N
Internship Report on
ATIONAL
B
ANK OF
The
PAKISTAN
The
Nation's Bank
Nation's Bank
National Bank
of
Pakistan
government
Treasury
The
Nation's Bank
The
Nation's Bank
HAILEY COLLEGE OF COMMERCE
Salma Bashir
The
Nation's Bank
Roll number: 126
B.com (Hons.)
Session : 2005 - 2009
Supervisor : Sir. Hassan Mubeen Alam
National Bank of Pakistan
Samnanabad Branch
Date of joining : 25-7-09 to 24-09-09
DEDICATION
Dedicated to my Parents
who always care me
and most formative teachers,
Sir Zafar & Sir. Yasin
for their unwavering support and guidance.
HAILEY COLLEGE OF COMMERCE
Salma Bashir
Roll number: 126
B.com (Hons.)
Session : 2005 - 2009
Supervisor : Sir. Hassan Mubeen Alam
National Bank of Pakistan
Samnanabad Branch
Date of joining : 25-7-09 t0 24-09-09
C
K
N O
W
L
E D G E
M
E N T
ACKNOWLEDGEMENT
All praise to Allah, the most merciful, kind and beneficent,
and the source of all knowledge, wisdom within and beyond
my comprehension. He is the only God, who can help us in
every field of life. All respect and possible tributes goes to
my Holy Prophet Mohammad (SAW), who is forever
guidance and knowledge for all human beings on this earth.
I am proud to say that I am very grateful to my family whose kind
prayers and cooperation helped me at every step of my work.
Special thanks go to my parents for their cooperation for the sake of
my knowledge.
I am greatly indebted to my learned teachers, Sir.Kumail Abbas
Rizvi, Sir. Yasin, Miss. Shamaila, Miss Hafza, Sir. Zafar who have
great influence on me during my formative years. This report
reflects the knowledge which I have gained from my valuable
teachers. I acknowledge with deep gratitude the invaluable help
extended to me by Mr. Rana Ahsaan-ul-Haq, one of the officer of
the National Bank of Pakistan, without his co-operation it was not
possible for me to complete my Internship Report. He guided and
helped me and specially the sympathetic attitude, which always
inspired me for hard work.
I am really very thankful to Muhammad Rafi Operational Manager
of National Bank Samanabad Branch, Lahore and all the bank staff
for their cooperative attitude during my internship.
In the end thanks are due to one of my friend Miss. Sana Khalid for
her cooperative attitude during the completion of my project work.
She helped and supported me during gathering and analyzing
information.
SALMA BASHIR
B.com(Hons.)
X
E C U
T I V E
U
M
M
A R
Y
EXECUTIVE S UMMARY
To interpret my skills and educational knowledge of Finance I done my
internship in National Bank of Pakistan Samanabad Branch, Lahore and to
know how I will work in financial institutions and among various types of
people have different attitude.
The objective of this Internship was to explore the issues relating to Finance
and to find out problems regarding the theoretical concepts with practical
experience working in an organization during the internship and study the
system of National Bank of Pakistan. There are many possible
improvements, which we can make positive changes in the system.
The report is based on my two months internship program in National Bank
of Pakistan. The methodology reported for collection of data is primary as
well as secondary data. The biggest source of information is my personal
observation while working with staff and having discussion with them.
The report summarizes the National bank of Pakistan with its working
divided into three parts first part deals with the description of the NBP the
second part covers the theory and practices adopted by NBP and third part
discuss the financial position of NBP, its analysis and at the end concluding
remarks and suggestions are given for improvements. It was too much
difficult for me to describe the functioning of such a vast organization within
the limits. In spite of this I tried my best to describe.
Finally, for any all too fallible errors, omissions and shortcomings in the
writing of the report only I am responsible for which I hope that all
concerning regards of this report will forgive us.
SALMA BASHIR
B.com(Hons.)
R
E F A C E
PREFACE
During this eight weeks long practical glimpse the theories and ideas which
we received from the books have been women in the texture of our actual
life. No doubt, it has helped us in cultivating the qualities of courage, hope,
initiatives and capacity to turn our knowledge to practical purpose.
Banking sector owes a pivotal importance in the economy of any country
through its vibrant functions. This is the deep seated motivator that geared up
me to join any bank for internship.
National Bank of Pakistan (NBP) was established in 1949 under the National
Bank of Pakistan Ordinance 1949 and was 100% government owned. NBP
acted as an agent of the Central Bank wherever the State Bank did not have
its own Branch. It also undertook Government Treasury operations. Inside
the bank, in branch banking it has Clearing and Collection Department,
Government Receipts Processing Department, Account Opening Department,
Remittance Department, Customer Services Department Cash Department,
Deposit Department, Advances and Credit Department. These are the most
common departments exist in almost each branch. It is offering different
deposit choices, advances, credits and securities etc for its customers through
its corporate branches.
Yet there are many possible improvements, which we can be made and that
can bring positive changes in the system. There is shortage of employees in
the organization. With development of online banking system the load of
work can be decreased. All the staffs do not know about computer. There is
almost one or two employees are trained to operate the system in every
branch. Especially, the cash department is not familiar with computer and
information system. It is not easy for it to implement a new system
immediately it takes a lot of time to replace systems. Once implemented its
testing takes more time. So it is important for the Bank to develop a research
department for redesigning the operations of the Bank
SALMA BASHIR
b
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BRIEF CONTENTS
Introduction and National Bank of Pakistan
 Bank's Profile
 Introduction
 Overview of Organization
Historical Background
 Background
 Establishment
1-4
2
3
4
5-8
6
7
Organizational Structure
9-15
Organizational Network
16-20




Registered and Head office
Share Registration Office
Share Capital
Branch Network
Management of NBP





Management System
Management Structure
Corporate Information
Senior Management
Oversea Management
Departments
17
17
17
17
21-26
22
22
24
25
26
27-72
 Departmentalization in NBP
 General Banking Department
Deposit Section
Account opening Section
Locker Service Section
Cash Dealing Department
Clearing Section
Remittance Section
28
29
29
33
42
43
47
53
 Advances Department
 Accounts department
 Billing and Government Receipt/ Payment Department
Commercial and Retail Banking












Premium Aamadni Scheme
Premium Saver Scheme
Karobar Scheme
Saiban scheme
Advance Salary Scheme
Cash card Scheme
Cash n Gold Scheme
Kisan Dost
Kisan Taqat
Pak Remit
NBP Protection Shield
NBP Student Loan Scheme
Financial Analysis




Horizontal Analysis
Vertical Analysis
Ratio Analysis
SWOT Analysis
Work Performed





Learning and Personal Experience
Branch Profile
Branch Hierarchy
Departments of training
Issues Faced by Branch
Findings and Conclusion
 Dilemmas faced by organization
 Recommendation
 Conclusion
Annexure and Documents
58
6
70
73-84
74
75
75
76
77
79
80
81
81
82
82
84
85
86
90
93
101
104-114
105
106
107
107
113
115-121
116
119
121
122
N T
R O D U C T I O N
INTRODUCTION
&
A T I O N A L
A N K
O F
A K I S T A N
NATIONAL BANK OF PAKISTAN
In this section three topics are discussed:
Bank's Profile
NBP Introduction
Overview of Organization
Vision
Mission
Core values
Goals
Bank's Profile
THE NATIONS'S BANK
Type
Government
KSE:
LSE
Established
1949
Headquarter
Principal Office, Karachi Pakistan
Key People
S. Ali Raza (President & Chairman)
Industry
Banking, capital Market
Products
Loans, Credit Card, Savings, Consumer
Deposit
624938 Million
Net income
15459 Million
Total Assets
817758 Million
Number of Employees
15204
Number of Branches
1276
Home page
www.nbp.com.pk
Banking etc
Internship Report
National Bank of Pakistan
INTRODUCTION
(Incorporated under the National Bank of Pakistan Ordinance, 1949)
National Bank of Pakistan is the largest commercial bank operating in Pakistan National
Bank of Pakistan was incorporated in Pakistan under the National Bank of Pakistan
Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. It's registered and head
office is situated in Karachi.
The bank is engaged in providing commercial banking and related services in Pakistan and
overseas. The Bank's services are available to individuals, corporate entities and government.
While it continues to act as trustee of public funds and as the agent to the State Bank of
Pakistan (in places where SBP does not have a presence) it has diversified its business
portfolio and is today a major lead player in the debt equity market, corporate investment
banking, retail and consumer banking, agricultural financing, treasury services and is
showing growing interest in promoting and developing the country's small and medium
enterprises and at the same time fulfilling its social responsibilities.
NBP headquarters in Karachi, Pakistan with over 1,200 branches country wide. In today's
competitive business environment, NBP needed to redefine its role and shed the public sector
bank image, for a modern commercial bank. It has offloaded 23.2 percent share in the stock
market, and while it has not been completely privatized like the other three public sector
banks, partial privatization has taken place. It is now listed on the Karachi Stock Exchange.
• Handling of treasury transactions for the Government of Pakistan as agent to the State
Bank of Pakistan.
• Accepting of deposits of money on current, fixed, saving, term deposit and profit and
loss sharing accounts.
• Borrowing money and arranging finance from other banks and advancing and lending
money to its clients.
•
Buying, selling, dealing, including entering into forward contracts of foreign
exchange.
•
Financing of seasonal crops like cotton, wheat, rice, sugar cane, tobacco, etc.
•
Carrying on agency business of any description other than managing agent, on behalf
of clients including Government and local authorities.
•
Generating, undertaking, promoting, etc. of issue of shares and, bonds, etc.
•
Transacting guarantee and indemnity business.
•
Undertaking and executing trusts.
•
Joint venturing with foreign dealers, agents and companies for its representation
abroad.
•
Participating in "World Bank" and "Asian Development Bank's" lines of credit.
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Internship Report
National Bank of Pakistan
OVERVIEW OF THE ORGANIZATION
VISION
"To be recognized as a leader and a brand synonymous with trust, highest standards of
service quality, international best practices and social responsibility."
MISSION
NBP will aspire to the values that make NBP truly the Nation’s Bank, by :
 Institutionalizing a merit and performance culture
 Creating a distinctive brand identity by providing the highest standards of services
 Adopting the best international management practices.
 Maximizing stakeholder’s value.
 Discharging our responsibility as a good corporate citizen of Pakistan and in
countries where we operate.
CORE VALUES
 Highest standards of Integrity.
 Institutionalizing teamwork and performance culture.
 Excellence in service.
 Advancement of skills for tomorrow’s challenges.
 Awareness of social and community responsibility.
 Value creation for all stakeholders.
GOALS
To enhance profitability and maximization of NBP share through increasing leverage
of existing customer base and diversified range of products.
Direction
Excellence in Growth
Excellence in Performance
Excellence in Management
Excellence in
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Internship Report
National Bank of Pakistan
Excellence in
5
Achievement
I S T O R I C A L
A C K G R O U N D
HISTORICAL BACKGROUND
In this section two topics are discussed:
Background of Foundation
Establishment
Internship Report
National Bank of Pakistan
HISTORY OF NATIONAL BANK OF
PAKISTAN
BACKGROUND
At the time of partition the total number of Commercial Banks in Pakistan was 38 .Out of
these Pakistan had 2 banks, India had 29 and there were 7 exchange banks. Before the
partition of Sub Continent the entire banking business was almost controlled and managed by
non-Muslims. The Muslims were deliberately kept cut of banking profession by the wealthy
Hindu community. When Hindu capitalists became sure of the division of Sub Continent,
they secretly began transferring their funds and the other valuables at an accelerated pace to
India and there was a mass scale migration of non Muslims from West Pakistan to India
which also caused the drain on the bank deposits. The Hindus closed down most of the head
offices and the branches of scheduled and non-scheduled banks in Pakistan. The number of
scheduled bank’s branches was reduced from 619 to 213 in both the wings of the country
after independence.
The non-scheduled banks also suffered a severe jolt and their number was reduced from 411
to 106 over the same period. West Pakistan from where there was greater exodus of nonMuslims to India suffered a great deal, as a number of branches fell down (from 487 to 69).
The mass scale closure of branches and withdrawal of the deposits caused a dead lock in the
banking business in Pakistan.
The government of Pakistan was quite aware of the serious banking situation caused by the
withdrawal of deposits and wholesale migration of banking staffs to India. It took up the
challenge and started reorganizing the crippled banking immediately after partition.
In 1949 September U.K. devalued its currency, India followed the suit but we did not. India
said we had contravened the agreement. On October 3, 1949 the two central banks have to
announce the new par value of both currencies but India denied the day earlier. India also
froze our trade balance surplus that is still an unsettled dispute. India also draws the Marwari
merchants who were employed annually for movement of jute crop by financing it. There
being no jute industry, prices fell sharply, and an agrarian unrest was threatening. Two
Ordinances were therefore issued.
1
2
Jute board Ordinance &
NBP ordinance dated 08.11.1949
In order to regulate both of the banking on sound footings, the following measures were
taken to develop the banking system in Pakistan.

The State Bank of Pakistan, which is the central bank of the country, was established
in July 1948.

The National Bank of Pakistan was established on 1949,to serve as an agent to the
SBP.
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Internship Report

National Bank of Pakistan
The Industrial Development Bank of Pakistan was set up on August 1, 1961 with a
Paid up Capital of Rs; five crore. The Agricultural Development Bank of Pakistan
(ADBP) was set up in 1961. it provides short , medium and long term loans to the
farmers. In Jan, 1974 the entire commercial banks were Nationalized. The weaker
commercial banks were merged with the stronger once and in all Five major banking
companies were formed. MCB and ABL have again been privatized.
ESTABLIHMENT
The normal procedure of establishing a banking company under the Companies Law was set
aside and the Bank was established through the promulgation of an Ordinance due to the
crisis situation that had developed with regard to financing of jute Trade. The Bank
commenced its operations from November 20, 1949 at six important jute centers in the then
East Pakistan and directed its resources in financing of jute crop. The Bank’s Karachi and
Lahore offices were subsequently opened in December 1949.
State bank of Pakistan after its formation demanded from the Indian Reserve Bank the assets
against the Indian currency retired from Pakistan territory. Government of India refused to
hand over the assets worth about five hundred million rupees. The dispute is still unsettled
and these assets are still not delivered to Pakistan. Until June 1950, the Bank was engaged
exclusively on jute operation. Thereafter, it was felt that it could expand its business to
include other commodities as well. Bank took a big stride in 1952, when it replaced the
Imperial Bank of India, as an agent of State Bank of Pakistan.
There were 14 Pakistani scheduled commercial banks operating in the country on December
1973, the name of these were:
1. National Bank of Pakistan
2. Habib Bank Limited
3. Habib Bank (Overseas) Limited
4. United Bank Limited
5. Muslim Commercial Bank Limited
6. Commerce Bank Limited
7. Australia Bank Limited
8. Standard Bank Limited
9. Bank of Bahawalpur Limited
10. Premier Bank Limited
11. Pak Bank Limited
12. Lahore Commercial Bank Limited
13. Sarhad Bank Limited
14. Punjab Provincial Co-operative Bank Limited
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Internship Report
National Bank of Pakistan
The Pakistan Banking Council prepared banks amalgamation schemes in 1974 for
amalgamation of smaller banks with the five bigger banks of the country. These five banks
are as under:
1. National Bank of Pakistan
2. Habib Bank Limited
3. United Bank Limited
4. Muslim Commercial Bank Limited
5. Allied Bank Limited
So, through the Nationalization of Bank Act 1974, the State Bank of Pakistan, all the
commercial banks incorporated in Pakistan and carrying on business in or outside the country
were brought under the government ownership with effect from Jan. 1, 1974. The ownership,
management, and control of all banks in Pakistan stood transferred to and vested in the
Federal Government.
With the passage of time its functioning diversified as they take over the function of different
institution with the passage of time like in past they took over the function of Imperial bank
of India and now of NDFC (national development finance corporation). It is working as the
agent of the state bank of Pakistan and performs its functions wherever state bank of Pakistan
is not present.
8
R G A N I Z A
T I O N L
T R U C T U R E
ORGANIZATIONL STRUCTURE
In this section topic is:
Overall Organizational Structure of NBP
and it's hierarchical View
Internship Report
National Bank of Pakistan
ORGANIZATIONAL STRUCTURE
In National Bank of Pakistan, the head is called “Chairman” or “President” of the Bank.
And after President there is Five Broad of Directors. National Bank of Pakistan has
eleven Groups which control the working of the Divisions, Wing, Department, Section
and Regional of the national bank of Pakistan. In NBP, “Department” is called “Wings”.
Chairman &
President
Board of
Directors
President’s
Secretariat
Secretary Board
of Directors
Corporate &
Investment
Banking Group
HRM &
Administration
Group
Credit
Management
Group
Operation
Group
Special Assets
Management
Group
Audit & Inspection
Group
Commercial &
Retail Banking
Group
Overseas
Management
Group
Compliance Group
Treasury
Management
Group
I.T. Group
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Internship Report
National Bank of Pakistan
National bank of Pakistan divided their task in to separate jobs. Basically national Bank
of Pakistan having different groups, and each group perform different task specialization
in their department. National Bank of Pakistan Categories their departments through their
work specialization. And NBP hire their employees also through work specialization. The
following Chart shows the Work Specialization in the bank. HRM & Administration,
Operation, Commercial & Retail Banking, and I.T Group are performing different
working in the Organization.
HRM &
Administration
Group
Operation Group
Commercial &
Retail Banking
Group
I.T. Group
National Bank of Pakistan is structurally divided into Groups and groups are also
subdivided into Departments, Wings, and Divisions. National Bank of Pakistan has
different Department in the Group and each department performing work, as their task
assign. Department also subdivided into working bases.
Credit Management
Group
(Functional Deptt)
Administration
Wing
Credit
Monitoring
Wing
Industrial
Research
Wing
Credit Policy &
SME Wing
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Internship Report
National Bank of Pakistan
GEOGRAPHIC DEPARTMENT
Special Assets
Management Group
(Geographic Deptt)
SAMG - North
(Lahore)
SAMG – Head
Office
SAMG – South
(Karachi)
PROCESS DEPARTMENT
Compliance Group
(Process Deptt)
Administration
Wing
SBP Inspection
Market &
Liquidity Risk
Credit Risk
CUSTOMER DEPARTMENT
Operation Group
(Customer Deptt)
Customer
Facilitation &
Admn.
Customer Services
& Govt. Business
Financial Institutional
&
Cash Manag.
12
Internship Report
National Bank of Pakistan
National Bank of Pakistan (NBP) provides Services through more than 1200 branches in
Pakistan and 22 branches in overseas. And there are 29 Regions. All Branches of
National Bank of Pakistan report to five Head of RMT Members. And these five
members reported to regional Offices. Regional Offices report to the Group Chief of the
Groups. All the process is working very quickly and it not consume more time. And the
Group Chief of each Group Report to the President of the National Bank of Pakistan. All
the data were proceed to the President of the bank.
Chairman &
President
Operation Group
Chief
HRM Group
Chief
West Region
South Region
North Region
Head 1
Head 2
Head 3
Branch 2
Branch 3
Branch 1
Audit & Inspection
Group Chief
East Region
Head 4
Branch 4
Compliance Group
Chief
Overseas Reg
Head 5
Branch 5
National Bank of Pakistan is relatively Wide span of control and Flat Structure. National
Bank of Pakistan are less layers of management to pass a message through, so the
message reaches more employees faster. More skillful Group Chief Managers can control
a greater number of employees. National Bank of Pakistan assess that the internal Control
environment is showing signs of improvement as compared to previous year in all areas
of the Bank.
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Internship Report
National Bank of Pakistan
Chairman & President
HRM Group
OD Wing
IRD Wing
T & S Wing
TMG
CMG
Operation Group
Tech Wing
C. M Wing
Admn. Wing
C. M Wing
National Bank of Pakistan is having Decentralization in the Bank. And give the authority
of Decision Making to their Group Chief of every Group, to take decision, which is
benefit for the Organization. National Bank of Pakistan provides facility of making
decision to their Senior Vice President as well as Vice President of the every Group.
President (NBP)
Group Chief (Group)
SVP or VP (Group)
AVP (Group)
Grade Officers (Group)
National Bank of Pakistan has low Formalization in the bank. And Employees are free to
take action or decision in their work specialization. Employees are follow the rules and
regulation in the bank is very little formalized. Employees’ behavior is little bit guided by
rules and regulation.
National Bank of Pakistan follow the Organic Model Organization. In NBP, there are
Cross- Functional teams, as well as Cross-hierarchical teams. There are free flow of
14
Admn. Wing
Internship Report
National Bank of Pakistan
Information and Wide span of Control. NBP is Decentralization in nature and very low
formalization in the bank. Basically National Bank of Pakistan is high Diagonal
Differentiation and every employee of any department can easily communicate to other
department of the Bank.
15
R G A N I Z A T I O N A L
E
T
W
O R
K
ORGANIZATIONAL NETWORK
In this section topics are:
Registered & Head office
Share Registration Office
Share Capital
Branch Network
Global Network
Domestic Network
Present Status of Bank
Internship Report
National Bank of Pakistan
ORGANIZATIONAL NETWORK
REGISTERED & HEAD OFFICE
Head office of NBP in NBP Building, I.I. Chundrigar Road, Karachi, Pakistan which is
“the city of lighting” in Urdu “Uroos-ul-Bilad” which was also the first capital and
ancient place of Pakistan. It carried out its successful journey to make it an “Asian
Tiger”.
SHARE REGISTERATION OFFICE
THK Associates (Pvt.) Ltd.
Shares Department, Ground Floor,
State Life Building #3,
Dr. Ziauddin Ahmed Road,
Karachi, Pakistan.
SHARE CAPITAL
Issued Capital
The bank was setup with an issued capital of Rs.1.5 million.
Authorized Capital
Authorized capital of National Bank of Pakistan in 2000 was Rs.25 Billion.
Issued, Subscribed, and Paid-up Capital
Issued, subscribed and paid-up capital in year 2008 was 10763702260
BRANCH NETWORK
Presently the Bank is divided into 10 Groups headed by SEVPs/EVPs. 9 Regions
reporting to as many Regional Chiefs and 15 Single Branch Zones headed by Zonal
Chiefs; 12 corporate branches and 1,254 domestic branches headed by Branch Managers
control its field operations.
With the geographical development of its branches, the Bank has been able to extend its
services to a much larger number of Pakistanis all over the country. Today it has more
than 8.5 million accounts.
Bank maintains its presence in all the major financial centers of the world through its
21overseas branches and 4 representative offices. Of these, three representative offices
17
Internship Report
National Bank of Pakistan
have recently been set up at Tashkent (Uzbekistan), Baku (Azerbaijan) and Almaty
(Kazakhstan) to take advantage of the emerging opportunities in CIS countries.
Apart from having a vast branch network, Bank is at the forefront in the acquisition and
application of new technologies in every aspect of its banking facilities. It has acquired
leased telephone lines for on-line banking. The Bank has 12 Regional Computer Centers
to cover various on-line and batch system requirements of branches and controlling
offices. Bank has also a presence on the Internet. It has modernized its services by
installing Automated Teller Machines (ATMs) called "CASH LINK" at selected branches
and presently 17 ATMs are operational in major cities.
GLOBAL NETWORK
 18 Overseas Branches
 5 Representative Offices
 1 overseas Subsidiaries
 Joint Venture.
 Overseas Branch Network:
 Paris
 Baku
 Seoul
 Kabul
 Tokyo
 Osaka
 Dhaka
 Bahrain
 Bishkek
 Kowloon
 Ashgabat
 Jalalabad
 Frankfurt
 Chittagong
 New York
 Hong Kong
 Washington D.C.
 KEPZ Offshore Banking Unit, Cairo
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Internship Report
National Bank of Pakistan
 Oversea Representative Offices
 Baku
 Beijing
 Toronto
 Chicago
 Tashkent
 Oversea Subsidary
 CJSC Almaty, Kazakhstan
DOMESTIC NETWORK
 1254 Domestic Branches
 6 domestic Subsidiaries
 29 domestic regional offices
 Domestic Subsidiaries
 NBP Capital Ltd.
 Taurus Securities Ltd.
 NBP Exchange Company Ltd
 National Bank Modaraba Management Co.
 National Agricultural and Storage company Ltd.
 Cast – N- Link Products Ltd
 Joint Venture
 United National Bank Ltd., UK
(Economic Indicators Pakistan, Published by Economic research Wing
NBP, Head Office Karachi)
PRESENT STATUS OF BANK
The new management team having extensive experience of management of large
financial institutions both within and outside the country is expected to further enhance
the profitability and operational efficiency of the Bank.
Prospects
The Bank's principal strategic going forward objective is to make the transition from a
public service institution to a modern commercial bank. Being the country's largest
financial institution, the Bank is uniquely positioned to leverage its large branch network
and its 8.5 million-customer base to consolidate its core businesses as well as develop
new revenue generating opportunities.
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Internship Report
National Bank of Pakistan
The new management team is in place combining the Bank's existing personnel with
professionals recruited from outside. Operating procedures are being re-defined and
internal controls strengthened utilizing a revamped IT architecture. A brief on the
progress on some critical areas is as follows:
Corporate & Investment Banking
A new approach to corporate banking is underway. The Bank has initiated a structured
approach to corporate banking by introducing a single point of contact through
Relationship Managers (RMs). For this purpose, new RMs as well as team leaders have
been inducted to expedite this process. Area Managers will be appointed to manage
relationships and to better service the needs of multinationals and large local corporates.
In investment banking team has also been formed to offer specialized services to major
relationships including advisory and debt syndications (TFCs). Furthermore, to stem the
growth in non-performing loans, the existing risk / credit management practices at the
Bank are being revamped.
Treasury / International Banking
The deregulation of foreign exchange treasury business has ensured that a growing
Volume of business now flows through the inter-bank market where rates are determined
by the market forces. This can prove to be an immense profitable proposition for the
Bank. Towards this objective, the Bank is shifting focusing on expanding its market share
in trade finance, home remittance and foreign investment related forex-denominated
flows.
20
A N A G E
M
E N T
O F
MANAGEMENT OF NBP
In this section topics are:
Management System
Management Structure
Central Board
Local Board
New Management Structure
Corporate Information
Board of Directors
Audit committee
Auditors
Legal Advisor
Senior Management
Oversea Management
Internship Report
National Bank of Pakistan
MANAGEMENT OF ORGANIZATION
Management is a distinct process consisting of activities of planning, organizing, actuating
and controlling performed to determine and accomplish stated objectives with the use of
human being and other resources.
MANGEMENT SYSTEM
The management has two types.

Centralized

Decentralized
Centralized Management tends to concentrate decision making at the top of the organization
Decentralized disperses decision making and authority throughout and further down the
organizational hierarchy.
NBP have a centralized type of management because all the decisions are taken by the
top management.
MANAGEMENT STRUCTURE
Central board
The general superintendent and direction of the affairs and business of the bank shall be
entrusted to the central board which may exercise all powers and things as may be exercised
or done or done by the bank and or not by this ordinance expressly directed or required to be
done by the bank in general meeting.
The Central bank consist of the following directors namely:

Managing director

President
Managing Director
The Managing director appointed by the central government under section 16, nine directors
is directed in local or special meeting by the share holder in the following manners. The share
holder registered in a branch, register maintained for an area mentioned in sub section (5) of
section 8, shall elect from amongst themselves, such number of directors for that area as may
be decided before election by the central government having regard to the proportion which
that share capital subscribed by the share holders of that area bears to the whole. Provided
that shareholders registered in branch register maintain at Dacca shall elect from among
themselves at least two directors.
Three directors appointed by the central government, provided that total number of elected
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National Bank of Pakistan
directors representing the area for which the decca register is maintained shall not be less
than three.
President
The president of a Central board shall be appointed by the central government from among
the directors.
Local Board
The local board shall be established for the area mentioned in sub section (5) of section B ,
one each at Karachi ,Dacca and the Lahore ,and shall without prejudice to the powers
conferred by the sections 12, have power ,within the prescribed limits generally to transact all
usual business of the bank. A local board should consist of following members namely;
 The Managing director
 One member appointed by the central board from amongst the directors elected by
the share holder register in the branch register of the area.
 Two members appointed by the central government from the area in which the
local board is situated.
 Three members elected in local or special board meeting from among themselves
by the shareholder register in the branch register of the area.
The Managing director shall be appointed by the central government for a period not
exceeding five years and on such salary and terms and condition of the service as the central
government may determined.
New Management Structure
The previous management was removed by the bank nationalization ordinance 1974. the general
direction and superintendent of the affairs and business of the banks vests in the Executive board
consisting of President (Chief executive) and five senior executives of the bank . The federal
government in 1980 constituted a board of directors comprising the president and the members of
executive board of the bank and two additional members one representing the ministry of finance and
the other Pakistani banking council.
Thus therefore, all nationalized commercial banks are controlled by the Pakistani banking council
being subject to State bank of Pakistan regulation as well. The federal ministry is responsible for bank
operations in the ministry of finance. Recently by the order of president of Pakistan, banking council
of Pakistan is removed.
Board of Directors.
An executive board composed of six senior executives of the bank and the president who is
also the chief executive supervises the affairs and business of the bank, called the Board of
Directors.
Management Committee:
Also there is a Management Committee consisting of nine senior executives of the bank,
called the members and the president who is also the chairman of the committee.
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TRAINIG and MANAGEMENT DEVELOPMENT WING
National bank of Pakistan has its national and development centers and 4 staff collages at: 
Karachi

Lahore

Peshawar

Islamabad
In these centers and staff colleges, the banking training is provided to the officers, managers,
and to potential managers. It arranges courses and seminars for middle and higher
management in all. Each year almost 1500 persons receive training over there.
CORPORATE INFORMATION
Board of Directors
Syed Ali Raza
Chairman & President, Chief executive
M. Ayuub Khan Tarin
officer
Director
Ibrar A. Mumtaz
Director
Officer and SEVP and Group Chief, Human
Resources Management & Administration
Group
Tariq Kimrani
Director
M. Arshad Chaudhry
Director
Sikandar Hayat Jamali
Director
Mian Kausar Hameed
Director
Audit Committee
M. Ayuub Khan Tarin
Chairman
Ibrar A. Mumtaz
Chairman
Tariq Kimrani
Chairman
M. Arshad Chaudhry
Chairman
Mian Kausar Hameed
Chairman
Auditors
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National Bank of Pakistan
Ford Rhodes Siddat Hyder &Co.
Charterd Accountant
M. Yousuf Adil Saleem & Co.
Charterd Accountant
Legal Advisors
Mandviwala & Zafar
Charterd Accountant
SENIOR MANAGEMENT
Qamar Hussain
Chief Operating Officer & Head of Credit & Risk
Management
Masood Karim Shaikh
SEVP & Group Chief, Corporate & Investment Banking
Group
Shahid Anwar Khan
SEVP & Group Chief, Overseas Banking Group
Dr. Asif A. Brohi
SEVP & Group Chief, Operations Group
Amer Siddiqui
SEVP & Group Chief, Commercial & Retail Banking
Group
Muhammed Nusrat Vohra
SEVP & Group Chief, Treasury Management Group
Dr. Mirza Abrar Baig
SEVP & Group Chief, Human Resources Management &
Administration Group
Imam Bakhsh Baloch
SEVP & Group Chief, Audit & Inspection Group
Ziaullah Khan
Senior Executive Vice President
Nabi Bakhsh Soomro
SEVP & Group Chief, Islamic Banking Group
Ekhlaq Ahmed
EVP & Secretary Board of Directors
Tajammal Hussain Bokharee
EVP & Group Chief, Special Assets Management Group
Nadeem Anwar Ilyas
EVP, PSO to the President & Group Chief, Compliance
Group (A)
Naeem Syed
EVP & Divisional Head-Project Management Office &
Core Banking Applications
Aamir Sattar
SVP & Financial Controller/ Divisional Head, Financial
Control Division
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Atif Hassan Khan
National Bank of Pakistan
SVP & Group Chief (A) Information Technology Groups
OVERSEA MANAGEMENT
R.A. Kaleemi
SEVP & Chief Representative, Canada Office
M. Rafiq Bengali
SEVP & Regional Chief Executive, Americas Region
Shahid Anwar Khan
SEVP & Group Chief, Overseas Banking Group
Dr. Asif A. Brohi
SEVP & Group Chief, Operations Group
Amer Siddiqui
SEVP & Group Chief, Commercial & Retail Banking
Group
Muhammed Nusrat Vohra
SEVP & Group Chief, Treasury Management Group
Dr. Mirza Abrar Baig
SEVP & Group Chief, Human Resources Management
& Administration Group
Imam Bakhsh Baloch
SEVP & Group Chief, Audit & Inspection Group
Ziaullah Khan
Senior Executive Vice President
Nabi Bakhsh Soomro
SEVP & Group Chief, Islamic Banking Group
Ekhlaq Ahmed
EVP & Secretary Board of Directors
Tajammal Hussain Bokharee
EVP & Group Chief, Special
Assets Management Group
Nadeem Anwar Ilyas
EVP, PSO to the President & Group Chief, Compliance
Group (A)
Naeem Syed
EVP & Divisional Head-Project Management
Office & Core Banking Applications
Aamir Sattar
SVP & Financial Controller/ Divisional Head, Financial
Control Division
26
E P A R
T
M
E N T
L I Z A T I O N
DEPARTMENTLIZATION
In this section topics are:
General Banking Department
Deposit Section
Accounts Opening Section
Lockers Services
Cash Dealing Section
Clearing Section
Remittance Section
Advances Department
Accounts Department
Government Receipt & Payment Department
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National Bank of Pakistan
DEPERTMENTALIZATION
Dividing an organization into different parts according to the functions is called
departmentalization. NBP Main branch ,Lahore offer a wide range of banking services to
public and private sector corporation ,partnership ,individual and others .
The National Bank of Pakistan has various departments. Brief description of all these
departments are given here one by one under separate heads for better understanding.

General Banking Department

Account opening Section

Deposit Section

Cash Dealing

Clearing Section

Remittance
 Credit and Advances Department
 Accounts Department
 Government Department
 Consumer & Retailing Department
 Foreign Exchange Department
 Import and Export Department

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GENERAL BANKING DEPARTMENT
General banking involves the following sections
1. Deposit Section
2. Accounts Opening Section
3. Cash dealing Section
4. Clearance Section
5. Remittance Section
6. Lockers Handling Section
Deposit Section
Deposits are the lifeblood of commercial banks. The main function of a commercial bank is
to mobilize deposits of money from the savers and lend into for most profitable purposes. The
process of collection deposits is Deposits Mobilization.
Commercial banks donor receive these deposits for safe keeping purpose only .but they
accept deposits as debts. When a bank receives a deposit from a customer becomes a creditor
and the bank a debtor. When the bank receives the amount of deposits as a debtor, it becomes
the owner of it but there is an implicit agreement that the amount owned would be paid back
by the bank to depositor on demand or often at specified time.
The classification is based on duration and purpose for which the deposits are to be kept at
the bank before the depositor can withdraw them. Deposits can be divided into two
categories.
Deposits
Checking
Non-Checking
Accounts
PLS Saving
Account
Accounts
PLS TDR’s
Current Deposit
Accounts
Special Notice
Deposit Accounts
Foreign Currency
Accounts
NIDA
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Categories of Deposits
There are two broad categories of deposits. These are

Time deposits

Demand deposits
Time Deposits

These are payable on maturity

Receive profit with respect to time
Demand Deposits

but on demand

period

These are not payable of maturity
No profit is given on demand
deposits
All TDRs, saving accounts and

other profit bearing accounts are
included.
They include current accounts
and call deposits etc.
TYPES OF ACCOUNT/ DEPOSIT
Following types of accounts are open in NBP
1. Current or demand account
2. Saving account
3. Fixed account
4. Call Deposit Accounts
5. Foreign Currency Accounts
1. Current
This account is also known as running balance account. Simply we can say “A bank account
which may be used to lodge payments or to withdraw money on demand.”Its main purpose is
to serve the businessman. Form number F-53 is provided to the person to open the account. It
is a statutory requirement to maintain current account.
Its main features are: 
Minimum amount for opening this account is Rs.500

Any person can open the account with the bank

According to inter banks agreement interest is not paid on current account.

Bank act as custodian of money

Over draft facility is provided to the customers

Customer can withdraw money through cheque supplied by bank
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
No limitation to the number of withdrawal

No zakat is deducted on current account.
Basic Bank Account (BBA)
BBA’s are opened on proper introduction and submission of required documents.

BBA’s are opened for individuals single or joint only.

Free ATM issuance

Minimum balance is 1000/-.

In BBA’s maximum two deposits transactions and two chequing withdrawals are
allowed free of charge through cash/clearing in a month.

Nill accounts are closed after 3 months
2. Saving account
This type of account is designed to encourage the saving habit of the customer and lead to a
long-term banking or investment relationship. Bank saving accounts are in the nature of
deposits accounts and are not normally available for drawings. Rates of interest are typically
ahead, by a small margin.
NBP offered the three types of saving accounts
a. Profit and Loss Sharing/Saving Account (PLS Acc)
b. National Income Daily Account (NIDA account)
a. Profit and Loss Sharing/Saving Account (PLS Acc)
In general it is also called saving account .To provide interest free banking facilities in
Pakistan, this type of account was introduced in January 1982 after the islamization of
banking.
The main features of this account are: 
Instead of having fixed return in the form of interest the deposited money will be
shared in profit and loss of the bank.

One can open the account by depositing minimum Rs.100

The bank is authorized to deduct service charges on half yearly basis.

Profit on PLS Saving Account is calculated on minimum monthly basis and is paid
half yearly basis announced by the Head Office after June 30 and December 31.

Zakat at the rate 2.50% is deducted from the PLS Saving Accounts.

No limit of withdrawals
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b. National Income Daily Account (NIDA account)
The scheme of NIDA was launched in December 1995 at attract at corporate customers.
NIDA are opened for individuals single or joint, Charitable institutions, Provident funds,
autonomous bodies, companies, associations, educational institutions, firms etc. the features
of this account are same to the features of the saving or PLS account except the following
ones:

In this account the minimum balance required to acquire the benefits of this account is
Rs 2 million, and the maximum limit is 5.0 million.

When the above condition is fulfilled, then the bank will pay interest on daily basis,
which is that if the deposit is minimum of 2 million than the mark up rate is
5.2%p.a.and if it is at maximum that is 5.0 million than the rate is 7.00 %p.a.

In this account the daily balance of account is taken, products are calculated and the
interest is calculated on that balance.

If the balance on any day comes below the lower limit, which is Rs 2 million then
interest will not be given.

This scheme did not gain popularity so NBP close this scheme.
3. Call Deposits
Call deposits are the sorts of deposits, which are deposited in the bank against any tender.
This is without interest deposit and may be with interest provided. The depositor has agreed
to keep this amount with the bank for some fixed period.
4. Fixed Deposit Account
This account is the major source of funds for the banks. This account is best for people who
have surplus money and don’t need such funds in nearer future. The rates on this type of
deposits are higher than the saving bank accounts.
The money is deposited for a fixed period of time. Main features of this account are: 
Fixed amount is deposited for fixed period.

Amount of profit can be obtained after each six months.

Higher will be the time period, higher will be the rate of profit, and vice versa.

A receipt is used for the amount deposited called fixed deposit receipt.

Period of deposit can vary from 3 months to 5 years depending upon the nature of
scheme offered by bank.
The amount can be withdrawn before maturity after surrendering interest.
PLS Term
The bank accepts these deposits with minimum sums as prescribed by the bank for a fixed
period of time. Profit may be paid in cash, pay order, demand draft or any other form.

Terms deposits are accepted for a period of one month to five years.

Minimum deposit is accepted is Rs.25, 000/= with no upper limit.
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
Available to all types of investors i.e. individuals, partnership firms, public and
private limited companies, corporation, trusts, and government bodies.

Profit is paid on maturity.
Fixation Schemes of NBP
NBP offered following types of fixation and saving schemes

PLS Special Notice Term Deposit Reciept- PLS SNTDR

PLS Monthly income Scheme – PLS MIS

Premium Saver Scheme- PLS Saving Account

Premium Amdani Scheme
5. Foreign Currency Accounts
These are the accounts in US $, Pound, Euro, yen etc. of different account holders and either
saving or current accounts. Profit is fluctuating as determined by the State Bank of Pakistan
on six monthly bases whereas return on Term deposits/SNTD will paid on maturity. The
transactions in these accounts are translated into Pak. Rupees at the exchange rate prevailing
on the date of transaction.
Account Opening Section
Account opening section of the bank can be considered the most important department
because banking starts with the account opening. Every customer of the bank either he is of
credit section or foreign section or any other department must have his account in order to get
benefit and transaction with the bank. Therefore it is considered the most important section of
the bank. Account opening officer take special consideration for the proper recognition of the
customers.
This section performs the following functions:

Opening of Accounts

Issuance of cheque books

Closing of accounts
OPENING OF ACCOUNTS
The opening of an account is the establishment of banker customer relationship. Before a
banker opens a new account, the banker should determine the prospective customer’s
integrity, respectability, occupation and the nature of business by the introductory references
given at the time of account opening. Preliminary investigation is necessary because of the
following reasons.
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 Avoiding frauds
 Safe guard against unintended over draft.
 Negligence.
 Inquiries about clients.
i. Terms and conditions
There are certain formalities, which are to be observed for opening an account with a bank.
 Formal Application
 Verification of customer's CNIC through the NADRA
 Copy of NIC of the customer
 Specimen Signature
 Minimum Initial Deposit
To open an account the customer has to meet the general banking manager with an introducer
with the ID card. Manager verifies the customer's ID card through the connection of
NADRA. NADRA send the verification report to the bank with the concluding remarks
called VERISIS. If the customer's id card is fake then bank has right not to accept the
contract and if the contract is acceptable to both, now it is ready to open the account formally.
After the identification of the customer along with the form a card for specimen signature is
also supplied to customer. Manager has every right not to accept this contract if he is not
satisfied by the details provided by the customer.
ii. Qualification of Customer
The relation of the banker and the customer is purely a contractual one, however, he must
have the following basic qualifications.
 He must be of the age of majority.
 He must be of sound mind.
 Law must not disqualify him.
 The agreement should be made for lawful object, which create legal relationship
 Not expressly declared void.
iii. Steps for Opening of Account
After entering into bank premises the person goes through the following steps for opening an
account in the bank and for becoming a bank customer.
1. A Verfication:
The first important step to take place in bank is to get satisfactory verification of the person,
who wants to become bank’s customer. This verification is made through the NADRA.
2. Account Opening Form and Specimen Signature Card:
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Now the person is provided with an application form known as Account Opening Form
(AOF).
This form contains: i. Type of account
 Current Account
 PLS SNTDR
 PLS Term
 BBA
 PLS Saving
 Premium Saver
 Premium Amdani
 Call Deposit
 NIDA
ii. Nature of Account
NBP has the offered services to following types of individuals.
Accounts of general customers (Individual accounts)
 Minor account
 Illiterate person account
 Joint account
Accounts of special customers
 Proprietorship account
 Partnership account (Registered/ Unregistered)
 Limited company’s account (Public/ Private)
 Accounts of clubs, societies and associations
 Corporate Body (Incorporated/ Unincorporated )
 Trust account
 Govt Institutions (Federal/ Provincial)
iii. Initial Deposit Amount
Deposit can be accepted in the form of:
 Pak Rs.
 US $
 UK
 EURO
 JY
iv. Particulars of customers e.g;
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 Title of Account
 Adress
 CNIC Number
 NTN Number (if available)
 Profession
 Telephone number may be of office, mobile or residential
v. Next of Kin
(all above mentioned particulars of introducing him)
In this customer mention the name and address of person to be contacted for
ascertaining his whereabouts after the expiry of three years from the date of last
operation in his account or last communication from him to the branch to inform him
the existence of account when the customer is not available at the given address.
This is simply the refrence of the 2nd person if the bank fails to communicate with the
customer then bank can contact with the next of kin / the mentioned person to know
about its customer.Customer provide in this all the personal details of the next of
kin.e.g;
 Name of person
 CNIC Number
 Address
 Telephone number etc.
vi. Operating Instructions
The account can be operated by
 Singly
 Jointly
 Either/ survivor
vii. Zakat Deduction
Zakat is deducted on each type of account accept current account in the 1st day of the
Ramzan at the rate of 2.5%. If customer wants no zakat deduction then he have to
submit affidavit/declaration as per zakat rules.
viii. Signatures of the applicant
ix. Service charges deduction
In this category customer authorize the bank to deduct service charges as per bank's
rariff.
Service charges are exempted for;
 Government employee
 Pensioner
 Student
 Widows
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State Bank of Pakistan now authorize all the banks to deduct service charges on all
types of accounts when the balance of the customer become less from 5000/-. Rs. 55/per month is deducted from the customer's account. 5000/- is the minimum amount
which should be kept by the customer in his account.
Specimen Signature Card (SS card)
Specimen of signatures will be obtained from depositor at the time of opening his account. A
specially designed card is used for this purpose; the card must be countersigned by an official
of the bank not below the rank of an officer.
For illiterate person a recent picture of the newly account holder is taken and attached with
SS Card. To reduce the risk of frauds and misuse of the cheques of an illiterate person the
specimen signature card and account opening form both are stamped by the Personal Visit
stamp. Person who use thumb impression as a mean of signature can operate their account
only by Personal Visit.
3. Account Opening Register
Now the name of the customer is recorded in account opening register, and from here the
account no. of the customer will be written on (top most corners) account opening form and
on specimen signature card.
4. Letter of thanks
Letter of thanks is the latter issued by the bank to the customer for two purposes
 1st purpose is to say thanks to the customer for opening the account in their bank
 2nd purpose is to confirm the address provided by the customer while opening the
account.
5. Issuance Of Cheque Book And Pass Book
The cheque book will ordinarily be issued to all customers desiring to have chequing facility.
First Cheque book is issued to the customer after sending the letter of thanks when the
customer comes with the latter of thanks and requests for the issuance of the cheque book.
A Cheque book consists of
 PLS 25 leaves or pages per order
 CD 50 leaves or pages per order
 100 leaves or pages per order
 CD 50 leaves or pages per bearer
 100 leaves or pages per bearer


Order- if a person appears himself for new cheque book or who is the holder
of account
Bearer- if the person other than account holder appears then he is bearer
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Rs. 3 per leaf as postage charges is charged to the customer. A special cheque book register
is kept to enter the name of the person having cheque book. Customer can withdraw money
by signing a cheque and writing the amount he wants to withdraw from his account.
6. Pass Book
Pass book is another important type of book handed over to the customer as he opens the
account with the bank. The withdrawal and deposit of money is recorded date wise in this
book.
7. Recording into General Ledger:
The concerned officer records the name and amount deposited with the bank in to general
ledger. Separate ledgers are maintained for different types of accounts e.g.
 Current Account Ledger
 Saving Account Ledger
 Fixed Deposit Account Ledger
 Call Deposit Account Ledger
As and when customer will deposit the money, amount will be credited in general ledger and
the withdrawal will be followed by a debit entry in the ledger.
iv. Documents Enclosed by Customer
Documents required to be attached by the customer are different for different categories.
Documentation In case of Individuals Account

Copy of CNIC/NICOP/POC

Copy of Driving license in case CNIC is without photograph

Applicant photograph and VNIC copy

Copy of service card/ evidence of employment in case of salaried person

Photographs in case of illetrate person

Copy of CNIC of Next of Kin.

Zakat exemption Declarartion

Evidence for exe,ption of account from levy of service charges

Proof of age in case opening of account with minor
Documentation In case of Private/ Public limited company accounts:



Photocopy of National Identity Card of each director
Application form
Copy of company’s memorandum and articles of association
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





National Bank of Pakistan
List of directors
Copy of board resolution
Certificate of incorporation
Their signature cards
Certificate to commence business
Power of Attorney
Documentation In case of Partnership Account

Application form

A copy of partnership deed

Signature cards of partners

Registration certificate copy

A copy of National Identity Card of each partner

Authority letter favoring persons authorized to operate the account
Documentation In case of Club, Society, Association or Trust

Application form

Copy of rules

Certified copy of resolution

Signature cards
Documentation in case of agents Account


Copy of power of attorney
Id card of each agent
Documentation in case of trust Account



Certificate of registration
CNIC of all trustees
Copy of instrument of Trust
v. Stamping and Scrutinizing
After the fulfillment of all the necessary terms and conditions and checking of the form the
relevant officer of Account Opening then affixed stamps on the AOF for the sake of
completion of all the formal rules and regulations. He affixed three types of stamps on the
form and two types of documents.
Affixed stamps:
 National Bank of Pakistan Stamp
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 Authorized Stamp
 Personal Visit Stamp---in case of illiterate person or the person not
having specific sign
Affixed Documents:
 Know Your Customer Form (KYC)
Summarizing the context of AOF briefly
 Signature Card
For identification and verification of signatures
vi. Loose Cheques
If any customer forgets or leaves his cheque book at his home, which is far away from the
bank or whatever the case may be, the customer applies with the bank for the issuance of
loose cheque by the bank as he does not has his cheque book with him and the money is
urgently required, the this cheque is called the loose cheque.
NBP issues a loose cheque for Rs.150 as charges for the issuance of the loose cheque.
NEW CHEQUE BOOK ISSUANCE
All subsequent cheque books to be issued against the requisition cheque extracted from the
previous cheque book. This slip is duly filled and signed by the customer. The signature of
the customer is verified by the bank and new cheque book is issued to the customer and serial
numbers of cheques are duly entered in the book of the bank. Along with the signature, the
person should also write his full name and address.
The authorized officer filled the cheque book requisition card for the customer and sends
them to Head office which is present in Karachi through the NIFT (National Institutional of
Facilitation Technology) (PVT) Ltd. The customer can obtain the cheque book after at least
two days of submission of requisition slip.

Cheque books issued in the running serial order with the name of the customer printed
on the book.

Rs. 3 per page of book is charged for the postage services through NIFT

Enter particulars in the cheque book issue register.

Enter detail in the system.

These records should be daily checked by the Daily Cheque Book Report, which
should be signed by the authorized officer after checking cheque book series input
number.

At the end of the day all the cheque books should be checked and balanced with the
help of requisition slips.
In case of cheque book is issued without the requisition cheque of previous cheque book care
must be taken to establish the genuineness of the customers and Form should be obtained. In
some cases when cheque book is issued by the person duly authorized by the account holder
for obtaining cheque book, a letter of issuance of cheque book is sent to the account holder
for his acknowledgement.
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In rare cases when customer demand printed cheque book, requisition slip with demand letter
is sent to the NIFT (National Institutional of Facilitation Technology) (PVT) Ltd.
CLOSING OF ACCOUNTS
Account Closing by Customer
The customer can close the account. Customer is required to submit an application for
closing the account. Then the account is closed out and his balance is paid to him after
deducting the closing charges, i.e., Rs. 200 and the application is filed in Account Closing
File. Remaining leaves of cheques will also be collected from the customer.
Account Closing by Bank
i. Dormant Account
All current accounts which have not been operated for six months or all saving accounts
which have not been operated upon for one year classify as dormant account.
ii. Inoperative Account
All the current accounts which have not been operated upon for 2 years or all saving
accounts which have not been operated since 3 years are classified under inoperative
accounts.
Operations in accounts classified as dormant or inoperative will remained suspended unless
request in writing for activation or restoration is received from the Account Holder. If the
account holder fails to reactive the account despite of bank's notice, the bank will have the
right of exercising option of closing of account and in such case will refund the balance to the
customer after deducting all applicable charges.
iii. Treatment of Deposit declared Unclaimed
Unclaimed Deposit
A debt payable owing by bank due to the reason of deposit in respect of which no transaction
has taken place and no statement of account has been requested by the creditor during a
period of ten years are classified under unclaimed deposit.
These are simply a debt owned by bank when a customer has not been operating his account
during a period of 10 year. The bank serves a 3 month Final Notice in writing to the account
holder at his latest known address for his reciving balnce lying in account. Upon expiry of
such period NBP then surrender the deposit to the SBP.
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Locker Services Section
National bank of Pakistan also provides lockers facility in the country. It means a box operate
by a customer of holder on permanent basis. Locker operation account is allowed for a
account holder, Non-account holder not able to operate it.
There are four types of locker depending upon the size of lockers operate in banks.

Small size locker

Medium size locker

Large size locker

Extra large size locker
An application form is necessary for customer with desire documents and approval made by
the head of department. Lien is placed on the account of a locker holder on drawing of
amount. Entries are made on “Locker Register” as well as on the system. Locker No and Key
No is allotted to the locker holder for further operation.
The dual control system is used for lockers. The officer has Master Key to apply on the
locker but he cannot open the locker of any person. The locker holder provides the bank his
specimen signature. Whenever the locker holders come to open the locker, his signatures are
verified by the officer and then will be able to open his locker.
If the key of the locker is lost company providing these lockers breaks the locker and new
lock is fitted in its locker and lock is destroyed in the presence of the locker holder and bank
charges RS 1200 for that. In case the locker holder dies, the court opens his locker in the
presence of his as mentioned in his will or and his belongings are given to them and the
locker is closed.
Customers paid the rent of lockers on annual basis. The annual rent of different lockers, their
security charges and insurance is shown in table.
Annual Rent of Lockers
SIZE OF LOCKERS
RENT
SECURITY
INSURANCE
Small
4000
25000
500,000
Medium
5000
30,000
500,000
Large
6000
200,000
700,000
Extra-Large
6000
200,000
1000,000
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National Bank of Pakistan
Cash Dealing Department
Cash department of NBP is given the complete responsibility of handling all receipts &
disbursements of cash as a result of transaction in both local and foreign currencies & near
cash items such as traveler's cheque etc. (when they are issued against cash).As a
consequence it is also responsible for the book keeping of these transactions & the safe
custody of cash and near cash securities of NBP.
Cash department of NBP is separate close part; no one other than cash departments'
employees is allowed to enter into that area. Cash department performs the following
functions.
 Cash receipts for receive deposits.
 Cash payment for encashment of cheques.
Receipt
The money, which either comes or goes out from the bank, its record should be kept. Cash
department performs this function. The deposits of all customers of the bank are controlled
by means of ledger accounts. Every customer has its own ledger account and has separate
ledger cards.
Payments
It is a banker’s primary contract to repay money received for this customer’s account usually
by honoring his cheques.
CASH RECEIPTS
The depositor uses pay-in-slip for depositing the amount in their account. There are two types
of pay-in-slip. Both are in different colors for clear identification.
i.
Cash Pay-in-Slip
ii.
Cheque Pay-in-Slip
There are two parts of deposit slips:

Counter foil

Adjacent credit voucher
i. Cash Pay-in-Slip
It is used whenever the account holder deposit cash in his account. For this he have to fill the
both parts i.e; counter foil and adjacent foil of the slip properly writing the amount in figures
as well as in words. Cashier of cash receipt accept the deposit slip with cash and then signed
the both parts of deposit slip, affixed cash received stamps on it and returned the counterfoil
to the customer. The amount is credited to the customer's account by the computer terminals.
ii. Cheque Pay-in-Slip
It is used whenever the account holder deposit amount in his account by the cross cheques.
This slip is used for transfer of funds from one customer's account to another. The processing
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National Bank of Pakistan
of the cross cheques held in the clearing department. The cashier just check the cross cheques
to confirm whether it is acceptable or not.
CASH PAYMENT
It is the primary function of bank to repay the money received from his customer’s account
usually by honoring the cheques. It is the contractual obligation of a banker to honor his
customer’s cheque. Bankers in Pakistan deal with three types of cheques.
Types of collected Cheques
Bearer Cheques
Bearer cheques are cashable at the counter of the bank. These can also be collected through
clearing.
Order cheque
These types of cheques are also cashable on the counter but its holder must satisfy the banker
that he is the proper man to collect the payment of the cheque and he has to show his
identification. It can also be collected through clearing.
Crossed Cheque
These cheques are not payable in cash at the counters of a banker. It can only be credited to
the payee’s account. If there are two persons having accounts at the same bank, one of the
account holder issues a cross-cheque in favor of the other account holder. Then the cheque
will be credited to the account of the person to whom the cheque was issued and debited from
the account of the person who has actually issued the cheque.
The Requisites of Cheques
There is no prescribed form of words or design of cheques but in order to fulfill the
requirements the cheques must have the following:
 It must be in writing
 It must contain an order to pay and addressed a specified bank.
 The order must be unconditional
 The order must direct to pay on demand
 The sum ordered to be paid must be certain
 The payment should be ordered to be paid to a certain or to his order or the bearer
Payment of Cash Cheques at Counter
Acceptance of Cheques
Whenever a cheque is presented at counter for payment, the officer examines the cheque
before issuing a token. The following is looked into:
 The cheque is drawn on the same branch of the bank.
 The cheque is not crossed that it is open cheque.
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 It is not stale or post dated.
 The drawer has signed the cheque.
 The amount written in words and figure is same.
 The drawer of the cheque duly signs all alteration or cancellation.
 The presenter has signed at the back of the cheque.
 Cheque should not be damaged
 Funds must be sufficiently available
 No legal bar prohibiting payment
Affirmation of Signatures
The accountant/authorized officer examine the cheque for the above mention things. When
cheque is found acceptable in all aspect, the signature of the drawer compared with his
signature on the Specimen Signature Card. When it is found similar to specimen signature, he
affixes SIGNATURE VERIFIED stamp, near the drawer signature in the cheque and sign it.
Computer Terminal Process
The cheque is received in computer terminal , where the computer operator cheques the
balance of the account holder . the operator also sees whether the stop payment instructions
are received from the account holder or not. After considering these two points he checks the
balance in the account through a software of Bank Back Office (BBO). If the account has the
sufficient balance, the cheque is posted. The cheque is then handed over to the cashier after
the allotment of the token number to the cheque. The token is given to the presenter.The
cheque is cancelled after posting & is returned to cashier .
Payment of Cash
The cashier calls the presenter and takes his token and compares the token number with the
number written at backside of the cheque. He takes out the cash to be handed over to the
presenter and writes its denomination at the back of cheque. Thereafter, he gets signature of
the presenter at the back of the cheque and hands over cash to him and affixes Cash Paid
stamp on cheque.
Stopping the Payment of Cash on Presentation of Cheques
The payment of cheques is stopped dishonored on the following grounds:
 Effects not yet cleared then request to present again
 Irregularity endorsed
 Drawer’s signature differ
 Payee’s endorsement requires bank’s guarantee
 Alteration requires full signatures
 Cheques is not post dated
 Cheques is without date
 Amount in figures and words differs
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 Crossed cheques must be presented through the bank
 Payment stopped by the drawer
Payment of Cheques in Transfer
The customer of the branch deposits the cheque drawn on the same branch, for the payment
to the credited into his account, attached with pay in slip. The officer accepts it after looking
into the following:
The person depositing the instrument for collection is the customer of branch.
 The correct pay in slip (current/saving) is attached with the cheque.
 The depositor signature is presented on the slip.
 The account number of depositor is written on both the sides of the slip.
 The word and figure of the amount tally with each other.
 The cheque is neither post dated nor stale.
 The drawer signature is present on the cheque.
 The drawer signs the alteration on the cheque.
 The cheque in name of the company, firm etc is not going into the account of any
person.
 The cheque with Payee Account Only crossing is not being deposited into the
account of any other person other than the person mention on the cheque.
Processing of Transfer Cheques
The cross cheques are then transferred to the Clearing Department. All the cross cheques are
processed through Clearing Houses. The local cheques are cleared through local clearing and
outstation cheques are cleared through intercity or short credit clearing.
CASH LINK
NBP ATM SERVICES FOR CONVENIENCE
 Cash withdrawal according to your cycle limit.
 Transfer of funds between PLS saving account and current account of the same
customer through the same ATM card
 Account balance inquiry.
 Instant mini statements of accounts listing the last 15 transactions in account. Request
for a new cheque book ,which might be collected by the customer from the branch.
How much cash can be withdrawn
There is a 24 hours cycle cash withdrawal limit imposed on all ATM cards. Withdrawal limit
depends upon the type of customer.
Personal identification number (PIN)
A pin mailer issued to the ATM card holder carries the pin number in a sealed envelope. Card
holder is required to keep the PIN number in a safe place as all the operation are carried out
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on the ATM are carried out through the same.
Clearing Section
Clearing
"The transfer of funds from one branch of bank to the other branch of the same bank or the
other bank on which the instrument is drawn , without involving cash through “State bank’s
clearing house "
We can say that cheques which cannot be cashed at the cash counter of the bank or cross
cheques go through the clearing process.
Clearing Department
The major function of Clearing Department is to receive the cheques, which are drawn on
some other bank. The customer can get the money in his account at NBP, from the cheques
drawn on another bank. The bank accepts these cheques and collects the amount from that
bank on which cheque is drawn through the Clearing House. Bank charges some commission
for this function.
Clearing House
A clearing house is an association of commercial banks set in State Bank of Pakistan for the
purpose of interchange and settlement of credit claims
National Institutional Facilitation Technology (NIFT) Pvt. Limited is performing the
function of clearing and charges commission against it. Before the NIFT, the State Bank of
Pakistan (SBP) with efficient controlling staff performed the process of clearing. If SBP had
no office at a place, then NBP, as a representative of SBP acted as a clearinghouse.
NIFT is a joint venture between a six major banks and private sector. The clearing operations
were commenced by the establishment of first centre at Karachi and now it has been extended
to all major cities of Pakistan. At such places where the area is not covered by NIFT the
clearing and settlement services are provided by National Bank of Pakistan.
TYPES OF THE CROSS CHEQUES
Some specific types of cheques are being entertained in the clearing department of NBP are:
i. Local Cheques
By local cheques we mean collection of cheques from the banks which are located within the
city. It means the presenting bank and the bank on which the cheques is drawn are situated in
the same city.
ii. Outstation Cheques
By outstation cheques we mean collection of cheques from the bank, which are situated
outside the city. It means the presenting bank and the bank on which the cheques is drawn are
not situated in the same city.
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iii. In House Cheques
In house cheques are drawn on one branch of NBP and presented to another branch of NBP
such cheques are marked with the transfer stamp.
TYPES OF CLEARING
i.
Local Clearing
ii.
Short Credit Service
iii.
Local Short Credit
iv.
Inter City
i. Local Clearing
All cheques and other Negotiable Instruments payable locally is presented through the local
clearing system. NIFT provides the local and intercity services. Cheques deposited at branch
counters presented for clearing on the same day. Bank give credit to the customer's account
on the day when clearing settlement takes place. No charges levied for local collection of
cheques or instruments which are collected through local clearing.
Time Frame for Collection of Local Cheques/ Instruments
The customer's account credited in respect of local cheques on the next day from the date of
acceptance of the cheque.
ii. Short Credit Services (SC)
For small cities where there are no NIFT services then branch bank clears the cheque either
through mail/ TCS or bank can own provide service and charge commission for providing
services. Bank give credit to the customer's account on the day when clearing settlement
takes place.
Time Frame for Collection of SC Cheques/ Instruments
The customers account are credited in respect of outstation cheques on 4th 0r 5th day from the
date of acceptance of the cheques.
iii. Local Short Credit (LSC)
This arrangement has been set up if the customer wants amount in his account on urgent
basis. Bank then provide service to its customer for those in house cheques when presented
and draw on NBP. Both can be of different branches of the bank but must be located within
the city. No Bank charges are recovered from customers for these services.
Time Frame for Collection of LSC Cheques/ Instruments
The customer's account credited in respect of local cheques on the same day from the date of
acceptance of the cheque.
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iv. Inter City
NIFT pvt. limited is responsible for the clearance of the outstation cheques. Cheques drawn
on bank's own branches at outstation centers or outstation other banks both are collected
using the inter city arrangements maintain by NIFT network. Its offices are present in all the
large cities of Pakistan. NIFT network is present in:

Islamabad

Karachi

Quetta

Sukhar

Hyderabad

Peshawar

Gujranwala

Sialkot

Daera ismael khan

Bhawalpur

Muzafarabad

Faisalabad

Rawalpindi

Multan
Time Frame for Collection of Inter City Cheques/ Instruments
The customer's account credited in respect of local cheques on the 2nd day from the date of
acceptance of the cheque.
CLEARING PROCESS
The process of clearing is carried in two categories.
i.
Inward clearing
ii.
Outward clearing
i. Inward Clearing
Cheque received of other parties after clearing are lodged in the system by vouching date,
signature, documents numbers is noted. The cheque without sufficient balance, changing in
amount, signature and verifying other formalities returned to the customer by attaching return
memo explaining the cause of cheque return. Return cheques also enter into the return
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register by writing dates, causes of return, and amount. After posting summary of cheques is
prepared and cheques return to third parties through NIFT.
ii. Outward Clearing
These are the cross cheques deposited by the customers for credit the same amount to its
account. Before posting following is being performed.
 Crossing cheque stamp if not place it.
 Title of account and account number from deposit slip is checked.
 The deposits slip is handed over to the customers by branch stamping.
 Entry is done in daily register.
 Add list is being prepared.
 Special crossing clearing stamp of next day is affixed.
 The payee’s amount will credit stamp is affixed on back of the cheque.
 In case of outside city clearing Inter-Branch Clearing Stamp is affixed.
 Place all the cheque in a bag with special closing and sent to NIFT.
Excess of outward clearing over inward clearing produces a net increase in clearing account
balance. Excess of inward clearing over outward clearing produces a net decrease in clearing
account balance. The first case is reffered to as favorable clearing & the second case is
unfavorable clearing.
CHARGES ON SC & INTERCITY CLEARANCE IN NBP
On clearance of instruments through SC and inter City three types of charges are deducted
from the depositor's account
i.
i.
Commission
ii.
Federal excise
iii.
Postage
Commission rates are
NBP to NBP -------------------------- 0.15%
NBP to Other Banks----------------- 0.20%
ii.
Postage rates are
------------------------------------------ 75 Rs.
iii.
Federal excise rates are ------------------------------------------- 16% of Commission
On clearing of cheques the minimum amount of commission is 50 Rs. and if it is less than
minimum amount then Rs. 50 and in case if it is greater then greater amount is considered.
PROCEDURE FOR CLEARING THE CHEQUES
Procedure for Outward Clearance
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i. Pay-in Slip- Cheque
The customer fills pay-in slip. This slip is just like deposit slip. The cheque number, date,
amount and account number must be written on this slip.
Stamping and Scrutinizing
The officer on receipt of cheques and pay-in slip will stamp the pay-in slip with “cheque
received” and give a portion of slip to customer and the remaining portion is attached with
the original cheque. The original cheque will be marked with two stamps in case of local
clearing.
 Endorsement stamp of NBP
 Clearing Stamp
The original cheque will be marked with three stamps which are called OBC stamps (over
branch clearing stamp) in case of intercity clearing.
 Endorsement stamp of NBP
 Crossing Stamp
 Next Date stamp
At the end of day, all cheques are counted and then scrutinized in bank-wise and sent to the
NIFT for local as well as intercity clearing. Entry is done in daily register.
Procedure for Inward Clearance
All the remittance which are received from other banks then go through the inward clearance
which include all the steps for lodging of amount into customer's account.
i. Fanfold
The drawer bank then verify the payer's account for clearance of the cheque and send back
the amount to the presented bank or NBP through the fanfold. In case if the customer account
is short of balance then the original cheque is returned back to the presented or collected bank
with the reason of returning the cheque on the clearing return form. NBP receive these
amount in form of remittance.
ii. Charge Deduction
On receiving the amount through fanfold bank deduct service charges of clearance which are
excise duty, commission and postage for the intercity and SC payments.
Vouchering is done on four types of fanfold;
 Debit voucher for---------------- total amount charged for sevice
 Credit voucher for--------------- commission
 Pay –in-slip of cheques for----- Federal excise
 Pay-in-slip of cheques for------ postage
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No any charge levy for local clearing so no vouchering is required for this. Customer's
account is credited on the next day of clearance.
iii. Credit of the customers account
After deduction of charges the amount is transferred and credited to the customer's account.
Remittance Section
Remittance means a sum of money sent in payment for something. This department deals
with either the transfer of money from one bank to other bank or from one branch to another
branch for their customers. NBP offers the following forms of remittances.
Main modes of remittance are:

Pay Order

Mail Transfer

Demand Draft

Telegraphic Transfer
PAY ORDER
Pay order issued from one branch is only payable from the same branch. It is issued for
payment in the same city.
Issuance of pay order

Gets application form from the customer.

Issues pay order after vouchering all necessary formalities.

Gets recovering charges and withholding tax in case of cheque deposit for PO.

Makes entry in PO issue register.

All pay order must be crossed “payee’s account only”.

It must be noted that Inter-Branch Clearing Advice is not involved because it is
payable at the same branch and same city only.
Cancellation of PO

Application for cancellation with original pay order.

Recovers cancellation charges.

Signature verified by the officer.
Duplicate PO

Checks the record that payment has never been made.

Gets application for issuing of duplicate PO.

Recovers charges as per schedule.

Issues duplicate PO by writing “ink red” pen “Duplicate PO”.
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Issuance Procedure to an Account Holder
 Applicant fills an application form, which is general credit voucher and tells the name
of person in whom favour it is to be drawn.
 Account Holder draws a cheque (it can be in cash as well) of the amount of which
Payment Order is to be issued and the amount of commission to be paid by him,
which is Rs.50 for Account Holder.
 A general credit voucher is filled by Bank for commission charges and Account
Number is debited (in case of cash, cash is debited).
Issuance to a Non-Account Holder
 Applicant fills an application form, which is general credit voucher and tells the name
of person in whom favour it is to be drawn.
 Non-Account Holder deposits the amount of Payment Order, to be issued on cash
counter along with the amount of commission to be paid by him, which is Rs.100 for
Non-Account Holder.
 A general credit voucher is filled by Bank for commission charges and Account
Number is debited (in case of cash, cash is debited).
MAIL TRANSFER
The same application form is used for draft and mail transfers generally in NBP.The mail
transfer is not delivered to purchaser but instead the issuing office to beneficiary’s branch on
its own risk and responsibility sends it. This type of remittance facility is provided only when
the beneficiary happens to be customer of the bank.
The amount is directly credited to the beneficiary’s account and as such loss of mail transfer
has no concern with the applicant. Also the credit balance of customer is transferred from one
branch to another branch with the help of this instrument in case the
Customer so desire.
The applicant desiring to remit the funds by way of mail transfer can either deposit cash or he
may ask the bank to debit his account with the cost of mail transfer including bank charges.
An exchange memo is issued to the applicant in case he desires to have some sort of receipt
from the bank for his office record. The participants of mail transfer are recorded in mail
transfer register just like drafts while at the paying branch instrument is
treated as branch voucher for credit into beneficiary’s account.
If the customer is not he account holder of this bank, then firstly he has to deposit the money
and then rest of the procedure will be adopted to transfer his money. Secret test apply on
MT. If the amount is less than 5000 rs then test will not apply.

It is the quick and safe mode of transfer of funds.

Application form submission is same as DD.

In MT funds are transfer through system within seconds if 2nd branch is online.

Funds transfer only same branch of the banks.
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 It is necessary that the customer must have the Branch Code of the host branch,
account number of a drawer, name of place, etc.

Inter-Branch Clearing Advice is involved.
DEMAND DRAFT
A method used by individuals to make transfer payments from one bank account to another.
Demand drafts are marketed as a relatively secure method for cashing checks. It is made for
both account holders and non account holders. Secret test apply on DD. If the amount is less
than 5000/- Rs. then test will not apply.
Types
 Junior draft
 Senior draft
Junior Draft
For 1 to 1000/- Rs. junior draft is made.
Senior Draft
For 1000 to 10 million Rs. senior draft is made.
Particulars of DD

Date

Name of the office on which it is drawn

Name of beneficiary

Amount in words and figures

Bank exchange rates

Signature and address of the applicant
Issuance of Demand Draft

The customer on standard DD application form makes request.

All information such as name of beneficiary, place where the DD is drawn, amount
mode of payment, cash/cheque/debit authority, signature with name and address is
filled.

The issuer checks the information.

Commission as per schedule of charges is charged.

Federal excise duty is charged.

After the customer has made payment by cash/cheque, get the voucher from cash
department.

The DD of required amount is prepared.

The DD in NBP is manually prepared.
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Entry of DD
Entry is made in DD issued register as well as on the system on which following entry is
passed.
Dr: Cash/Customer’s A/C
Cr: DD issued
Cr: DD issuance charges
Drawing branch of bank will give credit to the drawee branch on same date the draft is
issued; through their account for settling inter branch transactions.NBP does not pay before
the receipt of relative advice.
On the receipt of relative advice the drawee branch will credit the amount into their draft
payable account and each time draft is paid, this account will be debited with the amount of
draft paid. In case the draft receipt is not received the draft will be paid “ex-advice” duly
entered in the ex-advice register and entry in said register will be marked off on receipt of
relative advice.
Cancellation of DD

If any customer wants to cancel DD, bank obtains application in writing along with
original DD.

Verifies the signature of applicant. This signature should tally with the signature of
DD application form.

Checks the DD account into system of payment made or not.

Marks cancellation in DD issued register.

Recovers cancellation charges.

Payment is made from Suspense Account DD cancelled after recovery of cancellation
cheque is per schedule charges.

Inform the drawee branch regarding cancellation and ask for Inter-Branch Credit
Advice (IBCA).
 On the receipt of IBCA adjustment is made.
Issuance of Duplicate DD
In case draft is lost or destroyed by mistake, its duplicate can be issued at the request of
purchaser after obtaining indemnity bond on stamped paper of appropriate value. This is done
to cover the risk of double payment by mistake.

Application form received from purchaser and verifies the signature.

Informs the drawee branch of the loss of DD and advise them to mark caution against
payment if presented.

After necessary checking, the drawee branch will inform the branch about the status
of DD whether it has been paid or still outstanding.

Writes on the face of duplicate DD in red ink Duplicate in lien of original DD No--dated ---reported lost.
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National Bank of Pakistan
The signing officer must check all the particulars before signing.
TELEGRAPHIC TRANSFER
It is the message, which is sent from one branch to another on the order of payer to payee
through wire. It is one of the quickest means to transfer fund through the use of
Telex/fax/internet or cable. Secret test apply on TT. If the amount is less than 5000 rs then
test will not apply.

It is quickest way of transfer funds from one branch to another of the same bank
through telephone, fax/telex.

Procedure of application and vouchering is same as a DD.

Apply test on the TT message and appropriate codes and instructions such as advice
& credit or advice & debit.

It is mostly cleared through main branch of the same area.

Recovers commission, and other charges as per applicable rate.
The entries at issuing office are recorded in telegraphic transfer issued issued register while at
the other end it is entered in the tt payable register.
Issuance and Payment of Telegraphic Transfer Outgoing
Application form is filled by the client in whom the name and account number of the
beneficiary, which is to be credited and name of customer, is required. For telegraphic
transfer, the payment can be made in case or by cheque or by debiting the customer’s account
if he is the account holder.
The amount of Telegraphic Transfer should be written on the form. The amount is
transferred to beneficiary’s account in the other bank. An advice is given to the customer but
application is filled in the record of the bank.
Issuance and Payment of Telegraphic Transfer Incoming
When a TT is received then an entry is passed in TT incoming register after verifying the test.
When a person comes and wants to encash his TT, bank checks the statements of that person.
If the bank finds any account credited to the person’s account against TT, bank prepares a
voucher for this payment against that TT. The customer then presents that certificate to the
cash counter and collects money.
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Remittance charges
Exchange on DD/MT/TT
From 1 to Rs.100,000/-
0.10% minimumRs.50/-
From Rs.100,000 to 500000
0.05% minimumRs.100/0.04 % minimumRs.400/-
From 500000 to 10000000
Issuance of Duplicate Draft
For A/C Holder
Rs. 200/-
For Non-A/C Holder
Rs. 250/-
FED on DD,MT, PO
16% of commission
Postage charges on MT & DD
only
Rs. 75/-
Pay order
For A/C Holder
Rs. 50/- (flat)
For Non-A/C Holder
Rs. 100/- (flat)
Issuance of Duplicate PO
For A/C Holder
Rs. 100/- (flat)
For Non-A/C Holder
Rs. 150/- (flat)
ADVANCES DEPARTMENT
Advances department is one of the most sensitive and important departments of the bank. The
major portion of the profit is earned through this department. The Credit Management
Division of Head Office directly controls all the advances. As we known bank is a profit
seeking institution. It attracts surplus balances from the customers at low rate of interest and
makes advances at a higher rate of interest to the individuals and business firms. Credit
extensions are the most important activity of all financial institutions, because it is the main
source of earning. However, at the same time, it is a very risky task and the risk cannot be
completely eliminated but could be minimized largely with certain techniques.
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PRINCIPLES OF LENDING
i. Character
It is based on the borrower willingness to repay the obligation. The loan officer sees the
family background mode of living, business nature, habits, moral reputation and etc. before
giving the loan.
ii. Capacity
The ability of borrower to repay the loan when due. The borrower ability to repay the loan is
assessed by the office so that he will be able to repay the loan in future.
iii. Capital
The officer assesses the capital of the borrower. If assets held by the borrower are liquid, they
can be easily convertible in cash; but if non liquid is used then it is risky to given loan.
iv. Collateral
It is collateral security. It may consists of stocks bonds , bill of exchange, bills of lading, etc.
the bank has protect himself from any discrepancy in the future. They increase the ability of
the borrower to obtain the funds from the bank.
v. Condition
The economic condition of the borrower is determined. The economic conditions of the
borrower in and outside the country effects the repayment of loan. If condition is favorable
then loan is given otherwise vice versa.
TYPES OF ADVANCES
i. Demand Finance
One time disbursement of the whole amount sanctioned, as the limit for the credit allows.
Any person, individual, group, company, firm and all others can achieve this Mode of
financing. The mark-up or interest is calculated on the total amount disbursed and requires to
be paid before the date of final adjustment. Regarding the amount, limit and period, it
depends on the nature of the case in review.
ii. Cash Finance
In this mode of financing the borrower is allowed to make withdrawals of funds as he
requires, but the total amount outstanding cannot exceed the limit sanctioned. The markup/interest is calculated on the amount outstanding on his account.
The calculation of mark-up/interest is based on the number of days a specific amount is
withdrawn. This finance if normally borrowed by small traders or individuals for their petty
matters involving cash transactions up to rupees three hundred thousand maximum.
iii. Running Finance
To assist a large-scale business operator to carry on his day to day requirements of liquid
funds, this account is opened is made operation in his favor. Running finance is provided
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where the amount goes beyond rupees three hundred thousand. The mark-up/interest is
calculated the same way as in case of cash finance. Security against running finance is that
which is easily convertible in to cash and bank kept 25% margins with it.
iv. Loans
When a customer borrows a fixed amount from a banker repayable either in periodic
installments or in lump sum at a fixed future time, it is called a "loan". When bankers allow
loan to their customers against collateral securities they are called secured loan and when no
collateral; security is taken it is called "clean loans"
Types Of Loans
The credit department of NBP has providing the following types of loans
a. Short term loans
b. Long term loans
c. Working capital loan
d. Syndicate (project) loan
e. Monitoring
CRITERIA CHECKED FOR LOANS
Major areas requiring focused attention of the analyst are:
Financial Condition
Which is reflected in the trends of:

Net sales

Gross sales

Operating profits

Net profits (at least for the last 3 years)
Structural Liquidity
It refers to the extent of liquidity usually available in the business, or which is the routine
requirement of the borrower based on the nature of his periodically maturing liabilities.
Industry/Business Of Operation
The banker has to check that in which industry or segment of market the loan is being given
this is important because if there were a recession in that industry for decades then it would
not be feasible to invest in such a business. Certain traditionally stable industries are in
Pakistan in which NBP feels satisfied while investing. For example if they feel satisfied by
investing in ICI.
Debt Equity Management
Excessive reliance on debt, rather than plough back of profits or injection of fresh equity, to
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maintain a healthy combination of debt and equity is thought with danger because ultimately
the debt servicing requirements place a heavy burden on its liquidity thereby its survival.
Asesst Management
Asset management involves the analysis of how productively the assets of the company are
being used. Sales and profitability can be measured with this.
Borrower’s Credit Worthiness
In order to get a complete picture of the borrower’s credit worthiness, inquiries will have to
be made about:

His business.

Trade experience.

Assets and liabilities.

His account with bank or with other banks.

His financial statements and income tax returns.

An interview with him will be necessary to elucidate or supplement the
information that may have been collected.
Management
Before giving loan NBP also checks whether the management have the depth, skill and
experience. If the management is aggressive and adoptive to the new changes then it is most
likely that the banker may receive the loan back on due date
Securities
In case the borrower is not in a position to meet his obligations, there must be something else
to call back upon. So bankers take securities to have a resource to them to guard liquidity,
that is, security is an insurance against calamities.
In case of cash finance the customer have to give the same amount of money to the NBP as a
security for which it takes loan.
The bank provides the following securities to the customers.
Mortgage
Transfer of interest in movable property for securing the payment of money lend on existing
or future liability. The bank provides the following two types of mortgage.
 Registered mortgage
 Equitable mortgage
 Registered mortgage
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Registered mortgage is provided on the residential property, commercial industrial
property, raw plot, etc. A party can get registered mortgage if they provide the following
documents to the bank.

Title deed

Non encumbrance (NEC)

pit form (in case a constructed hose)

Valuation certificate

Affidavit

Mortgage deed

Personnel guarantee of mortgagor

Power of attorney

Legal opinion.
Banks examine all these reports, and if they are correct then issue the mortgage to the
party. The bank examines these reports to see that the property they want to mortgage is
registered and is not already pledged. The bank also calculates the value of the property
and the legal opinion of the customer in case of non-payment.
 Equitable mortgage
Equitable mortgage is provided on the residential property, commercial industrial
property, raw plot, etc.

Title deed

Non encumbrance certificate (nec)

Pti form (in case a constructed house)

Valuation certificate

Affidavit

Memorandum of deposit of title deed

Personal guarantee of mortgagor

Power of attorney

Legal opinion
In this mortgage a charge form bound the customer for any legal action in case of nonpayment. In this type of mortgage hypothecation of stocks involves.
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Pledge
A pledge is an “a class security given to customers for stocks ware house, customs, and etc. it
is defined as actual delivery of movable property to lender as security for a loan. When the
customer makes the payment of the loan in full he can back his mortgage property from the
bank i.e. when full payment is made the stock is released.
PROCEDURE OF SANCTION OF LOAN
Any individual or company, who wants loan from NBP, first of all has to undergo the filling
of a prescribed form, which provides the following information to the banker.

Purpose of loan

Details of all firms or companies associated with business

Name of proprietor/ partner/directors

Accurate and up-to-date balance sheet and profit and loss statement of last two years
of business

Market report of the borrower repute

Report from the bank if borrower has maintain his account with the bank

CIB report

Full details of existing limit and actual liability against the business

Particular about the foreign exchange deposits and bills given by the borrower to the
bank

Memorandum and article of association in case of limited company

Audited report of balance sheet and income statement of last two years
After checking all the securities, customer verification the manager done the following
tasks
1. Preparation of credit proposal
2. Prepare the about the customer
3. Sanction of loan
Preparation of credit proposal
After formal application for the credit the party submits approval. For this purpose borrower
can use coarse paper or the form provided by the bank. Along with the application borrower
also submits the documents required by the bank. The bank manager evaluates the documents
provided by the borrower. He gets the party’s credibility report confidentially from the other
commercial banks. He checks the balance sheet and income against the assets in the
company. He also measures the percentage of owner’s equity.
Then he doses the ratios analysis of the company. If the party is involved in the export and
import business then the data of the last three years of this business is considered. The
manager of the bank also examine the project violability, the securities provided by the
debtor to the bank are evaluated by measuring their worth. In the case of pledge is assessed
by the manager while in case of new party manger checks from where the party is financing
for their business
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Prepare the Proposal about the customer
After preparing the proposal manger prepare the report about the customer. Report contains
the following information

Name of the company

Date of establishment

Address

Nature of business

Branch office

Worth of business

Date

Banker’s opinion

Head cashier opinion

Branch manger opinion
In case of partnership business following information are included in the report

Partner, their share in capital, profit and loss

Deed of partnership

Partnership letter

Turn over

Net profit

Personal property of partners

Bank balance of partners

Advance payment of suppliers

Particular of machinery installed in the factory through financing
Incase of corporation/limited companies the following information are included

Incorporation and commencement of company

Sales offices

Capital information

Directors and their contribution to capital
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
Balance sheet with explanation and evaluation

Net worth of the company
Sanction of Loan
If the limit of the loan lies within the power of manger then he sanction the loan otherwise
manger with the covering letter along with all necessary documents sends it to the concerned
sanctioning authority.
ACCOUNTS DEPARTMENT
The main function of account department of NBP is to maintain general ledger accounts and
after the business hours the function of the account officer is to close books. There are many
other important functions performed by accounts department of NBP so broadly they can be
categorized in three heads

Routing of expenses vouchers

Preparation of daily activity reports

Preparation of weekly and monthly statements

Preparation of statements for tax purpose
ROUTING of EXPENSES
Vouchers of all expenses and material purchases are routed out through this department. As
far as the expenses are concerned, they include the

Heads of salaries paid to confirmed employees of bank

Wages paid to employees that are on contractual basis

Rent of the building

Lease installment

Insurance premium paid to insurance company for the insurance of vehicles and cash
in safe and counter.

Utility bill, which consists of courier, electricity, water and gas bills

Medical expenses (reimbursed)
Voucher System
Voucher is written authorization sued in approving a transaction for recording and payment.
Voucher is a system, which is generally designed to provide strong internal control over the
transaction, which takes place during the business hours. It is prepared whenever
 A transaction takes place in any department of the bank.
 One debit and one credit voucher is prepared
 At the end of the day these vouchers are collected and recorded,
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In bank two vouchers are used
i.
Debit Voucher
ii.
Credit Voucher
Debit Voucher
Different types of debit vouchers are used by the bank as an evidence of the transaction. For
identification they are differentiated by using different colors.
Debit vouchers are used in three cases:

Whenever any expense is incurred

For the preparation of two negotiable instruments i.e; MT, DD.

When Account holder transfer money in his account then bank deduct charges on
intercity and SC clearing. The account of the customer is debited with the amount
deducted for services and debit voucher is prepared.
Accounts department used debit voucher mainly for expenses while the other two purposes of
debit voucher is used by the remittance department.
The format of the debit voucher includes:
 Name of the branch
 Date
 Branch No.
 Account No.
 Transaction code
 Amount and other details (Narration)
Credit Vouchers
Different types of credit vouchers having different colors and format are used by the bank.
There are three types transaction in which credit vouchers are used.

When a depositor deposits any amount in his account because it is the liability of the
bank therefore credit voucher is prepared.

Any income received by the bank e.g . bank draft.

For the preparation of PO
Salary Structure
Salary included
i. Bonuses
These bonuses are credited after every six months i.e. June and December . These are first
and second profit bonuses and are equal to one month’s basic salary.
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ii. Allowances
Allowances included house allowance ,transport allowance and medial allowance.
iii. Provident fund
Provident fund is provided to each employee on his retirement, contribution by employer and
employee is 8.3%.
DAILY ACTIVITIES REPORT
The main function of this department is to check daily transactions whether cash, transfer of
payments, billing, and clearing of all the departments. It includes the details of the following:
 Loan transactions.
 general ledger transactions
 Foreign currency related transactions.
 Fixed deposits transactions.
Following procedure is followed in checking daily activities carried out in different
departments of the branch.

All the vouchers, advices both manual as well as computerized obtained for posting in
the system of each department.

All the vouchers and advices are further sorted in ascending and descending order for
the sake of convenience in checking and tally information.

It is checked whether or not the account number, instrument number, document
number and amount appearing in words and figures are agreed with the information
appearing in the computerized record.

In case of changing or discrepancy informed to the concerned department.

All the credit, debit and billing voucher bunched separately.

The name of the branch, date of vouchering, title and number of vouchers is written
on voucher must be cover authorized signature.

All the above vouchers assist in case of any enquiry and audit.
PREPARATION OF STATEMENTS
Second major function of accounts department is the preparation of various statements. These
statements are:
Weekly statements:
These weekly statements are sent first to NBP head office Karachi. These statements are
generated on weekly basis for the purpose of sending it to Head Office. These also include:
 Statement of affair
 Deposit and advances position of the bank
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Monthly statements:
These monthly statements are sent first to NBP head office Karachi and then these statements
are sent to head office in consolidated form. All vouchers and statements signed and
approved by manager accounts or who has authority to sign on behalf of the bank and whose
signature appears in one of the bank’s book of specimen signature of a person who has
authority to sign internal vouchers and record extents of its authority will be made by the
counter manager. All vouchers prepared by different relative departments on computer.
These statements are prepared on monthly basis and also sent to Head Office (Qatar). These
include:
 Provisional statement of income and expenses. This statement adjusted for
accruals and pre-payments.
 Monthly Balance Sheet and Income Statement
 Comparative Statement
In third and last step the following functions of accounts department of NBP are described as
follows:
 Approval of daily expenses voucher
 SBP balance
 Tax returns
 Budgeting
 Forward cover fee
 Debit balance calculation.
 Pay order /telegraphic commission transfer
 Deposit entry
 Depreciation
 Result/budget
 Head office report
 Trail balance /fax position
 Commitment return
 Source and uses
 Activity report
 Monthly assets and liability
 Liquidity 1,2,3,4,5, years
 Excise duty balancing
 Customers internal account statements
 Computer complete back up
 Quaterly statement size wise
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 FCY interest reporting
 FCY interest checking
 Services charges
 A/c to be dormant
 Letters to customer
 Classification of deposits
 Lists of deposits
 A/c opening and closing
 Staff loans
 A/c blocked and unblocked
 Monthly resident and non resident
 Zakat calculation
TAX PURPOSE STATEMENT
The department also prepares two statements for the purpose of paying tax on monthly and
annual basis. These statements are generated for the purpose of submitting to Central Board
of Revenue. These are:

Statement of deduction of income chargeable under the head salary under Section 53
(Tax deducted at source)

Withholding Tax from the payments made to vendors, suppliers and other parties
providing various services. The rate of withholding tax is as follows:
 Suppliers------------------------ 3.5%

For other parties------------- 5%
Data Entry
The next task after receiving the data is to enter that data in to a computer. The floppy
disk is directly inserted in the computer. The program in used is based on “COBOL”
language. This program is designed in away that it demand “Hash Value” value before
opening the floppy for further action this value serve the purpose of password or pin code
send by the branch on entering that value the data enter in to the computer. This computer is
attached with the terminal of central computer. The operator of that terminal takes the data
from the computer and converted it in to a text file through that terminal the data finally goes
to the central computer.
ACCOUNTING PROCEDURE IN NBP:
1. Various departments use debit and credit vouchers for regarding the transactions.
2. Accounting department receives the departmental journal from the departments
together with all vouchers.
3. Verify correction of total of all into departmental entries in departmental journal.
4. Sort vouchers into general ledger a/c order debit separately from debit for each
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account.
5. From departmental journals add all debits and all credits for each general ledger
account and write total for each accounting relative account and extend new balances.
6. Prove debit and credit totals to department journal total. Write total obtained from
machines list for each contingent accident in general ledger and up data balances.
7. Date and sign general ledger and obtain signature of an officer .
8. Place general ledger includes leaf binder in chronological order.
BILLING & GOVERNMENT RECEIPT/
PAYMENT DEPARTMENT
In this department all types of Government receipts i.e. Revenues, Taxes, Agriculture Tax,
Government Fees, EOBI Funds and Utility Bills are deposited. This way NBP is serving great
job of revenue collection and charges commission for providing services. This department is
performing following functions

Payment of Provident Fund

Payment of Benevolent Fund

Payment of pension

Collection of utility bills

Collection of property taxes and Challans

Collection of dues of education institution

Payment of salaries

Payment of zakat
The investment by the NBP in the provident fund for the benefit of their employees in 2008 is
Rs. 8507300/- and in pension schemes reached to Rs. 17738992/-
PAYMENT OF PROVIDENT FUND
Provident fund are maintained by many organizations for the benefit of their employees.
There are three types of provident fund granted by the organizations.

Government provident fund: fund maintained by government institutions

Recognized provident fund: fund maintained by private organizations fulfils the
conditions maintained by law.

Unrecognized Provident Fund: fund maintained by private organization which has
not been granted recognition by law
BENEOVALENT FUND
The Funds are utilized for the relief of Government servants and their families by giving
financial assistance to the families of deceased Government servants; to Government servants
invalided out of service.
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COLLECTION OF UTILITY BILLS
NBP as an agent of the SBP collects bills from the general public and charge commission for
the services rendered. The commission on each type of bill is Rs. 8/- per bill. The branches
collect the utility bills and the proceeds are then send to head office through MT.
PAYMENT OF PENSION
Pension is the Post-retirement benefits that an employee might receive from some employers.
It is a payment, not wages, made regularly to a person who has fulfilled certain conditions of
service, reached a certain age. The date up to which pension is payable may vary depending
upon the employee services. It can be payable for Life, Death , Remarriage
Types of Pension
i.
Employment based Pension
ii.
State Pension
iii.
Employees Old Age Benefits
Employment-based pensions
A retirement plan is an arrangement to provide people with an income during retirement
when they are no longer earning a steady income from employment. Often retirement plans
require both the employer and employee to contribute money to a fund during their
employment in order to receive defined benefits upon retirement.
The GOP has been introduced two types of pension are given to the employees on retirement
on the basis of the services which they have rendered.

Retirement Pension: refers to pension granted upon 25 year of services

Superannuation Pension: refers to pension granted upon 30 years of services
State pensions
Many countries have created funds for their citizens and residents to provide income when
they retire. GOP has been introduced pension for their employees who are working in the
State owned Institutions; e.g WAPDA, WASA, PIA etc

Provincial Pension : granted to the employees who work under the government of
Punjab.

Central Pension: granted to the employees who are employed under the federal
government. Recently GOP increased the pension of central employees by giving
them an arial of 20% and 15%:
20% increase: For employees who have retired before 1999
15% increase: For employees who have retired after 1999

Defensive Pension: It is given to the employees who work in forces e.g; PIA
employees, Army, Navy, Police
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National Bank of Pakistan
Railway Pension: It is given to the employees who work in railway under the three
head:
LHR: Lahore Railway Head
WS: Work Shop Head
RHQ: Railway Head Quarter
Employees Old Age Benifit
Non government employees having 5 or more than 5 employees grant EOBI funds to their
employees. The contribution towards the fund by the employee is 5% of the basic pay scale
of employee and by the employer is 1% of the basic pay scale.
71
O
M
M
E
R C I A L
E
T A I L
COMMERCIAL & RETAIL
BANKING
A N
K I N G
In this section products offered by NBP are
discussed:
Premium Aamadni Scheme
Premium Saver Scheme
Accounts Department
President Karobar Scheme
Saiban Scheme
Advance Salary Scheme
Cash Card Scheme
Cash n Gold Scheme
Kisan Dost Scheme
Kisan Taqat Scheme
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National Bank of Pakistan
COMMERCIAL & RETAIL BANKING
National Bank of Pakistan serving following product lines:
Premium Aamdani Scheme Unprecedented Safety - Unprecedented Return
Monthly Income Scheme
A monthly income scheme introduced by National Bank of Pakistan for investors as well as
for general public. Incentives are available for investors providing finance facility against
these certificates and also allowed to customers to convert existing deposits into National
Bank Premium Aamdani Certificates.

Earn up to 11% p.a.

Minimum deposit of Rs. 20,000/-

Maximum deposit of Rs. 5,000,000/-

Investment period is 5 years

Free Demand Draft, Pay Order and Cheque Book

Convenience of NBP online Aasan Banking (for online banking customers)

Free NBP Cash Card (ATM+Debit)

Running finance facility up to 90%

Profits paid on monthly basis
Period
Profit Rates
1st year
7.50%
2nd year
8.50%
3rd year
9.50%
4th year
10.50%
5th year
11%
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Premium Saver Scheme
National Bank of Pakistan
your's saving reward
(PLS Saving Account)
• Earn up to 7.25% p.a.
• Minimum saving balance of Rs. 20,001/- & a maximum
balance of Rs. 300,000/-*
• Free NBP Cash Card (ATM + Debit)
• Convenience of NBP Online Aasan Banking (for online banking customers)
• Two debit withdrawals allowed in a month & no limit on number of deposit
transactions
• Profit calculated on monthly and paid on half yearly basis
President's Karobar Scheme Mera Apna Karobar
National Bank of Pakistan is providing financing under President Karobar Scheme with the
cooperation of government of Pakistan. The purpose of this scheme is to reduce
unemployment from the country. Main features are as under

Minimum down payment, 10% of asset price (5% for PCO & Telecaster)

Tenure of loans 1 to 5 years (for PCO 2 years)

Grace period 3 months

Maximum loan amount Rs. 200,000/-

Age 18-45 years

Mark-up (variable) 1 year KIBOR + 2.00% p.a.

The customer will pay markup @ 6% p.a., rest will be borne by GOP*

Life & disability insurance paid by GOP

NBP’S loan available for:
 Utility Store,
 Transport
 PCO/Tele-centers
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Procedure to Apply

Customer to visit any NBP branch to obtain loan application form and scheme details.
Application form could also be downloaded from the NBP web site. Photo copy of the
form will also be accepted. Each form will cost Rs. 5. In case of photocopy or downloaded form, form fees will be charged at the time of application submission

Branch to provide details of the scheme along with the required documents to be
submitted with the application form

Customer to submit the application form along with all the required documents as
well as the verification and the processing fees.

The application form and all the relevant papers of the customer will be checked by
the Branch staff and if found complete, application processing will commence

If the case is approved then the customer will be informed accordingly and will be
advised to deposit the Down payment and fulfill all the other product specific
formalities

Upon fulfillment of all the details and approval of the loan by the competent
authority, Purchase Order in favor of vendor will be issued and a copy of the same
will be given to the customer

Delivery of the financed asset will be made directly to the customer by the NBP
selected vender
Saibaan Scheme Open the Door to Your Dream Home
(Home Financing)
National Bank of Pakistan lending for construction of home to general public as well as
employees of government and non-government institutions. Main features of this scheme are
as under.

Finance is available for:
 Home Purchase
 Home Construction
 Home Renovation
 Purchase of Land + Construction

Period of repayment ranges between 30-20 years.

Loan available up to a maximum of Rs. 15-20
million.

NBP provide markup choices to its consumer i.e. Variable Discount Rate, Fixed Rate.

Minimum approval and disbursement timing.

Limited to areas where there are no documentations, fee, resale and foreclosure
related issues, so to protect the bank’s interest.
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National Bank of Pakistan
Mark Up Rates
Variable Rate Option: SBP Discount Rate with (+2%) with12 months re-pricing
Processing Fee
Government Employees: Rs. 500/- irrespective of financing amount.
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
Eligibility

Balance Transfer Facility (BTF)

Must be Pakistani Resident (National)

Aged between 21 and 65 years at the time of application/disbursement of loan

Salaried Person, Self-employed professionals and businessmen

Property located in NBP approved localities.

Service duration: Two years for salaried class Three years for self-employed/business
class.
Advance Salary Scheme Personal Loan
Take up to 20 times of Your Take Home Salary
NBP Advance Salary , the leading personal loan product of the country, is maintaining its
inimitability ever since it was launched. This was only possible due to its swift growth and
remarkable loan disbursement of over 138 billion.
Employees can avail up to 20 net take home salaries with easy repayment installments. It's
hassle free acquisition with no prior formalities and easy availability in a short turn round
time are attributed as the most distinguishing features of the product. The product is offered
countrywide. It's salient features are;

Easy installments of 1 to 60 months at your choice

Take upto 20 advance salaries

Quick processing and fastest disbursement

The product is for permanent employees of Government, Semi
Government and Autonomous bodies receiving salaries through NBP
accounts
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National Bank of Pakistan
Eligibility
Permanent Employees of Govt., Semi-Govt., Autonomous,
Semi Autonomous, Local & other bodies who are maintaining
their Salary A/Cs at NBP.
Repayment
Direct deduction from Salary A/C
Maximum Loan Amount
Rs. 490,000/-
Security
Employer will provide undertaking that borrower’s Salary and
end of service benefits will route through his/her Salary A/C
maintained at NBP during the tenure of the loan and his/her
end of service benefits are at least equal to the amount of
Advance Salary required.
Hypothecation of Consumer durables owned by the borrower.
Three (3) Undated Cheques
Max. Repayment Period
5 years (60 months)
Advance in terms of # of net
Up to 20 net take home salaries
take home salaries
Markup Rate
SBP Discount Rate + 5%
Processing Fee
1% of Loan Amount
Verification Charges
Rs 500/-
Life Insurance
No Insurance of any kind.
Documentation Charges
at actual
Contact
Your Salary disbursing NBP Branch.
Remaining Service Age
At the time of approval and disbursement the applicant’s
remaining service age should be 6 months after maturity of the
loan
Debt Burden
50%
Minimum net take home
salary
no minimum take home requirement
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National Bank of Pakistan
Cash Card Scheme one card does it all
ATM + Debit Card
NBP Cash Card is a 24-hour direct access ATM/ Debit card to bank account, which lets pay
directly from the account as an alternative payment method to cash. The transaction is
authorized and processed by entering PIN. The NBP Cash Card holders are able to transact at
any of the 4000 + Merchants where Orix logo is displayed and can withdraw cash from NBP,
1-Link & M-NET ATM’s across the count.

Use it as an ATM in any of the ATM’s in Pakistan

Use it as Debit Card in any of the outlets with ORIX POS machine

Cash withdrawal up to Rs. 20,000/- per day

Account Balance Enquiry

Mini Statement (Only at NBP ATM)

PIN Change facility (Only at NBP ATM)
Advantages

Customers don’t need to carry a lot of cash with you every time you go out.

Secure and Safe transaction.

Account Information on tips (like: Mini Statement, Balance Inquiry, Utility Bill
Payment etc.)

Enable To Withdraw Cash From 1-Link ATMs / MNET ATMs.

Enable to make purchases round 4000 POS (Merchants) Countrywide including
2500+ POS in Karachi.

No Card Issuance Fee for first 12 Months
Investor Advantage Scheme easier financing ,profitable trading
Financing Facility for Stock / Retail Investors

Comfortable and secure environment for trading

NBP financing at very easy terms requiring minimum documentation

Minimum turn around time

No security requirement from the customer except for the customer's equity
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Internship Report
National Bank of Pakistan

Customer's equity freely available for investment.

Equity acceptable in cash or approved share.
Eligibility

Pakisani National with vaid computerized national ID Card

Over 21 years of age

An account with NBP designated Branch

Equity in the form of cash or NBP approved shares

No default with any financial institution
Application Procedure

Obtain facilty application form the NBP Marginal Desk at designated branches

Fill in the application form and submit it to the branch

On application approval, deposit equity as cash in the margin financing account at the
bank. Alternatively NBP approved shares can also be deposited in the NBP CDC
Account (CDC A/c No. 2345)

Start trading through comfortable & friendly trading centers establishment for you (In
collaboratino with Taurus Security Limited a subsidiary of NBP)

Trading limit available for the amount of equity + bank financing.
Cash n Gold Scheme encash and meet your needs
Ready Cash Against Gold
With NBP's Cash n Gold, provide facility for ready cash against idle gold jewelry with no
minimum limit and provide extra benifit. The main features are:

Facility of Rs. 10, 000/-against each 10 gms of net weight of Gold Ornaments

No maximum limit of cash

Repayment after one year

Roll over facility

No penalty for each repayment

Rate of mark-up 13% p.a.
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
National Bank of Pakistan
Weight and quality of gold to be determined by NBP's appointed schroffs
Kisan Dost Scheme Agriculture Made Easy
Agriculture Farming Program
National Bank of Pakistan is lending in agricultural field. National Bank of Pakistan is
lending farmers for development of agriculture sector of the country under certain terms and
conditions.
NBP provide loan to farmers for production, development purposes, for purchase of tractors,
for installation of tube wells, for purchase of agricultural instruments, micro loan, for
construction of godwon, for construction of fish pond, for development of livestock and
farming, for mil processing, for cold storage, bio-gas plants.

interest @ 14.5 percent per annum

Quick & easy processing

Delivery at the farmer’s doorstep

Technical guidance to farmers

Wide range of financing schemes for farmers

Finance facility up to Rs. 500,000/- for landless farmers against personal guarantee

Financing available against pass book, residential/commercial property, gold
ornaments and paper security

Loan facility on revolving basis for three years (renewable on yearly basis without
documentation and approval)
Kisan Taqat Scheme promise of prosperity
Dairy Farm Scheme
National Bank of Pakistan is providing loans for the dairy farms and for the development of
the livestock and dairy farms.

NBP facilitates with livestock experts

Less documentation and easy to repay

Available at the next door step

Scheme is available in more than 50 branches of
NBP
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National Bank of Pakistan
PakRemit Scheme
NBP's Internet Based Home Remittence Service
Product Information
Pakremit is an internet based Home Remittance Service. This service is available to U.S.
residents for sending money to their family and friends in Pakistan. One must have a valid
US Dollar account with a U.S. bank or a US Dollar credit or debit card in order to remit funds
through this channel.
Remitters in USA can log on to our user friendly website, www.pakremit.com and easily
remit funds to Pakistan from the comfort of their homes, in a matter of minutes. The service
is fully secure with advance encryption application and is available for use 24 hours a day, 7
days a week. Fees and exchange rate have been set at competitive levels and the remitters
have the ability to track delivery of funds as well.
Process:

Remitters log on to www.pakremit.com and after completing the registration process,
are able to remit funds. The whole process takes a few minutes.

Funds in Pak Rupees can be sent to beneficiaries, having an account with any bank in
Pakistan, including NBP. While funds are credited directly to beneficiaries
maintaining accounts with NBP, a pay order or demand draft is couriered to other
banks for their customers. Pay order or demand draft can also be couriered directly to
the beneficiary’s office or home, if requested by the remitter.

Funds in US Dollars can be sent only to a Beneficiary maintaining a US Dollar
account with one of NBP’s Foreign Exchange Branches. Click here for details of NBP
Foreign Exchange Branches.
USPs ( Unique Selling Propositions)
 Convenient and Fast
 Reliable and Secure
 Available 24 x 7
NBP Protection Shield Scheme Life is Precious
Personal Accident Insurance
Insurance Coverage- In case of Accidental Death (Including death due to Riots, Strikes, Civil
commotion, Acts of Terrorism and Natural Calamities like Flood, Earth Quake, Cyclones etc)
provided that the insured is not directly involved in these activities
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National Bank of Pakistan
Coverage of Rs. 200,000/- for Rs. 20/- per month
Accident means unintentional, unfortunate or a harmful event by chance or apparent cause.
Accidental Death means death due to accidental injuries, but not illness.
Insured Person means a National Bank of Pakistan PLS account holder, aged between 18
years and above, and whose premium is deducted & details are reported to the selected
insurance company by NBP.
Policy means Group Personal Accident Policy dated 26/09/05 executed between NBP and
Insurer.
Principal Sum means the amount stated in the Policy’s Schedule of Benefits as respects each
Insured Person.
Features

No documentation

No medical required

Premium Auto Debit facility & choice of deactivation

Coverage includes death due to:

Natural Calamities e.g. Earthquake, Flood, Cyclone etc.

Accident

Riots

Civil Commotion

Strikes

Acts of Terrorism
Eligibility

NBP PLS account holders

18 years and above
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National Bank of Pakistan
NBP Student Loan Scheme
Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002 budget
speech, a STUDENTS LOAN SCHEME (SLS) for Education was launched by the
Government of Pakistan in collaboration with major commercial banks of Pakistan (NBP,
HBL, UBL, MCB and ABL). Under the Scheme, financial assistance is provided by way of
Interest Free Loans to the meritorious students who have financial constraints for pursuing
their studies in Scientific, Technical and Professional education within Pakistan.
The Scheme is being administered by a high powered committee comprising Deputy
Governor, State Bank of Pakistan, Presidents of the commercial banks and representative of
Ministry of Finance, Government of Pakistan.
Eligibility
Under the scheme the students are eligible to apply for loans provided: He/She has obtained
admission on merit through normal course/procedure in the approved Universities/Colleges
of the public sector mentioned hereunder. He/She falls at the time of admission within the age
bracket of:For Graduation
For Post-Graduation
For Ph.D


Not exceeding 21 Years
Not exceeding 31 Years
Not exceeding 36 Years
He/She has secured 70% marks in the last public examination.
He/She is unable to pursue studies due to financial constraints.
Repayment
The maximum period of repayment of loan is 10-Years from the date of disbursement of first
installment. The borrower shall repay the loan in monthly installment after six months from
the date of first employment or one year from the date of completion of studies, which ever is
earlier.
84
I N A N C I A L
N A L
Y S I S
FINANCIAL ANALYSIS
In this section topics are:
Horizontal Analysis
Vertical Analysis
SWOT Analysis
Strength
Weaknesses
Opportunity
Threats
Internship Report
National Bank of Pakistan
FINANCIAL ANALYSIS
The financial statement of any organization shows the results of its operation and its position in
business. It is a process which involves reclassification and summarization of information
through the establishment of ratios and trends. The overall objective of financial statement
analysis is the examination of a firm’s financial position.
Horizontal analysis
Through this analysis we can check that what are changes with in years in the items of balance
sheet and profit and loss account. Last year become base for next year. And change can be easily
analyzed.
Vertical analysis
In vertical analysis of balance sheet the percentage of each item of statement is calculated to total
and then the change in the percentages is checked with in years.
Horizontal Analysis of Balance Sheet
2008
2007
ASSETS
Percentage
change
106503756
94873249
12.3%
Balances with other banks
38344608
37472832
2.33%
Lending to financial institutions
17128032
21464600
(20.92%)
Investments
170822491
210787868
(19%)
Advances
412986865
340677100
21.2%
Operating fix assets
24217655
25922979
(6.6%)
Deferred tax assets
3204572
-
-
Other assets
44550347
30994965
43.73%
Total assets
817758326
762193593
7.3%
Cash balances with other treasury
banks
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National Bank of Pakistan
LIABILITIES
2008
2007
Percentage
Bills payable
10219061
7061902
44.7%
Borrowing from financial
40458926
10886063
272%
624939016
591907435
5.6%
-
-
-
25274
33554
(24.7%)
-
5097831
-
Other liabilities
39656831
30869154
28.5%
Total liabilities
715299108
645855939
10.75%
Net assets
102459218
116337654
(11.93%)
2008
2007
institutions
Deposits & other accounts
Subordinated loans
Liabilities against assets of leasing
Deferred tax liabilities-net
REPRESENTED BY
Percenta
ge
Share capital
8969751
8154319
10%
Reserves
19941047
15772124
26.43%
Unappropriated profit
52456204
45344188
15.7%
81367002
69270631
17.5%
21092216
47067023
(55.2%)
102459218
116337654
(11.93%)
Surplus on revaluation of assets
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National Bank of Pakistan
Horizontal Analysis of Profit And Loss Account
PARTICULARS
2008
2007
Percentage
Mark-up/return/interest earned
60942798
50569481
20.5%
Mark-up/return/interest expenses
23884768
16940011
41%
Net mark-up/ interest income
37058030
33629470
10.2%
Provisions against non performing
10593565
4723084
124.3%
373249
(40248)
1027.4%
4000
-
-
-
39899
-
10970814
4722735
132.3%
26087216
28906735
(9.75%)
Fee,commision and brokerage income
7925370
6781683
17%
dividend income
2878932
3263246
11.8%
Income from dealing in foreign
currencies
3969057
1042827
281%
Gain on sale and redemption of
securities-net
395427
2341690
(83.11%)
advances
Provision for/(reversal of)
diminution in the value of investment
Provision against off balance sheet
obligations
Bad debt written off directly
Net Mark-up/interest Income after
provisions
Non-Mark-up/interest Income
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National Bank of Pakistan
Unrealized/(loss) on revaluation of
investments
classified as held-for-trading
1707
(31964)
105%
Other income
1245369
147363
745%
Total Non-Mark-up/interest Income
16415862
13544845
21.2%
42503078
42451580
0.12%
18171198
14205911
28%
Other provisions/write offs
747521
168027
345%
Other charges
583361
17141
3303%
19502080
14391079
35.5%
23000998
28060501
(18%)
-
-
-
23000998
28060501
(18%)
11762650
8311500
41.5%
-
391497
-
(4220242)
323731
1403%
7542408
9026728
(16.4%)
Profit After Taxation
15458590
19033773
18.8%
Un-appropriated profit brought
forward
45344188
32074677
41.4%
130456
39007
234%
60933234
51147457
19.13%
Non-Mark-up/interest expenses
Administrative expenses
Total Non-Mark-up/interest expenses
Extraordinary/unusual items
Profit Before Taxation
Taxation-current
-prior years
-deferred
Transfer from surplus on revaluation
of fix assets
Profit available for appropriation
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National Bank of Pakistan
Vertical Analysis of Balance Sheet
ASSETS
2008
Percentage
2007
Percentage
106503756
13.02%
94873249
12.45%
Balances with other banks
38344608
4.7%
37472832
4.92%
Lending to financial institutions
17128032
2.1%
21464600
2.82%
Investments
170822491
21%
210787868
27.7%
Advances
412986865
50.5%
340677100
44.7%
Operating fix assets
24217655
3%
25922979
3.4%
Deferred tax assets
3204572
0.4%
-
-
Other assets
44550347
5.45%
30994965
4.07%
Cash balances with other
treasury banks
LIABILITIES
2008
Percentage
2007
Percentage
Bills payable
10219061
1.43%
7061902
1.1%
Borrowing from financial
40458926
5.7%
10886063
1.7%
624939016
87.4%
591907435
91.65%
-
-
-
-
25274
.0035%
33554
.0052%
-
-
5097831
0.79%
institutions
Deposits & other accounts
Subordinated loans
Liabilities against assets of
leasing
Deferred tax liabilities-net
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Internship Report
Other liabilities
REPRESENTED BY
National Bank of Pakistan
39656831
5.5%
30869154
4.78%
2008
Percentage
2007
Percentage
Share capital
8969751
11.02%
8154319
11.77%
Reserves
19941047
24.5%
15772124
22.77%
Unappropriated profit
52456204
64.5%
45344188
65.46%
Vertical Analysis of Profit And Loss Account
PARTICULARS
Mark-up/return/interest
2008
Percentage
2007
Percentage
23884768
39.2%
16940011
33.5%
37058030
60.81%
33629470
66.5
10593565
17.4%
4723084
9.34%
373249
0.61%
(40248)
(0.08%)
expenses
Net mark-up/ interest
income
Provisions against non
performing advances
Provision for/(reversal of)
diminution in the value of
investment
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Internship Report
Provision against off
balance sheet obligations
National Bank of Pakistan
4000
0.007%
-
-
-
-
39899
0.08%
10970814
18%
4722735
9.34%
26087216
43%
28906735
57.16%
7925370
13%
6781683
13.41%
2878932
4.72%
3263246
6.5%
Income from dealing in
foreign currencies
Gain on sale and
redemption of securitiesnet
Unrealized/(loss) on
revaluation of investments
classified as held-fortrading
Other income
3969057
6.51%
1042827
2.1%
395427
0.65%
2341690
4.63%
1707
0.003%
(31964)
(0.063) %
1245369
2.04%
147363
0.29%
Total Non-Markup/interest Income
16415862
27%
13544845
26.8%
42503078
70%
42451580
83.95%
18171198
30%
14205911
28.1%
Other provisions/write offs
747521
1.23%
168027
0.33%
Other charges
583361
0.96%
17141
0.034%
19502080
32%
14391079
28.5%
23000998
37.74%
28060501
55.5%
-
-
-
-
Bad debt written off
directly
Net Mark-up/interest
Income after provisions
Non-Mark-up/interest
Income
Fee,commision and
brokerage income
dividend income
Non-Mark-up/interest
expenses
Administrative expenses
Total Non-Markup/interest expenses
Extraordinary/unusual
items
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National Bank of Pakistan
Profit Before Taxation
23000998
37.74%
28060501
55.5%
Taxation-current
11762650
19.3%
8311500
16.43%
-
-
391497
0.77%
(4220242)
(6.92%)
323731
0.64%
7542408
12.4%
9026728
18%
Profit After Taxation
15458590
25.4%
19033773
37.64%
Un-appropriated profit
brought forward
45344188
74.4%
32074677
63.43%
130456
0.21%
39007
0.08%
60933234
100%
51147457
101.14%
-prior years
-deferred
Transfer from surplus on
revaluation of fix assets on
account of incremental
depreciation
Profit available for
appropriation
RATIO ANALYSIS
Ratio analysis includes method of interpreting financial ratios to access the performance of any
organization. The basic input to ratio analysis is profit and loss account and balance sheet. Ration
analysis of any organization is in interest of its creditors, employees, shareholders and of its
management as well. Both existing and prospective customer are interested in the ratio analysis
of organization
Ratio analysis is a valuable aid to management in the discharge of its basic functions such as
planning, forecasting, control etc. these ratios describe the relationship with the functioning of
the business and helpful for controlling cost of goods manufactured. The great advantage of ratio
analysis is that it reduces raw data of widely varying magnitude to a common comparative basis.
Thus, ratio analysis is the most meaningful to compare financial information regarding a giving
company.
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National Bank of Pakistan
Current Ratio
Formula:
Current ratio=
Current assets
Current liabilities
Year 2007
Year 2008
Current assets
153810681
161976396
Current liabilities
481381235
53667962
.3195
.3035
Current ratio
Interpretation
An increase in the current ratio represents improvement in the liquidity position of
bank while a decrease in the current ratio indicates that there has been deterioration in
the liquidity position of the bank. Current ratio in 2008 is decreasing as compared with
2007. It should be improved.
Working Capital
Formula:
Working Capital=current assets-current liabilities
Current assets
Current liabilities
Working Capital
Year 2007
Year 2008
153810681
161976396
481381235
533667962
(327570554)
(371691566)
Interpretation
Working capital should increase which will show that there is increase in current assets.
But here working capital is decreasing in 2008 as compared with 2007. it should be
improved.
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National Bank of Pakistan
Total asset turnover
Formula:
Total asset turnover= sales
Total assets
Year 2007
Year 2008
Sales
50569481
60942798
Total assets
762193593
817758326
Total asset turnover
0.0663
0.0745
Interpretation
Higher the total asset turnover the more efficiently its assets have been used. This
measure is probably of greatest interest to management, because it indicates whether
the efficient operations have been financially efficient. Total asset turnover is increasing
in 2008 as compared with 2007 which is a good sign.
Debt Ratio
Formula:
Debt Ratio=Total liabilities
Total assets
Year 2007
Year 2008
Total liabilities
645855939
715299108
Total assets
762193593
817758326
Debt ratio
84.74%
95
87.47%
Internship Report
National Bank of Pakistan
Interpretation
The debt ratio measures the proportion of total assets by the creditors. The greater this
ratio the greater the amount of other people’s money being used to generate profits. The
higher this ratio greater the degree of indebtedness an more financial leverage. NBP’s
debt ratio is increasing in 2008 as compared with 2007 which is not favorable.
Time interest earned ratio
Formula
Time interest earned ratio=Earning before interest and taxes
Interest
Earning before interest
and taxes
Interest
Year 2007
Year 2008
42451580
42503078
14391079
19502080
2.95
2.18
Time interest earned
ratio
Interpretation
Time interest earned ratio sometimes called interest coverage ratio, measure the ability
to make contractual interest payments. The higher its value the better able the
organization is to fulfill its interest obligations. Time interest earned ratio is decreasing
in 2008 as compared with 2007. It should be improved.
Gross profit margin
Formula
Gross profit margin= Sales-cost of goods sold
Sales
= Gross profit
Sales
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Internship Report
National Bank of Pakistan
Year 2007
Year 2008
Gross profit
33629470
37058030
Sales
50569481
60942798
Gross profit margin
66.5%
61%
Interpretation
Gross profit margin measures the percentage of each sales rupee remaining after the
organization has paid for its goods. The higher the gross profit margin, the better (that
is the lower the relative cost of merchandise sold). Gross profit margin is decreased in
2008 as compared with 2007. It should be improved.
Operating profit margin
Formula
Operating profit margin= Operating profit
Sales
Year 2007
Year 2008
Operating profit
42451580
42503708
Sales
50569481
60942798
83.95%
69.74%
Operating profit
margin
Interpretation
Operating profits are pure because they measure only the profits earned on operations
and ignore interest, taxes and preferred stock dividend. A higher operating profit
margin is preferred. Operating profit margin is decreased in 2008 as compared with
2007. It should be improved.
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Net profit margin
Formula
Net profit margin= Earning available for common stock holder
Sales
Year 2007
Year 2008
Earning available for
common stock holder
19033773
15458590
Sales
50569481
60942798
Net profit margin
37.64%
25.4%
Earning per share
Formula
Earning per share= Earning available for common stock holder
No. of shares of common stock outstanding
Earning available for
common stock holder
No. of shares of
common stock
outstanding
EPS
Year 2007
Year 2008
19033773
15458590
815500
897190
23.34
17.23
Interpretation
Earnings per share (EPS) are the earnings returned on the each share. Higher eps is
good but here EPS is decreased in 2008 as compared with 2007 which is not good.
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Return on total assets
Formula:
Return on assets= Earning available to common stock holder
Total assets
Year 2007
Year 2008
Earning available for
common stock holder
19033773
15458590
Total assets
762193593
817758326
EPS
2.5%
1.9%
Interpretation
Return on assets often called the return on investment. It measures the overall
effectiveness of management in generating profit with its available assets. The higher
the firm’s return on total assets, the better. ROA in 2008 is decreased as compared with
2007. It should be improved.
Return on common equity
Formula
Return on common equity= Earning available to common stock holder
Common stock equity
Year 2007
Year 2008
Earning available for
common stock holder
19033773
15458590
Common stock equity
69270631
81367002
ROE
27.5%
19%
Interpretation
ROE measures the return earned on common stockholders investment. The better the
ROE, the better. ROE is decreased in 2008 as compared with 2007. It should be
improved.
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Book value per share of common stock
Formula
BV per share of common stock=
common stock equity
No. of shares of common stock outstanding
Year 2007
Year 2008
69270631
81367002
815500
897190
85
91
Common stock equity
No. of shares of
common stock
outstanding
BV per share of
common stock
Interpretation
Book value per share of common stock is increased as in 2008 as compare with 2007,
which is a good sign.
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SOWT ANALYSIS
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats
SWOT analysis is careful evaluation of an organization’s internal strengths and weakness as
well as its environment opportunities and threats. In SWOT analysis the best strategies
accomplish an organization’s mission by:
 Exploiting an organizations opportunities and strength
 Neutralizing it threats
 Avoiding or correcting its weakness
SWOT analysis is one of the most important steps in formulating strategy using the
organization mission as a context, managers assess internal strengths distinctive
competencies and weakness and external opportunities and threats. The goal is to then
develop good strategies and exploit opportunities and strengths neutralize threats and avoid
weaknesses.
STRENGHTS

NBP one of the largest financial institutions of Pakistan with eight million of customer
base NBP holds 24.6% share of time and demand deposits in the country. Local currency
deposits comprise 67% of bank's total deposits while foreign currency deposits account
for the rest.

NBP has an extensive domestic branch network of 1254 branches located all over
Pakistan. The Bank also has a presence in 23 international locations including the USA,
United Kingdom, Europe and the Far East.

NBP's total assets stood at Pak Rs.370 billion on December 2008. This included total
earning assets of about Pak Rs.268 billion with gross loan portfolio of Pak Rs.140 billion.
The bank also has an investment portfolio of Pak Rs.91 billion, which comprises treasury
securities, corporate bonds, shares and other securities.

NBP cash provision as percentage of non performing loans equal to 60% this coverage
factor for the non performing loans is the highest amongst the nationalized commercial
bank.

NBP is working as right arm government of Pakistan as it is responsible for all claims of
government for recovery as well as payment. All depositor of NBP are in relief that their
money security is guaranteed by government of Pakistan.

It acts as an agent of the Central Bank wherever the State Bank does not have its own
Branch.

The working condition in the NBP branch here is very conductive and favorable for better
output. The informal environment affects the performance of the employees in a positive
way.

Performing social responsibilities and claiming “The Nation’s Bank”

Disbursing Salaries and Pensions to the Government employees and earning high profit
on NBP-Advance Salary Loan Scheme·
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
Earning commission from SBP on Government transaction

Facing never problem of cash/currency being its Chest and Sub-chest

Holds largest deposit base in the market share in terms of number of accounts

Leading bank in agriculture financing amongst commercial banks with the market share
of 15%

Helping in earning of foreign exchange, remittances and leading agent of Western Union
Money Transfer NBP has decided to diversify the fund base by investing in capital
markets not only in Pakistan but also in the foreign countries.
WEEKNESSES

Lowest Internal Control and Compliance System, SBP rated “Marginal” which is
alarming for the Bank.

Unsatisfactory corporate culture of the Bank

Physical environment and atmosphere compare to other banks is not meet the standard

Less number of Online Branches

Ineffectively use of technologies i.e. Information technology

Shortage of staff- per employee customer is very high side

Technical education and training of staff is insufficien The workload in NBP is not evenly
distributed and the workload tends to be more on some employees while others abscond
away from their responsibilities, which server as a demotivation factor for employees
performing above average work.

In NBP the individual difference have strong impact on the organization’s performance
due to the wrong criteria of selection of the employee. So with the passage of time
individual differences are increasing which are undermining the good will of the
organization.

Uncertainly among the employees due to threat of downsizing
OPPORTUNITIES

Being a Government Bank NBP having wide scope in economic market.

Trust and reliability creates chances to enhance deposit and profitability.

Its vast network of domestic and overseas branches can help to expand business.

Bank’s deposit is increasing rapidly so there is a great opportunity to enhance its
investment and financing.

Being an agent of State Bank of Pakistan it can play vital role in local economy.

Earning commission/exchange on Government transactions.
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
Amongst highest bank is Asia, NBP further expand its services proudest and earn more
profit.

The bank is reshaping its portfolios by investing into higher area of growth developing
core competing as a result to get maximum return.

I.T and HR are important factors for development in any organization, NBP continue
struggle to achieve this target.
THREATS

SBP penalties due to low internal control and compliance.

Government, SBP and Prudential Rules and Regulations.

Schedule banks and Multinational/International bank’s profit rates.

Its staff switching over to other private banks due to more facilities.

Other bank’s charming atmosphere and relaxation in documentation.

SBP rated just “Marginal” in respect of System & Control which is alarming for the Bank
to survive its license.

NBP staff code of ethics and practices.

High number of complaints regarding staff behavior.

Government Schemes, Government Revenue Collection, Government.

Payments and FBR Collections create heavy workload.
103
O R
K
E R F O
M
E D
WORK PERFOMED
In this section topics are:
Lesson learned and Personal experience
Branch Profile
Introduction of branch & Establishmemt
Branch Hierarchy
Training Departments
Remittance and Account opening
Deposit Section
Pension Section
Cash Section
Use of Information Technology
Issues Faced by the Branch
Internship Report
National Bank of Pakistan
LEARNING AND PERSONAL
INTERNSHIP
EXPERIENCE
In Hailey College of Commerce, Quaid-e-Azam Campus, the
students are required to undergo for four weeks of internship to
complete the B.com (Hons.) degree. For this reason, I carried out
my internship in National Bank of Pakistan, Samanabad Branch,
Lahore and tried to prepare my report.
This branch was founded in July 1962. From last many years this
branch is not only achieving its targets of deposits and advances
rather it remains above the targets. According to the financial record
of last year this branch was earning more than 20% of total profit of
the region.
Every year the targets of this branch are increasing by 20 to 25
percent but still there is a potential in the market to meet these
additional targets. This branch is performing its functions in
traditional style and most of the work is done manually but in spite
of all challenges and lack of resources the branch is now trying to
make most of its activities computerized.
During the session of four weeks I work in different departments on
weekly basis. The employees of the bank help me and provide me
all required information. I studied major functions, objectives and
future planning. I worked in different departments during working as
an internee which proves to me very beneficial and me able to get
basic concepts of banking operations.
105
After joining the bank for internship I got the practical exposure of
all the banking activities. The mechanism is not too simple to
understand easily but still lots of complexities have been solved. All
the staff of the branch provided me their time and information which
Internship Report
National Bank of Pakistan
BRANCH PROFILE
Name of Branch
National Bank of PakistanSamanabad Branch
Region
Lahore
Establishment
1967
Region Code
0015
Branch Code
0449
National Bank of Pakistan
Samanabad Branch
Address
Poonch Road
Lahore
Phone Number
042-7579464
Fax Number
7536555
Name of Manager
Abdullah Munir
15
Number of Working Staff
(Including contractual & outsourced staff)
Number of Non- Working Staff
04
Branch category
II
Starting and ending dates of internship
Starting Date------ 25-07-2009
Ending Date------ 24-09-2009
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INTRODUCTION OF BRANCH AND ESTABLISHMENT
The branch was established in 1967 in order to cope the financial needs of the people. As it is
an agent of the State Bank of Pakistan so its main objective is to provide credit in order to
fostering growth in all the sectors so with the view of this Samanabad Branch of National
Bank of Pakistan came into existence. From last many years this branch is not only achieving
its targets of deposits and advances rather it remains above the targets.
At present here Chief Manager is Mr. Abdullah Munir and operation manager is Mr.
Muhammad Rafi. It is a branch II category working with 15 employees. Mr. Aasir Butt, in
addition to perform his duties, also acts as a second manager in case when chief manager is
not available due to any unfavorable reason.
BRANCH HIERARCHY
RAGANAM
RAGANAMPA AMAANAG
ALAAHSNLBRAGA
OFFICER GRADE - I
OFFICER GRADE - II
OFFICER GRADE - III
MESSENGER
PEON
SWEEPER
Number of Employees -------------------- 15
Name of Manager------------------------ Abdullah Munir
Name of Operations Manager-------------- M. Rafi
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DEPARTMENTS OF TRAINIG
During the internship period of 4 weeks I got training in various departments in the branch.
This branch do not deals with foreign exchange and online bank but foreign remittance is
carried out. The branch is divided into two parts:
1. Cash Department
2. Operations Manager Department
3. General Banking Department
General banking is divided into following sections;
i. Remittance and Accouts Opening Section
ii. Deposit department
iii. Pension
iv. Establishment
But I did my internship in deposit, remittance, pension and cash sections. The computer
system was not allowed to me due to the secrecy and rules of the management. A brief
introduction of the departments in which I performed my work is as under:
1. Genearal Banking Department
i. Remittance and Accounts Opening Section
It is transfer of money payable at a certain place within or outside the country through various
way i.e. Bank draft, Telegraphic Transfer, Mail Transfer, Coupons, Govt. Draft. It works both
inward and outward. It was my first department. Mr. Rana Ahsaan-ul-Haq is the controller of
section who is a very competent person. Duties performed by him are;
 Issuing of demand draft
 Issuing of Mail transfer
 Issuing of Telegraphic transfer
 Issuing of payment order
 Issuing of call deposit
 Closing of government collections
 Intercity and Short Credit Clearing
 Accounts opening
 Issuance of cheque books
 Handling of lockers
 Maintenance of outward Mail Register
 Issuance of Benevolent fund
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In this section I learnt about issuance of PO, DD, MT, and T.T. I made all the four categories
of funds transfer. Sir. Rana helped me a lot to achieve this target. I only made vouchers of
PO, CDR and DD. The Manger only does TT because it is a secret way of transfer funds. I
sorted all the daily remittances; handed them to the respective officers. Sir Rana helped me a
lot in general understanding of the bank functioning.
I prepared several cheque books and enter the detail into the cheque books issuance register.
I also learnt to cheque posting on system. In the cheque book posting something which are
necessary, account number, cheque number and amount to be debit or credit should be
matched.
D.D & P.O: P.O is used locally and to transfer amount within the city whereas D.D is used
for outside the city.
Demand draft:
Procedure

First on the request of the customer all the details for issuance are demanded from
customer

The customer can be account holder or non- account holder.

While issuing the bank draft the care is taken that draft should be free from
alternations.

All the details must be clearly written in ink.

After deduction of charges, issuance of demand draft is handed over to the applicant .

Its advice containing the particulars of the draft is sent to the drawer branch with its
necessary information and payment of draft is make on its presentation.
Payment order
Procedure

Two applications forms called credit vouchers for payment and for bank commission
are made.

Application form is attached with cheques , debit authority or make payment in cash.

Then the payment order is made.

Then payment order is given to the customer.

Pay order for clearing again come to National bank of Pakistan.

Nothing is sent to next branch ,no fanfold is made.
Mail transfer
This is the facility just for account holders. Amount of M.T & T.T is transferred in account of
payee. Mail transfer is time consuming while telegraphic transfer is fast.
Procedure

Filling of application form.
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
Then make payment.

Preparation of M.T advice.

Then fanfold is made on F15.

M.T advice plus fanfold ( red copy ) is sent to responding branch.

M.T code is 22.
Telegraphic Transfer:
Procedure

Filling of application/ request form.

Then payment is made.

Then make massage voucher (telephone number is written at top of it ).

Then telegram transfer confirmation is made (F-15).

Massage is sent immediately by fax and T.T confirmation is sent by telegram.

F15 blue is filled and original red is sent to responding branch.

T.T code is 21.
Accounts Opening
In this department, I also gain the practical knowledge about account opening also, as this
department also deals in opening account and saving account for its customers and all matters
regarding thereof. The customers mainly opens current and saving account and these can be
opened by Individual , firms , Company , Trust , staff etc. I got training in this department for
one week and after understand the basic concept I practically opened account of walk-incustomers.
Procedure

Customer fills A/C opening form prescribed by the bank.

Then he submit the I.D card copy and other related documents

Specimen signature card is filled

2 officers attested the form.

The form is entered into computer and account opening register.

The amount in Rupees is submitted in new account.

Then letter of thanks is send to customer.

When letter is send back to bank by customer then bank issue cheque book to
customer.
Deposit Section
All banks depend on deposits. It is a very important department where customers deposit and
withdrawal their money. Banks use this money for loaning on higher rate to earn profit.Mr.
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Shahid with his colleague Miss. Shazia has been performing the activities of this section. The
main function of this department are
 Maintaining records of saving, current, call deposit, and NIDA account
holders
 Record of signatures of account holders
 Record of balances of customers
 Scrutiny of cheques issued
 Withdrawal through order/berarer cheques
 Local clearing
 Preparation of accounts holder activity report
Procedure of Withdrawals
There is a complete process in case of cash withdrawal.

Customer deposited cheque in deposit department for withdrawals or transfer of
amount through cross cheques.

The deposit department verifies the signature of the account holder through SS and
other requisites of the cheque. In case of any discrepancy the cheque is returned to the
customer.

The deposit department checks the balance in the account of the customer through
computer in BBO.

If the a/c of the account holder has balance equal to the cheque amount they passes
the cheque to cash department and post a Cash Paid stamp on it.

Deposit department debit A/C holder in computer and cash scroll register.

The cash department pays the amount to the customer on counter and cancels the
original cheque.
SS cards verification is one of the most difficult works of this department; I also go through
only specific activities in which the heads of verified informed me.
Procedure of Cross cheques
Whenever customer deposit amount in his account through cross cheques or security
decouments by transferring he has to fill the cheque pay-in-slip and is deposited into the
deposit department. The deposit department after verification and scrutiny of cheque passed
the cheque to remittance department.
Pension Section
Ms. Sarwat Jabeen is the head of pension department. The following activities are performed
by her;
 Maintenance of Pension Register
 Scrolling of Pensions Paid
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National Bank of Pakistan
 Arials in case of any increase announced by government
 Maintenance of the Inward Mail Register
During my internship, I learnt how to handle with new pensioner’s cases, entries made into
the “pension register”, recommend payments of pension on monthly basis, transfer of
payments into the accounts of the customer. The most obligatory thing for payment of
pension is to check pension slip in form of cash payment P.P.O.No., name of the pensioner,
signature, and payment period. In case of pension holder does not come to receive, it is
legally recommended that the pensioner holder issue authority letter to the desire person
otherwise pension will never be paid in cash.
2. Cash Department
Cash department mainly deals in cash. In this department all types of Government receipts
i.e. Revenues, Taxes, Abyana, Agriculture Tax, Government Fees and Utility Bills are
deposited. This way NBP is serving great job of revenue collection. The Head Cashier is Mr.
Abdul Aslam and two cashier Mr. Wajid and Mr. Akram Cheema all are fulfilling the
objective of cash department by facilitating people in the payments of their bills and taxes
and repayments of cash.
This section deals with;
i. Cash Payment
Payments are the function that they pay their cheques and pay cash.
ii. Cash Receipts
Receipts mean collection of utilities bills, taxes etc.
Cash Payment Procedure
In this branch of NBP, this section deals with the
 withdrawals of the cheques
 deposit of amount
 pension receipt
Procedure
For deposit:

Whenever account holder deposit amount in their accounts they fill cash-pay-in-slip.

Then handed over cash and slip to the cahier

Cashier after counting amount sign the slip and stamped it with cash received after
entering it to the cash scroll register

The counterfoil is given to the customer after signing while the adjacent credit
voucher is held by the bank
For withdrawals:
After the clearance of the cheque from deposit department the customer recived cash from the
cahier by giving him token. The original cheque is then crossed by the cashier.
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For pension receipt
After the approval of the pension officer the pensioner comes in this section for reciving cash
amount of pension.
Cash Receipts Procedure

Customer deposited their bills and taxes to cashier

Cashier after counting the amount signs the receipts of bill and taxes and affixed
stamp of NBP and cash received stamp.

A portion of receipt is handed over to customer.

The cashier entered the amount into the scrolls.

At the end of day all the total and balances of receipts is transferred to the remittance
section.
Use of Information Technology in Decision making
Today banking is becoming more and more complex with the introduction of new products,
services and enhancing regulatory compliance requirements. It is the use of information
technology that can improve the customer’s services and reduce the cost at the same time.
NBP adopted “IBM Software” for service providing motives, the “IBM Software” categories
into two sections.

BBO (Bank Branch Office)

EBS (Electronic Banking System)
Electronic Banking System
EBS is used for any kind of transaction within the bank .i.e. Receipts and payments, Bills
Collection, Tax receipts, etc.
Bank Branch Office
BBO is use for remittances.
The use of IBM Software is one of the main purposes of collection electronic data for the
bank that further helpful in future in decision making. Now a day, the bank plans for
transformation of the entire I.T. architecture by implementing a core Banking Solutions.
The bank prepares financial statements, agricultural reports, customer’s management, risk
management and other reports for decision-making purposes. The I.T. system of the bank not
only increases distribution capabilities but also simplify internal procedures thereby reducing
the cost and lead-time for services. Now the Samanabad Branch of NBP is trying to
computerized its all of activities for this purpose various aspects of extension and
development have been taking into consideration.
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ISSUES FACED BY THE BRANCH
During the internship I got practical experience that does not meet the theoretical concepts in
B.com(hons.) Program. I present here some critical analysis:
i.
Training: NBP has no great facility for their employees for training of new
technologies. This situation creates difficulty for handling new challenge.
ii.
Departmentalization: An employee deals various nature of work.
iii.
Staff Attitude: Due to heavy load of work staff attitude does not ideal for an
organization where public dealing is at large scale.
iv.
Work Environment: Work environment was not ideal due to heavy customers visit
in a single day. Furniture, light and sitting arrangement was not good for customers
and bank employees.
v.
Professional Approach: Work specialization and job specification are found very
low in bank’s employees. Business administration qualities and education is at low
side.
vi.
Shortage of Staff: There is shortage of staff in the Bank. Number of customer per
employee is very high. Cash department is suffering very badly and facing great deal
of over workload.
vii.
Less use of Technologies: Staff hesitate to use new technologies especially the
cash department. Even old employees are not able to operate PCs.
viii.
Communication Gap: I feel that there is communication gap between top
management and workers. They have fewer chances to communicate effectively.
ix.
Unjustified Appraisal Criteria: No justified appraisal criteria are implemented for
annual increase in salary and promotion of staff. It creates un-satisfaction among the
employees of the Bank.
x.
Undemocratic Decision Making: I observed that some times employees are not
involved in decision-making process. Manager himself takes decision and orders to
make changes.
xi.
Pensioner's sitting Arrangement: Bank should take step for the sitting
arrangement of the old age employees and pensioners for. Also management should
purchase more furniture and arrange them in such a way which provides maximum
space and convenient specially in deposit department and there should also be
convenient sitting place for customers.
xii.
Need of Telephone Operator: Branch has the problem of telephone operator
which can save the time of not only manager but other staff as well. On the other hand
bank’s communication system was not doing well. Therefore as an internee I felt that
there should be a telephone operator who can easily handle this situation.
114
I N D I N G S
O N C L
U S I O N
FINDINGS & CONCLUSION
In this section topics are:
Dilemmas Faced by Organization
Problems at branch
Functional Problems
Administrative Problems
Personal Management Problems
Recommendations for improvement
Conclusion
Internship Report
National Bank of Pakistan
DILEMMA FACED BY ORGANIZATION
Rather NBP is a nation's bank but like any other organization NBP also is not free from
problems and crisis. In SWOT analysis I have already discussed the major internal
weeknesses and flaws of the system. In this topic the most important problems are included
which are widely present at the branch level. For this purpose the topic is divided into the
four parts which are as under.

Problems at the branch.

Functional Problems

Administrative Problems.

Personal management’s Problems
PROBLEMS AT THE BRANCH




Customer Satisfaction
In NBP customer dealing is will, but during rush hour the customer has to wait for a
long time for their turn. It’s quite hard for a new customer or potential customer to get
the required information.
Poor record management and filing system
During my internship I observed that filing system of branch is not good. When
certain record is needed the staff has to struggle to find it out and a lot of time is
wasted.
Unequal distribution of work
Work is not equally distributed. On one hand some employee have to work all day
without relaxing while some others have nothing to do at all. This not only creates
confusion among employees but also hurting and disturbing for overall setup of the
bank. And above all it results in dissatisfaction among customers as well.
Marketing visits
A useful mode of contact is through personal marketing visits. Such visits are
important in informing and perusing the existing and potential customers about the
products and creating a sense of belongingness with them.
FUNNCTIONAL PROBLEMS

Formal Organization
Formal organization includes the activities of two or more person, which are
cautiously determined groups and coordinated towards a given objective. It provides
base when people are able to communicate with other, when they have common
purpose and they are willing to work. In NBP, we find a formal organization.
In this formal organization of NBP the activities are carried out in a more formal way.
In theoretical terms it provides basis for communication with one another but in
practice it is not exercised because an employee at high level cannot get straight away
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to manager or SVP and ask him about of his problem faced by him, because first he
has to talk to his immediate superior and follow a proper channel of communication.


Excessive paper work
It is notified that due to the lengthy procedure of paper work the bank employee are
over burdened. They are unable to give proper attention to the clients and face
difficulties in getting their job done. One reason for lengthy procedure and excessive
paper work in the bank is the lack of computerized technology.
More accounts fewer deposits.
Efficient banking is one which does not emphasize on number of accounts but on
greater amount of deposits. NBP is more interested in increasing its number of
account irrespective to its deposit.
ADMINISTRATIVE PROBLEMS




Job analysis is not effective
Only on the basis of job analysis it can be decided how a right person can be hired,
trained, compensated or promoted. It is very important for an organization that nature
of the job is described and job specifications are mentioned. Most of the employees
are simple graduate and do not have proper background about their job. This creates
problems both for organization and for the employees.
Lack of specialized training
NBP does not provide adequate facility of specialized training to their staff. Training
is generalized rather than specialized. As the worker finishes his training, he is
inducted into a specific field without having great deal of knowledge about the field.
Poor job rotation.
There is absence of job rotation in NBP Samanabad branch. A person placed in one
department remains their forever. It reduces career opportunities as well boredom and
in the end results in career plaguing. The newly recruit should be rated in all
department of the banking in order to get familiar with working of different
departments so that when they get a responsible position they have know how of the
whole system.
Lack of appreciation
Another very important thing which is ignored in the bank is appreciation if the
employee on their good performance. If hard work and performance of employees is
not recognized and appreciated they become dishearten which results in decline in
performance.
PERSONAL MANAGEMENT PROBLEMS

Need for better training program
Need of training is greatly emphasized all around the world. Training of the personnel
is part of human resource management. It has been noticed that the training program
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of NBP is not adequate.
Once the candidate is selected and placed on the respective job. It becomes essential
to train him adequately for the task. They should learn new methods for motivating
customers. The training programmed of the bank should include scientific techniques
to improve the decision making and interpersonal as will individual needs of the
employee both specialized to fresh as well as on job.
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Developing Managerial Leadership
Leadership is a practical term of visible, clear on objective and communicating better
control on financial and administrative matters. Manager is not only responsible for
their own units in business, but also in people terms i.e. training, recruiting, grievance
handling and taking immediate initiative in crisis situation to take major decision
affection the future of the bank and banking community.
Recruitment policy
Human resources are the lifeblood of the organization. If the personnel are recruited
carefully they can become asset to the organization in the case of carelessness a
liability on the organization. Bank is not following its recruitment policy properly due
to favoritism, nepotism and political pressure.
Promotions
Promotion in NBP is purely on the basis of seniority, so the new young person having
high qualification remains behind for quite a lot of time. Top management and staff
union put pressure for the promotion of their favorites.
Transfer
Transfer means when a person is shifted from one place to another place. It is done
either that person is needed more on the other branch or for improving his skill
variety. It is the policy of the Bank to transfer each employee 3 to 4 years.
Marketing at desk
Bank employee come in daily contact with many people who happen to deal with the
casual remittance, travelers cheques, safe custody, pensioners, depositing license fee
and variety of other functions and variety of other people with whom the Bank has no
account or regular business relationship. The Bank employees are doing very little on
their own to explore the possibilities of selling banking services to them as a
marketing contributor. The market opportunities are hidden in every dealing a banker
handles; the question is that if he has the art and urge to seize such opportunities.
 Lack of business communication
There is no proper way to give information to their customer. To avoid this minor
dissatisfaction and tension in the mind of customer, and deficiency of the service, it is
recommended that the bank should provide brochures etc containing information in
details. Some general information should be placed in information notice board on the
entrance where customer can see it easily or it should be self-attractive.
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RECOMMENDATIONS
As analysis shows that NBP is a most growing organization with highest return on capital,
The bank has been able to strategically manage and build on its competitive advantage, by
knowing customer’s requirements, understanding employee’s need, modern technology, to
making social responsibility and looking towards stakeholder’s values. But there is further
need for improvement. To overcome weaknesses and to maintain its position as an “Asian
Tiger” in banking field, following recommendations are made:
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Staff strength should be enhanced and professional qualified persons should be recruited.
It is recommended that proper training be provided to the staff members that will
ultimately increase the performance of Bank over all.
It is suggested that promotion be given to the staff in due time and on the basis of
performance to provide job satisfaction.
The bank should spend more on renovation of the branches to improve environment and
atmosphere to attract the customers.

There should be a proper desk for customer’s information in every branch.

Sitting arrangement, air conditioning and new furniture should be facilitated

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The Bank should introduce the computers software to cope the heavy load of work and
better control.
Extra counters should be established in order to facilitate during the rush days the
difficulties faced by the bank staff as well as the customers.

All Branches of the Bank must be online.

All the departments should be established separately in every branch.
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The Bank should locate new market for its operational activities in the country as well as
abroad.
The Bank should increase profit rate on deposits and saving schemes especially for
pensioners and old age citizens.
For improvement of internal control and system the compliance wing and surprise
inspection system should work more effectively.
The bank should use broad casting media for promotion of its products and services and
to further expand its area through more aggressive marketing. Customer services must be
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better to improve the efficiency of branch, which results in quality work and causes the
customer attraction that will create lucraturable activities.
These and many other that can make a good set of recommendations, which have to be made
possible to escape from the threats and weaknesses and the risks in environment that
surrounds the Bank. The management do considers the policy matter that is not helping the
Bank, but are still in practice due the absence of prudentially regulated system to protect them
and the Bank.
Efforts have been made with serious concern to give NBP a status that it has to maintain by
having practices of:

Right sizing of the employees.
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By closing unprofitable branches.

By introducing a merit based selection criteria.

Promotions made conditional with qualifications.
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CONCLUSION
The report is all about National Bank of Pakistan, one of the leading bank of Pakistan
banking industry with 1254 nationwide and almost 25 branches operating in other countries
including USA, China, France, Hong Kong, Azerbaijan, Bangladesh, Hong Kong. It has
maximum coverage with facilities of ATM and online banking throughout Pakistan. National
Bank of Pakistan (NBP) was established under the National Bank of Pakistan Ordinance
1949. The primary objective of NBP was to purchase jute from the growers in the former East
Pakistan and also to perform the commercial banking functions in the country.
It is a part of State Bank of Pakistan and it is its major strength. It is providing different
facilities to its customers. Inside the bank, in branch banking it has Clearing and Collection
Department, Government Receipts Processing Department, Account Opening Department,
Remittance Department, Customer Services Department Cash Department, Deposit
Department, Advances and Credit Department. These are the most common departments
exist in almost each branch. It is offering different deposit choices, advances, credits and
securities etc for its customers.
Its Human Resource is its major strength that is leading this bank in this way but there is
much gap to cover yet. The other strengths this bank has are that it is acting as Agent of State
Bank of Pakistan, providing Agency Arrangements for different government organizations
include WAPDA and PIA, Profitability and a vide coverage throughout Pakistan through its
Corporate Branches. And also it has comprehensive range of products it is offering in market.
The challenge it is facing are currently the lack of implementation of rules and regulations
that may lead to weak organizational culture, old organizational culture, no regular
promotions practices and not much use of IT technology in bank as other are using. There are
many workers and employees’ unions exist in National Bank of Pakistan that use to play
organizational politics instead of doing productive work that leads to wastage of time.
As analysis shows that NBP is a most growing organization with highest return on capital,
largest market share amongst all Pakistani banks and cost to income ratio is the highest in
banking sector. But there is further need for improvement to overcome weaknesses and to
maintain its position as an “Asian Tiger” in banking field.
As far as my internship and experience is concern, I learnt a lot during my internship because
I got practical knowledge before entering in the practical life after completion of my
B.com(hons.) degree. I learn a lot about banking practicing in Pakistan, rules and regulations
and different procedures followed by banks, the organizational culture and structure of the
bank, National Bank of Pakistan.
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