Internship Report

Introduction to BOP

“Bank is a pipeline through which currency moves into and out of circulation.”

Bank accepts deposits and repays cash to its customers on their demand. The Bank borrows

money at a lesser rate of interest and lends it to the borrowers at a higher rate. It is thus a profit-

lending concern. Bank cannot lend all the money that has been deposited with it. It has to keep a

certain portion of the total deposits in cash with them in order to meet the cash requirements of

the individuals and business concern.

Established in 1989, in pursuance of The Bank of Punjab Act 1989 and was given the status of

scheduled bank in 1994. The Bank of Punjab is working as a scheduled commercial bank with its

network of 273 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, Advances to Business, Trade, Industry and Agriculture A wholly owned subsidiary

of BOP First Punjab Modaraba (FPM) was established in 1992 and is being managed by

Punjab Modaraba Services (Pvt) Ltd.

The bank of panjab G-11 Markaz branch is an important part of the network, it is situated in the

capital city of the country. The G-11 branch is providing many services to their customers

Islamabad specially they are targeting the customer of sector G-11 and the surrounding areas.

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COORPERATE OBJECTIVE

MISSION STATEMENT

“To exceed the expectations of our stakeholders by leveraging our relationship with the

government of Punjab and delivering a complete range of professional solutions with a focus on

program driven products and services in the agriculture and middle tire markets through a

motivated team.”

VISION STATEMENT

“To be a customer focused bank with service excellence.

GOALS

To achieve this objective the bank aims to:

 Ensure that its performance in all facts of its operations more than matches that of its

competitors.

 Maintains a comprehensive range of domestic and international activities.

 Maximize contributions from its key sources of personal machines brands

representation and capital.

 Be innovative progressive and the need of its customers with in the frame work of

operational and prudent risk taker.

 Act as a reputable efficient and responsible organization.

 Pursue personal policies which recognize the aspirations.

 Performance of individual and which are suited to the devise levels of skills.

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CORE VALUES

 Integrity

 Dedication

 Transparency

 Team work

BOARD OF DIRECTORS

Name Designation
Mr. Safdar Javaid Syed Chairman
Mr. Naeemuddin Khan President
Mr. Azhar Hameed Director
Mr. Haroon Khawaja Director
Mr. Farooq Ahmed Awan Director
Mr. Naveed Masud Director
Mr. Mujtaba Jamal Chaudhry Director
Mr. Shafqat Ellahi Director
Mr. Shafqat Mahmood Director
Mr. Tariq Mahmood Pasha Director
Mr. Viqar Ahmed Khan Director
Mr. Raza Saeed Secretary To The Board

MANAGEMENT
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1. NASIR MEHMOOD

Branch manager

2. MARRIAM SURFARAZ AWAN

Operational manager

3. NUSRAT TARIQ

OG 2

4. HAFEEZ ULLAH KHAN

OG3

5. FAIZAN DAWOOD

Cashier

6. SHOIB KHAN

OG2

DEPARTMENTS AND ASSIGNED WORK

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Banking procedures are divided between various departments. Different departments do

their jobs in occurrence with the bank policies. In BOP each branch is divided into various
departments.
The departments in which I worked are as follows:

GENERAL BANKING DEPARTMENT

 Account opening department

 Remittances department
 Cash department
 Clearing department

PRIVILEGE BANKING DEPARTMENT

 Online banking
 Lockers

VOUCHERS

MAILING
 LBC ( Local bills collection)
 OBC (Outward bill collection)

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SERVICE PROVIDED TO THE CUSTOMERS

The following are the services being provided to the claims
1. Acceptance of deposits
2. Granting of loans
3. Transaction of foreign exchange services
4. Remittances – collection
5. Lockers facility
6. Utility service

The Bank of Punjab attaches specials importance to the fee earning business and business base
remuneration. As part of diversification of the banks utility services, the collection of bills for
WAPDA, SUI GAS, and PTCL. By using bank’s extensive branch network, effort have been to
made to maximize the exploitation of this source in view of its rich potential of yielding business
and deposit direct earning of commission.

Deposit section
In modern times very few business enterprises are carried out solely with the capital of the
owners. Borrowing funds from different sources has becomes an essential feature of today
business enterprise. But in the case of a entire banking system is based on it. The borrowed
capital of the bank is much greater then their own capital. Banks borrowing is mostly in the form
of deposits.
These deposits are lent out to different parties. The larger the difference between the rate at
which the deposits are borrowed and the rate. at which they is lent out the greater of the profit
margin of the bank. Furthermore, the larger the deposit the larger will be the funds available for
employment larger the funds lent out the greater will be the profit of the  bank.

To receive the deposit is the basic function of all commercial banks. The bank does not receive
these deposits for save keeping purpose only, but they accept deposits as debts. When banks

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receive deposit from a customer, the relationship of a debtor and creditor is established where by
the customer become the creditor and the bank a debtor. When the bank receives amount of
deposit as a debtor, it becomes the owner of it. It may, therefore use it as deems appropriate. But
there is an implicit agreement that the amount owned would be paid back by the bank to the
depositor after a specified period.

NATURE OF DEPOSITS:
1. Current deposist
2. Profit and lost sharing account
3. Short notice term deposit
4. Call deposit
5. Term deposit receits (TDR)

CURRENT DEPOSITS:
In this type of account the client to allow to deposit or with draw money as and when he likes.
Because of their nature, these deposits are treated as the current liabilities of the bank. There is
not profit on such deposits. Usually this type of account is opened for the business.

PROFIT AND LOSS ACCOUNT:

This type of accounts is one step towards the Islamization of banking system in Pakistan. There
are two types of PLS Accounts.
♦ PLS saving Account
♦ PLS-TDR (Profit & Loss Sharing Term Deposit Receipts).

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PLS saving accounts can be opened with the minimum sum of Rs. 100and PLS-TDR account can
be opened for a sum of Rs. 1000 or above. Profit is paid on both types of the PLS account on half
yearly basis.
Under PLS saving account the depositor undertakes to share profit or loss on the deposits earned
or sustained by the bank. Secondly the bank is at the liberty to invest the funds of the deposits in
any avenue, it deems fit. The PLS deposits are invested in non-interested channels

CALL DEPOSIST:
Call deposits are the sorts of deposits, which are deposited with the banker against any tender.
This is without interest deposit. This may be with interest provided the depositor has agreed to
keep this amount with the bank for some fixed period.

TERM DEPOSIT RECEIPTS (TDR):

This type of deposit is same as the SNTD. The difference is that SNTD is for short period (7- 30
days) while TDR is for long period (1 month up to 5 years)

ACCOUNT OPENING SECTION

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Account opening is the first step towards establishing a relationship between the customer and

the bank. The Bank of Punjab is offering basically two types of account:

 CURRENT DEPOSIT ACCOUNT

 PROFIT & LOSS SHARING ACCOUNT

The necessary condition for a customer, who wants to open an account with the bank, is

introduction, which is preferably by the bank officers or any account holder of the bank. The

different categories of accounts that are available are as under.

1. Individual accounts.

2. Joint account

3. Partnership account

4. Limited company account

5. Clubs, society, association, or trust accounts.

6. SNTD

7. TDR

8. Foreign currency deposits

FUNCTIONS OF ACCOUNT OPENING SECTION

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 Providing account opening form according to the customer's requirements.

 Take out the variscy of the customer and check the original ID card.
 Guide the customer about the requirements of the account opening and form filling,
 Check the forms whether they are correctly completed or not,
 Stamping on the form,
 Pasting of forms in register after release from general banking in charge,
 Issuance of cheque books,
 Issuance of ATM card
 Verification of signature in case of cheque presented before releasing of account opening
from SS card is not yet scanned.
 Take out the NAB list provided by the interior ministry and check whether the person is
invole in illegal activity or not.

IMPORTANCE OF INTRODUCTION FOR A\C OPENING

Introductory references As soon as a person opens an account with the bank, the banker customer
relationship is established. In such situation this is advisable the banker should not open new
accounts of unknown persons unless references regarding the integrity and responsibility of the
purposed persons are obtained from respectable parties.
Failure to exercise this care may result in serious consequences not only for the banker
concerned but also for the other bankers and general public. It is not sufficient to obtain the
reference but its genuineness must also be verified. Omission of this may have serious
consequences.
In practice we see that there is tough competition among bankers for procurement of deposits, so
to press a prospective new customer to find the desired reference may offend him, yet he is to be
welcomed by the banker as a source of fresh deposits. But these practical difficulties have to be
handled tactfully because the risk involved to carry out this requirement partially or wholly may
lead to undesirable results.

PRECAUTIONS TO AVOID FRAUD

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If preliminary necessary inquiries mentioned above are not made and account is opened, it is
possible that an undesirable person is provided with a chequebook to defraud innocent people or
the person being an undercharged bankrupt may put the banker in difficult situation.

1. SAFEGUARD AGAINST UNINTENTIONAL OVERDRAFT

Sometimes due to misreading of the balance an account may be inadvertently overdrawn
or the credit entry of customer is placed into the account of another person by mistake
who happens to have withdrawn that amount. In all such cases the amount can only be
realized if the person is man of integrity.

ACCOUNT OPENING PROCEDURE &PRECAUTIONS:-

 KNOW YOUR CUSTOMERS

The objective of knowing a customer is to have a fair idea about the identity, financial
resources, and general information about the customer at the time when the relationship is
established. A banker must have following information about the customer:
 Customer name:
Enter complete name as mentioned in original ID card /other business documents.
Nature of business /profession: if customer is of salaried class enter his employer name.
If the customer is a businessman, trader, sole proprietor, enter the business name, for
example “Jamil Traders”etc.also enter the customer’s title/position and address of the
business/employer. Address with P.O.BOX is not acceptable. Similarly remarks like
“Private service”, “business” are not acceptable, rather specify what type of
company/business the customer is associated with for example Manager Philips Electrical
Company.

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 Address:
Enter the complete business/residential address. With in the brackets you may also
provide prominent address identification marks for ease of physically locating the
address.

 Contact Numbers:
Enter home, official, mobile, fax number and e-mail address (if available). Banker can
verify the number by giving the customer a courtesy call or by sending him a e-mail.

 Other/ secondary/ mailing address/NOK

Some customer may volunteer their parents or siblings’ addressor second home address
or a mailing address other than a permanent address.

 Special instructions:
Clear-cut special instructions must be obtained from customers. If the customer has not
given any special instruction specified column must be cancelled by drawing a line, as
this column must not be left blank in any circumstance.

 Existing/other bankers:
Almost all the bankers usually have a banking relationship with another bank. In case of
customer who does not have an existing banking relationship, or does not want to
disclose the existing relationship, then it is strongly recommended that at least for some
time this particular account must be kept under observation.

TYPES OF ACCOUNTS

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1) ACCOUNTS OF GENERAL CUSTOMERS

 Current Account
 PLS Account

REMITTANCE DEPARTMENT

Remittance is a major function of the bank. It is the transfer of money from one place to

another place. The need for remittance is commonly felt in commercial life particularly and in

everyday life generally.

By proving this service to the customers the Bank of Punjab earns a lot of income in the form of
service charges.
The Bank of Punjab deals with the following type of remittances: -

1. Demand Draft (DD)

2. Mail Transfer (MT)

3. Telegraphic Transfer (TT)

4. Pay Order

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1. DEMAND DRAFT (DD):

Demand draft is a written order given by the one branch of a bank on behalf of customer

to another branch of the same bank to a certain amount to the certain person.

A. Procedure for Prepare Demand Draft.

 A draft voucher is filled which contains the following information

 A credit voucher is filled in order to get the excise duty and

exchange commission.

 The sender deposits the total amount of the two vouchers i.e. the
debit and credit vouchers.

 Then the cashier sends the cash receipt voucher to the accountsdepartment and the

account records the amount paid in his cashscroll.

 Accountant gives the DD leaf along with the DD voucher to hisassistant who records

the sender’s name, amount and receiver’sname. After writing all the information in

the DD register he givesit to the officer along with the DD for authentication.

 After authentication the DD is handed over to the sender and bank ends the advice to

the concerned branch. So when the partypresents the DD in the concerned branch its

payment could be made.

B. Parties involved in the Demand Draft:

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The following parties are involved in demand draft:

 Purchaser or Sender

The purchaser is the person who sends the money to a particular person payable at a
certain branch.

 Issuing or Drawing Branch

The branch from where the demand draft is issued to another branch of the same
bank.

 Drawer Branch

Branch in which the draft has drawn and called up on to pay the amount.

 Payee

The person who is entitled to receive the amount after presenting the demand draft in
the drawer branch.

2. MAIL TRANSFER (MT):

It is the transfer of money from one branch to another branch of the same bank through

mail service. In mail transfer there is no need of advices the amount is directly credited to the

receiver’s account.

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A. Procedure

 First a voucher is filled in whish the sender writes the amount to besent, name, account

number of the receiving person with the branchname and date.

 A credit voucher is filled in order to deduct exchange, postage charges according to the
amount of the mail transfer.

 The sender deposits the total amount in the cash department.

 The cash officer gives the vouchers to the officer after affixing received cash stamp and
writing the amount in red ink.

 Then the officer writes the amount paid in the cash scroll and gives the MT to his
assistant.

 MT leaf is filled according to the information provided in credit voucher. He also writes

the same information in the MT register. Then he gives the MT leaf and MT register to

the officer for authentication.

3. TELEGRAPHIC TRANSFER (TT):

This is the most urgent method of remitting the money from one placeto another place. This method

is used when the sender desires to sendurgently, in this case the sender request the manager of the branch to

issue TT.

A. Procedure:

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For sending the TT the manager and officer apply a test. In the test the manager and

officer uses a coding technique. They write their own code numbers, which is allotted, to them as

the bank branch code. After making all the conformation the concerned branch makes the

payment to the receiver. If the sender wants to convey the same message through telephone then

he has to pay the charges of telephone along with the TT charges. First the person deposit the TT

amount along with the charges through the credit voucher then his TT sent to the relevant

branch.

4. Pay Order (PO):

A pay order is a written order issued by the bank on its own branch, drawn upon and

payable by itself to pay a specified sum of money to the person. The purpose of a pay order is to

transfer the fund from one place to another. It is usually not issued in favor of the parties of other

cities. Usually the pay order is issued for the local transfer of money from one person to another

or from the person to any other department. It is used for different purposes. The purpose may be

the repairs of the branch or renovation of the branch.

A. Procedure.

The procedure of a pay order varies with the nature of the purpose. If the work is of huge

amount then first the manager writes a letter to the Zonal Chief in order to get sanction of the

work. Then the advertisement of the work is given in the newspaper in order to invite the

contractors. But if the work is small then the branch manager has discretionary power to select

the party whose rate is lowest. After finishing the work the contractor submits the bill of work on

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his stamp pad. Then the bank issues a pay order, against the pay order the contactor gets the

amount from the issuing branch.

CLEARING DEPARTMENT:

Clearing is the most important department of the bank performing

various function

1. Clearing house

A clearinghouse is an organization of the member banks, working under SBP and

which is for the purposes of setting inter banks claim resulting from transmission of funds from
one bank to another. The branch cheque/instruments are credited into the account of the
customer. The clearing can be:

A. Outward
B. Inward

A. Outward clearing

The instrument collected or stored bank wise and a schedules is prepared separately for

each bank mentioning the total number of instruments and the amount of the instruments. Then

these are recorded in a register called “OUTWARD CLEARING REGISTER” then a main

schedule is prepared showing the total number of cheque and their aggregate amount being

presented in the clearing.

The cheque/instruments are handed over the clearing branch. Central clearing branch issue
CREDIT ADVICE to the branch for passing credit to its customer immediately. The branch on
receiving credit advice debits the clearing account and credit the respective customer accounts

B. Inward clearing

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On receiving cheque/instruments from central clearing branch, the incharge checks the

number and amount of cheque received in clearing must tally with the main schedule received

from central clearing branch.

These cheque/instrument are entered in “INWARD CLEARING REGISTER” for the

cheque/instrument passed in clearing is a credit advice for the aggregate amount of cheque

passed in clearing is prepared, drawn on central clearing branch.

RESERVES AT THE STATE BANK:

Deposit held by bank at SBP serves as check clearing and collection balances. Rather than

physically transferring funds between banks, check clearing and collection can be done by

simply debiting or crediting a bank’s account at SBP.

CONCLUSION

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To sum up I can say that during my internship of 6 weeks I learned a lot

about the banking profession. All the staff members have been very
cooperative with me especially Mr Nasir Mehmood, Mr Hafeez Ullah
khan, Mr Faizan Dawood, Mr Shoib khan, Ma’am Marriam Surfaraz
Awan and Ma’am Nusrat Tariq. They all help me a lot in learning about
the working of the bank.

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