CHAPTER 1

INTRODUCTION

This is an essential and pre-requisite academic requirement to complete an internship

program of eight weeks/two months in an organization of repute. Report writing follows the
internship, which is an integral part in fulfillment of requirements for degree of BBA
(HONS) and also it is an opportunity for a student to work practically in an organization. The
main purpose of an internship is to show a difference in practical work and theoretical. A
report encompasses the experience of the internee, his learning, and analysis in the light of
which recommendations are made. During my internship I felt that the practical field is much
easier than the theoretical approach.
This internship report has been written on The Bank of Khyber, Jinnah road Branch
Abbottabad

1.1) Background of the study

Today, banks are the most important financial institutions, which play a vital role
throughout the world’s economic system. Because most of the sectors like Industries,
Commerce and Agriculture need financial assistance, it is the banks, which carefully
entertain them.

A resolution was passed in the Provincial Assembly of NWFP, in the year 1991 for
the establishment of a provincial bank. It proved successful and the result was the
emergence of a new bank in the banking sector, i.e. The Bank of Khyber

Pakistan. In the year 1994 it became a scheduled bank. The Head Office is situated at
Jinnah Road Abbottabad. NWFP-Pakistan. This bank has been playing an important
role for the development of different sectors in Pakistan and especially in NWFP. It
has a network of 29 branches, which are located in different locations of our country.
Despite difficult economic conditions, like lack of suitable lending opportunities,
volatility of interest rate and equity prices, the bank manages to show good results for
every year.

1
1.2) Purpose of the Study

Then basic purpose was to work in an organization and to compare the theory and application
of the management knowledge in real life situation. Another purpose was to improve personal
skills i.e. human relations and communication skills that is to interview and work with them,
similarly the report’s purpose is also to develop analytical skills by analyzing the working of
the organization through, critical and financial analysis. Moreover, it is also required to
analyze different aspects of the organization and to forward suggestions to put right
problems, which are being faced by the banks- if possible.

1.3) Scope of the study

The internship report is the reflection of analytical power of the students in case of BoK.
Main emphasis has been given to the ratio analysis by merging theoretical aspects and
practical outcome of different situation for example increase and decrease of financial trends
because of the operations of the bank. This report may help students in future to understand
banking practices in our country. It would also attempt to evaluate the overall performance of
The BoK through a thorough & detailed analysis of its daily working.

1.4) Research Methodology

Majority of the data presented in the report is primary. Mainly interviews in this regard have
been conducted. Three modes of interviewing have been used that are structured, semi
structured and unstructured. These interviews were taken mainly from the persons in
authority of the concerned posts.

Secondary data has also been used. Which is gathered from Management and Human
Resource Management books for the definitions and elaborations of certain topics;
Documents published by The Bank Of Khyber (BOK) i.e. The Bank Of Khyber Annual
Report 2003 and The Bank Of Khyber Official Website: i.e. www.bok.com.pk.
The methods of data collection are mostly based on personal observations and experiences of
actually working at the Bank. Dealings with customers, along with general procedures
involved were observed. Moreover, as the departments are always bustling with activity,
there was not enough time to carry out formal interviews or surveys, the methods used for
data collection are:

2
 a Primary Data

The data, which is collected for the first time and exist in raw form, is called
Primary data.

Sitting with Staff Members.

Observations
Discussions with Bank officers.
Annual Reports

b Secondary Data

The data gathered from existing resources are called Secondary data. They are in
processed form.

Reference Books
Brochures
Newspapers
Manuals Of The Bank
Information Memorandum
Internet.
1.5) Scheme of the study

The entire report is organized in the following manner.

Chapter1:
Gives the background of the study, the purpose of the study, the scope of
methodology that is used to collect all the relevant data and the scheme of the report itself.
Chapter2:
This chapter is about introduction to the Banking sector, history and establishment of
the bank of Khyber.
Chapter3:
Is about organizational review i.e., mission statement, scheduled Bank status
Organizational structure, List of division/Deptt at Head Office and Manpower position at
BOK.
Chapter4:
About Khyber Bank Jinnah Road Branch.
Chapter5:Micro Finance Unit {MFU}in Khyber Bank Jinnah road Branch Abbottabad.

3
 CHAPTER 2

THE BANK OF KHYBER

Banking Sector in Pakistan

2.1) DEFINITION OF BANK

The term “Bank” means a “bench” or institution or an exchange company. Caircross defines
bank as a financial intermediary and a dealer to create credits. Some authors are of the
opinion that the word ‘Bank’ is derived from the German word ‘Back’ which means ‘joint
stock fund’. Later on, when the Germans occupied a major part of Italy, the word ‘Back’ was
Italianized into ‘Bank’. Different authors have given different opinion but!

According to section 5 (b & c) of the Banking Companies Ordinance 1962 “Banking means
the accepting ,for the purpose of lending or investment, of deposits of money from the public,
repayable on demand or otherwise, and withdraw-able by cheques, drafts, order or
otherwise.” Where as banking company means any company, which transacts the business of
banking in Pakistan

2.2) FUNCTIONS OF BANK:

According to section 7 of the BCO, 1962, the banks in Pakistan are authorized to engage in
any one or more of the following forms of business, namely:

a. the borrowing ,raising or taking up of money;

b. the lending or advancing of money either upon or without security;

c. the drawing, making, accepting, discounting, buying, selling, collecting and

dealing in bills of exchange , promissory notes, drafts, bills of lading warrants,
debentures(musharika and mudaraba certificates);

d. the granting and issuing of letters of credit, travelers’ cheque and circular notes;

e. the buying and selling of foreign exchange including foreign bank notes;

4
 f. the acquiring, holding, issuing on commission, underwriting and dealing in stock
fund, share debenture stock, bonds, obligations, securities;

g. The receiving of all kinds of bonds, scripts or valuables on deposit or for safe
custody or otherwise, the providing of safe deposit vaults, the collecting and
transmitting of money and securities.

h. Acting as agents for any government or local authority or any other person or
persons;

i. Acting as “Mudaraba company” under the provisions of the Mudaraba Companies

Ordinance 1980;

j. Contracting for public and private loans and negotiating and issuing the same;

k. The effecting ,insuring, guaranteeing, underwriting, participating in managing and

carrying out of any issue, public and private, government, municipal, or other
loans or of shares, stock, debentures or debenture stock of any company,
corporation or association and the lending of money for the purpose of any such
issue;

l. Carrying on and transacting every kind of guarantee and indemnity business;

Purchase or acquisition in the normal course of its banking business of any property,
including commodities, patents, designs, trade-marks, and copy rights, with or
without buy-back arrangements by the seller, or for sale in the form of hire-purchase
or on deferred payment basis with markup or for leasing or licensing or for rent-
sharing or for any other mode of financing;

a. Managing, selling and realizing any property which may come into the possession
of the company in satisfaction or part satisfaction of any of its claims.

• 2.3 ESTABLISHMENT OF BANKING SECTOR IN PAKISTAN:

Prior to pre-partition the entire banking sector was dominated by the Hindus which
created a great financial vacuum after the shifting of their business to India (post-Partition).
Our great leader, the founder of Pakistan, Mohammad Ali Jinnah, had at that critical period,
accepted this challenge with faith and confidence on Almighty Allah and to continue with his

5
mission. At the time of independence there were 487 offices of scheduled banks, out of which
197 left over to Pakistan because of Hindu domination over the banks. There were 19 non-
Indian foreign banks with the status of small branch offices, which were engaged solely in the
export of crops from Pakistan, and there were only two other Pakistani institutions, i.e. Habib
Bank and Australisia Bank. The panic of an uncertain future shook the confidence of the
people. In response, the govt, therefore, promulgated the Banking Companies Ordinance
1947 to safeguard the interest of both the bankers and the customers. Meanwhile, the
Imperial Bank of India, which had been acting as the agent of Reserve Bank of India closed
down most of its offices in Pakistan and also was not willing to purchase even, token
amounts of Government of Pakistan securities. The Indian govt. withheld Pakistan’s share of
rupees 75 Crores in cash balances held by them at the time of partition. Because there was an
urgency of assuming control of banking and currency in Pakistan, in 1947, an expert
committee was appointed to deal with this major issue. This committee recommended that the
Reserve Bank of India would continue its function in Pakistan. Consequently, SBP was
established on July

1st, 1948, The SBP assumed full control of banking and currency in Pakistan. The first
Pakistani note was issued in October, 1948, in the denomination of Rs. 5, 10 & 100.

Following this, the SBP decided to expand the network of Habib Bank and recommended to
the govt. to establish an agent of SBP. As a result, the BANK OF KHYBER came into being
in 1949 and in the year 1952 it took over the agency function.

Consequently the outbreak of the Korean War in 1950 provided a great boom for
Pakistan’s exports and thus the demand for banks, advances increased sharply. However,
with the end of the Korean War 1952, there was a short fall in the country’s export earnings
with no appreciable change in its imports. This naturally caused a drain on the Foreign
Exchange Reserves and in turn affected the balance of payment position. Consequently, this
induced banks to provide working capital for industries & as a result SBP sponsored the
setting up of an Industrial Finance Corporation.

In the period of 1956-58 further expansion in the banking & credit facilities resulted
in the establishment of two more banks. The National Commercial Bank Ltd and the Pakistan
Industrial Credit and Investment Corporation (PICIC). 1959-66 saw the establishment of two
more Pakistani banks, i-e The Easter Mercantile Bank Ltd and United Bank Ltd. Another

6
very significant event in the development of banking in Pakistan was the appointment of the
Credit Enquiry Commission in 1959 to examine the scope and working of the institutions
providing credit facilities in agriculture, trade, commerce and industry and to recommend
measures for further improvements in the field of banking. In 1960 the Rural Credit Fund was
also setup with an appropriation of Rupees one crore to provide medium and long term
credits in the rural areas. In the hope that banking would enter into a new era of further
development and progress, Pakistani commercial banks were, nationalized in Pakistan from
January 1, 1974, however, it was later realized that this tip proved to be counter productive;
hence a reversal has been initiated since January 1991. By June 1997, more than 7000
branches of the above mentioned banks were expanded and mobilized more than Rs. 887.000
billion in deposits and provided finance to various sectors amounting more than Rs. 548.000
million. Over the years some specialized credit and financial institutions have also developed
like the National Investment Trust (NIT), the People Finance Corporation, the Equity
Participation Fund & the National Development Finance Corporation & the Small Business
Finance Corporation to name a few, all of which are contributing their due share in the
country’s economic life.

2.4) HISTORICAL BACKGROUND OF THE BANK OF KHYBER

The Bank of Khyber was established through the Bank of Khyber Act passed by the
Provincial Assembly in June 1991.It is the only bank in Pakistan having its Head office at
Peshawar.

The BOK was established to:

• Meet demand of the business community to have a bank with its Head Office in the
province.

• Have accessibility of local businessmen to senior management of the bank for the
prompt credit decision making there by accelerating investment in N.W.F.P.

• Have maximum utilization if funds rose in the Province for the economic development of
N.W.F.P.

The point of distinction between BOK and other national banks is that it acts not only
as a commercial bank but also strives to be a development bank through its emphasis on
financial support, especially to small and medium sized businesses, Whose access to credit is
not always easy. For these purposes the bank has established a Project Finance Department

7
and Long Term Project Department. The government of NWFP and other International
Agencies also sponsors these programs of the bank, mainly by international finance
commission (IFC), which has already extended a US $ 10 million direct credit line to the
bank.

The Bank has been showing improvement in all the lines of his business, mainly deposits
advances & profits. The bank has undertaken a complete computerization of its branch
operations and has also issued Traveler Cheques and has entered with American

Express and Diners Club Pakistan limited for issuance of their respective credit cards from
BOK counters. BOK has established correspondent banking relationship with several
international banks and financial institutions, and is competing hard with other banks for its
share of business.

The Bank Of Khyber was established in 1991 under the Bank Of Khyber Act of the
Provincial Assembly of N.W.F.P. The main objectives for establishment of the bank are to:

• To mobilize private saving and public funds for delivering the same into productive
channels and ensuring their availability.
• To promote industrial, agricultural and socio-economic processes through the active
participation of private and public sector in the province.
• To help under-developed areas and create employment opportunities especially in the
rural areas of the province. Further, to guide and assist the people of N.W.F.P.,
serving overseas, to effectively and profitably invest their foreign saving in the
province as well as in other parts of the country.
• To create a, diversified and portfolio for utilization of idle funds and their investment
in the pioneering of high-tech agro based export oriented and engineering projects to
ensure maximum returns.
• To participate and seek the share of the province in the capital market of Pakistan by
way of subscription through locally pools resources in the loading stock exchanges of
the country and eventually paving the way for establishing a stock market in the
province.

8
2.5) MISSION STSTEMENT
Mission, broadly stating is the purpose for which an organization exists and why should it
compete in certain sectors and industries, within mission, sometime stated as purpose, the
organization addresses itself to what it intends to accomplish both in the l long and short run.
Mission is a very broad statement of organizational direction and is normally summarized
and documented in mission statement. In the same way, the Bank of Khyber being an
organization has a mission. The mission, documented in the mission statement as follows:

“We are committed to ensure our ability and to provide resources with high quality services
to our client and to help create a supportive environment for micro business and export-based
venture, while maintains a highly motivated staff”.

2.6) PURPOSE

One of the purposes behind the establishment of Bank of Khyber was to fulfill the
demand of the business community of N.W.F.P, and to have a Commercial Bank with its
Head Office in the Province, to serve more effectively the people of the province. The Head
Office of the bank started functioning in November 1991. Investment processes previously
suffered, due to the time delays, since credit proposals were sent to Karachi for consideration
and approval. Accessibility of local business to senior management of Bank of Khyber has
accelerated the credit decision-making process.

Historically, there has been a net outflow of funds from the province as deposit due to lack of
investment avenues within the province and the absence of locally based Commercial bank.
The Bank of Khyber has filled this gap successfully as it aims to correct the resulting
imbalance of promoting savings and investments within N.W.F.P. in particular, and the
country in general.

By that time Bank of Khyber has been working as non-scheduled provincial batik
with the N.W.F.P. Government holding 51% Share while 49% earmarked for the general
public, which had to be offered for subscription at the leading stock exchanges of the country.
The share offering to the general public was expected to be made by end of the year 1993.
The Bank of Khyber is the second provincial bank established in the country after the Bank
of Punjab, which was established in 1989 by the Government of Punjab.

9
2.7) SCHEDULED BANK STATUS

Since 1994, the Bank of Khyber has come under the regulatory framework of State
Bank of Pakistan and operates as a Scheduled Bank at the National level. Compliance with
reserve requirement and other regulatory restriction has a negative impact on the Bank’s
profitability in 1995. However, the ensuring growth in business expanded the profits of the
bank reaching Rs.85 million in the year 1997.

2.7.1 Benefits of Scheduled Bank:

Following are the benefits of scheduled bank status achieved by

The Bank Of Khyber:

• Membership of the clearing House of Status achieved by Pakistan.

• Compliance with the server requirements of the State Bank Of Pakistan.
• Ability to open branches outside the N.W.F.P.
• Ability to engage in foreign trade business directly
• 2.8 THE NETWORK OF BRANCHES
The BOK has a network of 100 branches, which are located at different places of our country.
In order to strengthen the operation network in the country. The management is planning to
open new branches at important cities locations.
SYED
MAZHAR ALI
SHAH(Chief
Abbottab Manager) Jinnah Road, (0992)341431, (0992)341432, (0992)341
Yes
ad Abbottabad (0992)341444 430
AHSANULLAH
KHAN(Manager
Operations)
SAMINA
NAZ(Manager)
934-A,
Abbottab (0992)331913, (0992)331914, (0992)331
Mansehra Road, No
ad 2   ABID (0992)331915 916
Abbottabad.
AHMED(Manag
er Operations)
ARIF ULLAH
(Manager)

Ashraf MUHAMMAD Ashraf Road, (091)2552

(091)2553007, (091)2553989 Yes
Raod   TAHIR Peshawar City 497
ZEEHAN
(Manager
Operations)

10
 MUHAMMAD
Property No. B-
YOUSAF(Manag
V-99,
er)
Committee No. (057)2602
Attock (057)2602378, (057)2602379 Yes
E-3, Railway 378
MUHAMMAD
Park Chowk,
RIZWAN(Manag
Attock City.
er Operations)
JEHAN ZEB
KHAN (Chief
Manager)
Outside Lakhi (0928)621
Bannu (0928)612202, 613394 No
MUHAMMAD Gate, Bannu 429
IQBAL
SHAH(Manager
Operations)
MUHAMMAD Hafsa medical
ARIF(Manager) complex
Shahra-e
Battagra (0997)310
MUHAMMAD -Rasham, (0997)310155, 310154 No
m 156
IMTIAZ Opposite
(Manager Alfalah Bank
Operations) Battagram.
RAHIM
KHAN(Manager)

Main Bazar (0932)-

Batkhela (0932)-414851-3 Yes
MUHAMMAD Batkhela 414854
ALTAF
(Manager
Operations)
FAKHAR E
ALAM(Manager)
Civil
Police Lines (091)9212
Secretaria MUHAMMAD (091)9211710 Yes
Road, Peshawar 680
te YOUSAF
AFRIDI(Manage
r Operations)
MUHAMMAD
SHAFI
(Manager) Main Bazar,
Charsadd (091)9220
Mardan Road, (091)9220100-1 Yes
a 102
ZIA UR Charsadda 
REHMAN(Mana
ger Operations)
Chitral MUHAMMAD Ataleeq Bazar, (0943)414567, 412473, 414511 (0943)412 No
ZAFFAR Chitral 220
UDDIN
(Manager)

11
 -(Manager
Operations)
AURANGZEB(
Acting Manager) Shop No. 1-4,
Qazafi Market, (091)4145
Chitral (0943)414571-2 No
SHER Chew Bazar, 73
ZAMAN(Manag Chitral.
er Operations)
NOMAN
KHAN(Manager)
Circular Road, (0966)718098, (0966)718
DIKhan  Yes
AHSANULLAH D.I.Khan (0966)719017 099
KHAN(Manager
Operations)
NISAR
MUHAMMAD
(Manager)
Main Bazar, (0932)
Dargai (0932) 331447, 331448 No
SYED Dargai. 331449
BAKHTIAR
AHMED(Manag
er Operations)
MUHAMMAD
ANWAR KHAN
(Manager)
DIKhan Tank Adda, (0966)850724,(0966)850725, (0966)850
 No
Islamic D.I.Khan (0966)715531 727
ATTA
RASOOL(Manag
er Operations)
MUKHTAZ
KHAN(Manager)
Main Bazaar, (0944)890
Upper Dir (0944)890021  No
SAAD Upper Dir. 022
ULLAH(Manage
r Operations)
SAJJAD
AHMAD(Manag Ground Floor,
er) Afandi Tower,
(091)2263
GT Road Bilal Town, (091)2263409 to 414  Yes 
411
AYUB G.T. Road,
KHAN(Manager Peshawar.
Operations)
Gilgit ATTAULLAH Shop No. 1 to 6, (05811)922082-3 (05811)92  No 
ABBASI(Manag ZS Plaza, 2084
er) Opposite Radio
Pakistan,
KALEEMULLA Shahrah-e-
H Quaid-e-Azam,
BAIG(Manager Jutial Cantt,
Operations)

12
 Gilgit.
FARMANULLA
H KHAN Peshawar High
High (Manager) Court, Adjacent
Court to KPK, (091)5274
(091)5274368 Yes
Branch MUHAMMAD Provincial 168
Peshawar SHEHZAD Assembly, Jail
GHANI(Manager Road, Peshawar.
Operations)
ABDUL RAUF
KHAN(Manager)
Opposite DCO
Office, Main (0925) 620744, (0925)623
Hangu SAEED No
Bazar, Kohat 613394 744
MUSHTAQ
Road, Hangu
BANGASH(Man
ager Operations)
MUHAMMAD
SALEH(Manager
) Shahra-i- (0995) 610728, (0995)611
Haripur Yes
Hazara, Haripur 616800 285
SADAQAT(Man
ager Operations)
TARIQ
MAHMOOD(Act
Khurshid Plaza,
ing Manager)
Industrial Estate (0995) 617231, (0995)617
Hattar Yes
Hattar, Distt. 617631 631
ZAHIR
Haripur
SHAH(Manager
Operations)
NOWSHERWA
N
KHAN(Manager)
Property #4242,
(0992)
Havelian   Bank Square, (0992) 810733, 810732 No
GHULAM 810736
Haveline
RABBANI
(Manager
Operations)
SAMI UR
RAHMAN(Mana
ger) Royal Plaza,
Hayataba Hayatabad, Bara (091) 5823711, (091)5815
Yes
d SYED QAISAR Market, Jamrud 5829370 194
ALI Road, Peshawar.
SHAH(Manager
Operations)
Hayataba MAHMOOD UR Shop No.2, Saif (091)5853283,5853284 (091)5853 No
d Phase 3 REHMAN(Mana Shopping Mall 285
Chowk ger) Phase III,

13
 KHAWAJA
Hayatabad
HASNAIN
Chowk Main
LATIF
Jamrud
SETHI(Manager
Peshawar
Operations)
Hazara
Hazara
University,
Universit - (0997)414016 - No
Dadhyal,
y (Booth)
Mansehra
ASHIQ KHAN
AFRIDI(Manage Main Bazaar,
r) (Next to Caltex
(091)5830
Jamrud Petrol Station), (091)5830147, (091)5830148  No
149
MUHAMMAD Jamrud, Khyber
ASIF(Manager Agency.
Operation)
WAJAHAT
KIBRIA(Manage
Khyber
r)
Teaching
KTH (091)9218
Hospital, (091)9218016, No
Peshawar KAMRAN 016
University
MUHAMMAD
Road, Peshawar
ZAHEER(Manag
er Operation)
RAHAT ULLAH
City Market,
(Manager)
Main Road, (0945)886
Kambur (0945)885322 No
Kambur, Lower 332
-(Manager
Dir.
Operation)
MEHBOOB UR
REHMAN(Mana Irfan Plaza,
Khwaza ger) Main Bazaar, (0945)744
(0946)744661-64 Yes
Khela Khwaza Khela, 662
-(Manager Swat.
Operation)
MEHMOOD
SHAH(Manager)
Balagh Hotel
Khyber (091)2211
Khyber Bazar (091) 2568782, (091)2593705 No
Bazar RAFAQAT 170
Peshawar
HUSSAIN(Mana
ger Operations)
Karak MUHAMMAD Khasra No. (0927) 211810-12 (0927) No
MAQBOOL 1327/1364, 211813
KHAN(Manager) Mian Muqadess
Gul Market,
HABIB UR Main Bazar,
REHMAN(Mana Near BANK OF
ger Operations) KHYBER,

14
 Karak.
ARIF KAMAL
KHAN(Manager)
Cantonment
(0922) 9260146, (0922)926
Kohat MAJEED Plaza, Bannu Yes
111959595 0156
ULLAH Road, Kohat
KHATTAK(Man
ager Operations)
IRFAN
FAISAL(Manage
r)
Shop No. T-147,
(0922)
Kohat 2 T-148, Main (0922) 522013-14 No
SYED 522015
Bazar, Kohat.
TANVEER UL
HASSAN(Manag
er Operations)
MUSHTAQ
AHMED (Chief
Manager)
24-The Mall, (091)5279
Main (091) 5278284, 5271758 Yes
AHMAD Peshawar Cantt. 791
ZAFAR
(Manager
Operations)
NAEEM
ABBASI(Acting Opposite GTS
Manager) Stand,
(0997) 920181, 920183, (0997)
Mansehra Abbottabad Yes
920184 920182
MUHAMMAD Road, Mansehra
AAMIR(Manage City, Mansehra
r Operations)
SYED
Main Shahra-e-
ASADULLAH
Resham, Near
KAKAKHEL(M
Government
anager)
Mansehra Commerce (0997)
(0997)303271, 303273 No
2 College, 303272
MUHAMMAD
Opposite Attock
AZAM
Petrol Station,
KHAN(Manager
Mansehra
Operations)
ABDUL
NAVEED(Acting
Opposite
Manager)
Cantonment
(0937)9230505, 9230707, (0937)923
Mardan Plaza, Shahra-e- Yes
MUHAMMAD 874899 0606
Qazi Bashir,
NAYAB
Mardan
KHILJI(Manager
Operations)

15
 Property
ARSHAD
No.26/591-592,
ULLAH(Manage
27593-628, Haji
r) (0937)
Mardan 2 Khan Gul Trunk (0937) 870823, (0937) 870824 Yes
870825
House, Khwaja
-(Manager
Gunj Bazar,
Operations)
Mardan.

Sultan Plaza,
FALAK adjacent to
NAZ(Manager) BANK OF
KHYBER Main (0946)924
Mingora (0946) 9240045-7  Yes
YOUSAF Branch, Saidu 0046
KHAN(Manager Sharif Road,
Operations) Gul Kada,
Mingora, Swat.
SYED TARIQ
HUSSAIN(Mana
Shop No.1,
ger)
Mingora Bank Square, (0946)9240460, (0946)924
No
2 Main Bazar, 9240462 0461
SAJJAD
Mingora, Swat
ALI(Manager
Operations)
QAZI SARIR
UL
HAQ(Manager) Saad Plaza,
(0923) 9220035, (0923)613
Nowshera Saddar Bazar, Yes
9220038 530
MUHAMMAD Nowshera
JAMIL(Manager
Operations)
North
West
Hospital, North West
SOHAIL EJAZ
Hayataba Hospital, Phase-
PARACHA(Sub- (091)5822614-9(Ext-1950) - Yes
d, V, Hayatabad,
Manager)
Peshawar Peshawar.
(Sub-
Branch)
SYED AMIR
ALI Provincial
Provincial
SHAH(Manager) Assembly,
Assembly
Peshawar, (091) 5270592 - Yes
(Sub
ASIF Khyber
Branch)
ALI(Manager Pukhtunkhwa.
Operations)
Saddar MUHAMMAD Shop No.9,10 & (091) 5276485, (091)5277 Yes
Road RIZWAN(Manag 11, at Super (091)5273912 278
er) Market,

16
 MUHAMMAD Adjacent State
SAQIB bank of
ZEESHAN Pakistan, Saddar
(Manager Road, Peshawar.
Operations)
REHMAT
Khasra
SHAH(Manager)
No.424411,59-
Shabqada (091)
162, Opposite (091) 6281101-02 No
r -(Acting 6289333
Shabqadar Fort
Manager
Gate, Shabqadar
Operations)
SALIM ULLAH
KHAN(Manager)
Adda Bazar, (0963)
Tank MUHAMMAD (0963) 510068 No
Tank 510400
IMRAN
KHAN(Manager
Operations)
ABDUL
ALEEM(Manage Sher Khan
r) Market, Main
(0938)
Topi Bazar, Tarbela (0938) 271546, 271548 No
271547
IRSHAD Road, Topi,
AHMAD(Manag Distt Swabi.
er Operations)
ABID UR
Shaheed Plaza,
REHMAN(Mana
Ground Floor,
ger)
Timergar Alamzeb (0945)822
(0945)824290, (0945)822090 No
ah Shaheed 690
ASHFAQ
Chowk,
AHMAD(Manag
Timergara
er Operations)
AMJAD ALI
(Acting
Al-Murtaza
Manager)
Market, Bannu
(0925) 510741, 511740, (0925)510
Thall Chowk, Main No
MUHAMMAD 511741 740
Bazar, Thall
SHAHID
District Hangu
(Manager
Operations)
ABID
MEHMOOD
QURESHI(Chief Tariq Sultan
City Manager) Building (091)
(091)2561511-13 Yes
Branch Hospital Road, 2561511
IFTIKHAR Peshawar
AHMAD(Manag
er Operations)

17
 JAHAN
AFSAR(Manager
) Jamil Khan
Swabi (0938)
Market Mardan (0938)222513 No
Branch 222512
BAHR E Road, Swabi
KARAM(Manag
er Operations)
NASRULLAH
Khasra No. 438,
KHAN
(Sahibzada
(Manager)
Sarai Kabir Plaza), (0969)352
(0969)352963 No
Naurang G.T. Road, 964
MUHAMMAD
Sarai Naurang,
NADEEM(Mana
Lakki Marwat
ger Operations)
MUHAMMAD
KHAN(Manager)
Nisar Market,
Sowari (0939)555279,(0939)555289, (0939)555
Pir Baba Road, No
Buner AMIR ZAIB (0939)555249 229
Swari Buner
(Manager
Operations)
MUHAMMAD
HUMAYUN
Ghafar Plaza,
KHAN
Near Shiraz
Universit (Manager) (091) 9216952, (091)9216
Restaurant, Yes
y Road 9216951 959
University
AHMAD
Road, Peshawar
NAVEED(Mana
ger Operations)
ARBAB
AKHLAQ
Khasra No.
AHMAD(Manag
6184/2893,
er)
Warsak Shop No.1, (091)
(091) 5201301 Yes
Road Sabir Business 5201341
ZULFIQAR ALI
Center, Warsak
SIDDIQUI
Road, Peshawar.
(Manager
Operations)
Punjab
AT
Branch Fax M
Contact Person Address Telephone Number
Name Number Stat
us
Bahawalp TAHIR Library Chowk (062) 2887531-35 (062) No
ur Branch MAHMOOD(Chi Circular Road 2887532
ef Manager) Bahawalpur.
MUHAMMAD
HAROON
IMTIAZ(Manage

18
 r Operations)
AMJAD
RASHID(Chief
12104/9423,
Manager)
Chiniot Ehsan Plaza, (047)6333
(047)6333396,6333394 No
Branch Shahra-e-Quaid- 397
WASEEM
e-Azam, Chiniot
AHMED(Manag
er Operations)
ANJUM
KHURSHEED(C
hief Manager) Davis Hytes, 38
Davis (042) 36367407, (042) 111-95- (042)3630
- Davis Road, Yes
Road 95-95 7079
FARHAN Lahore.
AHMED(Manag
er Operations)
MUHAMMAD
ASHRAF
Plot No.5,
BALOCH(Mana
Dera Dawood Plaza,
ger) (0642)
Ghazi Railway Road, (0642) 470871-4 Yes
470875
Khan Dera Ghazi
IMRAN
Khan.
ALI(Manager
Operations)
AHMAD
FOUAD
AZEEM(Manage
178-Y, Phase-
DHA r) (042)
III, DHA (042) 35741073-6 Yes
Lahore 35741077
Lahore
FAHAD
SHAFIQ(Manage
r Operations)
AMJAD
MAHMOOD(Chi
ef Manager) Opposite M.C
Faisalaba (041)2412
College Kotwali (041)-2412116-9 Yes
d 120
MEHBOOB Road Faisalabad
ALAM(Manager
Operations)
AHMAD
MUJTABA
Ground & First
HASHMI(Chief
Floor, Madina
Faisalaba Manager) (041)- 8556201 (041)-
Tower, Sossan No
d2 (041)-8556202 8556203
Road,
IMRAN
Faisalabad.
ZAFAR(Manager
Operations)
Faysal MALIK Plot No. 811, (042) 35160472 (042)3516 Yes
Town JEHANZEB(Chi Block C, Faysal (042) 35160474-8 0473
Lahore ef Manager) Town, Lahore.

19
 MUHAMMAD
WASEEM(Mana
ger Operations)
Shop No. 6-8,
JAVED
Ward No. 5,
KHAN(Manager)
Gujar Near Ali (051)3511
(051)3511822-23 No
Khan Hospital, Main 824
-(Manager
G.T. Road,
Operations)
Gujar Khan.
MUHAMMAD
Property No.
YOUSAF(Acting
1157/527,
Manager)
Ground Floor, (0533)-525555 (0533)-
Gujrat Yes
Empire Center, (0533)-530380 520370
MUHAMMAD
G.T. Road
KHAN(Manager
Gujrat.
Operations)
AYUB
AHMED(Manag
Near General
er)
Gujranwa Bus Stand, (055)3820
(055)3730916-18, 3820917 Yes
la G.T.Road, 918
MUDASSAR
Gujranwala.
IQBAL(Manager
Operations)
MUHAMMAD
FAWAD
SADDOZAI(Chi
ef Manager) 38 - Zahoor
(051) 2824691, (051)2825
Islamabad Plaza, Blue Yes
2277397 3434
SYED Area, Islamabad
MASOOD
HUSSAIN(Mana
ger Operations)
NOOR NAWAZ
KHAN(Manager) F-10 Markaz,
Al-Maroof
(051)2222993, 2222994, (051)2222
Islamabad SYED AGHA Hospital Yes
2222995, 2222997 996
ANWAAR Building,
HAIDER(Manag Islamabad.
er Operations)
SAJJAD ALI
Plot No. 786-G,
KHAN(Manager)
Block-C, PWD (051)
Islamabad (051) 5170901-2 & 4 Yes
Society, 5170903
-(Manager
Islamabad
Operations)
Jehlum WAHEED UD 225/226, Koh-i- (0544)9270163-64-66 (0544)927 No
DIN(Acting Noor Plaza, Old 0165
Manager) GTS Road,
Jhelum Cantt.
JEHANZEB

20
 EHSAN
DAR(Acting
Manager
Operations)
REHAN
HUSSAIN Property No. 32,
(Manager) Paracha
Hospital,
(065)2556
Khanewal MUHAMMAD Adjacent JS (065)2556431-2 Yes
433
RASHID Bank, College
RASHEED Road,
(Manager Khanewal.
Operations)
EHSAN UL
HAQ(Chief
M.M Manager) Gulberg -III
(042) 99268268, (042) (042)
Alam M.M Alam Yes
99268267 35872013
Road OBED Road Lahore
ARTHUR(Mana
ger Operations)
MUHAMMAD
AKRAM Property No.
TAHIR(Manager 17/24, Shadab
Mian (065
) Market, G.T. (065) 2661871-72 Yes
Channu 2661870)
Road, Mian
-(Manager Channu.
Operations)
SIDDI SAMI
KHAN(Manager)
15/A Opposite
Rahimyar Town Hall, (068)5870182, 5870183, (068)5870
MUHAMMAD No
Khan Model Town 5870184 185
SALMAN
Rahimyar Khan.
SHAHID(Manag
er Operations)
HAFIZ
MUHAMMAD
Property No.
MUBBASHIR
82-84,
(Manager)
Ravi Amarpark (042)3794
(042)37947581-82 Yes
Road Building, Main 7583
AWAIS
Ravi Road,
KHALID
Lahore
SALEEMI(Mana
ger Operations)
Rawalpin MOHAMMAD 369-18, Zaman (051)-5120194-7 (051)5120 Yes
di KAMRAN Centre Bank 198
KHAN(Manager) Road
Rawalpindi
IKRAM
HAMEED
MARWAT(Mana

21
 ger Operations)
ABDUL RAUF
SHAHZAD(Man Shop No.
ager) A/308, Jinnah
Rawalpin (051)
Road (City (051)5540486 Yes
di 5540468
ANEES Sadder Road ),
RIAZ(Manager Rawalpindi
Operations)
AYESHA
AAMER(Chief
Johar Manager) 891- R-1, M.A
(042)
Town Johar Town (042)35316744-45 Yes
35316746
Lahore FARAH Lahore
KHAN(Manager
Operations)
FAROOQ
AHMED
Lower Ground
MALIK(Manager
Khan
) (061)
Multan Centre,Main (061)4545141-42 Yes
4545143
Market Abdali
QAISER SAEED
Road, Multan
TAREEN(Manag
er Operations)
MUDASSAR 1st Floor,
RASHEED Iftikhar
KHAN(Manager) Children (044)
Okara (044) 2511079-80 Yes
Hospital, M.A. 2511082
-(Manager Jinnah Road,
Operations) Okara.
ABDUL
MAJEED(Chief
Shop #E/36,
Manager)
Alamgir Market,
Shah (042)3764
Inside Shah Yes
Alam SHAHZADA (042)37641834-6 1837
Alam Gate,
AYZAD
Lahore.
SHAH(Manager
Operations)
ARBAB
AKHLAQ
AHMED(Acting Shop No. 10,
Sadiqaba Manager) Masood Plaza, (068)5801
(068)5801261-62-63 No
d Bank Road, 264
USMAN Sadiqabad.
ASHRAF(Manag
er Operations)
Sahiwal MUHAMMAD 272/B-2, High (040)4222404,4222448 (040)4222 No
Branch HASEEB(Manag Street, Sahiwal. 403
er)

22
 SHAISTA
SATTAR(Manag
er Operations)
MUHAMMAD
TAUQEER
ZAFAR
63/5/2/1 VIP
CHANDIA(Man
Complex, Niazi (048)3740893, (048)3740
Sargodha ager) No
Square, Club 3740894,3740895 891
Road, Sargodha.
SHERAZ
AHMAD(Manag
er Operations)
IMRAN
QURESHI(Mana Industrial Area
ger) Shahabpura,
Ugoki Road, (052)3559
Sialkot (052)3559225-27 Yes
SYED NADEEM Opposite Masjid 224
HUSSAIN Mohajirin,
RIZVI(Manager Sialkot
Operations)
MUHAMMAD Plot No. 12-B &
ASLAM 13-B, Haq
Vehari KHAN(Manager) Nawaz Plaza,
(061)6241
Road, Main Gate Shah (061)6241251-53 Yes
254
Multan KHURSHID Shams Colony,
AHMAD(Manag Vehari Road,
er Operations) Multan.
Sindh
AT
Branch Fax M
Contact Person Address Telephone Number
Name Number Stat
us
IMRAN Shop No.4 &
KHAN(Chief Flat No.2, Qazi
Manager) Court, Karachi
Bahadura
Cooperative (021)3494
bad (021)34946751-52-54-55 No
ANIL Housing 6753
Karachi
KUMAR(Acting Society,
Manager Bahadurabad,
Operations) Karachi.

Clifton SYED AKHTAR Garnet Centre, (021)35296293 (021)3529 Yes

Karachi ALI khayaban-e- 6291
SHAH(Chief Jami, Clifton
Manager) Block-8,
Karachi.
FARAH
KARAMAT
WAZIR(Manager

23
 Operations)
SYED
Plot No. 69-C,
MUHAMMAD
11th
FAISAL(Acting
DHA Commercial (021)3589
Manager) (021)35890171-4 No
Karachi Building, DHA, 0175
Phase II,
-(Manager
Karachi.
Operations)
Plot No. 41/444,
UBAIDULLAH
445, 446, 447,
JATOI(Chief
& 449, Main
Manager) (022)2731198, (022)2731200,
Hyderaba Bohari Bazar, (022)2731
(022)2731202-3, No
d Near Blair 211
NAVEED (022)2731209-10
Hospital, Saddar
ALI(Manager
Cantt,
Operations)
Hyderabad.

SYED AQEEL White house

REHMAN(Mana plaza,15-
ger) A.Block-
Shahrah- (021) 34389031-3 (021)
6,P.E.C.H.S  Yes 
e-Faisal 34389036-8 34389039
TALHA BIN Opp Fortune
TASNEEM(Man centre,Shahrah-
ager Operations) e-faisal Karachi 
ABID SALEEM
KUNDI(Manager
Sohrab )
Superhighway, (021)3683
Goth (021) 36830070, 36830072. Yes
Karachi (0110) 0067
Branch NADEEM EJAZ
KHAN(Manager
Operations)
QAMAR UL
HUSNAIN(Mana
ger) B-78 Allied
(021)-32565102-4, 32570832, (021)3256
S.I.T.E Plaza Estate Yes
32550211 5105
ANWAR IQBAL Avenue Karachi
(Manager
Operations)
ASHFAQ
KHAN(Acting
Manager)
Shireen Clifton, Shireen
(021)3587
Jinnah Jinnah Colony, (021)35873264-66 Yes
MUHAMMAD 3267
Colony Karachi
ASHFAQ
KHAN(Manager
Operations)
Sukkur MANSOOR Property No. D- (071)5617057-58-59 (071)5617 No
AHMED 986, D-971, 056
SOOMRO(chief Hussaini Raod,

24
 Manager)

SYED SAJID
Sukkur.
ALI
SHAH(Manager
Operations)
SHAMIM
AKHTAR(Chief
Karachi Manager) Karachi Stock
(021)32465807, 32465804, (021)3246
Stock Exchange, No
32465806 5805
Exchange GHAZANFAR Karachi.
QAYYUM(Mana
ger Operations)
AURANGZEB
AFRIDI
(Manager)
Khyber Chowk,
Metrovill (021)3675
Metroville-1, (021)36754233,(021)36754325 No
e 4236
Site, Karachi
ZEESHAN
(Manager
Operations)
Balochistan
AT
Branch Fax M
Contact Person Address Telephone Number
Name Number Stat
us
SYED BEHZAD
HUSSAIN(Mana
ger)
Jinnah Road, (081) 2822141, (081)2829
Quetta Yes
Quetta 2843203 469
ABDUL BARI
KHAN(Manager
Operations)
UMAIR
ALI(Acting Shop No.2-7/35,
Manager) Khyber Plaza,
(081)
Quetta Sharah-e- (081) 2834951, 2834955 No
2834952
ANSHAID Iqbal(Qandhari
KHAN(Manager Bazar), Quetta.
Operations)
FAHAD
HUSSAIN(Mana
ger) Trunch Road, (0826)614
Chaman (0826)614027-28 No
Chaman. 014
-(Manager
Operations)
Azad Kashmir
Branch Contact Person Address Telephone Number Fax AT
M

25
 Stat
Name Number
us
HABIB UR
Commercial
REHMAN(Mana
Property,
ger) (05826)
Kotli Khasra No. 579, (5826) 448673-74-75 No
448679
Bank Road,
-(Manager
Kotli.
Operations)
SHAGUFTA
IQBAL(Manager
) Secretariat
Muzaffar Road, (05822)92
(05822) 920492 Yes
abad Syeda Nazish Muzaffarabad,  0499
Kazmi(Acting AJ & K
Manager
Operations)
NADEEM A
KHAN(Manager) Plot No.3,
Sector B/3,
(05827)
Mirpur QAMMAR Allama Iqbal (05827) 447687 No
447685
SHAHZAD Road, Mirpur, 
AWAN(Manager AJ & K
Operations)
 

2.8 COMPUTERIZATION OF BRANCHS:

All the branches of BoK is fully computerize by new modern technology , before there was
only 90 branches who were computerize out of 100 branches but now all branches are
computerize. The program which used in BoK was “U Bank” which is now recently change
and brought a new program named “U plus”. The bank expecting more change in the
computer department to increase the efficiency of the bank.

2.9 EMPLOYEES OF THE BANK:

Bank is service oriented organization which need more professional and skillful people, the
Bank of Khyber is also managed by experienced and well qualified team of professional that
is lead by a distinguished banker of the country.

Currently the bank employs are 1000 regular officers in various departments. They include 01
Ph.D., 168 postgraduates including MBA/MPA/BBA (HONS)/M.A/M.Sc from foreign and
local universities and 169 gradates and 13 LLB. The bank provides them with on the job

26
training. As well as exposure to advance courses and seminars conducted by the Institute of
Bankers, Pakistan and other professional institutes the bank places high priority on
professional education and encourages its employees to sit in the professional examinations
conducted by the Institute of Bankers, Pakistan.

2.10 CREDIT CARDS:

BoK has entered into arrangements with American express and diners club Pakistan (Pvt)
Ltd, for issuance of their respective credit cards.

2.11 CAPITAL STRUCTURE:

Shareholder Paid-up Capital Bonus Total

Govt. of NWFP 652.50 261.00 913.50
DEG 97.50 39.00 136.50
Total 750.00 300.00 1,050.00

27
 CHAPTER 3

ORGANIZATIONAL AND FUNCTIONAL SETUP OF BOK

3.1) ORGANIZATIONAL STRUCTURE

Organization is defined as a system in which individuals and groups operating at

different levels perform the task assigned to them within the framework of delegated
authority and responsibility which are rationally coordinated to achieve the desired
organizational goals.

Organization makes management easier, effective and result oriented. In organization

designed and structured on planned lines promotes collaboration and negotiation among
individuals in a group and thus improves the effectiveness and efficiency of communication
within the organization. This function creates clear cut lines of authority and responsibility in
the organization.

The word “Organization” has two meanings, firstly, it means an institution or

structure, viz. a bank is an institution with its organizational structure of Head Office, local
office, district offices and branches. Secondly, it means a process of an ongoing activity i.e.,
the process of organizing, locating and bringing about relationships among men, money and
services. In fact organization establishes relationships among the people so that they
collectively contribute to the attainment of organizational goals effectively. Thus
organization is a means to an end. It is also an important part of management.

Similarly, organizational structure or hierarchy of a firm provides boundaries for

authority of persons which further clarifies responsibility and the scope of authority.
Basically, it shows who is responsible to whom and who has the authority to give orders to
someone. Actually these are the tools by which a manger is able to exercise discretion and
create an environment for individual performance.

The organizational structure of The BOK also has some specific aims and objectives.
In The BOK, all the structural procedures and systems are designed to serve customers of the
BOK in the best possible manner. The BOK is governed by a board of directors, consisting of

28
five members, in which the Managing Director of the BOK may also hold the position of a
Chairman of the Board.

3.2) ORGANIZATION HIERARCHY

To avoid the duties, goals, functions, responsibility and authority at each position are
clearly explained.
The channels that delegate these activities are called organization hierarchy. This
must be set in such a manner to best accomplish the organizational goals.
The nomenclature of various posts in the bank is as under:
• Executive Vice President
• Senior Vice President
• Vice President
• Assistant Vice President
• Officer Grade-I
• Officer Grade-II
• Officer grade-III
• Junior officer
• Driver

3.3 BOARD OF DIRECTORS

According to the BoK Act, the affairs of the Bank have been entrusted to a board of directors.
They comprise of eight directors. Among them four directors are nominated by the provincial
government while three directors are nominated by shareholders. Currently the board of
director is comprise of
• Managing director (chairman)
• Additional chief secretary.
• Secretary finance government of NWFP.
• Secretary industries government of NWFP.
• Secrtary Food and Agriculture

29
 A law graduate works as secretary to the board of directors. He calls the board meeting and
maintains the minutes and proceedings of the Board of Directors.

3.4) DEPARTMENTATION

Departmentation is the logical process of grouping of activities, or the process of

grouping jobs in a logical arrangement through which the organizational goals or objectives
can be achieved. It is also the process of division of work into various sections or
departments or divisions, over which a manager has authority & responsibility for
performance of specified activities. Basically there are four ways for organizational
departmentation.

i. Departmentation by function

ii. Departmentation by product

iii. Departmentation by geography

iv. Departmentation by customer

The Head Office of BOK is divided into the following departments”

• Credit

• Finance

• Islamic Banking

• Internal Audit

• Information Technology

• International Banking

• Human Resource

• Treasury

30
3.4.1) CREDIT DEPARTMENT

Credit division of BOK continuously review its policy frameworks in accordance with the
tough competition faced in the wake of reducing mark up rates scenario and increased
liquidity in market.

Credit monitoring is being strengthened with a view to develop early warning

signals through constant monitoring of loans from different angles, risk management plan is
being developed giving a rating to the clients, based on industry status, financial strength of
the client, security offered, repayment behavior, among other factors. SME financing and
micro loans were also given due importance, inorder to cater to the financial requirements of
neglected sector of economy. Introduction of new schemes like house finance, car finance,
consumer finance and micro finance will definitely improve and enhance the credit portfolio.
Bank of Khyber has strengthened its grip on the target market for these schemes. BOK
concentrated on timely reduction of Mark up rates.

3.4.2) FINANCE

The finance division is responsible for overall fiscal managing, financial control,
finacial reporting and accounting functions of the Bank. Division ensures that the accounting
records and system are maintained in accordance with internal policies, regulatory
requirements and international accounting standards. It establishes policies and procedures
relating to the finance function, monitoring returns on earning assets and reports on various
performance indicators including assets/liability mismatch. The division directs control of the
budgeting process in accordance with the annual plans, polices, management directives and
strategy, ensuring that quality budgets and forecasts are drawn up and consolidated for
approval.

Finance division exercise budgetary control on all expense and income items at both
Head Office and branch level, ensuring the effective monitoring arrangements are in place in
respect of adherence to budgets/forecasts. It continually reviews the accounting and control
system. It monitors capital adequacy in accordance with regulatory directives. It leases with
external auditors, tax authorities and SBP inspector, and facilitates their duties. It provides
necessary assistance to rating agencies. The maintains financial data bank and carries out
industry financial analysis vis-à-vis banks strength and opportunities.

31
3.4.3) ISLAMIC BANKING

The Bank of Khyber has taken the first step towards Islamic banking and for this
purpose an Islamic banking division has been established to complete the necessary
regulatory and operational formalities thereby paving the way  for conversion of all branches
of BOK into Islamic Banking Branches

The Islamic Banking aims and targets to implement the decisions of the board of
Directors to gradually convert the whole bank into an Islamic bank within three years under
the supervision of the Shariah Supervisory Board as per Rules and Regulations of the State
Bank of Pakistan. To achieve the target, Islamic Banking Division has devised an action plan
for the expansion and conversion of the whole bank by December 2006 and to develop the
business in various areas. According to the plan six branches of the Bank will be converted
into IBBs at the end of 2005 and the remaining in 2006.

Hayatabad Branch            (23-11-2003)

Quetta Branch                    (01-10-2004)

Bannu Branch                    (01-11-2004)

Nowshera Branch              (01-11-2005)

Islamic Banking Division is planning to start accepting deposits from all branches of
the Bank of Khyber as per standing instructions of the SBP. Disbursement of the funds under
Islamic Financing Modes through other branches of the Bank well also be started very soon.
Development of Business through Internet is also under active consideration.

3.4.4) INTERNAL AUDIT

The Internal Audit Division works independent of the management and reports to Audit
Committee of the Board of Directors. The audit committee comprises of three non-executive
directors and the head of Internal Audit Division has freely access to the chairman of the
committee. The Internal Audit Division consists of two departments namely Audit
&inspection and compliance &implementation.

The internal Audit Division conducts risk based of the bank on the risk matrix mechanism
including compliance audit.I.T Audit and management Audit.

32
Internal Audit Division provides regular training to its personnel in various fields of banking
to enhance their skill and proficiency. It ensures efficient/effective utilization of resources
and is on the front line with management for risk management, internal controls and
achievements of goals.

3.4.5) INFORMATION TECHNOLOGY

The I.T department of the Bank was established in 1994 at State Life Building and all
branches were successfully automated by the year1998. IT department has progressed in the
last eight year and trying its level best to abreast in the field of fast developing technology. In
order to achieve its goals, the management has decided to start on-line Banking in the very
near future, this will facilitate the customers of the bank of Khyber and they will be able to
transfer money between any two BOK Branches through out the country. Recently, The Bank
of Khyber has joined MNet ATM Switch, which is operated by MCB and allows Bank
customers to have access to over 200 ATMs throughout Pakistan. They are even available in
areas like Murree, Abbottabad and Swat.MNet ATMs are also present in all three main
Airports& Islamabad International Airport. The Network is expected to grow in future.

3.4.6) INTERNATIONAL BANKING

The principle line of business of International Banking is foreign trade and exchange
dealings. In year 2003 there was a sign9ificant improvement in all the areas of international
operations. As compared to the year 2002,the import and export business of the bank
witnessed a remarkable growth of 56% and 32% respectively.
The correspondent relationship with international Bank has significantly been expanded and
the bank enjoys direct financial communication relationship at 1300 destinations of 58
renowned international Banks in 711 countries around the Globe.
The S.W.IF.T.system acquired in the bank has proved very useful for secure global access for
trade communication, which has further strengthened the confidence of international traders
and our customers in Pakistan, on bilateral basis.
The Bank has established agency arrangements with international exchange companies in
order to facilitate the overseas Pakistanis with a Banking channel for their home remittances.

33
3.4.7) HUMAN RESOURCE
Human resource division (HRD) plays a vital role in carving the present and future
image of an organization by managing employees in the most beneficial and effective
manner, the functional arena of HRD consists of recruitment, training, performance
appraisals, planning and career development and above all grooming of staff to adhere to
office ethics and social norms.
The manpower is the most important and precious asset. The HDR tries to create an
environment of mutual trust and dignity and trying hard to pursuit the expression:” We rather
than I” so as to ensures best positive results. It is playing a proactive role in capacity buildind,
experience sharing, strengthening analytical and policymaking, skill up-grading to help the
staff in their endeavors to make BOK competitive, dynamic and one of the best banks in the
country.
HRD provides on the job as well as off-site to the staff in diverse areas of banking and
management. The training relies on both external courses at institutes of repute in the country
and internally arranged courses.

3.4.8) TREASURY
Treasury was a main source of revenue generation during 2003,for BOK .The year 2003 was
marked with low interest rate, robust capital activities in the capital market.
Keeping in view downward trend in the interest rates, the treasury department has moved
quickly to invest in the medium to long-term government papers, which was giving relatively
higher yields. The treasury also traded in the secondary markets and maintained trading
portfolio of TBs and Pakistan Investment Bonds (PIBs) that had generated trading profits.
Bank of Khyber is now gearing towards revamping its Treasury would soon assume a more
pro-active role in serving BOK customers, especially the corporate clients. In future the
department will be able to manage corporate customer funds and quote money market related
rates for short-term corporate size loans.

3.4.9 PERSONNEL & TRAINING DEPARTMENT

Personnel and Training Department is working in the bank since its anticipation in 1991. An
Assistant Vice President heads the department. The P&T department has staff strength of
seven members.

34
The P&T department is maintaining all the Human Resource records of salary, leaves,
qualification, promotions and ACR’s.

The functions include:

1. Recruitment
2. Training
3. Allocation of Administrative Budget to Branches & Head Office.
4. Promotion
5. Staff Advances
6. Disciplinary Proceedings
7. Resignation
8. Transfer-posting
9. Salaries, other Fringe Benefits
10. TA/DA
11. Leaves
12. Creation of posts
13. Payment of Dues to Employees Leaving the Bank.
14. Insurance Coverage for employees House Building Advance.
15. Enlistment of Lawyers on Bank’s Panels.
16. To arrange Group Team Insurance for Employees.
17. Hiring of Legal Advisors on Retainership.
18. Enlistment of Courier Companies.
19. Enlistment of Insurance Companies.
This department also carries an annual performance appraisal of the bank officers and
plains for training, and development of their human resources. The P&T has a vital role in the
bank. But the due recognition, which its needs, has not been given to it.
The functions of P & T department are

1. Selection And Evaluation

2. Training and development
3. Compensation
4. Maintenance
5. Discipline and general conduct

35
 6. Delegation of Powers
The following are the responsibilities:

1. Over all supervision of personnel deptt particularly appointments, resignation,

transfers, postings in line with the Bank’s Service Rules/Policies.
2. Looking after training needs, Liaison with IBP and other training institutes.
3. Checking, exercising control over daily expenses etc.
4. Implementation of decisions/policies as approved by the controlling/ component
authorities.
5. Surprise inspection of Branches and different departments of H.O regarding
uniform, time observance and cleanliness etc.

3.4.10 ADMINISTRATION & ESTABLISHMENT.

The administration and establishment department of the Bank works under the human
resource department .The Assistant Vice President (A.V.P) of HRD department is
responsible for the tasks of these departments .The working strength of A&E Department
is three members. This department works with public relations and personnel and training
departments to accomplish the goals and objectives of HRD Department.

Works and Responsibilities of Administration & Establishment Department

The works and responsibilities of A& E Departments is as under

1. Hiring of place for Branches.

2. Purchase of Land/Building for Bank.
3. Renovation of Bank/Premises.
4. Repair of Buildings.
5. Purchase of Bank Vehicles and other Assets.
6. Arrangement Insurance Coverage to Bank’s Assets.
7. Arrangement security for Bank branches/Head Office.
8. Arrangement for Electricity, Water, Telephone and other installation.
9. Arrangement for installation of Bank’s Neon Sign/Holdings and other publicity
items.

36
 10. Procurement of Bank’s Furniture, and other Equipment like A/Cs, Photocopier,
Fax Machine etc.
11. Recovery from Insurance Companies against lodged claims.
12. Co-coordination between different departments of the bank.
13. Arrangement for Uniforms/liveries for casual staff.
The administration department is assigned the following responsibilities:

1. Acquisition, Disposal / Replacement of Fixed Assets, including Vehicles.

2. Maintenance, up-keep / renovation of Fixed Assets.
3. Routine visits to Branches, HO Departments.
4. Negotiation, liaison with suppliers, contractors, Architects and Land Lords
(lessor).
5. Arrangement of premises for branches, HO and execution of Lease Agreement.
6. Check, pass and process TA/DA bills of Head office /Branch staff
7. Inviting of Tenders / Quotations for such job / works / goods.
8. Obtaining approval from competent authority for such works / goods.
9. Payments of Bills, pertaining to such works.
10. Matters pertaining to Insurance Claim.
11. Capital Budgeting of Bank.
12. Supervision of Administrative matters and general conditions / cleanliness of
branches and HO.
13. Liaison with branches regarding up-keep, maintenance, acquisition of such assets
and general condition of branches.

3.4.11) STATIONERY DEPTT.

Stationary department perform following functions:

1. Printing of security stationary.

2. Printing of other printing stationary.
3. Procurement of other petty stationary.
4. Safe custody and distribution of security and printed stationary to different
branches/Head office.
5. Enlistment of printers.
Works and responsibilities of Stationary department:

37
 1. Administrative and over all supervision of the deptt as incharge of the deptt.
2. Putting notes for seeking prior administrative approval of printed and security
stationary from purchase committee and after approval; order and placed to
printer. After receipt of respective consignments; payment notes are submitted to
purchase committee.
3. Correspondence with HO/Branches / Departments.
4. Being Secretary of Stationary Committee, meetings of committee are arrange for
making decision with regard to introduction of new items; amendments of existing
forms and pads with consultation and consent of members of committee.
5. Rectification of audit objections and removal of any complaint of the Branch I
Department in respect of supply of items at the stationary required.
6. Any other matter which management wants to discuss in respect of supply of
printed and security stationary items.

3.4.12 PUBLIC RELATION DEPTT.

An Assistant Vice President (A.V.P) heads the public relations department of HRD. An
officer grade-II is responsible for providing better quality stationary to the employees of the
Bank. PR also deals with coordination with other banks, financial intuitions and government
agencies. This department also helps in arranging bank functions, programs, & seminars. This
department carries out all the activities that will bring good name to the Bank. This
department has connections with the national print & electronic media to give due coverage
to the bank activities.

The job profile including the following:

1. Design and Launch publicity of the Bank of Khyber.

2. Arrange high-level meetings with Governors/CheifMinister/Provincial & Federal
Ministers Arrange high level Government Officials.
3. Accompany the Managing Director at the meeting as Principal Staff Officer.
4. Generate English Bulletin on Political/cultural/social/economic news.
5. Conduct Protocol duties with the visiting dignitaries, delegation and other
luminaries.
6. Prepare press release in English & Urdu.

38
 7. Keep close liaison with all Pakistani Political/social leaders.
8. Keep close liaison with all the International Organizations like
UNHCR/UNOCHA/Afghan Commissionerate, NWFP, Peshawar too coordinate
in relation to issues of BOK.
9. Keep close contact with local industries, businessmen and Sarhad Chamber of
Commerce & Industry for promoting mutual trade relations.
10. Handle correspondence with Government Semi-Government Private Institutions
on various matters.
11. Make arrangements for all ceremonies organized by the Bank of Khyber.
12. Perform duty assigned by the Management.
13. Boarding/Lodging Arrangements for Bank’s Guests from SBP/Ferguson’s and
Bank’s Executives/Officers.
14. Supervise inland/foreign TA/DA bills of Executive/Officers.
15. Supervise Sports, Donation and other Social Welfare/Cultural activities of the
Bank

3.5 Network of Foreign correspondent Banks.

The Bank Of Khyber has a Network of Correspondent Banks all over the world. The
bank is working hard to provide its customers the state of art Facilities.

39
 CHAPTER 4

REVIEW OF BANK OF KHYBER, “JINNAH ROAD

“BRANCH”
4.1 Branch hierarchy

Jinnah road Branch Abbottabad BRANCH

4.2 DEPOSIT DEPTT:

The main objective of all commercial banks is to accept/ mobile deposits of money
from the public and lend to invest them into the most profitable avenues possible. The Banker
customer relationship is initially established at the time of opening an account and acceptance
of deposit. Commercial banks mobilize savings and channels them predominantly, into short
term investments such as advances, to meet working capital and trade finance requirements of
business and industry. The banks have also ventured into long term or fixed investment
financing to a certain extent. The accounts opened by the bank are as follows.

4.2.1 TYPES OF ACCOUNT:

4.2.1.1 CURRENT ACCOUNT:
This type of account is mostly maintained by businessmen, business organization, and
other institution for their day to day cash management. Balance are payable on demand, no
restrictions on number of transaction i.e any amount can be withdrawn without prior notice,
no profit or return is paid on current accounts. This type of account is opened by Rs 500/-

4.2.1.2 PLS. SAVING ACCOUNTS:

This type of account is opened by Rs 100/-. This is mostly introduce for the people
who have small saving. Profit or return is paid bi-annually on minimum monthly balance. In
case of more withdrawal at least a week’s notice is given to bank, by the customer.

40
4.2.1.3 FIXED DEPOSITS:
Deposits kept with the bank for a fixed period of time, as against deposits that can be
withdraw on demand are called fixed or term deposits. It can be accepted between one month
to five years and profit is paid on maturity date.

The other type of accounts which are opened by the bank are:
i. Security Deposit receipts (SDP’s)
ii. PLS. Notice Deposits or Notice Deposit receipts (NDP’s)
iii. Accounts of minors
iv. Joint accounts
v. Account of sole proprietor
vi. Accounts of partnership firms
vii. Accounts of limited companies
viii. Trust accounts.
ix. Societies/Associations/clubs accounts

4.3 CASH DEPTT:

Cash dept is important as the fact that it is a major point of contact between the bank
and the customer. This dept of the bank conveys the first impressions and commitment to
professionalism in its systems and procedures, courteous and efficient customer service.
This dept has the following responsibilities.
• Receipt and payment of cash.
• Receipt voucher positing.
• Verification of income and expense transactions.
• Cash receipt and payment reports verification.

4.4 REMITTANCES DEPTT:

Remittances mean fund transfer by the bank from one place to another for his
customer to facilitate them. It may be inward and outward. It is one of the important key
functions of the bank, through which customer is save his time, eliminate his risk and
transportation of money from one place to another.

41
For remittances there is no need to open account, as when required. Any person who is of
sound mind according to contract act may involve and can sign the application to enter in a
contract of remittances.

4.5 BILLS DEPTT:

Today’s commercial world has minimized the use of hard cash to a great extent and as
such settlement of drafts and other obligations are generally performed through cheque and
other financial instruments, the payments against which are received by the beneficiaries
through their bank accounts.

4.6 CLEARING DEPTT:

Bok along with their daily business activity also provides the facility of collection
credit claims for customers. Main functions of the clearing dept, is to interchange and settle
the credit claims. The function of clearinghouse is performed by the central bank, i.e. in case
of Pakistan the clearing system is operated by the SBP. If SBP has no office at a place, then
BANK OF KHYBER as a representative of SBP act as a clearinghouse.
Clearing system is a device, which enables bankers to settle cheque and other instruments,
drawn on each other. The system is of immense value in saving a lot of labor, time and
expenditure and is increasing the efficiency of the banking system.

4.7 MICRO FINANCE UNIT (MFU):

It is established on November 1, 1999, the Micro Finance Unit (MFU) of the Bank of
Khyber carries with itself the portfolios and experiences of the Micro Business Development
dept, of the Bok. The Micro Business Development dept was created by the Bank in 1995 to
support micro businesses. In 1997 this department took the shape of the Micro Business and
Rural Development dept by expansion of its operation in the rural areas for income
generation activities. The MFU is the outcome of these structured development effort of the
Bok.
This was the first formal sector of micro finance operation of any of the commercial banks in
the country. So because of the perceived risks associated with micro financial operations and
its high cost of operations, the Bok renamed its micro business development deptt, to MFU so
as to run it as a profit center and demonstrative the commercial viability of micro finance.

42
4.8 CONSUMER FINANCE DEPARTMENT;

This department is engaged in providing electronic household items on a monthly

installment basis that can easily paid by salaried persons or businessmen. The said facility
may be availed after providing one personal guarantor and some documentary evidence,
which can identify the applicant and guarantor. It may be allowed from one year to three
years time period.
Mr. Johar Ayub Khan is Incharge of this department at Jinnah road Branch Abbottabad.

43
 CHAPTER 5
FINANCIAL ANALYSIS

5.1 FINANCIAL STATEMENT ANALYSIS

Financial Statement Analysis helps us to measure the financial position of any firm. It also
helps us for measuring the result from the operation of that firm. Financial analysis also helps
us in determining the strengths and weakness of any firm as well as provides information to
making the decision of the organization (Lawrence J.Gitman 2008). That also helps us for
achieving the goals and objectives of an organization and strategy making analysis.
5.2 THE FINANCIAL DATA OF BANK OF KHYBER IS ANALYZED IN THE
FOLLOWING WAYS

The given below types of analyses are used to measure firm’s performance over time. There
are three broad categories of the statement analysis.
 Vertical analysis

 Horizontal analysis

 Ratio analysis

5.2.1 VERTICAL ANALYSIS

In vertical analysis, we divide the each item asset/liability/income/expense by the total

asset/total liability/net income/net loss to check out the percentage of specific
asset/liability/income/expense in the total asset/total/net income/net loss liability that how
much this item is contributing to total (Gibson, Charles H, 2002).
5.2.1.1 Vertical analysis of Balance sheet (National bank of Pakistan)

For the year ended Dec 31, 2010 to2013

ASSETS 2011 2012 2013
Cash and balances with treasury banks 12.26% 11.15% 11.43%
Balances with other banks 3.08% 2.93% 2.43%
Lending to financial institutions- net 2.07% 2.26% 3.84%
Investments- net 23.05% 29.11% 27.70%
Advances- net 50.33% 46.13% 45.70%
Operating fixed assets 2.66% 2.59% 2.44%
Deferred tax assets 0.32% 0.67% 0.69%

44
 Other Assets 6.28% 5.16% 5.76%
Total Assets 100% 100% 100%
Liabilities and Owner Equities
Bills payable 1.12% 0.77% 0.79%
Borrowing 4.79% 1.94% 2.29%
Deposits and others accounts 76.93% 80.39% 80.40%
Liabilities against assets subject to finance lease 0.00% 0.01% 0.01%
Deferred tax liabilities- net ------ ----- ------
Other liabilities 4.47% 4.45% 4.74%
Share Capital 1.13% 1.29% 1.58%
Reserves 2.40% 2.36% 2.27%
Inappropriate profit 6.49% 6.36% 6.04%
Surplus on revaluation of assets- net 2.62% 2.38% 1.96%
Total Liabilities and Owner Equities 100% 100% 100%

Source: Bank of Khyber annual report, 2011

Interpretation
In balance sheet, we take asset, liability as a key figure for the measurement. Current assets
were decreases in 2012 and 2013 because of decrease in customer deposits. Its net investment
was declined in 2012 because bank has low Cash in that year and invested in operating and
other assets while it was high in 2011 because of high Cash with other banks. Due to the
decreasing trend of liabilities over years, lending to the financial institutions is increasing
accordingly.
There is decrease in firm’s investment in operating fixed asset in 2013 that shows that it is
not investing in further expanding its business while in 2011 investment in operating fixed
assets is increasing.

45
5.2.1.2 Vertical analysis of income statement (National bank of Pakistan)

For the year ended Dec 31, 2010 to2013

PROFIT & LOSS A/C 2011 2012 2013
Markup Revenue 100% 100% 100%
Markup Expense 50.66% 51.15% 50.70%
Gross Profit 49.33% 48.85% 49.30%
Provision for Advances 14.16% 7.92% 6.50%
Provision for Investments 0.78% 3.33% 3.28%
Bad debts written off ------ ----- -----
NON-MARKUP INCOME
Fee and Commission 11.45% 10.88% 10.40%
Dividend Income 2.46% 1.24% 1.67%
Exchange income 3.88% 2.49% 3.34%
Other income 0.71% 2.47% 2.66%
NON-MARKUP EXPENSE
Admin Expenses 28.95% 29.61% 32.15%
Other provisions/write offs 0.79% 0.16% 0.58%
Other charges 0.41% 0.13% 0.14%
Profit Before Tax 28.61% 27.59% 27.29%
Provision for Taxes 5.24% 7.74% 8.79%
Profit After Tax 23.36% 19.85% 18.51%

Source: Bank of Khyber annual report, 2013

Interpretation
Vertical analysis of profit and loss shows increase and decrease in each item as a percentage
of sales means that sales are chosen as key figure.
The expenses of the company were gradually increased in 2012 but again the management
controlled them. Gross income is also decreasing in year 2013 because of decrease in interest
income, other incomes, and non interest incomes
5.2.2 HORIZONTAL ANALYSIS

Horizontal analysis is done by dividing the each expense/asset value by the same
expense/asset/income of the base year; this is done to check out the current changes. In
simple words we can say that we compare the current performance with the performance of
base year (Gibson, Charles H, 2002).

46
5.2.2.1 Horizontal analysis of balance sheet: (National bank of Pakistan)

For the year ended Dec 31, 2010 to 2013

ASSETS 2011 2012 2013
Cash and balances with treasury banks 100% 99.85% 113.83%
Balances with other banks 100% 108.23% 98.80%
Lending to financial institutions- net 100% 117.69% 226.48%
Investments- net 100% 138.33% 146.81%
Advances- net 100% 100.77% 110.91%
Operating fixed assets 100% 109.84% 111.85%
Deferred tax assets 100% 227.09% 260.37%
Other Assets 100% 90.55% 111.40%
Total Assets 100% 109.89% 122.12%
Liabilities & Owner Equities
Bills payable 100% 75.38% 85.72%
Borrowing 100% 43.41% 58.24%
Deposits and others accounts 100% 114.39% 127.49%
Liabilities against assets subject to finance lease 100% 289.50% 217.55%
Deferred tax liabilities- net
Other liabilities 100% 110.71% 129.41%
Share Capital 100% 125.00% 156.25%
Reserves 100% 110.79% 115.54%
Inappropriate profit 100% 110.56% 114.85%
Surplus on revaluation of assets- net 100% 101.41% 91.11%
Total Liabilities and Owner Equities 100% 109.89% 122.12%

Source: Bank of Khyberannual report, 2013

47
Interpretation
Horizontal analysis of balance shows that current assets increases over the period of time, the
increase in cash and decrease in loan shows that the bank wants to have more cash in hand.
As far as the fixed assets of company are concern they are showing increasing trend in 2013
and decreasing trend in 2012 and same is case with the current and long term liabilities. Due
to the increasing trend of liabilities over years, lending ability of the bank has decreased.
There was increase trend showing by the firm in advancing the money that was good for its
financial health.

48
5.2.2.2Horizontal analysis of income statement

For the year ended Dec 31, 2010 to2013

PROFIT & LOSS A/C 2011 2012 2013
Markup Revenue 100% 113.77% 122.76%
Markup Expense 100% 111.56% 119.82%
Gross Profit 100% 116.16% 125.94%
Provision for Advances 100% 63.46% 56.32%
Provision for Investments 100% 479.66% 518.22%
NON-MARKUP INCOME 100% 115.26% 113.55%
Fee and Commission 100% 111% 111%
Dividend Income 100% 55.58% 83.07%
Exchange income 100% 75.25% 105.56%
Other income 100% 395.47% 460.53%
NON-MARKUP EXPENSE 100% 115.60% 122.61%
Admin Expenses 100% 118.43% 136.28%
Other provisions/write offs 100% 28.97% 89.37%
Other charges 100% 36.96% 42.86%
Profit Before Tax 100% 115.60% 122.61%
Provision for Taxes 100% 184.14% 224.88%
Profit After Tax 100% 101.01% 100.84%

Source: Bank of Khyberannual report, 2012

Interpretation
The horizontal analysis of the Profit and loss shows that mark-up interest earned increases
because of increase in its overall business and increased investment in its other services
which results in increase in interest expense ,provisions for loans and bad debts also
increases.
Operating expenses are increasing that means firm is investing and expanding its operations.
Profit before taxes is sharply increasing in 2013, as in 2012 it is very low where as Profit
after taxes is decreasing slowly in 2013.
5.2.4 RATIO ANALYSIS

Ratio analysis is the most commonly used to analysis the financial strength of any company.
It is a quantitative relation between two magnitudes of the same kind. In ratio analysis, the

49
financial ratios of the firm are compared to that of its competitors. This comparison allows
the firm to detect major operating differences to increase their profit. Many entities like
research houses, investment bankers, financial institutions, and investor use to analysis the
financial strength of any company. With the help of these we can make decision about
management and its capabilities, these decisions are important for the firm’s growth.

5.2.4.1 Earning Assets to Total Assets

Formula
Earning Assets/ Total Assets
2011 730,370,552/945,903,269 = 0.77
2012 947,687,548/1,035,024,680 = 0.91
2013 888, 95 7,373/1,149,577,736 = 0.77 (Annual report BANK OF KHYBER,
2011).
Interpretation:
Earning assets include loan, Lease, investment securities and money market assets. This ratio
shows that the earning ability of BANK OF KHYBER is gradually increased in 2012 but
again decreased in 2013 due to the less use of earning assets as compared with total assets. So
BANK OF KHYBER needs to improve its earning ability.

5.2.4.2 Return on Earning Assets

Formula
Net Income/Average Earning Assets
2011 19,379,837/839,029,050 = 0.023
2012 23,315,626/839,029,050 = 0.027
2013 24,264,100/918,322,461= 0.026 (Annual report BANK OF KHYBER, 2011).
Interpretation
Return on earning assets of BANK OF KHYBER are very low in 2011 because assets are not
efficiently utilized, but in 2012 the return shows the increasing trend, however again in 2013
the return of earning assets has declined which is not a positive sign for a bank.

5.2.4.3 Cost to income ratio operating

Formula

50
 Non interest Cost/Income

2011 23,513,897/19,379,837 = 1.21

2012 26,469,490/23,315,626 = 1.13
2013 30,796,310/24,264,100 = 1.27 (Annual report BANK OF KHYBER, 2013).
Interpretation
This ratio shows that how cost is changing compared to income. In 2011 both operating cost
and income are increased, but operating cost rise at higher rate as compared with 2012,
showing the unfavorable trend for the bank. Operating cost again showed increasing trend in
2013 reason behind this is might be the extension of branches. So there will be more income
in future due to expansion in bank’s network.

5.2.4.5 Equity to Total Assets

Formula
Equity/Total Assets
2011 94,141,919/944,582,762 = 0.099
2012 103,762,310/1,037,750,318 = 0.099
2013 110,520,012/1,149,577,736 = 0.096 (Annual report BANK OF KHYBER, 2013).
Interpretation
This ratio shows that how much BANK OF KHYBER have equity out of total assets, ratio of
ownership the bank in its total assets was same in 2011 and 2012 where as equity decreases
in 2013 as compared to previous years which is showing negative sign for the bank.

5.2.4.6 CREDIT TO DEPOSIT RATIO (CD RATIO)

Formula
Advances/ Deposits
2011 475,243,431/727,465,825 = 0.653
2012 477,506,564/832,151,888 = 0.574
2013 525,045,764/927,421,438 = 0.566 (Annual report BANK OF KHYBER, 2011).
Interpretation

51
CD radio shows that the credit to deposit ratio is high in 2011 but it shows the decreasing
trend in 2012 and 2013.it shows that BANK OF KHYBER has more advances in 2011 and
2012 as compared with 2011, which is favorable and shows a good sign for the bank.

5.2.4.7 INTEREST INCOME PER EMPLOYEE

Formula
Interest income/ Total no of employee
2011 77,947,697/16,248 = 4,797.37
2012 88,472,134/16,457 = 5,375.957
2013 95,325,179/16,924 = 5,632.544 (Annual report BANK OF KHYBER,
2011).

Interpretation
The interest income per employee of BANK OF KHYBER in 2010 is less, mean while it
shows increasing trend from 2011 to 2012 which means that the BANK OF KHYBER
generating more income by using its human resources effectively which is very positive sign
for the BANK OF KHYBER.

5.2.4.8 PROFIT PER EMPLOYEE

Formula
Profit after tax / Total no of employee
2011 17,561,846/16,248 = 1,080.86
2012 17,563,214/16,457 = 1,067.218
2013 17,604,722 /16,924 = 1040.222 (Annual report BANK OF KHYBER, 2011).
Interpretation
Profit per employee ratio shows the decreasing trend in 2012 and 2013 as compared with
previous year 2010 which means that the number of employees has increased from 2012 to
2013 this mean that bank has to pay more salaries.

52
5.2.4.9 BUSINESS PER EMPLOYEE

Formula
Total advances / Employee
2011 475,243,431 /16,248 = 29,249.35
2012 477,506,564/16,457 = 29,015.41
2013 525,045,764/16,924 = 31,023.74
Formula
Total deposits / Employee
2011 727,464,825 /16,248 = 44,772.576
2012 832,151,888/16,457 = 50,565.223
2013 927,421,438 /16,924 = 54, 799.19.(Annual report BANK OF KHYBER, 2013).
Interpretation
This ratio shows the management ability that how management uses its employee to earn
interest. This ratio indicates the average interest earned generated per employee, which is
increases in 2012, showing the positive sign for the bank.

BUSINESS PER BRANCH

Formula
Total deposits / No of branch
2011 475,243,431 /1,287 = 369,264.515
2012 477,506,564/1,289 = 370,447.296
2013 525,045,764/1,300 = 403,881.356
Formula
Total advances / No of branch
2011 727,464,825 /1,287 = 565,240.734
2012 832,151,888/1,289 = 645,579.4321
2013 927,421,438 /1,300 = 713,401.106 (Annual report BANK OF KHYBER, 2012).
Interpretation
This ratio shows that how much each branch of BANK OF KHYBER earned interest. The
business per branch ratio high in 2011 and 2013 as compared to 2011, mean the average
branches of BANK OF KHYBER performing efficiently in 2013, showing a growth of
BANK OF KHYBER.

53
5.2.4.11 EMPLOYEES PER BRANCH

Formula
Total no of employees / No of branches
2011 16,248/ 1,287 = 12.62
2012 16,457/ 1,289 = 12.76
2013 16,924/1,300 = 13.018 (Annual report BANK OF KHYBER, 2012).
Interpretation
This ratio indicates the average number of employee in each branch has increased in 2011
and 2013 as compared to 2012, which is favorable for BANK OF KHYBER and showing its
growth.

54
 CHAPTER 6
CONCLUSION AND RECOMMENDATION

BOK is one of the leading financial institutions in Pakistan. Since its establishment it
has revolutionized the banking industry of Pakistan by introducing state of the art
banking products and services.

BOK has provided an enthusiasm among the young business graduates to adopt
banking as a promising career. This happened because of the BOK’s dynamic
strategies that gave a totally new look to the banking industry of Pakistan.

Making recommendations is an effort to outline the basic tactics to cope with the
change. It involves suggesting new methods of doing business, modifying older ones,
searching for new lines of business or leaving the ones, which are no more attractive.
Based on the analysis and finding, recommendations are given below,

1. In order to survive and grow in intense competition, the Bank should pay more
and more attention to “Business Development”. Business development means
policies and programs to promote the proper marketing of different scheme and
services that has been already offered.

2. In most of the cases market research and analysis is not carried out. Projects
are launched with pre-conceived ideas, based on personal judgments and guess.
It is very essential for the Bank to carry out a detailed market research/analysis
and in such way can prepare best products like Maal- A-Maal scheme in the
market.

3. The rules and the regulations within the organization and the procedure must
be dynamic, flexible and subject to continuous monitoring and evaluation.

55
• The selection and recruitment of employees is not done on merit. The
recruitment process suffers from serious drawbacks. There is no concept of job
description. For recruiting competent employees, hiring process and job
description should be modified and improved. Should not totally relying on
internal recruitment.

• In any organization, human resource department is considered the key

department as it focuses on providing the skilled personnel for it. In BOK, I
observed that during selection, the prescribed rules are not followed in their true
spirit. I suggest that selection should be strictly on merit. Moreover, the
employees should be given job security so that they can optimistically
concentrate on their jobs.

1. Proper training programs and refresher courses should be designed for employees
to increase their performance and nurture them with new concepts of banking and
finance of the banking world.

• The BOK lacks female staff in their various branches. It is suggested that more
female staff should be recruited and open new female branches.

• Loan procedure should not be cumbersome and should be made easy.

Prolonged documentation should be avoided.

• BOK needs to expand technological advancement like, Tele banking and

internet banking facilities in order to serve customer more efficiently and
according to the international or modern banking techniques. In such way they
can capture a high market share, especially in Deposit

• The communication system between departments, branches circle offices

should be improve to make correct decision at correct time. New equipment
should be installed for this purpose i.e. Networking facilities between branches

56
 of BOK. In such way there will be no delay in transferring of message to one
and another and to customer also.

• The loan and advances departments should be made free from the political
influence. Because we observe the situation in the past. The political influence
created the stuck up loan problem. And it is very difficult to get back loans
from those people. So BOK should have the policy to investigate those
customers who get loans for a productive purpose or for any purpose, and after
the complete verification the loan should be sanction then the stuck up loan or
bad debt ratio can be decreased.

• The top management of the bank should make a committee for proper research
and development to identify the customer’s needs and design some new
scheme and strategies to overcome the stated weakness and use the
opportunities. BOK should take some steps to face the threats and they have to
properly plan for the growth of the bank and introduce some new scheme such
as “Apna karobar” scheme to encourage entrepreneurship development in the
province.

• BOK should have the policy to transfer their employees time to time from one
department to another department then they can have knowledge of more
departments and the job rotation factor can be solved. Then the employees feel
not bored and can work efficiently and effectively.

• The bank should be made independent of political influence, which will ensure
the efficiency of the bank to vigorously pursue the policies of the bank for the
development of the province

• To improve the lending position of the bank, BOK must reduce the mark-up
rates. As well as the procedure of loan securing should be made convenient

57
• The bank must increase its network of branches especially in rural areas to
mobilize their savings effectively.

• The management of the BOK must improve the upward communication so as

to have proper feedback and also to increase employee’s involvement in the
bank operations.

• One of the problems in BOK is that all the activities and functions are
centralized, which is adversely affecting the performance of the bank. There is
a need of decentralizing some of the functions due to which the decision
making process will be improved and unnecessary delay can easily be avoided.

• To avoid the problem of unavailability of information. Bank should provide

brochures etc and there should be a specific person who should available to
provided information to clients

• The bank should start online banking transitions so as to facilitate the

customer. Because the majority of the private banks have already started
offering this facility. This help BOK to offer 4 hours service and the concept of
banking hours will diminish and the general hesitancy of customers to walk
into a bank will be reduced.

MICRO FINANCE DEPARTMENT

PROBLEMS AND ISSUES

• Need for simplified legal procedure – e.g power given to bank managers for sealing of
businesses and arrest of borrower (making default a criminal offense).
• Credit Information Bureau for small loans to check for creditworthiness.
• Reduce charge document (i.e DP note, Finance Agreement etc) fees for small clients –
e.g. for all loan sizes DP Note amount stamps cost is the same i.e. Rs 100.
• Simplification of documentation procedure so that one charge document be taken as a
proof of claim against the party.

58
• Similarly simpler and less costly method of mortgaging property required in case of
small loans by reducing and/or removing mortgage registration fees.
• The problem of loaning to pardanashin women in rural areas who have ID cards
without pictures.
• Restriction on cash receipts from clients outside branch premises.
• Requirement of less costly funds for on lending. Micro finance operations are more
costly than the normal commercial banking operations. In order to reduce cost to the
borrower (lower markup rate) and increase profitability (higher spread), cheaper funds
in the form of credit line is required..

59
 REFERENCES
The Bank of Khyber, Branch Operation Manual 2013

2) The Bank of Khyber, Consumer Finance Manual 2012.

3) The Bank of Khyber Info Memo 1999

4) Stephen P. Robbins and Mary Coulter, Management, Ed. 5th, USA: Prentice Hall Inc,
1998, p329.
5) Annual Report 2011-2013 of BOK p 15

6) Personal Communication, interview, Mr.Zahid Sahibzada OG-I at Head Office

7) Personal Communication, interview, Mr.Naseer Khan, Public Relation Deptt at Head

office

8) Personnel Communication, Asad Ullah Khan Saddar Road Branch.

9) Internet (www.bok.com.pk)

10) Rose Peters. (1991). Commercial Bank Manaement.Boston: Donnelley & son

Company.

60