Beginning Pages of NBP

7/31/2019 Beginning Pages of NBP

1/16

Internship Report on

NATIONAL BANK OF PAKISTAN

Khyber Bazaar Branch Peshawar

SAMIULLAH

M.Com Final Year

Roll No.697

Morning

GOVERNMENT COLLEGE OF MANAGEMENT

SCIENCES PESHAWAR

SESSION: 2011 - 2012


2/16




Internship Report submitted to the University of Peshawar in partial

fulfillment of the requirements for the Degree ofMaster In Commerce

August 2012


3/16

In the Name of Allah,

3


4/16

The Most Merciful the

Beneficent

4


5/16

Dedicated to my Parents

I dedicated this report to my lovely

parents whose prays, affection and

support is always besides me. The

dedication of this humble effort of mine

is deserved only by my Parents constant

encouragement and counseling

my life as well as the confidence and

spirit instilled by them has enable me to

carry out this research successfully.

SAMIULLAH


6/16

INSTITUTE OF GCMS PESHAWAR




COORDINATOR RESEARCH & DEVELOPMENT DIVISION

Submitted to : ____________________

Submitted by: Sami ullah

SUPERVISOR

Name: Masroor Asim

Designation: Lecturer

Signature: ______________________

6


7/16

Acknowledgment

All gratitude and thanks to almighty ALLAH the gracious, the most merciful

and beneficent who gave me courage to undertake and complete this task. I am

very much obliged to my ever caring and loving parents whose prayers have

enabled to reach this stage.

I am grateful to almighty ALLAH who made me able to complete the work

presented in this report. It is due to HIS unending mercy that this work moved

towards success.

I am highly indebted to my course instructor Mr. Sir Masroor Asim for providing

me an opportunity to learn about the Banking system of National Bank of

Pakistan" which is vital ingredient of M.com program. I am very great full to my

teacher Mr.Sir Masroor Asim for providing me guideline for the completion of

this report.

I feel great pride and pleasure on the accomplishment of this report.

SAMIULLAH

M.com Final Year

ROLL NO, 697

MORNING

7


8/16

Preface

Once there was a man, who wanted to learn swimming; he bought and studied

many books on how to swim. One day he was passing by the bank of river

along with his books; he fell into the river with his books and drowned. The

research is like that; unless you jump into water you cant learn it.

For the application of our theoretical knowledge in a practical place I did the

feasibility study of National Bank of Pakistan by working for two months as an

internee.

With all praise and thanks to Almighty Allah, Who has been so kind in blessing

me with the energy, courage and resources to conduct this challenging report in

time.

The banking profession, especially the modern day banking with its challenging

and progressive methods has always interested me. Since I have an academic

background in finance and accounting, banking seemed an appropriate area for

my internship. I found National Bank of Pakistan the best available option for

my internship.

I am humbly grateful to the Coordinator of M.com Final of GCMS Mr. Masroor

Asim he is also my supervisor, whose guidance and knowledge, strengthened my

confidence to complete this report.

Moreover, I am extremely thankful to Mr. Masroor Asim & all those who helped

me to complete this report.

SAMIULLAH

i


9/16

TABLE OF CONTENTS

S. No. Title Page No.

Preface

Table of Contents

List of Tables & Charts

List of Acronyms vii.

Executive Summary viii.

1. SECTION INTRODUCTION

Chapter - 1 Introduction

Introduction 1

1.1 Background of the Study 1

1.2 Purpose of the Study 1

1.3 Scope of the Study 1

1.4 Methodology of the Report 1-2

1.5 Scheme of the Report 2-3

2. SECTION REVIEW

Chapter 2 Evolution of Banking in Pakistan

2.1 Banking 5

2.2 Evaluation of Banking 6

2.3 Banking Growth During (1948-1970) 6-9

2.4 Banking Reforms in 1972 10-11

2.5 References 12Chapter 3 Nationalization Of Banks (1974)

3.1 Islamization of Banking 15

3.2 Dis-Investment & Deregulation of Banking-1991 16

3.3 Interest Free Banking 16

3.4 History of NBP 16

3.4.1 Mission Statement 17

3.4.2 Goals & Objectives 18

3.4.3 Goals & Objectives of NBP 18

3.4.4 Board of Directors 18

3.5 Management 193.5.1 Senior Management of NBP 19

3.6 Network of Branches 20

3.7 Objectives of NBP 20

3.7.1 Increase in Deposits 20

3.7.2 Extension of Loans 20

3.8 Function of NBP 21

3.8.1 Accepting Deposits 21

3.8.1.1 Current Deposits 21

3.8.1.2 PLS Saving Deposits 22

3.8.1.3 PLS Term Deposits 22

3.8.2 Discounting bill of exchange 22

3.8.3 Agency Services 22

ii


10/16

3.8.3.1 Collecting of Dividends 22

3.8.3.2 Collection of Cheques 22

3.8.3.3 Acting as an Agent 23

3.8.3.4 General Utility Services 233.9 Unmatched Banking Facilities 23-24

3.10 NBP at the for front of PAK-AFGH Trade 24

3.11 References 25

Chapter 4 Services of NBP

4.1 Demand Drafts 27

4.2 Swift System 27

4.3 Letter of Credit 27

4.4 Travelers Cheques 28

4.5 Pay Order 28

4.6 Mail Transfers 28

4.7 Foreign Remittances 28

4.7.1 New Features 29

4.8 Short Term Investment 29

4.9 National Income Daily Account (NIDA) 29

4.9.1 Silent Features 29

4.9.2 Rates on NIDA 30

4.10 Investments 30

4.10.1 NBP Involved Investment 30

4.11 Commercial Finance 30

4.12 Trade Finance & other Business Loan 30

4.12.1 Agriculture Finance 31

4.12.1.1 Agriculture Finance Services 31

4.12.1.2 Agriculture Credit 31

4.12.1.3 Agriculture Credit (Medium Term) 31

4.12.1.4 Farm Credit 32

4.12.1.5 Production Loans 32

4.12.2 Corporate Finance 32

4.12.2.1 Working Capital & Short Term Loans 32

4.12.2.2 Medium Term Loans & Capital Expenditure Finance 32

4.12.2.3 Loan Structuring & Indicates 33

4.12.2.4 Cash Management Services 33

4.13 International Banking 33

4.13.1 NBP Offers 34

4.14 Cash & Gold Finance 34

4.15 Advance Salary Finance 34

4.16 References 35

3. SECTION BANK DEPARTMENT

Chapter 5 Departmentalization5.1 Cash Department 365.1.1 Receipts 36

5.1.2 Payments 36

iii


11/16

5.1.3 Cheques & Their Payment 36

5.1.4 The Requisites of Cheques 37

5.1.5 Parties to Cheques 37

5.1.6 Types of Cheques 375.17 Payment of Cheques 38

5.2 Clearance Department 39

5.2.1 In Word Clearing Book 40

5.2.2 Out Clearing Book 40

5.3 Advance Department 40

5.3.1 Name & Address of The Borrowers 41

5.3.2 Principles of Advances 41

5.3.3 Forms of Loans 44

5.4 Remittances Department 46

5.4.1 Demand Draft 46

5.4.2 Pay Order 46

5.4.3 Telegraph Transfer 47

5.4.4 Mail Transfer 47

5.5 Human Resource Management 47

5.6 Deposits Department 50

5.7 Foreign Exchange Department 54

NBP (Khyber Bazaar Branch Department)

5.1 Cash Department 54

5.2 General Banking 55

5.2.1 Remittances Department 55

5.2.2 Advances Department 56

5.2.3 Clearing Department 56

5.2.4 Computer Department 57

5.2.5 Establishment Department 57

5.3 References Department 59

4. SECTION ANALYSIS

Chapter 6 Financial Analysis6.1 Introduction to Financial Analysis 60

6.2 Purposes of Financial Analysis 606.3 Ratio Analysis 62

6.4 Liquidity Ratio 62

6.5 Activity Ratio 66

6.6 Profitability Ratio 70

6.7 NBP Balance Sheet 77

6.8 NBP Income Statement 78

Chapter 7 SWOT Analysis7.1 Strength of Branch 79

7.2 Weakness of Branch 79

7.3 Opportunities of Branch 807.4 Threats of Branch 80

5. SECTION MY RECOMMENDATION

iv


12/16

Chapter 8 Recommendation8.1 There Should be Contingency Plan 81

8.2 Lacking in Personnel Knowledge 81

8.3 Lacking in Staff 818.4 Staff Should be Trained 81

8.5 Improve Technology 81

8.6 Secrecy Should be there 82

8.7 Avoid Informal Interaction 82

8.8 High Level Influence be Avoided 82

8.9 Promotion & Reward System Should be there 82

8.10 Old Loan & Locker Facilities 82

8.11 Monitoring System 82

8.12 General Working Condition must be improved 82

8.13 Customer Orientation 82

8.14 Job Rotation 83

8.15 New Talent & Professional Should be hired 83

8.16 Conclusion 83

8.17 Bibliography 84

v


13/16

LIST OF TABLE AND GRAPHS

S.No Topic Page No

1 Board of Director 18

2 Senior Management of NBP 20

3 Organizational Structure of NBP 26

4 NBP three years Performance 59

5 Ration Analysis 60

6 Cash Ratio 60

7 Current Ratio 61

8 Earning Per share Ratio 62

9 Spread Ratio 63

10 Return On Asset 64

11 Total Assets Turn Over Ratio 65

12 Fixed Assets Turn Over Ratio 66

13 Return on Assets 67

14 Net Profit Margin 68

15 Debt Ratio 69

16 Debt/Equity Ratio 70

17 Return on Equity 71

18 Time Interest Earned Ratio 72

19 Investment to Deposit Ratio 73

20 Balance sheet 75

21 Income Statement 76

vi


14/16

LIST OF ACRONYMS

AVP Assistant Vice President

NCB Nationalize Commercial Banks

DD Demand Draft

ADBP Agricultural Development Bank of Pakistan

GM General Manager

HO Head Office

L/C Letter of Credit

NBP National Bank of Pakistan

OGI Officer Grade I

RTC Rupee Travelers Checks

SBP State Bank of Pakistan

SEVP Senior Executive Vice President

SVP Senior Vice President

TT Telegraphic Transfer NIB Non Interest Banking

IMF International Monetary Fund

DM Deutsche Mark

FDD Foreign Demand Draft

MT Mail Transfer

VP Vice President

RHQ Regional Head Quarter

ATM Automated Teller Machine

SME Small and Medium Enterprises

R&D Research and Development

vii


15/16

Executive Summary

Banking sector is considered as the backbone of an economy of a country because it has

major contribution in the economics development of a country. NBP, being the

nationalized commercial bank of Pakistan, has vital role in the field of providing

commercial banking services and significance in the banking sector due to being

pioneer in launching various innovative products and services in the banking sector of

Pakistan.

The purpose of this report is to highlight the problems being faced by the bank, by

analyzing financial and operational performance in order to give feasible and

constructive recommendation for the development of the bank. The methodology of

study is based on both primary as well as secondary data.

Being nationalized bank i.e. NBP, there is a government security to banks customers.

Bank has successfully launched Hub and Spokes Branch concept, has goodwill for

being pioneer in launching various products and services, much familiarity for services

being required by customer, spent huge amount on the computerization of its regional

offices and Hub branches, authority to deal foreign exchange, to give guarantee for

imports and exports. However, bank has burden of defaulted loans which can be

overcome by speeding up recovery system through appointment of exclusive judges

who should decide the defaulted cases in less time, the debt recovering agencies

regulated law may be used. Bank needs improvement in the credit management by

giving refresher courses regarding creditor and risk management to the concerned

employees. Bank may overcome the problem of not offering competitive and required

products and services by hiring professionally competent people who may do research

for designing the products and services according to changing needs and effectively

market them.

Bank has spectacular history in the banking sector of Pakistan, more than 1200

branches and high deposits but still it needs improvements for development i.e. in the

organizational hierarchy of the bank, downward communication is dominant over

upward communication which may be overcome by giving encouragement to the

feedback by the employees and arranging the informal meetings and introducing new

style of the organizational hierarchy. There is lack of motivation among the employees,

viii


16/16

which may be detached by giving those incentives increasing salaries and rewarding

them. There is need of changes in promotion basis recruitment policy which is based on

short term, which should be make long term. The absence of coordination among thefunctional divisions and overlapping of functions may be eliminated by complete

coordination among functions of various departments and the advancement growth and

opportunities for achievements.

In spite of various problems currently being faced by the bank, it has lot of potential to

grow by efficiently utilizing its human and organizational assets for meeting the

changing demands in the globalize world of today in order to be competitive in the

banking sector of Pakistan.

ix

Beginning Pages of NBP

Documents

Transcript of Beginning Pages of NBP