Bank of Punjab

Operations Management of Bank Of Punjab

Sana Khan, Hamza Asim, Nayab Waheed, Adnan Bashir, Ali
Jafri
BBA 3 O
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Table of Contents
Introduction.........................................................................4
PRODUCTS...................................................................................4
Organizational Hierarchy chart..............................................................8
Business Volume...............................................................................9
Product Line.................................................................................10
Deposits Products................................................................................10
Profit Loss Sharing Term Account............................................................10
Consumer Finance............................................................................... 11
Commercial Finance............................................................................ 11
Electronic Banking............................................................................... 12
Services................................................................................................. 12
Agriculture Credit................................................................................13
Trade Finance....................................................................................... 14
Competitors..................................................................................14
Introduction to All Departments............................................................14
Retail Banking Division............................................................................16
Special Assets Management Division......................................................16
Credit Administration Division.................................................................16
Human Resource Division........................................................................16
Finance Division...................................................................................... 16
Information Technology Division..............................................................17
Operations Division................................................................................. 17
Training, Research, Communication & Public Division.............................17
Audit and Inspection Division..................................................................17
Law Division............................................................................................ 17
BOP Service Flowchart......................................................................18
Functional Hierarchy of the Bank of Punjab..............................................20
Organizational Structure of Bank of Punjab..................................................22
Process strategy..............................................................................22
Process focus:.......................................................................................... 22
Process Flow diagram.......................................................................24
Process design................................................................................25
Open Office Layout.................................................................................. 25
Automation in Services: BOP...............................................................28
Projects and the Government/Tech involved in them..............................28
Supply chain Management..................................................................31
Suppliers............................................................................................... 33
Outsourcing..................................................................................33
Branchless Banking:............................................................................34
Insourcing....................................................................................35
The Difference Between Outsourcing & Insourcing.................................36
Cost...........................................................................................36
Resources.....................................................................................36
Control.......................................................................................36
Location......................................................................................36
Insourcing in BOP................................................................................36
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The Bank of Punjab: Quality Assurance Techniques......................................37

The Need for Quality Assurance:.......................................................37
Total Quality Management in BOP.........................................................39
Quality Assurance and Recommendations.................................................39
Credit Monitoring................................................................................. 42
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Bank of Punjab
Introduction
At Present, the bank has 364 branches including 37 Islamic banking branches in Pakistan
and Azad Jammu and Kashmir. The customers care centers and franchises of the banks
will be utilized in addition to launching different schemes and services under provincial
government in the future. The retail banking BOP consists of different specialized
departments for different

VISION
To be customer focused bank with service excellence.

MISSION
To exceed the expectation of our stakeholders by leveraging our relationship with the Government of
Punjab and delivering a complete range of professional solutions with a focus on program driven
products and services in the agriculture and middle tier markets through a motivated team.

PRODUCTS
The products being offered by Bank of Punjab are categorized under Retail Banking,
Agriculture, Retail Finance and Wholesale Banking.

RETAIL BANKING
In retail banking customers are considered top priority and are offered a range of
solution-driven and cost-effective products and services that covers all segments of
society. Its a mix of value-added services like Automated Teller Machines and Online
banking.

BOP Tijarat Account:

This accounts comes under Current Deposits, This is a chequing account deposit product
especially designed to cater the needs of business Individuals as well as Business entities including
Partnerships, Limited / Unlimited Companies, Not for Profit organizations, Trusts and any other
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business oriented government / Semi government entity. Its a nonprofit bearing account with
maintaining a monthly deposit of 25000 rupees and over.

BOP Life Current Account:

This is a current chequing account deposit product available for individuals with a Free of Cost Life
Insurance Cover. Its a nonprofit bearing account on maintaining as well as quarterly minimum deposit
of 5000 rupees.

BOP Salary Plus Account:

This is a current chequing account that can be opened by any individual who has been working for an
organization and is maintaining salary disbursement account with BOP. Focuses on employees of
government/semi government organizations, their allied corporations, autonomous bodies and private
sector entities. This is also a nonprofit bearing account.

BOP Youth Education Account:

This is also a current chequing account for the students studying in schools, colleges or universities
with additional value of free cost educational insurance on maintaining minimum deposit of 100,000
rupees per month. This is also a nonprofit bearing account.

BOP FCY Supreme Current Account:

This is a foreign currency current account available for all customers who are eligible to open a FCY
current account as per Banks criteria. There are certain value added attractions on maintaining
minimum balance of USD 10,000 or EURO 8,000 or GBP 7,000.

BOP Current Account:

This is a current chequing account deposit to capture the day by day needs of individuals and business
entities. This is a nonprofit bearing account.

BOP Current Direct Pension Credit Account:

The account is being opened in terms of Supreme Courts SUO MOTO regarding the hassle faced by
pensioners its subsequent order that pension may be disbursed through all branches of all the licensed
banks in Pakistan. This account can be opened by any pensioner. There will be no such charges for
maintaining the account.

Basic Banking Accounts:

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This account can be opened by minimum initial amount of 1000 rupees. No service charges for
maintaining the account. The account caters the customers like students, mustehkeen-e-zakat, salary
accounts of government and semi government employees, pensioners, widows and children of
deceased employees eligible for family pension/benevolent fund grant. This is also a nonprofit bearing
account.

BOP Asaan Current Account:

This is a current chequing account for low risk common people/individuals who face difficulties in
account opening due to strict requirements/formalities. These segments of society may include but are
not limited to self employed, pensioners, students, farmers, women/housewives, young adult
population, work force etc. This is also a nonprofit current account and it can be opened by as low as
100 rupees initial deposit.

PLS Saving Bank Account:

This saving account is available for general public and is a profit bearing bank account.

BOP Behtareen Munafa Account:

This is also a saving deposit bank account for general public and the profit will be calculated on the
monthly average deposit basis.

Corporate Premium Account:

This is a saving deposit account mostly for entertaining business factor, can be opened singly or
jointly. It again a profit bearing account.

BOP FCY Supreme Saving Account:

This is a saving deposit account for all the eligible customers for depositing foreign currency in a FCY
saving account according to the banks terms and conditions.
BOP Young Lions Saving Account:
This is a saving account for children under the age of 18 and can be opened by parents or guardian.
BOP PLS Direct Pension Credit Account:
The account is being opened in terms of Supreme Courts SUO MOTO regarding the hassle faced by
pensioners its subsequent order that pension may be disbursed through all branches of all the licensed
banks in Pakistan.
BOP Asaan Saving Account:
This is aprofit bearing account and can be opened by initial deposit of 100 rupees.
BOP Pehlay Munafa Deposit Scheme:
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This comes under the fixed deposit account on maintaining the minimum amount of 50,000 rupees.
BOP Bonus Munafa Term Deposit:
This is also a fixed deposit account on minimum investment of 50,000 rupees and profit will be paid
monthly.
Corporate Premium Term Account:
This is a profit bearing fixed account especially for corporate customers.
BOP Bai Misaal Term Deposit:
This is also a fixed deposit account on minimum investment of 100,000 rupees.
Small and Medium Enterprise:
The bank of Punjab also offers lending products and services to the SME sector by financing them to
run their business. The services include running finance, cash finance, team finance and lease finance.
AGRICULTURE
Bank of Punjab has also been financing farmers and tenants to help them with their cultivation, cold
storage units, for establishing dairy farms and green houses. The bank also provides loans to farmers
for purchasing any sort of machinery used for cultivation.
RETAIL FINANCE
The bank offers loans for leasing cars on repayment terms, loans for construction or renovation of
houses, advance salary personal loans, loans for solar energy which converts to electricity and loans
for caravan fleet financing.

Organizational Hierarchy chart

Chairman
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Board of
Directors

Chief Executive
Officer

Executive
Committee

Executive
Incharges

Area Manager Area Manager

North South

Business Volume

Total Number of Stock Holders

Directors 0

Provincial Government 269,686,662

Associated Companies 0
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Foreign Shareholders 37,567,609

Individuals 62,526,255

Insurance Companies/Modaraba Mutual Funds 32,993,540

Leasing Companies 957,701

Charitable Trust 273,911

Cooperative Societies 16,011

NIC Units 3,205,607

ICP 99,00

Joint Stock Companies 19,846,888

Others 101,713,292

Total number of shares 528,798,376

Product Line

Deposits Products

Current Account
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Basic Banking Account

Tijarat Account (LCY)
Supreme Current Account (FCY)
Young Loin Saving Account ( New Product 2010 )

Profit Loss Sharing Term Account

Profit and Loss sharing Term Accounts offered by Bank of Punjab are:

PLS Saving Account

Senior Citizen Account
Gharayloo Saving Account
Ziada Munafa Saving Account
PLS-Saving Profit plus Account
Corporate Premium Account
Supreme Saving Account (PLS)
Supreme Saving Account (FCY)
Corporate Premium Account

Consumer Finance

Types of consumer finance offered by Bank of Punjab are:

Aasaih Loan
Quick Cash
Car Loan
House Loan
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Small Cash Personal Loan

BOP Motorcycle Loan

Commercial Finance

The Bank of Punjab offers following Commercial Financing Loans:

Running Finance
Cash Finance
Demand Finance
CNG Filling Station Scheme
Auto Lease Financing Scheme
Car Lease Financing Scheme
Karobar Barao Scheme
Fertilizers Dealers Financing Scheme
Ali Akbar Group_ Franchise Financing Scheme
Atlas Honda Limited _Authorized Dealers Financing Scheme
Financing Scheme_ Purchase of Office/Shops

Electronic Banking

Electronic Banking provides non-stop banking convenience, twenty four hours a day,
seven days a week.

Visa Debit Card

Internet Banking
ATM Network
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BOP Quick pay

Call Center

Services

The Bank of Punjab is dedicate in its efforts to provide a quality banking experience to
our customer via a range of unique Banking Services

Commercial Banking
Online Banking
Cash Management Services
Utility Bills
Lockers
Treasury
Western union Money Transfer

Agriculture Credit

Agriculture credit is provided to the farmers and livestock organizations.

Bank of Punjab provides following agriculture loans with a specific markup rate:

Green Tractor Lease Finance

Agri Finance Branch
Agri Finance Scheme
Kissan Dost Finance Scheme
Second Hand Tractor Lease Finance Scheme
Kissan Dost Aabiari Scheme
Kissan Dost Mechanization Support Scheme
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Kissan Dost Farm transport Scheme

Kissan Eslahi-e-Erazi Scheme
Kissan Dost Live Stock Development Scheme
Livestock Breed Improvement Trough VVW
Kissan Dost Commercial Agro Services
Kissan Dost Agri Mall Finance Scheme
Corporate Farming Finance Scheme
Commercial Lease Finances Tractor Scheme
Demand Finance Sheds Construction and Civil Work
Lease Finance Facility for Milked Animals
Running Finance Livestock Poultry
Kissan Dost Model dairy Farms (PDDC)
Kissan Dost Model Milk Centre (PDDC)
Kissan Dost Green House Finance Facility
Kissan Dost Cold Storage Finance Facility
Scheme for Controlled Shed
Lease Finance Facility for Installation of Bio-gas Plant
Group Finance to Small farmers
Clean Credit Facility through Syngenta Franchises
Zarkaashat Drip Irrigation System
Markup of Schemes

Trade Finance

Trade finance is a loan provided to the importers and exporters to make their
transaction effective. This enhances the global business. The Bank of Punjab makes some
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trade processing centers to cooperate the exporters and also to the importers in different
cities of Pakistan such as Lahore, Islamabad, Rawalpindi and Karachi.

Competitors

The competitors of the Bank of Punjab are the other commercial banks in Pakistan such
as:
Muslim Commercial Bank Limited, Soneri Bank Limited, United Bank Limited,
Allied Bank Limited, Askari Bank Limited, Faisal Bank Limited, Standard
Chartered Bank Limited, Habib Bank Limited, Habib Metropolitan Bank Limited,
And Bank Al-Habib Limited

Introduction to All Departments

The departments and divisions of Bank of Punjab are as follows:

Retail Banking Division

Special Assets Management Division

Credit Administration Division

Human Resource Division

Finance division

Information Technology Division

Operations Division
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Credit Risk Management Division

Corporate Banking Division

Control and Compliance Division

Training, Research, Communication and Public Division

Consumer banking Division

Audit and Inspection Division

Law Division

Retail Banking Division

Retail banking division of the bank deals with the customers and executes their
transaction directly. It provides the services of saving account, mortgage loans, personal
loans, debit cards, accounts checking, credit cards, ATM cards.

Special Assets Management Division

The Bank will invest on behalf of its clients and give them access to a wide range of
traditional and alternative product offerings that would not be to the average investor. It
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includes the automatic sweep of cash balances into a money market fund, as well as
brokerage services.

Credit Administration Division

In this division, banks deals with the credit, banks give loans to individuals and to the
corporations.

Human Resource Division

This division performs the duty of hiring the employees, training the employees as well
as retaining the employees and if necessary, firing the employees.

Finance Division

This division controls the overall activities relating to finance i.e. monitoring the
investment activities, financing activities, Debit and Credit of funds and reasons there of
with proofs.

Information Technology Division

This department controls and record the data related with the bank. The backup of all
branches is sent to IT department on daily basis.
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Operations Division

This division controls the whole operation of all the branches and controls the cash
activities, cheques, account opening and other things about operations.

Training, Research, Communication & Public Division

This division conducts research on new products, trains newly hired employees, train old
employees on new and innovative circulars in banking sector. It also provides training on
customer relation management.

Audit and Inspection Division

This department of bank includes the Audit of all the branches; they do audit of the
branches and give some opinions to execute their transactions.

Law Division

In this division of BOP, lawyers are employee to solve the cases of the bank.

BOP Service Flowchart

Bank
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Policies

SOPS

Instructions

Services

Workers
Service/Product delivered at customers end

Report to Finance
HR
IT
State Bank of Pakistan
Divisio
19
 Functional Hierarchy of the Bank of Punjab

Chairperson of Board of
Governor

President of BOP
Special Assets
Management Division

Internation Retail President of Credit Audit HR Finance IT

al Division Banking BOP Administration Divisio Divisio Divisio Divisio
Division Division n n n n

Risk Regions Commercia Corporate RCAD Region Report to

Manageme l Assets Assets Departmen al State Bank of Pakistan
nt Manageme Manageme t Teams
nt nt
Areas Hub

Branches
Organizational Structure of Bank of Punjab

Division of Labor

The structure of the Bank of Punjab is divided into division and these divisions are
further divided into departments. This type of structure helps the management in
controlling the operations of the bank effectively. Each division is responsible for its
respective duties.

Span of Control

Span of control among hierarchical structure is clearly defined. Each department reports
to the central department and then this central department reports to the head office.

Communication

Communication among the organizational departments is easy. Horizontal and vertical

communication among departments is very effective.

Process strategy

Process focus:

The bank of Punjab employs the process focus strategy.

Process focus strategy:

BOP is a financial services facility organized around processes to facilitate low volume,
high variety productions. All operations are grouped according to the different type of
process as well as particular service required. Consequently these processes have been
subdivided into different departments within the bank. BOP branches are process focused
in terms of of layout, supervision, workforce and equipment. The advantage of process
focius strategy for services is that it provides a high degree of product flexibility as
different services are provided to the customer in accordance to their need/want. Each
process is designed to provide a high variety of activities and handle frequent changes.
Consequently they are also called intermittent process.
The system is also called job shop as the product/service moves from one department to
another in small batches that are determined by the customers order.

What are Process strategy main Characteristics?

Facilities are organized around specific activities or processes
General purpose equipment and skilled personnel
High degree of product flexibility
Typically high costs and low equipment utilization
Product flows may vary considerably making planning and scheduling a
challenge
To conclude, as each process, process focused supposes some positive aspects for the
company and some negatives ones:
1. Positive aspects implementing the process focused:
-Greater product flexibility

-More general propose equipment

-Lower initial capital investment

1. Negative aspects of implementing the process focused:

-More highly trained personal

-More difficult production planning and control

-Low equipment utilization (5%)

-Requires more time if the system operates on one or more processes at a time

-High Variable costs

Process Flow diagram

Process design

Open Office Layout

The cons of Open Office Layout are that it is unhealthy and stress inducing at it promotes
a hostile environment that is hostile to creativity, productivity and communication. It
breaks the ethical code of Privacy. This is because the lack separated workspace results
in invasion of Privacy.

However the main advantage of this process layout is that it is cheaper (lowers design
expenses) for BOP. Moreover another upside of this layout design for BOP is that it can
handle rapid changes in personnel number whereas in the traditional layout the number of
individual rooms in the structure would have limited BOP.
 As a part of BOPs commitment to provide high quality banking products and services to
Its customers, the Bank inaugurated its flagship conventional banking branch at BOP
Tower, Main Boulevard Gulberg, Lahore on 15th February 2016.

The newly renovated branch reflects their strategy to invest in Retail Banking with a
focus on customer-centric innovations and an eye towards growth and prosperity of the
Bank by adopting smart banking technologies and best practices. This branch allows
them to showcase a truly differentiated level of customer service and deliver the full
breadth of products and services that BOP has to offer to its customers.

The President/CEO Naeemuddin Khan inaugurated the new and modern branch. The
Deputy CEO Khalid Tirmizy and many members of the management committee
including the CFO Nadeem Amir and GHHR Moghis Bokhar also attended the ceremony.
The branch design and layout was a big success with the banks customers who had
major compliments for the direction and vision of the leadership and the efforts being made to
Improve the lives of our customers.

Staff Advantages
A lack of walls or other physical barriers in open-plan office spaces makes it easier
for employees to interact with each other on a regular basis. The constant
intermingling not only generates a sense of camaraderie among personnel, it also
enhances the flow of information and teamwork. Colleagues can turn to each other
for advice or assistance without having to knock on doors or schedule a formal
meeting. Interactions in an open-plan office space generally are more frequent and
informal than in closed environments where everyone has a separate office space.
Business Advantages
The increased collaboration resulting from an open-plan work space can lead to
business innovation and advancement. At the same time, an open-plan layout can
benefit the business economically by reducing costs tied to construction, utilities
 and office equipment. For example, fewer walls mean less time and materials
required to create the office space. Having a single work space also may reduce
heating/cooling and electricity expenses thanks to improved flow of air and light.
Businesses can save on equipment investment as well, since communal spaces
promote shared use of resources, such as printers, copiers and staplers. An open-
plan space also provides greater flexibility to accommodate evolving personnel
needs.

Staff Disadvantages
On the downside, the high level of everyday interaction that takes place in an
undivided work space may lead to noise and distractions that make it difficult for
employees to focus on their work and conduct business. Lack of privacy is another
potential problem with open-plan office spaces, where computer screens are easily
visible by those walking by and telephone conversations are likely to be
overheard. Open-plan layouts also facilitate the spread of disease, so if a colleague
comes to work with a cold, it can affect the health of the entire staff.

Business Disadvantages
Most of the factors that are disadvantages for personnel also are detrimental to the
bank as a whole. For example, the distractions caused by frequent interactions
among staff members and high levels of noise can result in decreased productivity.
Business output also may be reduced by the higher rate of absenteeism associated
with open-plan environments in which disease spreads more easily. In addition, the
lack of privacy inherent in open-plan designs may give rise to legal or ethical
issues stemming from compromised confidentiality in regard to clients or
colleagues.

Automation in Services: BOP

Projects and the Government/Tech involved in them

Successfully Executed Programs

We have successfully catered to the following programs till date managed end-to-end by
BOP.
Here it is pertinent to mention that BOP processes the payments, the selection of
beneficiaries and their verification is done by district management of the government and
NADRA respectively. BOP in no way is involved in data gathering and selection of
beneficiaries.

Khidmat Card Program:

Khidmat Card program is the Govt. of Punjabs initiative to achieve the ultimate goals of
improving income and livelihoods opportunities for poor and marginalized groups in
Pakistan through better access to financial services; the Govt. of Punjab created SAP
Social Protection Authority which has been tasked with fulfilling the basic needs of the
helpless families facing economic problems.
The Social Protection Authority has given the exclusive mandate to BOP to start the first
phase of disbursement, which is aimed at 200,000 Elderly & Disabled Persons out of
the total population of 2.6 million poorest of the poor families.
Project Related Information
Deployment of Biometric devices for identity confirmation of beneficiaries
Deployment of field resources for managing the govt. appointed distribution centers
SIMIs suance for mobile wallet
Fully functional mobile wallet account opening of beneficiaries
ATM / Debit Card issuance ( Khidmat Card )
Cash Withdrawal through any countrywide network of ATMs
Cash withdrawal through appointed Agents
Acceptability on nationwide POs Terminals

Kisan Relief Package

Kisan Package is a federal govt. initiative aimed at improving the farmer and
agricultures condition of Pakistan. To this effect, the govt. announced a mega Rs 341
billion-relief package for small farmers including direct cash support and provision of
soft agriculture loans.
Under the package, small farmers would get the chunk of Rs 147 billion as direct benefit
while
Rs 194 billion had been allocated for agriculture loans. BOP was selected as equal partner
with
the countrys largest bank to deliver the project successfully.

Project Related Information

Procurement of security paper for PO printing
PO printing and dispatch of location specific personalized POs to each location
Deployment of Biometric Devices
Deployment of field resources for managing the govt. appointed distribution centers
Setup of distribution centers in govt. appointed location s
Biometric Verification of beneficiaries for identity confirmation
POIs suance and marking system
Connectivity with large-scale banks and deployment of PO identification system for PO
encashment
IDPs of North Waziristan

Operation Zarb-e-Azb
It was star ted by the Pakistan Armed Forces to curb increasing insurgency and terrorism.
It resulted in a mass evacuation of the residents of North Waziristan under the watchful
eye of the Pak Army who also took it on themselves to look after the wellbeing of the
IDPs during the operations and also throughout the rehabilitation process.
The IDPs were settled in multiple camps in KPK and FATA areas after proper
registration. The
govt. immediately announced a sustenance package for the beneficiaries. Since operation
has progressed, as it met progressive success, the process of rehabilitation of the residents
of North Waziristan star ted. The govt. again took it upon themselves to oversee safe
return and rehabilitation of the beneficiaries and announced another return package.
NEWSLE - March 2016
The sustenance allowance is provided to all the beneficiaries on a monthly basis and a
return cash grant is approved for the beneficiaries who are returning to their homeland.
Project Related Information
Establishing and providing human resource for camps in remote and disturbed areas of
Pakistan
Preparing an agent network in highly adverse conditions and managing the network s
liquidity
Provision of SIMs & ATM Cards
Beneficiary identification and payment at Agent locations

Khadmin-e-Ala Imdad Package (KPIP) Flood Relief

Heavy rainfall and floods had erected around 1.7 million people in Punjab where 269 people lost their lives
and many others had become homeless. In response to the flood crisis, the Government of the Punjab had
initiated a Cash Disbursement Relief Program to support erected households in their recovery efforts. The
project was executed through branchless banking and branch network of all leading service providers/banks
and was managed by The Bank of Punjab.
Project Related Information
This was the first program of this magnitude where a financial assistance of PKR 12 billion was
disbursed in a record time of 15 days to Aectees and it was not possible through the usage of technologies.

A huge eco system was created by on boarding different government agencies (i.e. provincial, district
governments, NADRA (for proof of life check), Branchless Banking Service Providers (MobiCash, UPaisa,
Timepey), Banks (BOP, NBP, MCB, UBL, HBL) and donor agencies.
y - March 2016
A central data base was made at BOP and all stake holders were connected in order to provide uniform
customer experience across all delivery channels.
The beauty of this system that does not restrict beneficiary to use single channel; rather allowing them to
use the touch-point that is convenient and easily accessible.

BOPs assistance on upcoming G2P & P2G Projects

BOP has prepared its biometrically enabled ecosystem to facilitate the Govt. sector in disbursing auditable
salaries and pensions on a monthly basis which will be managed by the biometrically enabled system for a
proper Proof of Life for each payment through its branchless banking distribution network.
Following are our upcoming initiatives under G2P and P2G government program:
 e - Stamping Project
Motor Vehicle Ta x Collection
Salaries and Pension

E-Stamping
BOP has established the first online challan/deposit slip generation module for the issuance of non-judicial
stamp papers to eliminate fraud and forgery in manual paper based non-judicial stamp papers process. By
converting this into a system based process, the govt. sec tor can now ensure complete visibility on the
process and elimination of leakages in income.

Motor Vehicle Tax Collection

BOP is also working with Transport Department to digitalize the Collections against Vehicle
Registration, Issuance of route permit for commercial vehicles, issuance of challans, etc. across 36 districts
of Punjab.

Salaries and Pension

BOP is mandated with salaries and pension disbursement of the Govt. of Punjab and. This will not only
reduce the burden of billions of rupees in fake payments to the govt. but also provide ease of access and
convince to the pension / salary receiver

Supply chain Management

Supply chain management (SCM) is the oversight of materials, information, and
finances as they move in a process from supplier to manufacturer to wholesaler to retailer
to consumer. Supply chain management involves coordinating and integrating these
flows both within and among companies.
Input Process Output

Feedback

BOP as User for SCM:

4 Flows:
Material ->Money (cash)
Capital-> Investments
Information-> Economic-Financial
Manpower -> Employees
2 Ends:
Suppliers -> Depositors
Customers->Investors

Suppliers

BOP issues tenders in the newspapers and advertises their needs/requirements. A proper
bidding process takes place where the cheapest supplier is chosen as the final supplier of
the required equipment etc.

The BOP has hopes of going fully online after buying / installing the Flex Cube from
vendors in the industry. Flex cube is an information system whose purpose is online core
banking.

Outsourcing

Outsourcing is a practice used by different companies to reduce costs by transferring

portions of work to outside suppliers rather than completing it internally.

Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more

affordable to purchase a good from companies with than it is to produce the good
internally.

Cash Slotting cells:

Under the policies of State Bank of Pakistan, cash slotting cells have been bought which
convert used currency and replaces it with new/clean currency. This is a fully automated
process and hence doesnt require tellers or employee/ customer contact.

Plan to car generation

Transportation Debt cars

The Bank of Punjab acquires debt cars (Armored Vans) in order to fulfill/ move money or
other bank valuables from one place to another.

Data centre/Information system of BOP

The information/data system of BOP is outsourced which facilitates wireless/online
banking operations where no prior account is needed.
Machine Fitness Outsourcing

Branchless Banking:
Bank of Punjab and Zong have partnered up for Branchless Banking.

Zong has commenced operations for the launch of branchless banking in collaboration
of Bank of Punjab (BoP) . The central bank recently awarded a license to Bank of Punjab
to start its branchless banking operations to test a pilot phase in collaboration with Zong
and Invo8 Technologies.

BoP will be first public sector bank having branchless banking operations but it is going
to be competing with JS Bank , which was awarded the same license at the same time.
The bank which will finally meet the regulatory compliances, commercial and technical
standards will be finally granted a commercial license to commence a ninth operator of
branchless banking service.

Branchless banking is defined as the delivery of financial services outside conventional

bank branches, often using agents and relying on information and communications
technologies to transmit transaction details typically card-reading point-of-sale (POS)
terminals or mobile phones. It has the potential to radically reduce the cost of delivery
and increase convenience for customers.

Consequently, branchless banking can increase access to financial services for the poor,
but only if regulation allows the following:
It permits the use of a wide range of agents outside bank branches, thereby increasing the
number of service points. It promotes easy account opening (both on-site and remotely)
while maintaining adequate security standards. And permits a range of players to provide
payment services and issues e-money (or other similar stored-value instruments), thereby
enabling innovation from market actors with motivation to do so.

The basic concept is, for those who cannot or do not go to the bank for logistical or at
times even social reasons, the bank comes to their doorstep or at least nearby. Major
services on offer:
(i)Deposits
(ii)Withdrawals
(iii) Remittance to various cities, where the receiver may not need to have a bank account
(iv)Payment of utility bills
(v) Payments for products/services provided by vendors who accept e-payments through
branchless banking channels (for example Internet Service Providers)

In addition to consumer-centric services, there is also great potential for the government.
The government can use branchless banking to make or receive payments from remote
areas where physical infrastructure is not present.

Insourcing

The Difference Between Outsourcing & Insourcing

Outsourcing and insourcing are methods of dispersing work among different departments or companies for
strategic reasons. Insourcing is typically done solely from within a company's own operational
infrastructure, while outsourcing uses companies not affiliated with the outsourcing company to perform a
task. There are cost and resource differences between outsourcing and insourcing that influence a
company's management decisions.

Cost
A significant difference between outsourcing and insourcing is the cost to the company. Insourcing is
generally more expensive to a company because new work processes must be developed to start the new
division of the company; outsourcing uses an outside company that already has a workflow developed and
employees familiar with the process.

Resources

Companies that use outsourcing do not use their own resources for manufacturing products or providing
services. Insourcing uses resources already owned by the company to achieve a goal.

Control

A company's control over its operations differs if it uses outsourcing or insourcing. When BOP outsources a
certain service, they often have little to no managerial control over the way in which the outside company
operates. For instance, Bank known for its friendly customer service cannot typically enforce its way of
doing business on an outside customer support center. When BOP insources a service or related process or
a service have complete control over its operations and employees.

Location

The location of banking operations is usually different between outsourcing and insourcing. Insourcing
typically involves placing the new operation on site at the company or somewhere in the immediate
vicinity. Outsourcing usually involves using an outside company that is not near the main company's
operations. Outsourcing does not necessarily mean that the outside company is in another country.
Companies can outsource work to other firms in the same country.

Insourcing in BOP

BOP usually hires its employees from references and its existing employee base because
it is primarily time efficient as well as less costly than hiring through advertisements and
graduate interviews. BOP has its own team of trainees / managers to train the new
employees.
Benefits to BOP:

Improved productivity and adherence to quality standards.

Employees develop skill sets that allow them undertake a greater variety of work.

Improved ability to implement and realise specific goals outlined in a company's

business plan.

Increased ability to respond effectively to change.

Productivity usually increases when a company implements training courses. Training

across the workforce, from the shop floor to executive level and in any discipline,
improves:

Competitiveness

Morale

Profitability

Customer satisfaction

Market share

Company reputation and profile

It can also lead to reductions in:

Inefficient use of time and materials

Workplace accidents

Maintenance costs of equipment

Staff turnover and absenteeism

Recruitment expenses
The Bank of Punjab: Quality Assurance Techniques
The Need for Quality Assurance:

Business Drivers for QA Management Besides avoiding disasters and fatal errors, quality
assurance management delivers benefits for banks, in the form of more effective and
efficient processes that bring solutions to the marketplace that meet and even exceed
customer expectations.

The ultimate business drivers for QA management are:

A need to enhance customer satisfaction The banks products consistently have higher
numbers of issues than their competition, resulting in increased customer complaints and
lower customer satisfaction ratings.
Keeping product offerings aligned with evolving customer expectations Cost and
schedule overruns due to redesign, rework and resolving defects make it challenging to
bring new products to market efficiently. Thus BOP has a specialized department for
quality control and assurance.

Feedback
Once senior management has a vision statement that reflects the opinion and brainpower
of the entire management team, they ask the employees for feedback. Feedback from
customers is also really important. Effective ways of collecting feedback from customers
are to be implemented successfully.
Outside business organisations also can be utilised to collect feedback about the
satisfaction levels of the BOP Banks customers.

Product Mix
A bank has to clearly examine the nature of each product they are offering to their
customers. A need-identification programme conducted prior to the conceptualization of
the product will clear idea about the nature of the need the market has. Fine tuning the
product of the bank in accordance with that must be a continuous process.
Tools
Tools means the various forms and other documents used in the banks for receiving and processing the
requests from customers for availing the various products offered by the bank. They must be made very
simple, so that even customer with the minimum education even can understand it and provide the
necessary information sought through that easily. They should be reduced to the minimum possible.
Unnecessary paper-works are burden on the employees, a trouble to the customers and unfriendly to the
environment.

Total Quality Management in BOP

Total Quality Management (TQM) in Pakistan and especially in relation to Bank of

Punjab can do a lot in improving the present conditions, in rendering it more useful to the
people and in improving the profitability. Training the employees, fine-tuning the product
mix, improving the top management commitment to quality, fine-tuning of the processes
of ensuring quality top-bottom and bottom-top, reduction of retirement age, introducing
employee development programs with the nature of an academic course, monitoring of
the performances and proper rewarding based on achievements, empowering the
employees professionally and personally, ensuring the customer satisfaction in everything
etc are the ways suggested as a aspects of Total Quality Management in Banking.

The quality assurance department and the operations department of BOP works
successfully to implement the policies proposed by the State Bank Of Pakistan. While
yearly Audits are done in order to identify gaps/weaknesses.

Quality Assurance and Recommendations

Internal Controls

To us the main and most important defect in the BOP is in deficiency of internal controls
and inter communication between different branches of the bank and financial portion is
concerned there is no appropriate system is configured thats why there is always a
hazard of large frauds within the bank. So I suggest that the bank should set up some
suitable resource development and controlling systems like other banks do.

Qualified Training

BOP staff lacks qualified training. They lack the essential training to do the job
proficiently and appropriately. For this reason these staff should be reorganized and their
program of study should be made in a way that can assist the employee in understanding
the ever-changing market circumstances. Pakistan Banking Council should also
commence some programs to furnish the employees with much desirable skillful training.

Allocation of Authority

All the staff at the bank must be given accountability and power and they should be
inquired about their responsibility. The sense of responsibility in workers mind is one of
the main factors in the success of every organization.

Performance Appraisal

The managers at BOP should rigorously scrutinize the performance of every worker. The
awards should be assigned according to their performance that can be in the shape of
bonuses to motivate and incite them.

Job Rotation

Relocation is not appropriately conceded in BOP. Some of the staff is persistently serving
at the same position or they are merely rotated at the similar branch. Thats why I
recommend that consistently rotation of every member of staff should take place after
each three years in dissimilar branches of the bank.

Changes in Government or Bank Policies

There should not be any rapid policies alteration by the board, as this practice hurts the
customer confidence in the bank. Government should construct long-standing policies.
Need of Competent Staff

BOP require qualified staff in order to improve the carrying out of the branches.

Linkage with the Head Quarter

100 major branches of BOP should establish a direct linkage with the, head quarter in
Lahore, through Internet or Intranet. This will make the functions and decision making of
the management easier and convenient.

Clean Loans

Clean credit or clean overdraft is the facility offered to the customers without any
precautions. These types of small term loans should not be extended to anybody, because
sometime these loans are granted to dishonest people of the management and they turn
into a piece of bad debts.

Decreasing Administrative Expenses

Bank should cut their organizational expenses. This was Rs 2.25 billion in the year 2012.
This can be done by lying off the spare group of workers with golden handshakes
scheme. The branches that are not greatly used could also be closed. That can give
constructive results in the future.

Improper allocation of Work

Proper distribution of work prevents the workers from over and under job situation. So
for the soft running of business appropriate distribution of work is the implication to be
followed.

Favoritism and Nepotism

In the organization there should be no preferential treatment, transfer and promotion

decision should be completed on merit and in accordance to the rules and regulations of
the bank and not due to the favorable treatment to the employee to show their
performances.
Marketing Policy

The bank should take up a variety of selling and promotion strategy to support the bank
and its products. This includes Personal Marketing, the most effective way in term of
branch level. But on the entire organization stage, they should assemble the seminar in
and outside the bank.

Organizational dedication

It is suggested that employees working in BOP should be given some incentives; it will
increase their motivation and dedication towards their work. Their salaries should be
increased according to effectiveness, performance and service this will increase their
commitment to the bank.

Credit Monitoring

The credit division of the bank must carry out observant credit monitoring so that they
can make sure that the appropriate payment of installments and the mark-up by the
borrower.

The employees who were responsible for the term paper of the loan extension should
carry out the monitoring, as he/she will be having more information regarding the
borrower.

Avoiding Bad Debts

BOP should be very concerned while extending the credit. They should be granted
against levelheaded securities, so the market value should be equivalent to the loan
approved.

Policies should be crafted in a way to ensure that no loan is extended on political

pressure. BOP should strictly follow SBP regulation for loan approval. According to
which the current ratio of borrowers business must be 1:1 and the debt to equity ratio
should be 60:40,which means that the liquidity situation of business should be healthy.