INTERNSHIP REPORTON THE BANK OF KHYBER (Main Branch Peshawar) By NAJEEB KHAN Class#39 MPA (HRM) INSTITUTE OF MANAGEMENT STUDIES UNIVERSITY OF PESHAWAR-PAKISTAN SESSION: 2013-15 INTERNSHIP REPORT ON THE BANK OF KHYBER (Main Branch Peshawar) By NAJEEB KHAN Class#39 MPA (HRM) An internship report submitted to the IMS, University of Peshawar in practical and fulfillment of the requirement for the degree of MASTER IN PUBLIC ADMINISTRATION (HRM) Approved by: Advisor sign _____________________________________ Advisor Name: Sir Zia Obaid Department: IMS university of Peshawar INSTITUTE OF MANAGEMENT STUDIES UNIVERSITY OF PESHAWAR-PAKISTAN SESSION: 2013-15 DEDICATION Every challenging work needs self efforts as well as guidance Of elders especially those who were very close to our heart. My humble effort I dedicated to my Sweet and Loving Father & Mother Whose affection, love, encouragement and prays of day and night make me able to get such success and honor. Along with all hard working and respected Teachers. Najeeb Khan ACKNOWLEDGEMENT . Brothers and my Friends because my success is really the result of their devoted prayers. the kind and merciful and the Holy Prophet Hazrat Muhammad Peace Be upon Him who is forever a Lantern of guidance and knowledge for humanity as a whole. I feel pride in expressing my deepest sense of gratitude to my honorable advisor Dr. NAJEEB KHAN (MPA HRM) PREFACE . This internship report was hard to be accomplished without her cooperation. Last of all no acknowledgement could never express my obligation to my loving Parents. Her consistent advice. Main Branch Peshawar and all other members of the staff. who is the source of initiation of this internship. I can never compensate their unlimited love and kindness. I offer my sincere thanks to Mushtaq Ahmad. Zia Obaid. VP / Chief Manager of The Bank of Khyber. personal interest and dynamic supervision enabled me to complete the present report. valuable suggestion. encouraging behavior.Every praise is to Almighty Allah. The corporate banking. In 1994 it acquired the status of a scheduled bank that allowed at opening branches outside KPK become a member of the clearing house. I felt that the knowledge that I have gained through this experience is an excellent way of teaching the students to think analytically for solution of the problem and day-today life. I have produced the knowledge about the working of the Bank of Khyber. This branch has excellent working condition. and engaged in trade finance activities directly. The Bank of Khyber (BOK) established in 1991. The second purpose is to know complete picture and general description of the Bank of Khyber. . Today’s banking holds many challenges as well as opportunities for young enthusiastic executives. corporate and professional environment. The bank itself is a huge organization comprising of numerous departments. The purpose on undertaking this internship is basically to aid the students in their MPA program. The Bank of Khyber (Main Branch) is one of the outstanding and profitable branch of the Bank of Khyber. its objectives included promotion of saving and investment in the KPK. which enable me to put down my observation in the shape of internship report. It is impossible to study each one in detail and include everything in the report. and to prepare / furnish them with some experience of the practical work.Banking has always been the main field of interest for most of the students of Business Administration. the changes of public behavior towards saving schemes and extensive use of paper money have made banks most important institutions. Which will hopefully serve as guideline for all those who are interested in a job of banking sector. . Zia Obaid under his supervision and full support in the completion of this report. In the last but not least my high gratitude is to my Advisor Dr.I would like to express my gratitude to the bank management who guided me about the banking structure and procedure of the Bank of Khyber. Arsalan Khan. My special thanks to Dr. for his guidance and co-operation that provided me all the requisite information and data needed for this report. engage in various Trade finance activities and become a member of the clearing house.e. Chapter Two describes the existing situation of the organization under review. It has the following departments. The main purpose of this study is to so I got the opportunity in BOK. Brief introduction of the branch. Nature of the organization. Business volume. KPK-Pakistan. This chapter has further divided into six headings. Deposit dept. A distinguished factor of BOK is that not only is it a scheduled commercial bank but it also plays the role of a development agent. Advances dept. especially to small and medium size business as well as now making grounds to enhance Islamic Banking. through systematic process of long term lending. Remittances dept. Product lines.The Mall. It has a network of 104 branches. Purpose of study. Methodology of study. . because its location at one of the central business place of Peshawar. Cash dept. Main Branch Peshawar which is one of the profitable branch. This bank has been playing an important role for the development of different sectors in Pakistan and especially in KPK. The information of this section has been collected through relevant documents of the bank and by interviewing people. The Head Office is situated at 24. Competitors. which are located at different main cities of our country. This chapter has further divided into five headings. The report is divided into six chapters: Chapter One includes some basic information regarding the process of preparation of the report. Background of study. which are operated by various officers of the bank i. Peshawar Cantt.EXECUTIVE SUMMARY The Bank of Khyber was established in 1991 after a resolution was passed in the provincial assembly in the year 1994 it became a scheduled bank which allowed it to open branches outside KPK. It includes some basic information about the topic under discussion. Brief history. Scope of study. (Strengths. Advance Deposit Ratio. Number of employees. and a brief view of departments and their functions. Net Working Capital Ratio. Introduction of the department. Threats) Chapter Six is the most important part of the report.Chapter Three includes the overall structure of the organization. Organizational hierarchy chart of Branch. Return on Assets. Suggestions. Gross Profit Margin Ratio. number of employees. This section of the report consists of. Cash Ratio. Organizational hierarchy chart of H/O. Recommendations according to the SWOT analysis and Ratio analysis . Return on Equity. Main offices. Asset Turnover Ratio Chapter Five consists of SWOT analysis. Investment Deposit Ratio. Dept to Equity Ratio. and Opportunities. Current Ratio. Function of the department Chapter Four consists of Ratio analysis. its main branches location. Weakness. Dept to Asset Ratio. Net Profit Margin Ratio. P Assistant Vice President ATM Automatic Teller Machine BOK Bank of Khyber BOD Board of Directors CAD Credit Administration Department CDA Current Deposit Account CMD Credit Management Division CF Consumer Finance DSL Demand Salary Lone DCF Demand Consumer Finance E.V.P Executive Vice President Govt Government HO Head Office HRD Human Recourse Development HRM Human Recourse Management IBD Islamic Banking Division KPK Khyber Pakhtunkhwa KIBOR Karachi Inter Rank Offer Rate LC Letter of Credit LG Letter of Grantee MD Managing Director MIS Management Information System NBP National Bank of Pakistan .V.LIST OF ACRONYMS A. V.NIFT National Institute of Facilitation Technology OG-1 Officer Grade One OG-2 Officer Grade Two OG-3 Officer Grade Three P&E Personal and Training PLS Profit & Lose Saving Account RF Running Finance SMEDA Small & Medium Enterprise Development Authority S.P Senior Vice President T&D Training and Development V.P Vice President . 1 Background of study 1.5 Competitors 2. LIST OF CONTENTS SCHEME OF REPORT CHAPTER 1 INTRODUCTION TO THE REPORT 1.3 Scope of study 1.S.6 Brief introduction of the branch CHAPTER 3 ORGANIZATIONAL STRUCTURE .4 Methodology of study CHAPTER 2 ORGANIZATIONAL REVIEW 2.4 Product lines 2.3 Business volume 2.1 Brief history 2.2 Purpose of study 1.2 Nature of the organization 2.No. 4 Main offices 3.6 Debt to Asset Ratio 4.3 Cash Ratio 4.1 Net Working Capital Ratio 4.9 Return on Assets .5 Introduction of the department 3.2 Current Ratio 4.7 Gross Profit Margin Ratio 4.6 Function of the department CHAPTER 4 CRITICAL ANALYSIS 4.3 Number of employees 3.1 Organizational hierarchy chart of H/O 3.3.4 Investment Deposit Ratio 4.8 Net Profit Margin Ratio 4.2 Organizational hierarchy chart of Branch 3.5 Advance Deposit Ratio 4. 1 Current Ratio = Current Assets / Current Liabilities 4.1 Dairy Storage Loan Scheme 2.8.9.1 LIST OF TABLES Six Years Financials Highlights (Rs. 2.1 .4 Threats CHAPTER 6 CONCLUSION & RECOMMENDATIONS Table No.2.10 Return on Equity 4.11 Asset Turnover Ratio CHAPTER 5 SWOT ANALYSIS 5.1 Cash Ratio = Cash / Current Liabilities * 100 4.1 Strengths 5.1. In Millions) Livestock Loan Scheme 2.1 Working Capital Ratio = Current Assets – Current Liability 4.2 Weakness 5.3 Opportunities 5.9.4.3.5.4. 1 Advance Deposit Ratio = Advance / Deposit * 100 4.1 Debt to Asset Ratio= Total Debt/ Total Assets*100 4.1 Asset Turnover Ratio = Total Revenue / Total Asset * 100 .1 Net Profit Margin Ratio = Profit after Tax / Total Revenue * 100 4.Investment Deposit Ratio = Investment / Deposit * 100 4.1 4.1 Return on Assets = Profit after Tax / Total Assets * 100 4.10.7.5.4.1 Return on Equity = Profit after Tax / Total Equity * 100 4.11.6.8.9.1 Gross Profit Margin Ratio = Gross Profit / Total Revenue * 100 4. Background of study 2. Brief introduction of the branch CHAPTER 3: ORGANIZATIONAL STRUCTURE . Competitors 6. These headings are: 1. Purpose of study 3.Bank of Khyber` 1 SCHEME OF REPORT CHAPTER 1: INTRODUCTION TO THE REPORT Chapter one includes some basic information regarding the process of preparation of the report. Product lines 5. Scope of study 4. Brief history 2. It includes some basic information about the topic under discussion. Nature of the organization 3. This chapter has further divided into five headings. This chapter has further divided into six headings. These headings are: 1. Business volume 4. Methodology of study CHAPTER 2: ORGANIZATIONAL REVIEW This chapter describes the existing situation of the organization under review. The information of this section has been collected through relevant documents of the bank and by interviewing people. 1. Organizational hierarchy chart of H/O 2. its main branches location. Net Profit Margin Ratio 9. and a brief view of departments and their functions. Number of employees 4. Net Working Capital Ratio 2. Return on Assets 10. Organizational hierarchy chart of Branch 3.Bank of Khyber` 2 This chapter includes the over all structure of the organization. Advance Deposit Ratio 6. Investment Deposit Ratio 5. Function of the department CHAPTER 4: CRITICAL ANALYSIS This chapter of report consists of Ratio analysis Those are: 1. Current Ratio 3. Cash Ratio 4. Gross Profit Margin Ratio 8. Return on Equity . number of employees. Main offices 5. Introduction of the department 6. Debt to Asset Ratio 7. Bank of Khyber` 11. 3 Asset Turnover Ratio CHAPTER 5: SWOT ANALYSIS This chapter of report consists of SWOT analysis 1. Strengths 2. Weakness 3. Opportunities 4. Threats CHAPTER 6: CONCLUSION & RECOMMENDATIONS This is the most important part of the report. This section of the report consists of: Suggestions, Recommendations according to the SWOT analysis and Ratio analysis CHAPTER-1 INTRODUCTION 1.1 BACKGROUND OF THE STUDY It is the common practice at the universities that during their MPA (Fin) program students are given exposure to different practical fields related to their studies. The undertaking concern of this report is to an internship at the Bank of Khyber 24- The Mall, Main Corporate Branch Peshawar. The study is about the general operation and management of Bank of Khyber 24- The Mall, Main Corporate Branch Peshawar, and focuses on the online banking and ATM (Automated Teller Machine), which was conducted through interviews in the branch. Bank of Khyber` 4 The study is carried out to familiarize the students with the working of banks and banking environment and to produce a comprehensive report on it. 1.2 PURPOSE OF THE STUDY The primary purpose of the study is to understand the nature of a specific business organization and give the possible remedial action as this study as to find all facts upon which analysis of the organization is to be based. Second basic purpose is to work in an organization and to compare the theory and application of the management knowledge in real life situation. Another purpose is to improve personal skill i.e. human relation and communication skills that are 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 financial analysis. Specific Purpose A partial fulfillment as a requirement for the completion of BBA (HONS) degree in banking and finance sector. To objectively observe the operations of Bank of Khyber in general and the operations. To make recommendations or implementations plans for the improvements of the operations of BOK in the light of our professional studies. 1.3 NATURE OF STUDY The study is critical in nature. It was conducted to investigate critically in to the operation of Bank of Khyber and it also explain that how BOK provides facilities of online banking to its customers. The annual reports or the consolidation data of the BOK has not been focused in specific because it does not reflect on the operational performance of branches. However, they have been referred to as when and where required. Bank of Khyber` 1.4 5 SCOPE OF STUDY The internship of eight weeks is not long time for understanding the overall organization functioning. However, main emphasis of this study is on the working of the Bank of Khyber 24- The Mall, Main Corporate Branch Peshawar .More specifically, the operation department and credit department of the above mentioned bank branches is the major emphasis study. The scope of this particular study is confined to the Bank of Khyber 24- The Mall, Main Corporate Branch Peshawar. . As the functions of financial institution are much wider in scope so it is very difficult to clearly understand all these function in a limited time. 1.5 METHODOLOGY OF STUDY The data/ information for the internship report was gathered through different sources i.e. primary as well as secondary, Majority of the data presented in this report is collected through primary data sources. Primary data is collected when there is insufficient secondary data available. 1.5.1 PRIMARY DATA:- Primary Data refers to the data obtained for the first time and used specifically for the particular problem or issue under study. Primary data is collected directly from people and organization via 1. Questionnaires 2. Personal observation 3. Discussion with staff 4. Informal interviews with branch manager or staff member e.g: Q. Exporters and Importers. Why Export / Import must be necessary? Answer: Because the things which are varied in the state then the country export these things & Import more things which are necessary to state / country. Q. why bank involve in this? Answer: Because the banks are guarantor. Q. Name: Noman Designation: OGII Import Desk in Bank of Khyber Main Branch. Name of Book Used for Rule of law of Banking Sector? Answer: Book Name UCP 600 (Rules Book) “Book for law for Bank. Discussion about LC (Letter of Credit) Letter of Credit or guarantee letter issue from bank in favor of beneficiary (exporter) on the behalf of applicant (importer).Bank of Khyber` 6 Questions from Staff members Name: Ahsan Raza Designation: OG1 Export Desk in Bank of Khyber Main Branch. INVOICES:> Indend / Agent > Performa / Quotation Invoice > Commercial Invoice . Yearly basis.g: Country ID/Code Country Name 1880 Sudan .Bank of Khyber` 7 Name: Ahsan Raza Designation: OGI Export Desk in Bank of Khyber Main Branch. and Machinery etc. SITRS: Software used for Date Feeding of advance payment voucher of export. These Merchandise have own codes these codes shown in advance payment voucher with full detail of Amount. Shipment Date and advance payment date. Woolen Carpets. Culled Chicken. e. E-Reporting:Microsoft excel software which is also used for data of exporters advance payment voucher. Quantity. SITRS Table:1) Data entry 2) Print Reports 5) Merge/ Export Data 3) Switch Period 6)Setup 4) Period Maintenance 7)View verification report 8) Exit. In SITRS date saved in Monthly. Codes Exporters export their merchandise like Matches. Vegetable Ghee. use for those documents which the bank of Khyber sent to other organizations.Use for those documents or files which come from the outside organizations / department for the bank of Khyber.5. 2) Outward:. Manuals . Dispatch Dispatch is a word which is used for sending the documents from one organization to another organization / Department. The Bank of Khyber official website 3. 2. There are two type of Dispatch 1) Inward:. Annual reports of The Bank of Khyber 2011. 2012. 2013. 1.Bank of Khyber` 8 1920 Switzerland 0010 Afghanistan Purpose ID/Code Details 84071000 Aircraft Engines 84351000 Machinery 93012000 Rocket Launcher/ Grenades Name: Muhammad Aneel Designation: JO in Bank of Khyber Main Branch.2 SECONDARY DATA Secondary data refers to information gathered from sources that has already existed. There are several sources of secondary data including 1. pp 9-12 15. Mr. Pp-50 6. IMS Peshawar. Siddiqi. The Bank of Khyber Employees Service Rules (1998). The Bank of Khyber. pp-98 13. Anil JO . pp 13-16 16. Session (2007). Recruitment Policy 2008. pp 20-22 17. The Bank of Khyber Annual Report. pp-92 12. The Bank of Khyber Employees Service Rules (1998). Asfar H. p-21 . BOK Main Branch 8. Ahsan Raza. Broachers & Relevant books 5. BOK Main Branch Peshawar. pp 49-51 10. (1993) practice and law of Banking in Pakistan. Annual Report. Mr. Information Memorandum 2008. Noman. 2013 pp-69 11. The Bank of Khyber Employees Service Rules (1998). Export Desk. p-5 18. Nauman Amin. 9. Import Desk. The Bank of Khyber Employees Service Rules (1998) The Bank of Khyber. The Bank of Khyber Information Memorandum 1998. The Bank of Khyber Employees Service Rules (1998). The Bank of Khyber. 2013. pp 6-8 14.Bank of Khyber` 9 4. Mr. The Bank of Khyber 7. 3 SCHEDULED BANK STATUS Up to 1994 the Bank was operating at provincial level as unscheduled bank under the auspices of the provincial government. But in 1994 it got the status of the scheduled bank and . Have accessibility of local businessmen to senior management of the bank for the prompt credit decision making there by accelerating investment in KPK. Have maximum utilization of funds generated in the Province for the economic development of KPK. The BOK was established to: Meet demand of the business community to have a bank with its head office in the province. broadly speaking. 2. It has different branches in all over Pakistan. It is the only Bank in Pakistan having its head office at Peshawar.Bank of Khyber` 10 CHAPTER-2 HISTORICAL BACKGROUND OF THE BANK OF KHYBER 2. it creates maladjustment and impediments in the process of development.2 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. 2. If the banking system of a country is unorganized and inefficient.1 DEFINITION OF BANK “A financial institution. which deals with money and credit. Banker draws surplus money from the people who are no using it at the time and lend to those who are in a position to use it for productive purposes” Banks can play an important role in the economic development of a country. It also deals in Islamic mode of financing. ” . It answers the pivotal question. friendly work environment. Membership of the State Bank of Pakistan Compliance with the reserve requirements of State Bank of Pakistan Ability to engage in foreign trade business directly Ability to open branches outside the KPK 2. 2. 2. “What do we want to become?” The vision statement of bank is as follows: “To become a leading bank providing efficient and dynamic services in both Islamic and conventional banking through expanded nationwide network”. A vision statement should answer the basic question. and contributing towards an equitable socioeconomic growth.1 Benefits of Scheduled Bank Following are the benefits of scheduled bank status achieved by the BOK. Due to this status the BOK is also engaged in foreign trade business directly. It is an enduring statement of purpose that distinguishes one organization from other similar enterprises.3.4 VISION STATEMENT OF BOK A vision statement is a long-term goal that a company wants to achieve.5 MISSION STATEMENT OF BOK The mission statement is declaration of organization’s “reason for being”.Bank of Khyber` 11 came under the regulatory framework of SBP. currently operating at the national level. “What is our business?” The mission statement of bank is as follows: “To increase shareholders value and provide excellent service and innovative products to customers through effective corporate governance. iii. Further. To mobilize private savings and public funds for diverting the same into productive channels and ensure their availability.7 OBJECTIVES OF BOK Under the Bank of Khyber act of 1991 of provincial assembly of KPK the banks objectives are as follows: i. to guide and assist the people of KPK serving overseas to .Bank of Khyber` 12 2. Help under-developed areas and create employment opportunities.6 CORE VALUES OF BOK The core values of BOK are as follows Highest quality of service Professionalism Integrity Team work Innovation and utilization of latest technology Risk Mitigation Corporate Social Responsibility 2. especially in the areas of KPK. To promote industrial agricultural and socio-economic processes through the active participation of private and public sector in the province. ii. Six Years Financials Highlights (Rs.450 26.043 45.722 22.836 12.985 108.288 18.286 24.672 36. 153 million.685 19. v.339 s Total .548 36.794 38.8. Participate and seek the share of the province in the capital market of Pakistan by way of subscription through locally pooled resources in the leading stock exchanges of the country and eventually paving the way for establishing a stock market in the KPK.644 Investment 53. Create a diversified and sound portfolio for idle funds and their investment in the existing and new ventures especially in the pioneering of high-tech agro-based oriented and engineering projects to ensure maximum returns. iv.853 17.363 45. 2.1 2013 2012 2011 2010 2009 2008 Deposits 77. In Millions) Table 2.Bank of Khyber` 13 effectively and profitably invest their foreign savings in the province as well as in others of Pakistan.178 68.218 60.981 26.926 8.732 Advances 35.424 50.170 82. which has now risen to billions.811 31.238 11.8 BUSINESS VOLUME The initial paid up capital of the Bank was Rs. 2.776 9.572 1.154 1.604 5.700 5.669 1.678 1.913 10.9 PRODUCTS AND SERVICES ADVANCES Fund Based Non-Fund Based .078 872 563 (637) 137 10% 9% 10% -12% 2.285 713 (799) 206 1.4% Reserves Profit/loss Before Tax Profit/loss After Tax Return on 10% Equity Source: BOK Annual Report 2013.041 5.Bank of Khyber` 14 Assets Capital and 11. 00 . The employee must be confirmed having minimum of three years of service. However. 1. Loan limit is up-to 15 Take Home Salaries but not exceeding Rs.Bank of Khyber` 2. Loan against Salaries BOK provides loan against salary to employees of Government / Semi.Government organizations for personal domestic consumptions.1 Consumer Finance Agriculture Finance Micro Finance 15 FUND BASED Running Finance This is a working capital finance facility available for one year and renewed subject to satisfactory utilization thereof. the employee must be account holder of the bank. Demand Finance It is a term loan disbursed in lump sum or tranches and repayable in the form of monthly or quarterly installments. Funds are made available from SBP credit facilities. Cash Finance Cash finance is extended to manufacturing concerns for meeting their seasonal requirements (against pledge). To avail this facility. the remaining service period of the employees must not be less than terms of the loan.9. Export Refinance This facility is encouraged to boost exports of the country. autonomous & semi-autonomous bodies and corporations listed on stock exchange for personal and domestic consumptions. Loan against Salaries The Bank provides loan against salary to employees of federal / provincial governments. Credit Guarantee Scheme This is a Revolving Finance Facility for working capital requirements of production nature such as seeds. 2.9. Maximum Loan Limit is Rs. . Maximum Loan Limit is Rs.4 AGRICULTURE CREIDIT SCHEMES 1.Bank of Khyber` 16 million. Letter of Guarantee Letter of Guarantees is issued on behalf of customers to meet their commitments. 2. feed service charges etc. This facility is available for a maximum period of 4 years but can be allowed for a shorter period. Loan tenor is 3 years. Loans Against Salaries.9. 2.e. 2. feed etc.9. 5 Million and the rate of return is 3-6 months KIBOR + 400 BPS. fertilizers.3 CONSUMER FINANCE The Bank of Khyber is offering Consumer Finance to the general Public and Government Employees for meeting their personal and domestic financial requirements. BOK offers 3 loan facilities i. Sada Bahar Zarai Loan Scheme This is a Revolving Finance Facility for input requirements of production nature such as seeds. for small farmers. fertilizers. Mark up is recoverable after 6 months whereas principal is adjusted annually with automatic renewal for next day.2 NON-FUND BASED Documentary Letter of Credit Import and Export Letter of Credit Facility enhances trade with our countries. Car Finance and Suhana Ghar under consumer finance. Rate of Return.a. however. machinery / equipment. It is recoverable in quarterly/ half yearly installments with grace period of 3 months for Meat Production. Maximum Limit. 2. Livestock Loan Scheme Table 2. 3-6 months KIBOR + 400 BPS.4. period of 5 years in monthly installments. Mark up is recoverable after 6 months whereas principal is adjusted annually with automatic renewal for next day. 4. Purpose. iii. 3. service charges etc.and the rate of return is 3 months KIBOR + 300 BPS with no upper cap. Purchase of animal heads for milking and fattening. There is no maximum loan limit and rate of markup is 8% p. For Milk Production it is recoverable with in maximum v. Tenor. feeds. Repayment. iv. 5 Years including 3 months grace period. Rs. Dairy Farm. fertilizers. Nature of Facility. market rate will be changed in case of default. Loan is repayable in lump sum in 9 months for crop loans and yearly in case of orchards and off farm activities. vi. Demand Finance Facility ii. Agriculture Refinance Loan Scheme (for war affected areas of Malakand) This is a one year Demand Finance Facility for working capital requirements of production nature such as seeds.1 i. Loan tenor is 3 years. .Bank of Khyber` 17 500.000/.5 Million.9. Maximum Limit.4 Million. The (BOK) considers the promotion of micro-enterprises as one of the alternative economic development strategies for the province. Purpose. Down Payment. Contributing significantly to income and employment generation. Nature of Facility. MICRO FINANCE Micro Finance has proved to be one of the most effective tools for facilitating socioeconomic development through increased access to financial services. these smaller enterprise entities have never been a focused market for formal financial institutions operating in this region. For this purpose the BOK launched its micro business development in 1995 and rural financial services in 1997. 2. This was the first formal and . refrigeration plants and milk carrying containers. Demand Finance Facility. However.Bank of Khyber` 18 5. iii. ii. 3-6 months KIBOR + 400 BPS. Recoverable with in maximum period of 5 years in monthly.9. For construction/acquisition of facilities required for storage of dairy vi. v. Repayment. iv. half yearly or yearly installments. At least 10% of the price of the vehicle. quarterly. refrigerated meat.5. towns and rural areas. products and by-products like Milk storage chilling tanks. Machine/cost of civil work. The economic landscape of KPK is characterized by a number of flourishing small-scale economic activities scattered throughout the cities.1 i. Rate of Return.5. 2. Dairy Storage Loan Scheme TABLE 2. Rs.9. There will be no tax deducted on the funds that some on chooses to keep in these accounts. requiring technology improvement or working capital.3 billion to more than 27. The initiative was further strengthened and encouraged by various multilateral institutions such as Asian Development Bank (ADB). All individuals including foreigners . Any amounts can be with drawn without prior notice. International Fund for Agricultural Development (IFAD). BOK aims to be the largest Micro Finance provider in KPK on sustainable basis.1 Current Deposit Account The BOK current deposit account allows the facility of unlimited withdrawals up to the extent of the balance in account. 1.10 DEPOSITS 2. The pursuit of this objective will significantly contribute to the improvement of employment opportunities. Our main Objective is providing access to financial services to the low income and disadvantaged segment of the society to raise their standard of living with specific emphasis upon women. It has disbursed total loans of Rs. while accruing profits on deposits . 2.Bank of Khyber` 19 structured initiative by a commercial bank to broaden the base for micro enterprise market. BOK has made a modest beginning but a great potential for growth is still to be explored over the years. income generating activities and subsequently poverty alleviation. Similarly there is no restriction on number of transaction during the day. firms and corporate bodies are entitled to open and maintain current accounts No profit is paid on current accounts Overdrafts are allowed on this account 2.2 Saving Deposits Account The BOK rupee saving deposit account allows the facility of multiple withdrawals up to the credit balance.000 borrowers with majority of the loans below Rs. Balance in current accounts are payable on demand. Pursuing its objective the BOK provides micro enterprise and group loans for existing and new enterprises engaged in value addition process.10. KFW (German Development Bank) and Swiss Agency for Development Cooperation through credit lines and technical assistance.10. 50.000 per client. 4 Be-Baha Mahana Amadani (BBMA) Salient Features of the Be-Baha Mahana Amadani (BBMA) Tenor of the scheme will be 3 months. The respective other banks may recover charges for such transactions. where balance in BBA remains nil for a continuous six months period. 1000/- Will be non-remunerative account.50 % per annum for 3 months. free of charge.Bank of Khyber` 20 Types of saving deposit account Profit and loss sharing (PLS savings) account Special deposit account (SDA) PLS seven days notice deposits PLS 30 days notice deposits Profit is paid bi-annually on minimum monthly balance (Jan – June & July-Dec) which is announced in July and January respectively. No fee for maintaining BBA. . Expected rate of profit will be 10. withdrawals from this account are allowed on demand that is without any prior notice of with drawl. ATM withdrawals from the bank’s own ATMs. 2. Statements of account will be issued once in a year.000/-.10. Generally.10.50 % per annum for 1 Year. through cash/clearing per month Unlimited. Overdraft is not allowed on this account 2.00 % per annum for 6 months and 11. 6 months and 1 year. Minimum deposit requirement is Rs. 1. incase. incase of withdrawal from BBA through the ATM machines of other banks. such accounts will be closed. 00.3 BBA (Basic Banking Account) The minimum initial deposit will be Rs. Maximum two deposit transaction and two chequing withdraws are allowed. free for charge. No limit on minimum balance. 11. 2.e.5 Current Benefit Account Introducing a new business product in the name of “Current Benefit Account” w. 21 Value added features Free issuance of Cheque-book Free issuance of ATM Card Free quarterly statement of account 90 % financing Facility will be made available to the depositor. Corporate) . Partnership.10.Bank of Khyber` Profit payable on monthly basis. With-holding tax and Zakat to be deducted as per the Government rules.f 1st March 2010 The salient features of the scheme are given below: Product Name Current Benefit Account For Conventional Branches Eligibility: • Current Account Holders only (Individuals. Joint. 100.Bank of Khyber` Minimum Balance Requirement • Rs.(Rupees Twenty Thousand) (For individual/joint Accounts) • Rs.10. 000/.20.(Rupees One Hundred Thousand) (For Partnerships/Companies Accounts) 2.6 Khyber Pak Munafa Scheme Halal Profit on your Investment Key Features Minimum Investment Rs.100. 000/. 000/- Investment for 5 Years Profit Calculation on average Daily Balance Profit payment on Monthly Basis Profit Payment on every 5th working day of each month Profit up to 14% (based on previous history) Pre-Mature termination possible Free On-Line deposit/ Withdrawal Free Account Statement (once in a month) All other service charges are 50% for Senior Citizens 22 . The dual control system is used for lockers. the court opens his locker in the presence of his heir as mentioned in his will or and his belongings are given to them and the locker is closed. Lockers service Bank of Khyber also provides lockers facility in the country.1 ATM Service In order to keep pace with advancements in the field of technology. Following facilities are available at The Bank of Khyber’s Online Program for its customers: 1. The lockers issued only to the depositors. Transfer of Funds through Cheques among Branches.Bank of Khyber` 23 90% financing available 2.11. Whenever the locker holders come to open the locker. In case the locker holder dies. Cheques can be paid by a branch by debiting the customer’s account at another branch. his signatures are verified by the officer and then will be able to open his locker. The locker holder provides the bank has specimen signature. This will facilitate consumers by providing them access to their funds through the existing ATM network of the country. Cash Transfer 3.2 Online Banking The Bank of Khyber offers Online Banking Facility to its customers at branches all over Pakistan.11. If the key of the locker is lost company providing these lockers breaks the locker and new lock is fitted in its locker and lock is destroyed in the presence of the locker holder and bank charges RS 2000 for that. The officer has master key to apply on the locker but he cannot open the locker of any person. .11 SERVICES 2. 2. Cheque Encashment 2. Cash may be accepted at a branch for crediting accounts at another branch. The Bank of Khyber has joined the electronic platform of 1Link switch. No lockers are issued to any unknown person. Those are: National Bank of Pakistan The Bank of Punjab The Bank of Sindh.12 COMPETITORS OF BANK OF KHYBER Now a day there is very strong competition among all the banks. Bank of Baluchistan Habib Bank Limited ( HBL) Muslim Commercial Bank (MCB) Allied Bank Limited (ABL) Standard Chartered Bank National Investment Bank (NIB) Bank Islamic Banks Meezan Bank Bank Alfalah Limited .Bank of Khyber` 24 2. The competitors of the BOK are all the public and private banks and financial institutions. Dr.Ihsanul Haq Independent Director MANAGING DIRECTOR/ CEO (ACTING) Mr. The government of KPK is the major stakeholder of the bank therefore the chairman and all the members of the board are nominated by it.Javed Akhtar Independent Director Mr. Maqsood Ismail Non-Executive Director Mr. The Managing Director of the Bank represents the management in the Board and acts as a member of the Board.Imran Samad Acting Managing Director .Bank of Khyber` 25 Faysal Bank Limited & all savings centersCHAPTER -3 ORGANIZATIONAL REVIEW The bank’s ultimate governing body is “Board of Directors” comprising of eight members.Asad Muhammad Iqbal Independent Director Said Badshah Bukhari Non-Executive Director / Secretary Finance KPK. There is a company secretary who calls meeting of the Board of Directors.Sajjad Ahmad Non-Executive Director Mr. KPK Board of Directors Mr. The current members of BOD are as follows: Chairman / Non-Executive Director Khalid Pervez Additional Chief Secretary. Executive Vice President 2. At the branch network of BOK there are branch managers and assistant branch managers. The BOK ultimate governing body is the board of directors while the day-to-day affairs of the bank are managed by a Managing Director appointed by the board of directors for a term of three years on contract with the consent of the Government of KPK. responsibility and authority are clearly explained. The nomenclature of various posts and the bank is as under: 1. Under the supervision of MD there are executive vice presidents (EVPs) the senior most officials in the bank’s hierarchy each heading a bank unit. Next to EVP there are senior vice president (SVPs) and vice president (VPs) heading their respective divisions and departments. Vice President 4.Bank of Khyber` 3. function. goals. The channels that delegate these activities are called organization hierarchy. Assistant Vice President 5. This must be set in such a manner to best accomplish the organizational goals. Senior Vice President 3. Officer Grade-2 . Officer Grade-1 6.1 26 ORGANIZATIONAL HIERARCHY At each position the duties. Bank of Khyber` 7. Officer Grade-3 8. Junior Officer 27 . Bank of Khyber` 3. Credits Operations Deptt. Treasury Product/ Business Development Accounts Section MIS IBB(s) Source: BOK Annual Report 2013. Marketing .2 28 ORGANIZATIONAL HIERARCHY CHART OF THE BANK OF KHYBER (H/O) Board of Directors Shariah Supervisory Committee/ Shariah Advisor Managing Director Islamic banking Division Risk Management Deptt. Saeed (OG-2) Muhammad Faisal Khan (OG-3) * System Administrator M.Anil (J.THE MALL MAIN CORPORATE BRANCH) Mushtaq Ahmed (JVP/Chief Manager) Manager Foreign Trade NOT APPLICABLE Muhammad Irfan (OG-111) Manager Operations Import Hassan Raza (OG-1) Syed Ghous Ali Shah In charge Credits *Imran Baloch Compliance Officer Miss Faiza Kanwal M.Yousaf (OG-3) Accounts Opening Credit Officer SME/Corporate M.Arif(OG-1) Remittances M.Zubair(OG-2) Incharge Cash/Payments SBP/ HO Returns Dawood khan (J.Tariq Reciepts/UtilityBil Khuwaja iftikhar Payments M.Ibrahim Cash Sorting Imran Messah Sweepers Ibrahim Khan QASID Shabir Khan Telephone Operator .Zeeshan (OG-2) Deposits/Transfers Online Banking Nasir Shah Clearing/Remittances Export M.3 29 ORGANIZATIONAL HIERARCHY CHART OF THE BANK OF KHYBER (24.O) M.O) Asad Ali Credit Officer SME/Corporate M.Bank of Khyber` 3. One Hundred and four (104) Branches. Those are 3.Bank of Khyber` 3.5 One Chief Manager One Operational Manager One Credit In charge and Two Credit Officers One Cash In charge and Three Cash Assistants One Account Opening Officer One Bills & Remittances officer One Clearing Officer One Foreign Officer & Assistant One Compliance Officer One Recovery Officer.4 NUMBER OF EMPLOYEES IN BRANCH LEVEL There are sixteen employees working in the Bank of Khyber Main Corporate Branch. Location of Branches . MAIN OFFICES OR BRANCHES OF BOK BOK BRANCHES IN PAKISTAN Currently the Bank has One Head Office. Bank of Khyber` 55 KPK 32 PUNJAB 11 SINDH 3 BALOCHISTAN 3 AJ&K KHYBER PAKHTUNKHWA . and the nature of business of the respective customer. Credit Department 3. responsibility. it has complete control over administrative matters and operations as well as other areas of the Bank of Khyber. Remittances Department 4. Bills Department 5.Bank of Khyber` 3. and Main branch is located beside the Head Office. Account Opening Department 2.7. occupation. Clearing Department 6. This department performs the duty of opening accounts for customer. The bank officer fully obtains information about character.1 Account Opening Department The opening of an account is the establishment of banker customer relationship. 3. 1. A person who wishes to open an account with the bank has to fill an account opening form obtained from any branch of BOK at the time of opening an account.2 Cash Department . Cash Department 3. It also issues cheque books to customers.7. Following are the banking department’s functioning.7 FUNCTIONS OF DEPARTMENT 3. integrity. Various departments are working in all branches of BOK to facilitate the customer.6 DEPARTMENTATION AT THE BRANCH LEVEL The Bank of Khyber H/O is located in Peshawar. Demand Drafts It is order cheque (instrument) drawn by one branch of the bank upon another . 3. Remittances through banking channels save time. 1. This department performs the function of receipts and payments. Telegraphic transfer (TT) 5. Demand draft (DD) 3. the bank’s most valued relationships. Foreign currency demand draft.3 Remittances Department Funds transfer facility or remittances of funds are one of the functions of the bank all over the world. Foreign currency telegraphs transfer. 6. It is an instrument like DD and payment is made by cash / cheques payment. This department is the showcase of the bank and conveys the first impressions about the bank’s commitment to professionalism in its system and procedures and to courteous and efficient customer service. 2. Mail transfer (MT) 4. Bank of Khyber transfers money in the following ways: 1. Pay order (P/O) 2. transportation of money from one place to another.7. costs less and eliminate the risks involved in physical. Pay Order / Cash Order If funds are to be transferred with in a city then Pay Order is used.Bank of Khyber` Cash department owes its importance to the fact that it is a major point of contract between the bank and the customer. Other functions are approximately the same as Demand Draft. 6. Mail Transfer (MT) It is another quick way to transfer the funds from one station to another. The collection of cheque and other instruments has become a very important service that commercial banks render to their clients.7.4 Bills Department The bills department deals with the collection. secure and convenient to send carry instead of cash. 5.Bank of Khyber` branch or any other bank in Pakistan. Foreign Currency Demand Draft It is an order cheque drawn by a branch of the bank upon another branch of the same bank or any other in a country other than Pakistan. In this mode the funds are transferred through main and may take two or more than two day. 3. While . such funds is transferred through this mean. Foreign Currency Telegraphic Transfer When customer of one country wants to send funds from one place to another in other country on urgent basis. Such funds are transferred through TT from one account. The remaining functions are same as telegraphic transfer. Demand draft is safe. Through TT money is transferred with is 24 hours and this is purely inter-bank / inter-branch transaction. If DD amount exceed fifty thousand or more than a test telegram is issued to the bank to ensure prompt payment to payee. 3. It is negotiable instrument and can be made payable to bearer and it is only credited in the account of drawer himself or in the third party account. 4. Telegraph Transfer When customer desires to send funds one place to another place on urgent basis. purchase and discounting of bills on behalf of the customers. e. They have certain legal rights also and legal protection is available against fraudulent transactions under section of Negotiable instrument Act. Running Finance ( for one year) . the credit management division of H.O directly controls all the advances. banks have certain obligations to each other and to their customers. Credit and extensions are the most important activity of all the financial institution. a bank acts as an agent of its customers and therefore.5 Clearing Department BOK along with their daily business activity also provides the facility of collection credit claims for customer’s i. The job of this department is to make proposals about the loans. 3. which is of the some other bank. The major portion of the profit is usually earned through this department. Then bank collects this instrument for its customer through clearing and similarly in case of payments. collecting as well as paying. Facilities provided by BOK. Both. the bank makes the payment through clearing for the instruments (cheque or draft). The collection of bills usually involves two banks. which are given by its customers for his obligation fulfillment customer of some other bank.Bank of Khyber` collecting cheque and other instruments. because it is the main source of the earning. the collection bank and the paying bank. It attracts surplus balance from the customer at low rate of interest and makes advances at a higher rate of interest to the individual and business firms. when a customer deposits a cheque or draft for collection.7. 1881 3. Credit department is one of the most sensitive and important department of the bank.7. the banker-customer relationship to the agent principal relation.6 Credit Department The bank is profit seeking organization. . Sanction letter is sent to CO and party account is opened and debit transaction starts.Bank of Khyber` Demand Finance ( 3 to 5 years) CAD makes a check list and asked the credit officer to contact the party to complete the said documents. they issue sanction letter. They are Letter of continuity Personal Guarantee Letter of Hypothecation of stock D. When they found it correct.P Note Mortgage Deed NIC of executants and witness Stock report Insurance policy Party profile After completion of charge documents CO send it to CAD. borrowers. The regulatory authorities desire to assure themselves that the banks are operating in accordance with the requirements of the law and are in sound financial conditions.Bank of Khyber` CHAPTER-4 FINANCIAL ANALYSIS Financial analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing relationship between the items of balance sheet and profit and loss account. regulatory authorities.e. Stockholders are interested in the general financial condition of the bank . depositors. the safety and availability of his funds. stockholders. i. The analysis of bank statements is undertaken by analyst. the bank management etc. A depositor is interested in the solvency of the bank. 1 Years Current Assets Current Liabilities Working Ratio Capital . WORKING CAPITAL RATIO Working Capital Ratio = Current Assets – Current Liability Table 4. 2012.e. All the figures are taken in thousand i. 2. FINANCIAL RATIOS 4. 2011. and the management’s policy with reference to the accumulation of surplus.1.e. 3.Bank of Khyber` and the earning. In 000”. 2013. Financial ratio that relates two accounting numbers and is obtaining by dividing one number by the other ASSUMPTION 1. Figures are rounded off up to 2 decimal points. the dividends. The borrower is interested in knowing the extent of available funds and the use that is made of the bank’s resources.1. “Rs. Ratios are calculated for three (#) years i. 195. bill receivable. Current ratios 1.594 92.541 11. When the current assets are divided by current liability of the same year we find the current .797 68. 2013.222 2013 104. 2013.949 and in 2012 net working capital is increased to 10. stock etc. 4.896.021. Interpretation The net working capital in the 2011 is 8.053.15 1.602.447 2012 78.602. inventory.541 Source: BOK Annual Report 2011. While in 2013 the net working capital continuously increased to 11.221.396 56. 2012.594 92. investment. Current assets mean which can be converted into cash with in an according period and include cash.447 8.896. The first define the working capital as the investment in current assets.221.2 CURRENT RATIO Current Ratio = Current Assets / Current Liabilities Table 4. 2012.575.623.575 104. debtors.396 56.17 1.881. There are two concepts of working capital.1 Years Current Assets Current Liabilities 2011 65.881.949 78.021.053 2012 2013 Source: BOK Annual Report 2011. short-term securities.12 Interpretation Current assets are those assets which can quickly convertible to cash are very near to cash such as account receivable.103.103. According to the other concept working capital is the excess of current assets over current liabilities. and advances etc.797 68.195.299.299.Bank of Khyber` 2011 65.623.222 10.2. 548.57% 4.4 INVESTMENT DEPOSIT RATIO Investment Deposit Ratio = Investment / Deposit * 100 Table 4.700 60.363.043.98% 2012 2013 3. Interpretation This ratio analyzes the cash and current liabilities that whether we can pay our current liabilities by cash or not. And in the year 2012 and 2013 the current ratio is 1.802.37% Source: BOK Annual Report 2011.896.3 CASH RATIO Cash Ratio = Cash / Current Liabilities * 100 Table 4.5 % 2012 45.221.447 4. 4.689 45.4.671.541 4. 2013.819 4.3.678 68.733 69.17.781 56.163 77.083 76.Bank of Khyber` ratio.1 Years Cash Current liabilities Cash ratio 2011 2.98% while it decreases in 2012 and 2013.06% 2013 53.15 and 1. In 2011 the cash ratio is 4. 2012.068.684.222 92.021. 2012.423 80. In the year 2011 the current ratio shows a positive figure of 1.10% Source: BOK Annual Report 2011. 2013.108.217. deposit . 4.12 it is due to Increase in current assets.1 Years Investment Deposit Investment Ratio 2011 36. 50% 2013 35.5. In 2011 the ratio is 80. 2013.90%.799 45.Bank of Khyber` Interpretation This ratio shows the comparison of investment and deposits. this show that the bank has small concentrate on providing the loans to the customers due to lack information about the background and assets of customers.10% which show the performance of BOK is very good.043. while again in 2013 it decreases at 69. 4.733 45. From the above table it is very much clear that BOK is using their deposit very efficiently.423 48.721. In 2011 the advance deposit ratio is 48.450.217.06%.1 Years Advances Deposits Advance ratio 2011 22.201 77.93% 2012 26. Interpretation This ratio show that how much efficiently the banks advances the deposits of their customer to borrower.083 44.733 60.6 DEBT TO ASSET RATIOS .548. while in 2013 the advance deposit ratio is little increased to 45.93% which is decreased in 2012. Deposits and investments are continuously increasing. 4.5 ADVANCE DEPOSIT RATIO Advance Deposit Ratio = Advance / Deposit * 100 Table 4. This is calculated as total investment divided by total deposits.287.90% deposit Source: BOK Annual Report 2011. 2012.5% but in 2012 it was decreased to76. 204.while in 2013 it increases to 88. 2012.39% shows that the remaining 11.39% Source: BOK Annual Report 2011. 2013. in 2012 the debt to asset ratio is increasing at small rate at 85.572.937 2013 1.424.7.6.1 Years Gross Profit Total revenue 2011 12.669.7.72%.61% of financing came from equity investor.058.613. In 2011 is the debt to assets ratio is 84.Bank of Khyber` Debt to Asset Ratio= Total Debt/ Total Assets*100 Table 4.839 82.168 88.371 108. Gross profit margin ratio 18.827 2012 1.230 7.450. 4.170.85%.972 68.406.458 6. Interpretation The debt to total assets ratio measures the percentage of the firm’s assets that are financed with debt. Total assets Debt to assets ratio 2011 58.1 Years Total debts. GROSS PROFIT MARGIN RATIO Gross Profit Margin Ratio = Gross Profit / Total Revenue * 100 Table 4.466 84.177.076 7.638 85.72% 2013 95.8% 22.85% 2012 70.787 Source: BOK Annual Report 2011.53% Interpretation The gross profit margin measures how much profit remains out of each sales dollar .85. 2012. 2013.946.50% 21. 946.154. This shows the quality performance of BOK in generating gross profit 4. the better the cost controls compared to the sales revenue. In 2011 the gross profit ratio is 18.50% which increases in 2012 to 21.406. This means that selling price has increased the other expenses of the bank.078. 2013.787 Source: BOK Annual Report 2011.8% and 22.8.9.9.95% Interpretation The net profit margin measures how much profit out of each sales dollar is left after all expenses are subtracted by dividing profit after tax by sales revenue.8.827 2012 1. 2012. Net profit margin ratio 12.53% in 2013.Bank of Khyber` after the cost of the goods sold is subtracted.1 Years Profit after tax Total revenue 2011 872.96% 15. The higher the ratio. Net profit of BOK is fluctuating trend in 2013 are 15.058 7.95% as compared to 2011 and 2012.55% 14. RETURN ON ASSETS Return on Assets = Profit after Tax / Total Assets * 100 Table 4.204.1 Years Profit after tax Total assets Return on assets . 4.039 7. This ratio show how will a firm generate revenue compared to its cost. NET PROFIT MARGIN RATIO Net Profit Margin Ratio = Profit after Tax / Total Revenue * 100 Table 4.308 6.937 2013 1. 797 9. Interpretation The return on equity ratio measure the average return on the firm capital contribution from its owners.078.726.039 108.078.494 8. the return on assets is calculated by dividing profit after tax by the total assets of the firm.799 9.177.466 2011 12. 2012.19% 12.308 2011 10. 2013.19% 1.424.058 2012 11. RETURN ON EQUITY Return on Equity = Profit after Tax / Total Equity * 100 Table 4. it show whether the business is investing in its assets effectively.058 82. 2012. in 2013 the average income is 1.638 2012 1.365.Bank of Khyber` 872.74% 1. 2013. Interpretation The return on assets ratio indicates how much income each dollar of assets produces on average. It indicates how many dollars of income were produced for each dollar invested by the common stockholders. It is calculated by dividing net income .31% 1.168 2013 1.556.170.154.039 2013 Source: BOK Annual Report 2011.308 68.06% Source: BOK Annual Report 2011.10.1 Years Profit after tax Total equity Return on equity 872.154.41% 1.10. 4.066% this return on assets figure may seen low as compared to 2011 and 2012. In2011 the return on equity is 8.41% which increased in 2012 and 2013 with equal change at 9.1 Years Total revenue Total assets 6.170.84% CHAPTER 5 SWOT ANALYSIS SWOT analysis is a strategic development tool that matches internal organization .946.638 2012 8.466 2011 Asset turnover ratio 10.406. 4.19%.424. then the total asset turnover ratio will be low. 2012. in 2011 the assets turnover ratio is 10.787 108.11.15% but in 2012and 2013 it was decreased to 8. If a company has many assets that do not generate revenue.84% Source: BOK Annual Report 2011. 2013.168 2013 6. ASSET TURNOVER RATIO Asset Turnover Ratio = Total Revenue / Total Asset * 100 Table 4.76% 7.177.827 68. Interpretation The total asset turnover ratio measures how efficiently a firm utilizes its assets.11.204.937 82.15% 7.Bank of Khyber` by stockholder equity.76% and 6. quantitatively or qualitatively which areas of the business have Strengths that should be exploited by suitable strategies. and threats a useful strategy for ensuring organizational success will become evident to them. 5. Thus internal and external appraisals are brought together in a SWOT analysis. opportunities. Examples of such accounts are Traffic Challan accounts. The Bank of Khyber emphasis on consumers banking by providing them with innovative saving scheme. which can be exploited by the organization’s strengths. The BOK also obtained membership of SWIFT (Society for World Wide . and also to anticipate environmental threats.Bank of Khyber` strengths and weaknesses with external opportunities and threats. The BOK also has many government accounts due to which its reputation and image becomes stronger & more positive. Weaknesses for which strategies should be developed to improve them The purpose of an external appraisal (opportunities & threats) is to identify profitmaking opportunities. secretariat account and NADRA’s accounts. SWOT analysis is an important too to analysis the overall situation in which organization is conducting its affairs. each issue remains relevant and useful of corporate strategy formulation. weaknesses. TV License accounts.1 STRENGTHS ANALYSIS OF STRENGTHS OF BOK Strengths are the internal capabilities that promote organization objective in a competitive industry. products and services suiting best to their life style. The purpose of strengths & weaknesses analysis is to express. SWOT analysis is based on the assumption that if manages carefully review such strengths. which will affect competitors and the organization as well. BOK enjoys the following strengths. dedication and headwork towards the accomplishment of bank objectives. which has really improved their commitments. An efficient and experienced private management group also involved in other interest like. Rupee traveler cheques (RTCS) that minimize the degree of risk. Individual and personals attention. which facilitates the settlement of cross border transactions pertaining to international trade and foreign exchange business. Best optional policies and attractive compensation packages for an employee. which is very good for middle class group. The BOK provides consume ring financing which contract with AYS in cant and city. Attention and sensitivity prevailing in the country. Attractive and higher interest rates and prize on various accounts and producers.Bank of Khyber` Inter-Bank Financial Telecommunication).2 WEAKNESS ANALYSIS OF WEAKNESSES OF BOK Weaknesses are just the opposite of strengths and include all those internal factors . Human resources development and employment of technology towards modern development. textile and cement industries. That is why most of the Importers and exporters are availing the facility of letters of credit on which the BOK earns a lot of revenue. Extension and improvement in services to domestic as well as foreign customers. 5. the behavior of the staff is sometimes very rude to their customers and naturally the customers want to wind up their accounts in the BOK as a result. which does affect the performance of the bank (in the long run). Political or government influence of pressure from some interest groups. System of recruitment and selection is not transport and few training programs in junior level officers. which is given to those who have high accounts. events or situations that offer an organization the chance to achieve its objective.3 OPPORTUNITIES ANALYSIS OF OPPORTUNITIES TO BOK Opportunities are the external circumstances. The bank has the following weaknesses. Beside this.Bank of Khyber` that restrict the accomplishment of organization objective. 5. They have the opportunity to open new branches in the country as well as in foreign countries. In foreign countries the BOK has no branch and this creates problem for importers and exporters. They should open new branches at least al the district level. . Slowdown in advance growth in the short term as BOK focuses on quality customers in the market. The BOK faces a problem of availing technological facilities because online banking system and so many. Most of the employees consider themselves to be government employees and do not take interest in their work. The bank has following opportunities that can be availed. Customers having accounts with small amounts are not given the same services and dealings. Increasing number of competitors as the form of foreign bank in Pakistan. endanger its ability to achieve its objectives. harm the organization. Growing policies of governments on business and commerce sector provided BOK an opportunity to efficiently meet with the business people’s requirements of instant cash and financing facilities. Forces or situation that might potentially create problems.Bank of Khyber` Besides this they have the opportunity to take an NOC from SBP and open new branches in Afghanistan. whose services are move advance on modern techniques and they provide . These are external factors. professional and educated persons who are specialized in the course of banking and accountancy like CA’s (Chartered Accountants) & MBA’s. The step of Islamic banking in Pakistan is a big threat for the BOK. Because the whole banking system will be changed. The BOK has the opportunity to hire skilled. Customer’s feed back on different products and accounts has really improved the bank performance and encourage the atmosphere for other future polices. BOK also has an opportunity to expand new technology.4 THREATS ANALYSIS OF THREATS TO BOK Treats are the opposite of opportunities. 5. The bank faces the following threats. Competitors are increasing in the private sector banking in Pakistan due to privatization of the domestic bank. Foreign exchange department can be open in those cities branches where foreign activates are developing. Changing the customer needs. If BOK gives proper attention to their customer then in few years this bank will be the leading bank in Pakistan. Un-consistency in government policies regarding to business and economic sector. Rapid growth of advanced global technologies.Bank of Khyber` highly specialized and attractive services to their customers. Hors of confidence of overseas prospects and customers due to freezing of accounts. Strict regulation by the government over credit facilities to the customer as well as to meet the prudential regulation. 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 which has very effective. . After SOWT analysis the top management of the bank should make a committee for the proper research and development to identify the customer needs and design some new schemes and strategies to overcome the stated weakness and use the opportunities. 1 QUALIFIED STAFF The first priority is to be given to highly qualified staff.Bank of Khyber` CHAPTER 6 CONCLUSION AND RECOMMENDATIONS The Bank of Khyber has an enthusiasm among the young business graduated to adapt banking as a promising career. However. some key factors are pointed which are dropping the financial carrier of the BOK in this era of competition. And after that I am giving some suggestion that can help BOK in becoming the better institution among the leading banks of Pakistan.The Mall Main Corporate Branch Peshawar. some suggestions are given to BOK for improvement of the bank overall situation. . The bank should hire well and experienced persons for its management. I learned a lot about the banking concepts. This is because or its dynamic strategies that give totally new look to the banking industry of Pakistan. 6. which can really contribute in the improvement of the performance of BOK. The Bank of Khyber should acquire highly qualified persons for its banking operations. They should never compromise on lower level of management. During the work in various departments of the branch and interaction with the employees as well as with customers helped a lot to understand the various operation of the bank. due to interaction with the staff and personal observation as well as from financial analysis specially. These suggestions include the application of most advance information technology and other factors of management. SUGGESTIONS & RECOMMENDATIONS In this section. because management plays a huge role in the improvement of an organization. During the internship program of two months at the Bank of Khyber 24. so that it gives a sound gesture to the customer. modern dressing and outlook also helps in the improvement of bank’s image. on the counter services by providing quick and efficient over counter services.6 CLARITY OF PLANS/STRATEGIES . 6. of advances for self employment and also the bank should increase micro level credit. 6. Similarly the bank should offer loans to IT / Software developing firms and individuals. in which there is less risk of default and this also helps in poverty alleviation.4 SERVICES In this area The Bank of Khyber can work on problems to improve the bank performance and image like. this can increase the customers of the bank. The employees should look smart and well dressed. but yet fewer banks has come up practically. So the Bank of Khyber if started ‘Internet Merchant Accounts” will get a good size of business from the market of E-commerce and also Image will be enhanced. because of the growing number of internet users in the country.3 ADVANCES The bank should introduce new scheme.2 E-BANKING The bank has a golden opportunity to start ‘Internet Merchant Accounts’ in the country. which will create a new segment of the customers. Similarly also other functions of E-banking like providing different services to the customers on internet. and The Bank of Khyber will capture the market. like Garmin Bank has done in Bangladesh. thus strengthens the overall economy of the country along providing employment to the people. reduction in customer’s time utilization in. as State Bank of Pakistan (SBP) has asked bankers to start it. 6.5 UNIFORM DRESS CODE AND OUTLOOK Proper.Bank of Khyber` 6. So BOK can think of his project too. 6. and other tools of marketing. 6. But delegating of authority to the lower level of management can relieve this. promotional campaigns with products. training.8 INCREASE MARKETING ACTIVITIES The Bank of Khyber should increase marketing activities. and the people want bankers to provide the needed service at the earliest. Every member should be provided with a particular department. as this improves the implementation of plan/strategy. . 6. increasing customer relations.9 DELEGATION OF POWERS Business environment has changed and time is one of the most important factors for the businessmen.10 TRAINING OF STAFF Employees should be provided constant on job training. 6. 6. with more features than competitors. The bankers have to exercise due care in transaction while dealing the customer.Bank of Khyber` The management should clearly discuss plans/strategies and once adopted the plans/strategies should be clear to all levels of management in the bank. similarly proper job analysis for the job of every member of the staff setting of targets as tasks for each job.8 NEW COMPETITIVE SCHEMES The Bank of Khyber should introduce new schemes especially new deposits schemes. This will also increase the deposit base of the bank. This will increase the credibility and image of the bank. through reminder advertisement. refresher courses and workshops. So that at branch level manager can decide about the short time decisions and the unnecessary delays can be reduced to a minimum. so to get the required knowledge. 6. thus invoking professionalism and removing lethargy from the staff. targeting the low-income level segment and small savers.7 PROPER JOB ANALYSIS The job of the employees should be lucid and clear to them. In order to increase its customers and add to its publicity.13 MODES OF FINANCING The bank should introduce more new modes of financing in its Islamic Banking Sector. By doing so. To overcome this problem job description should be revised and grouped together in order to create new jobs.12 USE OF MEDIA The Bank of Khyber is new organization. 6. the profitability ratio will be increased and the bank will be able to compete in the challenging environment. a.14 SHORTAGE OF EMPLOYEES Shortage of employees increases the work load on existing employees and ultimately reduces the output and motivation level of employees.11 INTERNATIONAL BANKING The Bank of Khyber should expand its branches. it is recommended that the bank should advertise itself and introduce its services in detail through media. 6. 6. Recruitment should be done fin order to fill up these new vacancies. . operations will be stream lined and employees will feel comfortable in performing their duties more effectively. They should expand their branches not only in Pakistan but also outside the country to provide better services of Pakistanis living there.Bank of Khyber` 6. By doing so. RATE OF RETURN The rate of return plays a vital role in a financial institute and especially in banking sector. it will attract a large number of customers. The bank should improve its rate of return on deposits and should reduce the mark-up rate on advances. In this way the workload on employees will be reduced. google. www. www. The Bank of Khyber Annual Reports 4. Manuals of the Bank of Khyber 3.Bank of Khyber` REFERENCES 1.com 9.answer.com. The Bank of Khyber Annual Financial Statements 5.pk.com . Broachers of the Bank of Khyber 2.banking/history/pakistan. www.pk 6. 8.BOK.com 7.business/dictionary.com. www. www.