INTERNSHIP REPORT

THE BANK OF PUNJAB SUBMITTED TO LIAQAT ALI CHAUDHRY

SUBMITTED BY MARRIYUM SADDIQUA ROLL NO 207, M.COM UNIVERSITY OF THE PUNJAB HAILEY COLLEGE OF COMMERCE

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REPORT SUBMISSION LETTER

Respected Sir Azam Shafique, It is stated that I am a student of M.Com afternoon .I had done my two months internship in Bank of Punjab. After completion the period of two months I will submit my report to you. I shall be very thankful to you if you accept and recognize my work. Yours Sincerely, Marriyum Saddiqua

M.com Roll No 207

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Executive summary The aim of an internship is to gain the practical

awareness about the organizational working. Departments working in this building are Operations department, Credit department, Retail department, Government department and HR department. I accepted this task as a challenge and tried my best to explore & cover each and every aspect of BOP with in my 8 weeks internship.

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AREAS COVERED BY THE REPORT

Areas covered by the report are given as follow: Introduction of BOP Vision Statement Mission Statement Organizational structure Objectives Plan of internship program Training program Functions of Various Departments Financial analysis Ratio analysis Ratios Calculated By Bank of Punjab

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Swot analysis of bank

ACKNOWLEDGMENT
Special Thanks to Almighty ALLAH who is always been so kind and generous give me this much and wisdom that I completed this internship in such a nice manner. Thanks to all staff members of Bank of Punjab sadder bazaar who helped me a lot throughout my internship duration and provided me all practical knowledge about my internship. I feel very lucky because under the supervision of such a cooperative team I learned so many things and gain knowledge. After that I am very thankful to the operations manager Mr. Irfan Rafi Qureshi of the BOP sadder bazaar Lahore cantt who guided me and provided me enormous volume of oral as well as documentary information that making the majority of my work easy. After that I would like to thanks my loving parents whose prayers and provided all resources that I required in this internship make me able to complete this task.

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TABLE OF CONTENTS
Executive Summary...09 Historical overview.11

BANKS PHILOSOPHY..11

Business Volume...........12

Introduction of BOP ..12

Brief history .12 Nature of the organization 12 Nature of the organization .14

Vision Statement .14 Mission Statement ..14 Objectives .15 Organizational structure...........16
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Organizational Hierarchy chart .16 Categories of Services 17 Division and Departments..24 Regions..25

Comments on Organizational structure25

Plan of internship program26

Product lines 26 Brief introduction of the branch..39 Names of the departments in which I got training 39 Management Hierarchy of BOP 0025 41

Detailed description of Training program .......42

Clearing department42 Operations department...43 Remittance department .50 Cheque posting and token issuance department ..50 cash/billing department51

Functions of Various Departments 51 Detailed description of the task..54 FINANCIAL ANALYSIS...54

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Financial statement analysis54 Ratio analysis............55

Objective of ratio....56 Advantages of ratio analysis....56

Standards of comparison.....58 Users of ratio analysis..59 Significance of ratio analysis...60 Limitations of ratio analysis..62

TYPES OF RATIOS63

Liquidity ratios...64 Leverage ratios.65 Activity ratios.67 Profitability ratios..69

Ratios Calculated By Bank of Punjab.73 SWOT ANALYSIS OF THE BANK..92

Strength..92

Weaknesses...93
Threats94

Opportunities..94

SUGGESTIONS FOR REMOVING WEAKNESSES..95 Conclusion99 Recommendations101

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LIST OF ILLUSTRATIONS FIGURES ...11, 24, 25, 41 CHARTS.16, 74, 77, 78, 80, 82, 84, 85, 86, 88, 89, 91, 92 TABLES18, 19, 20, 21, 22, 74, 76, 78, 80, 82, 83, 85, 86, 88, 89, 90

Executive Summary
This report is based on internship in bank of Punjab sadder bazaar branch Lahore cantt.It is a famous and reputed bank of Pakistan. This report is based on the activities which are performed in this bank. This report contains history of bank, ratio analysis, SWOT analysis etc. There are also stated the activities which I performed during my internship in the branch. The aim of an internship is to gain the practical awareness about the organizational working. Departments working in this building are Operations department, Credit department, Retail department, Government department and HR department. I accepted this task as a challenge and tried my best to explore & cover each and every aspect of BOP with in my 8 weeks internship. This internship report covers numerous important features which are basically related with the operations, HR and financial aspects of the bank. This report is also cover whole banking procedures like account opening, authentication clearance etc
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There are five departments in the branch, and I worked as an Internee in that branch. For the first two weeks I worked in account opening department, where I have to perform following tasks: Entering information in account opening forms. Stamping and Verification of Documents.

Inform customer of essential conditions under which the account will be operated.

Afterwards I have learnt about vouchers, checking of vouchers is essential to confirm that correct calculation has been done. Vouchers are properly bind sealed, and checking by the manager. I have checked the following things: The check should not be post-dated/anti-dated. Amount in words and figures tallies.

Cash paid stamps (with dates) are duly affixed in case of cash cheques and in case of clearing stamps is affixed.

Cutting/over writings are duly authenticated by the account holder, etc. Then another task for me was issuing of cheque books. It is one of the most interesting works that I have learnt in the bank. Cheques books should be issued only after all the formalities of the account opening forms, which have been checked by the branch manager. Maintaining Dispatch register and Inward Mailing register was also included in duties assigned to me. I also used to help different employees in their work.

My work timings were from 9am to 5pm, six days in a week.

Historical overview

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The bank was established in 1989, pursuant to The Bank of Punjab Act 1989, and was given the status of a retail bank in 1994. The Bank of Punjab (BOP) is a Pakistan based scheduled and commercial bank. The bank chiefly offers variety of banking services, for example deposits in home currency, customer deposit in overseas currency, advances to businesses, agriculture, trade, and manufacturing sectors. BOP has provided profit-making banking, corporate and investment banking, cash administration services, utility bill services and facility of the locker. The Ebanking or electronic banking services such as ATM facility and on-line banking services is also offering by the bank to their valued customers in order to make them satisfied.

BANKS PHILOSOPHY
Banks business philosophy is described as to cater the banking requirement of Small and medium sized entrepreneurs by providing those competitive and quality services with emphasis on encouraging exports. The bank of Punjab serves in the following cities that are highlighted on the map of Pakistan.

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Head Office
Bank of Punjab Head Office, Main Boulevard Gulberg, Lahore Main Branch, Lahore (Pakistan) Chief Manager Tel: (042) 9200419, 9200187 Fax: (042) 920

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Business Volume
The volume of the bank of Punjab is approximately 3 hundred billion. The total revenue of bop is PKR 17,752 million (2009) and net income PKR 6,616 million (2009)

Introduction of BOP Brief history

For my internship I selected THE BANK OF PUNJAB in short known as BOP and branch location is BOP SADDAR BAZAR LHR CANTT. In banking sector every branch have unique code and whole working is based on these codes. The code of BOP sadder bazaar Lahore cantt is 0025.

Nature of the organization

The Bank of Punjab is working as a scheduled commercial bank with its network of 282 branches at all major business centers in the country and strength of employees Branches of this bank are increasing all over the country at a gradual speed which shows that customers are placing confidence and satisfaction in the services of BOP. In fact, it has made wonderful advancement in a very short time as compared to other banks in Pakistan. The Bank of Punjab functions as a scheduled commercial bank, with a network of 272 branches in major business centres throughout the country. It provides a wide range of banking services, including deposit in local currency; client deposit in foreign currency; remittances; and advances to business, trade, industry and

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agriculture. First Punjab Modaraba (FPM), a wholly owned subsidiary of the bank, was established in 1992 and is being managed by Punjab Modaraba Services (Pvt) Ltd. The Bank of Punjab is the best bank regarding the customer point of view. The Bank of Punjab (BOP) is only the bank thats modifies its products and services regarding the Customers of The Bank Of Punjab (BOP). Customer is always true and your totally business is depend upon the Customer. Customer is satisfied you can imagine that Business is growing. The Bank of Punjab (BOP) works for to exceed the expectations of our stakeholders by leveraging our relationship with the Government of Punjab and delivering a complete range of professional solutions with a focus on programmed driven products & services in the Agriculture and Middle Tier Markets through a motivated team.

The Bank of Punjab (BOP)

Punjab Government wishes to state that being the major stake holder in the Bank of Punjab it has full faith in the new management and operations of the Bank. The government further pledges its unequivocal support to the Bank and firmly believes that the affairs of the Bank are sound and its financial health robust

Nature of the organization

Karachi Region Islamabad Region Lahore North Region Lahore South Region Lahore Central Region
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Faisalabad Region Gujranwala Region Gujrat Region Multan Region Bahawalpur Region D.G. Khan Region Rawalpindi Region

Vision Statement
To be a customer focused bank with service excellence.

Mission Statement
To exceed the expectation of our stakeholders by leveraging our relationship with the Govt. of Punjab and delivering a complete range of professional solutions with a focus on program driven products and services in the agriculture and middle tier markets through a motivated team.

Values
Customers as our first priority Profitability for the prosperity of our stakeholders that allows us to constantly invest, improve and succeed. Corporate social responsibility is to enrich the lives of community where we live. Recognition & Reward For the talented and high performing employees.
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 Excellence in everything we do. Integrity In all our dealings Respect for our customers and for each other.

Objectives
The objectives of bank are:

Ensure that its performance in all facts of its operations more than matches that of its activities. competitors.

Maintains a comprehensive range of domestic and international Maximize contributions from its key sources of personal machines brands representation and capital. Be innovative progressive and the need of its customers with in the frame work of operational and prudent risk taker. Act as a reputable efficient and responsible organization.

Pursue personal policies which recognize the aspirations and performance of individual and which are suited to the devise levels of skills.

Organizational structure

Organizational Hierarchy chart

Categories of Services Division and Departments Regions

Organizational Hierarchy chart

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BOARD OF DIRECTORS

CHAIRMAN

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICER GRADE-I

OFFICER GRADE-II

OFFICER GRADE-III

CASH OFFICER

Categories of Services
The services in The Bank of Punjab are classified in different categories.

Category A:
President

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 Executive Vice President (EVP) Senior Vice President (SVP) Vice President (VP) Assistant Vice President (AVP)

Category B:
Officer Grade I Officer Grade II Officer Grade III Cash Officer

Category c:
Clerical Staff

Category D:
Non-Clerical Staff Driver Guards Gate Keepers Tea Boy

President Secretariat
President: Mr. Naeemuddin Khan Deputy CEO :Mr. Khalid S. Tirmizey

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Credit risk management division

SVP/Acting CRM P.S To CRM SVP SVP/ CRM C& IB

Mr. Muhammad Nauman Mr. M. Pervaiz Aziz Mr. Tariq Javed Butt

Mr. Raza Saeed Mr. Sheraz llahi Piracha Mr. Mazhar Ali Mr. Khalid Munir Mr. M. Siddique Butt

EOC /CM(SME) VP1 AVP/CM Agri AVP

Commercial Banking Group

Country Head Acting RM/Team Leader Jr. Officer

Mr. Aseer Ahmad Khan Mr. Faizan Khan Miss Shamaila Azeem

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OG-1

Mr. Gulbaz Ali Khan

Compliance & Internal Control

Head CCD AVP OGiii

Mr. Ilyas Ahmad Sadiq Mr.Irfan Rashid Mr.Muhammad Javed Iqbal

Credit Administration
Head Credit Administration Division/EOC Deputy Head Credit Administration Division:

Mr. Shahnawaz Saeed Khan Mr.Rana Abrar -ul- Hassan

Corporate & Investment Banking

Country head (acting) P.A to corporate head Unit head

Dr. Hafeez -ud-din Mr. Kashif Khan Mr. Maqsood Ahmed

Consumer & Agriculture Credit

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Group Head Agriculture Credit D

Mr. Moazzam M. Maneka

Unit manager

Mr. Jawad Qaiser

Finance department
Mr. Nadeem Amir

General Manager Chief manager VP

Mr. Muhammad Iqbal Shahzad Mr. Zeeshan Yaqoob

Human Resource Division

Group Head Human Resources Acting Manager Chief manager VP-1 Mr.Riaz Akhtar Mr. Shoiab Qureshi Mr. Naveed Hafeez Shaikh

Shares department
Mr. Muhammad Iqbal Mr. Irfan Rashid

Chief Manager Manager shares dept.

Services

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Group Head Operations, General Services Division & Information Technology: Operations Head Head Administration Head General Services Head Security / Transport Head Information Technology Mr. Fawzi Khawaja Mr. Faqir Syed Azm Ali Mr. Sajid Arif Nomani Col. (R) Tenwir ul Hassan Lt. Col. (Retd.) Sajid Ali Khan Mr. Azhar Hussain Dilawari

Special Assets Management

Head Special Asset ManagementCommercial General manager /EVP Deputy Head Special Asset Management-Commercial VP-1

Mr. Sajjad Hussain Mr. Shaheen Nazir Mr. Ammir Malik Mr. Ahmad Ameen

Transaction Banking
Group Head Transaction Banking Group & Equity Capital Market:

Mr. Mustafa Hamdani

Treasury department

Head Treasury:

Mr. M. Saleem Mirza

Number of employees
The total number of employees of the bop is 6,000 approximately
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Main offices of the bank of Punjab

The main offices of the bank of Punjab are located at the following cities

City

Lahore

Karachi

Faisalabad

Rawalpindi

Multan

Gujranwala

Number of main offices 05 03 02 01 02 02

Introduction of all departments

1. Human resource department 2. Audit & Risk Asset Review department 3. Commercial Banking Department 4. Credit Administration 5. Compliance & Internal Control 6. Corporate & Investment Banking
7. Consumer & Agriculture Credit 8. Finance department 9. Legal advisory department 10. Retail Banking 11. Services department

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12. Special Assets Management department 13. Transaction Banking

Categories of Services
The Bank of Punjab (BOP) Services

Commercial Banking Corporate & Investment Cash Management Services Financial Institute Correspondent Banking Utility Bills Lockers Treasury

DIVISION AND DEPARTMENTS

DIVISION

DEPARTMENTS

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ADMINISTRATION OPERATIONS BUSINESS DEVELOPMENT CREDIT INTERNATIONAL FINANCE RECOVERY AUDIT & INSPECTION TREASURY

ORGANIZATION & METHODS INFORMATIONAL & TECHNOLOGY OFFICERS TRAINING INSTITUTE SHARES LAW STATIONERY PLANNING RESERCH & PUBLICATION

HEADED BY: -

HEADED BY: -

GENERAL MANAGER

CHIEF MANAGER

REGIONAL CHIEFS

BRANCH NETWORK

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REGIONAL NET-Work

Comments on Organizational structure

The BOP is a medium sized organization that is dealing with the financial sector in the Pakistan. BOP is dealing in commercial and industrial sector to satisfy the customer by giving many products and services. BOP is also dealing with the agriculture sector and has offered many schemes for agri loan. Theses loans are offered on the basis of land of the farmer. Other then this BOP is also dealing in the remittance department. Management of BOP is very strong and makes strategies according to the conditions of the internal and external environment.

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Plan of internship program Product lines

BOP is dealing with many product line but the majors are as

Deposit Products
BOP is offering many deposit products and different types of accounts

Current Deposit Account:

Balance required to open this account is Rs 10,000/ This account is usually open by those customers who want to make transaction on daily bases. Maintaining of account required minimum Rs 10,000/ balance must keep in account. In case if the balance in account is less then 10000/ then bank will charge Rs 50/- per month. The businessman prefers current account.

PLS (Profit and Loss Account):

Balance required to open this account is Rs 10,000/ This account is usually open by those customers who earn salary and transaction performed infrequently. Maintaining of account required minimum Rs 10,000/ balance must keep in account. In case if the balance in account is less then 10000/ then bank will charge Rs 50/- per month. Customer gets profit @ 1.75% per annum.

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Collection account
The account that is op-e on the behalf of the company and mainly this account are for the billing of the company. The company cannot sign the Cheque to withdraw money.

BBA basic banking account:

Balance required to open this account is Rs 1,000/ No fee for maintaining the BBA account. If the BBA account is nil for six month then branch can close this account. Customer get profit @ 2.75% per annum

BTA (business Tijarat account)

In this account there is free Cheque book, online transactions and some other facilities but the account holder must poses s the amount in account more than 50,000 Rs.

Super saving Account:

This account is particular for those customers who want to save money for as longer period of time. Customer get profit @ 8.75% per annum

Currency of Account
In this rationale customer write with what type of currency he will deal because there are also specific rules for foreign currency e.g. zakat is exempted on foreign currency accounts.

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Title of Account
In this rationale the name of the customer is written in (capital letters) that will deal with the bank. The title of the bank may be individual, partnership, or joint company.

Contact
In this all the information of the customer is mention like; mailing Address Alternate address, phone no., mobile no. fax no. and E-mail address. This is very important rationale because in specific circumstances Bank has to contact with the account holder.

Category of Account
In this rationale customer write the category of account whether he/she want to open individual, joint, proprietorship, Public ltd, or Private ltd company account. These all types of accounts have different requirement for opening account in the Bank of Punjab. Zakat Not applicable in case if you are non-Muslim, foreign nation or other e.t.c.
Operational Instructions

In this A/c holder write the name of person who will operate the account that may be Manger, personal secretary or any other relative of the account holder. Introducer In this, the name of the introducer of that customer is mention. This is very important because if new customer committed in a fraud then BOP may ask from the introducer of that account holder

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Applicant

In this the name of applicant is mention that may be account holder self or any other manager or agent of account holder. Know Information Next (KIN) This is very important rationale; in this customer write the name and other contact information of any relative or other person. If the account holder does not contact till continuously three years then BOP contact that person whose name is mention in KIN. Additional Information In this A/C holder mention if he has any account in other BOP Branch or any other bank branch. This shows the strength of the customer that many its business is expanded. Account opening checklist This is for the bank use only. In this bank check and tick on all the information that were required for opening a bank account. This helps the managers or officer who opens the account for not missing any information or attached document.

General rules and Regulations

In this all the rules and regulations for opening an account in Bop are mention. A/C holder read and signs at bottom of every page of rules and regulations. This is very important because if customer committed into fraud then Bop may suit or take action in the light of those rules and regulations.

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Most important points or Rules that BOP fellows

Officer must view customer original CNIC and attached photo copy of NICI. Introducer NICI copy of next to kin.

Other accounts
Gharayloo Saving Account PLS-Saving Profit Plus Account Corporate Premier Account BOP FCY Supreme Saving Account YLS (youngs lions saving account) BOP PLS Supreme Saving Account Ziada Munafa saving Account Senior Citizens Saving Account Saving Accounts Current or demand accounts Fixed accounts

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Fixed account/ Term account

In this kind of deposit the customer has to deposit his/her surplus amount for a fixed period of time and the bank pays a fixed interest to the depositor on his amount. There will be a maturity date for the account and amount can be withdrawn under the rules of the bank after or before the maturity. Other Various Term Accounts BOP Pehlay Munafa Scheme Corporate Premier Term Account

Munafa Hi Munafa Term Account - III

Bai Misaal Term Deposit Account

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Finances/Loans
Financial loans are provided to the needy people and they must repay the amount to the bank in the easy installments. Various schemes are introduced by the bank to get loans. BOP is offering following schemes for customer Finance. o Quick cash o BOP house Loan o BOP motorcycle leasing scheme o BOP Car Loan

Agriculture Credit
Pakistan is an agriculture state and basic economy of the Pakistan depends on the agriculture sector. The loan that is given to the farmers on the basis of their agri lands called agri credit. Commercial loans are also given to the customers and farmers that dont have agri land. 19% flat mark up /annum on the agri land loan. 50 % loan of the market value of the commercial land can be taken and loan on agri land is ost bai 75%. The major plan of the agriculture credit is to facilitate the customers and farmers, providing them loans that fulfill their requirements. This will increase the crop output of the farmers.

The various Loan Schemes are as follows.

Kissan dost agriculture finance scheme Kissan dost tractor finance scheme Used /second hand tractors leasing scheme
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 Kissan dost Aabiari scheme

Kissan Dost Mechanization Support Scheme Kissan Dost Farm Transport Scheme Kissan Dost islah-e-Arazi Scheme Kissan Dost Live Stock Development Scheme finance for live stock breed improvement. Kissan Dost Commercial Agro Services finance scheme Kissan Dost Agri Mall Finance Scheme

Kissan dost agriculture corporate farming finance scheme Kissan dost commercial lease finance tractor scheme Kissan Dost Live Stock Development finance Scheme Facility to landless people Lease finance facility to farmers for purchase of milk animals. Mark up free finance facility for purchase of milk cooling tanks Running finance facility for live stock Model dairy farms (PDDC) Model milk collection center (PDDC) Facility for fish farming in collaboration with fisheries department Financing for potato growth under agreement with PEPSI cola international Kissan dost green house finance facility Kissan dost cold storage finance facility

Kissan dost controlled sheds

Commercial Financing
This type of financial services is proposed to offer the financial services to the commercial zone to accomplish various purposes. It

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includes running finance, demand finance and Car dealers financing etc.

Karobar Barhao Scheme Running Finance Demand Finance Auto Lease Financing Scheme Car Dealers Financing scheme Fertilizer Dealers Financing Scheme Atlas Honda Limited - Authorized Dealers Financing Scheme Financing Scheme - Purchase of Office/Shops CNG Filling Station Scheme Cash Finance Ali Akbar Group - Franchise Financing Scheme

Services Services of Bank of Punjab:

The Bank provides all types of banking services such as: Client Deposit in Foreign Currency Advances to Business Trade Industry and Agriculture.

ATM Facility On-Line Banking E-Banking Debit Card

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Consumer Financing Agriculture Financing Corporate Financing Commission free Remittance ZARCO Exchange Remittance Collection of Utility Lockers Facility account opening form deposit in local currency

Detail of the service sector Commercial Banking

The bank of Punjab is providing commercial services in small size and medium size organizations. The small and medium size customers or organizations can open their account in the bank, get loans and keep their deposits in the bank.

Corporate Banking
The BOP is providing the corporate banking to the public sector and mostly to the multinational companies. Basically in this type of banking the main target of the bank is to make good relations with the major corporations. BOP has a Corporate Management Group that offers financial recommended, operational services according to desires of clients.
o Cash management services

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The cash that is received from the customers in daily transactions is used for making funds.
o Utility Bills services

BOP provides a facility to the customers or to local public, they can pay their utility bills such as, WASA, Electricity, Sui gas and PTCL bills in any branch of the

Locker Facility

BOP is offering the locker facility for its customers. Remittance Form Remittance form deal in the following matters Online Transfer (OT) Call Deposit Pay Order (PO) Demand Draft (DD) Mail Transfer Telegraphic transfer/swift

Procedure:
For all of the above mentioned remittances Bank of Punjab have one structure. In order to get this facility of remittance form customer have to fill this form and must give details about Beneficiary and Benefactor
Beneficiary Informant:

Beneficiary is the person who is the receiver and all information must be fill by the applicant or the Benefactor and that includes information

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such as name of beneficiary (Receiver), Account No, Amount, Account Title, C.I.N.C No., Beneficiarys bank, branch code, address and City.
Benefactors Detail:

The sender of the remittance is called the benefactor he has to fill these requirements name, Copy of C.N.I.C No, Address, City, Contact number.
Date

This rationale printed on every type of forms and instruments that provides information about the transaction day.
Account Number

After opening account in the bank, bank issue an account number to the customer. Names may be same but A/C # will never same, Customer branch name The name of the branch is very important. From this head other people can understand where from the instrument came. Branch code Branch code is also very important. This code allocated by the bank management that shows in which branch this instrument and customers come. More than one branch can be in one city and at the same name of place but the branch code will distinguish between the branches. Amount (in words & figures) This head is also very important. It shows that how much amount is demanded of the instrument. Amount should written in words and figures both because in figures can arise mistake. So, when amount mentioned in words that mistake can be solve. Telephone number of customer
Contact number of customer is very in this modern period. In case of emergency you can call your customer and problem can be solving very quickly.

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Payment Order
In case of same city pay order is made for local payment purpose to party. Its a Government or Bank instrument it cannot be dishonor (means that the bank take the payment from customer and make the payment order in the favor of party). Whenever bank receives the payment order must have to pay to party.

Bank charge
Payment order Issuance of order Cancellation of payment order Issuance of duplicate Charges Rs 50 for account holder Rs 200 for non account holder Rs 100 for account holder Rs 200 for non account holder Rs 100 for account holder Rs 200 for non account holder There are no charges for the issuance of pay order to the Government. The amount can be paid through cash or Cheque. Payment order that is printed by the officer is of yellow color.

Payment Order

The Bank of Punjab Saddar bazaar Lahore cantt

Payment Order No:2011/00290 Issued No: 21/05/2011

Rs=44935/-

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Pay: Lahore Development Authority Rupees: forty four thousand nine hundred thirty five only PKR: *************44935/From the Bank of Punjab ____________________ Authorized Signature ___________________ Authorized Signature

Brief introduction of the branch

I selected bank of Punjab for my internship program that is situated at sadder bazaar Lahore cantt. The code of the branch is 0025. There are 13 staff members in the branch.

Starting and ending dates of internship

I started my internship at BOP sadder bazaar Lahore cantt. On 5 th july, 2011 and ending date is 5th of sep, 2011

Names of the departments in which I got training

I got the training in the following departments

Clearing department
In this department the clearing of different types of cheques occurs. The clearing is of two types
Inward clearing Outward clearing

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Inward clearing
In this type of clearing supposed that customer of BOP gives payment to party from cheque and this party has account in other bank may be MCB, HBL and bank of Alflah the customer deposit his cheque of BOP in his/her bank along with the deposit form then this process is know as inward clearing because this become the responsibility of the receivers bank to collect the amount and credit in the bank account of the receiver.

Out Word Clearing

When an account holder having some receivables and the other person give payment in Cheque rather than cash and Cheque is not of the same bank the account holder comes and gives Cheque of other bank in that branch where he has an account. That bank make payment to the account holder and at the evening that branch send Cheque to the concerned bank and collect that amount which branch paid to its account holder on the Cheque of that bank. This is called out ward clearing.

Operational department
In this department the operations of the all branch are handled. I view different types of operations.,which is performed by operational manager.

Remittance department
Remittance is dealing in the following matters Online Transfer (OT) Call Deposit Pay Order (PO)

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 Demand Draft (DD) Mail Transfer Telegraphic transfer/swift

Cheque posting and token issuance department

In this department I got training that how to issue the token and how cheque is entered into the system. After the entry the cheque is authenticated by the other senior officer then cash is paid to the customer.

Cash/ billing department

In this department cash is delivered to the customers on their recipient requisite. Cash received stamp is pasted on the cheque after the cash is received by the person.

Management Hierarchy of BOP 0025

The management Hierarchy of the Bank of Punjab saddar bazaar Lahore cantt Branch code is BOP-0025
Branch manager Syed Abbas Haider Rizwi

Operation manager Irfan Qureshi

Agriculture Manager Ashfaq ahmed

CD Officer Riaz Qadeer

System admin Nasir Hashmi

OGII Atif Qadeer

Cash officer Ashfaq Ahmed

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Cash officer Miss. Tamseel

Cash officer Mr. Muzammil

Operational manual officer Miss. Farzana

Complete description of Training program Clearing department

In this department the clearing of different types of cheques occurs. The clearing is of two types Inward clearing Outward clearing

Inward clearing
In this type of clearing supposed that customer of BOP gives payment to party from cheque and this party has account in other bank may be MCB, HBL and bank of Alflah the customer deposit his cheque of BOP in his/her bank along with the deposit form then this process is know as inward clearing because this become the responsibility of the receivers bank to collect the amount and credit in the bank account of the receiver.

Out Word Clearing

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When an account holder having some receivables and the other person give payment in Cheque rather than cash and Cheque is not of the same bank the account holder comes and gives Cheque of other bank in that branch where he has an account. That bank make payment to the account holder and at the evening that branch send Cheque to the concerned bank and collect that amount which branch paid to its account holder on the Cheque of that bank. This is called out ward clearing.

Operations department.
In this department the operations of the all branch are handled. I view different types of operations. Section A: Pre-planning 1. Obtain the following: Prior internal audit workpapers. Prior internal audit report(s) and management replies. Staff assignments for the audit. Time budget. 2. Review work program and prior reports. Interview division management and personnel to determine the procedures utilized in each department. Obtain documented policies and procedures, if available. 3. Coordinate audit with external auditors and compliance auditors as necessary to understand their role in the audit (if any), and the responsibilities of each group. 4. Review prior internal audit workpapers and reports extracting and/or noting any pertinent data or report items yet to be implemented.

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Section B: Item Processing 1. Request the following and prove totals to the corresponding daily statement on a scope basis: Official checks. Expense checks. Certified checks. Money orders. Dealer finance. 2. Determine that reconciliations are being properly performed and reviewed. 3. Determine if official checks have been paid with no credit. Follow-up on any such items outstanding for more than XXX week(s). 4. Select a sample of official checks and trace official check signatures to the signature card file. Determine a process is in place for updating official check signatures on a timely basis. 5. Determine that all checks outstanding in excess of X months have been moved into a dormant account. 6. Perform a review of the dormant check account. Determine that a proper reconciliation is being performed. Determine if there are any accounts or documents over XXX years old that have not been remitted to the state. If so, ascertain the reason. 7. Review the process in place for reconciling the municipal accounts. Determine if proper procedures are in place. 8. Review the procedures performed in operations relating to the Federal Reserve reconciliation. Determine that there is adequate and timely follow-up performed on outstanding items.

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9. Perform a review of the procedures in place for high dollar verification. Select a sample of items in excess of $xxxx to determine if operations is complying with procedures. 10. Review the procedures in effect for follow-up on non-sufficient funds return items. Section C: Customer Accounting 1. Obtain a complete understanding of the Deposit Auto Loan Journal. Determine how it is used to reconcile deposits (demand deposit accounts, time, and cash reserves) on a daily basis. 2. Collect supporting documentation for all entries required for

reconcilement. Obtain explanation for all reconciling items and trace through to resolution. 3. Review the Deposit Unposted Transaction Report. Determine if proper follow up procedures are in place to clear items on a timely basis. 4. Review automatic teller machine (ATM) settlement. Trace all reconciling items to resolution. Review rejected items. Section D: Retail Services 1. Review W-8s. Determine that these forms are renewed after three years. 2. Obtain the listing of outstanding collections and review for proper documentation. 3. Review the procedures in effect over restraining notices and tax levies. Select a sample and verify that they are handled in accordance with proper procedures. Restraining notices cannot exceed one year. Tax levies should be paid after XX days.

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4. Determine that the bank follows policies and procedures in accordance with the Right to Financial Privacy Act. Complete questionnaire. Note the number of records released by the bank since mm/dd/yy. Review a sample of these records for completeness. A representative list of items to be found: Copy of subpoena. Copy of request for research. Copy of letter sent to court/agency. Certified mail card to prove it was received. Determine how management ensures that bank personnel know the conditions under which they may provide to any federal government authority access to, or copies of, the information contained in the financial records of any customer. How are bank records required to be maintained on government agency requests for customer records and is that requirement adequately conveyed to all affected bank personnel? Are bank policies, procedures, and training adequate, on an ongoing basis, to ensure compliance with the Right to Financial Privacy Act? 5. Obtain latest abandoned property report filed with the State. Determine procedures in effect over remittance of abandoned property. 6. Ensure the bank is following proper account disclosures for their customers and proper funds availability policy.

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7. ATM Hot Card Request cards that have been lost, stolen, or have been subject to unauthorized use are hot carded to __________ via a fax. Select a sample of hot card request forms received by retail services over the last 12 months. Review the form to determine if it was properly completed. Determine if __________ was notified the same day the card was reported lost/stolen. If not, ascertain if the delay was caused by the branch or retail services. 8. Review the procedures relating to reporting ATM transaction irregularities to retail services. Ensure that the bank reports the results of preliminary investigation within XX days. Ensure a written confirmation request form was sent to the customer. If customer followed up with written confirmation, retail services is required to give a provisional credit and resolve the matter within 45 days. Trace credit to customers account. If no written confirmation was received then the bank does not have to give a provisional credit. 9. Review the ATM cash proof. Determine the procedures in effect for review, follow up and resolution of the overages/shortages. 10. Review procedures in effect in the operations area for ensuring that proper back-up withholdings are set up when necessary. 11. Review the procedures in place for properly filing reclamations. (returning social security deposits and checks upon death of depositor, etc.) 12. Obtain the reconciliations prepared by the department relating to travelers checks (e.g. Visa and American Express). Review the procedures in effect for reconciling these accounts to the vendor statements and controlling the distribution of the checks to the various branches.

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Section D: ATM Section Obtain an understanding of the controls over the ATM branch administration. Indicate in a memo the procedures that are followed relating to maintenance, upgrades, etc. of ATMs. 1. Determine if a log is kept for maintenance calls. Review for frequent calls for the same ATM. Section E: Support 1. Review the rate change process. Obtain copies of the rate change fax. Determine that the rate change was properly approved. Determine that the rate change was properly entered onto the system. 2. Ascertain that the bank is in compliance with Truth In Savings Regulations. Select a sample of each type of deposit account (money market, time deposits, etc.) Recalculate the APR rate calculations to determine that they are in compliance within the acceptable tolerance levels as specified by Truth In Savings Regulations. 3. Obtain the latest proof prepared by comptrollers. Determine that branch reconciling items are being cleared on a timely basis by the support group. Ensure that a clear path of resolution is maintained in the files and that an aging of unresolved items is maintained. 4. Determine the progress that has been made on the unreconciled items for the period mm/dd/yy through mm/dd/yy. Ensure that a clear path of resolution is maintained in the files. Determine the action plan for recovering funds, if necessary. Section F: General Ledger and Suspense Accounts

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1. Obtain a listing of all general ledger suspense accounts for which the operations area has responsibility for reconciling. Determine how often departmental proofs are prepared and confirm that an officer regularly reviews the proofs. Determine that agings of all suspense items are performed timely. Verify the balances in the general ledger accounts as of the audit date. Trace clearance of reconciling items to subsequent suspense listing. Trace item to subsequent posting to general ledger. 2. Obtain a listing of all accounts for which the operations area maintains responsibility. Review the activity in the accounts and determine that these accounts are properly reviewed. A list of these accounts should include: Origination fees. Other fee income. Teller clearing account. Other assets cash items. Section G: Disaster Recovery and Business Resumption Request whether a contingency plan exists for the department. Determine that key employees are aware of the plan in case it needs to be put in effect.

Section H: Summary and Report 1. Re-review previous audit report and managements replies and determine that all items were properly addressed by department management. If appropriate, include any remaining outstanding items in the new audit report. 2. All current exceptions should be discussed with management prior to completion of the fieldwork.
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3. Review the workpapers and draft the report. 4. Discuss the report draft with management.

Remittance department
Remittance is dealing in the following matters Online Transfer (OT)

Call Deposits

Pay Order (PO) Demand Draft (DD) Mail Transfer Telegraphic transfer/swift

Cheque posting and token issuance department

In this department I got training that how to issue the token and how cheque is entered into the system. After the entry the cheque is authenticated by the other senior officer then cash is paid to the customer.

Cash/ billing department

In this department cash is delivered to the customers on their recipient requisite. Cash received stamp is pasted on the cheque after the cash is received by the person Functions of Various Departments Manager Name: Syed Abbas Haider Rizwi

Administration

of

the

operations

of

the

all

branch

deposits/advances To check Overall functionality of branch

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 Dealing with different clients on regular basis watch overall discipline of branch Timely submission of returns to concerned quarters, Branchs overall supervision is being handled by the Abbas Haider Rizwi. Operational manager Name: Irfan Rafi Qureshi Responsible of internal control regarding day to day banking operations through implementation of procedures. Supervise balancing of branch books, vouchers, sheets and reports. Handling staff and other operational problems of the branch. Custodian of ATM pin codes. Handling of internship cases and formalities. Preparation of staff salaries.

Maintainace and secure all security documents

Authentication of cheques above 200,000/ Corresponding with A.O/R.O/H.O and its follow up. Ensure proper security and compliance password and system management as per strict controls and policies. Carry out performance appraisal of reporting staff. CD Officer Name: Riaz Qadeer Verification of all type of transactions.
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 Issuance/authentication of online transactions. Balancing GL heads. Balancing of pricing/security stationeries. Maintenance of profit and loss of the branch. Agriculture manager Name: Ishfaq Ahmed Maintains over all agri loans. Find the customers that has taken loan and to re-cover them.

System administrator
Name: Nasir Hashmi Maintains overall networking of the branch. Keep the systems efficient. Carry out daily transactions that are related to clearing.

OGII Name: Atif Qadeer Account opening Filing of account opening forms.

Cash officer
There are three cash officers and their area of job responsibilities are as follows 1. Cash is deposited on the receipt from duly filled in properly and signed by the depositor. 2. Cash denominations.
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3. Shortage /excess of cash, prize bond, found on physical checking must be reported to the regional manger. 4. Cash remittance are properly kept and recorded duly signed by the authorized officer. 5. Teller is making payment of cheques singly as per limit allocated. 6. Paid cash stamp is affixed on Cheque voucher paid in cash. 7. Fresh currency notes are issued as per SBP instructions. 8. All cash in transmit entries are zeroid on daily basis.

Operational manual officer

Name: Miss. Farzana Azad Khan Issuance of token for the cash recipients. Entry of the transactions manually as well as in the computer. Filling of the cheques of the customers.

Detailed description of the task

The task assigned to me during my internship program is to get familiar with all operations of the bank that are carried out on daily basis. I get the practical knowledge of all the departments as clearing department, cash department, remittance department, issuance and cheque posting department and operations department. The operation manager helps me in this matter. And at last I am able to the operate the functions successfully

FINANCIAL ANALYSIS

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Financial analysis is a statement, which represent the changes in financial position. The information contained in these statements is used by management creditors and investors and others to judge the operating performance of the firm. According to AICPA definition analysis of financial statements is an interpretation of results there of financial analysis is the process of identifying the financial strengths and weaknesses of the firm by property establishing relationship by means of ratios between the items of the balance sheet and profit and loss account.

FINANCIAL SATAEMENT ANALYSIS:

In the words of MYER Financial statement analysis largely a study of relationship among the various financial factors in a business disclosed by a single set statements and study of these factors as shown in a series of statements.

STEPS INVOLVED IN THE ANALYSIS: Compilation of financial data Study of data Systematic classification of data

Scientific arrangement of classified groups of data supplementing with appropriate comments analysis

Establishing relationship with related data for further comparison

Interpretation of the analysis.

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RATIO ANALYSIS
Ratio analysis is the most widely used tool of analysis. A ratio is a quotient to two numbers and is an expression of relationship between the two amounts. It indicates a quantitative relationship, which is used for a qualified judgment and decision-making. The ratios may be compared with the previous year or base year ratios of the same firm. The relationship between two accounting figures expressed mathematically is known as a financial ratio. British Institute of management has classified the ratios into two categories. Primary ratios Secondary ratios PRIMARY RATIOS: Ratio indicating the relationship between profits and capital employed area primary ratio.

SECONDARY RATIO
These ratios give the information about the financial position and capital structure of the company.

OBJECTIVES OF RATIO

The objectives of working out ratios and consequential analysis are: To study the liquidity of the firm. To find the profitability of the organization.

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Leverage that is financing by debt or equity or preference shares. To know operating efficiency of the organization. To know Effective utilization of assets.

ADVANTAGES OF RATIO ANALYSIS To identify the significant accounting data relationship. A ratio indicates trends in which will help in decision making and forecasting

Ratio analysis helps in assessment of liquidity profitability and solvency of the firm.

To know the over all operating efficiency and performance of the firm. It helps in understanding financial statements. It provides basis not only for intra-firm comparison but also for inter-firm company. It helps the management in controlling the affairs of the firm.

ACCOUNTING RATIOS CAN BE EXPRESSED IN VARIOUS WAYS: Such as A pure ratio say ratio of current assets to current liabilities. A rate say current assets are two times of current liabilities. A percentage says current asset are 200% of current liabilities. DIAGNOSTIC ROLE OF RATIOS: The essence of the financial soundness of a company lies in balancing its goal commercial strategy product, market choice and resultant

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financial needs. The company should have financial capability and flexibility to purpose its commercial strategy. Ratio analysis is a very useful analysis technique to raise permanent question on a number of managerial issues while assessing the financial wealth and health of the company with the help of ratio analysis answer to the following question may be sought.

How profitable is the company? What a accounting policies and practices does the company follow? Are stable?

Is the profitability of the company high/low/average? Is the return on equity high/low/average? It is due to Return on investment Financing Mix Capitalization of Resource

Can the company sustain its impressive profitability or improve its profitability given competitive and other environmental situations?

How effectively Does Company utilizes its assets in generating sales. What are the trends in collection period inventory turnover and fixed assets turnover?

What is the level of current assets relative to current liabilities? It is reasonable given the nature of the companys business? What is the Mix of current assets? Is the proportion of slow moving inventories high?

How promptly the company pays its creditors?

The answer for all these questions can be known through the care observation of companys financial position through ratios.

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STANDARDS OF COMPARISON
The ratio analysis involves comparison for a useful interpretation of the financial Statements. A single ratio in itself does not indicate favorable or unfavorable condition. It should be compared with some standards of comparison may consists of :

Ratio calculated from the past financial statements of the some firm. Ratio developed using the projected or performed financial statements of the same firm. Ratios of some selected firms especially most progressive and successful at the same point in time. Ratios of the industry to which the firm belongs some times future ratios are used as the standard of comparison ratio can be developed from the projected or performed financial statements. The comparison of past ratios with future ratios shows the firms relative strength and weakness inthe past and future.

This kind of a comparison indicates the relative financial position and performance of the firm can easily resort such a comparison and it is not difficult to get the published financial statements of the similar firm.

USERS OF RATIO ANALYSIS

The ratio analysis is on of the most powerful tools of financial Analysis. It is used as a device to analysis and inter-prate the financial health of an enterprise. 1. Managers

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These are the persons who among the business. Financial ratios are important to managers for evaluating the results of their decisions. Financial ratio also helps the managers in decision forecasting and planning co-ordination and control of business activities. 2. Shareholders/Investors Those who are interested in buying and selling the shares of a company are naturally interested in the financial ratios. These ratios are helps in knowing the safety of their investment. This ratios tells that the position of the firm whether it is good or not. 3. Creditors The creditors are interested to know whether their loan principal and interest will be paid when due suppliers and other creditors are also interested to know their dues in time.

4. Workers Generally the workers are entitled to payment of bonus in which depends on the size of profit earned. The knowledge also helps them in conducting negotiations for wages and bonus. 5. Government The ratio analysis of a company or industry is useful to the management in framing the policies and then the financial ratios are useful to the government in taking decision relating to taxes.

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6. Researchers The financial ratios being a mirror of business condition of great interest to undertaking in accounting theory as well as business affairs and practices.

SIGNIFICANCE OF RATIO ANALYSIS

Ratio analysis stands for the process of determining and presenting the relationship items and groups of items in the financial statements. It is an important technique of financial analysis. It is a way by which financial stability and health of a concern can be judged. The following are the main points of importance of ratio analysis. USEFUL IN FINANCIAL POSITION ANALYSIS Accounting ratios reveal the financial position of the concern. This helps the banks, insurance companies and other financial institution in lending and making investment decisions.

USEFUL IN SIMPLIFYING ACCOUNTING FIGURES

Accounting ratios simplify summarizes and systematize the accounting figures in order to make them more understandable and in lucid form. They highlight the interrelationship, which exists between various segments of the business as expressed by accounting statements. Often the figures standing alone cannot help them to convey any meaning and ratios help them to relate with other figures.

USEFUL IN ASSESSING THE OPERATINAL EFFICIENCY

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Accounting ratios helps to have an idea of the working of a concern. The efficiency of the firm becomes evident when analysis is based on accounting ratio. They diagnose the financial health by evaluating liquidity, solvency profitability the capabilities of various units.

USEFUL IN FORECASTING PURPOSE

If accounting ratios are calculated for a number of years, then a trend is established. This trend is setting up of future plans and forecasting. For Example: expenses as a percentage of sales can be easily forecasted on the basis of sales and expenses of the past years. USEFUL IN LOCATING THE WEAK SPORTS OF THE BUSINESS: Accounting ratios are of great assistance in locating the weak spots in the business even though the overall performance may be efficient weakness in financial structure due to in correct policies in past are reveals through accounting ratios. If a firm finds that increase in distribution expenses is more than proportionate to the results
expected for achieved it can be remedial measures to overcome this

adverse situation.

USEFUL IN COMPARISON OF PERFORMANCE:

Through accounting ratios comparison can be made between one department of a firm with another of the same firm in order to evaluate the performance of various department in the order to evaluate the performance of various departments in the firm manager is naturally interested in such comparison in order to know the proper and smooth functioning of such departments ratios also help him to make any change in the organization structure. Management has to protect the interest of all concerned parties. Their survival depends on their

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operating performance from time to time. Management uses ratios analysis to determine the firms financial strength and weakness and according takes actions to improve the firms position. The various concerned parties include the owners, investors, creditors, customers, consumers etc; they are interested to know the firms operating performance to get their expected returns. The owners of the company will observe the profitability of the firm and the effective utilization of the assets of the firm. The investors can observe about the net profit tax, which can be available for them to get the desired, dividends; The creditors will think about the debt payment capacity of the firm. Ratio analysis is very useful yardstick to determine the financial position of the firm and it will protect the interest of the parties, through careful security of financial statements.

LIMITATIONS OF RATIO ANALYSIS

Ratio analysis provides an indication of companys profitability, liquidity, leverage and solvency, ratio do not provide answers, and they are a guide to management and others of the areas of weakness and strengths of a company. Many firms are much diversified and are engaged in number of different activities. This makes it difficult to developed meaningful set of averages in order to compare performance. No company or firm is content being average. They to be the best. Thus it may be argued that comparing a companys performance against an overage is not flattering or indicative of a companys position in an industry. Ratios can be purposely distorted by companies to make it look better than it actually is. A company could sell its receivable at a discount for cash. As a result, its collection ratio of account receivables would be low, leading one to believe its efficiency is better than it actually. In
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order to state whether a ratio is good or bad it must be intelligently interpreted. A high current ratio may indicate a liquidity position, which is positive or excessive liquidity cash, which is negative. It is difficult to compare companies as they very often follow different accounting principles. A company may value inventory under Last in First out principle, where as another may depreciate under the straight-line method, while its competitor may use accelerated depreciation.

TYPES OF RATIOS
Several ratios calculated from the accounting data, can be grouped into various, classes according to financial activity or function to be evaluated management are interested in evaluating every aspect of the firms performance. They have to protect the interests of all parties and see that the firm grows profitably. In view of requirements of the various users of ratios, we may classify them into the following four important categories.

1. Liquidity ratios 2. Leverage ratios 3. Activity ratios 4. Profitability ratios LIQUIDITY RATIOS: Liquidity ratios are measures the firms ability to meet current obligations. It is externally essential for a firm to be able to meet preparation of cash budgets and cash flow and find flow statements. Its establishing a relationship between cash and current assets to
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current obligations. The failure of a company to meet its obligations due to lack of sufficient liquidity will result in poor credit worthiness cost of creditors confidence a very high degree of liquidity is also bad idle assets earn nothing. The most common ratios, which indicate the extent of liquidity a. Current ratio. b. Quick ratio or Acid test or liquid ratio. c. Absolute liquid ratio or cash position. Ratio

CUURENT RATIO
Current ratio may be defined as the relationship between the current assets and liabilities. This ratio is also known as working capital ratio. It is most widely used to make the analysis of a short-term financial position. It is calculated by dividing the total of current assets by the total current liabilities. Current assets include cash and those assets that can be converted into cash within a year such as marketable securities debtors and inventories and prepaid expenses also considered as current assets. Current liabilities are those obligations which are payable within a short period generally within a year. Current Ratio=current assets /current liabilities

QUICK ASSETS RATIO

Quick ratio may be defined as the relationship between quick/liquid assets and current liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value and Inventories are considered to be less liquid. Quick Ratio=Quick assets/ Current liabilities

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ABSOLUTE LIQUID RATIO OR CASH RATIO

Receivables, debtors and bills receivable are generally more liquid then inventories yet there may be doubts regarding their realization into cash immediately or in time. LEVERAGE RATIOS Leverage ratios may be calculated from the balance sheet items to determine the preparation of debt in total financing. Many variations of the ratios exist, but all these ratios indicate the same thing. Leverage ratios are also computed from the profit and loss items by determining the extent to which operating profits are sufficient to cover the fixed cost. The levearage ratios are: (a)Debt equity ratio (b) Total debt ratio (c) Capital equity ratio (d) Proprietary ratio (e) Fixed assets ratio Leverage ratios are designed to measure the contribution of owners against following information.

The companys ability to cover all its obligations including short term and long term obligations. The margin of safety afforded to the creditors by the equity. The extent of control of share holders over the enterprise. The potential ratio earnings from the long term funds.

DEBT EQUITY RATIO

The ratio relates to all the creditors on assets to the owners funds. It is

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computed by dividing the total debt, both the current and long term by its tangible net worth consisting of common stock and invested more in the business than the owners. Debt equity ratio=long term liabilities/capital employed

TOTAL DEBT RATIO

In order to know the long term solvency of the firm we may know by computing several debt ratios. Total debt ratios show the relation between total debt to net assets or capital or capital employed. Total debt ratio=total debt/capital employed

CAPITAL EQUITY RATIO

It is another form of leverage ratio are may want to know how much funds are contributed together by lenders and owners for rupee of owners contribution. This can be found out by calculating the ratio of capital employed or net assets to net worth. Capital equity ratio=Net assets/Net worth

PROPRIETARY RATIO
This ratio indicates the general financial strength of the concern. It is a test of the soundness of the financial structure of the concern. The total shareholders fund (net worth) is compared with the tangible assets of the company. Proprietary Ratio=Net worth or proprietary fund/Total assets

FIXED ASSETS TO CAPITAL EMPLOYED RATIO

This ratio indicates the extent of fixed assets the firm employed in the

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total capital employed during the period. It is calculated by dividing fixed assets by capital employed. Fixed assets to capital employed turn over ratio= fixed assets / capital employed

ACTIVITY RATIOS
Activity ratios reflect how effectively the company is managing its resources. These ratios express the relationship between the level of sales and the investment assets like inventory receivable fixed assets etc. The important activity ratios are a. Stock or inventory turnover ratio b. Total assets turnover ratio c. Fixed assets turnover ratio d. Working capital turnover ratio e. Current assets turnover ratio

INVENTORY TURNOVER RATIO

A ratio showing how many times the companys inventory is soled and replaced over a period. It is calculated as. Inventory turn over ratio=sales/inventory

TOTAL ASSETS TURNOVER RATIO

This ratio ensures whether the capital employed has been effectively used or not. This is also the test of managerial efficiency and business performance. Higher total capital turnover ratio is always required in

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the interest of the company. This ratio is measured on the basis of the following formula. Total assets turnover ratio=sales/total assets

FIXED ASSETS TURNOVER RATIO

This ratio expresses the number of times fixed assets are being over in a given period and how well the fixed assets are being used in the business. Fixed assets turnover ratio= sales/ Net fixed assets

WORKING CAPITAL TURNOVER RATIO

This ratio shows the number of timers capital is turned over in a stated period. It is calculated as follows. The higher is the ratio is lower is the investment in working capital and greater are the profits. Working capital turnover ratio=sales/net working capital

CURRENT ASSETS TURNOVER RATIO

The firm may wish to know its efficiency of utilizing currents in organization. A high gross profit margin ratio is assign of good management. A gross profit margin ratio may increase due to any of these factors. Higher sales prices and cost of goods sold remaining constant.

Lower cost of good a sold sale price remaining constant. Combination of variations in sales price and cost and margin widening.

Current assets turnover ratio= sales / net fixed assets

PROFITABILITY RATIOS

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1. Gross profit ratio 2. Net profit ratio 3. Operating profit ratio

PROFITABILITY AS RELATED TO INVESTMENT

1. Return on investment 2. Return on shareholders 3. Return on capital employees

PROFITABILITY RATIOS
Profit is the main objective of the every organization. A company should earn profits to serve and grow over a long period of time. It is a fact that sufficient profits must be earned to sustain the operations of the business to be able to obtain funds from investors for expansion and growth and to contribute towards the social overheads for the welfare of the society. The profitability ratios are calculated to measure the operating efficiency of the company. Creditors and owners are also interested to know the profitability of the firm. Creditors want to get interest and repayment of principal regularly and return on investment to investors. This is possible only when the company earn the enough profits.

GROSS PROFIT MARGIN RATIO

The gross profit margin reflected the efficiency with which management produces each unit of product. The high gross profit margin relative to the industry average implies that the firm is able to produce at relatively lower cost. A high gross profit margin ratio is

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assign of good management. A gross profit margin ratio may increase due to any of these factors. 1. Higher sales prices cost of goods sold remaining constant. 2. Lower cost of goods sold sale price remaining constant. 3. Combination of variations in sales price and cost margin widening.

OPERATING EXPENSE RATIO

The operating expense ratio explains the changes in the profit margin ratio. The ratio is computed by dividing operating expenses by net sales. The operating expense ratios a yardstick of operating efficiency but it should be used cautiously. It is affected by a number of factors such as external uncontrollable factors and internal factors and managerial efficiency.

EXPENSES RATIO
Expenses ratio indicate the relationship of various expenses to net sales. The operating ratio reveals the average total variations in expenses. But some of the expenses may be increasing while some may be falling. Expense ratios are calculated by dividing each item of expenses or group of expenses with the net sales to analysis the causes of variation of the operating ratio. The lower the ratio the greater is the profitability and higher the ratio and lower the profitability.

GROSS PROFIT RATIO

This ratio shows the relationship between gross profits with sales to measure the relative operating efficiency of the company. It also reflects its pricing policies. It is computed by dividing sales minus the

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cost of goods sold by sales sometimes, it is calculated by taking cost of goods sold instead of sales. It indicates the position of trading result. Gross profit can be measure by deducting the Cost of Goods Sold from the net sales. Gross profit is the relationship between prices, sales volume and costs. The Gross profit margin reflects the efficiency of the management. Gross profit ratio=gross profit/net sales

NET PROFIT RATIO

Net profit to sales is also called net profit margin ratio. It is calculated by dividing net incomes by net sales. This ratio provides good insight into the overall efficiency of the business. A higher ratio shows the higher overall efficiency of the business and better utilization of the total resources and at the same time the ratio indicates poor financial planning and low efficiency also. Net profit is obtained by deducting operating expenses, interest and taxes from the gross profit. This ratio indicates conditions. Net profit ratio= Net profit/ Net sales the firms capacity to withstand adverse economic

OPERATING PROFIT RATIO

This ratio indicates the relationship between Operating profit and sales. It is worked out by dividing Operating profit by net sales. The net profit ratio may mislead by showing high efficiency even though the efficiency is extremely low. Operating profit ratio= Operating profit/ Net sales

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RETURN ON CAPITAL EMPLOYED

This ratio explains the relationship between net profit after tax and capital employed. This ratio explains about the amount of return that was attained through the investment of capital. Net profit after tax is the profit that was available after the deduction of all operating expenses. This ratio reveals the earnings and earning capacity of the capital employed in the business. Return on capital employed= Net profit/ Capital employed

RETURN ON SHAREHOLDERS FUNDS (or) EARNING PER SHARE

The returns on shareholders funds explain the relationship between profit after tax and the total shareholders funds. Shareholders equity consists of performance share capital ordinary share capital and reserves and surplus. This ratio shows the owners funds have been used by the firm and may be used in comparing the profitability of similar firms. The ratio carries the relationships of return to the sources of funds provided by the owners of the firm. This measures the rate of return on shareholders funds. The higher the ratio, the safer and advantage the financial position. Earning per share= (profit after tax-preference share)/number of equity shares Ratios Calculated By Bank of Punjab LIQUIDITY RATIO

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The liquidity position of a bank is like a reservoir. It may be adequate, although nearly depleted, just before the start of the rainy season. Or it may be inadequate, although three quarters full just before the summer drought. Liquidity can be defined as the banks ability not only to meet possible deposit withdrawals but also to provide for the legitimate needs of the economy as well.

CURRENT RATIO
A liquidity ratio measures a companys ability to pay short-term obligations. The ratio is mainly used to give an idea of the companys ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt as there are many ways to access financing but it is definitely not a good sign. The current ratio can give a sense of the efficiency of a companys operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations.

CURRENT RATIO =Current Assets/ Current Liabilities Table

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Current Years 2007 2008 Current Assets liabilities 21,943,061 18,972,649 21,790360 18,062,831 RATIO 1.0

1.05

Graph
S e rie s 1 1 .2 1 0 .8 0 .6 0 .4 0 .2 0 2007 2008

S e rie s 1

Calculations
Current Assets Cash and balances with treasury banks Balances with other banks Other Assets Total Current Assets 2007 2008 Rs. in 000 14,210,302 10,685,057 1,927,662 2,178,455 5,805,097 6,109,137 21,943,061 18,972,649

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Current Liabilities Bills payable Burrowing from financial institutions Other liabilities Total Current Liabilities

2008

2007 Rs. in 000 1,219,801 937467 12,278,773 17,842,915 4,564,257 3,009,984 18,062,831 21,790,366

INTERPRETATION:
In case of The bank Of Punjab, we witness quite a strong current ratio in 2008 and 2007. It indicates that the bank has substantial capacity to solicit more deposits. There is an increase in almost all the current assets of the bank except for investments. On the other hand, the bills payables and borrowing from the financial institutions have decreased resulting in a strong current ratio. Although deposit have increased as compared with the previous years figure, but the increase in the current assets of the bank is more than the increase in the deposits creation. As a result, we observe more liquidity which means greater ability to meet the credit demands that may be made on the bank from time to time. If we go through the notes, we find out that the bank was charged penalty for not meeting the liquidity statutory requirement. These charges have decreased to a greater extent in the current year indicating the focus of management activeness, attention and concern for improvement in the liquidity position of the bank. That is why the banks liquidity position has increased in the current year

ADVANCES TO DEPOSITS RATIO

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A commonly used statistic for assessing a bank's liquidity by dividing the banks total loans by its total deposits. This number, also known as the LTD ratio, is expressed as a percentage. If the ratio is too high, it means that banks might not have enough liquidity to cover any unforeseen fund requirements; if the ratio is too low, banks may not be earning Formula = as much Advances Total Deposits Years 2007 2008 Advances 133,893,585 131,731,158 Total Deposits 191,968,909 164,072,532 Ratio 69.74% 80.29% as they could be.

Series1 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 2007 2008 Series1

INTERPRETATION: It demonstrate the degree to which bank has already used up its available resources to accommodate the credit needs of its customers. This ratio, a comparison of funds generation and its funds mobilization, indicates the total loans sanctioned by the bank in
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relation to total amount of money deposited with the bank stands at 69.74% as compared with the last year figure of 73.56%. This shows that the bank has greater potential to advance additional loans. Total loan able funds roughly measured by the deposits are sufficient to enable the bank to make additional loans without recourse to more or less continuous borrowing. At present, the bank has got a relatively small amount of advances as compared with its deposits raised. One reason for fewer advances is the cautious and selective approach on the part of the management while deciding upon credit proposals.

QUICK ASSETS TO DEPOSITS RATIO It is a measure of judging ability of the company to payoff its current obligations. It is obtained by dividing quick liabilities. Quick ratio is 1:1 is usually considered adequate, but again while using this ratio as a means of immediate ability to pay off its short-term obligations, liquidity of receivable which are not collectable, are not adequate to support the liquidity of the concern. Formula = Quick Assets Total Deposits

Years 2007 2008

Quick Assets 89,599,659 35,575,492

Total Deposits 191,968,909 164,072,532

Ratio 3.34% 0.47 %

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S e rie s 1 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2 0 07 2008

S e rie s 1

Calculations: Quick Assets Cash and balances with the treasury Balances with other banks Investments Total Quick Assets 2008 2007 Rs. in 000 10,685,057 14,210,302 2,178,455 1,927,662 22,711,980 73,461,695 35,575,492 89,599,659

INTERPRETATION:
The ratio of advances to total deposits reveals little, however the banks other assets available for conversion into the funds with which to meet withdrawals or make additional loans. The ratio of quick assets to deposits is more significant for this purpose. The banks quick assets constitute 0.5% of its deposits, which means the bank has the ability to accommodate the withdrawals of deposits

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up to 5% of its total deposits (a situation which hardly happens). It also indicates that the bank has not great potential to meet the demand for new credit approvals. The liquidity position is not quite sound in view of not only the deposit withdrawal impossibility but also unforeseen cash/funds demands faced by the bank in the future. FINANCING TO DEPOSITS & BORROWED FUNDS Formula = Total Financing Total Deposits

Years 2007 2008

Total Financing 136,343,585 132,364,491

Total Deposits 191,968,909 164,072,532

Ratio 71.02 % 80.67%

S erie s 1 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 2 007 200 8 S erie s 1

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Calculation
Financing Lending to Financial Institutions Advances Total Financing 2007 2008 Rs. in 000 2,450,000 633,333 133,893,585 131,731,158 136,343,585 132,364,491

Interpretation
This ratio highlights the relationship between the deposits raised by the bank and their obligations in the form of advances and loans to financial institutions. As indicated above, this ratio for the bank has decreased from 80% to 71% in the current year. Again the reason is the same; the desire of the banks management to attain high/good liquidity to safeguard the interest of the depositors. It also indicates low level of advancements being made by the bank in the current year. Although it sounds ineffective to held cash today the funds needed to make loans two years from now. But this is the demand of the economy today. As our economy is passing through rough patches, the advancements made by the banks are less, as these are insecure. However the bank has adopted a more secure means of utilizing the funds raised through deposits and this source is heavy lending to the financial institutions with less chance of becoming bad. Although the financial institutions pay less rate of mark up as compared to the ordinary borrower, but for a bank, liquidity is overrides the profitability aspects. GEARING RATIO

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Gearing ratios show the extent of debt in the banks resources.

Debt to Total Assets Ratio

Formula = Total Debt Total Assets

Years 2007 2008

Total Debts 215,978,767 180,946,194

Total Assets 234,990,675 185,909,120

Ratio 91.91% 97.33%

S e rie s 1 12 0.0 0% 10 0.0 0% 80.0 0% 60.0 0% 40.0 0% 20.0 0% 0.00% 2007 2008 S e rie s 1

INTERPRETATION:

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This ratio indicates the banks strategic risk of financial failure i.e. how much company owes in relation to its size. The above given ratio indicates that SCB is utilizing nearly 92% of the external funds in its business operations. For a banking concern, this ratio is quite acceptable as the whole structure of banking is based on the funds provided by the depositors.

If we consider the banks liabilities excluding the depositors funds, the situation would be like this; 2007 24,009,858 234,990,675 2008 = 16,873,662 185,909,120 It shows the true picture of the gearing. Excluding the banks core function i.e. Deposits Creation, the bank seems to be relying less on the borrowings to support its operations. In the year 2007, this figure stood at10.22% but the bank has further increased this ratio to 9.08% in the year 2008. This shows the inefficiency of the banks management. COVERAGE RATIO Coverage ratio measure the capacity of the bank to cover its interest charges, which are the main obligations on the bank. = 9.08 % = 10.22 %

Interest Coverage Ratio

Formula = Earning before int. & Tax Interest Exp.

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Years 2007 2008

Earning before int. & Tax 17,529.538 11,579,633

Interest Exp. 13,939,377 7,508,795

Ratio 1.26 times 1.43 times

S eries 1 1 .45 1 .4 1 .35 1 .3 1 .25 1 .2 1 .15 20 07 2008

S eries 1

INTERPRETATION:
It shows whether the bank is earning enough profit before mark up charges to be paid to the financiers and the taxation obligations due to the government in order to remain solvent. The above figure shows the less capacity on the part of the bank to cover its interest payments. It has declined as compared with the last year. The bank cannot afford it to decline further as it would mean no benefit for the capital providers. But this is a short term perspective of the banks financial position. In view of the long run financial perspective, this ratio is good for the bank. PROFITABILITY RATIO

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Profitability ratios are a measure of reasonable rate of return and adequate profits turnover. Return on Capital Funds Formula = Net mark up Received Capital Funds

years 2007 2008

Net mark up Received 3,920,240 4,956,217

Capital Funds 3,226,961 3,468,956

Ratio 34.50 % (1.00) %

S eries1 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2007 2008 S eries1

INTERPRETATION

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This ratio relates the net profits to the amount of capital funds that have been employed in making that profit. The above given ratios suggest that the profitability of the bank has increase very sharply in the year 2007 indicating less profitable operations of the bank. . However, the situation is not as intense as revealed by the above given ratios.

CAPITAL ADEQUACY RATIOS

Capital Adequacy/Leverage ratios indicate banks capacity to meet its short and long term obligations. Capital adequacy is very important as the banks depositors as well as the supervisors as his representative, favor maximum amount of capital as protection against the risk inherent in the banking operations.

Capital Funds to Deposits Ratio

Formula = Capital Funds Total Deposits Years 2007 2008 Capital Funds 3,468,956 5,287,974 Total Deposits 191,968,909 164,072,532 Ratio 9.69 % 1.92%

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Series1 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2007 2008 Series1

INTERPRETATION
This is the first and widely used ratio to measure the capital adequacy of a bank. Ideally this ratio should fall near 1.81 %. So the bank is quite up to the mark as far as the protection of the depositors is concerned. However the bank has decreased it from 2.34% in the year 2006 to 1.81% in the year 2007 keeping in view the short range profit maximization to operate with as much of capital funds as is sufficient in order to gain average leverage in earnings from the employment of the depositors funds but still it is not in conflict with the interest of the depositors. The banks management is quite concerned about its public images i.e. the capital providers to assume more risk. In this regard the banks management is efficient in combining the profitability and safety because in the longer run, their investment will become more profitable only if the bank stays in business. In order to maintain the confidence of the public (depositors current and potential), the bank has tried to hang around 2% as public trust and confidence is vital ingredient in the success of a bank.

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Capital Funds to Total Assets Ratio

Capital fund to total asset ratio shows the total capital and assets generated by the bank. Formula = Capital Funds Total Assets

Years 2007 2008

Capital Funds 3,226,961 3,468,956

Total Assets 164,862,861 234,990,675

Ratio 9.31 times (0.60) times

Series1 10 8 6 4 2 0 2007 -2 2008 Series1

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INTERPRETATION
This ratio indicates the extent of the funds employed by the bank in the total resources as shown in the balance sheet. It shows that for ever rupee invested in the assets, 15 paisa is attributable to the owners. Although this ratio has decreased in the current year, but still it is good enough to satisfy the general public

Years

Mark-up earned Markup Expense 3600 1139

Mark-up earned 17,539 17,753

Ratio

2007 2008

21% 6.42%

GROSS SPREAD RATIO

Gross spread ratio defines the total spread of interest between borrowing and lending. Spread: Difference between funded revenue as a percentage of average earning assets and the cost of funds as a percentage of average paying funds. The higher the spread the higher will be the profit margin. GSR= (Mark-up earned Mark-up Expense)/Mark-up earned

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Series1 25% 20% 15% Series1 10% 5% 0% 2007 2008

Interpretation
The higher the spread the higher will be the profit margin. In 2007 spread will be higher as compared to 2008. GSR of the bank is decreasing because of the decrease in margin, a SBP rise up the interest rates on the deposits.

RETURN ON TOTAL ASSET

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

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Years

Profit after tax

Total Assets

Ratio

2007

4,446

234,974

2.22

2008

(10,060)

185,909

(0.05)

Series1 2.5 2 1.5 1 0.5 0 2007 -0.5 2008 Series1

Interpretation
This ratio is decreasing in the last year because of decrease in Profit as expenses rose up. The decrease was mainly due to increased equity as a result of increase in minimum capital requirements and additional provision due to withdrawal of benefit of FSV for most types of advances.

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Solvency ratio
Solvency ratio=Total liabilities/Total assets Years 2007 2008 Total liabilities 216,005.7 182,165.4 Total assets 235,017.6 185,893.0 Ratio 0.9 0.9

Series1 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2007 2008 Series1

Interpretation
Generally the best solvency ratio to any firm is 1:1.In both years solvency ratio is less than 1,but nears to 1. so we can say that the bank is having a good solvency ratio and performing well.

SWOT ANALYSIS OF THE BANK

Strength

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 Fundamentally sound bank 3.7 crore strong customer base Well-entrenched Brand Image Dominant position in Indo-Gangetic Plain No competition A leader amongst Public Sector Banks High proportion of customer base in deposits Strong Risk Management Practices Redefined processes through technology initiatives like CBS, ATM, Internet Banking 100% CBS branches High tech platform incorporating EDW, CRM etc. Large network of branches with 66% in Rural & Semi urban areas

Weaknesses
presence in less developed areas leading to high operating cost Complacency (Structural & Environmental)

Weak & Inconsistent MIS rendering decision making difficult

Limited International presence.Low NRI business More dependence on conventional low margin business No Income from Financial Products such as Insurance, Mutual Fund, Credit Card etc.

State Ownership has affected level playing field and competitive ability Less flexibility in dealing with strategic HR & operational issues

Imbalance in distribution/ deployment of staff Inadequate skills for modern banking

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Changing environment, adoption of technological advancement, marketing of products requires change in the mind-set of employees

Low per employee productivity

Threats Aggressive marketing by competitor banks Expansion of peer Banks/Private Sector Banks in Indo-Gangetic belt eroding our dominance

Loss of savings business to Mutual Fund/ Insurance Products which are aggressively marketed as being more remunerative

Technological parity of competitor banks Aggressive strategy and innovative products, larger risk appetite of other banks.

Opportunities

Rural India is the next growth horizon with an opportunity 3 times the size of Urban India.

Financial Inclusion is a clear-cut opportunity with overall exposure to formal services of finance being about 20%.

Great opportunity for expanding business with over 60% populations outside the banking service network. IT Initiative creating a back bone for increasing reaches. It provides an opportunity to go beyond the Brick & Mortar.

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 Bank has a visionary leadership which can transform the bank.

Large workforce of 55398 number of employees. Each and every employee has to believe we can do it, usher in change in our attitudes/conventional wisdom, be a learner willing to adapt to the changing.

SUGGESTIONS FOR REMOVING WEAKNESSES INTERNAL CONTROL

To me the major and the most important flaw in the BOP is lack of internal controls and inter communication between different branches of the bank. As far as financial aspect is concerned there is no proper system is configured thats why there is always a risk of big frauds with in the bank. I during my internship also pointed out that point but no one bothered. To me the bank should install some proper resource planning and controlling systems like other banks do i.e., oracle financials etc.

PROFESSIONAL TRAINING
BOP staff lacks professionalism. They lack the necessary training to do the job efficiently and properly. Although staff colleges are in all major cities of the Punjab 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 which can help the employee understand the ever-changing global economic scenario.

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Banking council of Pakistan should also initiate some programs to equip the staff with much needed professional training.

DELEGATION OF AUTHORITY
Employees of the bank should be given a task and authority and they should be asked for their responsibility. The sense responsibility in employees mind is one of the most important factors in the success of any organization.

PERFORMANCE APPRAISAL
During Internship I felt that there is no or very less appraisal of any ones cool performance. 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.

TRANSFERS
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.

NEED OF QUALIFIED STAFF

Required, qualified staff should be provided to branch in order to improve the functioning of the branch. Especially a telephone operator should be appointed

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CREDIT CARD FACILITY

BOP should start its operation in credit card. These cards are very helpful for the ordinary customer in general and the business people in particular. To make it mores secure and to eliminate the misuse of it, the management is required to keep proper security against the card.

DECREASING ADMINISTRATIVE EXPENSE

Bank should decrease their administrative expenses. This was Rs 2.25 billion in the year 2007. That can be done by lying off the surplus pool of employee with golden hand shakes scheme. The branches that are not much used could also be closed. That will give positive results in the future.

SHOULD BE AGGRESSIVE IN CREDIT POLICY

As mentioned earlier, BOP is very conservative in advances and loans policy. It reduces the investment opportunities. Also loans should be given to the small businessmen and the other businesses on large scale like in agriculture sector at the low mark-up rate. It should adopt flexible credit policy while giving credit to the agriculture sector.

TECHNOLOGICAL IMPROVEMENT
I would like to suggest that at least all the main branches of BOP should be fully computerized in order to expedite the dealing process among bankers and their customers. Every department should be provided a computer with adequate training (especially Advances, Deposits and Foreign Exchange departments). Daily records should be entered directly into these

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computers, (instead entering the overall daily transactions after the banking hours). It will not only reduce transaction time, will increase accuracy but will also be efficient as well. Not only it will be economical but will also reduce the extra burden of work of the bank. It will also help in reducing the use of excessive paper work.

STAFF RELATIOSHIP
Good relationship among staff member leads to the peak performances in any organization. Observed that the staff relationship was normal other wise but some time I noticed that there exists little conformity among the staff members. Another syndrome from which the staff suffered was that all of them considered themselves more important than others.

FAVOURITISM & NIPOTISM

In the branch 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.

MARKETING POLICY

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The branch should adopt various marketing strategy and promotion strategy to promote the bank and its product. The most important in my opinion is personal marketing; it is the most effective of all when you think in term of branch level. But on the whole organization level, they should arrange the seminar with in the bank and outside the bank. They should do more advertising through newspaper and media and through channel of personal contacts.

AVOIDING BAD DEBTS

Great care should be taking while extending the loan. Loans should be awarded against reasonable securities, where market value should be equal to the loan granted. Policies should be crafted in a way to ensure that no loan is extended on political pressure. SBP regulation for loan approval should be strictly followed. According to which the current ration of borrowers business must be 1:1 and the debt to equity ratio should be 60:40, means the liquidity position of business should be healthy.

Conclusion
As we know nothing is perfect, there is always a room for improvement; following are my suggestions for the betterment of BOP: BOP is in the process of providing the services of Automated Teller Machine. In order to compete with other banks ATM services must be provided throughout the country as this service is becoming very popular in customer focus banks. The bank is also in process of computerizing its records which is good sign but it is going on with small progress Computerization must be done on early basis. This will help in increasing efficiency of work

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done, customers satisfaction, decrease the stationary cost and resultantly it will increase profits. In past BOP has always being suffered bad Government policies. Government intervention should be avoided completely. Employees Training programmed must be introduced on continuous basis so that employees get updated with latest developments and innovations especially related to customers. Bank should introduce incentive plans for employees on regular basis so that employees may work whole heartedly for the welfare of their organization. While giving incentives qualification, work, experience, hard work and such other factors must be consider. Mismanagement of resources must be avoided as much as possible as it decreases profit but also discourage hard workers and honest employees. Fresh graduates must be recruited. As the combination of Experienced and fresh people can produce better results and it will improve the efficiency of management. BOP is going towards mobile banking but the problem is that a common client has no idea of its usage due to lack of marketing. I think that a proper marketing programme must be launched for clients awareness. Bank should help the society by providing interest free loans to talented students. There is a great need of proper training of employee. The behavior with the customers should be improved. The employees way of dealing should be improved. The bank should take step to monitor the implementation of HR activities. The HRM department of BOP is not so good as compared to other well known organization. They have made separate sections within

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HRM department each section is assigned with different task. The implementation of HR activities is very low. The Hr staff is friendly and cooperative. Some employees in the department just do the same job, they become master of practicing job but they know almost nothing and are losing their knowledge about their jobs. They keep there data confidential I face great difficulty in collecting data related to HR department of BOP. The Bank of Punjab is using its own software which is not so good. The features of the system are not so advance it needs some modification. Another important factor which can be considered as a short fall is, that most of the employees are not aware with the advance studies related to their fields this can also effect their job performance. The procedure for evaluating the performance of employees is not fair and rational.

At the end I conclude that due to the assistance of all branch employees I have been able to learn many new things associated to the banking sector, I was able to run the day successfully at the end of each day, arranging all the vouchers, maintaining record of branch manfully, filling account opening forms of customers, filling cheques of the customers and handle other tasks as well.

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Bank of Punjab is a competitive organization and in the market share to overall banking sector BOP is at third position as relative to other banks in the Pakistan. On the other hand I am able to complete this report under the super vision of my Advisor Mr. Irfan Rafi Qureshi and make all concepts clear in proper way. THE BANK OF PUNJAB is a good Organization in the way that anybody can join it for his/ her long-term career. Overall working environment is comfortable. Management is very strong and above that its a government bank. Employees of Bank of Punjab sadder bazaar Lahore Cantt branch work more than their working hours and the working environment is friendly. It also shows their devotion, obligation to the organization. Customers are satisfied as best possible.

Recommendations
BOP is one of the leading commercial bank in the Pakistan but according to my point there are some recommendations in order to improve the worth of its system and to improve its products and services After doing a deep study following are my recommendation,

ATM machine must be installed so that increases the income of branch.

Improvement in the salary package to motivate the employees.

On the bases of performance, rewards should be assigned to increase the productivity

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There is shortage of staff in the branch. In order to improve the services of the BOP proper staff should be hired in the relative branch.

To retain or attract customer, bank should adopt competitive rates for its services. Branch should focus on the consumer banking as well because it is a good source of income to branch.

Proper facilitated branches should be maintained to gain value customer. The bank pays high profit to its customers and provides excellent services but there is a lack of publicity of its services on part of its clients. The pay of BOP employees is less than other banks, which is an indication of discouragement among employees. The employees have no direct access to higher authority and a large hierarchy of persons is involved. This creates frustration in employees in solving their problems. In most branches there is no facility of fax machines, which results in late delivery of messages and dealings.

The size of almost all branches of The bank of Punjab is very small. It creates difficulty for the customers as well staff members for proper dealings, which always gives congested atmosphere.

The grading system of the bank is not fair and the criteria for grading system are not mentioned. Due to unfair grading the employees of the bank are not happy. The HRM setup needs careful attention for betterment and improvements.

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 The HR practices and activities are not fully implemented.

Skills Acquired during internship period

References
Annual Reports of bank of Punjab News letter of BOP Employees

http://www.bop.com.pk/

Personal observation

SOURCES:

http://www.bop.com.pk www.google.com

Annual report Personal observation

www.investopedia .com

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http://www.sbp.com.pk/ http://www.wikipedia.org/ http://www.ibp.org.pk Principles of Managerial Finance by Gitman

Financial management by Van Horne

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Cash Flow Statement

NET INCOME Depreciation & Amortization Amortization of Goodwill and Intangible Assets 4,454.0 142.6 11.9 154.4 0.4 3.0 -1,945.8 --2,229.2 -1,863.3 -15,980.5 -13,680.4 -543.1 24.6 -43,252.4 -41,958.0 -0.7 -0.7 -54,240.2 -1,398.2 -10,084.9 215.8 12.3 228.0 0.4 -3.2 -272.8 10.1 -9,371.8 -18,863.6 -19,863.1 -20,493.6 -462.2 5.4 42,641.9 44,226.5 -9.7 -9.7 --27,906.3 -4,173.5

DEPRECIATION & AMORTIZATION, TOTAL Amortization of Deferred Charges (Gain) Loss from Sale of Asset (Gain) Loss on Sale of Investment Asset Writedown & Restructuring Costs Other Operating Activities Change in Trading Asset Securities Provision for Credit Losses Change in Other Working Capital CASH FROM OPERATIONS Capital Expenditure Sale of Property, Plant, and Equipment Investments in Marketable & Equity Securities CASH FROM INVESTING Long Term Debt Repaid TOTAL DEBT REPAID Issuance of Common Stock CASH FROM FINANCING NET CHANGE IN CASH

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