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FINI619 Internship Report on NBP 4

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					                Internship Report on

N     ATIONAL         B   ANK OF    PAKISTAN
     The                                    The
Nation's Bank                       Nation's Bank




                    National Bank
                          of
                    Pakistan
                                    government
         The                             Treasury
    Nation's Bank



                          The
                         tio a
                       Na n'sB nk



                                     HAILEY COLLEGE OF COMMERCE
                                                              Salma Bashir
         The
    Na n'sB nk
      tio a                                             Roll number: 126
                                                           B.com (Hons.)
                                                        Session : 2005 - 2009
                                       Supervisor : Sir. Hassan Mubeen Alam
                                                    National Bank of Pakistan
                                                        Samnanabad Branch
                                        Date of joining : 25-7-09 to 24-09-09
DEDICATION
          Dedicated to my Parents
            who always care me
       and most formative teachers,
            Sir Zafar & Sir. Yasin
 for their unwavering support and guidance.   HAILEY COLLEGE OF COMMERCE
                                                               Salma Bashir
                                                             Roll number: 126
                                                              B.com (Hons.)
                                                           Session : 2005 - 2009
                                                   Supervisor : Sir. Hassan Mubeen Alam
                                                         National Bank of Pakistan
                                                            Samnanabad Branch
                                                    Date of joining : 25-7-09 t0 24-09-09
              C   K   N O    W   L   E D G E      M    E N T

       ACKNOWLEDGEMENT
        All praise to Allah, the most merciful, kind and beneficent,
       and the source of all knowledge, wisdom within and beyond
       my comprehension. He is the only God, who can help us in
        every field of life. All respect and possible tributes goes to
          my Holy Prophet Mohammad (SAW), who is forever
       guidance and knowledge for all human beings on this earth.

 I am proud to say that I am very grateful to my family whose kind
    prayers and cooperation helped me at every step of my work.
Special thanks go to my parents for their cooperation for the sake of
                           my knowledge.

I am greatly indebted to my learned teachers, Sir.Kumail Abbas
Rizvi, Sir. Yasin, Miss. Shamaila, Miss Hafza, Sir. Zafar who have
great influence on me during my formative years. This report
reflects the knowledge which I have gained from my valuable
teachers. I acknowledge with deep gratitude the invaluable help
extended to me by Mr. Rana Ahsaan-ul-Haq, one of the officer of
the National Bank of Pakistan, without his co-operation it was not
possible for me to complete my Internship Report. He guided and
helped me and specially the sympathetic attitude, which always
inspired me for hard work.

I am really very thankful to Muhammad Rafi Operational Manager
of National Bank Samanabad Branch, Lahore and all the bank staff
for their cooperative attitude during my internship.

In the end thanks are due to one of my friend Miss. Sana Khalid for
her cooperative attitude during the completion of my project work.
She helped and supported me during gathering and analyzing
information.


                                          SALMA BASHIR
                                          B.com(Hons.)
                X   E C U    T I V E             U   M   M   A R    Y

         EXECUTIVE S UMMARY
To interpret my skills and educational knowledge of Finance I done my
internship in National Bank of Pakistan Samanabad Branch, Lahore and to
know how I will work in financial institutions and among various types of
people have different attitude.


The objective of this Internship was to explore the issues relating to Finance
and to find out problems regarding the theoretical concepts with practical
experience working in an organization during the internship and study the
system of National Bank of Pakistan. There are many possible
improvements, which we can make positive changes in the system.


The report is based on my two months internship program in National Bank
of Pakistan. The methodology reported for collection of data is primary as
well as secondary data. The biggest source of information is my personal
observation while working with staff and having discussion with them.


The report summarizes the National bank of Pakistan with its working
divided into three parts first part deals with the description of the NBP the
second part covers the theory and practices adopted by NBP and third part
discuss the financial position of NBP, its analysis and at the end concluding
remarks and suggestions are given for improvements. It was too much
difficult for me to describe the functioning of such a vast organization within
the limits. In spite of this I tried my best to describe.


Finally, for any all too fallible errors, omissions and shortcomings in the
writing of the report only I am responsible for which I hope that all
concerning regards of this report will forgive us.

                                                 SALMA BASHIR
                                                 B.com(Hons.)
                                   R   E F A C E

                            PREFACE
During this eight weeks long practical glimpse the theories and ideas which
we received from the books have been women in the texture of our actual
life. No doubt, it has helped us in cultivating the qualities of courage, hope,
initiatives and capacity to turn our knowledge to practical purpose.

Banking sector owes a pivotal importance in the economy of any country
through its vibrant functions. This is the deep seated motivator that geared up
me to join any bank for internship.

National Bank of Pakistan (NBP) was established in 1949 under the National
Bank of Pakistan Ordinance 1949 and was 100% government owned. NBP
acted as an agent of the Central Bank wherever the State Bank did not have
its own Branch. It also undertook Government Treasury operations. Inside
the bank, in branch banking it has Clearing and Collection Department,
Government Receipts Processing Department, Account Opening Department,
Remittance Department, Customer Services Department Cash Department,
Deposit Department, Advances and Credit Department. These are the most
common departments exist in almost each branch. It is offering different
deposit choices, advances, credits and securities etc for its customers through
its corporate branches.

Yet there are many possible improvements, which we can be made and that
can bring positive changes in the system. There is shortage of employees in
the organization. With development of online banking system the load of
work can be decreased. All the staffs do not know about computer. There is
almost one or two employees are trained to operate the system in every
branch. Especially, the cash department is not familiar with computer and
information system. It is not easy for it to implement a new system
immediately it takes a lot of time to replace systems. Once implemented its
testing takes more time. So it is important for the Bank to develop a research
department for redesigning the operations of the Bank

                                                  SALMA BASHIR
                   b    r   i   e   f   c   o   n   t   e   n   t   s

                  BRIEF CONTENTS
Introduction and National Bank of Pakistan                              1-4
    Bank's Profile                                                     2
    Introduction                                                       3
    Overview of Organization                                           4

Historical Background                                                   5-8
    Background                                                         6
    Establishment                                                      7

Organizational Structure                                                9-15

Organizational Network                                                  16-20
      Registered and Head office                                       17
      Share Registration Office                                        17
      Share Capital                                                    17
      Branch Network                                                   17

Management of NBP                                                       21-26
          Management System                                            22
          Management Structure                                         22
          Corporate Information                                        24
          Senior Management                                            25
          Oversea Management                                           26

Departments                                                             27-72
        Departmentalization in NBP                                     28
        General Banking Department                                     29
            Deposit Section                                             29
              Account opening Section                                   33
              Locker Service Section                                    42
              Cash Dealing Department                                   43
              Clearing Section                                          47
              Remittance Section                                        53
       Advances Department                                  58
       Accounts department                                  6
       Billing and Government Receipt/ Payment Department   70

Commercial and Retail Banking                                73-84
         Premium Aamadni Scheme                             74
         Premium Saver Scheme                               75
         Karobar Scheme                                     75
         Saiban scheme                                      76
         Advance Salary Scheme                              77
         Cash card Scheme                                   79
         Cash n Gold Scheme                                 80
         Kisan Dost                                         81
         Kisan Taqat                                        81
         Pak Remit                                          82
         NBP Protection Shield                              82
         NBP Student Loan Scheme                            84

Financial Analysis                                           85
         Horizontal Analysis                                86
         Vertical Analysis                                  90
         Ratio Analysis                                     93
         SWOT Analysis                                      101

Work Performed                                               104-114
         Learning and Personal Experience                   105
         Branch Profile                                     106
         Branch Hierarchy                                   107
         Departments of training                            107
         Issues Faced by Branch                             113

Findings and Conclusion                                      115-121
       Dilemmas faced by organization                       116
       Recommendation                                       119
       Conclusion                                           121

Annexure and Documents                                       122
                N T     R O D U C T I O N

             INTRODUCTION
                           &
   A T I O N A L          A N K   O F         A K I S T A N

NATIONAL BANK OF PAKISTAN
In this section three topics are discussed:
        Bank's Profile

        NBP Introduction

        Overview of Organization

                Vision

                Mission

                Core values

                Goals
    Bank's Profile


THE NATIONS'S BANK
Internship Report                                                   National Bank of Pakistan


                               INTRODUCTION
            (Incorporated under the National Bank of Pakistan Ordinance, 1949)

National Bank of Pakistan is the largest commercial bank operating in Pakistan National
Bank of Pakistan was incorporated in Pakistan under the National Bank of Pakistan
Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. It's registered and head
office is situated in Karachi.

The bank is engaged in providing commercial banking and related services in Pakistan and
overseas. The Bank's services are available to individuals, corporate entities and government.
While it continues to act as trustee of public funds and as the agent to the State Bank of
Pakistan (in places where SBP does not have a presence) it has diversified its business
portfolio and is today a major lead player in the debt equity market, corporate investment
banking, retail and consumer banking, agricultural financing, treasury services and is
showing growing interest in promoting and developing the country's small and medium
enterprises and at the same time fulfilling its social responsibilities.

 NBP headquarters in Karachi, Pakistan with over 1,200 branches country wide. In today's
competitive business environment, NBP needed to redefine its role and shed the public sector
bank image, for a modern commercial bank. It has offloaded 23.2 percent share in the stock
market, and while it has not been completely privatized like the other three public sector
banks, partial privatization has taken place. It is now listed on the Karachi Stock Exchange.


   • Handling of treasury transactions for the Government of Pakistan as agent to the State
       Bank of Pakistan.
   • Accepting of deposits of money on current, fixed, saving, term deposit and profit and
       loss sharing accounts.
   • Borrowing money and arranging finance from other banks and advancing and lending
       money to its clients.
   •   Buying, selling, dealing, including entering into forward contracts of foreign
       exchange.
   •   Financing of seasonal crops like cotton, wheat, rice, sugar cane, tobacco, etc.
   •   Carrying on agency business of any description other than managing agent, on behalf
       of clients including Government and local authorities.
   •   Generating, undertaking, promoting, etc. of issue of shares and, bonds, etc.
   •   Transacting guarantee and indemnity business.
   •   Undertaking and executing trusts.
   •   Joint venturing with foreign dealers, agents and companies for its representation
       abroad.
   •   Participating in "World Bank" and "Asian Development Bank's" lines of credit.




                                              3
Internship Report                                                 National Bank of Pakistan


   OVERVIEW OF THE ORGANIZATION
VISION
       "To be recognized as a leader and a brand synonymous with trust, highest standards of
       service quality, international best practices and social responsibility."




MISSION
NBP will aspire to the values that make NBP truly the Nation’s Bank, by :

      Institutionalizing a merit and performance culture
      Creating a distinctive brand identity by providing the highest standards of services
      Adopting the best international management practices.
      Maximizing stakeholder’s value.
      Discharging our responsibility as a good corporate citizen of Pakistan and in
       countries where we operate.
CORE VALUES

    Highest standards of Integrity.
    Institutionalizing teamwork and performance culture.
    Excellence in service.
    Advancement of skills for tomorrow’s challenges.
    Awareness of social and community responsibility.
    Value creation for all stakeholders.
GOALS
       To enhance profitability and maximization of NBP share through increasing leverage
       of existing customer base and diversified range of products.


                                            Excellence in Direction
                                            Excellence in Growth

                                            Excellence in Performance

                                            Excellence in Management




                                             4
Internship Report                        National Bank of Pakistan


                    Excellence in   Achievement




                     5
      I S T O R I C A L        A C K G R O U N D

HISTORICAL BACKGROUND
In this section two topics are discussed:
        Background of Foundation

        Establishment
Internship Report                                                      National Bank of Pakistan



          HISTORY OF NATIONAL BANK OF
                   PAKISTAN
BACKGROUND
At the time of partition the total number of Commercial Banks in Pakistan was 38 .Out of
these Pakistan had 2 banks, India had 29 and there were 7 exchange banks. Before the
partition of Sub Continent the entire banking business was almost controlled and managed by
non-Muslims. The Muslims were deliberately kept cut of banking profession by the wealthy
Hindu community. When Hindu capitalists became sure of the division of Sub Continent,
they secretly began transferring their funds and the other valuables at an accelerated pace to
India and there was a mass scale migration of non Muslims from West Pakistan to India
which also caused the drain on the bank deposits. The Hindus closed down most of the head
offices and the branches of scheduled and non-scheduled banks in Pakistan. The number of
scheduled bank’s branches was reduced from 619 to 213 in both the wings of the country
after independence.

The non-scheduled banks also suffered a severe jolt and their number was reduced from 411
to 106 over the same period. West Pakistan from where there was greater exodus of non-
Muslims to India suffered a great deal, as a number of branches fell down (from 487 to 69).
The mass scale closure of branches and withdrawal of the deposits caused a dead lock in the
banking business in Pakistan.

The government of Pakistan was quite aware of the serious banking situation caused by the
withdrawal of deposits and wholesale migration of banking staffs to India. It took up the
challenge and started reorganizing the crippled banking immediately after partition.

In 1949 September U.K. devalued its currency, India followed the suit but we did not. India
said we had contravened the agreement. On October 3, 1949 the two central banks have to
announce the new par value of both currencies but India denied the day earlier. India also
froze our trade balance surplus that is still an unsettled dispute. India also draws the Marwari
merchants who were employed annually for movement of jute crop by financing it. There
being no jute industry, prices fell sharply, and an agrarian unrest was threatening. Two
Ordinances were therefore issued.

1   Jute board Ordinance &
2   NBP ordinance dated 08.11.1949

In order to regulate both of the banking on sound footings, the following measures were
taken to develop the banking system in Pakistan.
       The State Bank of Pakistan, which is the central bank of the country, was established
        in July 1948.
       The National Bank of Pakistan was established on 1949,to serve as an agent to the
        SBP.



                                               6
Internship Report                                                   National Bank of Pakistan


      The Industrial Development Bank of Pakistan was set up on August 1, 1961 with a
       Paid up Capital of Rs; five crore. The Agricultural Development Bank of Pakistan
       (ADBP) was set up in 1961. it provides short , medium and long term loans to the
       farmers. In Jan, 1974 the entire commercial banks were Nationalized. The weaker
       commercial banks were merged with the stronger once and in all Five major banking
       companies were formed. MCB and ABL have again been privatized.

ESTABLIHMENT
The normal procedure of establishing a banking company under the Companies Law was set
aside and the Bank was established through the promulgation of an Ordinance due to the
crisis situation that had developed with regard to financing of jute Trade. The Bank
commenced its operations from November 20, 1949 at six important jute centers in the then
East Pakistan and directed its resources in financing of jute crop. The Bank’s Karachi and
Lahore offices were subsequently opened in December 1949.

State bank of Pakistan after its formation demanded from the Indian Reserve Bank the assets
against the Indian currency retired from Pakistan territory. Government of India refused to
hand over the assets worth about five hundred million rupees. The dispute is still unsettled
and these assets are still not delivered to Pakistan. Until June 1950, the Bank was engaged
exclusively on jute operation. Thereafter, it was felt that it could expand its business to
include other commodities as well. Bank took a big stride in 1952, when it replaced the
Imperial Bank of India, as an agent of State Bank of Pakistan.

There were 14 Pakistani scheduled commercial banks operating in the country on December
1973, the name of these were:

              1. National Bank of Pakistan
              2. Habib Bank Limited
              3. Habib Bank (Overseas) Limited
              4. United Bank Limited
              5. Muslim Commercial Bank Limited
              6. Commerce Bank Limited
              7. Australia Bank Limited
              8. Standard Bank Limited
              9. Bank of Bahawalpur Limited
              10. Premier Bank Limited
              11. Pak Bank Limited
              12. Lahore Commercial Bank Limited
              13. Sarhad Bank Limited
              14. Punjab Provincial Co-operative Bank Limited




                                             7
Internship Report                                                      National Bank of Pakistan


The Pakistan Banking Council prepared banks amalgamation schemes in 1974 for
amalgamation of smaller banks with the five bigger banks of the country. These five banks
are as under:
              1. National Bank of Pakistan
              2. Habib Bank Limited
              3. United Bank Limited
              4. Muslim Commercial Bank Limited
              5. Allied Bank Limited
So, through the Nationalization of Bank Act 1974, the State Bank of Pakistan, all the
commercial banks incorporated in Pakistan and carrying on business in or outside the country
were brought under the government ownership with effect from Jan. 1, 1974. The ownership,
management, and control of all banks in Pakistan stood transferred to and vested in the
Federal Government.

With the passage of time its functioning diversified as they take over the function of different
institution with the passage of time like in past they took over the function of Imperial bank
of India and now of NDFC (national development finance corporation). It is working as the
agent of the state bank of Pakistan and performs its functions wherever state bank of Pakistan
is not present.




                                               8
     R G A N I Z A T I O N L          T R U C T U R E

ORGANIZATIONL STRUCTURE
In this section topic is:
         Overall Organizational Structure of NBP

         and it's hierarchical View
Internship Report                                                  National Bank of Pakistan



      ORGANIZATIONAL STRUCTURE
In National Bank of Pakistan, the head is called “Chairman” or “President” of the Bank.
And after President there is Five Broad of Directors. National Bank of Pakistan has
eleven Groups which control the working of the Divisions, Wing, Department, Section
and Regional of the national bank of Pakistan. In NBP, “Department” is called “Wings”.


                                         Chairman &
                                          President

                                                              Board of
                                                              Directors
                    President’s
                    Secretariat
                                                         Secretary Board
                                                           of Directors




 Corporate &                    Credit                   Audit & Inspection       Compliance Group
  Investment                  Management                       Group
Banking Group                   Group




  HRM &                                                  Commercial &                Treasury
Administration
                             Operation                                              Management
                                                         Retail Banking
   Group                      Group                          Group                    Group




                    Special Assets                Overseas
                    Management                                                I.T. Group
                                                 Management
                       Group                       Group




                                                                                         10
Internship Report                                                 National Bank of Pakistan


National bank of Pakistan divided their task in to separate jobs. Basically national Bank
of Pakistan having different groups, and each group perform different task specialization
in their department. National Bank of Pakistan Categories their departments through their
work specialization. And NBP hire their employees also through work specialization. The
following Chart shows the Work Specialization in the bank. HRM & Administration,
Operation, Commercial & Retail Banking, and I.T Group are performing different
working in the Organization.




     HRM &               Operation Group                Commercial &               I.T. Group
  Administration                                        Retail Banking
     Group                                                  Group




National Bank of Pakistan is structurally divided into Groups and groups are also
subdivided into Departments, Wings, and Divisions. National Bank of Pakistan has
different Department in the Group and each department performing work, as their task
assign. Department also subdivided into working bases.



                                      Credit Management
                                             Group
                                       (Functional Deptt)




Administration            Credit                     Industrial          Credit Policy &
   Wing                  Monitoring                  Research              SME Wing
                           Wing                        Wing




                                                                                           11
Internship Report                                                National Bank of Pakistan


GEOGRAPHIC DEPARTMENT

                                      Special Assets
                                    Management Group
                                    (Geographic Deptt)




        SAMG - North                  SAMG – South                            SAMG – Head
          (Lahore)                      (Karachi)                                Office




PROCESS DEPARTMENT


                                     Compliance Group
                                      (Process Deptt)




    Administration           SBP Inspection                Market &                Credit Risk
       Wing                                              Liquidity Risk




CUSTOMER DEPARTMENT

                                     Operation Group
                                     (Customer Deptt)




              Customer                    Customer Services               Financial Institutional
            Facilitation &                 & Govt. Business                          &
               Admn.
                                                                              Cash Manag.




                                                                                       12
Internship Report                                                 National Bank of Pakistan


National Bank of Pakistan (NBP) provides Services through more than 1200 branches in
Pakistan and 22 branches in overseas. And there are 29 Regions. All Branches of
National Bank of Pakistan report to five Head of RMT Members. And these five
members reported to regional Offices. Regional Offices report to the Group Chief of the
Groups. All the process is working very quickly and it not consume more time. And the
Group Chief of each Group Report to the President of the National Bank of Pakistan. All
the data were proceed to the President of the bank.



                                       Chairman &
                                        President




  Operation Group                  HRM Group           Audit & Inspection       Compliance Group
       Chief                         Chief               Group Chief                 Chief




 South Region       North Region        West Region      East Region            Overseas Reg




   Head 1             Head 2               Head 3            Head 4                Head 5




Branch 1            Branch 2             Branch 3             Branch 4            Branch 5




National Bank of Pakistan is relatively Wide span of control and Flat Structure. National
Bank of Pakistan are less layers of management to pass a message through, so the
message reaches more employees faster. More skillful Group Chief Managers can control
a greater number of employees. National Bank of Pakistan assess that the internal Control
environment is showing signs of improvement as compared to previous year in all areas
of the Bank.




                                                                                        13
      Internship Report                                                      National Bank of Pakistan


                                         Chairman & President



      HRM Group                  Operation Group                       CMG                               TMG




OD Wing      IRD Wing       T & S Wing      Tech Wing      C. M Wing     Admn. Wing         C. M Wing          Admn. Wing




      National Bank of Pakistan is having Decentralization in the Bank. And give the authority
      of Decision Making to their Group Chief of every Group, to take decision, which is
      benefit for the Organization. National Bank of Pakistan provides facility of making
      decision to their Senior Vice President as well as Vice President of the every Group.




                                                    President (NBP)


                                                   Group Chief (Group)


                                                   SVP or VP (Group)


                                                     AVP (Group)

                                                   Grade Officers (Group)




      National Bank of Pakistan has low Formalization in the bank. And Employees are free to
      take action or decision in their work specialization. Employees are follow the rules and
      regulation in the bank is very little formalized. Employees’ behavior is little bit guided by
      rules and regulation.

      National Bank of Pakistan follow the Organic Model Organization. In NBP, there are
      Cross- Functional teams, as well as Cross-hierarchical teams. There are free flow of

                                                                                                   14
Internship Report                                              National Bank of Pakistan


Information and Wide span of Control. NBP is Decentralization in nature and very low
formalization in the bank. Basically National Bank of Pakistan is high Diagonal
Differentiation and every employee of any department can easily communicate to other
department of the Bank.




                                                                                       15
   R G A N I Z A T I O N A L        E   T   W   O R   K

ORGANIZATIONAL NETWORK
In this section topics are:
        Registered & Head office

        Share Registration Office

        Share Capital

        Branch Network

              Global Network

              Domestic Network

          Present Status of Bank
Internship Report                                               National Bank of Pakistan




         ORGANIZATIONAL NETWORK

REGISTERED & HEAD OFFICE

Head office of NBP in NBP Building, I.I. Chundrigar Road, Karachi, Pakistan which is
“the city of lighting” in Urdu “Uroos-ul-Bilad” which was also the first capital and
ancient place of Pakistan. It carried out its successful journey to make it an “Asian
Tiger”.

SHARE REGISTERATION OFFICE
       THK Associates (Pvt.) Ltd.
       Shares Department, Ground Floor,
       State Life Building #3,
       Dr. Ziauddin Ahmed Road,
       Karachi, Pakistan.

SHARE CAPITAL
Issued Capital
The bank was setup with an issued capital of Rs.1.5 million.

Authorized Capital
Authorized capital of National Bank of Pakistan in 2000 was Rs.25 Billion.

Issued, Subscribed, and Paid-up Capital
Issued, subscribed and paid-up capital in year 2008 was 10763702260

BRANCH NETWORK
Presently the Bank is divided into 10 Groups headed by SEVPs/EVPs. 9 Regions
reporting to as many Regional Chiefs and 15 Single Branch Zones headed by Zonal
Chiefs; 12 corporate branches and 1,254 domestic branches headed by Branch Managers
control its field operations.

With the geographical development of its branches, the Bank has been able to extend its
services to a much larger number of Pakistanis all over the country. Today it has more
than 8.5 million accounts.

Bank maintains its presence in all the major financial centers of the world through its
21overseas branches and 4 representative offices. Of these, three representative offices



                                           17
Internship Report                                                 National Bank of Pakistan


have recently been set up at Tashkent (Uzbekistan), Baku (Azerbaijan) and Almaty
(Kazakhstan) to take advantage of the emerging opportunities in CIS countries.

Apart from having a vast branch network, Bank is at the forefront in the acquisition and
application of new technologies in every aspect of its banking facilities. It has acquired
leased telephone lines for on-line banking. The Bank has 12 Regional Computer Centers
to cover various on-line and batch system requirements of branches and controlling
offices. Bank has also a presence on the Internet. It has modernized its services by
installing Automated Teller Machines (ATMs) called "CASH LINK" at selected branches
and presently 17 ATMs are operational in major cities.

GLOBAL NETWORK
      18 Overseas Branches
      5 Representative Offices
      1 overseas Subsidiaries
      Joint Venture.

   Overseas Branch Network:
            Paris
            Baku
            Seoul
            Kabul
            Tokyo
            Osaka
            Dhaka
            Bahrain
            Bishkek
            Kowloon
            Ashgabat
            Jalalabad
            Frankfurt
            Chittagong
            New York
            Hong Kong
            Washington D.C.
            KEPZ Offshore Banking Unit, Cairo


                                           18
Internship Report                                                 National Bank of Pakistan


    Oversea Representative Offices
             Baku
             Beijing
             Toronto
             Chicago
             Tashkent
    Oversea Subsidary
             CJSC Almaty, Kazakhstan
DOMESTIC NETWORK
      1254 Domestic Branches
      6 domestic Subsidiaries
      29 domestic regional offices

    Domestic Subsidiaries
             NBP Capital Ltd.
             Taurus Securities Ltd.
             NBP Exchange Company Ltd
             National Bank Modaraba Management Co.
             National Agricultural and Storage company Ltd.
             Cast – N- Link Products Ltd

      Joint Venture
          United National Bank Ltd., UK
             (Economic Indicators Pakistan, Published by Economic research Wing
             NBP, Head Office Karachi)

PRESENT STATUS OF BANK
The new management team having extensive experience of management of large
financial institutions both within and outside the country is expected to further enhance
the profitability and operational efficiency of the Bank.

Prospects
The Bank's principal strategic going forward objective is to make the transition from a
public service institution to a modern commercial bank. Being the country's largest
financial institution, the Bank is uniquely positioned to leverage its large branch network
and its 8.5 million-customer base to consolidate its core businesses as well as develop
new revenue generating opportunities.


                                            19
Internship Report                                                 National Bank of Pakistan


The new management team is in place combining the Bank's existing personnel with
professionals recruited from outside. Operating procedures are being re-defined and
internal controls strengthened utilizing a revamped IT architecture. A brief on the
progress on some critical areas is as follows:

Corporate & Investment Banking
A new approach to corporate banking is underway. The Bank has initiated a structured
approach to corporate banking by introducing a single point of contact through
Relationship Managers (RMs). For this purpose, new RMs as well as team leaders have
been inducted to expedite this process. Area Managers will be appointed to manage
relationships and to better service the needs of multinationals and large local corporates.

In investment banking team has also been formed to offer specialized services to major
relationships including advisory and debt syndications (TFCs). Furthermore, to stem the
growth in non-performing loans, the existing risk / credit management practices at the
Bank are being revamped.

Treasury / International Banking
The deregulation of foreign exchange treasury business has ensured that a growing
Volume of business now flows through the inter-bank market where rates are determined
by the market forces. This can prove to be an immense profitable proposition for the
Bank. Towards this objective, the Bank is shifting focusing on expanding its market share
in trade finance, home remittance and foreign investment related forex-denominated
flows.




                                            20
        A N A G E     M   E N T    O F

 MANAGEMENT OF NBP
In this section topics are:
        Management System

        Management Structure

        Central Board

        Local Board

        New Management Structure

        Corporate Information

              Board of Directors

              Audit committee

              Auditors

              Legal Advisor

        Senior Management

        Oversea Management
Internship Report                                                     National Bank of Pakistan



MANAGEMENT OF ORGANIZATION
Management is a distinct process consisting of activities of planning, organizing, actuating
and controlling performed to determine and accomplish stated objectives with the use of
human being and other resources.

MANGEMENT SYSTEM
The management has two types.
           Centralized
           Decentralized
Centralized Management tends to concentrate decision making at the top of the organization

Decentralized disperses decision making and authority throughout and further down the
organizational hierarchy.

NBP have a centralized type of management because all the decisions are taken by the
top management.

MANAGEMENT STRUCTURE
Central board
The general superintendent and direction of the affairs and business of the bank shall be
entrusted to the central board which may exercise all powers and things as may be exercised
or done or done by the bank and or not by this ordinance expressly directed or required to be
done by the bank in general meeting.
The Central bank consist of the following directors namely:
                       Managing director
                       President


Managing Director
The Managing director appointed by the central government under section 16, nine directors
is directed in local or special meeting by the share holder in the following manners. The share
holder registered in a branch, register maintained for an area mentioned in sub section (5) of
section 8, shall elect from amongst themselves, such number of directors for that area as may
be decided before election by the central government having regard to the proportion which
that share capital subscribed by the share holders of that area bears to the whole. Provided
that shareholders registered in branch register maintain at Dacca shall elect from among
themselves at least two directors.

Three directors appointed by the central government, provided that total number of elected



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Internship Report                                                            National Bank of Pakistan


directors representing the area for which the decca register is maintained shall not be less
than three.

President
The president of a Central board shall be appointed by the central government from among
the directors.

Local Board
The local board shall be established for the area mentioned in sub section (5) of section B ,
one each at Karachi ,Dacca and the Lahore ,and shall without prejudice to the powers
conferred by the sections 12, have power ,within the prescribed limits generally to transact all
usual business of the bank. A local board should consist of following members namely;
         The Managing director
         One member appointed by the central board from amongst the directors elected by
          the share holder register in the branch register of the area.
         Two members appointed by the central government from the area in which the
          local board is situated.
         Three members elected in local or special board meeting from among themselves
          by the shareholder register in the branch register of the area.

The Managing director shall be appointed by the central government for a period not
exceeding five years and on such salary and terms and condition of the service as the central
government may determined.

New Management Structure
The previous management was removed by the bank nationalization ordinance 1974. the general
direction and superintendent of the affairs and business of the banks vests in the Executive board
consisting of President (Chief executive) and five senior executives of the bank . The federal
government in 1980 constituted a board of directors comprising the president and the members of
executive board of the bank and two additional members one representing the ministry of finance and
the other Pakistani banking council.

Thus therefore, all nationalized commercial banks are controlled by the Pakistani banking council
being subject to State bank of Pakistan regulation as well. The federal ministry is responsible for bank
operations in the ministry of finance. Recently by the order of president of Pakistan, banking council
of Pakistan is removed.

Board of Directors.
An executive board composed of six senior executives of the bank and the president who is
also the chief executive supervises the affairs and business of the bank, called the Board of
Directors.

Management Committee:
Also there is a Management Committee consisting of nine senior executives of the bank,
called the members and the president who is also the chairman of the committee.




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TRAINIG and MANAGEMENT DEVELOPMENT WING
National bank of Pakistan has its national and development centers and 4 staff collages at: -
      Karachi
      Lahore
      Peshawar
      Islamabad

In these centers and staff colleges, the banking training is provided to the officers, managers,
and to potential managers. It arranges courses and seminars for middle and higher
management in all. Each year almost 1500 persons receive training over there.

CORPORATE INFORMATION
Board of Directors

        Syed Ali Raza                     Chairman & President, Chief executive

        M. Ayuub Khan Tarin               officer
                                          Director

        Ibrar A. Mumtaz                   Director and SEVP and Group Chief, Human
                                          Officer
                                          Resources Management & Administration
                                          Group

        Tariq Kimrani                     Director

        M. Arshad Chaudhry                Director

        Sikandar Hayat Jamali             Director

        Mian Kausar Hameed                Director


Audit Committee

           M. Ayuub Khan Tarin                       Chairman

           Ibrar A. Mumtaz                           Chairman
           Tariq Kimrani                             Chairman

           M. Arshad Chaudhry                        Chairman
           Mian Kausar Hameed                        Chairman



Auditors
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Internship Report                                                   National Bank of Pakistan


           Ford Rhodes Siddat Hyder &Co.         Charterd Accountant

           M. Yousuf Adil Saleem & Co.           Charterd Accountant

Legal Advisors
           Mandviwala & Zafar                    Charterd Accountant


SENIOR MANAGEMENT
   Qamar Hussain                 Chief Operating Officer & Head of Credit & Risk
                                 Management
   Masood Karim Shaikh           SEVP & Group Chief, Corporate & Investment Banking
                                 Group

   Shahid Anwar Khan             SEVP & Group Chief, Overseas Banking Group

   Dr. Asif A. Brohi             SEVP & Group Chief, Operations Group

   Amer Siddiqui                 SEVP & Group Chief, Commercial & Retail Banking
                                 Group

   Muhammed Nusrat Vohra         SEVP & Group Chief, Treasury Management Group

   Dr. Mirza Abrar Baig          SEVP & Group Chief, Human Resources Management &
                                 Administration Group

   Imam Bakhsh Baloch            SEVP & Group Chief, Audit & Inspection Group

   Ziaullah Khan                 Senior Executive Vice President

   Nabi Bakhsh Soomro            SEVP & Group Chief, Islamic Banking Group

   Ekhlaq Ahmed                  EVP & Secretary Board of Directors

   Tajammal Hussain Bokharee     EVP & Group Chief, Special Assets Management Group

   Nadeem Anwar Ilyas            EVP, PSO to the President & Group Chief, Compliance
                                 Group (A)

   Naeem Syed                    EVP & Divisional Head-Project Management Office &
                                 Core Banking Applications

   Aamir Sattar                  SVP & Financial Controller/ Divisional Head, Financial
                                 Control Division



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Internship Report                                                 National Bank of Pakistan


   Atif Hassan Khan             SVP & Group Chief (A) Information Technology Groups


OVERSEA MANAGEMENT

    R.A. Kaleemi                SEVP & Chief Representative, Canada Office

    M. Rafiq Bengali            SEVP & Regional Chief Executive, Americas Region

    Shahid Anwar Khan           SEVP & Group Chief, Overseas Banking Group

    Dr. Asif A. Brohi           SEVP & Group Chief, Operations Group

    Amer Siddiqui               SEVP & Group Chief, Commercial & Retail Banking
                                Group
    Muhammed Nusrat Vohra       SEVP & Group Chief, Treasury Management Group

    Dr. Mirza Abrar Baig        SEVP & Group Chief, Human Resources Management
                                & Administration Group

    Imam Bakhsh Baloch          SEVP & Group Chief, Audit & Inspection Group

    Ziaullah Khan               Senior Executive Vice President

    Nabi Bakhsh Soomro          SEVP & Group Chief, Islamic Banking Group
    Ekhlaq Ahmed                EVP & Secretary Board of Directors

    Tajammal Hussain Bokharee   EVP & Group Chief, Special
                                Assets Management Group
    Nadeem Anwar Ilyas          EVP, PSO to the President & Group Chief, Compliance
                                Group (A)

    Naeem Syed                  EVP & Divisional Head-Project Management
                                Office & Core Banking Applications
    Aamir Sattar                SVP & Financial Controller/ Divisional Head, Financial
                                Control Division




                                          26
         E P A R   T   M   E N T   L I Z A T I O N

   DEPARTMENTLIZATION
In this section topics are:
        General Banking Department

               Deposit Section

               Accounts Opening Section

               Lockers Services

               Cash Dealing Section

               Clearing Section

               Remittance Section

        Advances Department

        Accounts Department

        Government Receipt & Payment Department
Internship Report                                         National Bank of Pakistan



               DEPERTMENTALIZATION
Dividing an organization into different parts according to the functions is called
departmentalization. NBP Main branch ,Lahore offer a wide range of banking services to
public and private sector corporation ,partnership ,individual and others .

The National Bank of Pakistan has various departments. Brief description of all these
departments are given here one by one under separate heads for better understanding.

              General Banking Department

                    Account opening Section
                    Deposit Section
                    Cash Dealing
                    Clearing Section
                    Remittance
            Credit and Advances Department
            Accounts Department
            Government Department
            Consumer & Retailing Department
            Foreign Exchange Department
            Import and Export Department
       




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Internship Report                                             National Bank of Pakistan


        GENERAL BANKING DEPARTMENT
General banking involves the following sections
   1. Deposit Section
   2. Accounts Opening Section
   3. Cash dealing Section
   4. Clearance Section
   5. Remittance Section
   6. Lockers Handling Section

Deposit Section
Deposits are the lifeblood of commercial banks. The main function of a commercial bank is
to mobilize deposits of money from the savers and lend into for most profitable purposes. The
process of collection deposits is Deposits Mobilization.

Commercial banks donor receive these deposits for safe keeping purpose only .but they
accept deposits as debts. When a bank receives a deposit from a customer becomes a creditor
and the bank a debtor. When the bank receives the amount of deposits as a debtor, it becomes
the owner of it but there is an implicit agreement that the amount owned would be paid back
by the bank to depositor on demand or often at specified time.

The classification is based on duration and purpose for which the deposits are to be kept at
the bank before the depositor can withdraw them. Deposits can be divided into two
categories.

                                               Deposits



                             Checking                Non-Checking

                             Accounts                Accounts
                               PLS Saving              PLS TDR’s
                                Account

                             Current Deposit          Special Notice
                               Accounts              Deposit Accounts

                             Foreign Currency              NIDA
                                 Accounts




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Categories of Deposits
There are two broad categories of deposits. These are
       Time deposits
       Demand deposits


                 Time Deposits                                 Demand Deposits



       These are payable on maturity                     These are not payable of maturity
       Receive profit with respect to time                but on demand
        period                                            No profit is given on demand
       All TDRs, saving accounts and                      deposits
        other profit bearing accounts are                 They include current accounts
        included.                                          and call deposits etc.


TYPES OF ACCOUNT/ DEPOSIT
Following types of accounts are open in NBP
    1. Current or demand account
    2. Saving account
    3. Fixed account
    4. Call Deposit Accounts
    5. Foreign Currency Accounts

1. Current
This account is also known as running balance account. Simply we can say “A bank account
which may be used to lodge payments or to withdraw money on demand.”Its main purpose is
to serve the businessman. Form number F-53 is provided to the person to open the account. It
is a statutory requirement to maintain current account.

Its main features are: -
       Minimum amount for opening this account is Rs.500
       Any person can open the account with the bank
       According to inter banks agreement interest is not paid on current account.
       Bank act as custodian of money
       Over draft facility is provided to the customers
       Customer can withdraw money through cheque supplied by bank


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Internship Report                                               National Bank of Pakistan

      No limitation to the number of withdrawal
      No zakat is deducted on current account.

Basic Bank Account (BBA)

BBA’s are opened on proper introduction and submission of required documents.
      BBA’s are opened for individuals single or joint only.
      Free ATM issuance
      Minimum balance is 1000/-.
      In BBA’s maximum two deposits transactions and two chequing withdrawals are
       allowed free of charge through cash/clearing in a month.
      Nill accounts are closed after 3 months
2. Saving account
This type of account is designed to encourage the saving habit of the customer and lead to a
long-term banking or investment relationship. Bank saving accounts are in the nature of
deposits accounts and are not normally available for drawings. Rates of interest are typically
ahead, by a small margin.

NBP offered the three types of saving accounts
   a. Profit and Loss Sharing/Saving Account (PLS Acc)
   b. National Income Daily Account (NIDA account)

a. Profit and Loss Sharing/Saving Account (PLS Acc)
In general it is also called saving account .To provide interest free banking facilities in
Pakistan, this type of account was introduced in January 1982 after the islamization of
banking.

The main features of this account are: -
      Instead of having fixed return in the form of interest the deposited money will be
       shared in profit and loss of the bank.
      One can open the account by depositing minimum Rs.100
      The bank is authorized to deduct service charges on half yearly basis.
      Profit on PLS Saving Account is calculated on minimum monthly basis and is paid
       half yearly basis announced by the Head Office after June 30 and December 31.
      Zakat at the rate 2.50% is deducted from the PLS Saving Accounts.
      No limit of withdrawals




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Internship Report                                                National Bank of Pakistan


b. National Income Daily Account (NIDA account)

The scheme of NIDA was launched in December 1995 at attract at corporate customers.
NIDA are opened for individuals single or joint, Charitable institutions, Provident funds,
autonomous bodies, companies, associations, educational institutions, firms etc. the features
of this account are same to the features of the saving or PLS account except the following
ones:
      In this account the minimum balance required to acquire the benefits of this account is
       Rs 2 million, and the maximum limit is 5.0 million.
      When the above condition is fulfilled, then the bank will pay interest on daily basis,
       which is that if the deposit is minimum of 2 million than the mark up rate is
       5.2%p.a.and if it is at maximum that is 5.0 million than the rate is 7.00 %p.a.
      In this account the daily balance of account is taken, products are calculated and the
       interest is calculated on that balance.
      If the balance on any day comes below the lower limit, which is Rs 2 million then
       interest will not be given.
      This scheme did not gain popularity so NBP close this scheme.
3. Call Deposits

Call deposits are the sorts of deposits, which are deposited in the bank against any tender.
This is without interest deposit and may be with interest provided. The depositor has agreed
to keep this amount with the bank for some fixed period.

4. Fixed Deposit Account
This account is the major source of funds for the banks. This account is best for people who
have surplus money and don’t need such funds in nearer future. The rates on this type of
deposits are higher than the saving bank accounts.

The money is deposited for a fixed period of time. Main features of this account are: -
      Fixed amount is deposited for fixed period.
      Amount of profit can be obtained after each six months.
      Higher will be the time period, higher will be the rate of profit, and vice versa.
      A receipt is used for the amount deposited called fixed deposit receipt.
      Period of deposit can vary from 3 months to 5 years depending upon the nature of
       scheme offered by bank.
The amount can be withdrawn before maturity after surrendering interest.

PLS Term
The bank accepts these deposits with minimum sums as prescribed by the bank for a fixed
period of time. Profit may be paid in cash, pay order, demand draft or any other form.
      Terms deposits are accepted for a period of one month to five years.
      Minimum deposit is accepted is Rs.25, 000/= with no upper limit.


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Internship Report                                               National Bank of Pakistan

      Available to all types of investors i.e. individuals, partnership firms, public and
       private limited companies, corporation, trusts, and government bodies.
      Profit is paid on maturity.

Fixation Schemes of NBP
NBP offered following types of fixation and saving schemes
            PLS Special Notice Term Deposit Reciept- PLS SNTDR
            PLS Monthly income Scheme – PLS MIS
            Premium Saver Scheme- PLS Saving Account
            Premium Amdani Scheme


5. Foreign Currency Accounts

These are the accounts in US $, Pound, Euro, yen etc. of different account holders and either
saving or current accounts. Profit is fluctuating as determined by the State Bank of Pakistan
on six monthly bases whereas return on Term deposits/SNTD will paid on maturity. The
transactions in these accounts are translated into Pak. Rupees at the exchange rate prevailing
on the date of transaction.



Account Opening Section
Account opening section of the bank can be considered the most important department
because banking starts with the account opening. Every customer of the bank either he is of
credit section or foreign section or any other department must have his account in order to get
benefit and transaction with the bank. Therefore it is considered the most important section of
the bank. Account opening officer take special consideration for the proper recognition of the
customers.

This section performs the following functions:
      Opening of Accounts
      Issuance of cheque books
      Closing of accounts

OPENING OF ACCOUNTS
The opening of an account is the establishment of banker customer relationship. Before a
banker opens a new account, the banker should determine the prospective customer’s
integrity, respectability, occupation and the nature of business by the introductory references
given at the time of account opening. Preliminary investigation is necessary because of the
following reasons.




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 Internship Report                                                National Bank of Pakistan

         Avoiding frauds
         Safe guard against unintended over draft.
         Negligence.
         Inquiries about clients.
i. Terms and conditions
 There are certain formalities, which are to be observed for opening an account with a bank.
         Formal Application
         Verification of customer's CNIC through the NADRA
         Copy of NIC of the customer
         Specimen Signature
         Minimum Initial Deposit
 To open an account the customer has to meet the general banking manager with an introducer
 with the ID card. Manager verifies the customer's ID card through the connection of
 NADRA. NADRA send the verification report to the bank with the concluding remarks
 called VERISIS. If the customer's id card is fake then bank has right not to accept the
 contract and if the contract is acceptable to both, now it is ready to open the account formally.
 After the identification of the customer along with the form a card for specimen signature is
 also supplied to customer. Manager has every right not to accept this contract if he is not
 satisfied by the details provided by the customer.

ii. Qualification of Customer
 The relation of the banker and the customer is purely a contractual one, however, he must
 have the following basic qualifications.
         He must be of the age of majority.
         He must be of sound mind.
         Law must not disqualify him.
         The agreement should be made for lawful object, which create legal relationship
         Not expressly declared void.

iii. Steps for Opening of Account
 After entering into bank premises the person goes through the following steps for opening an
 account in the bank and for becoming a bank customer.
 1. A Verfication:
 The first important step to take place in bank is to get satisfactory verification of the person,
 who wants to become bank’s customer. This verification is made through the NADRA.


 2. Account Opening Form and Specimen Signature Card:



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Now the person is provided with an application form known as Account Opening Form
(AOF).
This form contains: -
    i. Type of account
               Current Account
               PLS SNTDR
               PLS Term
               BBA
               PLS Saving
               Premium Saver
               Premium Amdani
               Call Deposit
               NIDA
   ii. Nature of Account
      NBP has the offered services to following types of individuals.

       Accounts of general customers (Individual accounts)
               Minor account
               Illiterate person account
               Joint account
       Accounts of special customers
               Proprietorship account
               Partnership account (Registered/ Unregistered)
               Limited company’s account (Public/ Private)
               Accounts of clubs, societies and associations
               Corporate Body (Incorporated/ Unincorporated )
               Trust account
               Govt Institutions (Federal/ Provincial)
   iii. Initial Deposit Amount
       Deposit can be accepted in the form of:
               Pak Rs.
               US $
               UK
               EURO
               JY
   iv. Particulars of customers e.g;

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Internship Report                                              National Bank of Pakistan

                Title of Account
                Adress
                CNIC Number
                NTN Number (if available)
                Profession
                Telephone number may be of office, mobile or residential
   v. Next of Kin
      (all above mentioned particulars of introducing him)
       In this customer mention the name and address of person to be contacted for
       ascertaining his whereabouts after the expiry of three years from the date of last
       operation in his account or last communication from him to the branch to inform him
       the existence of account when the customer is not available at the given address.
       This is simply the refrence of the 2nd person if the bank fails to communicate with the
       customer then bank can contact with the next of kin / the mentioned person to know
       about its customer.Customer provide in this all the personal details of the next of
       kin.e.g;
                Name of person
                CNIC Number
                Address
                Telephone number etc.
   vi. Operating Instructions
       The account can be operated by
                Singly
                Jointly
                Either/ survivor
  vii. Zakat Deduction
       Zakat is deducted on each type of account accept current account in the 1st day of the
       Ramzan at the rate of 2.5%. If customer wants no zakat deduction then he have to
       submit affidavit/declaration as per zakat rules.
  viii. Signatures of the applicant
   ix. Service charges deduction
       In this category customer authorize the bank to deduct service charges as per bank's
       rariff.
       Service charges are exempted for;
                Government employee
                Pensioner
                Student
                Widows

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       State Bank of Pakistan now authorize all the banks to deduct service charges on all
       types of accounts when the balance of the customer become less from 5000/-. Rs. 55/-
       per month is deducted from the customer's account. 5000/- is the minimum amount
       which should be kept by the customer in his account.

Specimen Signature Card (SS card)
Specimen of signatures will be obtained from depositor at the time of opening his account. A
specially designed card is used for this purpose; the card must be countersigned by an official
of the bank not below the rank of an officer.

For illiterate person a recent picture of the newly account holder is taken and attached with
SS Card. To reduce the risk of frauds and misuse of the cheques of an illiterate person the
specimen signature card and account opening form both are stamped by the Personal Visit
stamp. Person who use thumb impression as a mean of signature can operate their account
only by Personal Visit.

3. Account Opening Register

Now the name of the customer is recorded in account opening register, and from here the
account no. of the customer will be written on (top most corners) account opening form and
on specimen signature card.

4. Letter of thanks

Letter of thanks is the latter issued by the bank to the customer for two purposes
    1st purpose is to say thanks to the customer for opening the account in their bank
    2nd purpose is to confirm the address provided by the customer while opening the
     account.

5. Issuance Of Cheque Book And Pass Book

The cheque book will ordinarily be issued to all customers desiring to have chequing facility.
First Cheque book is issued to the customer after sending the letter of thanks when the
customer comes with the latter of thanks and requests for the issuance of the cheque book.

A Cheque book consists of
                          PLS 25 leaves or pages per order
                          CD 50 leaves or pages per order
                          100 leaves or pages per order
                          CD 50 leaves or pages per bearer
                          100 leaves or pages per bearer

              Order- if a person appears himself for new cheque book or who is the holder
               of account
              Bearer- if the person other than account holder appears then he is bearer



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Rs. 3 per leaf as postage charges is charged to the customer. A special cheque book register
is kept to enter the name of the person having cheque book. Customer can withdraw money
by signing a cheque and writing the amount he wants to withdraw from his account.

6. Pass Book
Pass book is another important type of book handed over to the customer as he opens the
account with the bank. The withdrawal and deposit of money is recorded date wise in this
book.

7. Recording into General Ledger:
The concerned officer records the name and amount deposited with the bank in to general
ledger. Separate ledgers are maintained for different types of accounts e.g.
                Current Account Ledger
                Saving Account Ledger
                Fixed Deposit Account Ledger
                Call Deposit Account Ledger

As and when customer will deposit the money, amount will be credited in general ledger and
the withdrawal will be followed by a debit entry in the ledger.

iv. Documents Enclosed by Customer

Documents required to be attached by the customer are different for different categories.

Documentation In case of Individuals Account

      Copy of CNIC/NICOP/POC

      Copy of Driving license in case CNIC is without photograph

      Applicant photograph and VNIC copy

      Copy of service card/ evidence of employment in case of salaried person

      Photographs in case of illetrate person

      Copy of CNIC of Next of Kin.

      Zakat exemption Declarartion

      Evidence for exe,ption of account from levy of service charges

      Proof of age in case opening of account with minor

Documentation In case of Private/ Public limited company accounts:
      Photocopy of National Identity Card of each director
      Application form
      Copy of company’s memorandum and articles of association

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      List of directors
      Copy of board resolution
      Certificate of incorporation
      Their signature cards
      Certificate to commence business
      Power of Attorney
Documentation In case of Partnership Account

      Application form

      A copy of partnership deed

      Signature cards of partners

      Registration certificate copy

      A copy of National Identity Card of each partner

      Authority letter favoring persons authorized to operate the account
Documentation In case of Club, Society, Association or Trust

      Application form

      Copy of rules

      Certified copy of resolution

      Signature cards
Documentation in case of agents Account
      Copy of power of attorney
      Id card of each agent

Documentation in case of trust Account
      Certificate of registration
      CNIC of all trustees
      Copy of instrument of Trust

v. Stamping and Scrutinizing
After the fulfillment of all the necessary terms and conditions and checking of the form the
relevant officer of Account Opening then affixed stamps on the AOF for the sake of
completion of all the formal rules and regulations. He affixed three types of stamps on the
form and two types of documents.

 Affixed stamps:
                     National Bank of Pakistan Stamp

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  Internship Report                                                National Bank of Pakistan

                       Authorized Stamp
                   Personal Visit Stamp---in case of illiterate person or the person not
                     having specific sign
  Affixed Documents:
                       Know Your Customer Form (KYC)
                         Summarizing the context of AOF briefly
                       Signature Card
                         For identification and verification of signatures
vi. Loose Cheques
  If any customer forgets or leaves his cheque book at his home, which is far away from the
  bank or whatever the case may be, the customer applies with the bank for the issuance of
  loose cheque by the bank as he does not has his cheque book with him and the money is
  urgently required, the this cheque is called the loose cheque.

  NBP issues a loose cheque for Rs.150 as charges for the issuance of the loose cheque.

  NEW CHEQUE BOOK ISSUANCE
  All subsequent cheque books to be issued against the requisition cheque extracted from the
  previous cheque book. This slip is duly filled and signed by the customer. The signature of
  the customer is verified by the bank and new cheque book is issued to the customer and serial
  numbers of cheques are duly entered in the book of the bank. Along with the signature, the
  person should also write his full name and address.

  The authorized officer filled the cheque book requisition card for the customer and sends
  them to Head office which is present in Karachi through the NIFT (National Institutional of
  Facilitation Technology) (PVT) Ltd. The customer can obtain the cheque book after at least
  two days of submission of requisition slip.

        Cheque books issued in the running serial order with the name of the customer printed
         on the book.
        Rs. 3 per page of book is charged for the postage services through NIFT
        Enter particulars in the cheque book issue register.
        Enter detail in the system.
        These records should be daily checked by the Daily Cheque Book Report, which
         should be signed by the authorized officer after checking cheque book series input
         number.
        At the end of the day all the cheque books should be checked and balanced with the
         help of requisition slips.
  In case of cheque book is issued without the requisition cheque of previous cheque book care
  must be taken to establish the genuineness of the customers and Form should be obtained. In
  some cases when cheque book is issued by the person duly authorized by the account holder
  for obtaining cheque book, a letter of issuance of cheque book is sent to the account holder
  for his acknowledgement.

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 In rare cases when customer demand printed cheque book, requisition slip with demand letter
 is sent to the NIFT (National Institutional of Facilitation Technology) (PVT) Ltd.

 CLOSING OF ACCOUNTS
 Account Closing by Customer
 The customer can close the account. Customer is required to submit an application for
 closing the account. Then the account is closed out and his balance is paid to him after
 deducting the closing charges, i.e., Rs. 200 and the application is filed in Account Closing
 File. Remaining leaves of cheques will also be collected from the customer.

 Account Closing by Bank
 i. Dormant Account
 All current accounts which have not been operated for six months or all saving accounts
 which have not been operated upon for one year classify as dormant account.

ii. Inoperative Account
   All the current accounts which have not been operated upon for 2 years or all saving
   accounts which have not been operated since 3 years are classified under inoperative
   accounts.

 Operations in accounts classified as dormant or inoperative will remained suspended unless
 request in writing for activation or restoration is received from the Account Holder. If the
 account holder fails to reactive the account despite of bank's notice, the bank will have the
 right of exercising option of closing of account and in such case will refund the balance to the
 customer after deducting all applicable charges.

iii. Treatment of Deposit declared Unclaimed

 Unclaimed Deposit
 A debt payable owing by bank due to the reason of deposit in respect of which no transaction
 has taken place and no statement of account has been requested by the creditor during a
 period of ten years are classified under unclaimed deposit.

 These are simply a debt owned by bank when a customer has not been operating his account
 during a period of 10 year. The bank serves a 3 month Final Notice in writing to the account
 holder at his latest known address for his reciving balnce lying in account. Upon expiry of
 such period NBP then surrender the deposit to the SBP.




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Locker Services Section
National bank of Pakistan also provides lockers facility in the country. It means a box operate
by a customer of holder on permanent basis. Locker operation account is allowed for a
account holder, Non-account holder not able to operate it.

There are four types of locker depending upon the size of lockers operate in banks.
      Small size locker
      Medium size locker
      Large size locker
      Extra large size locker

An application form is necessary for customer with desire documents and approval made by
the head of department. Lien is placed on the account of a locker holder on drawing of
amount. Entries are made on “Locker Register” as well as on the system. Locker No and Key
No is allotted to the locker holder for further operation.

The dual control system is used for lockers. The officer has Master Key to apply on the
locker but he cannot open the locker of any person. The locker holder provides the bank his
specimen signature. Whenever the locker holders come to open the locker, his signatures are
verified by the officer and then will be able to open his locker.

If the key of the locker is lost company providing these lockers breaks the locker and new
lock is fitted in its locker and lock is destroyed in the presence of the locker holder and bank
charges RS 1200 for that. In case the locker holder dies, the court opens his locker in the
presence of his as mentioned in his will or and his belongings are given to them and the
locker is closed.

Customers paid the rent of lockers on annual basis. The annual rent of different lockers, their
security charges and insurance is shown in table.




             SIZE OF LOCKERS         RENT          SECURITY       INSURANCE

             Small                   4000          25000          500,000

             Medium                  5000          30,000         500,000

             Large                   6000          200,000        700,000

             Extra-Large             6000          200,000        1000,000



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Cash Dealing Department
Cash department of NBP is given the complete responsibility of handling all receipts &
disbursements of cash as a result of transaction in both local and foreign currencies & near
cash items such as traveler's cheque etc. (when they are issued against cash).As a
consequence it is also responsible for the book keeping of these transactions & the safe
custody of cash and near cash securities of NBP.

Cash department of NBP is separate close part; no one other than cash departments'
employees is allowed to enter into that area. Cash department performs the following
functions.
                 Cash receipts for receive deposits.
                 Cash payment for encashment of cheques.
Receipt
The money, which either comes or goes out from the bank, its record should be kept. Cash
department performs this function. The deposits of all customers of the bank are controlled
by means of ledger accounts. Every customer has its own ledger account and has separate
ledger cards.

Payments
It is a banker’s primary contract to repay money received for this customer’s account usually
by honoring his cheques.

CASH RECEIPTS
The depositor uses pay-in-slip for depositing the amount in their account. There are two types
of pay-in-slip. Both are in different colors for clear identification.
       i.    Cash Pay-in-Slip
      ii.    Cheque Pay-in-Slip


There are two parts of deposit slips:
            Counter foil
            Adjacent credit voucher

i. Cash Pay-in-Slip
It is used whenever the account holder deposit cash in his account. For this he have to fill the
both parts i.e; counter foil and adjacent foil of the slip properly writing the amount in figures
as well as in words. Cashier of cash receipt accept the deposit slip with cash and then signed
the both parts of deposit slip, affixed cash received stamps on it and returned the counterfoil
to the customer. The amount is credited to the customer's account by the computer terminals.

ii. Cheque Pay-in-Slip
It is used whenever the account holder deposit amount in his account by the cross cheques.
This slip is used for transfer of funds from one customer's account to another. The processing

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of the cross cheques held in the clearing department. The cashier just check the cross cheques
to confirm whether it is acceptable or not.

CASH PAYMENT
It is the primary function of bank to repay the money received from his customer’s account
usually by honoring the cheques. It is the contractual obligation of a banker to honor his
customer’s cheque. Bankers in Pakistan deal with three types of cheques.

Types of collected Cheques
Bearer Cheques
Bearer cheques are cashable at the counter of the bank. These can also be collected through
clearing.

Order cheque
These types of cheques are also cashable on the counter but its holder must satisfy the banker
that he is the proper man to collect the payment of the cheque and he has to show his
identification. It can also be collected through clearing.

Crossed Cheque
These cheques are not payable in cash at the counters of a banker. It can only be credited to
the payee’s account. If there are two persons having accounts at the same bank, one of the
account holder issues a cross-cheque in favor of the other account holder. Then the cheque
will be credited to the account of the person to whom the cheque was issued and debited from
the account of the person who has actually issued the cheque.

The Requisites of Cheques
There is no prescribed form of words or design of cheques but in order to fulfill the
requirements the cheques must have the following:
    It must be in writing
    It must contain an order to pay and addressed a specified bank.
    The order must be unconditional
    The order must direct to pay on demand
    The sum ordered to be paid must be certain
    The payment should be ordered to be paid to a certain or to his order or the bearer

Payment of Cash Cheques at Counter
Acceptance of Cheques
Whenever a cheque is presented at counter for payment, the officer examines the cheque
before issuing a token. The following is looked into:
        The cheque is drawn on the same branch of the bank.
        The cheque is not crossed that it is open cheque.

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        It is not stale or post dated.
        The drawer has signed the cheque.
        The amount written in words and figure is same.
        The drawer of the cheque duly signs all alteration or cancellation.
        The presenter has signed at the back of the cheque.
        Cheque should not be damaged
        Funds must be sufficiently available
        No legal bar prohibiting payment

Affirmation of Signatures
The accountant/authorized officer examine the cheque for the above mention things. When
cheque is found acceptable in all aspect, the signature of the drawer compared with his
signature on the Specimen Signature Card. When it is found similar to specimen signature, he
affixes SIGNATURE VERIFIED stamp, near the drawer signature in the cheque and sign it.

Computer Terminal Process
The cheque is received in computer terminal , where the computer operator cheques the
balance of the account holder . the operator also sees whether the stop payment instructions
are received from the account holder or not. After considering these two points he checks the
balance in the account through a software of Bank Back Office (BBO). If the account has the
sufficient balance, the cheque is posted. The cheque is then handed over to the cashier after
the allotment of the token number to the cheque. The token is given to the presenter.The
cheque is cancelled after posting & is returned to cashier .

Payment of Cash
The cashier calls the presenter and takes his token and compares the token number with the
number written at backside of the cheque. He takes out the cash to be handed over to the
presenter and writes its denomination at the back of cheque. Thereafter, he gets signature of
the presenter at the back of the cheque and hands over cash to him and affixes Cash Paid
stamp on cheque.

Stopping the Payment of Cash on Presentation of Cheques
The payment of cheques is stopped dishonored on the following grounds:
          Effects not yet cleared then request to present again
          Irregularity endorsed
          Drawer’s signature differ
          Payee’s endorsement requires bank’s guarantee
          Alteration requires full signatures
          Cheques is not post dated
          Cheques is without date
          Amount in figures and words differs

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          Crossed cheques must be presented through the bank
          Payment stopped by the drawer
Payment of Cheques in Transfer
The customer of the branch deposits the cheque drawn on the same branch, for the payment
to the credited into his account, attached with pay in slip. The officer accepts it after looking
into the following:

The person depositing the instrument for collection is the customer of branch.
        The correct pay in slip (current/saving) is attached with the cheque.
        The depositor signature is presented on the slip.
        The account number of depositor is written on both the sides of the slip.
        The word and figure of the amount tally with each other.
        The cheque is neither post dated nor stale.
        The drawer signature is present on the cheque.
        The drawer signs the alteration on the cheque.
        The cheque in name of the company, firm etc is not going into the account of any
         person.
        The cheque with Payee Account Only crossing is not being deposited into the
         account of any other person other than the person mention on the cheque.
Processing of Transfer Cheques
The cross cheques are then transferred to the Clearing Department. All the cross cheques are
processed through Clearing Houses. The local cheques are cleared through local clearing and
outstation cheques are cleared through intercity or short credit clearing.

CASH LINK
NBP ATM SERVICES FOR CONVENIENCE
    Cash withdrawal according to your cycle limit.
    Transfer of funds between PLS saving account and current account of the same
     customer through the same ATM card
    Account balance inquiry.
    Instant mini statements of accounts listing the last 15 transactions in account. Request
     for a new cheque book ,which might be collected by the customer from the branch.

How much cash can be withdrawn
There is a 24 hours cycle cash withdrawal limit imposed on all ATM cards. Withdrawal limit
depends upon the type of customer.

Personal identification number (PIN)
A pin mailer issued to the ATM card holder carries the pin number in a sealed envelope. Card
holder is required to keep the PIN number in a safe place as all the operation are carried out

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   Internship Report                                              National Bank of Pakistan

   on the ATM are carried out through the same.

   Clearing Section
   Clearing
   "The transfer of funds from one branch of bank to the other branch of the same bank or the
   other bank on which the instrument is drawn , without involving cash through “State bank’s
   clearing house "

   We can say that cheques which cannot be cashed at the cash counter of the bank or cross
   cheques go through the clearing process.

   Clearing Department
   The major function of Clearing Department is to receive the cheques, which are drawn on
   some other bank. The customer can get the money in his account at NBP, from the cheques
   drawn on another bank. The bank accepts these cheques and collects the amount from that
   bank on which cheque is drawn through the Clearing House. Bank charges some commission
   for this function.

   Clearing House
   A clearing house is an association of commercial banks set in State Bank of Pakistan for the
   purpose of interchange and settlement of credit claims

   National Institutional Facilitation Technology (NIFT) Pvt. Limited is performing the
   function of clearing and charges commission against it. Before the NIFT, the State Bank of
   Pakistan (SBP) with efficient controlling staff performed the process of clearing. If SBP had
   no office at a place, then NBP, as a representative of SBP acted as a clearinghouse.

   NIFT is a joint venture between a six major banks and private sector. The clearing operations
   were commenced by the establishment of first centre at Karachi and now it has been extended
   to all major cities of Pakistan. At such places where the area is not covered by NIFT the
   clearing and settlement services are provided by National Bank of Pakistan.

   TYPES OF THE CROSS CHEQUES
   Some specific types of cheques are being entertained in the clearing department of NBP are:

i. Local Cheques
   By local cheques we mean collection of cheques from the banks which are located within the
   city. It means the presenting bank and the bank on which the cheques is drawn are situated in
   the same city.

ii. Outstation Cheques
   By outstation cheques we mean collection of cheques from the bank, which are situated
   outside the city. It means the presenting bank and the bank on which the cheques is drawn are
   not situated in the same city.

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   Internship Report                                              National Bank of Pakistan



iii. In House Cheques
   In house cheques are drawn on one branch of NBP and presented to another branch of NBP
   such cheques are marked with the transfer stamp.

   TYPES OF CLEARING
              i.   Local Clearing
             ii.   Short Credit Service
            iii.   Local Short Credit
            iv.    Inter City

 i. Local Clearing
   All cheques and other Negotiable Instruments payable locally is presented through the local
   clearing system. NIFT provides the local and intercity services. Cheques deposited at branch
   counters presented for clearing on the same day. Bank give credit to the customer's account
   on the day when clearing settlement takes place. No charges levied for local collection of
   cheques or instruments which are collected through local clearing.

   Time Frame for Collection of Local Cheques/ Instruments
   The customer's account credited in respect of local cheques on the next day from the date of
   acceptance of the cheque.

ii. Short Credit Services (SC)
   For small cities where there are no NIFT services then branch bank clears the cheque either
   through mail/ TCS or bank can own provide service and charge commission for providing
   services. Bank give credit to the customer's account on the day when clearing settlement
   takes place.

   Time Frame for Collection of SC Cheques/ Instruments

   The customers account are credited in respect of outstation cheques on 4th 0r 5th day from the
   date of acceptance of the cheques.

iii. Local Short Credit (LSC)
   This arrangement has been set up if the customer wants amount in his account on urgent
   basis. Bank then provide service to its customer for those in house cheques when presented
   and draw on NBP. Both can be of different branches of the bank but must be located within
   the city. No Bank charges are recovered from customers for these services.

   Time Frame for Collection of LSC Cheques/ Instruments

   The customer's account credited in respect of local cheques on the same day from the date of
   acceptance of the cheque.


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iv. Inter City
   NIFT pvt. limited is responsible for the clearance of the outstation cheques. Cheques drawn
   on bank's own branches at outstation centers or outstation other banks both are collected
   using the inter city arrangements maintain by NIFT network. Its offices are present in all the
   large cities of Pakistan. NIFT network is present in:

                                  Islamabad

                                  Karachi

                                  Quetta

                                  Sukhar

                                  Hyderabad

                                  Peshawar

                                  Gujranwala

                                  Sialkot

                                  Daera ismael khan

                                  Bhawalpur

                                  Muzafarabad

                                  Faisalabad

                                  Rawalpindi

                                  Multan

   Time Frame for Collection of Inter City Cheques/ Instruments

   The customer's account credited in respect of local cheques on the 2nd day from the date of
   acceptance of the cheque.

   CLEARING PROCESS
   The process of clearing is carried in two categories.
           i.    Inward clearing
          ii.    Outward clearing

 i. Inward Clearing
   Cheque received of other parties after clearing are lodged in the system by vouching date,
   signature, documents numbers is noted. The cheque without sufficient balance, changing in
   amount, signature and verifying other formalities returned to the customer by attaching return
   memo explaining the cause of cheque return. Return cheques also enter into the return

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    register by writing dates, causes of return, and amount. After posting summary of cheques is
    prepared and cheques return to third parties through NIFT.

  ii. Outward Clearing
    These are the cross cheques deposited by the customers for credit the same amount to its
    account. Before posting following is being performed.
        Crossing cheque stamp if not place it.
        Title of account and account number from deposit slip is checked.
        The deposits slip is handed over to the customers by branch stamping.
        Entry is done in daily register.
        Add list is being prepared.
        Special crossing clearing stamp of next day is affixed.
        The payee’s amount will credit stamp is affixed on back of the cheque.
        In case of outside city clearing Inter-Branch Clearing Stamp is affixed.
        Place all the cheque in a bag with special closing and sent to NIFT.

    Excess of outward clearing over inward clearing produces a net increase in clearing account
    balance. Excess of inward clearing over outward clearing produces a net decrease in clearing
    account balance. The first case is reffered to as favorable clearing & the second case is
    unfavorable clearing.

    CHARGES ON SC & INTERCITY CLEARANCE IN NBP
    On clearance of instruments through SC and inter City three types of charges are deducted
    from the depositor's account
              i.   Commission
             ii.   Federal excise
            iii.   Postage

  i.   Commission rates are
                                    NBP to NBP -------------------------- 0.15%
                                    NBP to Other Banks----------------- 0.20%
ii.    Postage rates are            ------------------------------------------ 75 Rs.

iii.   Federal excise rates are ------------------------------------------- 16% of Commission

    On clearing of cheques the minimum amount of commission is 50 Rs. and if it is less than
    minimum amount then Rs. 50 and in case if it is greater then greater amount is considered.

    PROCEDURE FOR CLEARING THE CHEQUES

    Procedure for Outward Clearance


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   i. Pay-in Slip- Cheque

   The customer fills pay-in slip. This slip is just like deposit slip. The cheque number, date,
   amount and account number must be written on this slip.

   Stamping and Scrutinizing
   The officer on receipt of cheques and pay-in slip will stamp the pay-in slip with “cheque
   received” and give a portion of slip to customer and the remaining portion is attached with
   the original cheque. The original cheque will be marked with two stamps in case of local
   clearing.
               Endorsement stamp of NBP
               Clearing Stamp

   The original cheque will be marked with three stamps which are called OBC stamps (over
   branch clearing stamp) in case of intercity clearing.
               Endorsement stamp of NBP
               Crossing Stamp
               Next Date stamp
   At the end of day, all cheques are counted and then scrutinized in bank-wise and sent to the
   NIFT for local as well as intercity clearing. Entry is done in daily register.

   Procedure for Inward Clearance
   All the remittance which are received from other banks then go through the inward clearance
   which include all the steps for lodging of amount into customer's account.

 i. Fanfold
   The drawer bank then verify the payer's account for clearance of the cheque and send back
   the amount to the presented bank or NBP through the fanfold. In case if the customer account
   is short of balance then the original cheque is returned back to the presented or collected bank
   with the reason of returning the cheque on the clearing return form. NBP receive these
   amount in form of remittance.

ii. Charge Deduction
   On receiving the amount through fanfold bank deduct service charges of clearance which are
   excise duty, commission and postage for the intercity and SC payments.

   Vouchering is done on four types of fanfold;

               Debit voucher for---------------- total amount charged for sevice
               Credit voucher for--------------- commission
               Pay –in-slip of cheques for----- Federal excise
               Pay-in-slip of cheques for------ postage


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    No any charge levy for local clearing so no vouchering is required for this. Customer's
    account is credited on the next day of clearance.

iii. Credit of the customers account
    After deduction of charges the amount is transferred and credited to the customer's account.

    Remittance Section
    Remittance means a sum of money sent in payment for something. This department deals
    with either the transfer of money from one bank to other bank or from one branch to another
    branch for their customers. NBP offers the following forms of remittances.
    Main modes of remittance are:
          Pay Order
          Mail Transfer
          Demand Draft
          Telegraphic Transfer
    PAY ORDER
    Pay order issued from one branch is only payable from the same branch. It is issued for
    payment in the same city.

    Issuance of pay order
          Gets application form from the customer.
          Issues pay order after vouchering all necessary formalities.
          Gets recovering charges and withholding tax in case of cheque deposit for PO.
          Makes entry in PO issue register.
          All pay order must be crossed “payee’s account only”.
          It must be noted that Inter-Branch Clearing Advice is not involved because it is
           payable at the same branch and same city only.

    Cancellation of PO
          Application for cancellation with original pay order.
          Recovers cancellation charges.
          Signature verified by the officer.
    Duplicate PO
          Checks the record that payment has never been made.
          Gets application for issuing of duplicate PO.
          Recovers charges as per schedule.
          Issues duplicate PO by writing “ink red” pen “Duplicate PO”.


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Issuance Procedure to an Account Holder
    Applicant fills an application form, which is general credit voucher and tells the name
     of person in whom favour it is to be drawn.
    Account Holder draws a cheque (it can be in cash as well) of the amount of which
     Payment Order is to be issued and the amount of commission to be paid by him,
     which is Rs.50 for Account Holder.
    A general credit voucher is filled by Bank for commission charges and Account
     Number is debited (in case of cash, cash is debited).
Issuance to a Non-Account Holder
    Applicant fills an application form, which is general credit voucher and tells the name
     of person in whom favour it is to be drawn.
    Non-Account Holder deposits the amount of Payment Order, to be issued on cash
     counter along with the amount of commission to be paid by him, which is Rs.100 for
     Non-Account Holder.
    A general credit voucher is filled by Bank for commission charges and Account
     Number is debited (in case of cash, cash is debited).

MAIL TRANSFER
The same application form is used for draft and mail transfers generally in NBP.The mail
transfer is not delivered to purchaser but instead the issuing office to beneficiary’s branch on
its own risk and responsibility sends it. This type of remittance facility is provided only when
the beneficiary happens to be customer of the bank.
The amount is directly credited to the beneficiary’s account and as such loss of mail transfer
has no concern with the applicant. Also the credit balance of customer is transferred from one
branch to another branch with the help of this instrument in case the
Customer so desire.
The applicant desiring to remit the funds by way of mail transfer can either deposit cash or he
may ask the bank to debit his account with the cost of mail transfer including bank charges.
An exchange memo is issued to the applicant in case he desires to have some sort of receipt
from the bank for his office record. The participants of mail transfer are recorded in mail
transfer register just like drafts while at the paying branch instrument is
treated as branch voucher for credit into beneficiary’s account.
If the customer is not he account holder of this bank, then firstly he has to deposit the money
and then rest of the procedure will be adopted to transfer his money. Secret test apply on
MT. If the amount is less than 5000 rs then test will not apply.

      It is the quick and safe mode of transfer of funds.
      Application form submission is same as DD.
      In MT funds are transfer through system within seconds if 2nd branch is online.
      Funds transfer only same branch of the banks.




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    It is necessary that the customer must have the Branch Code of the host branch,
        account number of a drawer, name of place, etc.
       Inter-Branch Clearing Advice is involved.
DEMAND DRAFT
A method used by individuals to make transfer payments from one bank account to another.
Demand drafts are marketed as a relatively secure method for cashing checks. It is made for
both account holders and non account holders. Secret test apply on DD. If the amount is less
than 5000/- Rs. then test will not apply.

Types
    Junior draft
    Senior draft

Junior Draft
        For 1 to 1000/- Rs. junior draft is made.
Senior Draft
        For 1000 to 10 million Rs. senior draft is made.

Particulars of DD
       Date
       Name of the office on which it is drawn
       Name of beneficiary
       Amount in words and figures
       Bank exchange rates
       Signature and address of the applicant

Issuance of Demand Draft
       The customer on standard DD application form makes request.
       All information such as name of beneficiary, place where the DD is drawn, amount
        mode of payment, cash/cheque/debit authority, signature with name and address is
        filled.
       The issuer checks the information.
       Commission as per schedule of charges is charged.
       Federal excise duty is charged.
       After the customer has made payment by cash/cheque, get the voucher from cash
        department.
       The DD of required amount is prepared.
       The DD in NBP is manually prepared.



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Entry of DD
Entry is made in DD issued register as well as on the system on which following entry is
passed.
Dr: Cash/Customer’s A/C
Cr: DD issued
Cr: DD issuance charges
Drawing branch of bank will give credit to the drawee branch on same date the draft is
issued; through their account for settling inter branch transactions.NBP does not pay before
the receipt of relative advice.
On the receipt of relative advice the drawee branch will credit the amount into their draft
payable account and each time draft is paid, this account will be debited with the amount of
draft paid. In case the draft receipt is not received the draft will be paid “ex-advice” duly
entered in the ex-advice register and entry in said register will be marked off on receipt of
relative advice.

Cancellation of DD
      If any customer wants to cancel DD, bank obtains application in writing along with
       original DD.
      Verifies the signature of applicant. This signature should tally with the signature of
       DD application form.
      Checks the DD account into system of payment made or not.
      Marks cancellation in DD issued register.
      Recovers cancellation charges.
      Payment is made from Suspense Account DD cancelled after recovery of cancellation
       cheque is per schedule charges.
      Inform the drawee branch regarding cancellation and ask for Inter-Branch Credit
       Advice (IBCA).
    On the receipt of IBCA adjustment is made.
Issuance of Duplicate DD
In case draft is lost or destroyed by mistake, its duplicate can be issued at the request of
purchaser after obtaining indemnity bond on stamped paper of appropriate value. This is done
to cover the risk of double payment by mistake.

      Application form received from purchaser and verifies the signature.
      Informs the drawee branch of the loss of DD and advise them to mark caution against
       payment if presented.
      After necessary checking, the drawee branch will inform the branch about the status
       of DD whether it has been paid or still outstanding.
      Writes on the face of duplicate DD in red ink Duplicate in lien of original DD No---
       dated ---reported lost.

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      The signing officer must check all the particulars before signing.

TELEGRAPHIC TRANSFER
It is the message, which is sent from one branch to another on the order of payer to payee
through wire. It is one of the quickest means to transfer fund through the use of
Telex/fax/internet or cable. Secret test apply on TT. If the amount is less than 5000 rs then
test will not apply.
      It is quickest way of transfer funds from one branch to another of the same bank
       through telephone, fax/telex.
      Procedure of application and vouchering is same as a DD.
      Apply test on the TT message and appropriate codes and instructions such as advice
       & credit or advice & debit.
      It is mostly cleared through main branch of the same area.
      Recovers commission, and other charges as per applicable rate.

The entries at issuing office are recorded in telegraphic transfer issued issued register while at
the other end it is entered in the tt payable register.

Issuance and Payment of Telegraphic Transfer Outgoing
Application form is filled by the client in whom the name and account number of the
beneficiary, which is to be credited and name of customer, is required. For telegraphic
transfer, the payment can be made in case or by cheque or by debiting the customer’s account
if he is the account holder.

The amount of Telegraphic Transfer should be written on the form. The amount is
transferred to beneficiary’s account in the other bank. An advice is given to the customer but
application is filled in the record of the bank.

Issuance and Payment of Telegraphic Transfer Incoming
When a TT is received then an entry is passed in TT incoming register after verifying the test.
When a person comes and wants to encash his TT, bank checks the statements of that person.
If the bank finds any account credited to the person’s account against TT, bank prepares a
voucher for this payment against that TT. The customer then presents that certificate to the
cash counter and collects money.




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                                Remittance charges

            Exchange on DD/MT/TT

            From 1 to Rs.100,000/-                   0.10% minimumRs.50/-

            From Rs.100,000 to 500000               0.05% minimumRs.100/-
                                                   0.04 % minimumRs.400/-
            From 500000 to 10000000

            Issuance of Duplicate Draft

            For A/C Holder                                   Rs. 200/-

            For Non-A/C Holder                               Rs. 250/-

            FED on DD,MT, PO                           16% of commission

            Postage charges on MT & DD                        Rs. 75/-
            only

            Pay order

            For A/C Holder                                 Rs. 50/- (flat)

            For Non-A/C Holder                            Rs. 100/- (flat)

            Issuance of Duplicate PO

            For A/C Holder                                Rs. 100/- (flat)

            For Non-A/C Holder                            Rs. 150/- (flat)


                    ADVANCES DEPARTMENT
Advances department is one of the most sensitive and important departments of the bank. The
major portion of the profit is earned through this department. The Credit Management
Division of Head Office directly controls all the advances. As we known bank is a profit
seeking institution. It attracts surplus balances from the customers at low rate of interest and
makes advances at a higher rate of interest to the individuals and business firms. Credit
extensions are the most important activity of all financial institutions, because it is the main
source of earning. However, at the same time, it is a very risky task and the risk cannot be
completely eliminated but could be minimized largely with certain techniques.




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   PRINCIPLES OF LENDING

 i. Character
    It is based on the borrower willingness to repay the obligation. The loan officer sees the
    family background mode of living, business nature, habits, moral reputation and etc. before
    giving the loan.
ii. Capacity
   The ability of borrower to repay the loan when due. The borrower ability to repay the loan is
   assessed by the office so that he will be able to repay the loan in future.

iii. Capital
   The officer assesses the capital of the borrower. If assets held by the borrower are liquid, they
   can be easily convertible in cash; but if non liquid is used then it is risky to given loan.

iv. Collateral
   It is collateral security. It may consists of stocks bonds , bill of exchange, bills of lading, etc.
   the bank has protect himself from any discrepancy in the future. They increase the ability of
   the borrower to obtain the funds from the bank.

v. Condition
   The economic condition of the borrower is determined. The economic conditions of the
   borrower in and outside the country effects the repayment of loan. If condition is favorable
   then loan is given otherwise vice versa.

   TYPES OF ADVANCES

i. Demand Finance
   One time disbursement of the whole amount sanctioned, as the limit for the credit allows.
   Any person, individual, group, company, firm and all others can achieve this Mode of
   financing. The mark-up or interest is calculated on the total amount disbursed and requires to
   be paid before the date of final adjustment. Regarding the amount, limit and period, it
   depends on the nature of the case in review.

ii. Cash Finance
   In this mode of financing the borrower is allowed to make withdrawals of funds as he
   requires, but the total amount outstanding cannot exceed the limit sanctioned. The mark-
   up/interest is calculated on the amount outstanding on his account.

   The calculation of mark-up/interest is based on the number of days a specific amount is
   withdrawn. This finance if normally borrowed by small traders or individuals for their petty
   matters involving cash transactions up to rupees three hundred thousand maximum.

iii. Running Finance
   To assist a large-scale business operator to carry on his day to day requirements of liquid
   funds, this account is opened is made operation in his favor. Running finance is provided

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   where the amount goes beyond rupees three hundred thousand. The mark-up/interest is
   calculated the same way as in case of cash finance. Security against running finance is that
   which is easily convertible in to cash and bank kept 25% margins with it.
iv. Loans
   When a customer borrows a fixed amount from a banker repayable either in periodic
   installments or in lump sum at a fixed future time, it is called a "loan". When bankers allow
   loan to their customers against collateral securities they are called secured loan and when no
   collateral; security is taken it is called "clean loans"

   Types Of Loans
   The credit department of NBP has providing the following types of loans
          a. Short term loans
          b. Long term loans
          c. Working capital loan
          d. Syndicate (project) loan
          e. Monitoring

   CRITERIA CHECKED FOR LOANS
   Major areas requiring focused attention of the analyst are:

   Financial Condition
   Which is reflected in the trends of:

         Net sales

         Gross sales

         Operating profits

         Net profits (at least for the last 3 years)

   Structural Liquidity
   It refers to the extent of liquidity usually available in the business, or which is the routine
   requirement of the borrower based on the nature of his periodically maturing liabilities.

   Industry/Business Of Operation
   The banker has to check that in which industry or segment of market the loan is being given
   this is important because if there were a recession in that industry for decades then it would
   not be feasible to invest in such a business. Certain traditionally stable industries are in
   Pakistan in which NBP feels satisfied while investing. For example if they feel satisfied by
   investing in ICI.

   Debt Equity Management
   Excessive reliance on debt, rather than plough back of profits or injection of fresh equity, to


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 maintain a healthy combination of debt and equity is thought with danger because ultimately
the debt servicing requirements place a heavy burden on its liquidity thereby its survival.

Asesst Management
Asset management involves the analysis of how productively the assets of the company are
being used. Sales and profitability can be measured with this.

Borrower’s Credit Worthiness
In order to get a complete picture of the borrower’s credit worthiness, inquiries will have to
be made about:

          His business.

          Trade experience.

          Assets and liabilities.

          His account with bank or with other banks.

          His financial statements and income tax returns.

          An interview with him will be necessary to elucidate or supplement the
           information that may have been collected.

Management
Before giving loan NBP also checks whether the management have the depth, skill and
experience. If the management is aggressive and adoptive to the new changes then it is most
likely that the banker may receive the loan back on due date

Securities
In case the borrower is not in a position to meet his obligations, there must be something else
to call back upon. So bankers take securities to have a resource to them to guard liquidity,
that is, security is an insurance against calamities.
In case of cash finance the customer have to give the same amount of money to the NBP as a
security for which it takes loan.

The bank provides the following securities to the customers.

Mortgage
Transfer of interest in movable property for securing the payment of money lend on existing
or future liability. The bank provides the following two types of mortgage.
        Registered mortgage
        Equitable mortgage


 Registered mortgage



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   Registered mortgage is provided on the residential property, commercial industrial
   property, raw plot, etc. A party can get registered mortgage if they provide the following
   documents to the bank.

          Title deed

          Non encumbrance (NEC)

          pit form (in case a constructed hose)

          Valuation certificate

          Affidavit

          Mortgage deed

          Personnel guarantee of mortgagor

          Power of attorney

          Legal opinion.
   Banks examine all these reports, and if they are correct then issue the mortgage to the
   party. The bank examines these reports to see that the property they want to mortgage is
   registered and is not already pledged. The bank also calculates the value of the property
   and the legal opinion of the customer in case of non-payment.

 Equitable mortgage
   Equitable mortgage is provided on the residential property, commercial industrial
   property, raw plot, etc.

          Title deed

          Non encumbrance certificate (nec)

          Pti form (in case a constructed house)

          Valuation certificate

          Affidavit

          Memorandum of deposit of title deed

          Personal guarantee of mortgagor

          Power of attorney

          Legal opinion
   In this mortgage a charge form bound the customer for any legal action in case of non-
   payment. In this type of mortgage hypothecation of stocks involves.




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Pledge
A pledge is an “a class security given to customers for stocks ware house, customs, and etc. it
is defined as actual delivery of movable property to lender as security for a loan. When the
customer makes the payment of the loan in full he can back his mortgage property from the
bank i.e. when full payment is made the stock is released.

PROCEDURE OF SANCTION OF LOAN

Any individual or company, who wants loan from NBP, first of all has to undergo the filling
of a prescribed form, which provides the following information to the banker.
        Purpose of loan
        Details of all firms or companies associated with business
        Name of proprietor/ partner/directors
        Accurate and up-to-date balance sheet and profit and loss statement of last two years
         of business
        Market report of the borrower repute
        Report from the bank if borrower has maintain his account with the bank
        CIB report
        Full details of existing limit and actual liability against the business
        Particular about the foreign exchange deposits and bills given by the borrower to the
         bank
        Memorandum and article of association in case of limited company
        Audited report of balance sheet and income statement of last two years

After checking all the securities, customer verification the manager done the following
tasks
               1. Preparation of credit proposal
               2. Prepare the about the customer
               3. Sanction of loan

Preparation of credit proposal
After formal application for the credit the party submits approval. For this purpose borrower
can use coarse paper or the form provided by the bank. Along with the application borrower
also submits the documents required by the bank. The bank manager evaluates the documents
provided by the borrower. He gets the party’s credibility report confidentially from the other
commercial banks. He checks the balance sheet and income against the assets in the
company. He also measures the percentage of owner’s equity.
Then he doses the ratios analysis of the company. If the party is involved in the export and
import business then the data of the last three years of this business is considered. The
manager of the bank also examine the project violability, the securities provided by the
debtor to the bank are evaluated by measuring their worth. In the case of pledge is assessed
by the manager while in case of new party manger checks from where the party is financing
for their business

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Prepare the Proposal about the customer
After preparing the proposal manger prepare the report about the customer. Report contains
the following information

          Name of the company

          Date of establishment

          Address

          Nature of business

          Branch office

          Worth of business

          Date

          Banker’s opinion

          Head cashier opinion

          Branch manger opinion
In case of partnership business following information are included in the report

          Partner, their share in capital, profit and loss

          Deed of partnership

          Partnership letter

          Turn over

          Net profit

          Personal property of partners

          Bank balance of partners

          Advance payment of suppliers

          Particular of machinery installed in the factory through financing

Incase of corporation/limited companies the following information are included

          Incorporation and commencement of company

          Sales offices

          Capital information

          Directors and their contribution to capital


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          Balance sheet with explanation and evaluation

          Net worth of the company
Sanction of Loan
If the limit of the loan lies within the power of manger then he sanction the loan otherwise
manger with the covering letter along with all necessary documents sends it to the concerned
sanctioning authority.


                 ACCOUNTS DEPARTMENT
The main function of account department of NBP is to maintain general ledger accounts and
after the business hours the function of the account officer is to close books. There are many
other important functions performed by accounts department of NBP so broadly they can be
categorized in three heads
      Routing of expenses vouchers
      Preparation of daily activity reports
      Preparation of weekly and monthly statements
      Preparation of statements for tax purpose

ROUTING of EXPENSES
Vouchers of all expenses and material purchases are routed out through this department. As
far as the expenses are concerned, they include the
      Heads of salaries paid to confirmed employees of bank
      Wages paid to employees that are on contractual basis
      Rent of the building
      Lease installment
      Insurance premium paid to insurance company for the insurance of vehicles and cash
       in safe and counter.
      Utility bill, which consists of courier, electricity, water and gas bills
      Medical expenses (reimbursed)

Voucher System
Voucher is written authorization sued in approving a transaction for recording and payment.
Voucher is a system, which is generally designed to provide strong internal control over the
transaction, which takes place during the business hours. It is prepared whenever
    A transaction takes place in any department of the bank.
    One debit and one credit voucher is prepared
    At the end of the day these vouchers are collected and recorded,




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 In bank two vouchers are used
   i.    Debit Voucher
  ii.    Credit Voucher

 Debit Voucher
 Different types of debit vouchers are used by the bank as an evidence of the transaction. For
 identification they are differentiated by using different colors.

 Debit vouchers are used in three cases:
        Whenever any expense is incurred
        For the preparation of two negotiable instruments i.e; MT, DD.
        When Account holder transfer money in his account then bank deduct charges on
         intercity and SC clearing. The account of the customer is debited with the amount
         deducted for services and debit voucher is prepared.

 Accounts department used debit voucher mainly for expenses while the other two purposes of
 debit voucher is used by the remittance department.

 The format of the debit voucher includes:
                 Name of the branch
                 Date
                 Branch No.
                 Account No.
                 Transaction code
                 Amount and other details (Narration)
 Credit Vouchers
 Different types of credit vouchers having different colors and format are used by the bank.
 There are three types transaction in which credit vouchers are used.

        When a depositor deposits any amount in his account because it is the liability of the
         bank therefore credit voucher is prepared.
        Any income received by the bank e.g . bank draft.
        For the preparation of PO
 Salary Structure
 Salary included

i. Bonuses
 These bonuses are credited after every six months i.e. June and December . These are first
 and second profit bonuses and are equal to one month’s basic salary.




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 Internship Report                                                National Bank of Pakistan


ii. Allowances
 Allowances included house allowance ,transport allowance and medial allowance.

iii. Provident fund
 Provident fund is provided to each employee on his retirement, contribution by employer and
 employee is 8.3%.

 DAILY ACTIVITIES REPORT
 The main function of this department is to check daily transactions whether cash, transfer of
 payments, billing, and clearing of all the departments. It includes the details of the following:
                  Loan transactions.
                  general ledger transactions
                  Foreign currency related transactions.
                  Fixed deposits transactions.
 Following procedure is followed in checking daily activities carried out in different
 departments of the branch.

        All the vouchers, advices both manual as well as computerized obtained for posting in
         the system of each department.
        All the vouchers and advices are further sorted in ascending and descending order for
         the sake of convenience in checking and tally information.
        It is checked whether or not the account number, instrument number, document
         number and amount appearing in words and figures are agreed with the information
         appearing in the computerized record.
        In case of changing or discrepancy informed to the concerned department.
        All the credit, debit and billing voucher bunched separately.
        The name of the branch, date of vouchering, title and number of vouchers is written
         on voucher must be cover authorized signature.
        All the above vouchers assist in case of any enquiry and audit.

 PREPARATION OF STATEMENTS
 Second major function of accounts department is the preparation of various statements. These
 statements are:

 Weekly statements:
 These weekly statements are sent first to NBP head office Karachi. These statements are
 generated on weekly basis for the purpose of sending it to Head Office. These also include:
                  Statement of affair
                  Deposit and advances position of the bank



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Monthly statements:
These monthly statements are sent first to NBP head office Karachi and then these statements
are sent to head office in consolidated form. All vouchers and statements signed and
approved by manager accounts or who has authority to sign on behalf of the bank and whose
signature appears in one of the bank’s book of specimen signature of a person who has
authority to sign internal vouchers and record extents of its authority will be made by the
counter manager. All vouchers prepared by different relative departments on computer.

These statements are prepared on monthly basis and also sent to Head Office (Qatar). These
include:
               Provisional statement of income and expenses. This statement adjusted for
                accruals and pre-payments.
               Monthly Balance Sheet and Income Statement
               Comparative Statement

In third and last step the following functions of accounts department of NBP are described as
follows:

    Approval of daily expenses voucher
    SBP balance
    Tax returns
    Budgeting
    Forward cover fee
    Debit balance calculation.
    Pay order /telegraphic commission transfer
    Deposit entry
    Depreciation
    Result/budget
    Head office report
    Trail balance /fax position
    Commitment return
    Source and uses
    Activity report
    Monthly assets and liability
    Liquidity 1,2,3,4,5, years
    Excise duty balancing
    Customers internal account statements
    Computer complete back up
    Quaterly statement size wise


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    FCY interest reporting
    FCY interest checking
    Services charges
    A/c to be dormant
    Letters to customer
    Classification of deposits
    Lists of deposits
    A/c opening and closing
    Staff loans
    A/c blocked and unblocked
    Monthly resident and non resident
    Zakat calculation

TAX PURPOSE STATEMENT
The department also prepares two statements for the purpose of paying tax on monthly and
annual basis. These statements are generated for the purpose of submitting to Central Board
of Revenue. These are:
      Statement of deduction of income chargeable under the head salary under Section 53
       (Tax deducted at source)
      Withholding Tax from the payments made to vendors, suppliers and other parties
       providing various services. The rate of withholding tax is as follows:
                Suppliers------------------------ 3.5%
                   For other parties------------- 5%

Data Entry
The next task after receiving the data is to enter that data in to a computer. The floppy
disk is directly inserted in the computer. The program in used is based on “COBOL”
language. This program is designed in away that it demand “Hash Value” value before
opening the floppy for further action this value serve the purpose of password or pin code
send by the branch on entering that value the data enter in to the computer. This computer is
attached with the terminal of central computer. The operator of that terminal takes the data
from the computer and converted it in to a text file through that terminal the data finally goes
to the central computer.

ACCOUNTING PROCEDURE IN NBP:

   1. Various departments use debit and credit vouchers for regarding the transactions.
   2. Accounting department receives the departmental journal from the departments
      together with all vouchers.
   3. Verify correction of total of all into departmental entries in departmental journal.
   4. Sort vouchers into general ledger a/c order debit separately from debit for each

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       account.
   5. From departmental journals add all debits and all credits for each general ledger
      account and write total for each accounting relative account and extend new balances.
   6. Prove debit and credit totals to department journal total. Write total obtained from
      machines list for each contingent accident in general ledger and up data balances.
   7. Date and sign general ledger and obtain signature of an officer .
   8. Place general ledger includes leaf binder in chronological order.


       BILLING & GOVERNMENT RECEIPT/
            PAYMENT DEPARTMENT
In this department all types of Government receipts i.e. Revenues, Taxes, Agriculture Tax,
Government Fees, EOBI Funds and Utility Bills are deposited. This way NBP is serving great
job of revenue collection and charges commission for providing services. This department is
performing following functions
              Payment of Provident Fund
              Payment of Benevolent Fund
              Payment of pension
              Collection of utility bills
              Collection of property taxes and Challans
              Collection of dues of education institution
              Payment of salaries
              Payment of zakat
The investment by the NBP in the provident fund for the benefit of their employees in 2008 is
Rs. 8507300/- and in pension schemes reached to Rs. 17738992/-

PAYMENT OF PROVIDENT FUND
Provident fund are maintained by many organizations for the benefit of their employees.
There are three types of provident fund granted by the organizations.
      Government provident fund: fund maintained by government institutions
      Recognized provident fund: fund maintained by private organizations fulfils the
       conditions maintained by law.
      Unrecognized Provident Fund: fund maintained by private organization which has
       not been granted recognition by law

BENEOVALENT FUND
The Funds are utilized for the relief of Government servants and their families by giving
financial assistance to the families of deceased Government servants; to Government servants
invalided out of service.

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COLLECTION OF UTILITY BILLS
NBP as an agent of the SBP collects bills from the general public and charge commission for
the services rendered. The commission on each type of bill is Rs. 8/- per bill. The branches
collect the utility bills and the proceeds are then send to head office through MT.

PAYMENT OF PENSION
Pension is the Post-retirement benefits that an employee might receive from some employers.
It is a payment, not wages, made regularly to a person who has fulfilled certain conditions of
service, reached a certain age. The date up to which pension is payable may vary depending
upon the employee services. It can be payable for Life, Death , Remarriage
Types of Pension
        i.   Employment based Pension
       ii.   State Pension
    iii.     Employees Old Age Benefits
Employment-based pensions
A retirement plan is an arrangement to provide people with an income during retirement
when they are no longer earning a steady income from employment. Often retirement plans
require both the employer and employee to contribute money to a fund during their
employment in order to receive defined benefits upon retirement.

The GOP has been introduced two types of pension are given to the employees on retirement
on the basis of the services which they have rendered.
         Retirement Pension: refers to pension granted upon 25 year of services
         Superannuation Pension: refers to pension granted upon 30 years of services

State pensions

Many countries have created funds for their citizens and residents to provide income when
they retire. GOP has been introduced pension for their employees who are working in the
State owned Institutions; e.g WAPDA, WASA, PIA etc
         Provincial Pension : granted to the employees who work under the government of
          Punjab.
         Central Pension: granted to the employees who are employed under the federal
          government. Recently GOP increased the pension of central employees by giving
          them an arial of 20% and 15%:
                    20% increase: For employees who have retired before 1999
                    15% increase: For employees who have retired after 1999
         Defensive Pension: It is given to the employees who work in forces e.g; PIA
          employees, Army, Navy, Police




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      Railway Pension: It is given to the employees who work in railway under the three
       head:
                    LHR: Lahore Railway Head
                    WS: Work Shop Head
               RHQ: Railway Head Quarter
Employees Old Age Benifit
Non government employees having 5 or more than 5 employees grant EOBI funds to their
employees. The contribution towards the fund by the employee is 5% of the basic pay scale
of employee and by the employer is 1% of the basic pay scale.




                                           71
      O    M   M   E R C I A L         E   T A I L

COMMERCIAL & RETAIL
                       A N   K I N G

    BANKING
In this section products offered by NBP are
discussed:
          Premium Aamadni Scheme

          Premium Saver Scheme

          Accounts Department

          President Karobar Scheme

          Saiban Scheme

          Advance Salary Scheme

          Cash Card Scheme

          Cash n Gold Scheme

          Kisan Dost Scheme

          Kisan Taqat Scheme

          Pak Remit
Internship Report                                              National Bank of Pakistan



 COMMERCIAL & RETAIL BANKING
National Bank of Pakistan serving following product lines:

Premium Aamdani Scheme Unprecedented Safety - Unprecedented Return
Monthly Income Scheme

A monthly income scheme introduced by National Bank of Pakistan for investors as well as
for general public. Incentives are available for investors providing finance facility against
these certificates and also allowed to customers to convert existing deposits into National
Bank Premium Aamdani Certificates.




      Earn up to 11% p.a.
      Minimum deposit of Rs. 20,000/-
      Maximum deposit of Rs. 5,000,000/-
      Investment period is 5 years
      Free Demand Draft, Pay Order and Cheque Book
      Convenience of NBP online Aasan Banking (for online banking customers)
      Free NBP Cash Card (ATM+Debit)
      Running finance facility up to 90%
      Profits paid on monthly basis



                          Period                    Profit Rates
                         1st year                     7.50%
                         2nd year                     8.50%
                         3rd year                     9.50%
                         4th year                    10.50%
                         5th year                      11%




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Internship Report                                            National Bank of Pakistan


Premium Saver Scheme                  your's saving reward
(PLS Saving Account)


   • Earn up to 7.25% p.a.
   • Minimum saving balance of Rs. 20,001/- & a maximum
       balance of Rs. 300,000/-*
   • Free NBP Cash Card (ATM + Debit)
   • Convenience of NBP Online Aasan Banking (for online banking customers)
   • Two debit withdrawals allowed in a month & no limit on number of deposit
       transactions
   • Profit calculated on monthly and paid on half yearly basis

President's Karobar Scheme Mera Apna Karobar
National Bank of Pakistan is providing financing under President Karobar Scheme with the
cooperation of government of Pakistan. The purpose of this scheme is to reduce
unemployment from the country. Main features are as under

      Minimum down payment, 10% of asset price (5% for PCO & Telecaster)
      Tenure of loans 1 to 5 years (for PCO 2 years)
      Grace period 3 months
      Maximum loan amount Rs. 200,000/-
      Age 18-45 years
      Mark-up (variable) 1 year KIBOR + 2.00% p.a.
      The customer will pay markup @ 6% p.a., rest will be borne by GOP*
      Life & disability insurance paid by GOP
      NBP’S loan available for:
           Utility Store,
           Transport
           PCO/Tele-centers




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Internship Report                                             National Bank of Pakistan


Procedure to Apply
      Customer to visit any NBP branch to obtain loan application form and scheme details.
       Application form could also be downloaded from the NBP web site. Photo copy of the
       form will also be accepted. Each form will cost Rs. 5. In case of photocopy or down-
       loaded form, form fees will be charged at the time of application submission
      Branch to provide details of the scheme along with the required documents to be
       submitted with the application form
      Customer to submit the application form along with all the required documents as
       well as the verification and the processing fees.
      The application form and all the relevant papers of the customer will be checked by
       the Branch staff and if found complete, application processing will commence
      If the case is approved then the customer will be informed accordingly and will be
       advised to deposit the Down payment and fulfill all the other product specific
       formalities
      Upon fulfillment of all the details and approval of the loan by the competent
       authority, Purchase Order in favor of vendor will be issued and a copy of the same
       will be given to the customer
      Delivery of the financed asset will be made directly to the customer by the NBP
       selected vender

Saibaan Scheme Open the Door to Your Dream Home
(Home Financing)

National Bank of Pakistan lending for construction of home to general public as well as
employees of government and non-government institutions. Main features of this scheme are
as under.
      Finance is available for:
               Home Purchase
               Home Construction
               Home Renovation
               Purchase of Land + Construction
      Period of repayment ranges between 30-20 years.
      Loan available up to a maximum of Rs. 15-20
       million.
      NBP provide markup choices to its consumer i.e. Variable Discount Rate, Fixed Rate.
      Minimum approval and disbursement timing.
      Limited to areas where there are no documentations, fee, resale and foreclosure
       related issues, so to protect the bank’s interest.




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Internship Report                                              National Bank of Pakistan


Mark Up Rates
Variable Rate Option: SBP Discount Rate with (+2%) with12 months re-pricing

Processing Fee
Government Employees: Rs. 500/- irrespective of financing amount.
For Others :
                    Financing below Rs. 1 Million                Rs. 1000

                    Financing between Rs. 1 to 4 Million         Rs. 3000
                    Financing above Rs. 4 Million                Rs. 6000
Eligibility
      Balance Transfer Facility (BTF)
      Must be Pakistani Resident (National)
      Aged between 21 and 65 years at the time of application/disbursement of loan
      Salaried Person, Self-employed professionals and businessmen
      Property located in NBP approved localities.
      Service duration: Two years for salaried class Three years for self-employed/business
       class.

Advance Salary Scheme Personal Loan
Take up to 20 times of Your Take Home Salary

NBP Advance Salary , the leading personal loan product of the country, is maintaining its
inimitability ever since it was launched. This was only possible due to its swift growth and
remarkable loan disbursement of over 138 billion.

Employees can avail up to 20 net take home salaries with easy repayment installments. It's
hassle free acquisition with no prior formalities and easy availability in a short turn round
time are attributed as the most distinguishing features of the product. The product is offered
countrywide. It's salient features are;

      Easy installments of 1 to 60 months at your choice
      Take upto 20 advance salaries
      Quick processing and fastest disbursement
      The product is for permanent employees of Government, Semi
       Government and Autonomous bodies receiving salaries through NBP
       accounts




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Internship Report                                               National Bank of Pakistan


                            Permanent Employees of Govt., Semi-Govt., Autonomous,
 Eligibility                Semi Autonomous, Local & other bodies who are maintaining
                            their Salary A/Cs at NBP.

 Repayment                  Direct deduction from Salary A/C

 Maximum Loan Amount        Rs. 490,000/-
                             Employer will provide undertaking that borrower’s Salary and
                             end of service benefits will route through his/her Salary A/C
                             maintained at NBP during the tenure of the loan and his/her
                             end of service benefits are at least equal to the amount of
 Security                    Advance Salary required.

                             Hypothecation of Consumer durables owned by the borrower.

                            Three (3) Undated Cheques
 Max. Repayment Period      5 years (60 months)

 Advance in terms of # of net
                              Up to 20 net take home salaries
 take home salaries

 Markup Rate                SBP Discount Rate + 5%

 Processing Fee             1% of Loan Amount

 Verification Charges       Rs 500/-
 Life Insurance             No Insurance of any kind.

 Documentation Charges      at actual

 Contact                    Your Salary disbursing NBP Branch.

                            At the time of approval and disbursement the applicant’s
 Remaining Service Age      remaining service age should be 6 months after maturity of the
                            loan

 Debt Burden                50%

 Minimum net take home
                            no minimum take home requirement
 salary




                                             78
Internship Report                                             National Bank of Pakistan


Cash Card Scheme one card does it all
ATM + Debit Card

NBP Cash Card is a 24-hour direct access ATM/ Debit card to bank account, which lets pay
directly from the account as an alternative payment method to cash. The transaction is
authorized and processed by entering PIN. The NBP Cash Card holders are able to transact at
any of the 4000 + Merchants where Orix logo is displayed and can withdraw cash from NBP,
1-Link & M-NET ATM’s across the count.




      Use it as an ATM in any of the ATM’s in Pakistan
      Use it as Debit Card in any of the outlets with ORIX POS machine
      Cash withdrawal up to Rs. 20,000/- per day
      Account Balance Enquiry
      Mini Statement (Only at NBP ATM)
      PIN Change facility (Only at NBP ATM)

Advantages
      Customers don’t need to carry a lot of cash with you every time you go out.
      Secure and Safe transaction.
      Account Information on tips (like: Mini Statement, Balance Inquiry, Utility Bill
       Payment etc.)
      Enable To Withdraw Cash From 1-Link ATMs / MNET ATMs.
      Enable to make purchases round 4000 POS (Merchants) Countrywide including
       2500+ POS in Karachi.
      No Card Issuance Fee for first 12 Months


Investor Advantage Scheme easier financing ,profitable trading
Financing Facility for Stock / Retail Investors

      Comfortable and secure environment for trading
      NBP financing at very easy terms requiring minimum documentation
      Minimum turn around time
      No security requirement from the customer except for the customer's equity

                                              79
Internship Report                                                 National Bank of Pakistan

      Customer's equity freely available for investment.
      Equity acceptable in cash or approved share.

Eligibility
      Pakisani National with vaid computerized national ID Card
      Over 21 years of age
      An account with NBP designated Branch
      Equity in the form of cash or NBP approved shares
      No default with any financial institution
Application Procedure
      Obtain facilty application form the NBP Marginal Desk at designated branches
      Fill in the application form and submit it to the branch
      On application approval, deposit equity as cash in the margin financing account at the
       bank. Alternatively NBP approved shares can also be deposited in the NBP CDC
       Account (CDC A/c No. 2345)
      Start trading through comfortable & friendly trading centers establishment for you (In
       collaboratino with Taurus Security Limited a subsidiary of NBP)
      Trading limit available for the amount of equity + bank financing.

Cash n Gold Scheme encash and meet your needs
Ready Cash Against Gold

With NBP's Cash n Gold, provide facility for ready cash against idle gold jewelry with no
minimum limit and provide extra benifit. The main features are:




      Facility of Rs. 10, 000/-against each 10 gms of net weight of Gold Ornaments
      No maximum limit of cash
      Repayment after one year
      Roll over facility
      No penalty for each repayment
      Rate of mark-up 13% p.a.


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Internship Report                                              National Bank of Pakistan

      Weight and quality of gold to be determined by NBP's appointed schroffs

Kisan Dost Scheme Agriculture Made Easy
Agriculture Farming Program

National Bank of Pakistan is lending in agricultural field. National Bank of Pakistan is
lending farmers for development of agriculture sector of the country under certain terms and
conditions.

NBP provide loan to farmers for production, development purposes, for purchase of tractors,
for installation of tube wells, for purchase of agricultural instruments, micro loan, for
construction of godwon, for construction of fish pond, for development of livestock and
farming, for mil processing, for cold storage, bio-gas plants.

      interest @ 14.5 percent per annum
      Quick & easy processing
      Delivery at the farmer’s doorstep
      Technical guidance to farmers
      Wide range of financing schemes for farmers
      Finance facility up to Rs. 500,000/- for landless farmers against personal guarantee
      Financing available against pass book, residential/commercial property, gold
       ornaments and paper security
      Loan facility on revolving basis for three years (renewable on yearly basis without
       documentation and approval)

Kisan Taqat Scheme promise of prosperity
Dairy Farm Scheme

National Bank of Pakistan is providing loans for the dairy farms and for the development of
the livestock and dairy farms.

      NBP facilitates with livestock experts
      Less documentation and easy to repay
      Available at the next door step
      Scheme is available in more than 50 branches of
       NBP




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Internship Report                                              National Bank of Pakistan


PakRemit Scheme
NBP's Internet Based Home Remittence Service

Product Information
Pakremit is an internet based Home Remittance Service. This service is available to U.S.
residents for sending money to their family and friends in Pakistan. One must have a valid
US Dollar account with a U.S. bank or a US Dollar credit or debit card in order to remit funds
through this channel.

Remitters in USA can log on to our user friendly website, www.pakremit.com and easily
remit funds to Pakistan from the comfort of their homes, in a matter of minutes. The service
is fully secure with advance encryption application and is available for use 24 hours a day, 7
days a week. Fees and exchange rate have been set at competitive levels and the remitters
have the ability to track delivery of funds as well.




Process:
      Remitters log on to www.pakremit.com and after completing the registration process,
       are able to remit funds. The whole process takes a few minutes.
      Funds in Pak Rupees can be sent to beneficiaries, having an account with any bank in
       Pakistan, including NBP. While funds are credited directly to beneficiaries
       maintaining accounts with NBP, a pay order or demand draft is couriered to other
       banks for their customers. Pay order or demand draft can also be couriered directly to
       the beneficiary’s office or home, if requested by the remitter.
      Funds in US Dollars can be sent only to a Beneficiary maintaining a US Dollar
       account with one of NBP’s Foreign Exchange Branches. Click here for details of NBP
       Foreign Exchange Branches.

   USPs ( Unique Selling Propositions)
        Convenient and Fast
        Reliable and Secure
        Available 24 x 7


NBP Protection Shield Scheme Life is Precious
Personal Accident Insurance

Insurance Coverage- In case of Accidental Death (Including death due to Riots, Strikes, Civil
commotion, Acts of Terrorism and Natural Calamities like Flood, Earth Quake, Cyclones etc)
provided that the insured is not directly involved in these activities



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Internship Report                                                National Bank of Pakistan


                      Coverage of Rs. 200,000/- for Rs. 20/- per month




Accident means unintentional, unfortunate or a harmful event by chance or apparent cause.

Accidental Death means death due to accidental injuries, but not illness.

Insured Person means a National Bank of Pakistan PLS account holder, aged between 18
years and above, and whose premium is deducted & details are reported to the selected
insurance company by NBP.

Policy means Group Personal Accident Policy dated 26/09/05 executed between NBP and
Insurer.

Principal Sum means the amount stated in the Policy’s Schedule of Benefits as respects each
Insured Person.

Features
      No documentation
      No medical required
      Premium Auto Debit facility & choice of deactivation
      Coverage includes death due to:
      Natural Calamities e.g. Earthquake, Flood, Cyclone etc.
      Accident
      Riots
      Civil Commotion
      Strikes
      Acts of Terrorism
Eligibility
      NBP PLS account holders
      18 years and above




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Internship Report                                               National Bank of Pakistan


NBP Student Loan Scheme
Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002 budget
speech, a STUDENTS LOAN SCHEME (SLS) for Education was launched by the
Government of Pakistan in collaboration with major commercial banks of Pakistan (NBP,
HBL, UBL, MCB and ABL). Under the Scheme, financial assistance is provided by way of
Interest Free Loans to the meritorious students who have financial constraints for pursuing
their studies in Scientific, Technical and Professional education within Pakistan.

The Scheme is being administered by a high powered committee comprising Deputy
Governor, State Bank of Pakistan, Presidents of the commercial banks and representative of
Ministry of Finance, Government of Pakistan.

Eligibility
Under the scheme the students are eligible to apply for loans provided: He/She has obtained
admission on merit through normal course/procedure in the approved Universities/Colleges
of the public sector mentioned hereunder. He/She falls at the time of admission within the age
bracket of:-
         For Graduation                    Not exceeding 21 Years
         For Post-Graduation               Not exceeding 31 Years
         For Ph.D                          Not exceeding 36 Years

      He/She has secured 70% marks in the last public examination.
      He/She is unable to pursue studies due to financial constraints.

Repayment
The maximum period of repayment of loan is 10-Years from the date of disbursement of first
installment. The borrower shall repay the loan in monthly installment after six months from
the date of first employment or one year from the date of completion of studies, which ever is
earlier.




                                             84
         I N A N C I A L      N A L   Y S I S

    FINANCIAL ANALYSIS
In this section topics are:
        Horizontal Analysis

        Vertical Analysis

        SWOT Analysis

               Strength

               Weaknesses

               Opportunity

               Threats
Internship Report                                                 National Bank of Pakistan



                  FINANCIAL ANALYSIS
The financial statement of any organization shows the results of its operation and its position in
business. It is a process which involves reclassification and summarization of information
through the establishment of ratios and trends. The overall objective of financial statement
analysis is the examination of a firm’s financial position.

Horizontal analysis
Through this analysis we can check that what are changes with in years in the items of balance
sheet and profit and loss account. Last year become base for next year. And change can be easily
analyzed.

Vertical analysis
In vertical analysis of balance sheet the percentage of each item of statement is calculated to total
and then the change in the percentages is checked with in years.

                       Horizontal Analysis of Balance Sheet
                                                      2008            2007         Percentage
                 ASSETS                                                               change

Cash balances with other treasury                106503756         94873249           12.3%
banks

Balances with other banks                         38344608         37472832           2.33%

Lending to financial institutions                 17128032         21464600          (20.92%)

Investments                                      170822491         210787868          (19%)

Advances                                         412986865         340677100          21.2%

Operating fix assets                              24217655         25922979           (6.6%)

Deferred tax assets                               3204572               -                -

Other assets                                      44550347         30994965          43.73%

Total assets                                     817758326         762193593           7.3%



                                                 86
Internship Report                                               National Bank of Pakistan


                 LIABILITIES                   2008                2007         Percentage


  Bills payable                           10219061               7061902          44.7%

  Borrowing from financial                40458926               10886063          272%
  institutions

  Deposits & other accounts               624939016             591907435          5.6%

  Subordinated loans                             -                   -               -

  Liabilities against assets of leasing        25274              33554          (24.7%)

  Deferred tax liabilities-net                   -               5097831             -

  Other liabilities                       39656831               30869154         28.5%

  Total liabilities                       715299108             645855939         10.75%

  Net assets                              102459218             116337654        (11.93%)



                                                                                  Percenta
   REPRESENTED BY                               2008                2007
                                                                                  ge

   Share capital                                     8969751          8154319        10%

   Reserves                                          19941047        15772124      26.43%

   Unappropriated profit                             52456204        45344188       15.7%

                                                     81367002        69270631       17.5%

   Surplus on revaluation of assets                  21092216        47067023      (55.2%)

                                                 102459218          116337654      (11.93%)




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Internship Report                                           National Bank of Pakistan


               Horizontal Analysis of Profit And Loss Account

    PARTICULARS                             2008             2007          Percentage

    Mark-up/return/interest earned               60942798     50569481        20.5%


    Mark-up/return/interest expenses             23884768     16940011         41%


    Net mark-up/ interest income                 37058030     33629470        10.2%

    Provisions against non performing            10593565      4723084        124.3%
    advances
    Provision for/(reversal of)                   373249       (40248)       1027.4%
    diminution in the value of investment

    Provision against off balance sheet            4000             -            -
    obligations

    Bad debt written off directly                   -           39899            -

                                                 10970814      4722735        132.3%


    Net Mark-up/interest Income after            26087216     28906735        (9.75%)
    provisions

    Non-Mark-up/interest Income

    Fee,commision and brokerage income           7925370       6781683         17%

    dividend income                              2878932       3263246        11.8%


    Income from dealing in foreign               3969057       1042827         281%
    currencies

    Gain on sale and redemption of                395427       2341690       (83.11%)
    securities-net



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Internship Report                                           National Bank of Pakistan


    Unrealized/(loss) on revaluation of           1707         (31964)         105%
    investments
    classified as held-for-trading

    Other income                                1245369        147363          745%

    Total Non-Mark-up/interest Income           16415862      13544845        21.2%

                                                42503078      42451580        0.12%
    Non-Mark-up/interest expenses

    Administrative expenses                     18171198      14205911         28%

    Other provisions/write offs                  747521        168027          345%

    Other charges                                583361         17141         3303%
    Total Non-Mark-up/interest expenses         19502080      14391079        35.5%
                                                23000998      28060501        (18%)
                                                    -              -             -
    Extraordinary/unusual items                 23000998      28060501        (18%)

    Profit Before Taxation

    Taxation-current                            11762650       8311500        41.5%

           -prior years                             -          391497            -
           -deferred                            (4220242)      323731         1403%
                                                7542408        9026728        (16.4%)
    Profit After Taxation                       15458590      19033773        18.8%

    Un-appropriated profit brought              45344188      32074677        41.4%
    forward

    Transfer from surplus on revaluation         130456         39007          234%
    of fix assets

    Profit available for appropriation          60933234      51147457        19.13%




                                           89
Internship Report                                             National Bank of Pakistan


                      Vertical Analysis of Balance Sheet

ASSETS                              2008            Percentage    2007           Percentage

Cash balances with other            106503756         13.02%        94873249        12.45%
treasury banks

Balances with other banks            38344608          4.7%         37472832        4.92%

Lending to financial institutions    17128032          2.1%         21464600        2.82%

Investments                         170822491          21%         210787868        27.7%

Advances                            412986865         50.5%        340677100        44.7%

Operating fix assets                 24217655           3%          25922979         3.4%

Deferred tax assets                  3204572           0.4%              -                -

Other assets                         44550347         5.45%         30994965        4.07%


LIABILITIES                         2008            Percentage    2007           Percentage


Bills payable                        10219061         1.43%         7061902          1.1%

Borrowing from financial             40458926          5.7%         10886063         1.7%
institutions

Deposits & other accounts           624939016         87.4%        591907435        91.65%

Subordinated loans                         -             -               -                -

Liabilities against assets of         25274           .0035%          33554         .0052%
leasing

Deferred tax liabilities-net               -             -          5097831         0.79%


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Internship Report                                          National Bank of Pakistan


Other liabilities                39656831           5.5%         30869154           4.78%




    REPRESENTED BY              2008          Percentage       2007       Percentage


Share capital                 8969751          11.02%        8154319         11.77%

Reserves                      19941047          24.5%        15772124        22.77%

Unappropriated profit         52456204          64.5%        45344188        65.46%




                Vertical Analysis of Profit And Loss Account



      PARTICULARS               2008          Percentage      2007       Percentage


Mark-up/return/interest       23884768          39.2%       16940011        33.5%
expenses


Net mark-up/ interest         37058030         60.81%       33629470         66.5
income
Provisions against non        10593565          17.4%        4723084        9.34%
performing advances
Provision for/(reversal of)
diminution in the value of     373249           0.61%        (40248)        (0.08%)

investment



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Internship Report                                      National Bank of Pakistan


Provision against off           4000          0.007%        -             -
balance sheet obligations

Bad debt written off             -              -         39899         0.08%
directly
                              10970814         18%       4722735        9.34%
Net Mark-up/interest          26087216         43%      28906735       57.16%
Income after provisions
Non-Mark-up/interest
Income
Fee,commision and             7925370          13%       6781683       13.41%
brokerage income
dividend income               2878932         4.72%      3263246        6.5%
Income from dealing in        3969057         6.51%      1042827        2.1%
foreign currencies
Gain on sale and               395427         0.65%      2341690        4.63%
redemption of securities-
net
Unrealized/(loss) on            1707          0.003%     (31964)      (0.063) %
revaluation of investments
classified as held-for-
trading
Other income                  1245369         2.04%      147363         0.29%
Total Non-Mark-               16415862         27%      13544845        26.8%
up/interest Income
                              42503078         70%      42451580       83.95%
Non-Mark-up/interest
expenses
Administrative expenses       18171198         30%      14205911        28.1%
Other provisions/write offs    747521         1.23%      168027         0.33%
Other charges                  583361         0.96%       17141        0.034%
Total Non-Mark-               19502080         32%      14391079        28.5%
up/interest expenses
                              23000998        37.74%    28060501        55.5%
Extraordinary/unusual            -              -           -             -
items

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Internship Report                                                National Bank of Pakistan


Profit Before Taxation              23000998         37.74%        28060501        55.5%

Taxation-current                    11762650          19.3%        8311500         16.43%
        -prior years                    -                -          391497         0.77%
        -deferred                   (4220242)        (6.92%)        323731         0.64%
                                    7542408           12.4%        9026728          18%
Profit After Taxation               15458590          25.4%        19033773        37.64%


Un-appropriated profit              45344188          74.4%        32074677        63.43%
brought forward

Transfer from surplus on             130456           0.21%          39007         0.08%
revaluation of fix assets on
account of incremental
depreciation

Profit available for                60933234          100%         51147457       101.14%
appropriation




RATIO ANALYSIS
Ratio analysis includes method of interpreting financial ratios to access the performance of any
organization. The basic input to ratio analysis is profit and loss account and balance sheet. Ration
analysis of any organization is in interest of its creditors, employees, shareholders and of its
management as well. Both existing and prospective customer are interested in the ratio analysis
of organization

Ratio analysis is a valuable aid to management in the discharge of its basic functions such as
planning, forecasting, control etc. these ratios describe the relationship with the functioning of
the business and helpful for controlling cost of goods manufactured. The great advantage of ratio
analysis is that it reduces raw data of widely varying magnitude to a common comparative basis.
Thus, ratio analysis is the most meaningful to compare financial information regarding a giving
company.




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Current Ratio
Formula:

  Current ratio=     Current assets
                    Current liabilities


                                           Year 2007               Year 2008

        Current assets                     153810681               161976396

        Current liabilities                481381235                53667962


        Current ratio                           .3195                 .3035

Interpretation

An increase in the current ratio represents improvement in the liquidity position of
bank while a decrease in the current ratio indicates that there has been deterioration in
the liquidity position of the bank. Current ratio in 2008 is decreasing as compared with
2007. It should be improved.

Working Capital
Formula:

Working Capital=current assets-current liabilities



                                           Year 2007               Year 2008

        Current assets                     153810681               161976396
                                           481381235               533667962
        Current liabilities
        Working Capital                   (327570554)             (371691566)


Interpretation

Working capital should increase which will show that there is increase in current assets.
But here working capital is decreasing in 2008 as compared with 2007. it should be
improved.


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Internship Report                                           National Bank of Pakistan


Total asset turnover
Formula:
    Total asset turnover= sales
                         Total assets



                                             Year 2007               Year 2008

        Sales                                50569481                 60942798

        Total assets                        762193593                 817758326


        Total asset turnover                  0.0663                   0.0745


Interpretation
Higher the total asset turnover the more efficiently its assets have been used. This
measure is probably of greatest interest to management, because it indicates whether
the efficient operations have been financially efficient. Total asset turnover is increasing
in 2008 as compared with 2007 which is a good sign.
Debt Ratio
Formula:

Debt Ratio=Total liabilities
            Total assets



                                             Year 2007               Year 2008

        Total liabilities                   645855939                715299108

        Total assets                        762193593                817758326

        Debt ratio                            84.74%                 87.47%




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Interpretation

The debt ratio measures the proportion of total assets by the creditors. The greater this
ratio the greater the amount of other people’s money being used to generate profits. The
higher this ratio greater the degree of indebtedness an more financial leverage. NBP’s
debt ratio is increasing in 2008 as compared with 2007 which is not favorable.

Time interest earned ratio

Formula

        Time interest earned ratio=Earning before interest and taxes
                                           Interest



                                             Year 2007                Year 2008

        Earning before interest              42451580                 42503078
        and taxes
        Interest                             14391079                 19502080

        Time interest earned                      2.95                  2.18
        ratio

Interpretation

Time interest earned ratio sometimes called interest coverage ratio, measure the ability
to make contractual interest payments. The higher its value the better able the
organization is to fulfill its interest obligations. Time interest earned ratio is decreasing
in 2008 as compared with 2007. It should be improved.

Gross profit margin
Formula

Gross profit margin= Sales-cost of goods sold
                             Sales

       = Gross profit
             Sales




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                                            Year 2007              Year 2008

        Gross profit                        33629470               37058030

        Sales                               50569481               60942798

        Gross profit margin                      66.5%               61%



Interpretation

Gross profit margin measures the percentage of each sales rupee remaining after the
organization has paid for its goods. The higher the gross profit margin, the better (that
is the lower the relative cost of merchandise sold). Gross profit margin is decreased in
2008 as compared with 2007. It should be improved.

Operating profit margin
Formula
Operating profit margin= Operating profit
                              Sales



                                            Year 2007              Year 2008

        Operating profit                    42451580               42503708

        Sales                               50569481               60942798

        Operating profit                         83.95%              69.74%
        margin

Interpretation

Operating profits are pure because they measure only the profits earned on operations
and ignore interest, taxes and preferred stock dividend. A higher operating profit
margin is preferred. Operating profit margin is decreased in 2008 as compared with
2007. It should be improved.




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Net profit margin
Formula

Net profit margin= Earning available for common stock holder
                                   Sales



                                        Year 2007               Year 2008
        Earning available for
        common stock holder              19033773               15458590

        Sales                            50569481               60942798

        Net profit margin                    37.64%              25.4%



Earning per share
Formula

Earning per share= Earning available for common stock holder
                   No. of shares of common stock outstanding



                                        Year 2007               Year 2008
        Earning available for
        common stock holder              19033773               15458590

        No. of shares of
        common stock                      815500                  897190
        outstanding
        EPS                                  23.34               17.23



Interpretation

Earnings per share (EPS) are the earnings returned on the each share. Higher eps is
good but here EPS is decreased in 2008 as compared with 2007 which is not good.




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Return on total assets
Formula:

Return on assets= Earning available to common stock holder
                            Total assets



                                          Year 2007               Year 2008
         Earning available for
         common stock holder              19033773                15458590

         Total assets                     762193593              817758326
         EPS                                2.5%                   1.9%


Interpretation

Return on assets often called the return on investment. It measures the overall
effectiveness of management in generating profit with its available assets. The higher
the firm’s return on total assets, the better. ROA in 2008 is decreased as compared with
2007. It should be improved.
Return on common equity
Formula
Return on common equity= Earning available to common stock holder
                                  Common stock equity



                                          Year 2007               Year 2008
         Earning available for
         common stock holder              19033773                15458590

         Common stock equity              69270631                81367002
         ROE                                27.5%                  19%


Interpretation

ROE measures the return earned on common stockholders investment. The better the
ROE, the better. ROE is decreased in 2008 as compared with 2007. It should be
improved.

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Book value per share of common stock
Formula
BV per share of common stock=          common stock equity
                                No. of shares of common stock outstanding



                                        Year 2007              Year 2008
         Common stock equity
                                         69270631               81367002


         No. of shares of                 815500                 897190
         common stock
         outstanding
         BV per share of                      85                   91
         common stock

Interpretation

Book value per share of common stock is increased as in 2008 as compare with 2007,
which is a good sign.




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                          SOWT ANALYSIS
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats
SWOT analysis is careful evaluation of an organization’s internal strengths and weakness as
well as its environment opportunities and threats. In SWOT analysis the best strategies
accomplish an organization’s mission by:
        Exploiting an organizations opportunities and strength
        Neutralizing it threats
        Avoiding or correcting its weakness
SWOT analysis is one of the most important steps in formulating strategy using the
organization mission as a context, managers assess internal strengths distinctive
competencies and weakness and external opportunities and threats. The goal is to then
develop good strategies and exploit opportunities and strengths neutralize threats and avoid
weaknesses.

STRENGHTS
   NBP one of the largest financial institutions of Pakistan with eight million of customer
    base NBP holds 24.6% share of time and demand deposits in the country. Local currency
    deposits comprise 67% of bank's total deposits while foreign currency deposits account
    for the rest.
   NBP has an extensive domestic branch network of 1254 branches located all over
    Pakistan. The Bank also has a presence in 23 international locations including the USA,
    United Kingdom, Europe and the Far East.
   NBP's total assets stood at Pak Rs.370 billion on December 2008. This included total
    earning assets of about Pak Rs.268 billion with gross loan portfolio of Pak Rs.140 billion.
    The bank also has an investment portfolio of Pak Rs.91 billion, which comprises treasury
    securities, corporate bonds, shares and other securities.
   NBP cash provision as percentage of non performing loans equal to 60% this coverage
    factor for the non performing loans is the highest amongst the nationalized commercial
    bank.
   NBP is working as right arm government of Pakistan as it is responsible for all claims of
    government for recovery as well as payment. All depositor of NBP are in relief that their
    money security is guaranteed by government of Pakistan.
   It acts as an agent of the Central Bank wherever the State Bank does not have its own
    Branch.
   The working condition in the NBP branch here is very conductive and favorable for better
    output. The informal environment affects the performance of the employees in a positive
    way.
   Performing social responsibilities and claiming “The Nation’s Bank”
   Disbursing Salaries and Pensions to the Government employees and earning high profit
    on NBP-Advance Salary Loan Scheme·


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   Earning commission from SBP on Government transaction
   Facing never problem of cash/currency being its Chest and Sub-chest
   Holds largest deposit base in the market share in terms of number of accounts
   Leading bank in agriculture financing amongst commercial banks with the market share
    of 15%
   Helping in earning of foreign exchange, remittances and leading agent of Western Union
    Money Transfer NBP has decided to diversify the fund base by investing in capital
    markets not only in Pakistan but also in the foreign countries.



WEEKNESSES
   Lowest Internal Control and Compliance System, SBP rated “Marginal” which is
    alarming for the Bank.
   Unsatisfactory corporate culture of the Bank
   Physical environment and atmosphere compare to other banks is not meet the standard
   Less number of Online Branches
   Ineffectively use of technologies i.e. Information technology
   Shortage of staff- per employee customer is very high side
   Technical education and training of staff is insufficien The workload in NBP is not evenly
    distributed and the workload tends to be more on some employees while others abscond
    away from their responsibilities, which server as a demotivation factor for employees
    performing above average work.
   In NBP the individual difference have strong impact on the organization’s performance
    due to the wrong criteria of selection of the employee. So with the passage of time
    individual differences are increasing which are undermining the good will of the
    organization.
   Uncertainly among the employees due to threat of downsizing

OPPORTUNITIES
   Being a Government Bank NBP having wide scope in economic market.
   Trust and reliability creates chances to enhance deposit and profitability.
   Its vast network of domestic and overseas branches can help to expand business.
   Bank’s deposit is increasing rapidly so there is a great opportunity to enhance its
    investment and financing.
   Being an agent of State Bank of Pakistan it can play vital role in local economy.
   Earning commission/exchange on Government transactions.




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   Amongst highest bank is Asia, NBP further expand its services proudest and earn more
    profit.
   The bank is reshaping its portfolios by investing into higher area of growth developing
    core competing as a result to get maximum return.
   I.T and HR are important factors for development in any organization, NBP continue
    struggle to achieve this target.

THREATS
   SBP penalties due to low internal control and compliance.
   Government, SBP and Prudential Rules and Regulations.
   Schedule banks and Multinational/International bank’s profit rates.
   Its staff switching over to other private banks due to more facilities.
   Other bank’s charming atmosphere and relaxation in documentation.
   SBP rated just “Marginal” in respect of System & Control which is alarming for the Bank
    to survive its license.
   NBP staff code of ethics and practices.
   High number of complaints regarding staff behavior.
   Government Schemes, Government Revenue Collection, Government.
   Payments and FBR Collections create heavy workload.




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               O R   K        E R F O   M   E D

       WORK PERFOMED
In this section topics are:
        Lesson learned and Personal experience

        Branch Profile

        Introduction of branch & Establishmemt

        Branch Hierarchy

        Training Departments

              Remittance and Account opening

              Deposit Section

              Pension Section

              Cash Section

        Use of Information Technology

        Issues Faced by the Branch
Internship Report                                          National Bank of Pakistan




       LEARNING AND PERSONAL
             INTERNSHIP
            EXPERIENCE




          In Hailey College of Commerce, Quaid-e-Azam Campus, the
          students are required to undergo for four weeks of internship to
          complete the B.com (Hons.) degree. For this reason, I carried out
          my internship in National Bank of Pakistan, Samanabad Branch,
          Lahore and tried to prepare my report.



          This branch was founded in July 1962. From last many years this
          branch is not only achieving its targets of deposits and advances
          rather it remains above the targets. According to the financial record
          of last year this branch was earning more than 20% of total profit of
          the region.



          Every year the targets of this branch are increasing by 20 to 25
          percent but still there is a potential in the market to meet these
          additional targets. This branch is performing its functions in
          traditional style and most of the work is done manually but in spite
          of all challenges and lack of resources the branch is now trying to
          make most of its activities computerized.



          During the session of four weeks I work in different departments on
          weekly basis. The employees of the bank help me and provide me
          all required information. I studied major functions, objectives and
          future planning. I worked in different departments during working as
          an internee which proves to me very beneficial and me able to get
          basic concepts of banking operations.


                                           105
          After joining the bank for internship I got the practical exposure of
          all the banking activities. The mechanism is not too simple to
          understand easily but still lots of complexities have been solved. All
          the staff of the branch provided me their time and information which
Internship Report                                  National Bank of Pakistan



                    BRANCH PROFILE
Name of Branch                 National Bank of PakistanSamanabad Branch

Region                         Lahore

Establishment                  1967

Region Code                    0015

Branch Code                    0449

                               National Bank of Pakistan

                               Samanabad Branch
Address
                               Poonch Road

                               Lahore

Phone Number                   042-7579464

Fax Number                     7536555

Name of Manager                Abdullah Munir

                               15
Number of Working Staff
                               (Including contractual & outsourced staff)

Number of Non- Working Staff   04


Branch category                II




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INTRODUCTION OF BRANCH AND ESTABLISHMENT
The branch was established in 1967 in order to cope the financial needs of the people. As it is
an agent of the State Bank of Pakistan so its main objective is to provide credit in order to
fostering growth in all the sectors so with the view of this Samanabad Branch of National
Bank of Pakistan came into existence. From last many years this branch is not only achieving
its targets of deposits and advances rather it remains above the targets.

At present here Chief Manager is Mr. Abdullah Munir and operation manager is Mr.
Muhammad Rafi. It is a branch II category working with 15 employees. Mr. Aasir Butt, in
addition to perform his duties, also acts as a second manager in case when chief manager is
not available due to any unfavorable reason.

BRANCH HIERARCHY

                                     RAGANAM



                               RAGANAMPA AMAANAG



                                   ALAAHSNLBRAGA


                                  OFFICER GRADE - I



                                 OFFICER GRADE - II


                                 OFFICER GRADE - III


                                      MESSENGER


                                         PEON


                                       SWEEPER




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 Internship Report                                                National Bank of Pakistan


 DEPARTMENTS OF TRAINIG
 During the internship period of 4 weeks I got training in various departments in the branch.
 This branch do not deals with foreign exchange and online bank but foreign remittance is
 carried out. The branch is divided into two parts:
    1. Cash Department
    2. Operations Manager Department
    3. General Banking Department
        General banking is divided into following sections;
             i. Remittance and Accouts Opening Section
            ii. Deposit department
           iii. Pension
           iv. Establishment

  But I did my internship in deposit, remittance, pension and cash sections. The computer
 system was not allowed to me due to the secrecy and rules of the management. A brief
 introduction of the departments in which I performed my work is as under:

1. Genearal Banking Department

 i. Remittance and Accounts Opening Section
 It is transfer of money payable at a certain place within or outside the country through various
 way i.e. Bank draft, Telegraphic Transfer, Mail Transfer, Coupons, Govt. Draft. It works both
 inward and outward. It was my first department. Mr. Rana Ahsaan-ul-Haq is the controller of
 section who is a very competent person. Duties performed by him are;
             Issuing of demand draft
             Issuing of Mail transfer
             Issuing of Telegraphic transfer
             Issuing of payment order
             Issuing of call deposit
             Closing of government collections
             Intercity and Short Credit Clearing
             Accounts opening
             Issuance of cheque books
             Handling of lockers
             Maintenance of outward Mail Register
             Issuance of Benevolent fund




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In this section I learnt about issuance of PO, DD, MT, and T.T. I made all the four categories
of funds transfer. Sir. Rana helped me a lot to achieve this target. I only made vouchers of
PO, CDR and DD. The Manger only does TT because it is a secret way of transfer funds. I
sorted all the daily remittances; handed them to the respective officers. Sir Rana helped me a
lot in general understanding of the bank functioning.

 I prepared several cheque books and enter the detail into the cheque books issuance register.
I also learnt to cheque posting on system. In the cheque book posting something which are
necessary, account number, cheque number and amount to be debit or credit should be
matched.

D.D & P.O: P.O is used locally and to transfer amount within the city whereas D.D is used
for outside the city.

Demand draft:

Procedure
      First on the request of the customer all the details for issuance are demanded from
       customer
      The customer can be account holder or non- account holder.
      While issuing the bank draft the care is taken that draft should be free from
       alternations.
      All the details must be clearly written in ink.
      After deduction of charges, issuance of demand draft is handed over to the applicant .
      Its advice containing the particulars of the draft is sent to the drawer branch with its
       necessary information and payment of draft is make on its presentation.

Payment order

Procedure
      Two applications forms called credit vouchers for payment and for bank commission
       are made.
      Application form is attached with cheques , debit authority or make payment in cash.
      Then the payment order is made.
      Then payment order is given to the customer.
      Pay order for clearing again come to National bank of Pakistan.
      Nothing is sent to next branch ,no fanfold is made.

Mail transfer

This is the facility just for account holders. Amount of M.T & T.T is transferred in account of
payee. Mail transfer is time consuming while telegraphic transfer is fast.

Procedure
      Filling of application form.


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      Then make payment.
      Preparation of M.T advice.
      Then fanfold is made on F15.
      M.T advice plus fanfold ( red copy ) is sent to responding branch.
      M.T code is 22.

Telegraphic Transfer:

Procedure
      Filling of application/ request form.
      Then payment is made.
      Then make massage voucher (telephone number is written at top of it ).
      Then telegram transfer confirmation is made (F-15).
      Massage is sent immediately by fax and T.T confirmation is sent by telegram.
      F15 blue is filled and original red is sent to responding branch.
      T.T code is 21.

Accounts Opening

In this department, I also gain the practical knowledge about account opening also, as this
department also deals in opening account and saving account for its customers and all matters
regarding thereof. The customers mainly opens current and saving account and these can be
opened by Individual , firms , Company , Trust , staff etc. I got training in this department for
one week and after understand the basic concept I practically opened account of walk-in-
customers.

Procedure
      Customer fills A/C opening form prescribed by the bank.
      Then he submit the I.D card copy and other related documents
      Specimen signature card is filled
      2 officers attested the form.
      The form is entered into computer and account opening register.
      The amount in Rupees is submitted in new account.
      Then letter of thanks is send to customer.
      When letter is send back to bank by customer then bank issue cheque book to
       customer.

Deposit Section
All banks depend on deposits. It is a very important department where customers deposit and
withdrawal their money. Banks use this money for loaning on higher rate to earn profit.Mr.



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Internship Report                                               National Bank of Pakistan

Shahid with his colleague Miss. Shazia has been performing the activities of this section. The
main function of this department are
            Maintaining records of saving, current, call deposit, and NIDA account
             holders
            Record of signatures of account holders
            Record of balances of customers
            Scrutiny of cheques issued
            Withdrawal through order/berarer cheques
            Local clearing
            Preparation of accounts holder activity report

Procedure of Withdrawals

There is a complete process in case of cash withdrawal.
      Customer deposited cheque in deposit department for withdrawals or transfer of
       amount through cross cheques.
      The deposit department verifies the signature of the account holder through SS and
       other requisites of the cheque. In case of any discrepancy the cheque is returned to the
       customer.
      The deposit department checks the balance in the account of the customer through
       computer in BBO.
      If the a/c of the account holder has balance equal to the cheque amount they passes
       the cheque to cash department and post a Cash Paid stamp on it.
      Deposit department debit A/C holder in computer and cash scroll register.
      The cash department pays the amount to the customer on counter and cancels the
       original cheque.

SS cards verification is one of the most difficult works of this department; I also go through
only specific activities in which the heads of verified informed me.

Procedure of Cross cheques

Whenever customer deposit amount in his account through cross cheques or security
decouments by transferring he has to fill the cheque pay-in-slip and is deposited into the
deposit department. The deposit department after verification and scrutiny of cheque passed
the cheque to remittance department.

Pension Section
Ms. Sarwat Jabeen is the head of pension department. The following activities are performed
by her;
            Maintenance of Pension Register
            Scrolling of Pensions Paid


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Internship Report                                                    National Bank of Pakistan

             Arials in case of any increase announced by government
             Maintenance of the Inward Mail Register
During my internship, I learnt how to handle with new pensioner’s cases, entries made into
the “pension register”, recommend payments of pension on monthly basis, transfer of
payments into the accounts of the customer. The most obligatory thing for payment of
pension is to check pension slip in form of cash payment P.P.O.No., name of the pensioner,
signature, and payment period. In case of pension holder does not come to receive, it is
legally recommended that the pensioner holder issue authority letter to the desire person
otherwise pension will never be paid in cash.


2. Cash Department

Cash department mainly deals in cash. In this department all types of Government receipts
i.e. Revenues, Taxes, Abyana, Agriculture Tax, Government Fees and Utility Bills are
deposited. This way NBP is serving great job of revenue collection. The Head Cashier is Mr.
Abdul Aslam and two cashier Mr. Wajid and Mr. Akram Cheema all are fulfilling the
objective of cash department by facilitating people in the payments of their bills and taxes
and repayments of cash.

This section deals with;
    i. Cash Payment
          Payments are the function that they pay their cheques and pay cash.

    ii. Cash Receipts
           Receipts mean collection of utilities bills, taxes etc.
Cash Payment Procedure
In this branch of NBP, this section deals with the
             withdrawals of the cheques
             deposit of amount
             pension receipt
Procedure
For deposit:
      Whenever account holder deposit amount in their accounts they fill cash-pay-in-slip.
      Then handed over cash and slip to the cahier
      Cashier after counting amount sign the slip and stamped it with cash received after
       entering it to the cash scroll register
      The counterfoil is given to the customer after signing while the adjacent credit
       voucher is held by the bank

For withdrawals:
After the clearance of the cheque from deposit department the customer recived cash from the
cahier by giving him token. The original cheque is then crossed by the cashier.


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Internship Report                                                National Bank of Pakistan


For pension receipt
After the approval of the pension officer the pensioner comes in this section for reciving cash
amount of pension.
Cash Receipts Procedure
      Customer deposited their bills and taxes to cashier
      Cashier after counting the amount signs the receipts of bill and taxes and affixed
       stamp of NBP and cash received stamp.
      A portion of receipt is handed over to customer.
      The cashier entered the amount into the scrolls.
      At the end of day all the total and balances of receipts is transferred to the remittance
       section.

Use of Information Technology in Decision making
Today banking is becoming more and more complex with the introduction of new products,
services and enhancing regulatory compliance requirements. It is the use of information
technology that can improve the customer’s services and reduce the cost at the same time.
NBP adopted “IBM Software” for service providing motives, the “IBM Software” categories
into two sections.
      BBO (Bank Branch Office)
      EBS (Electronic Banking System)
Electronic Banking System

EBS is used for any kind of transaction within the bank .i.e. Receipts and payments, Bills
Collection, Tax receipts, etc.
Bank Branch Office

BBO is use for remittances.

The use of IBM Software is one of the main purposes of collection electronic data for the
bank that further helpful in future in decision making. Now a day, the bank plans for
transformation of the entire I.T. architecture by implementing a core Banking Solutions.

The bank prepares financial statements, agricultural reports, customer’s management, risk
management and other reports for decision-making purposes. The I.T. system of the bank not
only increases distribution capabilities but also simplify internal procedures thereby reducing
the cost and lead-time for services. Now the Samanabad Branch of NBP is trying to
computerized its all of activities for this purpose various aspects of extension and
development have been taking into consideration.




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Internship Report                                               National Bank of Pakistan


ISSUES FACED BY THE BRANCH
During the internship I got practical experience that does not meet the theoretical concepts in
B.com(hons.) Program. I present here some critical analysis:

   i.   Training: NBP has no great facility for their employees for training of new
        technologies. This situation creates difficulty for handling new challenge.

  ii.   Departmentalization: An employee deals various nature of work.

 iii.   Staff Attitude: Due to heavy load of work staff attitude does not ideal for an
        organization where public dealing is at large scale.

 iv.    Work Environment: Work environment was not ideal due to heavy customers visit
        in a single day. Furniture, light and sitting arrangement was not good for customers
        and bank employees.

  v.    Professional Approach: Work specialization and job specification are found very
        low in bank’s employees. Business administration qualities and education is at low
        side.

 vi.    Shortage of Staff: There is shortage of staff in the Bank. Number of customer per
        employee is very high. Cash department is suffering very badly and facing great deal
        of over workload.

vii.    Less use of Technologies: Staff hesitate to use new technologies especially the
        cash department. Even old employees are not able to operate PCs.

viii.   Communication Gap: I feel that there is communication gap between top
        management and workers. They have fewer chances to communicate effectively.

 ix.    Unjustified Appraisal Criteria: No justified appraisal criteria are implemented for
        annual increase in salary and promotion of staff. It creates un-satisfaction among the
        employees of the Bank.

  x.    Undemocratic Decision Making: I observed that some times employees are not
        involved in decision-making process. Manager himself takes decision and orders to
        make changes.

 xi.    Pensioner's sitting Arrangement: Bank should take step for the sitting
        arrangement of the old age employees and pensioners for. Also management should
        purchase more furniture and arrange them in such a way which provides maximum
        space and convenient specially in deposit department and there should also be
        convenient sitting place for customers.

xii.    Need of Telephone Operator: Branch has the problem of telephone operator
        which can save the time of not only manager but other staff as well. On the other hand
        bank’s communication system was not doing well. Therefore as an internee I felt that
        there should be a telephone operator who can easily handle this situation.


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     I N D I N G S            O N C L   U S I O N

FINDINGS & CONCLUSION
In this section topics are:
        Dilemmas Faced by Organization

              Problems at branch

              Functional Problems

              Administrative Problems

              Personal Management Problems

        Recommendations for improvement

        Conclusion
Internship Report                                                National Bank of Pakistan


DILEMMA FACED BY ORGANIZATION
Rather NBP is a nation's bank but like any other organization NBP also is not free from
problems and crisis. In SWOT analysis I have already discussed the major internal
weeknesses and flaws of the system. In this topic the most important problems are included
which are widely present at the branch level. For this purpose the topic is divided into the
four parts which are as under.
             Problems at the branch.
             Functional Problems
             Administrative Problems.
             Personal management’s Problems

PROBLEMS AT THE BRANCH
      Customer Satisfaction
       In NBP customer dealing is will, but during rush hour the customer has to wait for a
       long time for their turn. It’s quite hard for a new customer or potential customer to get
       the required information.

      Poor record management and filing system
       During my internship I observed that filing system of branch is not good. When
       certain record is needed the staff has to struggle to find it out and a lot of time is
       wasted.

      Unequal distribution of work
       Work is not equally distributed. On one hand some employee have to work all day
       without relaxing while some others have nothing to do at all. This not only creates
       confusion among employees but also hurting and disturbing for overall setup of the
       bank. And above all it results in dissatisfaction among customers as well.

      Marketing visits
       A useful mode of contact is through personal marketing visits. Such visits are
       important in informing and perusing the existing and potential customers about the
       products and creating a sense of belongingness with them.

FUNNCTIONAL PROBLEMS

      Formal Organization
       Formal organization includes the activities of two or more person, which are
       cautiously determined groups and coordinated towards a given objective. It provides
       base when people are able to communicate with other, when they have common
       purpose and they are willing to work. In NBP, we find a formal organization.

       In this formal organization of NBP the activities are carried out in a more formal way.
       In theoretical terms it provides basis for communication with one another but in
       practice it is not exercised because an employee at high level cannot get straight away

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       to manager or SVP and ask him about of his problem faced by him, because first he
       has to talk to his immediate superior and follow a proper channel of communication.

      Excessive paper work
       It is notified that due to the lengthy procedure of paper work the bank employee are
       over burdened. They are unable to give proper attention to the clients and face
       difficulties in getting their job done. One reason for lengthy procedure and excessive
       paper work in the bank is the lack of computerized technology.

      More accounts fewer deposits.
       Efficient banking is one which does not emphasize on number of accounts but on
       greater amount of deposits. NBP is more interested in increasing its number of
       account irrespective to its deposit.

ADMINISTRATIVE PROBLEMS

      Job analysis is not effective
       Only on the basis of job analysis it can be decided how a right person can be hired,
       trained, compensated or promoted. It is very important for an organization that nature
       of the job is described and job specifications are mentioned. Most of the employees
       are simple graduate and do not have proper background about their job. This creates
       problems both for organization and for the employees.

      Lack of specialized training
       NBP does not provide adequate facility of specialized training to their staff. Training
       is generalized rather than specialized. As the worker finishes his training, he is
       inducted into a specific field without having great deal of knowledge about the field.

      Poor job rotation.
       There is absence of job rotation in NBP Samanabad branch. A person placed in one
       department remains their forever. It reduces career opportunities as well boredom and
       in the end results in career plaguing. The newly recruit should be rated in all
       department of the banking in order to get familiar with working of different
       departments so that when they get a responsible position they have know how of the
       whole system.

      Lack of appreciation
       Another very important thing which is ignored in the bank is appreciation if the
       employee on their good performance. If hard work and performance of employees is
       not recognized and appreciated they become dishearten which results in decline in
       performance.

PERSONAL MANAGEMENT PROBLEMS
      Need for better training program
       Need of training is greatly emphasized all around the world. Training of the personnel
       is part of human resource management. It has been noticed that the training program


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       of NBP is not adequate.
       Once the candidate is selected and placed on the respective job. It becomes essential
       to train him adequately for the task. They should learn new methods for motivating
       customers. The training programmed of the bank should include scientific techniques
       to improve the decision making and interpersonal as will individual needs of the
       employee both specialized to fresh as well as on job.

      Developing Managerial Leadership
       Leadership is a practical term of visible, clear on objective and communicating better
       control on financial and administrative matters. Manager is not only responsible for
       their own units in business, but also in people terms i.e. training, recruiting, grievance
       handling and taking immediate initiative in crisis situation to take major decision
       affection the future of the bank and banking community.

      Recruitment policy
       Human resources are the lifeblood of the organization. If the personnel are recruited
       carefully they can become asset to the organization in the case of carelessness a
       liability on the organization. Bank is not following its recruitment policy properly due
       to favoritism, nepotism and political pressure.

      Promotions
       Promotion in NBP is purely on the basis of seniority, so the new young person having
       high qualification remains behind for quite a lot of time. Top management and staff
       union put pressure for the promotion of their favorites.

      Transfer
       Transfer means when a person is shifted from one place to another place. It is done
       either that person is needed more on the other branch or for improving his skill
       variety. It is the policy of the Bank to transfer each employee 3 to 4 years.

      Marketing at desk
       Bank employee come in daily contact with many people who happen to deal with the
       casual remittance, travelers cheques, safe custody, pensioners, depositing license fee
       and variety of other functions and variety of other people with whom the Bank has no
       account or regular business relationship. The Bank employees are doing very little on
       their own to explore the possibilities of selling banking services to them as a
       marketing contributor. The market opportunities are hidden in every dealing a banker
       handles; the question is that if he has the art and urge to seize such opportunities.

    Lack of business communication
       There is no proper way to give information to their customer. To avoid this minor
       dissatisfaction and tension in the mind of customer, and deficiency of the service, it is
       recommended that the bank should provide brochures etc containing information in
       details. Some general information should be placed in information notice board on the
       entrance where customer can see it easily or it should be self-attractive.




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                     RECOMMENDATIONS
As analysis shows that NBP is a most growing organization with highest return on capital,
The bank has been able to strategically manage and build on its competitive advantage, by
knowing customer’s requirements, understanding employee’s need, modern technology, to
making social responsibility and looking towards stakeholder’s values. But there is further
need for improvement. To overcome weaknesses and to maintain its position as an “Asian
Tiger” in banking field, following recommendations are made:

   Staff strength should be enhanced and professional qualified persons should be recruited.

   It is recommended that proper training be provided to the staff members that will
    ultimately increase the performance of Bank over all.

   It is suggested that promotion be given to the staff in due time and on the basis of
    performance to provide job satisfaction.

   The bank should spend more on renovation of the branches to improve environment and
    atmosphere to attract the customers.

   There should be a proper desk for customer’s information in every branch.

   Sitting arrangement, air conditioning and new furniture should be facilitated

   The Bank should introduce the computers software to cope the heavy load of work and
    better control.

   Extra counters should be established in order to facilitate during the rush days the
    difficulties faced by the bank staff as well as the customers.

   All Branches of the Bank must be online.

   All the departments should be established separately in every branch.

   The Bank should locate new market for its operational activities in the country as well as
    abroad.

   The Bank should increase profit rate on deposits and saving schemes especially for
    pensioners and old age citizens.

   For improvement of internal control and system the compliance wing and surprise
    inspection system should work more effectively.

   The bank should use broad casting media for promotion of its products and services and
    to further expand its area through more aggressive marketing. Customer services must be



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    better to improve the efficiency of branch, which results in quality work and causes the
    customer attraction that will create lucraturable activities.


These and many other that can make a good set of recommendations, which have to be made
possible to escape from the threats and weaknesses and the risks in environment that
surrounds the Bank. The management do considers the policy matter that is not helping the
Bank, but are still in practice due the absence of prudentially regulated system to protect them
and the Bank.

Efforts have been made with serious concern to give NBP a status that it has to maintain by
having practices of:

   Right sizing of the employees.

   By closing unprofitable branches.

   By introducing a merit based selection criteria.

   Promotions made conditional with qualifications.




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                           CONCLUSION
The report is all about National Bank of Pakistan, one of the leading bank of Pakistan
banking industry with 1254 nationwide and almost 25 branches operating in other countries
including USA, China, France, Hong Kong, Azerbaijan, Bangladesh, Hong Kong. It has
maximum coverage with facilities of ATM and online banking throughout Pakistan. National
Bank of Pakistan (NBP) was established under the National Bank of Pakistan Ordinance
1949. The primary objective of NBP was to purchase jute from the growers in the former East
Pakistan and also to perform the commercial banking functions in the country.

It is a part of State Bank of Pakistan and it is its major strength. It is providing different
facilities to its customers. Inside the bank, in branch banking it has Clearing and Collection
Department, Government Receipts Processing Department, Account Opening Department,
Remittance Department, Customer Services Department Cash Department, Deposit
Department, Advances and Credit Department. These are the most common departments
exist in almost each branch. It is offering different deposit choices, advances, credits and
securities etc for its customers.

Its Human Resource is its major strength that is leading this bank in this way but there is
much gap to cover yet. The other strengths this bank has are that it is acting as Agent of State
Bank of Pakistan, providing Agency Arrangements for different government organizations
include WAPDA and PIA, Profitability and a vide coverage throughout Pakistan through its
Corporate Branches. And also it has comprehensive range of products it is offering in market.

The challenge it is facing are currently the lack of implementation of rules and regulations
that may lead to weak organizational culture, old organizational culture, no regular
promotions practices and not much use of IT technology in bank as other are using. There are
many workers and employees’ unions exist in National Bank of Pakistan that use to play
organizational politics instead of doing productive work that leads to wastage of time.

As analysis shows that NBP is a most growing organization with highest return on capital,
largest market share amongst all Pakistani banks and cost to income ratio is the highest in
banking sector. But there is further need for improvement to overcome weaknesses and to
maintain its position as an “Asian Tiger” in banking field.

As far as my internship and experience is concern, I learnt a lot during my internship because
I got practical knowledge before entering in the practical life after completion of my
B.com(hons.) degree. I learn a lot about banking practicing in Pakistan, rules and regulations
and different procedures followed by banks, the organizational culture and structure of the
bank, National Bank of Pakistan.




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