Roll of Bank in The Economy

Roll of bank in the Economy
Banking is one of the sensitive businesses all over the world. Banks play very important role in
the economy of an every country. Banks are custodian to the assets of the general masses. The
banking sector plays a significant role in a contemporary world of money and economy. It
influences and facilitates many different but integrated economic activities like resources
mobilization, poverty elimination, production & distribution of public finance, financing of
development projects, enhancing trade activities, climate for capital formation in the Country and
many other things. Banks are always there to serve you better if you want to purchase a car or
home or want to fulfill any other requirement. If you want financial help for play ground or any
educational or healthy societal activity, banks will be there; similarly if there is an industrial
project or agricultural development of the country the sponsor-ship of banks is very much
involved. Banks play very positive and important role in the overall economic development of
the country.
Economic Review
Domestic economy which had shown sustained good performance over the past five years faced
a grim 2008, because of ever rising inflation, severe power shortages, an erratic stock market,
deteriorating law and order situation, slowdown in the large scale manufacturing sector, a sharp
hike in interest rates, and widening current account deficit. As a consequence of these
developments, the pace of economic growth was glacial, at best. Investors were precautious in
investing. Increasing fuel and raw material prices and power outages retarded industrial output,
fiscal performance indicators weakened, domestic and external debt mounted and foreign
exchange reserves remained under constant pressure. Overall inflation soared 25 % from 8.8 %
in December 2007, fiscal and current deficit reached 7.4 % and to 8.4 % of GDP respectively.
These structural imbalances depleted foreign exchange reserves to around 6.5 billion dollars by
the end of November from 15.7 billion dollars in January 2008. The Pak Rupee weakened
against the US dollar.
With the enormous economic challenges still at the forefront for which the International
monetary fund (IMF) support has been sought for stabilization, the betterment of economic
fundamentals can be forecast but with many strict strings. Betterment in law and order situation,
weeding out of terrorism, relative political normalcy and increased inflows as a result of aid
package, growing foreign remittances and mobilization pledges by friends is likely to facilitate
Government spending on infrastructure development, improving job creation and social uplift
which in turn will impart an improved complexion to the economy
The Bank of Punjab

The Bank of Punjab was formed under The Bank of Punjab Act, 1989. It was given the status of
a scheduled bank by the State Bank of Pakistan (SBP) on September 19, 1994. It is principally
engaged in commercial banking and related services with its registered head office at Lahore.
The Bank has 7 regions and 272 branches at all over major locations in the Punjab. The Bank
provides all types of banking services such as Deposits in Local Currency and client foreign
currency, remittances, and advances to business, trade, industry and agriculture. The Bank of
Punjab has indeed entered a new era of science to the nation under experience and professional
hands of its management. The Bank of Punjab plays a vital role in the national economy through
mobilization of hitherto untapped local resources, promoting savings and providing funds for
investments. The bank offers attractive rates of profit on all deposits, opening of foreign currency
accounts and handling of foreign exchange business for example imports, exports and
remittances, financing, trade and industry for working capital requirements and money market
operations. The lending policy of bank is not only cautious and constructive but also based on
principles of prudent lending with maximum emphasis on security.
Mission Statement
“To exceed the expectations of our stakeholders by leveraging our relationship with the
government of Punjab and delivering a complete range of professional solutions with a focus on
program driven products and services in the agriculture and middle tire markets through a
motivated team.”
Vision Statement
“To be a customer focused bank with service excellence.”
Business Volume
These are the quick facts of BOP’s business volume.
2008 2007 2006
Assets 185,909,120 235,001,100 164,855,137
Liabilities 182,165,995 216,005,306 148,729,423
Net Assets 3,743,125 18,995,794 16,125,714
Investments 22,711,980 73,461,695 28,233,211
Advances 131,731,158 133,893,585 101,319,954
Staff Strength
The total number of employees in the organization is approx 6500.
Services:
These are the services provided by the BOP.
ATM Facility, Letter of Credit, Pay Order, On-Line Banking, E-Banking, Debit Card, Consumer
Financing, Agriculture Financing, Corporate Financing, Commission free Remittance,
Demand Drafts, Collection of Utility, Lockers Facility, Organizational Structure
Competitors:
All national and international banks are considered to be a competitor of BOP such as MCB,
Bank Alfalah, HBL, NBP, Silk Bank, UBL etc.
Organizational Structure
Head Office and the main branch of BOP are in Gulberg 3, & Egerton Road, Lahore
Respectively. BOP support horizontal structure within organization in which Board of Director
are at top level then came President then Department Head / GM, Department Managers, Staff
and lower staff.
At the level of Decision-making and implementation, senior management of the bank is drawn
from highly accomplished bankers with rich experience in the banking profession both domestic
and international. The entire responsibilities of policy formulation and management have been
placed, under the law, with the Board of Director. Furthermore Punjab Government try to not to
interfere in bank routine procedure work in order to overcome the possibility any of pressure
which may be put on the management of the bank in respect of recruitment of staff or provision
of credit. These instructions have become an essential part of the culture of the bank. The
graphical form of BOP management structure is as under:
BOD
President
Department Head / GM
Department Managers
Reporting Staff
Analysis
Computer system
The system has not totally shifted on computer. Manual procedure is still there hence computer
facility is not fully availed. There should be a system at each counter for quick processing.
Right person for right job

During my internship I have observed the person who has came as customer Relationship Officer
was acting as Cashier. It should not be like this. The person should be posted according to his
qualification, profession skills and experience.
Customer problem
People have to wait for en-cashing their cheques for about 10-20 minutes, which is not good for
the reputation of bank, the delay is due to manual work. Therefore I suggest that computers and
other electronic machines should be installed in bank so that time could be saved.
5.1.4Deficiency in management
I felt at some places the BOP need to have employees, because a lot of work is to be done by a
single employee that will result in work overload and employee might not perform his/her job
with full devotion
SWOT Analysis
Strength
•272 branches
•Schemes
•Diversification of investment
•Foreign reserves
Weakness
•Lack of communication
•Lack of trust
•Lack of loyal customers
•Lack of conflict handlings
Opportunities
•To seek new customers
•Lending
•Investment
•Mark up/ profit
Threats
•Competitors
•Low security
•Economic instability
•Political instability

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Roll of bank in the Economy

The Bank of Punjab

Right person for right job

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