INTERNSHIP REPOR

NATIONAL BANK OF PAKISTAN

MBA 6TH

EXECUTIVE SUMMARY

We are living in a time of extraordinary change. The ecological and economic threat is looming large on the entire sphere of Pakistanis economy. Pakistani firms must design and make better products and services and should find better ways to market them. What was once regarded enough is no longer competitive. What were once limitless resources are now to be used more efficiently. I have learned the lessons perhaps the hardest way, that is, though my mistakes. I have tried my best to peep into the generic as well as real cumulative problems faced by the pioneer of banking industry in Pakistan but that degree of objective analysis proved to be of little use since this bank is firmly entrenched in the claws of red-tapism and royal bureaucracy.Several chapters have been inducted in the report but they seem to be very conventional in nature giving supplementary justification to the fact that NBP is the most conventional of the conventional bank.This report is an upshot of my six weeks internship in National Bank of Pakistan . National Bank of Pakistan posses an imperative and historical importance in the banking sector of Pakistan. It always remains the center of hustles in business activities.National Bank of Pakistan is one of the largest commercial bank operating in Pakistan. It has redefined its role and has moved from a public sector organization into a modern commercial bank. The Bank's services are available to individuals, corporate entities and government. While it continues to act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does not have presence). It has diversified its business portfolio and is today a major lead player in the debt equity market, corporate investment banking, retail and consumer banking, agricultural financing, treasury services and is showing growing interest in promoting and developing the country's small and medium enterprises and at the same time fulfilling its social responsibilities, as a corporate citizen.In today's competitive business environment, NBP needed to redefine its role and shed the public sector bank image, for a modern commercial bank. It has offloaded 23.2 percent share in the stock market, and while it has not been completely privatized like the other three public sector banks, partial privatization has taken place. It is now listed on the Karachi/Islamabad/Lahore Stock Exchanges.National Bank of Pakistan is today a progressive, efficient, and customer focused institution. It has developed a wide range of consumer products, to enhance business and cater to the different segments of society. Some schemes have been specifically designed for the low to middle income segments of the population. These include NBP Advance Salary, NBP Saiban, NBP Kisan Dost, NBP Cash n Gold.

History OF NBP

IN 1949 National Bank of Pakistan (NBP) was established under the National Bank of Pakistan Ordinance of 1949 and was government-owned. NBP acted as an agent of the central bank wherever the State Bank did not have its own branch. It also undertook government treasury operations. Its first branches were in jute growing areas in East Pakistan. Offices in Karachi and Lahore followed.1950 NBP established a branch in Jeddah, Saudi Arabia.1955 By this time NBP had branches in London and Calcutta.1957 NBP established a branch in Baghdad, Iraq.1962 NBP established a branch in Dar es Salaam, Tanganyika.1964 The Iraqi government nationalized NBP's Baghdad branch.1965 The Indian government seized the Calcutta branch on the outbreak of hostilities between India and Pakistan.1967 The Tanzanian government nationalized the Dar es Salaam branch.1971 NBP acquired Bank of China's two branches, one in Karachi and one at Chittagong. At separation of East Pakistan NBP lost its branches there. NBP merged with Eastern Mercantile Bank and with Eastern Bank Corporation.1974 The government of Pakistan nationalized NBP. As part of the concomitant consolidation of the banking sector, NBP acquired Bank of Bahawalpur.1977 NBP opened an offshore brain Cairo.1994 NBP amalgamated Mehran Bank.1997 NBP branch in Ashgabat, Turkmenistan commenced operations.2000 NBP opened a representative office in Almaty, Kazakhstan.2001 State Bank of Pakistan and Bank of England agree to allow only 2 Pakistani banks to operate in the UK. NBP and United Bank agreed to merge their operations to form Pakistan International Bank, of which NBP would own 45% and United Bank 55%.2002 Pakistan International Bank renamed itself United National Bank Limited (UNB). The ownership structure of the UNB remained as before. The only change to the shareholding structure is that UNB had recently been privatized in Pakistan and was now owned 49% by the Government of Pakistan and 51% by a joint foreign consortium of Abu Dhabi.NBP needed to redefine its role and shed the public sector bank image, for a modern commercial bank. It has offloaded 23.2 percent share in the stock market, and while it has not been completely privatized like the other three public sector banks, partial privatization has taken place. It is now listed on the Karachi Stock Exchange.

2003 NBP opened its branch in Kabul, and the first ATM in Afghanistan was installed there.2005 NBP closed its offshore branch in Cairo.2010 NBP opened its branch in Karaganda (Kazakhstan.2011 NBP opened its representative office in Toronto (Canada). A number of initiatives have been taken, in terms of institutional restructuring, changes in the field structure, in policies and procedures, in internal control systems with special emphasis on corporate governance, adoption of Capital Adequacy Standards under Basel II framework, in the upgradation of the IT infrastructure and developing the human resources.

National Bank of Pakistan has built an extensive branch network with 1250 branches in Pakistan and operates in major business centre abroad. The Bank has representative offices in Beijing, Tashkent, Chicago and Toronto . It has agency arrangements with more than 3000 correspondent banks worldwide.

The Bank saw significant growth between 2000 and 2006. In 2006, total assets were estimated at PKR 635 billion, while deposits have grown to nearly PKR 502 billion. Pre-tax profit rose to PKR 26 billion. Earnings per share have jumped to PKR 24.01. The increase in profit was achieved through strong growth in core banking income. Interest income increased by PKR 10 billion through growth in the loan portfolio as well as increase in spreads. Advances increased by PKR 48 billion to PKR 316 billion. It ranges from providing credit to the unbanked market segment under NBP Karobar, to small and medium enterprises, to agricultural loans, to large corporate customers.

It has taken various measures to facilitate overseas Pakistanis to send their remittances. In 2002 the Bank signed an agreement with Western Union for expanding the base for documented remittances.

OBJECTIVES OF THE STUDING NBP

The main purpose of the study in hand is together relevant information to compile internship report on National Bank of Pakistan.To observe, analyze and interpret the relevant data competently and in a useful manner. To work practically in an organization. To develop interpersonal communication. Discuss thorough study of National Bank of Pakistan To understand the various operations and to equip with practical

Yes I have achieved the above mentioned objective by the way of practical study at NBP. The NBP has a huge business Volume in the economy of Pakistan. I did not feel any problem through the completion of my internship report for achieving the objective I have mentioned before.

NATURE OF THE ORGANIZATION 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. Additionally, we have recently set up the Financial Institution Wing, which is placed under the Risk Management Group. The role of the Financial Institution Wing is:- To effectively manage NBPs exposure to foreign and domestic correspondence Manage the monetary aspect of NBPs relationship with the correspondents to support trade, treasury and other key business areas, thereby contributing to the banks profitability. Generation of incremental trade-finance business and revenues.

National Bank of Pakistan (the bank) was incorporated in Pakistan under the National Bank of Pakistan Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. Its registered and head office is situated at I.I. Chandigarh Road, Karachi. The bank is engaged in providing commercial banking and related services in Pakistan and overseas. The bank also handles treasury transactions for the Government of Pakistan (GoP) as an agent to the State Bank of Pakistan (SBP). The bank operates 1,254 branches in Pakistan and overseas branches (including the Export Processing Zone branch, Karachi). PRODUCTS OF NATIONAL BANK OF PAKISTANMonthly Income Scheme

Earn up to 11% p.a. + 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 Aasan Banking (for online banking customers) Free NBP Cash Card (ATM+Debit) Running finance facility up to 90%

PLS Saving Account

Earn up to 8.50% p.a. +. Minimum saving balance of Rs. 20,001/- & a maximum balance of Rs. 1 million*. Free NBP Cash Card (ATM + Debit). Convenience of NBP Online Aasan Banking (for online banking customers). Two debit withdrawals allowed in a month & no limit on number of deposit transactions. Profit calculated on monthly and paid on half yearly basis. Home Financing

Home Purchase Home Construction Home Renovation Purchase of Land + Construction Balance Transfer Facility (BTF) Advance SalaryPersonal Loan

Easy installments of 1 to 60 months at your choice. No minimum income, collateral & insurance charges required. Quick processing and fastest disbursement.For permanent employees of Government, Semi Government and Autonomous bodies receiving salaries through NBP

Terms and conditions EligibilityPermanentEmployees of Govt., Semi-Govt., Autonomous, Semi Autonomous, Local & other bodies who are maintaining their Salary A/Cs at NBP.

RepaymentDirect deduction from Salary A/C

Maximum Loan AmountRs. 490,000/-

SecurityEmployer will provideundertakingthat borrowers Salary and end of service benefits will route through his/her Salary A/C maintained at NBP during the tenure of the loan and his/her end of service benefits are at least equal to the amount of Advance Salary required.Hypothecationof Consumer durables owned by the borrower.Three (3) Undated Cheques

Max. Repayment Period5 years (60 months)

Advance in terms of # of net take home salariesUp to 20 net take home salaries

Markup RateSBP Discount Rate + 5%

Processing Fee1% of Loan Amount

Verification ChargesRs 500/-

Life InsuranceNo Insurance of any kind.

Documentation Chargesat actual

ContactYour Salary disbursing NBP Branch.

Remaining ServiceAgeAt the time of approval and disbursement the applicants remaining service age should be 6 months after maturity of the loan

Debt Burden50%

Minimum net take home salaryno minimum take home requirement

ATM + Debit Card

Use it as an ATM in any of the ATMs in Pakistan Use it as Debit Card in any of the outlets with ORIX POS machine Cash withdrawal up to Rs. 20,000/- per day Account Balance Enquiry Mini Statement (Only at NBP ATM) PIN Change facility (Only at NBP ATM)

Financing Facility for Stock Investors

Comfortable environment for trading No security requirement, except for the customers equity Customers equity freely available for investment Equity acceptable in cash or approved shares

Ready Cash Against Gold

Facility of Rs. 20, 000/-against each 10 gms of net weight of Gold Ornaments No maximum limit of cash Repayment after one year Roll over facility No penalty for each repayment

Agriculture Farming Program

Competitive mark-up rate. Provision of technical guidance to farmers at their doorstep. Quick & easy processing. Wide range of financing schemes for farmers. Finance facility up to Rs. 500,000/- for landless farmers on personal guarantee. Financing available against Pass Book, Residential / Commercial property, Gold ornaments and paper security. Loan facility on revolving basis for three years (renewable on yearly basis without obtention of fresh documentation and approval). Product 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 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.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

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 beneficiarys 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 NBPs Foreign Exchange Branches. Click here for details of NBP Foreign Exchange Branches.

Personal Accident Insurance

No documentation No medical required Premium Auto Debit facility & choice of deactivation Coverage includes death due to: Natural Calamities e.g. Earthquake, Flood, Cyclone etc. Accident Riots* Civil Commotion* Strikes* Acts of Terrorism*

Services OF NATIONAL BANK OF PAKISTAN

NBP ONLINE (ASSAN BANKING)

The services from Online Branches located in 30 cities. NBP Online" offers following services: Balance Enquiry Statement of Account Stop payment Cash withdrawal through cheque Cash deposit to own and third party account Transfer of funds to own and third party account

NBP CALL CENTER-WEBSITE INFORMATION

NBP has taken a step towards improving customer services by establishing a state of the art Call Center with a Help Line Toll Free Number 0800-80080 working in two shifts from 8:30 am till 10:30 pm to provide instant service to all the existing & prospective customers on all the NBP products being offered by the bank specially NBP Karobar. Presently, the Call Center is receiving more than 1500 calls per day for resolving customer based product enquiries and complaints.HAJJ MUBARAK SCHEME For the convenience of a person with a limited income who desire to perform Hajj, Hajj Mubarak Scheme is introduced. Moreover, National Bank of Pakistan process the Hajj applications of thousands of people successfully more than any other bank in Pakistan.GOVERNMENT COLLECTIONS

There are number of collection made on behalf of the Govt. National bank of Pakistan collects various types of Chelan form name A-32 for Traffic Chelan, Domicile Chelan, Passport Chelan, Property Chelan etc. The Govt. collection also includes the collection of the Income tax Sales tax and property tax on behalf of FBR. The Public Service Commission Chelan is also collected under the Govt. collection of the bank. UTILITY BILLS COLLECTION

The bank collect the bills in his regular routine work and after the end of day all the bills are totaled and then the vouchers of bills sent to the relative company. The bank charges a specific commission on the utility bills collected by him.

DEMAND DRAFT

The demand draft facility is available to the banks and nonbanks customers. The draft is a secure mean of payment from one city to another & even within the city. The demand draft is easy to handle and convenient to the customers too. These demand drafts are available at very competitive rate. The minimum amount for getting the draft of the bank is Rs.50/-The payment of draft is advised to the concerned branch of the NBP and the rest of the work is done by it.

MAIL TRANSFERS

NBP is offering mail transfer service for the customers who dont want to take the headache of postage of instrument just like in D.D. The bank itself posts the instrument to the corresponding branch and all the risk lays on the banks end. The customer feels more secure himself while using the M.T. service of NBP.

SWIFT SYSTEM:

The SWIFT system (Society for Worldwide Interbank 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-APKKA. All NBP overseas branches and overseas correspondents (over 450) are drawing remittances through SWIFT.SHORT TERM INVESTMENTS

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.

EQUITY INVESTMENTSNBP 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.

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.

TRADE FINANCE OTHER BUSINESS LOANS

AGRICULTURAL FINANCENBP 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 sprinklersFARM 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.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 NBP understands the syndicate partners' asset criteria, it 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. The NBPs syndication capabilities are complemented by its 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 his desktop computer. They will also be able to take advantage of the banks outstanding range of payment, ejection, liquidity and investment services. In fact, with NBP, each customer is provided everything, which takes to manage his cash flow more accurately.TRADE SERVICES

NBP also provide both front office and back office hassle free processing for import and export letters of credit, documentary collections, and reimbursements. Whether importing or exporting, National Bank of Pakistan will provide Global Trade Services to mitigate with the requirements by providing client to client trade solutions in world's major financials hubs worldwide. The bank offers a complete set of services for importers and exporters:

LETTERS OF CREDITNBP is committed to offering its business customers the widest range of options in the area of money transfer.The letter of credit service is very attractive for the commercial enterprises with competitive rates, security, and ease of transactions. NBP Letters of Credit are the best way to do business transactions.The NBP prefer the Liquid securities for the purpose of providing the facility like LC. The DSCs and TDSs are the most liquid securities for this purpose. The fixed securities like home or property is mortgaged by the bank also for this service.LC AdvisingLC ConfirmationExport Bills Collections Services (EBCS) LC Reimbursement

TRADE FINANCINGA/C Receivable discounting Usance Payable at Sight Structure LC Discounting Trade Payment Guarantees LC Refinancing

INTERNATIONAL PAYMENTS AND COLLECTION SERVICES

Documentary Collections ServicesClean CollectionsElectronic Payment ServicesFund Transfer Services

STRUCTURED TRADE FINANCE Risk ParticipationBridge Financing / Project Finan FI Syndication FI Lending

NBP offers their institutional customers a single point of entry of co-ordinate relationship for Trade and Finance. We can anticipate customer needs and draw up tailored solution in close collaboration with the business lines involved.

NBPS SERVICES ENABLE ITS CUSTOMERS TO ENJOY THE FOLLOWING BENEFITS:

NBP speak its customers language Local contacts Faster turnaround time Cost reduction Improving document handling efficiency Quality customer service Local representation Flexible delivery models Professional team. Faster reconciliations

EXPORTER'S NEEDS

For ensuring prompt payment and the delivery of accurate information, NBP can make it simple to finance exports, manage export receivables and monitor export business worldwide.

DOCUMENT PRESENTATION AND PAYMENT SERVICES:

For the purpose of securing the interest of the customers NBPs team of experts can expedite the preparation and presentation of export documentation and accelerate collection of receivables.

PRE AND POSTSHIPMENT FINANCING:

The exporters can sell on both letter of credit and open account payment terms; reduce payment cycles; enhance access to liquidity; and eliminate routine inquiries.

BANKTOBANK REIMBURSEMENTS:

Bank is also serving as reimbursing bank under letters of credit. By using NBP USD account to consolidate letter of credit payments, the customers will enjoy consolidated predebit advices, realtime balance and transaction reporting and overnight investment services for excess balances.

EXPORT BILLS COLLECTION SERVICE :

Combine courier delivery of open receivables letters, payment tracing, tracking, reporting and received funds concentration to quickly deposit the funds due from export receivables into the exporters account while keeping him informed of paid and open items.

IMPORTER'S NEEDS

Companies importing goods need to mitigate crossborder trading risks and increase cash flow and operating efficiencies. NBP can help importers to compete more effectively on a worldwide basis with trade finance solutions tailored to their specific needs as an importer. By offering import related services to customers, delivered by experienced trade team of bank, who will ensure that customer's business is handled efficiently and without delay. Import services include: Documentary credits Import finance Shipping guarantee

NBP SERVICES-ALLIANCE PRODUCTS

WESTERN UNION

The Western Union money transfer facility is the highly credible source for making payment internationally. This is a fast as well as a secure system for making payments. Infact a secret code of 10 digits is provided to the customer of Western Union wishes to transfer the payment from one country to another. The code is entering in the receiving counter of the bank for making the secure payment to actual receivers.SAMBA

The SAMBA money transfer facility is also provided by the National Bank of Pakistan. This is a web base money transfer system, in which money can be transfer from one country to another. A secure system and also regulated heavily by the number of IT specialist. One secret Pin code of 7 digits is provided to the customers who wish to transfer the money from one to another country. The receiver provides the code to the NBP respective officer for receiving the payment through SAMBA money transfer facility.

EXCHANGE COMPANIES

The following Exchange Companies are empowered by NBP to remit from Middle East or their representatives around the globe anywhere in Pakistan or on NBPs overseas network. Oman Exchange Company Alfalah Exchange Lari Exchange UAE Exchange Habib Exchange Company Wall Street Exchange Co. LLC Aldar Exchange Works Dollarco Exchange Company National Exchange Company S Kuwait Asian Int. Exchange

TRAVELERS CHEQUES

NEGOTIABILITY: Pak Rupees Travelers Cheques are a negotiable instrumentVALIDITY: There is no restriction on the period of validityAVAILABILITY: At 700 branches of NBP all over the countryENCASHMENT: At 400 branches of NBPLIMITATION: No limit on purchaseSAFETY:NBP Travelers Cheques are the safest way to carry our moneyPAY ORDER:NBP provides another reason to transfer money. Pay orders are a secure and easy way to move money from one place to another. And, as usual, charges for this service are extremely competitive.INTERNATIONAL BANKING SERVICES

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. Additionally, we have recently set up the Financial Institution Wing, which is placed under the Risk Management Group. The role of the Financial Institution Wing is to effectively manage NBP's exposure to foreign and domestic correspondence 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 MANAGEMENT AND ORGANIZATION OF NBP

Board of Directors Executive Board Chief Executive Divisional Chiefs Provisional Chiefs Circle Executive Zonal Heads Branch Managers

EXECUTIVE BOARDThe 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. CHIEF EXECUTIVEThe 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.DIVISIONAL CHIEFSIn 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)PROVISIONAL CHIEFSIn 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.CIRCLE EXECUTIVEEach commercial bank has a number of circles placed directly under the control and supervision of Chief ExecutiveZONAL HEADSEach 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.BRANCH MANAGERSEach zone of commercial ISLAMI BANKINGNBP is proud to expand its range of products and services to include Shariah Compliant Islamic Banking products, now available at our dedicated Islamic Banking Branches at Karachi, Lahore and Peshawar.ISLAMIC BANKING MISSIONTo become a leading player in the growing field of Islamic Finance in Pakistan and abroad, providing depositors and shareholders in a truly SHARIAH COMPLIANT way, the best combination of returns and future growthISLAMIC BANKING VISIONTo set standards of best practices and performance through efficient asset allocation, and offer / develop products based on the true spirit of Islamic finance.PRODUCTS AND SERVICES AVAIABLE AT ISLAMIC BANKING BRANCHProducts and services being offered by our Islamic Banking Branch are fully Shariah Compliant and have been certified by NBPs Shariah Advisor.DEPOSIT SCHEMESDeposit Schemes being offered by NBPs Islamic Banking Branches would include the following:

Current Deposit Scheme Profit & Loss Sharing (PLS) Deposit Scheme Current Deposit Scheme

Ideal for customers looking for security of their funds along with absolute convenience in its use, in the form of Current accountsFunds deposited with the bank will be utilized by the bank at its sole discretion in Shariah acceptable avenues.The Customer will have the flexibility to withdraw a part or the whole of their balances at any time as per their requirementThis is a non remunerative deposit scheme and thus the customer will not be sharing the profits nor will be sharing losses (if any). However, the Bank may at its absolute discretion give rewards to these Depositors depending upon the operational results of the Bank. Losses will not be passed on to these Depositors.Other terms, conditions and rules for Current Deposit Accounts to be advised by the Bank at the time of opening of Account.Profit & Loss Sharing Deposit (PLS) SchemePLS Saving Deposits Scheme will accept deposits on Mudaraba basis, where the depositor will be Rabb-ul-Mal and Bank will be Mudarib. The Bank will invest the deposited funds at its (Banks) sole discretion in Shariah acceptable avenuesThe Depositor will have the flexibility to withdraw a part or the whole of their balances at any time as per their requirement.The Bank will give profit to the Depositors on the basis of agreed ratio of actual profits to be announced by the Bank from time to time.In the event of financial loss, the PLS depositors will bear the loss in proportion of their investment.The Depositors will not participate in the management of the business of the BankOther terms and conditions as well as rules for PLS Deposit Account to be advised by the Bank at the time of opening of Account.

FINANCING FACILITIESCommercial and Corporate customers requiring financing will have the following financing facilities available to them to meet their requirements:MurabahaMurabaha may be defined as a contract between a Buyer and Seller under which the Seller discloses to the Buyer the cost of goods being sold and adds an agreed profit. Price is payable on spot or at a certain future date, in lump sum or in installments (deferred payments).Murabaha FacilityUnder the MURABAHA FACILITY, the Bank will first purchase the required goods directly or through an Agent. All costs incurred on such purchases will be borne by the Bank.Subsequently the Bank will sell the goods to the customer on deferred payment basis (30 days to one year) at an agreed price comprising cost of goods purchased and Bank's profit.On due date the customer will pay to the Bank the agreed price, in lump sum or as per the agreed installment schedule.Ijarah (Leasing)Ijarah means to give something on rent.The term IJARAH is analogous to the English term leasing.Firstly the Bank will purchase the Assets as required by the Customer and subsequently the assets will be leased to the Customer on the terms and conditions as agreed with him.Ijarah Facility will be offered for the following assets:Vehicles (both Commercial and Private)Office EquipmentPlant and Machinery

OTHER FACILITIES In addition to Shariah acceptable standard general banking services, following services are also being offered at the Islamic Banking Branch : Letter of Credit Facility Handling of Remittances Issuance of Bank Drafts and Pay Orders. Collection of Export Bills. Collection of Local Bills. Government Collections Utility Bills Collection

DEPARTMENTATION OF NBP Cash Department Deposit Department Clearing Department Advances and Credit Department Remittance Department

CASH DEPARTMENT CThis is very important department because cash is the most liquid asset and mostly frauds are made in this department, therefore, extra care is taken in this department and nobody 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.The following books are maintained in the cash department:- Receiving Cash Books Token Book Paying Cash Book Scroll Books Cash Balance BookWhen 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. DEPOSIT DEPARTMENT: - Bank 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. ACCOUNT OPENING The opening of an account is the establishment of banker customer relationship. The banker should determine the prospective customers integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. Preliminary investigation is necessary because of the following reasons. Avoiding frauds Safe guard against unintended over draft. Negligence. . Inquiries about clients. TYPES OF DEPOSITS

Deposits 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: Time Deposits Demand DepositsAnd on the basis of the cost of acquire these funds, a deposit can be classified as any one of the following four: High Cost Medium Cost Low Cost No CostBank 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:FIXED DEPOSITSIn 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.SHORT NOTICE TERM DEPOSITThis 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.CALL DEPOSITCall Deposits are the sorts of deposits, which are deposited with the banker against any tender. This is without interest deposit, this may be with interest provided with the depositor has agreed to keep this amount with the banker for some fixed period.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.

MONTHLY INCOME SCHEMENational 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 schemeCURRENT 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/- otherwise 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.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.5000/- If the balance in the account falls below the minimum requirement then a flat charge of Rs.50/- is made in the account once in a half year. Zakat and other withholding taxes are deducted as per rules of the government.CLEARING DEPARTMENT Every banker acts both as a paying as well as a collecting banker. It is however an important function of crossed cheques. A large part of this work is carried out through the bankers clearing house. A clearing house is a place where representatives of all the banks of a city get together and settle the receipts and payments of cheques drawn on each other bank. As the collecting banker runs the certain risks in receipt of their ownership, the law has provided certain protections to the banks.The bank uses outward clearing register for the purpose of recording all the details of the cheques that the bank has delivered to other banks. ADVANCES DEPARTMENT Advances department is one of the most sensitive and important departments of the bank. The major portion of the profit is earned through this department. The job of this department is to make proposals about the loans. The Credit Management Division of Head Office directly controls all the advances. As we known bank is a profit seeking institution. It attracts surplus balances from the customers at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms. Credit extensions are the most important activity of all financial institutions, because it is the main source of earning. Any individual or company, who wants loan from NBP, first of all has to undergo the filling of a prescribed form, which provides the following information to the banker. Name and address of the borrower. Existing financial position of a borrower at a particular branch. Accounts details of other banks (if any). Security against loan. Exiting financial position of the company. (Balance Sheet & Income Statement). Signing a promissory note is also a requirement of lending, through this note borrower promise that he will be responsible to pay the certain amount of money with interest.

PRINCIPLES OF ADVANCES There are five principles, which must be duly observed while advancing money to the borrowers. Safety Liquidity Dispersal Remuneration Suitability COMMON SECURITIES FOR THE BANKERS ADVANCES 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 actual or constructive possession remains with the creditors, though he has no right to sell it.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.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.HYPOTHICATION (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 bankers charge on the hypothecated goods.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

In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the form of cash finance, overdrafts and loans. NBP provides advances to different people in different ways as the case demand. These Cash Finance Running Finance(Overdraft) Demand Finance(Ordinary Loans) Small Finance Finance against Bills Agriculture Loans

CASH FINANCE This is a very common form of borrowing by commercial and industrial concerns and is made available either against pledge or hypothecation of goods, produce or merchandise. In cash finance a borrower is allowed to borrow money from the banker up to a certain limit, either at once or as and when required. The borrower prefers this form of lending due to the facility of paying markup/services charges only on the amount he actually utilizes. If the borrower does not utilize the full limit, the banker has to lose return on the un-utilized amount. In order to offset this loss, the banker may provide for a suitable clause in the cash finance agreement, according to which the borrower has to pay markup/service charges on at least on self or one quarter of the amount of cash finance limit allowed to him even when he does not utilize that amount. These types of loans are given against the following: Against locally manufactured goods Cash finance against rice and paddyAgainst pledge Against commodities Besides advances against the above commodities bank may be approached by parties for advances against other commodities like tobacco, oil, etc. Against Trust Receipts

OVERDRAFT/RUNNING FINANCE When a borrower requires temporary accommodation his banker allows withdrawals on his account in excess of the balance, which the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is generally allowed against collateral securities. When it is against collateral securities it is called Secured Overdraft and when the borrowing customer cannot offer any collateral security except his personal security, the accommodation is called a Clean Overdraft. The borrowing customer is in an advantageous position in an overdraft, because he has to pay service charges only on the balance outstanding against him. The main difference between a cash finance and overdraft lies in the fact that cash finance is a bank finance used for long term by commercial and industrial concern on regular basis, while an overdraft is a temporary accommodation occasionally resorted to. DEMAND FINANCING/LOANS When a customer borrows from a banker a fixed amount repayable either in periodic installments or in lump sum at a fixed future time, it is called a loan. When bankers allow loans to their customers against collateral securities they are called secured loans and when no collateral security is taken they are called clean loans. The amount of loan is placed at the borrowers disposal in lump sum for the period agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a fixed amount of money for his use, while the banker feels satisfied in lending money in fixed amounts for definite short periods against a satisfactory security SMALL LOANSLoans are allowed to contractors clearing and forwarding agents. These loans are repayable within a year.FINANCE AGAINST BILLSThe advances are allowed both on local and foreign bills such as: Bill of Exchange and Invoices Bill of Lading

AGRICULTURE LOANSAgriculture loans are given to the farmers with holding up to 25 acres for meeting their short medium and long term production requirements such as: Agriculture inputs Tractors instruments Tube wells .Live stock farming Land Improvements REMITTANCE DEPARTMENT Remittance means a sum of money sent in payment for something. This department deals with either the transfer of money from one bank to other bank or from one branch to another branch for their customers. NBP offers the following forms of remittances. Demand Draft Telegraphic Transfer Pay Order Mail Transfer

HUMAN RESOURCE MANAGEMENT Human Resource plays a vital role in the success of every service organization. They interact between man and machine. Their attitude can win or lose the customer. The positive attitude could only be created in a conducive environment, which can make the staff dedicated towards the organization and its objectives. In reality the man is more important than machine as it is the human which could get maximum out of machine to keep a happy customer. However, most organizations give little importance to this very important asset. Various aspects related to human resource of National Bank of Pakistan are critically examined in the following text:

SELECTION & RECRUITMENT Although the Bank believes in merit but in practice the selection of employees is not done on merit. Most of the employees are low educated. This shows that candidates with some strong family background or political pressure are given preference in recruitment and qualified candidates are sometimes left behind. JOB FOR LIFE Like the employee of public sector organizations in Pakistan, the employees of NBP also enjoy their job for life. Since there is no risk of early retirement or redundancy in rank, they do not perform with their full potentials. This is one redundancy in rank, they do not perform with their full potentials, and this is one of the reasons responsible for the low productivity of the employees of the Bank. PERFORMANCE APPRAISAL The performance of employees of the Bank are appraised though their annual confidential reports at the end of each year. This has become an outdated method of performance appraisal and no longer used due to the following reasons: 1. The dominant trend in all modern industrial societies of the world is merit and expertise, which helps promote cohesion and reduce conflicts. But the feudalistic mindset is still very strong in set up of NBP and there is no tradition of tolerance for differing viewpoints. Hence, interpersonal conflicts are generated. CORRUPTION Our social acceptance of corruption gives rise to corruption at every level of social and organizational set up. Corruption involves financial embezzlement, favoritism, nepotism, and other number of such practices. All these cause resentment that keep building up and lead to conflict sooner or later. In the past few years, some cases of frauds have happened in different branches. The reasons can be linked with the employee dissatisfaction of NBP. DISCIPLINE & AUTHORITY Maintaining discipline and implementation of authority (tables) in letter and spirit is the key to success of any organization. In NBP, The authority tables are not strictly maintained. Line managers are not fully equipped with the authority with no vertical or horizontal interference.

FOREIGN EXCHANGE/DEPARTMENT: This department mainly deals with the foreign business. The main functions of this department are: DEALING NBP is committed to offering its business customers the widest range of options in the area of money transfer. For a commercial enterprise the Letter of Credit service is just what is required by him. With competitive rates, security, and ease of transaction, NBP Letters of Credit are the best way to do business transactions. FOREIGN CURRENCY ACCOUNT DEALING: NBP launched this to attract deposits in foreign currencies like US Dollars, Pound Sterling, Euro and Japanese-Yen. NBP invites a resident or a non-resident of Pakistan all to operate in a foreign currency account.STRUCTURE & FUNCTIONS OF ACCOUNT / FINANCE The basic objective of Accounts Department is to keep records of financial transactions in an accurate, transparent and time-bound manner. Accounts Department is also responsible for preparing accounts of the Bank on monthly basis and yearly basis which are also placed before the Banks in its meeting. The mission of preparation of monthly accounts is to enable one to know the financial position of the NBP on a particular date. The Accounts Department is also responsible to provide qualified Accountants in various departments of the Bank and impart them practical training from time to time as well as to conduct refresher courses so that they are kept well informed with the latest developments in the systematic accounting procedures.

The main duties performed by the officers of Accounts Departments and various accounting units of Bank are as follows:- To record/get recorded initial entries of all financial transactions in the initial books of record and to ensure their proper maintenance. Preparation and submission of monthly Accounts Preparation and submission of monthly progress reports of works-in-progress/targets.To reconcile inter-divisional/ departmental monthly/quarterly Accounts and adjustment of differences. To control the budgets and maintain the Accounts books of records for budgetary control.To prepare the annual budget estimates/revised estimates of the division/section. To maintain Objection Book of Accountants. To maintain the Voucher Registers and all the monthly vouchers properly. To pass all the bills of expenditure after proper scrutiny and exercising all the checks. Any other work specially assigned by the Divisional Officer or the higher authorities.

The accounts department of NBP performs the following functions:- Providing financial data for management reporting conducting surveys for major schemes, interpret financial statements participate in all capital expenditure, rating/pricing decisions and Conducting inspections.

Duties: - The work of the accounts office falls mainly under the following divisions:- Administration, Booking and Compilation, Budget, Cash and Pay, Compensation Claims, Establishment Accounts,

Finance and Planning, Inspection (Executive and Accounts Offices),

Usually accounts are maintained in two ways Journal System Vouchers System

Types of Supplementary: Debit supplementary Credit supplementary

General Ledger:Statement of daily affairsCash Book or Cash cum Day BookTransfer book

Income and Expenditure Ledger etc. Income Includes: Discount Service charges Rent (on building) Commission (from utility services) Brokerage (A bank sells and buys share, stock, debentures, other securities and receives payment for these services.)

Expenditure Includes: Salaries, allowances and provident fund Rent, taxes, insurance, lighting etc Profit paid on deposits and borrowing Stationary, printing and advertisement charges etc Auditors fee and legal charges.

THE ROLE OF FINANCIAL MANAGERS A Financial Manager is the one who communicates organizational vision to the employees of the organization. He should ensure that there is effective communication flow in an organization and that there should no misinterpretations taking place. Financial Manager create and learn how the importance of law of cash and decision making in organization. Financial Managers identify the relationship between them and their employees; they also play an important role in value of the efforts of their employees. Financial Managers use the information elements to support the decision making made by their employees so as to improve the safety and healthy working conditions in the company.They also ensure that resources are applied to those activities that return the great benefit and provide the highest value to the customers. Financial Managers participate on cost of products which the organization produces to give an understandable price to its products. Such products, the Financial Managers must witness the processing and the activities such as labor, materials are accumulated to become unity to help healthy working conditions. In order for managers to achieve a successful organization, he/she should follow the following objectives; lead, change, create a shared need, shape a vision, mobilize a commitment, monitor progress and change systems and structures. Financial Managers engage with employees to pursuit of joint goals of an organization as leaders give a specific action in a relationship of a mutual stimulation and elevation that raises the level of employee conduct. Financial Managers must transform a mechanism that promotes a two way communication and the exchange of information and ideas. Financial Managers must establish and make a commitment with fellow employees on an ongoing basis that leaders play the major role in maintaining and nurturing their relationship with employees by giving them their wants, needs and other motivations to create and maintain a healthy organizational culture.

Financial Managers in organization change some needs as to achieve a higher level of employee performance, this changes are the management practices, safety culture of organization, workforce deployment and work design. Financial Managers must make sure that workers implement the act of the organization so as to the productivity performance creates a healthy working condition. Financial Managers are there to supervise the workers to achieve the organizational goals.The Financial Manager of NBP thought that Gone are the days when firms confined themselves solely to running their business without a thought for the society in which they existed. According to him every big or small organization is expected to make its contribution towards a better quality of life for the entire society. Big companies are having their own philanthropy or trust to help needy people.His role is to achieve effective utilization of available resources of the branch. He is achieving it through coordinated human efforts. He is playing to achieving organizational objectives. He is responsible for aligning the individual's objectives with the organizational objectives. This is very essential for achieving long-term organizational success. He has to decide how to bring and communicate organizational changes. He plays a major role in setting organizational goals. He has to be in close contact with the employees of the organization. He understands them and motivates them. He uses to encourage them so that they can perform effectively. He praises them when they show brilliant performance and on bad performance, he gives them constructive feedback rather than negative feedback. He provides them online support and coaching.He resolves conflicts among the employees and tries to reach at an acceptable solution. This defiantly improves employees work quality as well as performance. Thus, Financial Managers role is very important so as to improve employees productivity as well as organization's productivity. He understands that organizational success depends on employees. Thus the more satisfied and happy the employees are the more success the organization will show. He is also very committed to his work so as to set an example for his subordinates.He is also discharging his responsibility towards the government is in the matter of paying regularly and fairly all taxes, dues and duties.The recent raids on large industrial groups are an attempt on the part of the government to unearth unpaid taxes and undeclared assets. A manager who acts in a responsible manner will be ensuring that his firm never has to face such a situation. He always strives to make firm a model corporate citizen.Other firms within the banking industry are competitors in the market place but are the associates of NBP when has to lobby for or represent and an industry and not as individual firms. Most industries have their own associations at the local, regional, national and international level. The objectives of organizing such bodies are to protect and promote the interests of the industry, seek concessions from government and represent against any discrimination, and provide a forum for sharing and disseminating information on the latest technological and market trends. USES OF ECLECTRONIC DATA IN DECISION MAKINGIn modern management usage, one can easily discern a trend away from the term 'data' in composite expressions to the term information or even knowledge when talking in non-technical context. Thus there exists not only data management, but also information management and knowledge management. This is a fairly detrimental tendency in that it obscures the fact that is usually always plain, traditional data that is managed or somehow processed on second looks. The extremely relevant distinction between data and derived values can be seen in the information ladder. While data can exist as such, 'information' and 'knowledge' are always in the "eye" (or rather the brain) of the beholder and can only be measured in relative units.

There is lack of use of electronic data in decision making being an operational branch of the bank all the decision make by higher officers i.e., Regional Office or Head Office and this branch only act upon on the order received from higher command.

SOFTWARES USED BY THE NBP The NBP mainly use only three types of softwares named EBS (Electronic Banking System) BBO (Branch Backup Operating) MS Office

The both softwares are used for operating the day to day working of the organization. The EBS (Electronic Banking System) is used in the organizations where there is huge capacity to get it online branch. The EBS performs the main role in handling the working or branches where it is installed. Each and every transaction relating to banks operation is made on it. The matters of ATMs are also dealt with this software. The day to day transaction as to the receiving of cash, payment of cash, issuance of Demand Draft, Issuance of Payments orders, Disbursement of Loan, Opening of new account, Handling the old accounts, Pension Funds, Dealing expenditure accounts, Handling various types of deposits, marking the stop payments of cheques, marking lien on any account for stopping its further operations, all is done through EBS software also used by the NBP .The other type of software named BBO (Branch Backup Operating system) is used the branched which are not online branches of NBP. The some of the online branches also used it for reducing the burden of their working on EBS. The NBP where I got the training and prepare all of my report also uses this BBO. The main purpose of BBO is to deal with the day to day working of the bank. But its a supplementary for NBP Civil .The main working of the Branch is done through EBS (as already explained) but assisting work is done on BBO. The branch uses it for preparing demand drafts advices, payments of Pay Orders, issuance and payment of Mails Transfer etc.The 3rd type of software being used by the NBP Civil Lines Branch is Microsoft Office. The very common two softwares are used by the Branch named, MS Word, & MS Excel. Both of the softwares are used to prepare different types of reports. The MS Word is also used for drafting letters of correspondence. The MS Excel is mainly used for preparing reports required time to time by the Regional Office as well as the Head Office of the bank.REPORTS, PRODUCED FOR MANAGEMENT USEThere are different types of report being used for management use through different softwares are as follow:-LOANS REPORTSThere are different types of loans reports are prepared by the band by using the available softwares. These reports show the figures of the loan amount of the bank which are being issued / recover, to / from debtors. These reports are prepared weekly, monthly, quarterly, half yearly and annually. These reports are directly sent to Regional Office or Head Office, who utilize it for further decision making.DELINQUENCY REPORTS OF THE LOANSThe delinquency reports are prepared on daily basis. These reports are prepared by the Collection / Recovery department of NBP. The main purpose of preparing these types of reports is to trace out the defaulters of NBP. The persons which are not making payment of their loan are tracked through these reports.PAK RUPEES DEPOSITS REPORTS Pak Rupees deposits reports are prepared for acknowledging the position of the deposits of the branch. The deposits of the branch are handled periodically through these reports. The actual position of the deposits of the branch is measured.FOREIGN CURRENCY DEPOSIT REPORTSForeign currency deposits reports are prepared for acknowledging the position of the deposits of the branch. The deposits of the branch are handled periodically through these reports. The actual position of the deposits of the branch is measured.STATEMENT OF COLLATERALSThese statements measure the amount of the collateral available with the bank. This amount of the collateral is utilized when estimating the true amount of the securities available for adjusting any loan.HYPOTHECATIONS REPORTSHypothecations reports are important with the point of view of reporting to the higher management as to tell them the securities available by the bank to handle any the issued loan. These hypothecation reports work when estimation the shortage or shortfall in the goods is estimated.PLEDGED REPORTSPledged reports are basically prepared by t he MUCADAMs. These are the companies recruited by the Head Office to handle the pledges of the bank in the Godowns. These companies report to the bank on daily basis the position of the pledged stock. The bank further delivers this information to the Regional Office & Head office for further actions.LIABILITYR STATEMENTSThese statements are prepared by the banks internal officials (the Administration Department) who handle the loans of the Employees of the bank. The liability statement is one in which the amount of all loan is described. There are different loans named Car Finance, Home Finance, Computer Loan etc given to the employees of bank.INWARD REMITTANCES REPOTSThe foreign inward remittances are measured through prepared these statements. The inward remittances measured in different currencies as well as in Pak rupees.OUTWARD REMITTANCES REPORTSThe foreign outward remittances are measured through prepared these statements. The outward remittances measured in different currencies as well as in Pak rupees.ORGANIZATIONAL ANALYSISThe organizational analyses of NBP are mainly concern here with the analysis of the bank with the whole industry and somehow I have compared the National bank with other competitors in the market. There are also some specialized banks in the industry with whom it was necessary to compare NBP for showing the position of the bank.

INDUSTRY ANALYSISBanking is one of the most sensitive businesses all over the world. Banks play very important role in the economy of a country and Pakistan is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance. It is purchase of car or building of home banks is always there to serve you better. It is play ground or any educational or healthy societal activities the money of banks nurtures them. It is an industrial project or agricultural development of the country the sponsor-ship of banks is very much involved. Banks play very positive and important role in the overall economic development of the country. Pakistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it had acquired a flourishing banking sector.COMPARATIVE STUDY OF DOMESTIC BANKING INDUSTRY Nationalization of banks in the seventies was a major upset to domestic banking industry of the country, which changed the whole complexion of the banking industry. With irrational decision at the top all the commercial banks were made subservient to the political leadership and the bureaucracy. Specialized banking institutions were already working in the public sector. The new accountability paradigm changed the business ethics in the banking industry, and with this change started the disaster. Nationalization of banking industry was accompanied by violent changes in the external value of rupee. The commercial banks thus lost their assets management equilibrium, initiative and growth momentum. They ceased to be a business concern and became big bureaucracies. This was accompanied by indiscreet loaning under political pressure. They suffered from three terminal diseases: non-performing loans; higher intermediation cost; and loss of initiative and entrepreneurship. The rise to Labor Unions and Officers Associations made life tough and working conditions ugly to honest, dedicated and industrious workers in the realms of domestic banking industry. The era of nineties was the climax of privatization, deregulation and restructuring in the domestic banking industry and financial institutions. The Muslim Commercial Bank was the first bank to privatize. Followed by Allied Bank limited, United Bank Limited and now the Habib Bank Limited have been privatized. One thing good for that particular period was the recruitment of fresh officers in the domestic banking industry through well-organized policies of Banking Council. With the decay of Banking Council there was flood of insincere, nonprofessional, incompetent candidates directly appointed/ recruited in all the domestic banks of the country. Public Sector Commercial Banks National Bank of PakistanNBP First Women Bank LimitedFWB The Bank of KhyberKB The Bank of PunjabBOP The government of Pakistan permitted small private sector banks to operate, which indulged in doubtful policies to promote business. The public sector banking, which constituted the backbone, thus continued to suffer because of their approach, size and carried over liabilities. Mehran Bank is the prime example of that kind of lax banking in the country, which ultimately merged into National bank of Pakistan i.e. last resort of domestic banking industry. LOCAL PRIVATE BANKS Askari Commercial Bank LimitedBank Al-Falah Limited Bank Al Habib LimitedBolan Bank Limited Faysal Bank LimitedMetropolitan Bank Limited Platinum Commercial Bank LtdPrime Commercial Bank Limited Saudi Pak Commercial Bank LtdPICIC Commercial Bank Limited Soneri Bank LimitedUnion Bank Limited Muslim Commercial Bank LimitedAllied Bank of Pakistan Union Bank LimitedMashreq Bank

In the meanwhile, western banks started entering into the business. They, with the support of ruling elite, concentrated on the big business, leaving the routine business to the local banks. This reduced the profitability of the local banks.

FOREIGN BANKS ABN Amro BankAl Baraka Islamic Bank American ExpressThe Bank of Tokyo Mitsubishi CITI BankCredit Agricole Indo Suez Deutsche BankDoha Bank Emirates BankHabib Bank A. G. Zurich Hong Kong Shangai Banking CorporationIFIC Mashreq Bank PJSCOman Bank Rupali BankStandard Chartered Bank

SPECIALIZED BANKS Zari Tarqiati Bank Ltd. Industrial Development Bank of Pakistan Punjab Provincial Cooperative Bank Limited

FUTURE OUTLOOKThe reduction in the interest rate environment will overall have a negative impact on the financial sector's profitability in the short term. To meet these challenges we will focus on building our loan portfolio, both on corporate and retail side. On the retail side focus will be on additional fee business while maintaining stringent controls over cost. Longer term we will be focusing on those sectors in the country, which have traditionally received less attention from the financial sector, i.e. agriculture, small and medium enterprises and of the entire range of retail products. Our key strength remains our customer base of over 9 million and we are confident that we are positioned to capitalize on the opportunities.WEAKNESSESLack of Implementation of Rules and Regulations because NBP is a govt. owned organization so there is a lack of implementation of rules and regulations.

Lack Of Communication Between EmployeesDuring the internship in NBP Civil Lines Branch Gujranwala I found the problem of lack of communication between the employees and management. They have not very much understanding with each other and not share the work of each other.Public dealing is not very effective:Public respect is not very effective in NBP. Employees are not taking care of the customers, especially in pension and bills department. Staff Shortage:There is also weak point for NBP that staff is very short and more staff is required to meet the needs of the branch work. They help from internees. Lack Of Respect Of Seniors:They are not a healthy sign for NBP that respect of seniors is not up to the manners. Juniors try to avoid the seniors and no take the help from them.Poor Working ConditionsDespite, cultural change program the working condition of the NBP is not up to standard.Irregularities In PromotionIn NBP there is no smooth and continuous promotion system. Unfair means are used in order to get the promotion especially the promotion of the managers.

Individual DifferenceIn NBP the individual difference have strong impact on the organizations performance due to the wrong criteria of selection of the employees. So with the passage of time individual differences are increasing which are undermining the good will of the organization.Lack Of Modern EquipmentThe bank lacks the modern Equipment that is note counting machine computers. Even if there is any equipment they lack to fall in the criteria of being rearmed as update and upgraded. Lack Of Marketing Effort:The bank does not promote its corporate image, services, etc on a competitive way. Hence lacks far behind in marketing effort .A need for aggressive marketing in there in the era marketing in now becoming a part of every organization.Inefficient Counter Services In The Rush HoursDuring the rush hours, the bank is founded out to be a total flop to handle the mob of people peaking from windows and doors. The bank has deficiency to operate in the stages of rush hours where the people find them services entangled in a situation of nowhere because they are not well served.CONCLUSION I have studied and analyzed NBP I found out that this a good bank as for as its working and management is concerned. National Bank of Pakistan is one of the oldest and biggest banks of Pakistan.Internship at National Bank of Pakistan has been an excellent experience for me due to its large operations and due to number of fields of activities, and more importantly culture of the organization, attitude of management, staff, and workers.Environment of the Bank is very suitable for Internship as well as from job perspective as management is very sincere with its employees and worker.The management of NBP is presently taking significant strategic steps to enable the bank to emerge as a strong and progressive institutionI noted that NBP is providing their customers with wide range of services including online banking, phone banking and some of their new products in the pipeline; include ATM network etc shows that NBP is taking good care of their customers.According to my judgments NBP has made heavy investments, towards enhancing its capabilities in the area of automation and technology. NBP is well positioned to meet client needs, with improved competitive advantage. From the analysis of this year I concluded that in 2008 profits are less than the previous years. So I can say that NBP has to perform very well.Because NBP is a govt. owned organization so there is a lack of implementation of rules and regulations.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. RECOMMENDATIONS & SUGGETIONSNBP is an effectively operating and profit making organization and carrying out its activities under a specified system of procedure. The main regulatory body is State Bank of Pakistan, which provides policy guidelines and ensures that the money market operates on sound professional basis. While the head office specifies the whole procedure of function and operations. This procedure has been modernized with the passage of time with a view to streamline the approach and underlying procedure for effective overhauling of its own capabilities so as to bring them at par with international practices.Here I am giving some suggestions, which in my view can add some input for efficiency and better performance of NBP as an organization in general and Main Branch of the City in particular.

THE RECOMMENDATIONS ARE AS FOLLOWS:

Professional TrainingNBP staff lacks professionalism. They lack the necessary training to do the job efficiently and properly. Although staff colleges in all major cities but they are not performing well. For this purpose these staff colleges should be reorganized and their syllabus should be made in such a way to help the employee understand the ever-changing global economic scenario. Banking council of Pakistan should also initiate some programs to equip the staff with much needed professional training.Delegation Of AuthorityEmployees of the bank should be given a task and authority and they should be asked for their responsibility.Performance AppraisalThe manager should strictly monitor the performance of every staff member. All of them should be awarded according to their performance and result in the shape of bonuses to motivated and incite them to work more efficiently.To Over Come Problem Of Space And FurnitureIn the critical analysis this, problem is discussed. To overcome this problem it is suggested that a special section should be made inside the branch. Which should only handle the treasury function, salaries and pensions of federal personnel or the bank should do these functions in the evening time. Also management should purchase more furniture and arrange them in such a way which provides maximum space and convenient especially in deposit department and there should also be convenient sitting place for customers.TransferTransfer is not properly carried out. Some of the employees are continually serving at the same post. They are simply rotated at the same branch. Therefore it is recommended that evenly rotation of every employee should take place after every three years in different branches of the bank.

Changes In PoliciesThere should not be any abrupt policies change by the upper management, as this practice hurts the customer confidences in the bank. Government should make long-term policies

Need Of Qualified StaffRequired, qualified staff should be provided to branch in order to improve the functioning of the branch. Especially a telephone operator should be appointed.Credit CardNational bank of Pakistan should start its operation in credit card. These cards are very helpful for the ordinary customer in general and the business people in particular. To make it more secure and to eliminate the misuse of it, the management is required to keep proper security against the card.Clean LoansClean loan or clean overdraft is the credit facility extended to the customers to the customers without any security. These types of small term loans should not be extended to anybody, because sometime these loans are provided to blue-eyed people of the management and they become a part of bad debts.Cash FinancingIn this mode of financing the amount of credit not utilized by the borrower is remained tax-free. It is recommended that a small amount of interest should be charge on this amount as well because the bank gas kept-aside the amount for that borrower and cannot advance it anywhere.Needs To Be Flexible In Credit PolicyAs mentioned earlier, NBP is very conservative in advances and loans policy. It reduces the investment opportunities. Also loans should be given to the small businessmen and the agriculture sector at the low markup rate. It should adopt flexible credit policy while giving credit to the agriculture sector.Technological AdvancementI would like to suggest that at least all the main branches of NBP should be fully computerized in order to expedite the dealing process among bankers and their customers. Every department should be provided a computer with adequate training (especially Advances, Deposits and Foreign Exchange departments). Daily records should be entered directly into these computers, (instead entering the overall daily transactions after the banking hours). It will not only reduce transaction time, will increase accuracy but will also be efficient as well. Not only it will be economical but will also reduce the extra burden of work of the bank. It will also help in reducing the use of excessive paper work.

Staff RelationshipGood relationship among staff member leads to the peak performances in any organization. I observed that the staff relationship was normal otherwise but some time I noticed that there existed a little conformity among the staff members. Another syndrome from which the staff suffered was that all of them considered themselves more important than others. Some of the officers used to say that if I am absent for a day the bank would stop working. So this sort of attitude is not good because it mars bank image and juniors willingness learn and work hard and in the end will hurt the whole team.Proper Distribution Of WorkProper distribution work leads to success in every organization. Proper distribution of work prevents the employee from over and under work situation. So for a smooth running of an organization proper distribution of work is the hint to be followed.During my internship I observed that there was no proper distribution of work in the bank. I saw that some of the employee worked like ants other sat idle starting here and there. So this created a lot of over work situation for while relaxation for other.Favoritism And NepotismIn Civil Lines branch during my internship I saw that when some of the employees are transfer to other places, due to their relation with influential people and with top management they can cancel their transfer in few weeks, when they are unsatisfied at that place.So I suggest that in the organization there should be no favoritism, nepotism and politics and their transfer and promotion should be made on merit and according to the rules and regulations of the bank and provided favorable environment to the employee to show their performances.Marketing PolicyThe branch should adopt various marketing strategy and promotion strategy to promote the bank and its product. The most important in my opinion is personal marketing; it is the most effective of all when you think in term of branch level. But on the whole organization level, they should arrange the seminar within the bank and outside the bank. They should introduce various prizing schemes just like Allied Bank. Karamad Scheme, Bank Al-Falah (monthly income earning scheme) and various others. They should do more advertising through newspaper and media and through channel of personal contacts.Complaints Of CustomerThere should be an information desk to provide the information and to receive the complaints of the customer in the bank. There is no complaint box available in the branch and not any person appointed to hear the complaints. Every person cannot go to the manager for the complaint because most of the people are hesitant. So I suggest management to install a compliant box in the branch, and recruit a special person for that guidance of the customer when they are unable to manage some difficulties in banking matters. Credit Monitoring The credit department of the bank should carries out vigilant credit monitoring. They should ensure the proper payment of installments and the mark-up by the borrower. The staff members who have done all the paper work of the loan extension should perform the monitoring, as he/she will be having more information about the borrower.Extended Banking HoursSome of the business community due to law and order situation are now reluctant to keep the fund in their premises and would want to depart with it. Therefore, Civil Lines Branch may extend the night banking to cater to demand of this business community. The branch could also be opened to cater the requirements of this business community limited staff.Avoiding Bad Debts

Great care should be taking while extending the loan. Loans should be awarded against reasonable securities, where market value should be equal to the loan granted. Policies should be crafted in a way to ensure that no loan is extended on political pressure. SBP regulation for loan approval should be strictly followed. According to which the current ration of borrowers business must be 1:1 and the debt to equity ratio should be 60:40, means the liquidity position of business should be healthy.

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