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

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Some schemes have been specifically designed for the low to middle income segments of the
population. These include NBP Advance Salary, NBP Saiban, NBP Kisan Dost, NBP Cash n

History OF NBP
IN 1949 National Bank of Pakistan (NBP) was established under the National Bank of Pakistan
Ordinance of 1949 and was government-owned.
NBP acted as an agent of the central bank wherever the State Bank did not have its own
branch. It also undertook government treasury operations. Its first branches were in jute growing
areas in East Pakistan.
Offices in Karachi and Lahore followed.
1950 NBP established a branch in Jeddah, Saudi Arabia.
1955 By this time NBP had branches in London and Calcutta.
1957 NBP established a branch in Baghdad, Iraq.
1962 NBP established a branch in Dar es Salaam, Tanganyika.
1964 The Iraqi government nationalized NBP's Baghdad branch.
1965 The Indian government seized the Calcutta branch on the outbreak of hostilities between
India and Pakistan.
1967 The Tanzanian government nationalized the Dar es Salaam branch.
1971 NBP acquired Bank of China's two branches, one in Karachi and one at Chittagong. At
separation of East Pakistan NBP lost its branches there. NBP merged with Eastern Mercantile
Bank and with Eastern Bank Corporation.
1974 The government of Pakistan nationalized NBP. As part of the concomitant consolidation of
the banking sector, NBP acquired Bank of Bahawalpur.
1977 NBP opened an offshore brain Cairo.
1994 NBP amalgamated Mehran Bank.
1997 NBP branch in Ashgabat, Turkmenistan commenced operations.

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2000 NBP opened a representative office in Almaty, Kazakhstan.

2001 State Bank of Pakistan and Bank of England agree to allow only 2 Pakistani banks to
operate in the UK. NBP and United Bank agreed to merge their operations to form Pakistan
International Bank, of which NBP would own 45% and United Bank 55%.
2002 Pakistan International Bank renamed itself United National Bank Limited (UNB). The
ownership structure of the UNB remained as before. The only change to the shareholding
structure is that UNB had recently been privatized in Pakistan and was now owned 49% by the
Government of Pakistan and 51% by a joint foreign consortium of Abu Dhabi.
NBP needed to redefine its role and shed the public sector bank image, for a modern
commercial bank. It has offloaded 23.2 percent share in the stock market, and while it has not
been completely privatized like the other three public sector banks, partial privatization has
taken place. It is now listed on the Karachi Stock Exchange.

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

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

The Bank saw significant growth between 2000 and 2006. In 2006, total assets were estimated
at PKR 635 billion, while deposits have grown to nearly PKR 502 billion. Pre-tax profit rose to
PKR 26 billion. Earnings per share have jumped to PKR 24.01. The increase in profit was
achieved through strong growth in core banking income.
Interest income increased by PKR 10 billion through growth in the loan portfolio as well as
increase in spreads. Advances increased by PKR 48 billion to PKR 316 billion. It ranges from
providing credit to the unbanked market segment under NBP Karobar, to small and medium
enterprises, to agricultural loans, to large corporate customers.
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It has taken various measures to facilitate overseas Pakistanis to send their remittances. In
2002 the Bank signed an agreement with Western Union for expanding the base for
documented remittances.


The main purpose of the study in hand is together relevant information to compile internship
report on National Bank of Pakistan.
To observe, analyze and interpret the relevant data competently and in a useful manner.

To work practically in an organization.

To develop interpersonal communication.
Discuss thorough study of National Bank of Pakistan
To understand the various operations and to equip with practical

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


National Bank of Pakistan is at the forefront of international banking in Pakistan which is
proven by the fact that NBP has its branches in all of the major financial capitals of the world.
Additionally, we have recently set up the Financial Institution Wing, which is placed under the
Risk Management Group. The role of the Financial Institution Wing is: To effectively manage NBPs exposure to foreign and domestic correspondence
Manage the monetary aspect of NBPs relationship with the correspondents to support
trade, treasury and other key business areas, thereby contributing to the banks
Generation of incremental trade-finance business and revenues.

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


Monthly Income Scheme

Earn up to 11% p.a. +

Minimum deposit of Rs. 20,000/- and a maximum deposit of Rs. 5,000,000/- for 5 years
Free Demand Draft, Pay Order and Cheque Book*
Convenience of NBP online Aasan Banking (for online banking customers)
Free NBP Cash Card (ATM+Debit)
Running finance facility up to 90%

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PLS Saving Account

Earn up to 8.50% p.a. +.

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

Home Financing

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

Advance Salary
Personal Loan

Easy installments of 1 to 60 months at your choice.

No minimum income, collateral & insurance charges required.
Quick processing and fastest disbursement.For permanent employees of Government,
Semi Government and Autonomous bodies receiving salaries through NBP

Terms and conditions


Permanent Employees of Govt., Semi-Govt., Autonomous,

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Semi Autonomous, Local & other bodies who are

maintaining their Salary A/Cs at NBP.

Direct deduction from Salary A/C

Maximum Loan Amount Rs. 490,000/-


Employer will provide undertaking that borrowers Salary

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

Max. Repayment Period 5 years (60 months)

Advance in terms of #
of net take home

Up to 20 net 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.


at actual


Your Salary disbursing NBP Branch.

At the time of approval and disbursement the applicants

Remaining Service Age remaining service age should be 6 months after maturity of
the loan
Debt Burden


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Minimum net take

home salary

no minimum take home requirement

ATM + Debit Card

Use it as an ATM in any of the ATMs in Pakistan

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

Financing Facility for Stock Investors

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Comfortable environment for trading

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

Ready Cash Against Gold

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

No penalty for each repayment

Agriculture Farming Program

Competitive mark-up rate.

Provision of technical guidance to farmers at their doorstep.
Quick & easy processing.
Wide range of financing schemes for farmers.
Finance facility up to Rs. 500,000/- for landless farmers on personal guarantee.
Financing available against Pass Book, Residential / Commercial property, Gold
ornaments and paper security.
Loan facility on revolving basis for three years (renewable on yearly basis without
obtention of fresh documentation and approval).
Product Information:
Pakremit is an internet based Home Remittance Service. This service is
available to U.S. residents for sending money to their family and friends in Pakistan. One use 24
hours a day, 7 days a week.
Fees and exchange rate have been set at competitive levels and the remitters have the
ability to track delivery of funds as well.must have a valid US Dollar account with a U.S.
bank or a US Dollar credit or debit card in order to remit funds through this channel.

Remitters in USA can log on to our user friendly website, www.pakremit.com and easily
remit funds to Pakistan from the comfort of their homes, in a matter of minutes.

The service is fully secure with advance encryption application and is available for

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Remitters log on to www.pakremit.com and after completing the registration process, are
able to remit funds. The whole process takes a few minutes.
Funds in Pak Rupees can be sent to beneficiaries, having an account with any bank in
Pakistan, including NBP. While funds are credited directly to beneficiaries maintaining
accounts with NBP, a pay order or demand draft is couriered to other banks for their
customers. Pay order or demand draft can also be couriered directly to the beneficiarys
office or home, if requested by the remitter.
Funds in US Dollars can be sent only to a Beneficiary maintaining a US Dollar account
with one of NBPs Foreign Exchange Branches. Click here for details of NBP Foreign
Exchange Branches.

Personal Accident Insurance

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

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The services from Online Branches located in 30 cities. NBP Online" offers following services:

Balance Enquiry
Statement of Account
Stop payment
Cash withdrawal through cheque
Cash deposit to own and third party account
Transfer of funds to own and third party account


NBP has taken a step towards improving customer services by establishing a state of the art
Call Center with a Help Line Toll Free Number 0800-80080 working in two shifts from 8:30 am
till 10:30 pm to provide instant service to all the existing & prospective customers on all the
NBP products being offered by the bank specially NBP Karobar. Presently, the Call Center is
receiving more than 1500 calls per day for resolving customer based product enquiries and

or the convenience of a person with a limited income who desire to perform Hajj, Hajj
Mubarak Scheme is introduced. Moreover, National Bank of Pakistan process the Hajj
applications of thousands of people successfully more than any other bank in Pakistan.


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here are number of collection made on behalf of the Govt. National bank of Pakistan
collects various types of Chelan form name A-32 for Traffic Chelan, Domicile Chelan,
Passport Chelan, Property Chelan etc. The Govt. collection also includes the collection

of the Income tax Sales tax and property tax on behalf of FBR. The Public Service Commission
Chelan is also collected under the Govt. collection of the bank.
The bank collect the bills in his regular routine work and after the end of day all the bills are
totaled and then the vouchers of bills sent to the relative company. The bank charges a specific
commission on the utility bills collected by him.


he demand draft facility is available to the banks and nonbanks customers. The draft is
a secure mean of payment from one city to another & even within the city. The demand
draft is easy to handle and convenient to the customers too. These demand drafts are

available at very competitive rate. The minimum amount for getting the draft of the bank is
Rs.50/-The payment of draft is advised to the concerned branch of the NBP and the rest of the
work is done by it.
NBP is offering mail transfer service for the customers who dont want to take the headache of
postage of instrument just like in D.D. The bank itself posts the instrument to the corresponding
branch and all the risk lays on the banks end. The customer feels more secure himself while
using the M.T. service of NBP.

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he SWIFT system (Society for Worldwide Interbank Financial Telecommunication) has

been introduced for speedy services in the area of home remittances. The system has
built-in features of computerized test keys, which eliminates the manual application of

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

The SWIFT Center is operational at National Bank of Pakistan with a universal access number
NBP-APKKA. All NBP overseas branches and overseas correspondents (over 450) are drawing
remittances through SWIFT.


BP 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.

BP has accelerated its activities in the stock market to improve its economic base and
restore investor confidence. The bank is now regarded as the most active and
dominant player in the development of the stock market. NBP is involved in the


Investment into the capital market

Introduction of capital market accounts (under process)
NBP's involvement in capital markets is expected to increase its earnings, which would result in
better returns offered to account holders.

ational Income Daily Account The scheme was launched in December 1995 to attract
corporate customers. It is a current account scheme and is part of the profit and loss
system of accounts in operation throughout the country.

Mode of Calculation: Average Balance during a Calendar Month.


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NBP provides Agricultural Finance to solidify faith, commitment and pride of farmers who
produce some of the best agricultural products in the World.


I Feed the World program, a new product, is introduced by NBP with the aim to help farmers
maximize the per acre production with minimum of required input. Select farms will be made
role models for other farms and farmers to follow, thus helping farmers across Pakistan to
increase production.
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.


Production and development
Watercourse improvement
Farm power
Development loans for tea plantation
Solar energy
Equipment for sprinklers
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NBP also provides the following subsidized with ranges of 3 months to 1 year on a renewal
Operating loans
Land improvement loans
Equipment loans for purchase of tractors, farm implements or any other equipment
Livestock loans for the purchase, care, and feeding of livestock
Production loans are meant for basic inputs of the farm and are short term in nature. Seeds,
fertilizers, sprayers, etc are all covered under this scheme.
NBP specializes in providing Project Finance Export Refinance to exporters Pre-shipment
and Post-shipment financing to exporters Running finance Cash Finance Small Finance
Discounting & Bills Purchased Export Bills Purchased / Pre-shipment / Post Shipment
Agricultural Production Loans.
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.
National Bank's leadership in loan syndicating stems from ability to forge strong relationships
not only with borrowers but also with bank investors. Because NBP understands the syndicate
partners' asset criteria, it help borrowers meet substantial financing needs by enabling them to
reach the banks most interested in lending to their particular industry, geographic location and
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structure through syndicated debt offerings.

The NBPs syndication capabilities are

complemented by its own capital strength and by industry teams, who bring specialized
knowledge to the structure of a transaction.
With National Bank's Cash Management Services (in process of being set up), the customer's
sales collection will be channeled through vast network of NBP branched spread across the
country. This will enable the customer to manage their company's total financial position right
from his desktop computer. They will also be able to take advantage of the banks outstanding
range of payment, ejection, liquidity and investment services. In fact, with NBP, each customer
is provided everything, which takes to manage his cash flow more accurately.
NBP also provide both front office and back office hassle free processing for import and export
letters of credit, documentary collections, and reimbursements. Whether importing or exporting,
National Bank of Pakistan will provide Global Trade Services to mitigate with the requirements
by providing client to client trade solutions in world's major financials hubs worldwide. The bank
offers a complete set of services for importers and exporters:

NBP is committed to offering its business customers the widest range of options in the area of
money transfer. The letter of credit service is very attractive for the commercial enterprises with
competitive rates, security, and ease of transactions. NBP Letters of Credit are the best way to
do business transactions.
The NBP prefer the Liquid securities for the purpose of providing the facility like LC. The DSCs
and TDSs are the most liquid securities for this purpose. The fixed securities like home or
property is mortgaged by the bank also for this service.
LC Advising
LC Confirmation
Export Bills Collections Services (EBCS)
LC Reimbursement
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A/C Receivable discounting
Usance Payable at Sight Structure
LC Discounting
Trade Payment Guarantees
LC Refinancing


Documentary Collections Services

Clean Collections
Electronic Payment Services
Fund Transfer Services
Risk Participation Bridge Financing / Project Finan
FI Syndication
FI Lending
NBP offers their institutional customers a single point of entry of co-ordinate relationship for
Trade and Finance. We can anticipate customer needs and draw up tailored solution in close
collaboration with the business lines involved.
NBP speak its customers language
Local contacts
Faster turnaround time
Cost reduction
Improving document handling efficiency
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Quality customer service

Local representation
Flexible delivery models
Professional team.
Faster reconciliations
For ensuring prompt payment and the delivery of accurate information, NBP can make it simple
to finance exports, manage export receivables and monitor export business worldwide.
For the purpose of securing the interest of the customers NBPs team of experts can expedite
the preparation and presentation of export documentation and accelerate collection of
The exporters can sell on both letter of credit and open account payment terms; reduce
payment cycles; enhance access to liquidity; and eliminate routine inquiries.
Bank is also serving as reimbursing bank under letters of credit. By using NBP USD account to
consolidate letter of credit payments, the customers will enjoy consolidated predebit advices,
realtime balance and transaction reporting and overnight investment services for excess
Combine courier delivery of open receivables letters, payment tracing, tracking, reporting and
received funds concentration to quickly deposit the funds due from export receivables into the
exporters account while keeping him informed of paid and open items.
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Companies importing goods need to mitigate crossborder trading risks and increase cash flow
and operating efficiencies. NBP can help importers to compete more effectively on a worldwide
basis with trade finance solutions tailored to their specific needs as an importer. By offering
import related services to customers, delivered by experienced trade team of bank, who will
ensure that customer's business is handled efficiently and without delay. Import services
Documentary credits
Import finance
Shipping guarantee
The Western Union money transfer facility is the highly credible source for making payment
internationally. This is a fast as well as a secure system for making payments. Infact a secret
code of 10 digits is provided to the customer of Western Union wishes to transfer the payment
from one country to another. The code is entering in the receiving counter of the bank for
making the secure payment to actual receivers.
The SAMBA money transfer facility is also provided by the National Bank of Pakistan. This is a
web base money transfer system, in which money can be transfer from one country to another.
A secure system and also regulated heavily by the number of IT specialist. One secret Pin code
of 7 digits is provided to the customers who wish to transfer the money from one to another
country. The receiver provides the code to the NBP respective officer for receiving the payment
through SAMBA money transfer facility.

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


Pak Rupees Travelers Cheques are a negotiable instrument
There is no restriction on the period of validity
At 700 branches of NBP all over the country
At 400 branches of NBP
No limit on purchase
NBP Travelers Cheques are the safest way to carry our money
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NBP provides another reason to transfer money. Pay orders are a secure and easy way to
move money from one place to another. And, as usual, charges for this service are extremely
National Bank of Pakistan is at the forefront of international banking in Pakistan which is proven
by the fact that NBP has its branches in all of the major financial capitals of the world.
Additionally, we have recently set up the Financial Institution Wing, which is placed under the
Risk Management Group. The role of the Financial Institution Wing is to effectively manage
NBP's exposure to foreign and domestic correspondence Manage the monetary aspect of
NBP's relationship with the correspondents to support trade, treasury and other key business
areas, thereby contributing to the bank's profitability Generation of incremental trade-finance
business and revenues

Board of Directors

Executive Board

Chief Executive

Divisional Chiefs

Provisional Chiefs

Circle Executive

Zonal Heads

Branch Managers

The general direction and supervision of the affairs of commercial banks lies in their respective
Executive Boards. An EB also consists of a President, a Secretary, and 9 other members,
appointed by the Federal Government.

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The President of the Executive Board is the Chief Executive. He is the administrative head of a
bank and presides over the meetings of Executive Board.
In order to improve the management and operation of a bank, it has been split up into a
numbers of divisions. Each division of a bank is placed under the supervision and control of
Divisional Chief (also called the Senior Executive Vice President or Executive Vice President)
In order to improve the performance of banking system, each bank has a Provisional Chief. PC
has the powers for sanctioning finance and other credit facilities. Each headquarter is situated in
each province e.g. in Lahore, Peshawar, Quetta, and Karachi.
Each commercial bank has a number of circles placed directly under the control and supervision
of Chief Executive
Each circle is divided into a number of zones. These zones are administered by Zonal Heads
who hold the posts of Vice President or Assistant Vice President.
Each zone of commercial

NBP is proud to expand its range of products and services to include Shariah Compliant Islamic
Banking products, now available at our dedicated Islamic Banking Branches at Karachi, Lahore
and Peshawar.
To become a leading player in the growing field of Islamic Finance in Pakistan and abroad,
providing depositors and shareholders in a truly SHARIAH COMPLIANT way, the best
combination of returns and future growth
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To set standards of best practices and performance through efficient asset allocation, and offer /
develop products based on the true spirit of Islamic finance.
Products and services being offered by our Islamic Banking Branch are fully Shariah Compliant
and have been certified by NBPs Shariah Advisor.
Deposit Schemes being offered by NBPs Islamic Banking Branches would include the following:

Current Deposit Scheme

Profit & Loss Sharing (PLS) Deposit Scheme
Current Deposit Scheme
Ideal for customers looking for security of their funds along with absolute convenience in its use,
in the form of Current accounts
Funds deposited with the bank will be utilized by the bank at its sole discretion in Shariah
acceptable avenues.
The Customer will have the flexibility to withdraw a part or the whole of their balances at any
time as per their requirement
This is a non remunerative deposit scheme and thus the customer will not be sharing the profits
nor will be sharing losses (if any). However, the Bank may at its absolute discretion give
rewards to these Depositors depending upon the operational results of the Bank. Losses will not
be passed on to these Depositors.
Other terms, conditions and rules for Current Deposit Accounts to be advised by the Bank at the
time of opening of Account.
Profit & Loss Sharing Deposit (PLS) Scheme

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PLS Saving Deposits Scheme will accept deposits on Mudaraba basis, where the depositor will
be Rabb-ul-Mal and Bank will be Mudarib. The Bank will invest the deposited funds at its
(Banks) sole discretion in Shariah acceptable avenues
The Depositor will have the flexibility to withdraw a part or the whole of their balances at any
time as per their requirement.
The Bank will give profit to the Depositors on the basis of agreed ratio of actual profits to be
announced by the Bank from time to time.
In the event of financial loss, the PLS depositors will bear the loss in proportion of their
The Depositors will not participate in the management of the business of the Bank
Other terms and conditions as well as rules for PLS Deposit Account to be advised by the Bank
at the time of opening of Account.

Commercial and Corporate customers requiring financing will have the following financing
facilities available to them to meet their requirements:
Murabaha may be defined as a contract between a Buyer and Seller under which the Seller
discloses to the Buyer the cost of goods being sold and adds an agreed profit. Price is payable
on spot or at a certain future date, in lump sum or in installments (deferred payments).
Murabaha Facility
Under the MURABAHA FACILITY, the Bank will first purchase the required goods directly or
through an Agent. All costs incurred on such purchases will be borne by the Bank.
Subsequently the Bank will sell the goods to the customer on deferred payment basis (30 days
to one year) at an agreed price comprising cost of goods purchased and Bank's profit.

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On due date the customer will pay to the Bank the agreed price, in lump sum or as per the
agreed installment schedule.Ijarah (Leasing)Ijarah means to give something on rent.The term
IJARAH is analogous to the English term leasing.
Firstly the Bank will purchase the Assets as required by the Customer and subsequently the
assets will be leased to the Customer on the terms and conditions as agreed with him.
Ijarah Facility will be offered for the following assets:
Vehicles (both Commercial and Private)
Office Equipment
Plant and Machinery

In addition to Shariah acceptable standard general banking services, following services are also
being offered at the Islamic Banking Branch :

o Letter of Credit Facility

o Handling of Remittances
o Issuance of Bank Drafts and Pay Orders.
o Collection of Export Bills.
o Collection of Local Bills.
o Government Collections
o Utility Bills Collection


Cash Department

Deposit Department

Clearing Department

Advances and Credit Department

Remittance Department
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This is very important department because cash is the most liquid asset and mostly
frauds are made in this department, therefore, extra care is taken in this department
and nobody is allowed to enter or leave the area freely. Mostly, cash area is grilled and

its door is under the supervision of head of that department. Officer checks the books
maintained in this department.
The following books are maintained in the cash department:

Receiving Cash Books

Token Book

Paying Cash Book

Scroll Books

Cash Balance Book

When cash is received in counter, it is entered in the Scroll Book and Receiving Cashier Book.
At the close of the day, these are balanced with each other. When the cheque or any negotiable
instrument is presented at counter for payment, it is entered in the Token Book and Token is
issued to the customer. The Token and the cashier make entry in the Payment Book and the
payment is made to payee. At the close of the day, the Token Book and paying Cashier Book is
DEPOSIT DEPARTMENT: Bank deals in money and they are merely mobilizing funds within the economy. They borrow
from one person and lend to another, the difference between the rates borrowed and lend from
their spread or gross profit. Therefore, we can rightly state that deposits are the blood of the
banks which cause the body of an institution to get to work. These deposits are liability of the
bank so from the viewpoint of bank we can refer to them as liabilities.
The opening of an account is the establishment of banker customer relationship. The banker
should determine the prospective customers integrity, respectability, occupation and the nature
of business by the introductory references given at the time of account opening. Preliminary
investigation is necessary because of the following reasons.

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Avoiding frauds
Safe guard against unintended over draft.
. Inquiries about clients
Deposits can be segregated on two bases, one is the duration in which these funds are
expected to be with the bank, and second is the cost of getting these funds. So we can divide
deposits into two classes according to duration:

Time Deposits

Demand Deposits

And on the basis of the cost of acquire these funds, a deposit can be classified as any one of
the following four:

High Cost

Medium Cost

Low Cost

No Cost

Bank has different kind of deposit schemes in order to induce deposits. These schemes are a
mixture of the above mentioned two types of deposits with and addition of different services and
requirements, mode of transactions, basis for calculation of profit, deduction, additional benefits,
and eligibility for different groups. In the similar fashion, national Bank of Pakistan has large
variety of deposit schemes and some of these are as follows:
In this type of account a certain amount is deposited for a certain period such as six months,
one year, two year or longer. A fixed deposit receipt is issued in the name of the depositor. The
receipt is signed by the officer in charge and the bank manager. A notice is given to the
depositor on a prescribed from two weeks before the Fixed Deposit Receipt (FDR) falls due,
requesting the depositor to withdraw his money or to renew his deposits. The interest is allowed
on fixed deposit varies with the period for which the deposit is made.
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This kind of deposit is for a short period as the name indicates. The depositor may withdraw his
deposit at any time by giving seven days notice to the banker. This type of deposit facilitates the
trader to withdraw his amount with interest of the deposited period.
Call Deposits are the sorts of deposits, which are deposited with the banker against any tender.
This is without interest deposit, this may be with interest provided with the depositor has agreed
to keep this amount with the banker for some fixed period.
This is just like of fixed deposit. In this kind of deposit, the rate of interest is higher as compared
to other kind of deposits, which are mentioned previously. The rate of interest rises gradually as
the period extends. Its period ranges from three month to twenty years.


National Bank of Pakistan has also introduced Monthly Income Scheme for the benefits of its
customers. An individual or institution, company, corporation etc. can take the advantage of this
In this type of accounts, the client is allowed to deposit or withdraw money as and when he
likes, but there is requirement of maintaining the minimum balance of Rs.5000/- otherwise
Rs.50/- will be deducted every month. Usually the businessmen open this type of account and
the bank pays no profit on it. These types of deposits are also exempt from compulsory
deduction of Zakat.
This type of account is for those persons who want to make small savings. This type of account
is opened with a minimum deposit if Rs.5000/- If the balance in the account falls below the
minimum requirement then a flat charge of Rs.50/- is made in the account once in a half year.
Zakat and other withholding taxes are deducted as per rules of the government.

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Every banker acts both as a paying as well as a collecting banker. It is however an important
function of crossed cheques. A large part of this work is carried out through the bankers clearing
house. A clearing house is a place where representatives of all the banks of a city get together
and settle the receipts and payments of cheques drawn on each other bank. As the collecting
banker runs the certain risks in receipt of their ownership, the law has provided certain
protections to the banks.
The bank uses outward clearing register for the purpose of recording all the details of the
cheques that the bank has delivered to other banks.
Advances department is one of the most sensitive and important departments of the bank. The
major portion of the profit is earned through this department. The job of this department is to
make proposals about the loans. The Credit Management Division of Head Office directly
controls all the advances. As we known bank is a profit seeking institution. It attracts surplus
balances from the customers at low rate of interest and makes advances at a higher rate of
interest to the individuals and business firms. Credit extensions are the most important activity
of all financial institutions, because it is the main source of earning. Any individual or company,
who wants loan from NBP, first of all has to undergo the filling of a prescribed form, which
provides the following information to the banker.

Name and address of the borrower.

Existing financial position of a borrower at a particular


Accounts details of other banks (if any).

Security against loan.

Exiting financial position of the company. (Balance Sheet &

Income Statement).

Signing a promissory note is also a requirement of lending,

through this note borrower promise that he will be
responsible to pay the certain amount of money with interest.

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There are five principles, which must be duly observed while advancing money to the







(Moveable property possessed to the lender cannot be sold in case of default)
Lien is the bankers right to hold the property until the claim on the property is paid. The bankers
look at their lien as a protection against loss on loan or overdraft or any other credit facility. In
ordinary lien, the borrower remains the owner if the property, but the actual or constructive
possession remains with the creditors, though he has no right to sell it.
When an application for an advance can offer any tangible security, the banker may rely on
personal guarantees to protect himself against loss on advances or overdraft to the applicant.
(Immoveable property possessed to the lender can be sold in case of default)
A mortgage is the transfer of an interest in specific immoveable property for the purpose of
securing the payment of money advanced or to be advanced by way of loan, and existing of
future debt, or the performance of an engagement, which may rise to a particular liability. The
person in whose interest the property is transfer is called mortgagee.
(Immoveable property possessed to the borrower can be sold in case of default)

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When property in the shape of goods is charged as security for a loan from the bank, the
ownership and possession is with the borrower, the goods are said to be hypothecated. The
essence of hypothecation is that neither the property in goods nor the possession of them
passes to the lender, but the security is granted by means of letter of hypothecation which
usually provides for a bankers charge on the hypothecated goods.
(Moveable property possessed to the lender can be sold in case of default)
In a pledge, the ownership remains with pledger (borrower), but the pledgee has the possession
of property until the advance is repaid in full. While in case of defaulter, the pledge has the right
of sale after giving due notice

In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the form of
cash finance, overdrafts and loans. NBP provides advances to different people in different ways
as the case demand. These

Cash Finance

Running Finance(Overdraft)

Demand Finance(Ordinary Loans)

Small Finance

Finance against Bills

Agriculture Loans

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

Against locally manufactured goods

Cash finance against rice and paddy

Against pledge
Against commodities

Besides advances against the above commodities bank may be

approached by parties for advances against other commodities like tobacco, oil,

Against Trust Receipts

When a borrower requires temporary accommodation his banker allows withdrawals on his
account in excess of the balance, which the borrowing customer has in credit, and an overdraft
thus occurs. This accommodation is generally allowed against collateral securities. When it is
against collateral securities it is called Secured Overdraft and when the borrowing customer
cannot offer any collateral security except his personal security, the accommodation is called a
Clean Overdraft. The borrowing customer is in an advantageous position in an overdraft,
because he has to pay service charges only on the balance outstanding against him. The main
difference between a cash finance and overdraft lies in the fact that cash finance is a bank
finance used for long term by commercial and industrial concern on regular basis, while an
overdraft is a temporary accommodation occasionally resorted to.
When a customer borrows from a banker a fixed amount repayable either in periodic
installments or in lump sum at a fixed future time, it is called a loan. When bankers allow loans
to their customers against collateral securities they are called secured loans and when no
collateral security is taken they are called clean loans. The amount of loan is placed at the
borrowers disposal in lump sum for the period agreed upon, and the borrowing customer has to
Page | 35

pay interest on the entire amount. Thus the borrower gets a fixed amount of money for his use,
while the banker feels satisfied in lending money in fixed amounts for definite short periods
against a satisfactory security
Loans are allowed to contractors clearing and forwarding agents. These loans are repayable
within a year.
The advances are allowed both on local and foreign bills such as:

Bill of Exchange and Invoices

Bill of Lading

Agriculture loans are given to the farmers with holding up to 25 acres for meeting their short
medium and long term production requirements such as:

Agriculture inputs
Tractors instruments
Tube wells
.Live stock farming
Land Improvements

Remittance means a sum of money sent in payment for something. This department deals with
either the transfer of money from one bank to other bank or from one branch to another branch
for their customers. NBP offers the following forms of remittances.

Demand Draft

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Telegraphic Transfer

Pay Order

Mail Transfer


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


Although the Bank believes in merit but in practice the selection of employees is not done on
merit. Most of the employees are low educated. This shows that candidates with some strong
family background or political pressure are given preference in recruitment and qualified
candidates are sometimes left behind.
Like the employee of public sector organizations in Pakistan, the employees of NBP also enjoy
their job for life. Since there is no risk of early retirement or redundancy in rank, they do not
perform with their full potentials. This is one redundancy in rank, they do not perform with their
full potentials, and this is one of the reasons responsible for the low productivity of the
employees of the Bank.
The performance of employees of the Bank are appraised though their annual confidential
reports at the end of each year. This has become an outdated method of performance appraisal
Page | 37

and no longer used due to the following reasons: 1. The dominant trend in all modern industrial
societies of the world is merit and expertise, which helps promote cohesion and reduce
conflicts. But the feudalistic mindset is still very strong in set up of NBP and there is no tradition
of tolerance for differing viewpoints. Hence, interpersonal conflicts are generated.
Our social acceptance of corruption gives rise to corruption at every level of social and
organizational set up. Corruption involves financial embezzlement, favoritism, nepotism, and
other number of such practices. All these cause resentment that keep building up and lead to
conflict sooner or later. In the past few years, some cases of frauds have happened in different
branches. The reasons can be linked with the employee dissatisfaction of NBP.
Maintaining discipline and implementation of authority (tables) in letter and spirit is the key to
success of any organization. In NBP, The authority tables are not strictly maintained. Line
managers are not fully equipped with the authority with no vertical or horizontal interference.

This department mainly deals with the foreign business. The main functions of this department
NBP is committed to offering its business customers the widest range of options in the area of
money transfer. For a commercial enterprise the Letter of Credit service is just what is required
by him. With competitive rates, security, and ease of transaction, NBP Letters of Credit are the
best way to do business transactions.

Page | 38

NBP launched this to attract deposits in foreign currencies like US Dollars, Pound Sterling, Euro
and Japanese-Yen. NBP invites a resident or a non-resident of Pakistan all to operate in a
foreign currency account.


The basic objective of Accounts Department is to keep records of financial transactions in an
accurate, transparent and time-bound manner. Accounts Department is also responsible for
preparing accounts of the Bank on monthly basis and yearly basis which are also placed before
the Banks in its meeting. The mission of preparation of monthly accounts is to enable one to
know the financial position of the NBP on a particular date. The Accounts Department is also
responsible to provide qualified Accountants in various departments of the Bank and impart
them practical training from time to time as well as to conduct refresher courses so that they are
kept well informed with the latest developments in the systematic accounting procedures.

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

Page | 39

Any other work specially assigned by the Divisional Officer or the higher

The accounts department of NBP performs the following functions:-

Providing financial data for management reporting

conducting surveys for major schemes,
interpret financial statements
participate in all capital expenditure,
rating/pricing decisions and

Conducting inspections.

Duties: The work of the accounts office falls mainly under the following divisions:-

Booking and Compilation,
Cash and Pay,
Compensation Claims,
Establishment Accounts,

Finance and Planning,

Inspection (Executive and Accounts Offices),

Usually accounts are maintained in two ways

Journal System
Vouchers System

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Types of Supplementary:

Debit supplementary
Credit supplementary

General Ledger:
Statement of daily affairs
Cash Book or Cash cum Day Book
Transfer book

Income and Expenditure Ledger etc.

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

Expenditure Includes:

Salaries, allowances and provident fund

Rent, taxes, insurance, lighting etc
Profit paid on deposits and borrowing
Stationary, printing and advertisement charges etc
Auditors fee and legal charges.


Page | 41

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

Financial Managers in organization change some needs as to achieve a higher level of

employee performance, this changes are the management practices, safety culture of
organization, workforce deployment and work design. Financial Managers must make sure that
workers implement the act of the organization so as to the productivity performance creates a
healthy working condition. Financial Managers are there to supervise the workers to achieve the
organizational goals.

Page | 42

The Financial Manager of NBP thought that Gone are the days when firms confined
themselves solely to running their business without a thought for the society in which they
existed. According to him every big or small organization is expected to make its contribution
towards a better quality of life for the entire society. Big companies are having their own
philanthropy or trust to help needy people.
His role is to achieve effective utilization of available resources of the branch. He is achieving it
through coordinated human efforts. He is playing to achieving organizational objectives. He is
responsible for aligning the individual's objectives with the organizational objectives. This is very
essential for achieving long-term organizational success. He has to decide how to bring and
communicate organizational changes.
He plays a major role in setting organizational goals. He has to be in close contact with the
employees of the organization. He understands them and motivates them. He uses to
encourage them so that they can perform effectively. He praises them when they show brilliant
performance and on bad performance, he gives them constructive feedback rather than
negative feedback. He provides them online support and coaching.
He resolves conflicts among the employees and tries to reach at an acceptable solution. This
defiantly improves employees work quality as well as performance.
Thus, Financial Managers role is very important so as to improve employees productivity as
well as organization's productivity. He understands that organizational success depends on
employees. Thus the more satisfied and happy the employees are the more success the
organization will show. He is also very committed to his work so as to set an example for his
subordinates.He is also discharging his responsibility towards the government is in the matter of
paying regularly and fairly all taxes, dues and duties.
The recent raids on large industrial groups are an attempt on the part of the government to
unearth unpaid taxes and undeclared assets. A manager who acts in a responsible manner will
be ensuring that his firm never has to face such a situation. He always strives to make firm a
model corporate citizen.
Other firms within the banking industry are competitors in the market place but are the
associates of NBP when has to lobby for or represent and an industry and not as individual
firms. Most industries have their own associations at the local, regional, national and
international level. The objectives of organizing such bodies are to protect and promote the
Page | 43

interests of the industry, seek concessions from government and represent against any
discrimination, and provide a forum for sharing and disseminating information on the latest
technological and market trends.
In modern management usage, one can easily discern a trend away from the term 'data' in
composite expressions to the term information or even knowledge when talking in non-technical
context. Thus there exists not only data management, but also information management and
knowledge management.
This is a fairly detrimental tendency in that it obscures the fact that is usually always plain,
traditional data that is managed or somehow processed on second looks. The extremely
relevant distinction between data and derived values can be seen in the information ladder.
While data can exist as such, 'information' and 'knowledge' are always in the "eye" (or rather the
brain) of the beholder and can only be measured in relative units.

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


The NBP mainly use only three types of softwares named

EBS (Electronic Banking System)

BBO (Branch Backup Operating)
MS Office

The both softwares are used for operating the day to day working of the organization. The EBS
(Electronic Banking System) is used in the organizations where there is huge capacity to get it
online branch. The EBS performs the main role in handling the working or branches where it is
Page | 44

installed. Each and every transaction relating to banks operation is made on it. The matters of
ATMs are also dealt with this software.
The day to day transaction as to the receiving of cash, payment of cash, issuance of Demand
Draft, Issuance of Payments orders, Disbursement of Loan, Opening of new account, Handling
the old accounts, Pension Funds, Dealing expenditure accounts, Handling various types of
deposits, marking the stop payments of cheques, marking lien on any account for stopping its
further operations, all is done through EBS software also used by the NBP .
The other type of software named BBO (Branch Backup Operating system) is used the
branched which are not online branches of NBP. The some of the online branches also used it
for reducing the burden of their working on EBS.
The NBP where I got the training and prepare all of my report also uses this BBO. The main
purpose of BBO is to deal with the day to day working of the bank. But its a supplementary for
NBP Civil .The main working of the Branch is done through EBS (as already explained) but
assisting work is done on BBO.
The branch uses it for preparing demand drafts advices, payments of Pay Orders, issuance
and payment of Mails Transfer etc.
The 3rd type of software being used by the NBP Civil Lines Branch is Microsoft Office. The very
common two softwares are used by the Branch named, MS Word, & MS Excel. Both of the
softwares are used to prepare different types of reports. The MS Word is also used for drafting
letters of correspondence.
The MS Excel is mainly used for preparing reports required time to time by the Regional Office
as well as the Head Office of the bank.
There are different types of report being used for management use through different softwares
are as follow:LOANS REPORTS
There are different types of loans reports are prepared by the band by using the available
softwares. These reports show the figures of the loan amount of the bank which are being
issued / recover, to / from debtors. These reports are prepared weekly, monthly, quarterly, half
Page | 45

yearly and annually. These reports are directly sent to Regional Office or Head Office, who
utilize it for further decision making.
The delinquency reports are prepared on daily basis. These reports are prepared by the
Collection / Recovery department of NBP. The main purpose of preparing these types of reports
is to trace out the defaulters of NBP. The persons which are not making payment of their loan
are tracked through these reports.
Pak Rupees deposits reports are prepared for acknowledging the position of the deposits of the
branch. The deposits of the branch are handled periodically through these reports. The actual
position of the deposits of the branch is measured.
Foreign currency deposits reports are prepared for acknowledging the position of the deposits of
the branch. The deposits of the branch are handled periodically through these reports. The
actual position of the deposits of the branch is measured.
These statements measure the amount of the collateral available with the bank. This amount of
the collateral is utilized when estimating the true amount of the securities available for adjusting
any loan.
Hypothecations reports are important with the point of view of reporting to the higher
management as to tell them the securities available by the bank to handle any the issued loan.
These hypothecation reports work when estimation the shortage or shortfall in the goods is
Pledged reports are basically prepared by t he MUCADAMs. These are the companies recruited
by the Head Office to handle the pledges of the bank in the Godowns. These companies report

Page | 46

to the bank on daily basis the position of the pledged stock. The bank further delivers this
information to the Regional Office & Head office for further actions.
These statements are prepared by the banks internal officials (the Administration Department)
who handle the loans of the Employees of the bank. The liability statement is one in which the
amount of all loan is described. There are different loans named Car Finance, Home Finance,
Computer Loan etc given to the employees of bank.
The foreign inward remittances are measured through prepared these statements. The inward
remittances measured in different currencies as well as in Pak rupees.
The foreign outward remittances are measured through prepared these statements. The
outward remittances measured in different currencies as well as in Pak rupees.
The organizational analyses of NBP are mainly concern here with the analysis of the bank with
the whole industry and somehow I have compared the National bank with other competitors in
the market. There are also some specialized banks in the industry with whom it was necessary
to compare NBP for showing the position of the bank.

Banking is one of the most sensitive businesses all over the world. Banks play very important
role in the economy of a country and Pakistan is no exemption. Banks are custodian to the
assets of the general masses. The banking sector plays a significant role in a contemporary
world of money and economy.
It influences and facilitates many different but integrated economic activities like resources
mobilization, poverty elimination, production and distribution of public finance. It is purchase of
car or building of home banks is always there to serve you better. It is play ground or any
educational or healthy societal activities the money of banks nurtures them. It is an industrial
Page | 47

project or agricultural development of the country the sponsor-ship of banks is very much
involved. Banks play very positive and important role in the overall economic development of
the country.
Pakistan has a well-developed banking system, which consists of a wide variety of institutions
ranging from a central bank to commercial banks and to specialized agencies to cater for
special requirements of specific sectors. The country started without any worthwhile banking
network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it had
acquired a flourishing banking sector.
Nationalization of banks in the seventies was a major upset to domestic banking industry of the
country, which changed the whole complexion of the banking industry. With irrational decision at
the top all the commercial banks were made subservient to the political leadership and the
bureaucracy. Specialized banking institutions were already working in the public sector. The new
accountability paradigm changed the business ethics in the banking industry, and with this
change started the disaster. Nationalization of banking industry was accompanied by violent
changes in the external value of rupee.
The commercial banks thus lost their assets management equilibrium, initiative and growth
momentum. They ceased to be a business concern and became big bureaucracies. This was
accompanied by indiscreet loaning under political pressure.
They suffered from three terminal diseases: non-performing loans; higher intermediation cost;
and loss of initiative and entrepreneurship. The rise to Labor Unions and Officers Associations
made life tough and working conditions ugly to honest, dedicated and industrious workers in the
realms of domestic banking industry.
The era of nineties was the climax of privatization, deregulation and restructuring in the
domestic banking industry and financial institutions. The Muslim Commercial Bank was the first
bank to privatize. Followed by Allied Bank limited, United Bank Limited and now the Habib Bank
Limited have been privatized.
One thing good for that particular period was the recruitment of fresh officers in the domestic
banking industry through well-organized policies of Banking Council. With the decay of Banking

Page | 48

Council there was flood of insincere, nonprofessional, incompetent candidates directly

appointed/ recruited in all the domestic banks of the country.
Public Sector Commercial Banks

National Bank of Pakistan NBP

First Women Bank Limited FWB
The Bank of Khyber KB
The Bank of Punjab BOP

The government of Pakistan permitted small private sector banks to operate, which indulged in
doubtful policies to promote business. The public sector banking, which constituted the
backbone, thus continued to suffer because of their approach, size and carried over liabilities.
Mehran Bank is the prime example of that kind of lax banking in the country, which ultimately
merged into National bank of Pakistan i.e. last resort of domestic banking industry.

Askari Commercial Bank Limited Bank Al-Falah Limited

Bank Al Habib Limited

Bolan Bank Limited

Faysal Bank Limited

Metropolitan Bank Limited

Platinum Commercial Bank Ltd

Prime Commercial Bank Limited

Saudi Pak Commercial Bank Ltd PICIC Commercial Bank Limited

Soneri Bank LimitedUnion Bank Limited
Muslim Commercial Bank Limited Allied Bank of Pakistan
Union Bank Limited Mashreq Bank

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

Page | 49

ABN Amro Bank

Al Baraka Islamic Bank

American Express The Bank of Tokyo Mitsubishi


Credit Agricole Indo Suez

Deutsche Bank

Doha Bank

Emirates Bank

Habib Bank A. G. Zurich

Hong Kong Shangai Banking Corporation

Mashreq Bank PJSC


Oman Bank

Rupali Bank Standard Chartered Bank


Zari Tarqiati Bank Ltd.

Industrial Development Bank of Pakistan
Punjab Provincial Cooperative Bank Limited

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

Lack Of Communication Between Employees

Page | 50

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

Individual Difference
In NBP the individual difference have strong impact on the organizations performance due to
the wrong criteria of selection of the employees. So with the passage of time individual
differences are increasing which are undermining the good will of the organization.
Lack Of Modern 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.
Lack Of Marketing Effort:
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The bank does not promote its corporate image, services, etc on a competitive way. Hence
lacks far behind in marketing effort .A need for aggressive marketing in there in the era
marketing in now becoming a part of every organization.
Inefficient Counter Services In The Rush Hours
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.
I have studied and analyzed NBP I found out that this a good bank as for as its working and
management is concerned.
National Bank of Pakistan is one of the oldest and biggest banks of Pakistan.Internship at
National Bank of Pakistan has been an excellent experience for me due to its large operations
and due to number of fields of activities, and more importantly culture of the organization,
attitude of management, staff, and workers.
Environment of the Bank is very suitable for Internship as well as from job perspective as
management is very sincere with its employees and worker.

The management of NBP is presently taking significant strategic steps to enable the bank to
emerge as a strong and progressive institution
I noted that NBP is providing their customers with wide range of services including online
banking, phone banking and some of their new products in the pipeline; include ATM network
etc shows that NBP is taking good care of their customers.
According to my judgments NBP has made heavy investments, towards enhancing its
capabilities in the area of automation and technology. NBP is well positioned to meet client
needs, with improved competitive advantage.
From the analysis of this year I concluded that in 2008 profits are less than the previous
years. So I can say that NBP has to perform very well.
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Because NBP is a govt. owned organization so there is a lack of implementation of rules and
The no. of banks in Pakistan is increasing with the passage of time. So due to poor working
condition and poor customer service it may be possible NBP will lose its market share in future.


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. This procedure has been modernized with the passage of time with a view to
streamline the approach and underlying procedure for effective overhauling of its own
capabilities so as to bring them at par with international practices.
Here I am giving some suggestions, which in my view can add some input for efficiency and
better performance of NBP as an organization in general and Main Branch of the City in


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. For this
purpose these staff colleges should be reorganized and their syllabus should be made in such a
way to help the employee understand the ever-changing global economic scenario. Banking
council of Pakistan should also initiate some programs to equip the staff with much needed
professional training.
Delegation Of Authority
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Employees of the bank should be given a task and authority and they should be asked for their
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.
To Over Come Problem Of Space And Furniture
In the critical analysis this, problem is discussed. To overcome this problem it is suggested that
a special section should be made inside the branch. Which should only handle the treasury
function, salaries and pensions of federal personnel or the bank should do these functions in the
evening time. Also management should purchase more furniture and arrange them in such a
way which provides maximum space and convenient especially in deposit department and there
should also be convenient sitting place for customers.
Transfer is not properly carried out. Some of the employees are continually serving at the same
post. They are simply rotated at the same branch. Therefore it is recommended that evenly
rotation of every employee should take place after every three years in different branches of the

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

Need Of Qualified Staff

Required, qualified staff should be provided to branch in order to improve the functioning of the
branch. Especially a telephone operator should be appointed.
Credit Card
National bank of Pakistan should start its operation in credit card. These cards are very helpful
for the ordinary customer in general and the business people in particular. To make it more
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secure and to eliminate the misuse of it, the management is required to keep proper security
against the card.
Clean Loans
Clean loan or clean overdraft is the credit facility extended to the customers to the customers
without any security. These types of small term loans should not be extended to anybody,
because sometime these loans are provided to blue-eyed people of the management and they
become a part of bad debts.
Cash 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 cannot advance it anywhere.
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 sector.
Technological Advancement
I would like to suggest that at least all the main branches of NBP should be fully computerized in
order to expedite the dealing process among bankers and their customers. Every department
should be provided a computer with adequate training (especially Advances, Deposits and
Foreign Exchange departments). Daily records should be entered directly into these computers,
(instead entering the overall daily transactions after the banking hours). It will not only reduce
transaction time, will increase accuracy but will also be efficient as well. Not only it will be
economical but will also reduce the extra burden of work of the bank. It will also help in reducing
the use of excessive paper work.

Staff Relationship
Good relationship among staff member leads to the peak performances in any organization. I
observed that the staff relationship was normal otherwise but some time I noticed that there
existed a little conformity among the staff members. Another syndrome from which the staff
suffered was that all of them considered themselves more important than others. Some of the
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officers used to say that if I am absent for a day the bank would stop working. So this sort of
attitude is not good because it mars bank image and juniors willingness learn and work hard
and in the end will hurt the whole team.
Proper Distribution Of 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.
Favoritism And Nepotism
In Civil Lines branch during my internship I saw that when some of the employees are transfer
to other places, due to their relation with influential people and with top management they can
cancel their transfer in few weeks, when they are unsatisfied at that place.
So I suggest that in the organization there should be no favoritism, nepotism and politics and
their transfer and promotion should be made on merit and according to the rules and regulations
of the bank and provided favorable environment to the employee to show their performances.
Marketing Policy
The branch should adopt various marketing strategy and promotion strategy to promote the
bank and its product. The most important in my opinion is personal marketing; it is the most
effective of all when you think in term of branch level. But on the whole organization level, they
should arrange the seminar within the bank and outside the bank. They should introduce
various prizing schemes just like Allied Bank. Karamad Scheme, Bank Al-Falah (monthly income
earning scheme) and various others. They should do more advertising through newspaper and
media and through channel of personal contacts.
Complaints Of Customer
There should be an information desk to provide the information and to receive the complaints of
the customer in the bank. There is no complaint box available in the branch and not any person
appointed to hear the complaints. Every person cannot go to the manager for the complaint
because most of the people are hesitant. So I suggest management to install a compliant box in

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the branch, and recruit a special person for that guidance of the customer when they are unable
to manage some difficulties in banking matters.
Credit Monitoring
The credit department of the bank should carries out vigilant credit monitoring. They should
ensure the proper payment of installments and the mark-up by the borrower. The staff members
who have done all the paper work of the loan extension should perform the monitoring, as
he/she will be having more information about the borrower.
Extended Banking Hours
Some of the business community due to law and order situation are now reluctant to keep the
fund in their premises and would want to depart with it. Therefore, Civil Lines Branch may
extend the night banking to cater to demand of this business community. The branch could also
be opened to cater the requirements of this business community limited staff.
Avoiding Bad Debts
Great care should be taking while extending the loan. Loans should be awarded against
reasonable securities, where market value should be equal to the loan granted. Policies should
be crafted in a way to ensure that no loan is extended on political pressure. SBP regulation for
loan approval should be strictly followed. According to which the current ration of borrowers
business must be 1:1 and the debt to equity ratio should be 60:40, means the liquidity position
of business should be healthy.

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