INTERNSHIP REPORTINTERNSHIP REPORT

ZARAI TARAQIATI BANK LIMITED

HEAD OFFICE ISLAMABAD

Supervised ByMr. Muhammad Kaleem

Lecturer IMS Dept.

Submitted ByWasim Uddin

BBA (Hons) 8th term

INSTITUTE OF MANAGEMENT SCIENCES

KOHAT UNIVERSITY OF SCIENCE &

TCHNOLOGY

KOHAT, N.W.F.P. PAKISTAN

SESSION 2005-2009

INTERNSHIP REPORTINTERNSHIP REPORT

ZARAI TARAQIATI BANK LIMITED

HEAD OFFICE ISLAMABAD

This internship report is submitted to the Institute of Management Sciences in partial fulfillment of the Requirement for the Degree of the Bachelor of Business Administration (Hons) from the Kohat University of Science and Technology.

INSTITUTE OF MANAGEMENT SCIENCES

KOHAT UNIVERSITY OF SCIENCE &

TCHNOLOGY

KOHAT, N.W.F.P. PAKISTAN

SESSION 2005-2009

“Read and Lord is the most bounteous, who teaches by the pen, teaches man that which he knew not.”

(Al-Quran)

It is certify that this internship report on “Finance & Accounts Division of ZTBL Head Office Islamabad” is approved & recommended as partial fulfillment for the Degree of Bachelor of Business Administration (Hons), from the Institute of Management Sciences, Kohat University of Science & Technology.

_____________

_____________ Sir Muhammad Kaleem Lecturar IMS Dept. KUST

_____________

Sir Safi Ullah Lecturar IMS Dept. KUST

I dedicated this endeavor to my kind mother & all my respectable teachers whose guidelines, suggestions

& encouragements are great source of strength that helps me & their prolonged banishment provide me an incentive

& opportunity to complete this report on the “Finance & Accounts Division of the ZTBL”, successfully.

WASIM UDDIN

I always wanted to work in an organization where there is exclusive

environment, healthy competition and ample prospect of professional

growth, for this reason the best option that came in my mind was “Zarai

Taraqiati Bank Limited”, for accomplishment of my internship. During my

internship, I was exposed to different types of work environments which

really enhanced my knowledge and broadened my experience to

maximum. I worked in four departments of the Finance Accounts Division

such as the Central Accounts Department, the Head Office Accounts

Department, the Regulatory and Reporting Department and the Budget

and Fund Reconciliation Department. I am really grateful to the

management of this bank for providing challenging and dynamic

opportunities. The employees of the ZTBL are very talented & educated &

the way to give the training to the internees is very frankly & cooperatively

that leads to complete my internship report successfully.

First of all, I offer my deep gratitude to Almighty Allah, most merciful

and gracious, who blessed us knowledge and inspiration to accomplish

the internship report on “Finance & Accounts Division of the Zarai

Taraqiati Bank Limited”, successfully.

Secondly, I express my heartiest obligation and thanks to our

internship report supervisor, Sir Muhammad Kaleem Sultan (Lecturer in

Finance), for his kind guidance and valuable suggestions. His patronizing

attitude and possible support helped me in the completion of this

internship report and BBA (Hons) degree as well.

I extend my acknowledgement to Mr. Mustafa Khan (Senior Office

in the ZTBL) who helped and gave me all pertinent information in such

away that we did not feel any difficulty to understand the overall operation

of Finance & Accounts Division of the ZTBL that will leads to complete the

internship report on the ZTBL successfully.

Finally, I am extremely grateful to our parents, who played a vital

role throughout our graduation and particularly during our preparation of

internship report on the ZTBL. Without their support, cooperation and

prayers, I would have never been able to complete the internship report

on “Finance & Accounts Division of the ZTBL” successfully.

WASIM UDDIN

1. Preface.................................................................................... i

2. Acknowledgement................................................................... ii

3. Table of Contents..................................................................... iii

4. List of Acronyms...................................................................... viii

5. List of Tables........................................................................... x

6. List of Figures/ Hierarchy........................................................ xi

7. Executive Summary................................................................ xii

SECTION -I

Chapter-1 INTRODUCTION TO REPORT

1.1 Background of Study............................................................... 1

1.2 Purpose of Study..................................................................... 2

1.3 Scope of Study........................................................................ 3

1.4 Importance of Study................................................................ 3

1.5 Research Methodology........................................................... 4

1.5.1 Primary Data............................................................. 4

1.5.2 Secondary Data........................................................ 4

1.6 Limitation of Study................................................................... 5

1.7 Scheme of Report.................................................................... 5

SECTION -II

Chapter-2 INTRODUCTION TO BANKING

2.1 Meaning and Origin of Bank................................................... 8

2.2 Evolution of Banking.............................................................. 8

2.2.1 The Merchants.......................................................... 9

2.2.2 The Goldsmiths......................................................... 9

2.2.3 The Money Lenders................................................... 9

2.3 Evolution of Banking in the Pakistan...................................... 10

2.4 Classification of Banks in the Pakistan................................... 11

2.5 Role of ZTBL in the Economic Development of Pakistan....... 13

Chapter-3 INTRODUCTION TO ZTBL 3.0 Introduction............................................................................... 16

3.1 History of ZTBL......................................................................... 17

3.2 Corporate Vision....................................................................... 17

3.3 Corporate Mission..................................................................... 17

3.4 Corporate Objective.................................................................. 18

3.5 Restructuring Plans................................................................... 18

3.6 Board of Directors..................................................................... 19

3.7 Committees & Organizational Structure of the ZTBL................ 20

3.7.1 Board Committees...................................................... 20

3.7.2 Management Committees........................................... 20

3.7.3 Organizational Structure of ZTBL............................... 21

3.8 Zonal Offices & Branches......................................................... 21

3.9 Ranking of Staff Members........................................................ 22

3.10 Subsidiary............................................................................... .. 23

Chapter-4 PRODUCTS AND SERVICES OF ZTBL

4.0 Introduction................................................................................ 24

4.1 Schemes of ZTBL...................................................................... 24

4.1.1 Sairab Pakistan Scheme............................................. 25

4.1.2 Supervised Agriculture Credit Scheme........................ 25

4.1.3 White Revolution Scheme........................................... 25

4.1.4 Micro Credit Scheme................................................... 26

4.1.5 Zarkhaiz Scheme (One Window Operation) ............... 26

4.1.6 Sada Bahar Scheme................................................... 27

4.1.7 Tea Financing Scheme................................................ 27

4.2 Loans of ZTBL........................................................................... 28

4.2.1 Production Loan.......................................................... 28

4.2.2 Development Loan...................................................... 28

4.3 Recovery Procedure of Loan..................................................... 29

4.3.1 Recovery Schedule.................................................... 29

4.3.2 Issuance of Notice...................................................... 30

4.3.3 Legal Action................................................................ 30

Chapter-5 FINANCE & ACCOUNTS DIVISION

5.0 Introduction..................................................................................... 31

5.1 Functions of Finance & Accounts Division...................................... 32

5.3 Classification of Finance & Accounts Division................................ 33

5.4 Hierarchy of Finance & Accounts Division...................................... 34

Chapter-6 CENTRAL ACCOUNTS DEPARTMENT

6.0 Introduction...................................................................................... 35

6.1 Objectives of Central Accounts Department.................................... 35

6.2 Functions of Central Accounts Department..................................... 35

6.3 Units of Central Accounts Department............................................ 36

6.3.1 Policy Unit...................................................................... 36

6.3.2 Accounts Unit................................................................. 37

6.3.3 Tax Unit........................................................................... 38

6.3.4 Fixed Asset Unit............................................................. 38

6.3.5 Pre-payment Verification Unit........................................ 39

Chapter-7 HEAD OFFICE ACCOUNTS DEPARTMENT

7.0 Introduction.................................................................................... 40

7.1 Units of Head Office Accounts Department................................... 41

7.1.1 Payroll Unit................................................................... 40

7.1.2 Fund Unit...................................................................... 40

7.1.3 Payment Unit................................................................ 41

7.1.4 Inter Branch Transaction Unit (IBTU)........................... 41

7.1.4.1 Objectives of the IBTU............................... 43

7.1.4.2 Unit Structure of the IBTU.......................... 43

7.1.4.3 Responsibilities of Unit Incharge................ 43

7.1.4.4 Steps in Information Processing................. 44

7.1.4.5 Diagrammatic Representation of

Information Processing of IBTU................. 45

Chapter-8 REGULATORY REPORTING DEPARTMENT

8.0 Introduction.................................................................................... ... 46 8.1 Objectives of Regulatory Reporting Department............................... 46

8.2 Functions of Regulatory Reporting Department................................ 46

8.3 Units of Regulatory Reporting Department....................................... 47

8.3.1 Regulatory & Internal Reporting Unit............................... 47

8.3.2 Financial Management Information

System Unit...................................................................... 48

8.3.2.1 Role of Financial Management

Information System Unit.................................... 48

Chapter-9 BUDGET & FUND RECONCILITATION DEPARTMENT

9.0 Introduction.................................................................................... .... 49

9.1 Objectives of Budget & Fund Reconciliation Unit.............................. 50

9.2 Functions of Budget & Fund Reconciliation Unit............................... 50

9.3 Units of Budget & Fund Reconciliation Unit...................................... 51

9.3.1 Budget Planning Unit........................................................ 51

9.3.1.1 The Budget Development Cycle (BDC)............ 52

9.3.2 Budget Analysis Unit......................................................... 53

9.3.3 Treasury Unit...................................................................... 53

9.3.4 Fund Reconciliation Unit.................................................... 54

SECTION -III

Chapter-10 VARIOUS ANALYSIS

10.0 Introduction.................................................................................... ... 55

10.1 SWOT Analysis................................................................................. 55

10.1.1 Strengths.......................................................................... 56

10.1.2 Weakness........................................................................ 57

10.1.3 Opportunities.................................................................... 58

10.1.4 Threats............................................................................. 59

10.2 Ratio Analysis.................................................................................... ... 60

10.2.1 Liquidity Ratios............................................................. 60

10.2.1.1 Current Ratio............................................. 60

10.2.1.2 Quick Ratio................................................ 61

10.2.1.3 Net Working Capital................................... 61

10.2.2 Leverage Ratios........................................................... 62

10.2.2.1 Debt Ratio................................................. 62

10.2.2.2 Total Debt to Net Worth Ratio.................... 62

10.2.2.3 Time Interest Earned Ratio........................ 63

10.2.3 Profitability Ratios.......................................................... 63

10.2.3.1 Return on Asset.......................................... 64

10.2.3.2 Return on Equity......................................... 64

10.2.3.3 Earnings Per Share.................................... 65

10.3 Human Resource Analysis............................................................ 65

10.4 Marketing Analysis........................................................................ 67

SECTION -IV

Chapter-11 FINDINGS & RECOMMENDATIONS

14.1 Findings........................................................................................... 69

14.2 Recommendations........................................................................... 70

14.3 Personal Experience........................................................................ 71

14.4 Conclusion....................................................................................... 72

14.5 Annexures........................................................................................ 73

Bibliography

ABL Allied Bank Limited

ADB Agriculture Development Bank

ADFC Agriculture Development Finance Corporation

ADPB Agriculture Development Bank of Pakistan

BFRD Budget and Fund Reconciliation Department BDC Budget Development Cycle

BOD Board of Director

CAD Central Accounts Department

CAF Central Accounts File

COBOL COmmon Business-Oriented Language

FAD Finance and Account Division

FAU Fixed Asset Unit

FMISU Financial Management Information System GDP Gross Domestic Product

GLH General Ledger Head

HBL Habib Bank Limited

HOAD Head Office Accounts Department

HOOD Head Office Operations Department

IBTU Inter Branch Transaction Unit ITSSD Information Technology and System Support Department

KSSL Kissan Support Services Limited

MCB Muslim Commercial Bank

MCO Mobile Credit Officers

MINFAL Ministry of Food, Agriculture and Livestock

NBP National Bank of Pakistan

NDFC National Development Finance Corporation

NPL Nestle Pakistan Limited

PDDC Pakistan Development Diary Company

PICIC Pakistan Industrial Credit & Investment Company

PVU Pre-payment Verification Unit

RIRU Regulatory and Internal Reporting Unit

RRD Regulatory Reporting Department

SBP State Bank of Pakistan

SECP Security & Exchange Commission of Pakistan

SME Small Medium Enterprise

SWOT Strengths Weakness Opportunity and Threats

UBL United Bank Limited

ZTBL Zarai Taraqiati Bank Limited

S.No. Topics Page No.

1. List of Board of Director of the ZTBL 19 2. Network of zonal offices & branches of the ZTBL 21 3. Category of employees provided by KSSL 23 4. Provinces wise disbursement of loans & its percentages 28 5. Summary of term wise disbursement of loans

29

6. Calculation of current ratio from 2005 to 2007 60 7.

Calculation of quick ratio from 2005 to 2007 61

8. Calculation of NWC from 2005 to 2007 61 9. Calculation of debt ratio from 2005 to 2007

62

10. Calculation of total debt to net worth ratio from 2005 to 2007 62 11. Calculation of time interest earned ratio from 2005 to 2007 63 12. Calculation of ROA from 2005 to 2007

64

13. Calculation of ROE from 2005 to 2007

64

14.

Calculation of EPS from 2005 to 2007 65

S.No. Topics Page No.

1. Organization Structure of ZTBL 21 2. Ranking of Staff Members in Order of Seniority 22

3. Hierarchy of Finance and Accounts Division 34 4. Unit Structure of Inter Branch Transaction Unit (IBTU) 43 5. Diagram of Information Processing of the IBTU

45

6. Diagram of SWOT Analysis 55

Now a day’s strong and efficient capital and financial institutions

are the basic requirements of each county. So no country can be

considered strong without having strong enough capital and financial

institutions and markets. One of the components of these financial

institutions is the banks. Banking is one of the most sensitive

businesses all over the world. Banks play very important role in the

economy of a country and Pakistan is no exemption. Banks are

custodian to the assets of the general masses.

In banking sector of the Pakistan, the ZTBL is one of the leading,

premier and specialized financial institution geared towards the

development of agriculture, industrial and SME sector by providing

financial products, services and loans for their clients and customers.

The ADFC & ABP were merged together as the ADPB in 18th

February 1961. The ZTBL was incorporated as the public limited

company on 14th December, 2002 through repeal of the ADB

Ordinance of 1961. The ZTBL plays very important role in the

agriculture sector of the Pakistan.

In short, the ZTBL is a providing financial service to the rural

areas of the Pakistan that comprising 68% of the total population. The

ZTBL is expanding day by day, & its network of 25 zonal office & 342

branches is serving around half a million clients annually and over one

million accumulated account holders with the average loan size of

around Rs.89,000 serving 65%, 31% & 4% of subsistence, economic

and large growers respectively.