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					Internship Report




By
                       Hassan Mughal




                              Sep, 2010



          Internship Report on NBP, Main Branch Gujranwala


                                  1
In the Name of




   Most Merciful and Compassionate the Most Gracious and Beneficent
                   Whose help and guidance I always

                     Solicit at every step, at every moment.




                 Internship Report on NBP, Main Branch Gujranwala




                                        2
INTERNSHIP REPORT ON


                       National Bank of Pakistan
                            Main branch, Gujranwala




     Internship report submitted to business of the administration sciences,
       University of Gujrat in partial fulfilment of the requirements for the
                   Degree of masters of public administration.




By

                               Hassan Mughal
                                 (09022054-074)
                                     M.Com
                               Session: 2009-2011



                 Internship Report on NBP, Main Branch Gujranwala



                                         3
      UNIVERSITY OF GUJRAT




Internship Report on NBP, Main Branch Gujranwala



                       4
Internship Report on NBP, Main Branch Gujranwala



                       5
        Faculty of Management and Administrative Sciences
                 University of Gujrat, HH-campus


                                  Internship


Supervisor:



NAME:                  -----------------------------



DESIGNATION            -----------------------------



SIGNATURE              -----------------------------



Chairman:



NAME                   -----------------------------



SIGNATURE              -----------------------------




              Internship Report on NBP, Main Branch Gujranwala



                                          6
                            EXACUTIVE SUMMARY



My report is comprised upon four section 1st section denote the introduction of internship,
and purpose of purpose, and 2nd is over all role and functioning of bank (Highlights the
operations and functions of bank) and 3rd one is about NBP history, introduction,
performance, etc and 4th section denote that policies and strategies of NBP and success.5th is
about SWOT analysis, pest analysis, ratios analysis and chapter 6th consist on some
recommendations and suggestion. Banks acts as financial agents to their customer; in return
they get reward for their services. Banks play important role in development of society. A
strong economy must have a good banking system.


National Bank of Pakistan is one of the leading banks in Pakistan. According to international
standards of banking system it is one of the best banks in South Asian region as well as the
bank, which is, come the top ten in the world. This report explains how different functions of
NBP works and what are their services.


Introduction denotes that what is the purpose of my internship. After that how banking enter
in the Pakistan. What is its working structure? It is review and organizational structure.




                   Internship Report on NBP, Main Branch Gujranwala



                                               7
                              ACKNOWLEDGEMENT




For the completion of our report I am indebted to plenty of people for their very sincere
cooperation that they extended to me at various stages. First and foremost problem that every
student faces is the selection of a Report. I am very thankful to my friend Bilal for helping me
out in time of confusion. During our course and the execution of my report, I had a real
chance to learn from his vast experience and immense knowledge.


I am very thankful to staff members of National Bank of Pakistan main branch Gujranwala
That they have guide and provide me valuable information regarding my report.


Finally I am thankful to the most merciful and Almighty Allah who gives me the strength that
I fulfill my task. With efficiently.




                    Internship Report on NBP, Main Branch Gujranwala



                                               8
                                       Table of contents
Executive Summary                                                       VI
Acknowledgement                                                         VII
CHAPTER NO. 01
      Introduction of Internship Report
      Introduction………………………………………………..…01
      1.1   Background of study…………………………………………...…01
      1.2   Purpose …………………………………………………………………01
      1.3   Scope……………………………………………………………………..02
      1.4   Objective……………………………………………02
      1.5   Methodology………………………………………..03
             Primary Data
             Secondary Data
      1.6   Organization…………………………………………03
      1.7   Summary…………………………………………….04
CHAPTER NO. 02
      NBP and its role & Functions
      Introduction …………………………………………………..05
      2.1   NBP in Pakistan……………………………………..05
      2.2   Role of NBP in Pakistan…………………………….07
             Products of NBP
      2.3   Overall organization & functions of organization in Pakistan….10
             Functions of NBP in Pakistan
      2.4   Organization Office In Which I done my work…………………13
      2.5   Summary………………………………………………………....14
CHAPTER NO. 03
      Introduction of NBP
      Introduction ……………………………………………………………….15
      3.1   Brief history of NBP……………………………………………..15
             Mission
             Vision
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                                                9
              Goals and objectives NBP
              Board of directors
              Management
                Organizational chart of NBP
     3.1.1   Relationship of head office to the branch office………………21
     3.1.2   Departments of NBP


              Cash Department
              Clearance Department
              Advances Department
              Remittances Department
              General Banking
              Inquiry Section
     3.1.3   Office or field offices…………………………………………...28
     3.2     Current staff……………………………………………………..30
     3.2.1   Current staff in branch according to qualification & experience30
     3.2.2   Training received by no. of employees……………………….....30
     3.2.3   Workload………………………………………………………...31
     3.2.4   Salary structure…………………………………………………..31
     3.2.5   Promotion system……………………………………………......31
     3.2.6   Incentive & Motivation………………………………………….31
     3.2.7   Responsibilities………………………………………………….32
     3.3     Critical analysis of the branch…………………………………..32
     3.3.1   Communication system…………………………………………32
     3.3.2   Hiring system……………………………………………………33
     3.3.3   Morale of staff…………………………………………………..33
     3.3.4   Physical facilities………………………………………………..33
     3.4     Performance……………………………………………………..33
     3.5     Latest budget reviews…………………………………………...34
     3.6     Summary………………………………………………………..34
CHAPTER NO. 04
     NBP Policies & Strategies
     Introduction………………………………………………………………35
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                                                  10
      4.1    Policies………………………………………………………….35
      4.2   Strategies………………………………………………………..35
      4.3   Success………………………………………………………….36
      4.4   Summary………………………………………………………..39
CHAPTER NO. 05
      Different analysis of NBP
      Introduction………………………………………………………………40
      5.1   SWOT analysis…………………………………………………40
      5.2   PEST analysis…………………………………………………..43
      5.3   Ratios analysis………………………………………………….45
      5.4   Summary……………………………………………………….49
CHAPTER NO. 06
      6.1   Introduction…………………………………………………….50
      6.2   Recommendations …………………………………………….56
      6.3   Summary
   List of Abbreviations…………………………………………….X
   References ……………………………………………………..XI
LIST OF ABBREVATIONS:

NBP         National Bank Of Pakistan
MBA         Master of Business Administration
IT          Information Technology
SBP         State Bank of Pakistan
UK          United Kingdom
DD          Demand Draft
USA         United State of America
PLS         Profit And Loss Saving Account
DM          Deutsche Mark
DF          Demand Finance
IBC         Inward Bills for Collection
OBC         Outward Bills for Collection
SME         Small Medium Enterprises
A/C         Account


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TT     Telegraphic Transfer
MT     Mail Transfer
FDD    Foreign Demand Draft
ACR    Annual Confidential Report
MCB    Muslim Commercial Bank
HBL    Habib Bank Limited
ABL    Allied Bank Limited
ROA    Return on Assets
ROE    Return on Equity
ROD    Return on Deposit
SWOT   Strength, Weakness, Opportunities, Threats
ATM    Automated Teller Machine




          Internship Report on NBP, Main Branch Gujranwala



                                    12
REFERENCES:

I collect this information from:
    National Bank, Annual Reports
    State Bank of Pakistan Prudential Regulation for Corporate and Commercial Banking
    State Bank of Pakistan BPRD Circulars
    Dawn Newspapers for updated information. Instruction Circulars of National Bank
       Limited
    Economic Reviews for Banks and their activities.
    State Bank of Pakistan, Website, http://www.sbp.gov.pk
    National Bank website, http://www.nbp.com I also visit & complete
    I also visit & complete 6 weeks internship in national bank of Pakistan Main branch
       Gujranwala for collecting data.
    http://www.sbp.gov.pk8
    www.nbp.com.pk
    http://www.scribd.com/doc/13314549/Internship-Report-of-NBP
    http://www.scribd.com/doc/19161491/NBP-Internship-Report
    http://www.nbp.com.pk/aboutus/index.aspx
    http://www.docstoc.com/docs/1007562/national-bank-of-pakistan-a-hollow-dream/
    http://www.nbp.com.pk/aboutus/dreport2.aspx




                   Internship Report on NBP, Main Branch Gujranwala



                                          13
CHAPTER # 01

INTRODUCTION OF INTERNSHIP REPORT

Introduction:
As part of the academic requirement for completing MBA (Finance) Master of Business
Administration, The students are required to undergo for six weeks of internship with an
organization. The internship is to serve the purpose of acquainting the students with the
practice of knowledge of the discipline of banking administration.

This report is about National Bank of Pakistan. NBP was established in 1949 and since then,
it has expended its network, becoming the largest commercial Bank of the country. It offers
different products of services to its customers.


1.1Background of study:

The internship requirement in the degree of Master in Business Administration (Finance) led
me to experience an exciting and professional exposure to NBP as an intern.
1.2Purpose:
   The main purpose of the study in hand is together relevant information to compile
   internship report on National Bank of Pakistan.
   To observe, analyze and interpret the relevant data competently and in a useful manner.
            To work practically in an organization.

            To improve report writing skills.
            To develop interpersonal communication.

1.3Scope:
                   Internship Report on NBP, Main Branch Gujranwala




                                               14
As an internee in National Bank of Pakistan the main focus of my study research was on
general banking procedures in one of the branches of NBP. These operations include
remittances, deposits,

advances and foreign exchange. Similarly different aspects of overall of NBP are also
covered in this report.

1.4Objective:
The primary purpose of this study is to fulfillment of the requirements for the degree of
Degree of masters of public administration.For this connection each student of this particular
course is required to undertake training in a relevant organization selected by them, for a
period of 5-7 weeks.

The secondary purpose of this internship is to understand how the theoretical knowledge can
be applied to the practical situations and examine an organization‟s financial issues and
identify its opportunities/ problems and also suggest corrective measures. This internship is
also very necessary to gain confidence and become aware of the mechanism of an
organization. As an internee I want to achieve following objectives during my internship and
organization study:

            To familiarize with a business organization.
            To familiarize with the different departments in the organization and their
               functioning.
            To enable myself to understand how the key business process are carried out
               in organization.
            To understand how information is used in an organization for decision making
               at various levels.



                   Internship Report on NBP, Main Branch Gujranwala




                                               15
            I want to develop my skills in the application of theory to practical work
               situations.
            To develop my attitude conducive to effective interpersonal relationships.
            To acquire good work habits and sense of responsibility.

1.5Methodology:
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. Formally arranged interviews and discussions also helped me in this
regards.

       Primary data:

       Primary data include, Personal observation and Interviews of The Staff Members

       Secondary data:

       Secondary data consist of Manuals, Journals, magazines, Annual Reports and Internet.

1.6Organization:
The NBP was established vide NBP Ordinance No. XIX of November 9. 1949. British Govt.
devalued its currency in September 1949, India devalued its rupees but Pakistan did not. It
led to a crisis in trading between the two countries and India refused to lift the Pakistan Jute.
To solve this problem i.e. to export jute NBP was established through an Ordinance of GOP.
National Bank of Pakistan maintains its position as Pakistan's premier bank determined to set
higher standards of achievements. It is the major business partner for the Government of
Pakistan with special emphasis on fostering Pakistan's economic growth through aggressive
and balanced lending policies,

                   Internship Report on NBP, Main Branch Gujranwala




                                               16
       technologically oriented products and services offered through its large network of
       branches locally, internationally and representative offices.National Bank of Pakistan
       is a Govt. bank. It has its head office in Karachi. It has over 1,232 branches in
       Pakistan & 18 abroad. National Bank of Pakistan maintains its position as Pakistan's
       premier bank determined to set higher standards of achievements. It is the major
       business partner for the Government of Pakistan with special emphasis on fostering
       Pakistan's economic growth through aggressive and balanced lending policies,
       technologically oriented products and services offered through its large network of
       branches locally, internationally and representative offices. We aim to be an
       organization that is founded on… •Growth through creation of sustainable
       relationships with our customers. •Prudence to guide our business conduct. •A
       national presence with a history of contribution to our communities.•Reward
       entrepreneurial efforts. •Create value for all stakeholders.   We aim to be peopling
       who…•Care about relationships. •Lead through the strength of our commitment and
       willingness to excel. •Practice integrity, honesty and hard work. We believe that these
       are measures of true success. We have confidence that tomorrow we will
       be…•Leaders in our industry. •An organization maintaining the trust of stakeholders.


1.7 Summary:

In this chapter, I concluded that internship is a best way of analyzing and understanding the
market before the entrance in market, during internship we see practically implementations of
our knowledge so we can say that internship program is a good fortune for all of the students
during their studies. Because it‟s a initial plate form during our study to analyze the market
situations. Although there were some restrictions during but I tried my best to full fill the
purpose and objective of the study.

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CHAPTER # 02

Organization

Introduction:
In this chapter we will discuss about organization and also about its performance, its roles in
development of Pakistan mean how much part of organization in development that is it
participative or not? We will also discuss function of organization in Pakistan.


2.1 overall    respective sectors in Pakistan
National Bank of Pakistan is the largest commercial bank operating in Pakistan. Its balance
sheet size surpasses that of any of the other banks functioning locally. It has redefined its
role and has moved from a public sector organization into a modern commercial bank. The
Bank's services are available to individuals, corporate entities and government. While it
continues to act as trustee of public funds and as the agent to the State Bank of Pakistan (in
places where SBP does not have a presence) it has diversified its business portfolio and is
today a major lead player in the debt equity market, corporate investment banking, retail and
consumer banking, agricultural financing, treasury services and is showing growing interest
in promoting and developing the country's small and medium enterprises and at the same
time fulfilling its social responsibilities, as a corporate citizen.
National Bank of Pakistan is today a progressive, efficient, and customer focused institution.
It has developed a wide range of consumer products, to enhance business and cater to the
different segments of society. Some schemes have been specifically designed for the low to
middle income segments of the population.
These include NBP Karobar, NBP Advance Salary, NBP Saiban, NBP Kisan Dost, NBP
Cash and Gold.



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                                                 18
It has implemented special credit schemes like small finance for agriculture, business and
industries, administrator to Qarz-e-Hasna loans to students, self employment scheme for
unemployed persons, public transport scheme. The Bank has expanded its range of products
and services to include Shariah Compliant Islamic Banking products. For the promotion of
literature, NBP recently initiated the Annual Awards for Excellence in Literature. NBP will
confer annual awards to the best books in Urdu and in all languages published during the
defined period. Patronage from NBP would help creative work in the field of literature. The
Bank is also the largest sponsor of sports in Pakistan. It has provided generously to
philanthropic causes whenever the need arose.

It has taken various measures to facilitate overseas Pakistanis to send their remittances in a
convenient and efficient manner. In 2002 the Bank signed an agreement with Western Union
for expanding the base for documented remittances. More recently it has started Electronic
Home Remittances Project. This project introduces technology based system to handle
inward remittances efficiently, by ensuring that the Bank's branches keep a track of the
remittance received from abroad till its final receipt.

A number of initiatives have been taken, in terms of institutional restructuring, changes in the
field structure, in policies and procedures, in internal control systems with special emphasis
on corporate governance, adoption of Capital Adequacy Standards under Basel II framework,
in the upgradation of the IT infrastructure and developing the human resources.National Bank
of Pakistan has built an extensive branch network with 1250 branches in Pakistan and
operates in major business centre abroad. The Bank has representative offices in Beijing,
Tashkent and Toront. It has agency arrangements with more than 3000 correspondent banks
worldwide. The Bank's financial performance has been remarkable. In 2006, total assets are
estimated at Rs635 billion,

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                                                19
While deposits have grown to nearly Rs502 billion. Pre-tax profit rose to Rs26 billion.
Earnings per share have jumped to Rs24.01 in 2006. The increase in profit was achieved
through strong growth in core banking income. Interest income increased by Rs10 billion
through growths in the loan portfolio as well as increase in spreads. Advances increased by
Rs48 billion to Rs316 billion. The Bank maintains a sound loan portfolio diversified in nature
to counter the risk of credit concentration. It ranges from providing credit to the un-banked
market segment under NBP Karobar, to small and medium enterprises, to agricultural loans,
to corporate customers.

National Bank has earned recognition and numerous awards internationally. It has been the
recipient of The Bank of the Year 2001, 2002, 2004 and 2005 Award by The Banker
Magazine, the Best Foreign Exchange Bank –– Pakistan for 2004, 2005, 2006 and 2007,
Global Finance, Best Emerging Market Bank from Pakistan for the year 2005, Global
Finance, Kissan Time Awards – 2005 for NBP's services in the agriculture field. It is listed
amongst the Region's largest banks and also amongst the largest banks in South Asia 2005,
The Asian Banker. It has also been presented a Recognition Award –– 2004 for having a
Gender Sensitive Management by WEBCOP AASHA besides other awards.

2.2 Role of the organization in Pakistan
NBP is playing a vital role in development of Pakistan; NBP is making a pioneer role in
development of agriculture sector, which is the main production sector in Pakistan. As we all
knows that agriculture sector is major part of our exports e.g.
cotton, sugar, rice, wheat etc. so its helps to earn major part of foreign exchange through our
exports.
The nature of responsibilities of the Bank is different and unique from other banks/financial
institutions. The bank also handles treasury transactions for the Government of Pakistan as an
agent to the State Bank of Pakistan for handling provincial/Federal Government receipts and
payments on their behalf. The National Bank of Pakistan has also played an important role in
                   Internship Report on NBP, Main Branch Gujranwala




                                               20
financing the country‟s growing trade, which has expanded through the years as
diversification.


Products of NBP:



                     Unprecedented Safety - Unprecedented Return

                                  Premium Aamdani




                     Unprecedented Safety - Unprecedented Return

                                    Premium Saver




             President's Rozgar Scheme - Easy financing for self employment

                                       Karobar




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                                          21
  Affordable, Flexible & Convenient home financing for all

                           Saibaan




Take up to 20 Advance Salaries - Affordable Installations from

                        1 - 60 months

                       Advance Salary




      One Card does it all - ATM plus Debit Card in one

                         Cash Card




     Invest with Confidence - Marginal Finance Facility

                     Investor Advantage




     Internship Report on NBP, Main Branch Gujranwala



                             22
 Meet your need for ready cash against your idle gold jewelry

                  With no minimum limits

                        Cash n Gold




                     NBP KISAN Taqat

                        Kisan Taqat




NBP's affordable agricultural program offers you a wide range

                        Of financing

                   Kisan Dost Home Page




     Internship Report on NBP, Main Branch Gujranwala




                             23
                      NBP's Internet Based Home Remittence Service

                                     Pak Remit Home Page




                                 Personal Accident Insurance
                                          Protection Shield




2.3 Overall organization & functions of organization in Pakistan
Basically NBP is surviving as a major shareholder of financial sector in Pakistan. NBP is in
the top ten financial institutions in Asia. NBP is surviving in less human force with modern
IT equipment to meet all challenges of the time and it is the biggest financial earning unit in
Pakistan. Its profitability is higher than other banks.
Basically NBP is the institution of lower middle class and middle class of the country. People
feel quite relax while dealing with it.


Functions of National Bank of Pakistan
The National Bank of Pakistan a commercial bank generally makes advances for a period not
exceeding one year, except in case of small and medium

                    Internship Report on NBP, Main Branch Gujranwala




                                                 24
industries for which advance may be made for a maximum period of five years. The bank
makes not only against the security of stocks and goods hypothecated or pledged to the bank,
but also against documents of goods and properly, shares are various joint stock companies,
Government securities, Insurance policies deposits receipts, etc. The margin and rate of
interest are determined by several factors including the type of security the size of loan and
the honor of the party.
The Bank is authorized to carry on kinds of banking business and is empowered to make
loans. It has also undertaken special financing operations connected with Government prices
support scheme. The bank also gives advances loans, especially for agricultural products,
such as cotton etc. It also safeguards the valuable articles of people. It also arranges training
programs for Bank officials. It participates in procurement of seasonal crops e.g. wheat, rice,
cotton, sugar cane, etc. It also provides credit facilities to small industrial units agriculture
sectors as per credit mandatory targets fixed by the State bank of Pakistan.
Sometimes NBP is performing as State Bank of Pakistan in the Dist. Where State Bank of
Pakistan is not situated. It acts as treasury office & serve as Govt. collateral & Govt.
disbursements.
It deals as right hand in all kind of Govt. Financial activities; no any other can perform these
activities. Services are outputs of the firm/organization, which are in intangible form &
which are the backbones of any organization to earn profit? NBP offers the following
services to the people as a representative of “STATE BANK OF PAKISTAN”.
    Collection of cheques and bill of exchange for its customers.
    Paying insurance premium, rent or other obligations of the customers.
    Collecting interests due, dividend, pensions and other sums due to customers.
    Transferring of money from place to place.
    Acting executors, trustees for the customers.
    Providing safe custody and jewelry, documents or securities.


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                                               25
 Accepting bills of exchange on behalf of customers.
 Undertaking foreign exchange business.
 Furnishing trade information and tendering advice to customers.
 Formulating operation policy guidelines for the banks.
 Laying down performance criteria for banks and taking steps for ensuring their
   observance.
 Evaluating the performance of the banks in the context of operational guidelines
   issued to the banks.
 Determining the areas of coordination of the banks.
 Formulating schemes under section of the act.
 Making recommendations to the federal government for the appointment of the
   president and members of the executive board.
 Analyzing and appraising financial statement including balance sheets and profit and
   loss accounts of banks and appointment of auditors of the bank.
 Conducting such surveys, inquiries and appraisals as may be necessary for the
   purpose of this act.
 Exercising and performing such powers and functions of the federal government
   under the act and such other functions as the federal government may assign to it.
 Establishing a research department or conduct banking research and in particular
   study overseas banking operation and problems of the agricultural financing.
 Establishing a central training institution for improving bank services.
 Coordinating the planning of the operations of nationalized commercial banks, and
   exercising general overall checks on the cost of their operations.
 Appointing lead banks and to apportion share of advance among the banks in respect
   of consortium loans financed by the nationalized commercial banks only, in
   accordance with resource availability of each bank.




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                                          26
    Watching the progress of the implementation of the rulings made in State Bank
          Annual Inspection Reports and the remedial and corrective measures taken by the
          banks with a view of removing imbalances.


2.4 Organization Office In Which You Are Working
Branch Details



Branch Name:            Civil Lines Branch Gujranwala

Branch Code:            0333

Address:                Civil Lines Gujranwala

Phone:                  055/9200330 - 9200071 - 9200351

Fax:                   9200313

Tehsil:                Gujranwala

District:              Gujranwala

Province:              PUNJAB

Swift Code:            NBPAPKKA02G

Status:               Online

Email:           manager0333@nationalbank.com.pk ,
opsmanager0333@nationalbank.com.pk

I have completed internship in NBP civil line branch Gujranwala coded (0333). There are
number of competitors in this area but it is the bank of Govt. and also due to its management
performance.




                        Internship Report on NBP, Main Branch Gujranwala



                                                 27
it is a well known branch in this local area. They are providing different services to their
customer to attract them and to gain their trust and to build long term relationship with them.
To fully satisfy their customer, and for efficient working, they assign different services to
different departments.

                Clearance Department

        Advance Department

        Remittance Department

        Western Union Department

        Cash Department


        Biling department


        HR Department


        Account Opening,


        Government department

2.5 Summary

Banking started in Pakistan after the courageous and developing decision of formulation of
State Bank of Pakistan on July 30, 1948. Thereafter this sector has witnessed enormous
growth. In 1974 banks were nationalized, in the hope that new era of growth could be
achieved through it. However the process is reverse since 1991, up till now MCB, ABL, and
UBL have been privatized and HBL is in the process of its privatization and NBP is a just
bank in banking industry which is under regulation of Govt.

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                                              28
Banks acts as financial agents to their customer; in return they get reward for their services.
Banks play important role in development of society. A strong economy must have a good
banking system. In this chapter we seen NBP importance and functioning through which I
concluded that it is playing a vital role in development of banking sector in Pakistan as well
as in country.

CHAPTER # 03

INTRODUCTION OF NBP



Introduction:
In this Chapter I am going to clarify the analysis of the organization that contains brief
history of NBP, what is the management structure of NBP, how many departments are there,
and their working. Current staff members of the branch, their qualification and experience,
salary structure, and promotion strategy. What are the responsibilities of their employees,
incentives and motivation methods. Working hours of the organization, physical facilities
(working environment) provided to the employees. How they communicated with in the
organization. A critical analysis of the branch, its performance in terms of customer
satisfaction, and at the end latest budget review of the branch.

3.1.1 Brief history of the organization:


       The NBP was established vide NBP Ordinance No. XIX of November 9. 1949.
British Govt. devalued its currency in September 1949, India devalued its rupees but Pakistan
did not. It led to a crisis in trading between the two countries and India refused to lift the
Pakistan Jute. To solve this problem i.e.

                       Internship Report on NBP, Main Branch Gujranwala




                                               29
i.e. to export jute NBP was established through an Ordinance of GOP. National Bank of
Pakistan maintains its position as Pakistan's premier bank determined to set higher standards
of achievements. It is the major business partner for the Government of Pakistan with special
emphasis on fostering Pakistan's economic growth through aggressive and balanced lending
policies, technologically oriented products and services offered through its large network of
branches locally, internationally and representative offices.

National Bank of Pakistan is the largest commercial bank operating in Pakistan. Its balance
sheet size surpasses that of any of the other banks functioning locally. It has redefined its role
and has moved from a public sector organization into a modern commercial bank. The Bank's
services are available to individuals, corporate entities and government. While it continues to
act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where
SBP does not have a presence) it has diversified its business portfolio and is today a major
lead player in the debt equity market, corporate investment banking, retail and consumer
banking, agricultural financing,

treasury services and is showing growing interest in promoting and developing the country's
small and medium enterprises and at the same time fulfilling its social responsibilities, as a
corporate citizen. National Bank of Pakistan has built an extensive branch network with 1250
branches in Pakistan and operates in major business centre abroad. The Bank has
representative offices in Beijing, Tashkent, Chicago and Toronto. It has agency arrangements
with more than 3000 correspondent banks worldwide. Its subsidiaries are Taurus Securities
Ltd, NBP Exchange Company Ltd, NBP Capital Ltd, NBP Modaraba Management Company
Ltd, and CJSC Bank, Almaty, Kazakhstan . The Bank's joint ventures are, United National
Bank (UK), First Investment Bank and NAFA, an Asset Management Company (a joint
venture with NIB Bank & Fullerton Fund Management of Singapore).




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The Bank's financial performance has been remarkable. In 2006, total assets are estimated at
Rs635 billion, while deposits have grown to nearly Rs502 billion. Pre-tax profit rose to Rs26
billion. Earnings per share have jumped to Rs24.01 in 2006. The increase in profit was
achieved through strong growth in core banking income. Interest income increased by Rs10
billion through growth in the loan portfolio as well as increase in spreads.
Advances increased by Rs48 billion to Rs316 billion. The Bank maintains a sound loan
portfolio diversified in nature to counter the risk of credit concentration. It ranges from
providing credit to the un-banked market segment under NBP Karobar, to small and medium
enterprises, to agricultural loans, to large corporate customers.
The Bank has also played an important role in financing the country‟s growing trade, which
has expended through the years as diversification took place. Today the Bank finances
import/export business to the tune of Rs.62.17billion, whereas in 1960 financing under this
head was only Rs.1.54billion.
The field is being de-layered to improve customer services and enable faster decision making.
As a result of this de-layering zones have been eliminated and the numbers of regions have
been increased. Organizational hierarchy at the regional level has been restructured and
operational and business activities have been completely separated. This separation will
improve communication, decision making and promote teamwork.
For the third consecutive year, the Bank is recognized as the best Bank in Pakistan for the
year 2004 by the prestigious periodical. “The Banker” UK (a subsidiary of Financial Times
Group).

VISION


To be the pre-eminent financial institution in Pakistan and Achieve market recognition both
in the quality and delivery of service as well as the range of product offering.




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MISSION STATEMENT
NBP will aspire to the values that make NBP truly the Nation‟s Bank, by:
• Institutionalizing a merit and performance culture
• Creating a distinctive brand identity by providing the highest standards of services
• Adopting the best international management practices
• Maximizing stakeholders value
• Discharging our responsibility as a good corporate citizen of Pakistan and in countries
where we operate.


VALUES


NBP aim to be an organization that is founded on…
    Growth through creation of sustainable relationships with our customers.
    Prudence to guide our business conduct.
    A national presence with a history of contribution to our communities.
    NBP shall work to…
    Meet expectations through Market-based solutions and products.
    Reward entrepreneurial efforts.
    Create value for all stakeholders.


       NBP aim to be peopling who…
    Care about relationships.
    Lead through the strength of our commitment and willingness to excel.
    Practice integrity, honesty and hard work. We believe that these are measures of true
       success.
       NBP have confidence that tomorrow we will be…



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    Leaders in our industry.

    An organization maintaining the trust of stakeholders.
    An innovative, creative and dynamic institution responding to the changing needs of
       the internal and external environment


       OBJECTIVES
       Strong emphasis has been laid upon training of branch officers to better equip them
       for marketing of retail banking products. Initiatives on similar lines are being
       launched for the SME sector. In future NBP is going to introduce modern banking
       services to keep pace with the competition and more important our customer needs.
       These are as follows:
                   Debit cards
                   Internet banking
                   Call centers
                   Mobile banking
       MILESTONES
    “Best Emerging Market Bank from Pakistan” for the year 2005 „Global Finance‟
       USA, May 2005
    NBP is one of the “Top 100 Banks of Asia” „Euro money‟ UK, March 2005
    Bank of the year 2001, 2003&2004 for Pakistan „The Banker‟ financial times Group
       UK.
    Best Foreign Exchange Bank in Pakistan „global Finance‟ USA, March 2004


BOARD OF DIRECTORS

NBP, Board of Directors list consist the following members and their designation.

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NAME                                      DISIGNATION

Ali Raza                                  Chairman & President

Mian Kausar Hameed                        Director

Mr. Ibrar A. Mumtaz                       Director

Mr. Tariq Kirmani                         Director

Mrs. Haniya Shahid Naseem                 Director

Ms. Nazrat Bashir                         Director

Mr. Ekhlaq Ahmed                          Director

During my stay in National Bank of Pakistan, I found it as among one of the best banks in
Pakistan. As an internee, I enjoy working there .NBP has a very cooperative staff .I worked
there in very congenial and supportive environment. The staff over there is always being
ready to guide about bank and its systems.
According to its financial statements it is on a way to progress. It announces 12 billion profits
for the year of 2004. Due to its miraculous working government bestowed its president Syed
Ali Raza with “sitara-e-imtiaz”in august2005.


Moreover according to Euro money magazine the leading journal of UK in the month of
March 05 declared:
“NBP is the only Pakistani bank which has been ranked among the top100 banks of
Asia”
                      ORGANIZATIONAL CHART OF NBP

                     DESIGNATIONS FO HIGHER LEVEL OFFICE



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                 PRESIDENT



    SENIOR EXECUTIVE VICE PRESIDENT

                  GRADE 22



         EXECUTIVE VICE PRESIDENT

                  GRADE 21



               VICE PRESIDENT

                  GRADE 20



         ASSISTANT VICE PRESIDENT

                  GRADE 19



               GRADE I OFFICER

                  GRADE 18



              GRADE II OFFICER

                  GRADE 17



              GRADE III OFFICER

                  GRADE 16

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3.1.2 Relationship of head office to the branch offices:
Relationship of head office with branch is linked through regional head quarter. If branch
face any difficulty or require any thing which it needed they communicate to regional head
quarter and then regional head quarter communicates with head office.


3.1.3 DEPARTMENTATION OF NBP
The Departments functioning at NBP as briefed by its concerned officers during the internship
are:

        Cash Department
        Clearance Department.
        Remittance Department.
        Advances Department.
CASH DEPARTMENT

Cash department performs the following functions

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




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

Cheques and their Payment

The Negotiable Instruments. Act, 1881

“Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable
otherwise than on demand”.

Since a Cheque has been declared to be a bill of exchange, it must have all its characteristics
as mentioned in Section 5 of the Negotiable Instruments Act, 1881. Therefore, one can say
that a Cheque can be defined as an:

“An unconditional order in writing drawn on a specified banker, signed by the drawer,
requiring the banker to pay on demand a sum certain in money to, or to the order of, a
specified person or to the bearer, and which does not order any act to be done in addition to
the payment of money”.

CLEARANCE DEPARTMENT

A clearinghouse is an association of commercial banks set up in given locality for the
purpose of interchange and settlement of credit claims. The function of clearinghouse is
performed by the central bank of a country by tradition or by law. In Pakistan, the clearing
system is operated by the SBP. If SBP has no office at a place, then NBP, as a representative
of SBP act as a clearinghouse. After the World War II, a rapid growth in banking institutions
has taken place. The use of cheques in making payments has also widely increased. The
collection as settlement of mutual obligations in the form of cheques is now a big task for all
the commercial bank.

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When Cheque is drawn on one bank and the holder (payee) deposits the same in his account
at the bank of the drawer, the mutual obligation are settled by the internal bank administration
and there arises no interbank debits from the use of cheques. The total assets and total
liabilities of the bank remain unchanged.

In practice, the person receiving a Cheque as rarely a depositor of the cheque at the same
bank as the drawer. He deposits the cheque with his bank other than of payer for the
collection of the amount. Now the bank in which the cheque has been deposited becomes a
creditor of the drawer‟s bank. The depositor bank will pay his amount of the cheque by
transferring it from cash reserves if there are no offsetting transactions. The banks on which
the cheques are drawn become in debt to the bank in which the cheques are deposited. At the
same time, the creditors‟ banks receive large amounts of cheques drawn on other banks
giving claims of payment by them.

The easy, safe and most efficient way is to offset the reciprocal claims against the other and
receive only the net amount owned by them. This facility of net interbank payment is
provided by the clearinghouse. The representatives of the local commercial banks meet at a
fixed time on all the business days of the week. The meeting is held in the office of the bank
that officially performs the duties of clearinghouse. The representatives of the commercial
banks deliver the cheques payable at other local banks and receive the cheques drawn on their
bank. The cheques are then sorted according to the bank on which they are drawn. A
summary sheet is prepared which shows the names of the banks, the total number of cheques
delivered and received by them. Totals are also made of all the cheques presented by or to
each bank. The difference between the total represents the amount to be paid by a particular
bank and the amount to be received by it. Each bank then receives the net amount due to it or
pays the net amount owed by it.

In-Word Clearing Books:

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The bank uses this book for the purpose of recording all the cheques that are being received
by the bank in the first clearing. All details of the cheques are recorded in this book.

Out-Word Clearing Book:

The bank uses outward clearing register for the purpose of recording all the details of the
cheques that the bank has delivered to other banks.

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 job of this department is to
make proposals about the loans. 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 cann be completely eliminated but could be
minimized largely with certain techniques. 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.

Name and address of the borrower.

a)     Existing financial position of a borrower at a particular branch.

b)     Accounts details of other banks (if any).

c)     Security against loan.

d)     Exiting financial position of the company. And Signing a promissory note is also a

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e)        Requirement of lending, through this note borrower promise that he will be
          responsible to pay the certain amount of money with interest.

Principles of Advances

There are five principles, which must be duly observed while advancing money to the
borrowers.

     a.      Safety

     b.      Liquidity

     c.      Dispersal

     d.      Remuneration

     e.      Suitability

Forms of Loans

In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the
form of cash finance, overdrafts and loans. NBP provides advances to different people in
different ways as the case demand.

a) Cash Finance

This is a very common form of borrowing by commercial and industrial concerns and is
made available either against pledge or hypothecation of goods, produce or merchandise. In
cash finance a borrower is allowed to borrow money from the banker up to a certain limit,
either at once or as and when required. The borrower prefers this form of lending due to the
facility of paying markup/services charges only on the amount he actually utilizes.

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If the borrower does not utilize the full limit, the banker has to lose return on the un-utilized
amount. In order to offset this loss, the banker may provide for a suitable clause in the cash
finance agreement, according to which the borrower has to pay markup/service charges on at
least on self or one quarter of the amount of cash finance limit allowed to him even when he
does not utilize that amount.

b) Overdraft/Running Finance

This is the most common form of bank lending. When a borrower requires temporary
accommodation his banker allows withdrawals on his account in excess of the balance, which
the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is
generally allowed against collateral securities. When it is against collateral securities it is
called “Secured Overdraft” and when the borrowing customer cannot offer any collateral
security except his personal security, the accommodation is called a “Clean Overdraft”. The
borrowing customer is in an advantageous position in an overdraft, because he has to pay
service charges only on the balance outstanding against him. The main difference between a
cash finance and overdraft lies in the fact that cash finance is a bank finance used for long
term by commercial and industrial concern on regular basis, while an overdraft is a temporary
accommodation occasionally resorted to.

c) Demand Financing/Loans

When a customer borrows from a banker a fixed amount repayable either in periodic
installments or in lump sum at a fixed future time, it is called a “loan”. When bankers allow
loans to their customers against collateral securities they are called “secured loans” and when
no collateral security is taken they are called “clean loans”.The amount of loan is placed at
the borrower‟s disposal in lump sum for the period agreed upon, and the borrowing customer
has to pay interest on the

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Entire amount. Thus the borrower gets a fixed amount of money for his use, while the banker
feels satisfied in lending money in fixed amounts for definite short periods against a
satisfactory security.

REMITTANCE DEPARTMENT

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.

a)     Demand Draft

b)     Pay Order

c)     Mail Transfer

Demand Draft

Demand draft is a popular mode of transfer. The customer fills the application form.
Application form includes the beneficiary name, account number and a sender‟s name. The
customer deposits the amount of DD in the branch. After the payment the DD is prepared and
given to the customer. NBP officials note the transaction in issuance register on the page of
that branch of NBP on which DD is drawn and will prepare the advice to send to that branch.
The account of the customer is credited when the DD advice from originating branch comes
to the responding branch and the account is debited when DD comes for clearance. DD are of
two types.

a)     Open DD:          Where direct payment is made.

b)      Cross DD:        Where payment is made though account

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NBP CHARGES FOR DD

I.     Up to Rs. 50,000/- is Rs 50/- only

II.    Over Rs. 50,000/- is 0.1%

Pay Order

Pay order is made for local transfer of money. Pay order is the most convenient, simple and
secure way of transfer of money. NBP takes fixed commission of Rs. 25 per pay order from
the account holder and Rs. 100 from a non-account holder.

Mail Transfer

When the money is not required immediately, the remittances can also be made by mail
transfer (MT). Here the selling office of the bank sends instructions in writing by mail to the
paying bank for the payment of a specified amount of money. Debiting to the buyer‟s account
at the selling office and crediting to the recipient‟s account at the paying bank make the
payment under this transfer. NBP taxes mail charges from the applicant where no excise duty
is charged. Postage charges on mail transfer are actual minimum Rs. 40/- if sent by registered
post locally Rs.40/- if sent by registered post inland on party‟s request.

GENERAL BANKING
General banking section consists of following sub sections:
        Inquiry section
        Inland Remittances
        Deposits
        Cash Department
        Utility Bills


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INQUIRY SECTION
       Account opening
       Issuing Cheque Book
       Term Deposits
       Travelers Cheque (TC)


3.1.4 Offices or field offices:
NBP karianwala (2025) is a small branch working under regional office. There is no any
branch working under NBP. But NBP facilitating their customers through offering different
services like hajj application, advancing loans at lower rate of returns etc.


Branch Network of National Bank of Pakistan


With the geographical development of its branches, the National Bank of Pakistan has been
able to extend its services to a much larger number of Pakistanis all over the country. Today
the Bank has more than 8.8 million accounts & Bank maintains its presence in all the major
financial centers of the world through its 22 (2008) overseas branches and 5 representative
offices. Bank‟s role 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.
Presently the National Bank of Pakistan is divided into various Groups headed by
SEVPs/EVPs. Its field operations are controlled by 29 regions ( Annexed II) reporting to as
many Regional chiefs, who control 40 zones and 15 single Branch zones headed by Zonal
Chiefs; 12 corporate branches and 1249 domestic branches headed by Branch Managers. The
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bank has 12 SWIFT local centers.
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. Bank has also a presence on the internet. The National
Bank of Pakistan has 156 online branches
Throughout the country. It has modernized its services by installing Automated Teller
Machines (ATMs) called “CASH LINK” at selected branches.
The Head Office formulates and implements the strategic, management and operational
policies.
The Branch network of National Bank of Pakistan is divided into following categories:
     ATM network ( Total ATMs 101 & Total ATMs machines 104)
     Domestic network ( 1249 Branches)
     Islamic network ( 5 Branches)
     Online network ( 156 Branches)
     Overseas network ( 29 Branches)
     Swift network ( 12 Branches)
     Customer Facilitation Centers (6 Customer Facilitation Centers)
     Agriculture branches ( 825 Branches)

TYPES OF BRANCHES
There are a lot of different branches of National Bank of Pakistan. We explain them one by
one.
     There are main branches in every city. In one city there is only one main branch, it is
        directly under the zonal office.
     Then there are commercial branches. These are the ordinary branches and are in the
        commercial areas such as the Mall Road Branch.
     The Industrial Branches are exclusively in industrial zones.


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       There are also Residential Branches. These are exclusively in residential colonies.
       Another type is the Mixed Branch such as civil secretariat branch. Every kind of work
         is done.
       There are also Project Branches created for specific purposes i-e the project and are at
         the site.
       Another unique type is the Model Branch. No other bank in Pakistan has these. In
         these branches all the work is done by the officers. Even the officers sit on the
         counters. Model Branches are in Karachi, Lahore and Islamabad.
3.2      Current staff:
The branch staff is consisting of 6 members. Which include manager, cashier, and four
security guards Staff of bank is too much cooperative with each other as well as with
customers. They try their best to provide best services to their customers according to
customer‟s requirements.
3.2.1 Current staff of branch according to qualification and experience
Current staff of the branch is not well educated but they have no. of year‟s experience which
helps them to achieve their targets effectively and efficiently.
Manager qualification is B.Sc in Math, Stats, and Economics with experience of 14 years.
Cashier qualification is B.A with 19 years experience.
And in guards one‟s qualification is metric and remaining is under metric.
3.2.2 Training Received By No. Employees
National bank of Pakistan has its national and development centers and 4 staff collages at: -
1. Karachi
2. Lahore
3. Peshawar
4. Islamabad



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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.
Each employee of NBP before starting its work practically in bank and after selection as
employee in bank get training and then come on job properly.


3.2.3 Workload
Workloads means how many hours they work in bank or facilitate the customers on daily
basis .Here as we are concerned with National bank of Pakistan, they facilitate their
customers 9am to 1.30pm and done their work 7hours according to official requirement
which includes done post pone work, closings and adjusting balances etc.


3.2.4 Salary structure
Salary structure includes performance bonuses, incentives and basic salary. The salary
structure of NBP is based on seniority plus performance base. Employees get their fixed
salary plus additional bonuses and incentives according to their performance.



3.2.5 Promotion system
NBP promotion system based on performance and experience of employees. Manager
promoted by his/her performance and through increase in sales. While lower management
promotion system differ than higher management.
Promotion system of NBP varies with the designations or level of employees jobs. As in civil
line branch (0333) if the manager perform well on continuous basis that is terms of sales and
deposits then he will be promoted. But when we talk about the promotion of lower level staff
then they promoted on their deposits plus operational performance, that how well they
manage their daily operational activities.
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3.2.6 Incentives & motivation
If the employees take deposit for the bank, they will be given incentives in the percentage of
amount taken as deposit. For instance, if Saving Officers or any other employees bring
deposit, they are given incentives of some % of the total amount which is given to them with
monthly income; these are the motivational factors for the employees as well as incentive. If
loan officers perform well their
duties means that screening of clients in well and efficient manner, they are appreciated by
the Branch Manager and by completion of screening, every incentive is added in their
monthly salary, so these are also the motivational factors for the employees working in NBP.


3.2.7 Responsibilities
Manager operational is responsible for all affairs of branch. He is answerable for all assign
tasks and he is totally answerable as internal controller of the branch. He is responsible to
take duty from all employees any lapses, causes is negligence.


3.3    Critical analysis of the branch
NBP civil line branch It is true that bank is trying to adopting computerized system but their
most of staff is unable to use computerized system or not familiar with computer. There are
no proper facilities in bank for customer. No proper facilities for old age people, they face so
many problems in bank. There is no any shop for bank staff so that they can bring something
for themselves or their guests in break time. Their all system is manual so much time waste in
different process. There is also an electricity problem in this bank. There is reduction of staff
in some departments, so they complete almost their work from internees. There is reduction
of law & order, so sometimes branch faces so many problems especially in the dates of
pensions. All types of pensioners are treated same day that‟s why this creates problems.


3.3.1 Communication
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Communication system between branch employees is very good and admiring. They easily
communicate their problems with each other The employees of NBP (0333) are all linked
with each other from top to lower management. So when any problem arises in branch they
just discuss with each and solve it in few minutes. We can say that there is open and simple
communication system within branch. But there is one flaw that there is high communication
gap between head office and branches because it take a lot time to reach in head office and in
taken approval.
3.3.2 Hiring system
The hiring system of employees is conduct by two ways; firstly, the employee is interviewed
by the branch manager and then his/ her CV is transferred to the head office and he is again
interviewed and give test to the Human Resource Manager of head office or regional office
and after fulfilling the whole requirements of policies given by the Head Office, he or she is
selected as an employee for the branch where he or she is needed.
3.3.3 Morale of staff
There is a good morale in staff of the whole branch, the staff covenant with one another in a
good way and there is no concept of jealousy and leg pulling among staff. They behave with
each other and also with me in a good way during the period of my internship and there is
just like a family atmosphere.
3.3.4 Physical facilities
The NBP branch 0333 of is well established, air conditioning facility is available in the whole
branch but there are separate rooms for officers. Cash officers do not have Computer system
on their tables, there is also shortage of office equipment on their tables, he has just calculator
as helping material for huge amount of calculations.
3.4 Performances:
There are two types of performance measurement one of them is customer satisfaction and
other is in terms of sales (number of account averagely open in a month).
In term of quality
First I am going to focusing on customer satisfaction, in NBP (0333) all employees were very
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experienced people so, they always deal the customer politely and in very impressive way.
That‟s why they can easily attracting and retaining the customer in this competitive
environment. Only due to customer satisfaction and trust on bank products NBP (0333)
achieve very best performance with respect to its operational time or activation time.
In term of quality
Secondly sales or no. of Accounts is based on the how much a banker can satisfy and attract
the customer. In NBP in which I done my internship its age 2 months but its customer
volume spreads to 1300, which is remarkable according to budget point of view. Bank not
just achieved its budgeted target fixed by higher management but also extend them up to 65%
of fixed earning targets.


3.5 Latest budget review
Deposit target has been increase up to 63% of the base (last financial year date) & advances
target has been fixed 45% of the base.
Earning target has been increase fixed up to 35% of the base.


3.6 Summary
During my stay in National Bank of Pakistan, I found it as among one of the best banks in
Pakistan. As an internee, I enjoy working there. NBP has a very cooperative staff .I worked
there in very congenial and supportive environment.
According to Euro money magazine the leading journal of UK in the month of March 05
declared:
“NBP is the only Pakistani bank which has been


Ranked among the top100 banks of Asia”
It offers very good package of salary and benefits to its employees. Management is trying to
regulate a system for promotions. It has both contract as well as regular employees as it
beliefs on the use of strangeness for the cross fertilization of ideas. It has unlimited offers for
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its employees in the areas of economic well being &development. National bank of Pakistan
gives many benefits and allowances to their employees (executives, officers, clerical & non
clerical staff).
CHAPTER # 04

NBP POLICIES & STRATEGIES

Introduction
This chapter include the polices and strategies of NBP, that how they work and what are the
basic rules for the accounting record assigned by SBP. The last part of the chapter consisted
on success of NBP through its policies and strategies.
4.1 Policies
Policy is a projected programme consisting of desired objectives and the means to achieve
them. Following are some policies implemented by NBP.

     Provide job satisfaction to their employees.

     Allow the employees to participate in the decisions that affect them.

     Good performance reward is also in the form of hajj and umrah package.

     Use goals and feedback.

     Developing a benefit package.

     HR policies are in the form of circulars and instruction forms.

     Organizing 6 weeks internship for the students.

     NBP has no gender bias.
4.2 Strategies
Five year plan approved by BOD is hollow and does not address any serious thinking on:
1. Development required for serving major sectors of the economy


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2. Productivity improvement and benchmarking with the competition


3. Bringing the institution on international banking landscape in the coming five years, not to
speak of the seven years which the current management has already served.
4. Inducting and leveraging specialized human capital
5. Infrastructure to support planned growth and vision
Even this plan is not cascaded down the line to align the annual performance, targets and
resultantly actions and tasks with the grand plan. Now in its second year, this plan.
4.3 Successes
After effectively implementing the policies and strategies NBP had achieve its goals
efficiently and effectively in previous year performance. In below there are number of
successes which has been achieve by NBP.




"Best Foreign Exchange Bank 2008” awarded by world's leading financial journal “Global
Finance."

Stable AAA/A-1+(Triple A/A-One Plus) rating (Standalone Basis) by JCR-VIS (July
2007)

Best Return on Capital for 2006 amongst all Banks in Asia. -“Banker Magazine” in July
2007

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World's leading financial journal, “Global Finance” has named NBP as the Best
Emerging Market Bank from Pakistan for the year 2006.

"Best Foreign Exchange Bank – Pakistan” award for the year 2006 by world's leading
financial journal “Global Finance”.

Due to consistent improvement in NBP's Core Profitability , Asset Quality and
Economic Capitalization in recent years ,Moody's Investors Service upgraded the
Financial Strength Rating (FSR) room E+ to D-, in November 2005 .

“Best Foreign Exchange Bank – Pakistan” award for the year 2005 by world's leading
financial journal “Global Finance”.

“Best Bank - Pakistan” award for the year 2005 by world's leading financial journal “Global
Finance”.

The Asian Banker, a reputable financial journal, has published the report of its research
project on the ranking of 300 of Asia 's Strongest Banks based on a 11-Dimensional Dynamic
Scoring Criteria has adjudged National Bank of Pakistan as the Strongest Bank in Pakistan.

On the basis of overall financial performance during 2004, NBP has been listed “Amongst
top 1000 banks in the world” and “ Number 1 Bank in Pakistan” by the prestigious
“Banker Magazine” in its issue of July 2005 .

The “Banker Magazine” in July 2005 recognized NBP as the 10th Best Bank in terms of
„Profit on Capital' in the world.

“Bank of the Year” awarded for the year 2005 by the world renowned “The Banker”

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magazine owned by the Financial Times Group, London. On an all Pakistan basis National
Bank of Pakistan was awarded the “Kissan Times

Award” for the year 2005 by the Prime Minister, Mr. Shaukat Aziz, for its services in the
Agriculture Sector .World leading financial journal, “Global”

“Bank of the Year” award for the year 2004 by the world renowned “ The Banker”
magazine owned by the Financial Times Group , London . -*-*

“ Euro money” Magazine, a leading and prestigious journal, published from London , UK ,
in its issue of March 2005 has published Moody's Investors Service rankings in which NBP
is the only Pakistani bank which has been ranked among the Top 100 banks of Asia for it
performance in the fiscal year 2003

WEBCOP-AASHA, an alliance against gender discrimination at workplace, presented a
Recognition Award to National Bank of Pakistan on December 18, 2004 for having a
Gender Sensitive Management .

In May 2004, NBP's standalone long-term rating was upgraded by JCR-VIS Credit Rating
Agency to AA (double A) from AA -( double A minus) with “stable outlook”, while
standalone short-term rating was maintained at A-1+(A one plus). This is now the best
rating for a local commercial bank in Pakistan The “Banker Magazine” in July 2003
recognized NBP as the bank with the highest return on capital in Asia and No.8 in the
world.

President's Awards:

Mr. S. Ali Raza, Chairman & President, NBP was awarded “The Asian Banker Leadership
 Achievement Award 2007” by Asian Banker ( an internationally reputed Fina Internship

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1) Journal in its issue of June 2007

2) Mr. S. Ali Raza Chairman & President, NBP, was conferred Sitara-i-Imtiaz by the
President of Pakistan , General Pervaiz Musharraf on August 14, 2005

3) “ Business Week” of “The McGraw Hill Companies” in its July 11,2005 edition has
adjudged Mr. S. Ali Raza, Chairman President, NBP as one of the twenty five Leaders of
Asia at the & Forefront of Change and has identified them as Stars of Asia including the
President of Indonesia.


4.4 Summary

As NBP is enjoying the highest rating of „AAA‟ in the industry assigned by M/s JCR-VIS
Credit Rating Company Limited on a standalone basis i.e. without the benefit of the 75%
government ownership.
In addition to the highest credit rating in the banking sector NBP has received several awards
from both local and foreign institutions of repute during 2008 including „Bank of the Year‟
award given by the „The Banker‟ magazine and the ‟Best Foreign Exchange Bank in
Pakistan‟ awarded by „Global Finance‟. NBP has a strong commitment towards the
betterment of society and is fully aware of its social obligations and responsibilities. NBP has
always shown great generosity in times when a natural calamity strikes like the 2008
devastating earthquake in Balochistan or when it comes to rural development, children
education and promotion of Sports. In 2008 NBP inaugurated its own built Sports club at
Clifton
NBP remains committed to the interest of all stake holders including its employees, owners,
regulators and Pakistani nation. NBP has well defined strategy on where and how we want to
proceed in the years to come. With the implementation of the new „Core Banking Package‟,


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NBP will completely automate its functions which in turn will appreciably enhance work
efficiency.
CHAPTER # 05

DIFFERENT ANALYSIS OF ORGANIZATION

Introduction:
This chapter consisted on different analysis of NBP. In this chapter I will analyze NBP
through different perspectives, I will conduct different analysis to realize the actual financial
position of NBP.
5.1 SWOT ANALYSIS
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective.If SWOT
analysis does not start with defining a desired end state or objective, it runs the risk of being
useless. A SWOT analysis may be incorporated into the strategic planning model. An
example of a strategic planning technique that incorporates an objective-driven SWOT
analysis is SCAN analysis. Strategic Planning, including SWOT and SCAN analysis, has
been the subject of much research.

    Strengths: Attributes of the organization that is helpful to achieving the objective.
    Weaknesses: Attributes of the organization that is harmful to achieving the objective.
    Opportunities: External conditions that is helpful to achieving the objective.
    Threats: External conditions which could do damage to the business's performance.

Strengths:

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Advance salary product

    It exists in the list of top 10 banks in the ASIA.

    It has the highest profit among the largest banks of the ASIA.
    Its paid-up capital is very high
    Very less uncertainty because of a Govt. bank
    High confidence due to higher capital investment.
    LC (letter of credit) is acceptable all over the world.
    Chest branches can supply cash on the behalf of state bank.
    Chest loans can be used for limited time
    Stake holder is Govt. of Pakistan.
    It holds the Govt. treasury.
    The biggest customer of NBP is Govt. of Pakistan.
    Work as corresponding of ASKARI bank
    Provide High packages to employees.
    Provide high staff benefits.
    Recruitment occurs after every year.
    MTO‟s selection is planned till 2010.

      Weaknesses:

    The Major problem with NBP is its image as it is a Govt. bank so the vision of the
      customer is not positive about it.
    People think it will not provide them satisfactory services.
    In many branches management is not up to date.
    In small area‟s branches employees have less education.
    Award and promotion policies are not implemented in all branches.




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    There is no concept of job rotation
    Employees have low coordination level among each other.

Opportunities:

    Advance salary for employees
    Employee benefits
    Pensions
    Award for employee performance
    Promotions
    Corporate planning learning.

Threats:

    Turn out of employee
    Job security and Strugglers
    At a time do no. of jobs due to competitor.
    NBP have to do those jobs which have no loss and no profit because of their
       competition
    Customer dissatisfaction
    Slow actions on complains
    Political environment.


4.2 PEST ANALYSIS
It is very important that an organization considers its environment before beginning the
marketing process. In fact, environmental analysis should be continuous and feed all aspects
of planning. The organization's marketing environment is made up of:

   1. The internal environment e.g. staff (or internal customers), office technology, wages
      and

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finance, etc.

2. The micro-environment e.g. our external customers, agents and distributors, suppliers, our
competitors, etc.

3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural
forces, and Technological forces. These are known as PEST factors.

Political:


     Privatization policy and deregulation.
     Impact of subsidized credit affecting and NCB‟s.
     Employment practices, Unions, Associations.
     Political Interference and harassment.
     Incidents of high taxation on banking industry.
Economical:


     Constraints in mobilization of public savings because of inflation.
     Staff cost.
     Operating cost.
     Bad debts
Social & Cultural:


     Inadequate human resources.
     Cultural strain to savings.
     Defaulter‟s lobby.
     Declining education and work ethics.
     Inadequate accountability.
     Adequate empowerment.



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Technological:


    Inadequate communication infrastructure.
    Inadequate computer facilities.
    Inadequate IT training


5.3 Ratios analysis:
Ratio Analysis enables the business owner/manager to spot trends in a business and to
compare its performance and condition with the average performance of similar businesses in
the same industry. To do this compare your ratios with the average of businesses similar to
yours and compare your own ratios for several successive years, watching especially for any
unfavorable trends that may be starting. Ratio analysis may provide the all-important early
warning indications that allow you to solve your business problems before your business is
destroyed by them.
Ratio means “one number expressed in term of another a ratio is statistical yardstick by mean
of which relationship between two or various figures can be compared or measured. Here we
are going to explain the ratio analysis of NBP (bank) which is little bit different from other
organizations.


Profitability Ratios:


Profitability means “Measure of the ability of business to generate returns for the business or
for the owner” or “Overall effectiveness of the management is known as profitability”
Here we will calculate Solvency ratios of NBP to evaluate its financial position.
To calculate this ratio we needed these items Operating profit, net profit, operating fixed
assets, total assets, and total investments with in business, operating fixed assets.


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     Earnings Ratios          2007                2008                 2009


     ROA                      2.72%               1.96%                2.07%
     ROE                      19.20%              14.13%               16.41%
     ROD                      3.48%               2.54%                2.70%


Critical Analysis:


The earnings ratios of NBP were higher in 2007 but due to economic crisis return decreases
but now the economic activities are accelerating that‟s why the NBP returns also increases
that Is the good symbol for the future of NBP


Debt Management.


Debt Management        2007                2008                 2009


Debt to Equity         6.05                6.22                 6.94
Debt to Assets         0.86                0.86                 0.87
Deposits         times 5.52                5.56                 6.09
Capital


Critical Analysis


These above ratios of NBP have no effect of recession and bank maintained as well as
improves the above ratios that show the efficiency of the NBP activities.




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Liquidity Ratios

      Liquidity Ratios          2007               2008                2009


      Earning Assets To 0.75                       0.74                0.75
      Assets
      Advance to Deposits       0.60               0.62                0.66


Critical Analysis
Earning assets of the NBP almost have no effect of the world recession but the improvement
in advances against the deposit reflects that the people of Pakistan have less money to deposit
and they are encourage to get loan from the bank.
Growth Rates
Growth Rates             2007              2008                 2009


Profits After Tax        11.82%            -18.78%              17.81%
Return on Assets         -2.95%            -28.71%              5.64%
Net             Interest 11.53%            10.20%               3.78%
income(before
provision)


Critical Analysis
This table of ratios is telling about the future of banking sector in Pakistan. In 2007 all the
world was under the recession and it also affects the economy of Pakistan. Banks are the
industry that was hardly hit by this recession and the profits of all banks convert into
negatives but in 2009 hope for bright future arises because now the NBP come back on the
track and generating the profit.


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Market Value Ratio
Market         Value 2007                   2008                  2009
Ratio


Average Share Price 251.46                  174.76                72.60
for the Year


Analysis
As the above data shows the average price of shares of NBP is very high in 2007 but later it
trend to decline and in 2009 the price of share is less than three times as compare to the 2007.
It is due to the economic recession that effect badly to the banking sector.
Solvency Ratios:




Solvency Ratios        2007               2008                 2009


Equity to Assets       14.19%             13.85%               12.60%
Equity to Deposits     18.13%             17.98%               16.43%
Earning Assets to 0.96                    0.96                 0.97
Deposits




Critical Analysis


Due to the recession the equity to assets and to deposits ratios of the NBP are declining over
the period but the earning assets to deposits ratio was maintained by the bank and in 2009 it is
rising.
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     Composition         of 2007                   2008               2009
     Earning Assets


     Lending to Financial 4.23%                    3.29%              2.80%
     Institutions
     Investments             33.34%                32.51%             29.58%
     Advances                62.43%                64.20%             67.63%


Critical Analysis
This section of NBP ratios explains the portfolio of the NBP, explaining that NBP portion of
advances in the portfolio has increases and others have the decreasing trend.
5.4 Summary

The summary of is SWOT Analysis, PEST Analysis and ratios Analysis of NBP. To know
how NBP can compete well and how to maintain its position in the market as a best services
organization. In conclusion we can say that the global economic environment has changed,
creating challenges and opportunities for the world‟s policy makers. The privatization drive
has emerged as a strong tool of transformation, which is being recognized as an essential
ingredient for the economic wellbeing. Now there is a greater awareness that in an

Interdependent world all countries gain individually, these countries should be a positive
contributor to world economic growth as whole. Banks are playing very important role in the
economic growth of the countries. N.B.P no doubts a positive contributor in this respect but I
think there are certain points by adopting which can serve more effectively and efficiently.
Those points are discussed in next chapter.

CHAPTER # 6



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RECOMMENDATIONS & SUGGETIONS

INTRODUCTION

NBP is an effectively operating and profit making organization and carrying out its activities
under a specified system of procedure. The main regulatory body is State Bank of Pakistan,
which provides policy guidelines and ensures that the money market operates on sound
professional basis. While the head office specifies the whole procedure of function and
operations. This procedure has been modernized with the passage of time with a view to
streamline the approach and underlying procedure for effective overhauling of its own
capabilities so as to bring them at par with international practices.

Here I am giving some suggestions, which in my view can add some input for efficiency and
better performance of NBP as an organization in general and City branch in particular.

The recommendations are as follows:

        Professional training

NBP staff lacks professionalism. They lack the necessary training to do the job efficiently
and properly. Although staff colleges in all major cities but they are not performing well. For
this purpose these staff colleges should be reorganized and their syllabus should be made in
such a way to help the employee understand the ever-changing global economic scenario.

Banking council of Pakistan should also initiate some programs to equip the staff with much
needed professional training.

        Delegation of authority



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Employees of the bank should be given a task and authority and they should be asked for
their responsibility.

     Performance Appraisal

The manager should strictly monitor the performance of every staff member. All of them
should be awarded according to their performance and result in the shape of bonuses to
motivated and incite them to work more efficiently.

     Transfer

Transfer is not properly carried out. Some of the employees are continually serving at the
same post. They are simply rotated at the same branch. Therefore it is recommended that
evenly rotation of every employee should take place after every three years in different
branches of the bank.

     Changes in Policies

There should not be any abrupt policies change by the upper management, as this practice
hurts the customer confidences in the bank. Government should make long-term policies

     Need of Qualified Staff

Required, qualified staff should be provided to branch in order to improve the functioning of
the branch. Especially a telephone operator should be appointed.

     Utility Bill Charges

Bank gets Rs. 10 to processes a utility bill, and it is very tire, tough and hard job. These
charges should be increased to RS 15 per bill to enable the branch to cover their handling
costs and make some profit.



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    Link with the Head Quarter

100 major branches of NBP should established a direct link with the, head quarter In Karachi,
through Internet or Intranet. This will make the functions and decision making of the
management easier and convenient.

    Credit Card

National bank of Pakistan should start its operation in credit card. These cards are very
helpful for the ordinary customer in general and the business people in particular. To make it
more secure and to eliminate the misuse of it, the management is required to keep proper
security against the card.

    Installing Validator and ATM

Validator machine is used to count the currency notes and its installation will help to
eliminate to counting errors and will save time.

This branch is situated in the City, which is supported to be the hub of business activates. In
this area an auto teller machine (ATM) is the need of the hour businessmen can easily check
their balance in the bank and also with draw their money conveniently.

    Clean Loans

Clean loan or clean overdraft is the credit facility extended to the customers to the customers
without any security. These types of small term loans should not be extended to anybody,
because sometime these loans are provided to blue-eyed people of the management and they
become a part of bad debts.

    Cash Financing In this mode of financing the amount of credit not utilized by the
       borrower is remained tax-

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free. It is recommended that a small amount of interest should be charge on this amount as
well because the bank gas kept-aside the amount for that borrower and cannot advance it
anywhere..

     Needs to be Flexible in credit Policy

As mentioned earlier, NBP is very conservative in advances and loans policy. It reduces the
investment opportunities. Also loans should be given to the small businessmen and the
agriculture sector at the low markup rate. It should adopt flexible credit policy while giving
credit to the agriculture sector.

     Technological Advancement

I would like to suggest that at least all the main branches of NBP should be fully
computerized in order to expedite the dealing process among bankers and their customers.
Every department should be provided a computer with adequate training (especially
Advances, Deposits and Foreign Exchange departments).Daily records should be entered
directly into these computers, (instead entering the overall daily transactions after the banking
hours). It will not only reduce transaction time, will increase accuracy but will also be
efficient as well. Not only it will be economical but will also reduce the extra burden of work
of the bank. It will also help in reducing the use of excessive paper work.

     Improper Distribution of Work

Proper distribution work leads to success in every organization. Proper distribution of work
prevents the employee from over and under work situation. So for a smooth running of an
organization proper distribution of work is the hint to be followed.During my internship I
observed that there was no proper distribution of work in the bank. I saw that some of the
employee worked like ants other sat idle starting here and there. So this created a lot of over



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work situation for while relaxation for other.

    Favoritism and nepotism

In the City branch during my internship I saw that when some of the employees are transfer
to other places, due to their relation with influential people and with top management they
can cancel their transfer in few weeks, when they are unsatisfied at that place.

So I suggest that in the organization there should be no favoritism, nepotism and politics and
their transfer and promotion should be made on merit and according to the rules and
regulations of the bank and provided favorable environment to the employee to show their
performances.

    Inter Departmental Transfer

I watched during my internship that, there is number of employee who have worked on one
seat for many a year. It can have negative effects motivation of employee who is hard
working and intelligent. Take the example of advances section. In advance section if the
employee is transfer after sixth month or seven month, how can he be able to show his
performances and how can he be able to know the bank customer in a short period of time.

    Marketing Policy

The branch should adopt various marketing strategy and promotion strategy to promote the
bank and its product. The most important in my opinion is personal marketing; it is the most
effective of all when you think in term of branch level. But on the whole organization level,
they should arrange the seminar within the bank and outside the bank. They should introduce
various prizing schemes just like Allied Bank. Karamad Scheme, Bank Al-Falah (monthly
income earning scheme) and various others. They should do more advertising through
newspaper and media and through channel of personal contacts.

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    Complaints of Customer

There should be an information desk to provide the information and to receive the complaints
of the customer in the bank. There is no complaint box available in the branch and not any
person appointed to hear the complaints.

Every person cannot go to the manager for the complaint because most of the people are
hesitant. So I suggest management to install a compliant box in the branch, and recruit a
special person for that guidance of the customer when they are unable to manage some
difficulties in banking matters.

    Analysis of the Business:

Proper analysis of the business reports should be conducted before extending any type of
loan. For this purpose professional training of the stuff member is required.

    Organizational Commitment

It is suggested that employees working on daily wages basis should be given some benefits,
which the other employees are getting. Their salaries must increase according to efficiency,
performance and service.

    Managerial Leadership

In the analysis, we have discussed the difficulties of the assistant in taking any initiative;
therefore it is recommended that the assistants should he given special training to make them
ready for the leadership.

    Credit Monitoring

The credit department of the bank should carries out vigilant credit monitoring. They should



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ensure the proper payment of installments and the mark-up by the borrower. The staff
members who have done all the paper work of the loan extension should perform the
monitoring, as he/she will be having more information about the borrower.

       Extended Banking Hours

The banking hours may be extended up to six, as being practiced by HBL opposite to it.

Some of the business community due to law and order situation are now reluctant to keep the
fund in their premises and would want to depart with it. Therefore, City Branch may extend
the night banking to cater to demand of this business community. The branch could also be
opened to cater the requirements of this business community

       Limited staff:

Staff of NBP in village branches is limited; they face much difficulty to perform their task
efficiently. So I recommended that staff should increase in those branches for better
development of resources. On other hand I observed that many branches of NBP are
overcrowded. Less people can work which extra people perform. Number of employees
should decrease or new branches should opens for the adjustment of these extra employees.
So there should be effective distribution of human resource achieve goals effectively and
efficiently.

       Housing and House Hold Goods loans

Bank should initiate these loans because most of bank‟s customers are middle class and they
cannot afford to buy house or household goods at once by their own.




6.3      Summary:

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We discussed in this chapter about the recommendation and suggestion for NBP as an
organization in general and NBP, Civil line Branch, Gujranwala in particular. Banks are
playing very important role in the economic growth of the countries. N.B.P no doubts a
positive contributor in this respect but I think if NBP impose some policies related to above
recommendations and there are certain points by which adopting NBP can serve more
effectively and efficiently.




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