Final Report of NBP
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Transcript of Final Report of NBP
Internship Report
FASIH UR REHMAN
BC-07007 (MORNING)B.COM (HONS.) (FINANCE)
SESSION 2007-2011
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
UNIVERSITY OF THE PUNJAB
[Type the phone number]
[Type the fax number]
9 / 5 / 2 0 1 1
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Table of Contents
Sr. No. Description Page #
1 Dedication 4
Preface
Executive summary
2 Acknowledgment
4 History of NBP
5 Vision Statement
6 Mission statement
7 Core Values
8 Branch network
9 Products
10 Services
11 Departments
12 Work Done By Me
13 Current Problem
14 SWOT Analysis
15 Financial Analysis 2010
16 Conclusion
17 Recommendations
18 Biblography
19
20
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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 must understand you and of course, you must understand his/her,
too. I think, another important point in a friendship is confidence. You mustn't tell lies to each
other. In addition, you must say everything mustn't tell lies to each other. In addition, you
must say everything about 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.
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Preface
Banking sector owes a pivotal importance in the economy of any country through its vibrant
functions. This is the deep seated motivator that geared up me to join the National Bank of
Pakistan for my internship. Moreover the practice and the familiarity learned during this
tenure would also attest 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 Pakistan possess 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 complex operations 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.
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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 nation’s 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 to banks 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 sector 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 procedures and precautions for availing any product and
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.
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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 that I 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, Abid Adeel and Asrar who were really
cooperative to me in the completion of this report and who directly or indirectly helped me 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
NBP will aspire to the values that make NBP truly the Nation’s 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 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.
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 emerging
economies. According to SBP, the financial sector’s 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 "pass
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 by Florentines bankers, who used to make their transactions above a desk
covered by a green tablecloth. However, there are traces of banking 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 Bank having a few branches
in Lahore and its suburbs. In 1942, the Australasia bank was housed in a garage 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 of Indian
banks were operating and soon after creation of Pakistan they shifted their branches and
headquarters to India.
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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-Azam flowed from Quetta to Karachi specially to
grace the occasion. Originally the State Bank was scheduled to be established in September
1948. Zahid Hussain, 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. However
Indian banks operating in Pakistan refused to finance Pakistani exports.
Pakistan’s 1997 banking reforms were aimed to strengthen the sources of governance and
financial discipline for the banking sector, namely bank regulators, markets, the courts and
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 initiating corporate governance
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 Pakistan’s banking sector since President
Musharraf’s 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 institution.
It has developed a wide range of consumer products, to enhance business and cater to the
different segments of society. Some schemes have been specifically designed for the low to
middle income segments of the population. These include NBP 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-e-
Hasna loans to students, self employment scheme for unemployed persons, public transport
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scheme. The Bank has expanded its range of products and services to include Shariah
Compliant 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 more than 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 NAFA, 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 Year 2001, 2002, 2004 and 2005 Award by The Banker
Magazine, the Best Foreign Exchange Bank –– Pakistan for 2004, 2005, 2006 and 2007
Global Finance, Best Emerging Market Bank from Pakistan for 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 Management by 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. Jute Board Establishment Ordinance
2. NBP Ordinance dated 08.11.1949
National Bank of Pakistan was established on November 9, 1949 under the National Bank of
Pakistan Ordinance 1949 in order to cope with the crisis conditions which were developed
after trade deadlock with India and devaluation of Indian Rupee in 1949. Initially the Bank
was established with the objective to extend credit to the agriculture sector. The normal
procedure of establishing a banking company under the Companies Law was set aside and the
Bank was established through the promulgation of an Ordinance due to the crisis situation
that had developed with regard to financing of JUTE trade. The Bank commenced its
operations from November 20, 1949 at six important jute centers in the East Pakistan and
directed its resources in financing of jute crop. The Bank’s Karachi and Lahore offices were
subsequently opened in December 1949. The nature of responsibilities of the Bank is
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.Ghulam Farooq 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. Zahid Hussain, 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
MD Mirpur (He had already served NBP for 10 years as its Chairman of government
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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 1949-50. 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 country’s 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 1960 financing under this
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)
“We’re expanding horizons, reaching out,
Being there and bringing something for everyone.
After all, we are The Nation’s Bank”.
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Branch Network of NBP
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Overseas Branches
16 Overseas Branches 4 Representative offices 1 Subsidiary 1 Joint Venture
Domestic Branches
29 Regional Offices 1190 Branches 130 Online Branches 4 Subsidiaries
TYPES OF BRANCHESThere 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 Branches These 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
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President
Board of Directors
Member Executive Board
Regional Chief
Zonal Chief
Manager
NBP Services/ProductsBank 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. Customer’s purchases National
Bank of Pakistan’s 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 ORDERNBP provides another reason to transfer your money using its facilities. National Bank of
Pakistan’s 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 CHEQUESAgain the Traveler’s 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 Traveler’s 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 Traveler’s Cheques are the safest way to carry the money.
5. LETTER OF CREDITNBP 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, NBP’s
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 FINANCEObviously 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 customer’s best resource in making NBP’s products and services
work for them. Through this facility the bank is making dreams of people a reality.
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7. FOREIGN REMITTANCESTo 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 well-
trained field functionaries are posted to provide efficient and reliable home remittance
services to nonresident Pakistanis at 15 overseas branches of the Bank besides United
National Bank (the joint venture between NBP and UBL in UK)., and Bank Al-Jazira, Saudi
Arabia.
Zero 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 SYSTEMThe 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 for our
business and personal needs.
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10. Other Services
In addition to acceptable standard general banking services, following services are also 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:
PeriodProfit Rates
1 year7.50%
2 years8.50%
3 years9.50%
4 years10.50%
5 years11%
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 SchemeIf a person is aged between 18 and 45 years, he could be eligible for easy
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
customer’s 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 ATM’s across
the country.
Advantages
o Customer won’t 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
vii. 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 documentation
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 NBP’s Online Branches located in 30 cities:
Karachi Hyderabad Mirpur (AJK) SargodhaIslamabad Quetta Gujrat SukkurRawalpindi Lahore Abbottabad JhelumGujar Khan Burewala Bahawalpur Wah Cantt
Sailkot Multan Peshawar D.G. KhanGujranwala Muzaffarabad Kohat D.I. Khan
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Sheikhupura Faisalabad Larkana JhangMardan Sahiwal
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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 demand draft is
couriered to other banks for their customers. Pay order or demand draft can also
be couriered directly to the beneficiary’s 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 NBP’s 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 & details are reported to the selected
insurance company by NBP.
“Policy” means Group Personal Accident Policy dated 26/09/05 executed between NBP and
Insurer.
“Principal Sum” means the amount stated in the Policy’s 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
the depositors. No lockers are issued to any unknown person. The dual control system is used
for lockers. The officer has master key to apply on the locker but he cannot open the locker of
any person. The locker holder provides the bank has specimen signature. Whenever the
locker holders come to open the locker, his signatures are verified by the officer and then will
be able to open his locker. If the key of the locker is lost company providing these lockers
breaks the locker and new lock is fitted in its locker and lock is destroyed in the presence of
the locker holder and bank charges RS 1200 for that. In case the locker holder dies, the court
opens his locker in the presence of his heir as mentioned in his will or and his belongings are
given to them and the locker is closed.
ii. NBP CASHCARD
NBP Cash Card is a 24-hour direct access ATM/Debit card to your bank account, which lets
you pay directly from your account as an alternative payment method to cash. The transaction
is authorized and processed by entering PIN. The NBP Cash Card holders are able to transact
at any of the 4000 + Merchants where Orix logo is displayed and can withdraw cash from
NBP, 1-Link & M-NET ATM’s across the country. The followings are the main features of
this product:
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. INTERNATIONAL BANKING
National Bank of Pakistan is at the forefront of international banking in Pakistan which is
proven by the fact that NBP has its branches in all of the major financial capitals of the
world. Additionally, the Bank has recently set up the Financial Institution Wing, which is
placed under the Risk Management Group. The role of the Financial Institution Wing is:-
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 support
trade, treasury and other key business areas, thereby contributing to the bank's
profitability
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 DepositsThis function is important because banks largely depend on the funds deposited with them by
its customers. Deposits are of many types:
i. Current depositsCurrent 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/-.
ii. PLS saving depositProfit 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/-
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iii. PLS term depositsFixed 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 exchangeDiscounting 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 serviceNBP also provides best and unique service to its valued customers. NBP provide the
following agency services to the customers:
i. Collection of dividendsAs 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 of Cheques, bills and promissory notes etc. National bank of
Pakistan acts as an agent for its customers.
iii. Acting as an agentNBP also acts as an agent correspondent or representative for its customer at home or abroad.
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.
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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 of a current or 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 introduction 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 customer.
i. Pay in slip book.
ii. 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 customer Himself
should.
i. Send the pass book for making entries and also periodically check them.
ii. He should also see that the entries are initialed by the accountant.
iii. The customer should verify the entries with own books of account.
iv. In order to safe guard the secrecy of the account; the customer should receive
v. The pass book in closed cover.
WITH-DRAWL
Withdrawal is made on cheques supplied by the Bank. A new cheque book is issued only on
receipts of the requisition slip attached to the cheque book issued previously and this
presented along with the depositor pass book for entire against cheque book challan. Cheque
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 ascertain that the
Bank. This rate is subject to change. The amount of interest is calculated for each calendar
month on the lowest balance at credit of an account between the close of the sixth day of a
month and the end of the month and only on every complete 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 his pass book in order that with drawls
and the amount of interest due on the account is entered therein and final balance stuck. This
balance is then paid to the depositor and his receipt is taken, the pass book is canceled,
unused cheque forms on hand are also surrendered at the same time.
SECRECY
The secrecy of depositor’s 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 letter starting the number of his
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account, the amount to be drawn and either 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 is normally
operated by the Business-men. It can be operated by minimum amount of Rs. 500/- Any
number of cheque amounting undue minimum balance limit can be issued by the account
holder for withdrawal or for payment. No interest is allowed on this 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/- or above. The
holder of this account will get profit of his amount, or he will bear the loss as the case may
be. So an individual is equally participant in profit and loss.The holder of account can
withdraw up to Rs. 15,000/- per month is eight withdrawals, in case of higher withdrawal,
seven day prior notice is necessary. This account 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. The fixed
period may be three months, six months, one year, two years, five years and more. 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 period and amount. The account holder cannot withdraw his
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amount before the specified period, but the same Bank will allow loan against that certificate.
Bank is liable to give 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. Current account form.
ii. Saving account form.
iii. Private or individual form
iv. 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 which are
drawn up to Banks for customers. Similarly the cheques drawn on different Banks and
deposited by Banks own customers for collection within the city is known as clearing The
functions of receiving and paying is mostly done through the clearinghouse. A clearing house
can be defined as "AA place where that representatives of all Bank get together to settle the
receipts and payment of cheques drawn on each other" Clearing House provides the facility
which can hardly be dispensed with especially, in case of crossed cheques.
There are two main types of clearing.
i. Outward clearing
ii. Inward clearing
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OUTWARD CLEARING:
It includes those cheques and other instruments which are sent by the Bank to the Banks for
payment on behalf of its own clients. Cheques are sent to clearing house thorough 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. Account number of payee/endorsee is written on the back side of the cheques.
ii. The instrument and the paying in slips are separated.
iii. The instruments are sorted I Bank-wise and branch wise.
iv. Schedules are prepared.
v. 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. After balancing the outward clearing, the pay in slips are released to C.D. department.
vii. After balancing, a transfer debit voucher is prepared.
viii. The instrument schedule. etc. are delivered to the messenger from the main branch
INWARD CLEARING
The cheques drawn are called inward clearing drawn on National Bank through its
representatives on the Bank presented by other Banks for payment it includes those cheques
and other instruments of Pakistan branches which other Banks present at the clearing house.
Inward Clearing At the Drawn Branch
i. Numbers of instruments noted in the schedules are verified immediately on receipt.
ii. 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. The amounts are debarred to the relevant accounts if otherwise in order.
iv. The IBCO is prepared crediting the amount of the main branch.
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v. If there is any return, that is deducted from the total and IBCO prepared for the
remaining amount.
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. For example
Mr. Ali is a customer of N.B.P. of CITY branch and draws a cheque in favor of 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 Bank situated in the
same city. For example a person draws a cheque on N.B.P. main branch, 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. The bank maintain account with the paying bank
iii. 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 collection to 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 clearing house sent for
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 customer wants to
deposit any cheque, he fills in the pay in slip himself and hands it over the counter along with
the instrument.
4. REMITTANCE SECTION
Remittance means transfer of money from one place to another place. It is of two kinds.
i. Inland remittance.
ii. 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. Within locality.
ii. Outside locality.
WITHIN LOCALITY
When a branch situated in Lahore is required to send drafts to any other branch situated in the
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 transfer of
money payable outside the city. For example, N.B.P. Main Branch Lahore sends any draft to
a Branch situated at Lahore.
It is commonly done through the following three means:-
i. Telegraphic transfer (T.T)
ii. Mail Transfer (M.T)
iii. Demand Draft (D. D)
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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 all details. All bank
Branches have been provided with their code books name Bank Keys 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 payable amount at the
drawee branch can only be transferred to an account; amount cannot be 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 an advice 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 another branch of
the same Bank to pay a certain sum of money only to or to the order of the Payee. Demand
drafts are purchased by the clients and after receipt of money Bank issues and delivers the
D.D. to the purchaser, who himself sends it to the payee. In D.D. the Banks do not recover
postal charges as it is payable by the purchaser. The Bank, after delivery of D.D. to the
purchaser also sends its own advice called IBCO (Inter Branch Credit Order) to the drawee
branch mentioning therein all details of issued 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 BRANCHMajor 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 all matters 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 form prescribed 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 of the
introducer is written on the space provided on the specimen 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. There are different requirements
for different types of accounts and accountholders.
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DEPOSITSThe 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.
WITHDRAWALSCheques can withdraw amount. The withdrawals can be made only 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 BOOKThe 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 kept buy the bank.
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2. CLEARING DEPARTMENTIn 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 alternations. All
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 Government’s bank: In commercial banking system NBP is only the government
bank. They make their policies according to the government’s 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 government’s bank, it is enjoying the customer’s
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 Employee’s loyalty: Employees are very much loyal to NBP. Employee’s 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 organization.
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 Nation’s Bank: State Bank of Pakistan is government owned
bank that is why Pakistani nation has a trust on the bank that their deposits are
secured. Due to this reason the deposits of the banks are increasing with the passage
of time
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o Agent of State Bank of Pakistan National 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
has Total Deposits of Rs. 362.87 billion and becomes the first bank to cross the
deposit of Rs. 350 billion.
o Profitability: The pre-tax profits of NBP have gone up to Rs. 6.05 billion.
o Corporate Branches: National Bank of Pakistan is now the biggest financial
institution with assets totaling over Rs.310 billion with 1428 local and 23 foreign
branches. The bank is the higher financer in agriculture and commodity operation
sector.
o Corporate Branches: National Bank of Pakistan is now the biggest financial
institution with assets totaling over Rs.310 billion with 1428 local and 23 foreign
branches. The bank is the higher 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. Credit cards
ii. Foreign exchange bearer certificates
iii. National bank daily account
iv. 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 the promotion
of the managers.
o Individual Difference: In NBP the individual difference have strong impact on the
organization’s performance due to the wrong criteria of selection of the employee. So
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with the passage of time individual differences are increasing which are undermining
the good 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 decision making is.
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
government’s bank.
o Increase in economic activities: The economic activities are increase nowadays, so
banks are contributes more in economic activities. Banks are played role in trade and
commerce. So the business of commercial banks is increase.
o Consumer Banking: The basis need of the consumer such as housing, transportation
and other durable goods are not adequately financed by the banks. So by initiating
these services, the bank 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 to expand its business the bank may start investment
banking by investing in the portfolio 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.
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o Night Banking: Despite of poor customer service of NBP, people still come to NBP
because of its Govt. ownership as they feel it secure therefore bank improve its
deposit by giving facility 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
customer’s 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 continuous problems
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 poor working 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. So due to the increase in price of the products, the savings of the
nation is decreasing with the passage of time. So it is the threat for the banking sector.
In the future, the deposits of the bank will decrease
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o Government Policy: On NBP Govt. policies have strong impact. A slight change in
Govt. policies may affect the performance of the bank. The bank has to work with in
the regulation framework.
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Statement of financial positionAs on December 31 2010
201020092008
Note……………….Rupees in '000'……………….
(Restated)
ASSETS
Cash and balances with treasury banks115,442,360115,827,868106,503,756
Balances with other banks30,389,66428,405,56438,344,608
Lendings to financial institutions - net23,025,15619,587,17617,128,032
Investments - net301,323,804217,642,822170,822,491
Advances - net477,506,564475,243,431412,986,865
Operating fixed assets26,888,22625,147,19224,217,655
Deferred tax assets - net6,952,6663,062,2713,204,572
Other assets - net53,496,24059,666,43844,550,347
1,035,024,680944,582,762817,758,326
LIABILITIES
Bills payable8,006,63110,621,16910,219,061
Borrowings20,103,59145,278,13840,458,926
Deposits and other accounts832,151,888727,464,825624,939,016
Sub-ordinated loans---
Liabilities against assets subject to106,70442,62925,274
finance lease---
Deferred tax liabilities46,160,03842,269,62339,656,831
906,528,852825,676,384715,299,108
Represented by
Share capital19 13,454,62810,763,7028,969,751
Reserves24,450,24422,681,70719,941,047
Unappropriated profit65,857,43860,696,51052,456,204
103,762,31094,141,91981,367,002
Surplus on revaluation of assets - net20 24,733,51824,764,45921,092,216
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Profit and Loss Account As on 31 December 2010
20102009
Note…Rupees in '000'…(Restated)
Mark-up / return / interest earned88,472,13
477,947,697
Mark-up / return / interest expensed45,250,476
40,489,649
Net mark-up / interest income43,221,658
37,458,048 Provision against non-performing advances-net7,011,04611,043,469 Provision for diminution in the value of investments-net
2,954,678605,629 Provision against off balance sheet obligations3,96520,237 Bad debts written off directly--
9,969,68911,669,335
Net mark-up / interest income after provisions33,251,969
25,788,713
NON MARK-UP / INTEREST INCOME
Fee, commission and brokerage income9,631,5798,930,391Dividend income1,099,4931,920,336Income from dealing in foreign currencies2,211,1393,028,165Gain on sale and redemption of securities - net2,512,3634,591,894Unrealized gain on revaluation of Investments
classified as Held-for-trading6,7302,355Other income2,171,336552,216
Total non mark-up / interest income17,632,640
19,025,35750,884,60
944,814,070
Administrative expenses26,202,57
722,571,470
148,026620,780118,887321,647
Total non-markup / interest expenses26,469,490
23,513,89724,415,11
921,300,173
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Extra ordinary / unusual items--PROFIT BEFORE TAXATION24,415,11
921,300,173
9,835,0488,871,513 - Prior year(s)-939,256-4,133,282 - Deferred-2,043,887-999,904
6,851,9053,738,327PROFIT AFTER TAXATION17,563,21
417,561,846
Inappropriate profit brought forward60,696,510
52,456,204 Transfer from surplus on revaluation of fixed assets on account of incremental depreciation117,738123,934 Profit available for appropriation78,377,46
270,141,984
...Rupees...
Earnings per share13.0513.05
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Ratios Analysis
1. Profitability Ratio
2. Liquidity Ratio
3. Solvency Ratio
4. Performance ratio
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Profitability Ratio
MARGIN OF PROFIT
=Net profit
X 100markup/return/interest earned
2010 in '000'2009 in '000'
17563214X 100
17561846X 100
9947213477947697
=17.65642%=22.53029%
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
X 100Total Deposits
2010 in '000'2009 in '000'
17563214X 100
17561846X 100
732151888727464825
=2.3988484%=2.4141162%
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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
X 100Shareholder's Equity
COMMENTS:
Return on equity is much increased in 2004 than the previous year, which indicated
beneficiary effect to the shareholder.
LIQUIDITY RATIO1. WORKING CAPITAL
= Current Asset – Current Liabilities
COMMENTS:
Working capital increased which shows that there is an increase in current assets, which is
good indication.
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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 '000'2009 in '000'
506703380508035607732151888727464825
=0.692074129=0.698364498
COMMENTS:
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 increase
in area of activity of bank.
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SOLVENCY RATIO
1. LONG TERM DEBT TO FIXED ASSETS RATIO
=Long term Debt
X 100Fixed Assets
COMMENTS:
It shows that the long-term debt of the bank in ratio to fixed assets decreases as compared to
previous years which is favourable.
2. RETURN ON TOTAL ASSETS
=Net profit after Tax
X 100Total Assets
COMMENTS:
Return on total assets increases in 2004 which is favourable for bank.
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2. DEBT RATIO
=Total liabilities other than Equity
X 100Total Assets
20042003
506804383
= --------------------- x 100
549740825
= 92.2%
441388308
= ---------------------- x 100
468972322
= 94.1%
COMMENTS:
The decreasing debt ratio shows the decreased share of debt in total assets as compared to
owner’s equity. The lower the share of the debt, more will be the secure financial position.
PERFPRMANCE RATIO1. STOCK HOLDER EQUITY TO TOTAL LIABILITIES
=Stockholders' Equity
Total Liabilities
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20042003
25257284000
=-------------------
506804383000
= 0.05:1
18133897000
=---------------------
441388308000
=0.04:1
COMMENTS:
Stock holder’s equity in 2004 increases as compared to total liabilities than the previous
year. This is a good sign for bank.
2. EARNING PER SHARE
=Net profit
Number of shares
20042003
6242929000
=----------------------
492411000
= 12.68
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.
3. BREAK UP VALUE
=Net Worth
Number of shares
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20042003
25257284000
=--------------------
492411000
= 51.3
1813397000
=------------------------
492411000
= 36.8
COMMENTS:
Break up value per share increases in 2004 as compared to 2003 which is favaourable for
bank.
SUMMARY OF RATIO ANALYSIS:
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PROFITABILITY RATIO: 2004 2003
MARGIN OF PROFIT 29.8% 21.58%
RETURN ON DEPOSITS 1.34% 1.06%
RETURN ON EQUITY 24.7% 23.15%
LIQUIDITY RATIO:
WORKING CAPITAL (in ooo’s) 58787718 27707818
CURRENT RATIO 1.19:1 1.1:1
ADVANCES TO TOTAL DEPOSITS 0.48 0.41
SOLVENCY RATIO:
DEBT EQUITY RATIO IN FIXED ASSETS 1.2:1 1.85:1
RETURN ON ASSETS 1.14% 0.90%
DEBT RATIO 92.2% 94.1%
PERFORMANCE RATIO:
STOCKHOLDER EQUITY TO TOTAL LIABILITIE 0.05:1
0.04:1
EARNING PER SHARE 12.68per share 8.53per share
BOOK VALUE PER SHARE 51.3 36.8
AVERAGE PROFIT PER SHARE 5092111 per branch 3427023 per
branch
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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 and admin. expenses.
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 impairment charges, 3) robust 20%YoY
growth in non-interest income and 4) 15%YoY growth in non-interest expenses.
PkR(million)1HCY11A1HCY10A
Mark-up earned47,11243,605
Mark-up expensed24,25022,728
Net mark-up income22,86220,877
Total Provisions6,1364,459
Net interest income16,72616,418
Non interest income10,0508,347
Total Income26,77624,765
Non mark-up expenses15,06313,056
Profit before taxation11,71311,710
Total taxation3,5803,831
Profit after taxation8,1337,879
EPS4.844.68
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RECOMMENDATIONS The global economic environment has changed, creating challenges and opportunities for the world’s policy makers. The privatization drive has emerged as a strong tool of transformation, which is being recognized as an essential ingredient for the economic well. 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 growth 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.
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o CREDIT CARDS are issued by the different banks like MCB, ABP and Citi Bank etc.
but NBP don’t 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 people 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. There is too much dependence on handwork and they are not getting at with
computer programmed. All the branches of NBP should be computerized.
o 18. There are some employees untrained which decreases the efficiency of the
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.
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o 23. People have to wait for re-cashing their cheques and for paying their utility
bills, which is not good for reputation of bank, it should be improved.
o 24. Promotion should be given to competent persons on merit basis.
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