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                                  Internship Report on
                                National Bank of Pakistan
                                (University Road Branch Peshawar)




 Internship Report submitted to the CECOS University of Science & Technology,
Peshawar in partial fulfillment of the requirements for the degree of MS in Finance.

                                   Imdad ullah (MS Finance)
                                           Session 2009-2011



                                            Submitted To:
                                           Dr Zainab Saleem.




            CECOS University Of Science & Technology, Peshawar Pakistan.


CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                                                PREFACE

       It is an academic requirement for a student of MS in Finance to undergo an

internship program of eight months week duration. This requirement provides with

an opportunity to acquaint the student of MS (Finance) with practical working of an

organization.

      I selected National Bank of Pakistan University road branch Peshawar for my

internship. During my work, I was rotated in different departments of National

Bank of Pakistan University road branch Peshawar and got some understanding of

their operations and procedures.

       The Bank staff was very much cooperative with me, they have provided me

with guidance and relevant material to write a report. I am very much thankful to

them and to my advisor sir Zulqirnain Ahmed for his supervision and guidance.




                                           DEDICATION:

        I dedicated my effort to my co-operative and encouraging family.


                                            IMDAD ULLAH.




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                                      ACKNOWLEDGEMENT

I am very thankful to all the NBP staff of University road branch Peshawar, who
supports me on every step & guide me in routine transactions. I am also thankful to
Mr. Baber Rehman, who supports me in providing data about National bank. I say
thanks to all those who support me in preparing this internship report & provide
me assistance at crucial times. I am also very thankful to Mrs. Zainab Saleem for his
guidance & assistance during report preparation.



                                            IMDAD ULLAH.




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                                        TABLE OF CONTENTS

  S.NO                                               Title                                         Page No.

     1.                                            Preface

     2.                                      List of Acronyms

     3.                                    Executive Summary

 Section-1                                Introduction to Study

Chapter#1                                       Introduction

    1.1                                   Background of Study

    1.2                                      Purpose of Study

    1.3                                       Scope of Study

    1.4                                   Methodology of Study

    1.5                                      Scheme of Study

 Section-2                                  Literature Review

Chapter#2                    History , Formation and Growth of NBP

    2.1                                        Incorporation

    2.2                                       History of NBP

    2.3                               Aggressive Style of Business

    2.4                                       Modernization

    2.5
The Den         Nationalization And Cost Minimization Era (1996 Onwards)

    2.6                                Organizational Objectives

    2.7                               The Institutional Approach




 CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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    2.8                                     Corporate Culture

    2.9                                 The Change Programme

   2.10                               Customer Oriented System

   2.11                                      Decentralization

   2.12                                  System and Procedures

Chapter#3                                 Organizational Setup

    3.1                                      General Outlook

    3.2                                Organizational Structure

    3.3                                   Executive Committee

    3.4                            Regional Headquarter Peshawar

    3.5                                    Main Branch Kohat

    3.6                                    Corporate Branches

    3.7                              Overseas Operations of NBP

    3.8                                   Organizational Setup

    3.9                             Banker Customer Relationship

   3.10                       Rights Of Customer Towards The Bank

   3.11                    Rights Of Bankers Towards The Customers

Chapter#4                                  Departmentalization

    4.1                             Human Resource Department

    4.2                                      Selection Process

    4.3                                       Transfer Policy

    4.4                                            Criteria

    4.5                                           Training



 CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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    4.6                                          Motivation

    4.7                                    Deposit department

    4.8                                   Advance department

    4.9                                Remittances Departments

   4.10                                    Account department

   4.11                                  Computer department

   4.12                             Foreign exchange department

   4.13                                Establishment department

   4.14                              Central account department

   4.15                           Audit and inspection department

   4.16                             Stores and record department

   4.17                                  Marketing department

   4.18                               Public relation department

   4.19                Government Receipts And Payments Department

   4.20                                   Dispatch Department

Section-3                                      Ratio Analysis

Chapter#5                               Financial Ratio Analysis

    5.1                                         Trade credit

    5.2                               Suppliers of long term debts

    5.3                                            Investor

    5.4                                         Management

    5.5                                  Financial ratio analysis

    5.6                                        Index analysis



 CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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    5.7                                  Financial performance

Section-4                                          Analysis

Chapter#6                                     critical analysis

    6.1                                   Role of Headquarters

    6.2                               The narrow span of control

    6.3                            Need of computerized networks

    6.4                                      Customer service

    6.5                                    Presentation factors

    6.6                                  Working environment

    6.7                     Recruitment procedure of IT professionals

    6.8                                 Professionalism required

    6.9                             Training need of IT personnel

   6.10                                      Promotion policy

   6.11                                       Transfer policy

   6.12                                     Retirement policy

   6.13                                 Communication function

   6.14                                     Transport facility

   6.15                               Need of competitive attitude

   6.16                             Need for aggressive marketing

   6.17                              Need For Societal Marketing

   6.18                                       Online Banking

   6.19                                        ATM Facility

   6.20                                        Credit Cards



 CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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Chapter#7                         Conclusion and Recommendation

    7.1                                          Conclusion

    7.2                                     Recommendations

    7.3                                       Online Banking

                                      List of persons Interviewed

                                                 References

                                                Bibliography




 CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                                        LIST OF ACRONYMS



NBP                        National Bank of Pakistan

HBL                        Habib Bank Limited

SEVP                       Senior Executive Vice President

EVP                        Executive Vice President

VP                         Vice President

OG                         Officer Grade

RBC                        Regional Business Chief

RHQ                        Regional Headquarter

RCC                        Regional Compliance Chief

ROC                         Regional Operational Chief

A&I                        Audit and Inspection

GM                         General Manager

OI                          Office In charge

MPC                        Management Policy Committee

RO                          Regional Office

MDD                         Marketing Development Division

MSD                        Management Banking Division




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                                     EXECUTIVE SUMMARY

 This report is aimed at studying and analyzing the National Bank of Pakistan

    University road branch Peshawar. This report is based on findings of eight weeks

    internship. National Bank of Pakistan was established in 1949. It has 1193 branches.

    National Bank of Pakistan has 28 regional headquarters and 12 corporate branches.

 The main purpose of the internship is to prepare and submit the report as partial

    fulfillment for the award of MS (Finance) degree.

       The methodology used in my report is based on two types of data. One is primary

data consisting of interviews, discussions with executives and officials, and personal

observation. Other type of data is secondary data consisting of annual reports, manuals,

journals, circulars, brochures and relevant books. During the internship, one of major

problems was the limitation of time and also there were very little material available in

the branch but my sense of personal observation moved me to collect the material as

much as possible from the National Bank of Pakistan University road branch Peshawar

but also from other branches of National Bank of Pakistan in Peshawar. I have also taken

the help from the books like Finance, Investment, Corporate Finance and accounting etc.

as well as from the Internet.

 Report findings are as follows. Apart from other chapters, I have done the financial

    analysis. some problems are:

   lack of professional staff

   improper management

   delegations of authorities are not according to the responsibilities

   lack of computers



CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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   functional problems in departments

   favoritism and nepotism

   unequal distribution of work

   improper counter services

   ineffective marketing

     For the better functioning of bank, it needs to have sound system without such

problems. For that I have suggested some recommendations for improvement;

 report recommendations are as follows:

(a) complaint of customers

(b) marketing policy

(c) note counting machine

(d) poor quality of counter service

(e) unequal distribution of work

(f) computer networking

        Bank should make its distinctive position in such area of competition by providing

more effective services.




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                                               SECTION#1

                                              CHAPTER#-1

                                   INTRODUCTION OF STUDY

                                1.1 : BACKGROUND OF STUDY

National Bank of Pakistan is one of the leading and first government recognized bank in
Pakistan.
NBP was established in November 9th, 1949, which started functioning from November
20th, 1949. The reason for development was that the NBP in addition to being a
commercial bank in the public sector at a time when all other commercial banks were in
private sector also came to acquire certain characteristics which to this day set it part
from other nationalized commercial banks of the country.
The most important of these characteristics is that NBP acts as an agent of the central
bank of the country. The NBP also acts as a trustee to the national investment trust (NIT);
one of the premier financial institutions of the country charged the responsibility of
mobilizing small saving.
The establishment of NBP thus signaled the achievement of another milestone in the
development of the banking industry in Pakistan.
                                     1.2 : PURPOSE OF STUDY

National Bank of Pakistan is one of the oldest and well-established bank in the public
sector. So I prefer NBP in order to set knowledge of this organization (NBP) for the
students of Business Administration, it is very important to know the all the financial
activity. In finance department I know, in which method the branch issued the advances
and what markup.
In National Bank of Pakistan University road branch Peshawar that give short –term
finance especially for the govt. employees, and the chance of default is very low because
they have also a bank account, and their salary come in that branch.
The weakness of the finance section is that the process is very slow, and the requirement
for issuing the advances, for the govt. employees is very tough. And there is no even
single case of default.



CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                               : SCOPE OF WORK
The scope of my work is based on the complete observation of national bank, but due to
shortage of time, I worked in special department of the branch, first of all deposit
department.
In deposit department, deposits are divided in to two or three types.
i)       current deposits
ii)      PLS deposits (PLS saving A/C, PLS term deposit.)
iii)     Fixed Deposits.
           In the above three types of deposits, I learn the entire necessary requirements
and also know the interest rate.
Secondly advance department is the most important department of the bank. It deals long-
term advance and Short-term advance and also consists of finance i.e. short-term finance
and long term finance.
Thirdly I also worked in remittance department. It consists of issuing DDS, MITS,
telegraphic transfers SE (short credit).
LAC (local short credit) clearing. I also worked in account department and check issuing
and computer department.
                      1.3 : METHODOLOGY OF STUDY/RESEARCH

During my internship in National Bank of Pakistan University road branch Peshawar, the
most important task was to collect more quality information about the organization as
much as possible that is why I used a number of techniques to collect the required
material and conduct the report.
The methodology, which I adopted for this research is based on both the primary data as
well as secondary data regarding the overall operation of NBP.
The primary data consist of interviews with manager, discussions coordination with the
executive and officers, and other staff’s personal observation and different types of
written material from Bank.
        The sources of secondary data were annual report 2008, manuals, circulars,
relevant books, brochures and monthly economic reports.
       I have also got support from available banking material & books, as well as
information from human resource management and research methodology material.



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                                     1.4 : SCHEME OF STUDY

Chapter #1 includes background, purpose scope, methodology and scheme of study.

Chapter #2 includes formation and growth of NBP, incorporation, organizational

objectives and customer oriented system

Chapter #3 includes organization setup general outlook, organization structure,

corporate branches and overseas operation branches.

Chapter #4 departmentalization it include various department in branch.

Chapter #5 includes financial Ratio Analysis

Chapter #6 SWOT (Critical) Analysis

Chapter #7 Conclusion and Recommendations

                                              SECTION # 2.

           CHAPTER-2: HISTORY OF NATIONAL BANK OF PAKISTAN

                                        Evaluation of Banking

The word “banking” is derived from the words Bancus, Banque or Back. The history of
Banking is traced to as early as 2000BC.
The origin of banking is also traced to early goldsmith. The first stage in the development
of modern banking thus was the accepting of deposits of cash from these persons who
had surplus money with themselves.
In the second step, goldsmiths used issue receipts for the money deposits with them.
These receipts began to pass from hand to hand in settlement of transaction.
In the same time they thought it profitable to lend at least some of the money deposited
with them to the needy persons. This proved quite a profitable business for the gold
smiths.
In order to create confidence among the people, different steps were taken to regulate the
banking organization.




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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A conference was held in Nuremberg, 1584. It was decided that a bank should be set up
by the state, which should streamline the banking organization and technique.
The first central bank was formed in Genoa in 1587. Banks of England were established
in 1694.
Wit the passage of time the activities of the commercial banks have greatly increased.
They now deal with large number of matters such as obtaining funds, advancing loans to
businesses, farmers, house holds, and making investment in stocks discount bills of
exchange etc.

                                        MODERN BANKING
By the year 1700 the bank of England was not only 100 issuing notes but also
conducting accounts for customers. In 1853 bank of England further impetus for cheques,
currency, and they became very popular among the customers who would either pass
them from hand to hand. In 1946 the labor government nationalized the Bank of England.

                                     DEFINITION OF BANKS.

       Banking companies ordinance 1962 section 5(b) defines bank as, “Banking means
the accepting for the purpose of lending or investment, of deposits of money from the
public, repayable on demand or otherwise, an draw able by cheques, drafts order or
otherwise.



       FORMATION AND GROWTH OF NATIONAL BANK OF PAKISTAN

The History starts from the partition of Indo-Pak subcontinent in August 1947. At that
time, the area constituting Pakistan had 631 offices of 45 schedule banks out of which
487 were located in West Pakistan and 144 in East Pakistan, which was also served by
500 offices of small and non-scheduled banks. There were 19 branches of foreign banks
in Pakistan but they had a very little role to play.
Just after the partition the Indian bankers started migrating and shifting all the head
offices of their banks and capital to India. This way great set back to the banking field in
Pakistan, and resulted in a decline in the number of offices of scheduled banks from 631
to 195 by June 1948. In West Pakistan the number fell from 487 to 81, in East Pakistan


CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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from 144 to 114. Among Habib Bank limited with 25 offices and Australian Bank
Limited with 19 offices were institutions run by Muslims who shifted their head offices
to Pakistan.
The technical and administrative difficulties of establishing a central bank just after
independence compelled Pakistan to enter into an agreement with reserve Bank of India
by which the bank was to perform function of central bank in this area upto 30th
September 1948. The reserve bank of India started following polices against interest of
Pakistan. The situation become so grave that after the consolation of two governments,
the Reserve Bank of India way asked to finish the agreement from 30th June 1948 instead
of 30th September 1948. The Government of Pakistan decided to establish the State Bank
of Pakistan as its Central Bank from 1st July 1948. In the same year the first Pakistani
notes comes in the domination.
                                           INCORPORATION

On 9 November 1949, the government of Pakistan issued an order, which brought into
being the first public sector bank in Pakistan named as National Bank of Pakistan.
According to the order, the Bank started functioning on November 20, 1949. All other
earlier and subsequent commercial banks were incorporated under companies’ law but in
the case of NBP; this practice was set aside, which gave NBP a sole identity than other
banks. Need for this step was felt necessary because of the financial crises in September
1949, when Government interest was not secure due to absence of public sector bank.
That’s why from the very beginning the board of directors of the bank, the Government
duly presented the law. The new bank received a liberal advance from the State Bank of
Pakistan, which help it to extend finances for Jute and Cotton trade in the beginning.
National Bank of Pakistan was not only the first commercial bank of public sector but it
also attained some special features over other banks like it acts as an agent of the State
Bank of Pakistan where SBP does maintain its own branches. In those places it provides
all facilities of clearing house and other related, to commercial banks in that area. In
addition it is also an agent to the government and custodian of government treasury and
government transactions. It also acts as a trusty to the National Investment Trust, a
premier financial institution charged with the responsibility of mobilizing small saving in




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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the country. In this way the establishment of State Bank of Pakistan was another
milestone development of banking industry in Pakistan.

               2.1       : HISTORY OF NATIONAL BANK OF PAKISTAN

                         2.1.1 : The Expansion (1949-1960)
National bank of Pakistan came into being, and filled a vast vacuum, left in banking as a
consequence of the emergence of the independent state of Pakistan. Thus it was
continued to be the largest commercial bank in the country due to its monopoly over
government funds and its role as banker to the government and as an agent of the State
Bank of Pakistan. This was a period of steady expansion with the growth of government
funds and business.

                                 2.1.2 : The Decline (1961-1972)

Privatization increased in terms of size and sophistication, as a result major private bank
i.e. Habib Bank Limited (HBP) overtook National Bank of Pakistan (NBP) to become the
large bank. HBL was also ahead in the deposit size. During this period, NBP expands
very cautiously, from the competitive fray after the creation (1958) of the highly
aggressive Habib Bank Limited (HBP) and United Bank Limited (UBP), lost
continuously not only in the base of assets and size of deposits but also in profitability.


                              2.2.3: Commercialization (1973- 1981)

Nationalization of commercial banks occurred in the country, and the monopoly of NBP
over government businesses and funds began to be eroded. As a consequence, NBP came
under pressure to commercialize. This period saw the introduction of new commercial
response. Mainly due to very rapid expansion, the system of internal control failed to
keep pace with the requirement of a fast expanding system. The market share in the
overall deposits of nationalized banks declined from 25 percent during this period. At the
same time, the return on asses and on the deposits declined from Rs.0.63 percent to 0.32
percent while profits grew sluggishly from Rs.95 millions to Rs.110 millions till 1981.




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                   2.2.4: AGGRESSIVE STYLE OF BUSINESS (1982-90)

Beginning from 1982-1983 periods, a basis was laid for an aggressive competitive and
market-orient response. It was during this period that the domestic network began to
show increasingly profits. The share of NBP in the bank deposit of nationalized banks
grew from 25.4 percent in 1983 to 27.7 percent in 1988. The share in the advances
increased from 20.7 percent to 26.9 percent during the same period. It was during this
strategic phase that NBP achieved as relatively firm position as number two in relation to
Habib Bank Ltd. And left United Bank Ltd. Behind profit before tax grew from Rs.149
million in 1988, thus registering an increase of 111 percent in the seven years period
comparing with only 4 percent increase in the profits during the previous seven years
period.

                             2.2.5: MODERNIZATION (1990-1996)

The National Bank of Pakistan posed itself for a strong bank through into its next
strategic phase that can be termed as the strategic phase. The main thrust of this phase
was the re-organization of the bank to meet the challenges of the 21st century and to build
a sound basis for the organizational excellence through modern techniques and methods
of bank management from bottom upward starting from the branch to the top.
      A beautiful achievement in orientation and commercial bank basis existed in the
field and Head Offices as a result success in the 1985-88 periods and the revolutionary
success in 1995-1996. The executive and office cadres are also conscious of the
organizational business aim and are expected to respond vigorously to Excellent through
Modernization strategy. The change in the attitude of the top bosses of the NBP could be
easily seen by the revolutionary reforms introduced in the organization for example,
Culture Change Program and Credit Card. These two reforms portrayed that the bosses of
the NBP were well aware of the market changes.




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  2.2.6: THE DENATIONALIZATION AND COST MINIMIZATION ERA (1996
                            ONWARDS)

Like all businesses in Pakistan, National Bank of Pakistan was also put under a great
pressure in this period when the biggest bank of the country was faced with losses.
Government of Pakistan also made some reform in this time. The Pakistan banking
Council was demolishes and all banks were put under
Independent boards of governors. Default of loans is the big issue since that time. In
1996-97 the government of Pakistan pressurized all the institutions of the country to
down-size their staff so as to
Cut-down the expenses. This was the demand of I.M.F. As a result, a Golden Handshake
Scheme was offered to the employees of the bank under which over 7500 employees
were removed. This decision created a lot of cost that was then amortized. In the second
phase of the cost reduction program, the number of branches was reduced by a figure of
100, which included all the branches that were making loses.
         The decision of May 28,1998 blasts followed by a political decision of freezing of
foreign currency accounts also created a hard time of NBP. But still NBP performed well
in such difficult conditions and succeeded in the increase of deposits and also collects a
reasonable amount of money from the defaulters. The situation became worst by the
economic crises of East Asian countries but again National Bank of Pakistan performed
well in that area and maintained its credibility in these areas.
         National Bank of Pakistan, as per its tradition, forwarded for revival of fifty six
units with Rs. 3.5 billion in 1998 and also participated in the self employment scheme
with Rs.1.9 billion. National Bank of Pakistan also introduced ATM card system and it
also became a member of SWIFT in New York. It has also prepared a plane for electronic
banking and E-commerce. By seeing all these improvements we can say that the officials
and directors of the bank are well aware of all the necessity of modernization.




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                                : ORAGNIZATION OBJECTIVES

                          2.6.1 : Mission Statement:
To be recognized in the market place by institutionalizing a merit and performance
culture, creating a powerful and distinctive brand, identity, achieving top-tier financial
performance, and adopting and living out our core values.

                              2.6.2 : The Objectives:
All the objectives of the National Bank of Pakistan were compatible to the mission
statement of the bank. As a business organization, its main objective was profit
maximization, the only yard of performance. NBP tries to maximize its profits by its two
basic functions i.e. deposits and finances.

                           2.6.3 : To Increase Deposits:
Due to the tough competition faced in every field, banking has no competition from this
category. Whether the bank is Pakistani, Foreign, and private or nationalized, competition
is there. In the competition NBP has the goal to achieve the greatest possible amounts of
deposits. The tool used by the bank in order to increase its deposits was to provide the
best of facilities to their customers. By the increase in profits of bank mean that bank
becomes capable of lending more loans to the clients and hence earning profit from them.
In simple terms, holding greater deposits results in greater income of the bank, and the
profit maximization occurs and that is achievement of the banks’ objectives. In this
regard, the bank’s favorite account was PLS saving account because in the main city
branch Peshawar there was small savings with the general public. Current account was
also popular in the bank because the bank does not have to pay any interest to the
customers and hence banks can save some money, although some facilities are provided
to the customers.

                                    2.6.4 : Extension of Loans:

The profitability of the bank depends upon the amount of loan sanctioned or given to the
people. The credits afforded by the bank depends greatly on one factor and that is the
credit along with the interest payable should be secure, and that in turn depends upon the
type of people, the bank is sanctioning loans. Banking history is full of incidences where



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people were offered huge loans and they wrote off their loans by means of political
influence.
         It was very important issue for NBP to secure its loans and the interest as well.
Therefore NBP was very selective in sanctioning loans to the people in those days. NBP
preferred loans to bigger and reliable parties, after securing the collateral. NBP also
provides loans to small businesses but mostly the loans were provided to the industrial
sector of Sindh and Punjab.
         The loans provided by the NBP constitute the major portion of the profit of the
bank. The markup charged by the bank varies with the type of loan issued to the
customer; the terms and the conditions of the loans were also negotiable depending upon
the relationship between the customer and the bank. NBP has an extremely well
organized credit section. The staff is trained and educated and competent. They carry out
complete financial analysis and different ratios are also calculated. The bank specially
emphasized a sound quick ratio that shows the current cashable assets and could be relied
upon to provide the cover for the loan.

                         2.7       : THE INSTITUTIONAL APPROACH

THE UNIQUE ROLE OF NBP IN Pakistan’s financial sectors confers on the institution a
dual responsibility to be a commercial bank in its own right and at the same time, as a
trustee of public finances, to act as a custodian of the public interest. The continuing
validity of this role means that the kind of responsibility borne by National Bank of
Pakistan is unlike any other financial institution. As the only institution of its kind, it
performance an operational direction a need to be reflected in an ethos of productivity,
efficiency, flexibility and quality of services both to the individual customer and the
nation at large.
New initiatives and new efforts have been undertaken so as to:
1)       Restore institutional effectiveness with priority to customer care.
2)       Improve decisions making at all level relating rewards with performance.
3)       Upgrade the quality of resources available to the bank.
4)       Improve deployment of resources.
5)       Diversity in to new areas of activities.



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6)       Build on existing strength.

                                2.8      : CORPORATE CULTURE

National Bank of Pakistan, after its pure commercialization, focused its eyes on the
corporate sector and initiates an ambitious and farsighted Corporate Culture Change
Program in collaboration with price Water House (U.K) and AF FERGUSON &
Company in 1995. It commenced with an Executive Envisioning workshop in Bhurban.
This two days workshop developed a comprehensive Mission Statement, vision of the
bank’s future; it sets out in clear and realistic terms, the key objectives and goals of NBP
based on the perceived strengths, weakness, opportunities and threats being faced by the
institution. In this perspective, NBP has defined for itself a course where it will endeavor
to maximize its impact commensurate with the size and scale of operations. In order to
change the bank’s posture from reactive, four major areas had been highlighted for
concerted of actions.


1)       Personal Human Resource Management plan
2)       Operations and Strategic management Plan
3)       Technology Information Technologies Acquisition Plan
4)       Marketing.

                            2.9       : THE CHANGE PROGRAMME

                                  2.9.1 : The Symbol Of Change

The Logo of national Bank of Pakistan is “the symbol of change”. This logo has led the
bank to believe that “Organizations that do not change the changing environment wither
away into oblivion.” This led NBP to introduce the “Cultural Change Program”. The
spirit of the Culture Change Program is symbolized by the special “Change” logo. It
depicts a soaring eagle clasping the NBP logo, and epitomizes our vision. The NBP logo
represents the tradition of scholarly and Security, the basis for the future of the bank. The
Eagle represents Dynamisms, symbolizing the new customer focus and the new products,
new way of working carrying the bank to dominance.



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                            3.4 : OVERSEAS OPERATION ON NBP

National Bank of Pakistan HAS 1193 branches in Pakistan. The 29 overseas branches are

as under.

                               1.    United States of America (USA)

i.        New York Branch (100 wall street)
ii.       UN Plaza Branch
iii.      Washington B.C Branch
iv.       Chicago Branch

                                         2. U.K
i.        Man in Branch London (18 Fins burs Circus London)
ii.       Knights ire Branch (30 Sloame Street)
iii.      Mainchter Branch
iv.       Glasgow Branch
v.        Bradford Branch
vi.       Sheffield Branch
vii.      Edinburgh Branch
                                      3. Germany

      Frankfurt Branch

                                                 4.     Japan

i.        Tokyo Branch

ii.       Osaka Branch



                                                 5.    France

i.        Paris Branch

                                            6.        Hong Kong

i.        Hong Kong Main Branch

ii.       Kowloan Branch

                                                 7.     Korea




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i.       Soul Branch

                                                  8.China

i.       Beijing Representative Branch



                                               9. Bahrain

i.       Bahrain Branch (Gent Avenue)

                                             10. Bangladesh

i.       Dhaka Branch (Central Area)

                                                 11.Egypt

i.       Cairo Branch (Al-Dawad)

                                              12 .Ashghabat

i.       Ashghabat Branch.

ii.      Representative Office Tashkand (Uzbakistan).

                              13. Representative Office (Azberia…)

                     14.Representative Office Almatay (Kazakistan)

                     15.Africa Middle East Region

                     16.Afghanistan Kabul Branch

                     17.UAE

                     18.Abu Dubbi Branch

                     19.Dubai Branch


                                  3.5 : ORGANIZATION SETUP

                                    Objective of the Organization




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National Bank of Pakistan is a business organization and its main objective is profit
maximization, which can achieve in two ways i.e. by deposit or by finance.
                                       1. : Increase in Deposit

         Every bank whether foreign or Pakistani, has an objective to increase their
deposit. Therefore, the main objective of NBP is also to increase their deposit in order to
achieve the profit, because there is a tough competition in the market.
        The deposit growth rate was over 7.3 % to 15.76 % in 2002-2003 period. Total
deposit grew by over 10% to Rs. 349 billion from Rs. 316 billion. The growth in deposit
portrays the bank ability to attract additional deposit, without increasing its cost.
       In 2002, the total advances of a bank were Rs. 140.3 billion, while in year 2003,
the total advances were Rs. 170.3 billion. Project advances had dominant share of over
all advances.
      The emphasis of the bank has been on the trade finance; small and medium
customers, agriculture and project related financing. The bank extended project loans of
Rs. 3.5 billion. Specialized staff equipped with necessary skills to critically examine
project financing. Deposit is being built through training and new contractual selective
hiring. In keeping with the economic reality mark up rates.
                                             2. : Recoveries

        Bank cash recovery position was very good in 2002-2003. Cash recovery was Rs.
46.2 billion in 2002-2003. Classified advances as a percentage of advances of bank were
brought deem from 24% in 2001 to 19% in 2002. While compare very favorably with the
bank sector average.
                      3.6 : BANKERS, CUSTOMERS RELATIONSHIP

Before examine the relationship at bank and customers it is necessary to explain the
banker and customers.
Bankers.
A banker or a bank is a person carrying on the business of receiving money and
collecting draft for customers.




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Accepting for the purpose of lending or investment of deposit of money from the public,
repayable on demand or after wise and with strands by cheque, draft, and order or
otherwise.
1.    The relation of a banker and customer is primarily that a debtor and creditor when
      the customer deposit any money with a bank, the banker from the debtor.
2.    The relation between customer and bank is also that of a principal and agent. When
      a banker sells or buys securities on behalf of the customer, he then performs agency
      services.
3.    The relationship between bailer and bailee is established when the customer to the
      bank delivers goals.
4.    The banker issue letter of credit to the customer.
5.    Buying and selling of foreign exchange.
6.    Collecting negotiable instrument on behalf of the customer.
7.    The bank receives valuable instrument for safe custody etc.
8.    Discounting Bill of Exchange etc.
Besides these functions, there are so many function performed by bank.
                                                Customers
In order to constitute a customer of the bank, he should have an account with the bank.
By having some sort of account at the bank, the law recognizes that a person becomes a
customer of bank as long as his money is accepted as deposit for credit into his account.
The accounts are always open with hard cash, and thereafter cheques and other
instruments are accepted for collection on behalf of the
Customers, for this a single transaction is sufficient. Then there is sort of relationship
develops, and the parties have certain right and obligation against each other.

            3.7 : RIGHT OF THE CUSTOMERS TOWARD THE BANKER

         The customers have the following right toward the banker, which is become the
obligations or duties of the banker.
1. To give reasonable notice to the customers before closing his account
2. To sue when the banker has not maintain the secrecy of his account
3. To collect the proceed of the cheque and other order deposited into the account.



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4. One of the duties of the banker to his customers is the payment of his cheques
     properly drawn and in order on the branch of the bank where the account is kept.
     There should be sufficient funds account or arrangement for accommodation made
     with the bank earlier. in the customer
            3.8 : RIGHT OF THE BANKER TOWARDS THE CUSTOMER

1.       The customer should keep his cheque book under a lock and key so that no un-
         authorized person gets access to it.
2.       The customer must present the cheque for payment and collection within the
         business hours of his banker.
3.       Customers should responsible that the cheques are presented for payment within
         the reserve from the paid of their issue.
4.       To pay reasonable charges for services rendered by the bank.
5.       The banker has also the right to charge compared interest on many rent to his
         customer.

                                                Chapter-4


                                   DEPARTMENTALIZATION.

                       4.1       : HUMAN RESOURCE DEPARTMENT

 Recruitment:-

There was no set rule for recruitment. Although a procedure has been given in the Staff
(Service) rule, yet the same was only followed to the extent of the procedure and was not
done in the true spirit. The main point in recruitment, i.e.. Merit, was seldom adhered to
Political involvement that is rampant in our culture, also played havoc with NBP,
resultantly every change in government saw a large number of new industries.
There have been no select criteria for selection of employees to either lower-ranks or
officer/executive grades. This was done at times through simple interviews; however,
there have been instances, when regular tests have been conducted for recruitment to the
posts of officer.




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                                     SELECTION PROCESS

Selection is divided into following steps:

 SHORT LISTING OF THE APPLICATION:-


Candidates who were scrutinized were sent the test calls. In the first step, thousands of
candidates apply for limited posts available. The Head Office sent the calls to only those
candidates who fulfill the requirements of the job advertised.
 Tests:-
The Pakistan bank council under the supervision of the Pakistan Banking and Finance
Commission conducts test. In the tests the applicants are further short-listed.
INTERVIEW:-
        For the interview only those candidates are called which qualify the written test.
Different type of questions is asked from the candidate by the interviewing board, which
includes:
  1      Question about the personal background, extraordinary activities during
         education, and about personal contacts.
  2      About the role of banking in current situation of economy.
  3      Role of foreign enterprise in public economy etc.
Apart from these questions the candidate personnel interests are also discussed and an
effort is made to have the understanding of the individuals personality and after these
question an evaluation is made whether the candidate will prove an asset to the
organization or not.

 Merit List:-

      After the final result, the successful candidates are sent the appointment letters and
they are asked to sign the agreement with the bank person.


                                       TRANSFER POLICY

 Inter Transfer Policy




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The management of the National Bank of Pakistan transfers frequently the staff members
from one station to the other. Usually managers are transferred to enhance their
managerial skills. Sometimes the efficient workers are sent to those stations where the
performance of the staff is not satisfactory. Appropriate facilities are provided to the
transferred staff members so that they must feel comfortable and in response should work
efficiently.

 Inter Department Transfer:

Enter department transfer refer to the transfer from one department to another department
or one section to the other section in a branch. The purpose of this transfer is to
generalize the staff and to make them all rounder. In this way every body is able to
perform any kind of work in the branch.

                                                 Leaves.

 Privilege Leave

Privilege leave of 30 days is granted in a calendar year cumulative its up to a maximum
of to 60 days. Privilege leaves will not be granted for a period in excess of the no. of
days to the credit of an employer. Privilege leave must be taken more than time a year
and must be granted less than 6 days each time.

 Casual Leave

      Maximum 11 days per calendar year and must be granted more than three days at a
time and may be granted in combination with another leave.

 Sick Leaves

      Up to one-month sick leave per calendar year with full pay. The bank may grant
additional half pay up to one month the same year in which five sick leaves on full pays
allowed.

 Pilgrimage Leave




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      Special leave with full pay for 40 days will be granted to visit. To The holy places,
a special leave will be paid for actual no. of days allowed by the government for
performing HAJJ plus 7 days before departure and 7 days after arrival to the staff once in
a service.


                                          Promotion Policy:

Promotion is a term, which covers a change, calls for greater responsibilities and usually
involves higher pay and better terms and conditions of service and therefore a higher
status.
The purposes of promotion are:
          a.      To provide satisfaction the employee who are working hard.

          b.      To improve skill and experience ability.

          c.      To provide an organization with a competent worker.

          d.      To find out the most competent and suitable candidates.

                                             : CRITERIA

 Seniority List

National Bank of Pakistan shall maintain seniority list at different levels as follows.
                  1.    For OG2, separately at RHQ level.
                  2.    For OG1 and above up to SVP level at Head Office
                  3.    For EVPS, the list on the integrated NCB`s by Broad of Director.
 Annual Evaluation

Performance of an Officer and executive shall be recorded in the Annual Confidential
report (ACR) at the end of the year by immediate supervisor of the executive.


 Sanction strength:

After considering operational requirements of the Bank, the Board of Directors determine
strength in each cadre.




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                                       Process of Evaluation:

          In order to make the evaluation objective, the following steps are taken into
account.
    For the promotions of the Officers from grade III to Grade II, the minimum service
requirement is five years.
    For the promotions of officers of Grade II to Grade I, the minimum requirement of
service is four years.
   For the promotions of officers of grade I to the AVP, the minimum service
requirement is three years in Grade I and eight years of banking experience.
   For the promotion of AVP` to VP post, the minimum service requirement is three
years at the AVP post and ten years of banking experience.
   For the promotion of the VP`s                  to the SVP`s position, the minimum service
requirements is three years at the VP and thirteen years of the banking experience.
   For the promotion of SVP`s to the EVP`s post, the minimum service requirement is
three year at the SVP position and sixteen year of the banking experience.
   For the promotion of EVP`s to the SEVP`s post, the minimum service requirement is
three years in the EVP position and nineteen years of banking experience.



      The evaluation of overall performance comprises of the following elements.

         a.       Educational Qualification.
         b.       Professional Qualification.
         c.       Service in Grade.
         d.       ACRS of three years.
         e.       Operating performance.
         f.       Experience in different disciplines.
         g.       Positioning at for away places.


 Assessment of suitability

Committee interviews the eligible candidate to assess their suitability. The marks of the
interview are 20 and the total marks obtained by the candidate are added in the following
manner.




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a.        Assessment of performance 80
b.        Interview                20
            _______________________________
          Total                     100



 Promotion committee

The promotion committees exist at the following levels.

          a.        Committee at Regional Headquarter Levels.
          b.        Committee No.1 for Head Office Personnel.
          c.        Committee No.2 at the Head Office.
          d.        Inter Banking promotion committee.


                                     Operational performance

To lend objectivity to the promotion, the evaluating officer/executive should keep in view
key elements, at the time of the evaluation of the candidates:


     a.   For those who work in the field.
     b.   For those who work in the controlling capacity.
     c.   Promotion of semi technical;/specialist officers and executives.
           Factors to be considered by the promotion committee include:
               1.   Administrative ability and effectiveness at supervise level.
               2.   Leadership quality and initiative.
               3.   The ability to create a sense of discipline among the staff.
               4.   Self-confidence.
               5.   Commitment and motivation to achieve the organization Goals.
               6.   Ability to take prompt decisions and accept responsibility.
               7.   Reputation of integrity and moral rectitude.
                     This includes living with in known source of income and non-
               involvement in any business dealings, directly or indirectly.




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                                              TRAINING

      Staff college receive junior bank officers for further training in banking, the courses
lasting from six to nine weeks with about 25 students in each course. The college is
residential one and provides a measure of collegiate atmosphere that help to impart a
sense of camaraderie, which in itself is of great value. It is also of interest to record that
the Staff College receives trainees from abroad as well as domestic, which helps to create
worthwhile reference to banking business.
The staff college courses are designed not only to impart, technical instructions, but also
to develop qualities of judgment decision.                 The college is one the most important
institution set up by the bank because its students are likely to be drawn those people who
may except to rise to the senior most executive positions which the bank offers. It is
business of the staff college to keep in touch with all that is going on the world of
banking and finance and so revise its instructions as to keep pace with developments in
Pakistan and wish changes in the world outside.
The training institutions are intended to train supervisory and clerical personnel and to
provide basic training in banking procedure, and practice exercise in the routine work of
the bank. At the end of the course, trainees are required to go through a written test and
positions with respect to staff seniority are determined by the results achieved. The bank
motivates the officers to attend banking seminars both in Pakistan and abroad and it
attaches great importance to the exchange of ideas, information and knowledge.
National Bank of Pakistan realizes its position as the premier of the Bank in Pakistan.
This considers it responsibility to ensure dignified position while it representing it-self in
the meetings of the bankers mostly when finance is the question at hand.
 Training

The purpose of training is to provide the knowledge, skills, and the attitudes for
individuals to undertake their current jobs more effectively. NBP fully recognizes the
need for training of corporate personnel to be able to compete effectively in the
increasingly competitive market environment in which they have to operate.

 PRE-SERVICE TRAINING




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All newly recruited personnel without relevant work experience are provided with
training facilities, during which an employee is rotated through different operations of the
branch so that he may learn through practice and experience. The minimum probation
period is 6 months.

 IN-SERVICE TRAINING

The in-service training programs can be arranged at anytime when the need arises for
training. These training courses are of short duration, mostly for 2 to 4 weeks. These
training courses are arranged at the home station or at any other station. In case of other
station, the transportation and boarding charges are paid by the NBP. NBP has training
institutions. These training institutions arrange seminars/courses for the NBP employees.

 Grievance Handling:

Dispute always arises in both large and small organizations, which change into grievance.
NBP has a written procedure for grievance arise at the time of promotion, when someone
is superseded.
The aggrieved can appeal within 15 days. The aggrieved gives application to the branch
manager. The branch manager gives that application to the Regional head, which is put
forwarded to the Head Office.
Head Office appoints a committee and refers the case to that committee; the committee
reconsiders case of review about the aggrieved. The committee checks the number and
their calculation given in their view about the aggrieved and makes decision.



                                           MOTIVATION.

The management adopts different techniques to motivate employees towards their work.
They adopt techniques to attract qualified and skilled people.
For the purpose of attracting qualified people, management offers attractive salary, loans
allowances, fringe benefits and better working conditions.
In order to increase productivity and efficiency at the branch level, the management
adopts a reward system, which includes bonuses and other incentives.                          Streamlined



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systems and procedures are established and sanctioning powers are also delegated which
result in enhanced efficiency and considerable reduction in the time involved in
processing loan application.
The branch personnel are also motivated through the policy of providing adequate
incentives based on performance level.

 Performance Evaluation:

A system of annual confidential reports on the line of the ones used in government
departments was employed in NBP for evaluating the performance of an employee.
These reports were required to be given for each employee at the end of the year, and
were by their vary nature, confidential. Thus the employee never knew his rating. The
ACR`s contained such questions, like: “is he helpful in attracting deposits?” Instead Of
such simple question like: “what is the amount of deposits he procured and against what
target?”. Moreover, final evaluation at the end of the ACR’s, carried all the marks and
whatever written apart from the evaluation, did not matter at all.
                                  4.2: DEPOSIT DEPARTMENT

All the banking activities are aimed at deposit. Deposits are divided into two or three
type.

   Current Deposit

It is demand deposit. The bank has no interest on it. When a person wants to cash his
money, he will be allowed.

   PLS Deposit

By this, the bank gave profit to the customer. It has two types.

         1.       PLS Saving Account

         2.       PLS term Deposit.

Term deposit is from 3 months to 5 years. Each duration has separate profit rates. In this
deposit there is an agreement between bank and customer and due to this agreement
depositors can not cash fix deposit Amount before the fix time.




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Other deposits are call deposits, which were for contractors. There is no interest of Bank
on it. When the call deposit made then the bank takes some commission on it. It is only
for tender scheme.
Other account is NIDA. Its initial deposit is 5 million. On this account banks gives the
profit on daily basis. Old accounts are finished which were on interest based. Saving
accounts, fixed deposits, all were finished. Now, today PLS Accounts are available
which means Profit and Loss sharing account.


                                 4.3: ADVANCE DEPARTMENT

Advance department is one the most important department of the Bank. It deals with
long-term advance and short term advance. There are two types of advances: (a) Long-
term advances. (b) Short-term advances.



   Long term advances:

It is for one or more years. It includes running finance and agriculture finance.

Long-term finance included mortgage of properties, third party guarantee or personal
guarantee, hypothecation, and pledge stock.

   Short-Term Advances:

In case of short-term finances, running finance is against terms deposit certificate regular
income scheme, price bonds against salary, mortgage of property etc.
Agricultural finance is against personnel guarantees.
In short-term, gold finance are also included which is given against pledge of gold. In
case of long-term finance, there included national self-employment scheme which are for
un-employed personals and its limit is 3 lack, its security is personnel guarantee and
hypothecation of business asset. It is for 5 years.




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                           4.4      : REMITTANCES DEPARTMENT

NBP also provides facility of money transfer. NBP uses all the three means to transfer
money.      This department is also known as Bills department, which was under the
Supervision of Mr. Muhammad Iqbal(Assistant).

 Bank or Demand draft:

This is an order to pay money, drawn by one office of the bank upon another office of the
same bank for the sum of money payable to order a demand purpose to be endorsed by or
on behalf of the payer. The bank is discharged by the payment in due course.

 Mail transfer (MT):

An account holder of a bank, who maintains accounts in more than one branches of the
bank, may want to transfer the funds from his one account to another account. Other than
this, non-constituent wishes to remit funds in a particular account at some place with the
branch of the bank to another branch can resort to the transfer by mail, described as mail
transfer remittance. Bank is responsible for mailing and remittance.

 Telegraphic transfer (TT):

A more quick system of TT is also present to assure the requirements of fast growing
business community, which have no time. If the amounts are deposited in cash, a sample
cash vouchers is passed, giving credit to the main office Karachi, and a telegraphic
message is sent to the bank on which the TT is drawn, specifying the TT number, date,
name of the party in whose favor it is drawn and the test member.
    There are two types of telegraphic transfers:
         In case of advice and credit, the payer has an account in the bank on which it is
drawn. The amount is simply credited into his account. He can get the cash if he desires
so, through his account.
         In case of advice and pay, the payee has no account in the bank in which it is
drawn. In such cases the bank issues a TTR. The party can get TTR after identification




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and present it to his bank on which he maintains an account. It is then cleared through
clearing house.
     This department also handles with trade bills. Therefore it is also called bills
    department.
                                              Commission

Commission is charged according to specified rate of the bank on DD and MT, the rate
on up-to         Rs.100, 000 is 0.10 percent, up-to Rs.10, 00000 is 0.50 percent, and over
Rs.10, 00000, the rate is                      0.40 percent.

                              4.5      : ACCOUNTS DEPARTMENT

The accounts department maintains the account data record and inters branch
transactions. It falls under the Treasury Management Division at the Head Office level.
Generally it has main sections at the Regional Head Quarters. It is responsible for
preparation of the bank statement of the accounts, weekly or monthly. This department is
responsible for initial recording of the daily transactions made in the branch on routine
basis.
This department maintains three basic books of accounting named as Clean Cash.
General Ledger, and Abstract Ledger. These Ledgers are tallied every day after the
operational hours of the bank. A summary is prepared at the end of the day, called NBP
scroll. This scroll is then sent to the head office and a copy is made to the zonal office.

                             4.6       : COMPUTER DEPARTMENT

There are two kinds of vouchers cash and transfer. Vouchers received by branch in cash
are called cash receipt voucher, which are paid, is called payment in cash. All vouchers
involved in cash are punched in computer and scrolled off which is called cash scroll.

 Transfer

Every transfer vouchers has a contra, for example a customer deposits a cheque for credit
to other persons A/C, Credit voucher of the said cheque is called contra. These both debit




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and credit vouchers are punched in computer and scroll relating to transfer is called
transfer scroll.


All debit and credit entries in other heads are punched in computer and scroll of which is
called general ledger. At the end for balancing, the daily account and other head is used
which is called clean cash. If clean cashbook is balanced, the daily work of the branch is
over.
                   4.7     : THE FOREIGN EXCHANGE DEPARTMENT:

This department deals with all overseas business, which occupies a special place in the
banks operations. This is a highly technical section involving commercial credit, bills of
exchange, shipping and insurance documents, foreign remittances and collections.
The main function of this department is import and export. The bank has handled
imports by 23.3 percent to 12.3 billion and exports went up by 12.1% to 8.9 billion. This
substantial foreign exchange business handled under the direction of the foreign
exchange department. All branches of the National Bank deal in foreign exchange and
55 of them are authorized to conduct foreign business independently. This enables the
bank to give very prompt service to Pakistani businessmen engaged in import and export
business or who are concerned with the procurement of equipment and supplies for
industrial undertakings.
It was worth adding that in order to give maximum help and encouragement to the export
trade. The bank has set up a new department to deal exclusively with export finance.
The central export finance department as it is called has sub-organization at the local
principal offices at Karachi and Lahore, with the staff of field officers whose business is
to promote export trade by introducing to the businessmen, the facilities offered by the
bank.



                         4.8      : ESTABLISHMENT DEPARTMENT

Establishment department is also very important department of the bank. Establishment
department consists of salary, various expenses, means personal expenses, benevolent
funds and other expenses.


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The personal expenses include salaries and allowances; basic pay is the actual salary of
an employee. Benevolent fund consists of pension funds, liveries and Bonuses. Pension
fund is the fund given at the time of pension, Group Insurance is the whole life insurance
to help life insurance, and overtime is the extra time the employee spent from the normal
routine work.
Other expenses are the prevailing expenses, rent, taxes, residence rent, group insurance,
lighting and power, telephone/ bank calls, office telephone call, and depreciation of bank
property.
In establishment department, other expenses are car maintenance and fuel expenses,
entertainment expenses, advertisement expenses, postage and telegrams and Sunday
expenses are on annually basis.



                       4.9      : CENTRAL ACCOUNT DEPARTMENT

The account department controlled inter-branch transactions and is the main accounting
department of the bank. It is responsible for preparation of the banks weekly statement
of accounts and for the annual balance sheet of profit and loss account. The department
is fully mechanized and is now engaged in installing computers to deal, more efficiently,
with the rapid growth of the bank business and activities.



              4.10 : AUDIT AND INSPECTION DEPARTMENT
Headed by the Chief Inspector of Branches. It is responsible for the periodic audit and
inspection of the branches and offices of the bank.
                    4.11      : STORES AND RECORDS DEPARTMENT

It is managed by a controller of stores and record, and deals with the provision of
stationery, furniture, registers, office equipments and similar movable and expendable
store.
                             4.12     : MARKETING DEPARTMENT

At head office level, there is a division, which deals with marketing. It is known as
business and development division. But National Bank is a nationalized bank, the Govt.



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does not allow them to publicize like other banks do. Internally the bank gives their staff,
the incentive like cash rewards, promotion but promotion in banking council cut down
the non-development changes.               That’s why nationalized bank do not print diaries,
calendar or advertise.
Inspite of bank largely deserved reputation on the most formally organized bank, There
are inadequacies from the point of view of a sound commercial response.
Following is the list of major areas leading efforts for improving in a system.

   Economic and business information system:

Economic and business information system is needed office on well as at all PHQ’s and
Regional offices to provide data to support to the projected massive marketing efforts for
the next strategic phase.

   Marketing and customer contact system:

It is the planned regular contact with customers for business and out of the courtesy that
essentially forms part of an overall marketing program.


   Simplification of banking system:

Different Procedures are introduced to make them more responsive to customer and
employees need. A number of new opportunities, fully at significant business potential
or waiting to be seized by bank with the vigor and planning as they enter into the fifty-
five year of existence.

                        4.13     : PUBLIC RELATION DEPARTMENT

The intensification of competition for banking business in Pakistan renders such a
department very necessary, to handle publicity and also to brief advertising agents. But
this is only one aspect of the duties of this department is a country where people are still
inadequately informed about banking and what banks can do for them. It is not only the
bank that has to be advertised, but banking relations as such, and it is the promotion of
both of these that the public relations department is concerned with.



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                  4.14     : GOVERNMENT RECEIPT AND PAYMENTS

This is the only department of the bank, which distinguishes it from other commercial
banks. As stated earlier, National Bank of Pakistan is the only bank, which is working as
an agent to the Government of Pakistan. Hence all the receipts and payments of the
government money to its (government) employees and for any transactions there on.
This department passes pay bills of government officials and Government contracts. It
also maintains accounts of Governments authorities, like deputy commissioners funds,
funds of the Education Department, funds of works Department.                            It also maintains
accounts of Government institutions like Government Degree College, or other schools
and colleges. Due to Government Agency, the bank also enjoys the funds control of all
the Local Bodies in the area.
One officer supervises this department. In 2004 this department is under the charge of
Mr. Muzamil Khan (OG11).
Due to Government agency, the bank maintains the treasury in its premises, which
facilitates the satisfactory functions of the funds.

                              4.15      : DISPATCH DEPARTMENT

It consists of two mails.

    a.       Inward dispatch.

    b.    Outward dispatch.

        Inward Dispatch

The mail, which we receive from other branches, the principal offices or head offices, is
termed as inward dispatch.            A separate inward mail register is maintained for this
purpose. All the letters, which are receiving in the branch, are properly registered in the
inward mail register. It is further circulated to the concerned offices for necessary action.
        Outward Dispatch

It consists of all remittances, DDS, MTS, demand draft, advises, TTS, DD advises etc.
Besides this, official letter are also sent in the dispatch. For the purpose of dispatch the



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services of the most recognized courier services running in the country has been acquired.
These courier services include TCS, LCS etc for outward dispatch; a dispatch register is
maintained in the branch. The envelope was named with the branch sent. The receipt
number of courier service and the dispatch number in the register were both properly
checked on monthly basis by the manager.
For dispatch to be used locally, the services of post office are acquired.
The dispatch officer used Rs. 400 in the shape of buying the envelopes or the stamps for
the dispatch.
                                                Section –3

                                                  Analysis

                                                Chapter#5

                               FINANCIAL RATIO ANALYSIS

       Financial analysis is the process of identifying the financial strengths and
weaknesses of the firm by properly establishing relationships between the items of
balance sheet and profit and loss account. Financial analysis can be undertaken by
management of the firm, or by parties outsides the firm viz., owners, creditors, investors
and others. The nature of analysis depending on the purpose of the analyst.

                                     5.1: TRADE CREDITORS

       Trade creditors are interested in firm’s ability to meet their claims over a very short
period of time. Their analysis will, therefore, confine to the evaluation of the firms
liquidity position.

                       5.2: SUPPLIERS OF LONG TERM DEBT

      Suppliers of long-term debt on the other hand are concerned with firm’s long-term
solvency and survival. They analyze the firm’s profitability over time, its ability to
generate cash to be able to pay interest and repay interest and repay principal, and the
relationship between various sources of funds (Capital structure relationship). Long term
creditors do analysis of the historical financial statements by placing more emphasis on




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the firm's projected financial statements to make analysis about its future solvency and
profitability.

                                  5.3: INVESTORS
Investors who have invested their money in the forms of share are most concerned about
the firms that have steady growth in earnings. As such, they concentrate on the analysis
of the firm’s present and future profitability. They are also interested in the firm's
financial structure to the extent; it influences the firm's earnings ability and risk.
                                         5.4: MANAGEMENT

Management of the firm would be interested in every aspect of the financial analysis. It
is their overall responsibility to see that the resources of the firm are used most
effectively and efficiently and that the firm’s financial condition is sound.

                               FINANCIAL RATIO ANALYSIS

Ratio analysis is powerful tool of financial analysis. A ratio is defined as “the quotient of
two mathematical expression” and as “the relationship between two or more things”. In
financial ratio analysis, a ratio is used as benchmark for evaluating the financial position
and performance of a firm.

                                     Standards of Comparison

The ratio analysis involves comparison for a useful interpretation of the financial
statements. A single ratio “1” itself does not indicate favorable or unfavorable condition.
It should be compared with some standards.                    Standards of comparison of Ratio may
consist of:
         Past ratio: ratio calculated from the past financial statements of the same firm.
         Competitor’s ratio: Ratios of some selected firm especially the most progressive
         and successful competitors at the same point in time.
         Industry ratios: Ratio of the industry to which firm belongs.
         Projected ratios: ratios developed using the projected or Perform a financial
         statements of the same firm.




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                                                Current Ratio:

It shows the relationship between current assets and current liabilities. It is widely used
to make the analysis for a short –term financial position or liquidity of a firm. This ratio
is expressed in times.
    Current Ratio =current assets / current liabilities
    For 2006                            265424444 /182224697 = 1.4 times
    For 2007                             315288622 / 174089037 = 1.8 times
    For 2008                         425660500/ 202710020 = 2.10 times
    Analysis: The Current Ratio of NBP is improved from 1.4 in the year 2006 to 1.8 in
    the year 2007, which further improved to 2.10 in the year 2008, which means that the
    liquidity of the bank is improved. This comparison of current ratio for the bank
    signifies a strong measure of short-term debts paying ability in the year 2004 as
    compare to the previous year under study.

                                            Gross Profit Margin:

    Gross Profit Margin is the ratio of gross profit to net sales expressed as a percentage.
    It expresses the relationship between gross profit and net sales.

    Gross Profit Margin = Gross Profit / Net Sales x 100
    For 2006               =11172207/8821045 x 100 = 126.65%
    For 2007               =14774278/1241337 x 100 = 119.01%
    For 2008               =16025000/11527400 x 100 = 139.01%

    Analysis: The Gross Profit Margin is decreased to 119.01% in the year 2007 as
    compare to 126.65% in the year 2006, which increased again in 2007 up-to 139.01%,
    so the ratio measure of the profitability of the firm that the bank earns has more Gross
    Profit on sales in the year 2004 from the previous year.

                                         NET PROFIT MARGIN:

    This is ratio of net profit after taxes to net sales. It is also expressed as a percentage.

    Net Profit Margin = Net Income / Net Sales x 100
    For 2006                = 461227 / 8821045 x 100 = 5.22%
    For 2007                =1148529 / 1241337 x 100 = 92.5%




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    For 2008                         = 11052000/11527400 x 100 = 95.87%

    Analysis: Net Profit Margin in the year 2008 is 95.87%, while 92.5% in the year
    2007 and 5.22% in the year 2006. Because of the low payment for administrative
    expenses, financial expenses and also making less provision for taxation in the year
    2008 as compare to year 2007 & 2006.
                                    Return on Capital Employed:

    The primary objective of making investments in any business is to obtain satisfactory
    return on capital invested.           Hence, the return on capital employed is used as a
    measure of success of a business in realizing this objective.                        Return on capital
    employed establishes the relationship between profit and capital employed.                              It
    indicates the percentage of return on the capital employed in the business and it can
    be used to show the overall profitability and efficiency of the business.

                                  Return of Gross Capital Employed:

Gross Capital Employed means the Total Assets including fixed as well as current, used
in the business.
Return on Gross Capital Employed=Income before taxes / Gross capital Employed x
100

    For 2006               =1032400/371635738 x 100 = 0.27%
    For 2007               =3015629/415088990 x 100 = 0.72%
    For 2008               = 16015200/950000000 x 100 = 1.68%

    Analysis: The Return of Gross Capital Employed is increased to 1.68% in the year
    2008 as compared to 0.72 in 2007 & 0.27% in the year 2006.

                                   Return on Net Capital Employed:

    By deducting Current Liabilities from the Total Assets we will get the Net Capital
    employed.

    Return on Net Capital Employed= Net Income before Taxes / Net Capital
    Employed x 100
    For 2006        =1032400 / 16982917 x 100 = 6.07%
    For 2007        =3015629 / 117510437 x 100=17.22%
    For 2008        = 16015200/80200000 x 100 = 19.96%




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      Analysis: Return on Capital employed shows that how well the management has
      used the investment made by inside sources and outside sources. Higher the return on
      capital employed, the more efficient the firm is using the funds. This ratio for bank is
      increased to 19.96% in the year 2008 from 17.22% in the year 2007 & 6.07% in the
      year 2006.
                                         Debt to Equity Ratio:

It indicates the extent to which debt financing is used relative to equity financing.
Debt to Equity Ratio = Total Debts / Owners equity

For 2006                   =354652821 / 11192679 = 31.6 times
For 2007                   =397578553 / 11206447 = 35.5 times
For 2008                   = 456500000/ 11540000 = 39.55 times

Analysis: from this analysis we came to know that the bank relies more on equity
financing rather than on debt financing.

                                         Debt to Assets Ratio:


It shows the relationship between total debts and total asset

Debt of Assets = Total Debts / Total Assets.
For 2006             =354652821 / 371635738 = 0.95 times
For 2007             =397578553 / 415088990 = 0.96 times
For 2008             = 456500000/ 950000000 = 0.48 times

Analysis: This analysis shows that the firm is not relying on borrowed money because
the ratio is consistently decreasing.

5.7      : FINANCIAL PERFORMANCE

National Bank of Pakistan maintained its position as a Pakistan’s largest bank in 2007. A
31% increase in total revenue was achieved in the year, while operating profit (before
provision and amortization) increased by 69% to Rs.8.1 billion from Rs. 4.8 billion and
pre tax profit went up 193% to Rs.3.02 billion from Rs.1.03 billion.                         Total assets
increased to Rs.415 billion from Rs.372 billion, while deposit grew by over 10% to
Rs.349 billion from Rs.316 billion. As a consequence all financial and operating ratios
improved. Cost to income ratio was 0.52, the pre tax return on equity was 25% and
capital adequacy ratio was around 11%.



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The non-performing loan (NPL) portfolio of the bank is adequately covered through a
combination of cash provision (60%) and forced sale value (FSV) of securities. The cash
provisioning is the highest in our peer group. The focus on managing the NPL is on
restructuring as opposed to litigation.
                                    MARKET RECOGNITION

Besides the very large over subscription for the public issue, NBP was also recognized as
the best bank in Pakistan for 2004 by the prestigious periodical, “The banker” UK (a
subsidiary of Financial Times group.) The bank was also awarded “AAA” rating by
JCR-VIS Credit Rating Co. Limited, an affiliate of Japan Credit Rating Agency.
                                                 Section-4

                                              CHAPTER- 6

                                           SWOT ANALYSIS

     It has been observed that it is quite difficult for a bank to maintain a balance between
providing service on one hand and achieving growth in assets and profit on the other
hand. Many important factors contribute in this regard. Although, NBP has the ability to
coup with these challenges through its biggest networking in the country by a reasonable
representation in the international community, but still due to the changing environment,
it is necessary for the bank to innovate accordingly.
     Following are few areas, which need improvements with the admittance that these
deficiencies may not be present in the other branches of the bank.

                            6.1: THE ROLL OF HEADQUARTERS

It is said that there are too many layers of management, and this structure prevents the
line offices from exercise real responsibility and decision- making. The lower
management is not given that power and authorities which should be delegated to them.
That’s why the branch managers and other staff are allergic to take any step at their own.
Rather they wait for head office orders and initiatives. This prevents innovations on one
side and slows down the operation on other side. Elimination of decision power among
the staff is one of the other consequences.




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                                  6.2: THE SPAN OF CONTROL

Another consideration regarding the organizational structure is the span of control. Span
of structure means the number of subordinators working under a supervisor, in the
branch. The span of control is narrow, as there are too many layers in the management.
Although it is considered an efficient system in accordance with the classical theory but
at the same time this system is too much cost-oriented and less work-oriented. The
unnecessary pressure over the staff produces guilty feelings among them.

                        6.3: NEED OF COMPUTERIZED NETWORK

Computers are flesh and blood of today’s every institution and no organization can run
without the specialized network. The use of computer becomes inequitable in such a big
organization like national bank of Pakistan. Banking is a sensitive system involving
money, and need 100% accuracy in the record keeping. All private banks are making full
use of this facility. Through computer network, they provide fast service of advances and
remittances.
Use of computers in national bank of Pakistan is very limited. At head quarter’s level,
there is excellent computerized network used for record keeping. Computer used there in
head quarters are mini or main frames, having high efficiency, but at branch level the
situation is different. There is only one computer in the branch under study, there is
neither computer network nor any computer service at the counter and most of the work
is done manually.

                                   6.4: CUSTOMER SERVICES

Like all business organizations, National Bank of Pakistan is also a customer oriented.
Like in other government institutions, the customer service provider is not satisfactory.
As political leaders supported most of the staff members, they least care about the
reputation of the organization. Although the un-educated people of the villages of
N.W.F.P. were not easy to handle, but it does not justify the poor attitude towards them.
Favoritism, and nepotism was a common phenomenon like in other government



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organizations, therefore people were motivated towards other private banks, which are
sole competitors of the National Bank.

                                6.5: PRESENTATION FACTORS

     Presentation at the customer outlets can do a lot for the success of an organization,
but national bank of Pakistan was found lacking in this respect. There was no standard
dressing and personal getup for the staff. One of the major causes of success of all the
newly established private banks is that the bank staff wears very nice and attractive
dresses. In the University road branch Peshawar, most of the staff members used to come
in shabby dresses, which present a neglected and non-decent picture of the bank.
Although there were some improvements reported that wearing of clean and neat suit
were made compulsory in bank timing, which was warmly welcomed by officers but it
need a bit of strict implementation.
    Apart from the staff, branch’s own representation necessary, this seems better in
University road branch Peshawar, but still not encouraging at the level of small branches.
No doubt that national bank of Pakistan is working in very hard areas where hardly a
bank can survive but as it is a government’s agency, it has to maintain branches. Some of
the quite busy and important branches portray a pathetic picture and a lot of money
would be required for their maintenance.
                                6.6: WORKING ENVIRONMENT

      The working environment in this organization is certainly not an ideal one expected
of such a big organization. Employees, working at different levels of hierarchy, work
under pressure all the times and this is mainly due to bureaucratic style of management.
Thus there is not job loyalty among the workers and they consider it as a burden. The
working environment needs improvements. Working environment can be bettered if
online banking is introduced in the bank.

             6.7: RECRUITMENT PROCEDURE OF IT PROFESSIONALS

     The recruitment system of national bank of Pakistan is directly under the control of
head office Karachi, but regional headquarters can appoints some of the staff. As, in all
the government organizations, the procedures and rules regulations are just for the sake of


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record keeping. The system involves a lot of nepotism, and merit seems to be the
secondary importance. Practical is not in consonance with the policies and the standard
procedure are not being followed as described of the organization are influential and not
in conformity with the rules. In IT department in the branches, their should be a person
with proper IT knowledge but it seems not good because not a single employee is an IT
Professional.
                            6.8: PROFESSIONALISM REQUIRED

      Professionalism means to be an expertise, having command and necessary skills in
the field of work. Here in the national bank of Pakistan, the one would hardly find the
persons, who have been specially trained, for the specific job. The policy of the right man
at right place is not focused. The other big gap arises when most of the experienced staff
members went out in the well known golden handshake scheme, all the persons applied
in this scheme were well experienced and backbone of the organization, and capable to
adjust themselves easily or they were at the edge of retirement.

                        6.9: TRAINING NEEDS OF IR PERSONNEL

      In banking, performance of employees plays major role for prospering the business.
Every employee of the bank needs a variety of training courses to improve his
performance. National bank of Pakistan offers various courses to its employees from time
to time but the main undesirable thing pointed out by the bank employees is that there is
no criteria of selection of these courses. It means that those who really need to be trained
are not given a chance. There is no training provided to the IT personnel because of lack
of this department in various branches.
     Besides, all the executive staff of the bank is highly qualified and well trained but
they are trained in regulated atmosphere where the fact of existing of deregulated
environment is totally ignored.

                                   6.10: PROMOTIONS POLICY

      In National bank of Pakistan, the head of department or the branch manager keeps
an eye on the employees and if he finds some one with good performance he mark him
good in annual confidential report, a report which is generally based on personal liking


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and disliking. Those reports provide a base for promotion as the performance was given
60% weightage. Further more, the promotion has no specific time of service limit. When
the bank authorities want, they just do it. These practices de-motive the employees and do
not take keen interest in their job.
                                       6.11: TRNSFER POLICY

      The transfer policy of the National bank of Pakistan is that every person of the bank
may not stay more than three years at a station. The situation was different practically,
and most of the persons were working at the same branch for even more than five years.
This has not only produced frustration among the workers but curb the chance of
innovation in the branch.

                                   6.12: RETIREMENT POLICY

      Retirement policy of golden handshake proved to be a hard decision for the bank as
it generated a huge cost burden over the organization. Still the employees are happy of
the scheme.
                              6.13: COMMUNICATION FUNCTION

      The communication with in the various branches of the bank in general is
satisfactory as for as the services are concerned but the official communication is a bit
slow in the NBP. The files and circulars sent by the bank authorities are not
communicated to the concerned persons. As a result no body knows about the rules and
regulations of the head office. The head office is also not exception itself. It sends as
many amendments as its order that it also a gap among the different seats and counters of
the branch which create difficulty in communication.
     The communication skills of the staff are not encouraging. The staff actually does
not have any professional manners to deal the customers. They are rigid in conversation,
lack in courtesy that becomes a barrier in the customer satisfaction.




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                           6.14: TRANSPORT FACILITY
      National Bank of Pakistan do provides conveyance to its employees but only to
executive level, and the lower level employees have no provision of pick and drop for
their offices. Even their managers do not have this facility many times. This also has
adverse effects on the efficiency of the staff members.
                          6.15: NEED OF COMPETITIVE ATTITUDE

     National Bank of Pakistan has monopoly in the government transaction due to which
its employees lack in competitive attitude. There are instances, when not in good mood,
they simply say to the customer, you please go to the other bank. This is the thing, which
is responsible for the disaster of all the government control organization including
National bank of Pakistan. The management of the bank has failed to eradicate this evil.
They do not try to improve the existing standards. They seem to be happy where they
stand and these attitudes prohibit them from innovation process.
                    6.16: NEED FOR AGGRESSIVE MARKETING
     Unfortunately, National bank of Pakistan has very poor strategy of marketing.
Although they show their adds in Pakistan Television bet they do not have any brochure
or pamphlet for the new comers or for the potential customers which may contents the
package of investment and deposits.
                           6.17: NEED OF SOCIETAL MARKETING

     Societal marketing is one of the popular ways of marketing now-a-days but National
bank of Pakistan is not involved in any societal marketing as “Arial” is doing those days.
They should participate in the activities involving betterment of society. Only societal
marketing can produce a soft corner in the customer’s hearts.
                              6.18: ON LINE BANKING
     As far National bank of Pakistan is concerned except for one or two main branches,
most of the branches are not doing on-line banking & now a days almost all the banks are
providing this facility. Online banking is the most effective way to increase the efficiency
of working conditions of the bank as well as to attract more & more customers.




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                                    6.19: ATM FACILITY
     This facility is very useful for the customers to have their account open & can encash
his/her money 24 hours a day, whenever required. But in most of the branches, this
facility is not provided.
                                        6.20: CREDIT CARDS

     Credit cards help the customers but NBP has no such service available, which is also
a draw back in its efforts to attract more potential customers.
                                              CHAPTER- 7.

                        CONCLUSION AND RECOMMENDATIONS.

                                           CONCLUSION.


        A detailed study of the organization made it to conclude that in era of
decomposition and de-formalization, the survival of an organization is now
multidimensional. Today’s organization is not related to managing things but now it is
moving towards the creation if opportunities is the main purpose of the manger. Every
manger can be seen in the roll of a leader. The era of restricted and bureaucratic
environment has gone. Now the manager is more realistic for problem & the use of
computerized network is necessary to survive.
        It is observed that National bank of Pakistan, as a purely financial institution has
its own cultural environment and the functions of the bank run according to this
environment but the changing environment demands for a change, a change which is
unique in nature. No doubt the National bank of Pakistan is one of the successful banks in
the Pakistan, but still some alternatives are required for a pace to the change. As advance
use of information technology and informational change will bring a roll of performance
to bank.
The executive class and the upper management of the bank are highly trained and well
experienced as for as the operational area of the bank are concerned. But unfortunately
they are operational where existence of regulation is stresses. This is era of deregulation,
but they simply ignore the reality. The management should change them with the
changing environment. The awareness of staff from the goals of the organization is



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extremely important and they require a roll in the setting of regulation and
implementation of rules.
For the purpose, a creative leadership is also required. The leaders and managers of the
bank have operational and administrative skills required to run the organization but now
they need some additional skills, which are important for survival in the competitive
market. Today everyone needs to differentiate himself from other to capture the market.
In short, National bank of Pakistan in not only one of the leading banks, but it is also the
agent to the Government and state bank of Pakistan. The situation, which is facing by the
National bank of Pakistan, was never before. Considering all these things and to meet the
demands of the new millennium, the bank must shift its attitude from ordinary
commercial banking to the attitude of a specialized financial institution.
National bank of Pakistan has too much strength, which are not available to the other
commercial banks in Pakistan. It has the largest market for improvement as it has
branches all over the country’s rural and urban areas. So it has the best access to the
public capital. The only thing remains is that the strengths and opportunities should be
capitalized in a scientific way to generate more of it. All the activities of the bank are
Best but the bank needs to solve the problem of online banking activities, which should
help the bank operations and will ease its way to become number one in banking sector.
                                     RECOMMENDATIONS.

        Problems never exist without remedies. National bank of Pakistan is not exception.
Understanding its complexities and the requirements of new millennium can solve the
problems faced by the bank in the era of modernization.
     Following are the remedial measures suggested for the bank, which may bring it to
success.
                                    7.1: Market Driven Strategies

       Keeping in view the long term goals and objectives of any financial institutions,
NBP will has to focus on the achievement of the market driven strategies. It has to focus
the challenges and avail the opportunities to get the maximization of goals. And then the
people working in the organization in order to make the process of achieving the
objectives easier must understand these goals of the organization. For the purpose a



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written copy of goals should be provided to the bank employees in which each and every
aspect of strategies, consequences, responsibilities, and ultimate objectives are explained
in a comprehensive and clear wording.
The understanding of goals of the organization, the achievement of these goals within
prescribed budget, the knowledge about the today’s employee, and introducing new
productive programs with time to time will expand the area of operations of the bank and
maintain the stability in the competitive market.
                        7.2: Modernization Of The Technology
       Although national bank of Pakistan is one of the leading banks of the country still
it requires some way to modernize the bank’s operations. The installation of
computerized information system is necessity of the bank to compete the private banks of
the country. Communication means among the branches should be modified with
installation of computerized networking all over the network of branches in the world.
This will save time of the organization but also money of the bank. All private banks
have networking of this type, which makes available the records of all the customers
through out the country, hence the customer incase his cheque from any branch of the
bank with out any inconvenience. If national bank of Pakistan will provide this facility, it
will play a roll of milestone to the up heights.
The culture of ATM cards has already been established in the major cities but still lacks
in the other areas. This system should be given wide ranges that will not only help in
minimizing the main staff of the bank but it will also generate a customer satisfaction.
                            7.3: Implementation Of Personal Policies

       As far as the personal problems of enrollment, promotion, transfer, and training etc
are concerned; the only bone of connection is violation of rules, Nepotism, favoritism,
and barbarism are the catalysts of the evil, which is now-a-days common in all
government controlled organizations with out any exception. This is only possible if all
the employees joint their hands for eradication of these evils. There should be a proper
checking system in the organization to avoid the embazerment of other.
The bank needs to adopt the scientific tools of the personal management like job
description and job analysis which will help in the justified promotion and reward
system. This will also prevent the exploitation of the staff.



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Salary is the most important thing for staff. The salary packages of the bank should be
make compatible with the packages offered by private banks otherwise bank will loose its
highly qualified staff and creative minds as they may accept the other offer of other banks
for better package.
      All employee of the bank should be channalized in a systematic way for training
courses so as to make sure that every person is getting necessary training and skills on
regular basis. If the required result of the training could not be achieved it will simply
mean the wastage of NBP resources and no organization can afford wastage of its
resources in this era of competition.
                                           7.4: Liberalization

         The age of bureaucracy has gone. Every organization in this modern world is
looking for free and liberal management system where workers and staff members are
given their due part in the decision making of the organization regarding strategies, goals,
and functions of the organization. National bank of Pakistan, if want to meet the
challenges of the modern world must decentralized and deregulate its system and let the
staff to participate in the affairs of the bank. This will produce the environment of the
friendship in the bank and will bring loyalty to the organization.
The unnecessary rule other Head Quarter should be minimized as much as possible. The
branch manager and working staff should be given the authority, which is necessary for
their successful performance, which will bring innovation in the functional area, as many
minds can think more.
                                     7.5: Better Communication

        Communication is the backbone of any organization to run. For satisfactory
function it is necessary that the orders and demands should be properly communicated to
the concerned subordinates. National bank of Pakistan is very weak in communication
skills. Although it is now preparing itself information technology and video conferencing
but still it is too late. It should be implementing immediately.




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                                   7.6: Regular Market Research

       It has been suggested that the bank should establish a systematic research system in
the research centers of the bank. Research is required to meet the challenges of newly
emerging environment of competition in the financial market. There is a lot of
uncertainty of future in the world market that can only be handled with efficiency of the
bank continues research of its market.
                                      7.7: Marketing Strategies
      National bank of Pakistan has failed to propagate its services property. It is
suggested that it should apply the strategies where every staff member of the bank is part
of the marketing activities. The same strategy is used in Union Bank where every person
is given the advantage of the bank is part of the marketing activities. The same strategy is
used in Union Bank where is given the advantage of the deposits he introduced. In this
way every person tries his best to elaborate the bank in front of customers and they also
courteous to the customer. The staff should also be given proper training for the purpose.
Another weak point is that does not have any broacher or pamphlet. Marketing material
like this should be kept at a very branch of the bank including the introductory notes of
the new offers and investment packages. The bank should also involve itself in different
schemes.
Societal marketing is also the most popular and result oriented style of marketing. Every
business organization seems to be the part of this type of marketing but National Bank of
Pakistan does not have any such activities. It is suggested that NBP should perform
society factor in its marketing.
National bank of Pakistan has the advantage of being as government controlled bank and
the common people trust in more than any other private or multinational bank but the
only grievance is that of customer service which if eliminated can do a lot for the bank in
terms of its reputation as well as in terms of money.
      National bank of Pakistan is successful in maintaining of its present status but the
achievement not lies in the staying as a place but there should be innovation and growth.
The officials of national bank of Pakistan are aware of the need and have started a change
program but the pace of the program is very slow which needs improvement.



CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
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                              7.8: Minimization Of Losses
          The branches running in losses have been closed but still there are few branches
still running in losses. These branches are mostly in the remote areas of the country and
should be closed down. As a business concern the main objective of the bank is to
minimize the losses and maximize the profits if the bank is successful in doing so it will
be a liability to the bank. The staff working in the braches where the workload is greater
than the staff strength, the staff should be well utilized. The bank should also emphasize
on the establishment of newly emerging industrial areas.
                              7.9: Need To Be Specialized
          Up-till now the bank is working in the environment of general banking which
limited the scope of operation of the bank. Now it is needed to be converted into a
specialized financial institution. It should deal with the various moods if financial
matters. It should offer special scheme of investment for public and it should apply now
means of operation.
                                        ONLINE BANKING

          As mentioned before it is very important for National bank of Pakistan to start
online banking facility to attract more & more potential customers. For this purpose
WAN (Wide Area Network) or dedicated lines can be used. If full online banking cannot
be started only Local Area Network (LAN) should be introduced.

 Credit Cards

         Credit cards are demolished from bank but can see easily that all the good banks
are emphasizing on his facility and they are using it as a marketing tool. National bank of
Pakistan should consider the opportunities and reopen the facility, the facility that will
mark it a first class bank.

 Non-Customer Services

         Non-customer services like remittances, preparing of draft, safe custody holders,
and traveler’s cheque and bond owners are the most important for the bank. The people
seeking these facilities are the potential customers of the bank. These people should be




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
www.qundeel.com

welcomed and treated with due courtesy to pursue them to make the customer of the
bank.

 Staff Relationship

         Staff relationship in the branches should be cordial. The senior staff must guide
the juniors should cooperate and listen to the senior. It has been seen that senior and
junior staff does not enjoy cordial relationship. Due to this reason tension and conflicts
prevails in the branch environment. It totally depends on the staff of the bank and how
they maintain a friendly atmosphere in the bank.
Like any other organization in the requirement of the Creative Leadership is also present
in the bank. The leaders and manager of the bank have operational and administrative
skills that are considered as important t survive in the competitive market. Today
everyone needs to differentiate himself from other to attract the market opportunities. So
the bankers of national bank of Pakistan should realize the fact and move according to the
new approach.
The staff of the national bank of Pakistan is not aware of the strategies of the bank and
they are not provided the required information. They should be provided with the copies
of the objectives and strategies. The feedback of the performance i.e. the manual report of
the bank should also be provide to the staff member separately which will help them in
the location of the bank in the business community and they would able to elaborate the
actual position of the bank before the customers. In this regard the achievements should
be highlighted and the deficiencies should be removed.

 ATM Facility

          This is very helpful service for the customer but no ATM is provided in most of
the branches of NBP. So this facility should be availed to attract more & more potential
customers.




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
www.qundeel.com

                              LIST OF PERSONS INTREVIEWED


Name of Organization                           Designation             Name of Person                Time
Date

NBP University road branch Peshawar.                       OGI                Malik Liaqat Ali
11:30    30 Dec. 2004
                                                                       Khan.                          (AM)


NBP University road branch Peshawar.                       OGII               Muhammad Nisar.
12:00     30 Dec. 2004
                                                                                                      (PM)



NBP IT Centre Peshawar                                OGII                 Naveed Akhtar               2:00
Jan. 2005.
                                                                                                      (PM)


NBP University road branch Peshawar.                     Assistant.            Muhammad Iqbal.
10:00    12th Jan. 2005.
                                                                                                    (A.M)


NBP University road branch Peshawar.                     Assistant.            Sajjad Ahmed.
2:00 09:00       15th Jan. 2005.
                                                                                                    (A.M)


NBP University road branch Peshawar.                     Cashier.              Akhlaq Hussain.
12:00    20th Jan. 2005.
                                                                                                     (P.M)




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
www.qundeel.com

                                                References

    1.       Uma Sekaran “Research method for business” john Wiley & sons, Inc. New

             York. p.p 220-222.

    2.       shahnaz Arifullah, “Research Process Simplified” Shaheen Books Peshawar,

             p.p 9-11

    3.       NBP BBI, 1999-2000, National banking and Finance, RHQ, Peshawar, p. 1.

    4.       Ibid, p.p, 1-2.

    5.       nbpeeo@nbp.com.pk

    6.       AM. Ghani “Principal of Accounting” publishers Chaudhry Book Depot,

             1996. p.p 81-86.

    7.       Griffin “Management” 5th Addition, AITBS, publisher (India) p.p 202-205.

    8.       Deceuzo & Robins, “Human Resource Management” 5th edition 1996, p.p, 1, 56,

             157, 240, 295.

    9.       Koontz, Harold & Weihrich, Heinz. “Management” 10th Edition, Singapore,

             McGraw Hill, 355-357.




CECOS University of IT & Emerging Sciences Peshawar Pakistan. Internship report on NBP   By: Imdadulllah
www.qundeel.com

                                           BIBLIOGRAPHY

    1.       Avashti, Shriran, (1983), Public Administration; sixth Ed, New York: MC

             Graw Hill Book Company

    2.       Asrar, H. SIddique, (1983), Practice and Law in Banking in Pakistan: 3rd Ed,

             Royal Book Co. Karachi.

    3.       Chhabra, T.N (1985), Principles and Management; Delhi, D.R. Printing

             Services.

    4.       Chruder Sherman, (1983) Managing Human Resources; 7th Ed. South Western

             pub. co, Dallas, N.D.

    5.       Dewitt, K.K. (1984), Modern economic theory; 3rd Ed, Bombary: Move

             Publishing Company.

    6.       Edwin, B. Flippo, (1976), Principles of Personnel Management: McGraw Hill

             Co. Tokyo.

    7.       Fred Luthens, (1985), Organizational Behaviour; Ed. N.r McGraw Hill Book

             Co.

    8.       Grant Smith, “ Personnel Administration and Industrial relations”, 3rd Edition,

             Lung King Tong Co. Ltd, Hong Kong, 1984, p. 349.

    9.       Kennedy, Ralph dale, (1973), Financial Statement Analysis amnd

             Interpretation: 6th Ed, Homewood; Richard d. Irwin.

    10.      King, David, (1987), Banking and Money; London; Edward Arnold press.

    11.      www.nbp.com.pk

    12.      www.google.com




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www.qundeel.com




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