PURPOSE OF STUDY

The main essence of the study is to get the overall information and practicing within the
organization to get some know how about the practical work.
As the branch day to day operation are different so the analysis were taken on long
term to show the earning capacity and financial position financial statement of different
years have been analyze.
This study will help the reader to know about the insight story and operational efficiency
of the organization.

Department of management sciences requires its students of MBA Finance to undergo

a 8 weeks internship program Selection of organization depends upon SBP and the
students field of specialization. The 8 weeks practical experience is then documented in
the written form known as Internship report, based on theoretical and practical learning
of the internee. This report is about The Bank of Khyber Mingora Branch.. They provide
new and improved customer services facilities also mobilize the foreign investment.

EXECUTIVE SUMMARY
Bankers mean a person transacting the business of accepting money for the purpose Of
lending or investment, of deposits of money from the public, repayable on demand or
other wise and withdraw able by cheques, drafts or otherwise and includes any Post
Office Saving banks. Bank play with the money of other peoples by taking money from
people at lower interest rate and lending it to investors at a higher rate of interest and
the difference between these two interest rates are the bank profit.
Bank of Khyber maintains its position as Pakistan's premier bank determined to set
higher standards of achievements. It is the major business partner for the Government
of Pakistan with special emphasis on fostering Pakistan's economic growth through
aggressive and balanced lending policies, technologically oriented products and
services offered through its large network of branches locally, internationally and
representative offices.
The purpose of this report is to analyze the performance activities of The Bank of
Khyber university road branch and BOK overall performance and its financial position
and organizational structure as well. According to my knowledge BOK chain of
command is chairman of BOK is the upper most position and there are many directors
under that chairman then chief executive then five senior executive vice president and
this hierarchy is going to end at non clerical staff.
In this report we analyze different departments of Bank of Khyber including Cash
department, Accounts opening department, Clearance department, Advances / Credit
department, Remittance department, Foreign Exchange department and after analyzing
these department we have certain findings and recommendation for that.

AIMS AND OBJECTIVES

1. To fulfill the requirements for the degree of Masters of Business Administration at
College of Modern Sciences, Hyderabad.
2. To acquire firsthand knowledge of practical field and develop the discerning
capabilities to apply the knowledge gained during the course of studies to real
world situations.
3. To perform financial and other analyses of BOK
4. To make possible recommendations in light of the analysis.
5. To get better long report writing skills.

6. To study the tools and techniques used for the analysis.

7. Collection of financial data thoroughly and collect other relevant information.

8. To ascertain problems through primary and secondary survey

9. To enumerate the prospects mostly through secondary data survey, that is,
annual reports.
10. Develop recommendations for solution of the discerning problems.

1.5

METHODOLOGY OF STUDY

The data collected for analysis and review includes both primary and secondary
data. Every nerve was strained to collect the quality information. The methods
used for collecting primary and secondary data are as follows:

1.5.1 Primary Data

Data collected for the first time is called primary data. The methods used to
collect such data include:
1 Personal observations
2 Discussions
2 Interviews
3 Survey

1.5.2 Secondary Data

The data collected earlier by someone else and which has gone through
mathematical and statistical techniques after its collection, is called secondary
data. Methods used to collect secondary data include:
1 BOK annual reports
2 BOK manuals
3 Internship reports on BOK available in library
4 Journal and Newspapers
5 Internet
6 Stories
7 Internet

CHAPTER #01
INTRODUCTION
1.1

INTRODUCTION OF BANKING

Banking as a system arose simultaneously with the use of notes. A note has come into
use in the seventeenth century in England when many people held their wealth in gold.
During the civil war, people were frightened of being robbed so they had to look for
someone who had a safe vault for his own business and then to ask him to keep their
gold in his safe. The obvious choice was the local goldsmith who had a safe vault
available in which he kept his gold coins and bullion (bullion is the name of given to uncoined refined gold and silver, generally, in the shape of bars or bricks). So it came
about that goldsmiths took these deposits for safe keeping on charge of a fee and
issued a receipt, which acknowledged the deposit of money and incorporated a promise
to return it on demand. More and more people came to hold these receipts. Thus, the
original purpose of the receipt became obscure as its function as promissory note (a
note which promises to pay) became all important. In time, people stopped calling them
receipts and began to describe them as notes. Thus, the goldsmiths emerged the first
banks.
The origin of the word bank is not easy to trace. There are different opinions about it.
One set of experts believe that it could have come from Italian words bance or bancus
meaning bench upon which the early bankers sat to conduct their business. The other
experts, however, trace the word to Germanic origin where the word meant joint stock
fund. (Banking and Finance, B.A AIOU).
Banking is indicated as primitive as human society forever since men came to realize
the importance of money as medium of exchange. Today the word bank is used as a
comprehensive term for a number of institutions carrying on certain kinds of financial
business. In practice the word bank means, which borrow money from one class of
people and lends to another class of people for interest.
5

1.2

AN OVERVIEW OF BANK OF KHYBER

The Bank of Khyber was established through an Act of NWFP assembly called, The
BOK Act, 1991, passed in June 1991 the bank was formally launched on November 01,
1991.

The Bank of Khyber initially started as a provincial Bank and later declared as
Scheduled Commercial Bank by SBP in September, 1994.The initial paid up capital of
the Bank was Rs.153 million, which has now been raised to Rs.1 billion.

1.3

HISTORY OF BANKING IN PAKISTAN

According to Meenai(1977) the history of Banking in Pakistan dated back to August

1947, when various banks transferred their Head Offices and funds to areas likely to fall
in India.
In united India there were 3496 branches of scheduled banks out of which 487
branches located in areas comprising Pakistan. After the partition their number
drastically reduced to 195.
Two banks having the honor to be the first commercial banks of the Pakistan namely
PICIC Bank Limited (which was setup in 1941, with its Head Office in Bombay) and
Australasian Bank Limited (established in 1944 with its Head Office in Karachi).
According to Meenai (1977) the History of Banking system in Pakistan started with the
great contributions of PICIC Bank (which played a vital part in the establishment of
monetary system in the newly independent country and extended huge loan to the
Government at very nominal rates) till the inauguration of State Bank of Pakistan by
Quaid-e-Azam on 1st July 1948, (through an order of Governor General promulgated on
12-05-1948).

1.4

BOKMISSION AND VISION STATEMENT

BOK VISION
To become a Leading Bank providing efficient and dynamic services in both Islamic and
Conventional banking through expanded nationwide network.

BOK MISSION
To increase shareholders value and provide excellent service and innovative products
to customers through effective corporate governance, friendly work environment and
contributing towards an equitable socioeconomic growth.

1.5

OBJECTIVES OF BOK

The main objectives of Bank of Khyber has been to include and spread banking facilities
among the people, mobilize their savings and thus make ever-increasing contributions
to the economic development of the country. It has all along pursued a policy of rapid
development extending its facilities to almost every center of economic potential in the
country. Its services have been increasing to number of people.
Today it provides the largest network of offices in the country, 1514 being in Pakistan
and 23 abroad it offers remittances facilities covering almost every important center in
the country. The bank has introduced its own travelers Cheque to provide facilities to
the traveling public, which are cashable at any branch of the bank of Pakistan.

1.6

FUNCTIONS OF BOK

There are many functions performed by BOK Main Branch Sukkur. These are as under:
1. Receiving /paying cash dealing, deposits security.
2. Advanced / lowest rates on export and other borrowing.
3. Clearing
7

4. Safe custody of valuable

5. Transfer of money
6. General utility services
7. High rates of return to encourage saving
8. Agent of the State Bank of Pakistan for handling for treasury functions
9. Receipts of taxes and other revenues
10.

Handling of salaries and pensions of contrarys federal provincial employees and

defense personnel.

CHAPTER #02
ORGANIZATIONAL STRUCTURE
2.1

MANAGEMENT AND ORGANIZATIONAL STRUCTURE

The management and organizational structure of BOK is given following.

2.1.1 Management
Bank of Khyber is one of the modern organizations; a competent staff is
Managing it. It is a centralized organization and the authority flows from top to
Bottom. All the available information about the organizations management and
Structures are given in this chapter. Bank of Khyber has been entrusted to
The Board of Directors. The Board consists of five directors comprising four
Directors nominated by the Government of N.W.F.P.

2.1.2 Administrative/Organizational Structure

Bank of Khyber administrative setup shows as under

Board of Directors (BOD)

Chairman / President:
Dr. Hammad Uwais Agha

Directors:
Mr. Maqsood Ismail, Non-Executive Director
Mr. Rashid Ali Khan, Non-Executive Director
Mr. Javed Akhtar, Independent Director
Mr. Asad Muhammad Iqbal, Independent Director
Mr. Shams Ul Qayyum, Managing Director & CEO
Mr. Ahmad Hanif Orakzai, Non-Executive Director
9

Dr. Ihsanul Haq, Independent Director

Organization and Head Office Management in the BANK OF KHYBERs Head Office,
there are six separate groups to deal with all field offices and the necessary problems
separately.

The details about these groups are as under

i.

Overseas Banking Group

This group is again further sub divided into two divisions;
a)

Foreign exchange and operation division

b)

Administration and Credit division

Executive Vice Presidents are managing these divisions separately.

ii.

Finance group
A senior Executive Vice President is group, which contains two divisions.
This group is further segmented into different wings and a senior vice president looks
after ever wing.
a)

Investment and Resources wing

b)

Accounts, Planning and Budgeting wing

c)

Govt. Debit Management wing

d)

Publicity and Public Relations wing

e)

Editorial Board Quomi Banker wing

f)

Reconciling wing

10

iii.

Human Resources and Administration Group

It consists of three divisions namely.

a) Administration Division
This division is also divided into Establishment wing, Staff Relations, Central unit fraud
and Forgery and Regulation wing, Personal wing and Personal Career planning wing.

b) Information Technology Division

The division consists of computer wind and audit, and procedure and administrating
wing.

c) Human Reassurance Development

This wing supervises all the staff colleges, at Karachi, Islamabad, Lahore and
Peshawar.

d) Audit and Inspection Group

There are two wings working under this group which are;
a)

Implementing Wing

b)

Regional Audit Wing

This group deals with audit and inspection of sub-ordinate offices.

iv.

Special Assets Management Group

There are two divisions, which constitute this group;

a)

Recovery and Litigation Division

b)

Customer Service Division

v.

Credit Processing and Monitoring Group

This division is distributed according to different areas;

a)

N.W.F.P and A.K Sindh Baluchistan Area Wing

11

b)

Karachi Area Wing

c)

Special Credit Cell and Punjab Area Wing

d)

Corporate Credit Division/Credit Policy Wing

e)

Agriculture Financing Division

2.2

FIELD MANAGEMENT AND ORGANIZATION

The field management is divided into nine Regional Headquarters,

Which are headed by Regional Chief Executives these are:
KARACHI (West)

HYDERABAD

SUKKUR

LARKANA

QUETTA

GAWADER

LAHORE (central)

LAHORE (east)

GUJRANWALA

SIALKOT

FAISALABAD
JHANG
SARGODHA
MARDAN
MULTAN
BHAWALPUR
DERA GHAZI KHAN
SAHIWAL
RAWALPINDI
GUJRAT
FEDERAL CAPITAL (ISLAMBAD)
GILGIT
PESHAWAR
DERA ISMAIL KHAN
ABBOTABAD
MUZZFARABAD
MIRPUR (AJK)

12

CHAPTER #03
DEPARTMENTS OF BOK
3.1

FINANCE / ADVANCES DEPARTMENT

Finance department receives the applications from intending borrowers and after
scrutiny and processing the same application to the higher authorities. The following
advances are made at branch level;
i.

Agriculture advances to farmers

ii.

Short term advances to business man

iii.

Long term advances for setting up industries and structural updating

iv.

Medium term advances for working capital

v.

Seasonal term advances to cotton ginners, rice mills and sugar mills

3.2

REMITTANCE DEPARTMENT

Bank promotes the facility of remitting the funds within the country and outside country
within certain limits. Usually money remitted through Demand Draft, Mail Transfer,
Telegraphic Transfer and SWIFT.
Now Western Union and BOK together transfer the remittances from any location in the
world. This has given advantage to the clients and money is transferred in minutes. The
transaction in this department is cleared in five minutes after data is matched.
Due to good performance of BOK, the WESTERN UNION has given nine awards to
BOK.

3.3

ACCOUNTS DEPARTMENT

Account Department maintains the record of fixed deposit receipts of the depositors.
Account department also keeps record of income and expenses incurred at branch level
and maintain profit and loss accounts of the branch. Account department prepares the
weekly and daily statements of the affairs of the branch.

13

3.4

FOREIGN EXCHANGE DEPARTMENT

The functions of foreign exchange department are as under;

i.

Imports
We sell our foreign exchanges to the other country in return to purchase the foreign
goods. Payments for imports are made through Letter of Credit (LC) by the importer.
Letter of Credit is an undertaking given by the importer bank to the exporters bank to
make payments on receipt of documents evidencing dispatch of goods from exporters
country to importers country.

ii.

Exports
We sell our goods at foreign lands and earn foreign exchanges. This whole process is
called Export. The bank provides facilities to exporters for export of the commodities.

iii.

Foreign Remittance
The bank provides the foreign remittance facilities to the student studying abroad. Bank
also provides foreign exchanges in the shape of travelers Cheque to the intended
visitors.

3.5

CLEARING HOUSE DEPARTMENT

The function of clearing house department of the branch represents other branches of
the bank of State Bank of Pakistan for exchange of Cheque drawn at bank or otherwise.
It subsequently passes on the transactions to other branches where from Cheque have
been drawn and collected. However, it is worthy to mention that BANK OF KHYBER
conducts proceedings of clearing house where the SBP has no branch. Clearing house
is usually conducted in big cities with the State Bank of Pakistan.

3.6

CASH DEPARTMENT

Cash department is backbone of the branch. Cash department receives the cash from
depositors and other branches of the area. It performs function as the depository
branches. It feeds other branches with required cash whenever the branches of area
make indent for cash. Similarly, excess cash is also remitted to this branch.
14

3.7

MARKETING / BUSINESS DEVELOPMENT DEPARTMENT

Marketing department is established in important and corporate branches of the bank.

This department is working efficiently in the branch.
The main functions of the marketing department are as under;
i.

Introduce valued clients/depositors to the bank branch.

ii.

Bring a valuable business for the branch.

iii.

Provide the financial facilities to the customers.

iv.

Marketing department plays very vital role in increasing the business and
deposits base the branch.

v.
vi.

The development of the branch depends upon effective marketing system.

Marketing department/ sale image of institution in the public
The manager of the branch leads marketing in order to attain strategic business
objectives.

15

CHAPTER #04
FEATURES OF DIFFERENT TYPES OF ACCOUNTS/DEPOSITS
4.1

CURRENT DEPOSITS

The current account is opened in the name of individuals, proprietary firms, partnership
firms, and primitive limited companies, clubs, associations, societies and other
institutions. The account can be operated by single or two or more persons jointly as the
instructions may be given at the time of opening the account. No any profit is given on
current account deposits.
If the person who wants to open the account is not in a position to sign or his signature
is not firm or shaky, the bank requires his photographs and he has to present cheques
personally at the counter for withdrawals from his account. The initial amount of deposit
with which he can open the account must not be less than Rs.1000. However, this
restriction is not imposed to the accounts of charitable institutions.

4.2

PLS SAVING DEPOSIT

Profit and loss sharing accounts to be opened in BOK are as under;

i.

Individual in their own single or joint names can open these accounts. The PLS saving
account can also be opened for provident fund or other benevolent funds of companies,
firms, organizations of welfare and educational institutions.

ii.

PLS saving account can be opened with the minimum amount of Rs. 500.

iii.

Money can be withdrawn from PLS with prior notice if heavy amount is involved.

iv.

To share in the profit a minimum balance of Rs. 500 must be maintained in account. The
minimum balance on sixth and last of month will qualify for the profits.

v.

The profit will be calculated based on monthly minimum balance for the period of six
month i.e. from January to June and July to December.

16

vi.

The head office of BOK determines the profit or loss on PLS saving deposits and
advises its branches the rate and time of distribution of these profits concerned PLS
saving account.

vii.

Withdrawals from PLS saving accounts are allowed not oftener than 8 times in a
calendar month and for a total amount not exceeding Rs. 1500 for withdrawal of a large
amount seven days prior notice in writing is required to be given. This notice shall not
however affect the monthly withdrawals ordinarily allowed. In the event of contravention
of rule, depositors shall forfeit his right to share profit for the notice period shall be
deducted from his total profit earning products.

viii.
ix.

There is not restriction on maintaining the maximum balance in PLS saving account
On the first of Ramadan, every year the Zakat of 2.5% will be recovered from the
deposits on the balance of that day. But if depositors give declaration of Zakat or he is
non-Muslim Zakat will not be recovered from him. In the same day Zakat is not
recovered from accounts in which the balance is below than prescribed limit as declared
by the administrator of Zakat Pakistan. This system of accepting deposits has been
started in BOK since 1 January 1981.

4.3

FIXED DEPOSITS ACCOUNT (TERM DEPOSITS)

In the case of fixed deposits, account deposit is made for a fixed period and money
deposited can be withdrawn after the expiry of period fixed or before giving an advance
notice to the bank. Fixed deposit carries a higher rate of interest than the other type of
bank deposit account, and the rate of interest rises with the length of the period and the
amount of deposit.
On opening a fixed deposit account, the bank grants to the depositor a Fixed Deposit
Receipt (FDR) that is not transferable to any other person. When the deposit in
withdrawn the receipt must be handed back to the bank.
The silent features of profit and loss sharing term deposit accepted by BOK are given as
under:
i.

The PLS term deposit are accepted from individuals in their own single or joint names,
companies, firms and other organization.

17

ii.

The PLS term deposit receipts are issued for any amount. There is no minimum or
maximum limit or deposits in a single term deposit account.

iii.

PLS term deposit may be allowed some facilities against the security of these receipt
credits, after making lien on the relevant receipt and subject to recovery of a service
charge.

iv.

Under term deposit scheme, the depositors not cease to earn the profit immediately,
after the respective maturity date, but they have been afforded a liberal facility. In case
the depositors said, to withdraw their term deposits on maturity their funds will remain
temporarily in used and out of profit earned a responsible share would occur to such
overdue PLS term deposit at the rates declared on PLS sharing account.

v.

The head office of the bank determines the profit or loss on PLS term deposit at by any
one interval i.e. the end of June and December each year. In addition, payment of profit
to or deduction of loss if any form of PLS term deposit is to be made the deposits for
longer period will earn a little more profit than those of shorter period deposits.

vi.

The total profit up to Rs. 950 is exempted from income tax.

vii.

In the case of encashment before maturity but after completion of three months profit
will be paid for the entire period for which the deposits remained with bank at the rates
payable for the respective period to the PLS saving account after deduction of the Zakat
if any.

viii.

In PLS term deposit expired and the depositors request with in one month after the
expired date, for investment. The PLS terms deposit will be reinvested for the desire
period from the date immediately following the expiring date.

ix.

Zakat or the face value of PLS term deposit will be recovered as may time as the
valuation dates (i.e. 1st Ramadan) falls between the date of issue and the date of expiry
of the deposit.

4.4
i.

FOREIGN CURRENCY DEPOSITS

BOK has also introduced foreign currency accounts for Pakistan and foreign nationalists
in Pakistan and abroad. This scheme assures its customers of better profit and superior
services.

18

ii.

It offers Pakistani or foreign nationalists to operate a foreign currency account with any
one of their authorized branches spread all over the country.

iii.

Deposits of this account will be accepted in all convertible currencies, but accounts will
be maintained on the customers choice in US $, British , Japanese and German
Mark.

iv.

Deposits may be made in the forms of remittances in foreign currencies.

Travelers cheques on the bank counter will be accepted.

i.

The customer can make withdrawals and transfers to anywhere in the world.

ii.

All the deposits and profits in the customers foreign account are expected from Zakat,
income or wealth tax.

iii.

The customers sources are protected from any scrutiny of concerned authorities.
The BOK has over 1226 branches at home and abroad, these more than 100 branches
are authorized and fully equipped to deal with all kinds of foreign currency transactions.
BOK has worldwide network of branches and it has associates in Saudi Arabia Bank, AlJazira (15 branches) and National Exchange company (5 branches) in UAE to Facilitate
the customers in Pakistan, Saudi Arabia and UAE.

19

CHAPTER #05
TRAINING AND FACILITIES TO STAFF

5.1

TRAINING TO STAFF

In 1949, the first year of operations, the BANK OF KHYBER had one hundred
employees on its pay toll, but with two years this number had grown to 1505,by 1960,
the had ties to 5023 and now it is in the order of about 25000.
During the first ten years, the BOK trained its own staff through a series of training
programs both for junior officers and clerical staff. By 1958, however it was obvious that
something more comprehensive was needed and the bank established a staff college at
Karachi, three more colleges at Islamabad, Lahore, and Peshawar.
These colleges provide courses of instructions for supervisory, personnel and clerks to
meet the banks ever-growing need for trained personnel. This need springs not only
from the steady growth of the banks business but also to replace wastage to retirement,
resignation, will health or death.
The staff college receives junior bank officers for further training in banking, the courses
lasting from six to nine weeks with about twenty-five student in each course. The staff
college courses are designed not only to impart technical instruction, but also to develop
qualities, judgment decision, leadership and management. Since these students are
likely to be those who may expect to rise to the senior executive position the bank has
to offer.
The bank also deputes officers to attend banking seminar both in Pakistan and abroad
and it attaches great importance to the exchange of ideas, information, and knowledge,
which cannot usefully accurse from these gatherings.
In its position, the National Bank has considerable responsibility in ensuring the country
is well represented at meetings of banking at domestic and international level.

20

5.2

SALARIES AND FACILITIES TO STAFF

As an employer, BANK OF KHYBER is also deeply conscious of its responsibilities and,
let it be said at the outset, considers itself a good employer, it is scale of pay, terms of
services, staff benefits and amenities compare very well with institutions of similar
stature in Pakistan.
The result is that employment with the bank has some been regarded as something of
prize. The scales of pay and allowances for officers and staff are revised from time to
time as need grows. In addition, employment with the bank is responsible and bonuses
are regularly paid.
Two bonuses are issued one Eid
Annual bonuses are issued according to the profit.
Medical allowances has been issued annually according to basic pay of complies.
Some amount has been issued on the marriage and death of employees.
Loan facilities
Motor cycle loan
Car loan
House building loan

21

CHAPTER #06
THE PRODUCTS AND SERVICES OFFERED BY BOK
BOK is providing many products and services to their potential clients. These products
and services which BANK OF KHYBER is providing are some similar to other banks
and some are unique to BOK. But as BOK provides products services are totally
different from other banks and less expensive as compare to other Banks so most
people prefer the BANK OF KHYBER. The most common products and services of
BANK OF KHYBER are given below;

6.1

PRODUCTS

a)

DEPOSITS

b)

LETTER OF CREDIT

c)

LETTER OF GUARANTEE

d)

CREDIT

e)

TRAVELERS CHEQUE

f)

TRADE FINANCE

g)

SAIBAN

h)

KISSAN DOST

i)

KARSAZ

6.2

SERVICES

a)

LOCKERS

b)

ATMs

c)

SBP TREASURY OPERATIONS

d)

PENSION AND SALARIES

e)

UTILITY BILLS COLLECTIONS

f)

COLLECTIONS

g)

CLEARING

h)

EVENING BANKING
22

i)

CASH

j)

SAVING & INVESTMENT FACILITIES

6.1

PRODUCTS

The BANK OF KHYBER is serving its client with many products. Some of them are
common to other banks but few are unique which other banks do not offer to their
clients.

a)

DEPOSITS
These are saving/money submitted by the people with the bank for fetching some return
or for the purpose of safety and security.
These are various types of deposits, such as

i.

Saving Deposit
These deposits fetch returns upon them. These are introduced to inculcate habit of
saving in the general masses and to invest and reinvest the saved money. These
deposits get return on the basis of announced rate for these deposits and that rate is
according to the economic activity and net profit earned by the organization. In fact, this
is a profit and loss sharing mode, but the history or till the introduction of these deposits,
the depositors never share a loss. There are certain rules of the game viz. there are
restrictions upon frequency of withdrawal and amount of withdrawal i.e. you cannot
withdraw more than twice a week and in case of amount more than Rs. 10,000 then you
have to submit prior notice. In fact, these are not practiced now because customer does
want to bound himself in such things and want to avail of the facilities of the account
along with return. These are restrictions of keeping the minimum balance otherwise
service charges are imposed. Further, you have to open with at least Rs. 3,000, which is
now days relaxed up to Rs. 100 for opening the teachers account.

ii.

Current Deposit

23

These accounts were basically introduced for the businessmen and firms who
frequently use their account and want to avail banking facilities of remittance, collection
transfer of funds, safety security etc. these were basically in contrast to the saving
accounts, as these did not offer any restriction in terms of withdrawal of amount. These
accounts doesnt fetch any return on them because you are allowed to take your money
at any time so bank does not get enough time to invest the amount for longer period.
More over this account was as mentioned early, was introduced for the executives, and
provide them other facilities apart from return, SBP is taking steps to make it mandatory
to provide upon minimum balance and current account.

iii.

Fixed or Term Deposits

These deposits are saving deposits, meant for inculcating the habit of saving for longer
period, and provide chance for the bank to invest in long-term projects or plan. These
fetch comparatively higher returns than the other deposit account because of the longer
periods. These are available for three or six months, and for one, two, three, four, five or
more years. These have a maturity date on which principle and mark up amount is to be
provided to the depositor. This also has a slight modification in shape of MIS (Monthly
Income Scheme). This is also a term deposit scheme but one can earn profit on monthly
basis instead getting the same along with principle amount at maturity.

iv.

Call Deposit
These are purely meant for the business class persons like Govt. contractors they
deposit call money or call certificate with Govt. departments as caution money or surety
where banks instrument is deposit and the concerned department indirectly gets the
bank guarantee for payment. These are issued for short-term and are paid on demand
or call hence the name, so these do not fetch any return.

v.

Cumulative
These were the older scheme not being offered a new but is continuing for the payment
to the deposit or certificates holders in this cumulative return are to be paid to the
depositors it was a high cost scheme hence ceased.
24

b)

LETTER OF CREDIT (LC)

Letter of credits are promises or guarantee to a sum of the amounts to importers or
exporters or to their agents on accomplishment of certain agreement. These are also
offered by the BOK is shape of import or export LCs, so as to boost up countrys trade
and improve foreign exchange reserves, to enhance countrys exports and to introduce
them worldwide.

c)

LETTER OF GUARANTEE
One of the outstanding products of the BANK OF KHYBER is to issue the guarantee on
behalf of their clients. They issue the letter of guarantee against the hundred % margin
of cash and collateral guarantee. These act as the surety on behalf of beneficiary with
the demanding department. These are submitted usually to court of law, academic
institutions like LUM&HS, MUET, and Sindh University etc. It can also be furnished to
the private companies and organizations even these are accepted by the institutions
abroad as National Bank is one of the listed banks abroad. These term guarantee are
continuing one.

Term Guarantee; it is issued for a specific period or term after which it has to be
renewed again.
Continuing Guarantee, it is a guarantee, which did not expire until the
accomplishment of the job for which it was acquired, or the beneficiary requests
for its discontinuation.
d)

CREDIT
These are the various advances or finance facilities issued to the borrowers to
carry on or to meet their business requirements. These are extended in three modes as

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explained above, which are Short-term, Medium-term and Long-term, which caters the
needs of clients according to their requirements.

e)

TRAVELERS CHEQUE
These are modern tools, which enables clients to carry money from one point to
another with complete safety and security. These are available in various denominations
ranges for Rs. 5000 to 100,000. They provide you guarantee of payments even in case
of lost or theft. They are available for inland transfer of money as well as for abroad
wherever the branches of BOK are available and at other places through the agency
arrangement.

f)

TRADE FINANCE
These are special mode of financing which are available in case of established
business working requirement. Various modes are available such as Small finance,
Cash Finance etc. for facilitating the borrowers and clients.

g) HOUSE FINANCE (SAIBAN).

This is product of BOK, which provides funds for homes

It is affordable, flexible, and convenient.

Home finance for BUY, BUILD, RENOVATE or EVEN REFINANCE.

h) KISSAN DOST

BOKs affordable agriculture program offers you a wide range of financing.

This is really important b/c agriculture is back bone of Pakistan economy, and
Any progress in this sector will affect large portion of population.

i) KARSAZ
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Discovers the easy way to grow your small or medium business at BOK

6.2 SERVICES
a) LOCKERS
These are one of the services, which BOK provides to its clients for safekeeping of their
valuable and documents at cheaper rates. These are available in three sizes at the
designated branches. These are small, medium, and large. These are usually used for
keeping the Gold, Cash and Documents etc. there are 42561lockers available for clients
at BOK Fatima Jinnah road branch.

b) ATMs
More than 150 auto machines are installed at present at the main business centers like
Karachi, Lahore, Islamabad, Hyderabad etc. and 30 more are to be installed shortly at
other places for which feasibility reports are prepared. These modern banking tools that
provide the unique facility for the clients to withdraw their cash at late hours in case of
emergency.

c) SBP TREASURY OPERATIONS

Being the agent of SBP, BOK performs treasury operations like collection of salaries
from the treasury and collection of challans for various taxes and fees on the behalf of
Govt. and facilitates clients, which is a unique function of BOK. It receives commission
for offering these functions from SBP but these are nominal and are not compatible with
the services provided by the BOK.

d) PENSION AND SALARIES PAYMENT

Both types of pensions that is provincial and federal, are paid to the thousands of
pensioners, this is also a unique feature of BOK, which it performs being the agent of
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SBP. Salary payment is also one of distinct features of BOK that it provides services to
the Govt. departments to distribute their salaries every month. The prominent examples
are Army, Rangers, Police, Education and Public works etc.

e) UTILITY BILLS COLLECTIONS

BANK OF KHYBER is providing this facility since long but recently it embark upon it with
a new vigor and vitality and extended the range of its utility collections. In this
connection National Bank nominated its 148 branches all over the Pakistan to provide
utility bill collections facility up to 9: pm instead of normal working hours of 5:pm. It also
amended the previous collection timings, which were for 9: am to 1: pm; now all
branches collect the utility bills up to 5: pm instead of 1: pm. These amounts to the unmatched and unique services provided only by the BOK. Its utility collection ratio is
more than 34% of market, which is clear proof of its exclusive services in this respect.

f) GOVT. COLLECTIONS & OTHER COLLECTIONS

This is another unique feature of BOK that it provides services for collection of various
instruments everywhere throughout the country without or on the nominal charges. This
facility is also provided to the public on the nominal and fair charges not only inland but
also across the borders.

g) CLEARING
This is an extra ordinary banking facility, which is provided to the public in this if
they are maintaining an account with the BOK they can lodge cheques of any Bank in
Pakistan, which will be collected and credited to their respective accounts through the
process of clearing. In this, representatives of various banks are gathered at SBP and
exchange the cheques presented to them for debit of the respective accounts and in
second round of meeting provide each other the fate of those cheques to be credited to
respective accounts.

h) EVENING BANKING
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In order to provide extra banking facilities round the clock and to compete with the
contemporaries National Bank embarked upon evening banking facilities. This also
improves their image in the general public and corporate circle. This facility at present is
undertaken at the selected centers but the management is planning to expand it shortly.

i) CASH
Being the agent of SBP, it also provides this service to the other commercial banks
where branches of SBP are not available. It takes and supplies cash to the other banks
and sends or receives the same to the SBP. It receives sold notes from public and
banks whenever required or occasions like Eid and other festivals.

j) SAVING & INVESTMENT FACILITIES

Through these facilities, not only the clients are encouraged to inculcate the habit of
saving which not only is beneficial for them but also to their country. As these funds are
utilized for the development purpose, secondly they are also provided with the chance
of investment to earn the return and multiply their funds. Various schemes as detailed
above are in practice and available at BOK.

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CHAPTER #07
SWOT ANALYSIS OF BOK
7.1 STRENGTH

1 Provincial government backing and confidence of people due to government

bank.
2 It has modern technology and resources.
3 Staff has combination of young and rich in experience and working skill.
4 Officer attractive schemes and, more saving for customer from time to time.
5 The Bank of Khyber has market confidence in providing products and services to
the customers over the year.
6 Bank of Khyber has the ability to cope with pressure of competition.
7 Bank has the good with of the people and it is also an assets to it.
8 Banks management has the motivation to make it best bank of the country.

7.2 WEAKNESS
1 Employees are lacking motivation. Bank is not limits and thus reducing the
efficiency.
2 Communication gap between different levels of management.
3 The lower level management lacks clear direction and is not having the
managerial depth.
4 Lack of experienced commercial bankers in the top management positions
5 Lack of modern banking approaches like ATM and commerce on line banking.
6 Marketing skills of the bank are good but they have little presence at different
media.
7 Low salary structure as compare to competitors.
8 Not in the position to compete with other banks.
9 Lack of highly trained resource staff. Increasing trend of bad loans.
10. Lack of modern technology.
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7.3 OPPORTUNITIES

1 Opportunity to open branches in northern areas specially Timergara etc because

there is 100% current deposit.
2 Extending banking hours and providing more branches facilities to customers.
3 All branches are computerized therefore no difficulty
in thinking it into on line banking.
4 Bank should take interest in the new market segments like IT business, software
business etc.
5 A new serves to its product line.
6 Increasing credit facilities to lower income groups, thus reducing the risk of loss
and also improving the image of the bank.

7 To open a branch in Afghanistan.

7.4 THREATS

1 Political, economic situation of the country. Reduction in the business activities in

the country.
2 Deteriorating confidence of people in bank uncertainties of the investors.
3 Modern technology used by other commercial banks.
4 Starting Islamic banking is threats for BoK because if it is flop it will be a big loss
for BoK.
5 Increasing number of private/foreign banks in the country.
6 Reducing the rates of savings in different segments of people.
7 Global technological advancement.
8 Bank Alfalah and other commercial banks is the biggest threat for BoK.
9 Qualified staff working in other banks.

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For SWOT analysis we can conclude that the management of the bank should adopt
systematic planning for the bank growth, talking with them all management levels of the
banks, discover new segments of the customers, offering schemes for its customers.

Similarly Bank of Khyber has to focus on potential customers and give proper attention
to every customer and their need then it will become one of the leading and
comprehensive bank.

Emphasis on present customers by giving them personal Services and targeting the
private potential customers instead of Government deposits at high interest rates.
Creeping trend of non-performing loans.

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SUGGESTIONS
1)

Proper training and orientation should be given to employees through mobile

training program conducted.

2)

Through processing and sectioning procedure have been stream lined in line with
modern lines but there is still lot to be done in this direction.

3)

The BOK should follow advance technology to attract customers such as MIS
section should be effective in every branch and all branches are interconnected to each
other.

4)

It is suggested that responsible steps should be taken to recover all absolute

advances.

5)

The establishment of extra counters is BOK will not only reduce the extra
pressure of the staff but also save the time of its valuable customers.

6)

It is consulted that bank should reduce its large expenses in order to increase the
value of the bank.

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CONCLUSIONS
1)

It seems to appear that there is no proper training for staff members.

2)

Loaning procedure seems to be lengthy.

3)

It seems to appear that BOK is advertising and introducing its new Schemes and
Policies only in English language

4)

The profit on investment in PLS account and fixed deposits accounts seem to be
less in comparison with other Financial Institute.

5)

It appears that large amounts paid on administration cost.

6)

It seems to appear that the traditional method of work is still in practice in BOK.

7)

An over burden of Employees observed during research.

8)

It seems to appear that no efforts have been made to introduce benefits of saving
and Investment to School and College students to motivate them for saving.

34

REFERENCE

BOK information booklet

All information collected from BOK officers.
Newspapers
BOK official website (www.BOK.com.pk)
Wikipedia (wikipedia.com) www.BOK.com.pk
Daily Times, Tuesday, January 17, 2006: Bank of Khyber IPO to be held from

25th
Dawn, January 1, 2006: Bank of Khyber IPO on Jan 26-27
The Nation: Bank of Khyber subscription opens today
Yasir Mahmood Securities (Pvt) Ltd: Bank of Khyber

BIBLIOGRAPHY

http://www.bok.com.pk/
http://www.bok.com.pk/management.htm
http://www.bok.com.pk/departments.htm
http://www.bok.com.pk/divisions.htm
http://www.bok.com.pk/executives.htm
http://www.bok.com.pk/bods.htm
https://en.wikipedia.org/wiki/Bank_of_Khyber

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