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NATIONAL BANK OF

PAKISTAN

INTERNSHIP REPORT
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TABLE OF CONTENTS
Objectives of Studying the Organization.........................................................................................7
Brief History of National Bank of Pakistan.....................................................................................8
Nature of National Bank of Pakistan.............................................................................................10
Business volume of National Bank of Pakistan.............................................................................13
Branch Network of National Bank of Pakistan.............................................................................16
Number of Employees of National Bank of Pakistan....................................................................18
Product Lines.................................................................................................................................19
1. Deposits..............................................................................................................................19
a) Current Deposits.............................................................................................................19
b) PLS Saving Deposits.......................................................................................................20
c) Fixed Deposit Account (Time Deposits).........................................................................20
d) Foreign Currency Account..............................................................................................21
2. Advances.............................................................................................................................23
b) NBP Advance Salary.......................................................................................................23
c) NBP Cash & Gold...........................................................................................................23
d) Students Loan Scheme....................................................................................................24
3. Corporate Advances............................................................................................................24
a) Cash Finance...................................................................................................................25
b) Running Finance/ Overdraft............................................................................................25
c) Demand Finance.............................................................................................................26
4. Remittances.........................................................................................................................26
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a) Demand Drafts................................................................................................................27
b) Travelers Cheques...........................................................................................................27
c) Letter Of Credit...............................................................................................................28
d) Foreign Remittances.......................................................................................................28
e) Swift System...................................................................................................................29
h) Pay Order........................................................................................................................29
5. Miscellaneous.....................................................................................................................30
a) Lockers............................................................................................................................31
c) International Banking......................................................................................................32
weekly leaning in NBP..................................................................................................................33
Organizational Structure of National Bank of Pakistan.................................................................35
Board of Directors......................................................................................................................37
Senior Management....................................................................................................................40
1. Corporate & Investment Banking Group........................................................................41
2. Compliance Group..........................................................................................................42
3. Islamic Banking Group...................................................................................................43
4. Treasury Management Group.........................................................................................44
5. Credit Management Group..............................................................................................47
6. Audit & Inspection Group...............................................................................................48
7. Human Resource Management & Administration Group...............................................50
8. Information technology group........................................................................................51
9. Financial control Division...............................................................................................52
10. Overseas Coordination & Management Group...............................................................53
11. Commercial & Retail Banking Group............................................................................54
12. Special Assets Management Group.................................................................................55
13. Employee Benefits, Disbursements & Trustee Division.................................................55
14. Core Banking Application...............................................................................................58
15. Operations Group............................................................................................................59
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Provincial & Regional Management..........................................................................................60


Branch Management...................................................................................................................60
Organizational (Management) levels at NBP................................................................................61
Top Managers.............................................................................................................................61
Middle Managers........................................................................................................................62
First Line Managers or Lower Level Management....................................................................62
Non Managerial Employees.......................................................................................................62
Hierarchy of National Bank of Pakistan........................................................................................63
Organization Structure of the Branch............................................................................................64
a) Centralized Decision Making.............................................................................................64
b) Downward Communication................................................................................................65
c) Chain of Command.............................................................................................................65
d) Authority and Responsibility..............................................................................................66
e) Delegation...........................................................................................................................66
Departments of the Branch............................................................................................................67
1. Clearing House Department...............................................................................................68
2. Remittance Department......................................................................................................71
3. Account Opening Department............................................................................................73
4. Cash Department................................................................................................................74
5. Deposits Department..........................................................................................................76
6. Advances Department.........................................................................................................77
7. Computer Department........................................................................................................78
a) Online branches...............................................................................................................78
b) Batch Branches...............................................................................................................78
c) Manual Branches.............................................................................................................79
8. Pension Disbursement Department.....................................................................................80
9. Accounts Department.........................................................................................................80
Structure of Branch’s Accounts Department.................................................................................83
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Bank Accounting Operations.........................................................................................................86


Role Of CFO (Chief Financial Officer).........................................................................................88
Sources of Funds............................................................................................................................95
Generation of funds.......................................................................................................................98
Allocation of Funds.....................................................................................................................100
Critical Analysis (Theory vs Practical)........................................................................................104
Balance Sheet..............................................................................................................................105
Income Statement........................................................................................................................106
Financial Statements Analysis.....................................................................................................107
Ratio Analysis..........................................................................................................................108
Horizontal Analysis..................................................................................................................125
Horizontal Analysis of Balance Sheet......................................................................................126
Horizontal Analysis of Income Statement................................................................................135
Vertical Analysis.......................................................................................................................144
Vertical Analysis of Balance Sheet...........................................................................................145
Vertical Analysis of Income Statement....................................................................................154
Bank Analysis with refernce to commercial Banks listed on stock exchange.............................161
Future prospects of National Bank of Pakistan...........................................................................164
Short falls/ Weaknesses of National Bank of Pakistan................................................................166
Conclusions.................................................................................................................................168
Recommendations.......................................................................................................................169
References...................................................................................................................................116
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ACKNOWLEDGEMENT
For the completion of my report I am indebted to plenty of people for their very sincere
cooperation that they extended to me at various stages. First and foremost, problem that every
student faces is the completion of a report is gathering of data while it is very difficult to learn &
rotate in different department of the bank especially in National Bank of Pakistan where work
burden is quite higher compare with other banks. Furthermore staffs of the bank are too busy in
their work so that we cannot be able to learn and do according to our report requirement.

I am very thankful to staff members of National Bank of Pakistan, Main Branch Islamabad, for
guidance and providing me valuable information regarding my report completion.

Finally I am thankful to the most merciful and Almighty Allah who gives me the strength that I
fulfill my task efficiently.

Bilal Maqbool
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OBJECTIVES OF STUDYING THE ORGANIZATION


The primary purpose of this study is to fulfillment of the requirements for the degree of MBA.
For this connection, each student of this particular course is required to undertake training in a
relevant organization selected by them.

The secondary purpose of this internship is to understand how the theoretical knowledge can be
applied to the practical situations and examine an organization’s financial issues and identify its
opportunities/ problems and also suggest corrective measures. This internship is also very
necessary to gain confidence and become aware of the mechanism of an organization. As an
internee, I have achieved following objectives during my internship and organization study:

1. Familiarize with a business organization.


2. Familiarize with the different departments in the organization and their functioning.
3. Enable myself to understand how the key business process are carried out in organization.
4. Understand how information is used in an organization for decision making at various
levels.
5. Relate theory with practice.
6. I develop my skills in the application of theory to practical work situations.
7. Develop my attitude conducive to effective interpersonal relationships.
8. Acquire good work habits and sense of responsibility.
9. Enhance my learning experience by application of fundamental concepts previously
learned.

10. Develop my interpersonal communication.

11. Enhanced my knowledge of the discipline of banking administration.

BRIEF HISTORY OF NATIONAL BANK OF PAKISTAN


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The history of National Bank of Pakistan is part of Pakistan’s struggle for economic
independence. National Bank of Pakistan was established on November 9, 1949 under the
National Bank of Pakistan Ordinance, 1949 in order to cope with the crisis conditions which
were developed after trade deadlock with India and devaluation of Indian Rupee in 1949.
Initially the Bank was established with the objective to extend credit to the agriculture sector.
The normal procedure of establishing a banking company under the Companies Law was set
aside and the Bank was established through the promulgation of an Ordinance, due to the crisis
situation that had developed with regard to financing of jute trade. The Bank commenced its
operations from November 20, 1949 at six important jute centers in the then, East Pakistan and
directed its resources in financing of jute crop. The Bank’s Karachi and Lahore offices were
subsequently opened in December 1949. The National Bank of Pakistan came forward to
establish its offices in the Cotton growing areas and extended credit facilities liberally in order to
restore stability to the market. In 1951, the country was once again faced with a crisis in the
cotton trade when prices was crashed and touched the lowest level since independence following
the cessation of hostilities in Korea. The bank in collaboration with the cotton board provided the
necessary Credit facilities to the trade and the crisis was tided over. The nature of
responsibilities of the Bank is different and unique from other banks/financial institutions. The
Bank acts as the agent to the State Bank of Pakistan for handling Provincial/Federal Government
Receipts and Payments on their behalf. The Bank has also played an important role in financing
the country’s growing trade, which has expanded through the years as diversification took place.1

The National Bank of Pakistan has its headquarters in Karachi, Pakistan. The bank operates
1249(2016) branches in Pakistan and 22(2016) overseas branches. Under a trust Deed, the bank
also provides services as trustee to National Investment Trust (NIT) including safe custody of
securities on behalf of NIT. The National Bank of Pakistan has assets worth Rupees 737976.44
million on September 30, 2016.2

National Bank of Pakistan is today a progressive, efficient, and customer focused institution. It
has developed a wide range of consumer products, to enhance business and cater to the different
segments of society. Some schemes have been specifically designed for the low to middle
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income segments of the population. These include NBP Karobar, NBP Advance Salary, NBP
Saibaan, NBP Kisan Dost, and NBP Cash n Gold.

The National Bank of Pakistan has implemented special credit schemes like small finance for
agriculture, business and industries, administrator to Qarz-e-Hasna loans to students, self
employment scheme for unemployed persons, public transport scheme. The Bank has expanded
its range of products and services to include Shariah Compliant Islamic Banking products. For
the promotion of literature, NBP recently initiated the Annual Awards for Excellence in
Literature. NBP will confer annual awards to the best books in Urdu and in all prominent
regional languages published during the defined period. Patronage from NBP would help
creative work in the field of literature. The Bank is also the largest sponsor of sports in Pakistan.
It has provided generously to philanthropic causes whenever the need arose.

It has taken various measures to facilitate overseas Pakistanis to send their remittances in a
convenient and efficient manner. In 2002 the Bank signed an agreement with Western Union for
expanding the base for documented remittances. More recently it has started Electronic Home
Remittances Project. This project introduces technology based system to handle inward
remittances efficiently, by ensuring that the Bank's branches keep a track of the remittance
received from abroad till its final receipt.

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
up gradation of the IT infrastructure and developing the human resources.

National Bank has earned recognition and numerous awards internationally. It has been the
recipient of The Bank of the Year 2001, 2002, 2012 and 2013 Award by The Banker Magazine,
the Best Foreign Exchange Bank –– Pakistan for 2012, 2013, 2014 and 2015, Global Finance,
Best Emerging Market Bank from Pakistan for the year 2013, Global Finance, Kisan Time
Awards – 2013 for NBP's services in the agriculture field. It is listed amongst the Region's largest
banks and also amongst the largest banks in South Asia 2013, The Asian Banker. It has also been
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presented a Recognition Award –– 2012 for having a Gender Sensitive Management by


WEBCOP AASHA besides other awards.3

The precise summary of National Bank of Pakistan regarding its countrywide and overseas
operations is as fallows:

1949 National Bank of Pakistan (NBP) was established under the National Bank of
Pakistan Ordinance 1949 and was 100% govt.-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.
The Bank in 1950 had one subsidiary ‘The Bank of Bahawalpur’ on December4, 1947 by
the former Bahawalpur State
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 (est. 1947).
1977 NBP opened an offshore brain Cairo.
1994 NBP amalgamated Mehran Bank (est. 1991).
1997 NBP's branch in Ashgabat, Turkmenistan commenced operations.
2000 NBP opened a representative office in Almaty, Kazakhstan.
2001 State Bank of Pakistan and Bank of England agree to allow only 2 Pakistani banks
to operate in the UK. NBP and United Bank agreed to merge their operations to form
Pakistan International Bank, of which NBP would own 45% and United Bank 55%.
2003 NBP received permission to open a branch in Afghanistan.
2014 NBP closed its offshore branch in Cairo.
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NATURE OF NATIONAL BANK OF PAKISTAN


National Bank of Pakistan was incorporated in Pakistan under the National Bank of Pakistan
Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. The bank is engaged in
providing commercial banking and related services in Pakistan and overseas. The bank operates
1,249 (2015: 1,232) branches in Pakistan and 22 (2015:18) overseas branches (including the
Export Processing Zone branch, Karachi). Under a Trust Deed, the bank also provides services as
trustee to National Investment Trust (NIT) including safe custody of securities on behalf of NIT.4

The nature of responsibilities of the Bank is different and unique from other banks/financial
institutions. The bank also handles treasury transactions for the Government of Pakistan as an
agent to the State Bank of Pakistan for handling provincial/Federal Government receipts and
payments on their behalf. The National Bank of Pakistan has also played an important role in
financing the country’s growing trade, which has expanded through the years as diversification
took place. The bank is providing all banking services of mercantile and commercial banking
permissible in the country, which include:

Accepting of deposits of money on current, fixed, saving, term deposit and profit and loss
sharing accounts.
Borrowing money and arranging finance from other banks.
Advancing and lending money to its clients.
Financing of projects, including technical assistance, project appraisal through long term/
short term loans, term finance and musharika certificates, etc.
Buying, selling, dealing, including entering into forward contracts of foreign exchange.
Financing of seasonal crops like cotton, wheat, rice, sugar cane, tobacco, etc.
Receiving of bonds, valuables, etc. for safe custody.
Carrying on agency business for any description other than managing agent, on behalf of
clients including Government and local authorities.
Generating, undertaking, promoting, etc. of issue of shares and, bonds etc.
Transacting guarantee and indemnity business.
Undertaking and executing trusts.
Joint venturing with foreign dealers, agents and companies for its representation abroad.
Participating in “World Bank” and “Asian Development Bank’s” lines of credit.
Providing personalized Hajj services to intending Hajjis.
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BUSINESS VOLUME OF NATIONAL BANK OF PAKISTAN

Rupees in
Millions
Year 2012 2013 2014 2015 2016
Total Assets 553,231,467 577,719,114 645,132,711 762,193,593 817,758,326
Deposits 465,571,717 463,426,602 501,872,243 591,907,435 624,939,016
Advances 220,794,075 268,838,779 316,110,406 340,677,100 412,986,865
Reserves 10,813,914 13,536,041 13,879,260 15,772,124 19,941,047
Investments 149,350,096 156,985,686 139,946,995 210,787,868 170,822,491
Horizontal
Analysis (%)
Total Assets 100 104 117 138 148
Deposits 100 100 108 127 134
Advances 100 122 143 154 187
Reserves 100 125 128 146 184
Investments 100 105 94 141 114

The business volume of National Bank of Pakistan is stated in terms of total assets, deposits,
advances, reserves and investments. To analyze the trend in these items the Horizontal analysis
of each item is calculated.
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A NALYSIS
The Total Assets of National Bank of Pakistan fluctuates during all years as they show an
increasing trend. The total assets are increased 4 % in 2013 and 17 % in 2014. The year 2015
represents second highest percentage on account of total assets as it was increased to 38%. There
was an increase of 48 % in 2015 as compare to base year and 10% as compare to 2016.

A NALYSIS
The deposits and other accounts of National Bank of Pakistan show a mixed trend during all
years. In the year 2013, the deposits were increased very marginally, with the year 2014
represents an increase of 8%. The deposits are increased 27% & 34% in the years 2015 and 2016
respectively.
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A NALYSIS
The advances made by National Bank of Pakistan shows an increasing trend in all years as
compare to base year. This implies that National Bank of Pakistan is keener to advance money to
lenders. The advances were increased 22 % in the year 2013 and 43 % in 2014 as compare to
base year. The year 2015 represents an increase of 54 % and 2016 represents highest percentage
among all years that is 87 % as compare to base year.

A NALYSIS
The Banks’ reserves are banks' holdings of deposits in accounts with their central bank plus
currency that is physically held in bank vaults (vault cash). The reserves of National Bank of
Pakistan fluctuate during all years as they show an increasing trend. The reserves are increased
25 %, 28 % & 46 % in the years 2013, 2014 & 2015 respectively. The year 2016 represents
highest increasing percentage of 84% as compare to base and previous years.
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A NALYSIS
The investments made by National Bank of Pakistan fluctuate during all years. There was an
increase of 5 % in 2013. The year 2014 indicates a decrease of 6% in investments. The year 2015
represents an increase of 41 %, highest among all years. The investments are increased 14 % in
2016 as compare to base year; however investments are decreased 27 % as compare to the year
2015.

BRANCH NETWORK OF NATIONAL BANK OF PAKISTAN


With the geographical development of its branches, the National Bank of Pakistan has been able
to extend its services to a much larger number of Pakistanis all over the country. Today the Bank
has more than 8.8 million accounts & Bank maintains its presence in all the major financial
centers of the world through its 22 (2016) overseas branches and 5 representative offices. Of
these, three representative offices have recently been set up at Tashkent (Uzbekistan), Baku
(Azerbaijan) and Almaty (Kazakhstan) to take advantage of the emerging opportunities in CIS
countries. Bank’s role Apart from having a vast branch network, Bank is at the forefront in the
acquisition and application of new technologies in every aspect of its banking facilities. It has
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acquired leased telephone lines for on-line banking. The Bank has 12 Regional Computer
Centers to cover various on-line and batch system requirements of branches and controlling
offices.

Presently the National Bank of Pakistan is divided into various Groups headed by SEVPs/EVPs.
Its field operations are controlled by 29 regions ( Annexed II) reporting to as many Regional
chiefs, who control 40 zones and 15 single Branch zones headed by Zonal Chiefs; 12 corporate
branches and 1249 domestic branches headed by Branch Managers. The bank has 12 SWIFT
local centers.

Apart from having a vast branch network, Bank is at the forefront in the acquisition and
application of new technologies in every aspect of its banking facilities. It has acquired leased
telephone lines for on-line banking. Bank has also a presence on the internet. The National Bank
of Pakistan has 156 online branches throughout the country. It has modernized its services by
installing Automated Teller Machines (ATMs) called “CASH LINK” at selected branches.

The Bank's organizational structure reflects the three levels at which it operates: international,
national and local. The Head Office formulates and implements the strategic, management and
operational policies.

The Bank's geographical organization consists of branches located in the regional capitals and in
some provincial capitals. The branches' activities relate to the State treasury service, payment
system services, currency circulation, banking and financial supervision, and the analysis of
economic and financial developments at the local level.

The Bank has representative offices abroad, in London, New York and Tokyo; a number of
officers are seconded as financial experts to Italian embassies and consulates. The Bank has
representative offices in Beijing, Tashkent, Chicago and Toronto. It has agency arrangements
with more than 3000 correspondent banks worldwide. Its subsidiaries are Taurus Securities Ltd,
NBP Exchange Company Ltd, NBP Capital Ltd, NBP Modaraba Management Company Ltd, and
CJSC Bank, Almaty, Kazakhstan. The Bank's joint ventures are, United National Bank (UK),
First Investment Bank and NAFA, an Asset Management Company (a joint venture with NIB
Bank & Fullerton Fund Management of Singapore).5
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The Branch network of National Bank of Pakistan is divided into following categories

ATM network (Total ATMs 201 & Total ATMs machines 209)
Domestic network (1249 Branches)
Islamic network (15 Branches)
Online network (1150 Branches)
Overseas network (39 Branches)
Swift network (22 Branches)
Customer Facilitation Centers (6 Customer Facilitation Centers)
Agriculture branches (1100 Branches)

NUMBER OF EMPLOYEES OF NATIONAL BANK OF PAKISTAN

Permanent 113237
Temporary/ On Contractual basis 1042
Bank's own staff strength at the end of the year 19079
Outsourced 6350
Total Staff Strength 19429

An employee may be defined as: "A person in the service of another under any contract of hire,
express or implied, oral or written, where the employer has the power or right to control and
direct the employee in the material details of how the work is to be performed." 6An employee
contributes labor and expertise to an endeavor. Employees perform the discrete activity of
economic production. Of the three factors of production, employees usually provide the labour.
Specifically, an employee is any person hired by an employer to do a specific "job". In most
modern economies, the term employee refers to a specific defined relationship between an
individual and a corporation, which differs from those of customer, or client. The relationship
between National Bank of Pakistan and its employees is usually handled through the Human
Resource Management & Administration Group & Employees benefit disbursement & trustee
division. These groups handle the incorporation of new hires, and the disbursement of any
benefits which the employee may be entitled, or any grievances that employee may have.

There are differing classifications of workers within National Bank of Pakistan, these are:
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Permanent
Temporary / On Contractual
Outsourced

The Employees of National Bank of Pakistan are organizing into trade unions, which represent
most of the available work force in National Bank of Pakistan. These trade Unions utilize their
representative power to collectively bargain with the management of bank in order to advance
concerns and demands of their membership.

PRODUCT LINES
The most precise definition of product is anything capable of satisfying needs, including tangible
items, services and ideas. In marketing, a product is anything that can be offered to a market that
might satisfy a want or need.7 Since 1575, the word "product" has referred to anything produced.
Since 1695, the word has referred to "thing or things produced”. The economic or commercial
meaning of product was first used by political economist Adam Smith. In general usage, product
may refer to a single item or unit, a group of equivalent products, a grouping of goods or
services, or an industrial classification for the goods or services. The consumer banking products
include personal accounts, credit cards, loans, investment products, treasury products and many
more. The National Bank of Pakistan offering for sale several related products individually,
which is commonly known as product lining. A product line is defined as “A group of products
that are closely related because they function in a similar manner, are sold to the same customer
groups, are marketed through same types of outlets, or fall within the given price ranges”. 8 The
followings are the main consumer banking products of NBP.

1. DEPOSITS
The National Bank of Pakistan offers to their clients a variety of Deposit Schemes with
personalized services at competitive rates of interest. Any Pakistani citizen can open his/her
account for any deposit scheme at any of its Branches strategically located throughout Pakistan.
The Bank with its huge network of 1243 branches garners savings from both the rich and the
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poor in urban as well as rural areas. Even a poor farmer in a remote village, with his meager
annual income, feels secure to safe keep his minuscule savings in National Bank of Pakistan,
Because National Bank of Pakistan has a long heritage of trust and professional commitment.

A) CURRENT DEPOSITS
These are payable to the customer when ever 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. Bankers in Pakistan do not allow nay profit on these deposits, and
customers are required to maintain a minimum balance, failing which incidental charges are
deducted from such accounts. This is because Current Deposits may be withdrawn by the
depositors at any time, and as such the bank is not entirely free to employ such deposits.9 Current
Accounts/ Basic Banking accounts are opened, on proper introduction and submission of
required documents along with initial deposit prescribed from time to time. Basic banking
accounts are opened for an individuals (single or joint) only whereas current accounts are opened
for individuals (single or joint) Charitable institution, provident and other funds of benevolent
nature of local bodies, autonomous corporations, companies, associations, educational
institutions, firms etc. and in all other cases where the accounts are to opened under the order of
a competent court of law. No profit is paid on the balances of current/basic banking accounts.
The bank is authorized to deduct service charges (incidental charges) on current accounts levied
through its half yearly schedule of charges, in case the average balance falls below the minimum
balance as prescribed by the bank. No balance maintenance condition is applied on basic banking
account.

B) PLS SAVING DEPOSITS


In Pakistan, a Savings Deposits Account can be opened with a 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 monthly bases under the Interest Free Banking System. There is no restriction on the
withdrawals from the deposit accounts but the amount of money withdraw is deleted from the
amount to be taken for calculation of products for assessment of profit to be paid to the account
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holder. It discourages unnecessary withdrawals from the deposits. In order to popularize the
scheme the SBP has allowed the Savings Scheme for school and college students and industrial
labour also. The purpose of these accounts is to inculcate the habit of savings in the constituents.
As such, the initial deposits required for opening these accounts are very nominal. 10NBP charge
Rs.500 for opening of PLS Savings deposits.

The silent features of profit and loss sharing and saving accounts of NBP are as fallows

1. These accounts can be opened by individuals in their own single or joint name. The PLS
savings account can also be opened for provident fund or other benevolent funds of
companies, firms, organizations, NGO’s and educational institutions.
2. PLS saving account can be opened with a minimum amount of Rs.500/- only
3. To share in the profit a minimum balance of Rs.500/- must be maintained in the account.
The minimum balance on sixth and last of month will qualify for the profits. The profits
will be calculated on the basis of monthly minimum balance for the periods of six months
i.e. from January to June and July to December
4. The head office of NBP determines the profit or loss on PLS saving deposits and advice
its branches the rate and time of distribution of these profits.
5. There shall be no restrictions on maintaining the maximum balance in PLS saving
account.
6. On the first day of Ramzan each year the Zakat at the rate of 2.5% will be deducted from
these deposits on the balance of that day. But if depositors affix an affidavit of Zakat
deduction along with account opening form or he is a non-Muslim, no Zakat will be
deducted from his account.

C) FIXED DEPOSIT ACCOUNT (TIME DEPOSITS)


The deposits that can be withdrawn after a specified period of time are referred to as Fixed or
Term Deposits. The period for which these deposits are kept by the bank ordinarily varies from
three months to five years in accordance with the agreement made between the customer and the
banker. Profit/Return is paid to the depositors on all fixed or Time deposits, and the rate of
profit/Return varies with the duration for which the amount is kept with the banker. By lending
out or investing these funds, the bank earns more than the Profit/Return that it has to pay on them
to the depositors.11 By giving an advance notice to the bank the deposit can be withdraw from
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the bank before the expiry of the period. Fixed deposit accounts have higher rate of interest as
compare to other accounts. The rate of interest rises with the length of period and the amount of
deposit. The bank grants to the depositor a fix deposit (FDR) which is not transferable to any
other person. The silent features of fixed deposit account of NBP are as fallows

1. The PLS term deposit are opened for individuals in their own single or joint names,
companies firms and other organizations.
2. The PLS term deposit receipt are issued for any amount. There is minimum or maximum
limit or deposits in a single term deposit account.
3. PLS term depositors may be allowed some facilities against the security of these receipt
credits, after making “Lien” on the relevant receipt and subject to recovery of service
charges.
4. Under term deposit scheme the depositors not cease to earn the profit immediately, after
the respective maturity date.

D) FOREIGN CURRENCY ACCOUNT


Government of Pakistan has introduced many important reforms in Foreign Exchange Control in
the country since February, 1990, for the purpose of strengthening the Foreign Exchange
Reserves. One of these reforms relates to foreign currency accounts, which can be opened in
United States Dollars, Pound Sterling, Euro and Japanese Yen in any of the authorized branches
of commercial banks throughout the country.12 Foreign currency accounts are opened, on proper
introduction and submission of required documents along with an initial deposit prescribed from
time to time. Rates of return on foreign currency deposits are subject to fluctuation as determined
in accordance with State Bank of Pakistan directives and will be paid on six monthly basis
whereas the return on term deposit/SNTD will be paid on maturity or as prescribed by SBP. The
bank shall have no responsibility for or liability to the account holders for any diminution due to
taxes imposed or depreciation in the value of funds credited to the account whether due to
devaluation or fluctuation in the exchange rate or other wise.

E) NBP PREMIUM AAMDANI


NBP Premium aamdani is a retail product of the bank. The amount of investment required for
this account is Rs. 20,000/-to Rs. 5,000,000.The investment period is 5 years. Zakat and
P a g e | 23

withholding tax will be deducted as per rules. In NBP premium aamdani, the account holders
have benefit of free demand draft, pay order; free cheque book and NBP cash card (ATM+Debit).
The Financing facility is available up to 90% of the deposit value. 13 Profit paid every period as
follows:

Period Profit Rates


1st year 7.50%
2nd years 8.50%
3rd years 9.50%
4th years 10.50%
5th years 11%
f) NBP Premium Saver

NBP Premium saver is a retail product of the bank. The minimum saving balance of Rs. 20,001
and a maximum balance of Rs. 300,000 are required for opening a premium saver account. Two
debit withdrawals allowed in a month and no limit on number of deposit transactions. The profit
is calculated monthly and Paid on half yearly basis. Free NBP Cash Card (ATM + Debit) facility
is available to account holder.14

G) NATIONAL INCOME DAILY ACCOUNT (NIDA)


The scheme of National income daily account 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. Deposits in the NIDA accepted on the condition
that the depositor shall always maintain a minimum balance as prescribed by the bank in his
account. In the event however, that any depositor wishes to withdraw the amount and the balance
in his account is less than the required amount, the account will be converted to the ordinary PLS
SB account for the purpose of calculating profit. An example of how the NIDA accounts are
maintained is shown on the next page.

R ATES ON N ATIONAL INCOME DAILY ACCOUNT

From Rs 2/- million to Rs 50/- the rate is 1.4%.


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From Rs50/- million but less than Rs 500/-million, the rate is 1.5%.

From Rs 500/- million but below Rs 1000/- the rate is 1.6%.

From Rs 1000/- and above the rate is 1.75%.

S ALIENT F EATURES

Rs 2-million is required to open an account and there is no maximum limit.

Profit is paid on half yearly basis on monthly balances.

The rates of profit vary according to the slabs of deposit. On Deposits of Rs.2 million to
2,000 million, the rate fluctuates from 1.4 to 1.75

It is a checking account and there is no limit of withdrawals.

2. ADVANCES
National Bank of Pakistan plays a pivotal role in translating the government's development plans
in terms of growth in industrial, commercial and agricultural sectors in Pakistan. Accordingly the
Bank has formulated its Credit Policy under the guidelines of SBP-the Central Bank of Pakistan.

A) NBP SAIBAAN
The NBP Saibaan is retail product of the bank. It has different product items which are home
purchase, home construction, home renovation and purchase of land plus construction. If anyone
has a Home Finance Facility outstanding with another bank he can have it transferred to NBP
through a hassle-free process. 15 A brief description of these products is as fallows

TYPE OF ADVANCE Financing Amount Financing Period Debt to equity


Ratio
Home Purchase (House or Apartment) Rs. 35 Million 3 to 20 years 85:15 (maximum)
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Home Rs. 35 Million 3 to 20 years 85:15 (maximum)


Construction
Home Renovation Rs. 15 Million 3 to 15 years 80:20 (maximum)
Purchase of land Plus Construction Rs.35 Million 3 to 20 years 80:20 (maximum)

B) NBP ADVANCE SALARY


The NBP Advance salary has been the flag-ship product for NBP. NBP Advance Salary, the
leading personal loan product of the country, is maintaining its inimitability ever since it was
launched. This was only possible due to its swift growth and remarkable loan disbursement of
over 118 billion.16 You can avail up to 20 net take home salaries with easy repayment
installments. Its hassle free acquisition with no prior formalities and easy availability in a short
turn around time is attributed as the most distinguishing features of the product. The product is
offered countrywide. The terms and conditions of NBP Advance salary is shown on next page:

T ERMS & C ONDITIONS

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


Autonomous, Semi Autonomous, Local & other bodies
who are maintaining their Salary A/Cs at NBP.
Repayment Direct deduction from Salary A/C
Maximum Loan Rs. 490,000/-
Amount
Security Employer will provide undertaking that borrower’s Salary
and end of service benefits will route through his/her
Salary A/C maintained at NBP during the tenure of the loan
and his/her end of service benefits are at least equal to the
amount of Advance Salary required.

Hypothecation of Consumer durables owned by the


borrower.
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Three (3) Undated Cheques


Max. Repayment 5 years (60 months)
Period
Advance in terms of # Up to 20 net take home salaries
of net take home
salaries
Markup Rate 15 %
(Based on diminishing balance method)
Processing Fee 1% of Loan Amount
Verification Charges Rs 500/-
Life Insurance No Insurance of any kind.
Documentation at actual
Charges
Contact Your Salary disbursing NBP Branch.
Remaining Service At the time of approval and disbursement the applicant’s
Age remaining service age should be 6 months after maturity of
the loan
Debt Burden 50%
Minimum net take no minimum take home requirement
home salary
P a g e | 27

C) NBP CASH & GOLD


With NBP’s Cash & Gold, the customers meet their need for ready cash against their idle gold
jewelry. The rate of mark up is 13% p.a. This product has following features17

Facility of Rs. 7,000 against each 10 grams of net contents of gold


No maximum limits of cash
Repayment after one year
Only gold ornaments acceptable
Weight and quality of gold to be determined by NBP's appointed schroffs
No penalty for early repayment

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

B) RUNNING FINANCE/ OVERDRAFT


This is the most common form of bank lending. 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
P a g e | 28

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.

C) DEMAND FINANCE
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 borrower’s disposal in lump sum for the period agreed upon,
and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a
fixed amount of money for his use, while the banker feels satisfied in lending money in fixed
amounts for definite short periods against a satisfactory security.

2. REMITTANCES
A) DEMAND DRAFTS
Drafts drawn by one branch on another branch or on the Head Office of same bank or vice versa,
are not cheques or bills, as these have no distinct drawer and drawee. Section 85-A reads:

“ Where any draft, that is, an order to pay money, drawn by one office of bank upon another
office of the same bank for a sum of money payable to order on demand, purports to be issued by
or on behalf of the payee, the bank is discharged by payment in due course”.

Banker’s drafts payable to order on demand are within the protection of Sections 10 and 131-A
of the Negotiable Instruments Act. However, if a demand draft drawn on a bank by its own
branch bears a forged endorsement, the person in possession of it cannot compel that bank to pay
it. As far as possible the banker’s draft should be crossed and it should never be drawn payable to
bearer.
P a g e | 29

When a person requires a draft he should be asked to complete the prescribed application form in
which he should state the amount of the draft, the name of the payee, and the place of payment.
This application form should be signed by the purchaser or by those persons who have been duly
authorized to act on his behalf. When a customer requests his banker to provide him with a
banker’s draft, the amount of which is to be debited to his account, he should enclose with his
written request a cheque covering the amount of the required draft and other charges etc. payable
to banker.18

The National Bank of Pakistan provides demand drafts at very reasonable rates with safety,
speedy and reliable way to transfer money. Any person whether an account holder of the bank or
not, can purchase a Demand Draft form a bank.

B) TRAVELERS CHEQUES
They are generally issued for the convenience of person travelling abroad, but some Pakistani
banks issue them in Pakistan currency also for use within the country as well. Before issuing, the
bankers receive an amount equal to the face value of the cheques, and also charge a small
commission. The travelers’ cheques are for fixed amount and are treated as Order cheques
payable only to the purchaser whose specimen signature appears on each traveler’s cheque itself.
Foreign currency travelers cheques are issued and encashed in accordance with the provisions of
the Exchange Control Regulation Act, 1947. While making payment, the paying banker must
insist that the holder signs in his presence.19

The National Bank of Pakistan provides their services for traveler’s cheque at very reasonable
and competitive rates. It has following features

Negotiability Pak Rupees Traveler’s Cheques are a negotiable


instrument
Validity There is no restriction on the period of validity
P a g e | 30

Availability At 700 branches of NBP all over the country


Encashment At all 400 branches of NBP
Limitation No limit on purchase
Safety NBP Traveler’s Cheques are the safest way to carry our money

C) LETTER OF CREDIT
Letters of credit are very useful instruments in facilitating commercial relations between
businessmen at various places. Letter of credit state the limit of the credit and the time during
which it is held at the disposal of the grantee, but they are neither negotiable nor transferable.
Letter of credit may be revocable. There are many kinds of letter of credit such as Revolving
credit, Back to Back credit, Claused credit etc.20 NBP is committed to offering its business
customers the widest range of options in the area of money transfer. If you are a commercial
enterprise then our Letter of Credit service is just what you are looking for. With competitive
rates, security, and ease of transaction, NBP Letters of Credit are the best way to do your
business transactions.

D) 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 the
beneficiaries.

The new features of NBP foreign remittances include:

The existing system of home remittances has been revised/significantly improved and
well-trained field functionaries are posted to provide efficient and reliable home
remittance services to nonresident Pakistanis at 15 overseas branches of the Bank besides
United National Bank (the joint venture between NBP and UBL in UK)., and Bank Al-
Jazira, Saudi Arabia.
Zero Tariffs: NBP is providing home remittance services without any charges.
Strict monitoring of the system is done to ensure the highest possible security.
P a g e | 31

Special courier services are hired for expeditious delivery of home remittances to the
beneficiaries.

E) SWIFT SYSTEM
The SWIFT system (Society for Worldwide Inter bank Financial Telecommunication) has been
introduced for speedy services in the area of home remittances. The system has built-in features
of computerized test keys, which eliminates the manual application of tests that often cause delay
in the payment of home remittances. The SWIFT Center is operational at National Bank of
Pakistan with a universal access number NBP-PKKA. All NBP overseas branches and overseas
correspondents (over 450) are drawing remittances through SWIFT. Using the NBP network of
branches, we can safely and speedily transfer money for our business and personal needs.

F) 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 some one want a duplicate of payment
order they charges Rs 100/- for NBP account holders and Rs 150/- for non account holders.

3. MISCELLANEOUS
A) LOCKERS
National of Pakistan also provides lockers facility in the country. The lockers issued only to the
depositors. No lockers are issued to any unknown person. The dual control system is used for
lockers. The officer has master key to apply on the locker but he cannot open the locker of any
person. The locker holder provides the bank has specimen signature. Whenever the locker
holders come to open the locker, his signatures are verified by the officer and then will be able to
open his locker. If the key of the locker is lost company providing these lockers breaks the locker
and new lock is fitted in its locker and lock is destroyed in the presence of the locker holder and
P a g e | 32

bank charges RS 1200 for that. In case the locker holder dies, the court opens his locker in the
presence of his heir as mentioned in his will or and his belongings are given to them and the
locker is closed.

B) NBP CASH CARD


NBP Cash Card is a 24-hour direct access ATM/Debit card to your bank account, which lets you
pay directly from your account as an alternative payment method to cash. The transaction is
authorized and processed by entering PIN. The NBP Cash Card holders are able to transact at
any of the 4000 + Merchants where Orix logo is displayed and can withdraw cash from NBP, 1-
Link & M-NET ATM’s across the country. The followings are the main features of this product:

You won't need to carry a lot of cash with you every time you go out.
Secure and Safe transaction.
Account Information on tips (like: Mini Statement, Balance Inquiry, Utility Bill Payment
etc.)
Enable To Withdraw Cash From 1-Link ATMs / MNET ATMs.
Enable to Make Purchases from Around 4000 POS (Merchants) Countrywide including
2500+ POS in Karachi.
No Card Issuance Fee for first 12 Months

C) INTERNATIONAL BANKING
National Bank of Pakistan is at the forefront of international banking in Pakistan which is proven
by the fact that NBP has its branches in all of the major financial capitals of the world.
Additionally, the Bank has 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
P a g e | 33

WEEKLY LEARNING

These are following learning points for me in the bank.

Duties

In my 1st and 3nd week in NBP I worked under the assistance of Mr. Muhammad Tanveer
(Branch Manager) from him I learn about activities related to Deposit Dept.: and performed
such activities like:

 Opening an account
 Issue new cheque books

 Sorting out cheques


 Difference between cheques of current, saving and royal account

And I also scrolled the challan of Government and pass vouchers.

In my 4rd and 6th week in NBP, they assigned me work related to pension department. The staff
guided me very nicely and I learned lot of things pension related activities. They give the pension
to retired Govt. employees. There are three types of pensions given,

 Provincial
 Central

 Defense

These are different according to their PPO numbers

For example:
P a g e | 34

Provincial PPO 123456

Central PPO 12345/Pak

Defense PPO da/dg1/gh/4 etc.

I am full trained now in this particular job and I served lot of people in that week. How to fill
farm? How to enter in ledgers and balance account and what are file and book and all other
things concerning to pension department.

In 7th week I worked under the assistance of Mr. Muhammad Tanveer (Branch Manager) from
him I learn about remittance activities:

 Demand Draf

 Telegraphic Transfer

 Pay Order

 Mail Transfer

In 8th week I learnt the swift operations. How swift system works and managed and how to
transfer money through swift system.

ORGANIZATIONAL STRUCTURE OF NATIONAL BANK OF


PAKISTAN
A well-developed and properly coordinate structure is an important requirement for the success
of any organization. It provides the basic framework within which functions and procedures are
performed. Any organization needs a structure, which provides a framework for successful
operations. The operation of an organization involves a number of activities, which are related to
P a g e | 35

decision making, and communication of these decisions. These activities must be well
coordinated so that the goals of the organization are achieved successfully.

The Organization Structure (Annexed I) shows the internal operations and reporting lines of the
National Bank of Pakistan. The bank has clearly defined organizational structure, which supports
clear lines of communications and reporting relationships. There exists a properly defined
financial and administrative power of various committees and key management personnel, which
supports delegations of authority and accountability.

The internal operations of the Bank are organized into 15 main departments and divisions
headed by senior management of the bank and are report directly to the Board of Directors. The
organizational structure of National Bank of Pakistan is centralized because all the decisions of
the bank are taken by the top Management. The National Bank of Pakistan’s Departmental key
roles and functions are as follows:

BOARD OF DIRECTORS
Pursuant to Section 11 of The Banks’ (Nationalization) Act, 1974, the number of Directors of the
Bank shall not be less than 5 and not more than 7, excluding the President. The Federal
Government may, if deems necessary, appoint a Chairman of the Board in respect of the Bank. At
present National Bank of Pakistan’s Board of Directors consist of 6 Directors and a President
who is the Chief Executive of the Bank and presides over the meetings of the Board. The
responsibilities of Directors include the followings:21
1. The Board of Directors shall assume its role independent of the influence of the
Management and should know its responsibilities and powers in clear terms. it should be
ensured that the Board of Directors focus on policy making and general direction,
oversight and supervision of the affairs and business of the Bank and does not play any
role in the day-to-day operations, as that is the role of the Management.
2. The Board shall approve and monitor the objectives, strategies and overall business plans
of the institution and shall oversee that the affairs of the institution are carried out
prudently within the framework of existing laws & regulations and high business ethics.
3. All the members of the Board should undertake and fulfill their duties & responsibilities
keeping in view their legal obligations under all the applicable laws and regulations.
P a g e | 36

4. The Board shall clearly define the authorities and key responsibilities of both the
Directors and the Senior Management without delegating its policy-making powers to
the Management and shall ensure that the Management is in the hands of qualified
personnel.
5. The Board shall approve and ensure implementation of policies, including but not limited
to, in areas of Risk Management, Credit, Treasury & Investment, Internal Control
System and Audit, IT Security, Human Resource, Expenditure, Accounting & Disclosure,
and any other operational area which the Board may deem appropriate from time to time.
The Board shall also be responsible to review and update policies periodically and
whenever circumstances justify.
6. As regards Internal Audit or Internal Control, a separate department shall be created
which shall be manned preferably by professionals responsible to conduct audit of the
Bank, Various Divisions, Offices, and Units Branches etc. The Head of this department
will report directly to the BOD or Board Committee on Internal Audit.
7. The business conditions and markets are ever changing and so are their requirements.
The Board, therefore, is required to ensure existence of an effective ‘Management
Information system’ to remain fully informed of the activities, operating performance
and financial condition of the institution, the environment in which it operates, the
various risks it is exposed to and to evaluate performance of the Management at regular
intervals.
8. The Board should meet frequently (preferably on monthly basis, but in any event, not
less than once every quarter) and the individual directors of an institution should attend
at least half of the meetings held in a financial year. The Board should ensure that it
receives sufficient information from Management on the agenda items well in advance of
each meeting to enable it to effectively participate in and contribute to each meeting.
9. The Board should carry out its responsibilities in such a way that the external auditors
and supervisors can see and form judgment on the quality of Board’s work and its
contributions through proper and detailed minutes of the deliberations held and decisions
taken during the Board meetings.
10. To share the load of activities, the Board may form specialized committees with well-
defined objectives, authorities and tenure. These committees, preferably comprising of
‘Non- Executive’ Board members, shall oversee areas like audit, risk management,
P a g e | 37

credit, recruitment, compensation etc. these committees of the Board should neither
indulge in day-to-day affairs/operations of the bank and enjoy any credit approval
authority for transaction/limits. These committees should apprise the Board of their
activities and achievements on regular basis.
11. The Board should ensure that it receives management letter from the external auditors
without delay. It should also be ensured that appropriate action is taken in consultation
with the Audit Committee of the Board to deal with control or other weaknesses
identified in the management letter. A copy of that letter should be submitted to the State
Bank of Pakistan so that it can monitor follow-up actions.

SENIOR MANAGEMENT
The senior management of National Bank of Pakistan is consists of Group chiefs, who report
directly to the Directors of Bank. The whole functions of National Bank of Pakistan are
performed under these Groups. The National Bank of Pakistan has following groups and
divisions:

Corporate and investment Banking Group


Operations Group
Credit Management Group
Audit & Inspection Group
Compliance Group
HRM & Administration Group
Commercial & Retail Banking Group
Treasury Management Group
Special Assets Management Group
Employees benefit & Disbursements Group
Overseas & Coordination Group
Islamic Banking
Core Banking Application, PMO
Financial Control Division
Information Technology Group

Name Group Name & Designation


Masood Karim Shaikh SEVP & Group Chief, Corporate & Investment Banking Group
Shahid Anwar Khan SEVP & Group Chief, Credit Management Group
Dr. Asif A. Brohi SEVP & Group Chief, Operations Group
Imam Bakhsh Baloch SEVP & Group Chief, Audit & Inspection Group
P a g e | 38

Ziaullah Khan SEVP & Group Chief, Compliance Group


Dr. Mirza Abrar Baig SEVP & Group Chief, Human Resources Management & Administration Group
Amer Siddiqui SEVP & Group Chief, Commercial & Retail Banking Group
Muhammad Nusrat
Vohra SEVP & Group Chief, Treasury Management Group
Amim Akhtar EVP & PSO to the President
Ekhlaq Ahmed EVP & Secretary Board of Directors
Tajammal Hussain Bokharee EVP/Divisional Head, Special Assets Management Group
Mrs. Khurshid Maqsood Ali EVP & Divisional Head Employee Benefits, Disbursements & Trustee Division
Tahir Yaqoob EVP & Group Chief, Overseas Coordination & Management Group
Anwar Ahmed Meenai EVP & Divisional Head, Islamic Banking
Naeem
Syed EVP & Head, Core Banking Application, PMO
Aamir Financial Controller & Divisional Head, Financial Control
Sattar Division
Atif Hassan Khan Group Chief (A), Information Technology Group

1. CORPORATE & INVESTMENT BANKING GROUP


The corporate & investment banking group is headed by Mr. Masood Karim Shaikh. This group
performs its function through its following two units:
Corporate Banking
Investment Banking
The corporate and investment banking will continue to play a major role in loan syndications,
structured financing and debt / capital raising transactions with the objective of providing entire
range of corporate and investment banking solutions to its valued clients under one umbrella.

The Corporate Banking Group achieved excellent results in 2015 with a number of landmark
transactions in cement, energy, communication and fertilizer sectors. In addition to the funded
income, our corporate and investment banking has substantially increased its fee base income
this year by being the lead advisor in a number of transactions in the corporate world of Pakistan

The challenges to corporate business in year 2015 were manifold including reduction in Private
Credit Investment as a result of slowing down of economy as well as rising interest rates. The
P a g e | 39

increasing pressure on the textile industry reduced the lending to this sector. In addition the
bank's corporate loans yields also faced pressure as substitute form of funding sources are
available in the market in form of Islamic financing, mutual funds, issuance of debt instruments
like TFCs and Bonds and the Capital markets.

Despite these threats and challenges at NBP, our corporate team not only increased the volume as
well as the yield of the loans they also maintained a strong franchise with the leading Pakistani
corporate so as to ensure that NBP not only maintains its market share but is in a position to meet
any challenges in future. NBP during the year also participated in a number of TFC issues and
mutual funds subscriptions thereby increasing the overall yield on investment portfolio.

NBP has the largest equity portfolio in the banking sector primarily due to 27% holding in NIT
units, the largest mutual fund in Pakistan. During the year 2016 the bank redeemed 10% of its
NIT holding covered under LoC, which resulted in capital gain of Rs. 1.8 billion in 2016.

The National Bank of Pakistan has initiated a structured approach to corporate banking by
introducing a single point of contact through Relationship Managers. For this purpose, new
Relationship Managers as well as team leaders has been inducted to expedite this process. The
Area Managers of National Bank of Pakistan are appointed to manage relationships and to better
service the needs of multinationals and large local corporate. An investment banking team has
also been formed by National Bank of Pakistan to offer specialized services to major
relationships including advisory and debt syndications. The National Bank o Pakistan have
special focus on Corporate Banking with a presence in all major locations through out the
country, offering full range of Banking products / services and one window interface through
designated Relationship Managers. Corporate Banking offers tailor made products / solutions as
required by corporate customers which includes:

The key features of corporate Banking includes:

Funded facilities, ranging from short to medium and long term lending

Trade related financing.


Foreign currency financing.
P a g e | 40

All sorts of non-funded facilities / services which include Cash receipts / payments,
Remittances, Collections, guarantees, letter of credit etc.
Customized products / solutions

2. COMPLIANCE GROUP
The Compliance Group of National Bank of Pakistan is headed by Mr. Ziaullah Khan and is
report directly to the President/ Chief executive of NBP. In order to keep the working of Audit
Department aligned with the best international practices 'Compliance Group’ has been created.
This group is responsible for monitoring compliance of various administrative / operative
instructions, rules, and regulations by constantly reviewing and reporting status of compliance
and non-compliance. The Compliance Group of NBP is set to ensure that all relevant laws are
complied with, in letter and spirit, and, thus, minimize legal and regulatory risks. The
Compliance officers will primarily be responsible for Bank’s effective compliance relating to:
Relevant provisions of existing laws and regulations.
Guidelines for KYC.
Anti money laundering laws and regulations.
Timely submission of accurate data / returns to regulator and other agencies.
Monitor and report suspicious transactions to President / Chief Executive Officer of the
bank and other related agencies.
The Compliance Officers will serve as a contact point between President /Chief executive
officers and senior management, with regard to functioning of compliance program
provide assistance in this area to branches and other departments of the bank, and act as
liaison with State Bank of Pakistan concerning the issues related to compliance.
The functions of compliance group of National Bank of Pakistan are as fallows:
Study and emphasize compliance of best international practices in audit of various
functions of NBP.
Monitor compliance of Administrative/Operational Instructions, Rules, Regulations
issued from time to time by the Management.
Review over the compliance carried out by the audit departments.
Prepare and put up a consolidated Report to the Directors of National Bank of Pakistan
regarding the status of compliance and non-compliance of the recommendations agreed
by the Departmental Management.

3. ISLAMIC BANKING GROUP


P a g e | 41

The divisional head of Islamic Banking group is Mr. Anwar Ahmed Meenai. Islamic Banking is
one of the emerging field in global financial market, having tremendous potential and growing at
a very fast pace all around the world. Al-Hamdulillah, the progress of Islamic Banking in
Pakistan has also been commendable during the last Five years. The year 2015 marked the first
year of Islamic Banking operations. During the year under review, in addition to active
participation in various Sukuk transactions, two more Islamic Banking branches at Lahore and
Peshawar started operations. NBP's plans for the year 2016 include opening of Faisalabad and
Rawalpindi branches with the focus on growing organically by opening more standalone Islamic
Banking branches, utilizing NBP's existing branch network of 1,200 plus conventional branches
and looking into strategic acquisitions for expansion in this field. The products & services being
offered by National Bank of Pakistan’s Islamic Banking are fully Shariah Compliant and have
been certified by NBP’s Shariah Advisor. Deposit Schemes being offered by NBP’s Islamic
Banking Branches include the following:
a) Current Deposit Scheme
b) Profit & Loss Sharing (PLS) Deposit Scheme
Commercial and Corporate customers requiring financing will have the following financing
facilities available to them to meet their requirements:
a) Murabaha
b) Murabaha Facility
c) Ijarah (Leasing)
In addition to Shariah acceptable standard general banking services, following services are also
being offered at the Islamic Banking Branches:
Letter of Credit Facility
Handling of Remittances
Issuance of Bank Drafts and Pay Orders.
Collection of Export Bills.
Collection of Local Bills.
Government Collections
Utility Bills Collection

4. TREASURY MANAGEMENT GROUP


The group chief of Treasury management group of National Bank of Pakistan is Mr. Muhammad
Nusrat Vohra. The NBP treasury and capital market group has developed a reputation of being
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the market leader in coming up with customized solutions for a large and varied client base that
is spread virtually all across the country. The client base does not consist of only blue chips ones
but encompasses public sector clients, retail sector, multinationals, local conglomerates as well
as individuals.
National bank treasury is currently regarded as a market leader in both foreign exchange and
rupee denominated products because of its emphasis on service quality. The Treasury
management group of National Bank of Pakistan’s offer:22
Narrowest bid / offer spread and quickest on line quotes
Customized solutions to minimize risk and optimize returns as per the needs and
circumstances of the clients
Focus on building sustained and long term relationship with institutional, corporate and
retail clients.
Local presence across the nation as well as internationally.
Currently the National Bank of Pakistan offer following Treasury Products:23

A) P LAIN V ANILLA FX P RODUCTS


NBP Treasury Management Group is a market price maker and trend setter in the plain vanilla
Foreign Exchange products. Its ability to offer tight prices, coupled with timely and accurate
research making it a bank of choice for clients seeking to favorably position their currency risk
As a result, National bank has one of the largest FX book in the country.

B) P AKISTAN I NVESTMENT B ONDS


Pakistan Investment Bonds issued by Government of Pakistan are a preferred means for a
majority of institutional investors to invest their surplus funds for a longer time horizon. This
way they are able to lock a higher yield for a relatively long term rather than take the risk of re-
pricing after relatively shorter time periods. Furthermore, PIBs are highly secured and risk free
as they are guaranteed by the government of Pakistan.

NBP is the leading Primary Dealer for PIBs primarily because of its inventory size and the
appetite for such a long-term instrument given its deposit base. While most foreign / private
banks would have to go to the secondary market in order to satisfy a large order from an
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institutional investor, NBP can execute such large orders through its own book. This means that
it can offer tight prices for large amounts even under volatile market conditions.

C) D ERIVATIVES P RODUCTS
NBP treasury Management group has been at the forefront in developing the derivatives market
in Pakistan and has contributed both individually and from the FMA (Financial Market
Association) front as well. The first ever Derivative transaction of the Pakistani banking sector
was done by NBP. Some of the more common derivative structures being offered include:

1) C URRENCY O PTIONS
An option gives the buyer the right but not the obligation to buy or sell an asset at a pre-specified
date and price. So the upside profit potential is unlimited whereas the downside loss is protected
at a pre determined level. Various structures of currency options are available including
Knock-ins / Knock outs
Participating Forwards

2) I NTEREST R ATE S WAPS AND FRA S


A client can convert a fix rate loan into floating rate one or vice versa by using these derivative
instruments. This allows the clients to develop and implement their views about the evolving
interest rate scenario. For example, if the borrower feels that the interest rate might go up in the
future, than he may choose to enter into a Pay Fixed – Received Floating swap with its bank to
effectively hedge its floating rate loans.

3) C ROSS C URRENCY S WAPS


This product allows a client to convert its rupee based loans into a dollar based loan. The client’s
exposure is shifted from PKR KIBOR to USD LIBOR.
The functions of Treasury management group include:
The Management of National Bank of Pakistan’s holdings in and trading in government
and corporate bonds, currencies, financial futures, options and derivatives, payment
systems and the associated financial risk management.
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The management of cash flows, banking, money-market and capital-market transactions;


the effective control of the risks associated with those activities; and the pursuit of
optimum performance consistent with those risks.
Presentations of information on which treasury-management decisions are to be taken
reflect the principles of trustworthiness, honesty, truthfulness and objectivity.
Employing National Bank of Pakistan’s treasury-management policies and practices
accurately reflect the legal and regulatory regimes under which the Bank operates.
Review of National Bank of Pakistan’s treasury-management policies and practices on a
regular basis with a view to identifying ways of minimizing the risks of losses through
improved checks and safeguards and through clarity and segregation of responsibilities
and dealing procedure.

5. CREDIT MANAGEMENT GROUP


The group chief of Credit Management Group is Mr. Shahid Anwar Khan. This group usually
deals with Bank’s allocations of payments or cash application, internal fund movements,
reconciliations and also maintaining positive working relationships with customer during the
debt collection or credit review and approval process, screening of customers and only those who
is credit worthy are allowed to do business. The divisions of this group are distributed according
to different areas which are:
1) NWFP Azad Kashmir Sind & Balochistan area wing
2) Karachi area wing
3) Special Credit Cell & Punjab area Wing
The functions of this department include:
Enforcing the State Policies, financial regulations, and credit rules of the bank
Framing credit policies and regulations; supervising the staff to execute orders
Putting forward the proposal of credit management and development; guiding and
supervising the branch-banks to deal with credit business
Managing the authorized business; dealing with the legal affairs consulted and
coordinated
Establishing development rules on credit; dealing with the acceptance draft; estimating
the loaning accounts
Responsible for reporting the credit statistic statement
Responsible for training client managers
Responsible for dealing with other work according to the directors of the bank
Responsible for the credit-registered consulting system; regulating the five-graded loans
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6. AUDIT & INSPECTION GROUP


The group chief of National Bank of Pakistan’s Audit & inspection group is Mr. Imam Bakhsh
Baloch. It is one of the core departments at NBP. Its mission is to strive for soundness & stability
of the financial system and safeguard interest of stakeholders through proactive inspection,
compatible with best international practices. This group plays a vital role in meeting NBP’s main
responsibility of supervising the bank’s soundness of the system and protection of the interest of
depositors, thereby ensuring public confidence in the system. In order to assess the branches,
Audit & inspection group conducts regular audit & inspection of branches. Bank's management
has established and is managing an adequate and effective system of internal control which
encompasses the policies, procedures, processes and tasks as approved by the Board of Directors
that facilitate effective and efficient operations. The management and the employees at all levels
within the Bank are required to perform as per these approved Internal Control System
components. The Internal Control System ensures quality of external and internal reporting,
maintenance of proper records and processes, compliance with applicable laws and regulations
and internal policies with respect to conduct of business. The management ensures that an
efficient and effective Internal Control System is in place by identifying control objectives,
reviewing existing procedures and policies and ensuing that control procedure and policies are
amended for time to time wherever required. However, Internal Control System is designed to
manage rather than eliminate the risk of failure to achieve objectives and provide reasonable but
not absolute assurance against material misstatement or loss.24 The audit system of National
Bank of Pakistan consists of following:
a) Internal Audit
b) External Audit
c) Statutory Audit

A ) I NTERNAL A UDIT
The Bank has an independent Internal Audit Group that conducts audit of all Branches, Regions
and Groups at Head Office on an on-going basis to evaluate the efficiency and effectiveness of
Internal Control System. In addition to that, Compliance Group is also in place with independent
Compliance Officer in 119 Branches and 29 Regional Compliance Chiefs with supporting staff to
take care of compliance related issues to strengthen the control environment.25
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For the purpose of inspection the National Bank of Pakistan inspects its branches through
inspectors. Inspections are conducted on regular basis in the branches. The current chairmen of
audit committee of NBP are Azam Faruque, Ibrar. A. Mumtaz & Mian Kausar Hameed. The
State Bank of Pakistan conducts the regular full scope examination of banks pursuant to an
inspection schedule; however, flexibility exists in policy for frequency of inspections depending
upon the need to maintain safety & soundness. The CAMELS (Capital, Asset Quality,
Management, Earnings, Liquidity, Sensitivity and System & Controls) rating is a criteria to
determine the frequency of inspection of banks as weak institutions are given greater attention.
Special investigations (targeted inspections) are also conducted as and when circumstances so
warrant on the basis of complaints or market reports about specific institution.

B) E XTERNAL A UDIT
The Board of Directors on the recommendations of Audit Committee has also recommended
name of Messer’s Ford Rhodes Sidat Hyder, Chartered Accountants and Yousaf Adil Saleem &
Co. as auditors of National Bank of Pakistan.

C) S TATUTORY A UDIT
The statutory audit of National Bank of Pakistan is conducted to meet the particular requirements
of State Bank of Pakistan. The scope and audit programs are set by the State Bank of Pakistan.
The National Bank of Pakistan has to pay a penalty of Rs.20000 for each mistake in the Books
and procedures as prescribed by the law plus surcharge of per day from the date of mistake to the
date of statutory audit.

The functions of Audit & inspection group of National Bank of Pakistan are as fallows:

Examine and evaluate adequacy and effectiveness of the internal control systems in the
Bank.
Review the applications and effectiveness of risk management procedures and risk
assessment methodologies in financial, operational and Corporate Governance aspects of
the Bank’s activities.
Review financial, automation technology and MIS.
Review and ensure accuracy and reliability of accounting records and financial reports.
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Perform testing of both transactions and functioning of specific internal control


procedures.
Evaluate and ensure that approved policies and procedures meet legal and regulatory
requirements.
Examine and evaluate effectiveness of existing policies, procedures and give
recommendations for improvements.
Identify opportunities for cost savings in Bank operations and make recommendations.
Examining those resources are acquired economically, used efficiently and safeguarded
adequately.
Review various reports of Bank’s subsidiaries, recommend improvements and provide
policy guideline

7. HUMAN RESOURCE MANAGEMENT & ADMINISTRATION GROUP


The group chief of Human resource management & administration group is Mr. Dr. Mirza Abrar
Baig. This Division is responsible for fresh induction of employees and other professionals
through a rigorous induction process in order to ensure presence of quality professionals.
Following units and areas of work are the part of this division. This group is responsible to
develop annual manpower plan for National Bank of Pakistan, conduct job analysis, prepare job
descriptions, and conduct job evaluation process. The other functions of this group include
attracting, selecting and recruiting the right people from the market. The group firmly works on
adopting latest organizational theories & change management processes to bring in efficiency.
This group also performs following functions:
Deals from placing job advertisements to timely recruitment of competent personnel by
using modern selection techniques.
Systematically observes & measures employee’s/candidate’s performance for the purpose
of recruitment, selection and promotions.
Facilitates in establishing successful productive working relationships through effectively
orienting new employees to their respective departments/divisions and to their positions.
Encourages employees to seek promotion/transfers to fill internal openings and meet
employees’ personal objectives.
Foster a culture of acknowledgement and appreciation amongst employees for
introducing innovative business practices, showing extra ordinary efforts for achievement
of goals and enhancing Bank’s corporate image uses various methods of recognition
ranging from simple “Thank you” letters to elaborate celebrations and monetary rewards.
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Conducting motivation surveys and developing market based employee satisfaction &
retention strategies.
Conduction of evaluation of positions and grades to ascertain employees’ position in the
grade structure.
This Group supervises all the staff colleges, at Karachi, Islamabad, Lahore and Peshawar.

8. INFORMATION TECHNOLOGY GROUP


The group chief of Information technology group is Mr. Atif Hassan Khan. This group is formed
to implement latest technology to keep National Bank of Pakistan online with the domestic and
international financial industry, and other stakeholders in order to promote efficiency and
stability in the financial market. The group’s objective is to provide appropriate technical
solutions to business requirements and develop state of the art integrated system that will
facilitate internal and external stakeholders to acquire accurate information in the most effective
manner. The National Bank of Pakistan with its capabilities, methodologies and experience aims
at technological advancement in bank, focusing on solutions that intend to reduce operating
costs, improves end user performance, and meet overall business goal.
The group provides services and solutions to improve and strengthen NBP’s technology portfolio
and identify future requirements. Besides providing these useful resources, IT group focuses on
safeguarding the information assets and relevant systems, critical to NBP, through its Security
plans and policies. The information technology group has following divisions:
In-house Development
Software development
Web development
Central Server
System Admin – UNIX
System Admin – Windows
Customer Support
Database Management
Network Management
Production Support
Administration
Director Section

9. FINANCIAL CONTROL DIVISION


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This division is headed by Mr. Atif Hassan Khan, who is also financial controller of National
Bank of Pakistan. The financial control division is responsible to perform and manage following
functions:
Maintenance of books of accounts and preparation of financial statements of the Bank in
accordance with the IAS, as adopted by the Bank.
Coordination and facilitation for Business planning and budgeting function in the Bank
and periodic reporting to the management and to the Board.
Preparation of Annual Financial Statements Accounting Policies for the bank.
Quarterly profit updates to the Board of Directors.
Consolidation of Departmental Budgets.
Maintenance of Federal & Provincial Government Account on the basis of receipt and
payments.
Monthly Abstract, Daily Reserves and Weekly review reporting.
Short/Medium term investment and Swap deposits and maintenance of Foreign Currency
accounts and revaluation of Foreign Currency Assets & Liabilities.
Making of payments to external suppliers and employees of the Bank after independent
verification of transaction documents on the basis of bills/ invoices/claims approved by
the processing units.
Checking and verifying the selected financial transactions to ensure accuracy and
compliance to respective rules and regulations.
Assets capitalization, assets transfers and overall responsibility to manage and maintain
assets physical inventory, keeping track of physical location of assets.
To ensure the smooth and unhampered running of the Fixed Assets Management
function.
To record all the expenses regarding repair/ maintenance and rent taxes for NBP
buildings and equipments.
To deal with various administrative matters arising in the Finance Department.
To respond to various queries rose from various internal and external sources.

10. OVERSEAS COORDINATION & MANAGEMENT GROUP


The group chief of NBP’s overseas coordination & management group is Mr. Tahir Yaqoob. This
department is in charge of the management and operation of foreign exchange business including
marketing and operating of the financial products and trade financing of foreign exchange in the
light of National foreign exchange management policy, and is the governing department of
foreign exchange. The functions of this group are as follows:
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Establishing marketing strategy, policy and management system of foreign exchange.


Making annual operating and working plan.
Selecting and opening overseas account under supervision, and establishing and
harmonizing the business among agent banks.
Corresponding and dealing with foreign exchange business among branches.
Showing business requirement of costumers and development of new products;
publicizing foreign exchange business; training managers of customer-service for foreign
exchange business.
Managing and operating foreign fund of the whole bank.
Making deposit and loan rate of each wholesale foreign exchange according to
management and market situation of deposit and loan rate of foreign exchange
Focusing on direct marketing of VIP customers and overall plans to put all resources
together so as to provide one-stop service.
Examining and approving international business financing(import & export bill purchase,
foreign exchange bill discount, acceptance, documentary credit, stand-by L/C,
international non-financing guarantee and so on) .
Auditing foreign exchange business.
Management and operation of researching credit, and consult and testimony business.
Managing turnover position of exchange settlement and sales.
Declaring international balance, register foreign loans and manage foreign exchange
account.
Supervising wholesale foreign exchange deposit and payment to defend money
laundering and bank swindle.
Managing and operating SWIFT system and foreign exchange system.
Organizing international business research and statistic; establishing and improving
foreign exchange files; making accounting report forms and business report forms.
Regularly examining the executive results of all system of foreign exchange and renovate
all the problems.
Contacting and corresponding with National foreign trade department, customs, industry
governing department and foreign exchange department.
Examining and approving the branches launching foreign exchange business, applying
for new foreign business category to the People’s Bank of China according to current
foreign exchange policy.
The National Bank of Pakistan is shifting focusing on expanding its market share in trade
finance, home remittance and foreign investments. The Bank is setting high-speed satellite link
along with the extension of S.W.IF.T service to large domestic and international branches.
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11. COMMERCIAL & RETAIL BANKING GROUP


The group chief of National Bank of Pakistan’s commercial & retail Banking group is Mr. Amer
Siddiqui. Retail banking includes retail lending and deposits, banking services, trust and estates,
private lending and deposits, banking service, trust and estates investment advice, merchant /
commercial / corporate cards and private labels and retail. 26 Commercial banking includes
project finance, real estate, export finance, trade finance, factoring, lending, guarantees, bills of
exchange and deposits.
This group is responsible for serving the needs of the retail and commercial market, focusing on
individual consumers and small and medium size enterprises. This group is responsible for
developing and managing brands which serve the investment needs of the consumer market, and
focuses on deposit mobilization, provision of value added services based on modern technology
and undertaking the centralized marketing and advertising for the Bank. This group is engaged in
the development and management of retail credit schemes. The consumer market in Pakistan has
not only grows exponentially over the last decade or so, but the needs of this segment have
become extremely diverse. In order to sustain competition, it is but imperative to continue
offering innovative consumer credit schemes.

The National Bank of Pakistan plan to establish commercial centers across the country looking at
the business potential in the area, size of the branch and its capabilities to deliver the desired
service in order to attract quality customers. The objective is to target the untapped sectors and
provide them professional quality service, through one window operations and Relationship
Managers stationed at those centers. We expect and hope to reduce the turn around time and
become more competitive and market oriented. Further this customer friendly and dedicated set
up at convenient locations would help in improving the image of the Bank as well. These Centers
would work in conjunction with the existing set–up of Commercial Lending done throughout the
NBP branch network. The main purpose of these centers is to generate ancillary business in
addition to funded and non-funded facilities, with quick turn around time in decisions for
customer satisfaction.

12. SPECIAL ASSETS MANAGEMENT GROUP


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The group chief of Special assets management group is Mr. Tajammal Hussain Bokharee. The
Special Asset Management Group (SAMG) is a group of people with specialized skills in
managing the "stressed" assets of National Bank of Pakistan. The group was created with a view
to enable restructuring and recoveries through various initiatives like innovative work-outs,
merger & acquisition strategies, asset stripping, security enhancements and structured sell-
downs. The group has also been working with / advising various governmental and regulatory
bodies in evolving a framework for implementing international best practices like asset
reconstruction companies in the country.
With provision coverage of 84% we believe that going forward our Special Assets Management
Group will make major contribution towards the Bank's profitability through recoveries and
reversal of provision charge as a result of declassification / rescheduling. We have revamped our
special assets management business and have coordinated our efforts to expedite recoveries and
settlements.

13. EMPLOYEE BENEFITS , DISBURSEMENTS & TRUSTEE DIVISION


The divisional head of this division is Mr. Mrs. Khurshid Maqsood Ali. The function of the
National Bank of Pakistan’s Employee benefits, disbursement & trustee division is to handle the
administration of trust funds, provide estate planning support, and in some cases see to the
disposition of the estate of a deceased customer. One of the factors that make the use of this
department so attractive is that it tends to be somewhat conservative with their management
approach. This means that this department is likely to take time to evaluate all options when
involved in settling estates, establishing guardianships, or administering trusts that have been set
up for the survivors of a major depositor. This methodical approach is often in line with the
motivation for establishing the asset in the first place, which was to provide a source of financial
support for loved ones, even after a parent or significant other has died.
Along with estate settlement, this department also provides a number of other agency services,
such as functioning as the trustee of record for corporate bonds or administering a pension or
profit sharing plan. As a means of ensuring that the resources of the bank safely protect the
investments involved, the department makes it relatively easy for the client to deal with other
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matters. Thus, the investor can focus more on family or other business matters, and be less
involved in the task of protecting assets that are already established and set on a path of
consistent growth.

E MPLOYEE BENEFITS OF NATIONAL B ANK OF P AKISTAN


D EFINED B ENEFIT P LANS

1. P ENSION S CHEME
The bank operates defined benefit approved funded pension scheme for its eligible employees.
The bank’s costs are determined based on actuarial valuation carried out using Projected Unit
Credit Method. Net cumulative un-recognized actuarial gains/losses relating to previous
reporting period in excess of the highest of 10% of present value of defined benefit obligation or
10% of the fair value of plan assets are recognized as income or expense over the estimated
working lives of the employees. Where the fair value of plan assets exceeds the present value of
defined benefit obligation together with unrecognized actuarial gains or losses and unrecognized
past service cost, the bank reduces the resulting asset to an amount equal to the total of present
value of any economic benefit in the form of reduction in future contributions to the plan and
unrecognized actuarial losses and past service costs.

2. P OST RETIREMENT MEDICAL BENEFITS

The bank operates an un-funded defined post retirement medical benefits scheme for all of its
employees. Provision is made in the financial statements for the benefit based on actuarial
valuation carried out using the Projected Unit Credit Method. Actuarial gains/losses are
accounted for in a manner similar to the pension scheme.

3. B ENEVOLENT SCHEME

The bank also operates an un-funded defined benefit benevolent scheme for its eligible
employees. Provision is made in the financial statements based on the actuarial valuation using
the Projected Unit Credit Method. Actuarial gains/losses are recognized in the period in which
they arise.

4. G RATUITY SCHEME
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The bank also operates an un-funded defined benefit gratuity scheme for its eligible contractual
employees. Provision is made in the financial statements based on the actuarial valuation using
the Projected Unit Credit Method. Actuarial gains/losses are accounted for in a manner similar to
pension scheme.

O THER EMPLOYEE BENEFITS

1. E MPLOYEES ' COMPENSATED ABSENCES

The bank accounts for all accumulating compensated absences when employees render service
that increases their entitlement to future compensated absences. The liability is determined based
on actuarial valuation carried out using the Projected Unit Credit Method.

T RUST ACTIVITIES OF N ATIONAL B ANK OF P AKISTAN

A) N ATIONAL I NVESTMENT T RUST (NIT)

Under a trust deed, the bank provides services, as a trustee to NIT and is performing functions of
sale/purchase of NIT units, safe custody and maintaining unit holder’s accounts.

B) L ONG - TERM C REDIT F UND (LTCF)


Consequent upon the NDFC amalgamation, the bank manages on behalf of the Government of
Pakistan, LTCF established from the proceeds of loans disbursed by various international
funding agencies for financing private sector energy development projects. The National Bank of
Pakistan is in process of negotiating the charge of fee in consideration of administrative services
to the LTCF.

C) Q ARZ - E -H ASNA F UND


The work relating to Qarz-e-Hasna Scheme was attended by Pakistan Banking Council (PBC)
since inception. PBC was dissolved in January 1997. In order to fill the void created by the
dissolution of PBC and in order to continue the scheme, SBP decided to entrust all funds and
P a g e | 55

transfer all record relating to Qarz-e-Hasna scheme for education to the bank with the
instructions to perform all work relating to the Fund.

14. CORE BANKING APPLICATION


The head of core banking application is Mr. Naeem Syed. The core banking application is an
integrated application that supports real time, multi banking and multi channel strategies. The
single biggest achievement of implementing the Core Banking Solution is that each customer is
truly the customer of the Bank and not just the customer of the Branch, where his/her account is
maintained. The customer can go to a branch anywhere in the country and perform a transaction.
This is possible as the entire Customer Database is centrally located at the central Data Centre
and can be accessed throughout the network of branches. Business processes in all the branches
of National Bank of Pakistan update a common database in a central server located at data
centre, which gives a consolidated view of bank’s operations.
Key features of the Core banking application of NBP
24X7 Banking
As a result of implementing Core Banking, most of the facilities being offered by bank are
available to Customers 24 hours a day, 7 days a week. The transactions are performed using
multiple channels such as ATMs, Internet Banking, Phone Banking and Mobile Banking.
Anywhere Banking
Customers can avail of banking services across the branch and Channel network irrespective of
location where their account is maintained.
Integration with strategic sectors
Core Banking integrates all strategic sectors of Banking such as Trade Finance, Treasury, Asset-
Liability Management and Corporate Balance Sheet. As a result, the information related to these
areas is centrally available for use or reference.
Strengthening MIS, DSS and EIS
Core banking application is more than just a transaction processing system. It provides updated
data for generating various reports for Management information system (MIS), and will facilitate
Decision Support System (DSS) and Executive Information System (EIS). As data is located on
CDC, branches and administrative offices can concurrently avail updated data when required.
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Business Process Re-engineering


Core Banking would enable implementation of BPR initiatives of a Bank and facilitate
centralized handling of various processes. Branches would do less and less back office work and
would be able to focus on marketing, customer relationship management and cross selling.

PROVINCIAL & REGIONAL MANAGEMENT


There are four executives of National Bank of Pakistan to supervise the Bank’s maters of every
province, as they are called Provincial Chiefs. These provincial chiefs are responsible for the
entire banking operations in their respective provinces. The provincial management includes:
The Provincial Chief Punjab
The Provincial Chief Sind
The Provincial Chief Baluchistan
The Provincial Chief N.W.FP & Kashmir
These provinces are sub-divided into regions, the regions are controlled and manage by Regional
heads, which are responsible for the supervision in their circles and deal with the problems of
their respective Regions. The regional management of National Bank of Pakistan is divided into
two areas which are:
Overseas
Countrywide
The overseas regions include Middle East, Far East, Europe & USA, and Central Asia. The
country has been divided into 29 regions by National Bank of Pakistan to facilitate its functions.
The detail about National Bank of Pakistan’s regions is shown as Annexed-II at the end of the
report. These regions are sub divided into Zones, the in charge of a Zone is called Zonal Chief.

BRANCH MANAGEMENT
The National Bank of Pakistan, in order to facilitate its functions on branch level appoints
Branch Managers & other staff according to branch’s activities and volume of business. The
branch managers are responsible for all functions and staff within the branch office. The job of
branch managers is to take charge of the entire operation of his branch, making sure that
everything runs smoothly. The other functions involves scheduling of employee work hours,
overseeing training, hiring and firing, assuring that proper procedures are followed, and reporting
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to upper management any problems or providing reports and updates as required by bank’s
protocol.

ORGANIZATIONAL (MANAGEMENT) LEVELS AT NBP


Successful and profitable banking management deepens upon two principal factors:

a) The manner in which the function of banking, that is, the acquiring of deposits, the
investing or converting such deposits into earning assets, and the servicing of each
deposits, are performed.

b) The degree to which officers and employees contribute their talents to the progress and
welfare of the bank in discharging duties and responsibilities.

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.27 The management has two types i.e..,

a) Centralized (Centralized Management tends to concentrate decision making at the top of


the organization)

b) Decentralized (Decentralized disperses decision making and authority throughout and


further down the organizational hierarchy)

National Bank of Pakistan has a centralized type of management because all the decisions are
taken by the top management. The National Bank of Pakistan has four types of management
levels which are as fallows:

 TOP MANAGERS

 MIDDLE MANAGERS
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 FIRST LINE MANAGERS OR LOWER LEVEL MANAGEMENT

 NON MANAGERIAL EMPLOYEES

HIERARCHY OF NATIONAL BANK OF PAKISTAN


The Hierarchy (An arrangement of objects, people, elements, values, grades, orders, classes etc.,
any system of persons or things ranked one above another) of National Bank of Pakistan is
shown as Annexed III at the end of this report. The hierarchy may include:

Categorization of a group of people according to ability or status.


A body of clergy organized into successive ranks or grades with each level subordinate to
the one above.
A series in which each element is graded or ranked
A body of officials disposed organically in ranks and orders each subordinate to the one
above it; a body of ecclesiastical rulers.
An organization with few things, or one thing, at the top and with several things below
each other thing.

The President of National Bank of Pakistan is ranked Top at the hierarchy. The other six
directors of National Bank of Pakistan are ranked second in the hierarchy. The Provisional,
Regional & Zonal chiefs are ranked 3rd, 4th & 5th respectively. The vice President & assistant vice
Presidents of National Bank of Pakistan are ranked 6th & 7th respectively. The Officers Grade I, II
& III are ranked 8th at the hierarchy of National Bank of Pakistan. The lower level of National
Bank of Pakistan is consist of Clerical & non- clerical staff.
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ORGANIZATION STRUCTURE OF THE BRANCH


A well-developed and properly coordinate structure is an important requirement for the success
of any organization. It provides the basic framework within which functions and procedures are
performed. Any organization needs a structure, which provides a framework for successful
operations. The operation of an organization involves a number of activities, which are related to
decision making, and communication of these decisions. These activities must be well
coordinated so that the goals of the organization are achieved successfully.

A) CENTRALIZED DECISION MAKING

The Branch Manager of National Bank of Pakistan is responsible for all the affairs of the Bank.
All the decisions relating to Branch are made by him and the subordinates have to obey these
decisions. All the employees of the Bank are report directly to the Branch Manager. The branch
has two operation Managers. Operation Manager I controls Clearing house & Remittance
Department and Operation Manager II controls Deposits, Advance & Branch accounts
department. Both of them are report directly to the Manager regarding affairs of their
departments. The Chief Accountant controls Accounts department & is report directly to branch
Manager. The branch also has two cashiers responsible for cash & Pension disbursement
department reports directly to branch Manger. The BBO (Branch Back Office System) Operator
controls computer department of the branch and is report directly to Operation Manager I and
Branch Manager.

B) DOWNWARD COMMUNICATION
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Communication is the process by which information is exchanged and understood by two or


more people, usually with the interest to motivate or influence the behavior of others in the
organization. Downward communication is the message and information sent from top
management to subordinates in a downward direction. The same pattern is followed at National
Bank of Pakistan Rawat branch, the Manager of the branch sent orders, information & messages
to following subordinates

Operation Manager I
Operation Manager II
BBO ( Branch Back Office System) Operator
Chief Accountant
Cashier I
Cashier II
Clerk I
Clerk II
Non Clerical Staff

C) CHAIN OF COMMAND

The chain of command is an unbroken line of authority that links all persons in an organization
and shows who reports to whom. By analyzing the organizational structure of the National Bank
of Pakistan Rawat branch it can be found that there is a scalar principle followed with in the
branch because each and every employee of the branch knows to whom they can report. The
authority and responsibility for different tasks and duties are different, as well as every one
knows the successive levels of management all the way to the top.

D) AUTHORITY AND RESPONSIBILITY

The chain of command illustrates the authority structure of National Bank of Pakistan Rawat
Branch. Authority is the formal and legitimate right of the manger to make decisions, issues
orders and allocates resources to achieve organizational desired outcomes. By analyzing the
chain of command of NBP, one can come to the conclusion that, as there is scalar pattern
P a g e | 61

followed at the organizational setup of NBP, therefore it is implied that everyone in his position
knows that what is one’s authority and what is the responsibility and the authority it allocated.

E) DELEGATION

Delegation is the process, which managers use to transfer the authority and responsibility to
position below in the hierarchy. Most organizations today encourage managers to delegate
authority to the lowest possible level to provide maximum flexibility to meet customer needs and
adapts to the environment. At National Bank of Pakistan Rawat branch Operation Managers have
some authority & responsibility relating to affairs of the Branch.

DEPARTMENTS OF THE BRANCH


Banking procedures are divided between various departments. Different departments do their
jobs in occurrence with the bank policies. In National Bank of Pakistan each branch is divided
into various departments depending on their size and volume of business. Head of department
manages each department & officials of the branch follow procedures. The departments working
within National Bank of Pakistan Rawat branch are as under:

1. Clearing House Department


2. Remittance Department
3. Computer Department
4. Deposits Department
5. Advances Department
6. Account Opening Department
7. Accounts Department
8. Cash Department
9. Pension Disbursement Department
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STRUCTURE OF BRANCH’S ACCOUNTS DEPARTMENT


The structure of National Bank of Pakistan’s Accounts department is shown as Annexed VI at the
end of this report. The Accounts department of the branch is controlled by the Chief Accountant
under direct supervision of Branch Manager. The Branch has one cashier & two clerks for
assistance and help of Chief Accountant. The BBO (Branch Back Office system) Operator has
also assist Chief Accountant in various tasks.

The head of branch’s Accounts department is called Chief Accountant, who performs his
functions under direct supervision of Branch Manager. The Chief Accountant is responsible for
the central accounting records and controls over all financial transactions of the Branch. He also
directs a wide variety of accounting activities and meets important deadlines & analyzes and
interprets accounting data of the branch. The other responsibilities of Chief Accountant include:

Plans and directs the activities of Cashier, BBO Operator and clerical employees of the
branch engaged in the maintenance of a variety of accounting records.
Directs and participates in the development and revision of procedures in order to meet
requirements of law, provide services to Branch Manager, improve efficiency in branch
activities, and coordinate branch activities with those of other departments.
Directs and reviews the preparation of periodic and special financial statements, reports,
projections, and recommendations, on which important administrative decisions are
based.
Directs and reviews the study of new and revised laws, rules, and programs affecting the
central accounting system and records and installs or recommends changes as
appropriate.
Designing and operating a system to capture, record, process, and store all relevant
documents and information about the financial activities of the branch.
Ensuring the integrity and reliability of the information system, and preventing fraud
from inside and outside the branch.
Preparing financial statements that are reported to Regional Management of National
Bank of Pakistan.
Preparing financial statements and accounting reports for distribution to the branch
Manager for their planning, control, and decision-making needs.
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The Chief Accountant with the help of branch’s clerical staff is preparing following
reports:
o Monthly Profit & Loss account- F48
o Daily Statement- F21
o General Ledger
o General Ledger Abstract
o General Ledger head wise
o Bank transfer Scroll
o Posting NBP Advance Salary
o Misc Book
o Posting National Income Daily Account (NIDA)
o Monthly return file
o Charger List
o PLS Profit list
o Weekly Telegram
o Government Scroll
o Government Scroll Dr & Cr
o Transfer Responding Advice Dispatched Register- F15
o Cash Remittance In
o Cash Remittance Out
o NBP General Account
o Clearing register
o Debit & Credit supplementary

Debit supplementary is used for debit voucher and credit supplementary is used for credit
voucher books and register maintained by bank are as fallows

General ledger included:

Statement of daily affairs


Cash book or cash cum day book
Transfer book
Income & expenditure ledger

Income & expenditure includes:

1. Discount
2. Service charges
3. Commission from utility services
4. Salaries allowances & provident fund
5. Rent taxes insurance lighting
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6. Profit paid on deposits and borrowings


7. Auditor’s fee & legal charges

BANK ACCOUNTING OPERATIONS


The National Bank of Pakistan’s accounting consists in making computerized, written and
permanent records of every transaction. For Computerized recording of transactions the bank
used software called BBO (Branch Back Office). BBO enable Bank to record a variety of
transactions. The most common part of BBO which is operating by the BBO Operator is
Individual Ledgers. Individual Ledgers are the accounts in which accounts with depositors are
kept. They are kept so that the balance of each depositor's account may at any time be readily
seen, and they should be frequently balanced to verify their correctness. The three column form
of individual ledger is used because it has a column for checks paid or other debit entries, one for
deposits or other items credited, and a third for showing the balance after each entry or the day's
entries are made in the account. The BBO enlist Chart of Accounts of the Bank shown in
Annexed VIII. All the accounts shown in Annexed are opened and managed through BBO. All
the Remittances of the bank are recorded managed and control through BBO. The “End of the
Day” report is also generated through BBO.

accounting is involved. "Accuracy first" is a motto that should be framed, figuratively at least,
upon the wall of every banking room.

The books used by National Bank of Pakistan are of various kinds and their purpose is indicated
by name. A ledger is a book used to keep a record of balances. To "post" means to enter in the
proper columns either the debits or credits on the ledger, and the difference between them
represents the balance either due by or to the bank. Another important book which is used by the
National Bank of Pakistan is journal, a book in which daily transactions are listed in regular
order as to accounts, and the total debit or credit is then posted on the ledgers. All other books,
cards and sheets used by bank of whatever nature is a part or subdivisions of these books. Often
they become known among the clerks by some other name descriptive of their general
appearance. For instance, the general ledger scratcher in one bank is known as the "red book,"
while the collection scratcher is the "black book."
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The records made by one clerk upon one set of books go to check the records of another clerk
upon a different set of books. For instance, the paying teller and the receiving teller will each
keep a record of checks cashed or deposited payable within the bank. The debit postings of the
individual bookkeeper would agree with the teller's figures. Skillful accounting lies in making
the fullest possible use of original entries, at the same time having a check on all figures to guard
against either error or fraud.

Every transaction ultimately affects the bank's statement of condition by debit or credit. For
example, a deposit of Rs.1000 is made, consisting of Rs.200 cash and checks as follows: Rs.200
on the bank itself and Rs. 600 payable in another city. At the end of the day (assuming this to be
the only deposit), on the liabilities side there is an increase of Rs 800 all of which appears in the
item "deposits" being the total Rs.1000, less the check for Rs 200 which is charged to the
account of the drawer. On the resource side, then, a corresponding increase of Rs.800 and this is
made up by an increase in the cash of Rs 200 and an increase of Rs.600 in the item "due from
banks." Or a transaction may appear on one side of the statement only. The bank has sold Rs.5,
000.00 of the bonds it owns.

ROLE OF CFO (CHIEF FINANCIAL OFFICER)


The performance of any organization is reflected by the financial statements, any ambiguity if
remains there, makes the reflection of the performance doubtful. Therefore, the role of CFO
becomes very important as he controls the reflection of performance, which is reported to
different authorities and the organization is assessed by them, and they must perform their job
with professional competency and integrity, so that the financial statements give credible
information to its users. The code of corporate governance provides the guidelines and
opportunity to do this.

The Chief Financial Officers of National Bank of Pakistan used to perform several tasks which
were preparing accounts, preparing budgets, operational reporting and interpreting, evaluating
P a g e | 66

operating results, preparing income tax returns, establishing internal control procedures to safe-
guard the companies assets.

Due to increased governance requirement there arises a need to empower the chief accountant
and to make him responsible by requiring him to sign the accounts. There comes the code of
corporate governance, which makes the chief accountant powerful and more responsible. With
the new role, Chief Accountant becomes Chief Financial Officer (CFO). The appointment,
removal and remuneration terms and conditions of employment of the chief financial officer of a
listed company shell are determined by the Chief Executive Officer with the approval of the
Board of Directors.

Q UALIFICATION R EQUIREMENT
The qualification requirement is defined under the code of corporate governance that is the
person appointed as the Chief Financial Officer must be

Member of recognized body of professional accountants or


A graduate from a recognized university or equivalent, having at least 5 years experience
in handling financial and corporate affairs of a listed company.

R ESPONSIBILITIES OF CFO
The new responsibilities apply to all Chief Financial Officers of Listed Companies, Insurance
Companies, Banks and DFIs. Mostly the CFO presents the financial position relating to the
period which has been over, and the period which has to come that is the financial position
attained and the financial projection i.e. where the organization will be.

R ESPONSIBILITIES TOWARDS B OARD OF D IRECTORS


The Chief Financial Officer is required to furnish necessary and classified information to the
board of directors along with his analysis and suggestions as the Chief Financial Officer attends
the board meetings, any issue with financial implications is being discussed, the person likely to
be most in command of these implication is on the spot and immediately available for questions.
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In order to strengthen and formalize corporate decision-making process, significant issues are
required to be placed for the information, consideration and decision of the boards of directors by
the CFO. These are:

Annual business planes, cash flow projection, forecasts and long term planes.
Budgets include capital, manpower and overhead budgets along with variance
analyses.
Quarterly operating results of the company as a whole and in terms of its operating
divisions or business segments.
Details of joint ventures or collaboration agreements or agreements with distributors,
agents, etc.
Default in payment of principal and/or interest, including penalties on late payments
and other dues, to a creditor, bank or financial institution, or default in payment of
public deposit.
Failure to recover material amounts of loans, advances, and deposits made by the
company, including trade debts and inter-corporate finances.
Significant public or product liability claims likely to be made against the company,
including any adverse judgment or order made on the conduct of the company.

R ESPONSIBILITIES TOWARDS S HAREHOLDERS


The Chief Financial Officer is required to provide all the necessary data to be presented in the
“Director’s Report”. For this purpose Chief Financial Officer must ensure the following.

The financial statement, prepared by the management of company, present fairly its states
of affairs, the results of its operation, cash flows and changes in equities.
Proper books of accounts of the company have been maintained
Appropriate accounting policies have been consistently applied in preparation in financial
statements and accounting estimates are based on reasonable and prudent judgment.
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International accounting standards, as applicable in Pakistan, have been followed in


preparation of financial statements and any departure there from has been adequately
disclosed.
The system of internal control is sound in design and has been effectively implemented
and monitored.
There are no significant doubts upon the companies’ ability to continue as going concern.
There has been no material departure from the best practice of corporate governance as
detailed in the listing regulations.

I NTERNAL AND E XTERNAL R EPORTING


Chief Financial Officer now has extensive responsibilities for internal and external reporting. All
the information required for decision-making by the Board of Directors and Chief Executive is
processed and furnished by the Chief Financial Officer. Apart from this, external reporting
requirement is fulfilled by Chief Financial Officer, the accounts and financial statements are
signed by the Chief Financial Officer before they are sent to concerned authorities.CCG requires
that the listed companies submit their quarterly accounts to the shareholders within one month of
the close of the first and third quarter of year of account. The CCG does not prescribe the time
for submitting half yearly accounts to the shareholders. Here we can refer to section 245 of
companies’ ordinance 1984 for this purpose, which requires half yearly accounts to be submitted
within two months of the close of first half. The CCG requires a limited review of half yearly
accounts by external auditor. Annual audited accounts are now required to be submitted within
four months of the close of financial year.

The Securities and Exchange Commission of Pakistan is exercising strict vigilance to ensure
compliance of 4th and 5th schedule of the Companies Ordinance, 1984 and timely submission of
accounts by companies. It has recently imposed penalties on Directors of nine listed companies
who failed to prepare and circulate the quarterly accounts. Furthermore, fines have been imposed
on chief executives.
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USE OF ELECTRONIC DATA IN DECISION MAKING


The technological development in the field of information systems make it possible for
management to use electronic data in decision making. An understanding of the effective and
responsible use and management of information systems and technologies is important for
managers, business professionals, and other knowledge workers in today’s internetworked
enterprises. Information systems play a vital role in the e-business and e-commerce operations,
enterprise collaboration and management, and strategic success of businesses that must operate
in an internetworked global environment. Thus, the field of information systems has become a
major functional area of business administration. The management of a business can use
information systems in their decision making process. Before proceeds it’s important to discuss
precisely about decision making.

Decision making can be regarded as an outcome of mental processes leading to the selection of a
course of action among several alternatives. Every decision making process produces a final
choice.28 The output can be an action or an opinion of choice. A significant part of decision
making skills is in knowing and practicing good decision making techniques. One of the most
practical decision making techniques can be summarized in following simple decision making
steps:

1. Identify the purpose of your decision. What is exactly the problem to be solved? Why it
should be solved?
2. Gather information. What factors does the problem involve?
3. Identify the principles to judge the alternatives. What standards and judgment criteria
should the solution meet?
4. Brainstorm and list different possible choices. Generate ideas for possible solutions.
See more on extending your options for your decisions on my brainstorming tips page.
5. Evaluate each choice in terms of its consequences. Use your standards and judgment
criteria to determine the cons and pros of each alternative.
6. Determine the best alternative. This is much easier after you go through the above
preparation steps.
7. Put the decision into action. Transform your decision into specific plan of action steps.
Execute your plan.
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8. Evaluate the outcome of your decision and action steps. What lessons can be learnt?
This is an important step for further development of your decision making skills and
judgment.

The decision making of Management of National Bank of Pakistan rely on information system
resources which includes people and a variety of hardware, software, data, and communications
network technologies as resources to collect, transform, and disseminate information in Bank.

INFORMATION SYSTEM RESOURCES OF NBP


A) PEOPLE RESOURCES
People are required for the operation of all information systems. These people resources include
end users and Information system Specialists. The Management and employees of National Bank
of Pakistan are end users and Knowledge workers of information system. These are the
employees of the Bank who spend most of their time communicating and collaborating in teams
and workgroups and creating, using and distributing information.

The Information systems Specialist are people who develop and operate information systems.
They include System analysts, software developers, system operators, and other managerial,
technical, and clerical IS personnel of National Bank of Pakistan. The system analysts of
National Bank of Pakistan design information systems of the Bank based on the information
requirements of the end users. The software developers create computer programs based on the
specification of system analysts of National Bank of Pakistan.

B) HARDWARE RESOURCES
The Hardware resources of National Bank of Pakistan include all physical devices and materials
used in information processing. Specifically, it includes not only machines, such as computers
and other equipments, but also all data media, that is, tangible objects on which data are
recorded, from sheets of paper to magnetic or optical disks.
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C) SOFTWARE RESOURCES
The software resources of National Bank of Pakistan include all sets of information processing
instructions. It also includes sets of operating instructions called programs, which direct and
control computer hardware. The followings are the examples of National Bank of Pakistan’s
software resources:

System Software: The National Bank of Pakistan uses Windows Operating Systems for
controls and supports the operations of a computer system.
Application Software: These are the programs that direct processing for a particular use
of computers by employees of the Bank. Bank uses BBO system, Microsoft Office suit as
application software.

D) DATA RESOURCES
The data resources of National Bank of Pakistan are typically organized, stored, and accessed by
a variety of data resource management technologies. The data about Branch transactions is
accumulated, processed, and stored in a BBO system that can be accessed by Manager for an
analysis and decision making.

E) NETWORK RESOURCES
The network resources of National Bank of Pakistan include:

Communication Media: The Bank’s communication media include cellular and landline.
Network Support: The Bank uses hardware, software, and data technologies which are
needed to support the operation and use of a communication network. The Bank uses
communication processers such as Modems and internetwork processors, and
communication control software such as network operating systems and Internet Browser
packages.

SOURCES OF FUNDS
Rupees in Millions
P a g e | 72

Year 2012 2013 2014 2015 2016


Share Capital 4,924,106 5,908,927 7,090,712 8,154,319 8,969,751
Reserves 10,813,914 13,536,041 13,879,260 15,772,124 19,941,047
Borrowings 11,084,790 8,756,847 11,704,079 10,886,063 40,458,926
Deposits 465,571,717 463,426,602 501,872,243 591,907,435 624,939,016
Other Liabilities 23,068,314 24,974,450 26,596,300 30,869,154 39,656,831
Horizontal Analysis (%)
Share Capital 100 120 144 166 182
Reserves 100 125 128 146 184
Borrowings 100 79 106 98 365
Deposits 100 100 108 127 134
Other Liabilities 100 108 115 134 172

The National Bank of Pakistan’s sources of funds includes share capital, reserves, borrowings,
deposits and other liabilities etc. To analyze trend, Horizontal analysis of each item is calculated.

A NALYSIS
The Share capital refers to the portion of a Bank's equity that has been obtained by trading stock
to a shareholder for cash or an equivalent item of capital value. The share capital of National
Bank of Pakistan shows an increasing trend in all years as compare to base year. The increase in
share capital during all years indicates share holder’s concern toward National Bank of Pakistan
and efficient bank’s Management policies.
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A NALYSIS
The Banks’ reserves are banks' holdings of deposits in accounts with their central bank plus
currency that is physically held in bank vaults (vault cash). The reserves of National Bank of
Pakistan fluctuate during all years as they show an increasing trend. The reserves are increased
25 %, 28 % & 46 % in the years 2013, 2014 & 2015 respectively. The year 2016 represents
highest increasing percentage of 84% as compare to base and previous years.

A NALYSIS
The National Bank of Pakistan’s borrowings fluctuates during all years and shows a mixed trend.
The borrowings were decreased 21 % in 2013; however same are increased 6 % in 2014 as
compare to base year. There was a marginal decrease of 2% in bank’s borrowings in the year
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2015. The year 2016 represents highest percentage of borrowings as these were increased to 265
% comparing with base year and are increased 267 % as compare to 2015.

A NALYSIS
The deposits and other accounts of National Bank of Pakistan show a mixed trend during all
years. In the year 2013 the deposits were increased very marginally, with the year 2014
represents an increase of 8% as compare to base year. The year 2015 represents second highest
percentage as deposits are increased to 27%. The year 2016 indicates an increase of 34%, highest
among all years.

A NALYSIS
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The other liabilities of National Bank of Pakistan are fluctuating during all years and show an
increasing trend. The year 2013 indicates an increase of 8 % and 2014 indicates an increase of
15%. The other liabilities in the year 2015 represent an increase of 34%. The other liabilities
were on their peak percentage in 2016 as the shows an increase of 72%.

GENERATION OF FUNDS
Rupees in
Millions
Year 2012 2013 2014 2015 2016
Markup/return/interest earned 20,947,333 33,692,665 44,100,934 50,569,481 60,942,798
Net markup/interest income 14,387,935 23,370,897 30,153,716 33,629,470 37,058,030
Net markup/interest income after provisions 12,639,770 21,146,970 27,782,170 28,906,735 26,087,216
Total non-markup/ Interest income 8,304,716 9,392,351 12,162,892 13,544,845 16,415,862
Total income ( Interest + non-Interest) 20,944,486 30,539,321 39,945,062 42,451,580 42,503,078
PROFIT BEFORE TAXATION 11,977,601 19,056,028 26,310,577 28,060,501 23,000,998
Horizontal Analysis (%)
Markup/return/interest earned 100 161 211 241 291
Net markup/interest income 100 162 210 234 258
Net markup/interest income after provisions 100 167 220 229 206
Total non-markup/ Interest income 100 113 146 163 198
Total income ( Interest + non-Interest) 100 146 191 203 203
PROFIT BEFORE TAXATION 100 159 220 234 192

The National Bank of Pakistan’s generation of funds include

Interest earned
Net interest income
Net interest income after provisions
Total non markup interest income
Total income ( Interest plus non- Interest)
Profit before Taxation
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A NALYSIS
The interest earned by National Bank of Pakistan fluctuates during all years, as it was increased
during all years as compare to base year. The interest earned is increased 61% in 2013 and 111%
in 2014. The year 2015 represents second highest percentage on account of interest earned as it
was increase 141 %. The year 2016 represents peak percentage of 191 % as compare to all years.

A NALYSIS
The net markup/ interest income after provisions fluctuates and shows a mixed trend during all
years. It was increased 67% (2013), 120% (2014) and 129% in 2015. The income is increased
106 % as compare to base year but the same was decreased by 23% as compare to 2015.
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A NALYSIS
The Total non- markup/ Interest income of National Bank of Pakistan shows an increasing trend
during all years. It was increased 13% in 2013 and 46% in 2014. The income is increased 63 %
in 2015, second highest among all years. There was an increase of 98% in 2016, highest among
all years.

Analysis

The profit before taxation of National Bank of Pakistan fluctuates and shows a mixed trend
during all years. It was increased 59% in 2013 and 120% in 2014. The year 2015 represents
highest percentage on account of profit before taxation as it was increased to 134%. The year
2016 indicates an increase of 92% as compare with base year but it was decreased in 2016 by
42% as compare to 2015
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ALLOCATION OF FUNDS
Rupees in
Millions
Year 2012 2013 2014 2015 2016
Lending’s to Financial Institutions 10,511,322 16,282,942 23,012,732 21,464,600 17,128,032
Investments 149,350,096 156,985,686 139,946,995 210,787,868 170,822,491
Advances 220,794,075 268,838,779 316,110,406 340,677,100 412,986,865
Operating Fixed Assets 9,202,969 9,454,365 9,681,974 25,922,979 24,217,655
Other Assets 19,141,569 23,941,056 37,113,698 30,994,965 44,550,347
Horizontal Analysis (%)
Lending’s to Financial Institutions 100 155 219 204 163
Investments 100 105 94 141 114
Advances 100 122 143 154 187
Operating Fixed Assets 100 103 105 282 263
Other Assets 100 125 194 162 233

After the acquisition of the funds their allocation becomes necessary. The Bank seeks the best
way for making investment to get more profit with the maximum security. The Bank has an
investment portfolio in which it allocate its funds for crediting to borrowers, investment in the
stock market etc. The National Bank of Pakistan allocate its funds in Lending’s to financial
institutions, investments, advances, operating fixed assets and other assets etc. To analyze trend
in these items, Horizontal analysis of each item is calculated.
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CRITICAL ANALYSIS (THEORY VS PRACTICAL)


During Internship it was my prime objective to furnish my knowledge (Theory) to various
practical situations. The practical work presents an analytical problem while relating theory with
practice. As a result, analysis of practical versus theory requires a distinct approach. This part of
report is the essence of the internship, as this will help to better understand the working
environment of the bank by finding the relationship between what is written in the books and
what is actually going on in fields. The theory written in the books in cases is not implemented as
it is. In some cases theory is implemented with a little modification but in other cases theory has
nothing to do with practice.

In accounting, banks don’t prepare worksheet, but part of worksheet is prepared like trial
balance. The securities for the loans are handled in the same way as theory says like mortgage,
pledge, hypothecation, advances against insurance policies or liquidation procedure is the same.
There is some difference lies in types of loans in bank that is theory talks about four or five types
of loans that is cash finance, overdraft, loans etc., but in practice there are some more types used
by bank like running finance, demand finance etc. All other concepts of remittances, bills,
foreign exchange deposits, letters of credit are in accordance with theory almost. A bank's
balance sheet is different from that of a typical company. You won't find inventory, accounts
receivable, or accounts payable. Instead, under assets, you'll see mostly loans and investments,
and on the liabilities side, you'll see deposits and borrowings.

C ONCLUSION
To me, Theory gives the direction to understand the processes and the terminologies going
across the World using best business practices in a broader view covering each and every aspect
of possible business scenarios. On the contrary practical life is specific, enclosed in a jar.
P a g e | 80

BALANCE SHEET
Rupees in Millions

ASSETS 2012 2013 2014 2015 2016


Cash and balances with treasury
banks 94,446,552 71,196,956 78,625,227 94,873,249 106,503,756
Balances with other banks 49,784,884 31,019,330 40,641,679 37,472,832 38,344,608
Lending’s to financial institutions 10,511,322 16,282,942 23,012,732 21,464,600 17,128,032
Investments 149,350,096 156,985,686 139,946,995 210,787,868 170,822,491
Advances 220,794,075 268,838,779 316,110,406 340,677,100 412,986,865
Other assets 19,141,569 23,941,056 27,113,698 30,994,965 44,550,347
Operating fixed assets 9,202,969 9,454,365 9,681,974 25,922,979 24,217,655
Deferred tax assets _ _ _ _ 3,204,572
553,231,46
7 577,719,114 635,132,711 762,193,593 817,758,326

LIABILITIES
Bills payable 7,214,671 1,741,156 10,605,663 7,061,902 10,219,061
Borrowings from financial institutions 11,084,790 8,756,847 11,704,079 10,886,063 40,458,926
Deposits and other accounts 465,571,717 463,426,602 501,872,243 591,907,435 624,939,016
Sub-ordinated loans _ _ _ _ _
Liabilities against assets subject to
finance lease 17,058 16,629 13,235 33,554 25,274
Other liabilities 23,068,314 24,974,450 26,596,300 30,869,154 39,656,831
Deferred tax liabilities net 29,185 4,462,718 2,387,073 5,097,831 _
506,985,73 503,378,40 553,178,59 645,855,93 715,299,10
5 2 3 9 8
46,245,73 74,340,71 81,954,11 116,337,65 102,459,21
NET ASSETS
2 2 8 4 8

REPRESENTED BY
Share capital 4,924,106 5,908,927 7,090,712 8,154,319 8,969,751
Reserves 10,813,914 13,536,041 13,879,260 15,772,124 19,941,047
Unappropriated Profit 9,161,747 16,713,506 32,074,677 45,344,188 52,456,204
24,899,76
7 36,158,474 53,044,649 69,270,631 81,367,002
Surplus 21,345,965 38,182,238 28,909,469 47,067,023 21,092,216
P a g e | 81

46,245,73 74,340,71 81,954,11 116,337,65 102,459,21


2 2 8 4 8

INCOME STATEMENT
Rupees in Millions

2012 2013 2014 2015 2016


Markup/return/interest earned 20,947,333 33,692,665 44,100,934 50,569,481 60,942,798
Markup/return/interest expensed 6,559,398 10,321,768 13,947,218 16,940,011 23,884,768
Net markup/interest income 14,387,935 23,370,897 30,153,716 33,629,470 37,058,030
Provisions against non-performing advances 1,515,354 2,446,739 3,075,723 4,723,084 10,593,565
provision for/(reversal of) diminution in the value
of investments 185,707 -245,881 -709,461 -40,248 373,249
provision against off balance sheet obligations 14,297 Nil Nil Nil 4,000
bad debts written off directly 32,807 23,069 5,284 39,899 Nil
1,748,165 2,223,927 2,371,546 4,722,735 10,970,814
Net markup/interest income after provisions 12,639,770 21,146,970 27,782,170 28,906,735 26,087,216
NON MARKUP/ INTEREST INCOME
Fee, Commission & brokerage income 5,099,195 4,926,604 6,144,628 6,781,683 7,925,370
Dividend income 1,273,863 1,718,478 2,891,755 3,263,246 2,878,932
Income form dealing in foreign currencies 1,008,988 1,205,638 1,333,840 1,042,827 3,969,057
Gain on sale & redemption of securities-net 47,557 1,365,771 1,169,515 2,341,690 395,427
Investments classified as held for trading Nil -1,979 -4,464 -31,964 1,707
Other income 875,113 177,839 627,618 147,363 1,245,369
Total non-markup/ Interest income 8,304,716 9,392,351 12,162,892 13,544,845 16,415,862
Total income ( Interest + non-Interest) 20,944,486 30,539,321 39,945,062 42,451,580 42,503,078
NON MARKUP/ INTERSET EXPENSES
Administration expenses 8,878,801 11,221,789 13,443,441 14,205,911 18,171,198
Other provisions written off 32,243 198,298 -17,283 168,027 747,521
Other charges 8,284 63,206 208,327 17,141 583,361
Total non markup/ Interest expenses 8,919,328 11,483,293 13,634,485 14,391,079 19,502,080
PROFIT BEFORE TAXATION 11,977,601 19,056,028 26,310,577 28,060,501 23,000,998
Taxation Current 4,950,000 7,154,002 8,695,598 8,311,500 11,762,650
Prior years 847,958 -1,098,709 530,652 391,497 Nil
Deferred -15,729 291,291 61,981 323,731 -4,220,242
5,782,229 6,346,584 9,288,231 9,026,728 7,542,408
PROFIT AFTER TAXATION 6,195,372 12,709,444 17,022,346 19,033,773 15,458,590
Unappropriated Profit brought forward 5,892,902 9,161,747 19,372,523 32,074,677 45,344,188
Transfer from surplus on revaluation of fixed
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assets on account of incremental depreciation 45,496 43,221 41,060 39,007 130,456


Profit available for appropriation 12,133,770 21,914,412 36,435,929 51,147,457 60,933,234

FINANCIAL STATEMENTS ANALYSIS


Financial analysis is a process which involves reclassification and summarization of information
through the establishment of ratios and trends. Financial statement analysis is the process of
examining relationships among financial statement elements and making comparisons with
relevant information. It is a valuable tool used by investors and creditors, financial analysts, and
others in their decision-making processes related to stocks, bonds, and other financial
instruments. The goal in analyzing financial statements is to assess past performance and current
financial position and to make predictions about the future performance of a company. Investors
who buy stock are primarily interested in a company's profitability and their prospects for
earning a return on their investment by receiving dividends and/or increasing the market value of
their stock holdings. Creditors and investors who buy debt securities, such as bonds, are more
interested in liquidity and solvency: the company's short-and long-run ability to pay its debts.
Financial analysts, who frequently specialize in following certain industries, routinely assess the
profitability, liquidity, and solvency of companies in order to make recommendations about the
purchase or sale of securities, such as stocks and bonds.

The analysis of financial statement refers to the examination of the statements for the purpose of
acquiring additional information regarding the activities of the business. The users of the
financial information often find analysis desirable for the interpretation of the firm’s activities.

The overall objective of financial statement analysis is the examination of a firm’s financial
position and returns in relation to risk. This must be done with a view to forecasting the firm’s
future prospective.

Analysts can obtain useful information by comparing a company's most recent financial
statements with its results in previous years and with the results of other companies in the same
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industry. Three primary types of financial statement analysis are commonly known as horizontal
analysis, vertical analysis, and ratio analysis.

RATIO ANALYSIS
Ratio analysis enables the analyst to compare items on a single financial statement or to examine
the relationships between items on two financial statements. After calculating ratios for each
year's financial data, the analyst can then examine trends for the company across years. Since
ratios adjust for size, using this analytical tool facilitates intercompany as well as intercompany
comparisons. Ratios are often classified using the following terms: profitability ratios (also
known as operating ratios), liquidity ratios, and solvency ratios. Profitability ratios are gauges of
the company's operating success for a given period of time. Liquidity ratios are measures of the
short-term ability of the company to pay its debts when they come due and to meet unexpected
needs for cash. Solvency ratios indicate the ability of the company to meet its long-term
obligations on a continuing basis and thus to survive over a long period of time. Financial ratios
allow for comparison:

Between companies
Between industries
Between different time periods for one company
Between a single company and its industry average

A) PROFITABILITY RATIOS
The continued viability of any bank depends on its ability to earn an appropriate return on its
assets and capital. Good earning performance enables a bank to fund its operations, remain
competitive in the market and increase or decrease in market funds. Profitability ratios relate
profit to sales and investments. These ratios indicate the firm’s overall effectiveness of
operations and give us idea how well firm utilized its resources in generating profit and
shareholder value.
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G ROSS P ROFIT M ARGIN R ATIO


Gross profit margin ratio is used to assess the profitability of a Bank's core activities. Gross profit
margin indicates the relationship between gross profit and interest earned. A high gross profit
margin indicates that a Bank can make a reasonable profit.

Formula = Gross Profit / Interest earned (Revenue)

Year 2012 2013 2014 2015 2016


Ratio % 57.17 56.55 59.65 55.48 37.74

NALYSIS

The Year 2014 has been an outstanding year with the bank recording the highest profit in its
history i.e.., 59.65 %.The National Bank of Pakistan’s wide range of product offering, large
branch network and committed workforce are some of fundamental strengths that enabled NBP
to achieve exceptional in a very competitive market. The gross profit is 37.74% in 2016. The
lowest percentage among all years.

N ET P ROFIT M ARGIN R ATIO


Net profit margin measures the percentage of revenue remaining after all cost and expenses,
including interest and taxes have been deducted.
Formula = Net Profit after Taxes / Interest earned

A NALYSIS
Net profit margin shows positive trend till 2014 and was the highest in the same year as it was
38.59%, the percentage is decreased in 2015 as it was 37.63%. The net profit margin is on its
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lowest level at the end of 2016 as it indicates a percentage of 25.63%. The primary reason of this
decline is current global economic conditions and current political crisis in Pakistan.

A SSETS T URNOVER
This ratio is useful to determine the amount of revenue that is generated from each Rupee of
assets. The Banks with low profit margins tend to have high asset turnover, those with high profit
margins have low asset turnover.

Formula = Revenue/ Total Assets

Year 2012 2013 2014 2015 2016


Ratio 0.03 0.05 0.06 0.05 0.05

A NALYSIS
The year 2012 represents a ratio of 0.03, lowest among all years. The years 2013, 2015 and 2016
indicates almost same percentage of 0.05% on account of bank’s assets turnover. The National
Bank of Pakistan’s assets turnover in 2014 is 0.06, peak ratio among all years.

R ETURN ON C APITAL F UND


This ratio relates the net profits to the amount of capital funds that have been employed in
making that profit.

Formula = Net markup received / Capital Funds

Year 2012 2013 2014 2015 2016


Ratio 2.92 3.95 4.25 4.12 4.13
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A NALYSIS
The above given ratios suggest that the profitability of the bank has a mixed trend during five
years. The first three years 2012 (2.92), 2013 (3.95), 2014 (4.95) shows an increasing trend,
indicating more profitable operations of the bank. It was decreased in the year 2015 (4.12) and
has increased in 2016 as the ratio was 4.13.

R ETURN ON I NVESTMENT
This ratio indicates the profit earned by the bank on the resources employed.

Formula = Net income afer taxes / Total Assets

Year 2012 2013 2014 2015 2016


Ratio 0.011 0.021 0.026 0.024 0.018
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A NALYSIS
There was an increase in the utilization of the resources till 2014 i.e.., 0.011(2012), 0.021 (2013)
and 0.026 (2015). The ratio was decreased to 0.024 (2015) and 0.018 (2016).

R ETURN ON D EPOSITS
This ratio indicates to what extent deposits which represent funds mobilization on the part of the
bank contribute towards income generation.

Formula = Net income before taxes / Total Deposits

Year 2012 2013 2014 2015 2016


Ratio 0.025 0.041 0.052 0.047 0.036

A NALYSIS
During all five years the return on deposits ratio of National Bank of Pakistan shows a mix trend.
The year 2014 (0.052) was the best year for bank in terms of its funds mobilization. Although the
ratio was decreasing in 2016 (0.036), indicating Bank is more keen to kept deposits and a change
in policy of the Bank regarding its funds mobilization.

E FFECTIVE T AX R ATE
This ratio is a measurement of a company's tax rate, which is calculated by comparing its income
tax expense to its pretax income. This amount will often differ from the company's stated
jurisdictional rate due to many accounting factors, including foreign exchange provisions. This
effective tax rate gives a good understanding of the tax rate the company faces.

Formula = Income Tax expense/ Pretax Income

Year 2012 2013 2014 2015 2016


Ratio % 0.48 0.33 0.35 0.32 0.32
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A NALYSIS
The effective tax rate of National Bank of Pakistan was highest in the year 2012 (0.48%).
However bank is able to reduce its tax burden because the Bank is able to adopt Tax management
techniques to lessen the tax burden. A relatively stable effective tax rate percentage, and resulting
net profit margin, would seem to indicate that the Bank's operational managers are more
responsible for a company's profitability than the company's tax accountants.

B) LIQUIDITY RATIOS
The liquidity position of a bank is like a reservoir. It may be adequate, although nearly depleted,
just before the start of the rainy season. Or it may be inadequate, although three quarters full just
before the summer drought.

Liquidity can be defined as:

“The bank’s ability not only to meet possible deposit withdrawals but also to provide for the
legitimate needs of the economy as well”

C URRENT R ATIO
Current ratio is a measure of the current adequacy of company's current assets to meet its current
obligations. It must be greater than 1. If it is less than 1, liabilities exceed current assets. For
every Rs.1 of liabilities, the company has a ratio amount of current assets available. The concept
behind this ratio is to ascertain whether a company's short-term assets (cash, cash equivalents,
P a g e | 89

marketable securities, receivables and inventory) are readily available to pay off its short-term
liabilities (notes payable, current portion of term debt, payables, accrued expenses and taxes). In
theory, the higher the current ratio, the better.

Formula = Current Assets / Current Liabilities

Year 2012 2013 2014 2015 2016


Ratio 0.83 0.96 1.02 1.00 1.12

A NALYSIS
The year 2012 (0.83) and 2013 (0.96) were not satisfied for bank as current assets are less than
current liabilities. However, in 2014 (1.02) the management of National Bank of Pakistan is able
to overcome this problem. The year 2015 (1.00) is also good for bank as per standards of this
ratio. Again in the year 2016 (1.12) the management of bank is able to increase its current ratio.

C ASH R ATIO
This ratio shows that the cash is enough for payment of current liabilities or not. This ratio is
obtained by dividing cash by current liabilities. For a bank this is the cash held by the bank as a
proportion of deposits in the bank.

Formula = Cash / Current Liabilities


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Year 2012 2013 2014 2015 2016


Ratio 4.09 2.85 2.96 3.07 2.69

A NALYSIS
The cash ratio of National Bank of Pakistan shows a mixed trend during five years of operations.
During all years, the ratio is satisfactory as per standards of this ratio. The year 2012 (4.09),
representing highest and 2013 (2.85) & 2016 (2.69), representing lowest ratio in all five years.

HORIZONTAL ANALYSIS
This technique is also known as comparative analysis. It is conducted by setting consecutive
balance sheet, income statement or statement of cash flow side-by-side and reviewing changes in
individual categories on a year-to-year or multiyear basis. The most important item revealed by
comparative financial statement analysis is trend. A comparison of statements over several years
reveals direction, speed and extent of a trend(s). The horizontal financial statements analysis is
done by restating amount of each item or group of items as a percentage. Such percentages are
calculated by selecting a base year and assign a weight of 100 to the amount of each item in the
base year statement. Thereafter, the amounts of similar items or groups of items in prior or
subsequent financial statements are expressed as a percentage of the base year amount. The
resulting figures are called index numbers or trend ratios.

Formula = Current Year amount / Base Year amount * 100


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Horizontal analysis, whilst simple to execute and useful to a certain extent, has its limitations.
These limitations include:

Being highly dependent on the selection of base year and the period under examination in
the financial model.
Horizontal analysis provides little insight into why the trend occurred in a financial
model.
Horizontal analysis does not provide insight into whether the trend in the financial model
results was superior/inferior to some benchmark.
Horizontal analysis does not address the challenge of negative numbers.

Horizontal Analysis of Balance Sheet

Horizontal Analysis
(%)
ASSETS 2012 2013 2014 2015 2016
Cash 100 75 83 100 113
Balances with other banks 100 62 82 75 77
Lending’s to fin. institutions 100 155 219 204 163
Investments 100 105 94 141 114
Advances 100 122 143 154 187
Operating fixed assets 100 103 105 282 263
Other assets 100 125 194 162 233
Total
Assets 100 104 117 138 148
LIABILITIES 2012 2013 2014 2015 2016
Share Capital 100 120 144 166 182
Reserves 100 125 128 146 184
Unappropriated profit 100 182 350 495 573
Surplus On Reval. of assets 100 179 135 221 99
Bills payable 100 24 147 98 142
Borrowings 100 79 106 98 365
Deposits and other accounts 100 100 108 127 134
Liabilities against assets 100 97 78 197 148
subject to finance lease
Deferred tax liabilities net 100 15291 8179 17467 Nil
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Other liabilities 100 108 115 134 172


Total Liabilities 100 104 117 138 133

A NALYSIS
The National Bank of Pakistan’s Cash & balance with treasury banks shows a mixed trend
during all years. It was decreased by 25% in 2013 and 17% in 2014. There was a marginal
increase in the year 2015. In 2016 the percentage is increased by 13% as compare to base year.

A NALYSIS
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The Balances of National Bank of Pakistan with other banks shows a decreasing trend as
compare to base year. The year 2013 represents lower percentage (38%), while the year 2014
represents highest percentage of 18%.

A NALYSIS
The lending’s to financial institutions by National Bank of Pakistan fluctuates during all years.
The lending’s increased 55 % in 2013. The year 2014 represents highest percentage of 119 %
among all years on account of lending’s to financial institutions. The year 2015 also shows an
increase of 104 % as compare to base year. The year 2016 indicates an increase of 63% as
compare to base year but lending’s decreased by 41 % in 2016 as compare to the year 2015.

HORIZONTAL ANALYSIS OF INCOME STATEMENT


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Rupees in Millions

2012 2013 2014 2015 2016


Markup/return/interest earned 100 161 211 241 291
Markup/return/interest expensed 100 157 213 258 364
Net markup/interest income 100 162 210 234 258
Provisions against non-performing advances 100 161 203 312 699
provision for/(reversal of) diminution in the value
of investments 100 -132 -382 -22 201
provision against off balance sheet obligations 100 Nil Nil Nil 28
bad debts written off directly 100 70 16 122 Nil
100 127 136 270 628
Net markup/interest income after provisions 100 167 220 229 206
NON MARKUP/ INTEREST INCOME
Fee, Commission & brokerage income 100 97 121 133 155
Dividend income 100 135 227 256 226
Income form dealing in foreign currencies 100 119 132 103 393
Gain on sale & redemption of securities-net 100 2,872 2,459 4,924 831
Investments classified as held for trading Nil Nil Nil Nil Nil
Other income 100 20 72 17 142
Total non-markup/ Interest income 100 113 146 163 198
Total income ( Interest + non-Interest) 100 146 191 203 203
NON MARKUP/ INTERSET EXPENSES
Administration expenses 100 126 151 160 205
Other provisions written off 100 615 -54 521 2,318
Other charges 100 763 2,515 207 7,042
Total non markup/ Interest expenses 100 129 153 161 219
PROFIT BEFORE TAXATION 100 159 220 234 192
Taxation Current 100 145 176 168 238
Prior years 100 -130 63 46 Nil
Deferred 100 -1,852 -394 -2,058 26,831
100 110 161 156 130
PROFIT AFTER TAXATION 100 205 275 307 250
Unappropriated Profit brought forward 100 155 329 544 769
Transfer from surplus on revaluation of fixed
assets on account of incremental depreciation 100 95 90 86 287
Profit available for appropriation 100 181 300 422 502
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A NALYSIS
The interest earned by National Bank of Pakistan fluctuates during all years, as it was increased
during all years as compare to base year. The interest earned is increased 61% in 2013 and 111%
in 2014. The year 2015 represents second highest percentage on account of interest earned as it
was increase 141 %. The year 2016 represents peak percentage of 191 % as compare to all years.

A NALYSIS
The interest expense of National Bank of Pakistan shows an increasing trend in all years, as it
was increased 57 % (2013) and 113 % (2014). The year 2015 represents second highest
percentage on account of interest expensed as it was increases to 158% as compare to base year.
The year 2016 shows an increase of 264 %, highest among all years.
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A NALYSIS
The net markup/ Interest income of National Bank of Pakistan fluctuates during all years as it
shows an increasing trend. It was increased 62 % in 2013 and 110% in 2014 as compare to base
year. The year 2015 represents second highest percentage on account of Net markup/ Interest
income as it was increased to 134%, comparing with base year. The percentage is increased 158
% in 2016, highest among all years.

A NALYSIS
The net markup/ interest income after provisions fluctuates and shows a mixed trend during all
years. It was increased 67% (2013), 120% (2014) and 129% in 2015. The income is increased
106 % as compare to base year but the same was decreased by 23% as compare to 2015.
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A NALYSIS
The Total non markup/ Interest expenses of National Bank of Pakistan fluctuates and shows an
increasing trend as compare to base year. It was increased 29%, 53% and 61% in the years 2013,
2014 and 2015 respectively. The year 2016 represents peak percentage of 119% in 2016.

A NALYSIS
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The current taxation of National Bank of Pakistan fluctuates during all years as it was increased
during all years as compare to base year. It was increased 45 % in 2013 and 76 % in 2014. The
year 2015 and 2016 indicates an increase of 68 % & 138 % respectively.

A NALYSIS
The National Bank of Pakistan’s Profit after taxation fluctuates during all years as it was
increased during all years as compare to base year. The profit after taxation is increased 105% in
2013 and 175 % in 2014 as compare to base year. The Year 2015 has been an outstanding year
with the National Bank of Pakistan recording the highest profit after taxation in its history as the
percentage increases to 207 % comparing with base year. The year 2016 indicates an increase of
150 % as compare to base year and a decrease of 57 % as compare to 2015.
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VERTICAL ANALYSIS
When using vertical analysis, the analyst calculates each item on a single financial statement as a
percentage of a total. The term vertical analysis applies because each year's figures are listed
vertically on a financial statement. The total used by the analyst on the income statement is net
sales revenue, while on the balance sheet it is total assets. This approach to financial statement
analysis, also known as component percentages, produces common-size financial statements.
Common-size balance sheets and income statements can be more easily compared, whether
across the years for a single company or across different companies.

Vertical analysis is a technique for identifying relationship between items in the same financial
statement by expressing all amounts as the percentage of the total amount taken as 100. In a
balance sheet, for example, cash and other assets are shown as a percentage of the total assets
and, in an income statement, each expense is shown as a percentage of the sales revenue.

In Vertical analysis, various components of the financial statements are standardized by


expressing them as a percentage of some bases.

Examples of common-sized statements include:

Components of the balance sheet expressed as a percentage of total assets


Components of the income statement expressed as a percentage of sales or revenue
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100

VERTICAL ANALYSIS OF BALANCE SHEET

Vertical Analysis (%)


ASSETS 2012 2013 2014 2015 2016
Cash 17.07 12.32 12.19 12.45 13.02
Balances with other banks 9.00 5.37 6.30 4.92 4.69
Lending’s to fin. institutions 1.90 2.82 3.57 2.82 2.09
Investments 27.00 27.17 21.69 27.66 20.88
Advances 39.91 46.53 49.00 44.70 50.50
Operating fixed assets 1.66 1.64 1.50 3.40 2.96
Other assets 3.46 4.14 5.75 4.07 5.45
Total 100 100 100 100 100
LIABILITIES 2012 2013 2014 2015 2016
Share Capital 0.89 1.02 1.10 1.07 1.09
Reserves 1.95 2.34 2.15 2.07 2.43
Unappropriated profit 1.66 2.89 4.97 5.95 6.41
Surplus On Reval. of assets 3.86 6.61 4.48 6.18 2.57
Bills payable 1.30 0.30 1.64 0.93 1.25
Borrowings 2.00 1.52 1.81 1.43 4.94
Deposits and other accounts 84.15 80.22 77.79 77.66 76.42
Liabilities against assets 0.0031 0.0029 0.0021 0.0044 0.0030
subject to finance lease
Deferred tax liabilities net 0.01 0.77 0.37 0.67 Nil
Other liabilities 4.17 4.32 4.12 4.05 4.85
Total 100 100 100 100 100
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101

A NALYSIS
The other assets of National Bank of Pakistan fluctuate during all years. The year 2012 has a
percentage of 3.46%, which is increased till 2014 that is 4.14% (2013) and 5.75% (2014). The
percentage of other assets is decreased to 4.07% in the year 2015; however it was increased to
5.45% in the year 2016.

VERTICAL ANALYSIS OF INCOME STATEMENT


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102

2012 2013 2014 2015 2016


Markup/return/interest earned 100 110 110 119 143
Markup/return/interest expensed 31 34 35 40 56
Net markup/interest income 69 77 75 79 87
Provisions against non-performing advances 7 8 8 11 25
provision for/(reversal of) diminution in the value
of investments 1 -1 -2 0 1
provision against off balance sheet obligations 0 Nil Nil Nil 0
bad debts written off directly 0 0 0 0 Nil
8 7 6 11 26
Net markup/interest income after provisions 60 69 70 68 61
NON MARKUP/ INTEREST INCOME
Fee, Commission & brokerage income 24 16 15 16 19
Dividend income 6 6 7 8 7
Income form dealing in foreign currencies 5 4 3 2 9
Gain on sale & redemption of securities-net 0 4 3 6 1
Investments classified as held for trading Nil 0 0 0 0
Other income 4 1 2 0 3
Total non-markup/ Interest income 40 31 30 32 39
Total income ( Interest + non-Interest) 100 100 100 100 100
NON MARKUP/ INTERSET EXPENSES
Administration expenses 42 37 34 33 43
Other provisions written off 0 2 0 1 5
Other charges 0 0 1 0 1
Total non markup/ Interest expenses 43 38 34 34 46
PROFIT BEFORE TAXATION 57 62 66 66 54
Taxation Current 24 23 22 20 28
Prior years 4 -4 1 1 Nil
Deferred 0 1 0 1 -10
28 21 23 21 18
PROFIT AFTER TAXATION 30 42 43 45 36
Unappropriated Profit brought forward 28 30 48 76 107
Transfer from surplus on revaluation of fixed
assets on account of incremental depreciation 0 0 0 0 0
Profit available for appropriation 58 72 91 120 143
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103

A NALYSIS
The interest earned by National Bank of Pakistan fluctuates and shows an increasing trend during
all years. The year 2016 is unique in terms of bank’s interest earned. The bank earned 143%
interest in this year. All other years shows an increasing trend that is 100% in 2012, 110% in
2013, 110% in 2014 and 119% in 2015.

A NALYSIS
The interest expense of National Bank of Pakistan shows an increasing trend during all years. In
the year 2012, the interest expensed is 31%. The interest expense is increase in 2013 as it shows
a percentage of 34%. There was a marginal increase in 2014, as interest expanse shows a
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104

percentage of 35%. The year 2015 also shows an increase of 40%. The year 2016 represents a
percentage of 56%, highest among all years.
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105

BANK ANALYSIS WITH REFERNCE TO COMMERCIAL


BANKS LISTED ON STOCK EXCHANGE
Financial Position of Commercial Banks
Registered in Pakistan
Name
of As of June 2016
Commercial Paid up Reserves Assets Deposits Advances Profit Earnings Branch Credit
(Rs. After Per
Bank Capital (Rs. Bn) Bn) (Rs. Bn) (Rs. Bn) Tax share Network Rating
(Rs. (Rs.
Bn) Bn) (Rs) (Nos)
Habib Bank 7.59 23.6 735.71 584.85 411.36 7.5 9.75 1400 AA+
NBP 8.97 18.54 788.12 621.53 173.42 8.1 9.03 1249 AAA
Allied Bank 6.46 5.48 344.7 293.97 168.45 2.51 3.88 757 AA
MCB 6.28 35.88 450.34 350.72 228.98 7.68 12.22 1038 AA+
United Bank 10.12 12.82 576.02 465.54 328.55 5.59 5.53 1100 AA+
First Women 0.28 0.22 8.04 6.4 3.09 0.05 1.67 38 BBB+
Bank of Punjab 5.29 7.43 217.85 180.82 142.85 -2.63 -4.97 272 AA-
Soneri Bank 4.11 1.88 81.61 64.73 45.83 0.47 1.13 90 AA-
Askari Bank 4.06 7.59 194.21 153.32 114.04 0.05 1.01 155 AA
Bank Al- Habib 4.79 2.8 167.36 136.75 93.25 1.25 2.61 203 AA
Bank of Khyber 4 1.34 34.43 24.4 11.14 0.11 0.27 34 BBB+
Bank Al- Falah 8 2.95 333.02 287.77 180.02 1.69 2.12 231 AA
Saudi Pak 5 0.22 50.83 42.35 27.62 -0.81 -1.54 55 A-
Faysal Bank 5.3 3.57 137.31 99.61 87.61 0.75 1.41 111 AA
KASB Bank 4.02 0.17 53.66 44.33 32.65 0.08 0.39 41 A
Meezan Bank 4.54 0.81 71.74 57.84 38.3 0.44 0.98 111 A+
NIB Bank 28.44 8.46 177.98 112.12 85.43 -0.73 0.23 240 AA-
Mybank 4.24 0.41 45.47 31.96 23.03 0.43 1.02 69 A
Atlas Bank 5.01 0.52 30.7 22.18 17.5 -0.2 -0.39 31 A-
Standard
Chartered 38.72 1.95 276.38 173.81 126.27 1.31 0.34 176 AA+
-
JS Bank 5.11 0.01 24.16 14.08 9.57 0.16 -0.31 11 A
Habib
Metropolitan 6.02 6.7 192.45 128.97 101.22 1.57 2.6 100 AA+
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106

A stock exchange is a corporation or mutual organization which provides "trading" facilities for
stock brokers and traders, to trade stocks and other securities. The securities traded on a stock
exchange include: shares issued by companies, unit trusts and other pooled investment products
and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. The
initial offering of stocks and bonds to investors is by definition done in the primary market and
subsequent trading is done in the secondary market. In Pakistan securities are traded on three
stock exchanges which are Karachi stock exchange, Lahore stock exchange and Islamabad stock
exchange.

The financial position of commercial banks registered on stock exchanges in Pakistan, are shown
in preceding page in terms of their:

Paid-up Capital
Reserves
Assets
Deposits
Advances
Profit after tax
Earnings per share
Credit rating

The best way to analyze these commercial banks is to analyze their credit ratings. The National
Bank of Pakistan enjoys the highest credit rating amongst Pakistani banks; JCR- VIS Credit
rating Co. Limited awarded highest standalone credit rating of AAA to NBP. The JCRVIS Credit
rating Co. comments about NBP say a lot about the bank:29
“The organization has been able to strategically manage and build on its competitive advantages
which has translated into the strong and well managed improvement in profitability trend
observed over the last few years, a substantial balance sheet of sound asset quality, and strong
liquidity and capitalization levels”
NBP’s key strength remains its extensive outreach and a low cost, stable deposit base. Deposits
are also guaranteed by the Government of Pakistan under the Banking Nationalization Act, 1974.
There have also been significant improvements in the management practices of the bank and a
focus on enhancement of systems and controls. In this regard the management has entered into
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an agreement for the acquisition of a core banking software which is likely to be implemented
over the next few years.
JCR-VIS believes that the current economic situation puts certain leading industrial sectors and
the general consumer under financial stress. Therefore, the second half of 2016 and 2009 are
likely to be challenging for the banking sector as a whole, in terms of maintaining growth, asset
quality and profitability.30
The JCR-VIS Rating Process include following steps:31

1. Signs agreement for an initial rating


2. Submits preliminary information materials
3. Conducts a preliminary study
4. Submits a detailed questionnaire to the issuer/client
5. Provides detailed information in response to detailed questionnaire
6. Conducts pre due diligence meeting analysis
7. Conducts due diligence meetings
8. Conducts post due diligence analysis
9. Brief for internal rating committee meetings is prepared
10. Sub Committee recommends preliminary/initial rating
11. Rating Committee decides the preliminary/initial rating
12. Discusses the rating rationales and rating issues with client
13. Notifies issuer of the preliminary/initial rating, deliberates on appeals by client, if any
14. Consents to release of preliminary/initial rating to the public in case of non-mandatory
ratings
15. Releases the preliminary/initial rating to the press

FUTURE PROSPECTS OF NATIONAL BANK OF PAKISTAN


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 forward-looking
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management of NBP is a firm believer in focusing on niches where there is critical mass and to
create products that meet that demand.

National Bank of Pakistan is gearing up to the challenges faced by the domestic banking industry
due to innovations and advances in the international banking world, which is the consequence of
globalization. The bank wishes to effectively utilize the financial assistance being extended by
the Government of Pakistan for banking sector reforms aimed at reducing operating costs and
improving profitability. National Bank of Pakistan is distinct from other banks in that it has a
nonprofit and service oriented motive, which has manifested itself in the area of salary deposits
of government employees and payment of utility bills. The bank renders these services across the
country reaching as far as the remotest regions; from our northern borders to the Arabian Sea.
These services do not contribute towards the earnings of the bank; rather they put pressure on
bank’s resources. Nevertheless, the bank is committed to serving small savers and the general
public of the country. National Bank of Pakistan is everyone’s bank and does not only serve
corporate customers. To extending and targeting research to improve bank earnings, through
customer focus of bank’s commercial and corporate branches, and by enhanced efforts towards
the development of human capital, the bank shall very soon transform from a bureaucratic
organization to a fast paced, modern, and competitive bank. In conclusion, the National Bank of
Pakistan have the vision, which will enable it to achieve even better results, safeguard the
interest of their customers and to assist them in their march towards progress and prosperity in
future.

The National Bank of Pakistan is confidence that tomorrow we will be…

Leaders in our industry


An organization maintaining the trust of stakeholders.
An innovative, creative and dynamic institution responding to the changing needs of the
internal and external environment

NBP’s current management has boarder vision. They have taken steps to improve customer
services, streamline internal procedure and creating a delectating climate for technology
initiative.
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Reorganizing efforts going on in the NBP has open many opportunities for NBP to grow. For
instance to achieve objectives NBP have taken following measures.

Setting of target for of making at least 300 branches country wide on line.
Closing of all those branches, which are burden on NBP.
Management to offer specialized services to major corporate including advisory and debt
syndication introduces the concept of relationship manager.
Comprehensive training programs has been develop to up grade the core banking skills of the
existing staff as well as integrate high quality hiring.
To improve the motivation of staff a merit-based culture is being promoted. Through
overhauling the manpower recruitment preservation and performance appraisal system.
The actions taken by current management provide a great opportunity for NBP for making it
future prosper and can make NBP not less than any modern commercialize bank in Pakistan.

The Management of NBP assess that the Internal Control environment is showing signs of
improvement as compared to previous years in all areas of the bank. The bank is endeavoring to
further refine its internal control design and assessment process as per guidelines issued by the
State Bank of Pakistan Accordingly, Bank is making all possible effort to improve the
professional skills and competency level of the staff through need based training programs and
our valued customers for their support and continued confidence in NBP.

SHORT FALLS/ WEAKNESSES OF NATIONAL BANK OF


PAKISTAN
The National Bank of Pakistan’s Advance salary, which has long been the flag-ship
product for NBP, is replete with charges of corruption, default and inefficiency.
The National Bank of Pakistan’s huge number of borrowers is untraceable or correct
whereabouts are not known.
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The housing finance product of NBP lacks proper infrastructure including database
support even after five years of post launch history. The similar products launched by
other commercial banks are much smaller in size are running on well-articulated systems
and are backed by proper policies and guidelines. The NBP product, despite boasting a
sizeable portfolio built around some reckless selling, is mostly infected.
The NBP Karobar scheme is designed around President’s Rozgar scheme. The scheme
which had all the potential to become a landmark was so badly mishandled by National
Bank of Pakistan.
The Quality of infrastructure added by National Bank of Pakistan during the last few
years is quite substandard as compared to that of peer banks.
In NBP’s five year strategic plan 2015-2011 approved by board of directors does not
address any serious thinking on
Productivity improvement and benchmarking with the competition.
Development required for serving major sectors of the economy.
Infrastructure to support planned growth and vision.
Inducting and leveraging specialized human capital.
Bringing the institution on international banking landscape in the coming five
years, not to speak of the seven years which the current management has already
served.
As for as public interest is concerned there were no service standards benchmarks and
guidelines available in NBP. There were only old documents that were crafted at least a
decade or more back.
Due to poor planning the bank had book losses of over 1.2 billion rupees in the Karobar
Scheme.
The National Bank of Pakistan’s outsourced employees (2350) was obtained from a
single source. Most of these are performing the core function of the bank outside their
assigned duties without any training and supervision.

The National Bank of Pakistan is incurred large expenses in running those branches,
which are not producing any income.
The up gradation of human resource is very slow in NBP. The branches of NBP have less
number of employees as their requirements. The concept of “One Man Show” is adopted
in many branches to save salary expenditure; even most of the branches use their security
guards for various tasks. The one reason for this is that the senior management is able to
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decrease salary expenditure of the bank, which result an increase in the net profit. For
their performance they received handsome amounts of bonus. But in long run it has a
negative effect on bank’s productivity.
The pension’s distribution service or payments to EOBI beneficiaries, utility payments;
workers remittances are occupied lowest priority level.
In NBP Karobar scheme the product selected by the NBP is of inferior quality and
develops faults in the first few months of delivery.
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CONCLUSIONS
The National Bank of Pakistan plays a key role in the strategic national development. The
bank has historically been the financial arm of the government and has enjoyed the
blessings of state support in the form of huge public sector funds and deposits.
In contract to other banks populating the FSI sector, NBP is mandated to uphold public
interest. It is critical too as all other banks and NBFIs in public sector have been closed
down or merged with NBP.
In contract to other banks populating the FSI sector, NBP is mandated to uphold public
interest. It is critical too as all other banks and NBFIs in public sector have been closed
down or merged with NBP.
The current management of National Bank of Pakistan was hired purely for their
international experience, business orientation to turn around a purely public institution
into a sustainable and commercially viable bank serving public interest along the lines of
a large modern commercial bank.
The National Bank of Pakistan has effective budgeting system in place. Annual budget of
the bank is approved by the Board and monthly comparisons of actual results with the
budget are prepared and reviewed by the senior management.
The National Bank of Pakistan has a comprehensive framework of written policies and
procedures on all major areas of operations such as Credit, Treasury Operations, Finance,
Internal audit and Compliance approved by the Board.
The National Bank of Pakistan provides sustainable financing for growth of industries of
critical national importance such as energy, education, healthcare, transport, shipping,
Research & development.

RECOMMENDATIONS
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The National bank of Pakistan should be fully prepared in its management of financial
crises and its business continuity planning, within the standing committee framework,
and should work with others to strengthen national crises management preparations.
The bank should improve the quality of training of its employees and the integrity,
controls and efficiency of its systems, processes and financial reporting.
The bank should improve its recruitment, retention and development and to reform the
Bank’s pension scheme.
The bank should renegotiate the Bank’s long term financial framework and to overhaul
the Bank’s financial system.
The Bank should improve IT capability in the analytical areas and to develop a medium
term strategy for banking and market operations.
The National bank of Pakistan should monitor the impact of its operations on the
environment, which is mainly through the use of power and the generation of waste.
NBP, being the only lending arm to the government for public sector development should
design, develop and deliver product and services for economic growth.
The bank should provide support to the Micro, Small and Medium enterprises thereby
reducing unemployment and helping to create a more equitable distribution of wealth.
The NBP should adopt modern banking tools and techniques. Quality leadership, clear
vision, investment in IT infrastructure and human resource development.
The bank should develop software for pension disbursement.
As for as Islamic Banking environment is concerned the management and employees of
NBP should work together for basic research for discovering their own laws, developing
theories or concepts for the better direction of their own business environment according
to Quran & Sunnah.
The branches should reduce its large expenses in order to increase the value of the bank.
The NBP should strengthen incentives and accelerate a results-oriented training and
communications programs for management and staff.
The National Bank of Pakistan should implement a financial inclusion program to meet
the needs of underserved economic subsectors, including outreach programs to meet the
requirements of the agriculture, housing, SME and microfinance sectors.
The National Bank of Pakistan should introduce a framework for consolidated
supervision and reorganize the regulatory architecture to allow better regulation and
supervision of financial control division of bank.
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REFERENCES
1
http://www.nbp.com.pk/EcomomicBulletin/FS-Complete-31-12-2007.pdf
2
NBP Quarterly Report September 2008
3
http://www.nbp.com.pk/nbp/About_Us/About_US.jsp
4
NBP Quarterly Report September 2008
5
http://www.nbp.com.pk/nbp/About_Us/About_US.jsp
6
Black's Law Dictionary page 471 (5th ed)
7
Kotler, P., Armstrong, G., Brown, L., and Adam, S. (2014) Marketing, 7th Ed.
8
Principles of marketing 8 ED by Kotler & Armstrong G7
9
Practice & Law of Banking in Pakistan by Dr. Asrar H. Siddiqui 7th ed page no 87
10
Practice & Law of Banking in Pakistan by Dr. Asrar H. Siddiqui 7th ed page no 91
11
Practice & Law of Banking in Pakistan by Dr. Asrar H. Siddiqui 7th ed page no 88
12
Practice & Law of Banking in Pakistan by Dr. Asrar H. Siddiqui 7th ed
13
http://www.nbp.com.pk/Aamdani/index.htm
14
http://www.nbp.com.pk/Premium/index.htm
15
http://www.nbp.com.pk/Saibaan/index.htm
16
http://www.nbp.com.pk/advancesalary/index.htm
17
http://www.nbp.com.pk/CashnGold/index.htm
18
Practice & Law of Banking in Pakistan by Dr. Asrar H. Siddiqui 7th ed page no 221
19
Practice & Law of Banking in Pakistan by Dr. Asrar H. Siddiqui 7th ed page no 228
20
Practice & Law of Banking in Pakistan by Dr. Asrar H. Siddiqui 7th ed page no 228
21
SBP Prudential Regulations
22
http://www.nbp.com.pk/nbp/NBP_Treasury.jsp
23
http://www.nbp.com.pk/nbp/Treasury_Products.jsp
24
http://www.nbp.com.pk/nbp/About_Us/DReport3.jsp
25
http://www.nbp.com.pk/nbp/About_Us/DReport3.jsp
26
NBP Annual Report 2007
27
Terry and Franklin Principles of Management
28
Human error by James Reason
29
NBP Annual Report 2007
30
http://www.jcrvis.com.pk
31
http://www.jcrvis.com.pk/ratingscale/rating_process.htm