Complete Report of NBP by Rameez

NBPMain Branch, Vehari

Internship Report

Submitted To:

MR.MUBASHIR MALIK

Submitted By:

RAMEEZ SHAHID

Session :( 2008 to 2010)

Department of Business

Administration

UNIVERSITY OF LAHORE

Internship Report NBP

LAHORE

UNIVERSITY OF LAHORE 2


This Piece of work is dedicated to my revered parents,

Who groomed my personality and provided

Me all the facilities to complete my educational career.

Their devotion, sincerity and love generated

Me a positive approach towards humanity.

I owe this achievement of my life to my parents

Whose prayers always with me.

I pray for their long life and prosperity.



Acknowledgement

All praises are for Almighty ALLAH who guides us through

the darkness of unknown. All respects for Holy Prophet

(PBUH) who enables us to recognize our creator and

whose spiritual teachings guide us in every matter of life.

I am also highly thankful to my honorable teachers for

theirs guidance. Special thanks to “MR. Zafar” Manager

Operations of National Bank of Pakistan main Branch

Vehari, and all other employees of the branch for their

cooperation.

I cannot forget the kindness and cooperation of Mr.

Khalid and Mr. Ameer Hamza who are very honest to

their work and organization. They provide me a lot of

information and practical knowledge, many regards to

them. I am also thank full to

Mr. Naseer Bhatti for his cooperation.



PREFACEIt is the requirement of the MBA program of University of

Lahore that all students of MBA have to spend Six Week in

any organization to get practical exposure and to get

familiarized with the ways to live in the organizational

environment which is dramatically different from the

educational environment. That six week period called

“Internship period”, if spent properly and sincerely,

enables the students to be more confident, more

knowledgeable, more responsible and more committed to

its work in the practical field. I have also been assigned to

do internship of six weeks period in National Bank of

Pakistan Main Branch Vehari.It has enabled me to

understand the practical scenario and sharpen our

decision making power and utilizing the resources in an

effective manner, so that our resources generate

maximum profit. In preparing this report, I have put al of

my best efforts and tried my level best to give maximum

knowledge. Despite of my all the coherent efforts, I do

believe that there will always be a room for improvement

in the efforts of learner like me.

RAMEEZ SHAHID

MBA FINANCE rameezshahid85@g

mail.com


mailto:[email protected]

mailto:[email protected]


Table of ContentInde

xExplanation Page

No.1 Title Page 1

2 Bissmillah 2

3 Dedication 3

4 Acknowledgement 4

5 Preface 5

6 Table of Content 6-8

7 Executive Summary 9-11

8 Introduction to Banking 12

9 What is National Bank of Pakistan 12

10 What is Commercial Bank 13

11 Banker and Customer Relationship 13-15

12 HISTORY 16

13 History of Banking 16-18

14 Efforts toward Islamic Banking 19

15 Vision & Mission Statement 20

16 NBP in Vehari 21

17 Branch Hierarchy 22

18 Senior Management 23-24

19 Management and Organizational Structure

25-27

20 Members of Board of Director 28-30

21 DEPARTMENTS OF NBP 30

22 Cash Department 31

23 Deposit Department 32-35

24 Clearing Department 35-36

25 Advance & Credit Department 37

26 Account Opening Department 37-39

27 Securities 40

28 Types of Advances 41-43



29 PRDUCTS OF NBP 44

30 NBP Premium Aamdani 45-46

31 NBP Premium Saver 47

32 NBP Karoobar 48-50

33 NBP Saibaan 51-52

34 NBP Advance Salary 53-54

35 NBP Cash Card 55-57

36 NBP Investor Advantage 58-59

37 NBP Cash n Gold 60

38 NBP Kisan Taqat 61

39 NBP Kisan Dost 62-63

40 NBP Pak-Remit 64-65

41 NBP Protection Shield 65-66

42 SERVICES OF NBP 67

43 International Banking 67

44 NBP Pak Rupee Traveller’s Cheque 68

45 Letter of Credit & Commercial Finance 68

46 Foreign Remittance 68-69

47 Swift System 69

48 Short Term Investment 70

49 N.I.D.A & Equity Investment 70

50 Trade Finance and Other Business Loan 71-72

51 Utility Bills & Foreign Currency Account 73

52 Corporate Finance 73-74

53 LEARNING AS AN INTERNEE 75

54 General Banking 75

55 Cheque at Counter 75-76

56 Cheque Payment Procedure & Issuance of Demand Draft & Bills Collection Department

76

57 Bills Remittance Department & Deposit Department

77



58 Pension Payment Procedure 77-78

59 Outward Bills For Collection 78

60 NBP Awards & Achievements 79-82

61 FINANCIAL ANANLYSIS 83

62 Balance Sheet 84-85

63 Profit & Loss Account 86

64 What is Financial Ratio 87

65 RATIO ANALYSIS 88-97

66 PEST ANALYSIS 98

67 SWOT ANALYSIS 99-102

68 RECOMMENDATION & CONCLUSION 103

69 Internship Letter 108

70 References 109



Executive SummaryNational bank of Pakistan since its formation in 1949 is working as a

commercial bank and also providing expert services to the

government and State Bank of Pakistan. The bank was nationalized

with other main banks in early seventies and since then being a

government owned organization it has not been able to gibe an

incredible performance. Further, the privatization of other banks has

also created an inflexible environment in the banking industry.

This report highlights the operations and functions of National Bank

of Pakistan. NBP act as financial agent to its customers in return it

gets reward for its services in the shape of profit. Being a

Government owned institution it plays an important role in

development of society as well as in development and growth of the

economy. National Bank of Pakistan is one of the leading banks in

Pakistan. According to international standards of banking system it

is one of the best bank in South Asian region. This report explains

how different functions of NBP work and what are their services.

The main purpose of the internship is to gather relevant information

to compile internship report on National Bank of Pakistan Main

Branch Vehari. Another purpose of this Internship program is to

enable the students to use the management techniques acquired

during their courses, and find out the possible solution of

management problems faced by the organization. The report is

based on my six week internship program in National Bank of

Pakistan. The methodology reported for collection of data is primary

as well as secondary data.



The biggest source of information is my personal experience,

observation while working with staff and having discussion with

them. The annual report 2005, 2006,2007,2008,2009 also helped

me in this regard. It has its head office in Karachi. It’s over 1265

branches in Pakistan and 22 abroad. It is a part of State Bank of

Pakistan and it is its major strength. It is providing different facilities

to its customers. Inside the bank, in branch banking it has Clearing

and Collection Department, Government Receipts processing

Department, Account Opening Department, Remittance

Department, Customer Service Department, Cash Department,

Deposit Department, Advance and Credit Department. There are the

most common departments exist almost each branch. It is offering

different deposit choices, Advances, Credit and Securities etc. for its

customers.

The finance is its major strength. The other strength of this it is

acting as a agent of State Bank of Pakistan, providing Agency

Arrangements for different government organizations include

WAPDA and PIA, profitability and a vide coverage throughout

Pakistan through its corporate branches. And also it has

comprehensive range of products it is offering in market. There is

large opportunity for this bank to give coverage to consumer

banking because it has not yet covered this area comprehensively.

Opportunities in Advisory services, investment banking also exist for

National Bank of Pakistan.

National Bank of Pakistan maintains its position as Pakistan’s

premier bank determined to set higher standards of achievements.

It is major business partner for the Government of Pakistan with

special emphasis on fostering Pakistan’s economic growth through

aggressive and balanced lending policies, technologically oriented

products and services offered through its large network of branches



locally, internationally and representative offices. The National Bank

of Pakistan offers a wide range of services to its customers &

recognizes the importance of efficient business delivery & providing

timely solutions.Thier competitor are United Bank, MCB Bank, Askari

Bank, Faysal Bank, Punjab Bank, Allied Bank etc. The essence of

Business philosophy is cater to the banking requirements of small &

medium sized entrepreneurs, providing them qualitative &

competitive services with emphasis on encouraging exports. Nearly

forty percent of our credit portfolio is related to export financing and

credit decisions are taken with in 48 hours. Its product are pay

order, mail transfer, Foreign Remittance, Foreign currency Accounts,

Short term Investment, NIDA *(National Income Daily Accounts),

Equity Investment, Commercial Finance etc.

The management is considering the fact and doing planning for the

sake of getting it through these unjustified pressures but still not

been able to implement them in good manner. This is further

disturbed by the demotivated and unqualified staff that is working

with the bank.

To be able to regain the level of performance and profitability the

bank has to take serious measures to escape from the political

influence, build a competent and qualified pool of employees, make

all possible efforts to introduce the modern technology that is

serving the banks in the world and to enhance the confidence of the

customer, are necessary steps be taken by the bank. I personally

very much gain from this internship.



Introduction To Banking

There are three main topics that we are discussing below.

What is National Bank of Pakistan?

What is Commercial Bank?

Banker and Customer Relationship

What is National Bank of

Pakistan?National Bank of Pakistan (NBP) was established under the National

Bank of Pakistan Ordinance 1949. The primary objective of NBP

was to purchase jute from the growers in the former East Pakistan

and also to perform the commercial banking functions in the

country.

National Bank of Pakistan is now the biggest financial institution

with assets totaling over Rs.944, 233 million with 1265 Domestic

and 22 foreign branches, 9Reginol/Representative offices.

The bank is the higher financer in agriculture and commodity

operation sector.

AGRICULTURE BRANCHES



Agriculture branches of NBP are 839. In which SINDH has 137

branches, PUNJAB has 472 branches, KHYBER PAKHTUNKHWA has

129 branches BALOCHISTAN has 17 branches and MUZAFRABAD

and KASHMIR have 84 branches.

National Bank of Pakistan maintains its position as Pakistan's

premier bank determined to set higher standards of achievements.

It is the major business partner for the Government of Pakistan with

special emphasis on fostering Pakistan's economic growth through

aggressive and balanced lending policies, technologically oriented

products and services offered through its large network of branches

locally, internationally and representative offices

WHAT IS A COMMERCIAL BANK?A bank is a financial institution which deals with money and credit. It

accepts deposits from individuals, firms, and companies at a lower

rate of interest and gives at a higher rate of interest to those who

apply for loan. The difference between the terms at which it borrows

and those at which it lends from the source of its profit. A bank,

thus, is a profit earning institute. Any bank that performs this

functioning is called the commercial bank.

According to Crowther“A bank is a firm which collects money from those who have it

spare. It lends money to those who require it.”

According to Banking Ordinance 1962

According to Section 5(b) of Banking Ordinance 1962, meaning

of banking is as under “Banking company is a company which

transacts the business of banking in Pakistan, mainly of accepting,

for the purpose of lending and investments of deposits of money



from the public, repayable on demand or otherwise and withdraw

able by cheque, draft, order, or otherwise”

BANKER AND CUSTOMER

RELATIONSHIPThe relationship between the banker and the customer are of

utmost importance. Both serve the society and the economy to

expand. Before we discuss the relationships between the banker

and the customer, it seems necessary that the two terms banker

and customer are made clear.

BankerA banker is a dealer in capital or more properly a dealer in money.

He is an intermediate party between the lender and the borrower

and charges a definite amount of money which is the profit of his.

CustomerA customer is a person who maintains a regular account with the

bank, without taking into consideration the duration and frequency

of operation of his account. The relations between the banker and

the customer are generally studied as under:

Debtor and CreditorThe general relationship between banker and customer is primarily

that of a debtor and creditor. When customer deposits money with a

bank, the bank then is the debtor and the customer is the creditor.

The customer expects from the bank that (I) his money will be kept



safe by the bank, (II) it will be returned on demand within business

hours. The position is reverse if the customer is advanced loan i.e.

the banker becomes the creditor and the customer is the debtor.

Principal and AgentThe special relationship between the customer and the banker is

that of principal and agent. The customer (principal) deposits

cheques, drafts, dividends etc. are for collection with the bank. He

also gives written instruments to the bank to purchase securities,

pay insurance premium, installments of loans etc on his behalf.

When the bank performs such agency services, he becomes an

agent of his customer.

Bailer and Bailment RelationshipA bailment is the delivery of goods in trust. A banker may accept the

valuables of his customers such as jewellery, documents, securities

etc. for safe custody. In such a case the customer is the bailer and

the bank is the bailee. It charges a very small amount of money as

service charges for safe custody of valuables.

Pledger and PledgeeWhen a customer pledges goods and documents with the bank as

security for an advance, he then becomes the pledger and the bank

becomes the pledgee. The pledged goods are to be returned intact

to the pledger after the debt is repaid by him.

Mortgager and MortgageeMortgage is the transfer of an interest in specific immoveable

property for the purpose of securing the payment of money

advanced or to be advanced by way of loan. When a customer



pledges specific immoveable property with the bank as security for

an advance, the customer becomes the mortgager and the bank

becomes the mortgagee.

Bank as a TrusteeThe bank acts as a trustee for his customers in those cases where

he accepts other valuables for safe custody. In such case, the

customer continues to be the owner of the valuables deposited with

the bank.

Executor, Attorney, GuarantorThe bank also acts as executor, attorney, and generator for his

customers.

HistoryHere we discuss three topics which are

History of Banking in Pakistan

Efforts towards Islamic Banking in Pakistan

HISTORY OF BANKINGHISTORY OF BANKING IN PAKISTANIN PAKISTANThe partition plan was announced on June 3, 1947 and August 15,

1949 was fixed as the date on which independence was to take

effect. It was decided that the Reserve bank of India should continue

to function in the dominion of Pakistan until September 30, 1948

due to administrative and technical difficulties involved in

immediately establishing and operating a Central Bank.



At the time of partition, total number of banks in Pakistan were 38

out of these the commercial banks in Pakistan were 2, which were

Habib Bank Limited and Australia Bank of India. The total deposits in

Pakistani banks stood at Rs.880 million whereas the advances were

Rs.198 million. The Governor General of Pakistan, Muhammad Ali

Jinnah issued the order for the establishment of State Bank of

Pakistan on 1st of July 1948.

In 1949, National Bank of Pakistan was established. It started with

six offices in former East Pakistan. There were 14 Pakistani

scheduled commercial banks operating in the country on December

1973, the name of these were:

1) National Bank of Pakistan

2) Habib Bank Limited

3) Habib Bank (Overseas) Limited

4) United Bank Limited

5) Muslim Commercial Bank Limited

6) Commerce Bank Limited

7) Australia Bank Limited

8) Standard Bank Limited

9) Bank of Bahawalpur Limited

10) Premier Bank Limited

11) Pak Bank Limited

12) Lahore Commercial Bank Limited

13) Sarhad Bank Limited

14) Punjab Provincial Co-operative Bank Limited

The Pakistan Banking Council prepared banks amalgamation

schemes in 1974 for amalgamation of smaller banks with the five

bigger banks of the country. These five banks are as under:



1. National Bank of Pakistan

2. Habib Bank Limited

3. United Bank Limited

4. Muslim Commercial Bank Limited

5. Allied Bank Limited

So, through the Nationalization of Bank Act 1974, the State Bank of

Pakistan, all the commercial banks incorporated in Pakistan and

carrying on business in or outside the country were brought under

the government ownership with effect from Jan. 1, 1974. The

ownership, management, and control of all banks in Pakistan stood

transferred to and vested in the Federal Government. The Finance

Minister announced plans to start Islamic Banking system in

Pakistan in the budget speech on June 26, 1980. The bank believes

that Islamic Banking offers good potential for growth. The bank has

opened eight (8) branches since 2007, of which three were opened

in 2009. During the last two years its asset size has grown

significantly with offering of market-driven products like Murabaha

and Ijarah. Islamic Banking is making its mark by catering to the

Bank’s already existing large customer-base as well as exploring

new and untapped markets including SME, Commercial and

Corporate. Islamic Banking is developing policies for new products

like Diminishing Musharikah, Salam and Istisna to meet customer’s

needs. The overall operations showed loss as a result of higher start

up cost of three new branches opened this year.



Efforts Toward Islamic Baking In Pakistan

Pakistan was created in the name of Islam on august 14, 1947. But

since then, the interest is paying the cardinal role in resource

allocation of the economy.

The banking system in Pakistan based on interest divergences with

Islamic ideology and is forbidden by Almighty Allah and His

Prophet Muhammad (PBUH).Any government till now in the

country except President Zia-ul-Haq did not dare to change this

system based on interest in banking in Pakistan. The only step taken

under this direction is starting of PLS Deposits from January 1,

1982. Only PLS saving account and PLS term deposits shall be

accepted on profit and loss sharing basis. The strategic endeavors

resulted in expansion in NBP Islamic banking branch network

covering all major cities of the country. To evaluate the commercial

viability, future profitability and growth of Islamic banking, the

committee guided Islamic Banking Group to prepare business plan

for the year-2010 and henceforth strategic plan 2011-2013. The

bank believes that Islamic Banking offers good potential for growth.

The bank has opened eight (8) branches since 2007, of which three

were opened in 2009. During the last two years its asset size has



grown significantly with offering of market-driven products like

Murabaha and Ijarah. Islamic Banking is making its mark by catering

to the Bank’s already existing large customer-base as well as

exploring new and untapped markets including SME, Commercial

and Corporate. Islamic Banking is developing policies for new

products like Diminishing Musharikah, Salam and Istisna to meet

customer’s needs. The overall operations showed loss as a result of

higher start up cost of three new branches opened this year.

VISION

“To be recognized as a leader and a brand synonymous with trust,

highest standards of services quality, international best practices

and social responsibility”

MISSIONNBP WILL aspire to the values that make NBP truly the National’s

Bank, by

Institutionalization a merit and performance culture



Creating a distinctive brand identify by providing the highest

standards of services

Adopting the best international management practices

Maximizing stakeholders value

Discharging our responsibility as a good corporate citizen of

Pakistan and in countries where we operate.

National Bank In Vehari

Vehari is the city in the vehari District, Punjab, Pakistan. It is located

about 100 kilometers from the regional metropolis of Multan and

about 25 kilometers from the southernmost of the five rivers Sutlej

in Punjab Vehari is to the north of the Sutlej River. A headwork’s of

canals is located on this river near Luddan on the Luddan Vehari

canal providing irrigation water to both banks of the river, which

includes the upper fringes of the Cholistan Desert.

The summer in Vehari is very hot, but the weather becomes much

more pleasant between October and February. Light rainfall leaves

the land generally arid and dusty, but the country's agricultural

products include mangoes in the summer and guava and other

citrus fruits in the winter. Vehari is considered the capital of cotton

growing in this part of Pakistan, with dozens of cotton processing



factories and cottonseed oil manufacturing plants, and sugarcane

farming and processing is also common.

Competition in banking sector at Vehari is increasing day by day.

One reason may be the special attention of the government towards

the development of the region. Second one, we can say that SME

(Small and Medium Enterprise) sector is demanding the special

attraction of banking sector. National Bank is one of them who have

paid special attention in SME sector.

BRANCH HIRARCEY


MANAGER

Mr. Naseer Bhatti

OPERATION MANAGER

Mr.Chudary Zafar

CLEARING DEPARTMENT

Mr. Khalid

DEPOSIT DEPARTMENT

Mr. Gafar khan

CREDIT DEPARTMENT

Mr.Nasrullah

IT INCHARGE

Mr.Khuram Zafar


SENIOR MANAGEMENT OF NBPQamar Hussain Chief Operating Officer , Head of

Credit & Risk Management Group

Dr. Asif A. Brohi SEVP & Group Chief, Operations

Group

Shahid Anwar Khan SEVP & Group Chief, Overseas

Banking Group / Corporate &

Investment Banking Group

Ziaullah Khan SEVP & Group Chief Agriculture

Finance Group

Dr. Mirza Abrar Baig SEVP & Group Chief, Human

Resources Management &

Administration Group

Amer Siddiqui SEVP & Group Chief, Commercial

& Retail Banking Group

Tariq Jamali SEVP & Group Chief, Compliance

Group

Nadeem A. Ilyas SEVP Group Chief, Assets

Recovery Group / Corporate &


GOVERNMENT INCHARGEMr.Ameer

Hamza


Investment Banking Group

Muhammad Nusrat Vohra SEVP & Group Chief, Treasury

Management Group

Khalid Bin Shaheen SEVP & Group Chief, Global

Home Remittance Management

Group

Imam Bakhsh Baloch SEVP & Group Chief, Audit &

Inspection Group

N. B. Soomro SEVP , Special Assignments,

President's Secretariat

Agha Fidaullah EVP/Group Chief, Special Assets

Management Group

Shafique Ahmed Khan EVP & Divisional Head, Islamic

Banking Division

Ekhlaq Ahmed EVP & Secretary Board of

Directors

Fazal-ur-Rehman EVP & Head P&IR Division,

HRM&A Group

Muhammad Hanif EVP & Head HR & OD Division,

HRM&A Group

Muhammad Iqbal Qasim EVP & Head SC & CSR Division,

HRM&A Group

Mohammad Kumail

Dehradunwala

EVP & Chief Information

Officer /Head Of Information

Technology Division

Aamir Sattar SVP & Divisional Head, Financial

Control Division

Faisal Mahmood VP & Divisional Head (A) , PMO &

Project Director CBA



MANAGEMENT AND

ORGANIZATIONAL STRUCTURE

The ownership, management, and control of all the commercial

banks were taken over by the Government of Pakistan on January

1st, 1974.

A banking council was formed under the Nationalization Act

1974. The banking council was set up for making policy

recommendations to the Federal Government, formulating policy

guidelines for the banks and their reorganization.

The management and organizational structure of the nationalized

banks have uniformity. This management and organizational

structure is briefly described as under:

Board of Directors

Executive Board

Chief Executive

Divisional Chiefs

Provisional Chiefs

Circle Executive

Zonal Heads



Branch Managers

1) Board of Directors In the management of the banks, the board of directors is at the top

of the controlling body. Since there are no private share holders

now, so there is no general meeting of the share holders and no

elected directors. The BOD consists of a nominated President, a

Secretary, and 9 other members. The board has limited

administrative powers because after the Nationalization Act 1974,

most of powers are transferred to the Banking Council and

Executive Board.

2) Executive Board The general direction and supervision of the affairs of commercial

banks lies in their respective Executive Boards. An EB also consists

of a President, a Secretary, and 9 other members, appointed

by the Federal Government.

3) Chief Executive The President of the Executive Board is the Chief Executive. He is

the administrative head of a bank and presides over the meetings of

Executive Board.

4) Divisional Chiefs In order to improve the management and operation of a bank, it has

been split up into a numbers of divisions. Each division of a bank is

placed under the supervision and control of Divisional Chief (also

called the Senior Executive Vice President or Executive Vice

President)

5) Provisional Chiefs



In order to improve the performance of banking system, each bank

has a Provisional Chief. PC has the powers for sanctioning finance

and other credit facilities. Each headquarter is situated in each

province e.g. in Lahore, Peshawar, Quetta, and Karachi.

6) Circle Executive Each commercial bank has a number of circles placed directly under

the control and supervision of Chief Executive.

7) Zonal Heads Each circle is divided into a number of zones. These zones are

administered by Zonal Heads who hold the posts of Vice President

or Assistant Vice President.

8) Branch Managers Each zone of commercial bank is divided into several branches. The

control and supervision of each branch is mostly entrusted to

Assistant Vice President or Officer G-II.



Members of Board of Director

Syed Ali Raza Chairman & president

Syed Ali Raza is the Chairman and President of National Bank of Pakistan (NBP), the largest commercial bank of the country.

Mr. Tariq Kirmani Director

Mr. Kirmani has served on the Boards of various companies and now is serving as a Director on the Board of National Bank of Pakistan.



Mrs. Haniya Shahid Naseem Director

Mrs. Haniya Shahid Naseem is an MBA with more than fifteen years experience of working in the education, social, industrial textile and agriculture sectors of Pakistan. Now is serving as a Director on the Board of National Bank of Pakistan.

Ms. Nazrat Bashir Director

Ms. Nazrat Bashir belongs to District Management Group of Civil Services of Pakistan. Besides NBP, she is on the Board of Directors of National Investment Trust (NIT) and Zarai Taraqiati Bank Limited.

Mr. Ibrar A. Mumtaz Director

Mr.Ibrar A Mumtaz is also the member of Board of Director. He serve many companies and now is serving as a Director on the Board of National Bank of Pakistan.



Mr. Sikandar Hayat Jamali Director

Mr. Sikandar Hayat Jamali is also the member of Board of Director. He serve many companies and now is serving as a Director on the Board of National Bank of Pakistan.

Mr. Ekhlaq AhmedSecretary Board of Directors

Mr. Ekhlaq Ahmed, EVP is the Company Secretary of the Bank and also the Secretary of Credit & Operations Committees.

DEPARTMENTS OF NBP

For proper functioning of all these activities, the bank has divided its

operations into different departments that would be discussed next.

These departments are as under:



(1) Cash Department

(2) Deposit Department

(3) Clearing Department

(4) Advances and Credit Department

(5) Account Opening Department

CASH DEPARTMENT

The following books are maintained in the cash department:-

1) Receiving Cashier Books

2) Token Book

3) Paying Cashier Book

4) Scroll Books

5) Cash Balance Book

When cash is received in counter, it is entered in the Scroll Book and

Receiving Cashier Book. At the close of the day, these are balanced

with each other. When the cheque or any negotiable instrument is

presented at counter for payment, it is entered in the Token Book

and Token is issued to the customer. The Token and the cashier

make entry in the Payment Book and the payment is made to

payee. At the close of the day, the Token Book and paying Cashier

Book is balanced. The consolidated figure of receipt and payment of



cash is entered in the Balance Book and drawn closing balance of

cash.

OPENING BALANCE + RECEIPT – PAYMENT = CLOSING

BALANCE

This is very important department because cash is the most liquid

asset and mostly frauds are made in this department, therefore,

extra care sis taken in this department and no body is allowed to

enter or leave the area freely. Mostly, cash area is grilled and its

door is under the supervision of head of that department. Officer

checks the books maintained in this department.

DEPOSIT DEPARTMENT

IMPORTANCEBank deals in money and they are merely mobilizing funds within

the economy. They borrow from one person and lend to another, the

difference between the rates borrowed and lend from their spread

or gross profit. Therefore, we can rightly state that deposits are the

blood of the banks which cause the body of an institution to get to

work. These deposits are liability of the bank so from the viewpoint

of bank we can refer to them as liabilities

TYPES OF DEPOSITSTYPES OF DEPOSITSDeposits can be segregated on two bases, one is the duration in

which these funds are expected to be with the bank, and second is

the cost of getting these funds. So we can divide deposits into two

classes according to duration:



(1)Time Deposits

(2)Demand Deposits

And on the basis of the cost of acquire these funds, a deposit can be

classified as any one of the following four:

a) High Cost

b) Medium Cost

c) Low Cost

d) No Cost

Bank has different kind of deposit schemes in order to induce

deposits. These schemes are a mixture of the above mentioned two

types of deposits with and addition of different services and

requirements, mode of transactions, basis for calculation of profit,

deduction, additional benefits, and eligibility for different groups. In

the similar fashion, national Bank of Pakistan has large variety of

deposit schemes and some of these are as follows:

1) Current Account

In this type of accounts, the client is allowed to deposit or withdraw

money as and when he likes, but there is requirement of

maintaining the minimum balance of Rs.5000/- other wise Rs.50/-

will be deducted every month. Usually the businessmen open this

type of account and the bank pays no profit on it. These types of

deposits are also exempt from compulsory deduction of Zakat.

2) PLS Saving Account

This type of account is for those persons who want to make small

savings. This type of account is opened with a minimum deposit if

Rs.200/- If the balance in the account falls below the minimum

requirement then a flat charge of Rs.150/- is made in the account



once in a half year. Zakat and other withholding taxes are deducted

as per rules of the government.

3) Fixed Deposits

In this type of account a certain amount is deposited for a certain

period such as six months, one year, two year or longer. A fixed

deposit receipt is issued in the name of the depositor. The receipt is

signed by the officer in charge and the bank manager. A notice is

given to the depositor on a prescribed from two weeks before the

Fixed Deposit Receipt (FDR) falls due, requesting the depositor to

withdraw his money or to renew his deposits. The interest is allowed

on fixed deposit varies with the period for which the deposit is

made.

4) Short Notice Term Deposit

This kind of deposit is for a short period as the name indicates. The

depositor may withdraw his deposit at any time by giving seven

days notice to the banker. This type of deposit facilitates the trader

to withdraw his amount with interest of the deposited period.

5) Call DepositCall Deposits are the sorts of deposits, which are deposited with the

banker against any tender. This is with out interest deposit, this may

be with interest provided with the depositor has agreed to keep this

amount with the banker for some fixed period.

6) Cumulative Deposit CertificateThis is just like of fixed deposit. In this kind of deposit, the rate of

interest is higher as compared to other kind of deposits, which are



mentioned previously. The rate of interest rises gradually as the

period extends. Its period ranges from three month to twenty years.

7) Monthly Income Scheme

National Bank of Pakistan has also introduced Monthly Income

Scheme for the benefits of its customers. An individual or institution,

company, corporation etc. can take the advantage of this scheme.

LEDGERS OF DEPOSIT DEPARTMENT

The following types of ledgers are concerned with deposit

department:

1) Saving Ledgers

2) Current Ledgers

3) Profit and Loss Sharing Ledgers

4) Fixed Deposit Register

5) Cumulative Deposit Certificate Register

6) Cash Book

7) Daily Profit and Loss Summary Book

8) Voucher Register

CLEARING DEPARTMENT



How National Bank Clear the Cheques

The department in charge Mr. Khalid checks the cheques which

came from the different banks. Clearing register Format is like that

Check

Number

Drawer’s

Name

UBL PUNJAB RSB

02127900532

401

Masood

Joiya

3900/=

02127900532

402

Shahid

Joiya

40000/=

02127900532

403

Rameez

Joiya

45000/=

After record the amount of cheques in the “Clearing Ledger”

“AVP”of National Bank prepare “Fan code” in Fan Code he record

the entire Vouchers amount which is mention on that voucher. After

making fan code all the cheques stapled and their voucher also

stapled separately. Then make sticks and stapled that sticks with

every bank cheques. Then he totals the amount of cheques which is

record in clearing Ledger. And also total the amount of vouchers

and also total the amount of sticks. These three totals must be

equals.

TYPES OF CHEQUES COLLECTEDTYPES OF CHEQUES COLLECTED

1) Transfer Cheque

Transfer cheques are those cheques which are collected and paid by

two different branches of the same bank situated in the same city.

2) Clearing Cheque



Clearing Cheques are those cheques which are drawn on the

branches of some other bank of the same city or of the same area

which covers a particular clearing house.

3) Collection Cheque

Collection Cheques are those cheques which are drawn on the

branches of either the same bank or of another bank, but branches

are not in the same city or they are not the members of clearing

house.

ADVANCE AND CREDIT DEPARTMENT

The function of Advances and Credit Department is to lend money in

the form of clean advances, against the promissory note, as well as

secured advances against tangible and marketable securities. The

bankers prefer such securities, which do not run the risk of general

depreciation due to market fluctuations.

ACCOUNT OPENING DEPARTMENT

This is the department who deal the new clients of the bank.

Opening the account is the main duty of this department.

Procedure of Opening New Account

According to my practice in bank, when a customer wants to open

an account, the AVP Mr.Khlaid gives him an application form. All

information, which is necessary to be known by the bank, are



requirements of the application form. Form also requires the

essential documents to be attached by the customer.

Required Documents

Basically following information is required to open an account

Title of Account

Full Name of Applicant

Occupation

Address

Telephone No.

Currency of account

Nature of Business

Introducer’s Name, Address & Signatures

Special instruction regarding the account

Initial Amount of the Deposit

Opening Account Appendix

Signature of the applicant

Reference’s Signature and name

Some important information regarding introducer e.g. the name and

account number of the introducer is written on the form. Then in

order to find out whether he is a true introducer or not, a letter is

sent to him thanking him for this introduction so that anything

wrong may come into notice.

There are different requirements for different types of accounts and

accountholders.

Opening Account AppendixIn this document the signature of Account Holder and the signature

of Account opening officer exist and also the number of Account also

mention like 189-1



And the amount which is deposit into Account it depend on the

nature of Account that either it is current Account or fixed deposit

account.

Now I want to tell all the procedure of Account

Opening by a diagram


Procedure to Open an Account

GET THE FORM FROM OPENING DEPARTMENT

FILL IT AND ATTACH THE NECESSARY DOCUMENTS

SUBMIT THE COMPLETE TO ACCOUNT OPENING

VERIFICATION BY NADRA BY ACCOUNT OPENING

OPEN THE ACCOUNT MANUALLY AND ONLINE

ISSUE THE CHEQUE BOOK


Types of Accounts

1. Current Account2. PLS or SB (Profit &Loss saving Account)3. Fixed Deposit Account4. NIDA(National Income Daily Account) Account

SECURITIES

1) Bankers Lien(Moveable property possessed to the lender cannot be sold in case

of default) Lien is the bankers’ right to hold the property until the

claim on the property is paid. The bankers look at their lien as a

protection against loss on loan or overdraft or any other credit

facility. In ordinary lien, the borrower remains the owner if the

property, but the real or constructive possession remains with the

creditors, though he has no right to sell it.

2) GuaranteesWhen an application for an advance can offer any tangible security,

the banker may rely on personal guarantees to protect himself

against loss on advances or overdraft to the applicant.



3) Mortgage(Immoveable property possessed to the lender can be sold in case

of default) A mortgage is the transfer of an interest in specific

immoveable property for the purpose of securing the payment of

money advanced or to be advanced by way of loan, and existing of

future debt, or the performance of an engagement, which may rise

to a particular liability. The person in whose interest the property is

transfer is called mortgagee.

4) Hypothecation(Immoveable property possessed to the borrower can be sold in

case of default) When property in the shape of goods is charged as

security for a loan from the bank, the ownership and possession is

with the borrower, the goods are said to be hypothecated. The

essence of hypothecation is that neither the property in goods nor

the possession of them passes to the lender, but the security is

granted by means of letter of hypothecation which usually provides

for a banker’s charge on the hypothecated goods.

5) Pledge(Moveable property possessed to the lender can be sold in case of

default) In a pledge, the ownership remains with pledger (borrower),

but the pledgee has the possession of property until the advance is

repaid in full. While in case of defaulter, the pledge has the right of

sale after giving due notice.

TYPES OF ADVANCES



1. Demand Finance(Ordinary Loans)

2. Running Finance(Overdraft)

3. Cash Finance

4. Small Finance

5. Finance against Bills

6. Agriculture Loans

1) Demand Finance (Ordinary Loans)These are those advances which are allowed in lump sum for a fixed

period and are repayable in lump sum or gradually in installments.

2) Running FinanceRunning finance are advances, which are gradually given to meet

temporary requirements of the customers. A good customer uses

the banks running finance limit, as a mean of protecting his credit in

the market and as a line of second defense to meet his

commitments. There are two types of running finance:

Types of Running Finance

a) Un-Secured

Under this type of overdraft, the bank relies upon the personal

security of the customer or customer’s account.

b) Secured

Under this type of overdraft, the bank allows his customer to

withdraw more than his deposit after giving security against the

amount overdrawn. The securities against which they are given are

as under:



a) Share Certificates

b) Savings Certificates

c) Deposits

d) Mortgage Property

e) Guarantee of a person

3) Cash FinanceThese types of loans are given against the following:

1. Against locally manufactured goods

2. Cash finance against rice and paddy

3. Against pledge

4. Against commodities

5. Besides advances against the above commodities bank

may be approached by parties for advances against other

commodities like tobacco, oil, etc.

6. Against Trust Receipts

4) Small LoansLoans are allowed to contractors’ clearing and forwarding agents.

These loans are repayable within a year.

5) Finance against BillsThe advances are allowed both on local and foreign bills such as:

a) Bill of Exchange and Invoices

b) Bill of Landing

6) Agriculture Loans



Agriculture loans are given to the farmers with holding up to 25

acres for meeting their short medium and long term production

requirements such as:

a) Agriculture inputs

b) Tractors instruments

c) Tube wells

d) Live stock farming

e) Land Improvements

PRODUCTS OF NBP

National Bank of Pakistan always makes efforts to improve its

goodwill in the general public. It introduces different kind of

schemes time to time.

The most popular schemes conducted by NBP are as under:

1. NBP Premium Amdani

2. NBP premium Saver

3. NBP karobar

4. NBP Saibaan

5. NBP Advance Salary

6. NBP Cash Card

7. NBP Investor Advantage

8. NBP Cash n Gold



9. NBP Kisan Taqat

10. NBP Kisan

Dost

11. NBP Pak

Remit

12. NBP

Protection Shield

NBP Premium Aamdani

Monthly Income Scheme

Earn up to 12% p.a. plus

Minimum deposit of Rs.20,000/- and a maximum deposit of

Rs.5,000,000/- for 5 years

Free Demand Draft Pay Order and Cheque Book

Convenience of NBP online Asan Banking (for online banking

customers)

Free NBP Cash Card(ATM+Debit)



Running Finance facility up to 90%

Amount of investment required from Rs. 20,000 to Rs.

5000,000

Investment period is 5 Years

Free Demand Draft, Pay Order and NBP online Aasan Banking

Free Cheque Book /NBP Cash Card (ATM+Debit)

Profit Paid every month as follows:

Period Profit Rates

1st Year 7.50%

2nd Year 8.50%

3rd Year 9.50%

4th Year 10.50%



5th Year 11%

Financing facility available up to 90% o the deposit value.

Premature encashment will attract penalties

Zakat and withholding tax will be deducted as per rule

NBP PREMIUM SAVER

PLS Saving Account

• Produce up to 7.25% p.a. +

• Minimum saving balance of Rs. 20,001/- and a maximum balance of Rs.

300,000/-

• Free NBP Cash Card (ATM + Debit)

• Ease of NBP Online Aasan Banking (for online banking customers)



• Two debit withdrawals permitted in a month & no limit on number of

deposit transactions

• Profit planned on monthly and paid on half yearly basis

Minimum saving balance of Rs. 20,001 and maximum balance

of Rs. 30,000

Free NBP Cash Card (ATM+Debit)

Two debit withdrawals allowed in a month and no limit on

number of deposit transaction

Profit calculated monthly and paid on half yearly basis

NBP KAROBAR

President Rozgar Scheme

If you are aged between 18 and 45 years, you could be eligible for

easy financing for self employment in the categories below:

NBP Karobar Utility Store



NBP Karobar Mobile Utility Store

NBP Karobar Mobile General Utility Store

NBP Karobar Transport

NBP Karobar PCO

NBP Karobar Tele-Center

NBP KAROBAR Utility Store (Shop)

Financing facility available to set-up a small scale Retail Outlet

(Utility Store in a shop) for purchase of furniture & fixtures. This is

also applicable on payment of security deposit / advance rent under

franchise from the USC. However, stocks will be purchased by the

customer.

NBP KAROBAR Mobile Utility Store

Financing facility available to purchase a 2/3 wheeler, 4 stroke

Petrol/CNG/LPG Vehicle (Auto Scooter / Motorcycle Rickshaw) with

attached Loader body (Thehla type) under franchise from the USC to

carry utility goods for retail sale ideally in areas where accessibility

to conventional utility stores is difficult.

NBP Karobar Mobile General Utility Store

NBP Karobar Mobile General Store (without USC Franchise): This

financing program has been designed on the similar pattern of

Mobile Utility Store. The only difference is that the borrower will

have the liberty of procuring stock/supplies/grocery items from open

market. Under this product the average loan size of Rs.100, 000/-

will be given for a maximum period of five years with a grace period

of three months

NBP Karobar Transport



NBP Karobar Transport: The NBP Karobar Transport is designed to

finance 2/3 wheeler, 4 strokes Petrol/CNG/LPG Vehicle (Auto Scooter

/ Motorcycle Rickshaw) to the eligible citizens of Pakistan for

providing less expensive environment friendly transport facility.

Under this product average loan size of Rs.100,000/- will be

provided for a maximum period of five years with a grace period of

three months.

NBP Karobar PCO

NBP Karobar PCO: This product is designed to finance setting-up a

PCO. NBP will be providing financing for the purchase of

Mobile/Wireless Telephone Set with connection, Credit Balance. The

average amount of financing under this product will be Rs.5,000/-

for a maximum period of two years with a grace period of three

months

NBP Karobar Tele-Center NBP Karobar Utility Store

The product has been designed in collaboration with “UTILITY

STORES CORPORATION OF PAKISTAN (USC)” to provide financing

facility of an average amount of Rs.100, 000/- for a maximum period

of five years with grace period of three months. This is available to

all eligible citizens of Pakistan for setting-up small-scale Retail

Outlet or Mobile Utility Store. The USC will give its franchise to

qualifying Pakistani citizens.

Mear Apna Karoabar

Minimum down payment, 10% of Asset price (5% of PCO &

Telecaster)

Tenure 1 to 5 years (for PCO 2 Years)

Grace period 3 months



Maximum Loan amount Rs.200,000/-

Age 18 to 45 Years

Mark-up (variable) 1 year KIBOR + 2.00% p.a.

The customer will pay markup @ 6% p.a ,rest will be borne by

GOP

Life and disability insurance paid by GOP

Subject to availability of subsidy from GOP

NBP Saibaan

National Bank of Pakistan (NBP) has announced the launch of a housing

scheme to cover all sections of the society with monthly income starting

from as low as Rs. 5000/- per month*. *(Conditions apply)



Open the door to your dream home with NBP

Saiban

Product Items

Home Purchase

Home Construction

Home Renovation

Purchase of Land plus Construction

Balance Transfer Facility (BTF)

Home Purchase (House or Apartment)

Financing

Amount

Up to 35 Million

Financing

Period

3 to 20 Years

Debt to Equity 85 : 15

(Maximum)

Home Construction – Product Detail

Financing

Amount

Up to 35 Million

Financing

Period

3 to 20 Years


(Maximum)



Home Renovation

Financing

Amount

Up to 35 Million

Financing

Period

3 to 15 Years


(Maximum)

Purchase of Land plus Construction

Financing

Amount

Up to 35 Million

Financing

Period

3 to 20 Years


(Maximum)

Balance Transfer Facility (BTF)

If you have a home Finance Facility outstanding with

another bank you can have it transfer to NBP through a

hassle-free process.

NBP Advance Salary



In January 2003 National Bank of Pakistan has launched a unique

product, NBP Advance Salary. Currently this product is for fixed-

income permanent employees of Federal & Provincial Government,

Semi-Government, Autonomous, Semi-autonomous, local bodies and

other Government organizations. The product is purely cash flow

based and offers its holder to avail 20 net salaries in one go to be

repaid in up to 60 (sixty) months. With no collateral, insurance or

requirements, Advance Salary provides rapid disbursement in a

short turnaround time.

“NBP advance salary “product alone has attracted many customers.

120months salary in advance (certain conditions apply), minimum

documentation, repayable in 5 years, no processing charges; no

collaterals, no guarantees, no insurance, Mark-up charged at 15%

per annum on reducing balance method

Following documents are required to advance salary

CNIC of borrower.

Departmental card of borrower.

Three last salary slips.

Two referring person one of equal Grade other officer Grade

and their CNIC and salary slip.

Undertaking by employment on 100 stamp paper.

Three undated Cheques.



ICIL Report.

C IB Report.

Annexure C and D.

Auto Rollover Form.

NBP Cash Card

Cash Free Spending - Step by Step



Step 1

To identify a merchant outlet that welcomes your card,

Just look for the NBP or Orix Logo.

Step 2

To make a payment give your NBP Cash Card to the merchant. The

merchant will swipe

Your card on the POS (Point Of Sale) machine and the purchase

amount will be entered.

Step 3

Enter your digital ATM Pin for verification (this is the same as your

cash withdrawal pin).



Step 4

After Approval a transaction slip will be provided. Collect your card

and slip and confirm you transaction amount

Step 5

Your purchase transaction is now complete and the transaction

amount has been debited to your NBP account. Please retain your

transaction for further reference.

NBP Cash Card Safety Tips

Welcome to our relationship enriched with a wide range of

remarkable e-banking service. For your safety and convenience

we would recommend some precautions while using NBP CASH

CARD at ATMs and merchant outlets.



Immediately after receiving the NBP Cash Card, change your PIN

Code at the nearest NBP ATM.

Never share your Personal Identification Number (PIN) or given it

out over telephone.

Never write your PIN Code on your card.

Never keep your card and PIN at the same place.

As you approach an ATM, beware of your surroundings, if you

notice anything unusual, visit the ATM later.

Immediately report a lost of stolen card to your NBP branch.

Stand close to the ATM machine while entering your PIN and do

not allow anyone to watch.

Ensure that the merchant has entered the correct amount of

transaction before you enter your PIN code.

Maintain your POS receipt as a record and ensure that he card

returned to you by the cashier/attendant is yours.

Protect your card from direct sunlight and magnetic fields.

Do not bend your card.

Carefully dispose off your old card when you are issued a new

one.

NBP Investor Advantage



A margin financing facility developed for retail investors in line with

Government’s efforts to promote Pakistani capital markets and will

replace the Badla (COT) system with a stable financing system in

line with international financial markets. Besides offering a

comfortable environment to the retail stock investors, a financing

facility will also be available. Willing investors can avail NBP

financing at very easy terms requiring minimum documentation and

least turn around time. The NBP financing also does not require any

security from the customer except for the customer’s equity.

Importantly, the customer’s equity will also be freely available for

investment. Customer has to fulfill all NBP and SBP regulatory

requirements.

To obtain NBP Investor Advantage facility Eligible if

A Pakistani Nationals with valid computerized national ID card

• Over 21 years of age

• Have an account with NBP designated branch

• willing to invest equity in the form of cash or NBP approved shares

• No default with any financial institution

For utilizing the NBP Investor Advantage, please follow

the following simple steps



Obtain Facility Application form from the NBP Margin Financial

Desk at NBP Main Branch.

Fill in the application form and submit it to the branch at the

Margin Financial Desk.

On application approval, customer deposits equity as Cash in the

customer’s margin financial account at bank .Alternatively NBP

approved Shares can also deposited in the NBP CDC account.

Customer would then be eligible for trading through trading

center of the NBP Subsidiary namely Taurus Securities limited

adjacent to the NBP Main Branch at Karachi.

Customer’s own equity and financial amount will both available

for trading.

NBP Cash n Gold



Get extra benefits from your Gold.

Meet your need for ready cash against your idle gold jewellery with

no minimum or maximum limits. Facility of Rs. 14000/- against 10

grams of gold.

Rate of mark up 15.50% p. a.

Facility of Rs.14000 against each 10 grams of net content of

Gold.

NO maximum limits of cash.

Repayment after one year.

Roll over facility.

Only Gold ornaments are acceptable.

Weight and quality of Gold to be determined by NBP’s

appointed schroffs.

No penalty for early payments.

NBP Kisan Taqat



National Bank Pakistan Dairy Form Scheme

Advantage to Getting Loan from NBP

Very Near Banks Branch from you

Easy and Short Paper working

Get ride from the tension payment of Installments

Experience Staff’s Help and Guide

NBP Kisan Dost



NBP KISAN DOST

NBP’s affordable agricultural program offers you a wide range of

financing. Loans available for the farmers for

Production

Development purposes

Purchases of tractors

Installations of tube wells

Purchases of agricultural implements

Micro loans

Good own construction

Construction of fish pond

Livestock farming

Milk processing

Cold storage

Bio-gas plants etc.

There are two types of agriculture finance these are

1. Production Loans

2. Development Loans


http://nbp.com.pk/KisanDost/Index.htm


Production Loans

In production loans, loans are provided for Seeds, Fertilizer and

Pesticides. These loans are provided for one year at the rate of 12%.

Limit of these loans are Rs.250, 000.The bank provide the loans

against the pledge of land.

Development Loans

In this type of loans bank provide loans for Tractor, Life Star, Dairy

and Machinery. These loans are provided for more than one year

and limit of these loans are Rs.500,000.

Requirements

1) Agri Passbook

2) CNIC

3) Photographs

4) Fard of land guarantors

5) AKS Sajrah

6) ICIL Report

7) NOC

8) SS Card (Specimen Signature Card)

9) CIB report

The borrower makes the payment of loan on annually basis interest

+ Principal

NBP Pak Remit



Production Information

Pakremit is an internet based Home Remittance Service. This

service is available to U.S. residents for sending money to their

family and friends in Pakistan. One must have a valid US Dollar

account with a U.S. bank or a US Dollar credit or debit card in order

to remit funds through this channel. Remitters in USA can log on to

our user friendly website, www.pakremit.com and easily remit funds

to Pakistan from the comfort of their homes, in a matter of minutes.

The service is fully secure with advance encryption application and

is available for use 24 hours a day, 7 days a week. Fees and

exchange rate have been set at competitive levels and the remitters

have the ability to track delivery of funds as well.

Process

Remitters log on to www.pakremit.com and after completing the

registration process, are able to remit funds. The whole process

takes a few minutes.

Funds in Pak Rupees can be sent to beneficiaries, having an

account with any bank in Pakistan, including NBP. While funds

are credited directly to beneficiaries maintaining accounts with

NBP, a pay order or demand draft is couriered to other banks for

their customers. Pay order or demand draft can also be couriered

directly to the beneficiary’s office or home, if requested by the

remitter.

Funds in US Dollars can be sent only to a Beneficiary maintaining

a US Dollar account with one of NBP’s Foreign Exchange



Branches. Click here for details of NBP Foreign Exchange

Branches.

NBP Protection Shield

Insurance Coverage In case of Accidental Death (Including death

due to *Riots, Strikes, Civil commotion, Acts of Terrorism and

Natural Calamities like Flood, Earth Quake, Cyclones etc.)

Coverage of Rs. 200,000/- for Rs. 20/- per month

Definitions

Provided the insured is not directly involved in these activities

Accident

Unintentional, unfortunate or a harmful event by chance or

apparent cause.

Accidental Death

Death due to accidental injuries, but not illness.

Insured Person

A National Bank of Pakistan PLS account holder, aged between 18

years and above, and whose premium is deducted & details are

reported to the selected insurance company by NBP.

Policy



Group Personal Accident Policy dated 26/09/05 executed between

NBP and Insurer.

Principal Sum

The amount stated in the Policy’s Schedule of Benefits as respects

each Insured Person.

Product Detail

No medical Required

No Documentation

Fixed Auto Premium deduction Facility (After customer consent)

Choice of Deactivation

Eligibility

NBP PLS Account holder

18 Years and Above

SERVISES OF NBP



International Banking

National Bank of Pakistan is at the forefront of international banking

in Pakistan which is proven by the fact that NBP has its branches in

all of the major financial capitals of the world. Furthermore, we

have recently set up the Financial Institution Wing, which is placed

under the Risk Management Group. The role of the Financial

Institution Section is

To effectively manage NBP's exposure to foreign and domestic

communication

Manage the monetary aspect of NBP's relationship with the

correspondents to support trade, treasury and other key

business areas, thereby contributing to the bank's profitability

Generation of incremental trade-finance business and

revenues

NBP offers:

The lowest rates on exports and other global banking products

Access to different local commercial banks in international

banking



NBP Pak Rupee Traveller’s Cheque

Negotiability: Pak Rupees Traveler’s Cheques are a negotiable instrument

Validity: There is no restriction on the period of validity

Availability At 700 branches of NBP all over the country

Encashment At all 400 branches of NBP Limitation No limit on purchase Safety NBP Traveler’s Cheques are

the safest way to carry our money

Letter of Credit

NBP is committed to offering its business customers the widest

range of options in the area of money transfer. If you are a

commercial enterprise then our Letter of Credit service is just what

you are looking for. With competitive rates, security, and ease of

transaction, NBP Letters of Credit are the best way to do your

business transactions.

Commercial Finance

Let us help make your dreams become a reality

Our dedicated team of professionals truly understands the needs of

professionals, agriculturists, large and small business and other

segments of the economy. They are the customer’s best resource

in making NBP’s products and services work for them.



Foreign Remittance

To facilitate its customers in the area of Home Remittances,

National Bank of Pakistan has taken a number of measures to:

Increase home remittances through the banking system

Meet the SBP directives/instructions for timely and prompt delivery

of remittances to the beneficiaries

New Features:

The existing system of home remittances has been

revised/significantly improved and well-trained field functionaries

are posted to provide efficient and reliable home remittance

services to nonresident Pakistanis at 15 overseas branches of the

Bank besides Pakistan International Bank (UK) Ltd., and Bank Al-

Jazira, Saudi Arabia.

Zero Tariffs: NBP is providing home remittance services

without any charges.

Strict monitoring of the system is done to ensure the highest

possible security.

Special courier services are hired for expeditious delivery of home

remittances to the beneficiaries.

Swift System

The SWIFT system (Society for Worldwide Inter bank Financial

Telecommunication) has been introduced for speedy services in the

area of home remittances. The system has built-in features of

computerized test keys, which eliminates the manual application of

tests that often cause delay in the payment of home remittances.

The SWIFT Center is operational at National Bank of Pakistan with a

universal access number NBP-PKKA. All NBP overseas branches



and overseas correspondents (over450) are drawing remittances

through SWIFT. Using the NBP network of branches, you can safely

and speedily transfer money for our business and personal needs.

Short Term Investment

NBP now offers excellent rates of profit on all its short term

investment accounts. Whether you are looking to invest for 3

months or 1 year, NBP’s rates of profit are extremely attractive,

along with the security and service only NBP can provide.

N.I.D.A

National Income Daily Account The scheme was launched in

December 1995 to attract corporate customers. It is a current

account scheme and is part of the profit and loss system of

accounts in operation throughout the country.

MODE OF CALCULATION

AVERAGE BALANCE DURING A CALENDAR MONTH

Equity Investment

NBP has accelerated its activities in the stock market to improve its

economic base and restore investor confidence. The bank is now

regarded as the most active and dominant player in the

development of the stock market. NBP is involved in the

following:

Investment into the capital market



Introduction of capital market accounts (under process)

NBP’s involvement in capital markets is expected to increase

its earnings, which would result in better returns offered to

account holders.

Trade Finance and Other Business Loan

Agriculture Finance

NBP provides Agricultural Finance to solidify faith, commitment and

pride of farmers who produce some of the best agricultural products

in the World.

Agricultural Finance Services

“I Feed the World” program, a new product, is introduced by NBP

with the aim to help farmers maximize the per acre production with

minimum of required input. Select farms will be made role models

for other farms and farmers to follow, thus helping farmers across

Pakistan to increase production.

Agricultural Credit

The agricultural financing strategy of NBP is aimed at three main

objectives:-

Providing reliable infrastructure for agricultural customers

Help farmers utilize funds efficiently to further develop and

achieve better production



Provide farmers an integrated package of credit with supplies

of essential inputs, technical knowledge, and supervision of

farming.

Agricultural Credit (Medium Term)

Production and development

Watercourse improvement

Wells

Farm power

Development loans for tea plantation

Fencing

Solar energy

Equipment for sprinklers

Farm Credit

NBP also provides the following subsidized with ranges of 3 months

to 1 year on a renewal basis.

Operating loans

Land improvement loans

Equipment loans for purchase of tractors, farm implements or

any other equipment

Livestock loans for the purchase, care, and feeding of livestock

Production Loans

Production loans are meant for basic inputs of the farm and are

short term in nature. Seeds, fertilizers, sprayers, etc. are all

covered under this scheme.

Utility Bills Collection



For the convenience of the customer, National Bank of Pakistan also

collects different kinds of utility bills such as:

Electricity Bills, Sui-Gas Bills, Telephone Bills etc.

Foreign Currency Account

Launched to attract deposits in foreign currencies like US Dollars,

Pound Sterling, Dutch Mark, and Japanese Yen. Whether you are a

resident or a non-resident of Pakistan, NBP invites all to operate in a

foreign currency account.

Corporate Finance

Working Capital and Short Term Loans

NBP specializes in providing Project Finance – Export Refinance to

exporters – Pre-shipment and Post-shipment financing to exporters –

Running finance – Cash Finance – Small Finance – Discounting &

Bills Purchased – Export Bills Purchased / Pre-shipment / Post

Shipment Agricultural Production Loans

Medium term loans and Capital Expenditure

Financing

NBP provides financing for its clients’ capital expenditure and other

long-term investment needs. By sharing the risk associated with

such long-term investments, NBP expedites clients’ attempt to

upgrade and expand their operation thereby making possible the

fulfillment of our clients’ vision. This type of long term financing



proves the bank’s belief in its client's capabilities, and its

commitment to the country.

Loan Structuring and Syndication

National Bank’s leadership in loan Syndicating stems from ability to

forge strong relationships not only with borrowers but also with

bank investors. Because we understand our syndicate partners’

asset criteria, we help borrowers meet substantial financing needs

by enabling them to reach the banks most interested in lending to

their particular industry, geographic location and structure through

syndicated debt offerings. Our syndication capabilities are

complemented by our own capital strength and by industry teams,

who bring specialized knowledge to the structure of a transaction.

Cash Management Services

With National Bank’s Cash Management Services (in process of

being set up), the customer’s sales collection will be channeled

through vast network of NBP branched spread across the country.

This will enable the customer to manage their company’s total

financial position right from your desktop computer. They will also

be able to take advantage of our outstanding range of payment,

ejection, liquidity and investment services. In fact, with NBP, you’ll

be provided everything, which takes to manage your cash flow more

accurately.



Learning as an Internee

I joined National Bank of Pakistan, Main Branch Vehari on 26 th June,

2010. First day, the manager introduced me about the functioning

of the branch and the staff. The manager told me that counter is the

most important place of the bank. During the six weeks of my

internship, I worked in different sections of the branch and did the

maximum practice of banking system details of which is as under:

a) General Banking First of all, I was asked to work in different sections of general

banking. I was attached to Counter with Mr. Khalid who has good

command on this section. Here we dealt with new customer who

wanted to get information and to deal with the branch. This is a very

interesting department because here we met people of different

types and deal with them accordingly. In this section, I observed the

following functions

b) Cheque at CounterA cheque to withdraw the amount is presented on the counter with

the following requisites:



1) Name of the Account Holder

2) Current or previous date

3) Amount in figures

4) Amount in wording

5) One signature of the account holder in the right bottom

corner of the cheque

6) Two signature of the bearer on the back

7) Branch Stamp in front of the cheque

8) Verification Stamp in front of the cheque

9) If the Account Holder uses thumb instead of signature

then the Pass Book is necessary with the cheque

Operation’s officer checks and verifies all these requisites. If it fulfills

all the requisites, it is forwarded for payment after a certain

procedure.

c) Cheque Payment ProcedureAfter all the requisites are verified and then the excessive balance is

checked and prescribed amount is deducted narrated on the cheque,

then SIGNATURE VERIFIED stamp (in case of signature only) on the

signature and a PAY CASH stamp are fixed and a Token is given to

the cheque bearer after writing Token No. on the specified cheque.

Then the Officer G-II verified the cheque and forwarded it to the

cashier where the cheque bearer receives the amount from the

account.

d) Issuance of Demand DraftA Demand Draft is provided to the client in whom he has to



specify that bank it is drawn. The amount both in words and figures

is written on Demand Draft.

e) Bills Collections DepartmentI spent second week of my training in bills collection department.

Mr. Ameer Hamza is the in charge of this section. Here we collected

utility bills like electricity bills, gas bills, and telephone bills.

f) Bill Remittance DepartmentThis is very important and interesting department. This section

deals with the transfer of money from one branch to another

branch. Nearly four drafts are issued daily from this department.

Here I know how the amount is transferred and what the procedure

is. This department also deals with TT transfer of money. I worked

nearly two weeks in this department.

g) Deposit DepartmentDeposit department deals with Current, Savings, and Fixed

Accounts. In current account the bank does not give any interest

and you can deposit the whole amount in lump sum in business

hours. However in PLS savings account we can only withdraw up to

Rs.25000/- without any notice otherwise a prior notification of a

week is required to the bank if the amount to be withdrawn is more

than Rs.25000/- Old ages are interested in Fixed Account usually.

The rate of interest is higher more than that of in Current and PLS

savings Account but the amount cannot be withdrawn before a

specific time fixed by the client. To open the account customer have

to fulfill an application form and submit to the concerning authority.

In Current and PLS saving Account, a Cheque Book is issued to the

client and he becomes the Account Holder of NBP. I worked in this

department for one and a half week.



h) Pension Payment Procedure

The pension payment procedure is the toughest procedure, because

a lot of people want to get their pension as soon as possible. Here I

seek how the dealing with the retired persons. Here I seek how the

pension increase and how the bank gives every month pension to

retired persons. Pension 25% increase and medical allowance is also

25%.if BPS less than 15.and if BPS more than 15 the increase

20%and medical allowance is 20%.This year Government have done

admirable work. Which is that they family pension is if less than

Rs.2250/=, then the pension of family should be Rs.2250/=.and also

that person take the medical 25%and now his pension is

Rs.2813/=and that person who is alive his pension is if less than

Rs.2250/=, it should be direct Rs.3000/= and this person also take

the medical 25% and now his/her pension is Rs.3750/=.

i) Outwards Bills for Collection

(OBC)I seek how Outward Bill for collection, the cheques drawn on the

bank that is out of city. These cheques are not collected through

NIFT. The banks clear these by sending them to the relevant branch

through mail. This service includes all activities involved in

collecting their claims on customers of the other branches of same

bank or of the other banks, located outside the clearinghouse area.

Procedure

Receive instrument, this instrument

It is in the name of the account holding customer



Must not be post dated or stale

Must have same amount in words and figure

Affix special crossing stamp on the face of instrument

Affix OBC stamp on the instrument, and on pay-in slip

Entry in OBC register

Write OBC# on the instrument

Prepare outward bill for collection schedule

NBP Awards & Achievements

Best Foreign Exchange Bank 2008 awarded by world's leading

financial journal Global Finance.

Best Return on Capital for 2006 amongst all Banks in Asia.

Banker Magazine in July 2007.

World's leading financial journal Global Finance has named

NBP as the Best Emerging Market Bank from Pakistan for the

year 2006.

Best Foreign Exchange Bank Pakistan award for the year 2006

by world's leading financial journal Global Finance.



Due to consistent improvement in NBP's Core Profitability

Asset Quality and Economic Capitalization in recent years,

Moody’s Investors Service upgraded the Financial Strength

Rating (FSR) rom E+ to D in November 2005.

Best Foreign Exchange Bank Pakistan award for the year 2005

by world's leading financial journal Global Finance.

Best Bank Pakistan award for the year 2005 by world's leading

financial journal Global Finance.

The Asian Banker a reputable financial journal has published

the report of its research project on the ranking of 300 of

Asia’s Strongest Banks based on an 11 Dimensional Dynamic

Scoring Criteria has adjudged National Bank of Pakistan as the

Strongest Bank in Pakistan.

On the basis of overall financial performance during 2004 NBP

has been listed Amongst top 1000 banks in the world and

Number 1 Bank in Pakistan by the prestigious Banker

Magazine in its issue of July 2005 .

The Banker Magazine in July 2005 recognized NBP as the

10th Best Bank in terms of Profit on Capital in the world.

Bank of the Year awarded for the year 2005 by the world

renowned. The Banker magazine owned by the Financial

Times Group London.

On an all Pakistan basis National Bank of Pakistan was

awarded the Kissan Times Award for the year 2005 by the

Prime Minister Mr. Shaukat Aziz for its services in the

Agriculture Sector .World leading financial journal Global

Finance in an exclusive survey has named NBP as the Best

Emerging Market Bank from Pakistan for the year 2005.



Bank of the Year awards for the year 2004 by the world


Times Group, London.

Euro money Magazine, a leading and prestigious journal,

published from London , UK , in its issue of March 2005 has

published Moody's Investors Service rankings in which NBP is

the only Pakistani bank which has been ranked among the Top

100 banks of Asia for it performance in the fiscal year 2003.

WEBCOP-AASHA an alliance against gender discrimination at

workplace presented a Recognition Award to National Bank

of Pakistan on December 18, 2004 for having a Gender

Sensitive Management.

In May 2004, NBP's standalone long-term rating was

upgraded by JCR-VIS Credit Rating Agency to AA (double A)

from AA (double A minus) with stable outlook while standalone

short-term rating was maintained at A-1+ (A one plus). This is

now the best rating for a local commercial bank in Pakistan.

In its issue of March 2004 Global Finance has also declared

NBP as The Best Foreign Exchange Bank in Pakistan.

The Banker Magazine in July 2003 recognized NBP as the

bank with the highest return on capital in Asia and No.8 in the

world.



World's leading financial journal Global Finance after a

worldwide survey declared NBP in its issue of May 2003 as one

of the best banks in the emerging markets.


renowned The Banker magazine owned by the Financial Times

Group London.



Times Group London.

President’s Awards

Mr. Syed Ali Raza, Chairman & President NBP was awarded.

The Asian Banker Leadership Achievement Award 2007 by

Asian Banker (an internationally reputed Financial Journal in

its issue of June 2007.

Mr. Syed Ali Raza Chairman & President, NBP was conferred

Sitara-i-Imtiaz by the President of Pakistan General Pervez

Musharraf on August 14, 2005.

Business Week of The McGraw Hill Companies in its July

11,2005 edition has adjudged Mr. Syed Ali Raza Chairman



President NBP as one of the twenty five Leaders of Asia at the

& Forefront of Change and has identified them as Stars of Asia

including the President of Indonesia.

Mr. Syed Ali Raza’s (Chairman & President, NBP) capabilities

were also recognized by the Institute of Bankers in Pakistan

when he was awarded a gold medal in 2003.

Financial Analysis

In this section two topics are discussed. Two major topics of this

section are:

Financial Highlights

Balance Sheet

Profit & Loss Account

Raito Analysis

FINANCIAL POSITIONDifferent facts and figures of opening balances of the year 2010

about National bank of Pakistan which show the financial position

are as under:

FINANCIAL HIGHLIGHTS



TOTAL DEPOSITS Rs. 726,465 Million

ADVANCES Rs. 475,243 Million

INVESTMENTS Rs. 217,643 Million

AFTER-TAX PROFIT Rs.18,212 Million

TOTAL ASSETS Rs. 945,903.3 Million

TOTAL EXPENDITURES Rs. 26.30 Billion

NO OF BRANCHES 1287

PROFIT Rs. 18,212

NO. OF EMPLOYEES 16,248

National Bank of Pakistan Balance Sheet

As at December 31, 2009

ASSETS 2008(Rs.in million)

2009(Rs.in million)

Cash and Equivalents 140,477.0 138,631.3

Trading Asset Securities 1,009.2 2,381.3

TOTAL CASH AND SHORT TERM INVESTMENTS

156,995.0 160,951.5

Other Receivables 2,105.7 13,566.9

TOTAL RECEIVABLES 2,105.7 13,566.9

Restricted Cash 5,792.1 6,823.6

Other Current Assets 16,276.2 21,070.2

TOTAL CURRENT ASSETS 195,166.9 218,341.3

Gross Property Plant and Equipment

28,214.4 29,982.1

Accumulated Depreciation -3,962.7 -4,810.5



NET PROPERTY PLANT AND EQUIPMENT

24,251.7 25,171.6

Deferred Tax Assets, Long Term 3,203.6 3,064.5

Other Intangibles 20.3 29.3

Other Long-Term Assets 34,280.7 32,238.3

TOTAL ASSETS 820,077.2 945,903.3

LIABILITIES & EQUITY

Accrued Expenses 15,204.6 18,247.5

Current Portion of Long-Term Debt/Capital Lease

5,117.9 2,921.1

Current Portion of Capital Lease Obligations

15.2 19.0

Other Current Liabilities, Total 10,242.6 10,654.7

TOTAL CURRENT LIABILITIES 687,806.3 792,041.4

Long-Term Debt 3,049.6 8,220.9

Capital Leases 10.0 23.6

Minority Interest 112.7 110.9

Unearned Revenue, Non-Current 133.3 218.0

Pension & Other Post-Retirement Benefits

3,052.8 3,531.0

Deferred Tax Liability Non-Current -- --

Other Non-Current Liabilities 21,573.9 20,425.7

TOTAL LIABILITIES 715,738.7 824,571.6

Common Stock 8,969.8 10,763.7

Retained Earnings 67,612.0 78,212.5

Comprehensive Income and Other 27,756.7 32,355.4

TOTAL COMMON EQUITY 104,338.5 121,331.6



TOTAL EQUITY 104,338.5 121,331.6

TOTAL LIABILITIES & EQUITY 820,077.2 945,903.3

Profit and loss Account

For the year ended on December 31, 2009.

2008(Rs.in

million)

2009(Rs.in million)

TOTAL REVENUES/SALES 41,957.1 45,980.5

Cost of Goods Sold 261.8 330.3

GROSS PROFIT 41,695.3 45,650.3

Selling General & Admin Expenses, Total

18,101.5 22,486.4

EBT, EXCLUDING UNUSUAL ITEMS

22,261.3 22,198.8

Other Unusual Items, Total 988.0 --

Other Unusual Items 988.0 --

EBT, INCLUDING UNUSUAL ITEMS

23,249.3 22,198.8

Income Tax Expense 7,565.2 4,099.8

Minority Interest in Earnings -3.0 1.8

Earnings from Continuing 15,681.1 18,100.8



Operations

NET INCOME 15,681.1 18,100.8

NET INCOME TO COMMON INCLUDING EXTRA ITEMS

15,681.1 18,100.8

NET INCOME TO COMMON EXCLUDING EXTRA ITEMS

15,681.1 18,100.8

What is Financial Ratio Analysis?

“Financial ratio an index that relates to accounting numbers and is

obtained by dividing one number by the other” The level and

historical Trends of these ratios can be used to make inferences

about a company's financial Condition, its operations and

attractiveness as an investment.

Ratio Analysis enables to the investor, supplier that they could know

the real position of the business. To do this compares your ratios

with the average of businesses similar to yours and compare your

own ratios for several successive years, watching especially for any

unfavorable.

There are following Ratios that we discuss below:

Liquidity Ratio

ACID-TEST/ (QUICK) Ratio



Leverage Ratio

Activity Ratio

Profitability Ratio

LIQUIDITY RATIO

Current Ratio

Current Ratio = Current Assets Current Liabilities

2008 2009195,166.9/687,806.3

=0.284:1218,341.3/792,041.4=0.276:

1

ExplanationA relatively high ratio is an indication that the firm is liquid and has

the ability to pay its current obligation in time as and when they

become due. On the other hand, a relatively low current ratio

represents that the liquidity position of the firm is not good and the

firm shall not be able to pay its current liabilities in time without



facing difficulties. Current ratio of national bank shows that bank is

not in position that it pay to its obligation in 2008 and 2009.

Graph

ACID-TEST/ (QUICK) Ratio

Acid-test (quick) Ratio = Current Assets-Inventories

Current Liabilities

First of all we find to inventory the method of finding is

Years Current Assets - Cash - Account Receivable =

Inventory

2008 195166.9 - 140477.0 - 2105.7 =

52584.2

2009 218341.3 - 138631.3 - 13566.9

=66143.1

2008 2009142582.7/687806.3 = 0.20:1 152198.2/792041.4 = 0.19:1



ExplanationThe Acid-test ratio is very useful in measuring the liquidity position

of firm.it measure the firm’s capacity to pay off current obligations

immediately. This ratio of 2008 and 2009 show that the bank is not

in position to pay his liabilities immediately,

Graph

Leverage RatioIn leverage two ratios are included

Debt-to-Equity

Debt-to-total-Assets Total DebtDebt-To-Equity = ____________________________________________ Shareholders Equity (Total Asset – Total Liabilities)

2008 2009

715738.7/104338.5 = 6.86 824571.6/121331.6 = 6.80



Explanation:

The ratio indicates the proportionate claim of owners and the

outsiders against the firm’s assets. If we see to the ratio of both

years it indicates that NBP debt is more than its equity so outsiders

can claim on its assets any time.

Graph

Debt - to –total –Assets = Total Debts

Total Assets

2008 2009

715738.7/820077.2 = 87% 824571.6/ 945,903.3 =87%

Explanation:The ratio indicates the relative extent in which firm is using

borrowed money. In 2009 and 2008 the company debts are more

than to its assets so the only 13% shareholders equities are left for

covering to creditor. This ratio shows that the 87% of assets are

financed while 13% we have share holder equity. That shows the



Financial Risk for creditors. More the share holder equity lesser the

Financial Risk for creditors.

Graph

Activity Ratios

Total Assets turnover = Net Sales Total Assets

2008 2009

41957.1 / 820077.2 = 0.51 45980.5 /945903.3 = 0.49

Explanation:



It indicates the efficiency of Assets to generate sale. If we

check to the efficiency of Assets to generate sale in 2008

and 2009 then we can say that it is not satisfactory for NBP.

Graph

Receivable Turnover

Receivable Turnover in Days

Receivable Turnover = Credit Sale Receivable

2008 2009

41,957.1/2105.7 = 20 times 45,980.5/13866.9 = 3times



ExplanationThis ratio shows us that how many times receive cash from

receivables. In this ratio we see that in the year 2008 we get cash

from receivables 20 times, and in 2009 this ratio decreases from 20

times to 3 times.

Graph

Receivable Turnover in Days: 365

RT

2008 2009

365/20 times = 18 days 365/3times = 122 days

ExplanationThis ratio indicates that how much days are required to return The

Account Receivables. In this ratio we see that in the year 2008 we



get cash from receivables in 18 days, and in 2009 years NBP can

receive to its Account Receivables in 122 days.

Graph

Profitability Ratios Net Profit Ratio

ROI (return on investment)

Net Profit Ratio = Net profit after tax

Net Sales

2008 2009

15,681.1/41957.1 =37% 18,100.8/45,980.5= 39%



ExplanationThe ratio indicates the overall profitability and hence it is very useful to

proprietors. The ratio also indicates the capacity of firm to face adverse

economic conditions such as price completion, low demanded. So the NBP

ratios of 2008 and 2009 indicates that it is good but not as could be.

Graph

Return on Investment

Formula = Net profit after taxes Net Sales Net sales Total Assets

2008 2009

5681.1/ 41957.1 41957.1 / 34280.7

100 = 16.47%

18100.8/4598.5 4598.5/32238.3 100 = 56%



Explanation This ratio indicates the efficiency of generating profit with available assets. If we see

to 2008 then the profit is 16.47% so the profit margin is very low in this year the bank

assets have no much capacity to produce more profit for bank on the other hand if we

see to 2009 then the profit is 56% in this year the bank assets have the capacity to

produce profit.

Graph

Financial Ratios Analysis

Ratios 2008 2009

Current Ratio 0.284 0.276

Acid Test/Quick Ratio 0.20 0.19

Debt to Equity Ratio 6.86 6.80



Debt to Total Assets 87% 87%

Total Assets Turnover 0.51 0.49

Receivable Turnover 20 Times 3Times

Receivable Turnover

In Days

18 Day 122 Day

Net Profit Ratio 37% 39%

Return on Investment 16.47% 56%

PEST Analysis

Political

Privatization policy and de-regulation.

Impact on subsidized credit affecting and NCB’s.?

Employment practices, unions and association.

Political interference and harassment.

Incidents of high taxation on banking industry.

Economic:

Constraints in mobilizing of public savings because of inflation.

Staff cost.



Operating cost.

Bad debts.

Social and cultural:

Inadequate H.R.

Cultural strain to saving

Defaulter’s lobby

Declining education and work ethics.

Inadequate accountability.

Adequate empowerment.

Technological:

Inadequate communication infrastructure.

Inadequate computer Facilities.

Inadequate training Facilities.

SWOT ANALYSIS

Here four topics are discussed. They are as under:

Strengths

Weaknesses

Opportunities

Threats

Strengths



The banking time of at the bank till 5:00 pm. This is highly

useful for those customers who find it difficult to leave their

officers in the morning. It is also highly useful who deposits

their amounts on daily basis at evening.

The organization showing concern for the people, ethics and

environment enjoy good public reputation and are able to

reap the benefits in the long run. National Bank management

is quite sensitive to this issue. The productivity of the bank is

very good. Bank is providing a high quality service to its

customers.

Different cameras are located at different locations to monitor

the working of staff members and outside customers by

branch manager.

Bank enjoys a strategic competitive advantage over the JS,

Alfalah, and Al-habib bank, RBS, Allied etc

With the passage of time National Bank has expand their

branches and now running almost 1287 branches.

Western union and express money transfer has exist in

National Bank of Pakistan

Professional staff, right person hired on the right place.

Weaknesses In formal language and Dressing used in National Bank of

Pakistan.



In NBP there is no major use of computer for maintaining the

records, of branches as compared to other banks of the

country.

Because NBP is a govt. owned organization so there is a lack

of implementation of rules and regulations.

In this organizational the organizational structure is

bureaucratic which a barrier in rapid and effective decision

making.

Despite, cultural change program the working condition of the

NBP is not up to standard.

Due to wrong recruitment policy staff of NBP is not proficient

in their work.

In NBP, employees are recruited on the basis of favoritism or

through other tools of corruption.

Opportunities NBP by establishing new branches in foreign countries can

expand its business and can enjoy with the profit.

To enjoy with large amount, NBP can introduce a

comprehensive range of bonds.

NBP can enjoy handsome return its funding base by investing

in capital markets in the foreign countries.



The basic need of the consumer such as housing,

transportation and other durable goods are not adequately

financed by the banks. So by initiating these services, the

bank can enjoy with more funds.

Until recently the bank perceived as purely commercial

banking entity so in order to expand its business the bank

may start investment banking by investing in the portfolio of

handsome return.

It can establish advisory services in order to facilitate the

customers in investing in the securities.

ThreatsThreats The no. of banks in Pakistan is increasing with the passage of

time. So due to poor working condition and poor customer

service it may be possible NBP will lose its market share in

future.

In our country, the rate of inflation is increasing along with the

unemployment. So due to the increase in price of the

products, the savings of the nation is decreasing with the

passage of time. So it is the threat for the banking sector. In

the future, the deposits of the bank will decrease.

On NBP Govt. policies have strong impact. A slight change in

Govt. policies may affect the performance of the bank. The

bank has to work with in the regulation frame work.



The hiring of uneducated people is a major threat for National

Bank of Pakistan

RECOMMENDATION AND CONCLUSION

Here we discuss four topics that are:

Findings

Suggestions



Recommendations

Conclusion

FindingsThere is no motivational factor in employees.

Company personal policies are not good.

The employees are not much aware of the latest Technology

Changing market situation, State Bank Rules and regulations

and Government policies are causing problems for operating

properly in market.

The performance appraisal for the employees is not carrying

properly and there is no proper system for evaluation of the

employees’ performance.

The top management is not doing sufficient efforts to increase

the motivation and job satisfaction of employees that is

leading towards decrease in productivity.

Suggestions Proper time to time training should be conducted to lower

staff as well to enhance their productivity.

The organization should take steps to use the latest IT

technology including different banking software to increase

the productivity of the organization and reduce the time of

different process.



All the authorities, responsibilities and duties should be

clearly communicated to the employees.

The computer technology should be used in decision

making processes as well as practicing in the developed

countries.

The management must observe the internal and external

environment so that it may able to identify the problems

before occurring these problems so that pro-active

approach may be used instead of solving it after

occurrence.

As the world has become global village, the management

should have latest knowledge and information about the

world because a little change in any corner of the world can

affect your business.

There should be more decentralization in decision making

process need less time to execute rather than approvals

from even H.O.D.

An effective coordination and relationship among

departments should be there and exercise as well.

The management should recruit right person for job and

must avoid favoritism and all other such activities.

RECOMMENDATIONSRECOMMENDATIONS

PROPER PLANNING



Bank should make a plan to gear up its recovery efforts on war

footing and reorganize the recovery function of global bases. In

addition, bank should tighten up control on expenditure

USE OF COMPUTERS

To save the time of the customers and other clients, bank should

adopt computerized system for book keeping and other filling

systems. It will increase the efficiency of the bank. I know that there

are some branches which are computerized but most of the

branches in various cities of the country are not computerized. So

the bank should mechanize all its branches in the country.

ADOPTION OF ADVERTISING

Bank should launch advertising campaigns through out the year to

promote the habits of savings in the people. Bank should open more

branches in the remote areas of the country to get deposits and idle

resources. Bank should provide similar facilities to all its branches in

big cities. The standard of service and other facilities are far better

as compared to smaller cities.

PROPER GUIDANCE

Bank should adopt such an induction plan that when a customer

opens his account with the bank, he should be supplied with a

booklet which enables him to know the procedure of filling the

cheques and pay-in-slip etc. It will save a lot of time of the bank

staff afterward during of the conduct of the account of that

customer.

DIVISION OF WORK

The billing system of national bank of Pakistan must be improved to

facilitate the customers and workers. The work should be divided



among the staff e.g. collection of bills, countering of cash and then

entry of these.

CHECK ON EXPENDITURES

Expenditures must be controlled which are very high and

unnecessary.

BORROWING AT LOW COST

Deposits must be taken at a lower cost and given at higher interest

rate.

Conclusion



I got a lot of experience from National Bank during my internship.

During Internship I came to know that how different activities take

place in organizations, what are the rules and procedures Followed

in National Bank.

National Bank of Pakistan is one of the leading in the Pakistan’s

Banking industry with almost 1267 plus national and 22 branches in

foreign countries. The Bank is still growing and growing on the way

of the prosperity. The management is highly qualified and

experience in its fields. I had a very great opportunity to work as

internee so as to gain an over view of practical life and working in

industry before entering in practical life. Practical things and

knowledge is very much different from the theory and bookish

knowledge. I had a very great chance to gain practical experience

and to implement my bookish and to very refine theoretical

knowledge in practical things.



Internship Letter



References

1) The first important thing is the discussions with the staff

of the bank especially with the manager of the branch.

2) The Bank Book of Instructions for the National Bank of

Pakistan called the B.B.I.

3) Surfing the website of the National Bank of Pakistan

(www.nbp.com.pk)

4) Reading the Annual Reports of the National Bank of

Pakistan

5) www.google.pk


http://www.google.pk/

http://www.nbp.com.pk/

Complete Report of NBP by Rameez

Documents

Transcript of Complete Report of NBP by Rameez