Final Report of NBP

Internship Report
FASIH UR REHMAN
BC-07007 (MORNING) B.COM (HONS.) (FINANCE) SESSION 2007-2011
UNIVERSITY OF THE PUNJAB [Type the phone number] [Type the fax number] 9/5/2011
SUBMITTED TO FACULTY OF COMMERCE UNIVERSITY OF THE PUNJAB GUJRANWALA CAMPUS IN TOTAL FULFILLMENT OF THE REQUIREMENTS OF THE DEGREE OF BACHELOR'S OF COMMERCE
NBP INTERNSHIP REPORT
UNIVERSITY OF THE PUNJAB (GUJANWALA CAMPUS)
Table of Contents
Sr. No. Description Page #
Dedication Preface Executive summary
2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Acknowledgment History of NBP Vision Statement Mission statement Core Values Branch network Products Services Departments Work Done By Me Current Problem SWOT Analysis Financial Analysis 2010 Conclusion Recommendations Biblography
Dedication
"To my Parents, Teachers and Friends"
I want to talk about friendship. Friends can change your life. So, you must know who is a real friend. Firstly, your friend mustunderstand you and of course, you must understand his/her, too. Ithink, another important point in a friendship is confidence. Youmustn't tell lies to each other. In addition, you must say everythingmustn't tell lies to each other. In addition, you must say everythingabout yourself. I think these are important for a friendship.
Forgetting the things that lie behind, I will strive towards my higher Spiritual possibilities. I dedicated my Report to University of the Punjab Gujranwala Campus.
Preface
Banking sector owes a pivotal importance in the economy of any countrythrough its vibrant functions. This is the deep seated motivator that geared up me to join the National Bankof Pakistan for my internship. Moreover the practice and the familiarity learned during this tenure would alsoattest very helpful and alleviating in the awaiting proficient life.
This report is an upshot of my 6 weeks internship in National Bank of Pakistan Satellite Town Branch Gujranwala. National Bank of Pakistanpossess an imperative and historical importance in the banking sector of Pakistan it always remains the center of hustles in business activities, and act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does not have a presence)
Although a derisory period of 6 weeks is not enough to learn the complexoperations of the bank yet I made industrious efforts to converse them comprehensively in this report. Particularly, I have made maximum ventures to elaborate this report with material read,listened and observed.
Executive Summary
In order to contend with the changing environment it is crucial to have some practical experience. During this practical course we are provided with an opportunity to learn that how the theoretical knowledge can be put into practice in actual. I selected National Bank of Pakistan for my internship, as it is the nations bank. I completed six weeks in NBP Satellite Town Branch Gujranwala. It is a theme-based report in which I have initiated from financial sector of Pakistan, narrowing down my discussion tobanks and then finally to National Bank of Pakistan. This report has been divided into three parts. In first part, I have thrashed out financial sector of Pakistan, financial markets, financial reforms and banks as well. Followed by, country and banking se ctor background is specified. Subsequently, I have given a brief overture of National Bank of Pakistan. Then there is a short introduction of its CIVIL LINES Branch Gujranwala and products and services offered by it. In second portion of the report, I have elaborated all activities and functions, which I performed during my internship, in a step -by-step arrangement.I have also mentioned my duties, accomplishments, and knowledge which I have gain during internship. A
comprehensive discussion about procedure and precautions for availing any product and s services are clearly stated. The last part of the report solely composed of Financial Analysis of National Bank of Pakistan. I have elaborated this financial analysis through proper comparisons, graphs and comments as well.
Acknowledgement
First, I pay thanks to Allah Almighty, who is the most Gracious and ever Merciful, knower of visible and invisibles who made me able to complete my task, before the time a lot.And all the respects and tributes go to Holy Prophet Mohammad (S.A.W.W) who is forever guidance and knowledge for human being on this earth I am proud to say that I am very grateful to my family whose kind prayers and cooperation helped me at every step of my work and specially thank my Parents for their cooperation and support for the sake of my education My kind teachers that always remained supportive to me, throughout my report. Their guidelines have been beneficial to me and who taught me so well thatI was in such a position to work for the internship report with my own ideas. I am so thankful to NBP staff specially MR.Kaisar, AbidAdeel and Asrar who were really cooperative to me in the completion of this report and who directly or indirectly helpedme in completing my internship report on time.
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Vision
To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility.
Motto:
Sharing In Success with You
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Mission
NBPwill aspire to the values that make NBP truly the Nations Bank, by:
Institutionalizing a merit and performance culture. Creating a distinctive brand identity by providing the highest standards of services. Adopting the best international management practices. Maximizing stakeholders value. Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate.
Goal
To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products.
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Core Values
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 Gove rnment 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. NBP aim to be an organization that is founded on Growth through creation of sustainable relationships with our customers. Prudence to guide our business conduct. A national presence with a history of contribution to our communities.
It shall work to Meet expectations through Market-based solutions and products. Reward entrepreneurial efforts. Create value for all stakeholders.
NBP aim to be people who Care about relationships. Lead through the strength of our commitment and willingness to excel. Practice integrity, honesty and hard work. We believe that these are measures of true success. NBP have 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
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Financial Sector of Pakistan

With reference to national economy, the financial sector growth scope and significance has increased. The financial sector of Pakistan showed great performance in 2006 and continued its growth during the fiscal year 2007.
Financial Markets
Financial markets in Pakistan comprise of a developed money market, foreign exchange market and capital markets, while the derivative market is still in its early days of development. And meaningful, diversified but integrated financial reforms of the government played a key role in the development of financial sector of the country. Its overall size reached Rs 6.9 trillion. Market capitalization of Karachi Stock Exchange grew by 38 per cent to reach 46 per cent of GDP and rated as one of the best stock exchange in the emeging r economies. According to SBP, the financial sectors deposits during the past five years have grown by 70 per cent. By the end of calendar year 2005 they reached Rs 5.10 trillion ($85 billion). It equals to 85 per cent of GDP.
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Bank
Bank is a financial institution where you can deposit your money. Banks provide a system for easily transferring money from one person or business to another. Using banks and the many services they offer saves us an incredible amount of time, and ensures that our funds "p ass hands" in a legal and structured manner. There are also other types of financial institutions that operate just like banks.
Origin of the word

The name bank derives from the Italian word banco"desk/bench", used during the Renaissance byFlorentines bankers, who used to make their transactions above a desk covered by a green tablecloth. However, there are traces of ban king activity even in ancient times. In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as smerely convert the foreign currency into the only legal tender in Rome- that of the Imperial Mint.
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Commercial Bank
Commercial bank is the term used for a normal bank to distinguish it from an investment bank. This is what people normally call a "bank". The term "commercial" was used to distinguish it from an investment bank. Since the two types of banks no longer have to be separate companies, some have used the term "commercial bank" to refer to banks which focus mainly on companies. It raises funds by collecting deposits from businesses and consumers via checkable deposits, savings deposits, and time (or term) deposits. It makes loans to businesses and consumers. It also buys corporate bonds and government bonds. Its primary liabilities are deposits and primary assets are loans and bonds.
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Pakistan and Banking Sector Background
Before Independence
A little earlier before the creation of country, the role of Muslims of the areas, which were later, included in Pakistan was of no significance due to their restricted participation in the banking sector. There was only a small bank namely Australasia Ban having a few branches k in Lahore and its suburbs. In 1942, the Australasia bank was housed in agarage of a trader of Lahore who used to trade at a small scale with Australia during that period. However the Muslims of the sub-continent ran the only Bank, Habib Bank, which was established in 1941. At that time Quaid-e-Azam Mohammad Ali Jinnah expressed his desire that another Muslim bank also be established in Calcutta which came into reality when Adamjee with the assistance of Isphanis established Muslim Commercial Bank a few months before the creation of Pakistan in Calcutta. When Pakistan came in to being The Habib Bank shifted its Headquarters from India to Karachi. A few of Habib Bank's branches were already in operation in Pakistan. The Muslim Commercial Bank also moved its headquarters from Calcutta to Dhaka and later on to Karachi. At the time of independence, another small bank namely Bank of Bahawalpur also started business from Bahawalpur from December 1947. Before independence, the financial sector was in the hands of foreign banks some of them were British by origin. The oldest bank operating from 1883 in this part of the world was the Chartered Bank while another bank namely the Grindlays Bank which was also working simultaneously from 1883. In order to expand its business operations, the Grindlays acquired other small banks and merged them into the business of Grindlays. For example Allied Bank, National Bank of India etc.was merged into Grindlays Bank. Among the contemporaries, Imperial bank of India was the largest Indian Bank which had started its operations in 1919 which was discharging the role of a commercial banks as well as the Central Bank for India until an independent Central Bank i.e. Reserve Bank of India was established in 1935. However, since the Imperial Bank had the largest network of its branches all over India, it continued to play its role as a subsidiary of the Reserve Bank of India. In the Muslim majority areas, which was later on, became the part of Pakistan, small branches o Indian f banks were operating and soon after creation of Pakistan they shifted their branches and headquarters to India.
NBP INTERNSHIP REPORT | UNIVERSITY OF THE PUNJAB (GUJANWALA CAMPUS)
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At the time of independence:
At the time of independence, two major banks including Punjab National Bank at Lahore and Comila Banking Corporation were working in the then East Pakistan. This trend was so obvious that the total number of bank offices between June 30, 1918 and August 14, 1947 were reduced from 631 to 195 only. During the early part of 1949 the numbers of branches of Imperial Bank of India in Pakistani areas were more than of Habib Bank. In the early days of Pakistan, the government worked hard left no stone unturned to establish and strengthen the banking system in Pakistan. These efforts resulted in the establishment of State Bank of Pakistan which was inaugurated by Quaid-e-Azam on July 1, 1948. Quaid-e-Azamflowed from Quetta to Karachi specially to grace the occasion. Originally the State Bank was scheduled to be established in September 1948. ZahidHussain, who was the first Governor of the State Bank devoted all his time and energy to streamline the working of the State Bank. In normal situation, the Central Bank of a country is only established when the commercial banking start working on sound footings. But the circumstances forced the government to establish Central Bank and the task of stabilizing the commercial banking was also assigned to the State Bank, which it really did.
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Establishment of National Bank of Pakistan

The establishment of the National Bank of Pakistan in 1950 on the pattern of Imperial Bank of India was yet another milestone in the banking history of Pakistan. In September 1949 the rupee value was reduced against the Pound sterling, which was a major event in the banking circles. Consequently Indian government devalued its Rupee against Pound Sterlings, however Pakistan decided not to devalue its currency against Pound Sterling which resulted in increase of Pakistani cotton and jute prices for India which affected our exports to India. Though Pakistan had to suffer economically due to decline of exports to India, it however gave a sense of economic independence to Pakistan. Cut in imports from Pakistan proved as a blessing in disguise as Pakistan had to explore new exports markets for its products. Ho wever Indian banks operating in Pakistan refused to finance Pakistani exports . Pakistans 1997 banking reforms were aimed to strengthen the sources of governance and financial discipline for the banking sector, namely bank regulators, markets, the courts a nd bank owners, by enhancing the authority and the ability of the central bank to supervise banks and enforce regulations, promoting market integration and competition, improving the legal and judicial processes for enforcing financial contracts, and initi ting corporate governance a reforms in the NCBs and DFIs. However, due to weak market conditions, the country's deteriorating foreign investment climate, and lack of sustained efforts, on the one hand, and the distressed conditions of these banks with high cost structures and depleted balance sheets, on the other hand, attempts to sell these institutions have so far failed. Compared with the situation at the end of 1996, the banking sector had improved by most benchmarks by the end of 1999.
Privatization of Pakistan s Banking Sector

Comprehensive reform and privatization of Pakistans banking sector since President Musharrafs administration came to power in 1999 has led to the creation of a modern and thriving financial sector in Pakistan that is fuelling economic growth in the country. Now boasting a lot of commercial banks, the sector has been a top destination for new foreign investment and has diversified to provide an array of new services for customers.
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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. National Bank of Pakistan is the largest commercial bank operating in Pakistan. Its balance sheet size surpasses that of any of the other banks functioning locally. It has redefined its role and has moved from a public sector organization into a modern commercial bank. The Bank's services are available to individuals, corporate entities and government. While it continues to act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does not have a presence) it has diversified its business portfolio and is today a major lead player in the debt equity market, corporate investment banking, retail and consumer banking, agricultural financing, treasury services and is showing growing interest in promoting and developing the country's small and medium enterprises and at the same time fulfilling its social responsibilities, as a corporate citizen. In today's competitive business environment, NBP needed to redefine its role and shed the public sector bank image, for a modern commercial bank. It has offloaded 23.2 percent share in the stock market, and while it has not been completely privatized like the other three public sector banks, partial privatization has taken place. It is now listed on the Karachi Stock Exchange. National Bank of Pakistan is today a progressive, efficient, and customer focused institutio n. 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 income segments of the population. These includeNBP Karobar, NBP Advance Salary, NBP Saiban, NBP Kisan Dost; NBP Cash n Gold .It has implemented special credit schemes like small finance for agriculture, business and industries, administrator to Qarz -eHasna loans to students, self employment scheme for unemployed persons, public transport scheme. The Bank has expanded its range of products and services to include
NBP INTERNSHIP REPORT | UNIVERSITY OF THE PUNJAB (GUJANWALA CAMPUS) 20
ShariahCompliant Islamic Banking products. 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. National Bank of Pakistan has built an extensive branch network with 1250 branches in Pakistan and operates in major business centre abroad. The Bank has representative offices in Beijing, Tashkent, Chicago and Toronto. It has agency arrangements with morethan 3000 correspondent banks worldwide. Its subsidiaries are Taurus Securities Ltd, NBP Exchange Company Ltd, NBP Capital Ltd, and NBP Modaraba Management Company Ltd. The Bank's joint ventures are, United National Bank (UK), First Investment Bank and NA FA, an Asset Management Company (a joint venture with NIB Bank & Fullerton Fund Management of Singapore). The Bank's financial performance has been remarkable. In 2006, total assets are estimated at Rs635 billion, while deposits have grown to nearly Rs502 billion. Pre-tax profit rose to Rs26 billion. Earnings per share have jumped to Rs24.01 in 2006. The increase in profit was achieved through strong growth in core banking income. Interest income increased by Rs10 billion through growths in the loan portfolio as well as increase in spreads. Advances increased by Rs48 billion to Rs316 billion. The Bank maintains a sound loan portfolio diversified in nature to counter the risk of credit concentration. It ranges from providing credit to the un-banked market segment under NBP Karobar, to small and medium enterprises, to agricultural loans, to large corporate customers. National Bank has earned recognition and numerous awards internationally. It has been the recipient of The Bank of the Year2001, 2002, 2004 and 2005 Award by The Banker Magazine, the Best Foreign Exchange Bank Pakistanfor 2004, 2005, 2006 and 2007 Global Finance, Best Emerging Market Bank from Pakistanfor the year 2005, Global Finance, Kissan Time Awards 2005 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 2005, The Asian Banker. It has also been presented a Recognition Award 2004 for having a Gender Sensitive Managementby WEBCOP AASHA besides other awards.
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History of National Bank of Pakistan

In 1949 (September) U.K. devalued its currency, India followed suit but Pakistan did not. India said we had contravened the agreement of keeping both currencies at par. We said we had not done that, India had done it arbitrarily without consulting us. On October 3, 1949 the two central banks were to announce the new par value of both currencies but India denied a day earlier. India also froze our trade - balance surplus that is still an unsettled dispute. India also withdraws the Marwari merchants who were employed annually for movement of jute crop by financing it. There being no jute industry, prices fell sharply, foreign banks and foreign merchants stood aside and an agrarian unrest was threatening. Two Ordinances were, therefore, issued 1. 2. Jute Board Establishment Ordinance NBP Ordinance dated 08.11.1949
National Bank of Pakistan was established on November 9, 1949 under the NationalBank 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 importantjute centers in the East Pakistan and directed its resources in financing of jute crop. The Banks Karachi and Lahore offices were subsequently opened in December 1949. The nature of responsibilities of the B is ank different and unique from other banks/financial institutions. The Bank act as the agent to the State Bank of Pakistan for handling Provincial/Federal Government Receipts and Payments on their behalf.Mr.GhulamFarooq was chairman Jute Board and Mr. Mumtaz Hassan was chairman NBP. Until June, 1950, NBP remained exclusively in jute operations, thereafter other commodities were also taken-up. After that Mr. ZahidHussain, Governor SBP assumed additional charge also as chairman NBP's Board of Directors and Mr.M.A.Muhajir became its first M.D.In 1952 NBP replaced Imperial Bank of India. This arrangement was negotiated by Mr. Mumtaz Hassan as Acting Governor of SBP.In 1962 when Mr. Mumtaz Hassan became
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MD Mirpur (He had already served NBP for 10 years as its Chairman of government Director), the number of branches had increased from 6 to 239 and deposits from Rs.5 crore (50 million) to 106 crore profit from 3 million (3 Lac) to 21 million (2.1. crore) and the staff increased from 380 to 7091, as compared to 19 49-50. In Dec. 1966 its 600th branch was opened raising the deposits to 2.31 billion and staff to 14, 963. Up to 1965, the shareholders had received 225% of their original investment. Now it has more than 21549 employees 1537 branches and Rs.208283 million deposits. The Bank has also played an important role in financing the countrys growing trade, which has expended through the years as diversification took place. Today the Bank finances import/export business to the tune of Rs.62.17billion, whereas in 19 financing under this 60 head was only Rs.1.54billion.The field is being de-layered to improve customer services and enable faster decision making. As a result of this de-layering zones have been eliminated and the numbers of regions have been increased. Organizational hierarchy at the regional level has been restructured and operational and business activities have been completely separated. This separation will improve communication, decision making and promote teamwork. For the third consecutive year, the Bank is recognized as the best Bank in Pakistan for the year 2004 by the prestigious periodical. The Banker UK (a subsidiary of Financial Times Group)
Were expanding horizons, reaching out, Being there and bringing something for everyone. After all, we are The Nations Bank.
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Branch Network of NBP
Overseas Branches
y y y y 16 Overseas Branches 4 Representative offices 1 Subsidiary 1 Joint Venture y y y y
Domestic Branches
29 Regional Offices 1190 Branches 130 Online Branches 4 Subsidiaries
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TYPES OF BRANCHES
There are a lot of different branches of National Bank of Pakistan. We explain them one by one.
o There are Main branches in every city. In one city there is only one main branch, it is directly under the zonal office.
o Then there are Commercial branches these are the ordinary branches and are in the commercial areas such as the Mall Road Branch. o The Industrial Branches are exclusively in industrial zones.
o There are also Residential BranchesThese are exclusively in residential colonies.
o Another type is the Mixed Branch such as civil secretariat branch. Every kind of work is done. o There are also Project Branches created for specific purposes i-e the project and are at the site.
o Another unique type is the Model Branch. No other bank in Pakistan has these. In these branches all the work is done by the officers. Even the officers sit on the counters. Model Branches are in Karachi, Lahore and Islamabad. o There is one special type known as Drive in Branch There is one in Karachi known as Kahkashan branch. People go to the bank in the car, hand over the check and get the money sitting in the car.
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Management Hierarchy
President Board of Directors Member Executive Board Regional Chief Zonal Chief Manager
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NBP Services/Products
Bank works for the connivance of the customer & this connivance travels to the customer through the services offered by the bank.
NBP offers these types of services to the customers 1. Demand Drafts (DD)
Demand Draft is the services offered by the National Bank of Pakistan, which is most convenient, safe, speedy and reliable way to transfer money. Customers purchases National Bank of Pakistans Demand Drafts at very reasonable rates. Any person whether an account holder of the bank or not, can purchase a Demand Draft from a bank branch, and also can use it in other banks of Pakistan to transfer its money from one account to another. It is more reliable way, when a person has its account in the National Bank of Pakistan and he/she wants to transfer it any other bank of Pakistan, whether it is in the same city or not.
2. MAIL TRANSFERS (MT)

Mail transfer is also a way to transfer the money safely from one place to another. Any customer can move his/her money safely and quickly using NBP Mail Transfer service. And National Bank of Pakistan also offers the most competitive rates for providing this service. Obviously for any facility/activity performed by the bank it charge some amount from the customer, but as compare to the other banks National Bank of Pakistan offers this service in very convenient price to facilitate the customer more.
3. PAY ORDER NBP provides another reason to transfer your money using its facilities. National Bank of Pakistans pay orders is a secure and easy way to move the money from one place to another. And, as usual, it has charges for this service, which are extremely competitive. But the main difference in Demand Draft and Pay Orders is that Demand Daft can be used in type of bank in Pakistan whether Pay Orders only can be used in the National Banks of Pakistan, whether they are locating anywhere in the Pakistan.
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4. TRAVELER'S CHEQUES
Again the Travelers Cheques are the sources to transfer the money but this facility is mainly using to facilitate the travelers. Means they can travel without any fear of theft or loss during the traveling. FEATURES OF TRAVELER CHEQUES o Negotiability: Pak Rupees Travelers Cheques are a negotiable instrument o Validity: There is no restriction on the period of validity o Availability: At 700 branches of NBP all over the country o Encashment: At all 400 branches of NBP o Limitation: No limit on purchase o Safety: NBP Travelers Cheques are the safest way to carry the money.
5. LETTER OF CREDIT NBP is committed to offering its business customers the widest range of options in the area of money transfer. If the customer is a commercial enterprise then the National Bank of Pakistan offers the Letter of Credit service, which is just the important service for which the customers were looking for. With competitive rates, security, and ease of transaction, NBPs Letters of Credit are the best way to do the business transactions. Business people/customers do their lot of transactions daily, which were in -between of their customers or suppliers. Means businessmen feel it a most convenient way to transfer their money regarding to their business.
6. COMMERCIAL FINANCE
Obviously a bank play a very important role in the economy of Pakistan, but by providing the convenient products and services and by providing finance to the people of Pakistan it is playing a great role. Commercial financing provided by the National Bank of Pakistan is great facility. Through which its dedicated team of professionals truly understands the needs of professionals, agriculturists, large and small businesses and other segments of the economy. They are the customers best resource in making NBPs products and services work for them. Through this facility the bank is making dreams of people a reality.
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7. 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.
8. HOME REMITTANCES
The existing system of home remittances has been revised/significantly improved and welltrained 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 Tariff: NBP is providing home remittance services without any charges. Strict monitoring of the system is done to ensure the highest possible security.
Special courier services are hired for expeditious delivery of home remittances to the beneficiaries.
9. SWIFT SYSTEM
The SWIFT system (Society for Worldwide Interbank Financial Telecommunication) has been introduced for speedy services in the area of home remittances. The system has built-in features of computerized test keys, which eliminates the manual application of tests that often cause delay in the payment of home remittances. The SWIFT Center is operational at National Bank of Pakistan with a universal access number NBP-PKKA. All NBP overseas branches and overseas correspondents (over 450) are drawing remittances through SWIFT. Using the NBP network of branches, you can safely and speedily transfer money forour business and personal needs.
10.
Other Services
In addition to acceptable standard general banking services, following services arealso being offered at the NBP: o Letter of Credit Facility o Handling of Remittances o Issuance of Bank Drafts and Pay Orders. o Collection of Export Bills. o Collection of Local Bills. o Government Collections o Utility Bills Collection
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NBP Retail Products

i. NBP Premium Aamdni Monthly Income Scheme
o Amount of investment required from o Rs. 50,000/- to Rs. 5,000,000 o Investment period is 5 years o Free Demand Draft, Pay Order and NBP Online Aasan Banking o Free Cheque Book / NBP Cash Card (ATM + Debit) o Profit paid every month as follows:
Period 1 year 2 years 3 years 4 years 5 years
Profit Rates 7.50% 8.50% 9.50% 10.50% 11%
o Financing facility available up to 90% of the deposit value o Premature encashment will attract penalties o Zakat and withholding tax will be deducted as per rules
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ii.

NBP Premium Saver

Minimum saving balance of Rs. 20,001 and a maximum balance of Rs. 300,000 Free NBP Cash Card (ATM + Debit) Two debit withdrawals allowed in a month and no limit on number of deposit transactions Profit calculated monthly and paid on half yearly basis Earn up to 7.25% p.a.
iii.
NBP Karobar - President's Rozgar Scheme
If a person is aged between 18 and 45 years, he could be eligible for e asy financing for self-employment in the categories below: o NBP Karobar Utility Store o NBP Karobar Mobile Utility Store o NBP Karobar Mobile General Store o NBP Karobar Transport o NBP Karobar PCO o NBP Karobar Tele-Centre
Step-By-Step Procedure o Customer has to visit any NBP branch to obtain loan application form and scheme details. Application form could also be downloaded from the NBP web site. Photo copy of the form will also be accepted. Each form will cost Rs. 5. In case of photocopy or down-loaded form, form fees will be charged at the time of application submission o Branch will provide details of the scheme along with the required documents to be submitted with the application form o Then Customer will submit the application form along with all the required documents as well as the verification and the processing fees
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o The application form and all the relevant papers of the customer will be checked by the Branch staff and if found complete, application processing will commence o If the case is approved then the customer will be informed accordingly and will be advised to deposit the Down payment and fulfill all the other product specific formalities o Upon fulfillment of all the details and approval of the loan by the competent authority, Purchase Order in favor of vendor will be issued and a copy of the same will be given to the customer o Delivery of the financed asset will be made directly to the customer by the NBP selected vender
iv.
NBP Saibaan House Financing

Following Product Items are offered under this scheme: o Home Finance Home Renovation o Home Construction o Purchase of Land + Construction o Balance Transfer Facility (BTF)
v.
NBP Advance Salary
In January-2003, National Bank of Pakistan has launched a unique product, NBP -Advance Salary. Currently this product is for fixed-income permanent employees of Federal & Provincial Government, Semi-Government, Autonomous, Semi-autonomous, local bodies and other Government organizations. The product is purely cash flow based and offers its holder to avail 20 (twenty) net salaries in one go to be repaid in up to 60 (sixty) months. With no collateral, insurance or requirements, Advance Salary provides rapid disbursement in a short turnaround time.
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vi.
NBP Cash Card
NBP Cash Card is a 24-hour direct access ATM/Debit card to customers bank account, which lets him/her pay directly from him/her 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 ATMs across the country. Advantages o Customer wont need to carry a lot of cash with himself/herself every time he/she goes out. o Secure and Safe transaction. o Account Information on tips (like: Mini Statement, Balance Inquiry, Utility Bill Payment etc.) o Enable To Withdraw Cash From 1-Link ATMs / MNET ATMs. o Enable to Make Purchases from Around 4000 POS (Merchants) Countrywide including 2500+ POS in Karachi. o No Card Issuance Fee for first 12 Months
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NBP Investor Advantage
It is a Financing Facility for Retail Investors with following Features o Comfortable and secure environment for trading o NBP financing at very easy terms requiring minimum documenta tion o Minimum turnaround time o No security requirement from the customer except for the customer's equity o Customer's equity freely available for investment. o Equity acceptable in cash or approved share.
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viii.
NBP Cash n Gold
With NBP's Cash n Gold, customers can meet their need for ready cash against their idle gold jewelry. This product is available with following features: o Rate of mark-up 13% p.a. o Facility of Rs. 7,000 against each 10 gms of net contents of gold o No maximum limits of cash o Repayment after one year o Roll over facility o Only gold ornaments acceptable o Weight and quality of gold to be determined by NBP's appointed schroffs o No penalty for early repayment
ix. NBP Online "NBP Online" offers following services: o Balance Enquiry o Statement of Account o Cash withdrawal through cheque o Cash deposit to own and third party account o Transfer of funds to own and third party account Customers can avail services from NBPs Online Branches located in 30 cities:
Karachi Islamabad Rawalpindi Gujar Khan Sailkot Gujranwala Sheikhupura Mardan
Hyderabad Quetta Lahore Burewala Multan Muzaffarabad Faisalabad Sahiwal
Mirpur (AJK) Gujrat Abbottabad Bahawalpur Peshawar Kohat Larkana
Sargodha Sukkur Jhelum WahCantt D.G. Khan D.I. Khan Jhang
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x.
NBP Help line - CALL CENTER
In an era of heightened customer demands and increased competition, Call Centers have become a crucially important mechanism to cost-effectively serve customers and sell products. National Bank of Pakistan realized that it needed not only to establish its Call Center by providing a one-stop service for all customer enquiries related to the bank's products & reengineer its delivery processes, but also to ensure that it provides the same level of out-standing service across channels to give a consistent customer experience. To meet this objective, the bank has launched a Customer Relationship Management system (CRM) following a proper intensified path & Turnaround Time nationwide for resolving Customer Complaints with solutions deployed at all its Regional Head Quarter in the country that are being used by millions of users that use self-service applications in addition to the live agent services. NBP has taken a step towards improving customer services by establishing a state of the art Call Center with a Help Line Toll Fee Number 0800-80080 working in two shifts from 8:30 am till 10:30 pm to provide instant service to all the existing & prospective customers on all the NBP products being offered by the bank specially NBP Karobar. Presently, the Call Center is receiving more than 1500 calls per day for resolving customer based product enquiries and complaints.
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xi.
NBP Pak Remit
Pak Remit is an Internet based Home Remittance Service. This service is available to U.S. residents for sending money to their family and friends in Pakistan. One must have a valid US Dollar account with a U.S. bank or a US Dollar credit or debit card in order to remit funds through this channel. Remitters in USA can log on to our user friendly website, www.pakremit.com and easily remit funds to Pakistan from the comfort of their homes, in a matter of minutes. The service is fully secure with advance encryption application and is available for use 24 hours a day, 7 days a week. Fees and exchange rate have been set at competitive levels and the remitters have the ability to track delivery of funds as well.
Process o Remitters log on to www.pakremit.com and after completing the registration process, are able to remit funds. The whole process takes a few minutes. o Funds in Pak Rupees can be sent to beneficiaries, having an account with any bank in Pakistan, including NBP. While funds are credited directly to beneficiaries maintaining accounts with NBP, a pay order or deman draft is d couriered to other banks for their customers. Pay order or demand draft can also be couriered directly to the beneficiarys office or home, if requested by the remitter. o Funds in US Dollars can be sent only to a Beneficiary maintaining a US Dollar account with one of NBPs Foreign Exchange Branches. Click here for details of NBP Foreign Exchange Branches.
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xii.
NBP Protection Shield
Insurance Coverage, In case of Accidental Death (Including death due to *Riots, *Strikes, *Civil commotion, *Acts of Terrorism and Natural Calamities like Flood, Earth Quake, Cyclones etc). Coverage of Rs. 200,000/- for Rs. 20/- per month Definitions: *provided the insured is not directly involved in these activities "Accident means unintentional, unfortunate or a harmful event by chance or apparent cause. Accidental Death means death due to accidental injuries, but not illness. Insured Person means a National Bank of Pakistan PLS account holder, aged between 18 years and above, and whose premium is deducted & detais are reported to the selected l insurance company by NBP. Policy means Group Personal Accident Policy dated 26/09/05 executed between NBPand Insurer. Principal Sum means the amount stated in the Policys Schedule of Benefits as respects each Insured Person.
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MISCELLANEOUS
i. L OCKERS
National of Pakistan also provides lockers facility in the country. The lockers issued only to thedepositors. No lockers are issued to any unknown person. The dual control system is used forlockers. The officer has master key to apply on the locker but he cannot open the locker of anyperson. The locker holder provides the bank has specimen signature. W henever the lockerholders come to open the locker, his signatures are verified by the officer and then will be able toopen his locker. If the key of the locker is lost company providing these lockers breaks the lockerand new lock is fitted in its locker an lock is destroyed in the presence of d the locker holder andbank charges RS 1200 for that. In case the locker holder dies, the court opens his locker in thepresence of his heir as mentioned in his will or and his belongings are given to them and the locker is closed.
ii.
NBP CASHCARD
NBP Cash Card is a 24-hour direct access ATM/Debit card to your bank account, which lets youpay directly from your account as an alternative payment method to cash. The transaction isauthorized and processed by entering PIN. The NBP Cash Card holders are able to transact atany of the 4000 + Merchants where Orix logo is displayed and can withdraw cash from NBP, 1-Link & M-NET ATMs across the country. The followings are the main features of this product: o You won't need to carry a lot of cash with you every time you go out. o Secure and Safe transaction. o Account Information on tips (like: Mini Statement, Balance Inquiry, Utility Bill Payment etc.) o Enable To Withdraw Cash From 1-Link ATMs / MNET ATMs. o Enable to Make Purchases from Around 4000 POS (Merchants) Countrywide including 2500+ POS in Karachi o No Card Issuance Fee for first 12 Months
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iii.
INTERNATIONALBANKING
National Bank of Pakistan is at the forefront of international banking in Pakistan which is provenby 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 underthe Risk Management Group. The role of the Financial Institution Wing is: o To effectively manage NBP's exposure to foreign and domestic correspondence o Manage the monetary aspect of NBP's relationship with the correspondents to supporttrade, treasury and other key business areas, thereby contributing to the bank'sprofitability o Generation of incremental trade-finance business and revenues
Core Business of National Bank of Pakistan

Since NBP is a commercial bank, it performs a variety of functions. Like other commercial banks, NBP is engaged in financing international trade. Its other major functions include receiving deposits, advancing loans and discounting of exchange. The functions performed by NBP are:
1. Accepting Deposits
This function is important because banks largely depend on the funds deposited with them by its customers. Deposits are of many types:
i. Current deposits Current deposits are also called demand liability on current deposits. NBP pays practically no interest on current deposits. Businessmen usually open current accounts. In NBP current account can be opened with a minimum amount of Rs.500/-.
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ii. PLS saving deposit Profit and loss sharing deposits (PLS) are also called checking accounts. One can deposit and draw money easily. Profit on PLS is calculated every month but paid after six months. PLS account can be opened with a minimum amount of Rs.500/-
iii. PLS term deposits Fixed term deposits are deposits with the bank for certain fixed period before the expiry of which they cannot be withdrawn unless giving due notice. In this case the rates of profit will be different depending upon the time period.
2. Discounting bills of exchange

Discounting of bill is practically speaking lending for exchange at their market rate i.e. it pays to holder of the bill an amount equal to the face value after deducting interest at the current market rate for the period. This bill has to be mature. This is the common way used for keeping a part of assets of the bank in a liquid form.
3. Agency service
NBP also provides best and unique service to its valued customers. NBP provide the following agency services to the customers:
i. Collection of dividends As NBP deals with the purchase and sale of various types of securities, therefore NBP also provide dividend or interest earned on share or bonds or invested money.
ii. Collection of Cheques In the collection and payment ofCheques, bills and promissory notes etc. National bank of Pakistan acts as an agent for its customers.
iii. Acting as an agent NBP also acts as an agent correspondent or representative for its customer at home or abroad.
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3.
Unmatched Banking Facilities

o Deposit security, Guaranteed by Government of Pakistan. o Highest rates of return to attract the savings. o Lowest rates on exports and other borrowings. o Largest contribution towards Government and Semi-Government requirements. o Agents of the SBP handling Treasury Functions, receipts of Taxes & other Revenues. o Handling of salaries & pensions of federal/provincial/defense personnel. o Utility Bills collections. o Hajj arrangements.
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DEPARTMENTS OF NBP
General banking is one of the major departments of National Bank of Pakistan.It consists of sections, which are following
1. Account opening section. 2. Deposit section. 3. Clearing section. 4. Remittance section.
1. ACCOUNT OPENING SECTION
HOW TO OPEN AN ACCOUNT

There are certain formalities which are to be observed for opening ofa currentor saving account with a Bank. These formalities in brief are as under
FORMAL APPLICATION
The customer is to filling "Account Opening Form 11 It is a formal request by a customer to the bank to allow him to have and operate the current or saving account.
OBTAINING INTRODUCTION
The bank before opening, and account obtains introdu ction of the customer from old customer, responsible person etc.
SPECIMEN SIGNATURE
When the Banker is satisfied about the integrity of the customer, he agrees to openthe account. The Banker obtains the specimen signatures of the customer on thesignature book or on card.
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MINIMUM INITIAL DEPOSIT

In Pakistan the current account can be opened with a minimum of Rs. 500/- and PLSSaving Account with a minimum of Rs 100/- These amounts are also the minimumbalances to be maintained by the account holders with the Bank.
OPERATING THE ACCOUNT

When an account is opened in a Bank, the Banker gives to the cu stomer. i. ii. Pay in slip book. Cheque Book and pass book with a view to operate it.
PRECAUTIONS IN PREPARING THE PASS BOOK

The Banker should be careful in preparing the pass book However, the customerHimself should. i. ii. iii. iv. v. Send the pass book for making entries and also periodically check them. He should also see that the entries are initialed by the accountant. The customer should verify the entries with own books of account. In order to safe guard the secrecy of the account; the customer should receive The pass book in closed cover.
WITH-DRAWL
Withdrawal is made on cheques supplied by the Bank. A new cheque book is issuedonly on receipts of the requisition slip attached to the cheque book issued previouslyand this presented along with the depositor pass bo for entire against chequebook challan. Cheque ok book is issued on discretion of the branch manager.
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INTEREST
The current rate of interest allowed on deposit in saving Bank account is as ertain that the c Bank. This rate is subject to change. The amount o interest is calculated foreach calendar f month on the lowest balance at credit of an account between theclose of the sixth day of a month and the end of the month and only on everycomplete sum of ten rupees. Every account is made up half yearly to 30th June 31st December, and the interest calculated as above is added to the balance of each account as on these dates.
TRANSFER OF AN ACCOUNT
Account can be transferred to any other branches of N.B.P. free of charge. If adepositor wants to transfer his account, he presents his pass book personally orsends it to Bank and writes an application for the transfer of an account.
CLOSING OF AN ACCOUNT
A depositor willing to do, his account must present h pass book in order that with drawls is and the amount of interest due on the account is entered therein and finalbalance stuck. This balance is then paid to the depositor and his receipt is taken, thepass book is canceled, unused cheque forms on hand are also surrendered at thesame time.
SECRECY
The secrecy of depositors account is the. Responsibility of every official engaged in the Bank service.
MONEY DEPOSITED OR DRAWN BY POST

When money is sent by post for deposit, the pass book and a letter starting the amount of the deposit and the number of the account accompany it. When a depositor wishes to withdraw money by post he must forwards his passbook with a le starting the number of his tter account, the amount to be drawn andeither the money is to be remitted by money -order or in currency notes registered.
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TYPES OF BANK ACCOUNT i. Saving Account
Saving Account is that account in which customer puts his surplus money which he saves from his daily expenditure. The account can be operated by depositing a minimum cash of Rs. 5/-. Small percentage of interest is allowed on the balance of this account.
ii.
Current Account:
The current account is that one which the customer draws his daily cheques and isnormally operated by the Business-men. It can be operated by minimum amount ofRs. 500/ Any number of cheque amounting undue minimum balance limit can beissued by the account holder for withdrawal or for payment. No interest is allowed onthis account.
iii.
Join Account
A joint account occurs when two or more than two customers have one account. The parties to a joint account are considered in law as they are one person.
iv.
Profit and Loss Sharing Account
This can be operated by a person, firm or organization by depositing Rs. 100/ orabove. The holder of this account will get profit of his amount, or he will bear the lossas th case may be. e So an individual is equally participant in profit and loss.The holder of account can withdraw up to Rs. 15,000/- per month is eightwithdrawals, in case of higher withdrawal, seven day prior notice is necessary. Thisaccount is operated under interest free system.
v.
Fixed Deposit Account
In this account an amount is deposited into the Bank for a fixed period of time. Thefixed period may be three months, six months, one year, two years, five years andmore. The Bank allows a higher rate of interest for larger period At the time of operating on account the Bank issues deposit certificates for the periodand amount. The account holder cannot withdraw his
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amount before the specifiedperiod, but the same Bank will allow loan against that certificate. Bank is liable togive interest on this account on maturity date.
2. DEPOSITS SECTION
There are two types of deposits i.e. current and saving. There are different forms present in the section of or deposits. i. ii. iii. iv. Current account form. Saving account form. Private or individual form Private firm account form
In the above mentioned forms, the bank makes an agreement with his customers.
3. CLEARING SECTION Every Bank performs the paying and receiving functions. Cheques are collected hich are w drawn up to Banks for customers. Similarly the cheques drawn on differentBanks and deposited by Banks own customers for collection within the city is know as clearing The n functions of receiving and paying is mostly done through the clearinghouse A clearing house . can be defined as "AA place where that representatives ofall Bank get together to settle the receipts and payment of cheques drawn on eachother" Clearing House provides the facility which can hardly be dispensed withespecially, in case o crossed cheques. f There are two main types of clearing.
i. ii.
Outward clearing Inward clearing
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OUTWARD CLEARING:
It includes those cheques and other instruments which are sent by the Bank to theBanks for payment on behalf of its own clients. Cheques are sent to clearing housethorough local main branch.A delivery message from the local main branch comes to every branch at a fixed time to pick its outward clearing or outward returns as the case maybe.
Outward Clearing at Branch

i. ii. iii. iv. v. Account number of payee/endorsee is written on the back side of the cheques. The instrument and the paying in slips are separated. The instruments are sorted I Bank-wise and branch wise. Schedules are prepared. Jotting of all the schedules are taken in the clearing House statement. Amount of the cheques in written in the "Delivered" and to pay column. vi. vii. viii. After balancing the outward clearing, the pay in slips are released to C.D. department. After balancing, a transfer debit voucher is prepared. The instrumentschedule. etc. are delivered to the messenger from the main branch
INWARD CLEARING
The cheques drawn are called inward clearing drawn on National Bank through itsrepresentatives on the Bank presented by other Banks for payment it includes thosecheques and other instruments of Pakistan branches which other Banks present atthe clearing house.
Inward Clearing At the Drawn Branch

i. ii. Numbers of instruments noted in the schedules are verified immediately on receipt. The amounts of all the instruments are jotted down and totaled. If should be equal to the amount mentioned in schedule from the local main branch. iii. iv. v. The amounts are debarred to the relevant accounts if otherwise in order. The IBCO is prepared crediting the amount of the main branch. If there is any return, that is deducted from the total and IBCO prepared for the remaining amount.
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TYPES OF CHEQUES COLLECTED BY CLEARING SECTION
TRANSFER CHEQUES.
These are the cheques which are collected and paid by same branch of N.B.P. Forexample Mr. Ali is a customer of N.B.P. of CITY branch and draws a cheque in favorof Mr. Hussain who is also the customer of the same branch.
TRANSFER DELIVERY CHEQUES.

The cheques which are collected and paid by two different branches of a Banksituated in the same city. For example a person draws a cheque on N.B.P. mainbranch, Lahore in favor of another person who maintains an account with N.B.P.model town branch, Lahore .
CLEARING CHEQUES
When the payee/endorse and the drawer of cheque maintains account with different Banks, the collection Bank in any one of the following methods: i. It can collect cash by sending its representatives with the cheques to each of the paying bank is no so much appropriate ii. iii. The bank maintain account with the paying bank The cheques are now being exchanged by the help of NIFT and this is the most efficient method of collection and paying of cheques
FUNCTIONS OF CLEARING SECTION IN A BRANCH

i. To accept transfer, transfer delivery and clearing cheques from the customer of the branch and to arrange for their collection. ii. To arrange payment of cheques drawn on the branch and gives for collectionto any other branch of N.B.P. or any other member or such member of local clearing house. iii. To collect amounts of cheques drawn on members of the local clearin housesent for g collection by N.B.P. branches not represented at the local clearinghouse.
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PROCEDURE FOR CLEARANCE OF CHEQUE

The customers are provided with the copes of pay4n -slip, whenever the customerwants to deposit any cheque, he fills in the pay in slip himself and hands it over thecounter along with the instrument.
4. REMITTANCE SECTION
Remittance means transfer of money from one place to another place. It is of two kinds. i. ii. Inland remittance. Home remittance.
INLAND REMITTANCE
An inland remittance means a transfer of money payable at a certain place within the country. Inland remittances can be classified as under i. ii. Within locality. Outside locality.
WITHIN LOCALITY
When a branch situated in Lahore is required to send drafts to any other branchsitua in the ted same city the process is known as within locality. For example N.B.P Main Branch, Lahore sends any draft to N.B.P. Moon market Lahore.
OUTSIDE LOCALITY
Outside locality is an important type of inland remittances, which means the transferof mone y payable outside the city. For example, N.B.P. Main Branch Lahore sendsany draft to a Branch situated at Lahore. It is commonly done through the following three means: i. ii. iii. Telegraphic transfer (T.T) Mail Transfer (M.T) Demand Draft (D. D)
| UNIVERSITY OF THE PUNJAB (GUJANWALA CAMPUS) 50
TELEGRAPHIC TRANSFER
In telegraphic transfer, the Bank takes commission and telegram charges from the sender. A receipt is issued to the sender for the value received. The Bank itself transfer the funds to the drawee branch though a coded message in telegram, confirmatory of which is also sent through routine post mentioning alldetails. All bank Branches have been provided with their code books name BankKeys Code Book where from the coded message is agreed by the drawee branch T.T. can be sent open, which may be paid in cash in drawee branch, or may be directly creditable to relevant account.
MAIL TRANSFER (M.T.)

The Money can be remitted through this means also. In this case the payableamount at the drawee branch can only be transferred to an account; amount cannotbe paid in cash. Other procedure is same as T. deposit of money at sending branch Difference is only of postage and. telegram charges. The M.T. which in its self is anadvice also is sent by registered post, while T.T. is sent through telegram.
DEMAND DRAFT (D.D)

Demand draft is a written order by a branch of a specified Bank, drawn on anotherbranch of the same Bank to pay a certain sum of money only to or to the order of thePayee. Demand drafts are purchased by the clients and after receipt of money Bankissues and delivers the D.D. to the purchaser, who himself sends it to the payee. InD.D. the Banks do not recover postal charges as it is payable by the purchaser. TheBank, after deliver of D.D. to the y purchaser also sends its own advice called IBCO(Inter Branch Credit Order) to the drawee branch mentioning therein all details ofissued draft.
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MY INTERNSHIP PROGRAMME
DURING TRANING IN NATIONAL BANK OF PAKISTAN (Satellite town Branch, Gujranwala) WORK DONE BY ME AT THE BRANCH
Major activities performed during my internship program are as follows:
1. ACCOUNT OPENNING DEPARTMENT:

In this department, I gain the practical knowledge about opening account. This department deals with opening current and saving account for its customers and allmatters regarding thereof. The customers opening current and saving accounts can be categorized as following. o Individual o Firm o Company o Trust o Staff o Others
OPENING AN ACCOUNT
In order to open an account, first of all the customers have to fill a formprescribed by the bank. The person is required to bring some reference or introduction for opening the account. Introducer may be the person who has any account with NBP. Some important information regarding introducer e.g. the name and account number ofthe introducer is written on the space provided on the spe cimen signature card. Then in order to find out whether he is a true introducer or not, a letter is sent to him thanking him for this introduction so that anything wrong may come into notice.Thereare different requirements for different types of accounts and accountholders.
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DEPOSITS
The procedure undertaken upon receiving deposits from the customers is as follows: o Examining the deposit slip to ensure that the name and the account numbers are clearly indicated. o Counting the cash and cheques and agree the total with the amount on the deposit slip. o After that the pay in slip is validated for cash transaction and transfer and clearing transfer as appropriate before the counterfoil is handed over to the customer. o Cheques signed by directors, partners or employees of a company, drawn in favour of them and credited in their account in the bank are to be scrutinized.
WITHDRAWALS
Cheques can withdraw amount. The withdrawals can be madeonly at the branch where the account is maintained. The officer under his full signature authorizes all cash withdrawals. No third party withdrawal is permitted. In current account, the bank does not offer any interest. We can deposit or withdraw any amount during banking hours.
ISSUANCE OF CHEQUE BOOK

The accountholders request for the new chequebook by presenting the requisition slips to the concerned office. His signatures are verified before giving him a new chequebook The . presence of the accountholders is compulsory to get a new chequebook.But if he sends a third person to get his chequebook then the procedure is as follows; o An authority letter is given to the third party by the accountholders. o The accountholders verify the signature of the third person on that authority letter. o The bank officer gets the signature of that third person to confirm whether he is the same to whom the accountholder has sent. o The bank issues the new cheques book and authority letter is keptbuy the bank.
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2. CLEARING DEPARTMENT
In this department, I have worked for two weeks. Main branch receives the cheques from all of its branches and makes the lots of these cheques again. Main branch sends these cheques to the State Bank of Pakistan where a clearinghouse exits. In this clearinghouse the representatives receive their cheques and go back to their bank's main branches. Then the main branch sends these cheques to their relevant branches where the validity of these cheques is verified and the accounts of the relevant clients are affected. The statement of clearing was submitted before 1.00 P.M. daily. The whole procedure of clearing is completed within two days.
3. REMITTANCES DEPARTMENT:
I worked in this department for one week. This department deals in transfer of money from one place to another or country by: o Demand drafts o Mail transfer o Telegraphic transfer In this department internees are advised only to observe the working of transfer of money from one place to another place of the country by the above modes of transferring money. During my stay in this department I observed that how demands draft be issued. The procedure is as follows. First the bank receives a written request from the customer to issue a bank draft. The written request is either in banks standard form or separate paper signed by the applicant enclosed with cash or cheques covering the amount of the draft and other charges of the bank. While issuing a bank draft it is necessary that the draft should be free from alternation All s. the details must be written clearly in ink. After issuance a demand draft it is handed over to the applicant and its advice containing the particulars of the draft is sent to drawer branch with its necessary information and payment of the draft is making on its presentation.
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4. BILLS COLLECTION DEPARTMENT:

I spent one week of my training in bills collection department. Here I collected utility bills like gas, electricity, water and telephone etc.
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SWOT Analysis
Strengths
o Western union facility:National Bank of Pakistan is only one bank which has the facility of Western union. In this particular scheme money is transfer in Pakistan from abroad. This is the fastest way to money transfer. You can receive the money from bank to see the name and password of particular client. o ATM finder:There is also strength of NBP that they are found the ATM. They now provide this facility to the customers. o Governments bank:In commercial banking system NBP is only the government bank. They make their policies according to the governments rules and regulations. It enjoys its position in the market of banking system in Pakistan. Government of Pakistan also facilitating the National Bank of Pakistan. o Customer satisfaction:Because of governments bank, it is enjoying the customers satisfaction. Customers feels secure their money in NBP. o Online banking:There is also strength of NBP that 130 branches are online. It helps the speedy services giving to the customers. There is also help in checking the balances and daily transactions just at one key press. o Employees loyalty:Employees are very much loyal to NBP. Employees turnover is very low in NBP. Very few employees are leaving the jobs in NBP. So it is very big strength that your employees are loyal to your organi ation. z o Wide area of services:They provide the wide area of services. They offer no. Of services relating to the banking system like, pension to retired government employees, traffic challans, fees received of AIOU, farms of AIOU, utilities bills, deposits, sales tax , withholding tax, property tax, and various loan schemes. o National Bank the Nations Bank:State Bank of Pakistan is government owned bank that is why Pakistani nation has atrust on the bank that their deposits are secured. Due to this reason the deposits ofthe banks are increasing with the passage of time o Agent of State Bank of PakistanNational Bank of Pakistan also works as an agent of State bank of Pakistan in those cities where SBP branches are not working.
o Agency Arrangements: National Bank of Pakistan is enjoying with deposit of different Govt. organization like Pakistan Railways, PIA, WAPDA, Sui-gas due to agency arrangements. o Deposits:National bank of Pakistan is the largest commercial bank of the country and hasTotal Deposits ofRs. 362.87 billion and becomes the first bank to cross the depositof Rs. 350 billion. o Profitability:The pre-tax profits of NBP have gone up toRs. 6.05 billion. o Corporate Branches:National Bank of Pakistan is now the biggest financial institution with assets totalingover Rs.310 billion with 1428 local and 23 foreign branches. The bank is thehigher financer in agriculture and commodity operation sector. o Corporate Branches:National Bank of Pakistan is now the biggest financial institution with assets totalingover Rs.310 billion with 1428 local and 23 foreign branches. The bank is thehigher financer in agriculture and commodity operation sector. o Collection of Cash from Shrines:Cash collected from different shrines is also deposited in National Bank of Pakistan. o Comprehensive Range of Financial Products:In order to facilitate the customers, NBP is offering the comprehensive range of financial products which are as follows: i. ii. iii. iv. Credit cards Foreign exchange bearer certificates National bank daily account Traveler cheques etc.
o Investing in Capital Market: NBP has decided to diversify the fund base by investing in capital markets not only in Pakistan but also in the foreign countries.
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Weakness
o Lack of communication between employees:During the internship in NBP I found the problem of lack of communication between the employees and management. They have not very much understanding with each other and not share the work of each other. o Punishment is not very strong for employees:Punishment threat is not very strong for employees. Some employees are not very professional in their field but top management not takes the action against such employees. o Public dealing is not very effective:Public respect is not very effective in NBP. Employees are not taking care of the customers, especially in pension and bills department. o Staff shortage:There is also weak point for NBP that staff is very short and more staff is required to meet the needs of the branch work. They help from internees. o Lack of respect of seniors:They are not a healthy sign for NBP that respect of seniors is not up to the manners.Juniors try to avoid the seniors and no take the help from them. o Lack of Implementation of Rules and Regulations :Because NBP is a govt. owned organization so there is a lack of implementation of rules and regulations. o Poor Working Conditions:Despite, cultural change program the working condition of the NBP is not up to standard. o Recruitment Policy:In NBP, employees are recruited on the basis of favoritism or through other tools of corruption. o Incompetent Staff:Due to wrong recruitment policy staff of NBP is not proficient in their work. o Irregularities in Promotion:In NBP there is no smooth and continuous promotion system. Unfair means are used in order to get the promotion especially thepromotion of the managers. o Individual Difference:In NBP the individual difference have strong impact on the organizationsperformance due to the wrong criteria of selection of the employee. So with thepassage of time individual differences are increasing which are undermining thegood will of the organization.
o No Major Use of Computer:In NBP there is no major use of computer for maintaining the records of branches as compared to other banks of the country. o Strong Union:Union has strong impact on performance of NBP. So the top management is unable to punish the violators and shrieks. o Organizational Structure:In this organizational the organizational structure is bureaucratic which a barrier in rapid and effective decisio making is. n
Opportunities
o Growing banking system:Nowadays banking system is growing quickly so NBP have opportunities to improve the standard and get the more share in the market. o NBP have government back:In growing era there is a chance for NBP to improve itself and increase the shares in the market because it is most trustable due to governments bank. o Increase in economic activities:The economic activities are increase nowadays, so banks are contributes more in economic activities. Banks are playe role in trade and d commerce. So the business of commercial banks is increase. o Consumer Banking: The basis need of the consumer such as housing, transportation and other durablegoods are not adequately financed by the banks. So by initiating these services, thebank can enjoy with more funds. o Investing in the Foreign Capital Market: NBP can enjoy handsome return its funding base by investing in capital markets in the foreign countries. o Investment Banking: Until recently the bank perceived as purely commercial banking entity so in order toexpand its business the bank may start investment banking by investing in theportfolio of handsome return. o New Branches: NBP by establishing new branches in foreign countries can expand its business and can enjoy with the profit. o Issuance of Bonds:To enjoy with large amount, NBP can introduce a comprehensive range of bonds. o Night Banking: Despite of poor customer service of NBP, people still come to NBP because of itsGovt. ownership as they feel it secure therefore bank improve its deposit
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by givingfacility of night banking and also can compete its competitors with positive steps. o Advisory Services: It can establish advisory services in order to facilitate the customers in investing in the securities.
Threats
o Increase in no. of banks:Increase in no. of banks is a threat for National Bank of Pakistan. No. of private banks (commercial and private) are operating their business and provide the same facilities. So increase in no. of banks is a threat for NBP. o Modern type of banking:Modern and computerized banking is required to fulfill the customers need. So maximum branches of NBP are worked in old traditional ways. o Highly skilled people and management required to meet the new standard of banking. In NBP some employees are totally irresponsible and lack of complete knowledge of banking system. So these employees are creating continuousproblems in the system of NBP. o The whole structure change to online:NBP have wide network of branches. Only 130 branches are online, so it is very difficult and time consumed to convert all branches to online system. So there is also risk involves that if one commuter of one branch suffers in problem, all system and all commuters of all branches must be turnoff o Competition: The no. of banks in Pakistan is increasing with the passage of time. So due to poorworking condition and poor customer service it may be possible NBP will lose its market share in future. o Inflation: In our country, the rate of inflation is increasing along with the unemployment. Sodue to the increase in price of the products, the savings of the nation is decreasingwith the passage of time. So it is the threat for the banking sector. In the future, thedeposits of the bank will decrease o Government Policy: On NBP Govt. policies have strong impact. A slight change in Govt. policies mayaffect the performance of the bank. The bank has to work with in the regulation framework.
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Statement of financial position

As on December 31 2010
2010 Note ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions - net Investments - net Advances - net Operating fixed assets Deferred tax assets - net Other assets - net 115,442,360 30,389,664 23,025,156 301,323,804 477,506,564 26,888,226 6,952,666 53,496,240 1,035,024,680 115,827,868 28,405,564 19,587,176 217,642,822 475,243,431 25,147,192 3,062,271 59,666,438 944,582,762 106,503,756 38,344,608 17,128,032 170,822,491 412,986,865 24,217,655 3,204,572 44,550,347 817,758,326 . 2009 Rupees in '000' (Restated) 2008 .
LIABILITIES Bills payable Borrowings Deposits and other accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred tax liabilities 8,006,631 20,103,591 832,151,888 106,704 46,160,038 906,528,852 Represented by Share capital Reserves Unappropriated profit 19 13,454,628 24,450,244 65,857,438 103,762,310 Surplus on revaluation of assets - net 20 24,733,518 10,763,702 22,681,707 60,696,510 94,141,919 24,764,459 8,969,751 19,941,047 52,456,204 81,367,002 21,092,216 10,621,169 45,278,138 727,464,825 42,629 42,269,623 825,676,384 10,219,061 40,458,926 624,939,016 25,274 39,656,831 715,299,108
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Profit and Loss Account

As on 31 December 2010
2010 Note 2009
Rupees in '000' (Restated) 88,472,134 45,250,476 43,221,658 7,011,046 2,954,678 3,965 9,969,689 77,947,697 40,489,649 37,458,048 11,043,469 605,629 20,237 11,669,335
Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against non-performing advances-net Provision for diminution in the value of investments-net against off balance sheet obligations Provision Bad debts written off directly
Net mark-up / interest income after provisions NON MARK-UP / INTEREST INCOME Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale and redemption of securities - net Unrealized gain on revaluation of Investments classified as Held-for-trading Other income Total non mark-up / interest income
33,251,969 25,788,713
9,631,579 1,099,493 2,211,139 2,512,363
8,930,391 1,920,336 3,028,165 4,591,894
6,730 2,355 2,171,336 552,216 17,632,640 19,025,357 50,884,609 44,814,070 26,202,577 22,571,470 148,026 620,780 118,887 321,647 26,469,490 23,513,897 24,415,119 21,300,173
Administrative expenses
Total non-markup / interest expenses
62
Extra ordinary / unusual items PROFIT BEFORE TAXATION - Prior year(s) - Deferred PROFIT AFTER TAXATION Inappropriate profit brought forward Transfer from surplus on revaluation of fixed assets on account of incremental depreciation Profit available for appropriation
24,415,119 21,300,173 9,835,048 8,871,513 -939,256 -4,133,282 -2,043,887 -999,904 6,851,905 3,738,327 17,563,214 17,561,846 60,696,510 52,456,204 117,738 123,934 78,377,462 70,141,984 ...Rupees... 13.05 13.05
Earnings per share
63
Ratios Analysis
1. Profitability Ratio 2. Liquidity Ratio 3. Solvency Ratio 4. Performance ratio
64
Profitability Ratio
MARGIN OF PROFIT
Net profit = markup/return/interest earned X 100
2010 in '000' 17563214 99472134 = 17.65642
2009in '000' 17561846 77947697 = 22.53029
X 100 %
X 100 %
COMMENTS: Profit is increasing with increase in total revenue, which shows that the profitability of bank is increasing, which is good sign. Share of profit in total revenue is increasing showing the , favorable trend.
1. RETURN ON DEPOSITS
Net profit = Total Deposits 2010 in '000' 17563214 732151888 = 2.3988484 2009 in '000' 17561846 727464825 = 2.4141162 X 100
X 100 %
X 100 %
65
COMMENTS: As return on deposits is increasing it is favorable trend. This shows that the profit margin on deposits is increasing with increase in deposits the profit also increase but with greater proportion.
2. RETURN ON EQUITY
Net profit = Shareholder's Equity X 100
COMMENTS: Return on equity is much increased in 2004 than the previous year, which indicated beneficiary effect to the shareholder.
LIQUIDITY RATIO
1. WORKING CAPITAL = Current Asset Current Liabilities
COMMENTS:
66
Working capital increased which shows that there is an increase in current assets, which is good indication.
2. CURRENT RATIO:
Current Assets = Current Liabilities
COMMENTS: Higher the ratio greater the ability to pay current liabilities which shows good liquidity position.
3. ADVANCES TO TOTAL DEPOSITS
Advances = Total Deposits
2010 in '000' 506703380 732151888 = 0.692074129 =
2009 in '000' 508035607 727464825 0.698364498
COMMENTS:
67
As deposits show an increase, the advances also increased. Bank is now providing the advances and loans to more customers as compared to previous year. This shows an incre se a in area of activity of bank.
SOLVENCY RATIO
1. LONG TERM DEBT TO FIXED ASSETS RATIO
Long term Debt = Fixed Assets X 100
COMMENTS: It shows that the long-term debt of the bank in ratio to fixed assets decreases as compared to previous years which isfavourable.
2. RETURN ON TOTAL ASSETS
Net profit after Tax = Total Assets

X 100
COMMENTS: Return on total assets increases in 2004 which is favourable for bank.
2. DEBT RATIO
Total liabilities other than Equity = Total Assets 2004 506804383 = --------------------- x 100 549740825 2003 441388308 = ---------------------- x 100 468972322 X 100
= 92.2%
= 94.1%
COMMENTS: The decreasing debt ratio shows the decreased share of debt in total assets as compared to owners equity. The lower the share of the debt, more will be the secure financial position.
PERFPRMANCE RATIO
1. STOCK HOLDER EQUITY TO TOTAL LIABILITIES
Stockholders' Equity = Total Liabilities 2004 25257284000 =------------------506804383000 2003 18133897000 =--------------------441388308000
= 0.05:1
=0.04:1
COMMENTS: Stock holders equity in 2004 increases as compared to totalliabilities than the previous year. This is a good sign for bank.
2. EARNING PER SHARE Net profit = Number of shares 2004 6242929000 =---------------------492411000 = 12.68 2003 4198103000 =----------------------4924110000 = 8.53
COMMENTS: Earning per share has also increased. This increase will effect the price of share positively. It also shows that bank is achieving the goal of maximum benefit to its shareholders. Profit has increased more rapidly.
70
3. BREAK UP VALUE
Net Worth = Number of shares 2004 25257284000 =-------------------492411000 = 51.3 = 36.8 2003 1813397000 =-----------------------492411000
COMMENTS: Break up value per share increases in 2004 as compared to 2003 which is favaourable for bank.
SUMMARY OF RATIO ANALYSIS:
71
PROFITABILITY RATIO: MARGIN OF PROFIT RETURN ON DEPOSITS RETURN ON EQUITY
2004 29.8% 1.34% 24.7%
2003 21.58% 1.06% 23.15%
LIQUIDITY RATIO: WORKING CAPITAL (in ooos) CURRENT RATIO ADVANCES TO TOTAL DEPOSITS 58787718 1.19:1 0.48 27707818 1.1:1 0.41
SOLVENCY RATIO: DEBT EQUITY RATIO IN FIXED ASSETS RETURN ON ASSETS DEBT RATIO 1.2:1 1.14% 92.2% 1.85:1 0.90% 94.1%
PERFORMANCE RATIO: STOCKHOLDER EQUITY TO TOTAL LIABILITIE 0.04:1 EARNING PER SHARE BOOK VALUE PER SHARE AVERAGE PROFIT PER SHARE branch 12.68 per share 51.3 5092111 per branch 8.53per share 36.8 3427023 per 0.05:1
72
73
On a consolidated basis, National Bank of Pakistan (NBP) has recorded lower than expected 1HCY11 results. In this regard, National Bank of Pakistan has posted NPAT of PkR8,133mn (EPS:PkR4.84) in 1HCY11, representing an earnings growth of just 3%YoY. On a sequential basis, National Bank of Pakistan has posted an earnings decline of 10%QoQ to reach NPAT of PkR3,859mn (EPS:PkR2.29) in 2QCY1. No payouts were announced alongside the result. The NBP result was below our expected NPAT of PkR8,682mn (EPS:PkR5.16) primarily due to higher than expected provisions an admin. expenses. d Key highlights of the National Bank of Pakistan consolidated result include: 1) 10%YoY growth in net mark-up income, 2) a significant 38%YoY growth in total provisions driven by 61%YoY higher loan provisions along with stubborn impairmen charges, 3) robust 20%YoY t growth in non-interest income and 4) 15%YoY growth in non-interest expenses. PkR(million) Mark-up earned Mark-up expensed Net mark-up income Total Provisions Net interest income Non interest income Total Income Non mark-up expenses Profit before taxation Total taxation Profit after taxation 1HCY11A 47,112 24,250 22,862 6,136 16,726 10,050 26,776 15,063 11,713 3,580 8,133 1HCY10A 43,605 22,728 20,877 4,459 16,418 8,347 24,765 13,056 11,710 3,831 7,879
74
EPS
4.84
4.68
75
RECOMMENDATIONS
The global economic environment has changed, creating challenges and opportunities for the worlds policy makers. The privatization drive has emerged as a strong tool of transformation, which is being recognized as an essential ingredie for the economic well. nt Being of the countries themselves and for the rest of the world. Now there is a greater awareness that in an interdependent world all countries gain individually if these countries become positive contributor to world economic gro wth as whole. Banks are playing very important role in the economic growth of the countries. N.B.P. no doubt a positive contributor in this respect but I think there are certain points by adopting which can serve more effectively and efficiently. These points are as under: o This is a computer era. With the use of computer we can increase our efficiency. N.B.P. should computerize all its branches. By the use of computer properly these branches can increase there working efficiency. o N.B.P. as public service oriented institution has to create business opportunities for themselves. Now a day there is a competition between the banks. o Central Asian Republics (CARs) have great opportunities of new business so N.B.P should open new branches in these Republic. o Model Banks like City Bank, M.C.B. is using media very effectively to increase the business of banks. So N.B.P. should use electronic media for its business developments. o The interference of union in banking business should be minimized as it decreases the working efficiency of the employee as well as the bank. o The working of the Lahore Cantt. Branch Lahore is satisfactory but still these working efficiencies are for from the standard of modern banking system. o The bank should finance its loans in those projects that are meeting the required standard and should avoid the political pressure. o The bank should bring forward the new talent as fresh knowledge and education is considered very important to increase the efficiency and production. o There is need to make the outlook situations of branches in those manners that can complete the other modern banks in the banking market. o Keeping in view the hard work by the staff members at all levels of management, staff should be given bonus and increment every year.
76
o CREDIT CARDS are issued by the different banks like MCB, ABP and Citi Bank etc. but NBP dont issued this type of finance scheme, there is a place for this type of scheme in this bank. o Separate desk or counter should be established in every branch to provide the information as required by the clients. o The environment of the offices should be comfortable so that the client and staff must feel comfort during business in bank. o 14. Unsecured loan are not to be provided in case of banks directions, their
families, companies or firms.
o 15.
There are some clients having sound and successful plan but without
financially sound and providing securities bank should firms such policies that may solve this problem. o 16. I observed that many branches of NBP are over crowded. Less p eople can
work which extra people perform. Number of employees should decrease or new branches should opens for the adjustment of these extra employees. o 17. o 18. There is too much dependence on handwork and they are not getting at with There are some employees untrained which decreases the efficiency of the computer programmed. All the branches of NBP should be computerized.
bank branch. All the employees should well trained. o 19. Most of the bank employees are sticking to one seat only, with the result that
they become master of one particular job and loose their grip on other banking operation. In my opinion each employee should have regular job change. o 20. Refreshes courses for staff are most important in my international
organization. All the employees should have their courses according to their requirement. o 21. Every year some of the employees should be sent for training to other
countries and employees from other countries should be brought here. o 22. In commercial institutions like banks, reward and punishment system should
be introduced. Means achieve, smart, educated, skilled, self-spoken and well-dressed staff should be rewarded and appreciated and lazy, lethargic staff should be warned and punished.
77
o 23. o 24.
People have to wait for re-cashing their cheques and for paying their utility Promotion should be given to competent persons on merit basis.
bills, which is not good for reputation of bank, it should be improved.
78

Final Report of NBP

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Internship Report

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Financial Sector of Pakistan

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Origin of the word

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Pakistan and Banking Sector Background

At the time of independence:

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Establishment of National Bank of Pakistan

Privatization of Pakistan s Banking Sector

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National Bank of Pakistan

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History of National Bank of Pakistan

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Branch Network of NBP

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o There are also Residential BranchesThese are exclusively in residential colonies.

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2. MAIL TRANSFERS (MT)

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NBP Retail Products

Period 1 year 2 years 3 years 4 years 5 years