Shahab Final REPORT

Internship Report on Bank of Khyber
CHAPTER -1
INTRODUCTION TO THE REPORT
1.1 BACKGROUND OF THE STUDY
For the completion of Bachelor Degree in Business Administration, every student

is required to undergo eight weeks internship within organization.
I selected the Bank of Khyber of Pakistan for my internship, and this report is
concerned with the banking function in Bank of Khyber. The internship is to serve the
purpose of acquainting the students with the practice of knowledge of business
administration.
1.2 PURPOSE OF THE STUDY
The main purpose of this study is to fulfill the requirements of Bachelor Degree in
Business Administration (Major Finance) at University of Peshawar, and to get the
relevant information in order to complete this internship report.
1.3 SCOPE OF THE STUDY
The scope of the study is to inform the banking function of IBD of BOK as well as its
entire department, its products, services and on its functions and procedures.
1.4 RESEARCH METHODOLOGY
Two months rigorous internship in the BOK, give me knowledge and confidence
to write this report. Every effort has been made to collect data and information about the
working of the organization however the following data collection methods have been mainly
used for the completion of this report.
Institute of Management Studies, UOP 1

1.4.1 PRIMARY DATA
a. Observation
Being an internee in Head Office of the Bank of Khyber, I observed all the
practices and dealing in the whole office, which helped me to have deep insight about the
problems and issues concerning the bank.
b. Discussions
To know about employee’s commitment, motivation and their out look towards
the management of the bank, I Discussed many issues with the Head of the department,
senior member and with lower level management member.
1.4.2 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.
Secondary data has been collected from different sources of the bank including
 Annual reports,
 Information memorandum,
 Bank manuals, training manuals,
 Service role of the bank and all the other documents provided to me by the bank.
 News papers and magazines
 Internet websites

1.5 SCHEME OF THE REPORT
Section-I
Chapter One contains the background of study, purpose of study, scope of study and
research methodology.
Section-II:
Chapter Two containing History of Banking.
Chapter Three containing Banking Sector.
Chapter Four containing Introduction, vision, mission, objectives and organizational structure
of BOK.
Chapter Five containing Products and different departments of the head office.
Section-III
Chapter Six containing Recommendations and Implementation.
Section-IV
Chapter Seven containing financial analysis, Ratio Analysis, SWOT analysis, and Suggestions.

CHAPTER- 2
Chapter 1
HISTORY OF BANKING
2.1 WHAT IS BANK?
A federally regulated financial institution that, in general, engages in the business

of taking deposits, lending and providing other financial services.
Institution for receiving, lending and safeguarding money. It may receive money
on deposit, cash checks, or bills of exchange, make loans, discount commercial paper,
and issue bank notes (promissory notes payable to bearer).
An organization, usually a corporation, chartered by a state or federal

government, which does most or all of the following: receives demand deposits and time
deposits, honors instruments drawn on them, and pays interest on them; discounts notes,
makes loans, and invests in securities; collects checks, drafts, and notes; certifies
depositor's checks; and issues drafts and cashier's checks.
2.2 EVOLUTION OF BANKING
It has not so far been decided as to how the word 'Bank' originated. Some authors
opine that this word is derived from the words 'Bancus' or 'Banque' which mean a bench.
The explanation of this origin is attributed to the fact that the Jews in Lombardy
transacted the business of money exchange on benches in the market-place; and when the
business failed, the 'Banco' was destroyed by the people. Incidentally the word 'Bankrupt'
is said to have been evolved from this practice. The opponents of this opinion argue that
if it was so, then how it that the Italian money changers were naver is called 'Banchierei'
in the Middle Ages?

Other authorities hold the opinion that the word 'Bank' is derived from the
German word 'Back' which means 'joint stock fund'. Later on, when the Germans
occupied major part of Italy, the word 'Back' was initialized to 'Bank'.
It is therefore, not possible to decide as to which of the opinions is correct, for no record
is available to ascertain the validity of any of the opinions.
2.3 MODERN BANKING
Despite the classical origin, banking in its modern form and structure started in
Britain when many of the Lombardy merchants came to England in the fourteenth
century and settled in the parts of the city of London now called Lombard Street. They
were so resourceful that even the Kings had to depend on them for loans despite the fact
that the Church was firmly against usury. They with not only keeping the money in safe
custody but also changed money for the travelers or merchants engaged in foreign trades.
Consequently this business was taken over by the goldsmiths who, up to that time, were
dealing only in gold and silver. They introduced necessary facilities of safe-keeping of
the valuables and cash of their customers. These goldsmiths issued receipts or notes to
their depositors in respect of the cash or articles left with them. These were called
Goldsmiths Notes, and carried an undertaking to return the money and articles to the
depositors or bearers on demand.

CHAPTER – 3
Chapter 1
BANKING SECTOR
3.1 BANKING IN PAKISTAN
At the time of independence, the areas which now constitute Pakistan were
producing only food grains and agricultural raw material for Indo-Pakistan subcontinent.
There were practically no industries, and whatever raw material was produced was being
exported from Pakistan. However, commercial banking facilities were provided fairly
well here.
As a new country without resources it was very difficult for Pakistan to run its
own banking system immediately. Therefore, in accordance with the provision of Indian
Independence Act of 1947, an Expert Committee was appointed to study the issue. The
Committee recommended that the Reserve Bank of India should continue to function in
Pakistan until 30th September 1948, so that the problems of time and demand liability,
coinage, currencies, exchange etc. be settled between India and Pakistan. It was also
stipulated that Pakistan would take over the management of public debt and exchange
control from Reserve Bank of India on 1st April, 1948, and that the Indian Notes would
continue to be legal tender in Pakistan till 30th September, 1948. Following the
announcement of Independence Plan in June 1947, the Hindus residing in the territories
now comprising Pakistan started transferring their assets to India.
There were 19 non-Indian foreign banks with the status of small branch offices
which were engaged solely in export of crops from Pakistan, while there was 2 Pakistani
institutions i.e. Habib Bank and the Australasia Bank. The panic of uncertain future
shook the confidence of people. The Government, therefore, promulgated the Banking

Companies Ordinance, 1947, to safeguard the interests of both the bankers and the
customers.
The Imperial Bank of India which had been acting as the Agent of Reserve Bank
of India closed down most of its offices in Pakistan, and also was not willing to purchase
even token amounts of Government of Pakistan securities on the plea that these securities
were not marketable.
In order to make necessary arrangements for the assumption of control an Expert

Committee was appointed to recommend necessary steps, including the required
legislation to establish a Central Bank for Pakistan. Consequently the Governor- General
of Pakistan and the Father of the Nation, Quid-i-Azam Mohammad Ali Jinnah,
inaugurated the State Bank of Pakistan on July1, 1948, after the State Bank of Pakistan
Order was promulgated on May12, 1948.Thus the State Bank of Pakistan assumed full
control of Banking and currency in Pakistan.
The first important task which the State Bank of Pakistan had to attend to was the
issue of currency notes and withdrawal of Reserve Bank of India notes with over-printing
there of Government of Pakistan, which had been in circulation in Pakistan so far.
As the Central Bank of the country, the State Bank addressed itself with the equally
urgent task of creating a national banking system. In order to attain this goal it provided
very help and encouragement to Habib Bank to expand its network of branches, and also
recommended to Government the establishment of a new bank which could serve as an
agent of the State Bank. As a result, The National Bank of Pakistan came in to being in
1949; and by 1952 it became strong enough to take over the agency function from the
Imperial Bank of India.
In order to develop sound banking and weeding out weak institutions, the banking
companies (Control) Act was promulgated in 1949, empowering the State Bank to
control the operations of Banking Companies in Pakistan, including preparation of the
required trained man-power. Further, the State Bank restricted the opening of new

branches by foreign banks in port towns or in big cities from where trade was being
carried out with foreign countries, while Pakistani banks were allowed to open as many
branches as possible within the country.
Pakistan now entered into a phase of planned economic development in 1956; and
naturally, further expansion in the banking and credit facilities was essential. Though
there had been a remarkable expansion in the number of offices of Pakistani banks since
Independence, it has remained heavily concentrated in large cities. Therefore, the State
Bank had to accord priority to the establishment of branches in the interior of the country.
Development of agriculture largely depends on agricultural finance, but the

scheduled banks were not very willing to undertake this risky venture. Therefore, the
State Bank sponsored the establishment of Agriculture Development Bank to attend
exclusively to agricultural finance. Moreover the functions of the State Bank were also
broadened by the State Bank of Pakistan Act, 1956, conferring the powers to increase
credit facilities for both agriculture and industry. All these measures had positive effect
on Pakistan’s economy during 1956-58. Money supply increased greatly as the
Government borrowed heavily against treasury bills from State Bank; but the credit
demand in the private sector did not rise so sharply due to rigorous restrictions on
imports. During this period a new Pakistani bank was registered and scheduled as the
National Commercial Bank Limited; and Government also established Pakistan Industrial
Credit and Investment Corporation- a new institution in the field of industrial finance.
In 1958, when the Government liberalized imports and transferred the food grain
trade to the private sector, the commodity market became firm, and demands for funds
became very acute. This caused some stringency to the banks during the busy season.
Therefore, the banks had to reduce down their excess reserve and increased their
indebtedness to the State Bank. The expansion in the banking and credit facilities was
further enlarged when during 1959-60 two more Pakistani banks, namely Eastern
Mercantile Bank Limited and the United Bank Limited were established and scheduled.

Another very important event in the development of banking in Pakistan was the
appointment of the Credit Enquiry Commission in 1959 to examine the scope and
working of the institutions providing credit facilities to agriculture, trade, commerce and
industry, and recommend measures for further improvements.
More Pakistani scheduled banks continued to be established, which included the

Commerce Bank Limited and the Standard Bank Limited. However, despite the pressing
needs, private enterprise was not forthcoming in East Pakistan. Consequently the State
Bank established a regional bank by the name of Eastern Mercantile Bank by
contributing 40 percent of its share capital. In June 1948 (West) Pakistan had only 81
offices of scheduled banks; but by June 1993 their number has been increased to 7100 in
every nook and corner of Pakistan. Besides this growth, specialized credit and financial
institutions have also developed over the years, and cater to the needs of the specific
sectors. National Investment Trust, Peoples Finance Corporation, Equity Participation
Fund, and National Development Finance Corporation, Banker's Equity Ltd., Small
Business Finance Corporation etc. are contributing their due share in the country's
economic life.
The nationalization of banks in Pakistan since January 01, 1974, has heralded a
new era of development and progress. It has taken a completely new turn with the phased
introduction of interest free banking system with effect from January, 1981.
At present the banking structure in Pakistan comprises of the following:
3.1.1 STATE BANK OF PAKISTAN
As the Central Bank of the country with its offices at Karachi, Lahore, Peshawar,
D.I.Khan, Quetta, Faisalabad, Rawalpindi, Islamabad, Multan, Gujranwala, Sialkot,
Sukkar and Hyderabad.

3.1.2 COMMERCIAL BANKS
Commercial Banks have been the most effective mobilizers of savings and have
been providing short-term requirements of working capital to trade, commerce and
industry.
Presently these commercial banks are operating in the nationalized and private
sectors both, after the amendments in the Bank's Nationalization Act, 1974 in 1991.
3.2 WHAT IS ISLAMIC BANKING?
Islamic banking has been defined as banking in consonance with the ethos and
value system of Islam and governed, in addition to the conventional good governance and
risk management rules, by the principles laid down by Islamic Shariah. Interest free
banking is a narrow concept denoting a number of banking instruments or operations,
which avoid interest. Islamic banking, the more general term is expected not only to
avoid interest-based transactions, prohibited in the Islamic Shariah, but also to avoid
unethical practices and participate actively in achieving the goals and objectives of an
Islamic economy.
3.2.1 BASIC PRINCIPLES OF ISLAMIC BANKING
The fact that a global network of Islamic banks, investment houses and other
financial institutions has started to take shape based on the principles of Islamic finance
laid down in the Quran and the Prophet’s traditions 14 centuries ago. Islamic banking,
based on the Quran prohibition of charging interest, has moved from a theoretical concept
to embrace more than 100 banks operating in 40 countries with multi-billion dollar
deposits worldwide.
Islamic banking is widely regarded as the fastest growing sector in the Middle
Eastern financial services market. Exploding onto the financial scene barely thirty years
ago, an estimated $US 70 billion worth of funds are now managed according to Shariah.
Deposit assets held by Islamic banks were approximately $US5 billion in 1985 but grew
over $60 billion in 1994.

The rules regarding Islamic finance are quite simple and can be summed up as follows:
a. Any predetermined payment over and above the actual amount of principal
is prohibited
Islam allows only one kind of loan and that is Qard-el-hassana (literally good
loan) whereby the lender does not charge any interest or additional amount over the
money lent. Traditional Muslim jurists have construed this principle so strictly that,
according to one commentator “this prohibition applies to any advantage or benefits that
the lender might secure out of the Qard (loan) such as riding the borrower’s mule, eating
at his table, or even taking advantage of the shade of his wall.” The principle derived
from the quotation emphasizes that associated or indirect benefits are prohibited.
b. The lender must share in the profits or losses arising out of the enterprise for
which the money was lent.
Islam encourages Muslims to invest their money and to become partners in order
to share profits and risks in the business instead of becoming creditors. As defined in the
Shariah, or Islamic law, Islamic finance is based on the belief that the provider of capital
and the user of capital should equally share the risk of business ventures, whether those
are industries, farms, service companies or simple trade deals. Translated into banking
terms, the depositor, the bank and the borrower should all share the risks and the rewards
of financing business ventures. This is unlike the interest-based commercial banking
system, where all the pressure is on the borrower: he must pay back his loan, with the
agreed interest, regardless of the success or failure of his venture.
Islam encourages investments in order that the community may benefit. However,
it is not willing to allow a loophole to exist for those who do not wish to invest and take
risks but rather content with hoarding money or depositing money in a bank in return for
receiving an increase on these funds for no risk (other than the bank becoming insolvent).
Islam encourages the notion of higher risks and higher returns and promotes it by leaving
no other avenue available to investors. The objective is that high-risk investments provide
a stimulus to the economy and encourage entrepreneurs to maximize their efforts.

c. Making money from money is not acceptable in Islamic
Money is only a medium of exchange, a way of defining the value of a thing; it

has no value in itself, and therefore should not be allowed to give rise to more money, via
fixed interest payments, simply by being put in a bank or lent to someone else. The
human effort, initiative, and risk involved in a productive venture are more important
than the money used to finance it. Muslim jurists consider money as potential capital
rather than capital, meaning that money becomes capital only when it is invested in
business.
Accordingly, money advanced to a business as a loan is regarded as a debt of the
business and not capital and, as such, it is not entitled to any return (i.e. interest).
Muslims are encouraged to purchase and are discouraged from keeping money idle. In
Islam, money represents purchasing power, which is considered to be the only proper use
of money. This purchasing power (money) cannot be used to make more purchasing
power (money) without undergoing the intermediate step of it being used for the purchase
of goods and services.
d. Investments should only support practices or products that are not forbidden
Islam discourages it. Trade in alcohol, for example would not be financed by an
Islamic bank; a real-estate loan could not be made for the construction of a casino; and
the bank could not lend money to other banks at interest.

CHAPTER – 4
Chapter 1
AN INTRODUCTION TO BANK OF KHYBER
4.1 BRIEF HISTORY
The Bank of Khyber was established in 1991 as a provincial commercial bank

through an act of the NWFP Assembly. The Bank of Khyber reached the status of
scheduled bank in 1994. The provincial government is its major shareholder, owning
87% of the capital. It has a network of 34 branches serving more than 100,000 account
holders. The micro-finance operations of The Bank of Khyber started in 1995, aimed at
the provision of micro credit to small and medium enterprises. In 1997 The Bank of
Khyber extended its operations to rural areas, providing smaller loans to micro-
enterprises and individual clients through its cooperation with NGOs and Rural Support
Programs (RSP). In 1999 The Bank of Khyber created its Micro finance Unit as a
separate profit centre, developing specific products. The Bank of Khyber is the first
formal and structured initiative by a commercial bank in Pakistan to broaden its client
base and reach the micro-enterprise market.
4.2 METHODOLOGY & DISTINCTIVE FEATURES
The Bank of Khyber provides micro credit services through its branch network
where credit officer of the micro finance unit are based. Bank of Khyber adopts a four-
pronged strategy in its lending methodology:
 Direct lending to individual micro-entrepreneurs

 Group lending through facilitators in rural areas
 Lending through business clusters in urban centers and small towns

 Wholesaling of funds to facilitators (NGOs, RSPs) for on lending in rural

areas
The Bank of Khyber is currently a partner to an ADB project, lending to NGOs in

Malakand region. The Bank of Khyber is able to provide micro finance services to clients
with no previous banking history. For micro finance services, The Bank of Khyber does
not require physical collateral.
4.3 CHALLENGES AND DEVELOPMENT PLANS
Providing micro finance services through a commercial banking structure, not

adapted to service grassroots clients, The Bank of Khyber has to cover high costs in its
lending delivery. Moreover, The Bank of Khyber has a limited outreach in micro finance,
particularly amongst women. The Bank of Khyber is restricted by its practice of lending
through branches, but is planning at developing mobile banking.
MISSION AND VISION OF BANK OF KHYBER

“Allah has permitted trade and forbidden usury”
4.4 VISION
Gradual conversion into ISLAMIC BANKING for development and promotion of

true Islamic Economic System.
4.5 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.
4.6 CORE VALUES
Highest quality of service.

Professionalism, integrity and team work.
Innovation and utilization of latest technology.

Risk mitigation.
Corporate social responsibility.
4.7 ACHIEVMENTS
The bank has shown in deposits and achieved the deposit target set for 2007. To
increase outreach, the Bank has successfully opened 5 new branches in 2007, with 4
branches in major business area viz Karachi, Lahore Faisalabad & Rawalpindi. This takes
the total number of branches of the bank to 34. The Bank expects to receive further
license for branches in the forthcoming year.
The Bank’s paid up capital as on December 31,2007 stood at Rs. 4.00 billion
which was raised successfully by offering 100% Right Issue at Rs. 12.75 per share.
4.8 BANK’S PERFORMANCE REVIEW
In the year under purview, the performance of the bank was satisfactory but it
could not extract its share from the Banking sector. As compared to last year the profit
was lower but the bank still earned an after tax profit of Rs. 219.437 million after
absorbing impact of provision of Rs. 655.624 million as required by the State Bank of
Pakistan under the new provisioning regulations. Apart from profit the Bank has shown
positive growth in Deposits and Advances. During the year, Bank maintained its strategy
of concentrating on growth while placing its customers at the centre of its activities. This
was achieved with the consistent dedication shown by Bank’s team of committed
professionals. Long term customer’s relationship has been developed through
enhancement in service quality.
To avoid any unexpected losses, a Risk Management Division has been set up and
the integrated Risk Management framework is in line with the evolving tends and
growing avenues of business. Thus it aims to align its systems and processes with best
international practices.

The bank’s rating has improved from BBB and A-2 to BBB+ and A-2; and
increase of one notch, as rated by JCR-VIS rating Agency. This up-gradation is due to
improvement in the management and assets quality of the Bank.
4.9 FUTURE OUTLOOK
The economic outlook for the coming year is promising. The government is
expected to continue with its proactive policies and executive corrective measures if and
when required. Though strong inflationary pressure persist but they are likely to ease off
due to tight monetary posture by the State Bank. Bank is determined to grow in view of
the structure improvements introduced in the bank and is well poised for all around
4.9.1 PEOPLE
A well trained and industrious work force is our most important assets. Our aim is
to manage this asset in such a way so as to improve its competitive advantage. Though
the journey has begun, we are confident that we will be able to strengthen our
performance culture, provide greater value to the organization and promote employees
satisfaction and growth. The bank laid special emphasis on development of its human
resources. We are striving towards making our human resources fit to respond to the
challenger that lies ahead.
4.10 OBJECTIVES OF THE BANK OF KHYBER
Under the Bank of Khyber act of 1991of the provincial Assembly of N.W.F.P the
banks objectives are as follows” To mobilize private savings and public funds for
diverting the same into productive channels and ensure their availability. To promote industrial,
agricultural and socio-economic processes through the active participation of private and public
sector in the province. Help under-developed areas and create employment opportunities, especially
in the rural areas of the province. Further, to guide and assist the people of N.W.F.P serving overseas
to effectively and profitably invest their foreign savings in the province as well as in other parts of
Pakistan.

Create a diversified and sound portfolio for utilization of idle funds and their
investment in the existing and new ventures especially in the pioneering of high-tech agro-based
export oriented and engineering projects to ensure maximum returns. Participate and seek the
share of the province in the capital market of Pakistan by way of subscription through locally pooled
resources in the leading stock exchanges of the country and eventually paving the way for
establishing a stock market in the province.
4.11 ORGANIZATIONAL STRUCTURE
“Organization is a group of people working together in a structured and co-

ordinate fashion to achieve a set of goals.” The essence is that the people who are
structured and coordinated will definitely be working in a proper system. This system
includes both organizational hierarchy and organizational chart.
4.11.1 Organization hierarchy
To avoid the conflict in the organization, all organizational positions are detailed
described and the duties, goals, functions, responsibilities and authority at each position
are made crystal clear. The channel which delegates these activities is called organizational
hierarchy and this must be set in such a manner to best accomplish the organizational
goals. The Bank of Khyber ultimate governing body is the Board of Directors while the
day to day affairs of the Bank are managed by a Managing Director appointed by the Board of
Directors for a term of three years on contract with the consent of the Government of
N.W.F.P. Under the supervision of MD, there are EVP's the senior most officials in the
bank hierarchy each heading a Bank unit, after EVP there are SVP's and VP's heading their
respective divisions and Departments.
At the branch network of BOK there are Branch Managers and Assistant Branch Managers.
Under Branch Managers there are Branch Departmental Heads responsible for their
respective Branch Department. The nomenclature of various posts in the Bank is as under:
Board of Directors
Managing Director

Executive Vice President

Senior Vice President
Vice President
Assistant Vice President
Branch Manager
Assistant Branch Manager
Officer Grade-1
Officer Grade-II
Officer Grade-III
Junior Officer.
Driver.
ORGANIZATIONAL CHART OF THE BANK OF KHYBER
Board of
Directors
Shariah
Managing Director Supervisory
Committee/
Shariah
Advisor
Islamic banking
Division
Marketing
Operations Deptt.
Risk Product/
Management Business
Deptt. Development
Credits
Treasury Account
MIS s
Section
IBB(s)

4.11.2 BOARD OF DIRECTORS
The bank ultimate governing body is the "Board of Directors" comprising of eight
members including a Chairman and MD. The Chairman of the Board is nominated by the
Govt. of N.W.F.P who will be a senior banker/ diplomat of repute. The two members of the board
are also nominated by the Govt. as Govt. is the major stakeholder of the bank. Usually
these two members are secretary finance Govt. of N.W.F.P and Assistant chief secretary
N.W.F.P. One member of the board is nominated by DEG (A German Development Bank) a 15%
Stakeholder of the bank. While two members are selected by the Government from
public / private sector. The Managing Director of the Bank represents the bank in the Board and
acts as a member of the Board.
Board of Directors of BOK
Mr.Javed Iqbal Chairman

Mr.Bilal Mustafa Managing Director
Mr.Zia-ur-Rehman Director
Mr.Muhammad Maqsood Khan Director
Mr.Muhammad Asif Director
Mr.Muhammad Shakir Siddiqui Director

C CHAPTER -5
DEPARTMENTATION OF THE BANK
5.1 DEPARTMENTS
5.1.1 INFORMATION TECHNOLOGY DEPARTMENT
The Bank of Khyber was established in 1991. In order to have an edge over its
competitors and to provide quick and efficient service to the customers, it was considered
mandatory to computerize banking network in the branches. IT Department was
established in 1994 and all the branches were successfully automated by the year 1998.
IT Department has progressed in the last eight years and trying its best to stay abreast in
the field of fast developing technology. In order to achieve its goals, the IT Department
has started on-line banking in almost all of its Branches. IT Department of the Bank is
working dedicatedly and with full enthusiasm to provide best services by efficiently
handling the in-house software development/maintenance, hardware/software trouble
shooting and uninterrupted support to 29 Branches. Besides, IT Department is playing an
important role in development and deployment of Islamic Banking Application and
timely support to the end-user. Moreover, The Bank of Khyber has joined 1Link ATM
Switch and has also installed ATM machines at 12 branches. Branches where ATM has
been successfully installed are:
Corporate Main Branch
Hayatabad Branch
G.T Road Branch
Islamabad Branch
Kohat Branch
D.I Khan Branch

Karachi Branch
Abbotabad Branch
Mingora Branch
Civil Secretriate Branch
Mansehra Branch
Mardan Branch
5.1.2 RISK MANAGEMENT DEPARTMENT
Risk Management Department (RMD) oversees the risks faced by the Bank in its
internal operations and from external environment. The Department initiates steps for
early identification of risks inherent in the Banking activities/functions; and recommend
remedial measures to the Bank’s Senior Management. Presently, key risk areas like
credit, operation, market and liquidity are focused on consolidated and integrated basis.
The Bank has been presently aligning its Risk Management framework while using Risk
Mapping technique, which has been diverted to remold the Job Descriptions of all
important functions.
At Branch level, certain amendments have been made to improve supervisory level of
Branch Managers. Risk Management has been ensured at Branches by introducing the
Key Risk areas in close supervision and monitoring through important checklist, which
have been implemented at Branches and its performance and implementation is
monitored at the Risk Management Department. The Department has also been working
actively on the implementation of Basel-II. While the Bank’s risks assessments at
Treasury have been ranked as per Basel-II, the Credit portfolio is under process for
external rating in order to assess the total Risk Weighted Assets and Bank’s Capital
Adequacy, as per State Bank of Pakistan guidelines. The Department also conducts
regular review of Bank’s Risk assets under stress situations in order to assess the Bank’s
shocks absorption capability.
5.1.3 CREDIT ADMINISTRATION DEPARTMENT
The Bank’s Credit Monitoring Cell was converted into a full fledged department
as Credit Administration. Being Middle Office of credits, the Department looks after the
risks identification, recommending, necessary remedial measures and act as control
function of credits. Credit Administration Department ensures complete and error free

documentation as per sanctions and simultaneously would work on the Internal Rating of
the borrowers.
Department maintains comprehensive Management Information System relating

to credits to cater for requirements of Senior Management, External Auditors and State
Bank of Pakistan. The Department is also responsible to monitor all credits which include
proper documentation, adequate collaterals, stock Inspection, and effective
Insurance/Risk coverage. NPL preparation is also within the ambit of the Department for
collection and classification of the information according to the prescribed criteria...
5.1.4 MICRO FINANCE DEPARTMENT
Micro Finance has proved to be one of the most effective tools for facilitating
socio-economic development through increased access to financial services. The
economic landscape of NWFP is characterized by a number of flourishing small-scale
economic activities scattered throughout the cities, towns and rural areas. However, these
smaller enterprise entities have never been a focused market for formal financial
institutions operating in this region.
Contributing significantly to income and employment generation, The Bank of

Khyber (BOK) considers the promotion of micro-enterprises as one of the alternative
economic development strategies for the province. For this purpose the BOK launched its
micro business development in 1995 and rural financial services in 1997. This was the
first formal and structured initiative by a commercial bank to broaden the base for micro
enterprise market. The initiative was further strengthened and encouraged by various
multilateral institutions such as Asian Development Bank (ADB), International Fund for
Agricultural Development (IFAD), KFW (German Development Bank) and Swiss
Agency for Development Cooperation (SDC) through credit lines and technical
assistance.
Encouraged by these developments a new unit called micro finance unit was instituted in
November 1999, which presently functions as Micro Finance Department (MFD) under

the umbrella of Credit Division. BOK aims to be the largest Micro Finance provider in
NWFP on sustainable basis. Our main Objective is providing access to financial services
to the low income and disadvantaged segment of the society to raise their standard of
living with specific emphasis upon women. The pursuit of this objective will significantly
contribute to the improvement of employment opportunities, income generating activities
and subsequently poverty alleviation.
Pursuing its objective the BOK provides micro enterprise and group loans for existing
and new enterprises engaged in value addition process, requiring technology
improvement or working capital. MFD offers the following loan products:
Micro-enterprise Loans to a maximum of Rs. 100,000 however fresh loans are considered
for below Rs. 50,000.
Group Loans to members of organized rural communities and urban clusters to a
maximum of Rs. 30,000 per member.
Domestic Consumption Loans to a maximum of Rs.100, 000 to employees of government
/ semi government organizations subject to prior Institutional Arrangements.
Tea Development Loans for tea growers in Mansehra.
Motorcycle financing to individuals and Institutions.
CNG Auto Rickshaw finance

CNG Kit Conversion finance
Credit Line to qualifying Rural Support Programs and NGOs for on lending in rural
areas.
BOK has made a modest beginning but a great potential for growth is still to be explored.
As of June 30, 2006, BOK has disbursed total loans of Rs.1.2 billion to more than 24,000
borrowers with majority of the loans below Rs.50,000 per client. Current outstanding
portfolio remains at Rs.207.7 million with an active clientele of 6,587.
5.2 DIVISIONS

5.2.1 FINANCE DIVISION
The Finance Division is responsible for overall fiscal managing, financial control,
financial reporting and accounting functions of the Bank. Division ensures that the
accounting records and system are maintained in accordance with internal policies,
regulatory requirements and international accounting standards. It establishes policies and
procedures relating to the finance function, monitors returns on earning assets and reports
on various performance indicators including assets/liability mismatch. The Division
directs control of the budgeting process in accordance with the annual plans, policies,
management directives and strategy, ensuring that quality budgets and forecasts are
drawn up and consolidated for approval.
Finance Division exercise budgetary control on all expense and income items at
both Head Office and branch level, ensuring the effective monitoring arrangements are in
place in respect of adherence to budgets/forecasts. It continually reviews the accounting
and control system, ensures that they are appropriate to the requirements of the business
and that they generate financial information necessary for effective decision-making. It
monitors capital adequacy in accordance with regulatory directives. It liaises with
external auditors, tax authorities and SBP inspectors, and facilitates their duties. It
provides necessary assistance to the rating agencies. The Division maintains financial
databank and carries out industry financial analysis vis-a-vis Banks strength and
opportunities. The Division has well-trained, experienced and qualified human resource,
automation of processes and effective communication with all operating units. The future
focus of the Division would be to improve automation of the accounting processes and
enhance the quality and effectiveness of MIS.
5.2.2 COMPLIANCE DIVISION
Under the directives of the State Bank of Pakistan and the Board of Directors had
appointed a senior officer as Chief Compliance Officer in January, 2004. The bank has
now hired the services of an officer from SBP on deputation as CCO for effective
implementation of the directives of SBP particularly on KYC and Anti Money
Laundering. The Compliance Division directly reports to the Managing Director of the

bank. We have designated Compliance Officers in all our branches who perform their
function as per TORs provided to them and report to Chief Compliance Officer. The bank
prepared a Compliance Manual in 2004 which is now being updated in the light of best
international practices. Compliance divisions consist of the following departments headed
by Chief Compliance Officer:
5.2.3 Compliance Department & Monitoring and Implementation Department
In order to enhance capacity building of Compliance Officers, a comprehensive

training program on Compliance will be held in May, 2006. Furthermore, a consolidated
training material was prepared on the basis of SBP's Prudential Regulations, Banking
Operations Instructions, Bank's Own Policies etc and the same disseminated to all
Compliance Officers for meticulous compliance of SBP's as well as H.O. instructions.
5.2.4 HUMAN RESOURCE DIVISION
It is imperative for the Human Resource Division to not only provide educated
and trained manpower so as to enable them to handle their jobs more professionally and
efficiently in all areas of banking but to develop talent and add value to staff potential to
enhance output improve profitability as well. The Human Resource Division (HRD) puts
in its concerted efforts to train, develop and groom a sound human resource base for the
Bank and to work for continuous learning, adaptation and application of knowledge. The
HRD tries to create an environment of mutual trust and dignity so as to ensure best
positive results. It is playing a proactive role in capacity building, experience sharing,
strengthening analytical and policymaking, skill up-gradation to help the staff in their
endeavors to make BOK competitive, dynamic and one of the best banks in the country.
The HRD aims to transform BOK into a modern and dynamic bank, highly
professional and efficient, fully equipped to play a meaningful role, on sustainable basis,
in the economic and social development of NWFP as well as the country
5.2.5 INTERNAL AUDIT DIVISION

The internal audit Division of a bank is an extension of the management and is a

tool through which they gauge the qualitative and quantitative output of the field offices.
The Internal Audit Division works independent of the management and reports to Audit
Committee of the Board of Directors. The Internal Audit Division consists of two
departments namely Audit & Inspection and Compliance & Implementation. The Audit
and inspection reports are passed on to the implementation department for
implementation/compliance and follow-up. The internal Audit Division conducts risk
based Audit of the bank on the risk matrix mechanism including compliance audit, IT
Audit and Management Audit.
The fundamental objective of internal audit is to assist the management in

materializing their pre-determined goals through established and clearly defined plans,
policies and programs, SBP regulations and also to assist them in the effective discharge
of their responsibilities, by providing them with reports, information, analysis, appraisals,
recommendations and pertinent comments on the activities reviewed. In short the internal
auditor renders services to the management to attain their over all objectives and to
ensure.
 Adequacy and soundness of internal controls within the Bank.

 Implementation of management policies and procedures.
 To safeguard Bank's assets from all typed of losses including fraud.
 To recommend improvements in the systems and operations and pinpoint
inefficient and uneconomical operations.
 Accuracy and reliability of management data.
5.2.6 ISLAMIC BANKING DIVISION
ALHAMDULILLAH
The Bank of Khyber has started Islamic Banking by converting all assets and
liabilities of Hayatabad Branch Peshawar on 27th Ramadan (22nd November 2003). The
Branch is now working according to the guideline of Shariah Supervisory Board. Aims
and target of the IBD is to implement the decision of the Board of Director to gradually

convert the whole Bank into an Islamic Bank within three years under the supervision of
the Shariah Supervisory Board as per rules and regulations of the State Bank of Pakistan.
To achieve the target, Islamic Banking Division has devised an action plan for expansion
and conversion of the whole bank by December 2006 and to develop the business in
various areas. According to the plan three new branches will be opened and six branches
of the Bank will be converted into IBBs in 2004. Islamic Banking Division plans to
convert 12 more branches in 2005 and the remaining in 2006.
Apart from branch expansion, Islamic Banking Division is planning to start

accepting deposits from all branches of the Bank of Khyber as per standing instructions
of the State Bank of Pakistan. Disbursement of funds under Islamic Financing Modes
through other branches of the Bank will also be started very soon. Development of
Business through Internet is also under active consideration. This will cover the
dissipation of information on the Internet, collection of information, applications (mainly
for consumer products Car, House, and consumer goods), and disposal of application.
Presently Islamic Banking Branch is offering Ijara, Murabaha. Diminishing

Musharaka and Guarantees as Islamic Finance Services and investing the idle funds
through Treasury in the Capital Market as well as placing funds with other Islamic
Banks. While Consumer Financing Schemes under Islamic modes of financing, Housing
Finance Scheme, House Construction Scheme is in launching phase. Future products
under planning are Export Finance Scheme, Foreign Exchange Accounts, Musharakah
business etc.
5.2.7 MARKETING DIVISION
The Marketing Division of the Bank is responsible for the formulation and
implementation of Marketing Strategy of the Bank's products both on assets and
liabilities side keeping in view the business environment of the province. Accordingly the
division works to popularize the Bank's deposit schemes and loan products among the
people with a view to improve business and over all image of the Bank. The Division
works in close coordination with the Branches and other Divisions/Department of the

bank towards the implementation of the marketing strategy and achievement of the
assigned targets.
The Division is comprised of three departments viz Research and Development
Department, Customer Relations Department and Product Promotions Department. The
responsibility of the Research and Development Department is to search and develop new
products according to the requirement of the market and Banks' marketing strategy as
well as to make the existing products more attractive for the customers. Research &
Development Department studies the offerings of the competitors for making the Bank's
products more competitive.
The Customer Relations Department is responsible for the implementation of the

marketing strategy. For this purpose the Department has to maintain a liaison with the
Branch Customer relation Officers and Managers, hold meetings with corporate clients
for business and coordinate the activities between Branches and Head Office for better
services provision to clients. The Product Promotion Department has been assigned with
the promotion of the products through electronic and print media and various other means
of promotion in vogue.
5.2.8 TREASURY & INVESTMENT DIVISION
Treasury & Investment Division has been the main earning during 2005. Main
source of income of the Division are Government Securities, Shares Investment and CFS
portfolio, Corporate Bonds and Forex Transactions. BOK Treasury & Investment
Division is an active player in the local inter bank market. Activities of Foreign Exchange
Desk includes ready and spot purchases/sales, Swaps and Arbitrages. Money Market
Desk mainly deals in purchase/sales of Government Securities, Corporate Bonds,
Repurchase Agreements, Call Lending/Placements transactions. Investment Division
Includes shares Trading both ready and future markets, CFS transactions and strategic
investments. The BOK Treasury & Investment reiterates its pro active role in serving its
customers, both individuals and corporate clients
5.2.9 RESEARCH AND DEVELOPMENT DIVISION

RDD started functioning under its new name in February 2004, and assumed the
responsibilities for the Recovery of all irregular as well as bad debts of the Bank. RDD
coordinates closely with Credit Department, as ongoing feed back on performance of
various segments of the portfolio is critical for fine tuning/amendment of underwriting
credit initiation criteria. The Division also co-ordinates with IT Department for the
automation of most of the processes and preparation of MIS containing information of all
the branches on different types of loans in order to bring effectiveness and cost control in
the Division. One of the primary responsibilities of RDD is to develop performance,
monitoring and evaluation criteria for Lawyers to optimize the litigation strategy. It also
coordinates with NAB for high balance and political cases.
RDD is also responsible for the capacity planning and hiring of the staff based on
number of accounts & training programs in order to ensure that Collection Officers
understand the imperatives of handling the customers according to the policy of the bank.
They must also understand the product in order to negotiate with the customers
effectively. As a part of action plan and recovery strategy, the Bank's BOD has conferred
powers upon Settlement Committees at different levels, which is used as a major tool to
affect recovery by offering out of court settlement to NPL customers. Moreover, the
Provincial assembly has recently amended BOK Act 1991 and put the bank under the
ambit of Land Revenue Act of the Province, which will be utilized as a deterrent tool for
recovery of infected loans of the bank.
A Vice President, who took over charge early this, year, leads the division. Due to
his able leadership, professional qualities and expertise in the recovery field, the division
has achieved remarkable results in reduction in NPLs amounting to Rs.262 million up to
June 30, 2004. Based on its half yearly performance, it is hoped that the Division will
achieve its annual recovery target of Rs.480. Million with considerable margin.
5.2.10 COMMERCIAL LENDING DIVISION
The credit policy of the bank is reviewed on periodic basis according to the target
market. It is communicated down the line and clearly spells out the roles and

responsibility of the individuals involved. Our credit portfolio is diversified for different
client segments. The consumer finance, car finance and house finance schemes have
successfully been introduced and are in real sense helping common folks in upraising
their standard of living. We significantly finance to corporate sector and actively
participate in syndication-bridge financing type of business opportunities. The
commercial lending is our regular feature and is always tailored according to current
requirement of business community. Lending under the mode of Islamic Banking is
another addition to our credit portfolio and we feel proud to mention that we have started
Murabaha and Ijara financing.
Under consumer financing we plan to include some new household items that will
further facilitate the common man. A policy to finance agricultural sector is being
formulated and should be part of our credit portfolio in near future. We are also playing
our due role in poverty alleviation by offering credits at micro level and our micro
finance unit has specially been established in this regard, through which we have
significantly financed in undeveloped areas of NWFP. To ensure quality lending we
conduct pre disbursement audit and Credit Administration Department has been
established for proper monitoring of the process of documentation.
A) CONSUMER FINANCE DEPARTMENT
Under the umbrella of Consumer Finance BoK offers following type of Credit
facilities
 Home Loan
 Car Finance
 Consumer Durables Finance
 Salary Loans for (Govt. Employees)
B) AGRICULTURE CREDIT DEPARTMENT
Pakistan is blessed with one of the most unique land features spread over an area
of 79.61 million hectares of which around 28% is under cultivation. The Country also
possesses one of the best irrigation systems in the world supplemented by ideal climatic
conditions and plenty of hard working and dedicated manpower. All these factors add up

to create an ideal situation for a vibrant agriculture sector that can contribute towards the
economic growth of Pakistan.
Moreover the need to encourage use of modern techniques in the shape of improved
seeds, tillage methods and utilization of farm machinery cannot be over-emphasized but
this requires availability of adequate capital. The Bank of Khyber, being fully committed
to this cause of National concern has established a separate Agriculture Credit
Department for provision of required capital to the agriculture sector.
The Agriculture Credit Department of the Bank has introduced the “Sada Bahar Zari
Loan” Scheme. The salient features of the scheme are as under:
Purpose of loan Purchase of agriculture inputs like seed, fertilizers, pesticides etc.
Maximum Rs.500,000/- assessed under SBP per acre credit limits for
Loan limit
various crops.
Charge on Agriculture land through Agriculture Pass Book.
Or
Registered / Equitable Mortgage of urban property.
Or
Security Two Personal guarantees of reputable persons (at least one guarantor
should
be a government servant.) Note: The Credit facility in this case will
be up to
a maximum of Rs. 30,000 only.
Insurance Crop loan insurance cover from an approved Insurance Company.
Mark-up Market based (linked with KIBOR.)
Mark-up payment on half-yearly basis against out standing amount
Repayment & once in a year full adjustment of Principal + Mark-up at the end of
the year.
Following Branches of the Bank have been designated to offer agriculture Loans.
Dera Ismail Khan
Mardan
Kohat
G.T Road
Chitral
Charsadda

Mingora
Haripur
Mansehra
5.2.11 RISK MANAGEMENT DIVISION
Risk Management Division (RMD) was formed in November 2005, in order to

implement the directives of the Regulatory for monitoring, and timely remedial measures
of Risk Management functions at various levels in the areas of Operations, Market,
Credits and Liquidity etc. The Division was also assigned the task of implementing Base
I-II in the Bank. Risk Management Division was entrusted with the responsibility to
identify risks, suggest risk mitigation policies, review Bank's Policies, Procedures,
Methods etc in collaboration with the related functional Department/Division and
coordinate with Credit Division and Treasury Division to cover risks in the areas of
macro Lending/Borrowing, Investments and the lateral operational risks.
Under the umbrella of Risk Management Division, the following four departments
report to the Head of Risk Management Division:
1. Risk Management Department
2. Credit Administration Department
3. Method, Procedure and Policy Department
4. Treasury Middle Office
Risk Management Division undertakes to monitor risks, critically analyze, evaluate

negative impact, suggest mitigation methods in collaboration with the functional
Department/Division and report Bank's Risk Level to Senior Management and the
Board's Risk Management Committee.
5.3 PRODUCTS OF BANK OF KHYBER
5.3.1 RUNNING FINANCE
This is a working capital finance facility available for one year and renewed
subject to satisfactory utilization thereof. Markup is charged on outstanding balance.


5.3.2 DEMAND FINANACE
It is a term loan disbursed in lump sum and repayable in 2 years in the form of
monthly or quarterly installments.
5.3.3 LOAN AGAINST SALARIES
BOK provides loan against salary to employees of Government / Semi-

Government organizations for domestic consumptions. The employee must be confirmed
having minimum of three years of service. However, the remaining service period of the
employees must not be less than three years. To avail this facility, the employee must be
account holder of the bank. Loan limit is up-to 5 gross salaries but not exceeding Rs.50,
000. This facility is available for a period of 2 years but it can be allowed for shorter
period.
5.3.4 WORKING CAPITAL FINANCE
Working Capital Funds are provided to traders and manufacturers for their
operational requirements.
5.3.5 EXPORT FINANACE
This facility is encouraged to boost exports of the country. Funds are made
available from SBP at lower rates. Please email here for further queries.
5.3.6 MICO FINANCE UNIT
This facility is available at the counter of our Micro Finance Unit, which in the
true sense reinforces the support to grass root level development. The purpose is to
empower the lower strata of the economy by providing speedy access to funds thus
generating employment and eradicating poverty.
5.3.7 DOCUMENTARY LETTER OF CREDIT
Import and Export Letter of Credit Facility enhances trade with our countries.

Standby Letter of Credit It is approved as and when the need is felt.
Letter of Guarantee Guaranties are issued on behalf of customers to meet their

commitments.
5.3.8 SCHEMES
The Bank of Khyber is pleased to launch a Consumer Finance Scheme for general
Public with immediate effect. Under this scheme House hold product like electronics,
audio-visual equipment home appliance shall be financed to the customers on easy
installments.
SALIENT FEATURES
Eligibility for the scheme shall be as under:
a) Citizen of Pakistan aged between 25 to 60.
Scheme will be opened to all permanent employees of Govt. & Semi Govt. Local
Govt., NGO, Autonomous Bodies, University, Banks, Reputed Industries , Corporations
and self employed professionals or business men.
Applicant should be resident of the city where Bok's Authorized Branch is operating.
The monthly installments should be maximum of 1/3 of take home salary of the
applicant. (Take home salary is to be determined by the branch manager).
The Borrower will provide a personal guarantee of a third person as a security.
b) Guarantor can be a person
Aged between 25 to 55 years. Preferably residing in a same area as of applicant.

Applicant must not be immediate family member of the borrower. BoK's Account holder
will be preferred. Shall not be a Bok's Employee. Two Borrowers can not provide
guarantee to each other.
c) Tenure: The tenure of the scheme shall be for 36 months, 24 months, 18 months
and 12 months.

 Amount of Loan: Amount of loan shall be from Rs.5000/- to Rs.99,000/-.
 Advance Payment: A sum of 5% shall be received from the customer as advance

payment.
 Processing Fee: No Processing fee will be charged.
d) Mark up Rate: Mark up rate is 14%. per annum.
e) Charge Documents to be obtained by the Branch.
Agreement for financing. Letter for comfort / Guarantee from employer. Letter
of personal Guarantee. Comprehensive insurance of assets (Premium to be borne by
customer). D.P note for marked up price.
f) Documents to be submitted by customer along with applications. Attested

copy of N.I.C Copy of any recent Utility Bill. Bank statement for the last six months.
g) For Salaried Persons. Employment Certificate from HR/Personnel Deptt
(stating Designation, Tenure of employment Gross and net salary) or latest salary slip
duly attested by HR.
h) For Self Employed Persons.
Professional Association certificate for self employed professional like doctors,

Lawyers, Charted Accountants , Engineers etc stating the number of years in profession.
i) Guarantor's Documents.
Copy of N.I.C duly attested by branch manager. Bank statement for last six
month. Copy of last paid utility bill. Detail of Business or Profession. Bank's Performa
showing worth of Guarantor duly filled in (attached) Customer shall have to open an
account with branch (if not already open) and post dated cheques for all installments due
will be obtained from him.

5.3.8 ATM SERVICES
In order to keep pace with advancements in the field of technology, The Bank of
Khyber has joined the electronic platform of MNet switch. This will facilitate consumers
by providing them access to their funds through the existing ATM network of the
country. Also, BOK has installed its first ATM at Corporate Branch Peshawar.

CHAPTER -6
RECOMMENDATION AND IMPLEMENTATION
6.1 RECOMMENDATIONS
In the end of this report I am giving the recommendation in order to improve the
efficiency of the bank. These recommendations are primarily based on the analysis.
These recommendations, if followed will have a positive effect on the profitability, and
the role it plays in the development of province.
6.1.1 Better Training Program
It has been noticed that the training program of BOK is not adequate. Special
marketing training should be given to employees for motivating customers. The training
program of bank should include scientific techniques to improve decision making and
inter-personal as well as individual needs of an employee.
6.1.2 Enhance Customers Services
Constant improvements in customer’s services are needed in today’s competitive

environment. Personalized banking should be introduced to attract more customers. Equal
respect should be given to all the customers.
6.1.3 Automated Teller Machines (ATM)
The bank should provide a (ATM) facility to its customers at some branches. This
facility will enable the customers to use the card facility, within the same branch where
they have account. This facility is used in holidays and other than banking hours.
Customers can get information and with draw their money with the help of this facility at
any time.

6.1.4 Job Rotation
The employees of BOK are specialists in their fields but they need straightening
in general banking. They generally confine to their own work and do not give sufficient
consideration to other department. They must have some basic information of other
departments; it is recommended that there must be proper job rotation.
6.1.5 Proper job Analysis
A detailed and systematic study of the job should be done to know the nature and
characteristics of the people to be employed. This will help in identifying the training
needs, evaluating the job and in appraising the performance of the employees.
6.1.6 Introduction Career Planning
As a matter of personnel policy, personnel department of BOK should prepare a

career plan showing their future growth, potential, depending on the job performance and
evaluation, which should be made known to the employees. In this regard the employees
should be given opportunities to show their performance.
6.1.7 Better Working Condition
The working are is comparatively smaller as compared to the needs of the branch.
As a result there is lesser working space provided to employees. They have to work from
8P.M and some time even longer time period. The congested places affect their efficiency
at work. It is suggested that better working conditions should be provided for effective
and efficient out-put.
6.1.8 Promotions and Publicity
BOK should advertise itself and introduce its services in detail through media to
people. This is the best way to enhance its business like other successful banks. They
should adopt strong strategies for promotion and publicity of their services they offer.
6.1.9 International Banking
Bok should expand its branches. They should expand their branches not only in
Pakistan but also outside the country.

6.1.10 Use of Media
Bok is new organization in order to increase its customers and add to its publicity,
it is recommended that the bank should advertise itself and introduce its services in detail
through media.
6.1.11 Latest Computer Equipment
Latest software should be installed in the bank so that the data processing speed of
computers can be enhanced.
6.1.12 Proper Distribution of work
In Bok the distribution of work needs further streamlining. Some employees have
more work to do and are under stress while others are not fully occupied. The work
should be distributed in such a manner that there should no undue load or burden on any
one.
6.1.13 Friendlier Environment
Most friendly 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 environment. Separate place or section should be
created for each separate task and more space should be provided. It would also be of
greater help in establishment of friendly environment.
6.2 IMPLEMENTATION PLAN
The recommendations of any report are useless unless there is proper

implementation. We are, therefore, giving the implementation plan of the
recommendations of my report, which is as follows.

6.2.1 Better Training Programs
There are many training institutions in the province imparting training in various
themes. A training calendar may be devised and every officer of BOK should undergo
two weeks training in a year in various disciplines. This will enhance the quality and
performance of the officials.
6.2.2 Enhance Customer Services
The training imparted by the officers of BOK will automatically enhance

customer services. More clients will be attracted though enhancing customer services.
6.2.3 Job Rotation
A comprehensive plan must be prepared and every officer of BOK must be

transferred to other departments after every one-year and their rotation should continue.
Every employee will get to know about the working of each department.
6.2.4 Better Working Condition
The working conditions are not conducive. There is a space problem and longer
duty hours. Both the problems must be rectified. A bigger building must be acquired and
main branch be shifted there within one year. The hours should be curtailed by one hour.
This will encourage the employees of BOK to work with more dedication.
6.2.5 Promotion and Publicity
The BOK must allocate funds for publicity. At least one-minute advertisement on
daily basis must be launched on PTV for the publicity of BOK. This will increase the
business of the BOK.

6.2.6 Latest Computer Equipment
This is an era of information technology. The BOK must acquire latest computers
and software within 6 months to enhance its efficiency. Quick decision will be taken with
the latest computer equipment.
6.2.7 Proper Distribution of Work
The Bank must prepare job Description of each employee and implement it within
three months. Thus no one will feel embraced while working according to his job
description.

CHAPTER -7
FINANCIAL ANALYSIS AND SWOT ANALYSIS
FINANCIAL ANALYSIS
Financial analysis is the process of identifying the financial strength and

weakness of the firm by properly establishing between the items of balance sheet and
profit and loss account.
The analysis of the bank statement is undertaken by annalist, depositors,

regulatory authorities, stock holders, borrower, the bank management etc. A depositor is
interested in the solvency of the bank, i.e. the safety and availability of his funds. The
regulatory authorities desire to ensure themselves that the banks are operating in the
accordance of the law and are in sound financial condition of the bank and the
accumulation of surplus. The borrower is interested in knowing the exact of available
funds and the use that is made of the banker’s resources.
Financial ratio that relates two accounting numbers and is obtained by dividing
one number by other.
Assumptions
1. Ratios are calculated for two (2) years i.e. 2006 and 2007.
2. Figures are rounded off up to 2 decimal points.

7.1 FINANCIAL RATIOS
7.1.1 Current Ratio
Cash ratio is the ratio of cash and its equivalent to current liabilities. It shows that
how much cash is available to cover the current liabilities.
Current assets
Current ratio = ___________________ × 100
Current liabilities
26982365
Ratio for 2007 = ___________________ × 100 = 1.2:1
23081176
25578042
Ratio for 2006= ___________________ × 100 = 1:1
23552808
Interpretation
The current ratio is gradually increasing and is increased by 0.2 in 2007 as compared to
the previous year. The gradual increase in the ratio shows that the bank has improved its
liquidity from year to year.
7.1.2 Return On Assets After Tax
This ratio is used in evaluating whether management has earned a reasonable

return on the assets under its control. It measures the overall effectiveness of the available
assets in generating profits.
Net income (profit after tax)

Return on assets after tax = __________________________
Total assets

219,437
Ratio for 2007 = ___________________ × 100 = 0.73%
29,739,717
203,013
Ratio for 2006 = ___________________ × 100 = 0.74%
27,183,212
Interpretation
There is no big deference or fluctuation in the ratios of 2007 and 2006, it is 0.73%
in 2007 while 0.74% in 2006. Return on assets after Tax is slightly decreases in 2007.
7.1.3 Operating Cost To Total Income Ratio
It shows the relationship between operating cost and the total income. It tells us
how much operating cost is incurred in generating total income.
Operating cost
Operating cost to total income = ___________________ × 100
Total income
543,763
Ratio for 2007 = ____________________ × 100 = 88%
621,188
375,957
For 2006 = ____________________ × 100 =66.3 %
567,219

Interpretation
In the year 2007, this ratio is increased by 21.7% as compared to 2006, which
shows that the bank has incurred more operating expenses in 2007 and its total income
with low operating cost.
7.1.4 Debt To Equity Ratio
This ratio shows the extent to which the firm is financed by debt.
Total debt (total liabilities)

Debt to equity ratio = _________________________
Total equity
23,863,487
Ratio for 2007 = _______________________ = 4.3 times
5,568,253
24,182,304
For 2006 = ________________________ = 8.6 times
2,796,222
Interpretation
By analyzing this ratio we can conclude that the bank is trying to reduce
dependence on debt financing and is trying to finance its assets more by equity; the trend
of the ratio is reducing one from year to year.

7.1.5 Return On Equity Ratio
This ratio shows that how much ratio is generated by shareholder’s equity.
Profit after Tax

Return on equity = ___________________ × 100
Total equity
219,437
Ratio for 2007 = ____________________ × 100 = 3.94%
5,568,253
203,013
For 2006 = ____________________ × 100 = 7.3%
2,796,222
Interpretation
The analysis shows that the return on equity is declining in 2007. It gives a
negative indication from shareholders point of view at the beginning but is good at the
end.
7.1.6 Interest expense to deposits ratio
This ratio shows the relationship between the interest expense and the deposits. It
tells about the interest expense paid on different types of deposits.
Interest expense
Interest expense to deposits = ____________________ × 100
Deposits
1,845,360
Ratio for 2007 = ____________________ × 100 = 8.62%
21,410,828
1,304,742
For 2006 = ____________________ × 100 = 6.84%
19,076,564

Interpretation
The interest expense to deposits ratio is increasing from year to year. The exact
increase in this ratio is 1.78% in the year 2007 as compare to 2006. This shows that the
deposits of bank are increased in this period while the interest expense is also increased
due to reduction in the profit rates on various accounts.
7.1.7 Interest earned to advance ratio
This ratio shows the relative extant to which interest is earned on Advances.
Interest earned
Interest earned to advances = _____________________ × 100
Advances
2,380,380
Ratio for 2007 = ______________________ × 100 = 23.6 %
10,085,640
1,924,279
For 2006 = ________________________ × 100 = 21%
9,189,447
Interpretation
The interest earned to deposits ratio is high in 2007. The fluctuation is due to the
return on deposits of the Bank of Khyber with financial institution.
7.1.8 Deposits growth ratio
This ratio reflects the percentage increases or decreases in the volume of deposits
over a period of time.

Current year deposits- previous year deposits

Deposits growth ratio = ____________________________________________ × 100
Previous year deposits
21,410,828-19,076,564
Deposit growth for 2007 = __________________________ × 100 = 12.23%
19,076,564
19,076,564-16,025,525
Deposit growth for 2006 = ___________________________ × 100 = 19%
16,025,525
Interpretation
The deposits in 2007 have decreased due to the stiff competition in the bank
markets.
7.1.9 Advances Growth
Current year Advances-previous year Advances

Advances growth = ____________________________________________ × 100
Previous year Advances
10,085,640-9,189,447
Advances growth for 2007 = _______________________ × 100 = 9.7%
9,189,447
9,189,447-8,560,250
Advances growth for 2006 = _______________________ × 100 = 7.3%
8,560,250

Table: 7.1: Summary of Financial Ratios
SUMMARY OF RATIOS 2007 2006

CURRENT RATIO 1.2 1
RETURN ON ASSETS AFTER TAX 0.73 0.74
OPERATING COST TO TOTAL INCOME RATIO 88 66.3
DEBT TO EQUITY RATIO 4.3 8.6
RETUEN ON EQUITY RATIO 3.94 7.3
INTEREST EXPENSE TO DEPOSITS RATIO 8.62 6.84
INTEREST EARNED TO ADVANCES RATIO 23.6 21
DEPOSITS GROWTH RATIO 12.23 19
ADVANCES GROWTH RATIO 9.7 7.3

7.2 TREND ANALYSIS
BALANCE SHEET
As at December 31, 2007
2007 2006
Rupees in ‘000’
ASSETS
Cash and balances with 1,364,853 1,574,531
treasury banks
Balances with other banks 3,728,016 3,755,151
Lending to financial 2,858,000 2,493,430
institutions
Investments 8,945,856 8,565,483
Advances 10,085,640 9,189,447
Operating fixed assets 213,025 142,002
Deferred tax assets 48,683 75,365
Other assets 2,495,644 1,387,803
29,739,717 27,183,212
LIABILITIES
Bills payable 348,952 150,435
Borrowings 1,321,396 4,325,809
Deposits and other accounts 21,410,828 19,076,564
Sub-ordinated loans - -
Liabilities against assets - -
subject to finance lease
Deferred tax liabilities - -
Other liabilities 782,311 629,496
23,863,487 24,182,304
NET ASSETS 5,876,230 3,000,908
REPRESENTED BY
Share capital 4,002,984 2,000,949
Reserves 1,323,077 728,631
Unappropriated profit 242,192 66,642
5,568,253 2,796,222
Surplus on revaluation of 307,977 204,686
assets
5,876,230 3,000,908

PROFIT AND LOSS ACCOUNT

For the Year Ended December 31, 2007
2007 2006
Rupees in’000’
Mark-up/return/interest earned 2,380,380 1,924,279
Mark-up/return/interest expensed 1,845,360 1,304,742
Net mark-up/interest income 535,020 619,537
Provision against non-performing loans and advances 655,624 348,995
Provision for doubtful placement with a financial - 10,000
institution
Provision for diminution in the value of investments 3,700 -
Bad debts written off directly 60 -
659,384 358,995
Net Mark-up/interest income after provisions (124,364) 260,542
NON MARK-UP/INTEREST INCOME
Fee, Commission and brokerage income 78,790 67,883
Dividend Income 126,878 120,743
Income from dealing in foreign currencies 14,856 12,572
Gain on sale of securities 433,333 65,079
Unrealized gain/loss on revaluation of investments (6,990) 382
classified as held for trading
Other income 98,685 40,018
745,552 306,677
Total non mark-up/interest income 621,188 567,219
NON MARK-UP/INTEREST EXPENSES
Administrative expenses 522,723 372,129
Other provision/write offs - -
Other charges 21,040 3,828
543,763 375,957
Total non mark-up/interest expense 77,425 191,262
Extra ordinary/unusual items - -
PROFIT BEFORE TAXATION 91,014 203,469
Taxation
Current 22,318 13,574
Prior years - (16,340)
Deferred (150,741) 3,222
(128,423) 456
PROFIT AFTER TAXATION 219,437 203,013
Unappropriated profit brought forward 66,642 176,089
Profit available for appropriation 286,079 379,102
Basic and diluted earnings per share 0.62 1.04

CASH FLOW STATEMENT

for the Year Ended December 31, 2007
2007 2006
Rupees in “000”
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 91,014 203,469
Less: dividend income 126,878 120,743
(35,864) 82,726
Adjustments:
Depreciation 18,214 16,534
Amortization 1,758 1,768
Provision against non-performing advances 655,624 348,995
Unrealized gain/(loss) on revaluation of investments 6,990 (382)
classified as held for trading
Provision against doubtful placement with financial - 10,000
institution
Provision for diminution in the value of 3,700 -
investments/other assets
Bad debts written off directly 60 -
(Gain) on sale of fixed assets (407) (634)
Share in results of an associate before taxation (13,589) (12,207)
672,350 364,074
636,486 446,800
(Increase)/ decrease in operating assets:
Lending to financial institutions (13,000) (127,810)
Net investments in held for trading securities (17,917) 288,593
Advances (1,551,877) 1,023,691
Other assets (excluding advance taxation) (1,036,076) (423,394)
(2,618,870) 761,080
Increase/(decrease) in operating liabilities:
Bills payable 198,517 31,127
Borrowings (3,004,413) (48,345)
Deposits and other accounts 2,334,264 1,624,394

Other liabilities (excluding current taxation) 152,815 (2,037)

(318,817) 1,605,139
Cash (used in)/ generated from operations (2,301,201) 2,813,019
Income tax paid (89,225) (67,619)
Net cash (used in)/ flow from operating activities (2,390,426) 2,745,400
CASH FLOW FROM INVESTING ACTIVITIES
Net investments in available-for-sale securities 291,150 (1,923,498)
Net investments in held-to-maturity securities (374,447) 485,938
Dividend received 126,092 121,153
Investments in operating fixed assets (91,033) (21,122)
Sale proceeds of property and equipment disposed-off 827 1,657
Net cash used in investing activities (47,411) (1,335,872)
CASH FLOW FROM FINANCING ACTIVITIES

Issue of right shares 2,002,035 409,915
Share premium received against issuance of shares 550,559 204,958
Net cash flow from financing activities 2,552,594 614,873
Increase in cash and cash equivalents

Cash and cash equivalent at beginning of the year 114,757 2,024,401
Cash and cash equivalent at the end of the year 7,513,112 5,488,711
7,627,869 7,513,112

7.3 SWOT ANALYSIS
STRENGTH, WEAKNESSES, OPPERTUNITIES, THREATS
SWOT an acronym that stands for strengths, weaknesses, opportunities and

threats.SWOT analysis is a careful evaluation of an organization’s internal strengths,
weaknesses as well as its environmental opportunities and threats. In SWOT analysis the
best strategies accomplish in organization’s mission by:
 Exploiting opportunities and strengths.

 Neutralizing its threats and
 Avoiding its weaknesses.
Following is a list of SWOT of BOK
7.3.1 STRENGTHS
Following are the main strengths of IBD of BoK.
The main strength of IBD of BoK is that its major stake holder is the Government of
NWFP so it is provincial government bank, so it has a say in the provincial government
and are not facing as many difficulties in regulations etc. as faced by another banks.
The provincial government has made it compulsory for all the provincial Department /
Institutions to keep 33% of their deposits with BoK. Due to this order the deposits of IBD
of BoK has grown substantially.
Now-a-days one of the important strength of the IBD of BoK is its small branch
network. The bank does not have branches in such areas where there is no business. The
other private and nationalized commercial banks are closing their unprofitable branches
and are passing through a paradigm shift; IBD of BoK is not facing such a situation at
this time. They intend to open new branches in strategic business areas.
As compared to other Pakistani banks its staff is well qualified, skilled, knowledgeable,
and courteous and can handle any situation tactfully.

The senior management of the bank is competent and takes expatriate decisions to
make the bank profitable.
As all the major activities of branches and head office has been computerized.
Which gives a leading edge to the bank? The bank works hard to start their credit cards
and online banking.
Another leading point of the bank is the trust and help expressed by international
financial institutions like IFC and DEG, which have opened new ways for the bank to
generate funds.
As BoK is not only a commercial bank but also acts as a development bank so its
corporate strategy is according to the cry of the day. Which is to strengthen the SME’s
and local industry to cope with globalization challenges. This leads to the increased
utility and importance of the bank.
The open communication and friendly environment developed by the

management and staff of the banks makes it very easy for the management of the bank to
take the right decision at the right time. Most of the banks in the country lack such type
of environment.
The banks offers new schemes and facilities from time to time which keeps not only the
clients of the bank committed but also leads to a growing sound base of deposits.
The Good thing in IBD of IBD of BoK that major decisions are made in light of SSC
Member (means they review every decision in compliance with Shariah)
7.3.2 WEAKNESSES
“Organizational weaknesses are skills and capabilities that do not enable an

organization to choose and implement strategies that support its mission”.
The major weaknesses of IBD of BoK are listed below:

As it is a provincial government bank so the unwanted interruption by provincial

government authorities hampers the bank good well, position and profitability.
The other major weakness of IBD of BoK is that far it has not been able to receive
the branch-opening license of proposed branches in the country and outside the country
from SBP.
The space of BoK Head Office is very limited so the bank has shifted some of
their departments to State Life Building but still the departments are overcrowded which
effects the employees performance at the head office.
Substantial bad debts of the bank effect are liquidity and profitability. This is the
weakness on the part of Recovery Department that they have not been able to recover it.
Lack of transparent system of recruitment and selection.
Lack of sound training system according to organizational goals.

Coordinated and targeted marketing activities are lacking in IBD of BoK and also the
Marketing Department has no value and presence in the bank.
Most of the employees are unmotivated and lack of technical knowledge and are scared
about their career development.
Most of the employees are having the lack of Islamic banking knowledge.
Not consistency in training programs.
Non aggressive policies (due to that IBD) are losing his experienced personnel.
7.3.3 OPPORTUNITIES
Organizational opportunity is defined as “An area in the environment that if

exploited may generate high performance”.
The Bank of Khyber can avail the following opportunities if they keep a vigil eye on the
environment and the changes, which are occurring in the environment.
As the situation in Afghanistan is getting better slowly and gradually

multinational companies and other rehabilitation agencies are opening their offices in

Afghanistan. To facilitate the rehabilitation process and the trade between Afghanistan
and other countries including Pakistan IBD of BoK should open their branches in Kabul
and Jalalabad inside Afghanistan and at Landi Kotal, Miran Shah and Para Chinar in
N.W.F.P., Pakistan.
As IBD of BoK is not only engaged in commercial banking but also acts as development
bank, so their development banking sector is according to the current government
policies and also with in accordance with the policies of international financial and
development situations so they can avail this opportunity by joining hands with the
government and DFI’s in the investments in development sector.
As BoK is planning to step in the Islamic Banking System so they should capture this
market before any competitor comes in.
Construction work is in progress on Deans Trade Centre the biggest Trade Centre
of Asia. It will attract the business community and multinational companies to flourish
over here. IBD of BoK can avail this opportunity by opening a new branch in Deans.
The bank should expend their branches and lower in come groups can reduce the default
risk and can enhance the bank good will and profitability.
Strong promotional strategies can attract huge deposits for the bank.
7.3.4 THREATS
Organizational threat “An area in environment that increases the difficulty of an

organization’s achieving high performance”.
The threat faced by IBD of BoK, if not faced tactfully it will harm the bank image,
performance and profitability. These are:
The Electronic banking facility offered by different national and international banks
is a serious threat to IBD of BoK. IBD of BoK should soon offer the e-banking facility to
maintain their customers.

In modern banking the ATM facility is of immense importance. IBD of BoK should
install ATM’s at their major branches to cope with the ongoing competition between
commercial banks.
The low rate of savings in the country is a serious threat to IBD of BoK. They should
aware the general public about the advantages of savings and investments.
The distributed political and legal environment of the country is also a threat to the
bank.
The decreasing confidence of people on commercial banks on the basis of offering low
returns and charging high interest rates is a threat to the IBD of BoK also.
Stagnation of the industry and economy in the country in general and in the province in
particular is a serious threat to IBD of BoK.
The failure of other NWFP based banks has shattered the bank image and the
confidence of the investors.
Major Banks have started their Islamic banking system which is the major threat
for IBD of BoK.
Of the most banks they have adopted the aggressive policy due to which the turn over
rate is very high at IBD of BoK.
7.4 SUGGESTIONS
Regardless of it that the problem is of the external nature or that of internal nature, it
is necessary for the bank administration to solve them properly so that the bank can run
better towards the achievements of its pre-determined objectives. Using the proper way
of administration could solve both the external and internal problem.
All the employees working in the bank may be granted motorcycle advance, which
may be recovered in easy installments, while sanctioning the advance period of the
service should not be taken into account because it closes the way for newly recruited

employees. Also there should be one or two tea breaks for the relaxation of the
employees during the working hours. Approximately one or two clerks may be appointed
other than the sanctioned strength, so that one the time when one takes leave could be
replaced by the person in extra. This may cause some financial problems to the bank for
which an institution always tries to get rid off. But it will help the bank in negotiating the
public properly, which will increase the goodwill of the bank the eyes of public that will
result in the increase in the business of bank and profit of bank. The workers should give
leave at any emergent time. This will increase the desires of workers for worker.
Proper remuneration to a worker brings positive results for the institution. It is

therefore suggested that if any employee works more than four hours, as overtime should
be given full delayed assigning jobs according to their knowledge and skills. The
computers should be utilized properly in order to decrease the expense of bank and
increase the ratio of work done per hour. In this regard the computer literate person
should be recruited and proper programs should be purchased because the computer
works much faster than the human being.

BIBLIOGRAPHY
1. James C. Van Horne & John M. Wachowicz. (2001). Fundamentals of Financial
Management. India: Saurabh Print O Pack.
2. Meiges, Robert. F. (1999). Accounting: The Basis for Business Decisions. Boston:
Irvin Inc.
3. Human Resource and personnerl Management by Werther and Davis
4. Griffin R. W. (1997). Management. Delhi: A.I.T.B.S. Publishers & Distributors
5. Howard, M. A. (1979). Management Essentials; Concepts and Application.

Chicago: Science Research Associates, Inc.
6. Kenney, R. D and S. Y. Mc Mullen. (1978). 6th Edition. Financial Statements:
Form, Analysis, and Interpretation. London: Irwin-Dorsey International.
7. Robert, F. M, JR. Williams, S.F. Haka, and M. S Bettner. (1999). 11th Edition,
Accounting; the Basis for Business Decisions. New York: Irwin McGraw-Hill.
8. Samuel, C. C. (1989). 4th edition, Principles of Modern Management.
Massachusetts:
9. Sayers, R. S. Modern Banking. Oxford: The Clarendon Press.
Periodicals
1. Brouchers of Bank of Khyber.
2. Manuals of Bank of Khyber.
Reports
1. The Bank of Khyber, Annual Report 2007.
2. The Bank of Khyber, Information Memorandum 2005.
Websites :
1. www.bok.com.pk
2. www.banking/history/pakistan.com
3. www.google.com.pk.
Contact:
Shahab Ahmed, IMS University of Peshawar.
Mobile: 03459034858
E-Mail: brown_ozar@yahoo.com

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Internship Report on Bank of Khyber

INTRODUCTION TO THE REPORT

1.1 BACKGROUND OF THE STUDY

For the completion of Bachelor Degree in Business Administration, every student

1.2 PURPOSE OF THE STUDY

1.3 SCOPE OF THE STUDY

1.4 RESEARCH METHODOLOGY

Institute of Management Studies, UOP 1

1.4.1 PRIMARY DATA

1.4.2 SECONDARY DATA

Institute of Management Studies, UOP 2

1.5 SCHEME OF THE REPORT

Institute of Management Studies, UOP 3

2.1 WHAT IS BANK?

A federally regulated financial institution that, in general, engages in the business

An organization, usually a corporation, chartered by a state or federal

2.2 EVOLUTION OF BANKING

Institute of Management Studies, UOP 4

2.3 MODERN BANKING

Institute of Management Studies, UOP 5

3.1 BANKING IN PAKISTAN

Institute of Management Studies, UOP 6

In order to make necessary arrangements for the assumption of control an Expert

Institute of Management Studies, UOP 7

Development of agriculture largely depends on agricultural finance, but the

Institute of Management Studies, UOP 8

More Pakistani scheduled banks continued to be established, which included the

At present the banking structure in Pakistan comprises of the following:

3.1.1 STATE BANK OF PAKISTAN

Institute of Management Studies, UOP 9

3.1.2 COMMERCIAL BANKS

3.2 WHAT IS ISLAMIC BANKING?

3.2.1 BASIC PRINCIPLES OF ISLAMIC BANKING

Institute of Management Studies, UOP 10

Institute of Management Studies, UOP 11

c. Making money from money is not acceptable in Islamic

Money is only a medium of exchange, a way of defining the value of a thing; it

Institute of Management Studies, UOP 12

AN INTRODUCTION TO BANK OF KHYBER

4.1 BRIEF HISTORY

The Bank of Khyber was established in 1991 as a provincial commercial bank

4.2 METHODOLOGY & DISTINCTIVE FEATURES

 Direct lending to individual micro-entrepreneurs

Institute of Management Studies, UOP 13

 Wholesaling of funds to facilitators (NGOs, RSPs) for on lending in rural

The Bank of Khyber is currently a partner to an ADB project, lending to NGOs in

4.3 CHALLENGES AND DEVELOPMENT PLANS

Providing micro finance services through a commercial banking structure, not

MISSION AND VISION OF BANK OF KHYBER

Gradual conversion into ISLAMIC BANKING for development and promotion of

To increase shareholders' value and provide excellent service and innovative

4.6 CORE VALUES

Highest quality of service.

Institute of Management Studies, UOP 14

4.8 BANK’S PERFORMANCE REVIEW

Institute of Management Studies, UOP 15

4.9 FUTURE OUTLOOK

4.10 OBJECTIVES OF THE BANK OF KHYBER

Institute of Management Studies, UOP 16

4.11 ORGANIZATIONAL STRUCTURE

“Organization is a group of people working together in a structured and co-

4.11.1 Organization hierarchy

Institute of Management Studies, UOP 17