Final Report on BOK 333

8/12/2019 Final Report on BOK 333

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Chapter-1

INTRODUCTION TO THE STUDY

1.1 BACK GROUND OF THE STUDY

Today, banks are the most important financial institutions, which play a vital

role throughout the worlds economic system. Because most of the sectors like

Industries, merce and Agriculture need financial assistance, it is the banks, which

carefully entertain them. A resolution was passed in the provincial assembly of KK,

in they year !""! for the establishment of a provincial bank. It proved successful and

the result was the emergence of a new bank in the banking sector, i.e. the bank of

Khyber akistan. In the year !""# it become a scheduled bank. The $ead %ffice is

situated at 'The (all, eshawar )antt. KK akistan. This bank has been playing

an important role for the development of different located in different locations of our

country. *espite difficult economic conditions, like lack manages to show good

results for every year. The study is carried out to familiari+e the students withy the

working of banks and banking environment and to produce a comprehensive report on

it. Internship is the best way of analy+ing and understanding the market before the

entrance in market, duing internship we see practically implementations of our

knowledge so we can say that internship program is a good fortune for all of the

students during their studies. Because it is an initial platform during our study to

analy+e the market situations. Althought there were some restrictions during but I

tried my best to fulfill the purpose and obective of the study.

1.2 PURPOSE OF THE STUDY

Being a student of business administration especially of -inance, the purpose

of conducting this study is to develop some insight into the working of banks, the

bank of Khyber especially here. (ore thoroughly, after somewhat understanding the

procedures of the Bank, the aim is to make financial and critical analysis of it and

suggest recommendations. Along with being a course reuirement, the purpose of this

study is to develop and enhance the analytical skills of students.

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1.3 SCOPE OF THE STUDY

The scope of this particular study confined to the bank of Khyber /addar

0oad Branch. (ore specifically, the operation department of the above mentioned

bank branch is the maor emphasis of the study. This report may help students in

future to understand banking practices in our country. It would also attempt to

evaluate the overall performance of the B%K through a through 1 detailed analysis of

its daily working.

1.4 ETHODOD!OGY OF RESEARCH

In preparation of this report, following data collection techniues have been

used i.e. rimary *ata and /econdary *ata.

2The information such as the background details of the Bank was obtained

from available published records. The 3ebsite of the Bank and other sources,

different type of written information such as history of the bank, branches, mission

statement, management and organi+ational chart other information about banks

policies and rules were obtained from the organi+ations records and documents. *ata

gathered through such e4isting source are called /econdary *ata.5

The primary data was collected through6

ersonal %bservation.

/itting with /taff (embers.

Interviews with /taff (embers.

The secondary data sources are6

0eference Books

Annual 0eports of The Bank of Khyber

Brochures

7ewspapers

(anuals of the Bank

Information (emorandum

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1." SCHEE OF THE REPORT

The entire report is organi+ed in the following manner.

)hapter one 8already )overed9 gives the background of the study, the purpose

of the study, the scope and methodology, that is used to collect all the relevant data

and the scheme of the report itself.

Chapter T#$ is about the organi+ational overview i.e. the history of the bank,

mission statement, nature of organi+ation, business volume, product lines, competitors

etc.

Chapter Three give the organi+ational structure of sadder 0oad branch i.e.

organi+ational chart, number of offices, main office and introduction to %peration

department and its functions.

Chapter F#%rcovers the financial and critical analysis of the bank, i.e. comparison

and evaluation of the organi+ations current strategies with the organi+ation vision

and mission statement.

Chapter &'(econsists of the recommendations based on the findings form the study,

i.e. identified in critical analysis.

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CHAPTER-2

ORGANI)ATION RE*IE+

BACKGROUND INFORATION OF THE BOK

2.1 SUARY OF BOK

The bank of Khyber 8B%K9 was established through the Bank of Khyber Act

passed by the provincial Assembly in ;une !""!. It is the only bank in akistan having

its $ead %ffice at eshawar. In !""# it acuired the status of a scheduled bank that

allowed it to open branches outside Khyber akhtunkhwa, become a member of the

clearing house, and engage in trade finance activity. Advantages of scheduling have

had a positive impact on the bank after adustments to state bank of akistan 8/B9

reuirements during !""


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@4perienced and well'ualified team of professionals manages the bank.

/everal international financial institutions have been collaborating with B%K since its

inception. These include I-), *@, K-3, $A, A* and the *utch government.

@uity participation by I-) and *@ would further increase collaborating between

them and the bank. The bank has been allocated a line of credit by /B under its

scheme for financing locally manufactured machinery and also actively utili+es the

e4port refinance scheme of /B.B%K has :< branches with &< in KK and : at

Karachi # in unab ! each at Islamabad uetta and mu+affarabad. 3hile three

additional branches are being planned to be opened in other parts of the country. The

bank employees are well'ualified persons and it places great importance to their

professional advancement. B%K actively participates in the development of the KK

through its movement in the KK investment committee set up by the KK

government for promotion of local and foreign investment in the province. The KK

offer opportunities to investors particularly in $ydel power generation and

distribution development of mineral resources agro'based and other industries forestry

and tourism with its pro4imity to Afghanistan and the central Asian republic. It is well

paced to take advantage of future trade with the region.

The B%K has been showing a steady increase in its deposits, advancesinvestments and profits since !""&. Its deposits have increased from 0s. !.&?Cmillion

in !""& to 0s. #.D?E million in !""D, advances from 0s. &E!million in!""& to 0s

&.!CC million in !""D and !""D and total investments from 0s. !."< million in !""& to

0s. !.


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came under the regulatory framework of the state bank of akistan. 3ith maor focus

on the KK, the bank hats the network over of :< branches.

Including B%K offices and branches in Islamabad, Fahore and Karachi. Beingthe sponsoring shareholder of the bank. The government of KK has #">

shareholding. 3hereas the international finance corporation 8an affiliate of the 3orld

Bank9 and *@ 8erman *evelopment Bank9 will have !?> and ! shareholding

respectively. The remaining portion will be offered to the general public, including

&> allocation to the employees of B%K. The bank provides a full range of

commercial and development banking facilities.

The purpose behind establishment of the B%K was to fulfill the demand of the

business community of the KK to have a commercial bank with its head office in the

province. @stablishment of a commercial bank with its head office in KK has

improved accessibility of local businesses to senior management of the bank and

accelerated the credit decision'making process. $istorically there has been a net out

flow of fund from the province as deposits raised in the KK have had to be invested

outside the province due to lack of investment avenues within the province and

absence of a locally head uartered commercial bank. B%K has filled this gap

successfully as it aims to correct this imbalance by promoting savings and

investments within KK. It will support capital formation with particular emphasis on

economic development of the KK.

2.3 IS!AIC BANKING IN BOK

The Bank of Khyber has achieved a milestone and has started converting its

conventional banking branches into Islamic Banking Branches. To start this

conversion, /./. la+a, $ayatabad Branch was selected for conversion. The

conventional banking was closed from &Cth 0ama+an'ul'(ubarak &&'!!'&??: and

Islamic Banking replaced it. Initially option from customers of the branch was being

sought to know their desire for conversion of their deposits and advances to profit and

loss sharing system of Islamic Banking where neither any kind of 0iba 8interest9 is

paid nor received. In this system depositors money is invested in businesses under

the direction of /hariah /upervisory Board and then net income received is distributed

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in the ratios of deposits on the basis of weight ages after deducting banks e4penses

and management fee.

The Bank of Khyber will be converted into a full'fledged Islamic Bank. The

/tate Bank of akistan authori+ed further three branches to be converted into an

Islamic bank, i.e. ,uetta, Bannu and 7owshera, which will with the grace of the

Almighty be completed by the end of this year. The response was fantastic in the first

month of its operations during *ecember &??: it recorded a profit and declared attrac'

tive rate of profits on various investment deposits.

Islamic Banking in akistan has started flourishing and an Islamic financial

market is being created as most of the banks are now reported to have obtained

permission for opening of Islamic Banking branches and their future plans are to

increase the network of Islam Banking branches all over the country. According to the

approved plan, the Bank of Khyber will be fully converted into an Islamic bank by the

year &??D and its new branches will only be based on Islamic Banking. )urrently !D

branches are undertaking Islamic Banking actives.

2.3.1 *ISION

To be the remier Islamic Bank providing innovative -inancial /ervices,based on the rinciples of /hariah.

2.3.2 ISSION

By partnering with our customers in $alal earnings, employing best business

practices, the latest financial services technologies and placing our trust in Allah we

are confident of our success in achieving constant economic growth, creation of obs

opportunities and poverty alleviation.

2.3.3

C#re (a,%e

$ighest uality of service

rofessionalism, Integrity and Team 3ork.

Innovation and utili+ation of latest technology

)orporate /ocial 0esponsibility.

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2. 4 ORGANI)ATIONA! OBECTI*ES

*''#/0-

radual conversion into I,a' Ba/'/ to develop and promote a true Islamic

economic system.

''#/ Statee/t0 -

To increase shareholders value and provide e4cellent service 1 innovative

products to customers through effective corporate governance, friendly work

environment, and contributing towards an euitable socioeconomic growth.

3.3.3 C#re (a,%e0 -

$ighest uality of service

Integrity

Innovative 1 utili+ation of latest technology

rofessionalism

Team work

)orporate 1 social responsibility

2." PRESCRIBED FUNCTIONS OF THE BANK OF KHYBER

The bank of Khyber was established in !""! under the Bank of Khyber Act of

the rovincial Assembly of KK. =nder this act, the obectives of the bank are as

follows6

!. To mobili+e private saving and public funds for diverting the same to

productive channels and ensure their availability.

&. To promote industrial, agricultural and other socio'economic process through

the active participation of private as well as public sectors in the province.

:. $elp under developed areas and create employment opportunities especially in

the rural areas of the province. -urther to guide and assist the people of KK.

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%verseas servants effectively and profitably invest their foreign savings in the

province as well as other parts of akistan.

#. )reate a diversified and sound portfolio for utili+ation of otherwise idle funds

and their investments in the e4isting as well as new ventures specially in the

pioneering of high tech based e4port oriented and engineering proects to

ensure ma4imum returns.


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2.8 ORGANI)ATIONA! SETUP OF THE B#K

BOARD OF DIRECTORS

1 Kha,'9 Per(e: Cha'ra/

2 r. a;##9 Ia', N#/-Ee9 Sa'9 Ba9hah B%har' D'ret#r F'/a/e Departe/t

6 Dr. Iha/%, Ha; I/9epe/9e/t D'ret#r

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KEY E?ECUTI*ES

S.N#. NAE DESIGNATION

1 r.B',a, %ta&a a/a'/ D'ret#r

2 r. @a:' %/'r-%,-Ha; E I/(ete/t

D'(''#/

" (. asin )haudhary

Se/'#r *'e Pre'9e/t

Spe'a, Aet a/aee/t

D'(''#/

5 %haa9 @a' Shah

Jice resident

I/rat'#/ Teh/#,#>

D'(''#/

6 %haa9 Aa9

Jice resident

Operat'#/ S%pp#rt

D'(''#/ I,a' Ba/'/

8 S#ha', Kha/

/enior Jice resident

B%'/e De(e,#pe/t

D'(''#/ I,a' Ba/'/

Sa,' G%,

Jice resident

R' a/aee/t D'(''#/

1 Rahat G%, F'/a/e D'(''#/

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Jice residentG)-%

11 Ta', Rah'9


Cre9't a/aee/t

D'(''#/

12 Kh%rh'9 A,a

Jice resident

Ba/'/ Operat'#/

D'(''#/

13 Tar'; Naee


Eta7,'he/t D'(''#/

14 Ha=' !%t& %haa9 Kha/

@4ecutive

I/ter/a, A%9't D'(''#/

1" Kh'a, )aeer Khatta

@4ecutiveB%'/e De(e,#pe/t

D'(''#/

Departe/ta, I/hare

S.N#. NAE DEPARTENT

1 A79%, Sa7##r Kha/ #/'t#r'/ Departe/t RD

2 S>e9 Fa':-%,-Ha9'@4ecutive

A,ter/ate De,'(er> Cha//e,B.O

3 Sha'r%rReha/Jice resident

Ba/'/ Operat'#/ Departe/t

4 Tar'; Kha/Assistant Jice resident

F'/a/'a, I/t't%t'#/ Departe/t

" A,' Na$a: G',a/'Jice resident

aret'/ Departe/t

5 'r a/:##r H%a'/@4ecutive

I/pet'#/ Ip,ee/tat'#/

Departe/tIAD

6 eh##9 Shah F'e,9 A%9't I/pet'#/ Departe/tIAD

8 A7'9 eh##9 @%reh'Jice resident

Operat'#/ Departe/t

I,a' Ba/'/ D'(''#/

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%haa9 a;7##, !'t'at'#/ !ea, Departe/t

1 %/a$ar Kha/ S>te S%pp#rt Departe/t

11 @a' eh##9 T#r%Assistant Jice resident

#/'t#r'/ C#,,et'#/ Departe/t

12 Aha9 H%a'/Jice resident

Cre9't Departe/t

13 Gh%,a H%a'//pecial Assistant to (.*

D Seretar'at

14 G%, @'a:Jice resident Ar'%,t%re Cre9't Departe/t

1" G%, @'a:Jice resident

'r# F'/a/e Departe/t

15 N%rat N##rAssistant Jice resident

F'/a/e Departe/t

Sher Baha9er A#%/t Departe/t

Far##; SattarJice resident

Per#//e, Departe/t

Tar'; I;7a,

Assistant Jice resident

AT Departe/t

%haa9 A,' Share Departe/t

2. THE BANK OF KHYBER ORGANI)ATIONA! CHART

!:


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THE BANK OF KHYBER KOHAT BRANCH

The bank of Khyber has total CC Branches in different cities. All the branchesare interrelated with each other.

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Kh>7er PAKHTUNKH+A

!. Abottabad Branch

&. Abbottabd Branch'&

:. Ashraf 0oad Branch

#. Banu Branch

ear 280

To focus on new emerging corporate sector of the Kohat city. K))F and

its different proects is the main target for this year.

As the city is going through the phase of construction revolution so the

construction companies are the main targets.

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Agriculture is the main focus area for the year &??E, so different schemes

are in the pipeline in this regard.

3.1 SAP!E FINANCIA! P!AN

-inancial plan is the e4pression of plans in terms of revenue and costs.

A,,#ate9 Taret r the >ear e/9'/ 25

*eposits 0s. D


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)ash *epartment

0emittances *epartment

)learing *epartment

AdvancesG )redit *epartment

I.T *epartment

Y ACTI*ITIES IN EACH DEPARTENT IN BOK KOHAT

The bank of Khyber departmentation may also be done on the basis of

functions. The Banking %peration department performs the general banking

operations, credit departments have their own functions, and so on. As there is already

the shortage of staff so the internees have got the opportunity to perform different

obs.

*uring the Internship I have got the opportunity to work in the following

departments. Their functions are briefly shown below.

4.1 ACCOUNTS DEPARTENT

A#%/t #pe/'/ re;%'ree/t a/9 9#%e/tat'#/0

Account opening is the first step towards establishing bankercustomer

relationship. Any individual, who has attained the age of maority and is of sound

mind can open and maintain hisGher account. Two or more individuals may open an

account ointly. /imilarly, business organi+ations such as sole proprietary concerns,

partnership firms, and limited liability companies as well as non'profit organi+ations

like clubs, trusts, societies, associations and 7%s etc, may open their accounts.

The following reuirements are necessary for opening an account6

Identification of the new customer.

Ascertaining the genuineness of the stated occupation business of the

customer.

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*etermining the correct residential and permanent address.

)ompletion of all relevant columns of the A%-.

roper completion of documentation.

TYPES OF DEPOSIT ACCOUNTS

Per#/a, A#%/t6'

Accounts opened by individuals in their personal capacity are termed

as personal or private accounts. A personal account may be a F/ saving or )urrent

account in local currency or in foreign currency. There is no restriction as to number

of accounts that an individual may have with the bank. The bank officer takes the interview of the customer to know his purpose

of account opening, identity and status.

The full name of the individual or the business is given as title to the

account.

The permanent 8)orresponding9 address of the client is reuired in this

regard.

The account holder describes his occupation in definite and adeuate

terms. In case of employee the name and address of the employer is noted

on A%-.

)lear instructions are obtained regarding operations on the account and for

repayment of the balance in the event of the death of any of the oint

account holder and in case of single account holder.

/ignature of the account holder is taken on A%- and // card.

An a#%/t '/ the /ae #& '/#rmay be opened ointly with a parent or

guardian with the condition that the guardian will operate account. But

these are saving or fi4edG Term *eposit accounts only, where no over'draft

could be allowed in the minors account.

An ',,'terate per#/can open account with banks. This account will be

Ph#t#A#%/tJone photo is pasted on A%- and one is on // )ard and

Feft thumb impression in case of male and right thumb in case of female

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account holder is taken on the cards as well as on the account opening

forms.

The arr'e9 $#e/can open bank account with banks. In case a married

woman reuests for a loan, adeuate securities belonging to her should be

taken into consideration, because a banker has remedy only against her

own property, separate from that of her husband.

#'/t A#%/t0 -

Two or more persons may open an account ointly. All the parties sign A%- 1

// )ard. /pecial instructions are reuired for the operation of account at the time of

opening the account. /imilarly, instructions regarding operation of account and

payment of balance to the survivors are reuired in case of the death of one party or

more.

Part/erh'p a#%/t6 '

artnership is the relationship between persons who have agreed to share the

profit and loss of the business carried on by all or any of them acting for all. The

ma4imum number of partners in a banking business is !?, and for other businesses it

is &? but there is no partnership firm conducting banking business in akistan.

The account is to be operated according to the instructions given at the lime

of opening the account.

All the partners of the artnership -irm will sign the A%- 1 // card and any

one or more partners operate it.

#'/t t# #pa/'e a#%/t0 -

An association of individuals for the purpose of profit, possessing a

common capital contributed by the members constituting it, such capital being

!"


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commonly divided into shares, of which each possesses one or more and which is

transferable by the owner5.

/uch a company is called 2;oint stock )ompany5 and has three types

U/,''te9 C#pa/'e

In such companies the liability of each member, like partnership, is

unlimited. /ince there is a great risk, such companies are not operating in

akistan.

!''te9 C#pa/'e

/hares limit these companies, where the liability of members is limited to

the amount due on the shares held by them. There are numerous Fimited

)ompanies at the present time.

C#pa/'e !''te9 7> G%ara/tee

These are companies where the members undertake to contribute a fi4ed

amount of money to pay the debts in the event of company being wound up. The

capital of such a )ompany is not usually divided into shares and they formed not

with the obect to make profit but to promote some trade etc. Karachi /tock @4change

is a very good e4ample of such a )ompany.

0euirements for such companies to open an account6 '

i. 0esolution of B%* specifying the person authori+ed to

operate the account.

ii. (emorandum and Articles of association

iii. )ertificate of Incorporation

iv. Attested photocopies

4.2 REITTANCES DEPARTENT

0emittances include6

*emand *raft 8**9

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Telegraphic Transfer 8TT9

(ail Transfer

)heues

ay /lips

ay %rder

)all *eposit

DEAND DRAFT DD

** is a cheue drawn by one bank up on another, ordering the bank to pay the

payee. The bank drafts are used in transferring the money abroad as well as with in

the country. %rders by a bank to pay a stipulated amount are generally communicated

by written orders. A draft is a very authenticated and reliable instrument of credit for

remitting money. It has greatly helped in the financing of trade especially foreign

trade. -or payee the account is necessary. If the payee does not have account in the

bank then he cannot receive the money. BoK charges commission and postage kind of

facility.

TE!EGRAPHIC TRANSFER TT

-unds can also be transferred through a bank by using the telegraphic transfer

facility. It is a fastest and safest mode of fund transfer. The )lients bank, when

reuested in writing to transfer fund to another place, makes a telephonic advance to

their branch or a correspondent bank to pay a certain sum of money to a specific

payee. To ensure security the bank uses secret codes to transfer funds. The Branch

(anager only knows these codes

AI! TRANSFER

(ail transfer is also a kind of facility by which one can transfer money

from one place to another. But this facility is only for the staff members of

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BoK. There is some deduction of changes on this kind of facility. This facility

is very much like TT.

CHE@UES

A cheue may be defined as a written order of a depositor up on a bank

to pay to or to the order of a designated party or to bearer, specified sum of

money on demand. The person who draws the cheues is called drawer, the

bank on which the cheue is drawn is called drawee and the person to whom

payment is to made is called payee.

PAY S!IP

A pay slip is a special type of negotiable instrument. It is generally

used for transfer, ayment of funds and e4penses by the branches for

discharging their payments. It is same as a demand draft e4cept it is used for

internal payments between the branches, head office of BoK.

PAY ORDER

If the payment is to made within the city by the customer, then the ay

%rder is issued 8not demand draft9 by the bank on the reuest of customer.

CA!! DEPOSIT

It is mostly issued for tenders offered. If the party gets tender accepted

then the other party automatically is the owner of the call deposit. If he fails to

get the tender accepted, the other party gets the stamp of 20eleased 2on the

back of the call deposit and can en cash the same again.

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!OCKERS FACI!ITY

)ustomers use the lockers facility to keep their assets in safe custody. The

bank of Khyber charges one thousand rupees per locker for the year.

4.3 C!EARING DEPARTNET

NIFT SYSTE OF C!EARING

The automated cheue processing service is operated by 7ational Institutional

-acilitation Technologies 8pvt9 Fimited 87I-T9, a private company.

In this system different banks and their branches will directly approach the

7I-T and send their outward clearing instruments to it. At 7I-T these instrument will

be processed automatically. 7I-T will prepare sets of inward clearing instruments to

be sent directly to payee branches and report of net clearing positions of all banks to

be sent directly to /B for settlement. /o the 7I-T will replace both clearing

department of commercial banks and clearing houses of the /tate Bank of akistan.

Thus the 7I-T system is more efficient and uick in terms of time and

accuracy as compared to the manual system of cheue clearing. 7I-T is introducing

modern techniues for clearing of financial instruments by duly reali+ing the future

problems and prospectus of the payments system in akistan. The automated system,

installed by 7I-T, is not only uick and efficient but also fle4ible to accommodate

various types of instruments and e4pected increase in their volume.

7I-T has installed automatic cheue'sorters that can sort :?,??? cheues per

hour. It also uses imaging technology, which takes the photograph of the cheues.

These photographs have to be used to retrieve information from each instrument. This

information will then used to prepare various types of reports. This whole system has

been designed to process !&,


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4.3.1 PROCEDURE OF C!EARING AT BOK KOHAT

C#,,et'#/

The collection of cheues and other instruments has become a very important

service that )ommercial banks render to their clients. 3hile collecting cheues and

other instruments, a bank acts as an agent of its customers and therefore, the banker L

customer relationship in this case changes from the debtor L creditor relationship to

the agent L principal relationship.

The collection of bills usually involves two banks the )ollecting bank and the

aying bank. Both, collecting as well as paying, banks have certain obligations to

each other and to their customers. They have certain legal rights also and legal

protection is available against fraudulent transactions under various sections of the

7egotiable Instruments Act, !EE!.

D%t'e #& a C#,,et'/ Ba/

To act in ood -aith

To e4ercise due care and diligence and not be negligent

To act according to the instructions of the customerGprincipal

To follow the accepted norms and practices of banking

To abide by all the rules and regulations governing collections.

To account for the proceeds and chargesGlevies deducted from it, to the

customer.


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D%t'e #& Pa>'/ Ba/

The paying bank, in order to claim proper discharge.

/hould make the payment according to the apparent tenor of the

instrument

/hould act according to the instructions of the )ollecting Bank

ayment should be in good faith

/hould act e4peditiously and without negligence

ayment should be in the normal course of business.

O%t$ar9 C,ea/ B',, r C#,,et'#/

)heues and other instruments, which are drawn on other banks or B%K

branches in other townsGcities or countries 8outside clearing or transfer delivery

arrangements9, received for account of the banks customers, are lodged in %utward

)ollections 0egister either as %B)s or -B)s. The procedure for handling these bills

is discussed below.

I/'t'a, Sr%t'/>

%n receipt of bills for collection from the customers an initial scrutiny is

conducted with the following consideration.

Date

)heues and other instruments should not be without a date, post'dated that is

bearing a future date or stale that is bearing an old date that is no more legally valid or

is outdated.

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Pa>ee

ayee should be a customer of the bank whose account is reuired to be

credited with the proceeds of collection. In case a customer wants to deposit a

cheueGinstrument, which shows someone else as the payee, there should be an

appropriate endorsement by the named payee in favor of our customer.

A#%/t

)urrency and amount of the cheueGinstrument should be mentioned both in

words and figures and the amounts in words and figures should be the same.

Dra$er S'/at%re

The drawer8s9 should properly sign the cheuesGinstruments.

ater'a, A,terat'#/

*ate, payees name, drawers signature, and amount are all material parts of a

cheue. -ull signatures of the drawer8s9 should confirm any material alterations, in

these parts.

Cr#'/

)heuesG instruments must be crossed before processing them for collection.

/ec. !&< of the 7egotiable Instruments Act allows a collecting banker to cross a

cheue generally as well as especially for collectionGclearing purposes. An un'crossed

cheue is liable to be misusedGappropriated, since it would be payable to the bearer.

E/9#ree/t

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%rder cheues should be properly endorsed if being collected for &nd or

subseuent payees.

%t',at'#/

)heuesGinstruments should not be mutilated to the e4tent that they can be

misinterpreted or not be correctly read.

Pr#e9%re r Ha/9,'/ O%t$ar9 B',,

After scrutiny, if instrument is found in order, a /pecial )rossing stamp of the

bank is affi4ed on the face of the instrument. 3here a cheue bears across its face an

addition of the name of a banker, with or without two transverse parallel lines, the

cheue shall be deemed to be crossed specially to that banker. ayment of an

instrument which bears special crossing of a bank cant be made to any one e4cept the

named bank or another bank who acts as a collecting agent of the first one Ma bank

which acts as a collecting agent for some other bank is also authori+ed to put its own

special crossing.

In addition to the special crossing, the collecting bank has to give a

certificateGdischarge on the reverse side of the cheueGinstrument to the effect that

proceeds of the instruments will be credited to the payees account. A stamp

containing discharge is affi4ed as under6

ayees Account will be credited on reali+ation.

For The Bank of Khyber

Manager Officer

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In case, cheue or instrument is endorsed by the first payee in favor of another

person discharge will be as under6

Another stamp known as M%B) /TA( is also affi4ed on the face of the

cheueGinstrument, which indicates name of the collecting bank, %B) reference

number and date of lodgment for further reference. -orm or style of an %B) stamp

may differ from bank to bank and even branch'to'branch, however, contents remain

the same. A specimen is given below.

!#9e/t

After initial scrutiny and stamping, bills are lodged for collection by being

recorded in the %B) 0egister or by using an appropriate computer option. An officer

authori+ed to authenticate who uses an appropriate computer option to authenticate

the transaction should authenticate the entry. =pon authentication, the computer

generates an accounting entry 8Jouchers are manually passed where the branch is not

fully computeri+ed.9

The entry is made to record the fact that the bank has accepted the liability for

collection of a certain bill and simultaneously has obtained the right to receive the

payment as a collecting agent. 3hen collection is reali+ed or is returned by the

drawee this entry is reversed since the liability of the collecting banker as well as the

right to receive payment does not e4ist any more.

C#,,et'#/ She9%,e

The ne4t step after computer processing is to prepare collection schedulesGorders

addressed to the bankGbranch, which we have chosen as our collecting agent.

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D'path #& Ite r C#,,et'#/

After completion of above procedure, collections are sent to the designated collecting

agents or drawee banksGbranches, as appropriate.

C#''#/ Chare

)ommission on clean bills should be recovered strictly at the rate specified in the

Banks schedule of charges. )ollecting agents charges will be e4tra if the collecting

bank is other than the Bank of Khyber. (ailGtelegramGtrunk callGfa4 charges should

also be recovered, as per the schedule of charges if fate of the instrument is asked for

by telegramGtelephone or fa4 etc. )heue returning charges should be recovered as per

the schedule, in case the instruments are returned unpaid. If collections are send by

courier service, courier charges are also recovered. 7ormal postal chargesGregistered

mail charges for bills sent for collection are in'built in the commission.

Rea,':at'#/

If a collection is reali+ed through one of our own branches, proceeds are

received by means of a credit advice 8IB)A9 or telephonicGfa4 message depending

upon instructions contained in the collection schedule. 3here collections are sent

directly to the drawee banksGbranches other than our own branches or correspondent

banks with whom we have agency arrangements, proceeds are received by means of a

demand draft which is finally collected through clearing.

B',, Ret%r/e9 U/pa'9

If a cheueG Instrument is returned unpaid by a drawee bankGbranch due to any

procedural mistake made by the collecting bank such as 2banks discharge

irregularGreuired5, 2endorsement reuires banks guaranteeGconfirmation5 or 2 %B)

stamp or special crossing reuired5 etc., the mistake is rectified immediately and

collection is presented again by fastest available means such as courier serviceGurgent

mail service etc.

If collection is returned due to lack of funds in the drawers account or due to

Mstop payment made by the drawer or difference in drawers signature etc., thecustomer is immediately contacted and informed. roper entry is made in the )heue

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0eturn 0egister. The returned instrument together'with obection memo is handed

over to the customer or hisGher authori+ed representative after getting

acknowledgement on cheue return register. If a customer is not available, the

returned instrument may be send by registered mail or local e4press mailGcourier

service etc. depending upon situation and circumstances in each case.

I/$ar9 C,ea/ B',, r C#,,et'#/

Bank receives cheues, drafts and other instruments for collection from its

own branches or from branches of other banks, which are not included in local

clearinghouse arrangements. These bills would be its outward bills for collection

8%B)s9 or bills purchased but they become inward bills for collection 8IB)s9 for it.

I/'t'a, Sr%t'/>

Immediately upon receipt, all instruments are scrutini+ed on the following points6

3hether or not all instruments are apparently in order vi+. a vi+.

genuineness, date payees name, amount, and drawers signatures etcN

3hether or not instruments are drawn on our branch or banksGbranches

with whom we have arrangements through clearing or transfer delivery

proceduresN

If the answer is Myes only then instruments are processed further,

otherwise they are returned to the concerned banks or branches with

relevant obection.

Pr#e9%re r Ha/9,'/ I/$ar9 B',,

Re#r9'/ Ree'pt

(ail 0eceived stamp is affi4ed on all collection schedules received

which indicates the date of receipt of each and every inward collection.

All inward collections are entered in the IB) 0egister and every

collection is allotted a serial number called IB) 7umber.

IB) stamp is also affi4ed on the face of the instrument.

Instruments are segregated department'wise )heues, T*0s, ad

)*0s, etc. are handed over to the *eposits department while **sTT0s, (T0s and %s are given t the 0emittance department.

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Instruments, which are drawn on other banks or branches, are handed

over to the clearing department. $owever, only designated branches

perform this last function.

)omputer entry is made where a branch is computeri+ed, otherwise

manual entries are passed.

C#''#/ Chare

7o commission or service charge is recovered from the collections received

from bank own branches e4cept withholding ta4, if applicable. %nly collecting branch

is supposed to recover commission and other charges. $owever, commission at the

prescribed rate for the issuance of draft plus courier charges and government levies

like withholding ta4 and e4cise duty are recovered, in case collections are received

direct from other Banks.

** along with a covering letter is sent to the bank concerned, mentioning

their 0ef. 7o. or %B) 7o. and details of commission, charges, ta4es etc. deducted

from the bill amount. If any instrument is drawn on some other Branch or other Bank

in the city, it is processed in the transfer delivery or clearing respectively, to pay the

proceeds. Inward collections are generally routed through the (ain Branch or some

specially designated Branch.

!#a, B',, C#,,et'#/

The bank of Khyber Islamabad Branch collects its local Bills, through its

collecting agent (uslim )ommercial Bank 0awalpindi.

The cheues **, G% etc of the customers of Islamabad branch or %B)s of

other branches that are drawn on at any Bank in indi are sent to the ()B indi for

collection. The ()B will present these instruments in clearing at /B 0awalpindi.

Before to send these instruments the entries are made for these in FB) 0egister.

roper stamp is affi4ed on the Backside of the instrument.

The 7e4t day the statement comes from ()B indi. The cleared 8assed9

instruments are credited to the clients AG) and instruments returned are sent to

*rawer back and an entry is made in the FB) 0egister.

4.4 CASH DEPARTENT

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)ash is the most liuid medium of e4change. At BoK Kohat Branch, the cash unit

is responsible for making cash payment and receiving cash deposits from their clients.

%nly presenting a negotiable instrument pays the cash. %nce the instrument is verified

and there is enough balance in the account upon which the instrument has been

drawn, the cash is paid to the payee subect to the instructions of instruments. )ash

deposits are received from customers who possess accounts in the branch. Besides

making payments and collecting deposits the cash unit in the purchase and sale of

overnment Bonds.Bank usually do not allow the internees to handle the cash affair

because it is very sensitive ob and internees are ine4perience.

I%a/e #& he;%e 7##0

According to /ection D of the 7egotiable Instruments act, !EE!,

2)heue is a bill of e4change drawn on a specified banker and not e4pressed

to be payable otherwise than on demand.5

Bank issues the cheuebook for account holders on reuisition slap.

)heuebooks are issued for the transaction or withdrawal on account. The

bank of Khyber has different types of cheuebooks for different type of

accounts. )olors of cheuebooks are different for different types of accounts,

e.g. the F/ account has red a color cheuebook and the current account has

pale color of the cheuebook cover.

T>pe #& Che;%e0

10 Or9er he;%e0

3hen the customer or drawer presents the order cheue the special instruction for the

drawee or banker to check carefully and make payment for said person or specified

person. 3hen the account holder crosses the ward 2bearer5 from cheue it denotes

that it is order )heue.

20 Bearer he;%e0

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3hen the customer presents the simple cheue, means that it is a bearer cheue.

Bearer cheues are cashable at the counter of the bank. The responsibility of the

cancellation officer is to verify the account holder signature.

30 Cr#e9 he;%e0

This type of cheue is different from both, order and bearer cheue. They are not

payable in cash at the counter, but can be collected by only the banker who will credit

the proceeds to his customers account after reali+ation. The crossed cheues have

two types.

Ge/era, r#'/ he;%e0

eneral crossing has been defined as under6

2where a cheue bears across its face an addition of the words and company5 or

any abbreviation thereof, between two parallel transverse lines simply, either with

or without words5 not negotiable5, that addition shall be deemed to be a crossing,

and the cheue shall be crossed generally5.

Spe'a, r#'/ he;%e0 -

Those cheues, which are crossed with two parallel lines and some special instruction,

is written in the lines. e.g. 2payees account only5 or 2and co account only5. The

holder cannot receive payment e4cept through the banker named on the cheue. If the

crossed cheue is stolen, there is no risk of wrong payment.

Pa>e/t #& he;%e0

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It is a bankers primary contract to repay received for his customer account usually

by honoring his cheues. ayment of money deposited by the customer is one of the

root functions of the banking operation. The acid test of banking is the receipt of

money etc. from the depositors and repayment to them. This paying function is one

which is the distinguishing mark of a banker and differentiates him from others

institutions, which receive money from the public. $owever, the bankers legal

protection is only when payment is in M*ue )ourse. It is a contractual obligation of a

banker to honor his customers cheues if the following essentials are fulfilled.

)heue should be in proper form.

)heue should not be crossed

)heue should be payable to bearer or order. .

)heue should be drawn on the particular bank branch.

)heue should not mutilate.

7o unauthori+ed material alternation.

-unds must be sufficient and available.

The cheue should not be post dated or stale.

)heue should be presented during banking hours.

7o legal bar prohibiting payment.

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4." CREDIT AD*ANCES DEPARTENT

The bank of Khyber is a profit seeking institution. It attracts surplus balances

from the customers at low rate of interest and makes advances at a higher rate of

interest to the individuals and business firms. As for as my observation is concerned

the credit department of BoK Kohat was very inefficient because very few cases

credit I $ave seen. $owever it provides the following types of advances.

TYPES OF AD*ANCES ADE BY THE BANK OF KHYBER

KOHAT BRANCH

A. ICRO FINANCE !OANS

This facility is available at the counter of (icro -inance =nit, which in the true sense

reinforces the support to grass root level development. The purpose is to empower the

lower strata of the economy by providing speedy access to funds thus generating

employment and eradicating poverty.

B. AD*ANCES AGAINST SA!ARIES

B%K provides loan against salary to employees of overnment G /emi' overnment

organi+ations for domestic consumptions. The employee must be confirmed having

minimum of three years of service. $owever, the remaining service period of the

employees must not be less than three years. To avail this facility, the employee must

be account holder of the bank. Foan limit is up'to < gross salaries but not e4ceeding

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F. +ORKING CAPITA!.FINANCE

3orking )apital -unds are provided to traders and manufacturers for their operational

reuirements.

G. AD*ANCES AGAINST *ARIOUS TYPES OF SECURITIES

The various types of securities that are generally obtained include the following.

$ypothecation of stocks.

ledge of stocks.

Fien of deposits.

)harge on assets of limited companies..

(ortgage of property.

Fife insurance policies.

ledge of shares, stocks, bonds and marketable securities. $ypothecation of vehicles.

0epayment guarantees.

The branches should ensure that prior to the disbursement of the facilities, all the

reuired securities are perfected and the charge documents have been obtained.

7eedless to mention that complication of securityG charge documents subseuent to

the disbursement of funds may not only be cumbersome and time consuming and in

some cases, may become impossible

H. RUNNING FINANCE

0unning finance is a type of short'term loan. It is given to meet the working )apital

reuirements of a business. The loan is normally repayable with in a period ranging

repayable from one to two years depending up on the credit worthiness of the

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borrower, this can be renewed. A person who wishes to get 0- is reuired to maintain

0- aGc with the BoK. The bank after satisfying its credit criteria will allow overdraft

facility to that person after specific amount. (arkup is charged on outstanding

balance. The rate of interest is usually higher than other types of loans on running

finance.

I. DEAND FINANCE

It is a form of medium term loans. BoK is receiving credit lines from many informal

and e4ternal resources to e4tend such facility.It is a term loan disbursed in lump sum

and repayable in & years in the form of monthly or uarterly installments.

. AD*ANCE AGAINST SA!ARIES

Available to government and semi government employees up to five salaries. These

facilities are available to BoKs clients on attractive terms and conditions. BoK

provides personali+ed services and ensures to full fill the clients needs. %ur efficient

staff is available to help and select the best possible option that suits their needs.

Foan Amount 6 =p to !< Take $ome /alaries

0epayment eriod 6 -our years

(arkup 0ate 6 !?> p.a. to be calculated on reducing balances.

ayment (ode 6 By @ual (onthly Installments

rocessing -ee 6 0s.


38/55

:. ersonal uarantee from eual or senior grade employee of the concerned or

any overnment *epartment.

Beneficiary of the /chemes 6

All ermanent @mployees of -ederal 1 rovincial overnment *epartments,

Autonomous bodies.

K. KHYBER BIKE BIKE !OAN

This facility is offered to a variety of clients like employees of public and private

institutions, private practicing professionals like doctors, engineers, lawyers and

business people. The loan is comprehensively insured payable either in lump sum or

monthly installments. 7ominated authori+ed dealers deliver specified motorbikes

against the purchase order issued by the bank. (otorcycle is registered in the name of

the bank.

FEATURES

(inimum age &! and ma4imum D? years.

A minimum of 0s !?,??? is reuired as down payment.

(a4imum loan si+e is D: thousand.

@ffective rate is !D>

0epayment period is ! year, & year and : years

0s. !?? application fee.

!. APNA KAROBAR ICRO FINANCE !OANS

This facility is available at the counter of the (icro -inance =nit, which in the true

sense reinforces support to grass root level development. The purpose is to empower

the lower strata of the economy by proposing speedy access to funds thus generating

employment and eradicating poverty. BoK is a pioneer in micro finance loan. Foans

are given to the skilled people of rural and urban areas. Foan is given to widows and

other skilled women. Through this loan they can do farming, run their small

businesses of handicrafts. Jillage farmers can acuire modern technology and can get

rid of old tools they have been using up to now because of the lack of resources. All

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districts of KK are covered in it i.e. *ir, /wat, Boner, /hangla, Bannu etc. (a4imum

time period is!E months. (a4 limit for rural area is 0s &?,??? and for urban its 0s:?,

???.

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CONSUER FINANCE SCHEE

The bank of Khyber is happy to launch a consumer finance scheme for general

public who have insufficient funds to full fill their consumption needs. =nder this

house hold /cheme products like electronics audiovisual euipment shall be financed

to the consumers on easy installments. (a4imum loan amount is "",??? 0s. )lients

pay in regular installments on installments to BoK. BoK has worked a lot in consumer

financing.

A. KHYBER CAR CAR !OAN

CAR FINANCE SCHEE

FEATURES

/i+e of loan (a4imum 0s. !,&??,???G' Bank portion

*own ayment !?> minimum

(arkup 0ate !#.??>

eriod -i4ed period of months, :D months, #E

months 1 D? months.

Insurance %n borrowers cost from @-= or Adamee

Insurance company.

Age limit (inimum &! years. At loan maturity age should

not e4ceed D? years

(inimum age limit &! years

Foan maturity age D? years

/ecurity ;oint 0egistration of vehicle in favour of BoK

and the borrower.

B. SOHANA GHAR HOUSE BUI!DING !OAN FEATURES

All the adult citi+ens of KK who get monthly income

(a4imum amount ! ( 80s9

Age limit !E to

0epayment period is up to !< years on easy installments

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Application fee is !?? 0s

C. PKR DEPOSIT SCHEE

!#a, C%rre/> C%rre/t Dep#'t A#%/t

The B%K 0upee )urrent *eposit Account allows you the facility of unlimited

withdrawals up to the e4tent of the balance in your account.

P!S Sa('/ A#%/t

The B%K 0upee /avings *eposit Account allows you the facility of multiple

withdrawals, while accruing profit on your deposits.

Spe'a, Dep#'t A#%/t

%ffers attractive rate of return on daily product basis without any restriction on

withdrawals.

P!S N#t'e Dep#'t

Available for C and :? days.

P!S Ter Dep#'t

F/ Term *eposit offers attractive rates of return having different maturities ranging

from & months to < years. F/ /aving rate will be applied in case of premature

encashment. Automatic rollover G reinvestment allowed 8if reuested9.

Kh>7er #/th,> Shee

< years scheme having monthly profit payment facilities.

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B !EARNING DURING INTERNSHIP PROGRA AT B#K

KOHAT BRANCH

In the Bank of Khyber K%$AT B0A7)$, I really enoyed working with the staff and

having a wish to be employee of B%K. It was almost impossible to work in all the

departments within that limited time. But on my reuest, the staff of the branch

provided me the opportunity to work in the different departments for the sake of

practical knowledge. I feel highly indebted, working in that Branch, to the

%perational (anager of that branch (r.(aeedullah Khattak because he guides me

through every step.

*uring my internship training in the B%K, as I early mentioned that I have worked in

different departments 1 seats and learnt the followings.

)learance department

0emittance department

)ash department

Accounts department

1. I/ ,ear'/ Departe/t

In clearing I have perform manual work as will as computeri+e entries in

=Banklus.There are two types of clearing6

I/$ar9 ,ear'/

In inwards clearing those cheues come to us which are our cheues with other

banks. And they send us for clearing, for each cheue IB)A is prepared and then

transaction is made in =Banklus. /uch clearing is sent to 7I-T at morning.

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O%t$ar9 ,ear'/

In outward clearing those cheues which are of other banks, with us. And we send

these cheues to the concerned banks for clearing. /uch clearing are send through

7I-T. After putting different clearance stamps along with a scroll on which the

amounts of all cheues are entered which is eual to the amount of cheues. /uch

clearing is sent at afternoon.

At the end of the month we use to receive salary sheets on which the salaries of

employees are listed. The amount of salary is entered in = Bank lus and then

salaried people are able to get their salaries.

2. I/ Re'tta/e 9eparte/t0

I%a/e a/9 treate/t #& the ,,#$'/ '/tr%e/t0

*emand *raft 8**9

Telegraphic Transfer 8TT9

(ail Transfer

)heues

ay /lips

ay %rder

)all *eposit

In remittance department I also worked in that department I made different

instruments and IB)As for each instrument. The instruments are (T, TT, **, %,

etc, on which account pay only stamps and branchs manager stamp are put. And

managers signature as well as.

After making it we sent the instrument for authentication to the manager.

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4.3. I/ Cah 9eparte/t

C#,,et'#/ #& Ut','t> 7',, #,,et'#/ a/9 tra&&' ha,,a/

The Bank of Khyber collects utility bills on behalf of 3A*A, /ui 7orthern as

)ompanies, and akistan Telecommunication )orporation Fimited by putting the

stamp on the utility bills 2aid5, *ate of payment, /ignature of the officer receiving

the utility bills. After receiving utility bills a list is made on the form which is called

Bills scroll form. %ne copy of the scroll is with the bank for evidence whereas the

original copy with the receipt of the bills is sent to the billing department of the

respective corporation. Besides utility bills the BoK also collect traffic fine challans.

The bank charge commission on the bills and challans. I have also got he opportunity

to make computeri+e entries of cash in =Banklus.

4.4. I/ A#%/t Departe/t

I%a/e #& he;%e7##

Issuance of cheue book was also done by me. -or which reuisition form should be

filled by the customer. )heues book leaves varied from !?, &


45/55

4." Preparat'#/ #& #/th,> Dep#'t Statee/t #& B#K K#hat

Bra/h r State Ba/ #& Pa'ta/

I have also got the opportunity to prepare the monthly statement of deposits with bank

to be sent to /B. The statement of ;une is given6

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46/55

Chapter-"

S+OT ANA!YSIS

/3%T analysis is the techniue used to identify /trength, 3eaknesses, %pportunities,

Threats the bank faces while competing in the market. Below the /3%T analysis of

the BoK, Kohat branch is being given6

Stre/th0 -

The main strength of BoK Kohat branch is that, the Islamic Banking

department has started working. Being a rovincial overnment bank, BoK is the first priority of many local

institutions.

BoK is providing consumer finance facility which is not available at any other

financial institution.

The professional and helping attitude of the staff is also strengthening the

organi+ations image.

+ea/e0 -

The layout of the bank is not attractive for the modern day customer.

$igh technology shortage is the key hurdle to success.

/taff shortage is a problem to cope with the reuirements of the customers.

/ome time cash is not available on time which create problems for customers.

Opp#rt%/'t'e0-

resence of the e4perienced staff is the opportunity of the bank to be availed

in more positive manner.

Threat0 -

The high competitive environment is the main threat for the branch e.g. Bank

Alfalah, 7IB, ABF, =BF, etc.

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The inversion of high technology is another threat to the branch because it makes the

environment more intense.

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FINDINGS RECOENDATIONS

".1 FINDINGS0

B%K has provided an enthusiasm among the young Business (aster to adopt banking

as a promising career. This is because of its dynamic strategies that gave totally new

look to the banking industry of akistan.

*uring the internship program of eight weeks at B%K K%$AT B0A7)$, I learned a

lot about the banking concepts. *uring my work in various departments of the branch

and my interaction with the employees as well as with the customers helped me a lot

to understand the various operations of the bank.

$owever due to interaction with the staff and personal observation as well as from

financial analysis specially some key factors are pointed, which are dropping the

financial carrier of the B%K in this era of competition. And after this I am giving

some suggestionsGrecommendations that can help B%K in becoming the better

institution among the leading banks of akistan.

1 H'h,> Ce/tra,':e9 Ba/'/ S>te0

The bank of Khyber has highly centrali+ed system. *ecision making is centrali+ed.The organi+ational management system is also centrali+ed and the control is the most

concentrated one. In the B%K the line of authority moves from top to downwards

through various levels of the departments.

2 !#$ C%t#er Sat'&at'#/0

In now'today the world of strong competition everywhere, every producer or supplier

wants to give ma4imum satisfaction to the customers. Therefore the B%K tries to

provide good services for satisfying its customers. But the B%K did not succeed in

providing ma4imum satisfaction to the customers. 0egarding the utility bills deposit,

the customers put burden on the banker by attending the bank in the last days of the

month. It usually introduces errors in posting the amount to government account and

creates tension in the customers.

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3 !a #& e&&et'(e #%/'at'#/0

There is a lack of the best practices and effective channels of communication in the

branch. The branch has only one hall and the staff of the bank uses the peon or other

clerical staff to communicate or convey messages. This type of communication

introduces lot of errors in the message, as the peon does not fully understand what the

sender of the message wants from the receiver of the message. It also creates lot of

noise and disturbance in the bank. Also the flow of information is slow as there

e4istence gap among various counters, so if a manager or officers want verify or sign

any balance or document, it has to be moved personally or through the peon.

4 Rer%'te/t0

$uman resources are the flesh and blood of an organi+ation. If the personnel are

recruited carefully, they can become an asset to the organi+ation and in case of

carelessness the personnel can turn into liability as well. The B%K has a specified

recruitment procedure and the process is carried out under the supervision of akistan

Banking and -inance /ervice )ommission. The government carries out the process.

/o we can say that impartiality is observed in the whole process. But for the last few

years, it has been observed that there are element of subectivity on the part of the

government and some times incompetent people are also hired and later on they

become a liability to the bank.

" S>te #& #7 A/a,>' a/9 +ae Deter'/at'#/0

In the B%K wages are given according to the pre'established government pay scales

to the officers of different cadre. There is no concept of ob analysis and systematicwage determination. 3ages are not given according to the work performance of the

employees. eoples performing different types of obs, of varying degree of

responsibilities and comple4ities are getting the same salaries and facilities. Also there

is lack of ob rotation practice.

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5 Pr##t'#/ a/9 Tra/&er6

The employees regard romotions as recognition of the good work, increase in

ualifications skills and e4perience. In akistan seniority is the basis for almost all the

promotions. The same apply to the B%K.

Transfers are meant for ob rotation. ;ob rotation enhances the skills of the employees.

In B%K usually transfers are made after considering the domicile of the employees.

(ostly employees are transferred to the place of mentioned domiciles. An employee

is posted to other stations for a period of three years. /ometimes transfers are also

made on the basis of performance of the employee. It has been observed that in most

of the cases peoples use unfair means for posting to that area where they have greater

opportunities. They often succeed and the competent peoples who rely on theirability

and performance cannot avail the opportunity.

6 Tra'/'/0

The B%K reali+es the importance of training and is very keen in training its

employees. The recruits are given the ob training.-ormal training tothe employees

of the B%K is provided in the =nion Bank Academy in Fahore. The B%K also

provides training to its personnel by arranging seminars on different topics, which are

related to the technical aspects of banking. $ighly professional persons are invited

read their papers at the seminars.

8 C,#e S%per(''#/ at Bra/h !e(e,0

At the branch my observation, there is a close supervision of the employees

which poses a problem to the manager as he becomes too much involved in the

subordinates daily work routine. It reduces the distance between the manger and the

subordinate but the manager also face difficulties in enforcing his decisions upon his

subordinates due to the friendly relationships.

Ser('e0

The B%K provides a variety of services and facilities to its customers who are

benefited in terms of saving time and energy. The B%K also deals with most of the


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government affairs. Banking business is also based on personal contact it has been

observed that the officers deal their own relatives with a lot of care and do not

entertain other clients with the same hospitality.

1 B%',9'/0

The building of the branch is rented. The bank provides a reasonable rent to

the owner of the building. /till the owner considers this amount nominal and is

always in row with management over the rent amount and pressuri+es the

management to increase the monthly rent. This practice earns a bad name to the bank.

It is also observed that the building of the branch is small due to which lay out of the

branch is not will and customer mostly faces seating problems.

11 C#pet't'#/0

As it has already been mentioned that the competition in the banking business is

increasing day by day and now it is a matter of survival of the fittest. It is not only the

privati+ed banks that are putting pressure on the nationali+ed banks but there also

international banks and are doing uite good business in akistan. 3e can see that

bank Al'falah and other banks are doing very well. 3e can consider the e4ample of

bank Al'falah. /chemes introduced and the initiatives taken by the bank are

applicable. The initiatives taken by the bank are well backed up by the people. As the

bank is providing its customers a wide range of facilities which no other bank in

akistan is able to provide. It is true the bank Al'falah provides good services but

have very limited branches in akistan.

The bank of Khyber computes with all the banks along with the bank Al'falah,

because the bank of Khyber has many branches all over the country. The bank of

Khyber performs their services very well.

".2 RECOENDATIONS0

In the part of the analysis, I discussed the working of B%K in detail. The analysis

shows that B%K is functioning very smoothly and is also earning good profit. In my

internship of about eight weeks I found that there is a lot of room for improvement in

different departments of the bank. I suggest some recommendations based on the

findings enumerated above. These suggestions, if implemented, would help B%K in

becoming the leading banking institute of the country.


52/55

1 Re;%'ree/t #& S#%/9 Rer%'te/t P#,''e0

0egarding the recruitment procedure of the B%K, it is suggested that the coursecontents designed for the written test should be in compliance with the ob. The

written e4amination contents should be designed in such a manner that the

competence of the candidate can be evaluated for a bank ob. B%K is a financial

institution, so the officers must have the know how of Accounting, @conomics,

-inance and Administration etc and the competence of the candidate should be

checked on the basis of hisGher knowledge of such subects.

The bank needs to adopt the scientific tools of the personnel management like ob

description ob analysis. The adoption of these scientific tools may be help the bank in

various ways i.e. it may help to remove the incompetence as such people will be

identified, e4tra benefits and recognition of work will motivate the officers and will

help to a lot to improve the overall efficiency of the bank. Although these scientific

tools are difficult to implement but a basis could be laid for them and with the passage

of time, they may make their way in the whole organi+ation.

2 Arra/ee/t #& Tra'/'/0

The training of both the newly appointed officers and the older officers should be

arranged in a continuous, systematic chain, so that the organi+ation should enoy the

full fruits of training its employees. If the training program is not fetching any

positive result then all the money spent on training program may be considered

wasted. 3astage of money means wastage of available resources. B%K is business

organi+ation and its obective is to earn profit and the wastage of resources is never

going to serve the cause of the bank. Thus the training program should be planned

properly.

It has been observed that some of the old officers avoid training by making e4cuses.

They avoid training because they do not want to go far away from their homes. The

bank training arrangement authority should keep this in mind and the training must be

arranged having considered the above'mentioned fact. In fact, certain incentive along

with many training facilities may be offered to the officers so they should take keen

interest in it and do not consider it a mere formality. The bank management should


53/55

also try to develop a sense in the officers training is going to be fruitful and they

should be applying the training skills after attending the training program.

3 Dee/tra,':at'#/0

B%K is very much a centrali+ed organi+ation hence depends a lot upon the

decisions from the head uarter. /o it is suggested that B%K should reduce its

dependence on the head uarter for decisions and should eliminate the intermediate

layers of management.

The bank should make arrangements to bring down the level of decision making

closer to the customer so that the performance of the bank become better and efficient.

The decreased dependency on the head uarter will mean greater decision making

power with the line offices and the result will be swift and smooth operations, which

will satisfy the customers, and as a result the deposits may show a marked increase.

4 C#p%ter':e9 I/rat'#/ S>te0

*ue to the increased use of computers and office automation systems, the maor

loopholes of time consumption, e4tra space, and e4tra staff files maintenance and

other such problems are not found in modern organi+ations. Keeping in view the new

world reuirements, it is essential for the bank to install a computer information

system. To achieve the organi+ations goals in limited time and budget, it is

commonly felt that the bank must have moderni+ation in its operations. The use of

computer at a broader base will help the bank in many ways. The workload on the

employees will be decreased, as in the B%K )A7TT branch it was observed that the

staff was over burdened with the work. The accuracy, which comes with the use of

computer, is also an added advantage. Though the initial purchase and installation

costs of computeri+ed information system are always high, but it provides fruitful

results in the long run. Additionally to remain competitive and maintain the status of a

modern successful organi+ation, the bank must consider rigorous computeri+ations.


54/55

" C#/t'/%#% Reearh S>te0

It is suggested that the bank should carry a continuous and systematic research

work and it should be carried out in the research centers of the bank. 0esearch work is

reuired in the areas where new changes are reuired in order to scope with the

competition in the financial market. The factor of uncertainty in the todays

institutions due to fluctuations in the world market has necessitated that the bank must

have certain degreeof anticipation about the future and the ways to fulfill the banks

reuirements.

5 Sta&& Re,at'#/h'p0

The staff relationships in the branch should be cordial. The senior staff must guide the

unior ones and the uniors should co'operate and listen to the seniors. It has been

found that senior and unior staff does not enoy good working relationship. *ue to

this reason tension and conflicts prevail in the branchs environment.

6 F','/ S>te0

The record of the bank is not maintained according to the approved format of the head

office. /o the department heads should make it sure that filing of the record is done in

the proper and systematic way. -or this purpose the bank should utili+e its computer

technology, to maintain highly reliable and proper information about all kinds of

transactions.

8 #7 R#tat'#/0

The employees should be rotated through different seats of different departments, so

that each and every employee is aware of the whole banking system. It will benefit in

the absence of employees.

a'/te/a/e #& Sere>0

The branch must maintain the secrecy of its customers account especially when the

bank is asked on telephone to provide information about the financial standing and the

balance in account.


55/55

1 Ph>'a, I/&ratr%t%re0

It is said that appearances are often deceptive, but not very much in the fields of

services industries. $ere 2a first impression is the last time impression.5 wise saying

goes on. 7ow'a'days people udges the worth of an institution from the outward

appearance and conditions on the same, so the bank should pay attention to the

appearance and apparent condition of its e4teriors, interiors'layout, cleanliness,

designGcolors of furniture of the branches. This will give a good of their inner status to

the visitor. 3hile will benefit the bank in the time to come.11 A,,#at'#/ #& Perra/e Taret0

Allocation of the targets to the staff is very important area. It is through this allocation

and achievements of the target that the performance of the staff is evaluated. /o to

allocate such targets, which are achievable, will definitely bring good and positive

response from the staff. This will help both the employer and the employees alike.

12 #/'t#r'/ Operat'#/0

(onitoring of the on going activities is very important, because without monitoring

you not be able to take remedial action in due time. -or this purpose the management

reuires data and reports from its branches. But this process of reporting informationis placing unnecessary burden on the branches. This burden can be minimi+ed through

the application information technology 8I.T9 i.e. .the application of computer for

collecting processing and providing relevant information to the management.

Documents

Final Report on BOK 333