Internship Report on NBP
Title
INTERNSHIP REPORT
ON
NATIONAL BANK OF PAKISTAN
SUBMITTED TO:
Prof. Dr. Liaqat Ali
SUBMITTED BY:
Hassama Saeed
Roll no:148
Section:B
8th Semester
B.com hons
Session:2007-2011
Hailey College of Commerce
University Of the Punjab
Lahore
Date: 16.09.2011
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Internship Report on NBP
Transmittal Letter:
September 16, 2011
Prof. Abdul Jabbar
Hailey College of Commerce
University of the Punjab Lahore
Dear SIR,
I am submitting to you the report, due September 16, 2011, that you requested.
The report is entitled NATIONAL BANK OF PAKISTAN. The purpose of the
report is to inform you about the financial functioning of NBP. The content of this
report concentrates on the financial functions of the credit department, Foreign
Exchange department, General banking department and Administration
department of NBP. If you have any questions concerning my report kindly ask
me.
Sincerely
Hassama Saeed
Roll no. 148
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Internship Report on NBP
Acknowledgment
All praise to Almighty Allah, the most merciful and compassionate, who give me
Skills and abilities to complete this report successfully.
Secondly, I am grateful to my parents who are always been a source of
encouragement for me throughout my life. I can never give the return of their untired struggle for me, but I can only prove myself as they expect from me. And I
am also grateful to all other family members and all my friends for their moral
boosting and spiritual support during my study and especially in the internship
period.
I am grateful to Hailey College of Commerce that made this learning
opportunity a part of our education. I am also grateful to all the Teachers of
Hailey College of Commerce, who taught us whole-heartedly and shared great
knowledge with us. Because of their teaching I didn’t face any problems during
my Internship period, they told us how to co-ordinate, co-operate, and how to
interact with other peoples in practical life.
I am grateful to all the staff members of NBP, branch manager and operational
manager and other staff members. They were all very co-operative, kind and
affectionate. They taught us about practical application of our studies.
I express my great gratitude to my kindhearted Supervisor Sir Abdul Jabbar who
was the Person who made me able to write this report, His enthusiasm shows
the way forward to me to achieve this success and who kept me in high spirit
through his appreciation.
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Internship Report on NBP
TABLE OF CONTENTS
LETTER OF TRANSMITTAL………………………………………………………… 2
EXECUTIVE SUMMARY……………………………………………………………… 5
INTRODUCTION/HISTORY………………………………………………………….. 8
MISSION STATEMENT……………………………………………………………… 14
OBJECTIVES…………………………………………………………………………. 17
ORGANIZATIONAL STRUCTURE………………………………………………… 23
RATIO ANALYSIS……………………………………………………………………. 24
WORKING AS INTERNEE…………………………………………………………... 27
GENERAL BANKING………………………………………………………………... 27
FOREIGN TRADE …………………………………………………………………… 46
ACCOUNTS DEPARTEMENT……………………………………………...……… 56
CREDIT ADMINISTRATION………………………………………………………... 60
ADMINISTRATION DEPARTEMENT…………………………………………...… 68
ACHIVEMENTS...…………………………………………………………………….. 73
SWOT ANALYSIS……………………………………………………………………. 77
CONCLUSION ……………………………………………………………………….. 79
RECOMMENDATIONS……………………………………………………………… 80
APPENDIX ……………………………………………………………………………. 81
COMPLETION CERTIFICATE
DOCUMENTS
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Internship Report on NBP
Executive Summary
National Bank of Pakistan (the bank) was established under the National Bank of
Pakistan Ordinance 1949 and is listed on all the stock exchanges in Pakistan. It’s
registered head office is situated at I.I.Chundrigar road, Karachi. The bank is engaged in
providing commercial banking and related services in Pakistan (GOP) as agent to State
Bank of Pakistan (SBP). The bank operates 1219 branches in Pakistan and 19 overseas
branches (including the Export Processing Zone branch, Karachi). Under a Trust Deed,
the bank also provides services as trustee to National Bank of Pakistan investment Trust
(NIT) including safe custody of securities on behalf of NIT.
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.
Branch network of nbp is, 29RegionalOffices,1, 217Branches,130OnlineBranches,4
Subsidiaries.
National Bank of Pakistan has following distinguishing features:

It acts as the agent of the State Bank of Pakistan (SBP). At places where SBP has
no Branch, it receives money and makes payments on its behalf.

It provides credit for State Trading. It deals in internal and external bills of
exchange and discounts them.

It keeps the deposits of the people and provides lockers and agency services.

It invests in government securities and bonds.

It provides short terms loans to industry, import and export trade, agriculture and
construction.
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Internship Report on NBP

It provides credit lines for project financing like LMM and IDA etc.

The Bank to facilitate the people to have their own houses has recently launched a
big project under the head of SAIBAN.

NDSL a subsidiary of NBP has been established for catering the needs of capital
and money market.
National Bank of Pakistan performs some general Functions on behalf of the
Government of Pakistan.
In this report I analyzed functions of different departments, including General banking,
Accounts department, foreign trade, CAD Administration department.
NBP plays a important role in FOREIGN TRADE AND FOREIGN EXCHANGE
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. 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
NBP offers
 The lowest rates on exports and other international banking products
 Access to different local commercial banks in international banking
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Internship Report on NBP
NBP MAJOR ACHEIVEMENTS INCLUDS
CORPORATE AND INVESTMENT BANKING
NEW PRODUCT DEVELOPMENT
RISK MANAGEMENT
HUMAN RESOURCE DEVELOPMENT
CREDIT RATING OF THE BANK
SWOT ANALYSIS
Strength
 Custodian of government treasury
 Working as agent of SBP
Weakness
 Not fast service to the clients
 Lethargic and rude attitude of employees towards customers.
Opportunities
 Can launch a marketing strategy to capture the business from its peer banks.
Can be number one in Pakistan
Threats
 Not fully computerized and on line banking facilities
 Competition with foreign banks
From this SWOT Analysis I can conclude that beside the fact that National Bank of
Pakistan is a government based institution but in these days of competition it is not easy
to survive without adopting modern techniques and latest tools of sophisticated
technology. Recommendation for the National Bank of Pakistan (NBP) is that it
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Internship Report on NBP
should give the proper training to those employees are not to trained regarding computer
processing the customers and also by the employees, so there should be proper training
to improve their customers services.
History of "National Bank of Pakistan
National Bank of Pakistan (the bank) was established under the National Bank of
Pakistan Ordinance 1949 and is listed on all the stock exchanges in Pakistan. It’s
registered head office is situated at I.I.Chundrigar road, Karachi. The bank is
engaged in providing commercial banking and related services in Pakistan
(GOP) as agent to State Bank of Pakistan (SBP). The bank operates 1219
branches in Pakistan and 19 overseas branches (including the Export Processing
Zone branch, Karachi). Under a Trust Deed, the bank also provides services as
trustee to National Bank of Pakistan investment Trust (NIT) including safe
custody of securities on behalf of NIT. At the time of independence in 1947,
Government of Pakistan decided that Reserve Bank of India would act as the
common monetary authority of both countries up to September, 1948. But this
arrangement did not worked due to certain reasons. In October 1947, there was
fighting in Kashmir and India refused to pay the share of Pakistan amounting Rs/550 million. Due to Indian government attitude and role of Reserve Bank of India
in creating problems to cater to the banking needs of Pakistan. Government of
Pakistan established its own central bank “SBP” on 1st July 1948.
Soon after independence of Pakistan, most of our foreign trade was with India and Britain.
Britain and other countries of Commonwealth devaluated their currencies. India also
followed Britain and devalued her currency. They were also compelling Pakistan to do
so. But the Government of Pakistan felt that devaluation of currency was not in the
interest of the country, so GOP refused to follow instructions of Commonwealth countries.
It resulted in a very serious situation. Stocks of jute in East Pakistan and that of cotton in
West Pakistan were accumulating. At that time to rescue the economy of the country, the
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Internship Report on NBP
Government of Pakistan established National Bank of Pakistan under National Bank of
Pakistan Ordinance 1949.
NBP acted promptly and advanced loans to the farmers.
National Bank of Pakistan was set up with authorized and paid-up share capital of Rs/-30
(M). The government held 75% of shareholding and remaining 25% of the share capital
was held by the private sector.
In 1952 NBP replaced Imperial Bank of India. This arrangement was negotiated
by Mr. Mumtaz Hassan as Acting Governor of SBP. In 1962 when Mr. Mumtaz
Hassan became MD (He had already served NBP for 10 years as its Chairman
or Government Director), at that time NBP’s branches were increased from 6 to
239 and deposits from Rs/-5 core (50 million) to 106 core (1 billion & 60 million),
profit from 0.3 million (3 lac) to 21 million (2.1 core) and the staff increased from
380 to 7091 as compared to year 1949-50.
In December, 1966 its 600th
branches was opened raising the deposits to 2.31 billion and staff to 14, 963. Up
to 1965, the shareholders had received 225% of their original investment.
In 1974 during the era of nationalization, different small banks including Bank of
Bahawalpur were merged in National Bank of Pakistan. In addition to this Bank of Mehran
and NDFC were merged in it. 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.
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Internship Report on NBP
BRANCH NETWORK OF NBP
29 Regional Offices
1,217 Branches
130 Online Branches
4 Subsidiaries
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18 Overseas Branches
4 Representative Offices
1 Subsidiary
1 Joint Venture
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Internship Report on NBP
The Nation’s Bank
National Bank of Pakistan has following distinguishing features:
It acts as the agent of the State Bank of Pakistan (SBP). At places where SBP has
no Branch, it receives money and makes payments on its behalf.

It provides credit for State Trading.
It deals in internal and external bills of
exchange and discounts them.

It keeps the deposits of the people and provides lockers and agency services.

It invests in government securities and bonds.

It provides short terms loans to industry, import and export trade, agriculture and
construction.

It provides credit lines for project financing like LMM and IDA etc.

The Bank to facilitate the people to have their own houses has recently launched a
big project under the head of SAIBAN.

NDSL a subsidiary of NBP has been established for catering the needs of capital
and money market.
National Bank of Pakistan performs some general Functions on behalf of the
Government of Pakistan
 Disbursement of salaries to the government servants, private organizations and
autonomous bodies.
 Payment of pensions to hundreds of thousands of pensioners across the country.
Payment of benevolent funds to the public:
 Payment of Zakat funds on behalf of government to the needy and deserving person.
 Catering of collection and payment of donations for the welfare and charity purposes.
 Selling and purchasing of Prize bonds.
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 Selling of charity tickets on behalf of charity institutions.
 Collection of all types of utilities bills.
 Collections of Traffic challan fees and tokens.
 Collections of government treasury challans both Federal and Provincial.
 Loaning to the talented students of the nation (Qarz-e-Hasna).
 Collection of fees for passport and National Identity Cards.
 Loaning for the purchase, construction and renovation of houses for the government
employees and businessmen on easy installment and interest rate basis under the
name of “SAIBAN”.
 National Bank of Pakistan performs the functions of State Bank of Pakistan in those
areas where SBP has no Office.
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MISSION STATEMENT
“To be recognized in the market place by institutionalizing a merit and performance
culture, creating a powerful and distinctive brand identity, achieving top-tier financial
performance, and adopting and living out its core values”.
VISION STATEMENT
To be the pre-eminent financial institution in Pakistan and achieve market
recognition both in the quality and delivery of service as well as the range of
product offering.
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Internship Report on NBP
CORE VALUES
NBP aims to be an organization that is founded on:

Growth through creation of sustainable relationship with its
customers.

Meet expectations through market-based solutions and products.

Reward entrepreneurial efforts

Create values for all stakeholders.
NBP aim to be people who:

Care about relationships

Lead through the strength of its commitment and willingness to excel.
Practice integrity, honesty and hard work.
We believe that these are
measures of true success.
NBP have confidence that tomorrow NBP will be:

Leaders in its industry.

An organization maintaining the trust of its stakeholders.

An innovative, creative and dynamic institution, responding to the needs
of the internal and external environment.
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Internship Report on NBP
CODE OF ETHICS AND PRACTICES
NBP is very much conscious about the importance of code of ethics to deliver best
services to its customers and introduced Code of Ethics which lays down fundamental
principles of personal and professional conduct for all employees of NBP. These
principles are as follows:1. Integrity
2. Confidentiality
3. Professionalism
4. Compliance
INTEGRITY
Employees are required to behave with integrity and honesty in their dealings with
customers and other parties with whom they interact and in respect of all internal
matters.
CONFIDENTIALITY
All employees have a duty to safeguard confidential information obtained in the normal
course of business and respect for customers’ private affairs which requires the same
care as does the protection of the bank’s funds or other interests.
PROFESSIONALISM
All employees should carry out their duties in a professional and courteous manner.
Financial matters should be conducted in a fair manner and maintain maximum level
of dignity when interacting with employees of opposite sex.
COMPLIANCE
All employees should be fully committed that all business decisions and actions
comply with all applicable laws and regulations.
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Objectives
Strong emphasis has been laid upon training of branch officers to better equip
them for marketing of retail banking products. In future NBP is going to
introduce modern banking services to keep pace with the competition and
more important our customer needs. These are as follows:

Debit cards

Internet banking

Call centers

Mobile banking
Milestones
 “Best Emerging Market Bank from Pakistan” for the year 2005 ‘Global
Finance’ USA, May 2005
 NBP is one of the “Top 100 Banks of Asia” ‘Euro money’ UK, March
2005
 Bank of the year 2001, 2003&2004 for Pakistan ‘The Banker’ financial
times Group UK.
 Best Foreign Exchange Bank in Pakistan ‘global Finance’ USA, March
2004
 Amongst Top 1000 Banks in the world and Number 1 in Pakistan ‘the
Banker’ Financial Times Group UK, July 2005
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ORGANIZATIONAL SETUP AT HEAD OFFICE
President of National Bank of Pakistan is the head /Chief Executive of the
institution and is supported by the following group heads/departmental
heads: Operations Group Head
 Finance Group Head
 Corporate and Investment Banking Group Head
 Risk Management Head
 Commercial & Retail Banking Head
 Audit & Inspection Head
 Head IT Planning, Development and Implementation
 Head Strategic Planning & Economic Research Wing
 Head Special Assets and Remedial Management
 Head of HR Management Department
 Head of Organization Development & Training Department
 Overseas Regional Chiefs Head
COMMITTEES
For smooth running of business and quick decision making on matters relating
to the bank, the following committees have been formed:

Audit Committee,

Credit Committee

Operations Committee

Assets & Liability Committee

IT Steering Committee

Training and HR Committee
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Internship Report on NBP
NBP PAST HISTORY
NBP – Past History
1949 – NBP Started Business
1965 – Installation of First Machine IBM 1401
Problems / Challenges

Non Functional I.T. Group Organization

Obsolete Communications Infrastructure

Distributed & Limited Database

Database servers; End-of-life Cycle

Obsolete or non availability of equipment in Branches

Servers unable to support new technologies

Limited automation in branches
COMPUTERIZATION IN NBP
Automation Status
In 2002
On-Line
ATMs
44 Branches
16
Today
On Line Branches
126
ATMs
100+
Western Union Automation 800 + branches
Off Line Automation
850 Branches
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Technology up gradation Plan
4 year Plan (2003 -2006) launched for
*
Up gradation of Infrastructure
*
Network of 300 on Line Branches
*
Automation of remaining branches
*
Offer modern facilities to customers
(ATM, Debit Card, Consumer Finance etc..)
*
Centralization of Database
1 Link ATM Network
NBP in order to facilitate its customers is installing ATMs all over the country.
In this way customers can withdraw money whenever they desire
NBP has joined 1 Link ATM Network, linking it to the endless ATM Banking
opportunities.
“1Link is the ATM Network that works for you”.
Today marks the formation of a formidable banking technology network - 1
Link. Eleven banking powers bring NBP to the largest nation wide ATM
Network that provides reliable 24-Hours access to cash. ATM Network
supports transactions of following banks: Bank Alfalah, Union Bank ,Allied
Bank Limited ,Askari Bank, Habib Bank, ABN Amro, Soneri Bank, Bank Al
Habib, UBL, PICIC commercial Bank at the following places:
.
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Branches where ATMs are being Operated in Lahore:S.NO.
BRANCH
LOCATION
1
Main Branch
Main Branch, Shahrah-e-Quiad
-e-Azam Road,
2
Lahore Cantt. Branch
Cantt. Branch, Lahore Cantt.
3
Wapda House
Wapda House, Shahrah-e-Quiad
Branch
-e-Azam Road
4
5
ACP
Corporate
ACP Corporate Branch
Branch
Shadman Jail Road
Corporate Branch.
Corporate Branch. Rehman
Plaza Shahrah-e-Fatima Jinnah Rd.
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Internship Report on NBP
Projects Completed
Hardware Upgrade

SWIFT Systems hardware upgrade

Regional Computer Center Hardware Upgrades
Software Upgrade

Computerization of Kabul and Jalalabad Branch

C & RB Group's Debit Card Project Launch

Main Branch Up gradation and Computerization

Human Resource Management System Implementation

Advance Salary Factorization/Revised BBO Implementation (800+branches,
country wide)

Western Union Money Transfer System (400+branches country wide)

Software versions standardization (Country wide)

Consumer Asset Management System Implementation

Software Library Establishment
I.T. Infrastructure Overview
Information Technology Group’s aim is to keep National Bank of Pakistan apprised of
latest technological advancements in Banking automation systems and to offer cost
effective solutions in meeting the bank’s business automation needs. While also
providing for high performance, efficient, reliable, secure, seamless and scalable
banking technologies, which would easily meet current and future automation needs of
the bank.
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FACTORS EFFECTING THE NBP COMPUTERIZATION

Ineffective means of communication and coordination between the Head Office
and the branches.

Bank has no long term I.T. Plan and Policy.

Lack of coordination between I.T. Group and other Groups of Bank.

No confirmation of management and its style

No special budget has been allocated for IT in the past.

NBP Culture.
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ORGANISATIONAL CHART
Chief Manager
Chief Operation
manager (CRA)
Manager Credit
Processing
Manager
FEX*
Manager JB*
[Sections]
FEX
Export
Import
Remittance
F/C A/C
Inquiry
Deposits
Bills
Clearing
Utilities
Accounts
Cash/Chest
Govt. Collection
Manager Credit
Operation
Manager
Compliance
Manager Admin
[Sections]
[Sections]
Reconciliation
Dispatch
Dead Stock
Security
Staff Welfare
Audit /Inspection
To sign all Br. Returns
Money laundering
.etc
*FEX Foreign Exchange
*JB Journal Banking
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FINANCIAL ANALYSIS
BALANCE SHEET
2009
2010
(Rupees in thousands)
ASSETS
Cash
115,827,868
115,442,360
Balance with other banks
28,405,564
30,389,664
Lending to financial institutions
19,587,176
23,025,156
Investments_ net
217,642,822
301,323,804
Advances - net
475,243,431
477,506,564
Operating fixed assets
25,147,192
26,888,226
Other assets net
59,666,438
53,496,240-
Deferred tax assets net
3,062,271
6,952,666
944,582,762
1,035,024,680
Deposits and other accounts
727,464,825
832,151,888
Borrowings from financial inst.
45,278,138
20,103,591
Bills payable
10,621,169
8,006,631
Other liabilities
42,269,623
46,160,038
LIABILITIES
Deferred tax liabilities
0
Sub ordinate loans
0
Liabilities against assets
42,629
106,704
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Internship Report on NBP
906,528,852
825,676,384
NET ASSETS
118,906,378
128,495,828
Share capital
10,763,702
13,454,628
Reserve
22,681,707
24,450,244
Un-Appropriated profit
60,696,510
65,857,438
94,141,919
103,762,310
24,764,459
24,733,518
118,906,378
128,495,828
REPRESENTED BY
Surplus on revaluation of assets
INCOME STATEMENT
2009
2010
(Rupees in ‘000)
Mark-up/return/interest earned
77,947,697
88,472,134
Mark-up/return/interest expensed
40,489,649
45,250,476
Net mark-up/interest income
37,458,048
43,221,658
11,043,469
7,011,046
605,629
2,954,678
20,237
3,965
11,669,335
9,969,689
25,788,713
33,251,969
Provision against non-performing loans and
advances
Provision for diminution in the value of investments
Bad debts written off directly
Provision of balance sheet obligations
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Internship Report on NBP
Net mark-up/interest income after provisions
NON MARK-UP/INTEREST INCOME
8,930,391
9,631,579
Dividend income
1,920,336
1,099,493
Income from dealing in foreign currencies
3,028,165
2,211,139
Fee commission and brokerage income
Other income
Gain on sale and redemption of securities – net
4,591,894
Unrealized gain on revaluation of
Investments classified as Held-for-trading 2,355
Total non-mark-up/interest income
2,171,336
552,216
2,512,363
6,730
19,025,357
17,632,640
44,814,070
50,884,609
22,571,470
26,202,577
(Reversal) / Other provisions
620,780
148,026
Other charges
321,647
118,887
23,513,897
26,469,490
21300173
24,415,119
PROFIT BEFORE TAXATION
21,300,173
24,415,119
Taxation – current year
8,871,513
9,835,048
(4,133,282)
(939,256)
(999,904)
(2,043,887)
3,738,327
6,851,905
17,561,846
17,563,214
52,456,204
60,696,510
NON MARK-UP/INTEREST EXPENSES
Administrative expenses
Total non-mark-up/interest expenses
Prior years
Deferred
PROFIT AFTER TAXATION
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Un-appropriated profit brought forward
Transferred from surplus on revaluation of fixed
123,934
117,738
70,141,984
78,377,462
13.05
13.05
Assets
Profit available for appropriation
Basic and diluted earning per share after tax
RATIOS
1) Total Assets turnover Ratio
Total Assets turnover Ratio=Interest Earned/Total Assets
Interest earned
Total Assets
Total Assets turnover Ratio
2010
2009
88,472,134
77,947,697
1,035,024,680
944,582,762
8.54%
8.25%
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Interpretation
The total asset turnover ratio measures the ability of a company to use
its assets to generate sales. The total asset turnover ratio considers all
assets. The lower the total asset turnover ratio, as compared to
historical data for the firm and industry data, the more sluggish the
firm's sales. This may indicate a problem with one or more of the asset
categories composing total assets - inventory, receivables, or fixed
assets.
Total Assets turnover Ratio of the bank is good and is intend to
increase in coming years.
2) Net Profit Margin
Net Profit Margin=Net Profit after tax/Interest Earned
2010
2009
Net profit after tax
17,563,214
17,561,846
Interest Earned
88,472,134
77,947,697
19.85%
22.53%
Net Profit Margin
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Interpretation
The net profit margin ratio tells us the amount of net profit per Rs 1 of
turnover a business has earned. That is, after taking account of the
cost of sales, the administration costs, the selling and distributions
costs and all other costs, the net profit is the profit that is left, out of
which they will pay interest, tax, dividends and so on.
As we can show that the profit of NBP has significantly decreased in
2010 as compared with the 2009, so consideration should be paid in
order to enhance the profit.
3) Advances to total Deposits ratio
Advances to total Deposits ratio=Advances/Deposits
2010
2009
Advances
477,506,564
475,243,431
Deposits
832,151,888
727,464,825
57.38%
65.32%
Advances to total Deposits
ratio
I
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nterpretation
This ratio indicates that how much funds gathered by bank are used
efficiently to earn profits. This ratio signifies that advances are very
much less than the deposits, which shows that bank is not very much
considering about making the deposits useful by giving advances to
other parties to earn some handsome amount upon it.
4) Demand Deposit to total deposit ratio
Demand Deposit to total deposit ratio=Demand Deposit/Total Deposit
2010
2009
Demand
Deposits(Remunerative)
Total Deposits
Demand Deposit to total
deposit ratio
68,393,177
75,133,946
832,151,888
727,464,825
8.21%
10.32%
Interpretation
This Ratio describes the degree to which deposits of a bank are liquid.
Demand deposits are such deposits which can be demanded by
customers at any time. Demand deposit ratio of NBP is not high as
compared with the previous year and this is a good sign but more
consideration is required.
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Internship Report on NBP
5) Advances to Assets Ratio
Advances to Assets Ratio=Advances/Total Assets
Advances
Total Assets
Advances to Assets Ratio
2010
2009
477,506,564
475,243,431
1,035,024,680
46.13%
944,582,762
50.31%
Interpretation
This ratio shows that how much portion of the total assets is used as
advances. Because advances are the most efficient way of earning
profits for a bank. This ratio is showing downward trends. Proper steps
should be taken to avoid this problem.
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Internship Report on NBP
6) Investments to total Assets Ratio
Investments to total Assets Ratio=Investments/Total Assets
Investments
Total Assets
Investments to Assets Ratio
2010
2009
301,323,804
217,642,822
1,035,024,680
29.11%
944,582,762
23.04%
Interpretation
This ratio shows that how much portion of the total assets is used in
Investments. Because investments are the efficient way of earning
profits for a bank. This ratio is showing upward trends. Which is a good
sign that bank is little bit considering about the investments, but more
consideration is also required
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Internship Report on NBP
Leverage Ratios
Solvency analysis of a firm indicates the amount of the other people’s
money being used to generate profit. In general, these analyses are
more concerned with long term debts, because these commit the firm
to a stream of payments over the long run. Solvency analysis includes:
 Debt ratio

Debt to Equity rat
7)Debt Ratio / Solvency Ratio
Year
Total Debts
Total Assets
Debt Ratio / Solvency Ratio
2010
2009
906,528,852
825,676,384
1,035,024,680
944,582,762
87.58%
87.41%
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Internship Report on NBP
8)Debt to Equity Ratio
Year
2010
2009
Total Debts
906,528,852
825,676,384
Equity
128,495,828
118,906,378
7.05
6.94
Debt to Equity Ratio
Interpretation
The overall leverage position is not a better trend as compare to
previous year. The contribution of equity in total assets is decreasing,
while the debt contribution is increasing which is not better for
business. Equity ratio is decreased which shows the bad condition of
the bank. Solvency Ratio is not in good condition. So we can say that
overall Solvency condition of the NBP is not better with the comparison
to the previous year.
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Internship Report on NBP
Profitability analysis
Profitability analysis of a firm indicates the overall efficiently of the
management. Without profit a company can not attract the outside
capital. Profitability analysis includes:
i) Return on total assets
ii) Return on-equity
iii) Return on investment
9)Return on Assets
Year
Net Profit after Tax
Total Assets
Return on Assets
2010
2009
17,563,214
17,561,846
1,035,024,680
944,582,762
1.69%
1.85%
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Internship Report on NBP
10)Return on Equity
Year
2010
Net Profit after Tax
Equity
2009
17,563,214
17,561,846
128,495,828
118,906,378
13.67%
14.77%
Return on Equity

11)Return on Investment
Year
Net Profit after Tax
Investment
Return on Investment
2010
2009
17,563,214
17,561,846
301,323,804
217,642,822
5.82%
8.06%
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Internship Report on NBP
Investor Analysis Or Market Analysis
Investor analysis or market analysis are related to firm market valve, as
measure by its current share price to certain accounting values.
Investor analysis includes:
 Earning per share
 Dividend per share
 Break up value/Book value per share
12)Earning per Share
Year
2010
Net Profit after Tax
No. of Shares
Earning per share
13.05
2009
17,563,214
17,561,846
1,345,463
1,345,463
13.05
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13)Dividend per Share
Year
Total dividend
No. of shares
Dividend per Share
2010
2009
8,060,510
5,820,338
1,345,463
5.99
1,345,463
4.33
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Internship Report on NBP
14)Book Value per Share
Year
Equity
No. of Shares
Book Value per Share
2010
2009
128,495,828
118,906,378
1,345,463
1,345,463
95.50
88.37
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Internship Report on NBP
WORKING AS AN INTERNEE
GENERAL BANKING
Account opening
First of all, to secure his interest and to make the transaction with a customer
safe and sound bank conducts proper verification of whole contents of person
who has applied for opening account in NBP.
Know your customer (KYC)
It is the due responsibility and bank regulation that financial institutions and
other regulated companies must perform to identify their clients and ascertain
relevant information pertinent to doing financial business with them.
To prevent the frauds
Know your customer policies have becoming increasingly important globally to
prevent identity theft fraud, money laundering and terrorist financing.
KYC should not be thought of as a form to be filled , it is a process to be
undergone from the start of a customer relationship to the end.
Bank officer makes negotiations with account holder that why he is opening
accounts here in this bank and in this particular branch, if the bank is not
satisfied with contents he can refuse to open an account.
Relation with NADRA
Bank also has an arrangements with NADRA to verify the particulars of the
person .For this purpose NBP have developed a software VERISYS and pays
Rs 50/- oer verification.
In account opening form, even one clause is missing or is not filled by the
account holder and bank has accepted his form then SBP penalizes for this.
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Internship Report on NBP
Letter of Thanks
A letter of thanks is sent by the bank at present address of the customer to
verify that he has mentioned his correct residing address, this letter should be
posted back to the bank after signing it. When it is received back by the
customer it is a confirmation and after that cheaque book is issued to
customer.
Types of accounts
 Current Account
 Basic banking account
 PLS saving account
 Premium savers account
 NIDA (national income daily account)
 Premium amadni accounts
 PLS term/deposit
Current Account
Current accounts are opened for individuals(single, joint) , charitable
institutions , provident fund and other funds benevolent nature of local bodies
, companies , associations educational institutions , firms etc.
NO PROFIT
No profit is paid on this type of current account.
SERVICE CHARGES
The bank is authorized to deduct service charges levied through its half year
schedule.
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Internship Report on NBP
Basic banking account
It is opened for an individuals(single, joint).
Profit
No profit is paid on this type of basic banking account.
In case of basic banking account two deposits transaction and two checking
withdrawals are allowed free of charge in a month.
PLS saving account
This account is opened for
 individuals(single, joint)
 charitable institutions
 provident fund
 other funds benevolent nature of local bodies
 companies
 associations educational institutions
 firms
PLS term deposit/ premium amadni accounts are opened by all those who
have this account with NBP.
Service charges
The bank is authorized to deduct service charges levied through its half year
schedule.
There is no restriction on withdrawal of amount and number of cheaques.
Statement of accounts
The statement of account will be dispatched by the bank individually as
advised by the account holder.
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Internship Report on NBP
Profit and loss
Profit and loss will be distributed on half yearly basis.
Premium savers account
This is opened for an individual’s (single, joint).
In case where prescribed minimum balance in premium savers account is not
maintained no profit for the month will be paid to the account holder.
Rate of profit
In this account, a higher rate of profit as per bank discretion will be paid to the
depositors maintaining deposit below the mark of Rs 300,000/- as compared
to maintaining higher deposits in their premium savers account.
Allowed with drawls
Maximum two withdrawals are allowed free of charge.
NIDA (national income daily account)
It is opened for
 individuals(single, joint)
 charitable institutions,
 Provident and other funds of benevolent nature.
Profit
Profit calculated on daily basis but paid half yearly.
Premium amadni accounts
This account can be opened by all persons allowed to open current, PLS
saving and NIDA.
Amount is deposited for the period of five years and is accepted by the bank
with minimum sums as prescribed by the bank from time to time.
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Internship Report on NBP
Customers are eligible for the participation of profit and loss on the condition
that they will not be withdrawn before maturity.
Renewal
It will be renewed after for the desired period of time from the date following
the maturity date.
Profit
Profit is calculated and paid on monthly basis and rate changes every year.
PLS term/deposit
It can be opened by all persons allowed to open current, PLS saving and
NIDA.
It is accepted by the bank with minimum sums as prescribed by the bank from
time to time.
PLS term deposits will be accepted for a period of one month of five years.
Profit
Profit on PLS term deposit receipt determined by the bank at the end of each
half year on the basis of net working result and will be paid only if it is not
withdrawn before maturity.
Benefit
Holders of term deposits will be eligible for running finance facility against
pledge of their receipts/certificates.
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Internship Report on NBP
DEPOSITS DEPARTMENT
Attracting deposits from the customers is the basic
function of all commercial banks. They do not keep these
deposits in their safe custody but instead they invest
these resources in profitable ways and earn revenues on
it from which they meet cost of these resources and
excess is their profit. . But they accept deposits as debts.
When a bank receives a deposit from a customer
becomes the creditor and the bank a debtor. When the
bank receives the amount of deposit as a debtor, it
becomes the owner of it. It may, therefore, use it as it
deems appropriate. But there is an implicit agreement
that the amount owned would be paid back by the bank to
depositor on demand or often a specified time.
Deposits are the lifeblood of a bank
Deposits are the
lifeblood
of
a bank and their
classification is based on the duration and purpose for
which the deposits are to be kept at the bank before the
depositors can withdraw them.
Local and foreign currency dealing
At present NBP accepts deposits in both local & foreign
currencies and provides a variety of accounts where
these sums are put in at the desire of the customers.
Bank always keeps excess of deposits than advances to
meet the unexpected withdrawal requirements of account
holders.
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Internship Report on NBP
Two ways are used to Deposits from customers
1. Account holder fills a cash voucher and presents
to the bank with cash. Bank credit his account
immediately in case of cash.
2. If the account holder is presenting a cheque to
deposit, then after confirmation and clearing bank
credits the account of that client.
Dormant account
o This is also known as dead account.
 It is an account that is not in use (no transaction
has been made) for a long time.
 Account will be dormant account after six months
if the account is PLS saving account.
 1 year is the time spam to declare an account as
dormant account if no transaction is done in the
mentioned time period.
 When an account is declared as a dormant
account, NBP sends a notice to the account
holder. If he wants to re operate the account,
account holder gives an application to related
officer. He also shows all necessary documents to
the officer. After verification from the data base of
NBP, we reactivate the account of the client.
 Bank does not take any charges for activating the
dormant account.
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Internship Report on NBP
Stop Payment
I also learned the process of Stop Payment. Account
holder sends a request to stop the payments from his/her
account. It is needed when he/she loses his/her cheque
book, any person has theft cheque from his/her cheque
book. Banks first of all see the amount in the account of
the applicant. If there is no cash, then there is no need to
make stop payment process. Bank just saves the cheque
numbers that have been lost. If there is an amount in the
account of the applicant, then bank verifies the signature
of applicant, notes the time and the date of stop payment.
It is required because bank want to get surety that no lost
cheque had been presented before the application. Bank
is not liable for that cheque and the amount withdrawal.
After all checking and verification, bank stops the
payments from that account. Payments are stopped until
account holder sends an application for reactivate
payments from his/her account. Stop payments remain
valid up to six months.
Diseased Account
Another account that I learned is Diseased Account. It
is an account where account holder is died. When an
account is declared as a diseased account, NBP sends a
notice to next of kin. A person who is mentioned to run
the account after the absence of the account holder is
called next of kin or nominee. Nominee gives an
application to related officer.
He also shows all necessary documents to the officer
including death certificate, nominee CNIC account holder
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Internship Report on NBP
CNIC. Documents are sent to computer section. After
verification from the data base of NBP, we give amount to
nominee, if the amount is less than 10,000. In case of
greater amount in account, NBP sends the case in civil
court. The court distributes amount as in law. NBP get a
succession certificate and then gives the amount to the
nominee.
BILLS AND REMITTANCES DEPARTMENT

Issuance of Mail Transfer (MT)

Issuance of Telegraphic Transfer(TT)

Issuance of Demand Draft (DD)

Issuance of Term Deposit Receipt (TDR)

Issuance of Payment Orders (PO)
DEMAND DRAFTS
NBP offers safe, speedy and reliable way to transfer money through Demand Drafts at
very reasonable rates. Any person whether an account holder of the bank or not can
purchase a Demand Draft from a bank branch. Amount is credited by bank in the
account only when the Demand Draft is crossed. The bank charges for Demand Draft
are given in the NBP Tariff circulated bi-annually.

A DD can be junior or senior. A junior DD means
that its worth is 1000 or less in rupees. A DD will be
senior having worth of greater than Rs. 1000.
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Internship Report on NBP
Specification regarding DD
Old methodology

A DD is having two signatures of the party that is
claiming the amount.

Cash required amount should be mentioned on
three places in a single DD.
Latest methodology

A new method of checking a DD is via email.

The bank that is presenter of DD, send an email to
NBP contain the DD number, amount worth.

NBP
checks
DD with
given
information
.If
information matches, DD is accepted for the
payment.

Bank has an electronic entry system as well.
Through computer data base system all data is
sent directly to Karachi head office.
Note:
DD can be cancelled by giving the application to
bank.
TELEGRAPHIC TRANSFER
TT means telegram/telephonic transfer. When a client or
any party asks to transfer the amount from one city to
another place within one day, then TT or Online transfer
technology is used.(telephone etc.)
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Internship Report on NBP
CONDITONS

It is necessary that where we are going to transfer
the amount there should be an account of the
party.

It is not necessary that party should be an account
holder of the bank from where the amount is being
transferred.

Any person can transfer the amount from NBP
without having any account in the branch from
where the amount is being transferred.
MAIL TRANSFERS
MT is another way to send the money to one city to another
city or in foreign country. But it will only work in NBP to
NBP. Its process is just like DD but in MT; bank itself
responsible for delivery of MT.
Move your money safely and quickly using NBP Mail Transfer
service. NBP also offer the most competitive rates in the market.
REQUIREMENT

One of the requirements for Mail Transfer is that the customer should be an
Account Holder.
WAPDA is only one company in Pakistan which is exempted from any bank charges
on Mail Transfer of money. Otherwise, Bank charges a certain amount on for effecting
remittance through Mail Transfer.
BANK CHARGES
Bank Charges are announced through a circular bi-annually.
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DOCUMENT DETAIL
In Mail Transfer two documents sent to the branch where MT will
be sent.

One document is called fanfold (f-15).

Other is an instrument printed and named MT instrument.
Difference between MT and TT
Both are using similar methodology but the basic difference is that
TT is use when there is need to transfer the amount within one day.
Means in MT transferring of amount takes more time as compared
to TT.
Local Special Clearing (LSC)
Any party give a cheque of any bank except NBP then account
holder presents this cheque in NBP. The bank works for the client
as an agent of the client. NBP present the cheque to other branch
and to relevant branch.
I have seen a case that a client gave a cheque to bank for
presenting to MCB as the cheque was drawn by MCB larkana
branch.
The account holder had an account in NBP okara branch. Okara
branch sent the cheque to the main branch NBP Lahore. NBP
works as local branch to all banks in special clearing. Okara branch
NBP also attached a document F-275 with cheque. This document
represents a request that please sir give credit against the following
cheque. NBP sent the cheque to MCB larkana branch. A reply
came to NBP main branch that we can not credit this cheque
because of insufficient balance in the account of drawer. A cheque
was also returned to NBP main branch Lahore. NBP main branch
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Internship Report on NBP
sent back the cheque to Okara branch with the notice of error. If
there in MCB the cash were sufficient in drawer, then MCB bank
credits that account and informs NBP that they had done the work.
Demand Deposit Purchase
My learning part in bills section was DDP (Demand Deposit
Purchase). DDP is used by the companies for giving dividend to
the shareholders. Companies didn’t give dividend in cash to the
shareholders, as it is not a big amount to pay by them. Companies
purchase a specific amount for dividend warrants, is called Demand
Draft Purchase.
DD limit
IT means that companies ask the bank to give them a limit to issue
divided warrants. After this process, Companies issue divided
warrants
to
shareholders. They (shareholders) present the
instrument in the bank where they have the account. Bank sends
the warrant to a bank where company has the account. The bank of
Company credits the amount to shareholder’s bank after clearance.
After this process, Bank of client credits the client’s account to a
particular amount of dividend. So by DDP shareholders get dividend
from companies.
PAY ORDER
For transferring money within the City, NBP provides another product “Pay Order”
which is a secure and easy way to move money. And, as usual, NBP’s charges for
this service are extremely competitive.
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Internship Report on NBP
RETAIL BANKING PRODUCTS
A- NBP Saibaan:
HOUSING FINANCE
In line with vision of President NBP, the Commercial & Retail Banking Group at NBP
has recently launched a housing finance scheme under the brand name of
“NBP – SAIBAN”
This scheme covers all sections of the society with monthly income starting from as
low as Rs.5000/- per month *(Conditions apply)
This retail/consumer financing product is branded as ‘NBP Saibaan’ (Housing for all),
the scheme offers a maximum loan of Rs.10 million in accordance with the debt
burden criterion.
Loans are available
 Home Construction
 Home Purchase
 And Home improvement. For Home improvement Loans the maximum
amount is Rs.2.00 Million.
Home Construction and Home Purchase loans can be repaid over a period of 20
years, whereas the repayment period for Home Improvement loan is 15 years.
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Internship Report on NBP
WHAT IS NBP SAIBAAN?
NBP Saibaan is the most affordable House Financing Scheme.
You can avail now and repay over a 3 to 20 years period.
Home purchase loans up to 10 million

Home reconstruction loans up to 10 million

Home improvement loans up to 2.0 million 3 to 15 years)
People prefer NBP saibaan
Customers prefer NBP Saibaan because of following reasons:
Affordable

Easy installment

No surprises
Flexible

Mark-up choices

Grace period option

Convenient

Structured and programmed

Minimum approval and Disbursement timing
REQUIRED DOCUMENTS
Applications Form along with
1. Two attested passport size Photographs
2. Two attested copies of your National Identity Card
3. Cheque for the processing charges
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Internship Report on NBP
PROCESSING FEE
1. For government employees including NBP employees irrespective of the
finance amount Rs.500/
2. For Others

Financing below Rs.1 million: Rs.1000/-

Financing between Rs. 1 to 4 million: Rs.3000/-

Financing above Rs. 4 million: Rs.6000/-
OTHER CHARGES
Income Estimation, Legal and valuation Fee will be charged as per schedule.
PREPAYMENT (COMPLETE/PARTIAL) CHARGES
 2% of the amount being prepaid if pre-payment occurs during the first (5) years
of loan period.
 No penalty will be charged after five (5) years.
 Rates/Charges are subject to change as per the market factors/SBP
regulations, etc.

Who is eligible for this service
1. You are a Resident Pakistani national
2. You are aged between 21 and 62 years at the time of application/disbursement
of loan
3. You are a salaried person, self-employed professional or business person.
4. You have a Net Take Home income not less than Rs.5000/- per month (Govt.
and related organization employees) and Rs.10,000/- per month (for other
salaried class) Rs.15,000/- per month (for business persons and self employed)
5. Your property is located in NBP approved localities
6. Your duration of service is: Two years for salaried and three years for SelfEmployed/Business Persons.
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Internship Report on NBP
Types of loans
1. Home Purchase Loan
Financial assistance can be acquired under the NBP Mortgage Financing for
the purchase of ready residential property (House or Apartment).
Limits
Max. Loan amount:
Rs. 35 Million
Tenure
3 to 20 years
Debt to equity
85:15
2. Home Construction Loan
Financial assistance can be acquired under the NBP Mortgage Financing by
mortgaging self owned residential land, which may be open or partially
constructed upon, for construction purposes leading to self-occupancy
Limit
Max. Loan amount:
Rs.35 Million
Tenure
3 to 20 years
Debt to equity
85:15
3. Home Improvement Loan
Financial assistance being acquired under the NBP Mortgage Financing by
mortgaging self owned & self occupied ready residential property - House or
Apartment, for renovation purposes.
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Internship Report on NBP
Limit
Max. Loan amount: Rs. 15 million
Tenure :
3 to 15 years
Debt to equity
70:30
Balance Transfer Facility
Provide facility to those customers who have already availed housing finance
from some other banks and they intend to switch their loans to NBP.
Limit
Max. Loan amount: Rs. 15 million
Tenure
3 to 15 years
Debt to equity
70:30
RATE
VARIABLE RATE (WITH INSURANCE)
VARIABLE RATE (WITHOUT INSURANCE)
12.50%
14.50%
ELIGIBILITY
 All applicants must be Pakistani resident nationals.
 CNIC holder.
 Having clean CIB/Data Check report and maintaining salary.
 Current A/c (if not, then A/c to be opened at NBP branch before finance
disbursement).
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Internship Report on NBP
WHO CAN AQUIRE THIS FACILITY
Salaried Class(type A)
Further divided into Two Categories.
 First Category A1
 Second Category A2
First Category A1
All permanent and confirmed employees of:
 Federal
 Provincial Govt
 Semi-Govt
 Autonomous
 Semi-autonomous
 Local and other bodies
Employee salaries are disbursed through NBP branches and whose
employers are willing to give undertaking on NBP’s prescribed format. These
will also include permanent employees of NBP.
Second Category A2
All other salaried class employees including:
 Permanent Employees of Multinational Companies, scheduled
banks and reputed companies that have been approved by NBP
for Saibaan.
 Permanent employees of organizations other than the approved
list.
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Internship Report on NBP
 Contractual employees of the above categories including NBP
employees.
 Employees defined in category “A1” but fail to qualify because
their employer is not willing to give the required undertaking or
whose salary is or will not be disbursed through NBP branches
or is requesting for mode of repayment other than deduction
from salary
Type B
This type includes:
 Business Persons
 Self–Employed Professional
 Co-Applicants
1. Business Persons
Minimum Income:
Net Take Home >=Rs 15,000

Sole proprietor

Partner

Director of a reputed company/business
2. Self–Employed Professional
Minimum Income:
Net Take Home >=Rs 15,000
 Doctor, Engineer, Designers
 Architect, Chartered Accountant
 Cost & Management Accountant
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Internship Report on NBP
3.Co-Applicants
Only spouse, parents & adult male children can be co-applicant. The coapplicant’s income may be clubbed. In case where co-applicant’s income is
being clubbed, then he / she should also fall in the prescribed age bracket for
his / her category.
Processing fee
Category
Fees
Government employees
Rs. 500/=*
For others, amount up to Rs. 1 Million
Rs. 1,000/=*
For others, amount Between Rs. 1 Million to 4
Rs. 3,000/=*
Million
For others, amount more than Rs. 4 Million
Rs. 6,000/=*
Income
 For Type “A1” Salaried class category (Govt. employees):
Minimum net take home income of Rs/5, 000. (Employer will ensure mode
of repayment of salary/installment transfer). For rest of the salaried class,
minimum net take home income of Rs/10,000 will be required.
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Internship Report on NBP
 For Type B (Business Persons and Self-Employed):
Minimum net take home income required is Rs.15,000 .
Major Terms & Conditions regarding age
Monthly installments
Type A 1st Category
Monthly installment of all the loans deductible from the salary, it is credited to
account at NBP. It is not to exceed 50% of the net take home salary.
Type A 2nd Category
Monthly installment shall not exceed 50% of the net take home salary
.
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Internship Report on NBP
Type B
Debts repayment (under the subject loan) should not to exceed 50% of the
net Income.
Major Terms & Conditions regarding Length of Employment
Type A
Minimum 2 years with the same employer for all applicants of salaried class.
If it is less than 2 years, then a past record of collective and continuous
employment of three (3) years should be made available.
Type B
Length of occupation should be minimum three (3) year.
Major Terms & Conditions regarding Property Eligibility
 Property should be an already constructed House or Apartment.
 Should be having a separate title document and a leased one.
 Title document must be clear and chain of documents complete.
 Property can be co-owned by family members (spouse, parents,
and adult male children).
 The property should be purely residential and self occupied.
 Purchase of property from parents, siblings and spouse is not
allowed.
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Internship Report on NBP
Special Conditions Related To Home Construction Finance
The customer must be the owner of the land on which construction or/and
extension is to take place.
Required Security
 For security purposes, the property for the purchase / construction/
renovation of which the financing is being provided, will be mortgaged.
 Mortgage will be created jointly in case of co owners. Joint ownership with
other than spouse/ parent / adult male children not allowed.
 1 % token Registered of the finance amount and balance, as Equitable
(reasonable) Mortgage will be created on the property. However, only
Equitable Mortgage will be created on the properties financed at Karachi,
Lahore, Islamabad & Rawalpindi.
 All the original property documents are to be reserved by the bank and
charge to be created and registered with the Registrar of
Documents/Assurance.
 The bank will also give three undated cheques in favour of NBP. Each
check will amount to one finance instalment
 There should be no previous lien / claim on the property and Search
Certificate to be obtained.
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FOREIGN TRADE AND FOREIGN EXCHANGE
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. Additionally, we have recently set up the financial institution Wing, which is
placed under the Risk Management Group.
Role of financial institutional wing
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
NBP offers
 The lowest rates on exports and other international banking products
 Access to different local commercial banks in international banking
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-APKKA.
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Local SWIFT Centers
S.NO.
CITY
1
FAISALABAD
2
GUJRANWALA
3
HYDERABAD
4
ISLAMABAD
5
LAHORE
6
MULTAN
7
PESHAWAR
8
QUETTA
9
RAWALPINDI
10
SIALKOT
11
MIRPUR
12
MUZAFFARABAD
13
KARACHI
14
KARACHI
15
KARACHI
16
KARACHI
LETTERS 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.
IMPORT DEPARTEMENT
This department is responsible to handle the import processing or functions. Any client
who is interested to purchase any legal goods from out of the boundaries of Pakistan,
that person has to come in this department and has to follow the rules and procedure
given by this department.
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Type of LC

Sight LC

Usuance LC
Procedure
LC opening require following processes:
1. LC opening
2. Amendment
3. Lodgment
4. Retirement
1: LC Opening
For LC opening these different documents are required:
 Performa invoice
 Annexure
 I form
 Insurance
 Performa invoice:
It is the document containing the specifications of goods to be imported. It is
between importer and exporter dealing and required by the bank. It also have the
details of quantity and rate etc.
IB-8:
It is the only document by which we can go to court.
 Annexure:
It has some other details
 I form:
It is used to report import processing to SBP.
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 Insurance:
100 % margin is taken from unknown person. It is required for opening the LC. It is
vary according customers to customers
CHARGES
Following charges has to be taken:

Commission

FED

P&T(SWIFT)

Margin
Commission
0.4% commission is normally charged but slaps of commission is formed having
different rate according to the worth of business.
FED
16% on commission on every proceeding. This amount is gone to GOVT head.
P&T
It is the sort of the message which is transmitted to the foreign bank.
Charges of P&T

1200 for long message

400 for short message
2.Amendment
If any change is required by the importer in LC documents then after getting some
charges amendment is done.
Commission=Rs/750
FED=16% on commission
P&T=400
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3. Lodgment
It is that date when the documents are received and the bank gives credit to the head
office.
Documents required for it

Bill of lading

Commercial invoice
4: retirement
At this stage file of LC has to be closed as all the proceedings have been taken and
there is no mistake happened in the import process and party has made the payment
to the bank.
Charges

Mark-up

Service charges

Penalties(in case of delay in the payment to the bank)
Formula of calculating mark-up
Formula =bill amount*no of days*rate/36500
Rate=1 month KIBOR+4
Note
If margin has taken during the process then all the amount of margins has to be minus
then calculate the mark-up on that balancing amount (remaining amount)

KIBOR rate is taken from NET
Note

LC documents must not more than the amount of the LC.
Service charges

0.1of the bill amount is calculated as service charges.
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PENALITY
It is impose when the time of payment is expired
Sight LC
Usuance LC
Lodgment date has to be taken for
0.1% per month from expiry date
Calculation
FET is calculated
Expiry date is within 89 days
Above 15 days= 0.15%
This expiry date may be mention iv the LC
35-54 days=0.20%
by importer
55 and above=0.25%
R-form
It is used for the purpose of remittance.
NOTE

Tax is imposed at the start of the business.

No tax is imposed for the extension of the business.
Special form

Import /export by contract:
In this case bank will not take the responsibility of payment but it provides security as
documents are not handed over to the party if the permission is not received.
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EXPORTS DEPARTMENT
In exports department there are five major heads which are mentioned bellow:
 Packing finance
 Export refunds
 Foreign currency loans under FE25
 Export negotiation
 Export collection
Packing finance
The party has to show the documents or contract for the loan availment, it is known as
pre- shipment finance (before shipment)
Limit sanction
Limit is sanctioned up to 100 million if taken 50 million then it can be adjusted.

It is done by judgment of party repayment capacity
Registered mortgage deed is required
Payment is released
When export is made than the exporter informed to exporter bank and submits the
shipping document to it. The exporter bank transmits these shipping documents to
importer bank and then payment is released in favor of exporter.
Note

Imports are not favored and exports are encouraged

At export contract time is estimated and written.
Mark-up rate

It varies according party to party.

And KIBOUR rate is taken monthly basis (one day before the date mentioned
like if the date is 1 of JAN then rate should be taken 31 of DEC)
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Export refinance
Finance is given to the bank by SBP and it is necessary for the party to take the
packing finance. Otherwise it could not be avail the refinance opportunity.
Procedure

SBP make limit and than sanction it.

Maximum days are 180 days to give the shipping documents to NBP.

If the exporters not do export on time penalty is imposed which is very high and
exceeds from the mark – up.
Example
Principle amount is 96.000 million so here refinancing is possible just for amount of
4.000 million because max limit is 100.00 0million
All particulars are mentioned like name of goods, quantity , mark-up and finally amount
in Pak rupee also.
Sequencing of documents
 Request by bank
 Request by exporter
 Sales contract
 Undertaking
 Refinance claim form as per old schedule
 Promissory note
 Covering letter to SBP(here internal book entry is made )
 Sanction advice documents(here party name and sanctioned amount is
mentioned then
Internal book entry is made which is mentioned bellow)
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Then all the documents are submitted

LC copy

Shipping documents

E- form
PENALITY

Penalty is imposed to NBP if it not make payment to SBP on time

Penalty is imposed to party if it will not pay back the amount of loan to bank
E-Form
E-form is used to report the details of exports made by the bank to the SBP.
When we recovered the amount against export
Note

Imports are not favored and exports are encouraged

At export contract time is estimated and written.

different facilities are given to exporters to boast the exports

If party not pay then wait till 3 years after that security is sale out by court.
Documents required for loan sanction
 Loan application form
 BBFS
 C/P credit information report
 Pre sanctioning formalities
 Search report
Search report
It is formed through Lawyers and contains details of the loan history.
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 Form A
It is similar to the loan application form, it is attested by SECP.
 FORM 29
It has details of directors and also attested by SECP.
Financials
 Account verification by chartered accountant.
 Balance sheet
 Profit & loss statement
 Cash flow statement

 Certificate of incorporation
 MOA
 AOA
NOTE
If the party not give the export business its account is transferred to cash finance.
 Charge (lean marking)

SECP(security exchange commission of Pakistan)

Property tax department

Revenue department
 Evaluation report
It is obtain by prescribed private companies.
Foreign currency loans under FE25
Circular issued by which foreign currency accounts are seized then scheme is
launched to used this foreign currency for exporter financing.
Limit is sanction in dollars.
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LIBOR rate
Formula
Rate=libor rate +spread rate
The amount which comes form libor is transferred to treasury (Head office NBP)
And spread rate amount is gone to branch of NBP.

Officer note:
Here we have to estimate that either he is eligible to avail the loan or not, if cushion is
available the more amount of loan is sanctioned.
After sanctioning the loan entry is made :
H.O of NBP……………Dr
Party a/c…………Cr
If the amount is received from the party in foreign exchange then the amount is
multiplied by the exchange rate and converted in Pak rupees
Entry:
Party a/c…………….Dr
H.O of NBP………………….Cr

Form M(Miscellaneous)
By this form we report to state bank of Pakistan that we have received x amount of
foreign currency
Mark-Up
It is calculated when finally all the amount of loan is adjusted
Loan amount is adjusted from proceeds.
Method
Days are calculated from the date of sanctioning of the loan to the current date of the
first proceeding
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Formula
Outstanding loan amount in dollars* days=product
At the end all the products are summed.
Similarly libor and mark-up is also calculated and summed separately. The purpose of
separately calculation of this is that we have to receive this amount of libor and markup from party. And loan amount is adjusted through proceedings.
ACCOUNT DEPARTMENT
Activities being performed in the accounts department are as follows:
 Payment of salary to all regular as well as contractual employees.
 Payment of all expenditures of bank/ branch Dr. to charge account.
 Payment of pension to X employees of bank.
 Payment of benevolent fund to govt. employees as well as X
employees of bank.
 Preparation of returns i.e. P&L statement, liability statement etc.
 Preparation and balancing of clean cash book.
Pension
Retirement at 60 year age.
FORMULAE
Formulae to calculate pension is;
=1.10% * total basic pay*Total length of service
Example
1.10%*35000*40years=1540.
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Gratuity
FORMULAE
Formulae to calculate gratuity is=Pension/2
Example
15400/2 = 7700
15400 amount will be paid as pension and remaining half as gratuity for 15
years.
Amount*12*15=138600
Benevolent fund
The amount of benevolent fund is calculated as 1620 for employees having
above Rs 5000/- basic pay and below it is calculated accordingly. It is paid till
10 years after retirement and if deceased employee than for lifetime to his
widow.
FOR JUNIOR STAFF
 For junior staffs who are alive, period of benevolent fund is 5 years.
 And if he is deceased then his wife will receive for 10 years.
IN CASE OF OPTIONAL RETIREMENT
In case of optional retirement benevolent fund duration is increased to 15
years (if service is 25 years).
Salary
Basic pay of the employer
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House rent allowance
50% of Basic
Conveyance allowance
Is given to the employees Equivalent to
SVP
400Ltr
VP
290Ltr
AVP
240Ltr
GRADE 1 OFFICER
140Ltr
GRADE 2 OFFICER
130Ltr
GRADE 3 OFFICER
120Ltr
CLERICAL NON-
75Ltr
CLERICAL STAFF
Utility allowance
12% of Basic
Medical allowance
15% of Basic
Education allowance
Rs. 2500
Dearness allowance
15% of Basic
(For executives)
17% of Basic
(clerical staff)
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BONUSES
Three bonuses are given to employees
a. One on Eid-ul-fitr
b. One on Eid-ul-azha
c. One final bonus
PROFIT BONUSES
In case of profit following bonus is given to the employees

200% of basic or 21500
WELFARE FUND
Welfare fund amount ranges from 20,000--- 25,000.
MEDICAL GRANT
Medical grant is given in such a way to employees.
Self
60,000
(officers)
Child
60,000
(clerical)
After two years increase in salary package must takes place
I-e increase in petrol allowance etc.
System of maintaining an account:
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SYSTEM OF ACCOUNTS
Generally there are two types of system for maintaining an account
 Journal System
 Voucher System
Generally journal system is adopted by some commercial industrial
institutions. In journal system entries are reported on Journal Book and then
posted to main ledger.
In banking voucher system is used for every transaction voucher has to be
prepared.
There are two types of vouchers:
 Debit vouchers
Debit voucher is used for recording all expenses and payments. In NBP it
is identified by red colour anh have number F-15.
 Credit vouchers
Credit voucher is used for credit and income coming to the bank. They are green
colour and have number F-51.
CREDIT ADMINISTRATION DEPARTMENT FUNCTIONS
This department offers the following products:

House purchase/renovation/construction loans.

Demand Finance

Running Finance

Demand Loan

Small Finance

Small Loan

L.M.M.(locally Manufactured Machinery) loan
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
Advance against Gold Ornament

Mortgage Loan

Cash Finance

Student Loan

Marketing of Financial products of the bank.

Liaising with the businessmen and industry.

Preparation of loan proposals

Checking the suitability of the potential Borrowers.

Documentation of the pledged assets and Creation of charge

Disbursement of loans.

Application of mark-up

Recovery of loans.

Visit to the borrowers and checking of hypothecated stocks.

Monitoring of appropriate use of loans.

Preparation of the list of defaulted borrowers.

Sending of notices to the defaulters.

Filing of recovery suits in the courts.
DOCUMENTS REQUIRED BY CREDIT PROCEESING DEPARTEMENT
Standard documents required from client before sanction/disbursement
of loan
Sr.N Document name
1
Brief profile of the business
2
Production capacity of the business
3
Loan application form(LAF) on letter head
4
Borrower basic fact sheet(BBFS) each page to be signed
5
Audit financial a/c for last 3 years
6
Audit quarterly financial accounts if any
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7
Projected financial statements for the next 3 years
8
Status of the existing loan accounts with other banks-separately on letterhead
9
Memorandum & Article of association
10
Board Resolution for financing
11
Form-29
12
Form –A
13
Biographical note of directors/partners/owners
14
Details of net worth of directors-Separately on letterhead
15
Detail of personal guarantees provided to banks- Separately on letterhead
16
NIC copies of all directors/partners/owners
17
Details of associated concerns and transactions with them-separately on letterhead
18
Certificate of incorporation
19
Certificate of commencement of Business
20
Detail of godowns with capacity-separately on letterhead
21
Title deed of collateral property
22
Approved site plan of property
23
NEC
24
Clearance certificate
25
Mutation
26
Fard
27
PT-1
28
Aks shajra
29
Undertaking that bank fund would be utilized for the purpose stated
30
Pledge /hypo reports for the last three months
31
Stock statement
32
Feasibility report
33
3-machinery
34
3-civil work quotation
35
National tax number
36
Partnership deed
37
Form C (registration of partnership concern)
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Details of terms:
 F-29:
It is containing the details of the

Directors

Auditors

Company sectary
 F-A:
It contains details of share holders along with the details of the number of
shares.
 Biographical note:
It is containing the net worth of the business (assets-liabilities)
 Associated concerns:
It contains the detail if the company having shares of different companies.
o Subsidiaries:
The company which has more than 50%share.
o Certificate of incorporation:
it is required just in case of private company.
o Title of collateral property:

Registry

PT-1=payment of tax certificate

Transfer letter=in case of society
 NEC( non-encumbrance certificate):
It means that the property is free from all kind of charges.
 Clearance certificate:
It is the document that shows that this property is clear from tax and given by excise
department.
 Mutation:
It contains details of area of property.
Kasra>khatoni>khewat.
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Fard:
missing
 Aks shjra:
This document contains the details of surroundings of the site or property.
CREDIT ADMINISTRATION DEPARTEMENT ACTIVITIES
Inland letter of credit
Inland Letter of Credit is issued to meet out the credit requirement for
domestic trade. This is a form of non fund based credit extended by the
banks. This is given to the seller of the goods on behalf of the buyer by the
bank where the buyer deal.
Types of LC
There are two types of letter of credit regarding payment period.
 Sight LC
 Usuance LC
Sight LC
Exporter get the money immediately after presenting the documents
Usuance LC
In Usance LC, time can be between 30 and 180 days after the bill of lading
date. This is a form of delayed payment. Exporter will get the payment on the
maturity of instrument.
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Required documents
Following documents are necessary to open letter of credit and must be
presented to the bank.
 Request letter
Importer will make a request to the bank to open a letter of credit on his behalf
in favor of exporter.
 Performa invoice
A Commercial Invoice is a bill prepared by the seller for submission to the
buyer which details all items bought, together with amounts owed major terms
and conditions of the contract.
 IB 27
It is the legal document and name as Islamic banking form 27.
 Annexure “A”
It contains some additional details of the procedure.
 Bill of lading
A Bill of Lading is a receipt that a common carrier gives to the seller for the
goods that the carrier will transport. It frequently serves as a document of
title, giving the person who possesses it ownership of the goods.
Draft:
A draft or bill of exchange is a negotiable instrument that is payable
to the seller and drawn on the issuing bank and/or the buyer.
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Documents are prepared by seller
This document is prepared by the seller, but is analogous to a
check written from the buyer to the seller. Drafts can be either
"sight drafts" where the bank pays the full amount of the draft upon
the seller's presentation, or "time drafts" where the bank's obligation
at the time of presentation is merely to accept the draft for payment
at a later date (e.g. 90 days after the seller's presentation). Time
drafts provide the buyer with short-term financing. Often, banks will
purchase their accepted time drafts at a discounted rate.
Guarantee
Definition under Contract Act under sec 126
“It is a contract to perform a promise or discharge liability of a third person
in case of his default.”
Parties involved
There are three parties involved in a contract of guarantee
 Principal debtor
 Creditor/beneficiary
When two persons have signed a contract, the beneficiary who performs the
contract will involve bank as guarantor to secure his interests.
 Guarantor (NBP itself)
Once a tender is floated then terms and conditions mentioned are agreed
upon by the parties then these will never change and will remain same.
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TYPES OF EXPOSURES
There are two types of exposures
 Fund based exposure
In fund based exposures, bank’s funds are directly involved
 Non fund based exposures
In non fund bases exposures, bank’s funds are not involved but
bank act as a third
party or as an intermediary.
Documents
Documents required by the bank in a contract of guarantee are
 Letter of request
Stamp paper of Rs 100 with text drafted on it and this text will variy with
respect to transaction.
Date of issuance ,expiry, amount in words and figures ,name of principal
debtor, creditor and guarantor are mentioned in the LC documents.
 IB-30 (counter guarantee form) signed by the beneficiary.
Charges
Service charhes
Bank takes service charges 1.6% commission per annam and 16% FED.
Bank will have charge on fixed and current assets of the debtor.
FCO (finance against operations)
Finance allowed to customer against commodities (wheat, cotton, and gram
etc)
Also called SEASONAL FINANCING granted to accommodate the seasonal
needs of customers.
How it is financed
Consortium of different banks (ABL,UBL,MCB,NBP,Bank Alhabib, Habib
Metropolitan, soneri bank limited) is made that will provide finance.
First bid is taken, price is decided then share is allocated among these banks.
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Procedure
There are two main departments/institutes.
 Govt of Punjab food
 PASSCO (Pakistan agriculture storage and services corporation
limited)
Passco has established their centers within 20 km. Farmer goes to PASSCO
they Check wheat and make purchase bill and handover to the customer.
Farmer take it to the bank and branch manager makes payment on the spot
and debit the passco account and give credit to the NBP general account.
Markup rate
Markup rate = 3-MK rate as of June 30, 2009 + 3.25% p.a for full
Amount
3-MK is defined as 3 month KIBOR (Karachi interbank offered rate)
Markup rate is calculated on quarterly basis and changes on quarterly basis.
Bank will provide written notice of benchmark change before it is deemed to
become mutually applicable.
In the event of discontinuation of base rate
If the base rate ceases to exist, then lenders may in consultation with Punjab
food department decides on an alternative basis for calculation of base rate
and corresponding profit thereon.
Pledge
“Pledge means something delivered as security for the payment of
a debt, and subject to forfeiture on failure to pay or fulfill the
promise. Only commodities of the companies can be pledged. “
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Note
No building can be secured for loan application
Margin
To further secure its interest, NBP takes margin from the customer
as NBP takes 10% margin on cotton and 25% on yarn. These rates
are mentioned in sanction advice.
NBP has monopoly to advance loan against gold ornaments that
are also pledged.
NBP also allows NILL margin when a customer is exporting
something like cotton and LC for this is opened by the NBP then LC
will be pledged as security and no margin will be taken from client.
Advance value
Amount worth = 100000
Margin amount = 10 %
Advance limit = 90000(100000 – 10000)
Where, 10000 is the amount of margin.
Muqqadam
These companies act as agent that receive the cotton and yarn etc
pledged with the NBP. They inform the bank that they have
received the goods and keeps them until it receives the delivery
order and proper record of receipt of these goods is maintained.
Delivery/ Release order
A company can take her commodity back after paying amount and
after presenting delivery order
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ADMINISTARTION DEPARTMENTR
EPORT
EMPLOYEES SERVICES SAFETY, HEALTH AND WELFARE
National Bank of Pakistan is not only a commercial institution but also a welfare
institution, who always strive for the well being and welfare of the employees and in
this regard offers following benefits to its employees.
-
Pension, insurance, gratuity and provident fund facility
-
Free medical facility for self, family and parents.
-
Scholarships for children.
-
Housing facility in the shape of housing colony in the big cities.
-
School fees for the children.
-
Car loan, Computer loan and House loan facility at easy Installments.
-
Five bonuses and awards to all employees every year.
-
Market based salary structure and increase in the salary every year.
-
Establishment of NBP Staff Welfare Trust.
STAFF LOAN
To motivate employees of the bank, NBP is offering different loan facilities at
subsidized rates. Following loan facilities are offered by the bank:
Computer Loan

Motorcycle Loan

Motorcar Loan

House Building Loan

Clean Running Finance
1. Computer Loan
Eligibility
All confirmed employees can avail this loan facility.
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Limit
Rs 50,000/- (for all employees)
Rate of Interest
4% per annum
2. Motorcycle Loan
Eligibility
All confirmed employees having service of 2 years can avail this loan facility.
Limit
Rs 80,000/- (for all employees)
Rate of Interest
Without interest
Repayment
Loan is repayable in 10 years with equal monthly installments.
3. Motorcar Loan
Eligibility
All confirmed employees having service of 3 years can avail this loan facility.
Limit
Rs 350,000/- (for clerical/non-clerical staff)
Rs 422,000/- (for OG-3 to OG-1 Officers)
Rs 504,000/- (Above OG-1 )
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Rate of Interest
4 % per annum
Repayment
Loan is repayable in 10 years with equal monthly installments.
4. House Building Loan
Eligibility
All confirmed employees having service of 5 years can avail this loan facility.
Limit

Minimum
Rs
600,000/-
(for
clerical/non-clerical
staff),
if
any
clerical/non-clerical staff having basic pay of above Rs 10,000/- then
100 basic pays for all officers
Rate of Interest
Loan amount upto Rs 600,000/- is interest free for all officers, and for loan
amount above Rs 600,000/- rate of mark-up is 3% per annum.
Repayment
Loan is repayable in 20 years with equal monthly installments.
INDUSTRIAL RELATIONSHIP
The bank has developed very good industrial relationships with all the major
industries, which are our borrowers and customers. Some major of these industries
include:
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TEXTILE SECTOR
 Adil Textile (Pvt) Ltd.
 Sitara Textile Group
 Adamjee Textile industries
 Al-Karam Textile Industries
 National Textile (Pvt) Ltd.
 Haris & Hamad Textile Industries (Pvt) Ltd.
FERTILIZERS SECTOR
 Pak Arab Fertilizers
 Pak Saudi Fertilizers
 Pak China Fertilizers
 Fauji Fertilizers.
In addition to these all the major Public Sector and Private sector organizations are the
customers of National Bank of Pakistan.
NBP is providing them long term loan
facilities to meet their financial needs.
SYSTEM OF COMMUNICATIONS
NBP is one of the top most leading banks of Pakistan Basically it is a government
owned bank and has a sophisticated system of communications within the bank and
outside the bank, which is explained below.
OUTSIDE MEANS OF COMMUNICATION
 Fax and Telephones.
 Latest Satellite System
 Swift
 Internet facilities
 Web site
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INTERNAL COMMUNICATIONS
All the correspondence is held through proper channel and in a systematic way in the
following manner:
At branch level all the officers report to Operations Manager
1.
Operations Manager reports to Branch Manager.
2.
Branch Manager can report directly to the following Senior officer at
Regional Head Quarter (RHQ)
a. Regional Business Chief (RBC)
b. Regional Operations Chief (ROC)
c. Regional Risk Management Chief (RRMC)
d. Regional Compliance Chief (RCC)
3 All these Chiefs report directly to the Group of Operations (GOO) at Head Office
Karachi8.
4 All these Groups of Operations directly report to the President of the Bank.
5 President is answerable to State Bank of Pakistan (SBP), Board of Directors
(BOD), Stakeholders and other key government Authorities.
ACHEIVEMENTS
CORPORATE AND INVESTMENT BANKING
The Corporate and Investment banking group provides tailored financial
services to corporate and institutional clients. Our strength in this area is
further supplemented by balance sheet size and consequently the largest per
party limit in the country. In a highly competitive and challenging market
environment, NBP acted as lead advisor and arranger in landmark
syndications, acquisitions, advisory and project financing transactions to
substantially grow the loan book.
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NEW PRODUCT DEVELOPMENT
With the focus on upgrading existing and developing new distribution
channels, creating new and more competitive products, year 2004 was an
excellent year for retail banking. During the year, the bank significantly grew
its customer footings, continued to expand its delivery channels and further
improve its process efficiencies, thus re-enforcing its leadership position in the
market and enhancing its share of income contribution to the bank. This
business segment posted excellent results with strong revenue growth.
NBP is also the market leader in agriculture and commodity financing with
approximately 200,000 customers. There are new products under launch, for
example "NBP Kissan Taqat", a programmed based lending product for dairy
farmers and debit cards branded as "NBP cash card". E-banking products are
set to enhance NBP fee based income considerably. The main objectives are
to remain the market leader with effective MIS ensuring proper tracking and
monitoring, to increase fee based revenue, and to provide best customer
satisfaction as well as loyalty through top class branded products.
RISK MANAGEMENT
Progress
was
made
in
improving
the
overall
risk
architecture.
A
comprehensive risk management manual was put in place in line with Central
Bank guidelines. The bank has initiated a well defined risk rating system. The
bank is well aware of the challenges posed by risk management guidelines
and Basel II accord and is continuously improving the posture to cope up with
the challenges.
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HUMAN RESOURCE DEVELOPMENT
The bank firmly believes that a highly motivated and well trained workforce is
the
key factor
to
success.
Heavy
emphasis
is
being
placed
on
institutionalizing a merit culture through performance based rewards and
career development. The bank remains committed to improve the quality and
banking skills of its human resource, to ensure its position as the market
leader. The regular hiring of 70-80 MBA’s annually since 2002 will further
improve the quality of the workforce.
INFORMATION TECHNOLOGY
NBP is cognizant of the importance of information technology and is
constantly investing to expand and upgrade its technological platform. The IT
strategy is fully aligned to business requirements to offer IT enabled products
and services for the highest level of customer satisfaction. The bank is about
to install 70 new top of the line ATMs, set up a national call centre, introduce
on-line banking facilities and automate government business. NBP is also on
track for acquisition of a new core banking application to improve operational
efficiency and enhance customer service.
IMPROVEMENT IN PHYSICAL INFRASTRUCTURE
NBP branches are being upgraded with standardized premises and signage
under the new brand. To cater to the needs for Islamic banking, the opening
of the first Islamic banking branch is in the final stages. This initiative is
expected to attract new customers besides increasing revenue. The presence
of NBP in major financial centers of the world allows us to play a key role in
promoting the country’s trade. NBP further expanded its international
presence in the year by opening branches in Jalalabad and Chittagong to
increase the international presence to 17 countries.
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In recognition of NBP’s excellent performance, the bank was awarded the
prestigious "Bank of the year” in Pakistan by "The Banker" London in
2004. "Euromoney" magazine, a leading journal in its latest issue of
March 2005 has listed NBP amongst the top 100 banks in Asia, being the
only Pakistani bank.
CREDIT RATING OF THE BANK
JCR- VIS Credit Rating Company Limited re-affirmed the bank’s entity rating
AAA/ A-1+. The medium to long term standalone rating of the bank has been
upgraded from AA- to AA with a stable outlook. Rating has been upgraded in
view of the bank’s improving risk profile, with a reduced level of asset
impairment and diversification of risk assets.
CORPORATE AND FINANCIAL REPORTING FRAMEWORK (CODE OF
CORPORATE GOVERNANCE)
The board is fully aware of its responsibilities established by the Code of
Corporate Governance issued by the Securities & Exchange Commission of
Pakistan (SECP). The Directors are pleased to give the following
declarations/statements to comply with the requirements of the Code.
(a) The financial statements (Balance Sheet, Profit & Loss Account, Cash
Flow Statement, Statement of Changes in Equity and notes forming part
thereof), prepared by the management of the bank give the information
required by the Companies Ordinance, 1984 in the manner so required and
respectively give a true and fair view of the state of the bank’s affairs as at
December 31, 2004 and of the result of its operations, changes in equity and
its cash flows for the year then ended.
(b) Proper books of accounts have been maintained.
(c) Appropriate accounting policies have been consistently applied in the
preparation of the financial statements and accounting estimates are based
on the reasonable and prudent judgment.
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Internship Report on NBP
(d) Approved Accounting Standards have been followed in preparation of the
financial statements and there is no departure from the said standards.
(e) The system of internal control is sound in design and has been effectively
implemented and monitored throughout the year. The Board is responsible for
establishing and maintaining the system of internal control in the bank and for
its ongoing monitoring. However, such a system is designed to manage rather
than eliminate the risk of failure to achieve objectives, and provide reasonable
but not absolute assurance against material misstatements or loss.
SWOT ANALYSIS
Strength
 Custodian of government treasury
 Working as agent of SBP
 Job security for employees
 Main custodian of public money
 Government business owner
 Lender to the government agencies
 Blind limitation of public over NBP as government bank(PUCCA BANK)
 Negotiator with the international institution on behalf of government
 World wide network of branches
 Lender to the public based projects
Weakness
 Not fast service to the clients
 Lethargic and rude attitude of employees towards customers.
 Less marketing expedition
 No innovation and new products
 No on line and e-Banking facilities
 Worst conditions of branches.
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Internship Report on NBP
Opportunities
 Can launch a marketing strategy to capture the business from its peer banks.
 Can be number one in Pakistan
 Can offer new and innovative products to complete rest of the banks.
 With proper planning can hunt more and more business from the public and
private sector as people still trust over it.
Threats
 Not fully computerized and on line banking facilities
 Competition with foreign banks
 Not following modern banking system
 Growth of mushroom banks.
 Awareness of the public with the newly established banks.
 Less participation in capital market activities
 Use of traditional system of banking like ledgers and book keeping etc.
 Political influence.
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Internship Report on NBP
CONCLUSION
From this SWOT Analysis we can conclude that beside the fact that National Bank of
Pakistan is a government based institution but in these days of competition it is not
easy to survive without adopting modern techniques and latest tools of sophisticated
technology. Although National Bank of Pakistan is a Government Institution, but in the
modern era it has achieved a destination where other competitive modern banks can
simply reach.
From year 2001, The Bank has made a Hat-Trick in winning
International Awards.
That is why people have more trust in NBP and they are
willingly depositing their money in it without any threat. The performance of NBP in
previous five years is extra-ordinary. In the stock market, the share of national Bank of
Pakistan is going higher and higher day by day which shows better worth of NBP to
other Banks. In last, we would like to say the National Bank of Pakistan as “The
Nation’s Bank”.
At the end, I would like again to say a lot of thanks to our respected Teachers and
Friends, who guided us in every stage while we were completing this Project
assignment. We pray to Gold to bless whole mankind and guide them to the best way.
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Recommendations
Recommendation for the National Bank of Pakistan (NBP)
 NBP should give the proper training to those employees are not to trained
regarding computer processing
 In general banking the environment sometimes get tensed by the rode behavior
of the customers and also by the employees, so there should be proper training
to improve their customers services.
 In credit processing department I come to know that in pledge, the goods are
under the custodian of the an external party known as Muqqadam , by which
NBP has made contract but it is not the safe mode of custody of the pledge
goods. There is the chance of fraud. So they have to maintain their own
gowdowns.
 There is no facility regarding cafeteria so NBP must maintain a small cafe for
their employees.
 The services of NBP are good but there is a great need to make the entire
environment of the bank especially the main branch of NBP computerized.
 Manual working must be reduced. All the previous data must be computerizes.
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