obtained:
The names of all partners should be written in the AOF.
Specimen signatures of all partners.
On SS card & on form “A” only authorized person(s) will sign.
Letter of partnership should be obtained.
If the firm wants to authorize manager to operate the account then they will sign
Partnership deed is to be obtained (but it is not necessary).
JOINT ACCOUNTS
“The account in the name of more than one person is called joint account”.
The account shall be operated on by:
Any one singly or survivor or either or survivor(s).
Any two or jointly or survivor(s).
All jointly or survivor(s).
The survivorship mandate should be taken.
Signature of all partners should be obtained at the specified places.
JOINT STOCK COMPANIES ACCOUNT
Accounts opened by organizations formed by incorporation under Companies
Ordinance, 1984 are called Companies Accounts.
A company is an artificial person created by law and the assent of this artificial
person is signified by means of a common seal and perpetual succession. Just like
an individual, it can hold property and incur liabilities. It can sue and can be sued
in the same way as that of an individual. Bank is a joint stock company registered
under Companies Ordinance, 1984.
While opening the account of the company the following documents should be
taken:
Attested copy of the N.I.C of each Director.
Copy of the Certificate of Incorporation.
Copy of Memorandum and Articles of Association.
Copy of the Resolution of the Board of Directors to open an account with the bank.
List containing the names and signatures of the Directors.
Copy of the Certificate of Commencement of Business (in case of public limited
company).
Audited Balance Sheet.
ASSOCIATIONS, SOCIETIES & CLUBS ACCOUNTS
Accounts are often opened in the names of non-trading institutions such as Clubs,
associations, schools, committees, funds and Unions.
The following documents should be taken:
Attested copies of N.I.C of all the office bearers.
Certified Copy of the bye-laws or rules & regulations.
Copy of the Resolution of the Governing Body/Managing Committee for opening
an account with the bank..
Account opening form duly signed by the authorized persons.
List containing the names, addresses and signatures of the Directors.
PROPRIETARY FIRMS’ ACCOUNT
A firm owned by one person is called proprietary firm or sole proprietorship.
The following procedure should be followed:
Take the sole proprietorship form from the customer.
The signature of the sole proprietor is obtained in his/ her personal capacity under
the declaration.
If he wants to give authority to some other person to operate the account he has to
sign the “Form CD 55”.
In case of death of the proprietor, any authority given to any one will be ceased.
REFERENCES
1: Bank pf Khyber
Ibid

Chapter-7
CRITICAL ANALYSIS
During my short stay at the BOK Hripur Branch . I spent around one week in each
department of the bank and this short span of time is not sufficient for getting all
the information about the organization. During this short period of time, I
personally observed and experienced few problems along with those narrated by
concerned personnel of the branch. I do admit that these problems may or may not
be present in other branches of the bank. I have divided critical analysis into four
parts, which are as follows:
Problems at the branch.
Functional Analysis.
Administrative Analysis.
Personnel Management Analysis.
7.1 Problems At The Branch:
Some problems regarding to the BOK University road Branch are:
7.1.1 Communication Problems at the Branch:
There is a single hall in the branch and the staff of the bank uses peon or shout to
communicate with the other employee. As a consequence there is noise and
disturbance in the branch. The flow of information is very slow as there is gap
between the counters. The relationship among the staff members was good but
sometime in the working hours the employees leave their chairs for a chat with
their colleagues leaving the customers stranded.
7.1.2 Limited Number Of Staff:
The staff at BOK University road branch is limited in number. When one employee
goes on leave it puts additional burden on the other employees, it affects the
efficiency of the branch and the customers have to wait for a long time. There is no
telephone operator so when another officer is busy receiving telephone calls the
customers are left stranded. It gives a bad impression about the bank and the
branch. Also there was a need of public relation officer (PRO). As the queries of
the customers have to be answered by the busy staff, which was resulting in loss of
time.
7.1.3 Unequal Distribution Of work Load:
During my internship I observed that the work is not equally distributed which
resulted in discomfort among the staff. On one hand there are employees who are
all day without having much work to do whereas on the other hand there are
employees who don’t even have the time to relax for a moment. So this created a
lot of over work situation for some while relaxation for others.
7.1.4 Manual System:
As the system is manual, it takes a longer time to process the records. For instance,
if a customer asks for his balance it takes too much time to get the required
information. As the competition from HBL branch is growing with the
technological advancements BOK is also taking on the challenge up but it is very
slow. There is urgent need of computerization of branch.
7.1.5 Cash Counter:
Cash counter is a sub section of the operations department. Being a busy branch
most of the time there is a queue of five, six people at the cash counter.
7.1.6 Staff Relationship:
Good relationship among staff members leads to the peak performance in any
organization. Apart from few occasions the overall the relationship between most
of the staff was cordial and friendly.
7.2 Functional Analysis:
7.2.1 More Accounts less Deposit:
Efficient banking is one in which the emphasis is on total deposits not on number
of accounts. In BOK university road branch the number of account are higher with
respect to deposits. As a result of this personalized service cannot be provide to all
the account holders. This results in effecting the efficiency of the branch. There
was higher percentage of accounts with balance less then Rs. 1000.
7.2.2 Delegation Of Authority:
Manager has a limited authority. He has to take the approval from his management
authority. In branch the officers have limited authority. They have to take approval
of chief manager even in the case of minor issues. Due to this there is delay in
decision-making and these delay can result in poor performance. Decisions have to
be taken timely and have to be implemented quickly. Manager has no authority to
sanction loans.
7.2.3 Need For Competitive Attitude:
THE BANK OF KHYBER has monopoly in the government transactions due to
which its employees lack in competitive attitude. There are instances when not in
good mood, they simply say to the customers, you please go to any other bank.
This is the thing, which is responsible for the disaster of all the government control
organizations including. BOK The management of the branch has been successful
in minimizing this attitude.
7.2.4 Competition:
As it has already been mentioned that the competition in the banking business is
increasing day by day with the introduction of new private banks and now it is the
“survival of the fittest”.
It is not only the privatized banks that are putting pressure on the nationalized
banks but there are also international banks that are doing good business in
Pakistan. The branch in study is facing a stiff competition from UBL branch, which
has become sounder with the computerization and addition of ATM facility. Right
know BOK branch is lacking in the technological field, as the branch is not
computerized and there is no ATM facility available in the branch.

7.3 Administrative Analysis:

7.3.1 Lack of Specialized Training In Customer Services:
THE BANK OF KHYBER does not provide adequate facility of specialized
training in the customer services to its staff. As the workers finish their training
they are inducted into a specific field. The major deficiency in the staff of the
branch was related to customer service. Specific attention should be given to
customer service in the training programs of the bank.
7.3.2 Separation Of Activities:
There is lack of delineation of responsibilities. As such a function of remittances is
partially done in remittances and partially in deposits department. This creates
confusions and conflicts in the decision making process. There should be complete
separation of activities to avoid all this ambiguity and this may also reduce
overlapping of work. This problem is due to the shortage of space available to the
branch.
7.3.3 Low Profits:
Most of the customers shifted their account to the national saving center because of
the low profit rates of saving deposits. The bank management should increase their
profits to enhance business during this era of competition.
7.3.4 Delay In Loan Advancement:
It has been observed that there are delays in sanctioning of loans from the head
office, which results into customer dissatisfaction. This is primarily due to the fact
the chain of cycle of authority is very long and manager has very little powers. He
has no power even to sanction small loans.
7.3.5 High Work Load And Improper Distribution:
The workload on the employees of BOK civil sectrait branch is immense. As it is a
very busy branch due to the presence of accounts of government servants, so they
should be compensated for the extra time spent by them. Proper distribution of
work leads to success in every organization. Proper distribution of work prevents
the employees from over work and under work situations. So for the smooth
running of an organization, proper distribution of work is the hint to be followed,
there are employees who work tirelessly while there are employees who have little
work to do.
7.3.6 The Role of Presentation:
In every walk of life presentation plays a very important role, specially the
business concerns have to care about their presentation. Clients are attracted by
means of a proper presentation. In the banking business the presentation of the
branch office and the officers both are very important. In the newly established
private banks we can observe that the officers are dressed smartly, it is all due to
the policy of the bank. It means that the getup of the officers attract the customers.
Nicely and smartly dressed people do make a lot of difference.
The Bank Of Khyber has a lot of branches all over Pakistan, even in the remotest
part of the country, but the branches are not very well maintained. BOK University
road was a very well maintained branch but the dress up is not up to the mark and
it needs a lot of improvement.
7.4 Personnel Management Analysis:
7.4.1 Need For Better Training Program:
The need of training is felt all over the world. Training of the personnel is a part of
human resource management. Once a candidate has been selected and placed on
the respective job, it becomes essential to train him adequately for the task. They
should learn new methods for motivating customers. The training program of the
bank should include scientific techniques to improve the decision making and
interpersonal as well as individual’s needs of the employees.
7.4.2 Recruitment Policy:
Human resources are the lifeblood of organization. If the personnel are recruited
carefully they can become an asset to the organization and in the case of
carelessness the personnel can become a liability. Due to favoritism, nepotism and
political influence unsuitable candidates are selected. Both the top authority and
staff union tries their best to recruit their favorites.
7.4.3 Transfer Policy:
Promotion policy of BOK is very slow. Those employees who are having approach
to higher authorities are transferred to the seats or branches of their own choices,
and those who are not having approach are working on seats which they do not
deserve, or they will work in the branches which will not suit them either in one
way or other.
7.4.4 Performance Appraisal:
The rating of the employees on the basis of their performance in an organization,
performing certain defined standards is called performance appraisal.
It is again a scientific tool provided by the personnel administration. BOK has
followed the checklist method for the evaluation of the employees. It is a simple
procedure of checking the list with the given set of objectives or descriptive
statement and these are used for the performance evaluation of the employees.
In BOK ACRs are used for the purpose of evaluation, but the observation shows
that the element of subjectivity is involved in it. The confident report (CR) of the
employees are signed by the immediate boss, and then it is counter signed by two
superiors. The superior may not know about the employee or the hazards involved
with the employee’s work or the superior may not be in direct contact with the
employee.

Chapter 8
FINANCIAL ANALYSIS
FIVE YEAR PERFORMANCE AT A GLANCE
(Rs. In millions)
Years Total Deposits Advances Investments Shareholder
Assets Equity
2005 325,057 273,391 109,524 102,969 9,978
2006 350,406 294,754 122,559 91,486 10,358
2007 371,636 316,493 140,318 72,609 11,378
2008 415,089 349,617 170,319 71,759 11,959
2009 432,803 362,866 140,547 143,525 14,279
2010 471,860 395,568 160,990 166,196 18,134

Source: Annual Report 2010

Source: Annual Report 2010

Source: Annual Report 2010

Source: Annual Report 2010
5.8 FIVE YEAR PERFORMANCE AT A GLANCE
(Rs. In millions )
Years Pre-Tax After- Number ob Number of
Profit Tax Branches Employees
Profit
2005 2,135 530 1,434 15,785
2006 520 31 1,431 15,541
2007 1,032 461 1,428 15,351
2008 3,016 1,149 1,245 15,163
2009 6,045 2,253 1,204 12,195
2010 9,009 4,198 1199 13272

Source: Annual Report 2010

FIVE YEAR PERFORMANCE AT A GLANCE
FINANCIAL HIGHLIGHTS
Rs. In Millions
Authorized Capital 5,000
Paid up Capital 4,130
Shareholder Equity & Reserves 27,584
Deposits 395,568
Advances –Net 160,990
Investment Net 166,196
Total Assets 471,860
Pre-Tax Profit 9,009
After-Tax Profit 4,198
No. of Branches 1199
No. Of Employees 13272

Source: Annual Report 2010

Chapter-9
“SWOT ANALYSIS”
SWOT is an acronym for an organization’s strengths, weaknesses, opportunities
and threats. A SWOT analysis consists of sizing up a firm’s internal strengths and
weaknesses and its external opportunities and threats. It’s a tool, to get a quick
overview on a firm’s strategies situation. The SWOT analysis of BOK, BOK
university road is as follows:
9.1 STRENGTHS OF BOK’s UNIVERSITY ROAD:
The strengths of BOk are as follows:
BOK, BOK University road is a profitable branch.
Being a government branch it collects utility bills.
It has the goodwill of the people.
The branch staff is motivated to make it one of the best branches.
It is a secured branch.
Best optional policies and attractive compensation packages for employees, which
has really improved their commitments, dedication and headwork towards the
accomplishment of the objectives.
Human resources development and employment of tecnology towards modern
development.
Rupee traveler cheques(RTCS) that manimaze the degree of risk. Attention and
experienced private management group also involved in other intrests like, textile
and cement industries.
9.2 WEAKNESSES OF THE BRANCH:
There are some weaknesses of the branch. Which are discussed below.
The authority of the manager in decision-making is limited.
Employees are facing fears of downsizing.
Employees lack training in the consumer dealing.
4) "Govt. interferences also badly affect the credit and other policies of the bank.
5) It is also a major weakness of BOK because of nepotism and favoritism the
competent personnel cannot reach the higher positions and badly affects the
performance
Slow down in advance groth the short term as BOK focuses on quqlity customers
in the market.
New schemes are not introduces this year, due to which the attraction of customers
is slow down.
9.3 OPPORTUNITIES FOR THE BRANCH:
Positive external conditions of BOK that cannot be controlled but which can be
used to take advantage are as follows:
They have the opportunity to open new branches in the country as well as in the
foreign countries. They should open new branches at least at the district level.
They have to open in new branches in the Afghanistan taking NOC from the SBP.
BOK has also opportunity to expend new technology.
Foreign exchange department can open in those cities branches where foreign
activities are developing.
The branch should be computerized.
ATM facility should be introduced in the branch.
Employees should be sent for training and seminars to get advanced knowledge
about banking.

9.4 THREATS OF BOK:

The threats of BOK are as follows.
Increased competition especially from HBL branch, which has introduced ATM
facility and has computerized its branch.
Deteriorating confidence of people in bank.
Reduction in business activities in the country..
Politico economic situation of the country.
5) In the era of globalization the bank is now going to face tuff competition with
multinational banks, which are interested in opening their branches in Pakistan.
6) Privatization policy of the Govt. also create tuff times for he bank because of
this reason the bank is going away and away from the Govt. support during hard
times.
Strict regulation by the govt over credit facilities to the customer as well as to meet
the prudential regulation.
Hors of confidence of overseas prospectus and customers due to freeing of
accounts.
Changing of customer needs.
The step of islamization of bank in pakistan is in big threats for the BOK Because
the Whole banking system will be changed.
Chapter-10
FINDINGS AND RECOMMENDATIONS
During my internship of one month I observed a lot of things and I felt that there is
always nice ways of doing things so some recommendations are suggested for the
bank in accordance to the critical analysis.
10.1 Availability of Required Staff:
Required staff should be provided to branch in order to improve the functioning of
the branch. Especially a telephone operator and a customer service officer should
be appointed. These are necessary because without the customer service officer the
customers are facing a lot of difficulties. The employees waste a lot of time on
attending telephone calls. The customers are left stranded during this course of
time, damaging the reputation of the bank. The employees have to answer the
queries of the customers such as account balances on telephone. It wastes a lot of
time of the staff. In these conditions there is a need of telephone operator.
There is a need for the establishment of customer information center. It will take
one additional person who will handle both of these jobs. Although it will cost the
bank but it will benefit the bank in goodwill and better working environment.
10.2 Computerization of Branch:
Computers should be introduced in BOK . This will reduce administrative cost to
great extent. This will help a lot in the operation of the bank, Computer knowledge
should imparted to the employees. Communication and coordination problem will
be solved to great extent. It will help in speeding up the decision making process
regarding the loans. The branch will send these proposals instantly to headquarter
will process it swiftly. This will save the time, which is lost in the delivery process.
Keeping in view the new world requirement it is essential for the bank to install a
computer information system. To achieve the organizations goals in limited time
and budget, it is felt that the bank must have modernization in its operations. This
will decrease the workload on the employees in the branch. The accuracy is also
another an advantage which comes with the use of computers. Although the
installation of computer in the branch will cost a lot initially but in the longer run it
will produce fruitful results. As the computers are fast they can do a lot more work
than the human being thus the need for future employment will decrease
considerably. The employees have to be paid with the fringe benefits, but the
computers are bought once.
Proper training of computer has to be imparted to the staff. This can be done in
terms of 2-weeks short course at the computer center or evening coaching can be
done at the branch itself.
10.3 Inter Departmental Transfer:
There should be inter departmental transfer of employees, so that they should know
about all departments, in this way a proper coordination could be achieved. They
must have some basic information of other departments. There must be proper job
rotation. This will enhance the capabilities of the employees, as due to change in
work they will escape monotony. This will give them refreshing change and
motivate them for their work.
In the branch there were few seats where the load of work was more then the other
seats so the need of rotation was felt there so that no body should be overburdened.
As the officers working in those departments a spent quite a lot of time so need of
interdepartmental transfer was felt. It was seen that these persons were not happy
with this and due to this their motivation level was not at the highest level.
10.4 Customer Friendly Environment In Branch:
Friendlier environment should be created because it will help to gain the interest of
employees in work. Noise in the office should be reduced because it has
unfavorable impact on the working environments. At the start of the month there is
a rush in the bank due to the payment of salaries, in this kind of situation a cool
head is required as there is an element of lack of discipline in the customers. It is
required for the staff to educate them to follow discipline. All of them should be
treated equally; no relaxation should be given to the near ones.

10.5 Professional Attitude:

More professional attitude is required from the bankers. The management should
curtail the unnecessary expenses to improve profitability. All loop holes must be
closed that are used to incur expenses in respect of telephone, fuel, electricity,
fringe benefits etc. the bank should analyze each activity on cost and benefit basis
(cost benefit analysis).
As these are controllable expenses and they lead to the minimization of the profits
of the branch so the management should bring it to the minimum level. The staff of
the branch should be punctual and should follow the office timings very strictly.
There were few instances when the officers were not punctual and the customers
had to wait for the arrival of the officer. In today’s world of competition the
wastage of time is not tolerable so the staff should be loyal to their duties.
10.6 Personal Marketing:
A very useful mode of contact is through personal marketing visits. Such visits
have importance for products, such as information about the customer’s financial
and business position, about his market reputation and creating a feeling of
importance in the mind of client. Such visits should be properly planned with
regularity and consistency.
The staff of the branch is like an ambassador of the bank, by his personal contacts
and goodwill he can attract customers to the branch. This will help in increasing
the deposits of the branch and ultimately the profit of the branch. The officers of
the branch should increase their contacts among the local businessman who are the
potential customers for the bank.
10.7`Equal Distribution Of Work Load:
The employees of the branch should be given equal workload. The distribution of
workload should be such that there should be no undue load or burden on any one.
This will enhance the motivation and efficiency of the employees. No body should
be given undue relaxation.
There were few officers who were over loaded with work, at the same time there
were few who had little work to do. This created a unfair situation in which the
overloaded person felt disheartened. For the elimination of this kind of situation
the management should distribute the workload equally.
10.8 ATM Facility:
ATM facility should be introduced in BOK university road . This technological
advancement is necessary for improving the service of the bank. This will allow
the customer to get 24-hour banking service. The need of ATM facility is felt even
badly because of the fact the biggest competitor of BOK City branch is UBL
branch, has just introduced the ATM facility to its customers. In this way the
competitor has got a technological advantage of the BOK university road.
To cope with this kind of competition the branch has to be up to date with the
technology, these types of facilities are the need of the customers. Without being
update it will be difficult for the BOK university road to compete with the better-
equipped competitor.
10.9 Delegation Of Authority:
In BOK there is lack of delegation of authority. All of the major decisions are taken
at higher level of management. Or in head office peshawar.Major decisions have to
take accordance with the employee’s opinion. It will benefit both the management
and the organization.
The authority delegated to the managers of the branch is limited. They have to take
permission of the higher authority for almost every action. Same was the case in
BOK university road where the manager had to take permissions form the higher
authority for small affairs.
10.10 Role of Presentation:
As it is said, “first impression is the last impression”, BOK has to improve its
internal and external outlook of branches. As private banks are very good in this
field, so compete with them it is necessary that BOK should concentrate on the
internal and external outlook of its branches. The officers should be dressed
smartly so that they could attract the customers by their personality and behavior.
As far as the outlook of BOK, BOK university road is concerned its quite
attractive. The only thing that needs to improve is internal outlook i.e. the dress up
of the officers of the branch and their customer handling. They should always be
properly dressed. It gives a pleasure to the customers to come in a bank where
every thing is attractive. This improvement in the presentation of the branch will
attract customers and they would love to come the bank again and again.
10.11 Competition:
Competition is one of the major problems, that every business is facing and
banking is not exempted from the competition. BOK is facing competition both
from private and international banks.
BOK is facing a stiff competition from HBL branch.
10.12 Consumer Satisfaction:
In today’s world of competition only consumer’s satisfaction can reduce
competitive advantage. As said in critical analysis there are some problems related
to the dissatisfaction of consumers.
The Bank of Khyber has to improve services provided to the pensioners and also
they have to adopt scientific methods of paying utility bills. Improving the quality
of consumer service can do all these things. If the consumers are satisfied from the
service he will expand his business with the bank. But if the level of services is not
good then the bank will loose its customers. For this proper training has to be
imparted to the employees.
10.13 Recommendations Regarding To Human Resource
Management:
1) A modern and effective performance evaluation system should be devised, so
that every improvements and progress in employee’s skills, knowledge and
performance should be properly reported and suggestions can be forwarded.
2) A specialized officer should be hired so that he deals with employees to increase
their efficiency by watching and observing them. He should also check and
monitory employees dealing with customers. The officer should be given the
authority to have immediate corrective actions where faults are found. He should
encourage the employees to give
3) Proper training should be carried out on regular basis and if required other
educational, technical and skills development facilities should be engaged in. their
suggestions performance evaluation system should be devised, so that every
improvements and progress in employee’s skills, knowledge and performance
should be properly reported and suggestions can be forwarded.
4) Management should develop a mechanism for job rotation so that employees
can get experience in all the departments of the bank because at times when a
particular Operational Head is on leave, a lot of time is wasted in making
temporary adjustments for that seat.
5) BOK staff lacks professionalism. They lack the necessary training to do the job
efficiently and properly. Although staff colleges in all major cities but they are not
performing well. For this purpose these staff colleges should be reorganized and
their syllabus should be made in such a way to help the employee understand the
ever-changing global economic scenario. Banking council of Pakistan should also
initiate some programs to equip the staff with much needed professional training.
6) Employees of the bank should be given a task and authority and they should be
asked for their responsibility.
7) The manager should strictly monitor the performance of every staff member. All
of them should be awarded according to their performance and result in the shape
of bonuses to motivated and incite them to work more efficiently.
8) 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 braches of the bank
9) Required, qualified staff should be provided to branch in order to improve the
functioning of the branch. Especially a telephone operator should be appointed.
10) Bank should their administrative expenses. This was Rs 8 billion in the year
2000. That can be done by lying off the surplus pool of employee with golden
handshakes scheme. The branches that are not much used could also be closed.
Employee can also be how to control the bank expenses. That will give positive
results in the future.
11) Good relationship among staff member leads to the peak performances in any
organization. I observed that the staff relationship was normal other wise but some
time I noticed that there existed a little conformity among the staff members.
Another syndrome from which the staff suffered was that all of them considered
themselves more important than others. Some of the officers used to say that if I
am absent for a day the bank would stop working. So this sort of attitude is not
good because it mars bank image and juniors’ willingness learn and work hard and
in the end will hurt the whole team.
12) In the BOK’s during my internship I saw that when some of the employees are
transfer to other places, due to their relation with influential people and with top
management they can cancel their transfer in few weeks, when they are unsatisfied
at that place. So I suggest that in the organization there should be no favoritism,
nepotism and politics and their transfer and promotion should be made on merit
and according to the rules and regulations of the bank and provided favorable
environment to the employee to show their performances.
13) There should be an information desk to provide the information and to receive
the complaints of the customer in the bank. There is no complaint box available in
the branch and not any person appointed to hear the complaints. Every person
cannot go to the manager for the complaint because most of the people are hesitant.
So I suggest management to install a compliant box in the branch, and recruit a
special person for that guidance of the customer when they are unable to manage
some difficulties in banking matters.

BIBLIOGRAPHY
1) Koontz , Harload and Heinz Weigh Rich (1993), A global prospective , Tenth
Edition. (international Edition) , New York : MC Graw Hill, Inc.
2) Nasir Muhammad Saeed (1996) Banking Currency and finance, Sixth edition.
Fasilabad: Nafees Printing Press.
3) http:// wwwbok.com.pk
4) http: //www.bangor.ac.uk/ab/postgraduate/mbaf.htm
5) The Bank Of Khyber, information Memorandum,(2004).
6) The Bank Of Khyber, branch Operation Manual, (2008).
7) The Bank of Khyber Annual Report, 2006.
8) The Bank of Khyber Annual Report 2005.
9) The Bank of Khyber Annual Report 2004.

LIST OF ACRYNOMS:
1. BOK Bank of Khyber
2. SBP State Bank of Pakistan
3. ATM Automatic Teller Machine
4. H/O Head Office
5. ABL Allied bank limited
6. MCB Muslim Commercial Bank
7. MFD Micro Finance Department
8. PLS Profit & Loss Sharing Deposit
9. FOBC Foreign outwards Bills for collection
10. SDA Special Deposit Account
11. KMS Khyber monthly scheme
12. SDR Security deposit receipt
13. KRTC Khyber Rupee traveler cheque
14. LC Letter of Credit
15. L/G Letter of guarantee
16. FBP Foreign bills purchased
17. FATR Finance against trust receipt

18. FIM Finance Imported Merchandise