THE BANK OF KHYBER

The Bank of Khyber (BOK) was established in 1991 under the act of the NWFP assembly its
objectives included promotion of savings and investment in the NWFP. In 1994 it acquired the
status of a scheduled bank that allowed it to open branches outside NWFP, become a member of
the clearing house ,and engage in trade finance activity. Advantages of scheduling have had a
positive impact on the Bank after adjustments to State Bank of Pakistan (SBP) requirements
during 1995.

The bank has a paid up capital of Rs. 750 million out of which Rs. 652.5 million has been
provided by the government of NWFP, while the remaining Rs. 97 .50 million has been
contributed by DEG, a German Development Bank.

BOK is distinguished by the fact that it is not only a schooled commercial bank but it also plays
a role of a development agent, through systematic long-term lending, specially to small and
medium size business. Separate project financing departments namely, long-term projects
department and Micro Finance Unit has been set up for this purpose. Several line of credit from
international agencies have been arranged by BOK for meeting the funding requirements of
development projects in NWFP.

BOK has 29 branches with 23 in NWFP and 2 at Karachi, one each at Islamabad, Quetta,
Lahore, and Muzzaffarabad, (Azad Jammu and Kashmir). The Bank has 346 well qualified
officers, and it places great importance on their professional achievements.

MISSION STATEMENT
Mission, broadly stating, is the purpose for which an organization exists and why should it
compete in certain sectors and industries. Within mission, sometimes stated as purpose, the
organization addresses itself to what it intends to accomplish both in the long and short run.
Mission is a very broad statement of organizational direction, and is normally summarized and
documented in a mission statement.

In simple words, mission statement is a formal summary of the aims and values of an
organization.

VISION

The faculty or state of being able to see

The ability to think about or plan the future with imagination or wisdom

An experience of seeing something

MAIN OBJECTIVES OF THE BOK

Objectives are the ends towards which activities are aimed. In fact these are the results to be
achieved. The bank of Khyber has certain objectives, which are as follows;2

a. To mobilize private savings and public funds for diverting the same into productive
channels and ensure their availability.
b. To promote industrial, agricultural and socio economic processes through the active
participation of private and public sector in the province.
c. Help under develop areas and create employment opportunities, specially in the rural
areas of the province. Further, to guide and assist the people of NWFP serving overseas
to effectively and profitably invest their foreign savings in the province as well as the
other parts of Pakistan.
d. Create a diversified and sound portfolio for utilization of idle funds and their investment
in the existing and new ventures specially in the pioneering of high-tech agro based
export oriented and engineering projects to ensure maximum returns.
e. 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.

ORGANIZATIONAL HEIRARCHY

The BOK is a centralized organization in which little authority is given to the lower levels of
management.

The head office of BOK is divided into two divisions and each division has its own set of departments,
these two are:

 Banking operation division

 Personnel and establishment division
There are also two other independent departments.

 Long term projects

 Audit department
Long term projects (LTP) handles the investment proposals of huge industrial and agricultural projects.
Where as the audit department is responsible for having an internal control.
 Organization

Board of Directors

Managing Director Long Term Projects

Resident Directors
AUDIT

Managing Committee

Banking Operation Division Personnel & Establishment

Division

Branch
Operations Investment
Deptt.

Accounts &
Treasury Deptt.
Computers

Foreign Exchange
Deptt.

M.B.D

Credits Deptt.

P & E Deptt.
Monitoring &
Recovery Deptt.

Public Relation
Branches Deptt.

29
HOW DOES THE ORGANIZATION FORMULATE PLANS AND
SCHEDULES
The organizations make quarterly, half and yearly planning for execution of desires goals and
objectives through the branch network. The planning's included

- Strategic planning for deposits mobilizations.

- Strategic planning for deposits utilizations.
- Strategic planning for branch/bank profitability.
- Strategic planning for reduction in nonperforming loan.
- Strategic planning for adherence to rules and regulations.
- Strategic planning for proper reporting and disclosure.

HOW ARE THE RESOURCES CONCUMED IN THE ORGANIATION

AND HOW ARE THEY ORGANIZED
The resources are utilized for providing quality services to the consumers/customers. The resources are
consumed through proper utilization of human resources. FOR EXAMPLE
 Job descriptions/duty list
 Team work
 Job rotation
 Proper training and development
 Proper appraisal
 Right man at the right place and at the right time

WHAT LEADERSHIP STYLE IS USED BY THE MANAGEMENT

In banking organization, The management are using participative/consultative style of
leadership.

CITE SPECIFIC MEANS USED BY THE ADMINISTRATION TO

ENSURE MONITORING AND CONTROL OVER THEIR EMPLOYEES
The administration or manager used the following tools to control their employees

1. Physical control
2. Password control
3. Teamwork
4. Pro-active control
5. Detective control
 6. Proper training
7. Refresher courses on different banking products

WHAT IMPORTANCE DOES TEAM BUILDING HAVE IN THE

ORGANIZATION? HOW ARE CONFLICTS HANDLED BY THE
MANAGEMENT
In banking organization, the employees play an important role for the achievements of
desired objectives. Therefore, it is the responsibility of branch management/banks to hire
caliber competent professionally sound human resources for

 Making quick and timely decision to coordinate and to create confidence

 To make plan wisely

Conflicts are handled through consultation with higher management

 State bank of Pakistan prudential regulation

 Shariah complines
 Teamwork and proper solution of the complaint/conflict
 The conflicts are also settled through banking mohtasib

HOW ARE THE ORGANIZATIONAL FUNCTIONS ASSURED TO BE

FUNCTIONING EFFECTIVELY
The organization functions are manage through

 Products
 Quality
 Productivity
 Speed
 Innovations
THE BANK
OF KHYBER
EXECUTIVE SUMMARY

MISSION STATEMENT
Mission, broadly stating, is the purpose for which an organization exists and why should it compete in
certain sectors and industries. Within mission, sometimes stated as purpose, the organization addresses
itself to what it intends to accomplish both in the long and short run. Mission is a very broad statement of
organizational direction, and is normally summarized and documented in a mission statement. In same
way, the Bank of Khyber being an organization, has a mission statement, as follow:

“To excel as a quality service provider, in a supportive environment with a special focus on micro-
business and to exploit the indigenous resources, while maintaining a highly motivated staff”.

VISION

To become a leading Bank providing efficient and Dynamic Banking Services in both Islamic
and Conventional Sectors.

HISTORY AND INTRODUCTION

The Bank of Khyber (BOK) was established in 1991 under the act of the NWFP assembly its objectives
included promotion of savings and investment in the NWFP. In 1994 it acquired the status of a scheduled
bank that allowed it to open branches outside NWFP, become a member of the clearing house ,and
engage in trade finance activity. Advantages of scheduling have had a positive impact on the Bank after
adjustments to State Bank of Pakistan (SBP) requirements during 1995. BoK’s microfinance operations
started in 1995, aimed at the provision of microcredit to small and medium enterprises. In 1997 BoK 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 BoK created its Microfinance Unit as a separate profit
centre, developing specific products and BoK knowledge of microfinance practices. BoK is the first formal and
structured initiative by a commercial bank in Pakistan to broaden its client base and reach the micro-enterprise
market.

The bank has a paid up capital of Rs. 750 million out of which Rs. 652.5 million has been provided by the
government of NWFP, while the remaining Rs. 97 .50 million has been contributed by DEG, a German
Development Bank.
BOK is distinguished by the fact that it is not only a schooled commercial bank but it also plays a role of
a development agent, through systematic long-term lending, specially to small and medium size business.
Separate project financing departments namely, long-term projects department and Micro Finance Unit
has been set up for this purpose. Several line of credit from international agencies have been arranged by
BOK for meeting the funding requirements of development projects in NWFP.

BOK has 29 branches with 23 in NWFP and 2 at Karachi, one each at Islamabad, Quetta, Lahore, and
Muzzaffarabad, (Azad Jammu and Kashmir). The Bank has 346 well qualified officers, and it places great
importance on their professional achievements.

ORGANIZATIONAL STRUCTURE AND DEPARTMENTALIATION

ORGANIZATION STRUCTURE
 ORGANIZATION

BOARD OF DIRECTOR

MANAGING
DIRECTOR

MANAGING
COMMITTEE

BANKING PERSONNEL &

OPERATION DIVISION ESTABLISHMENT
DIVISION

BRANCH
INVESTMENT
OPERATIONS DEPTT

FORIEGN EXCHANGE
COMPUTERS
DEPTT

ACCOUNTS AND
M.B.D
TREASURY DEPTT

CREDITS DEPTT P & E DEPTT

MONITORING & PUBLIC RELATION

RECOVERY DEPTT DEPTT

DEPARTMENTALIZATION
 BRANCH
MANAGER

RELATIONSHIP MANAGER
COMPLINES
MANAGER OPERATIONS

FOREX
DEPARTMENT

CASH
DEPARTMENT

CREDIT
DEPARTMENT

CD
DEPARTMENT

BILLS
DEPARTMENT

PLANNING PROCESS
The organizations make quarterly, half and yearly planning for execution of desires goals and
objectives through the branch network. The planning's included

 Strategic planning for deposits mobilizations

  Strategic planning for deposits utilizations
 Strategic planning for branch/bank profitability
 Strategic planning for reduction in non performing loan
 Strategic planning for adherence to rules and regulations
 Strategic planning for proper reporting and disclosure

ORGANIZATION PROCEDURE
Organization procedure are prescribe by State Bank of Pakistan, Bank management and other
regulatory authority. The procedure included

 Risk management
 Know your customer
 Customer due deligience
 Money londering
 Foreign exchange
 Schedule of charges
 Product development
 Accounting standards
 Auditing standards

LEADERSHIP STYLES
There are four leadership styles of management

1. Consultative
2. Participative
3. Democratic
4. Autocratic

In banking,we are using consultative and participative styles of management.

CONTROLLING FUNCTION
Controlling function are perform through deligation of authority, duty list, teamwork and job
discription.

ASSURANCE
Assurance are abtained through

 Cost audit
 Management audit
  Internal audit
 External audit
 Shariah complines
 Shariah audit

SWOT ANALYSIS

SWOT is an acronym for an organization’s Strengths, Weaknesses, Opportunities and Threats.

SWOT analysis consist of a firm’s internal strengths and weaknesses and its external
opportunities and threats. It is a tool to get a quick overview of firm’s strategic situation. In the
following lines are the “SWOT” analysis of Bank of Khyber.

SWOT is an acronym for an organization’s Strengths, Weaknesses, Opportunities and

Threats. SWOT analyses consist of a firm’s internal strengths and weaknesses and its external
opportunities and threats. It is a tool to get a quick overview of firm’s strategic situation. In the
following lines are the “SWOT” analyses of Bank of Khyber.

STRENGTH

 Has market leadership in providing products and services to the customers

over the year.

 Have more branches and therefore accessible to more potential customers than
any other Bank.

 Have product innovation skills and resources.

 Bank of Khyber has the ability to cope with pressure of competition and has
several times come out of competition successful.

 It has modern technology and resources provided to its customer.

 Staff is young and rich in experience and working skills.

 Bank of Khyber has to good will of the people and it is also an asset to it.

 Has access to all part of the world, thus also providing services to Pakistanis
outside the country.

 Offer attractive schemes and more saving for customers from time to time.

 Bank’s management has the motivation to make it best bank of the country.
WEAKNESS

 Marketing skills of the bank are good but they have little
presence at different media.

 The lower level management lacks clear direction and is not having the
managerial depth.

 Employees are lacking motivation.

 They also fear of downsizing.

 Bank is not limits and thus reducing the efficiency.

 Problems of internal unionism from employees.

 Maximum number of branches, affecting the maintenance of consistency and

some working atmosphere at everywhere.

 Branch’s internal environment do not presents smart image of the bank in

most of cases.

 Communication gap between different levels of management.

OPPORTUNITIES

 Bank should take interest in the new market segments like I.T business,
software business etc.

 Extending banking hours and providing more branches facilities to customers.

 Increasing credit facilities to lower income groups, thus reducing the risk of
loss and also improving the image of the bank.

 If new schemes are introduced for the overseas Pakistanis can get the business
of remittances more than any other bank or “Hundi business”.

 A new service to its product line.

THREATS

 Increasing number of private/foreign banks in the country.

  Global technological advancement.

 Politic, economical situation of the country.

 Reduction in the business activities in the country.

 Reducing the rates of savings in different segments of people.

 Deteriorating confidence of people in bank uncertainties of the investors.

 Provisions of better services by private bank.

For “SWOT” analysis we can conclude that the management of the bank should adopt systematic
planning for the bank growth, talking with them all management levels of the banks, discover new
segments of the customers, offering new schemes for its customers. Similarly Bank of Khyber has more
customers as compared to the other banks; if they give proper attention to every customer and their needs
then it will become again one of the leading and comprehensive banks.

SUGGESTIONS AND RECOMMENDATIONS

 Training of the staff

 Improve quality of products and services
 Increase rate of profit on deposits
 Reduce rate of interest on financing
 Reduce ethical problems
 Provide latest technology
 Provision of ATM machine
 Introduction of E-mail culture in the bank
 Increase branch network
 Control leakage of income
 Reduction in non performing loan
 Provision of quality finances
 Revision of legal framework
 Revision of regulatory framework
 Proper accomtibility in the banks
 Avoid political interference in the bank
 Introduced merit oriented culture
 Maintain proper records of the transactions
 Proper rotation among the employees
 Introduction of honesty, integrity, technical standards, professional behaviour and professional
competancy at the branch level
 Proper division of the branches on the basis of proper market segmentations
  Introduction of new products for islamic banking according to Quran and Sunnah

CONCLUSION

Keeping in view quality of products and services, The Bank of Khyber will be a leading bank in the near
future. The bank of Khyber and their management have recently started foree cash products under the
Pakistan remmitance initiative under the supervision of State Bank of Pakistan and ministry of finance,
Government of Pakistan. The Bank of khyber have achieved tremendous results, so for we have inked
four agency agreement with exchange companies which included western union, malik exchange express,
money transfer and tlacid NK corporation for quick in land home remmitance. The Bank of Khyber are in
process of introduction of new shariah complines products with the support of Govt of Khyber Pukhtoon
Khwa and State bank of Pakistan. We hope that all the desired results will be achieved.