Acknowledgement: Irfan Ahmed Roll No: 2k7/com/54 Institute of Commerce University of Sindh

Acknowledgement:
All praise to Almighty Allah, the most merciful and compassionate,

who give me skills and abilities to complete this report successfully.
I’m grateful to my parents who are always been a source of strength

and encouragement for me throughout my life.
And I’m also thankful to all my staff members’ Of National Bank of

Pakistan. I found every one very co-operative and helpful for
providing me the theoretical as well as practical knowledge about the
functions and operations of the bank.
I want express greatest gratitude to my Supervisor Prof: Noor

Mohammad Jamali, who was the person who made me able to write
report, his co-operation shows the way forward to me to achieve this
success and who kept in high spirit through this appreciation. He
helped me a lot each time I went up to him.
Irfan Ahmed
Roll no: 2k7/Com/54
Bs.Com final
Institute of Commerce
University of Sindh
Contents:
Chapter # 1(Introduction to Organization)
Topics:
 What is bank
 History of banking
 History of banking in Pakistan
 History of National Bank Of Pakistan
 President message
 Vision Of NBP
 Mission Of NBP
 Core values Of NBP
 Goals Of NBP
 Board Of Directors Of NBP
 Senior Management Of NBP
 Domestic Branches Of NBP
 Regional Branches Of NBP
 Overseas Branches Of NBP
 Awards and Achievements
Chapter # 2(NBP's Initiative In 2009)

Topics:
 Corporate banking
 Retail banking
 Commercial banking
 SME
 Human resource
 Credit and risk management
 Special assets management
 Operations
 I.T
 Agriculture
 Deposits
 International operations
 Islamic banking
 Credit rating
 Market recognition
 Social responsibility
Chapter # 3(Products and services of NBP)

Topics:
 NBP Premium Amdani
 NBP Premium Saver
 NBP karobar mera apna karobar
 NBP Saiban
 NBP Advance salary
 NBP Cash card
 NBP Investor advantage
 NBP Cash and Gold
 NBP Students loan Scheme
 NBP Pak remittance
 NBP Protection shield
 NBP Islamic banking
 NBP corporate treasury
 NBP International banking service
 NBP Kisan Dost
 NBP Kisan Taqat
 NBP ATM
Chapter # 4(NBP Fatima Jinnah Road (Hub Branch)

Topics:
Departments:
 Current and saving department
 Accounts department
 Remittance department
 Cash department
 Clearing department
 Billing section
 HRM department
SWOT Analysis
Chapter # 5 (Suggestions & recommendations)

Topics:
 Problems found during internship
 Suggestions and recommendations
 Tips how to deal with customers.
Chapter 1
What is Bank?
Some authors write that the word bank is derived from Italian word “Bancus” which means a
“Bench”. Because in the olden days the Jews were use to make banking settlement by sitting on
the benches and to deal the exchange of money in the market place.
Some other authors are of the opinion that the word bank is derived from a German word
“Back” which means “Joint stock Fund” when the major part of Italy was occupied by the
German then this word “Back ” was Italianized in to the word Bank.
We can define bank as “A institution for exchange of money, sanctioning credit, transfer funds
by domestic and foreign bills of exchange”. OR in other words simply we can say that the bank is
an institution that facilitates the matter in which the money is involved.
History of Banking:
The bank derived from the word “Banko” or “Bankus” which means “Benches”.
Babylonians start banking in 2000 B.C.
“Great Templs E.Phesus & dolphin as banks.
The origin of bank start from 12th century from the northern Italy by Jewish Gold Smith started
the banking system.
They are doing money exchange transactions in markets on the benches.
In the 14th century they migrated to the England.
The modern banking started in Asia from 17th century.

In 1885 the central bank of India, Bangal bank and Madrass banks was established.
In 1920 to 1921 these three banks was amalgamate and make the bank of name imperial bank
of India, Bombay and Calcutta bank.
In 1935 the reserve bank was established and considered as central bank.
Banking in Pakistan
First formally started in Pakistan during the period of British in the South Asia. After
independence from British Raj in 1947, and the emergence of Pakistan as a country in the globe,
the scope of banking in Pakistan has been increasing and expanding continuously. Pakistan's
oldest bank is the State Bank of Pakistan, which is also the central bank of the nation. Before
independence on August 14, 1947, the Reserve Bank of India was the central bank of what is
now Pakistan. After independence, Muhammad Ali Jinnah took actions to establish a central
bank in Pakistan which resulted in the new founding of the State bank of Pakistan, with its
headquarters to be based in Karachi.
Nationalized scheduled banks
 First Women Bank Limited

 National Bank of Pakistan
 The Bank of Punjab
 The Bank Of Khyber
 The bank of phatan
Specialized banks
 Industrial Development Bank

 Zarai Taraqiati Bank Limited
 Punjab Provincial Cooperative Bank
 SME Bank
Development financial institutions
 Pak China Investment Company Limited, Islamabad

 Pak Kuwait Investment Company Limited, Karachi
 Pak Libya Holding Company Limited, Karachi
 Pak Iran Joint Investment Company Limited, Karachi
 Pak-Oman Investment Company Limited, Karachi
 Saudi Pak Industrial and Agricultural Investment Company Limited, Islamabad
 House Building Finance Corporation, Karachi
 Investment Corporation of Pakistan, Karachi
 Pak Brunei Investment Company Limited, Karachi
Investment banks
 AKD Securities Limited

 Invest Capital Investment Bank Limited
 IGI Investment Bank Limited
 AMZ Securities
 Oryx Leasing (Pakistan) Limited
 Trust Investment Bank Limited
 Arif Habib Investment and Mutual Funds Co.
 Sami international bank Sialkot Pakistan
Discount and guarantee houses
 First Credit & Discount Corp Limited

 National Discounting Services Limited
 Speedway Ford metal (Pakistan) Limited
Housing finance companies
 Asian Housing Finance Limited

 Citibank Housing Finance Company Limited
 House Building Finance Corporation
 International Housing Finance Limited
Micro finance banks
 NRSP Micro Finance Bank Limited

 The First Micro Finance Bank Limited
 Khushali Bank Limited
 Karakuram Bank
 Network Micro Finance Bank
 Pak Oman Micro Finance Bank
 Rozgar Micro Finance Bank, Karachi
 Tameer Microfinance Bank Limited
 Kashf Microfinance Bank Limited
Islamic banks
 AlBaraka Islamic Bank

 BankIslami Pakistan Limited
 Dubai Islamic Bank Pakistan limited
 Dawood Islamic Bank Limited
 Emirates Global Islamic Bank Limited
 Meezan Bank Limited-Premier Islamic Bank In Pakistan
Upcoming or transaction in process
 Al Baraka Islamic Bank, Dubai will acquire Emirates Global Islamic Bank, Pakistan

 Qatar Islamic Bank is looking to expand its operation in Pakistan in the cities
of Karachi, Lahore and Islamabad.
 Faysal Bank has signed sale agreement with The Royal Bank of Scotland -
Pakistan.The Royal Bank of Scotland - 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.
In today's competitive business environment,

NBP needed to redefine its role and shed the
public sector bank image, for a modern
commercial bank. It has offloaded 23.2
percent share in the stock market, and while it
has not been completely privatized like the
other three public sector banks, partial
privatization has taken place. It is now listed
on the Karachi Stock Exchange.

National Bank of Pakistan is today a progressive,
efficient, and customer focused institution. It has
developed a wide range of consumer products, to
enhance business and cater to the different
segments of society. Some schemes have been
specifically designed for the low to middle income
segments of the population. These include NBP
Karobar, NBP Advance Salary, NBP Saiban, NBP
Kisan Dost, NBP Cash n Gold
It has implemented special credit schemes like small finance for agriculture, business and
industries, administrator to Qarz-e-Hasna loans to students, self employment scheme for
unemployed persons, public transport 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 prominent
regional 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 up gradation 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 , 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).
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.
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
President Message:
It gives me great pleasure to present on behalf of the Board of Directors 60th annual report of the bank
for the year ended December 31, 2009. In November 2009, the Bank completed its 60th year of service
to the country. On this auspicious occasion I give my heartiest facilitations to all the stake holders in
NBP.
In the year 2009, the economy showed signs of stabilization. Inflation remains the top concern which
eased to 10.7% by August, it’s lowest in 20 months, as a result of monetary tightening. The current
account deficit improved and foreign exchange reserves stabilized - mainly on account of lower oil prices
and record remittances from workers abroad. Growth slid to 2% in 2008-09, scarcely outpacing
population growth.
Problems in the energy sector, with demand outstripping generating capacity, depressed growth
potential are key burdens on public finances. Year 2009 witnessed unprecedented challenges; terrorism
remained the biggest challenge for Pakistan and still is. The negative effects of international economic
meltdown which started in 2008 were evident in 2009, with the sharp rise in non performing loans and
rising cost of operations; these factors hampered the business confidence and performance of the
banking sector.
In this backdrop it is commendable to note that NBP’s after tax profit increased by 18% from Rs. 15.5
billion to Rs.18.2 billion. The said increase is owing to higher fee & commission income, tax credit and
capital gains. Earnings per share increased by 18% to Rs.16.92 in 2009. The top line (operating revenue)
increased by 7.5% from Rs. 53.4 billion in 2008 to Rs. 57.5 billion in 2009. Pre-tax profit however, has
reduced to Rs. 22.3 billion, a decrease of 3% over last year mainly on account of higher administrative
cost and provision charge which increased due to both fresh accretions and further downgrading of non
performing portfolio. The bank has prudently provided for the non performing loans which is evident
from the provision coverage ratio of 76 %, higher than the industry average.
Pre- tax return on equity stood at 27%, pre-tax return on assets at 2.6% while cost to income ratio is at
0.39. The bank is well capitalized with capital adequacy ratio at 16.9%.
Net interest income increased by 3.8 % or Rs. 1.4 billion from the corresponding period last year owing
mainly to volume growth. The interest rates that were at record level in beginning of the year gradually
decreased during the year. Cost of deposits increased mainly owing to the minimum rate of 5.0% for all
remunerative deposits. The bank increased its deposits to strengthen liquidity position which though
increased cost of fund, but its overall impact on the system’s stability and liquidity outweighs the rise in
cost.
Non-interest income shows growth of 16 % mainly due to increase in fee, commission and
capital gains whereas the exchange income, dividend income as well as other income shows
decline. Fee income increased by 13%, increase have been noted in commission on trade
finance, general banking, arrangement & advisory services as well as government transactions.
Income from dealing in foreign currencies decreased mainly on account of lower revaluation
gains due to less volatility in Pak Rupee in the year under review. Other income is lower by
Rs.693 million due to one off receipt of Rs.988 million compensation on delayed refunds last
year. Dividend income decreased by Rs.959 million this year mainly on account of lower
dividend declared on NIT units this year.
Capital gains show a sharp increase of Rs.4.2 billion over last year mainly on account of Rs. 3.9
billion gain on redemption of NIT Units. Salaries & Allowances increased as a result of annual
increase in salaries, promotions and head count. Charges to defined plan shows sharp increase
due to additional charge of Rs.1.4 billion on account of revision in pension factor. Other
administrative expenses increased mainly due to inflation, and branches up- gradation.

Provision charge against advances, investments & other assets increased by Rs.572 million from
Rs. 11.7 billion in 2008 to Rs.12.3 billion in 2009. The increase in provision charge is both due to
fresh accretions as well as further downgrading of the portfolio. The increase in NPLs is an
industry wide phenomena which increased by 25% in 2009. High inflation and interest rates,
power shortages, pressure on trade volumes coupled with deteriorating law & order situation
as a result of ongoing war on terror were the factors which seriously dampened the business
confidence and as a result the repayment capacity of the borrowers was seriously affected
which resulted in higher NPLs. Provision against investment is mainly on account of impairment
loss recorded on equity portfolio.
Despite many challenges, NBP recorded an impressive growth both in terms of advances as well
as deposits. By year end, the deposits increased by16% or Rs.102 billion. The increase was in all
categories of deposit. In case of advances the growth was mainly in commodity and corporate
sector on account of higher borrowings by Government from commercial banks.
Vision:
To be recognized as a leader and a brand synonymous with trust, highest standards of service
quality, international best practices and social responsibility.
Mission:
NBP will aspire to the values that make NBP truly
the Nation’s Bank, by:
• Institutionalizing a merit and performance culture
• Creating a distinctive brand identity by providing the
highest standards of services
• Adopting the best international management practices
• Maximizing stakeholders value
• Discharging our responsibility as a good corporate
citizen of Pakistan and in countries where we operate
Core values:
• Highest standards of Integrity
• Institutionalizing team work and performance culture
• Excellence in service
• Advancement of skills for tomorrow’s challenges
• Awareness of social and community responsibility
• Value creation for all stakeholders
Goals:
To enhance profitability and maximization of NBP
share through increasing leverage of existing customer base and diversified range of products.
Board of Directors:
Syed Ali Raza

Chairman & President
Syed Ali Raza is the Chairman and President of National Bank of Pakistan (NBP), the
largest commercial bank of the country. Mr. Raza is a graduate of the London
School of Economics and M.Sc. in Admn. Sciences as well as a Fellow Member of
The Institute of Bankers in Pakistan. He started his career in 1974 with Bank of
America, arising to become Managing Director and Regional Manager for the
Middle East, North Africa and Pakistan for Bank of America.
Mr. Tariq Kirmani

Director
Soon after completing his Masters in Business Administration (MBA) Mr. Kirmani
embarked upon a rewarding career, starting with a multi-national Oil Company
(Caltex later Chevron Pakistan) in 1969 and worked for seven years in the United
States of America, United Arab Emirates and Australia in different senior
management positions in Marketing Operations and Finance. In 1991, Mr. Kirmani
became the first Pakistani to be elected as a Company Director of the mentioned
multi-national company.
Mrs. Haniya Shahid Naseem

Director
Mrs. Haniya Shahid Naseem is an MBA with more than fifteen years experience of
working in the education, social, industrial textile and agriculture sectors of
Pakistan. She has served for 5 years on the Board of a textile company, having a
turnover of more than one Billion Rupees. Presently she is actively involved in the
administration of Pakistan Public School Multan. She is a progressive agriculturist
and actively participates in the management of her family’s agricultural farms. She
is a member of the Multan Chamber of Commerce and Industry, and is also on the
guest faculty of IBA, Multan.
Ms. Nazrat Bashir

Director
Ms. Nazrat Bashir belongs to District Management Group of Civil Services of
Pakistan. She is Masters in Economics from New York University, New York, USA
and Master in Psychology from Peshawar University, Peshawar
She has extensively traveled abroad and has attended various international
Seminars and Conferences such as on Micro Finance, Anti Money Laundering,
Instruments of Financial Markets etc. Domestically too she has attended various
programmes in some of very prestigious institutions of Pakistan.
Mr. Ekhlaq Ahmed
Secretary Board of Directors
Mr. Ekhlaq Ahmed, EVP is the Company Secretary of the Bank and also the
Secretary of Credit & Operations Committees. He is M.A. (Economics) from Rajshahi
University, Bangladesh (former East Pakistan). He is a Diplomaed Associate
Institute of Bankers, Pakistan (DAIBP) and secured overall 1 st position in order of
merit and won Muslim Commercial Bank Prize in the subject of “Foreign Trade &
Foreign Exchange”. He is an Associate of Institute of Corporate Secretaries of
Pakistan (ACIS). He is also a “Certified Director” on the panel of Pakistan Institute
of Corporate Governance (PICG) since November, 2007. Mr. Ekhlaq Ahmed is the
first senior executive of the Bank who has achieved the status of “Certified
Director”.

Senior Management
Qamar Husain
Chief Operating Officer , Head of Credit & Risk Management Group
Dr. Asif A. Brohi
SEVP & Group Chief, Operations Group
Shahid Anwar Khan
SEVP & Group Chief, Overseas Banking Group / Corporate & Investment
Banking Group
Ziaullah Khan
SEVP & Group Chief Agriculture Finance Group
Dr. Mirza Abrar Baig
SEVP & Group Chief, Human Resources Management & Administration Group
Amer Siddiqui
SEVP & Group Chief, Commercial & Retail Banking Group
Tariq Jamali
SEVP & Group Chief, Compliance Group
Nadeem A. Ilyas
SEVP Group Chief, Assets Recovery Group / Corporate & Investment Banking
Group
Muhammad Nusrat Vohra
SEVP & Group Chief, Treasury Management Group
Khalid Bin Shaheen
SEVP & Group Chief, Global Home Remittance Management Group
Imam Bakhsh Baloch
SEVP & Group Chief, Audit & Inspection Group
N. B. Soomro
SEVP , Special Assignments, President's Secretriate
Agha Fidaullah
EVP/Group Chief, Special Assets Management Group
Shafique Ahmed Khan
EVP & Divisional Head, Islamic Banking Division
Ekhlaq Ahmed
EVP & Secretary Board of Directors
Fazal-ur-Rehman
EVP & Head P&IR Division, HRM&A Group
Muhammad Hanif
EVP & Head HR & OD Division, HRM&A Group
Muhammad Iqbal Qasim
EVP & Head SC & CSR Division, HRM&A Group
Tahira Raza
EVP & Head Risk Review Division, Credit and Risk Management
Mohammad Kumail Dehradunwala
EVP & Chief Information Officer /Head Of Information Technology Division
Aamir Sattar
SVP & Divisional Head, Financial Control Division
Faisal Mahmood
VP & Divisional Head (A) , PMO & Project Director CBA
NBP DOMESTIC BRANCHES:
SINDH
 Dadu/ Sanghar
 Hyderabad
 Jacobabad/ Shikarpur
 Karachi
 Larkana
 Mirpurkhas/ Badin
 Nawabshah/ N' Feroze
 Sukkur/ Khairpur
 Tharparkar
PUNJAB
 Bahawalpur
 D.G. Khan/ RYKhan
 Faisalabad
 Gujranwala
 Sialkot/ Narowal
 Islamabad
 Jhang
 Jhelum/ Gujrat/ Chakwal
 Lahore
 Multan/ Baha'nagar
 Murree/ Attock/ Gilgit
 Rawalpindi
 Sahiwal
 Sargodha/ Sheikhupura
NWFP
 Abbottabad/ Mansehra
 Bannu/ D.I. Khan
 Kohat / Mingora
 Mardan
 Peshawar
BALUCHISTAN
 All Branches
 Azad kashmir
 Muzaffarabad
 Mirpur
NBP REGIONAL OFFICES

 Karachi (South)
 Karachi (West)
 Hyderabad
 Larkana
 Sukkur
 Quetta
 Gawadar
 Lahore (Central)
 Lahore (East)
 Gujranwala
 Sialkot
 Faisalabad
 Jhang
 Sargodha
 Multan
 Bahawalpur
 Dera Ghazi Khan
 Sahiwal
 Federal Capital Islamabad
 Rawalpindi
 Jhelum
 Gujrat
 Peshawar
 Mardan
 Dera Ismail Khan
 Abbottabad
 Muzaffarabad (A.K.)
 Mirpur (A.K.)
 Gilgit (sub-region)
NBP OVERSEAS BRANCHES
America and Europe Region
 USA
 Canada
 Germany
 France
Far East Region
 Hong Kong
 Japan
 South Korea
 China
Middle East, Africa & South Asia Region
 Bahrain
 Egypt
 Bangladesh
 EPZ
Central Asian Republics

 Afghanistan
 Turkmenistan
 Kyrgyz Republic
 Kazakhstan
 Uzbekistan
 Azerbaijan
Subsidiary Joint Venture Representative Off
 NBP Kazakhstan
 (Almaty)
 United National
 Bank (UK)
 Canada (Toronto)
 USA (Chicago)
 China (Beijing)
 Uzbekistan
 (Tashkent)
Awards and Achievements:
 "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
 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) rom 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” 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's leading financial journal,“Global Finance” in an exclusive
survey has named NBP as the Best Emerging Market Bank from Pakistan for the year
2005 .
 “ Bank of the Year” award for the year 2004 by the world renowned “ The
Banker” magazine owned by the Financial Times Group , London .
 “ Euromoney” 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 theTop 100 banks of Asia
for it performance in the fiscal year 2003
 WEBCOP-AASHA, an alliance against gender discrimination at workplace, presented

aRecognition 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 .
 In its issue of March 2004, “Global Finance” has also declared NBP as “The Best Foreign
Exchange 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.
 World's leading financial journal, “Global Finance”after a worldwide survey declared

NBP in its issue of May 2003 as one of the best banks in the emerging markets.

Banker” magazine owned by the Financial Times Group, London

Banker” magazine owned by the Financial Times Group, London
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 Financial
Journal) in its issue of June 2007
 Mr. S. Ali Raza Chairman & President, NBP, was conferred Sitara-i-Imtiaz by the
President of Pakistan , General Pervaiz Musharraf on August 14, 2005
 “ 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 asStars of Asia including the
President of Indonesia
 Mr. S. Ali Raza's (Chairman & President, NBP) capabilities were also recognized by
the Institute of Bankers in Pakistan when he was awarded a gold medal in 2003 .
NBP Initiative 2009
Corporate and Investment Banking
Corporate & Investment Banking Group

enjoys robust relationship with premier
corporate clients. The length and breadth of
our corporate clientele has been built on
corporate strategy of providing
comprehensive and customized financial
solutions to our corporate customers.
Varied banking and investment products are
offered to the corporate clients from
working capital financing to infrastructure
project, structured and syndicated
financing, divestitures, financial
restructuring, mergers and acquisitions
assignments and associated financing
solutions.
he group facilitated 122 projects and syndicate financing proposals which were mainly in
financing for energy and power sectors. Advisory fee on corporate finance was a major
contributor as the bank executed a number of large transactions in the energy and
infrastructure projects. The bank also focused on increasing trade finance income by
leveraging the bank’s relationship with clients.
Corporate & Investment Banking Group is geared to take advantage of tremendous growth
potential of corporate accounts and continued its efforts to remain a major contributor to
the bank’s earnings. It is striving to market new clients and retain the existing relationships
and build market share through offering superior services, competitive pricing and wide
product range to valued corporate clients.
Commercial & Retail Banking
NBP has the largest retail client base in the country with one of the highest retail
portfolios. The bank’s retail strategy focuses on its extensive branch network and
leveraging the customer base. In 2009 however due to the high interest rate environment
and pressure due to non performing loans, the consumer advances registered decline.
Despite an ailing economy and adverse macroeconomic factors, the Commercial & Retail
Banking Group (C&RBG) closed 2009 with the key performance indicators being positive.
The absolute domestic deposits base increased by 22% with emphasis on growth in low
cost deposits. As a major initiative in this direction the bank launched CASA Deposit
Mobilization Scheme in late 2009 aimed at mobilizing Current / Saving Accounts through
incentivizing employees. With the increase in NPLs, the focus on recoveries has been
heightened, along with prudent growth in advances.
SME financing is an area of good future potential. Due to negative impact of high inflation
& interest rates, power shortages, fluctuation in commodity prices and reduction in export
orders, this sector suffered considerable pressure that reduced the repayment capacity of
the borrowers for existing loans and also their willingness to go for fresh financing. Due to
these factors SME loans registered decline.
Commodity support prices were raised by the Government to provide much needed
support and encouragement to the growers and as a result the loans under commodity
operations witnessed robust growth during 2009 and increased by 110%. These loans are
fully backed by GOP guarantee.
Overseas banking
National Bank of Pakistan is present in all major financial centers of the world; in Europe,
USA, Hong Kong, Japan as well as in the emerging markets of Central Asia, South Asia and
Far East to capture trade related business. Bank’s overseas network is spread in 16
countries of the world comprising of 22 branches, a wholly owned subsidiary and a Joint
Venture Bank in the United Kingdom besides three Representative Offices.
NBP overseas branches provide all kinds of banking facilities like accepting deposits,
advances to individuals and corporate clients, participation in syndications and trade
financing. The opening of Saudi Arabia branch is underway. In addition efforts are
underway to upgrade Bank’s existing Representative Offices in Tashkent and Beijing.
Agriculture finance
The bank aims to cater to the entire farming and non-farming agriculture business and
provides finances ranging from short to long term for the production and development of
crops and non-crop items for agriculture business related to packing, grading, processing,
storage, marketing and exports.
Pakistan’s rural economy has high growth potential and offers attractive opportunities. The
bank’s product and services are offered to address the needs of both the farm and non
farm sectors. NBP’s large rural coverage of the country is second to none and is one of the
major strengths of the bank. Presently, the agriculture financing facility is offered under
the product category of NBP Kisaan Dost where 30 agriculture financing schemes are
offered.
The importance of agriculture financing cannot be over emphasized as agriculture is key to

Pakistan’s future. Rural banking in Pakistan is in nascent stages and deployment of
technology and modern banking channels continue to be an evolving process.
Treasury Management

NBP has the largest treasury in terms of size. Its function includes liquidity, exchange and
interest rate management. The Bank is a major player in the foreign exchange and money
market and is a primary dealer of government securities. It has the capability to offer
structured products to its customers, including derivatives. For the banking industry, the
year was very volatile in terms of interest rates, varying liquidity conditions, global credit
tightening, depreciation of Pak Rupee and high inflation resulting in significant movements
in yield curve. Treasury Management Group actively managed its portfolio and optimized
yields.
Islamic Banking
The bank believes that Islamic Banking offers good potential for growth. The bank has
opened eight (8) branches since 2007, of which three were opened in 2009. During the last
two years its asset size has grown significantly with offering of market-driven products like
Murabaha and Ijarah. Islamic Banking is making its mark by catering to the Bank’s already
existing large customer-base as well as exploring new and untapped markets including
SME, Commercial and Corporate. Islamic Banking is developing policies for new products
like Diminishing Musharikah, Salam and Istisna to meet customer’s needs. The overall
operations showed loss as a result of higher start up cost of three new branches opened
this year.
Global Home Remittances Management

The Bank channelizes the remittance business through extensive overseas branch network.
The Bank signed an agreement with Western Union for further increase in remittances
business. The bank has also agreements in this regard with exchange companies in U.S.,
Europe, Central Asia, Middle East and Asia. Over the years, NBP has taken various
measures to facilitate overseas Pakistanis to send their remittances through its branches.
Global Home Remittances Management Group was established with renewed focus to
increase home remittances. With recent introduction of NBP e-Remittances, prompt and
efficient transfer of credit to the beneficiary is ensured. The Group generated more than
50% growth in home remittances volume and transaction compared to last year marking a
historical milestone for NBP and at the same time serving the country.
The bank also launched an effective marketing campaign in Pakistan and in the overseas
market to promote NBP as ‘choice for home remittances’. We have improved our service
quality by developing effective complaint handling system in Pakistan.

Equity Investment Division
Equity Investments Division (EID) was formed in November 2009. Earlier Equity Investment
was functioning under the umbrella of Corporate and Investment Banking Group. The main
objective of EID is to build and maintain equity investment portfolio for NBP that provides
attractive returns in terms of dividend income as well as capital gains.
EID is planning to diversify its investments by actively participating in the primary as well as
secondary markets. Furthermore, EID is also responsible for investments
in mutual funds, secondary trading in Term Finance Certificate, underwriting for

companies and evaluating investments/divestments of unlisted companies. EID has been
instrumental in structuring the acquisition of National Fullerton Asset Management
Limited (NAFA). The deal is in final stages.
The role of this division becomes more significant after redemption of NIT Units against
which the bank has received prorata ordinary shares portfolio. Going forward the Bank will
be a major player of the capital market with the focus to optimize return.
Operations

NBP is continuously transforming its image and customer perception as a modern bank
through branch renovation and relocation to more convenient and accessible sites. The
team at Operations Group commits itself to change the face of the Bank by way of
improving its physical outlook, effective implementation of its systems & controls and the
quality of service provided to its customers. Improving operational efficiency is getting
more focus given the challenges being faced by the industry. With opening of customer
facilitation centers for the collection of utility bills and making payments to pensioners, the
bank expects to reduce its counter traffic at branches thereby focusing more on its
customer’s business needs. Customer care is a key area of the bank and various training
programs have been conducted for employees to improve customer handling and
interaction.
Operations group has formulated and implemented various policies to improve efficiency
and transparency in execution of banking operations. Special emphasis have been placed
on development of Anti money laundering (AML) & Know your customer (KYC) policies.
Special Assets Management

Special Assets Management Group is primarily responsible for monitoring and settlement
of non performing loans (NPLs) portfolio. With NPL coverage of more than 76% we believe
that non performing loans can contribute substantially in the bank’s profitability through
recoveries and settlements.
Rising non-performing loans has been an industry wide phenomenon and due to adverse
economic factors, NPLs increased by 26% or Rs. 14.5 billion. We believe that most of the
NPLs are the result of business cycle / circumstantial defaults and with the economy
picking up and reduction in interest rates; the quantum of non-performing loans is
expected to decline. We are keeping our staunch focus on recovery and reduction in non
performing loans is the area of greatest attention.
Information Technology

National Bank of Pakistan is embarking on industry leading IT initiatives to upgrade and
implement new application solutions to meet the challenges of growing competition and
enhanced business requirements. Core Banking Application (CBA) contract has been signed
with M/s Fidelity Information Systems and its implementation has started and by the end
of 2010 three pilot branches are expected to come on this new IT platform. 250 more
branches will be converted and the remaining branches shall come on the new platform in
next three to four years. This will be a transformational change which will greatly improve
operational efficiency and control, customer service and facilitate launch of new banking
products. The existing legacy applications have been enhanced and upgraded. Five new
capacity building projects were initiated i.e. Online Connectivity, Bandwidth Enhancement
for core WAN links, Call Centre, ATMs Expansion, E-Channel Manager/CMS projects. The
purpose of these initiatives is business integration and transition towards modern banking
with a focus on customer facilitation.
Human Resource Management
The bank truly values its staff and the vital role they play in successful organizations. The
bank gives special attention to attracting, developing and retaining good quality human
resource. Our new hiring of top class MBAs as Management Trainees Officers (MTOs) and
search for talent within the Bank have helped in preparing second and third tier leadership
lines. ‘Female Empowerment’ was launched to empower female employees and impact
communities by championing the cause of women’s empowerment in the society. Today,
NBP is determined in pursuing the policy of placing females on responsible and challenging
position as Branch Managers, Branch Operations Managers and Customer Facilitation
Officers. A number of female MTOs have been selected, trained and posted as branch
managers. Currently, 60 branches are being headed by females. HR initiatives and strategy
is amid at competitive employee compensation, training need assessment and succession
planning. NBP is striving to become an employer of choice through improved HR policies
and competitive remuneration.
Audit & Inspection
Internal Auditing is an independent, objective assurance and consulting activity designed to

add value and improve organizational operations. It helps the bank accomplish its
objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, control and governance
processes.
In order to restructure the Audit & inspection Group in line with international best practices
a detailed strategic plan has been evolved wherein time-bound action plan was chalked out
to implement four pronged strategy to bring about a quality change in the functioning of
audit and to change its approach from traditional procedure-based audit to a more
sophisticated Risk Based & Value Added Audit & Management Consultancy. To achieve
these goals we are hiring qualified staff, arranging appropriate training programs,
encouraging audit functionaries to acquire professional qualifications, re-engineering
systems, policies and structure of internal audit in line with our objective of undertaking
risk-based and value-added activities.
Credit and Risk Management
NBP is continuously upgrading its risk management process to identify, evaluate and
manage risk. Our focus includes analysis, evaluation and management of all risks which
include credit, liquidity, market, operational and reputation risks. The bank’s risk
management policies and procedures are subject to high degree of supervision and
guidance to ensure that all risk categories are systematically identified, measured, analyzed
and proactively managed.
We have deployed value at risk (VaR) framework for measurement and monitoring of
market risk. Operational Risk Management Unit has been established that supplements
Credit and Market risk units for comprehensive risk management. Our risk management in
terms of adoption of Basel II guidelines is advancing smoothly where consultants have been
appointed to assist the bank in developing a robust framework for managing risk.
We have our internal filtration systems and approval hierarchy to ensure that proper
authority and responsibility is established whilst reducing the lead processing time of the
credit application. The bank has proper monitoring system with Credit Administration
Department (CAD) to further improve risk management function.
Compliance

Compliance is an independent function that identifies, assesses, advises, monitors and
reports on the Bank’s compliance risk, i.e. the risk of legal or regulatory sanctions, financial
loss or loss to the reputation which the bank may suffer as a result of its failure to comply
with applicable laws, regulations, and codes of conduct and standards of best practices. The
bank has accelerated its efforts proactively to strengthen compliance culture in the bank.
During 2009 we have revised Compliance Review Program (CRP) to incorporate relevant
changes in rules, regulations and changing dynamics to help senior management in
identifying and assessing risk. In view of development of Compliance Review Program,
Exception Reporting Mechanism has improved and now senior management receives report
of violations promptly. Immediate corrective measures are initiated to secure the bank’s
interest.
Domestic Branches Network
We expanded our operations in 2009 and 11 more branches across Pakistan were opened
in 2009 taking the domestic branch network to 1265. NBP has a well defined strategy for
branch expansion to enter the untapped markets and to strike a balance between its rural
and urban coverage.
Credit Rating
NBP enjoys the highest rating of ‘AAA’ in the industry assigned by M/s JCR-VIS Credit Rating
Company. The ratings assigned to NBP are primarily driven by the bank’s role in the national
economy as an agent of the State Bank of Pakistan and as a bank to the Government of
Pakistan. Additionally, ratings also derive strength from the bank’s consistently high
capitalization levels, and nationwide access that has enabled it to secure a cost effective
and diversified deposit base.
Social Responsibility
NBP has been at the forefront of socioeconomic development in the country. It has over the
years funded projects which best serve the economic objectives and social needs of the
country. The bank has made tremendous contribution to the development of small and
medium sized entrepreneurs and to self-employment schemes. The Bank fulfils its social
responsibility through contribution towards various causes. The Bank have always been
generously donating in cases of national disasters and times of difficulty being faced by the
nation, whether it was the devastating earthquake, flood relief efforts or the issue of
Internally displaced persons (IDPs) the bank and its employees have been at the forefront
to help and support the nation.
NBP realizing its responsibility towards improving natural environment accepted the
challenge of planting saplings in an area of 3,000 hectares where severe deforestation has
occurred over the years in the districts of Umerkot, Tharparkar and Mirpurkhas. The bank
was applauded for its contribution in setting “ Guinness World Record” for planting
maximum number of trees in a single day. The record was set on 15th July 2009 in an area
of Keti Bundar under the president’s Mass Afforestation Program for plantation of 400,000
mangrove tree seedlings.
Profit & Loss Appropriation
The Profit for the year 2009 after carry over of accumulated profit of 2008 is proposed to be
appropriated as follows: -
Rupees in Millions
Net Profit before taxation for year 2009 22,300
Taxation
Current year 9,221
Prior year(s) (4,133)
Deferred (1,000)
4,088
After Tax Profit 18,212
Profit Brought Forward 52,456
Transfer from surplus on revalution of fixed assets 124
Profit available for appropriation 70,792

Transfer to Statutory Reserve (10% of after tax 1,821
profit)
Issue of bonus shares 1,794
Cash dividend 5,830
9,445
Profit carried forward 61,347

Future Outlook
NBP remains committed to the interest of all stake holders including its employees, owners,
regulators and the Pakistani nation. We have well defined strategy on where and how we
want to proceed in the years to come. With the implementation of new ‘Core Banking
Package’, NBP will completely automate its functions which in turn will appreciably enhance
work efficiency. We will continue to diversify our customer segments thereby increasing our
product offering. Our commitment towards the employees’ empowerment / development
will continue as we believe that a motivated and well trained work force is necessary to
ensure sustenance and growth. On the business side our main focus would be to reduce
non-performing loans and increase deposits.
We remain committed to our Vision, Mission & core values and our strategy for the future
includes recovery efforts and revival of non performing loans, deposit mobilization,
consolidation of loans, expense management and tapping into untapped markets by
increasing our network both domestically and internationally. Customer service will remain
our main focus of operations management.
The Board places on record its condolences for the sad demise of our director Mr. Sikandar
Hayat Jamali on 25th of July 2009. His professionalism and prudent guidance served for the
utmost betterment of our Bank.
The Board also places on record its appreciation for the services of Mr. Ayub Khan Tarin
who have been replaced on the board by Ms. Nazrat Bashir. The Board remains indebted to
the guidance and the insight provided by Mr. Tarin while he was on the Board.
The Board welcomes the induction of Mrs. Haniya Shahid Naseem and Ms. Nazrat Bashir as
our Board members. We are confident that their experience and professionalism would add
value and esteem for our stakeholders.
REVIEW OF BOARD OF DIRECTORS’ COMMITTEES AT NBP:
At NBP, the Board of Director’s have an active role in providing their able guidance and
support to the Bank’s management. For this purpose a number of Board’s
committees have been constituted in the bank. These committees have well defined terms
of reference and they meet at regular intervals to review and make decisions on matters of
importance for their respective area of functioning. The following are the committees:
Number Number of Chairman of the

Name of the Committees of Meetings Committee
Directors held in 2008
Audit Committee 3 28 Mr. Ibrar A. Mumtaz
HR Management 4 23 Mian Kauser Hameed
Committee
I.T Committee 3 14 Mr. Tariq Kirmani
Board Risk Committee 3 13 Mr. M Ayub Khan Tarin
Agriculture Finance 3 11 Mr. Ibrar A. Mumtaz
Committee
Islamic Banking & 3 13 Mr. Tariq Kirmani
Subsidiaries Committee
Sports & Culture 3 11 Mr. Sikander Hayat
Committee Jamali

Audit Committee:
This committee has the oversight monitoring / assurance responsibility mainly relating to
the effectiveness of the Bank’s internal audit function, integrity of the Bank’s financial
statements, system of internal control, safeguarding of Bank’s assets and associated risks,
compliance with the applicable legal and regulatory
requirements, corporate governance and Bank’s “Code of Conduct” and co-ordination with
external auditors, making recommendations with respect to other matters relating to their
independence, performance, appointment and remuneration and approval of provision of
other than audit services. The major achievement of the committee includes conducting a
Quality Assurance Review of the bank’s internal audit function through independent
consultants to align the internal audit function with international standards/best practices
of corporate governance. The Committee ensured independence of the Internal Audit
function and further strengthened it in line with the requirements of International
Standards on Internal Auditing, Institute of Internal Auditors USA, regulators and best
practices of corporate governance.
28 meetings were conducted during 2009 and discussed the matters towards fiduciary,
advisory and assurance responsibilities entrusted by the Board of Directors. The Committee
reviewed various matters during the year for improvement in the internal audit, financial
reporting, corporate governance, internal controls, risk management, compliance with
relevant laws and regulations, code of conduct and external audit etc.
HR Management Committee:
The committee is an advisory and assurance committee which assists the board in fulfilling
its responsibilities relating to all HR policy matters. It reviews and formulates human
resource policies and best practices for attraction, retention, succession, motivation,
training and development policies to achieve corporate objectives. It also recommends to
the board the compensation, annual increase, performance bonuses, and perquisites of the
CEO, Chief Internal Auditor, Secretary to the Board, CFO and all positions reporting to the
CEO. It suggests strategies for negotiations with training and educational institutions both
nationally & internationally for collaborating in training activities. It is also responsible for
improvements in training methodology and identifying areas relevant to the needs of the
organization. During 2009 several decisions were taken for improvement in the areas of HR
policies, planning, training & development, compensation & pension, institutional
discipline, and other HR related areas.
The Committee also discussed and directed to establish state of the art training institute to
impart cutting edge knowledge, modern managerial and leadership skills to the employees
of the Bank and enable them to face the challenges of ever changing environment. The
committee emphasized the automation of all HR functions.
I.T Committee :
The Committee is responsible for identifying areas of the prospective automation, reviews
and decides strategic technology implementation and provides guidance and approves
selection of appropriate technology solution; software, hardware, infrastructure and
outsourcing.

For the first time in the history of National Bank a comprehensive IT strategy for the Bank
was designed which encompasses the phase-1 focusing on “Strategy for Systems Quality
Assurance & Testing Strategy (Policy, Procedures, Methodology and Framework).” The
phase-2 of the strategy will cover the entire bank wide transformation and full spectrum
automation, systems and data center integration, depth and width of IT Service Portfolio, IT
Operations, plus incorporating the IT Internal Control Framework supported by COBIT, ISO
ISMS 27001 and ITIL.
The ITBC has reshaped the IT Group’s Organogram (Organizational Chart) to modernize and
harmonize the entire IT Group with global and local best practices with a futuristic view to
take IT into the new millennium. The new organizational chart also supports Enterprise Core
Banking Application (CBA) Projects and the existing Banking Systems /Applications
/Platforms.

ITBC kept a proactive oversight of all 20 Core Banking related projects through monthly
meetings. Provided policy level guidance on bank wide transformation of all 1265 branches
and Head Office from physical layouts to workflows, and data quality. ITBC assigned the
Chief Information Security Officer to undertake the revamping of the Information Security
Policy to achieve harmonization with ISO Information Security Management Systems 27001
standard, State Bank of Pakistan’s guidelines and the COBIT Framework. ITBC approved the
updated policy “ Information Security Policy” (IT Security Policy v1.1) during the year 2009.
The ITBC approved the Governance, Risk and Compliance (GRC) Stream / Project.
Board’s Risk Committee (BRC):
BRC over sighted the risk related issues of the bank and took several decisions for
implementation. The functional scope of the Risk Management Committee is to develop the
risk management role by identifying the relevant/new risk management tools as per Basel
guidelines and developing the road map for implementing Basel II framework as per SBP
guidelines. It also works for Risk & Exposure Reporting by development of Basel II’s
economic capital management frame work. This committee also provides the reporting and
research for Board of Directors. It also reviews the liquidity position, forecasting and
projections and portfolio of the Bank. In 2009 the committee approved rating model for
corporate & commercial borrowers.
Beside this the BRC discussed in detail and took decisions on various issues; role &
responsibilities of Risk & Audit, Risk reports, Risk Management Policy, Development on SaS
Project, Regulatory Requirement, Progress on Basel II implementation, HR requirement of
RMD, IRAF grading, Sectoral Analysis, Industrial Ratings, and Status of CIF project. Various
MIS reports such as Monthly Risk Bulletin, an overview of operational risk management,
operational risk report based on fraud & forgery data & SBP penalties were the key
highlights discussed in the BRC meetings during 2009.
Agriculture Finance Committee:
Agriculture Finance Committee directed restructuring and reorganization of Agriculture

Finance Group and approved TOR, vision & mission statement of the group, Livestock/Dairy
Farm Financing policy and Agricultural Finance Policy Manual. Particular emphasis was
given to disbursement of finance to improve the yield/out put of this sector while
maintaining the healthy recovery ratio.

Islamic Banking & Subsidiaries Committee:

This Committee provides strategic guidance and recommends initiatives for expansions,
mergers & acquisitions. The strategic endeavors resulted in expansion in NBP Islamic
banking branch network covering all major cities of the country. To evaluate the
commercial viability, future profitability and growth of Islamic banking, the committee
guided Islamic Banking Group to prepare business plan for the year-2010 and henceforth
strategic plan 2011-2013.
Registering the potential of Assets Management companies in Pakistan, particularly those

backed by banks, the committee directed management to look into the formation of bank’s
own assets management company. The committee also facilitated an agreement between
NBP Exchange Company (a wholly owned subsidiary) and Western Union for home
remittances.
Sports & Culture Committee
The functional scope of the Committee is to devise strategies to promote sports and
cultural activities in the bank as well as in the country.
During 2009 the Committee reviewed the progress of various activities undertaken by the
Sports, Culture & CSR Division and also approved various incentive and cash award policies
for sportspersons working for NBP. The Committee also finalized the fee structure and
membership rules & regulations of NBP Sports Club.
The Committee also reviewed the performance of the Bank’s sports teams and provided
guidance and support to enhance their performance. The Committee also approved NBP
Award for Excellence in Literature and devised modalities for evaluation of books. The
Award ceremony was held in February-2009. NBP Sports Club was inaugurated in 2008 and
is now fully functional and offers state of the art facilities to its members including health
club, swimming pool, indoor tennis, badminton, squash, table tennis and snooker.
Corporate and financial reporting framework (Code of Corporate

Governance)
The Board is fully aware of its responsibilities established by the Code of Corporate
Governance issued by the Securities & Exchange Commission of Pakistan (SECP). The
Directors are pleased to give the following declarations/statements to comply with the
requirements of the Code.
(a) The financial statements (Balance Sheet, Profit & Loss Account, Statement of
Comprehensive Income, Cash Flow Statement, Statement of Changes in Equity and notes
forming part thereof), prepared by the management of the bank give the information in the
manner so required and respectively give a true and fair view of the state of the bank’s
affairs as at December 31, 2009 and of the results of its operations, changes in equity and
its cash flows for the year then ended.
(b) Proper books of accounts have been maintained.
(c) Appropriate accounting policies have been consistently applied in preparation of the
financial statements except for changes resulting on initial application of standards,
ammendments or interpretations to existing standards. Accounting estimates are based on
the reasonable and prudent judgment.
(d) The International Financial Reporting Standards, as applicable in Pakistan have been
followed in preparation of the financial statements and departure there from, if any has
been adequately disclosed.
(e) The system of internal control is sound in design and has been effectively implemented
and monitored throughout the year. The Board is responsible for establishing and
maintaining the system of internal control in the bank and for its ongoing monitoring.
However, such a system is designed to
manage rather than eliminate the risk of failure to achieve objectives, and
provide reasonable but not absolute assurance against material
misstatements or loss.

The process used by the Board to review the efficiency and effectiveness of the system of
internal control includes, the following:
• The Board has formed various committees comprising of non-executive directors.
• Internal audit department of the bank conducts the audit of all branches, regions and
groups at Head Office level on ongoing basis to evaluate the efficiency and effectiveness of
internal control system and proper follow up of irregularities and control weaknesses is
carried out.
• The Board receives confirmations / representations from all group and regional heads
on annual basis confirming effectiveness of the internal control system established and
maintained by them within their function.
The principal features of the bank’s control framework include:
• The bank has clearly defined organizational structure, which supports clear lines of
communications and reporting relationships.
• There exists a properly defined financial and administrative power of various committees
and key management personnel, which supports delegations of authority and
accountability.
• The bank has effective budgeting system in place. Annual budget of the bank is approved
by the Board and monthly comparisons of actual results with the budget are prepared and
reviewed by the senior management.
The bank has a comprehensive framework of written policies and

procedures on all major areas of operations such as Credit, Treasury
Operations, Finance, Internal audit and Compliance approved by the Board.
(f) There are no significant doubts about the bank’s ability to continue as a going concern.
(g) There has been no material departure from the best practices of the corporate
governance as detailed in the listing regulations.
(h) Key operating and financial data is available in the annual report.
The number of board meeting held during the year was 8 and attended by the directors
as follows:
Syed Ali Raza President / Chairman 8
Mr. Muhammad Ayub Khan Tarin Director 8

Mr. Sikandar Hayat Jamali Director 4
Mr. Tariq Kirmani Director 8
Mian Kausar Hameed Director 8
Mr. Ibrar A. Mumtaz Director 8
Mrs. Haniya Shahid Naseem Director 6
The Board places on record its sincerest appreciation to the outgoing Directors, Dr. Waqar
Masood Khan, and Mr. Azam Faruque to whom we are indebted for their prudent,
professional and diligent guidance that helped in achieving such tremendous performance.
(j) Value of investments of Employees’ Pension Fund and Employees Provident Fund as at
December 31, 2009 (un-audited) was as follows:
Rs. in - `000
Employees Pension Fund 19,781,585
Employees Provident Fund 8,448,101
Pattern of Share holding: The pattern of share holding as at December 31, 2009 is
given in Annual Report.
Earning per share
After tax earning per share for the year 2009 is Rs. 16.92.
Appointment of Auditors
The Board of Directors on the recommendation of the Audit Committee has recommended
M/s Anjum Asim Shahid Rahman & Co. Chartered Accountants & M/s M. Yousuf Adil Saleem
& Co. Chartered Accountants as statutory auditors for the year ending December 31, 2010.
Both the firms being eligible offer themselves for appointment.
Risk Management Framework
NBP Board of Directors and Senior Management are fully committed to strengthen the Risk
Management structure and practices. Several initiatives taken and planned by the Bank, in
this regard, reflect commitment of Senior Management & Board of Directors to upgrade the
quality of Risk Management process such as formation of Board Risk Committee, Executive
Risk Management Committee, Basel II Implementation Committee, strengthening of Risk
Management Division, conducting of exercises like Basel II Gap Analysis, Hiring of
consultant for Basel II advisory services, implementation of software / systems for Credit
Risk, designing of Internal Rating system, Scorecards for Consumer Credits , Revision and
continuous improvement in policies, procedures, reporting structure for effective Risk
Management and shift from fixed markup rate structure to floating rates for markup for
managing Interest Rate Risk.
Statement of Internal Controls
The Board is pleased to endorse the statement made by management relating to internal
control. The Management’s Statement on Internal Control is included in the Annual
Report.
We extend our appreciation to the bank’s staff for their commitment, dedication and hard
work in achieving these excellent results. We would like to express our sincere reverence to
the Board members whose valuable guidance has always enlightened us in our decision
making. Finally we would like to express our appreciation to our stakeholders, regulators
and our valued customers for their support and continued confidence in NBP.
On behalf of Board of Directors
S. Ali Raza
Chairman & President Date: March 04, 2010 .
Chapter 3
Products and services of NBP
Monthly Income Scheme
 Amount of investement required from Rs. 20,000/- to Rs. 5,000,000
 Investment period is 5 years
 Free Demand Draft, Pay Order and NBP Online Aasan Banking*
 Free Cheque Book / NBP Cash Card (ATM + Debit)
 Profit paid every month as follows:
Period Profit Rates**

1st year 7.50%
2nd year 8.50%
3rd year 9.50%
4th year 10.50%
5th year 11%
 Financing facility available upto 90% of the deposit value

 Premature encashment will attract penalties
 Zakat and withholding tax will be deducted as per rules

PLS Saving Account

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

• Minimum down payment, 10% of asset price (5%
for PCO & Telecaster)
• Tenure 1 to 5 years (for PCO 2 years)
• Grace period 3 months
• Maximum loan amount Rs. 200,000/-
• Age 18-45 years
• Mark-up (variable) 1 year KIBOR + 2.00% p.a.
• The customer will pay markup @ 6% p.a., rest will
be borne by GOP*
• Life & disability insurance paid by GOP*
Product Items
Home Purchase
Home Construction
Home Renovation
Purchase of Land + Construction
Balance Transfer Facility (BTF)
Home Purchase (House or Apartment) *

Financing Amount Upto 35 Million
Financing Period 3 to 20 Years
Debt to Equity 85:15 (Maximum)
Home Construction *
Home Construction * - Product Detail

Home Renovation *
Purchase of Land and for Construction thereon *

Re-Financing (Balance Transfer Facility (BTF)) *

If you have a Home Finance Facility outstanding with another bank you can have it
transferred to NBP through a hassle-free process.
Take up to 20 advance salaries

(currently for NBP account holders of govt. or related organization
employees).
National Bank of Pakistan (NBP)
NBP Advance Salary, the leading personal loan product of the country, is maintaining its
inimitability ever since it was launched. This was only possible due to its swift growth and
remarkable loan disbursement of over 138 billion.
You can avail up to 20 net take home salaries with easy repayment installments. Its hassle
free acquisition with no prior formalities and easy availability in a short turn around time
are attributed as the most distinguishing features of the product. The product is offered
countrywide
NBP Cash Card
is an 24-hour direct access ATM/Debit card to your bank account, which lets you pay
directly from your account as an alternative payment method to cash. The transaction is
authorized and processed by entering PIN. The NBP CashCard holders are able to transact
at any of the 4000 + Merchants where Orix logo is displayed and can withdraw cash from
NBP, 1-Link & M-NET ATM’s across the country.
Advantages
 You won't need to carry a lot of cash with you every time you go out.
 Secure and Safe transaction.
 Account Information on tips (like: Mini Statement, Balance Inquiry, Utility Bill
Payment etc.)
 Enable To Withdraw Cash From 1-Link ATMs / MNET ATMs.
 Enable To Make Purchases From Around 4000 POS (Merchants) Countrywide
including 2500+ POS in Karachi.
 No Card Issuance Fee for first 12 Months
Features
 Comfortable and secure environment for trading
 NBP financing at very easy terms requiring minimum documentation
 Minimum turn around time
 No security requirement from the customer except for the customer's equity
 Customer's equity freely available for investment.
 Equity acceptable in cash or approved share.
Eligibility Application Procudures

 Pakisani National with vaid  Obtain facilty application form the
computerized national ID Card NBP Marginal Desk at designated
 Over 21 years of age branches
 An account with NBP designated  Fill in the application form and
Branch submit it to the branch
 Equity in the form of cash or NBP  On application approval, deposit
approved shares equity as cash in the margin
 No default with any financial financing account at the bank.
institution Alternatively NBP approved shares
can also be deposited in the NBP
CDC Account (CDC A/c No. 2345)
 Start trading through comfortable

& friendly trading centers
establishment for you (In
collaboratino with Taurus Security
Limited a subsidiary of NBP)
 Trading limit available for the
amount of equity + bank financing.

Product Information
Financing Amount: Rs.50,000/ - To Rs.10,000,000/-

In the Form of Cash or Shares or Both (Currently Minimum
Equity Requirement:
Rs. 215,000/- @ 30%)
As per NBP Approved List Available. Shares In Physical Form
Shares:
Not Acceptable.
Allowed Only Through Trading Centers Created by NBP and
Trading:
Operated byTaurus Securities Limited (A Subsidiarty of NBP)
Pricing Requirements
Fixed Price At The Time of Facility  Photograph of Applicant
Sanction, Currently 6 Month Kibor + 3%  NBP Account - Current or PLS
(Per Annum)  Marginal Financing Application
Form
Other Charges  Copy of CNIC
 On Time Application Processing Fee  Copy of CNIC of Two (2) References
of 0.5% of the loan amount or  Borrower Basic Fact Sheet
Rs.5,000/- (Whichever is lower)  Duly Filled In Statement of Assets &
 Brokerage Charges/ Fees/ Taxes/ Liablities
etc. Charged At Actual On  List od Shares, Given as Margin
Brokerage Invoices (Optional)
 Documenation Fee Would Be
Charged On Actual
Rate of mark-up 15.50% p.a.

Facility of Rs. 14,000 against each 10
gms of net contents of gold
No maximum limits of cash
Repayment after one year
Roll over facility
Only gold ornaments acceptable
Weight and quality of gold to be
determined by NBP's appointed
schroffs
No penalty for early repayment
STUDENT LOAN SCHEME:
Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002-budget
speech, a STUDENTS LOAN SCHEME (SLS) for Education was launched by the Government of
Pakistan in collaboration with major commercial banks of Pakistan (NBP, HBL, UBL, MCB and
ABL). Under the Scheme, financial assistance is provided by way of Interest Free Loans to the
meritorious students who have financial constraints for pursuing their studies in Scientific,
Technical and Professional education within Pakistan.
The Scheme is being administered by a high powered committee comprising Deputy Governor,
State Bank of Pakistan, Presidents of the commercial banks and representative of Ministry of
Finance, Government of Pakistan.
ELIGIBILITY:
• Under the scheme the students are eligible to apply for loans provided:
i) He/She has obtained admission on merit through normal course/procedure in the approved
Universities/Colleges of the public sector mentioned hereunder.
ii) He/She falls at the time of admission within the age bracket of:-
For Graduation Not exceeding 21 Years

For Post-Graduation Not exceeding 31 Years
For Ph.D Not exceeding 36 Years
iii) He/She has secured at least 70% marks in the last public examination.
iv) He/She has undertaken the study of the subjects given below.
v) He/She is unable to pursue studies due to financial constraints.

TYPES OF LOAN:
The loan facility will be available for entire duration of the study for:-
Schedule Fee Paid directly to the

University/College
Boarding expenses excluding meal charges
Procurement of textbooks--- Disbursed directly to the student
REPAYMENT OF LOAN:
The maximum period of repayment of loan is 10-Years from the date of disbursement of first
installment .The borrower shall repay the loan in monthly installment after one year from the
date of first employment or one year from the date of completion of studies, which ever is
earlier.
APPROVED UNIVERSITIES/INSTITUTIONS OF PUBLIC SECTOR AND

DESIGNATED NBP BRANCHES
Under the Scheme, loans is available in the following subjects.
i) Engineering ii) Electronics

iii) Oil Gas & Petro-Chemical Technology iv) Agriculture
v) Medicine vi) Physics
vii) Chemistry viii) Biology, Molecular Biology & Genetics
ix) Mathematics x) Other Natural Sciences
xi) DAWA and Islamic Jurisprudence xii) Computer Science/Information
(LL.B/LL.M Sharia) System and Technology including hardware.
xiii) Economics, Statistics and Econometrics xiv) Business Management Sciences
xv) Commerce
NBP's Internet Based Home

Remittence Service
Product Information:
Pakremit is an internet based Home Remittance Service. This service is available to U.S.
residents for sending money to their family and friends in Pakistan. One must have a valid
US Dollar account with a U.S. bank or a US Dollar credit or debit card in order to remit
funds through this channel.
Remitters in USA can log on to our user friendly website, www.pakremit.com and easily
remit funds to Pakistan from the comfort of their homes, in a matter of minutes.
The service is fully secure with advance encryption application and is available for use 24
hours a day, 7 days a week. Fees and exchange rate have been set at competitive levels
and the remitters have the ability to track delivery of funds as well.
Process:
 Remitters log on to www.pakremit.com and after completing the registration
process, are able to remit funds. The whole process takes a few minutes.
 Funds in Pak Rupees can be sent to beneficiaries, having an account with any bank
in Pakistan, including NBP. While funds are credited directly to beneficiaries
maintaining accounts with NBP, a pay order or demand draft is couriered to other
banks for their customers. Pay order or demand draft can also be couriered directly
to the beneficiary’s office or home, if requested by the remitter.
 Funds in US Dollars can be sent only to a Beneficiary maintaining a US Dollar
account with one of NBP’s Foreign Exchange Branches. Click here for details of NBP
Foreign Exchange Branches.
Product Information:
Insurance Coverage In case of Accidental Death
(Including death due to *Riots, *Strikes, *Civil
commotion, *Acts of Terrorism and Natural
Calamities like Flood, Earth Quake, Cyclones etc).
Coverage of Rs. 200,000/- for Rs. 20/- per

month
Definitions: *provided the insured is not directly

involved in these activities
"Accident” means unintentional, unfortunate or a harmful event by chance or apparent
cause.
“Accidental Death” means death due to accidental injuries, but not illness.

“Insured Person” means a National Bank of Pakistan PLS account holder, aged between
18 years and above, and whose premium is deducted & details are reported to the selected
insurance company by NBP.
“Policy” means Group Personal Accident Policy dated 26/09/05 executed between NBP
and Insurer.
“Principal Sum” means the amount stated in the Policy’s Schedule of Benefits as

respects each Insured Person.
Product Details Eligibility

 No Medical Required  NBP PLS account holders
 No Documentation  18 years and above
 Fixed Auto Premium Deduction
Facility (after customers consent)
 Choice of Deactivation
Termination of Coverage
 The date the policy executed by NBP with ALICO is terminated.
 The date the Insured Person is no longer eligible within the Classification of Insured
Person(s).
 If the required premium is not paid/deducted for the particular month.
 The date the benefits are paid to the extent of the Principal Sum in respect of any
Insured Person.
 The date the Insured Person cancels coverage under this policy.
General Terms
Insurer ALICO (American Life Insurance Company (Pakistan) Limited
or such other insurance company as NBP may nominate
from time to time.
Maximum Amount Maximum Sum Assured PKR 1,000,000 (this limit is for
multiple accounts of an insured)
Joint Account Coverage amount will be distributed proportionately at the
time of claim
Term Available Monthly deduction
Claim Payment Within 10 working days upon completion of all
documentation / formalities
Claim Requirements Claimant & Physician statement, original death certificate,
hospital death certificate, original NIC, FIR, newspaper
clippings (if any) & statement of account.
Disclaimer
o The NBP Protection Shield is underwritten by ALICO (American Life Insurance
Company (Pakistan) Limited) or such other insurance company as NBP may select
from time to time.
o NBP will not be responsible in any manner if your claim is rejected or not
entertained.
o NBP does not offer insurance advice or underwrite or issue insurance policies.
o Purchase of insurance/bancassurance product does not represent an investment
and does not accumulate a cash value.
o The information available here is intended for the customer intimation and
understanding only, and is subject to the policy documentation between NBP and
ALICO, as may be applicable from time to time.
Please note that in making deduction from the customer's account for the purpose of coverage under the
policy the bank is solely acting as the authorized nominee/agent of the customer, provided sufficient funds
are available in the relevant PLS Account.
Exclusions
The insurance policy does not cover the following and no claim payment shall be made in
respect to:
 intentionally self-inflicted Injury, suicide or any attempt threat while sane or insane;
 war, invasion, act of foreign enemy, hostilities or warlike operations (whether war
be declared or not), mutiny, civil war, rebellion, revolution, insurrections,
conspiracy, military or usurped power, martial law, or state of siege; assault and
murder;, shelling, sniping, ambushes, and all acts of similar nature; or any period a
Insured Person is serving in the Armed Forces of any country or international
authority, whether in peace or war. Riots, strikes, civil commotion and terrorism
acts if the insured person is actively involved in any of these activities;
 any loss sustained or contracted in consequence of a Insured Person being
intoxicated or under the influence of any alcohol, narcotic or drug unless
administered on the advice of a Physician;
 any loss of which a contributing cause was the Insured Person’s attempted
commission of, or willful participation in an illegal act any violation or attempted
violation of the law or resistance to arrest by the Insured Person;
 any loss sustained while flying in any aircraft or device for aerial navigation except
as a fare paying passenger (not as an operator or crew member) on a commercial
airline operated by properly certified pilot, flying between duly established and
maintained airports;
 congenital anomalies and conditions arising out of or resulting there from;
 Pre-Existing Conditions;
 driving or riding as a passenger in or on (a) any vehicle engaged in any race, speed
test or endurance test or (b) any vehicle being used for acrobatic or stunt driving;
 any loss occurring while the Insured Person is participating in competitions, races,
contests, matches in land air or sea; mountaineering, rock climbing, pot holing;
paragliding, bungee jumping, parachuting or scuba diving;
 any claim caused by opportunistic infection or malignant neoplasm, or any other
sickness condition, if, at the time of the claim, the Insured Person had been
diagnosed as having AIDS (Acquired Immune Deficiency Syndrome), ARC (AIDS
Related Complex) or having an antibody positive blood test to HIV (Human Immune
Virus).
NBP ISLAMIC BANKING
Banking on your Faith
1) DEPOSIT SCHEMES
Deposit Schemes being offered by NBP’s Islamic Banking Branches would include the
following:
1) Current Deposit Scheme
2) Profit & Loss Sharing (PLS) Deposit Scheme
Current Deposit Scheme
Ideal for customers looking for security of their funds along with absolute convenience in
its use, in the form of Current accounts Funds deposited with the bank will be utilized by
the bank at its sole discretion in Shariah acceptable avenues.
The Customer will have the flexibility to withdraw a part or the whole of their balances at
any time as per their requirement
This is a non remunerative deposit scheme and thus the customer will not be sharing the
profits nor will be sharing losses (if any). However, the Bank may at its absolute
discretion give rewards to these Depositors depending upon the operational results of the
Bank. Losses will not be passed on to these Depositors. Other terms, conditions and rules
for Current Deposit Accounts to be advised by the Bank at the time of opening of
Account.
Profit & Loss Sharing Deposit (PLS) Scheme
PLS Saving Deposits Scheme will accept deposits on Mudaraba basis, where the
depositor will be Rabb-ul-Mal and Bank will be Mudarib. The Bank will invest the
deposited funds at its (Bank’s) sole discretion in Shariah acceptable avenues The
Depositor will have the flexibility to withdraw a part or the whole of their balances at any
time as per their requirement. The Bank will give profit to the Depositors on the basis of
agreed ratio of actual profits to be announced by the Bank from time to time.
In the event of financial loss, the PLS depositors will bear the loss in proportion of their
investment. The Depositors will not participate in the management of the business of the
Bank Other terms and conditions as well as rules for PLS Deposit Account to be advised
by the Bank at the time of opening of Account.
2) FINANCING FACILITIES
Commercial and Corporate customers requiring financing will have the following
financing facilities available to them to meet their requirements:
1. Murabaha
Murabaha may be defined as a contract between a Buyer and Seller under which the
Seller discloses to the Buyer the cost of goods being sold and adds an agreed profit. Price
is payable on spot or at a certain future date, in lump sum or in installments (deferred
payments).
Murabaha Facility
Under the MURABAHA FACILITY, the Bank will first purchase the required goods
directly or through an Agent. All costs incurred on such purchases will be borne by the
Bank.
Subsequently the Bank will sell the goods to the customer on deferred payment basis (30
days to one year) at an agreed price comprising cost of goods purchased and Bank's
profit.
On due date the customer will pay to the Bank the agreed price, in lump sum or as per the
agreed installment schedule.
2. Ijarah (Leasing)
Ijarah means “to give something on rent”. The term “IJARAH’ is analogous to the
English term “leasing“.
Firstly the Bank will purchase the Assets as required by the Customer and subsequently
the assets will be leased to the Customer on the terms and conditions as agreed with him.
Ijarah Facility will be offered for the following assets:
1. Vehicles (both Commercial and Private)

2. Office Equipment
3. Plant and Machinery
3) OTHER SERVICES
In addition to Shariah acceptable standard general banking services, following services

are also being offered at the Islamic Banking Branch :
Letter of Credit Facility
Handling of Remittances
Issuance of Bank Drafts and Pay Orders.
Collection of Export Bills.
Collection of Local Bills.
Government Collections
Utility Bills Collection
NBP CORPORATE TREASURY:
The NBP treasury and capital market group has developed a reputation of being the
market leader in coming up with customized solutions for a large and varied client base
that is spread virtually all across the country. The client base does not consist of only blue
chips ones but encompasses public sector clients, retail sector, multinationals, local
conglomerates as well as individuals.
National bank treasury is currently regarded as a market leader in both foreign exchange
and rupee denominated products because of it’s emphasis on service quality.
We offer
Narrowest bid / offer spread and quickest on line quotes

Customized solutions to minimize risk and optimize returns as per the needs and
circumstances of the clients
Focus on building sustained and long term relationship with institutional,
corporate and retail clients.
Local presence across the nation as well as internationally.
Latest Rate Sheet
PRODUCTS OFFERED
1) Plain Vanila Fx Products

2) Pakistan Investment Bonds
3) Derivatives Products
Market Research and Feedback
The treasury periodically prepares its own research report on money market and FX and
sends it to clients who are interested in getting such information. This research report is
quite popular with clients who are proactive and wants to develop their own views.
TREASURY PRODUCTS
1) Plain Vanilla FX Products
NBP Treasury a market price maker and trend setter in the plain vanilla Foreign
Exchange products. It’s ability to offer tight prices, coupled with timely and accurate
research making it a bank of choice for clients seeking to favorably position their
currency risk As a result, National bank has one of the largest FX book in the country.
2) Pakistan Investment Bonds
Pakistan Investment Bonds issued by Government of Pakistan are a preferred means for a
majority of institutional investors to invest their surplus funds for a longer time horizon.
This way they are able to lock a higher yield for a relatively long term rather than take the
risk of re-pricing after relatively shorter time periods. Furthermore, PIBs are highly
secured and risk free as they are guaranteed by the government of Pakistan.
NBP is the leading Primary Dealer for PIBs primarily because of its inventory size and
the appetite for such a long-term instrument given its deposit base. While most foreign /
private banks would have to go to the secondary market in order to satisfy a large order
from an institutional investor, NBP can execute such large orders through its own book.
This means that it can offer tight prices for large amounts even under volatile market
conditions.
3) Derivatives Products
NBP treasury has been at the forefront in developing the derivatives market in Pakistan
and has contributed both individually and from the FMA (Financial Market Association)
front as well. The first ever Derivative transaction of the Pakistani banking sector was
done by NBP. Some of the more common derivative structures being offered include:
a) Currency Options
b) Hedges Foreign Exchange Risk
An option gives the buyer the right but not the obligation to buy or sell an asset at a
prespecified
date and price. So the upside profit potential is unlimited whereas the downside
loss is protected at a pre determined level. Various structures of currency options are
available including.
Knock-ins / Knock outs
Participating Forwards... and many more
c) Interest Rate Swaps and FRAs

Hedges the Interest Rate risk
A client can convert a fix rate loan into floating rate one or vice versa by using these
derivative instruments. This allows the clients to develop and implement their views
about the evolving interest rate scenario. For example, if the borrower feels that the
interest rate might go up in the future, than he may choose to enter into a Pay Fixed –
Received Floating swap with its bank to effectively hedge its floating rate loans.
d) Cross Currency Swaps
Hedges the Interest Rate Risk

This product allows a client to convert its rupee based loans into a dollar based loan. The
client’s exposure is shifted from PKR KIBOR to USD LIBOR.
Islamic Banking 5 Branches
1) FAISAL ABD
2) KRACHI
3) LAHORE
4) PESHAWAR
5) RAWALPINDI
6 Customer Facilitation Center(s)
 Mirpur
 Karachi
 Lahore
 Rawalpindi
INTERNATIONAL BANKING SERVICES
National Bank of Pakistan is at the forefront of international banking in Pakistan which is

Proven by the fact that NBP has its branches in all of the major financial capitals of the
World. Additionally, we have recently set up the Financial Institution Wing, which is
Placed under the Risk Management Group. The role of the Financial Institution Wing is
To effectively manage NBP's exposure to foreign and domestic correspondence Manage
The monetary aspect of NBP's relationship with the correspondents to support trade,
Treasury and other key business areas, thereby contributing to the bank's profitability
Generation of incremental trade-finance business and revenues
NBP offers:
The lowest rates on exports and other international banking products
Access to different local commercial banks in international banking
1) DEMAND DRAFTS
If you are looking for a safe, speedy and reliable way to transfer money, you can now
Purchase NBP's Demand Drafts at very reasonable rates. Any person whether an account
Holder of the bank or not, can purchase a Demand Draft from a bank branch
2) MAIL TRANSFERS
Move your money safely and quickly using NBP Mail Transfer service. And we also
offer the most competitive rates in the market.
3) PAY ORDER *
NBP provides another reason to transfer your money using our facilities. Our pay orders
are a secure and easy way to move your money from one place to another. And, as usual,
our charges for this service are extremely competitive.
4) TRAVELER'S CHEQUES
Negotiability: Pak Rupees Traveler's Cheques are a negotiable instrument

Validity: There is no restriction on the period of validity
Availability: At 700 branches of NBP all over the country
Encashment: At all 400 branches of NBP
Limitation: No limit on purchase
Safety: NBP Traveler's Cheques are the safest way to carry our money
5) LETTER OF CREDIT
NBP is committed to offering its business customers the widest range of options in the
area of money transfer. If you are a commercial enterprise then our Letter of Credit
service is just what you are looking for. With competitive rates, security, and ease of
transaction, NBP Letters of Credit are the best way to do your business transactions.
6) COMMERCIAL FINANCE
Let us help make your dreams become a reality

Our dedicated team of professionals truly understands the needs of professionals,
agriculturists, large and small business and other segments of the economy. They are the
customer's best resource in making NBP's products and services work for them.
7) FOREIGN REMITTANCES
To facilitate its customers in the area of Home Remittances, National Bank of Pakistan
has taken a number of measures to:
Increase home remittances through the banking system
i. Meet the SBP directives/instructions for timely and prompt delivery of
remittances to the beneficiaries
ii. PakRemit™
iii. Remit funds from USA to Pakistan
NBP Kisan Dost:

Agriculture Farming Program
• Competitive mark-up rate

• Quick & easy processing
• Delivery at the farmer’s doorstep
• Technical guidance to farmers
• Wide range of financing schemes for farmers
• Finance facility up to Rs. 500,000/- for landless
farmers against
personal guarantee
• Financing available against pass book,
residential/commercial
property, gold ornaments and paper security
• Loan facility on revolving basis for three years
(renewable on yearly basis
without documentation and approval)
NBP Kisan Dost
NBP Kisan Dost
( Agriculture Made Easy)
NBP Kisan Taqat:
Benefits of taking loan from NBP:
 You ‘ll find nearest branches of NBP

 Easy and very less paper work
 Now you are free from the payment of installments
 Get suggestions from our expert and experienced staff
 More then 50 years old bank, so you can trust.
National Bank ATM:
Few years back National Bank of Pakistan launched its new product of ATM, expecting a high
number of ATM users. The out come was contrary to the expectations only government
employees were using the ATM facility provided by
NBP.
This was probably due to high deductions if the ATM card was used on any other
banks ATM. This shows that the Management was not able to make effective policy.
Another reason for less number of ATM user is that most of the time these machines were
offline due to server problems which was effecting the real purpose of ATM, this relates to the
Research and Development of NBP.
Now days it has been observed that use of ATM is very much common and appreciated by the
account holders of the banks. It is just because of implementation of new technology used by
the banks and 24 hours service provided by the banks for customers.
Chapter 4
NBP Fatima Jinnah Road (Hub Branch):

Branch Details

Branch Name Fatima Jinnah Road (Hub Branch)
Branch Code 0014
Address NBP Building Fatima Jinnah Road Hyderabad

Phone 022/9200082-9200142-9200508 to 10-9200466-755
Fax 9200613
Tehsil Hyderabad
District Hyderabad
Province SINDH
Swift Code NBPAPKKA02H
Status Online
manager0014@nationalbank.com.pk ,
Email
opsmanager0014@nationalbank.com.pk
Departments:
Current saving department:
In NBP current saving department mainly deals with cheques, Vouchers and advices. First of all
cheque holder have to present his/her cheque to the person responsible for issuing the tokens.
Then cheque is passed on to the computer operator to make entry in computer, Afterword it
will go for signature verification after which it will be given to cashier for payment.
Computer Operations:
In NBP the computer section performs several duties which are given below;
1. Daily transaction
To record all the transactions in case of deposits made by the peoples and also to record all the
withdrawals made by the peoples and customers. Each transaction has to be recorded in its
appropriate head of account with the help of prescribed codes.
2. Vouchers
To record all the vouchers made by the remittance department have to prepare debit and credit
vouchers for about every transaction recorded in their department. Then these vouchers are
sent to computer operator to record those in computer.
3. Advices
To record all advices received from other branches most of the inter branch or intra branch –
remittance are subject to ultimate receipt of advices from the corresponding branch to
materialize the transaction. These advices also recorded in computer
4. Statements
To close the daily records a number of statements have to be printed out. Statements like;
 Day’s transactions
 Overdrawn facilities a/c statement
 Markup sheet
 Inter branch transaction
 Detail of PLS and current account
 Operative, Dormant, Inoperative and Unclaimed A/c
 All ATM transactions
 Summary of all A/c (Debit, credit & balances )
 Profit due, transferred , disbursed , etc.
Accounts department:
THE TYPES OF ACCOUNTS

The different types of accounts offered by NBP are:
PLS saving account (profit and loss saving account):
CURRENT ACCOUNT:
NBP offers current account facility for individuals as well as institutions and
Commercial customers.
Current accounts are also called demand liability on current deposits. NBP pays practically no
interest oncurrent deposits. Businessmen usually open current accounts. In NBP current
account can be opened with aminimum amount of Rs.100/-.
PLS SAVING ACCOUNT:
NBP offers PLS savings account facility to it’s customers with the
attractive features.
Profit and loss sharing deposits (PLS) are also called checking accounts. One can deposit and
draw moneyeasily. Profit on PLS is calculated every month but paid after six months. PLS
account can be opened with aminimum amount of Rs.100/-
REASON FOR CLOSING THE CUSTOMER’S ACCOUNT:
The banker may close the account of the customer due to following reasons:
i. Customer Request
ii.Death of a Customer
iii. Court order
iv.Having zero balance till six months
OPENING OF ACCOUNT BY AN INDIVIDUAL:
After entering into bank premises the person goes through the following steps for opening an
account in the bank and for becoming a bank customer.
1. An Introduction:
The first important step to take place in bank is to get satisfactory introduction of the person,
who wants to become bank’s customer.
This introduction is made from the person /party who are respectable and honorable and have
an account with the bank.
In N.B.P (Circular Road Branch) the branch manager takes great care of this step and gets
introduced with the person himself. His main intention is to determine the prospective
customer’s integrity, respectability, occupation, and nature of business he is doing at the time
of opening an account.
2. Account Opening Form and Specimen Signature Card:
Now the person is provided with an application form known as Account Opening Form.
This form contains: -
i. Title of account
ii. Address
iii. I.D. Card number
iv. Telephone No. (Office and Residence)
v. Introductory reference (all above mentioned particulars of introducing him)
vi. Signatures of the applicant
vii. Amount deposited
viii. Check book series No.
The customer will attach a copy of National Identity Card with the form.
Specimen Signature Card:
Specimen of signatures will be obtained from depositor at the time of opening his account. A
specially designed card is used for this purpose; the card must be countersigned by an official of
the bank not below the rank of an officer.
3. Account Opening Register:
Now the name of the customer will be recorded in account opening register, and from here the
account no. of the customer will be written on (top most corners) account opening form and on
specimen signature card.
　4. Issuance Of Cheque Book And Pass Book:
The cheque book will ordinarily be issued to all customers desiring to have chequing facility.
Cheque book consists of 10, 25, 50, or 100 leaves depending upon customer requirement.
Customer can withdraw money by signing a cheque and writing the amount he wants to
withdraw from his account.
A special cheque book register is kept to enter the name of the person having cheque book.
5. PASSBOOK
PASSBOOK is another important type of book handed over to the customer as he opens the
account with the bank. The withdrawal and deposit of money is recorded date wise in this book.
Remittance department:
Another important department of NBP is remittance department. The remittance department

transfers he funds from one bank to another bank and from one place to another. In the NBP
remittance department the five types of money transfers are takes place which are given below;
 Mail transfer(MT): Move your money safely and quickly using NBP Mail Transfer service.
NBP also offers the most competitive rates in the market. They charges Rs.50/- exchange
rate and Rs.75/- postage charges on issuing mail transfer.
 Demand draft(DD) : If you are looking for a safe, speedy and reliable way to transfer
money, you can now purchase NBP’s Demand Drafts at very reasonable rates. Any
person whether an account holder of the bank or not, can purchase a Demand Draft
from a bank branch
 Telegraphic Transfer (TT): With the changing requirements of the customer, NBP has
introduced the fastest transfer of the money. The sender is required to apply through a
from in which he will give all necessary details about the sender and beneficiary. the
sender deposits the money to be transferred plus bank charges at the counter(PNT
charges). The remittance officials send a telegram to concerned branch with code words
and the receiving branch make payment.
 Pay Order (PO): Pay Order:NBP provides another way to transfer your money using our
facilities.NBP pay orders are a secure and easy way to move your money from one place
to another . And, as usual, NBP charges for this service are extremely competitive. The
charges of NBP are very low all over the Pakistan. It charges Rs.50/- for NBP account
holders on issuing one payment order. And charges Rs.100/- for NBP non-account
holders on issuing one payment order. It charges Rs.25/- for students on payment of
fees of educational institutions. If some one want a duplicate of payment order they
chargesRs.100/- for NBP account holders and Rs.150/- for non account holders.
 Dormin Graph (DG): In this there are no any charges and this is only for government to
government.
Cash department:
This is the most important and critical department in the bank. There are two basic functions
performed by the cash department. These are;
Receipts:
An Individual who has account in the bank can deposit money in his account. For deposit of the
money the individual has to fill the deposit slip in which the account holder writes his name,
Account number, amount of the money both in figures and in words.
After filling the deposit slip the cash amount along with the deposit slip is submitted with the
cashier. The cashier collects the cash and counts it and after verification the cashier stamps the
deposit slip. One part of the deposit sip is given back to the customer and the other part of the
slip deposit slip remains with bank for the record purposes.
The cashier also record the deposits made by the customer in credit sheets daily. The deposits
of the all customer of the bank are controlled by mean of ledger account. Every customer has its
own ledger account and has separate ledger cards in which his/ her total record is kept.
Payment:
The procedure of clearance of a cheque or payment is as following:
First of all the customer presents his cheque to the cashier the cashier records the account
number and the amount, which is to be, drowns. Then the cashier check the cheque number in
the computer for the verification whether the account holder has such amount in his account
which he is demanding or not. If the computer passes the cheque the passing officer sign the
cheque and sent it to the cash counter then cashier pays the written amount to the customer
and then in the end cashier records the amount paid in the computer.
Clearing Department:
In clearing process, if the account holder of NBP receive the cheque of the bank like ABL Or
Habib bank limited etc, and he submit it in NBP branch to cashed . At the same time the clearing
process starts. First the bank name, cheque number and the amount are written in the register.
After this three kind of stamps are required first bank name stemp , secondly clearance stamp
of next date and if the cheque is not local then the inter city clearance stamp is required.
The clearance of cheque is informed through advice. Some cheques is not passed so they
should return Rs. 100 is deducted and if the cheque is intercity then the postage charges is
deducted. For this purpose the debit and credit voucher is used. When the cheque is cleared
the today stamp is required. Some cheque is drawn On NBP. This is called outward clearing.
These cheques will be entered in outward clearing egister. And the advice is sent for the
clearance of cheques. The account holder’s account is credited.
BILLING SECTION DEPARTMENT:
TRAVELER'S CHEQUES
Negotiability: Pak Rupees Traveler's Cheques are a negotiable instrument

Validity: There is no restriction on the period of validity
Availability: At 700 branches of NBP all over the country
Encashment: At all 400 branches of NBP
Limitation: No limit on purchase
Safety: NBP Traveler's Cheques are the safest way to carry our money
LETTER OF CREDIT
NBP is committed to offering its business customers the widest range of options in the
area of money transfer. If you are a commercial enterprise then our Letter of Credit
service is just what you are looking for. With competitive rates, security, and ease of
transaction, NBP Letters of Credit are the best way to do your business transactions.
BILLS SECTION RECORDS REGISTERS TYPES
o Bills section maintains following types of records:

o Online
o End of day
o DD/ GDD balance
o Fanfold dispatch register
o Pay order register
o DD issue register
o GDD issue register
o MT issue register
o TT issue register
o Draft advice dispatch register
o GDD advice dispatch register
o Bank draft advice received register
o GDD advice received register
o MT received register
o DD payment register
o GDD payment register
o DD paid ex-advice register
o GDD paid ex-advice register
o Pay order weekly balance
o DD/ GDD monthly balance
o Daily general ledger abstract
Human Resource:
For NBP the dedicated, hardworking staff is one of the key strengths of the bank. NBP
has been investing in developing this valuable resource through need based training and
career growth development. Our HR objective is to become an employer of choice and to
maintain complete industrial harmony within the institution.
Our new hiring of top class MBAs as Management Trainee Officers (MTOs) and
search for talent within the bank has helped in preparing second and third tier leadership
lines which will shape our succession planning process and at the same time will ensure
that with the passage of time our employee refinement and skill enrichment program
continues. We also have started new ‘Employee Communication Program' and internal
organizational magazine to improve the interaction of top and middle level management
with the lower management. Female employees are being encouraged through female
empowerment program under which they are given responsible and challenging
assignments. Currently over 60 females are employed as branch managers all over the
country and some females hold senior management positions.
SWOT Analysis:
STRENGTH
o Custodian of government treasury
o Working as agent of SBP
o Job security for employees
o Main custodian of public money
o Government business owner
o Lender to the government agencies

o Public Confidence
o Sound financial foundation
o Highest profitability
o Vast operational network
o Recognition of hard work of staff through incentives
WEAKNESS
Beside a public bank it has the following weaknesses
o Not fast service to the clients
o Less marketing expenditures
o Worst conditions of branches
o Outdated systems and procedures
o Delays in decision making
o Resistance to change
o Inadequate, poorly placed network technology
o Less share in import and export business
o Lack of proper advertisement & marketing of products
OPPORTUNITIES
o Introduction of new technology
o Introduction of new products and services
o Develop an aggressive marketing plan
o Can lunch a marketing strategy to capture the business from its pee banks
o Can be number one in Pakistan

o Can offer new and innovative products to complete rest of the banks
o With proper planning can hunt more and more business from the public and private
sector as people still trust over it.
o Leasing
THREATS
o Less qualified staff in NBP
o Not fully computerized
o Competition with foreign bank
o Less participation in the capital market activities
o Use of traditional system of banking
o Political influence
o New products from private Pakistani and Foreign banks
o Inability to change
o Quality of human resources
o Internal politics
Chapter 5
Suggestions and
recommendations
Some problems I found during internship:
 Lack of commitment is also a problem faced by the national bank of Pakistan; Employees
are not committed to the work and their duties.
 There is also a big issue that they think its government’s bank so it does not care
customers. It is a wrong perception. There must be a good public dealing in public
service organization. If one customer asked a question twice. They angry on him and
stop working. I personally experienced in cash department have no respect to the old
customers and he used wrong wording against them same is also happened in other
departments., so there should be solve this problem to create a good environment of
the NBP
 It looks that the staff member are not properly trained, and the dressing of employees is
also not good.
 Efficiency of employees is also low at this branch.
Suggestions and recommendations:
 Straight forward not involving long difficult procedure for simple task.
 Bank management has to put its all effort to change the prevailing culture of
 the bank and to put the foundation stone of business oriented culture. In which
employees give important to the bank and its customer.
 Late promotions, shortage of training, development facilities, and favoritism in appraisal

and lack of sufficient incentives are some problems that are arising dissatisfaction
among the employees.
 The bank is still depending on the manual work to a great deal which causes slow
performance and increases the chances of mistakes.
 The interior look of branch is not so good so they must try to change it.
End
 Abdul Razaque Shaikh (Manager)
 Aamir Lodhi (Operation manager)
 www.nbp.com.pk
 www.propakistan.com.pk
 www.google.com

Acknowledgement: Irfan Ahmed Roll No: 2k7/com/54 Institute of Commerce University of Sindh

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Acknowledgement: Irfan Ahmed Roll No: 2k7/com/54 Institute of Commerce University of Sindh

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Acknowledgement:

All praise to Almighty Allah, the most merciful and compassionate,

I’m grateful to my parents who are always been a source of strength

And I’m also thankful to all my staff members’ Of National Bank of

I want express greatest gratitude to my Supervisor Prof: Noor

Chapter # 2(NBP's Initiative In 2009)

Chapter # 3(Products and services of NBP)

Chapter # 4(NBP Fatima Jinnah Road (Hub Branch)

Chapter # 5 (Suggestions & recommendations)

Babylonians start banking in 2000 B.C.

“Great Templs E.Phesus & dolphin as banks.

They are doing money exchange transactions in markets on the benches.

In the 14th century they migrated to the England.

The modern banking started in Asia from 17th century.

Nationalized scheduled banks

 First Women Bank Limited

 Industrial Development Bank

 Pak China Investment Company Limited, Islamabad

 AKD Securities Limited

Discount and guarantee houses

 First Credit & Discount Corp Limited

 Asian Housing Finance Limited

 NRSP Micro Finance Bank Limited

 AlBaraka Islamic Bank

Upcoming or transaction in process

 Al Baraka Islamic Bank, Dubai will acquire Emirates Global Islamic Bank, Pakistan

National Bank of Pakistan

In today's competitive business environment,

A number of initiatives have been taken, in terms of institutional restructuring, changes in

Syed Ali Raza

Mr. Tariq Kirmani

Mrs. Haniya Shahid Naseem

Ms. Nazrat Bashir

NBP DOMESTIC BRANCHES:

NBP REGIONAL OFFICES

NBP OVERSEAS BRANCHES

America and Europe Region

Far East Region

Middle East, Africa & South Asia Region

Central Asian Republics

Subsidiary Joint Venture Representative Off

Awards and Achievements:

 "Best Foreign Exchange Bank 2008” awarded by world's leading financial

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

 Due to consistent improvement in NBP's Core Profitability , Asset Quality and

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

 WEBCOP-AASHA, an alliance against gender discrimination at workplace, presented

 World's leading financial journal, “Global Finance”after a worldwide survey declared

 “ Bank of the Year” awarded for the year 2002 by the world renowned “The

 “ Bank of the Year” awarded for the year 2001 by the world renowned “The

Corporate and Investment Banking

Corporate & Investment Banking Group

Commercial & Retail Banking

The importance of agriculture financing cannot be over emphasized as agriculture is key to

Global Home Remittances Management

in mutual funds, secondary trading in Term Finance Certificate, underwriting for

Special Assets Management

Human Resource Management