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A bank is an institution for the custody, loan or exchange of money for sanctioning credit, for transferring funds by domestic and foreign bills of exchange. It is a pipeline through which currency moves into and out of circulation. As it is clear from the definition of banking, the main activity or function of banking is borrowing and lending of money with a margin of gain. However, as far as the present day banking is concerned, there are a number of different banks, set up under specific different objectives, performing various functions. Primarily all banks gather temporarily idle money for the purpose of lending to other and investment gain in the form of return, profits and dividends etc. however, due to the verity of resources of money and the diversity in lending and investment operations, bank has been place in various categories, such as commercial, saving, merchant, mortgage, consumer, investment and central bank. In the developed societies, the banks do not have to make many efforts in mobilizing savings, as it has become a second habit with the people. The commercial banks are financing the short and long-term capital needs of the business. The loans and discounts of commercial banks include real state mortgages and long term loans, which extend to as long a period as ten years. These banks also administer estates, acts as insurance agents and underwriters, provide brokerage services and implement domestic as well as foreign economic policies of the government. Commercial banks in developing countries have to make vigorous efforts of resource mobilization at all levels. However, with the passage of time the commercial banking operations are under going remarkable qualitative change. In Pakistan for instance, banking facilities are being extended to the un-banked places. Planned efforts are being made to enhance the supply of bank advances to the new priority sectors in consonance with the present day socio-economic needs. A special scheme to induct commercial banks in the field of agricultural credit was introduced in December 1972. The scheme provides for short and medium term loans to farmers under a much-simplified procedure. State Bank's measures aimed at increasing the flow of credit to the small man in business and industry as well as to housing and non-traditional exports have also yielded positive results. The large risk to the commercial banks in the sphere of agricultural finance and small loans are being covered to a reasonable extent by the "Credit Guarantee Scheme". Mandatory targets for small loan credit to the agriculture sector and for housing have been prescribed and are being enforced. Corporate banking is also being reorganized and reactivated on lines that are more viable. Banks play a vital role in the economic development of a country. They accumulate the idle savings of the people and make them available for investment. They also create new demand deposits in the process of granting loans and purchasing investment securities. They facilitate trade both inside and outside the country by accepting and discounting of bills of exchange. Banks also increase the mobility of capital. They provide a variety of facilities for remitting a large amount of money from one place to another by the transfer of a small slip of a paper.
In a country like Pakistan, which is still in the initial stages of economic development, a well-organized banking system is the need of the day. There is acute shortage of capital in Pakistan. The banks have to play an important role in promoting capital formation, in controlling speculation in maintaining a balance between requirements and availability and in directing physical resources in to desired channels. In advanced countries of the world like America, Japan, Germany, the rate of capital formation ranges from 12% to 25% of their Gross National product. Where as, in Pakistan, the rate of saving has varied from 5% to 8% only. In order to accelerate the rate of economic development the Government has been acquiring foreign capital. The banks by launching a vigorous campaign in both the villages and cities can mobilize the idle savings and can increase the rate of investment. The country thus becomes independent of foreign capital, which
in fact has let us down on almost all the crucial happenings in the country. This deficiency of capital accumulation is due to so many reasons like, lower per capita income, disparity of wealth, un-organized banking system, ineffective fiscal measures etc. One reason of this capital deficiency is the non-adoption of modern marketing tools, such as market research, sales organization, sales training, sales management, advertising etc. for attracting deposits. Therefore, these are the new challenges for banks, which are to be achieved for the betterment of the economy.
As part of the academic requirement for completing Master of Business Administration, The students are required to under go for six weeks of internship with an organization. The internship is to serve the purpose of acquainting the students with the practice of knowledge of the discipline of organization's administration and system.
1.3 Scope of the Study
This study can be helpful for private banking sectors in Pakistan to offer innovative products and services to its customers. It can facilitate the leaders to adapt the effective leadership behavior that can facilitate them for achieving the personal as well as the organization's goals or objectives. This study can be useful for providing the bank a competitive edge in offering instant services to its clientele. This learning will also assist other economies and cultures related to that of Pakistan.
1.4 Limitation of the Study
Something is better than nothing. No matter how efficiently a study is conducted, it cannot be perfect in all respects. The study may not include broad explanations of facts and figures due to the nature of the study. The limitation is the restriction on mentioning every fact of the bank due to the problem of secrecy of the bank. In addition, the availability of required data was a problem as all the documents and files are kept strictly under lock and key due to their strictly confidential nature. Thirdly, the problem of short time period also makes the analysis restricted as one cannot properly understand and thus analyze all the operations of a bank just in a very short time of six weeks.
THE BANK OF PUNJAB
2 THE BANK OF PUNJAB (BOP)
This chapter starts with a history of BOP with its vision & mission. Discuss its organizational structure and operations with product & services. Later part consist human resource management of BOP.
2.1 Brief History
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 scheduled commercial bank with its network of 272 branches at all major business centers in country. The Bank provides all types of banking services such as Deposit in Local Currency, Client Deposit in Foreign Currency, Remittances, and Advances to Business, Trade, Industry and Agriculture. The Bank of Punjab has indeed entered a new era of science to the nation under experience and professional hands of its management. The Bank of Punjab plays a vital role in the national economy through mobilization of hitherto untapped local resources, promoting saving and providing funds for investments. Attractive rates of profit on all types of deposits, opening of Foreign Currency Accounts and handling of Foreign Exchange business such as Imports, Exports and Remittances, Financing, Trade and Industry for working capital requirements and money market operations are some facilities being provided by the Bank. The lending policy of Bank is not only cautions and constructive but also based on principles of prudent lending with maximum emphasis on security. As agriculture is considered as backbone of our economy the Bank of Punjab has introduced "Kissan Dost Agriculture Finance Scheme" to small farmers.
Lending under Islamic mode of finance, main vehicles are morabaha, ifarah musharika to encompass requirements of corporate, commercial and individual customers.
The bank of punjab vision is To be a customer focused bank with service excellence.
"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 programmer driven products & services in the Agriculture and Middle Tier Markets through a motivated team"
SEHEDULED BANK STATUS:-
Consequent on scheduling, in accordance with the State Bank of Pakistan prescribed regulations, the Bank had a diversify assets mix. It has started maintaining minimum cash reserve requirements with the State Bank of Pakistan since the date of scheduling, and is gradually building up statuary liquidity reserve in the form of approved Government Securities. The Year 1995 would, therefore, be a year of reorganizing the Bank's financial.
In addition to this Bank has started functioning as a full-fledged scheduled commercial bank, also dealing in those functions previously not allowed to it e.g. foreign trade and exchange transactions, money market operations and other commission earning business.
The bank would, with broad-based branch network, earn profits from the business segments thereby compensating the reduction in pre-scheduling profit earning assets.
In Bank of punjab, while certain initiatives are nearing completion, new initiatives have been launched thus depicting Bop continuous desire to improve the ways of doing business. The most prominent being the information technology initiative which is aimed to improve quality offerings, customer service, and controls to meet the future challenges.
2.6 Future Prospectus of the Organization
Bop is fully aware of the developments taking place in the Pakistan, as well as the changes occurring in the economic and social condition within the country. The bank is determined to meet new challenges by redefining its goals and strategy as well as by the adjustment of its operational policies.
The bank planning to institute major improvements, especially in customer service launch innovative products to ensure that the bank continues to play a dynamic role in the development of the country.
2.7 Branches of Bank of punjab
The Bank is fully aware that the branch network has direct implications on the services that it provides to its customers. We offer services through a network of 272 branches and 272 state of the art ATMs.
2.8 Organizational Structure
Bank of punjab is managed by board of directors who are commanded by chairman. Afterward, CEO and COO controlled bank operations through group heads and general mangers of different division. Bop organizational structure could be described by following chart.
Board of Directors
Chief Executive Officer
Chief Operating Officer
Chief Compliance Officer
Retail & Middle Market, North
Retail & Middle Market, South
Corporate & Investment Banking
Audit and Inspection
Technology & Operations
Chief Financial Officer
GM (HR & QA)
GM (Strategic Planning)
GM (Legal & Company Secretary)
GM (Risk Management)
GM (Information Technology)
Retail & Middle Market, Central
GM (Establishment & Administration)
2.9 Human Resource Department in Bop
The role of Human Resources department is to assist the business lines and to provide conditions where the employees can achieve their ultimate potential.
Recruitment is the process of attracting individuals in a sufficient numbers and appropriate qualifications for encouraging them for jobs with an organization. Applications with qualifications most related to job analysis. In Bop both internal and external recruitment are taking place with a passage of time although there are manifestly beneficial effects for bank from following a policy of filling vacancies within the bank as possible but there are inherent problems and limitations also.
2.9.2 Job Analysis
A job analysis is a systematic exploration of the activities within a job. It is a technical procedure used to define the duties, responsibilities, and accountabilities of a job. In Bop, job analysis method is using an individual's interview method, a team of job incumbents is selecting and extensively interviewed. The results are combined into a single job analysis. This method is effective for assessing jobs. The information amassed and written down from the job analysis process generates three outcomes job description, specifications and evaluation.
2.10 Human Resource Management in Bop
There are following main processes:
2.10.1 Human Resource Planning
Resource planning parallels the plans for the business as a whole. HRP means different things to different people; general agreement exists on its ultimate objective-namely the most effective use of scarce talent in the interests of the worker and the organization. HRP broadly act as an effort to anticipate future business and environmental demands on an organization and to provide qualified people to fulfill that business and satisfy those demands.
Job Analysis plays a crucial role in managing the personal/human resources function. Job analysis is defined what is meant by a job. The smallest element of activity that employees are asked to perform is called a task, word processing, filing, calculations and answering the telephone are all tasks. A group of logically connected activities are combined into a position. When different individuals occupy different positions but perform the same group of tasks, this is called a job. Job analysis is the systematic process of describing the purpose of a job along with its component activities.
Also included in this description are qualifications and requirements of the employees. Job analysis defines that the specific activities that have to be performed, the responsibilities and accountabilities of the employee, the expected results, mission or outcome of the activities performed.
18.104.22.168 Human Resource Forecasting
We define job analysis because job analysis is the foundation for forecasting the need for human resources as well as for plans for such activities as training, transfer or promotion. The purpose of Human Resource forecasting is to estimate the employees' requirements at some future time period. Education is increasing day by day in developing countries. Machines become old rapidly due to invention of new technology. Culture, habits and fashions are always changing after a period of time. To fulfill the necessities of their customer, it is necessary to adopt new techniques and hire new professionals that fulfill the demand of their customers. It is complete competitive area according to the production. Every worker wants their development according to technology and according to money. So, it is very important to forecast HR requirement. Some employees are retired, expansion of existence work, promotions and lay off are all the factors that assess the need of HR requirement.
22.214.171.124 Goal Setting and Strategic Planning
There are four broad types of internal moves. These moves correspond to promotions (up), demotions (down). Transfers and relocations (over) and layoffs, retirements and resignations (out).
1. Promotion of employees usually assumes greater responsibility and authority in Saturn for higher pay and benefits. Bop head of department check the condition of work and thoroughly observe the whole performance of the employee according to the nature of the work. If Head of department completely satisfy from the whole performance employee then he recommend that employee for promotion and forward his request for promotion to HR department. HR department gives the promotion form to the employee and employee fills this form and return to HR department after approval of HR department. HR department check this employee document file (discipline, punctually, personality) and attach whole record with the promotion form along with SEVP HR remarks and forward to the VP for approval. When process has been completed then promotion is to be given.
2. In demotion opposite process is carried out in the same way.
3. Transfers and relocations are carried out on the twin basis.
4. Layoffs, Retirement and Resignation: Under probation period employees can give the 24 hours resign but permanent employees give the one month notice and after completion of one month clearance process has been carried out. Employee gives the resign to the head of department. Head of department approve this resignation and forward to HR department. SEVP HR approves this resignation and files it till completion of one month. All dues are paid on every Thursday without any delay. If company layoff or dismiss to any employee the company pay one salary in advance to the permanent employee and employee leave the gate in 24 hours. After completion of 15 years in BOP employee can take the retirement with full benefits.
126.96.36.199 Program Implementation and Evaluation
Bop implements different employee oriented programs after evaluation through following ways:
A) Performance Appraisal
HR department with the help of Head of department check the performance, discipline, health, personality, corporation and honestly of employees and provide the necessary suggestion to the head of department and their employees.
B) Career Path Planning
If the organization as well as the individual do not have a thorough understanding of the requirement of available job and how jobs at succeeding levels relate to one another. HR department provides effective career path planning.
2.10.2 Employee Recruitment
Recruitment begins with a clear statement of objectives based on the types of knowledge, skills, abilities and other characteristics that an organization needs. Recruitment is a form of business competition. Just as corporation compete to develop, manufacture and market the best product or service, so they must also compete to identify, attract and hire the most qualified people. Banks focuses specifically on the process of planning, managing and evaluating recruitment efforts.
A) Internal Resources
Candidates are those people who want the jobs. Promotions, Transfer, Lay off, death and expansion factors came into existence in the companies. Hundreds of people are performed their services in the company. When vacancies become vacant or new vacancies are generated due to expansion and modification of the company then these information reach to those candidates who desire the job or fulfill the necessities of new/old vacancies. These candidates should be their close relatives, friends and some other peoples which have some kind of links with these people. Some employees have their name in the employee market due to their better performance. Management tries to hire those employees which perform their services in other banks at better benefits. Professionals have close link in every company and change their job at the better benefits and Management also desire to appoint the experience persons.
B) External Resources
Four most popular external recruitments are university relation, executive search firms, employment agencies, recruitment advertising. Some companies and institutes have information about the vacancies and provide labor/professional to the desire companies. On the basis of these information candidates apply for the jobs and face the complete selection process.
2.10.3 Employment Selection, Orientation and Placement Process
Recruitment begins by specifying Human Resource requirement (numbers, skills mix, levels, time frame) which is the typical result of job analysis and HR planning activities. It is necessary to specify the work to be done and the personal characteristics necessary to do the work (knowledge, skills, abilities and other characteristics) before one can specify the numbers and types of people needed to do the work. The step following recruitment is initial screening and it was done only on the basis of physical characteristics. But physical characteristics alone do not provide clues about a persons potential for management for any kind of work for that matter. What is needed, of course are samples of behavior, either through tests and personal interviews or through the testimony of others about a candidate. After selection process, the next step is the introduction to the Bank policies and benefits is an orientation may take up several hours or several weeks; it may be formal, informal or some combination of the two. Placement occurs after orientation. Placement is the assignment of individuals to jobs. In general, individuals may be selected initially on the basis of their potential to succeed in general management. After they have been observed and assessed during an intensive management training program, however the organization is in a much better position to assign them to specific jobs within broader job families, such as marketing, production or sales. The technical expertise and the resources necessary to implement are required. Optimal Placement programs (select, orient, and then place) are found mostly in the organization. Once new employees are selected, oriented and placed, they can be trained to achieve a competent level of job performance.
Finally, performance appraisal, one component of a performance management system, provides feed back to employees regarding their past and present job performance proficiency as well as a basis for improving performance in the future.
2.10.4 Training and Development
Training and development consist of planned progress designed to improve performance at the individual group and or organizational levels. Improved performance in tern implies that there have been measurable changes in knowledge, skills, attitudes and social needs. Training is to improve skills related to job and development is to improve employee ability and is long term oriented.
188.8.131.52 Training Need Assessment
The assessment serves as a foundation for the entire training effort. Both training and development depend on inputs from assessment. The purpose of assessment is to define what is the employee should learn in relation to desire job behaviors. There are three levels of analysis for determining the needs that training can fulfill. Organization analysis focuses on identifying where with in the organization training is needed. Operations analysis attempts to identify the content of training. What an employee must do in order to perform competently. Analysis determines how well each employee is performing the tasks that make up his or her job. Finally, there is individual analysis. At this level, training needs may be defined in terms of the following general ideas; the difference between desired performance and actual performance is the individual's training need. Performance standards identified in the operations analyses. A gap between actual and desired performance may be filled by training. At the organizational level, senior managers who set the organization's goals should analyze needs. At the operations level, the managers (or Team) specify how the organization's goals are going to be achieved should analyze needs. At the individual level, the Managers and workers who do the work to achieve those goals should analyze needs.
184.108.40.206 Training and Development Program for Employees
An efficient staff ensures the effective delivery of services. Hence, it is important for the development of employees to provide frequent training programs. These programs ensure whether or not the employees are meeting their job specifications. The basic function of such programs is:
To lay stress on provision of efficient service.
To refresh employees about their duties.
To introduce them to new concepts.
To introduce a new service to be launched shortly.
To be able to adapt with the changing environment.
Improve service quality.
Bop stands out owing to its high quality service. It has laid special attention on the training of its employees to enrich their service quality to an even higher standard. Another vital purpose for such programs is for the employees to keep abreast with the changing environment. Let us briefly look at the salient of these training courses.
Types of Programs
Most of the training seminars/courses that are held at Bop are concerned in marketing, meaning thereby for those staff members who are working in the sales & marketing department. These are called "Management Training Programs". Very few such courses are held for those who do not deal directly with the clients.
A) Frequency of the Program
Such courses are not held very frequently. However, their frequency is once yearly on the average.
B) Duration of the Program
The courses are held for not more than 2-3 days. However, in these couple of days the attendants are given seminars and are in other activities for throughout the day.
C) Selection Criteria
The selection of candidates is through a well-structured system. The branch manager of each branch forwards the names of a number of staff members whom in his best of judgment are most eligible to attend these programs. These names are sent to the Head Office in Karachi for final approval.
D) Venue of the Program
Programs of such nature are usually held in Karachi, Lahore or Islamabad/Rawalpindi where selected members from all branches gather.
E) Evaluation Methodology
Such courses/seminars are of no benefit until things are not implemented practically during work process. To ensure whether an attendant has gained any good out of such a program there are two methods:
An after course feedback is taken from the members, where each member is asked what he/she has learnt/gained out of the course.
Another way is that members are told to implement what they have learnt on their jobs. They are required to periodically report to the program instructor or their immediate senior & notify them whether or not they are applying their new skills or knowledge on the job. In this case, the immediate senior is the only person who is able to ensure if the person has actually benefited or not.
2.10.5 Performance Management (Setting Performance Standards and Expectations)
Bop has formed two groups, which are Investigation Group (IG) and Financial Control. These are responsible for measuring performance of employees and branches. Performance standards translate job requirements into levels of acceptable or unacceptable employee behaviors. Performance standards specify how well work is to be done. Such standards may be quantitative (e.g. time, errors) or qualitative (e.g. quality or work, ability to analyze, say market research data or a machine malfunction). More precisely, performance standards define as ways of doing the work in specified time, quality of work that is performed. For example when a task is given to the manager then the procedures or Techniques that manager are used is known as performance standards. The concluded result is the expectations. It is another thing that result fulfills the necessities of expectations or not. When a job is given to the manager then some standards are supposed about their performance. This is known as performance standard of those mangers. In the same way, result is also supposed this is known as expectation. The process which are carried out during his performance or doing the work. The assessment of this performance is known as performance appraisal.
2.10.6 Employees Compensation and Benefits
An organizational reward system includes anything an employee values and desires that an employer contributes. To cover its employee cost and other expenses, a bank must earn sufficient revenues through the sales of its products or services. More specifically, the reward system includes both financial and non financial rewards. Financial rewards include direct payment (e.g. net payment) plus indirect payments in the form of employee benefits. Non financial rewards include everything in a work environment that enhances a sense of self respect and esteem by others (e.g. work environments are physically, socially and mentally healthy opportunity for training and personal development and effective supervision. Although money is obviously a powerful tool to capture the minds and hearts of employee and to maximize their productivity, yet the impact of non financial rewards should not be underestimated. Compensations are the benefits that government approves in their legislation. It is necessary for the company to pay the employees. For example, Social Security, Bonus, double overtime, heath injection, Cafeteria, Cleanliness, Soft/cool water vacations and defined working hours. The benefits are those which company provides their customer to enhance production and create attraction from the employee side and for the satisfaction of their customers.
Types of Compensation and Benefits
Government defines some rules in their legislation, it is necessary for every company to obey these rules and regulations.
A) Minimum wages
Government define rupees- 8000/- for UN skilled labor. It is necessary for every company to pay minimum wages rupees-8000.
B) Social Security
All amounts are 7 percent of the salary paid by the company. This facility is also available up to the wages rupees 7000/-.
When Bank earns the profit in the financial year, 5% of his profits pay to the
Overall every Bank discourages the factor of overtime but in case of extreme emergency, it is necessary for the company to pay the employee at the double ratio of their salary.
It is necessary for the company to provide the free injection of hepatitis to all employees. These are all facilities which are approved by the government and it is necessary for all companies to obey them.
F) Other Benefits
Banks to successfully run their production provide the many facilities like cash reward, fringe benefits and indirect benefits.
Bank at the end of financial year assesses the performance and gives the cash award on the better performance. Banks provide the pick and drop facilities to their employees, accommodation facilities are provided to those employees which belong to for flung areas, neat and clean environment during their performance, Soft and cool drinking water is provided. Cafeteria facility is provided on the minimum rate in contrast to the open market. Visit facility to the foreign country is provided to the better performer. Employees' involvement in decision making; effective supervision and training opportunities are included in the non financial benefits.
2.7 Responsibilities of HR Management
Boards of Directors are held responsible by the stock holders for the management of the bank. Because of the scope of responsibility and detail of management involved, they usually delegated some of the responsibility. Generally, following the stockholders meeting and their election, the Directors:
Elect one of their members as Chairman of the Board and delegate to him the responsibility of presiding at all meetings.
Elect one of their members as President and Chief Executive Officer of the bank
Elect corporate records of the bank.
Approve the compensation to be paid to the various officers and employees of the bank.
2.8 Strategies of HR Management
The management, anticipation the prior year's provisioning in line with the ongoing banking sector reforms, has already initiated major re-engineering and re-organization of the Bank. The Bank had embarked upon a two-prolonged strategy of adopting a nationalized program to bring down cost, introduce innovative products and offers specialized financial solutions and services to customers. Measures, which have already been implemented, are set out below:
With the objective of achieving decentralization and cutting down expenses, the decision-making has been reduced from four to two tires, 68 controlling offices, comprising of 4 provincial, 18 circles and 46 zonal offices have been consolidated into 16 regional offices.
With a view to improving efficiency and right sizing the BOP network, 66 branches have been closed or merged.
The corporate units have been re-structured by reducing the number of divisions and redefine their functional responsibilities, so as to provide valuable support to field operations.
Treasury operation has been re-organized on a modern technology platform.
A centralized Special Asset Management Division has been established for expeditious recover and settlement of non- performing loans.
Expensive deposits have been reduced, improving the interest margin.
The implementation of the aforementioned steps has been successful in cutting down costs and improving efficiencies, resulting in enhanced operational profits.
2.9 Job Advertisement
The job is advertised through both electronic and print media. But usually, print media that are newspapers are preferred. In newspapers, the job is advertised without mentioning the name of the bank rather P.O Box is used to cancel bank's identity. This is done for avoiding any political or any other pressure, influence or approach for selecting any particular individual or group of people.
2.10 Classification of Staff
The permanent staff of the Bank shall be classified under the following categories:
2.10.1 Category I
Senior Executive Vice President/Executive Vice President: (Executive grade)
Senior Vice President: (senior grade-I)
Vice President: (senior grade-II)
Assistant Vice President (senior grade-III)
2.10.2 Category II
Senior Casher/Stenographer/Tele-printer/Key punch operator
Assistant, typist, casher, go down Keeper, machine and telephone operator, construction supervisor, tracer and other techniques.
Bank guard, watch keeper, messenger, electrician, plumber, carpenter, gardener and such other staff
The board of directors shall have the power to determine the classification of any new posts that may be created, if they do not fall under any of the classifications in category I. In the case of other Categories the classification of such posts will be determined by the president.
2.11 Human Resource Development in Bop
The Bank now plans to focus on further strategic objectives, as set out below:
Training and Development
Employees services, Safety, Health & Welfare
System of Communication
Negotiating with Union; and
Terms & Conditions of Employment, etc. in Bop
2.11.1 Training and Development of Employee
For the training and development of newly recruited as well as existing employees, Bank of punjab Limited has five training academies, two in Lahore, two in Karachi, and one in Islamabad. At these training academies, lectures, seminars etc, are conducted throughout the year on different sectors and field operations, like general banking, foreign exchange, letter of credits, advances etc. New techniques and methods are used to keep the employees well-informed and abreast of the repaid and new changes due to sheer competition and globalization. There is a monthly course on computer orientation to equip employees for cyber competition and war. Both in house as well as mobile courses are held and conducted for the training and development of the employees. In addition to above, trainers' training is arranged and held at Institute of banker's. For these outsiders, experts from every field and renowned professors, doctors etc. are invited to deliver and share their practical experience to polish, groom latent stills of the officials of the Bank.
2.11.2 Employees Safety, Health & Welfare
As Bop is not an industrial concern, so there is as such no extra-ordinary need for safety and precautionary measures which are taken by almost all industrial concern and factories which working on machines and big plants etc. As regards Health and Welfare of workers, job security is there. Medical allowances and compensation for accidental loses are granted. At Officer's level: 2 basic salaries or medicine; Basic salary is or consultancy, hospitalization and laboratory charges etc lower level: Medicine as a part of salary and consultancy expenditure are given. All these facilities are given on re-imbursement basis that is to get the money after presenting the bills.
Besides this, following allowances are given for welfare of employees
Recognized Provident Fund
Post Job Allowances like Pension, Gratuity, Life time Medial Facility even at abroad
Group Insurance Scheme etc.
In addition to above, the following types of leaves may be granted to an employee to facilitate him when they are submitted to competent authority and through proper channel.
On Full Pay
On Half Pay
Leave not due
Leave Preparatory To Retirement
For the social welfare of employees loans on very easy installments and mark-ups are given for house, conveyance etc. too. For example, for house constructions 80 B.S. is given out of which 40 are free and remaining are on 7% interest, which is very low as compared to others.
2.11.3 Salary Administration
The Bank distributes salary on monthly basis to its employees. The amount of salary varies according to the scale or grade of an employee. In addition to Basic salary, Increments, fringe benefits, cash prices are given and facility to visit abroad in special cases is awarded. Besides this, following allowances (other than traveling allowances) are given to employees basing upon their grades and job nature.
Special Duty Allowance
House Rent Allowance
Extra payment Allowance/Ceiling
Extra payment for Extra Work
Conveyance Allowance/Transportation Facility
Evening Banking Allowance
Unattractive Area Allowance
Following is the list of various forms of Traveling Allowances
Daily Allowance, day, fare, mileage etc.
Traveling Allowance Rates for employees in Category-I
Traveling Allowance Rates for employees in Category-II
Traveling Allowance on first Appointment
Travel by shortest route
Journey/on con official duty
Traveling expenses higher than entitlement
Certificate to accompany traveling bill
Transfer on request
2.11.4 Industrial Relations
As Bop is a commercial bank, so it has strong industrial relationship with its fellow beings. The Bank's fundamental strengths lie in its strong lending capability, as well as providing a variety of financial services, which has allowed Bop to diversify and enhance its deposit base and hence good industrial relationship.
The bank has one of the most extensive branch networks with deep penetration in both urban as well as rural Pakistan. This acts as a major competitive advantage over its more urban private sector competitors and foreign banks. The extensive branch network has allowed these banks to tap into a lucrative base of low cost and stable deposits.
There are number of key and famous firms to whom Bop has financed and lend loans. Bop is one of the largest semi government sector banks in Pakistan in terms of assets, deposits and advances. Because of this, the Bank is in a position not to develop strong and healthy relationship but also to maintain sustaining them.
2.11.5 System of Communication
In Bop, upward and downward or ascending and descending or vertical communication occurs for internal communication. Top level management give instruction to medium and lower level management by face-to-face meetings. Besides this, faxes, phones, emails etc that is electronic media for circulars regarding instruction are also used. The management or organizational structure is split into different heads/divisions. These divisions are in a continuous contact with each other to inform each other regarding any issue, as they are dependant heavily on each other. Apart from electronic media, ordinary mails through TCS and other swift courier's services are sent regarding different issues and matters. For communication externally, a part from direct face meeting, both print as well as electronic media is used. ATM's and credit cards are gaining Popularity in now a day fast and dynamic market and business situation.
2.11.6 Influence & Role of Union
No one can deny the positive role of union. Union of any organization really works for the social, economic welfare of the workers of any firm or organization. It can really fights for the employees and convince the management to adopt such system, which is necessary for the safety of guarding and protective shield against all malpractices of owners or management. The union in Bop is established and is guided by Labor Act. Its role and influence varies from time to time. But Allied Bank's union is strong enough to play its role as it comprises of the employees of the Bank and the Bank is owned by the employees too. At the time, when Government was ready to sell the shares of Bop to general public, the Allied employees union was quite active at that time and they purchased 51% shares of the Bank. The union was quite unanimous at the juncture. It was the real representative of employees of the Bank. The bank's president, at that time, promoted and encouraged union activities to convince government to sell the Bank's share to its employees. Unfortunately, with the passage of time, the union splited into segments due to different policies and interests and is no more active and efficient as it was in the past.
2.11.7 Terms & Conditions of Employment
Bop is governed by Service (Staff) Rules, 1981, so it has certain and specified terms and conditions for its employees which must to be fulfilled by them, so
Every employee shall confirm to and abide by these rules and shall observe, comply with and obey all orders and directions which may from time to time be given by any person or persons under whose superintendence or control he may, for the time being, be placed.
Every employee shall sever the bank honestly and faithfully
And shall maintain strict secrecy regarding the Bank's affairs and the affairs of its constituents.
He shall use his utmost endeavors to promote the interest of the Bank and shall show courtesy and attention in all transactions which officers of Government, the Bank's constituents and the Public.
No employee shall be member of any political party, take part in, subscribe in aid of, or assist in any way, any political movement in Pakistan or relating to the affairs of Pakistan.
No one shall express views detrimental to the ideology of Pakistan
No employee shall leave his station overnight, shall not absent from Bank without prior permission from competent authority.
No one shall make any personal representation direct to the Board of Director's/Government/Government Agency.
No employees shall bring or attempt to bring political or other outside pressure/influence directly or indirectly to beet on the authority.
No employee shall accept any gift from a constituent or a subordinate employee of the Bank.
Except with the permission from competent, no employee incurs an unsecured debt to an extent exceeding his emoluments of three months.
No speculation in stocks, shares, giving of guarantee without permission from competent authority.
No employee shall marry a foreigner without permission of president except Muslim citizen of India.
No one shall open and maintain an account with ay other bank is banker without previous permission from competent authority.
An employee guilty of infringing any of the provision of rules mentioned will render himself liable to disciplinary action including dismissal from service.
Without Prejudice to the other provisions contained these rules where an employee who commits breach of the regulations/other orders issued to him in connection with his official work or who displays negligence, inefficiency, or indolence or who knowing does anything detrimental to the interest of the Bank or is guilty of any other act of misconduct or in subordination the competent authority may impose on him one or more of the following penalties:
Postponement or stoppage of increment or promotion
Forfeiture of pay for any period of unauthorized absence from duty
Recovery from pay of the whole or part of any pecuniary loss caused to
the bank by the employee
Degradation to a lower stage of pay in his grade to a lower grade
Compulsory retirement from service
Removal from service which does not disqualify for future
Employment or calls upon an employee to resign from service and dismissal which will involve permanent disqualification for future employment in the Bank.
2.12 SWOT ANALYSIS
This chapter presents the SWOT analysis of BOP where reader will find strength, weaknesses, opportunities and threats faced by Bop in current area.
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats. SWOT analysis is careful evaluation of an organization's internal strengths and weakness as well as its environment opportunities and threats.
Exploiting an organizations opportunities and strength
Neutralizing it threats
Avoiding or correcting its weakness
SWOT analysis is one of the most important steps in formulating strategy using the organization mission as a context; managers assess internal strengths distinctive competencies and weakness and external opportunities and threats. The goal is to then develop good strategies and exploit opportunities and strengths neutralize threats and avoid weaknesses. Here I have applied this very useful technique to identify the strengths, weaknesses, opportunities and threats of bop. opportunities and threats of Bank of Punjab are as follows.
2.12.1 Strengths of Bank of Punjab
Bank of Punjab has certain strengths which are different from the other Banks.
High Motivation of Employees
Strength is the high motivation of employees to their work because they know that what so ever they do, it will be in their own benefit. They know that the profit, which they will earn, will be distributed among all the employees. So they work with high motivation and concentration.
Good salary package
Salaries are very reasonable, so the employees are not financially disturbed and they devote their selves fully to their work.
Huge network of branches
They have wide area network in all over the Pakistan, so that they cover a lot of portion of cash transactions and make customer satisfied.
Customer Oriented Bank
The Bank has very strict rules and regulations about the customer's complaints. The customers are treated as very special persons in the Bank.
Strong Financial Position
As we can see in the financial statements of the bank, the financial position of the organization is very sound and its profitability is increasing.
Highly Qualified Employees
The bank has highly qualified and skilled workforce and it has succeeded to attract the best banking professionals from across the country due to its growing pace and sound reputation.
The management of the bank is very much concerned with the development and improvement of the working environment. The bank has state of the art and purpose built branches where all the modern technologies are provided to get the efficiency of the workforce and the customer satisfaction.
Govt. Support and Encouragement
The of Punjab basically semi government and the type of their investment in Pakistan is a government investment, the govt. is fully supporting the bank management, to get the economic prosperity.
Fastest Growing Financial Institution
Due to its successful business policies and the strong financial position the bank has achieved the reputation of fastest growing financial institution in the country. It has greatly increased the customer's confidence in the bank.
Huge Expansion Plan
Due to its strong financial position the bank has undergone a huge expansion plan to compete with the existing banks all over the country and with the passage of time the branch network is expanding at a very good pace.
Young and Energetic Workforce
As the bank is a newer one in the country, the bank has an advantage over its competitors because the majority of its workforce is young and not very much over aged. Thus the bank is getting maximum output from its young and energetic workforce by spending comparatively less on their remunerations.
2.12.2 Weaknesses of Bank of Punjab
Lack of Entertainment Facilities
No entertainment facilities are available in the Bank when customer goes to the Bank and wait for a longer time. These facilities can be the newspaper, magazines, etc.
Advertisement Is Not So Attractive
Advertisement of bop is not such goods as of other banks.
Outlets are Unattractive
Outlook of the some Bop branches is not attractive to the people.
All Branches Are Not Fully Centralized
As compare to other private commercial banks the limited branches of Bop are computerized and centralized.
As the majority of the workforce consists of young professional, they lack in their experience. And sometimes lack of experience becomes a hurdle while serving to the customers. It is the point where they feel difficulty while competing the other bank, which have a very experienced workforce.
Over Work Load On Employees
It was observed in the branch that as compared to huge business the bank is dealing in, the no. of employees is lesser and thus there is an increased workload on the employees. Due to this the efficiency of the employees is reduced.
Employees Are Not Very Much Motivated
As discussed before, the workload is high and the employees, especially the credit department, have to do late sittings to complete their tasks. On the other hand the bank has revised its salary increments policy to decrease the increment rate, as a result a decreased motivation level of employees is observed.
Lack Of Self Marketing Department
In today's fast growing world, media is an important source for marketing your products. Bop lacks a self marketing department for advertising its new product benefits to customers on a large scale.
2.12.3 Opportunities for Bank of Punjab
Financial Sector Reforms
The policies of the new government to uplift the economy and pursue financial sector reforms are expected to yield positive results in the banking industry of the country. The Bop is very well praised to avail promising opportunities.
Attraction for Small Borrowers
As a result of the different steps taken by the Government regarding the betterment of the economy, small borrowers are attracted to get the financing and start small businesses. So, the Bop has an opportunity to attract the customers by giving them attractive schemes.
Remittances From Abroad
They have wide area network in all over the Pakistan, if Bop can make it possible the fast delivery of fund from abroad through online banking, it can cover the major market of Pakistan which still is capturing by 'Hundi'.
Rapidly Growing Economy
At present the Pakistan's Economy is growing on a very fast pace. The rapid growth of economy has resulted in the increase in the growth rate of all economic sectors especially in the banking sector which is growing at a fastest speed than ever and in future the growth is expected to increase even a higher rate.
Increased Interest Rates
The SBP has revised the interest policy and the interest rates have been linked with the KIBOR rates. Due to which the banks interest rate has been substantially increased which will greatly increase the banks' profitability.
Mega Projects Financing
As the increase in overall business activity in the country, the investors are launching various types of Mega Projects especially in housing and textile the bank has a great opportunity to finance these projects at very profitable term.
Huge Demand for Consumer Financing
The increase in per capita income and overall economy has resulted into a great demand for the consumer financing especially for home finance and car financing and it is said that this trend will increase more in future. The bank can earn a lot by focusing on its consumer financing sections.
Spending Practices of Mass
As the Pakistani's are known for their extravagant practices, and to fulfill their funds requirements they don't hesitate from getting loans from banks. Thus there is a very good scope for the bank to run successful business in such circumstances.
2.12.4 Threats for Bank of Punjab
First threat is that of political influence.Boards of directors are of government. So that they can influence on the decisions of the Bop.
The Continuous Downfall in the Economy
The biggest threat in the banking sector is the continuous downfall of the country economy since the last few years. If this downfall remains for more few years then it may be the great hindrance in achieving the Bank's objectives.
Uncertainty of Economy
Although the economy is growing at a good pace, but there are many factors which results in the uncertain position of the economy. Such as political uncertainty, increase in poverty etc. As a result there are permanent threats of future risks and losses for the bank.
High Rate of Inflation
The inflation rate of the country has gone above the 14%. This can result into an unfavorable situation for the bank.
Trend of Mergers
There is a trend of mergers among the banks to become prominent in the market and to get the maximum market share. This trend can result into the union of some leading banks which can give tough time to the bank and it will become difficult for the bank to compete with them.
Privatization of Banks
Due to its privatization policy, the govt. is privatizing the state owned banks. The change in management may result in the increase in the efficiency and productivity of the banks. Thus it can become a threat for the bank.
Risk of Defaults
As discussed earlier that there is a trend of launching mega projects in the country. And every one is involved in this trend without taking any measure for the successfulness of these projects. This can result into the failure of this project which can make it difficult for the banks to recover their funds from these defaulters.
.2.13 Competitive Strategy
Bop has this strategy that it always gives priority to its customers , as compared to other banks it has made it its motive that its foremost priority are its customers service . According to their strategy it is the demand and need of customers which should be given priority and importance, so that if they will get what they really want then definitely they will be satisfied and prefer that bank over others. Another important thing which differentiates them is that, Bop believes that making your existing customers loyal is very important, because it is really the existence of your already existing customers that attracts new people to come and try, like a famous saying that money attracts money so in the same way loyal customers attract new customers. To achieve this motive, Bop has made it its policy to give its customers full time and attention, to introduce them with new policies, through their employees, help line number, pamphlets, magazines, and it is made the duty of its employees to deal with customers in such a manner that they feel very safe, that they have got all the safety of their wealth, full attention and interest by the bankers.
2.15 Okara Branch
Bank of punjab has been established in M.A Jinnah road. It is central area of okara city where other banks are located. It is one the most profitable bank in okara city. It was incorporated on 16th September 2002.The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962, with the registered office at gulbrg11 Lahore. The financial position of bank is to shares of govt in a bank. Brief introduction of Jhelum branch is as follows;
Branch Name: Bank of Punjab M.a Jinnah road okara.
Branch Code 0018
Branch Manager: Mr.Hamid ali khan
Manager Operations: Mr. Muhammad Faisal
(CLEARING)Contact Number: 0442-
2.14.1 Branch Organization Structure
HUB BRANCH MANAGER
LEARNING AS A STUDENT INTERNSHIP
3 INTERNSHIP EXPERIENCE
This chapter presents my eight weeks experience tenor in Bop where I mostly spend my time in Operations to explore my knowledge and understanding and get the chance to have a look on implementation of bookish knowledge in practically.
I have done internship at the Bank of Punjab Main Branch okara. I have worked in the HR departments of the bank. My internship was for the short span of time i.e. two months. The tasks performed in the bank are as under:
Names of Departments Where I Got Training
During my stay at Bank of Punab main branch I worked in the following departments:
Their details are as follows:
3.1 INTERNSHIP EXPERIENCE
3.1.1 Clearing department
It is one of the most important departments of BOP and any of the Bank that not only pays but also collects cheques from the customers .In Bop main branch this department is run by Mr Asif,who performs her duties with more concentration and devotion as a minor mistake can cause a big loss to the bank .All the work is performed through a "clearing house"
220.127.116.11 Clearing House
A place where all the reprensentives of all banks of a city get together to settle the arrangements of cheque receipts and payments. The advantages of clearing house are manifold. It prevents the cost and waste involved in collection each and every cheque and claim which a banker holds against another across the counter with all the danger of loss in the transit incumbent upon it.
But now the task is performed by NIFT. (National Institutional Facilitation Technologies). NIFT is a joint venture between a consortium of six major banks and private sector. It is responsible for the establishment and management of automated clearinghouse facilities in Pakistan. NIFT is proactively involved in the modernization of payment systems in Pakistan. NIFT offers three types of services namely;
Same Day Clearing
There are two types of clearing i.e.
Many types of clearing stamps are used in the clearing department. Each stamp has its own significance. Mostly four clearing stamps are used. These are:
The Clearing Stamp
Stamp For Special Crossing
Stamp For Payee's Account Credited
Stamp For Endorsement
NIFT delivers Local Inward Cheques early in the morning usually within half an hour after opening of bank. After receiving the mail, the next step is to post them and debit the customer's account. These are actually the cheques of the same cheque book that was issued by our branch. After it the clearing process starts.
The process in which reserves or funds are transferred among banks to settle the accounts of cheques written on one account and deposited into another is called clearing process. Cheque clearing is the heart and sole of daily banking activity and the final step in the use of chequeable deposits as the medium of exchange for conducting transactions in the economy.
NIFT also delivers local as well as intercity cheques for clearing process. The above mentioned same process is repeated after receiving NIFT inward intercity cheques. After posting these cheques, Signature Verified stamp is used to verify the customer's signature.
18.104.22.168 Inward Return
If all formal requirement of the instruments(cheques, demand draft etc.) are fulfilled then bank debit the customer account in case of inward clearing but if anything is missing or not according to the prescribed procedures, the bank may return the instrument. This is known as Inward Return. There are number of reason for inward return e.g.
Post Dated Cheque
Amount In Words And In Figure Differs
Incorrect Date of Clearing Stamp etc.
22.214.171.124 Inward Bills for Collection
IBC means Inward Bills for Collection. IBC comes into existence due to OBC means