Published on: Mar 3, 2016
Transcripts - National bank
A project OF Management of
NATIONAL BANK OF PAKISTAN
Kashif Mehmood (09-ARID-910)
University Institute of Information Technology
( U A A R )
Bachelor of Business Administration Program
Reg. No.: 09-Arid-910
University Institute of Management Sciences
University of Arid Agriculture Rawalpindi
Company Name: National Bank of Pakistan Industrial area Branch Islamabad (1531)
Main Telephone Number(s):051-9258672-73
Fax Number: 9258671
Postal Address: National Bank of Pakistan Industrial area branch Islamabad
Supervisor Name: Khalid Mahmood Abbasi(Manager Operation)
Supervisor Telephone Number:0308-5163787
Start Date for Internship: 10 july 2012
End Date for Internship: 17 august 2012
Report Date: 21 feb 2013
completed internship at
<National Bank of Pakistan industrial area Branch Islamabad>
Internship report submitted for the Final Evaluation in
Partial Fulfillment of the requirements for the Degree of
<Bachelors in Business Administration>
It is certified that, the Internship report and the work contained in it conforms to all the
standards set by the Institute for the evaluation of any such work.
University Institute of Management Sciences
< Signature >
< Ali Haider >
< Signature >
< Hafiz Hafeez
< Signature >
D E C L A R A T I O N
I, student of University of Arid Agriculture Rawalpindi solemnly declare that the work
presented in this report is my original work and no portion of it has been submitted for any other
degree of qualification to this or any other university of learning.
A C K N O W L E D G E M E N T
All praise is to ALLAH ALMIGHTY, for giving us knowledge, insight, devotion and strength
to accomplish this task. we immensely thankful to all the teachers and friends who helped me to
complete the project. I am grateful to the staff of NBP as well, who supported me lot during this
project and provided comprehensive knowledge of their products and services and banking
practices. Specially Syed Hammad Raza Naqvi, Branch Incharge CAD, NBP Civil Lines Branch
Jhelum & Syed Muhammad Fakhir Hassan Naqvi, Compliance Officer, NBP Civil Lines Branch
Jhleum. Their guidelines have lead us to display a picture of NBP’s Management in this report.
In the end I would like to thank all of my friends and family members for their support and
Banking sector pivotal importance in the economy of any country through its
vibrant functions. Moreover, the practice and familiarity learned during this
tenure would also attest very helpful and alleviating in the awaiting proficient
This report is an upshot of my six weeks internship in NBP. NBP possess
an imperative and historical importance in the banking sector of Pakistan. It
always remains the center of hustles in business activities. It always endows
with great covenant of really round in terms of funds and services at all epochs
of its dynamism.
Although, a derisory period of six weeks is not enough to learn the
complex operations of NBP yet I made industrious efforts to converse them
comprehensively in this report. Particularly, I have remunerated more accents on
study of distinguishing features and services of NBP. I have made maximum
venture to elaborate this report with the material read, listed and observed.
Dear readers, I hope you will appreciate my report and sense that reading my
report is not like to waste the time in any respect because of the four principal
reasons as under:
• I have made 100% realistic attempt to provide you the exact information
• All the terms have been explained carefully in a simple and
• This report is wholly up to date, equipping the information about currently
prevailing functioning and services of the banking system of NBP.
The banking system in Pakistan has witnesses some evolutionary changes
during the recent years and has made long-strides towards its goal of becoming a
financially viable as well as firm arm of the economy which in turn would
promote not only growth but also prosperity not only of the banking sector but
of the economy as a whole. As vibrant and dynamic banking sector is vital for
the strong and prosperous economy. Therefore, on realizing the inherent
weakness of the financial structure that emerged after nationalization,
government of Pakistan initiated a broad based program of reforms in the
financial sector. In this way Government’s commitment to banking reforms has
made Pakistan’s financial sector stronger in the last four to five. The banking
sector has shown remarkable performance in a number of areas which has helped
in further strengthening of the whole process.
Banking industry is presently facing a hyper turbulent situation where
banks have to operate in increasingly competitive and complex local and global
markets. The ability to compete in the fast paced global environment is of
paramount importance – survival of the fittest being the name of the game. The
competition has even become ever tough and challenging with the entry of many
foreign world-class banks and other financial institutions.
In this report i have explained the evolution of banking sector, the
industry background which leads to different reforms. Then i have explained the
background of NBP its different products and services. After doing all this We
have explained the products and services. Based on the data taken, i have done
financial analysis, competitive analysis, ratio analysis, HR analysis. In the last I
have explained the different problems at NBP AOC industrial area Branch and
CHAPTER # 1
HISTORY OF NBP
The NBP was established vide NBP Ordinance No. XIX of November
British Govt. devalued its currency in September 1949, India devalued
its rupees but Pakistan did not. It led to a crisis in trading between the
two countries and India refused to lift the Pakistan Jute. To solve this
problem i.e. to export jute NBP was established through an Ordinance
of GOP. National Bank of Pakistan maintains its position as Pakistan's
premier bank determined to set higher standards of achievements. It is
the major business partner for the Government of Pakistan with special
emphasis on fostering Pakistan's economic growth through aggressive
and balanced lending policies, technologically oriented products and
services offered through its large network of branches locally,
internationally and representative offices.
The Bank in 1950 had one subsidiary ‘The Bank of Bahawalpur’ on
December4, 1947 by the former Bahawalpur State.
NBP was undertaking Treasury Operations and Managing Currency
Chests or Sub Chests at 57 of its offices where the turnover of the
business under the head amounted to Rs.2460 million.
i) Deposits held by NBP constituted about 3.1% of total deposits
of all Pakistani Banks in 1949, which rose to 38% in 1952.
ii) Growth in Deposits was accompanied by increase in Bank
portfolio in advances. NBP lent out to Textile, Yarn, Iron and
Steel and played a pioneer role in support of agriculture and
iii) NBP advances reached Rs.554.4 million by December 1959,
which was one third of the total schedule bank credit.
1.1 MISSION STATEMENT
“To make the Bank complete and competitive with all international
Standard in performing, quality of, operations, staff, financial strength
and products and services To develop a culture of excellence in every
spare of activity of the bank”
1.2 GOALS AND OBJICTIVES
“An organizational objective is the intended goal that prescribes definite
scope and suggests direction to the panning efforts of an organization”
1.3 GOALS AND OBJICTIVES NBP
“To be the pre-eminent financial institution in Pakistan and achieve
market recognition both in the quality and delivery of service as well as
the range of product offerings.”
1.4 BOARD OF DIRECTORS
NBP, Board of Directors list consist the following members and their
Ali Raza Chairman & President
Dr Waqar Masood Director
Ifthikhar Ali Malik Director
Sikandar Hayat Jamali Director
Azam Faruque Director
Ibrar A. Mumtaz Director
Mian Kausar Hameed Director
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. The management has two types.
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 the top management
takes all the decisions.
1.6 SENIOR MANAGEMENT OF NBP
Senior Management of NBP consists of following member and their
Masood Karim Sheikh
SEVP & Group Chief, Corporate & Investment
Banking Group and Chief Financial Officer
Shahid Anwar Khan SEVP & Group chief, credit management group.
Dr. Asif A. Brohi SEVP & Group Chief, Operation Group.
Imam Bakhsh Baloch SEVP & Group Chief, audit and inspection group.
Ziaullah Khan SEVP & Group Chief, Complaince Group.
EVP & Group Chief, commercial and retail banking
Muhammad Nusrat Vohra
SEVP & Group Chief, Treasury Management
Eklaq Ahmad EVP & secretary board of director.
EVP & Group Chief, Special asset Management
Mrs. Khurshid Maqsood
EVP & Divisional Head, employees benefits,
Disbursement & Trustees Division
Amim Akhtar EVP & PSO to the President
Dr. Mirza Abrar Baig
SEVP & Group chief, human resource management
& administration group.
Tahir Yaqoob EVP & Group Chief, Overseas coordination &
Anwar Ahmad Meenai EVP & Divisional Head, Islamic Banking Division
Financial controller & Divisional Head, Financial
Asif Hussain Khan Group Chief (A), IT Group
1.7 Net Work of Branches:
NBP have wide range of branches inside the country and outside the
In Pakistan it has 28 regional offices, 1285Branches and 4 Subsidiaries.
In overseas it has 24 overseas branches, 6 other offices.
1.8 Functions of NBP
Since NBP is a commercial bank, it performs a variety of functions.Like
other commercial banks, NBP is engaged in financing international trade.
Its other major functions include receiving deposits, advancing loans and
discounting of exchange. The functions performed by NBP are:
1.9.1 Accepting Deposits
This function is important because banks largely depend on the
funds deposited with them by its customers. Deposits are of many
Current deposits are also called demand liability on current deposits. NBP pays
practically no interest on current deposits. Businessmen usually open current
accounts. In NBP current account can be opened with a minimum amount of
i) PLS saving deposit
Profit and loss sharing deposits (PLS) are also called
checking accounts. One can deposit and draw money easily.
Profit on PLS is calculated every month but paid after six
months. PLS account can be opened with a minimum amount
ii) PLS term deposits
Fixed term deposits are deposits with the bank for certain
fixed period before the expiry of which they cannot be
withdrawn unless giving due notice. In this case the rates of
profit will be different depending upon the time period
PRODUCTS AND SERVICES
2.1 Major product lines market segmentation
Services are outputs of the firm, which are in intangible form. Which are
the backbones of any organization to earn profit? NBP offers the
following services to the people.
2.2 DEMAND DRAFTS
If you are looking for a safe, speedy and reliable way to transfer money,
you can now purchase NBP’s Demand Drafts at very reasonable rates. Any
person whether an account holder of the bank or not, can purchase a
Demand Draft from a bank branch.
2.3 SWIFT SYSTEM
The SWIFT system (Society for Worldwide Interbank Financial
Telecommunication) has been introduced for speedy services in the areas
of home remittances. The system has built-in features of computerized
test keys, which eliminates the manual application of tests that often
cause delay in the payment of home remittances. The SWIFT Center is
operational at National Bank of Pakistan with a universal access number
NBP-APKKA. All NBP overseas branches and overseas correspondents
(over 450) are drawing remittances through SWIFT.
Using the NBP network of branches, you can safely and speedily transfer
money for our business and personal needs.
2.4 LETTERS OF CREDIT
NBP is committed to offering its business customers the widest range of
options in the area of money transfer. If you are a commercial enterprise
then our Letter of Credit service is just what
You are looking for. With competitive rates, security, and ease of
transaction, NBP Letters of Credit are the best way to do your business
2.5 TRAVELER'S CHEQUES
Traveler’s cheques are negotiable instruments, and there is no restriction
on the period of validity of the cheques. Rupee traveler’s cheque is
available at all 700 branches of NBP. This can be cashed in all 400
branches of NBP. There is no limit on purchase of this cheque. It is one of
the safest ways for carrying money.
2.6 PAY ORDER
NBP provides another reason to transfer your money using our facilities.
NBP pay orders are a secure and easy way to move your money from one
place to another. And, as usual, NBP charges for this service are
extremely competitive. The charges of NBP are very low all over the
Pakistan. It charges Rs 50/- for NBP account holders on issuing one
payment order. And charges Rs 100/- for NBP non-account holders on
issuing one payment order. It charges Rs 25/- for students on payment of
fees of educational institutions. If someone want a duplicate of payment
order they charges Rs 100/- for NBP account holders and Rs 150/- for
Move your money safely and quickly using NBP Mail Transfer service.
And NBP also offers the most competitive rates in the market. They
charges Rs 50/- exchange rate and RS 75/- postage charges on issuing mail
2.8 FOREIGN REMITTANCES:
To facilitate its customers in the area of Home Remittances, National
Bank of Pakistan has taken a number of measures to Increase home
remittances through the banking system Meet the SBP
directives/instructions for timely and prompt delivery of remittances to
2.9 SHORT TERM INVESTMENTS
NBP now offers excellent rates of profit on all its short-term investment
accounts. Whether you are looking to invest for 3 months or 1 year,
NBP’s rates of profit are extremely attractive, along with the security and
service only NBP can provide.
2.10 National Income Daily Account (NIDA)
The scheme was launched in December 1995 to attract corporate
customers. It is a current account scheme and is part of the profit and loss
system of accounts in operation throughout the country.
2.11 QUITY INVESTMENTS
NBP has accelerated its activities in the stock market to improve its
economic base and restore investor confidence. The bank is now regarded
as the most active and dominant player in the development of the stock
2.12 COMMERCIAL FINANCE
NBP dedicated team of professionals truly understands the needs of
professionals, agriculturists, large and small business and other segments
of the economy. They are the customer’s best resource in making NBP’s
products and services work for them.
2.13 TRADE FINANCE OTHER BUSINESS LOANS
There are two types of trade finance.
2.13.1 Agricultural Credit:
The agricultural financing strategy of NBP is aimed at
three main objectives:-
Providing reliable infrastructure for agricultural customers
Help farmers utilize funds efficiently to further develop
and achieve better production
Provide farmers an integrated package of credit with
supplies of essential inputs, technical knowledge, and
supervision of farming.
2.13.2 CORPORATE FINANCE
NBP specializes in providing Project Finance – Export
Refinance to exporters – Pre-shipment and Post-shipment
financing to exporters – Running finance – Cash Finance –
Small Finance – Discounting & Bills Purchased – Export Bills
Purchased / Pre-shipment / Post Shipment Agricultural
NBP provides financing for its clients’ capital expenditure
and other long-term investment needs. By sharing the risk
associated with such long-term investments, NBP expedites
clients’ attempt to upgrade and expand their operation thereby
making possible the fulfillment of our clients’ vision. This
type of long term financing proves the bank’s belief in its
client's capabilities, and its commitment to the country.
2.14 NATIONAL BANK OF PAKISTAN OFFERS:
The lowest rates on exports and other international banking
Access to different local commercial banks in international
2.14.1 Cash and Gold Finance.
Cash and Gold finance means that loan is given against the
gold. The gold is mortgaged with the bank and loan is taken.
It is the area of consumer finance. And borrower can take
loan for common use.
2.14.2 Advance salary loan
This loan is given to those people who are Govt servants.
They can get a loan up to the salary of fifteen months.
BUSINESS OPERATIONS AND DEPARTMENTS OF NBP
Dividing an organization into different parts according to the functions is
called departments. So NBP can be divided into the following main
3.1 DEPARTMENTS OF NBP
3.1.1 CASH DEPARTMENT
Cash department performs the following functions
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
It is a banker’s primary contract to repay money received for this
customer’s account usually by honoring his cheques.
3.1.4 Cheques and their Payment
The Negotiable Instruments Act, 1881
“Cheque is a bill of exchange drawn on a specified banker and not
expressed to be payable otherwise than on demand”.
3.1.5 Types of Cheques
3.1.5(i) Bearer Cheques
Bearer cheques are cashable at the counter of the bank. These
can also be collected through clearing.
3.1.5(ii) 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.
3.1.5(iii) 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 favour 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.
3.1.6 Payment of Cheques
It is a banker’s primary contract to repay money received for his
customer’s account usually by honouring his cheques. It is a contractual
obligation of a banker to honor his customer’s cheques if the following
essentials are fulfilled.
a) Cheques should be in a proper form:
b) Cheque should not be crossed:
c) Cheque should be drawn on the particular bank:
d) Cheque should not mutilated:
e) Funds must be sufficient and available:
f) The Cheque should not be postdated or stale:
g) Cheque should be presented during banking hours
3.2 CLEARANCE DEPARTMENT
A clearinghouse is an association of commercial banks set up in given
locality for the purpose of interchange and settlement of credit claims.
The function of clearinghouse is performed by the central bank of a
country by tradition or by law. In Pakistan, the clearing system is
operated by the SBP. If SBP has no office at a place, then NBP, as a
representative of SBP act as a clearinghouse.
In practice the person receiving a Cheque as rarely a depositor of the
cheque at the same bank as the drawer. He deposits the cheque with his
bank other than of payer for the collection of the amount. Now the bank in
which the cheque has been deposited becomes a creditor of the drawer’s
bank. The depositor bank will pay his amount of the cheque by
transferring it from cash reserves if there are no offsetting transactions.
The banks on which the cheques are drawn become in debt to the bank in
which the cheques are deposited. At the same time, the creditors’ banks
receive large amounts of cheques drawn on other banks giving claims of
payment by them.
The easy, safe and most efficient way is to offset the reciprocal claims
against the other and receive only the net amount owned by them. This
facility of net interbank payment is provided by the clearinghouse.
3.2.1 in-Word Clearing Books
The bank uses this book for the purpose of recording all the
cheques that are being received by the bank in the first clearing.
All details of the cheques are recorded in this book.
3.2.2 Out-Word Clearing Book:
The bank uses outward clearing register for the purpose of
recording all the details of the cheques that the bank has
delivered to other banks.
3.3 ADVANCES DEPARTMENT
Advances department is one of the most sensitive and important
departments of the bank. The major portion of the profit is earned through
this department. The job of this department is to make proposals about the
loans. The Credit Management Division of Head Office directly controls
all the advances. As we known bank is a profit seeking institution. It
attracts surplus balances from the customers at low rate of interest and
makes advances at a higher rate of interest to the individuals and business
firms. Credit extensions are the most important activity of all financial
institutions, because it is the main source of earning. 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.
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.
a) Existing financial position of a borrower at a particular branch.
b) Accounts details of other banks (if any).
c) Name & address of the borrower
d) Security against loan.
e) Exiting financial position of the company. (Balance Sheet & Income
f) Signing a promissory note is also a requirement of lending, through
this note borrower promise that he will be responsible to pay the
certain amount of money with interest.
3.4 REMITTANCE DEPARTMENT
Remittance means a sum of money sent in payment for something. This
department deals with either the transfer of money from one bank to other
bank or from one branch to another branch for their customers. NBP offers
the following forms of remittances.
a) Demand Draft
b) Telegraphic Transfer
c) Pay Order
d) Mail Transfer
A) Demand Draft
Demand draft is a popular mode of transfer. The customer fills the
application form. Application form includes the beneficiary name,
account number and a sender’s name. The customer deposits the
amount of DD in the branch. After the payment the DD is prepared
and given to the customer. NBP officials note the transaction in
issuance register on the page of that branch of NBP on which DD is
drawn and will prepare the advice to send to that branch. The
account of the customer is credited when the DD advice from
originating branch comes to the responding branch and the account
is debited when DD comes for clearance. DD are of two types.
a) Open DD: Where direct payment is made.
b) Cross DD: Where payment is made though account.
B) Pay Order
Pay order is made for local transfer of money. Pay order is the most
convenient, simple and secure way of transfer of money. NBP takes
fixed commission of Rs. 25 per pay order from the account holder
and Rs. 100 from a non-account holder.
C) Telegraphic Transfer
Telegraphic transfer or cable transfer is the quickest method of
making remittances. Telegraphic transfer is an order by telegram to
a bank to pay a specified sum of money to the specified person. The
customer for requesting TT fills an application form. Vouchers are
prepared and sent by ordinary mail to keep the record. TT charges
are taken from the customer. No excise duty is charged on TT. The
TT charges are:
Telegram/ Fax Charges on TT = Actual-minimum Rs.125.
D) Mail Transfer
When the money is not required immediately, the remittances can
also be made by mail transfer (MT). Here the selling office of the
bank sends instructions in writing by mail to the paying bank for the
payment of a specified amount of money. Debiting to the buyer’s
account at the selling office and crediting to the recipient’s account
at the paying bank make the payment under this transfer. NBP taxes
mail charges from the applicant where no excise duty is charged.
Postage charges on mail transfer are actual minimum Rs. 40/- if sent
by registered post locally Rs.40/- if sent by registered post inland
on party’s request.
3.5 HUMAN RESOURCE DEPARTMENT
Human Resource plays a vital role in the success of every service
organization. They interact between man and machine. Their attitude can
win or lose the customer. The positive attitude could only be created in a
conductive environment, which can make the staff dedicated towards the
Main objectives of my study were to see following areas
1. Working Environment of NBP
2. HR Department of NBP
. Functions of HR Department .
Following are the functions of HR Management and Administration
department, National Bank of Pakistan.
1. Human Resource Planning
Human Resource Planning is conducted by the HR department. They
assess the existing number and nature of staff and then place / post them
at needy branches according to the requirement of that branch. For
example, if the load on cash counter is increasing, one new cashier will be
posted at the Branch.
2. Recruitment of Staff
Another important function of HR department is recruitment of staff as
per availability of vacancies. At NBP, recruitment of permanent staff is
centralized and all recruitments are made by their Head Officer Karachi.
However, in near past limited authority has been given to regional offices
to hire the services of outsourced staff i.e staff provided by the
employment companies. This type of recruitment is being made in
c.Sale & Marketing staff for retail products.
3. Transfer of Employee
The regional office controls fifty five (55) branches. All transfer and
posting of employees among these branches is made by HR department
keeping in view the staff requirement at different branches.
4. Job Rotation
Function of Job rotation is also performed by regional office. Normally
when an employee completes three years at a particular seat, he rotates to
another seat. This rotation is very important for internal control, to
prevent fraud and forgery and to enhance the employee’s skills for
5. Human Resource Development & Training
H.R Department analyzes the day to day requirement of SBP regulation
for different Banking activities, and plans for training and development of
staff .This training may also be based upon introduction of new Banking
produces and competition with rival Banks.
6. Performance Appraisal
H.R Department also performs the function of performance appraisal of
employees on yearly basis .At the close of every year annual confidential
report (ACR) of each and every employee is written by HR department.
This ACR contains subjective and objective evaluation as well as personal
traits of an employee.
7. Promotion of employees
NBP HR department performs the function of promotion. Normally NBP
promotes its employees after every three yours on the basis of their past
performance, availability of vacancies in each grade/cadre and quota
approved by the Ministry of Finance, for each grade/cadre.
8. Lay Off
Lay off function is also performed by HR department. NBP is a govt.
owned organization and its employees retire at the attainment of age of 60
years. However, in 1998 and 2002 the NBP announced the Golden Hand
Shakeschemes and almost 5000 and 3500 employees separated from Bank
services in these respective years.
9. Health & Safety
H R department arranges for medical facilities to its employees. There are
several hospitals on Banks panel and employees can avail medical
facilities from these hospitals. Hospitals bills are being paid by HR
department after proper verification. NBP extend medical facility to
employees, their spouse (wife) and children as well as parents of the
employee. Brother or sister or any other relation is not entitled for this
10. Disciplinary Cases
HR department deals with all disciplinary cases of employees. These
disciplinary cases include: -
a. afraid & Forgery
b. Unauthorized leaves
d. Misconduct of finances
e. Violation of procedure & policy
11. Retirement Benefits
HR department also manages pensions and group life insurance. Pension is
allowed to all employees after retirement and when the employee dies and
his widow can avail this facility till death. Even if the widow dies, the and
daughter/son of employee can avail pension till she/he attain the age of
majority i.e. 18years or she/he married, whichever is happened earlier.
12. Personnel Information System
HR department is responsible to keep and maintain complete data of
Each and every employees this data includes his personal data as well as
professional data and being used to place right person for the right job.
13. Equal Employment Chance
NBP provides equal employment chance to men & women. HR department
is responsible to implement this policy, too.
14. Salary & Loan Administration
HR department performs the function of disbursement of Salary and
administration of Staff Loans. Salary is being disbursed in last week of
the month. NBP allows house building loan, Motor car loan and computer
loan toits employees. Period of house building loan is 20 years, Car loan
is 10 years and computer loan is 5 years. Mark up on HBL is 3% and
HR department pays salaries to employees after deduction of monthly
installments of loans, already availed by them.
3.6. DEPOSIT DEPARTMENT
It controls the following activities:
3.6.1 Account opening
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
i. Avoiding frauds
ii. Safe guard against unintended over draft.
iv. Inquiries about clients.
There are certain formalities, which are to be observed for opening
an account with a bank.
Minimum Initial Deposit
Operating the Account
3.6.2 Types of Accounts
Following are the main types of accounts
1) Individual Account
2) Joint Account
3) Basic Banking Accounts
4) Profit support Accounts
5) Pensioner Accounts
6) Accounts of Special Types
Joint stock company account
Accounts of clubs, societies and associations
Executors and administrators accounts
Pak rupee non-resident accounts
Foreign currency accounts
3.6.3 Issuing of cheque book:
This department issue cheque books to account holders.
Requirements for issuing cheque book
a) The account holder must sign the requisition slip
b) Entry should be made in the cheque book-issuing book
c) Three rupees per cheque should be recovered from a/c
holder if not then debit his/her account.
3.6.4 Current account
These are payable to the customer whenever they are demanded.
When a banker accepts a demand deposit, he incurs the obligation of
paying all cheques etc. drawn against him to the extent of the
balance in the account. Because of their nature, these deposits are
treated as current liabilities by the banks.
3.6.5 Saving account
Savings Deposits account can be opened with very small amount of
money, and the depositor is issued a cheque book for withdrawals.
Profit is paid at a flexible rate calculated on six-month basis under
the Interest-Free Banking System. There is no restriction on the
withdrawals from the deposit accounts but the amount of money
withdrawn is deleted from the amount to be taken for calculation of
products for assessment of., profit to be paid to the account holder.
3.6.6 Cheque cancellation:
This department can cancel a cheque on the basis of;
a) Post dated cheque
b) Stale cheque
c) Warn out cheque
d) Wrong sign etc
CHAPTER # 4
4.1 SWOT ANALYSIS
To carryout the SWOT and Financial Analysis of NBP through the help of
calculating necessary ratios in this section.
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.
“SWOT analysis is a situational which includes strengths, weaknesses,
opportunities and threats that affect organizational performance.”
“The overall evaluation of a company strengths, weaknesses,
opportunities and threats is called SWOT analysis.”
In SWOT analysis the best strategies accomplish an organization’s
a) Exploiting an organizations opportunities and strength.
b) Neutralizing it threats.
c) 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
(i) OLDEST INSTITUTION:
NBP is one of the oldest bank of Pakistan and first nationalized bank Hence
its customer base is strength from this plus point as customers have more
confidence in the bank. The additional value services as the privilege for the
(ii) ALTERNATE DUTIES IN SBP ABSENCE
The NBP performs additional services for its customers as well
as the other bank customer in the absence of SBP.
(iii) MORE DEPOSITS THAN OTHER BANKS
NBP has the relative competence in having more deposits than the other bank.
This is because of the confidence the customer have in the bank. The bank
being the privileged and oldest bank in banking sector of Pakistan enjoys this
edge over all others, lacking it.
(iv) EMPLOYEE BENEFITS
The employers at NBP are offered reasonable monetary benefit. Normally two
bonuses are given Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional
benefit and competency for the bank and a source of motivation for the
(v) BROAD NETWORK
The bank has another competency i.e. it has broad-basses
network of branches throughout the country also more than one
branch in high productive cities. The customers are provided
services at their nearest possible place to confirm customer
(vi) STRICTLY FOLLOWED RULES & REGULATION:
The employees at NBP are strict followers of rule & regulation imposed by
bank. The disciplined environment at NBP bolsters its image and also
enhances the over all out put of the organization.
(vii) PROFESSIONAL COMPETENCE
The employees at NBP here have a good hold on their descriptions, as they
are highly skilled Professionals with background in business administration,
banking, economics etc. These professional competencies enable the
employees to understand and perform the function and operation in better
(viii) HEALTHY ENVIROMNMENT
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
(ix)RELATION BETWEEN STAFF AND OTHER
The bank enjoys a good plus point when it comes to the
employee manager relationship the hearing as removing of
discrepancies if any, between the employees, and between the
manager and employees.
(x) NBP ADVANCE SALARY
The product of the year 2008,2009. the product was developed by
NBP Credit Group, their basic target is salaried Govt Employees.
This has increased NBP’s Credit portfolio with a major boost.
With minimum default ratio, its been the success story of NBP.
Still its a good product than their competitors personal loans.
The interest rate charged to this loan is SBP Discount Rate + 5%.
(xi) NO panelty on Late Payment or Early Settlement of
NBP is one of those banks, who donot impose any panelty to
their customers regarding late payment of installments or markup
and early settlement of laons or balloon payments in case of
In case a customer wants to make balloon payments will not b
charged to any panelty in any advances case of NBP. It’s a
strength of NBP against its competitors.
(xii) NBP Premium Aaamdani
This is the only product of any commercial bank in the country
which is competing with the NATIONAL SAVINGS CENTER’s
products. NBP is offering rates to the customers who deposits
money in multiples of Rs 50,000/- with them till five years.
• At first year 7.5%
• At second year 8.5%
• At third year 9.5%
• At fourth year 10.5%
• At fifth year 11.5%
a) LACK OF MARKETING EFFORT:
The bank does not promote its corporate image, services etc on a
competitive way. Hence lacks far behind in marketing effort .A
need for aggressive marketing in there in the era marketing in
now becoming a part of every organization.
b) NBP UNDER POLITICAL PRESSURE
The strong political hold of some parties and government and
their dominance is affecting the bank in a negative way. They
sometime have to provide loan under the pressure, which leads to
uneven and adjusted feeling in the bank employees.4.3.3
c) FAVORITISM AND NEPOTIS
The promotions and bonuses etc in the bank are often powered
by senior’s favoritism or depend upon their wills and decision.
This adds to the negative factors, which denominate the
employees thus resulting in affecting their performance
d) LACK OF FINACIAL PRODUCT
The bank falls far behind when the innovative and new schemes
are consider. It has not been involved in the tug of war between
the competitors to the accounts and strengthens the existing
customer base. This stands out to be the major incompetence and
weakness of the banks.
e) INEFFICIENT COUNTER SERVICES IN THE RUSH
During the rush hours, the bank is founded out to be a total flop
to handle the mob of people peaking from windows and doors.
The bank has deficiency to operate in the stages of rush hours
where the people find them services entangled in a situation of
nowhere because they are not well served.
f) LACK OF COMPUTERIZED NETWORK
The bank lack the strength of being powered by the network of
computers, which have saved time, energy and would have
lessened the mental stress, the employees have currently. This
would add to the strength if it were powered by network of
g) LACK OF MODERN EQUIPMENT
The bank lacks the modern Equipment that is note counting
machine computers. Even if there is any equipment they lack to
fall in the criteria of being rearmed as update and upgraded.
h) UNEVEN WORK DISTIBUTION.
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 demonization factor
for employees performing above average work.
i) OLD employee awareness
Computer awareness to old Staff of NBP is a weakness. They
should develop employee development & training programme to
effectively update their employees regarding computer
applications & upcoming CORE BANKING SOFTWARE of bank.
a) ELECTRONIC BANKING
The world today has become a global village because of
advancement in the technologies, especially in communication
sector. More emphasis is now given to avail the modern
technologies to better the performances. NBP can utilize the
electronic banking opportunity to ensure on line banking 24
hours a day. This would give a competitive edge over others.
b) MICRO FINANCING
Because of the need for micro financing in the market, there are
lot of opportunities in this regard. Other banks have already
initiated, now the time has arrived when the NBP must realize it
and take on step to cater an ongoing demand.
c) CAR FINANCING
This is the major area where NBP has not competed with private
banks. As per repute of NBP they must enter in personal & car
d) CORE BANKING SYSTEM
Implementation of the CORE BANKING SYSTEM is still an
opportunity, as till now none of the banks operating in Pakistan
is using this most updated & famous banking application. It will
lead NBP to smooth sailing environment as a leading bank in
technology as well as competing between other banks. This will
upgrade NBP from paper & ledger era to the smooth &
sophisticated computer application.
a) EMERGENCE OF NEW COMPETITORS
The bank is facing threats with the emergence of new competitor
especially in terms of foreign banks. These foreign banks are
equipped with heavy financial power with excellent and
innovative ways of promoting and performing their services. The
bank has to take initiative in this regard or will find itself far
back in competition.
b) POLITICAL PRESSURE BY ELECTED GOVERNMENT
The ongoing shift in power in political arena in the country
effects the performance of the bank has to forward loans to
politically powerful persons which create a sense of insecurity
and demoralization in the customer as well as employees.
The bank is currently acting upon the policy of downsizing
which threaten the environment of the bank Employees feel
insecurity in doing their jobs and work, hence affecting the over
all performance of employees negatively.
d) CUSTOMERS COMPLAINTS
There exists no regular and specific system of the removal of
customer complaints. Now a day a need for total customer
satisfaction is emerging and in their demanding consequences
customer's complaints are ignored.
CHAPTER # 5
After proper analysis of the organization I divided it into in four parts.
This analysis is mainly based on practical experience of NBP Staff,
analysis is as under: -
Problems at the branch.
Personal management’s analysis.
5.1 PROBLEMS AT THE BRANCH
Poor record management and filing system
Unequal distribution of work
5.2 FUNCTIONAL ANALYSIS
Difference between theory and practice
Bank duty to maintain secrecy.
Excessive paper work
More accounts fewer deposits.
Delegation of authority
5.3 ADMINISTRATIVE ANALYSIS
Job analysis is not effective
Carelessness in opening of account
Lack of specialized training
Low Profit Rates
Poor job rotation.
Delays in Loan Advancement
Lack of appreciation
5.4 PERSONAL MANAGEMENT ANALYSIS
Need for better training program
Developing Managerial Leadership
Marketing at desk
Lack of business communication
CHAPTER # 6
NBP is an effectively operating and profit making organization and
carrying out its activities under a specified system of procedure. The main
regulatory body is State Bank of Pakistan, which provides policy
guidelines and ensures that the money market operates on sound
professional basis while the head office specifies the whole procedure of
function and operations.
Here I am giving some suggestions, which in my view can add some input
for efficiency and better performance of NBP as an organization in
general and City branch in particular.
The recommendations are as follows:
6.1 Professional training
NBP staff lacks professionalism. They lack the necessary
training to do the job efficiently and properly. Although staff
colleges in all major cities but they are not performing well.
Banking council of Pakistan should also initiate some
programs to equip the staff with much needed professional
6.2 Delegation of Authority
Employees of the bank should be given a task and authority
and they should be asked for their responsibility.
6.3 Performance Appraisal
The manager should strictly monitor the performance of every
staff member. All of them should be awarded according to
their performance and result in the shape of bonuses to
motivated and incite them to work more efficiently.
6.4 Changes in Policies
There should not be any abrupt policies change by the upper
management, as this practice hurts the customer confidences
in the bank. Government should make long-term policies.
6.5 Utility Bill Charges
Bank gets Rs. 5 to 8 to processes a utility bill, and it is very
tire, tough and hard job despite this working resulting in a
loss to then Rs 5 to 8 per transaction. These charges should
be increased to RS 10 per bill to enable the branch to cover
their handling costs and make some profit.
6.6 Link with the Head Quarter
160 major branches of NBP should established a direct link
with the, head quarter in Karachi, through Internet or
Intranet. This will make the functions and decision making of
the management easier and convenient.
6.7 Credit Card
National bank of Pakistan should start its operation in credit
card. These cards were very helpful for the ordinary customer
in general and the business people in particular. To make it
mores secure and to eliminate the misuse of it, the
management is required to keep proper security against the
card. But as NBP is a GOVT bank so most of the customer
gets defaulted and do not want to repay the CREDIT CARDS
amounts. Effective involvement of Collection officers for the
repayment of credited amount rather than treating and
provisioning them as NPL.
6.8 Cash Financing
In this mode of financing the amount of credit not utilized by
the borrower is remained tax-free. It is recommended that a
small amount of interest should be charge on this amount as
well because the bank gas kept-aside the amount for that
borrower and can not advance it anywhere.
6.9 Decreasing Administrative Expenses
Bank should their administrative expenses. This was Rs 8
billion in the year 2009. That can be done by lying off the
surplus pool of employee with golden handshakes scheme.
The branches that are not much used could also be closed.
Employee can also be how to control the bank expenses. That
will give positive results in the future.
6.10 Needs to be Flexible in credit Policy
As mentioned earlier, NBP is very conservative in advances
and loans policy. It reduces the investment opportunities.
Also loans should be given to the small businessmen and the
agriculture sector at the low markup rate. It should adopt
flexible credit policy while giving credit to the agriculture
Not only it will be economical but will also reduce the extra
burden of work of the bank. It will also help in reducing the
use of excessive paper work.
6.11 Improper Distribution of Work
Proper distribution work leads to success in every
organization. Proper distribution of work prevents the
employee from over and under work situation. So for a
smooth running of an organization proper distribution of work
is the hint to be followed.
During my internship I observed that there was no proper
distribution of work in the bank. I saw that some of the
employee worked like ants other sat idle starting here and
there. So this created a lot of over work situation for while
relaxation for other.
6.12 Inter Departmental Transfer
I watched during my internship that, there is number of
employee who have worked on one seat for many a year. It
can have negative effects motivation of employee who is hard
working and intelligent. Take the example of advances
section. In advance section if the employee is transfer after
sixth month or seven month, how can he be able to show his
performances and how can he be able to know the bank
customer in a short period of time.
6.13 Complaints of Customer
There should be an information desk to provide the
information and to receive the complaints of the customer in
There is no complaint box available in the branch and not any
person appointed to hear the complaints.
Every person cannot go to the manager for the complaint
because most of the people are hesitant. So I suggest
management to install a compliant box in the branch, and
recruit a special person for that guidance of the customer
when they are unable to manage some difficulties in banking
6.14 Organizational Commitment
It is suggested that employees working on daily wages basis
should be given some benefits, which the other employees are
getting. Their salaries must increase according to efficiency,
performance and service.
6.15 Managerial Leadership
In the analysis, we have discussed the difficulties of the
assistant in taking any initiative; therefore it is recommended
that the assistants should he given special training to make
them ready for the leadership.
6.16 Housing and House Hold Goods loans
Bank should initiate these loans because most of bank’s
customers are middle class and they cannot afford to buy
house or household goods at once by their own.
6.17 SOME MORE Solutions / Improvements suggested
After the completion of my internship in the NBP I am able to
give some suggestions for the betterment of the organization.
During the internship we had discussions with different
persons like manager, operational manager different officers
employees and customers. In the light of these discussions we
are able to give some suggestions which are given below.
Use of modern technology.
Training and Development of Employees
Promotion on the basis of Ability
NBP annual report (2010)
NBP annual report (2011)
NBP annual report (2012)