achieved and economic growth rate can be increased.

The power of sanctioned loans had been

delegated for controlling different offices, according to the amount of loans. This department is
also called as risk management group.
Advances section:
Advances are investments of bank to earn profit. After restructuring of National Bank of
Pakistan, Head Office gives loan targets to each branch that must be achieved for its survival.
The Manager is responsible to achieve these targets in the given period.
TYPES OF LOANS /FINANCES:
There are three major types of loans that are offered by NBP mostly at the rate of
15.50% or Kibor+premium (premium lies between 1.10% to 4.50%), they are as follows:
 Short Term Finances
 Medium Term Finances
 Long Term Finances
SHORT TERM FINANCES:
Short-term finances are sanctioned for increasing Working Capital & Production.
These are given for the period of one year to 3 years maximum. Short Term finance includes the
following types:
 Cash Finance
 Demand Finance
 Running Finance
Cash Finance
In this mode of financing the borrower is allowed to make withdrawals of funds as require, but
the total amount outstanding cannot exceeding the limit sanctioned. The calculation of mark-up
or interest is based on the number of day a specific amount is withdrawn. This finance is
normally borrowed by the small traders or individuals for their petty matters involving cash
transactions up to three hundred thousand maximum. The bank gives this loan to the customer &
businessman against certain specified immovable property. It is issued for establishment &
extension of industry.
Demand Finance
One time disbursement of the whole amount sanctioned, as the limit for the credit allows. Any
person, individual, group, company, firm and all others can achieve this mode of financing. The
mark-up or interest is calculated on the total amount disbursed and requires to be paid before the
date of final adjustment. Regarding the amount, limit and period it depends on the nature of the
case in interview. This loan is given against movable property (called Secure Finance) or may be
given against personal guarantee (called Clean Finance).
Demand finance is further divided into three types:
 Staff Finance
 Gold Finance
 Agriculture Finance
I. Staff Finance
This finance is given to the employees of National Bank for improving their living standard e.g.
for purchasing a motorcycle, car, house building, computer etc. There is no markup on this loan
except on car & computer buying @ 4%.
II. Gold Finance
It is sanctioned for the period of 11 months by pledging gold ornaments.
III. Agricultural (Seasonal Finance)
It is given for supporting seasonal crops like ‘Rabi’ & ‘Kharif’. It is sanctioned for six month
only at high markup rate.
Running Finance
This finance is only a secured finance which is sanctioned against movable security that is easily
convertible into cash e.g. security bonds, Govt. certificates & bonds etc. Example for this loan is
Three Advance Salary. Three Advance Salaries is given to Govt. or semi govt. registered
company’s employees. The only condition for this type of credit is that the salary must be
directly credited into the bank. The borrower must give a blank cheque for security. Security
against running finance is that whish is e

SEVP

EVP

SVP
 VP

AVP

GRADE-1

GRADE -2

GRADE-3

CLERICAL

ASSISTANT

Clerical Staff Non-Clerical Staff

Cashier Messenger

Technical Staff Dispatch Rider

Analysis and Comments on Organizational Structure of National Bank

Before 02-07-2010 the organizational structure was so complicated. Each authority has a large
span of control. In that structure president has to control six head and it shows a lot of
responsibility. At that time the president of Bank Mr. Syed Ali Raza announced to reorganize the
structure. After reorganizing the structure becomes so simple and convenient. The first line
managers are the president and board of directors of the organization.
If we made a deep analysis over the hierarchy of the structure president has further chiefs. Chiefs
supervise the regions assign to them. Each branch then works under the guidelines and
instructions of the regional offices. Then there is a chest branch in every city. A chest branch has
authority of issue Government Draft.
Now the structure is so simple and easy that everyone can understand it so easily. Initially there
is a president than board of director, member executive board , regional head, zonal head ,branch
manager.

Departments in National Bank of Pakistan Branch

Following departments are working in National Bank of Pakistan branches:
 Foreign Exchange Department
(The said Deptt. did not exist in the Ahmed Pur East Branch)
 Credits and Advances Department
 Remittances Department and Collection
 Cash Department
 Deposits Department
 Bills and Government Receipt & Payment
 Clearing Department
Credit & Advances Department
The most important activity of the bank is the granting of credit to the customers.
National Bank of Pakistan provides short term and long term financing for domestic and
international trade. The policies are made by the central office of the cash can be amended on the
basis of rules and regulations, economic risk of each country board of directors and committee of
the National Bank of Pakistan made this type of decision and informed about these decision to
branch managers.
Managers can grant the credit limit to each customer with in the declared limits approved
by the controlling offices i.e. zonal. Banks grant credit to the customer for a certain period of
time. The Banks provides the credit to the customers so that they can purchase ahead of their
liability. By giving these facility to the customer large scale production of commodity can be