intrenship report of bank of punjab.doc

CLEARING DEPARTMENT:

PAGE 3

INTERNSHIP REPORT

THE BANK OF PUNJAB

SUBMITTED BY Ghulam NabiRoll#993, Sec.F (Afternoon)B.com(Hons)

30th Sep, 2009

UNIVERSITY OF THE PUNJABDEDICATION

I DEDICATE THIS REPORT TO MY FAMILY AND FRIENDS.EXECUTIVE SUMMARY

The Bank of Punjab was established in 1989 and was given the status scheduled bank in 1994.

The Bank of Punjab is working as a scheduled commercial bank with network of almost 272 branches at all over major locations in the Punjab. The Bank provides all types of banking services such as Deposits in Local Currency and client foreign currency, remittances, and advances to business, trade, industry and agriculture. The Bank of Punjab has indeed entered a new era of science to the nation under experience and professional hands of its management. The Bank of Punjab plays a vital role in the national economy through mobilization of hitherto untapped local resources, promoting savings and providing funds for investments. The bank offers attractive rates of profit on all deposits, opening of foreign currency accounts and handling of foreign exchange business for example imports, exports and remittances, financing, trade and industry for working capital requirements and money market operations. The lending policy of bank is not only cautious and constructive but also based on principles of prudent lending with maximum emphasis on security.

PREFACE

B

y the grace of almighty Allah , The Internship Report At The ank Of Punjab Garhi Shahu Branch is ready to submit.

Along with theory , practical work is very important for experience and handling all types of situation ,Every BBA student has to undergo and internship that really helps them to gain practical knowledge .

During my internship at Bank of Punjab Garhi sahau branch Lahore , I got a chance to observe all departments of banking . I learned lot of experience here.

I am thankful to my teachers and management staff of Garhi Shahu Branch Lahore to take interest in completion of this internship program

Ghulam nabiACKNOWLEDGEMENT

We are very thankful to Allah Almighty who has given us the power and ability to think and judge the matters and then to make use of the blessed abilities. I also deeply appreciate the wide range of suggestions and comments provided by my friends and colleagues.Table of Contents

Page# 1. History,---------------------------------------------------------------- 06- 14 Nature of the Organization

Business Volume

Product Line

CompetitorsManagement of the Bank of Punjab ------------------------------------------ 15 - 17 Organization Hierarchy Chart

Number of Employees

Main OfficesField of Activities------------------------------------------------------------ 18 - 109Plan of MY Internship Program --------------------------------------------- 110- 58

Introduction of the Branch

Starting & Ending date of Internship

Department in which I got Training

Financial Analysis & concluding remarks ------------------------------------- 98 SWOT Analysis of The Bank of Punjab--------------------------- 99 - 101Recommendations -------------------------------------------------- 102-103Conclusion------------------------------------------------------ References & Sources Used ------------------------------------------------------- 104Annexes ------------------------------------------------------------------------- 105- 107 BRIEF HISTORY

Established in 1989, in pursuance of The Bank of Punjab Act 1989 and was given the status of schedule commercial bank with its network of 272 branches at all major business centers in the country. The bank provides all types of banking services such as Deposit in local currency, Client deposit in foreign currency, Remittances, and Advances to business, Trade, Industry and Agriculture. The bank of Punjab has indeed entered a new era of science to the nation under experience and professional hands of its management. The bank of Punjab plays a vital role in the national economy through mobilization of hitherto untapped local resources, promoting savings and providing funds for investments. Attractive rates of profit on all types of deposits. Opening of foreign currency accounts and handling of Foreign Exchange business such as Imports, Exports and remittances, Financing, Trade and industry for working capital requirements and money market operations are some facilities provided by the Bank. The leading policy of bank is not only cautious and constructive but also based on principles of prudent leading with maximum emphasis on security. As agriculture is considered as backbone of our economy the Bank of Punjab has introduced Kissan Dost Agriculture Finance Scheme to small farmers.

THE BANK OF PUNJAB CORPORATE INFORMATION

Board of Directors

Mr. SAFDAR JAVAID SYED ChairmanMr. NAEEMUDDIN KHAN

PresidentMr. TARIQ MAHMOOD PASHA Director

Mr.SHAFQAT ELAHI

DirectorMr.AZHAR HAMID

DirectorMr. SHAFQAT MAHMOOD Director

Mr.VIQAR AHAMD KHAN Director

Mr. M. NAVEED MASUD DirectorMr. HAROON KHAWAJA DirectorMr. RAZA SAEED Secretary to the BoardAUDIT COMMITTEE

Mr.M. NAVEED MASUD

ChairmanMr.AZHAR HAMID

MemberMr.HAROON KHAWAJA

Member

AUDITORS

Ford Rhodes Sidat Hydar & Co., Charter Accountants

REGISTERD OFFICE

BOP TOWER, 10-B, BLOCK-E-IIMAIN BOULEVARD, GULBERG-III,

LAHORE.

TELEPHONES: +92-042-5783700-10

FAX NO. +92-042-5783975

WEBSITE: www.bop.com.pkUAN: 111-200-100

REGISTRAR

M/s corplink (Pvt) Ltd

Wings Arcade, 1-k (Commercial) Model Town, Lahore.

Ph: 042-5839182

CORPORATE GOAL

Organizational goal and strategy define the purpose and competitive techniques that set it apart from others organizations. Goals are often written down as an enduring statement of company intent.

A strategy is the plan of action that describes the resource allocation and activities for dealing with the environment and for reaching the organizational goal. Goals and strategies define the scope of operations and the relationship with employees, clients and competitors.

With over 140 years of experience in trade finance and an extensive international branch network, The Bank of Punjab is committed to help the customer succeed in every competitive environment. To keep pace with changing needs, BOP constantly review its comprehensive cash, trade and treasury products and services, ensuring that a full range of flexible and innovative services is always available for the customer wherever they trade.

THE VISION STATEMENT:

To be a customer focused bank with service excellence.

THE MISSION STATEMENT:

To exceed the expectations of our Stakeholders by leveraging our relationship with the Government of Punjab and delivering the complete range of professional solutions with the focused on programme driven products and Services in the agriculture and middle tier markets through a motivated team.

OBJECTIVES:

The main objective isTo offer outstanding value to the customers by providing a knowledgeable, efficient and reliable service in a personal, helpful and responsive-manner.

The objectives of The Bank of Punjab carving way towards the mission are

To be fast, focused, and determined.

Its tough out there- we face brutal challenge from both global competitors and local banks.

Like leopard- be more agile, move swiftly, respond faster, and work smarter.

Creating values for the customers, shareholders and employees.

Customer satisfaction and delight is given the top priority as we are for the customers and not the customers for us.

HOW WILL WE DELIVER THE CHALLENGE?

These objectives and guiding mission will be achieved through

Focused objective

Winning as a team

Excellence in delivery

Relentless quality

PUNJAB GOVERNMENT MESSAGE

Punjab Government Shows Faith in the Bank of Punjab.

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.

Finance DepartmentGovernment of the Punjab. CORE VALUES:

Our Customer

as our first priority

Profitabilityfor the prosperity of our stakeholders that allows us to constantly invest, improve and succeedCorporate Social Responsibilityto Enrich the Lives of community where we operate

Recognition and Reward

for the talented and high performing employees

Excellence

in every thing we doIntegrity

in all our dealingsRespect

for our customers and each other

BUSINESS VOLUMEThese are the quick facts of the business in Dec 2008. At that instant BOPs business volume is as under.

Assets (Current + Fixed) PKR 185.91 Bn Loans PKR 1.7 Bn

Deposits PKR 164.73 Bn

Share Capital= Rs. 5,287974Reserves =Rs. 7,427,232

Future outlook:

The year 2009 will prove to be another challenging year for the bank with scattered opportunities and tough competition. Diversification, innovation and mission driven approach are the key to success. Management of the bank is committed to continue its efforts for outstanding performance. Improvement in stakeholders value shall be ensured through progressive but cautious business expansion with strategic branch network extension and introduction of innovative products in all areas of business.

THEY BELIEVE

People

The Bank of Punjab has 272 branches in all major business centers in the country. THe Bank of Punjab has world-class managers and employees. Its aim is to develop this talent even further. This will create greater customer loyalty and greater benefit for all - staff, shareholders and the community

The challenge for the bank is that, unlike organizations who may be working in one country or countries with similar cultures and laws, the bank have to achieve the best people policies it can while being mindful of the different countries and cultures in which it operate. Differences in culture, social structure and economic status mean that one size may not fit all. Each of the countries in which it operates will potentially have different laws, regulations and customs. It strives to balance the need for global policies and processes without imposing rules that may conflict with the diverse local needs and ways of working of different countries.

Ethics

The Bank of Punjab reputation is critical to being the world's leading emerging markets bank. The preservation and enhancement of that reputation depends upon businesses operating to the highest standards of ethical conduct.

BOP faces a particular challenge to uphold consistent standards of conduct while at the same time respecting the culture and varying business customs of all the countries in which it operate.

The principles that govern the behaviour of its business and employees are reflected in a Group Code of Conduct. The Group Code of Conduct is a practical working document which guides employees through the many difficult conduct issues which confront them on a daily basis. Complying with each element of the Code will not always be easy but the employees recognise that they will be judged not just by what is set out in the Code but on how this is reflected in their day to day activities and the behaviours.

Environment

The Bank of Punjab is proud to showcase commitments to and awareness for the environment and encouraged if motivated by the customers in making day to day choices.

CODE OF BUSINESS PRINCIPLE OF

THE BANK OF PUNJAB Act with honesty and integrity including ethical handling of actual or apparent conflicts of interest between their personal, financial, commercial interest and responsibility to BOP.

Give a true and fair view of the state of affairs of the Bank in the reports and documents that POB files with or submit to shareholders .Government authorities and stock exchanges or otherwise makes public.

Respect the confidentially of information acquired in the course of their work, except or otherwise legally obligated to disclose and not to use such confidential information of third party ,which BOP has rightfully received under nondisclosure agreement a well:

Achieve responsible use of and control over all assets and resources employed or entrusted

Exercise good judgment to ensure the safety and welfare of its employees, agents and contractor and to maintain a cooperative, efficient, positive harmonious and productive work environment and business organization.

To comply with the Trading Codes of Conducts as laid down by BOP

Proactively promote and be an example of ethical behavior as a responsible partner among peers, in the work environment and the community. PRODUCTS AND SERVICES OF THE

BANK OF PUNJAB

ATM facility

On-line Banking

E-Banking

Debit cards

Consumer Financing

Agriculture Financing

Corporate Financing

Commission free Remittance

Zarco exchange remittance

Collection of utility

Lockers facilities

Account opening form

Prize Bonds

Deposit product

BBA Account

Current Account

Saving AccountCorporate Philosophy

OF THE BANK OF PUNJAB

BOP Bank has a progressive and a dynamic human resource (HR) philosophy. The Bank believes in transforming its human capital into a key source of competitive advantage. There is a strong value system in place, which is driven by result orientation, adaptability to change, humility and respect for subordinates and peers. The Bank believes that investment in human capital is critical for achieving and sustaining growth.

The Banks constant endeavor is to create a performance driven work culture with focus on employee satisfaction and retention.

We strongly believe that the interests of the Bank and the employees are inseparable. At BOP we try to create a we culture where there is mutual trust and respect for each other. We encourage ownership behavior so that everyone feels responsible for the performance and reputation of the Bank. We are committed to develop and enhance each employees skills and capabilities through extensive in-house and external training programs and job rotations

COMPETITORSThe competitors of Bank of Punjab are all financial institutions providing services to the public. Like

Al- habib bank

Meezan bank

citi bank

Saudi pak bank

Alfalah-bank

Askari bank

MANAGEMENTBOP Management1. IJAZ UR RAHMAN QURESHI HEAD AUDIT AND RAR

2. SHARJEAL MASUD HEAD OPERATIONS

3. SHAHID WAQAR MAHMOOD HEAD RETAIL BANKING

4. SAJJAD HUSSAIN HEAD SPECAIL ASSET MANAGEMENT

5. ASEER AHMAD KHAN COUNTRY COMMERCIAL HEAD6. AZHAR HUSSAIN DILAWARI HEAD INFORMATION TECHNOLOGY

7. HAFEEZUDDIN HEAD CORPORATE AND INVESTMENT BANKING

8. NAEEMUDDIN KHAN PRESIDEDNY/CEO9. KHALID S. TIRMAZI DEPUTY CEO

10. MOAZZAM MANEKA HEAD AGRICULTURE

11. NADEEM AMIR CHIEF FINANCIAL OFFICER

12. S.M. ATIF HEAD CONSUMER BANKING

13. KHAWAR S. ANSARI HEAD TREASURY

14. IRFANUDDIN HEAD CONTROL & COMPLIANCE

15. MUHAMMAD NAUMAN COUNTRY RISK MANAGER

16. NAVEED HAFIZ SHIEKH HEAD HUMAN RESOURCE

ORGANIZATIONAL HIERARCHY CHART

BOP BRANCH NETWORK

Lahore Region Faisalabad Region Gujranwala Region

Rawalpindi Region

Karachi / Quetta Region Multan Region Peshawar RegionHEAD OFFICE

MAIN BRANCH, LAHORE

10-B, block E-II, Main Boulevard

7 Egerton Road Lahore

Gulberg III, Lahore

Tel: (042) 9200419, 9200187

Tel: (042) 5783700-10

Fax: (042) 9200351FIELDS OF ACTIVITIESBOP has following departments:

1. Account Opening Department

2. Accounts Department

3. Cash And Deposit Department

4. Advances / Credit Department

5. Clearing Department

6. Foreign Remittances

7. Compliance Department

ACCOUNTS OPENING

DEPARTMENT

1) ACCOUNTS OPENING DEPARTMENT

Account opening department is the most important department in any commercial banks operations. The reason is that it serves as a first step in establishing customer-bank relationship. The main objective of any bank is to attract as many new accounts and deposits as possible. In order to fulfill the objectives first step is to opening the new accounts and maintaining the existing ones. The department of account opening is the major source of doing so. That is why such departments are maintained by the all banks in all there branches.

The Bank of Punjab Garhi Shahu Branch has an account opening department that provides service to new as well existing customers. It provides a wide rang of services to its customer and is strongly oriented towards providing banking services to the needs of a business. Understanding the customer requirements and guiding them accordingly is the basic function of the department.

1FUNCTIONS OF ACCOUNT OPENING DEPARTMENT

Account Opening

Account Closing

Customer Service

Answering Balance Inquiries

Issuance of SSCs and DSCs

Issuance of Long Term and Short Term Certificates

Issuance of Lockers

Issuance of cheque Books

Zakat Declaration

CATEGORIES OF ACCOUNTS

BOP has the following classification of accounts:

INDIVIDUAL ACCOUNTThis account is opened by individual as well as sole proprietor i.e. individual business which is not a legal entity. The nature of the account opened depends on the requirements of the holder. BOP offers various deposits as well as saving accounts for its customers which are discussed later in the forth coming pages.

JOINT ACCOUNT

It is also opened by the business as well as non business customers. The account opening forms provide the option to the customers whether they want the account to be operated by using by using either or both option. Either or survivor option is that anyone can operate the account. Both options means that both account holders have to make signatures in order to operate the account and if one of them expires, the order has to show a succession certificate to continue using that account.

PARTNERSHIP ACCOUNT

Opened by any partnership firm and operated as a joint account to be operated by the authorized partners. Authorized partners are those who are authorized by the partnership firm to operate the account.

LIMITED COMPANIES ACCOUNT

Limited companies are a legal entity. The account of a limited company is not requires to be introduced.

CLUB, SOCIETY OR ASSOCIATIONTYPES OF DEPOSITS Current Deposits Saving Deposits Term Deposits Special Notice Deposits Foreign Currency DepositsCURRENCIES OF ACCOUNTS

Pak Rupees

US Dollars

Pound Sterling

Deutsche Mark

Japanese Yen

Euro

ACCOUNT CODES

Current Account..01

Saving Account.....02

Primax Classic..06

1. ACCOUNT OPENING

It is the first and major function of the department. There are various steps involved in opening of an account. When the person wants to open an account with the bank he is required to fill an account opening form. along with this account opening form certain documents are to be attached to start the customer- bank relationship. There are certain formalities to fulfill before opening an account depending upon the nature of account and the nature of the customer.

PROCEDURE

a. ACCOUNT OPENING FORM

A printed account opening form along with the requisition slip and the signature card is given to the customer. The condition of opening the account is also attached with the form. It includes the information regarding the customers name, address, NIC #, telephone no.; Information about the account holders successor is also to be filled in the account opening form. This information is required to obtained the legal successor

Appointed by the account holder.b.INTRODUCTIONThe customer whose account is to be opened has to be introduced by an existing account holder of the bank. The introducer is the person who makes an introduction of the account opener by signing on his account opening form. The introducer should know about the whereabouts of the account opener and should know that the customer is bonafide i.e. he is opening the account in his real name. Introducer is not a guarantor. His only responsibility is to locate the customer if any problem comes up. The main purpose of getting the introduction of the account opener is to: Avoid any serious consequences

Desirability of the customer

Respectability

Occupation and nature of business of the customer

To get maximum information about the customer

c. REQUIRED DOCUMENTS

INDIVIDUAL ACCOUNT

Copy of CN.I.C

Signature Card ACCOUNT OF PARDANISHEENA pardanisheen lady has to come to the bank personally to open the account as well as operate her account. A vernacular form is to be filled in by her if she makes her signatures in Urdu or she is unable to provide her photograph.

FOR ILLITERATE PERSON

An illiterate person is required to submit two passport size photographs. One is put on the account opening form and the other one is out on the signature card. Another requirement is the account holder has to personally visit the bank to operate his or her account. The cheque of an illiterate person is to be written by the 2nd manger of the bank or the person who is not engaged in making payments in the bank.

JOINT ACCOUNT

Copy of CN.I.C

Signature Card

PROPRIETORSHIP ACCOUNT

Copy of CN.I.C

Signature Card

Registration (if applicable)

Request letter on company's letter head

Stamp

PARTNERSHIP ACCOUNT

Copies of CN.I.C of partners

Copy of partnership deed (preferably registered)

Signature Card


LIMITED COMPANY ACCOUNT

Memorandum of Association

Articles of Association

List of Directors

Copy of CN.I.C of all directors (attested)

Signature Card(s)

Copy of Board Resolution with embossed seal

Copy of Certificate of Incorporation (only for public ltd. Company)

Certificate of Commencement of Business


CLUB. SOCIETY OR ASSOCIATION

Copy of Resolution

Signature Card(s)

Copy of Rules/By-Laws

List of Management

Copy of N.I. C of members of committee

Copy of registration in case of registered club, society or association

JOINT STOCK COMPANY

Copy of resolution of board of directors

Memorandum of association

Articles of association

Certificate of incorporation

Certificate of commencement of business Form Q.A.22 is obtained from the foreign nationals resident in Pakistan and companies whose head offices are outside Pakistan for maintaining bank account.

d. VERIFICATION OF DOCUMENTS AND

ISSUANCE OF ACCOUNT NUMBER

The documents provided by the account opener are verified by the department head. In Bank of Punjab this verification is done by the cash and deposit department head. The signatures are also verified and a signature card is maintained for the purpose of future verification if required. The account is then entered into the bank's system and processed for getting the account number and the customer number. This system number comprises of following components

Branch code: Account type code: Customer number: Computer numbere. MINIMUM CASH REQUIREMENT

After providing the properly filled form and all the necessary documents the account holder has to deposit the minimum cash requirement for opening a specific account according to bank's rules.

The customer's account is opened after following the above stated procedure.

f. LETTER OF THANKS

After this process a letter of thanks is sent to the customer in order to verify that the address provided by him is correct.

g. ISSUANCE OF CHEQUE BOOK

After the customer brings the letter of thanks to the bank he fills in the requisition slip for obtaining a cheque book. This makes him the account holder of the bank and now he is able to operate his account.

ATTORNEY CARDAn attorney card is issued to authorize some other person to operate the account. The nature of the account remains individual. The benefit of this card is that its authorization can be revoked at anytime. On the other hand in case of a joint account you have to close the account in order to cancel the other person's authorization and open a new one. Therefore an attorney card is preferred.

2. RECORDING OF ALTERATIONS AND

ADDITIONS

In case of any alteration the account opening officer is required to update the customers account. The updating is required in the following cases

Change of address

Addition of signatories and attorneys

Change in signatures

Changes in any required documents

3. ACCOUNT CLOSING

It is the second function of this department. For closing an account the customer is required to

Submit a signed account closure request

REQUEST FOR CLOSURE OF ACCOUNTI/We am/are maintaining account no............................

Titled ....................................................with you.

I/We request you to please close my/our account. Unused cheque containing...... leaves is also enclosed.

Surrender the cheque book with the bank

Pay a statutory fee of Rs. 100 to the bank

The account opening officer gets an annexure (given on next page) approved by all the departments and then closes the account. This is a sort of clearance from all the

Departments. The cheque book is then destroyed.

Account closed log file is printed in order to complete the process of closing an account. In the end the account opening form is filed in the closed accounts file.

3. CUSTOMER SERVICE

It is the third very important function performed by account opening department. It is the customer service provided by the bank which ensures loyalty of customers and new accounts and deposits. Any service that a customer requires should be provided in order not only to satisfy him but also delight him. The following services are provided by the account opening department Balance confirmation

The account opening officer is responsible to provide answer to inquiries about balance on telephone as well as personal visits of the customers.

Cheque clearing inquiries

Account number confirmation

Issuance of statements

The bank provides statements of accounts on the requirement and instruction of the customers. Normally the bank sends the statement of account after every six months but if desired by the customer the statement can be sent on quarterly basis monthly basis or even weekly basis.

Filling deposit slips on request of the customers

4. CHEQUE BOOKS

A cheque book is issued to the new account holder on receiving a duly filled and signed requisition slip attached with account opening form. The number of leaves required by the customer is mentioned on this requisition slip.

Similar procedure is adopted for the issuance of cheque book to an existing account holder after receiving the requisition slip from the cheque book already issued.

Daily record of cheque books issued and the remaining cheque books with the bank is maintained according to serial number of the cheque book leaves.

REQUEST LETTER FOR DELIVERY OF CHEQUE BOOKPlease deliver the cheque book of my/our Account titled.....................

A/c no....................to the bearer of this letter Mr. / Mrs. ................... whose specimen signatures are verified by me/us.

BOP issues 25 leave and 100 leave cheque books for current and saving accounts. A 25 leave cheque book is issued for a foreign currency account. The account opening officer gets the customers signatures on the cheque book issued register as he gives the cheque book to the account holder to complete the process.

In the end all the entries related to issuance of cheque books are entered into the system and a print out is taken in order to get it signed by manger operations.

5. ISSUANCE OF SSC'S AND DSC'S

Defense Saving Certificates and Special Saving Certificates are issued on request of customers.

Forms are filled and completed on behalf of the account holder.

Settlement advice is made.

Certificates are received and delivered to the customers.

Formalities in case of encashment of the certificates are completed.

Formalities for profit paid on maturity.

These certificates are being issued through Gulberg branch. If any client comes to the branch, his portfolio, which includes the denomination and the amount of the certificates, is being sent to the main branch and the certificates are issued in his name and again sent to the respective branch. The requirements for getting the certificates issued are

a) Account with the bank

b) Application form

c) Deal Application

d) ID card copy

e) Zakat declaration

ISSUANCE OF CERTIFICATESFollowing certificates are issued

Account maintenance certificate

Sole proprietor certificate

Internship certificate

Tax deduction certificate

Profit paid certificate

Charges of Rs.200 are recovered for issuance of each certificate. These charges are for

Accounts having a balance of less than one million. Following are the requests for statements by the clients:

8.ISSUANCE OF LOCKERSBank of Punjab providing locker facilities in almost all of its branches. Four size lockers are available at Garhi Shahow branch

LOCKER CHARGES

Locker SizeKey DepositAnnual Rental Charges

Small15001000

Medium15001500

Large15002000

Extra Large15003000

The only condition, which a customer has to fulfill, is that he has to be an account holder of The Bank of Punjab. The charges include RS.1000 as key deposit. The key deposit is refundable if a customer decides to surrender the locker. A locker register is maintained to keep the daily record of locker operation. This register records the timing and date of use. As soon as the customer's locker renewal becomes due, it is being communicated to the client whether he wants to renew it or not.

RENEWAL OF LOCKER NOYour Locker No..................is due for renewal on.................... Please confirm at your earliest convenience if you wish to renew the locker. The annual charges for the above locker will be Rs.........................As soon as the renewal charges are due, these are debited from the clients account and the client is being informed about it through a letter. In case the client does not want to continue the locker then he should surrender the key before the next year's charges become due.

ACCOUNTS DEPARTMENT2) ACCOUNTS DEPARTMENTThe most important aspect in record keeping of a bank is its accounting system. The basic purpose for maintaining an accounting system is to ensure consistency in record keeping and accounts. The accounting system used in The Bank of Punjab is given in a computerized accounting software developed by the Banks IT department which very user friendly and easy to learn and operate, which states all the accounting practices to be adopted while recording any transactions.

The basic requirement for any accounting system is that it should be in accordance with the GAAP i.e. Generally Accepted Accounting Principles. There are two choices available to an organization for an accounting system

Cash Basis of Accounting

Accrual Basis of Accounting

MAIN FUNCTIONS OF ACCOUNTS DEPARTMENT

The major function of accounts department is related to record keeping and maintenance of accounting books. It performs the following two functions in this regard

To maintain General Ledger

Closing of Books of Accounts

GENERAL LEDGER

It is the main record of the branch reflecting its assets and liabilities and serves as the master control of accounting system of the branch. It consists of only those accounts which are authorized and approved by head office.

VOUCHER SYSTEM

Voucher is a written authorization used in approving a transaction for recording and payment. Voucher system is generally designed to provide strong internal control over the transactions, which take place during the business hours. Whenever a transaction takes place in any department of the bank, one debit and one credit voucher is prepared. At the end of the day, these vouchers are collected and recorded i.e. general ledger accounts or other related accounts are either credited or debited by that amount. There are two types of vouchers:

Debit vouchers

Credit vouchers

1.DEBIT VOUCHERS

A debit voucher is prepared whenever an expense is incurred or whenever a withdrawal is made by any customer of the bank. The debit voucher used by The Bank of Punjab is white in color and it contains the following specifications regarding the transaction

Name of the branch

Date

Branch Code

Account Number

Transaction Code

Amount

Other details or narration about the transaction

The number of the contra voucher is also stated on it

2.CREDIT VOUCHERS

A credit voucher is prepared whenever a customer deposits any amount with the bank or an income is received by the bank. The credit voucher used in The Bank is white in color and shows the information similar to the one on the debit voucher. The credit voucher is used for general ledger entries and simple entries to credit any account.

VOUCHER RECEIPT

This receipt is used when it is required to make similar vouchers, all the related entries whether debit or credit are being entered in this voucher sheet to save time.DOUBLE ENTRY SYSTEMThe Bank of Punjab uses double entry system i.e. whenever a transaction takes place its debit and credit entry is made simultaneously to keep the debit and credit sides of the general ledgers equal. The sequence of these debit and credit entries depends on the type of transaction

FUNCTIONS OF ACCOUNTS DEPARTMENT ACTIVITY VERIFICATION

This is the foremost function and responsibility of the accounts department. Activity is the detailed report of all the transactions that take place in the branch during one day. This detail is provided by all the departments separately. For example the cash and deposits department will generate reports regarding all the cash receipts and payments made during the day, all the pay orders, demand drafts, telegraphic transfer and call deposit receipts issued to the clients. The procedure of activity verification is to tally all the vouchers and cheques with the information contained in the batch report. Before that all the vouchers and cheques and any other instruments are checked whether they are complete and valid or not. In case of cheque the following things are checked

Date (whether post dated or stale dated)

Signatures of the client

Two signatures on the back of the cheque

Amount in figures and words

All necessary stamps e.g. paid stamp

Signatures by the respective verifying authority are checked. For example the checks which are up to Rs.25, 000 have to be signed by the CD department head and the cheques which are above that amount have to be signed by the manager operations before making payment against them.

After checking the above stated requirements, these cheques are tallied with the activity report.

Similar process is adopted for all other vouchers and instruments.

RECTIFICATION OF ERRORIf there is any error found out during activity verification, it is rectified and communicated to the respective departments. These errors might be some mistakes in the face of the instrument or the signature requirements.

ROUTINE EXPENSESThe accounts department is responsible for monitoring routine expenses of the branch. Majority of these expenses are related to daily routine of the bank and incurred by the accounts department on request of the concerned departments. These expenses are paid and then entered into the expense register to maintain an up to date record. This record is verified by the manager operations. These expenses include repair and maintenance expenses etc. The accounts department makes contracts with the suppliers,

ADMINISTRATIONThis department is responsible for the administration activities of the bank therefore it is responsible for all the administrative costs of the branch. It removes any branch grievance that is being observed or communicated to it. These complaints can be related to the customer service, external functions or bank's internal working.

STAFF REIMBURSEMENTSAll the reimbursements related to staff e.g. medical allowance, conveyance allowance etc are the responsibility of the accounts department. The staff members provide the required documents in this regard to the accounts officer and then after getting approval from the manager operations he reimburses the amount to the employees.

TREASURY RECONCILIATIONIt is the process which involves reconciliation of all the branch record with that of treasury after every 10 days. All the debit and credit entries of the branch have to be in accordance with the debit and credit entries of the treasury. If there are some outstanding figures then these should be carried forward to the next reconciliation until they are being reconciled.

HEAD OFFICE REPORTINGDifferent reports are generated by the accounts department to send to the head office.

Some of them are stated as follows

Suspense account report (every 15 days)

Reports about key data (profit, deposits, advances)

Politician account report

Frozen account report

These reports are being prepared to facilitate coordination between the head office and the branch operations. In this regard the accounts department at Garhi Shahow branch takes direct instructions from the accounts division at the head office and reports to it directly.

PREPAID EXPENSESMonthly charging of depreciation and amortization on pre paid expenses is being done by this department.

RECORD KEEPINGAll the records in the form of activity sheets and vouchers etc. are being kept by this department so that if there are some discrepancies that occur in the future, it is easy to get the previous record.

SYSTEMIt is another important function performed by accounts department. System of the bank acts as a backbone of all its internal record keeping. If there is any problem with this system then the banking operations cannot be carried out properly. The accounts department does the following functions in this regard

Look after the system troubleshooting

Update the system

Run end of day on daily basis

SALARIES TO THE STAFFAccounts department is responsible for payment of salaries to the staff members. All the voucher entries related to this payment are being made and then the pay cheques are given to the branch employees.

REPORTING TO SBPThis department is responsible for making any reports required by State Bank of Pakistan.

UPDATION OF TAX RECORDThe department is responsible for updating the record with the tax department. Depositing the withholding tax with the respective authority is also the responsibility of the accounts department.

CLOSING ACTIVITIESAnnual closing of branch accounts is done and reported to the head office. This information is required by the head office to make consolidated financial statements.

STATEMENTS GENERATED BY SYSTEM

All departments use debit and credit vouchers for recording the transaction and at the end of the day all vouchers with batch headers are sent to the accounts department where following statements are prepared by the system.

TRANSACTION LISTIt states all types of transactions related to cheques, pay orders, demand drafts, call deposit/receipts and telegraphic transfers.NEW ACCOUNTS OPENEDThis report states all the details about any new accounts opened during the day. The information provided by this report is as follows

Account number

Account type

Currency code

Customer type

DAILY ACCOUNT MAINTENANCE AND STATUS REPORTDaily statement regarding the maintenance of account is issued to give information about the account status. It gives an up to date balance of all the accounts.

TRANSACTIONS WITH OTHER BRANCHESThis statement shows all the transactions that are being done with branches of The Bank of Punjab other than Garhi Shahow.

GENERAL LEDGER AND SUBSIDIARY LEDGER REPORTThis report contains accumulative balances of all accounts in-group format or subsidiary ledger.

DEPOSITS PRODUCTS

1: Current Account: The Accounts shall be opened upon submission of duly filled-in Banks prescribed Account Opening Form properly introduced in the manner provided and on submitting all such documents as may be revised by the Bank. The Bank reserves the right to demand such relevant documents even after opening of account as deemed necessary. The Bank has the right to refuse to open an Account without assigning any reason.

The Accounts shall be opened with an initial/minimum deposit as stipulated by the Bank from time to time unless specifically exempted.

A distinctive number shall be allotted to every account and this number should be quoted in all correspondence relating to the account and at the time of making a deposit or withdrawal. The Bank reserves the right to change the Account Number or any part of it in order to meet its book keeping/administration requirement. However, intimation of change in the account number shall be sent to the account holder.

(a) Account for the recipient of Zakat or recipient of grants from Bait-ul-Mall, maybe opened with an initial deposit of Rs.100/- (introduced vide Inst Cir#97/129 dated 25.11.1997 & Inst Cir 98/53 dated 03.06.1998)

The Accounts may be opened singly in one name or jointly in two or more names. 2: Basic Banking Account:

The minimum initial deposit will be Rs.1000.

No profit will be Payable.

No fee (service charges) for maintaining such accounts will be charged.

There will be no limit for maintain minimum balance. In the cases, there balance in BBA does remain "NIL" for a continuous 6 month period, such accounts will be closed.

Account holder will be allowed a maximum of 2 deposit transactions and 2 checking withdrawals, free of charge either through cash/through clearing per month otherwise service charges of a regular banking account shall be applicable for that month as per Bank's Schedule of Charges.

Unlimited free of charge ATM withdrawals from Ban's own ATM's will be allowed. In case of withdrawals from BBA though the ATM Machine of other Banks, the Charges of these Banks shall be applicable for such transaction PLS SHARING PRODUCTS1: PLS Account: The Accounts shall be opened upon submission of duly filled-in Banks prescribed Account Opening Form properly introduced in the manner provided and on submitting all such documents as may be revised by the Bank. The Bank reserves the right to demand such relevant documents even after opening of account as deemed necessary

The Bank has the right to refuse to open an Account without assigning any reason.

The Accounts shall be opened with an initial/minimum deposit as stipulated by the Bank from time to time unless specifically exempted.

A distinctive number shall be allotted to every account and this number should be quoted in all correspondence relating to the account and at the time of making a deposit or withdrawal. The Bank reserves the right to change the Account Number or any part of it in order to meet its book keeping/administration requirement. However, intimation of change in the account number shall be sent to the account holder.

(a) Account for the recipient of Zakat or recipient of grants from Bait-ul-Mall, maybe opened with an initial deposit of Rs.100/- (introduced vide Inst Cir#97/129 dated 25.11.1997 & Inst Cir 98/53 dated 03.06.1998)

The Accounts may be opened singly in one name or jointly in two or more names. Deposit may be accepted from minors provided the account is opened and operated through a guardian. The Account thus opened will continue to be operated upon by the guardian even if the minor attains the age of majority. The necessary consent to this effect will be obtained at the time of opening of the account. The orders of the court will, however, be followed in case the guardian is appointed by the court. All monies/instruments to be deposited in an account should be accompanied by a pay-in-slip showing the title and number of the account. The entry of transaction shall be authenticated by putting Banks stamp under the joint signatures of two officers of the Bank on the pay-in-slip and counterfoil thereof. However in case of branches where teller system has been introduced, teller only shell authenticate the transactions up to the prescribed limits.

Withdrawals will not be allowed against postdated (payable on any future date) and stale (06 months after issuance date) Cheques and against un-cleared funds.

Where any account is not conducted to the satisfaction of the Bank, the account may be closed without any notice and the balance will be remitted to the depositor at the address given by the Account Holder(s).

PLS Savings Accounts may also be opened by charitable institutions, for Provident Funds and other funds of Benevolent nature by Local Bodies, Autonomous Corporations, Companies, Associations, Societies, Educational Institutions, Firms etc. and in all other cases where such accounts are required to be opened under the orders of Competent Court of Law

Not more than one PLS Savings Account may be opened at a branch in any one name except in the name of a parent or guardian for more than one child or for keeping funds of specified nature category by an entity, with the Banks prior approval.

Profit payable or Loss recoverable on PLS Saving Accounts to be credited or debited will be determined by the Bank at its sole discretion on the basis of its net working results at the end of each half-year within the time prescribed by SBP from the date of the close of the half-yearly books of accounts of the Bank. The rates of profits may vary from period to period viz January to June/July to December each year. Calculation of Profit on PLS Saving Accounts will be made for each calendar month on the lowest credit balance of an account between the close of the 6th day and the last day of the month. However, profit accrued even for Re. 1/- after deducting withholding tax will be payable to all Account Holders. When an account is CLOSED before declaration of profit rates, the accrued profit will be first credited in the account at the profit rates previously declared by the Bank. However, no recovery or payment of profit as a result of increase/decrease in the rate of profit will be affected upon such A/C holders after announcement of half-yearly profit rates by the Bank.

Withholding Tax at the rate notified by the Government of Pakistan from time to time will be deducted out of profits payable to the Account Holders.

ZAKAT is leviable on the assets as described in the Zakat & Ushr Ordinance 1980 (as amended from time to time) on balances which will fall within the definition of zakatable assets as notified by the Government of Pakistan on valuation date each year, provided Declaration (original/attested photocopy) for exemption from compulsory deduction of zakat is filed on the prescribed proforma (CZ-50) in the prescribed manner one month preceding the valuation date except in the case of newly opened accounts.

The branches shall ensure completion of all the formalities required by State Bank of Pakistan vide Prudential Regulation No.M-1with regard to KNOW YOUR CUSTOMER2: Senior Citizens Saving Account:

This is a saving bank product available for all senior citizens i.e. persons of 60 years and above who are eligible to open a saving account as per our Banks criteria. The account can be opened singly or preferably jointly (husband & wife) provided either of them is of 60 years or above. This product is designed to attract procure deposit/savings of senior citizens by offering attractive, innovative incentives and higher rate of profit to senior citizens. The Main Features are: A customer can open only one BOP Senior Citizens Saving Account singly or jointly regardless of the branch. In case it is found out that more than one account exists under this category, the Bank reserves the right to recover & forfeit the profits paid or not to give any profit. The account can be opened with a minimum initial deposit of Rs.10,000/-. However in case average deposit during the month falls below Rs.10,000/-, account maintaining charges shall be levied as per Banks Schedule of Charges.

The profit slab is as follows:

Minimum Monthly Balance* Expected rate of profitRs. 0 up to 10,000/-Normal PLS SB rate Rs.10, 001 up to 200,000/-5 % p.a.Rs.200, 001 up to 400,000/-7 % p.a.Rs.400, 001 up to 500,000/-8 % p.a. This product is governed under PLS rule of Profit & Loss sharing system. The rates mentioned are expected and the Bank reserves the right to review/revise the profit rates quarterly.

Maximum profit @ 8.0 % p.a. as per different slabs shall be paid on minimum monthly deposit upto Rs.500, 000/-. Deposit can exceed Rs.500, 000/- but no profit will be paid on amount over and above Rs.500, 000. The profit will be calculated on monthly basis based on the minimum monthly balance maintained by the customer during that particular month. The profit will be credited on monthly basis in the respective account.

Profit once disbursed will not be recovered in case of decrease in rate at the time of announcement of Half Yearly profit rates. However in case of rise in profit rate the difference amount will be paid. Existing senior citizen account holders can also open account under this scheme. In case they wish to close their existing PLS or other account, same may be allowed without deducting account closure charges Zakat will be deducted as per law like any other saving/profit bearing account.

Withholding tax will be deducted from the profit as per law in force

Preferably PLS SB joint a/c should be opened with special instructions of Either or Survivor which must be jointly authenticated under full signatures of the Joint A/c holders. Unlimited transaction (debit/credit) Free complimentary issuance of first ATM/Debit Card

Free complimentary issuance of first Cheque Book of 25 leaves

25 % reduction in rental charges of small or medium locker subject to availability.

Priority banking especially in utility bills payment, counter service etc The product carries all characteristics/conditions pertaining to PLS SB account i.e. issuance of DD/TT/MT/PO etc as per Banks Schedule of Charges except payment of profit which shall be paid on monthly basis on minimum monthly deposit upto Rs.500,000/- only as per admissible rates shown against each minimum monthly balance. 3: Gharayloo Saving Account:

This is a saving bank product available for all females who are eligible to open a saving account as per our Banks criteria. The account can be opened singly or jointly with husband. This product is designed to attract procure deposit/savings of ladies particularly housewives of expatriate& students.

The Main Features are: A customer can open only one BOP Gharayloo Saving Account singly or jointly regardless of the branch. In case it is found out that more than one account exists under this category, the Bank reserves the right to recover & forfeit the profits paid or not to give any profit.

The account can be opened with a minimum initial deposit of Rs.10, 000/-. However in case average deposit during the month falls below Rs.10,000/-, account maintaining charges shall be levied as per Banks Schedule of Charges

The profit slab is as follows:Minimum monthly balance* Expected rate of profitRs. 0 upto 10,000/-Normal PLS SB declared rate Rs. 10,001 upto 250,000/-7.25 % p.a.* This product is governed under PLS rule of Profit & Loss sharing system. The rates mentioned are expected and the Bank reserves the right to review/revise the profit rates quarterly.

Maximum profit @ 7.25 % p.la. Shall be paid on minimum monthly deposit upto Rs.250, 000/- but over Rs.10, 000/-. Deposit can exceed Rs.250, 000/- but no profit will be paid on balance over and above Rs.250, 000.

The profit will be calculated on monthly basis based on the minimum monthly balance maintained by the customer during that particular month.

The profit will be credited on monthly basis in the respective account.

Profit once disbursed will not be recovered in case of decrease in rate at the time of announcement of Half Yearly profit rates. However in case of rise in profit rate the difference amount will be paid.

Existing females account holders can also open account under this scheme.

In case they wish to close their existing PLS or other account, same may be allowed without deducting account closure charges

Zakat will be deducted as per law like any other saving/profit bearing account.

Withholding tax will be deducted from the profit as per law in force.

Preferably PLS SB joint a/c should be opened with special instructions of Either or Survivor which must be jointly authenticated under full signatures of the Joint A/c holders.

Unlimited transaction (debit/credit).

Free complimentary issuance of first ATM/Debit Card

25 % reduction in rental charges of small or medium locker subject to availability

Priority banking especially in utility bills payment, counter service etc

The product carries all characteristics/conditions pertaining to PLS SB account i.e. issuance of DD/TT/MT/PO etc as per Banks Schedule of Charges except payment of profit which shall be paid on monthly basis on minimum monthly deposit upto Rs.250,000/- only as per admissible rates shown against each minimum monthly balance 4: PLS-Saving Profit plus Account: Individuals, corporations, organizations and various provincial / federal government departments can open accounts under the scheme.

This is an operating/checquing account

The accounts can be opened in individual or joint names. The deduction of Zakat and Withholding tax will be applicable as per law of the land. Average balance during a calendar month will be taken to determine the deposit slabs and applicable profit rate for that month for the purpose of creating provisions. However, in case the average balance in any month falls below Rs. 1(M) being the minimum slab, the account for that particular month will be treated as an ordinary Pls-sb account and profit will be calculated on minimum balance during the month at the normal rate declared for Pls- sb account. Profit payable on half yearly basis.

5: Corporate Premier Account:

This account has been introduced for corporate clients. This is an operating/checquing account

Profit on the account will be calculated on daily product basis by determining the slab on the basis of average balance maintained in the account. The deduction of Zakat and Withholding tax will be applicable as per law of the land

Profit payable on monthly basis

7: Corporate Premier Term Account: This account has been introduced for corporate clients.

This is non operating/checquing account

Minimum amount of investment is Rs.500 (M).

The deduction of Zakat and Withholding tax will be applicable as per law of the land.

Profit payable at maturity

8: Munafa Hi Munafa III:

This is a term deposit product. The term is from 1 month to 1 years and the profit is paid on monthly basis. The minimum amount of deposit is Rs.100,000/-. The rate of profit is from 8.0 % p.a. to 12 % p.a. depending on the tenure which is higher than Banks normal term deposits as follows:

Term*Expected Profit Rates p.a.Minimum amount of Deposit Rs.Profit payment on monthly basis (With Holding Tax to be deducted)1 month8.00 %100,000/-Rs.667

3 months10.00 %100,000/-Rs.833

6 months 10.5 %100,000/-Rs.875

1 year 12.00 %100,000/-Rs.1000

* This product is governed under PLS rule i.e. the rates mentioned are expected and the Bank reserves the right to revise the rates and terms & conditions of profit under Profit & Loss sharing system.

BOP TIJARAT ACCOUNT (LCY)INCENTIVEAverage Balance from Rs.100,000 To Rs.500,000/- Average Balance from Rs.500,001 To Rs.1,000,000/-Average Balance from Rs.1,000,001 & Over

Free Inter-city/within-city deposit/withdrawalFree unlimited transactionFree unlimited transactionFree unlimited transaction

Free Issuance of ATM/Debit CardOne CardOne CardOne Card

Free Renewal of ATM/Debit CardAllowedAllowedAllowed

Free Issuance of Cheque BookOne 50 leaves per monthTwo 50 leaves per monthFree No limit

Free Issuance of Duplicate A/c Statement 1 per month 2 per month Free No limit

Free Rental Charges for Lockers (small/medium) NONEOne Small subject to availability One Medium subject to availability

No key deposit for lockersNo Key deposit equivalent of small lockerNo Key deposit equivalent of small lockerNo Key deposit equivalent of medium locker

Commission free issuance of PO/DD/MT/TT Free unlimited transactionFree unlimited transactionFree unlimited transaction

Free/reduction in Outward Bills for Collection chargesFree - on equal to last months average balance and above this amount reduced commission @ 0.32% Free - on equal to twice of last month average balance and above this amount reduced commission @ 0.28%Free - on equal to three times of last months average balance and above this amount reduced commission @ 0.25%

No Cheque return charges for cheques presented in clearing as collecting banker. 3 per month 5 per month Free No limit

Free Call Deposit ReceiptNo charges, if in own name or in favour of deptt on a/c holders behalf for earnest/bid money by debiting own account No charges, if in own name or in favour of deptt on a/c holders or on other contractors behalf for earnest/bid money by debiting own account No charges, if in own name or in favour of deptt on a/c holders or on other contractors behalf for earnest/bid money by debiting own account

CONSUMER FINANCING

Reduction in processing charges from 10 to 50 % upto 10% upto 25% upto 50%

Reduction in rate of markup upto 50 bps upto 25 bps upto 40 bps upto 50 bps

N.B. 1) The rent free locker facility will be allowed on availability of locker and after maintaining average balance for six months.

2) The reduction in rate of markup on Consumer finance will be on loan amount equal to twice of last months average balance. 3) In order to further facilitate the managers in targeting customers, it will be at the discretion of the manager to offer the incentive package from day one. However it will be the responsibility of the branch ensure that customer completes the criteria as per above table otherwise recover the charges waived 4) The incentive package will be reviewed on quarterly basis and on the deposit procured vis--vis cost benefit, package can be revised downward.9: PLS Supreme Saving Account: INCENTIVEAverage Balance from Rs.300,000 To Rs.1,000,000/-Average Balance from Rs.1,000,001 To Rs.5,000,000/-Average Balance from Rs.5,000,001 & OVER

Free Inter-city/within-city deposit/withdrawalFree unlimited transactionFree unlimited transactionFree unlimited transaction

Free Issuance of ATM/Debit CardOne CardOne CardOne Card

Free Renewal of ATM/Debit CardAllowedAllowedAllowed

Free Issuance of Cheque BookOne 25 leaves per monthTwo 25 leaves per monthFree No limit

Free Issuance of Duplicate A/c Statement 1 per month 2 per month Free No limit

Free Rental Charges for Lockers (small/medium) NONEOne Small subject to availability One Medium subject to availability


Commission free issuance of PO/DD/MT/TT Free unlimited transactionFree unlimited transactionFree unlimited transaction

Free/reduction in Outward Bills for Collection chargesFree - on equal to last months average balance and above this amount reduced commission @ 0.32% Free - on equal to twice of last months average balance and above this amount reduced commission @ 0.28%Free - on equal to three times of last months average balance and above this amount reduced commission @ 0.25%

No Cheque return charges for cheques presented in clearing as collecting banker. 3 per month 5 per month Free No limit

CONSUMER FINANCING

Reduction in processing charges from 10 to 50 % upto 10% upto 25% Upto 50%

Reduction in rate of markup upto 50 bps upto 25 bps upto 40 bps Upto 50 bps


2) The reduction in rate of markup on Consumer finance will be on loan amount equal to twice of last months average balance. 3) In order to further facilitate the managers in targeting customers, it will be at the discretion of the manager to offer the incentive package from day one. However it will be the responsibility of the branch ensure that customer completes the criteria as per above table otherwise recover the charges waived. 4) The incentive package will be reviewed on quarterly basis. The Bank reserves the right to change, modify the package. 5) The rate of profit will be same as per Banks declared rate of PLS SB

10: BOP FCY SUPREME CURRENT A/C (US $)INCENTIVEBalance from US$10,000/- To US $ 20,000/-Balance from US$20,001/- To US $ 50,000/-Balance from US$50,001/- & above

Free Issuance of ATM/Debit Card for Pak Rs. A/cOne CardOne CardOne Card

Free Renewal of ATM/Debit Card for Pak Rs. A/cAllowedAllowedAllowed

Free Issuance of Cheque BookOne per monthTwo per monthTwo per month

Free Issuance of Duplicate A/c Statement (Max. 2 per month) 1 per month 2 per month 2 per month

Free Rental Charges for Lockers (small/medium) * NONE One Small One Medium


CONSUMER FINANCING

Reduction in processing charges from 10 to 50 % upto 10% upto 25% upto 50%

Reduction in rate of markup upto 50 bps * upto 25 bps upto 40 bps upto 50 bps


2) The reduction in rate of markup on Consumer finance will be on loan amount equal to twice of last months average balance. 3) In order to further facilitate the managers in targeting customers, it will be at the discretion of the manager to offer the incentive package from day one. However it will be the responsibility of the branch ensure that customer completes the criteria as per above table otherwise recover the charges waived. 4) The incentive package will be reviewed on quarterly basis. The Bank reserves the right to change, modify the package.

11: BOP FCY SUPREME CURRENT A/C (EURO)INCENTIVEBalance from EURO 7,500/- To EURO 15,000/-Balance from EURO 15,001/- To EURO 37,500/-Balance from EURO 37,501/- & above

Free Issuance of ATM/Debit Card for Pak Rs. A/cOne CardOne CardOne Card

Free Renewal of ATM/Debit Card for Pak Rs. A/cAllowedAllowedAllowed

Free Issuance of Cheque BookOne per monthTwo per monthTwo per month

Free Issuance of Duplicate A/c Statement (Max. 2 per month) 1 per month 2 per month 2 per month

Free Rental Charges for Lockers (small/medium) NONE One Small One Medium


Standing Instructions1 instruction per month2 instruction per month3 instruction per month

CONSUMER FINANCING

Reduction in processing charges from 10 to 50 % upto 10% Upto 25% upto 50%

PRODUCT LINES

PRODUCTS: LOAN PRODUCTS

1: Commercial finance:

1.1: Running Finance:

A: Against Pledge of Shares:Pledge of SharesThis facility is generally extended to companies or individuals on selective basis against pledge of tangible securities such as Shares. Such financing is supportive to secondary Capital Market concept. The facility is required to be adjusted periodically or within the period as specified in the Sanction Advice/DAC. Given that Stock Market in Pakistan is volatile, banks are required to refrain from extending loans to the market players who are engaged in speculations for short term Gains, which quite often they fail to make, consequently rendering the facility to non-performing ultimately.

POLICY:

Advances against shares shall not be allowed to:

Take exposure against sponsor directors shares (issued in their own name or in the name of their family members) of banks/DFIs.

Take exposure on any one person (whether singly or together with other family members or companies owned and controlled by him or his family members) against shares of any commercial bank/DFI in excess of 5% of paid up capital of the share issuing bank/DFI.

Take exposure against the shares/TFCs of listed companies that are not members of the Central Depository System.

Take exposure against unsecured TFCs or non rated TFCs or TFCs rated below BBB or equivalent.

Unless otherwise adequately secured by other acceptable collaterals, Advance to finance Subscription, towards floatation of Share Capital of public limited company, is not allowed, under Credit Policy.

Advances approved shall be within Per Party Limit (i.e., 30% of un-impaired equity of Bank for fund based and non fund based subject to condition that the maximum outstanding against fund based exposure doest not exceed 20% of Banks equity) and supported by positive CIB/DFIs confidential reports. Loans exceeding Rs. 500,000/- (Total Accommodation) shall not be more than 10 times of Borrowers Equity i.e. Capital and Reserves minus losses and 04 times in case of fund based facility, as disclosed in their balance sheets.

Financing shall be allowed against shares registered in the name of Borrower, however in case the shares tendered for pledge are registered in the name of a Third Party, the letter of lien shall be signed by the Third Party and not by the Borrowers.

Advances Department Head or RCAD shall conduct a monthly review of financing against shares and exercise vigilance over:- Market Rates of pledged shares. Their marketability.

Dividend/Bonus declarations etc.Minimum margin requirements:

1. Exposure against Shares of Listed Companies shall be subject to minimum margin of 30% of their current market value as per prevalent Prudential Regulations, which may at the discretion of the Bank be set higher. However, in terms of the Prudential Regulations the Bank shall monitor the margin on at least weekly basis and shall take appropriate action for top-up and sell out, on the basis of approved Credit Policy and prior written authority from the borrower.

2. Exposure against TFCs rated A and above, by State Bank of Pakistan approved Credit Rating Agency, shall be subject to a minimum margin of 10%, while the exposure against TFCs rated A- and BBB shall be subject to a minimum margin of 20%.

B: Against Government Securities:

Government Securities:

Government Securities include Defense Saving Certificates (DSCs), Special Saving Certificates (SSCs), Regular Income Certificates (RICs), and Behbood Certificates, US Dollar Bonds & NIT Units etc, issued by National Saving Centre Government of Pakistan/National Investment Trust.

Large amount of funds representing Provident Fund, Benevolent Fund collections are invested in the Government Securities, which are yielding better return compared to placements with Commercial Banks. Banks also extend credit facilities against pledge of Deposit Certificates or other instruments of value issued in the name of Individuals, Joint Holders Public Bodies, and Firms, issued by various Government regulated Investment/Saving Organizations, which at the moment are restricted to Maximum of Rupees One Million and are subject to change.

POLICY:

1. All Credit Financing against pledge of Securities require Credit Limit approved by Credit Committee, even if 100% covered by cash or collateral.

2. Documents complete in all respect duly vetted by Banks legal counsel signature verified shall be obtained ensuring their validity in a Court of Law. Signatures shall be verified in pencil on each document.

C: Against Hypothecation of Stocks: Industrial organizations have to invest a large sum of money to build stocks of raw material to up keep their manufacturing line. This is apt to create liquidity constraints in the Financial Balance Sheet of the customer. To manage such financial gaps/shortfall in their cash flow they usually resort to borrowings from Banks against Hypothecation of raw material/semi or finished goods held by them in their stocks.

Banks in such cases although do not have a physical custody of the goods, however have a legal Charge/Lien established, thereon, providing a legal recourse to the Bank to take custody of the stocks, in the event the borrowers default to repay the loan or fail to meet their obligations, as agreed. Criteria to merit this facility is provided in the Banks Credit Policy Manual, which is care fully assessed by Risk Managers, while recommending a credit proposal to credit committee.

Some of the basic requirements are as follows which are included for general understanding of the Processing Officers at Branches/CAD:-

It shall be ensured that the borrowers have absolute title to the goods and the same are not encumbered or previously hypothecated to any other Bank.

Formal charge (First/Second/Pari Passu) is created in the name of the Bank.

Goods offered are not perishable, or have short expiry period and do not warrant special storing.

Stocks offered for hypothecation are easily marketable and its price is not highly fluctuating, otherwise the Bank retains higher margin.

Stocks under hypothecation are not restricted by SBP/Government as a policy to maintain market supply.

POLICY:

Advances against hypothecation of goods is subject to the policies as applicable to other loans, and as spelled out in the Credit Policy Manual with the exceptions given below:-

Stock Reports, duly signed by borrowers, are received periodically at a frequency as spelled out in the DAC/Credit Proposal etc.

Limits are adjusted by CAD in the system in accordance with the Drawing Power worked out each time a stock reports is received and value of stocks reassessed by applying latest Pricing Index.

Negative Variance between the net value of stocks (i.e., market value less margin) and the outstanding advance shall be reported to the relationship/Risk Manger, who shall advise the borrowers to cover the shortfall by additional stocks or adjust the facility accordingly.

1.2: Demand Finance:Credit facilities extended against registered mortgage of property (i.e., land/buildings constructed or to be constructed) is by nature classified as a Secured Advance. A formal charge on the property is established and recorded with the Registrar Land and Property termed as registered mortgage. Advances are also made against equitable mortgage of property, whereby the original title Deeds are deposited with the Bank as Security and the charge is registered with the Registrar SECP.

In case the Finance is allowed to Limited Companies, where the original title documents of Land/Building and other Fixed Assets are held by the senior charge holders, our charge (Pari-Pasu or ranking) as approved by Credit Committee, shall be recorded with the Registrar Securities & Exchange Commission of Pakistan (SECP). However, in case of Pari-Pasu Charge, NOCs from the senior Charge Holders shall be obtained before registration of charge with SECP. In case of borrowers failure to liquidate the obligation, or on classification of the advance to Non-Performing the Bank has a legal recourse to apply for a decree in a court of law, to sell off the mortgaged property through auction as ordered by the court.

POLICY:

Facilities are disbursed or allowed to be availed by the customers only on receipt of a formal DAC issued by RCAD & duly signed by CAD Head.

CAD shall issue DAC only when charge Documents & Securities as spelled out in the Sanction Advice have been received and lodged in the safe vault, however in rare cases DAC shall be issued where some of the secondary nature documents are not received for acceptable reasons and that the deferment is approved for a specified period by the level of the authority as given below:

- Formal approval for deferment of specified documents from Credit Committee shall be necessary, in terms of Credit Policy.

- DAC issued where receipt of some of the documents is deferred shall clearly highlight the deferment approval and the period of deferment. Extension in the deferment period, if required further shall require appropriate level of credit approval. 1.3: Cash Finance:

This facility is generally provided against pledge of goods. Under this type of financial accommodation the facility amount is disbursed in specially opened account for the purpose. The pledged goods are released to the borrower against cash payment only. In case the goods pledged are seasonal in nature, the customer would be required to adjust the facility before the season ends. Rollover shall not be allowed.

POLICY:

Basic criteria to qualify for advances against pledge of goods is as follows:- Facility is disbursed in specially opened CF A/C for the purpose

It shall be ensured that Goods tendered for pledge are:- Free from credit restrictions imposed by State Bank of Pakistan

Not perishable, do not require special Storing arrangements/conditions and have short expiry period. Easily marketable and their price is not highly fluctuating. If so higher margins shall have to be approved & retained

Where variation in pricing is observed during periodic evaluation, the customer shall be advised to make good the shortfall in the drawing power. Where variation in pricing is observed during periodic evaluation, the customer shall be advised to make good the shortfall in the D.P. The borrowers hold an absolute un-encumbered title to the goods2:Consumer Finance:1. BOP Aasiash Loan

2. Quick cash

3. Car loan

4. house loan

5. smart cash personal loan 3: BOP ATM / Debit Card:

BOP Apna Cash Card is an ATM plus Debit Card.

(a) The front of the card will have the following matter on it: Card Holders Name International Bin Number (6 Digits - XXXXXX)

Card Number (YYYYYYYYYY) (total IMD+CARD num has to be = 16 (b) The back of the card will have: Magnetic Strip

Signature Panel

Conditions of Usage

M-Net and M-Net logo1. Service:

The BOP Debit Card holders will be able to transact at any of the 1000 + Merchants acrossthe country. The following services can be utilized at the Point of Sale (POS) terminals.

1.1. Purchasing:Your BOP Debit Card can be used in place of cash at all outlets where the M-Net logo is displayed. This is a service which lets you pay directly from your account without using cash. When a payment is made through the debit card, your account is directly debited.

1.2. Balance Enquiry: The Point of Sale (POS) terminal also lets you view your balance of all the linked accounts to your card.

2. Sites: BOP Debit Card Holders can transact at any of M Net merchant locations country wide. These POS terminals are available at Shopping Malls to Petrol Stations. The list of country-wide merchants is attached as Annexure I. All merchants who display the M-Net logo will accept the BOP Debit Card.

3. Plastic with M-Net logo: All new plastic that will be ordered from now on will bear the M-Net logo. The existing plastic will be used for customers who want the debit card facility, as the cost of the wastage of scrapping our existing stock is too high. Merchants will have to be informed to accept all BOP plastic, irrespective of M-Net logo. New order of plastic will bear M-Net logo.

Customer Eligibility The ATM Card will be issued to Savings and Current Account holders who maintain their accounts with the bank and in terms of the account opening documentation are authorized to operate the account singly or jointly.

For Joint Accounts, which are operated on the signature of any one of the account holders, ATM / Debit card can be issued. The joint accountholders will be jointly & severally liable for any transactions processed by the use of the cards and the terms and conditions as laid down shall be jointly & severally binding on all account holders.

Cards will not be issued on the following accounts: i. Any non-personal account i.e. Companies, Organizations, Trust Account, Government account and Collection account etc.ii. Dormant, inoperative, blocked or restricted accounts. iii. Accounts with NIL balance. iv. Term Deposit Accounts. v.NIDF Accounts. (Non Interest Demand Finance Accounts) vi. Accounts requiring thumb / photo for operation (illiterate accounts) ATM/Debit cards can only be issued on local currency accounts.

4: SME Finance:

CNG Filling Station

Lady Entrepreneur Scheme

Auto lease financing scheme

Car Dealers financing scheme

Karobar Barhao scheme

Fertilizer Dealer

Ali Akbar group financing scheme

Alas Honda limited authorized dealers financing scheme

Financing scheme Office / Shops Purchase

5: Agriculture credit:

1.1: Kisan Dost Agree Finance Schemes.

Purpose: Provision of financial facility to farmers for purchase of inputs (Seed, fertilizers, pesticides, fungicides e.t.c).

Eligibility:

Resident Self Cultivator having maximum 50 acres. The applicant should not be defaulter of any other Bank and property should be free from any encumbrances.

Amount:

Maximum Rs.500, 000/- according to per acre limit of the crop.

Security:

Charge on Agriculture Land through Agri. Pass Book.

ORRegistered / Equitable mortgage of urban property assessed by PBAs approved surveyor and cleared by Banks legal counsel. ORLiquid security in the shape Banks Fixed Deposited Receipts/DSC/NSC or Regular Income Certificates. One Personal guarantee of reputable person. ACOs along with Regional Chief can waive this condition if they deem the borrower to be very credit worthy. Two written satisfactory market checking reports. Margin on Collateral Security:

50% Margin on Agri land or Urban property assessed by Surveyor.

25% margin on liquid security or Agri land as per value in revenue record.

The maximum amount of Finance will be allowed up to 75% of the Oast Bai Value of land (Oast Bai is verified by Revenue Officer)

Insurance:Borrower will to arranged Crop Insurance and Life assurance by company on banks

panel.

Mark-up:

Average Six month KIBOR + 350 bps (3.5%) with floor of 8.5% per annum.

Repayment:

Once in a year along with mark up.

Renewal:Automatic renewal upon adjustment of entire principal with full markup within one

year. Fresh documents will be obtained after three years.

1.2: corporate farming scheme:

Mode and Purpose of Finance:

I.FUND BASED FACILITIES: Following fund based facilities can be provided under this scheme.

1. Agricultural Finance Facility (Purchase of crop inputs i.e. seed, fertilizer,

pesticides, fungicides etc.)

2. Tractor Finance Facility (For purchase of maximum two tractors on lease finance

basis).

3. Finance for Farm Mechanization (For purchase of Farm Mechanization Machinery,

Tools and implements on lease finance basis).

4. Finance for Farm Aabiari (For installation of tube wells and adoption of modern

irrigation systems on lease finance basis).

5. Finance for Farm Transport (For purchase of Small pick-ups and loader for Farm

Transportation).

6. Finance for Live Stock Development (Purchase of animals for Dairy Farms,

Poultry Farms and Fish Farms).

7. Finance for Islah-e-Arazi (Land development, improvement and reclamation).

Any of all above facilities can be provided as a package deal.

II.NON FUND BASED FACILITIES: 1. Opening of Letters of credit for import of farm related agriculture goods for

corporate farming e.g. inputs, machinery, tools, implements and Vehicles etc.

2. Issuance of Bank guarantee for purchase of farm related commodities e.g.

inputs, machinery, tools, implements, and Vehicles etc.

ELIGIBILITY:1. Resident Self Cultivator doing corporate farming on an area not less than 50

acres of agri land.

2. Self Cultivator cum Tenant having total farming area not less than 50 acres of

Agriland (owned and leased). The Lease Agreement for lease hold area should

be valid and for reasonable tenure.

3. Tenant having valid lease agreement for reasonable tenure for not less than

area of 50 acres agri land.

Following persons will not be eligible for the said scheme:

1. The applicant who is not a genuine farmer.

2. The applicants whose name does not appear in the Revenue records.

3. The applicant should not be defaulter of the banking system.

4. The applicant is unable to produce proper security/securities/passbook.etc

SECURITY:1.Charge on

OR

Registered/Equitable mortgage of Urban property assessed by PBAs approved

surveyor and cleared by Banks legal counsel.

OR

Lien on Liquid security in the shape of Banks Fixed Deposited receipts/DSC/Regular

Income Certificates.

2.One personal guarantee of reputable person. ACO along with Regional Chief can

waive this condition if they deem the borrower to be very credit worthy. Two written

satisfactory market checking reports must be obtained before disbursement.

MARGIN ON SECURITY: 50% margin on landed property (Agri/Urban)

25% margin in case of liquid security or Agriland assessed as per revenue record.

The maximum amount of Finance will be allowed upto 75% of the Oast Bai Value of land (Oast Bai is verified by Revenue Officer)

AMOUNT OF FACILITY:The amount of facility will be based on value of security provided and future Cash Flows from the avenues on which the funds will be invested.

In order to assess the amount of future cash flows following aspects should taken into consideration:

1. Past three years output of the farm under cultivation with the applicant.

2. Future expected output of the farm.

3. Complete Feasibility Report of the project.

MARK UP:The prevailing Mark-up of respective Scheme.

REPAYMENT PERIOD:Repayment period of any or all facilities to be provided to an Owner cum Tenant or a Tenant should be fixed according to the validity of Lease Agreement of Agri Land e.g. if a person has lease agreement in his name which is valid up to 30-06-2007 all the facilities should be repaid or amortized before the expiry of lease agreement.

In case of exclusive owner repayment period will be fixed according to the terms and conditions of respective Kissan Dost Agriculture Finance Scheme.

INSURANCE: Crop Insurance and Borrowers Life Assurance.

DOCUMENTATION & OTHER TERMS AND CONDITIONS:Documentation and other terms and conditions of facilities mentioned herein above will be the same as that of respective Banks Kissan Dost Agriculture Finance Schemes.

1.3: Commercial Lease Finance Tractor Scheme:

PURPOSE: For Purchase of Tractors to be used in Agri related activities. The terms and conditions will be according to the structure of Lease Companies.

ELIGIBILITY:Farmers, self-employed persons/firms/companies/institutions related directly or indirectly related with Agri Business.

(i)

(ii)

(iii) AMOUNT OF FINANCE:

The amount of finance will be 80% of purchase price of the Tractor and lessee/borrower will contribute 20% equity towards the purchase price of Tractor.

(iv) SECURITY:1. Tractor itself which will be registered in the name of Bank.

2. Two personal guarantees of the persons having good market reputation and acceptable to the Bank. The guarantors should be having sufficient assets to cover the amount of finance. The Manager and ACO will verify the worth and market reputation of client and guarantors.

3. Comprehensive insurance of the assets (with Bank mortgage clause) and life assurance of the borrower.

RATE OF RENTAL INCOME/MARK UP:Average Six months KIBOR + 500bps (5.00%) with floor of 10% per annum.

PERIOD OF REPAYMENT:In five years 60 monthly installments (Principal + Markup). The installment will start from the month of delivery of tractor.

Sixty post dated cheques equal to the amount of installment (Principal + Markup) will be obtained from the borrower at the time of disbursement.

INSURANCE:Insurance coverage of agriculture finance is compulsory. Comprehensive Insurance of asset acquired and Life Insurance of borrower should be arranged through Head Office at the cost of borrower.

DOCUMENTATION:(b) Applications will be entertained on Agriculture Loan Application Forms. ACO and Branch Managers will conduct verifications as in vogue in other Agriculture Credit Schemes. All charge documents as per Lease Finance Tractor Scheme will be obtained along with 60 post dated cheques.(c)

(d) DOWN PAYMENT:Total down payment includes equity (margin), processing charges, Insurance Premium for first year.

PENALTY/PRE-PAYMENT:Late payment surcharge @ 5% on amount of installments delayed.

Pre-payment penalty @ 5% on principal outstanding. However, if the customer repays in order to obtain finance for new tractors no penalty may be charged.

LOAN APPROVING AUTHORITY:Regional Chiefs/Chief Manager, Main Branch,

CREDIT BUREAU:State Bank of Pakistan has a Credit Information Bureau (CIB), which maintains credit information of companys as well as individuals. Another independent consumer Credit Bureau by the name of Data Check (Pvt) Ltd. is also operating in the country containing negative data of large consumer Banks. CIB report will be obtained for the cases of Rs.500, 000/- and above

intrenship report of bank of punjab.doc

Documents

lending policy of bank

scheduled commercial

internship report

local currency

foreign currency accounts

client foreign currency

allah almighty

lot of experience