REPORT

On
BANK OF KHYBER PVT LTD

Prepared by
Salman Khaliq Bajwa (17817)

Lecturer: Mam Samina Riaz

Course: Introduction to Financial Accounting I

College of Business Management

Institute of Business Management
Karachi

DEDICATION

This report is dedicated to

my Parents,
Whose love, affection and support helped s in bringing our work to this level of
accomplishments; we are also thankful to them for educating us for unconditional support and
encouragement to pursue our interests, even when the interest went beyond the boundaries of
field and scope. Without their support and kindness this work would not have been possible.

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ACKNOWLEDEMENT
Praise to Allah the most beneficent and the most merciful.
I am using this opportunity to express my gratitude to everyone who supported me throughout
the course of this assignment/activity. I am thankful for their aspiring guidance, invaluably
constructive criticism and friendly advice during the assignment work. I am sincerely grateful to
them for sharing their truthful and illuminating views on a number of issues related to the
project.

I am also grateful to our Lecturer Mam Samina Riaz, for enlightening us with her precious
knowledge and vast experience to benefit us in the future. I am also thankful to the Senior
Assistant Librarian & HoD, Mr. Sharif Nasir for his efforts. I also like to thank all the other staff
members who directly or indirectly supported and assisted me.

I would also thank with all gratitude and depth of our hearts to the management of Bank of
Khyber especially Accounts Department who helped me but with integrity and supported me in
all my hardships. Finally, I would like to thank our institute IoBM, College of Business
Management, for providing us the opportunity to give us the strength to undertake this project.
Thank you.

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ABSTRACT
There have been historical studies that have played an obvious role in management accounting in
recent years. They have played a role in economics and sociology, which provide a basis for
management accounting research. As accountants use economic and sociological theories to
explain management accounting practice, they may often be using theories suggested and
supported by historical data.
Accounting researchers are frequently unfamiliar with historical research methods. If historical
studies significantly influence management accounting research, then this unfamiliarity means
that arguments and approaches may be adopted from historical studies. They may do this without
asking the questions that historians would ask of the material.
The main purpose of this activity is to understand the accounting, accounting cycles and how
accounts are maintained in Banks, how to compare different annual bank statements and what to
extract from them for forecasting purpose because when one goes into the market after
completing his MBA and occupies a certain position in any organization specifically in accounts
department , he or she should have knowledge of each and everything related to the accounting
management so that the organizational goals could be achieved easily.
The main reason of this activity is to understand how an organization tries to maintain its
accounts and compares different statements to achieve its future goal effectively and efficiently.

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Table of Contents
CHAPTER 1:.................................................................................................................................11
PROJECT OBJECTIVES..............................................................................................................11
1.1-Project Objective:....................................................................................................................12
1.2-Aim:.........................................................................................................................................12
1.3-Problem Discussion:................................................................................................................13
1.3.1-Common Problems Faced by Organizations/Professionals in terms of
Accounting/Finance:.............................................................................................. 13

1.4-Problem Solution:....................................................................................................................13
1.5-Methodology:..........................................................................................................................14
1.5.1-PhaseI- Defining the Objectives:............................................................................. 14
1.5.2- Phase II- Collection & Selection of the Information:....................................................14
1.5.3-Phase III- Report Writing:...................................................................................... 14

CHAPTER 2:.................................................................................................................................16
INTRODUCTION.........................................................................................................................16
2.0-Introduction:............................................................................................................................17
2.1-Introduction:......................................................................................................... 17
2.1.2-Types of Accounting:................................................................................. 17
2.1.4-Scope of the Accounting:..........................................................................17

CHAPTER 3:.................................................................................................................................18
BANK OF KHYBER/AN OVERVIEW........................................................................................18
3.1-Introduction:............................................................................................................................19
3.1.1-Mission:........................................................................................................ 19
3.1.2-Vision:........................................................................................................... 19
3.1.3-Core Values:................................................................................................. 19
3.1.4- History of Bank of Khyber:...........................................................................20
3.1.5-Organisation Structure of BoK:.....................................................................21
3.1.5.1-Departmentation:...................................................................................... 21
3.1.5.2-Departmentation of The Head Office Level:...........................................22
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3.1.5.3- Personal, Training & Establishment Division:.........................................22

3.1.5.4-Banking Operation Division:...................................................................22
3.1.5.5-Treasury Division:................................................................................... 23
3.1.5.6-Audit & Inspection Division:...................................................................23
3.1.5.7-Credit Division:....................................................................................... 23
3.1.5.8-Computer Department:..........................................................................24
3.1.5.9-Micro Finance Division:...........................................................................24
3.1.5.10-Public Relations Department:...............................................................24
3.1.5.11-International Banking Department:......................................................24
3.1.5.12-Islamic banking division:......................................................................25
3.1.5.13-Consumer Finance Department:...........................................................25
3.1.5.14- Marketing Department:.......................................................................25
3.1.6-Important Financial Products and Services of BOK:......................................26
3.1.6.1-Current Deposits Account (Rupee):........................................................26
3.1.6.2-Saving Deposit Account (Rupee):...........................................................26
3.1.6.3-Term Deposit Account (Rupee):..............................................................26
3.1.6.4-Khyber monthly Scheme (KMS):.............................................................27
3.1.6.5-Security deposit Receipt (SDRS):...........................................................27
3.1.6.6-Khyber Rupee Traveler Cheque:.............................................................27
3.1.6.7-Consumer Financing:.............................................................................. 27
3.1.6.8-Letter Of Credit (LC):.............................................................................. 28
3.1.6.9-Letter Of Guarantee (L/G):.....................................................................28

CHAPTER 4:.................................................................................................................................30
CRTICAL ANALYSIS..................................................................................................................30
4.0-Critical Analysis:.....................................................................................................................31
4.1-Problems at Different Branches:......................................................................31
4.1.1 Communication Problems at the Branch:..................................................31
4.1.2 Limited Number Of Staff:..........................................................................31
4.1.3-Manual System:........................................................................................ 31
4.2-Functional Analysis:......................................................................................... 32
4.2.1-More Accounts less Deposit:.....................................................................32
4.2.2-Delegation Of Authority:............................................................................32
4.2.3-Need for Competitive Attitude:.................................................................32
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4.2.4-Competition:............................................................................................. 32
4.3-Administrative Analysis:..................................................................................33
4.3.1-Lack of Specialized Training In Customer Services:...................................33
4.3.2-Separation Of Activities:............................................................................33
4.3.3-Low Profits:................................................................................................ 33
4.3.4-Delay in Loan Advancement:....................................................................33
4.3.5-High Work Load and Improper Distribution:..............................................33
4.3.6-The Role of Presentation:..........................................................................34
4.4-Personnel Management Analysis:....................................................................34
4.4.1 Need For Better Training Program:............................................................34
4.4.2-Recruitment Policy:................................................................................... 34
4.4.3-Transfer Policy:.......................................................................................... 34
4.4.4-Performance Appraisal:.............................................................................35

CHAPTER 4:.................................................................................................................................36
CRTICAL ANALYSIS..................................................................................................................36
5.0-Economic Analysis:.................................................................................................................37
5.1-Rating of SONERI BANK:.................................................................................. 37
5.2- Financial Statement Indicators:......................................................................39
5.2.1-Total Loans/Advances:..................................................................................39
5.2.2-Total Investments (in Millions):.....................................................................40
5.2.3-Total Deposits:.............................................................................................. 41
5.2.4-Operating Income:....................................................................................... 42
5.2.5-Operating Expenses (in Thousands):............................................................43
Comparison of Operating Income Vs Operating Expense:..................................44
5.2.6- Interest Spread %= Interest Income - Interest Exp/ Interest Income:.........45
5.2.7-Total Liabilities:............................................................................................. 46
5.2.8-Average of 12 Months Stock Price:...............................................................47
5.2.9- Net Interest Income= Interest Income- Interest Exp (Rupees in Thousands):
.............................................................................................................................. 49

CHAPTER 6:.................................................................................................................................51
CONCLUSION..............................................................................................................................51
6.0-Conclusion:..............................................................................................................................52
CHAPTER 7:.................................................................................................................................53
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FUTURE RECOOMENDATIONS...............................................................................................53
7.0-Future Recommendations:.......................................................................................................54
7.1-Availability of Required Staff:..........................................................................54
7.2-Computerization of Branch:.............................................................................54
7.3-Inter Departmental Transfer:...........................................................................55
7.4-Customer Friendly Environment in Branch:.....................................................55
7.5 Professional Attitude:...................................................................................... 55
7.6-Equal Distribution of Work Load:.....................................................................56
7.7-ATM Facility:..................................................................................................... 56
7.8-Delegation of Authority:.................................................................................. 56
7.9-Role of Presentation:....................................................................................... 57
7.10-Competition:.................................................................................................. 57
7.11-Consumer Satisfaction:.................................................................................57
7.12-Recommendations Regarding To Human Resource Management:.................58

CHAPTER 8:.................................................................................................................................60
REFERENCES/ACKNOWLEGEMENTS...................................................................................60
8.0-Refrences:................................................................................................................................61
8.1-WEB Refrences:.................................................................................................... 61
8.2-Book References:............................................................................................. 62

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CHAPTER 1:
PROJECT OBJECTIVES

1.1-Project Objective:
The objective of this project is to understand accounting and finance management, basics of
accounts, balance sheets, and income statements and to understand how an organization tries to
maintain its accounts and compares different statements to achieve its future goal effectively and
efficiently.
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1.2-Aim:
The aim of this project is to see

How Bank of Khyber maintains its accounts.

Compare and analyze different annual banks statements/reports.

Extract and Forecast something from them using our accountings knowledge and skills.

1.3-Problem Discussion:
Sometime, Professionals or the Organizations fail to achieve their targets/goals due to different
reasons. The reason of this activity is to understand the problems faced by Organizations or
Professionals in terms of understanding Accounting and Finance.

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1.3.1-Common Problems Faced by Organizations/Professionals

in terms of Accounting/Finance:

No proper understanding of Accounts/Finance

No proper Planning

Difficulty in Organizing the Resources

Difficulty in Controlling (Budgeting, Forecasting etc)

1.4-Problem Solution:
The project has been chosen to minimize the problems of Professionals working in different
organizations on different positions. The advantages of this project are:

Understanding the Bank Accounts/Statements etc

Understanding and Comparing the Statements
Forecasting on the basis of comparison and analysis.
Understanding the Planning and Controlling process to control and maintain budget,
make decisions etc.

1.5-Methodology:
I have divided this project into following major phases:

Phase I-Defining the Objectives

Phase II-Collection and Selection of the Information
Phase III- Report Writing

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1.5.1-PhaseI- Defining the Objectives:

The objective design phase included mainly the determination of the purpose of this activity. The
first step in this phase was the identification of aim and objectives. It actually gives the direction
what my tasks were and in which direction I had to move.

1.5.2- Phase II- Collection & Selection of the Information:

Once the objectives were properly defined, I decided to collect the information by visiting the
different websites; Bank of Khybers website, State Bank of Pakistans website. I also visited
Bank of Khybers DHA Phase II Branch on 15 th of Dec, 2014, met the Manager Operations, Ms
Farah Karamat Wazir and had a very informative session with her. I also did some literature
review and research for the proper understanding of the whole activity by going through different
case studies and visiting websites. When all the information was collected, the main task was to
analyze and compile the data for report writing.

1.5.3-Phase III- Report Writing:

Once all the information and data was collected and compiled, the most important task was to
write the report. Different sample reports were also reviewed so that there should not be
something missing.

Phase I
Defining
Objectives

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Phase II
Collection/Se
lection of
data

Phase III
Report
Writing

Figure-1.0-Methadology

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CHAPTER 2:
INTRODUCTION

2.0-Introduction:
2.1-Introduction:
Accounting is the systematic and comprehensive recording of financial transactions pertaining to
a business. Accounting also refers to the process of summarizing, analyzing and reporting these
transactions.
2.1.2-Types of Accounting:

There are four main types of accounting;

1. Financial Accounting (Recording of transactions/Financial statements)
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2. Management Accounting (Budgeting, Forecasting, Decision making)

3. Cost Accounting (Identify, Measure, Decision making and Control Cost)
4. Tax Accounting (Tax Planning, Tax Control etc)
2.1.4-Scope of the Accounting:

Today the profession of Accountancy is in demand; accounting jobs around the globe especially
in Pakistan are seen regularly in the newspapers. Number of colleges and universities offer
different accounting courses and accounting degree programs. Many foreign universities
offer online accounting degree Programs too. Opportunities for accountants in Banks are
increasing fast so it is essential to get into the ring as early as possible. It is vital to keep side by
side with new opportunities and make the links that will help in your career.
Today there are limitless career opportunities for accountants in Pakistan. Accounting firms
provide accounts graduate opportunities to start a career right after their graduation as a trainee
accountant in Pakistan. Those who like to work setting in ones home or own office can start
accounting outsourcing as there are lot of outsourcing opportunities worldwide where accounting
and finance jobs can be get as an outsourcing opportunity. The choices in accounting field are so
enormous, and so wide-ranging, that deciding a career path may turn out to be a key test. Thus it
is time to think about becoming an accountant selecting the right degree programmed for you
future life.

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CHAPTER 3:
BANK OF KHYBER/AN OVERVIEW

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3.1-Introduction:
The Bank of Khyber was established in 1991 through Act No. XIV, passed by the Provincial
Legislative Assembly of the KHYBER PAKHTUNKHWA Province of Pakistan. It was awarded
status of a scheduled bank in September 1994. The Bank of Khyber enjoys a unique position, and
stands out amidst the other banks operating within Pakistan, and has the privilege of being
bracketed amongst the only three government banks in the country.

3.1.1-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

3.1.2-Vision:
To become a Leading Bank providing efficient and dynamic services in both Islamic and
Conventional banking through expanded nationwide network.

3.1.3-Core Values:

Highest quality of Service

Professionalism
Integrity
Team Work
Innovation and Utilization of Latest Technology
Risk Mitigation
Corporate Social Responsibility

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3.1.4- History of Bank of Khyber:

The Bank of Khyber is one such bank, which came into being after the passing of a Resolution in
the Provincial Assembly of NWFP in 1991. The focus point for the establishment of this bank is
to provide employment opportunities for the man power of this province & to provide financial
assistance to the people of NWFP, who are engaged in small, medium and large scale businesses.
Most of the nationalized commercial banks have their Head Offices in provinces other than
NWFP, which is the main hindrance to availing loan in time from these banks. The banks have to
take formal approval from their H/O in order to advance loans to their customer or to make some
transactions within the branches. Therefore, it was felt that there was a great need to have a bank
which has its Head Office in the same province also, so that there could be no time delay,
communication gap or provisioning of documents to advance loans expeditiously. Initially, the
Bank of Khyber had agency arrangements with ABL and MCB for clearing and collecting
cheques from other banks, but with the grace of Almighty Allah and the hard work of its
management, it became a scheduled bank. It started its operation in SBP and to have a clearing
officer of its own for clearing purposes and tackling of other matters with SBP. Presently, this
bank has started to work as an agent for all its branches in Peshawar and other cities where SBP
arrangements are not possible. In 1995, the BOK availed an opportunity for a Foreign Exchange
license and its corporate main branch became the first authorized dealer to deal in foreign
exchange business and trade services/finance. Now, other than its branches in the NWFP, the
Bank of Khyber has its network of branches in Islamabad, Lahore, Karachi and Muzaffarabad
also.
The Bank is providing loans to private as well as public sector organizations, not only for the
prosperity of the people but also for the development of NWFP. In this way, job opportunities
surface in different sectors, mainly for the people of NWFP, which may help the country get out
of the clutches of unemployment and related poverty problems.
Besides, the Running Finance & Demand Finance facilities, it has also started loaning for small
clusters, which has a separate controlling department called the Micro Finance Department.
MFD has been introduced to cover the businesses, which are on a small scale either in the shape
of shops, small projects or home- level projects of ladies, like embroidery, beauty parlors &

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stitching centers. This level of loans may be advanced to customers, after they provide two
guarantors to The BoK.
The SBP has recently allowed the opening of banks and branches based on a pure Islamic
Banking System in the country. For the said purpose an Islamic Banking Department has been
established by the SBP to provide necessary guidance to the banks and concerned staff. They
have also instructed all the banks to introduce necessary steps for promotion of Islamic banking.
In pursuance of the SBP instructions an Islamic Banking Division has been established by the
Bank of Khyber to evaluate and implement policy and procedural matters to cater to the Islamic
banking demand of our valued customers. The recruitment of suitable staff for Islamic banking
operations and their necessary training arrangements are under process.

3.1.5-Organisation Structure of BoK:

3.1.5.1-Departmentation:
Departmentation is the logical process of grouping of activities, or the process of grouping jobs
in the logical arrangement through which the organizational goals or objectives can be achieved.
It is also the process of division of work into various sections or department or divisions, over
which a manager has authority and responsibility for performance of specified activities.
Basically there are four ways for organizational Department.
1) Departments by function
2) Departments by product
3) Departments by geography
4) Departments by customer
The deparmentation in the BOK has been done purely on functional basis, in the following
manner:

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3.1.5.2-Departmentation of The Head Office Level:

The BOKs H/O is located in Peshawar, and it has complete control over administrative matters
and operations as well as other areas of the BOK.
3.1.5.3- Personal, Training & Establishment Division:

This division performs the following tasks:

Recruitment & selection

Training
Supervision
Postings
Promotion
Leave and other staff matters
Motivation
Termination

While the Establishment Division deals with procurement, repair/renovation and disposal of real
assets of the bank, the purchases are made against demands of various departments through open
building .The contracts are given to an agency, which provides the best quality products at the
competitive rates and the delivery is made according to the schedule. if the assets is depreciated
according to the set percentage and it is no longer feasible to use it, then the Establishment
division deals with building , furniture/ fixtures, vehicles, computer and many other items, which
are related to the bank or juts staff.
3.1.5.4-Banking Operation Division:

This division is constitutes.

Tellers operation
Cash management
Remittances
Bills
Consolidation & statement.
Hajj operation
Special
Deposit Scheme
Travellers Cheques Credits Cards etc.

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3.1.5.5-Treasury Division:

Treasury Division is involved in the investments in the shares market, bonds debentures,
placement of the funds & reconciliation of Nastro accounts (foreign currency Accounts
maintained in the foreign countries in the respective currencies) The settlement of trade finances,
inward and out ward remittances, through Nastro accounts is made possible by the treasury
division.
3.1.5.6-Audit & Inspection Division:

This division is known as the eyes and ears of the top executives of the bank. it keeps them
informed of any contravention of bank regulations by any branch/department or staff and also
proposes remedial measures to set it right. in the BOK there are three types of Auditing, i.e.
internal Audit , External Audit. And SBP Audit. Auditors are assigned to make comprehensive
audit on yearly basis of all branches. A separate team of audit Division is deputed to make sure
the compliance of all irregularities, pointed their inspection..
The board of Directors of the BOK has appointed External Auditors for comprehensive audit of
all branches on the yearly basis. The board of BOK has to appoint any chartered Accountants
from the list of the SPB. Since they are External auditors and approved for SPB, therefore they
prepare all the financial statements of the BOK.
Since SBP is the central bank of the country and it has a right to carefully monitor all the
activities of all banks therefore they also conduct their audit in the BOK on yearly basis. In case
any bank violates Prudential Rules & Regulation of the SBP, SBP reverse the right to panelize
such banks .in case of any major violation, they may dissolve the management of any bank .the
compliance of irregularities are made sure by them as well.
3.1.5.7-Credit Division:

This division is engaged in providing fund based & non fund based facilities to customers of
different branches. They receive proposals & recommendation from their branches along with
application requests of their customers. Then they prepare aggregate proposals for further
submission to the Credit Committee, where these proposals are discussed thoroughly and final
decisions are made by the competent authority. This sanction loans proposals and forward the
same to the relevant branches with instructions to retain proper security, offerd by the customer
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and retain all legal documents to safeguard the banks position. Any activity related to facilities
may also be altered by this division.
3.1.5.8-Computer Department:

The Bok has appointed some qualified software and hardware engineers in the BOK IT
department. The senior most is deputed as in charge of IT department. Software
engineers/programmers are not only responsible for application development in the BOK , to
fulfill requirements of the bank, installation of the hardware in the also act like trouble shooters,
whereas, installation of the hardware in the branch set up is the responsibility of the hardware
engineers, in the each branch, they have assigned a systems administrator to look after jobs
related to the computing system. Proper trainings have been provided to the system administrator
in this effect.
3.1.5.9-Micro Finance Division:

The Micro Finance department at the branch level are watched carefully by this division.MFD is
exclusively designed to approve loans on a small scale to small units like, toy shops, garment
shops, and stitching centers run by women.
3.1.5.10-Public Relations Department:

It establishes a liaison between public sector organizations and corporate customers with the
bank on the behalf of the management of the bank.
3.1.5.11-International Banking Department:

This department carefully looks after the business transactions and activities of all the branches
which are authorized in the Foreign Exchange Business, like Trade services and Finance, foreign
Currency accounts, Remittances, Travellers Cheques issues and FOBC (Foreign outwards Bills
for collection) the details will be discussed in analyses section of the report.
3.1.5.12-Islamic banking division:

This division looks after PLS banking and other Islamic modes of financing. This department
does research in Islamic Banking and conducts training courses for the staff.

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3.1.5.13-Consumer Finance Department:

This department facilitates the common masses in getting all kinds of electrical households
items, like television, microwaves, oven, air conditioners, tape machines, music system and
refrigerators. This facility may be allowed against a personal guarantee of a single individual.
3.1.5.14- Marketing Department:

Banks are aware of the fact that marketing and advertising are very important for the healthy
growth of all organizations including banks. Advertisements are meant to get the attention of a
segment of the society which is the banks target. This is done through the following

News papers/ periodical/ journals

Radio & T .V
Outdoor boards / sign boards
Gift with the banks name printed on them like key chains or wall clocks.

3.1.6-Important Financial Products and Services of BOK:

Few of the important products and services are:

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3.1.6.1-Current Deposits Account (Rupee):

The BOK rupee current deposits account allows the facility if ultimate withdrawals up to the
extent of the balance in account. There will be no tax deducted on the funds that someone
chooses to keep in these accounts
(A) Balance in current accounts are payable on demand .any amount can be withdrawn prior
notice. Similarly there are no restrictions on number of transactions during the day.
(B) All individuals including foreigners, firms and corporate bodies are entitled to open and
maintain current accounts
(C) No profit will be paid on the current accounts
(D) Overdrafts are allowed on these accounts.
3.1.6.2-Saving Deposit Account (Rupee):

The Bank of Khyber rupee saving deposit account allows the facility of multiple withdrawals up
to the credit balance, with accruing profit on the deposits
TYPES OF SAVING ACCOUNT
Profit and loss sharing account (PLS)
Special Deposit Account (SDA)
PLS 7 days Notice Deposit.
PLS 30Days Notice Deposit.
Profit is paid bi-annually on the minimum monthly balance (Jan-June & July-Dec) which is
announced in the July and January respectively.
Generally, withdrawals from this account are allowed on demand i.e. without any prior notice of
withdrawals.
Over draft is not allowed on this account.
3.1.6.3-Term Deposit Account (Rupee):

The BOK Rupee term deposits Account offers the dual benefit of attractive returns with highly
liquidity. Option to take profit monthly, quarterly, annually or at maturity. Profit is accrued on the
daily basis. There is no penalty for premature encashment. However, in case of any encashment
the rate of the previous tender will be applied. The option of partial liquidity is allowed i.e.
withdrawals to a certain percentage from the fixed deposits without disturbing the remaining
deposit are allowed.
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Term of fixed deposit is accepted by BOK, mature between one and five year.
Profit on fixed deposit is paid on the maturity of deposits
Each fix deposit account is considered as a separate contract.
3.1.6.4-Khyber monthly Scheme (KMS):

On KMS the BOK gives monthly interest on amount deposited with the bank . This is a sort of
fixed deposit and the customers will have to keep the deposit for the five years.
3.1.6.5-Security deposit Receipt (SDRS):

This is a receipt by the bank, at the instruction of the depositor, confirming that amount of SDR
is held by the bank to be paid whenever called upon to do so by the beneficiary named in the
SDR
A: A SDR is non negotiable instrument. SDR;s are generally used to make advanced payment
are as earnest money or security deposit etc
B: SDR can be re paid to a named beneficiary or the purchaser/depositor upon proper
identification.
C: Non-profit is paid on called deposits
3.1.6.6-Khyber Rupee Traveler Cheque:

The generally issued for the convenience of persons travelling abroad, but some Pakistani banks
issue them in Pakistanis currency, for use within the country as well.
Before issuing the banker received the amount equal to the face value of the cheque, and also
charged a small commission. The traveler cheque are far fixed amount and are treated as order
cheque payable only to the purchaser whose specimen signature appear on the travelers cheque
itself, Foreign currency traveler cheque are issued and en cashed an accordance with provision of
the exchange control regulation act 1947
Khyber Rupee traveler cheque (KRTC), is a negotiable, which can be remittances. Funds and as
alternative to cash
3.1.6.7-Consumer Financing:

(a) Fund Based Facilities:

Fund base facilities are those which involved a cash disbursement at the time of allowing the
facility
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Running Finance
This is a working of capital finance facilities available for the one year and renewed subject to
satisfactory utilization there of Mark up is to change on outstanding balance.
It is a term loan disbursed in lump sum
And repayable in two year in the form monthly or quarterly installment.
Advance against salaries
This facility is available to Govt. and semi Govt. employees up to five gross salaries.
(b) Non- fund Based facilities:
The non-fund Based facilities are those in which the bank does not invest its own funds rather it
commitment is involved against which the bank charges a certain amount in the shape of
commission these facilities are available in the form of letter of credit and letter of guarantees.
3.1.6.8-Letter Of Credit (LC):

Letter of credit is required in the settlement of international trade, some time local transaction are
also done through the letter of credit which are termed as in the land L/Cs. usually there are four
parties involved in L/Cs:
A: Importer
B: Exporter
C: importers bank
D: exporters bank
L/C may be on the site or issuances basis .in sight based L/Cs, the importer has to pay the
amount upon payment of value. In case of issuance L/Cs, the exporter extends credit to importer.
The documents are handed over to the importer against his acceptance of bill and assurance of
payment of the maturity date of acceptance.
3.1.6.9-Letter Of Guarantee (L/G):

The bank provides assurance to beneficiary of the guarantee about the satisfactory performance
of certain act by the application of the guarantee.
In the letter of guarantee, there parties are involved i.e.
A: Bank (provider of guarantee)
B: Application of the guarantee (Bank customer on whose behalf the banks issue a guarantee)
C: Beneficiary (in whose favor the guarantee is issued)
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The bank at request of application issues the guarantee and charges commission for it
commitment from the application at exposure is secured against some security.

Page | 29

CHAPTER 4:
CRTICAL ANALYSIS

Page | 30

4.0-Critical Analysis:
I personally observed and experienced few problems along with those narrated by concerned
personnel. I do admit that these problems may or may not be present in other branches of the
bank. I have divided critical analysis into four parts, which are as follows:

Problems at the Different branches.

Functional Analysis.
Administrative Analysis.
Personnel Management Analysis
Economic Analysis

4.1-Problems at Different Branches:

Some problems regarding to the branches are:
4.1.1 Communication Problems at the Branch:

There is a single hall in the branch and the staff of the bank uses peon or shout to communicate
with the other employee. As a consequence there is noise and disturbance in the branch. The flow
of information is very slow as there is gap between the counters. The relationship among the staff
members was good but sometime in the working hours the employees leave their chairs for a
chat with their colleagues leaving the customers stranded.
4.1.2 Limited Number Of Staff:

Staff is limited. When one employee goes on leave it puts additional burden on the other
employees which decreases the efficiency as well as demotivates the staff. There is no telephone
operator so when another officer is busy receiving telephone calls the customers are left stranded.
It gives a bad impression about the bank and the branch. Also there was a need of public relation
officer (PRO). As the queries of the customers have to be answered by the busy staff, which was
resulting in loss of time.
4.1.3-Manual System:

As the system is manual, it takes a longer time to process the records. For instance, if a customer
asks for his balance it takes too much time to get the required information. As the competition
from other bank branches is growing with the technological advancements BOK is also taking on
the challenge up but it is very slow. There is urgent need of computerization of branch.

Page | 31

4.2-Functional Analysis:
4.2.1-More Accounts less Deposit:

Efficient banking is one in which the emphasis is on total deposits not on number of accounts. In
BOK university road branch the number of account are higher with respect to deposits. As a
result of this personalized service cannot provide to all the account holders. This results in
effecting the efficiency of the branch. There was higher percentage of accounts with balance less
then Rs. 1000.
4.2.2-Delegation Of Authority:

Manager has a limited authority. He has to take the approval from upper management as its a
public organization. Low Level Managers have limited authority. They have to take approval of
chief manager even in the case of minor issues. Due to this there is delay in decision-making and
these delays can result in poor performance. Decisions have to be taken timely and have to be
implemented quickly. Manager has no authority to sanction loans.
4.2.3-Need for Competitive Attitude:

THE BANK OF KHYBER has monopoly in the government transactions due to which its
employees lack in competitive attitude. There are instances when not in good mood, they simply
say to the customers, YOU PLEASE GO TO ANY OTHER BANK. This is the thing, which is
responsible for the disaster of all the government control organizations including. BOK The
management of the branch has been successful in minimizing this attitude.
4.2.4-Competition:

As it has already been mentioned that the competition in the banking business is increasing day
by day with the introduction of new private banks and now it is the SURVIVAL OF THE
FITTEST.
It is not only the privatized banks that are putting pressure on the nationalized banks but there are
also international banks that are doing good business in Pakistan. Right know BOK branch is
lacking in the technological field, as the branch is not computerized and there is no ATM facility
available most of the branches.

Page | 32

4.3-Administrative Analysis:
4.3.1-Lack of Specialized Training In Customer Services:

THE BANK OF KHYBER does not provide adequate facility of specialized training in the
customer services to its staff. As the workers finish their training they are inducted into a specific
field. The major deficiency in the staff of the branch is related to customer service. Specific
attention should be given to customer service in the training programs of the bank.
4.3.2-Separation Of Activities:

There is lack of delineation of responsibilities. As such a function of remittances is partially done

in remittances and partially in deposits department. This creates confusions and conflicts in the
decision making process. There should be complete separation of activities to avoid all this
ambiguity and this may also reduce overlapping of work. This problem is due to the shortage of
space available to the branch.
4.3.3-Low Profits:

Most of the customers shifted their account to the national saving center because of the low
profit rates of saving deposits. The bank management should increase their profits to enhance
business during this era of competition.
4.3.4-Delay in Loan Advancement:

It has been observed that there are delays in sanctioning of loans from the head office, which
results into Customer Dissatisfaction. This is primarily due to the fact the chain of cycle of
authority is very long and manager has very little powers. He has no power even to sanction
small loans.
4.3.5-High Work Load and Improper Distribution:

The workload on the employees of BOK is immense. Due to the presence of accounts of
government servants, so they should be compensated for the extra time spent by them. Proper
distribution of work leads to success in every organization. Proper distribution of work prevents
the employees from over work and under work situations. So for the smooth running of an
organization, proper distribution of work is the hint to be followed, there are employees who
work tirelessly while there are employees who have little work to do.

Page | 33

4.3.6-The Role of Presentation:

In every walk of life presentation plays a very important role, specially the business concerns
have to care about their presentation. Clients are attracted by means of a proper presentation. In
the banking business the presentation of the branch office and the officers both are very
important. In the newly established private banks we can observe that the officers are dressed
smartly, it is all due to the policy of the bank. It means that the getup of the officers attract the
customers. Nicely and smartly dressed people do make a lot of difference.
The Bank Of Khyber has a lot of branches all over Pakistan, even in the remotest part of the
country, but the branches are not very well maintained. The employees of BOK are not properly
dressed. They like to wear Shalwar Kameez and it needs a lot of improvement.

4.4-Personnel Management Analysis:

4.4.1 Need For Better Training Program:

The need of training is felt all over the world. Training of the personnel is a part of human
resource management. Once a candidate has been selected and placed on the respective job, it
becomes essential to train him adequately for the task. They should learn new methods for
motivating customers. The training program of the bank should include scientific techniques to
improve the decision making and interpersonal as well as individuals needs of the employees.
4.4.2-Recruitment Policy:

Human resources are the lifeblood of organization. If the personnel are recruited carefully they
can become an asset to the organization and in the case of carelessness the personnel can become
a liability. As it is a public organization so due to favoritism, nepotism and political influence
unsuitable candidates are selected. Both the top authority and staff union tries their best to recruit
their favorites.
4.4.3-Transfer Policy:

Promotion policy of BOK is very slow. Those employees who are having approach to higher
authorities are transferred to the seats or branches of their own choices, and those who are not
having approach are working on seats which they do not deserve, or they will work in the
branches which will not suit them either in one way or other. This thing demotivates the
employees and they lose their interest in doing their jobs.

Page | 34

4.4.4-Performance Appraisal:

The rating of the employees on the basis of their performance in an organization, performing
certain defined standards is called performance appraisal.
It is again a scientific tool provided by the personnel administration. BOK has followed the
checklist method for the evaluation of the employees. It is a simple procedure of checking the list
with the given set of objectives or descriptive statement and these are used for the performance
evaluation of the employees.
In BOK ACRs are used for the purpose of evaluation, but the observation shows that the element
of subjectivity is involved in it. The confident reports (CR) of the employees are signed by the
immediate boss, and then it is counter signed by two superiors. The superior may not know about
the employee or the hazards involved with the employees work or the superior may not be in
direct contact with the employee.

Page | 35

CHAPTER 5:
ECONOMIC ANALYSIS

Page | 36

5.0-Economic Analysis:
Bank of Khyber was established in the year 1991. It has a unique market position in tradefinance and transactions banking services, and boasts a loyal and satisfied client-base in all its
100 branches all over the country. The Bank is operating with 101 branches, 2 sub-branches and

2 booths throughout the country out of which 44 branches are functioning as dedicated Islamic
Banking Branches. The Bank is in the process to open 16 new branches by the year end 2014 for
which the Central Bank has already gave its consent.
The Bank of Khyber (BoK) has shown remarkable results for the half year ended June 30, 2014.
The Bank managed to post a pre-tax profit of Rs. 969 million against Rs. 823 million of the
corresponding period of 2013, showing an increase of 18%. Profit after tax (PAT) stood at Rs.
634 million, thus showing an increase of 15% over the corresponding period.
The deposits grow by 9% from Rs.77,218 million as of 31.12.2013 to Rs. 84,349 million as of
June 30, 2014 .Investments have shown healthy rise of 13% from Rs. 53,363 million to Rs.
60,493

million

as

of

June

30,

2014.

As on June 30, 2014, the Banks paid-up capital stood at Rs. 10.00 billion. The Minimum Capital
Requirement (MCR) of the State Bank of Pakistan has been fully met by the year ended
December 31, 2013 and the Bank is now fully compliant with the MCR requirements.

5.1-Rating of SONERI BANK:

Rating Agency : The Pakistan Credit Rating Agency (PACRA)

Ratings : Long term : "A" (Single A);

Short Term : "A1" (A one);

These ratings denote a very low expectation of credit risk emanating from a very strong capacity
for timely payment of financial commitments.

Page | 37

The ratings, in addition to the association of the bank with Government of Khyber Pakhtunkhwa
(GoKP), reflect BoK's strong liquidity and high capital adequacy, supplemented by sustained
profitability. The bank's management is making continuous efforts to develop access to a broad
based depositor profile and improve cost of deposits. The bank still has reliance on large ticket
deposits from Government of KPK and its related agencies. However, concentration risk is
mitigated by stability in such deposits over time. Recent growth in advances was mainly
manifested in commodity financing to Government of KPK. Meanwhile improving asset quality,
technology integration, and consistent improvement in bottom-line remained in focus. However,
with desired credit growth, strengthening management information systems, in turn, control
mechanism is to be strengthened.

Rating Update: 30-Jun-2014

Rating Action: Maintained
Analyst: Abdul Sami
Web Reference: http://www.bok.com.pk/Pdfs/BoK_PR_Jun14.pdf

Page | 38

5.2- Financial Statement Indicators:

Financial statements' indicators:

1.
2.
3.
4.
5.
6.
7.

Total Loans/Advances
Total Investments
Total Deposits
Operating Income
Operating Expenses
Interest Spread %= Interest Income - Interest Exp/ Interest Income
Total Liabilities
Page | 39

8. Average Of 12 Months' Stock Price

9. Net Interest Income= Interest Income- Interest Exp
5.2.1-Total Loans/Advances:
All the data was collected from State Bank of Pakistans website, The Bank of
Khyber Pakistans website and Karachi Stock Exchanges Website. The annual
financial reports have been attached with this report for the reference.
The total loans of Bank of Khyber in Millions from 2004 till March 2014 are given
below;

Year
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004

Total Loan/Advances (in Millions)

33,669
35,450
26,693
22,288
18,238
11,836
12,644
10,086
9,219
10,612
9,001

Page | 40

Loans & Advances in Millions

40,000
35,000
30,000
25,000

Loans & Advances in

Millions

20,000
15,000
10,000
5,000
0

The graph shows that the total loans and advances (Bank has given or Bank has taken) are
increasing gradually with the years. BoK provides shot term soft loans for different services like,
agriculture, small business etc. Due to the poor law and order situation and economy of KPK and
the country also, mostly people do not pay back the loans or unable to pay back. People have
also this concept in their minds related to Public Banks that nothing would happen if they dont
pay back the loans. There are also some other reasons as well that we have already discussed.

5.2.2-Total Investments (in Millions):

Year
31 March 2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004

Total Investment
45,831
53,363
45,672
36,685
19853
17,926
8985
8,324
8,565
7,698
6,926
Page | 41

Investment in Millions
60,000
50,000
40,000
Investment in Millions

30,000
20,000
10,000
0

As we can see from the graph, the graph of investments is increasing which is a positive sign.
But if we look at the other indicators like operating income and expenses, the liabilities and the
Credit Rating then the situation becomes very disappointing. The factors which I have discussed
before the Economic Analysis play very important role in progress of any Bank. Private sector is
progressing just because they emphasize more on these factors because of the competition where
as Public sector is declining because they never care.

5.2.3-Total Deposits:
Year
31 March 2014
2013
2012
2011
2010
2009
2008
2007
2006

Total Deposits
70,737
77,218
60,043
45,548
36981
26,286
24,732
21,410
19,076
Page | 42

2005
2004

17,452
15,831

Deposits in Banks
90,000
80,000
70,000
60,000
50,000

Deposits in Banks

40,000
30,000
20,000
10,000
0

The graph of Deposits in BoK is increasing gradually. At macro level, banks create deposits by
extending loans. Banks raise deposits to lend money to wherever it is required in the economy,
most preferably in the private sector. Lending to the government is among other avenues where
banks may use depositors money, but not at the cost of private sector borrowers. The State Bank
of Pakistan has floated the minimum deposit rate and signaled to banks that if they continue to
use depositors money for over-investing in treasury bills and bonds while ignoring the credit
demand of the private sector, they will have to accept a lower return on their end-of-the-day
leftover funds. And by extension, the SBP has sought to bring the banking spread more in line
with its monetary policy stance.

5.2.4-Operating Income:
Year
31 March 2014
2013
2012
2011

Total Operating Income

447000
1,756
1,861
1,618
Page | 43

2010
2009
2008
2007
2006
2005
2004

385,000
799,000
79,232
137.348
109,975
132,955
133,160

Operating Income
500000
450000
400000
350000
300000

Operating Income

250000
200000
150000
100000
50000
0

5.2.5-Operating Expenses (in Thousands):

Year
31 March 2014
2013
2012
2011
2010
2009
2008
2007
2006
2005

Total Operating Expense

1970365
1654703
1,657,560
1,468,480
943,680
719,453
654,869
522,723
372,129
361,569
Page | 44

2004

302,775

Operating Expense
2500000
2000000
1500000

Operating Expense

1000000
500000
0

Increase in the Expense decreases the Equity. As we can see from the graph, the
total operating expense till 31st March 2014 were 1970365 Rupees in thousand where as

the operating income is very low as compare to operating expense which shows that banks
equity is declining.
Comparison of Operating Income Vs Operating Expense:
2,500,000
2,000,000
1,500,000
1,000,000

Operating Income
Operating Expense

500,000
0

Page | 45

As we can see clearly from the graph showing the comparison of Operating Income and
Operating Expense that the operating Expenses of BoK are much greater than the their operating
income. The reason of this is recruitment of on basis of political affiliation; employees dont
want to work or work with no motivation. Workers are not proper trained. Everything is still
done manually which actually increases the cost as well as the burden on the employees as well
as on the bank. Bank is unable to control its expenses this is why Government of KPK had to
give bailout package for the BoK but that didnt work actually.

5.2.6- Interest Spread %= Interest Income - Interest Exp/

Interest Income:
Year
31 March 2014
2013
2012
2011
2010
2009
2008
2007
2006
2005

Interest Spread %
58.8
41.4
35.9
34.4
30.4
29.4
35.8
22.4
32.8
37.5
Page | 46

2004

55.4

Interest Spread %
70
60
50
40

Interest Spread %

30
20
10
0

5.2.7-Total Liabilities:
The provincial government of KPK had injected Rs 3 billion into the Bank of Khyber (BoK),
bailing it out to meet the condition of State Bank of Pakistan (SBP) for rising paid up capital in
2011. After getting the bailout package from the government, BoK is still declining due to
various reasons that we have already discussed before.
As we can see the graph of liabilities, the liabilities had reached 58 millions in rupees in 2011.
Due to Governments bailout package the graph went down in 2012 but again in 2013 it went up
rapidly. The management of BoK and government of KPK would have to take serious steps to
decrease the liabilities. Sometime, the liability also becomes expense when bank takes loan on
interest. The interest is basically the expense that bank had to pay back from where it borrowed.
Year

Total Liabilities
Page | 47

31 March 2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004

82,170,869
95,613,371
13,900,692
58,058,972
41,393,930
32,848,273
26,657,773
23,863,487
24,182,304
22,514,028
21,643,699

Total Libailities
120,000,000
100,000,000
80,000,000
Total Libailities

60,000,000
40,000,000
20,000,000
0

5.2.8-Average of 12 Months Stock Price:

Year
2014
2013
2012

Stock Price June

9.31
7.50
8.28

Stock Price Dec

9.50

7.50
7.12
Page | 48

2011
2010
2009
2008
2007
2006
2005
2004

4.73
3.78
2.81
14.20
16.50
16.90

5.40
4.30
4.91
6.41
15.50
15.75
17.2
14.8

14.8

One of the main business factors in determining a stock's price is a companys earnings,
including the current earnings and estimated future earnings. News from the company and other
national and world events also plays a large role in the direction of the stock market. Some
examples of this are oil prices, inflation, and terrorist attacks.
Every analyst and trader has a different perception of what that stock price should be now and
where it might be in the future, and trading decisions are made accordingly.
35
30
25
20
Stock Price Dec
15

Stock Price June

10
5
0
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

As we can see from the graph, the stock price is varying between the June and Dec, and annually.
AS we have already discussed the factors on which stock price depends. The equity of BoK is

Page | 49

declining due to the expenses so the stock price is also declining as we can see after the 2007
when the stock price went up is coming down. Currently in Dec 2014, the stock price is 9.50.

5.2.9- Net Interest Income= Interest Income- Interest Exp

(Rupees in Thousands):
Year

Interest Expense

Net Interest Income

31st March 2014

2013
2012
2011
2010
2009
2008
2007
2006

1,373,863
4,336,632
4,611,172
4,551,942
2,925,066
2,390,388
1,897,816
1,845,360
1,304,742

2,182,223
7,406,906
7,204,937
6,946,827
4,207,155
3,390,014
2,958,865
2,380,380
1,943,335

2005

908,085

1,453,726

2004

417,317

937,064

Page | 50

Net Interest Income

8,000,000
7,000,000
6,000,000
5,000,000
4,000,000

Net Interest Income

3,000,000
2,000,000
1,000,000
0

The net interest income is the difference between the revenue that is generated from a bank's
assets and the expenses associated with paying out its liabilities. A typical bank's assets consist of
all forms of personal and commercial loans, mortgages and securities. The liabilities are, of
course, the customer deposits. The excess revenue that is generated from the spread between
interest paid out on deposits and interest earned on assets is the net interest income.
AS we can see from the graph, the interest income is increasing which is a positive sign.

Page | 51

CHAPTER 6:
CONCLUSION

Page | 52

6.0-Conclusion:
I started off the project with aim to accomplish the simple looking task of establishing a report on
Bank of Khyber. But with time and experiences it was learnt that this was not at all an easy task,
especially collecting the information and then analyzing the economical information as compare
to other organizations in the banking sector.
Though I am able to achieve all the goals of this project but still I think that lots of advancement
can be done on this project. I have provided the platform and the platform is ready for everyone
to work on it. For advancements, need more time, money and hard work to understand and
analyze the financial statements.

Page | 53

CHAPTER 7:
FUTURE RECOOMENDATIONS

Page | 54

7.0-Future Recommendations:
Some recommendations are suggested for the bank in accordance to the critical analysis.

7.1-Availability of Required Staff:

The shortage of Staff is one of the main issues of BoK. There are no Telephone Operators
Customer Service Officers and Public Relation Officers.. Even when I called in BoK Defence
Branch, no one picked up the phone. These are necessary because without the customer service
officer the customers are facing a lot of difficulties. No one bothers to attend the calls.. The
customers are left stranded during this course of time, damaging the reputation of the bank. The
employees have to answer the queries of the customers such as account balances on telephone. It
wastes a lot of time of the staff. In these conditions there is a need of telephone operator.
A help desk in every branch should also be there. It will take one additional person who will
handle both of these jobs. Although it will cost the bank but it will benefit the bank in goodwill
and better working environment.

7.2-Computerization of Branch:
Computers should be introduced in BOK. This will reduce administrative cost to great extent.
This will help a lot in the operation of the bank, Computer knowledge should imparted to the
employees. Communication and coordination problem will be solved to great extent. It will help
in speeding up the decision making process regarding the loans. The branch will send these
proposals instantly to headquarter will process it swiftly. This will save the time, which is lost in
the delivery process.
Keeping in view the new world requirement it is essential for the bank to install a computer
information system. To achieve the organizations goals in limited time and budget, it is felt that
the bank must have modernization in its operations. This will decrease the workload on the
employees in the branch. The accuracy is also another advantage which comes with the use of
computers. Although the installation of computer in the branch will cost a lot initially but in the
longer run it will produce fruitful results. As the computers are fast they can do a lot more work
than the human being thus the need for future employment will decrease considerably. The
employees have to be paid with the fringe benefits, but the computers are bought once.
Page | 55

Proper training of computer has to be imparted to the staff. This can be done in terms of 2-weeks
short course at the computer center or evening coaching can be done at the branch itself.

7.3-Inter Departmental Transfer:

There should be inter departmental transfer of employees, so that they should know about all
departments, in this way a proper coordination could be achieved. They must have some basic
information of other departments. There must be proper job rotation. This will enhance the
capabilities of the employees, as due to change in work they will escape monotony. This will
give them refreshing change and motivate them for their work.
In the branch there were few seats where the load of work was more than the other seats so the
need of rotation was felt there so that nobody should be overburdened. As the officers working in
those departments spent lots of time so need of interdepartmental transfer was felt. It was seen
that these persons were not happy with this and due to this their motivation level was not at the
highest level.

7.4-Customer Friendly Environment in Branch:

Friendlier environment should be created because it will help to gain the interest of employees in
work. Noise in the office should be reduced because it has unfavorable impact on the working
environments. At the start of the month there is a rush in the bank due to the payment of salaries;
in this kind of situation a cool head is required as there is an element of lack of discipline in the
customers. It is required for the staff to educate them to follow discipline. All of them should be
treated equally; no relaxation should be given to the near ones.

7.5 Professional Attitude:

More professional attitude is required from the bankers. The management should curtail the
unnecessary expenses to improve profitability. All loop holes must be closed that are used to
incur expenses in respect of telephone, fuel, electricity, fringe benefits etc. the bank should
analyze each activity on cost and benefit basis (cost benefit analysis).
As these are controllable expenses and they lead to the minimization of the profits of the branch
so the management should bring it to the minimum level. The staff of the branch should be
punctual and should follow the office timings very strictly. There were few instances when the

Page | 56

officers were not punctual and the customers had to wait for the arrival of the officer. In todays
world of competition the wastage of time is not tolerable so the staff should be loyal to their
duties.

7.6-Equal Distribution of Work Load:

The employees of the branch should be given equal workload. The distribution of workload
should be such that there should be no undue load or burden on any one. This will enhance the
motivation and efficiency of the employees. Nobody should be given undue relaxation.
There were few officers who were over loaded with work, at the same time there were few who
had little work to do. This created a unfair situation in which the overloaded person felt
disheartened. For the elimination of this kind of situation the management should distribute the
workload equally.

7.7-ATM Facility:
ATM facility should be introduced in BOK university road . This technological advancement is
necessary for improving the service of the bank. This will allow the customer to get 24-hour
banking service. The need of ATM facility is felt even badly because of the fact the biggest
competitor of BOK City branch is UBL branch, has just introduced the ATM facility to its
customers. In this way the competitor has got a technological advantage of the BOK university
road.
To cope with this kind of competition the branch has to be up to date with the technology, these
types of facilities are the need of the customers. Without being update it will be difficult for the
BOK university road to compete with the better-equipped competitor.

7.8-Delegation of Authority:
In BOK there is lack of delegation of authority. All of the major decisions are taken at higher
level of management or in head office Peshawar. Major decisions have to take accordance with
the employees opinion. It will benefit both the management and the organization.
The authority delegated to the managers of the branch is limited. They have to take permission of
the higher authority for almost every action. Same was the case in BOK university road where
the manager had to take permissions form the higher authority for small affairs.
Page | 57

7.9-Role of Presentation:
As it is said, first impression is the last impression, BOK has to improve its internal and
external outlook of branches. As private banks are very good in this field, so compete with them
it is necessary that BOK should concentrate on the internal and external outlook of its branches.
The officers should be dressed smartly so that they could attract the customers by their
personality and behavior.
As far as the outlook of BOK, BOK university road is concerned its quite attractive. The only
thing that needs to improve is internal outlook i.e. the dress up of the officers of the branch and
their customer handling. They should always be properly dressed. It gives a pleasure to the
customers to come in a bank where everything is attractive. This improvement in the presentation
of the branch will attract customers and they would love to come the bank again and again.

7.10-Competition:
Competition is one of the major problems, that every business is facing and banking is not
exempted from the competition. BOK is facing competition both from private and international
banks.
BOK is facing a stiff competition from HBL branch.

7.11-Consumer Satisfaction:
In todays world of competition only consumers satisfaction can reduce competitive advantage.
As said in critical analysis there are some problems related to the dissatisfaction of consumers.
The Bank of Khyber has to improve services provided to the pensioners and also they have to
adopt scientific methods of paying utility bills. Improving the quality of consumer service can do
all these things. If the consumers are satisfied from the service he will expand his business with
the bank. But if the level of services is not good then the bank will loose its customers. For this
proper training has to be imparted to the employees.

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7.12-Recommendations Regarding To Human Resource

Management:

A modern and effective performance evaluation system should be devised, so that every
improvements and progress in employees skills, knowledge and performance should be

properly reported and suggestions can be forwarded.

Proper training should be carried out on regular basis and if required other educational,
technical and skills development facilities should be engaged in. their suggestions
performance evaluation system should be devised, so that every improvements and
progress in employees skills, knowledge and performance should be properly reported

and suggestions can be forwarded.

Management should develop a mechanism for job rotation so that employees can get
experience in all the departments of the bank because at times when a particular
Operational Head is on leave, a lot of time is wasted in making temporary adjustments for

that seat.
BOK staff lacks professionalism. They lack the necessary training to do the job
efficiently and properly. Although staff colleges in all major cities but they are not
performing well. For this purpose these staff colleges should be reorganized and their
syllabus should be made in such a way to help the employee understand the everchanging global economic scenario. Banking council of Pakistan should also initiate

some programs to equip the staff with much needed professional training.
Employees of the bank should be given a task and authority and they should be asked for

their responsibility.
The manager should strictly monitor the performance of every staff member. All of them
should be awarded according to their performance and result in the shape of bonuses to

motivated and incite them to work more efficiently.

Transfer is not properly carried out. Some of the employees are continually serving at the
same post. They are simply rotated at the same branch. Therefore it is recommended that
evenly rotation of every employee should take place after every three years in different

branches of the bank

Required, qualified staff should be provided to branch in order to improve the functioning

of the branch. Especially a telephone operator should be appointed.

Bank should their administrative expenses. This was Rs 8 billion in the year 2000. That
can be done by lying off the surplus pool of employee with golden handshakes scheme.
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The branches that are not much used could also be closed. Employee can also be how to

control the bank expenses. That will give positive results in the future.
There should be an information desk to provide the information and to receive the
complaints of the customer in the bank. There is no complaint box available in the branch
and not any person appointed to hear the complaints. Every person cannot go to the
manager for the complaint because most of the people are hesitant. So I suggest
management to install a compliant box in the branch, and recruit a special person for that
guidance of the customer when they are unable to manage some difficulties in banking
matters.

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CHAPTER 8:
REFERENCES/ACKNOWLEGEMENTS

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8.0-Refrences:
8.1-WEB Refrences:
[1] BLOGSPOT
Title: Bank of Khyber | Visiting Date: 08/DEC/2014
2014 Pearson Education Inc | Updated: 2 OCT, 2014 - 16:10
http://jobsntalent.blogspot.com/2011/10/bank-of-khyber-internship-report_5324.html

[2] WIKIPEDIA
Title: Bank of Khyber | Visiting Date: 17/DEC/2014
2005-2009 Wikipedia Foundation Inc | Updated: March 2, 2009 - 23:10
http://en.wikipedia.org/wiki/Bank_of_Khyber

[3] Bank of Khyber Pvt Ltd

Title: Financial Statments | Visiting Date: 12/DEC/2014
2012 Bank of KHYBER LTD | Updated: 01 NOV, 2014 09:00
http://www.bok.com/home

[4] Karachi Stock Exchange

Title: Annual Reports | Visiting Date: 12/DEC/2014
2014 e-Dynamics Private Limited | Updated: 01 DEC, 2014 17:00
http://www.khistocks.com/viewreport.php?id=1416&year=2005
http://www.khistocks.com/viewreport.php?id=1416&year=2006

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[5] Daily Dawn Newspaper

Title: Bank of Khyber Bailout | Visiting Date: 12/DEC/2014
2014 The DAWN MEDIA GROUP | Updated: 12 DEC, 2014 23:00
http://www.dawn.com/news/638413/bank-of-khyber-gets-rs3bn-bailout-2

8.2-Book References:
[1] FINANCIAL & MANAGERIAL ACCOUNTING BY MEIGA 13th EDITION

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