National Bank Of Pakistan

(Internship Report)

Submitted By

Saba Kaiynat Dar

(BBA F18-50)

BACHELOR OF BUSINESS ADMINISTRATION (HONS) IN FINANCE

DEPARTMENT OF BUSINESS ADMINISTRATION

UNIVERSITY OF THE PUNJAB, JHELUM CAMPUS, JHELUM

April 2022

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 SUPERVISOR CERTIFICATE ON
INTERNSHIP REPORT SUBMITTED BY A STUDENT

Section 1: Particular of the Student

1.1 Student’s Name Saba Kaiynat Dar

1.2 Father’s Name Nouroze Iqbal Dar

1.3 Registration Number BBA F18-50

1.4 Program BBA (HONS.)

1.5 Specialization Finance

Section 2: Particular of an Internship Report

2.1 Title National Bank Of Pakistan

I certify that:

• The above mentioned student has completed the internship report under my guidance and
supervision.
• I am satisfied with the quality of student’s work.
• I consider it worthy of submission to the department.

3.1 Supervisor Signature

3.2 Date

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 National Bank Of Pakistan
Internship report submitted by

Saba Kaiynat Dar

(BBA F18-50)

Muhammad Nadim

(Internship Supervisor)

Tabassum Riaz

(Incharge, Department of Business Administration)

DEPARTMENT OF BUSINESS ADMINISTRATION

UNIVERSITY OF THE PUNJAB, JHELUM CAMPUS, JHELUM

April 2022

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Declaration :

I hereby declare that this is my original work and that it has not been submitted elsewhere for
the award of any other degree, diploma or other similar title or prize. To prepare this report, I
have given my best effort that would enhance the internship report.

Student Name :

Saba Kaiynat Dar

BBA-F18-M-50

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Acknowledgement:

At the very beginning, I would like to express my deepest gratitude to almighty Allah for giving
me the strength and the composure to complete my BBA course and prepare this report within
the scheduled time. I express my deep gratefulness to my supervisor respected
“Sir Muhammad Nadim”.

I would also like to express my excessive thanks to all officer of National Bank for their
excellent support and proper guidance during the internship period of 6 weeks, who extended
their wholehearted cooperation to me despite their heavy workload during my practical
orientation.

I am ever grateful to my parents also for their guidance and sacrifice to continue my study. The
management of this branch had been extremely helpful in providing necessary documents,
annual report.

Finally an honorable mention goes to my university teachers and friends for their understanding
and support on completing my internship report.

May all of them live long life ………….Ameen!

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Executive Summary:

National Bank of Pakistan is a Govt. bank. It has its head office in Karachi. It has over
1,450 branches in Pakistan. National Bank of Pakistan maintains its position as Pakistan's
premier bank determined to set higher standards of achievements. It is the major
business partner for the Government of Pakistan with special emphasis on fostering
Pakistan's economic growth through aggressive and balanced lending policies,
technologically oriented products and services offered through its large network of
branches locally, internationally and representative offices. The National Bank of Pakistan
offers a wide range of services to its customers & recognizes the importance of efficient
business delivery & providing timely solutions.

Their competitors are untied bank, Allied bank, Habib bank, First women bank, Bank of
Punjab etc. The essence of business philosophy is to cater to the banking requirements of
small & medium sized entrepreneurs, providing them qualitative & competitive services
with emphasis on encouraging exports. Nearly forty percent of our credit portfolio is
related to export financing and credit decisions are taken within 48 hours that is why we
say: “We have more time for you”

Its products are Pay Order, Mail Transfer, Foreign Remittance, Foreign Currency
Account, Short Term Investment, NIDA (National Income Daily Accounts) Equity
Investment, Commercial Finance etc.

In Jhelum, Civil Lines Branch is a main branch of National Bank of Pakistan.

This document is the internship report that states my experience and observation in the NBP,
Civil line branch. I have formally introduced the bank, stated its vision, mission and goals and
have highlighted the offered products and its main competitors. Afterwards, I discussed the
organizational structure by discussing the organizational hierarchy.

Next, I introduced the branch I was working in, I explained the workforce distribution in the
bank, Next I stated my duration of internship in the bank and the departments that I served.

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Afterwards, I went through the training phase in which I was taught about the fundamental
processes involved in the working of the bank such as account opening, dispatching etc.

Next, I explained how banks are managed and planned in order to keep the flow of bank normal.
I also discussed the organization procedures that are followed by employees such as managers,
IT experts and then I explained the role of leaders and their role in controlling the bank.

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 Table of Contents:

Context:

Part 1: Introduction..............................................................................................................

1.1 Introduction of the NBP........................................................................................11

1.2 History..................................................................................................................11

1.3 Present status........................................................................................................14

1.4 List of competitors...............................................................................................14

1.5 Vision/Mission.....................................................................................................15

1.6 Objectives............................................................................................................15

1.7 Goals/Strategies of organization.........................................................................16

Part 2: Administrative/Management styles/Situational Analysis...................................

2.1 Board of Directors .........................................................................................................17

2.2 Organizational Hierarchy Chart ....................................................................................18

2.3 Policy Formulation .......................................................................................................19

2.4 Credit Policies / Division / Monitoring .........................................................................20

2.5 Management Functions… .............................................................................................21

2.6 Departmentalization… .................................................................................................22

2.7 Span of Control .............................................................................................................22

2.8 Decentralization ...........................................................................................................23

2.9 Formalization ................................................................................................................23

2.10 SWOT Analysis...............................................................................................25

2.11 BCG Matrix ....................................................................................................29

Part 3: Production Facilities: ......................................................... ................................

3.1 Deposits........................................................................................................................30

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 3.2 Advances ....................................................................................................................34

3.3 Corporate Advances ...................................................................................................38

3.4 Departments of Branch ..............................................................................................40

3.5 Account Opening & Closing .....................................................................................40

3.6 Types of Accounts .....................................................................................................40

3.7 Procedure for Account Opening ................................................................................41

3.8 Types of Cheques ......................................................................................................45

3.9 Types of Clearing............................................................................................48

Part 4: Company’s Marketing Mix: .............................................................................

4.1 Marketing Mix ............................................................................................................52

4.2 Promotion Tools..........................................................................................................55

4.3 Porter’s Five Force Model ..........................................................................................56

4.4 HR System ..................................................................................................................57

4.5 Structure of HR Department .......................................................................................58

4.6 HR Practices ................................................................................................................60

4.7 Financial Analysis .......................................................................................................65

4.8 Horizontal Analysis......................................................................................................66

4.9 Ratios ...............................................................................................................70

Part 5: Conclusion: ......................................................... ................................................

5.1 Conclusion........................................................................................................73

5.2 Recommendations............................................................................................74

Part 6: Internship Activity Plan: ....................................................................................

6.1 Training Program .........................................................................................................76

6.2 Departments .................................................................................................................76

6.3 References ........................................................................................................79

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Part 1:

1.1 Introduction of the organization:

The National Bank of Pakistan (NBP) is among the largest commercial banks operating in
Pakistan. It redefined its role and by moving from a public sector organization into a modern
commercial bank. NBP was established in 1949 and since then, its network has expanded making
it the largest commercial Bank of the country. NBP headquarter is in Karachi, Pakistan with
over 1,250 branches country wide. The bank provides both commercial and public sector
banking services.

The Bank's services are available to individuals, the corporate entities and Government. While
NBP continues to act as trustee of the public funds and as an 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.

Today, NBP is a progressive, efficient, and customer focused institution. The bank has
developed a wide range of consumer products in order to enhance its business capabilities and
cater to the different segments of the modern society. Some schemes have been specifically
designed for the low to middle income sectors of the population. For NBP’s clear introduction I
will explain its History and also its Mission, Vision, Values and Goals.

1.2 History:

1949 National Bank of Pakistan (NBP) was established under the National Bank of Pakistan
Ordinance of 1949 and was government-owned. NBP acted as an agent of the central
bank wherever the State Bank did not have its own branch. It also undertook government
treasury operations. Its first branches were in jute growing areas in East Pakistan. Offices
in Karachi and Lahore.

Brief History:

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National Bank of Pakistan was established on November 9, 1949 under the National Bank of
Pakistan Ordinance, 1949 in order to cope with the crisis conditions, which were developed after
trade deadlock with India and devaluation of Indian Rupee in1949. Initially the Bank was
established with the objective to extend credit to the agriculture sector. The normal procedure of
establishing a banking company under the Companies Law was set aside and the Bank was
established through the promulgation of an Ordinance due to the crisis situation that had
developed with regard to financing of jute trade. The Bank commenced its operations from
November 20, 1949 at six important jute centers in the then East Pakistan and directed its
resources in financing jute crop. The Bank’s Karachi and Lahore offices were subsequently
opened in December 1949. The nature of responsibilities of the Bank is different and unique
from other banks/financial institutions. The Bank acts as the agent to the State Bank of Pakistan
for handling Provincial/Federal Government Receipts and Payments on their behalf.The Bank
has also played an important role in financing the country’s growing trade, which has expanded
through the years as diversification took place. Today the Bank finances import/export business
to the tune of Rs. 52.7 billion, whereas in 1960 financing under this head was only Rs. 1.54
billion. The Bank has also played an important role in financing the country’s growing trade,
which has expanded through the years as diversification took place. National Bank of Pakistan
maintains its position as Pakistan's premier bank determined to set higher standards of
achievements. It is the major business partner for the Government of Pakistan with special
emphasis on fostering Pakistan's economic growth through aggressive and balanced lending
policies, technologically oriented products and services offered through its large network of
branches locally and internationally and representative offices. Bank of the Year 2001: awarded
for the year 2001 by the world renown “The Banker” magazine owned by the Financial Times
Group, London. Bank of the Year 2002: awarded for the year 2002 by the world renown “The
Banker” magazine owned by the Financial Times Group, London. The Best in the Emerging
Markets: World’s leading financial journal, “Global Finance” after a worldwide survey declared
NBP in its issue of May 2003 as one of the Best in the Emerging Markets. The “Bankers
Magazine” in July 2003 recognized NBP as the bank with the highest return on capital in Asia
and No.8 in the world. In its issue of March 2004, “Global Finance” has also declared NBP as
“The Best Foreign Exchange Bank” in Pakistan.

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In May 2004, NBP’s standard 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. WEBCOP-AASHA, an alliance against gender discrimination at workplace,
presented a Recognition Award to NBP on December 18, 2004 for having a Gender Sensitive
Management the Year” award for the year 2004 by the world renowned “The Banker” magazine
owned by the Financial Times Group, London. “Euromony” 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 in the only Pakistani bank which has been ranked
among the Top 100 banks of Asia for it performance in the fiscal year 2003. 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. On an all Pakistan basis NBP was awarded the
“Kisan Times Award” for the year 2005 by the Prime Minister of Pakistan Mr. Shaukat Aziz, fir
its services in the Agriculture Sector. Bank of the year” awarded for the year 2005 by the world-
renowned “The Banker” magazine owned by the Financial Times Group, London. The “Banker
Magazine” in July 2005 recognized NBP as the 10th Best Bank in terms of ‘Profit on Capital’ in
the world. 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 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. “Best Bank-Pakistan” award for the year 2005 by world’s leading
financial journal “Global Finance”. Best Foreign Exchange Bank- Pakistan” award for the year
2005 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+ to D-, in November 2005.
Best Foreign Exchange Bank-Pakistan” award for the year 2006 by world’s leading financial
journal “Global Finance”.

World’s leading financial journal, “Global Finance” has named NBP as the Best Emerging
Market Bank from Pakistan for the year 2006. Best return on Capital for 2006 amongst all banks
in Asia “Banker magazine” in July 2007. Stable AAA/A-1+ (Tipple A/A-One Plus) rating

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(Standalone Basis) by JCR-VIS (July 2007). World’s Best Foreign Exchange Bank 2008”
awarded by world’s leading financial journal Global finance”.

1.3 Present Status of NBP:

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

National Bank of Pakistan is the largest commercial bank operating in Pakistan. 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.

The Bank's financial performance has been remarkable. 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.

1.4 List of competitors:

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Following Banks can be termed as the competitors of the National Bank of Pakistan.

• Bank Alfalah

• Muslim Commercial Bank

• Habib Bank 15

• Meezan Bank

• Allied Bank

• United Bank

• First Women Bank

• Bank of Punjab etc

1.5 Vision:

For NBP to recognized as a leader and a brand synonymous with trust with highest standards of
service quality, international best practices and social responsibility.

Mission:

NBP aspires to meet up to the values that make NBP truly the Nation‟s Bank, by setting the
following goals:

• Institutionalizing a merit & performance culture.

• Creating a distinctive brand identity by providing the highest standard of services.
• Adopting the best international management standard.
• Maximizing stakeholder’s value.
• Discharging our responsibility as good corporate citizen of Pakistan & in country where
we operate.

1.6 Objectives:

Objectives are ends towards which an enterprise activity is aimed. The purpose of business is
production and marketing of economic goods and services but to accomplish these objectives to
a number of enterprise objectives may be necessary.

National bank of Pakistan has certain objectives. These objectives are

• Advancing loans

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 • Accept deposits
• Remitting of funds
• Sale of promissory notes
• Selling and realizing property of bank claims
• Investment or underwriting of stocks

a. Advancing loans: one of the main objective of NBP is advancing loans to industrialists and
traders against security of stock, debentures or other securities

b. Accept deposits: Bank provides deposit facility to its customers. The types of deposits are
profit and loss saving accounts, Fixed account, Current account. 13

c. Remitting of funds: The bank provides the facility to its customers remitting large amounts
of money in the form of bank Drafts, Telegraphic Transfer, Mail Transfer to where ever the
customers want.

d. Sale of promissory notes: To sell and realize the proceeds of sale of any promissory notes,
debentures, stock receipts, bounds, shares etc.

e. Selling and realizing property of bank claims: To manage sell and realize all property
whether moveable or immoveable which may come in any way of the bank in satisfaction of its
claim.

f. Investment or underwriting of stocks: To invest the funds of the bank in or the underwriting
of any of stocks, funds, shares securities, debentures, bonds or scripts or other securities for
money issued by any public limited companies and to convert them into money when required.

1.7 Goals:

To enhance the profitability and maximization of NBP‟s share through the increasing leverage of
existing customer base and diversified range of products.

Strategies of the organization:

To develop a refine structure & prepare platform for the best practices.

• To enhance our product line & trade finance services.

• To serve our clients more precisely by understanding their needs.
• To provide quality services & offering valuable products to enhance bank’s revenues.
• To enhance our stake in the bank’s profitability.
• To enhance our current market share & to be among the major service providers.

Part 2:

1. Administrative/Management Styles:

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A well-developed and properly coordinate structure is an important requirement for the success
of any organization. It provides the basic framework within which functions and procedures are
performed. Any organization needs a structure, which provides a framework for successful
operations. The operation of an organization involves a number of activities, which are related to
decision making, and communication of these decisions. These activities must be well
coordinated so that the goals of the organization are achieved successfully.

The Organization Structure (Annexed I) shows the internal operations and reporting lines of the
National Bank of Pakistan. 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 internal operations of the Bank are organized into 15 main departments and divisions
headed by senior management of the bank and are report directly to the Board of Directors. The
16 organizational structure of National Bank of Pakistan is centralized because all the decisions
of the bank are taken by the top Management.

2.1 Board of Directors:

The board of directors is the supreme governing body of National Bank of Pakistan. It comprises
of a government representative, Pakistan Banking Council Nominee, Nominee of corporate
sector and three directors from National Bank of Pakistan.

Executive Board of Directors:

The executive Board of Directors comprises of the four provincial chiefs, the three directors
from Board of Directors, and the division heads. These people run the organization. They are
answerable to the president and the president is answerable to the Board of Directors.

Structure of a Provincial Head Office:

A provincial head office is headed by a provincial chief. As the organizational chart shows that
under a provincial head office there are regional offices. In Punjab there are about nine regional
17 offices. Under each regional office there are two or three zonal offices and under each office
there are fifteen to twenty branches.

Senior Management:

The senior management of National Bank of Pakistan is consists of Group chiefs, who report
directly to the Directors of Bank. The whole functions of National Bank of Pakistan are
performed under these Groups. The National Bank of Pakistan has following groups and
divisions:

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• Corporate and investment Banking Group
• Operations Group
• Credit Management Group
• Audit & Inspection Group
• Compliance Group
• HRM & Administration Group
• Commercial & Retail Banking Group
• Treasury Management Group
• Special Assets Management Group
2.2 Organizational Hierarchy Chart

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2.3 Policy Formulation Process :

National bank of Pakistan policy formulation process is carried out by the top level managers.
Executive committee is responsible for designing policies in order to achieve strategic objective.
The committee holds meetings on monthly basis and half year basis. The committee consists of
members including;

• Board of Director
• Chief Executive Officer
• Executive-in-charge of strategic planning and global marketing

Major Functions :

Major functions performed by the executive committee are as follows;

• Analyzing the overall growth of bank.

• Defining the features of policy.
• Do the virtual testing.
• Remove the flaws.
• Implementation of the policy.

Managerial Policies:

In NBP, the policies are of three types:

 Operational policies

 Credit policies

 Human recourse policies

Operational Policies:

Operational and system division is responsible for the formation of the operational policies.
Executive in charge of the system and the operation division is there to implement the
operational policies. It is the duty of executive-in-charge to:

 Monitor the overall operation of the bank

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 Activities performed by operation department of different branches

 Analyzing the workflow of different departments such as remittance, current deposit

department, and account department

 Rate of increase in deposits of different branches

 Specify the rules regarding the account maintenance

Executive in charge also designs the motivational policies for:

 Home Finance

 Business Finance

 Leasing

2.4 Credit Policies:

Two division form credit policies:

 Credit Division

 Credit Monitoring Division

Credit Division:

Major purpose of credit division is to approve corporate loans, short and long term loans. Real
earning for the bank comes from the credit division.

Executive-in-charge of the credit division is responsible for making lending policies that are duly
approved by the board of directors and followed by different branches.

Credit division design the policies after taking into account the credit policies made by SBP.
Credit department of all branches must follow all the instructions given by the Executive-
incharge of the credit division.

Credit Monitoring Division:

Credit monitoring division monitor overall credit exposure and takes analytical and systematic
approaches to its credit structure categorized by group industry. This division has built up and
maintains a sound loan portfolio in terms of well-defined credit policy. Bank credit a valuation
22 system comprises of well-defined credit appraisal, sanctioning and review procedures for the
purpose of emphasizing prudence in its lending activities.

Human Resource Policies:

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 Development of the professional skills and knowledge of the employees is essential for the
efficient functioning of the organization. At Bank appropriate design policies and practices have
been instituted to achieve strategic objective. HR policies made by the Executive-in-charge of
human resource division. These policies are as follows:

HR Development

 Type of Human Development

 Type of loans provided to staff member

 Setting the career path of the employees

 Staff training programs

 Promotion of the staff members according to the performance

 Policies about the staff bonuses and staff benefits schemes

2.5 Management Functions of the Organization:

a. Planning:

Planning determines the organizational goals and the means of achieving them.

Organizations planning strategies:

The main objective and goal of a commercial bank is to earn profit. National Bank of Pakistan‟s
current strategy is to value the customers, and provide services which people can trust. NBP has
a big advantage of distributing Government Salaries and Pensions.

Decision Making Process:

National Bank of Pakistan has the following Decision Making Process.

At Head Office Level:

The President of the Bank is the CEO of the Organization. He is the Chairman of the Board of
Directors. The Board is responsible for Policymaking and implementation of all the major
decisions.

The board of Directors also give due weightage to the proposals submitted to them by the field
functionaries by time to time while making policies for bank‟s interest. We can say that there is
democratic atmosphere and environment for decision-making Process.

At Regional Office Level:

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The Regional Business Chief preside the Regional Management Team (RMT). All decisions are
made by the RMT Collectively. All of the five department‟s Regional Chiefs are the members of
this team.

At Branch Level:

The branch manager makes decision in association with branch operations manager and other
staff members.

b. Organizing:

Organizational Design:

Organizational Design is the process of developing or changing an organization‟s structure. This

involves the decisions of about six key elements, which are: Work Specialization,
Departmentalization, Chain of Command, Span of Control, Centralization/Decentralization, and
formalization.

2.6 Departmentalization:

Departmentalization at NBP is pretty elaborative and neat. The following Steps can extensively
define the hierarchy of the departments currently working in NBP.

• President

• Groups

• Divisions

• Dept. Head Office

• Regional Offices

• Departments at Regional Offices

• Wings

• Branches

2.7 Span of control:

Span of control is the number of subordinates who report directly to a specific manager in the
bank.

There are three types of branch categories i.e. I, II, & III.

Category I Branches: Four employees report to their branch manager.

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Category II Branches: Eleven employees report to their branch manager.

Category III Branches: Fifteen employees report to their branch manager.

2.8 Centralization/Decentralization:

NBP is a centralized organization.

2.9 Formalization:

One of the newer concepts in the organizational design is the team based structure which is made
up of work-groups or teams that performs the organization‟s work. NBP has high
departmentalization and more formalization.

Work specialization:

Work specialization is the degree to which the work necessary to achieve organizational goals is
fragmented into various jobs. These jobs are performed parallel to each other and their combined
result is counted as the organizational goal. Another term for this is division of labour. NBP is
emphasizing on work specialization and job specification.

Managing change and innovation:

The change management in an organization is a managerially difficult process. It is because

strategists normally consider a single variable instead of the holistic view of the organization.

In today‟s world perhaps the most frequent and common trigger for organizational
transformation is the technology and its continuous advancement. This transformation occurs on

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account of revolutionizing the production process, informational and communication
technologies or other processes such as demand management and, order fulfillment. It is the
technological innovation perceptibly that leads to the increased efficiency in value chain
activities, especially in primary and support activities of the value chain. NBP is focused towards
managing change environment and its innovations.

Managing IT and Communication:

Today banking is becoming more and more mechanized and it is the I.T. support that can
improve the customer service and reduce the cost involved at the same time. At NBP we have
elaborated plans for transformation of the entire I.T. architecture of the bank by implementing
core-banking solutions. The said technology will not only increase our distribution by many
folds but it will also simplify our internal procedures thereby reducing the transactional cost and
lead-time for service.

Leadership Style:

NBP is adopting democratic style of leadership in which employees‟ involve in decisionmaking

process. The bank uses the user feedback to coach employees for decision-making process.
Democratic leadership style could contribute to both the quantity as well as high quality of work.

Power and Politics:

The politics involved in any organization has a very significant role in shaping its future. The
politics is the role-playing with the sense of responsibility. The leadership skills of the person in
charge significantly shape the future of the bank. If the leader is not proving himself to be a good
leader, then the people working under him can use democratic power to change him.

Motivation:

The leader plays a very important role of uplifting the employees in any hardship. The job in the
bank is very time consuming and requires motivation and support from the leadership. The
leader acts as a guide for the employees and his technical superiority is very important for the
employees.

Controlling:

Controlling of operations:

The bank is committed and focused towards good quality customer service and in 2007 with the
motto of „Putting as smile on our Customers face‟, it made concerted efforts and took a number
of initiatives in order to improve the user experience and bank‟s operation capabilities.
Workshops and seminars were conducted in order to disseminate the very important message of
“excellent customer service”. It is transforming the bank‟s branches to give a modern look and
convenience to. A number of branches have been shifted to prominent and spacious locations. It
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also has established specialized customer facilitation centers to exclusively cater to pension
payments, utility and government collections. These are expected to reduce counter traffic at our
branches and will increase our distribution channels for better and convenient services. Business
hours have been extended with the establishment of customer facilitation offices at the regional
levels in order to help on the spot resolution of customer complaints.

Controlling of performance:

 Internal control is the fundamental control of any bank branch. The adequacy of internal
controls determines largely the risk profile of the respective branch. Almost all the potential
frauds can be analyzed all the way to the stem from faulty internal controls or their absence.

 Since internal controls have evolved over the years, NBP has accepted them without question
until now. Technology of computerization, which has changed the very face of Banking, has
compromised many of the internal controls not only because of other reasons such as execution
of a transaction in a different procedure.

 Monitoring progress towards goal achievement and taking corrective action when needed.
NBP is emphasizing on controlling to integration of the activities, plans, attitudes, policies and
efforts of the people of the Bank working together to provide reasonable assurance that the
organization will achieve its objectives and mission.

Situational Analysis:

2.10 SWOT Analysis:

Strengths:

Custodian of Govt:

N.B.P is a Custodian of government capital and Govt. Business owner as well as custodian of
public money.

Agent of State Bank:

N.B.P work as agent of State Bank of Pakistan

Old and sound Financial institution:

N.B.P is old and Sound financial institution among other banks and high profitability and it is the
lender of govt. agencies.

Western union facility:

National Bank of Pakistanis only one bank which provides the facility of Western union to their
customer. Through western union money is transfer in Pakistan from aboard.

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Vast Network:

N.B.P is the first bank which has huge operational network all over the Pakistanas well as
abroad.

Job Security:

Employee Job security, benefit and recognition hard work of staff through incentives.

Customer Satisfaction:

Due to govt. bank, Customers feels secure their money in N.B.P and enjoy the satisfaction.

Online Banking:

Online Banking is also strength of N.B.P because it has more then 150 branches is online. It
helps the fast service to the customers and we also check the balances and daily transactions just
at one key press.

Highest Rating and Receive awarded:

N.B.P highest credit rating bank in the Pakistan among all other banks and received many
awards locally and internationally due to its efficiency.

Weaknesses:

Product and Services :

N.B.P launch many products and services to their customer so N.B.P try to improved the quality
of life our customer.

Rules and Regulation:

Employees of N.B.P are strict follow the rules and regulation impose by the bank. In this way
the output of the bank is enhances.

More Deposit:

N.B.P has a lot of deposit of the customer among the other bank in the market.

Poor Dealing:

Employees of the bank know that their job is secure so their behavior with customer is not
professional. N.B.P Employees rudely behave with customers and as well as with each other.

Lack of Computerized Network:

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 Lack of computerized network which cause the more time consume, energy and mental stress in
rush face the employee. The bank lacks the modern equipment, outdated systems and procedures.

Political pressure:

Being Govt. bank political pressure affects the negative way and provides the loan to the
customer under pressure which creates the negative affect on bank employee.

Lack of online Branches:

Online work in now day is become very popular but N.B.P has limited online branches.

Lack of Advertisement of Product:

Lack of modern financial/banking product, the bank falls far behind when innovative and new
schemes are considered. There are no proper system for advertisement & marketing of products.

Lack of IT infrastructure:

Lack of IT infrastructure and some time IT system is hanged so bank could not provide the
information to their customer on time.

Favoritism:

The promotion and bonuses are powered by senior favoritism will and decision which affect the
employee‟s performance negatively. That is why, Condition of Bank branches is very poor and
service to the clients is slow.

Decision making:

Resistance to change and decision making process are slow.

Opportunities:

Growing Banking System:

Nowadays banking system is growing rapidly so N.B.P have opportunities to apply advance
standard and more contribute into the market.

Trust Due to Govt Bank:

N.B.P more trustable due to government bank so it has opportunity to improve itself and
increase market share among other banks.

Economic Activities:

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 Now a day economic and business activities are increasing, N.B.P play roll in trade and
commerce for the benefit of their customer. N.B.P has vast opportunity to introduce new
products and services because its branches spread all over the Pakistan and it has large number of
customer.

Electronic Banking:

Now a day, a world becomes a global village due to advancement of technology particularly in
computer field. So N.B.P introduce new technology to provide the good service of their
customer.

Marketing Plan:

Develop organize the aggressive marketing plan for promotion the bank and its products. Can
lunch a marketing strategy and offer new and innovative products to capture the business from
other banks.

Increase Business:

NBP has ability to become number one bank in Pakistan due to vast operational network, large
number of customer area and government of bank. With proper planning can hunt more and
more business from the public and private sector as people still trust over it.

Threats:

Number of Commercial Bank:

Number of commercial bank are opened, operating their business and provide same facilities
and product to the customer which provide N.B.P so It is threat for N.B.P.

Competition with other Banks:

Competition with foreign bank because they offer many service to their customer are totally free
or minimum prices.

Political Influence:

Political influence is also threat for N.B.P because it is a government bank and political pressure
affects the performance of it.

Customer Satisfaction:

Customer satisfaction is very important for business but in N.B.P there are no proper systems to
remove the customer complaints for its satisfaction.

High Interest Rates:

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 NBP receive high interest rate when other banks offer lower interest rates. Interest rates offered
by NBP like interest on loan, extra higher service charges.

2.11 BCG:

The BCG matrix or also called BCG model relates to marketing. The BCG model is a well
known portfolio management tool used in product life cycle theory. BCG matrix is often used to
prioritize which products within company product mix get more funding and attention.

The BCG matrix model is a portfolio planning model developed by Bruce Henderson of the
Boston Consulting Group in the early 1970's.

The BCG model is based on classification of products (and implicitly also company business
units) into four categories based on combinations of market growth and market share relative to
the largest competitor.

Four Categories of BCG Matrix Model:

Star:

In the star we have Loan on Gold, Home finance, Online banking which show the high growth
rate and high market share .

Cash Cow:

In cash cow we have deposits investment credit cards which shows the low growth rate and high
market share.

Question Mark:

In question mark we have Islamic banking ATM Debit cards which shows the high growth rate.

Dog:

In dog we have rupee traveller cheque which shows the low market share and low growth rate.

Part 3:

Production Facilities:

The most precise definition of product is anything capable of satisfying needs,

including tangible items, services and ideas. In marketing, a product is anything that
can be offered to a market that might satisfy a want or need. Since 1575, the word
"product" has referred to anything produced.

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 Since 1695, the word has referred to "thing or things produced”. The economic or
commercial meaning of product was first used by political economist Adam Smith. In
general usage, product may refer to a single item or unit, a group of equivalent
products, a grouping of goods or services, or an industrial classification for the goods
or services. The consumer banking products include personal accounts, credit cards,
loans, investment products, treasury products and many more. The National Bank of
Pakistan offering for sale several related products individually, which is commonly
known as product lining. A product line is defined as “A group of products that are
closely related because they function in a similar manner, are sold to the same customer
groups, are marketed through same types of outlets, or fall within the given price
ranges”. The followings are the main consumer banking products of NBP.

3.1. Deposits:

The National Bank of Pakistan offers to their clients a variety of Deposit Schemes with
personalized services at competitive rates of interest. Any Pakistani citizen can open his/her
account for any deposit scheme at any of its Branches strategically located throughout
Pakistan. The Bank with its huge network of 1243 branches garners savings from both the rich
and the poor in urban as well as rural areas. Even a poor farmer in a remote village, with his
meager. annual income, feels secure to safe keep his minuscule savings in National Bank of
Pakistan, Because National Bank of Pakistan has a long heritage of trust and professional
commitment.

a) Current Deposits:

These are payable to the customer whenever they are demanded. When a banker
accepts a demand deposit, he incurs the obligation of paying all cheques etc, drawn
against him to the extent of the balance in the account. Because of their nature, these
deposits are treated as current liabilities by the banks. Bankers in Pakistan do not allow
nay profit on these deposits, and customers are required to maintain a minimum
balance, failing which incidental charges are deducted from such accounts. This is
because Current Deposits may be withdrawn by the depositors at any time, and as such
the bank is not entirely free to employ such deposits. Current Accounts/ Basic Banking
accounts are opened, on proper introduction and submission of required documents

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along with initial deposit prescribed from time to time. Basic banking accounts are
opened for an individuals (single or joint) only whereas current accounts are opened for
individuals (single or joint) Charitable institution, provident and other funds of
benevolent nature of local bodies, autonomous corporations, companies, associations,
educational institutions, firms etc. and in all other cases where the accounts are to
opened under the order of a competent court of law. No profit is paid on the balances of
current/basic banking accounts.

The bank is authorized to deduct service charges (incidental charges) on current

accounts levied through its half yearly schedule of charges, in case the average balance
falls below the minimum balance as prescribed by the bank. No balance maintenance
condition is applied on basic banking account.

b) PLS Saving Deposits:

In Pakistan a Savings Deposits Account can be opened with a very small amount of
money, and the depositor is issued a cheque book for withdrawals. Profit is paid at a
flexible rate calculated on six monthly basis under the Interest Free Banking System.
There is no restriction on the withdrawals from the deposit accounts but the amount of
money withdraw is deleted from the amount to be taken for calculation of products for
assessment of profit to be paid to the account holder. It discourages unnecessary
withdrawals from the deposits. In order to popularize the scheme the SBP has allowed
the Savings Scheme for school and college students and industrial labour also. The
purpose of these accounts is to inculcate the habit of savings in the constituents.

As such, the initial deposits required for opening these accounts are very nominal. NBP
charge Rs.500 for opening of PLS Savings deposits.

c) Fixed Deposit Account (Time Deposits):

The deposits that can be withdrawn after a specified period of time are referred to as
Fixed or Term Deposits. The period for which these deposits are kept by the bank
ordinarily varies from three months to five years in accordance with the agreement
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made between the customer and the banker. Profit/Return is paid to the depositors on
all fixed or Time deposits, and the rate of profit/Return varies with the duration for
which the amount is kept with the banker. By lending out or investing these funds, the
bank earns more than the Profit/Return that it has to pay on them to the depositors. By
giving an advance notice to the bank the deposit can be withdraw from the bank before
the expiry of the period. Fixed deposit accounts have higher rate of interest as compare
to other accounts. The rate of interest rises with the length of period and the amount of
deposit. The bank grants to the depositor a fix deposit (FDR) which is not transferable
to any other person. The silent features of fixed deposit account of NBP are as fallows :

1. The PLS term deposit are opened for individuals in their own single or joint
names, companies firms and other organizations.

2. The PLS term deposit receipt are issued for any amount. There is minimum or
maximum limit or deposits in a single term deposit account.

3. PLS term depositors may be allowed some facilities against the security of these
receipt credits, after making “Lien” on the relevant receipt and subject to
recovery of service charges.
4. Under term deposit scheme the depositors not cease to earn the profit
immediately, after the respective maturity date.

d) Foreign Currency Account:

Government of Pakistan has introduced many important reforms in Foreign Exchange

Control in the country since February, 1990, for the purpose of strengthening the
Foreign Exchange Reserves. One of these reforms relates to foreign currency accounts,
which can be opened in United States Dollars, Pound Sterling, Euro and Japanese Yen
in any of the authorized branches of commercial banks throughout the country. Foreign
currency accounts are opened, on proper introduction and submission of required
documents along with an initial deposit prescribed from time to time. Rates of return on
foreign currency deposits are subject to fluctuation as determined in accordance with

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State Bank of Pakistan directives and will be paid on six monthly basis whereas the
return on term deposit/SNTD will be paid on maturity or as prescribed by SBP. The
bank shall have no responsibility for or liability to the account holders for any
diminution due to taxes imposed or depreciation in the value of funds credited to the
account whether due to devaluation or fluctuation in the exchange rate or other wise.

e) NBP Premium Aamdani:

NBP Premium aamdani is a retail product of the bank. The amount of investment
required for this account is Rs. 20,000/-to Rs. 5,000,000.The investment period is 5
years. Zakat and withholding tax will be deducted as per rules. In NBP premium
aamdani, the account holders have benefit of free demand draft, pay order; free cheque
book and NBP cash card (ATM+Debit).

f) NBP Premium Saver:

NBP Premium saver is a retail product of the bank. The minimum saving balance of Rs.
20,001 and a maximum balance of Rs. 300,000 are required for opening a premium
saver account. Two debit withdrawals allowed in a month and no limit on number of
deposit transactions. The profit is calculated monthly and Paid on half yearly basis.
Free NBP Cash Card (ATM + Debit) facility is available to account holder.

g) National Income Daily Account (NIDA):

The scheme of National income daily account was launched in December 1995 to
attract corporate customers. It is a current account scheme and is part of the profit and
loss system of accounts in operation throughout the country. Deposits in the NIDA
accepted on the condition that the depositor shall always maintain a minimum balance
as prescribed by the bank in his account. In the event however, that any depositor
wishes to withdraw the amount and the balance in his account is less than the required
amount, the account will be converted to the ordinary PLS SB account for the purpose
of calculating profit. An example of how the NIDA accounts are maintained is shown
on the next page.

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Rates on National income daily account :

From Rs 2/- million to Rs 50/- the rate is 1.4%.

From Rs50/- million but less than Rs 500/-million, the rate is 1.5%.

From Rs 500/- million but below Rs 1000/- the rate is 1.6%.

From Rs 1000/- and above the rate is 1.75%.

Salient Features:

Rs 2-million is required to open an account and there is no maximum limit.

Profit is paid on half yearly basis on monthly balances.
The rates of profit vary according to the slabs of deposit. On Deposits of Rs.2 million to
2,000 million, the rate fluctuates from 1.4 to 1.75%.
It is a checking account and there is no limit of withdrawals.

3.2. Advances:

National Bank of Pakistan plays a pivotal role in translating the government's development
plans in terms of growth in industrial, commercial and agricultural sectors in Pakistan.
Accordingly the Bank has formulated its Credit Policy under the guidelines of SBP-the
Central Bank of Pakistan.

a) NBP Saibaan:

The NBP Saibaan is retail product of the bank. It has different product items
which are home purchase, home construction, home renovation and purchase of
land plus construction. If anyone has a Home Finance Facility outstanding with
another bank he can have it transferred to NBP through a hassle-free process. A
brief description of these products is as follows:

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TYPE OF Financing Financing Period Debt to equity
ADVANCE Amount Ratio

Home Purchase (House or Rs. 35 Million 3 to 20 years 85:15 (maximum)

Apartment)
Home Rs. 35 Million 3 to 20 years 85:15 (maximum)
Construction
Home Rs. 15 Million 3 to 15 years 80:20 (maximum)
Renovation
Purchase of land Plus Construction Rs.35 Million 3 to 20 years 80:20 (maximum)

b) NBP Advance Salary:

The NBP Advance salary has been the flag-ship product for 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 118 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 is attributed as the most
distinguishing features of the product. The product is offered countrywide.

c) NBP Cash & Gold:

With NBP‟s Cash & Gold, the customers meet their need for ready cash against their
idle gold jewelry. The rate of mark up is 13% p.a. This product has following features.

Facility of Rs. 7,000 against each 10 grams of net contents of gold

No maximum limits of cash

Page | 35
 Repayment after one year

Only gold ornaments acceptable

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

No penalty for early repayment

d) Students Loan Scheme:

Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002
budget speech, a Student 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.

a) NBP Karobar Utility Store:

The product has been designed in collaboration with “UTILITY STORES

CORPORATION OF
PAKISTAN (USC)” to provide financing facility of an average amount of Rs.100,
000/- for a maximum period of five years with grace period of three months. This is
available to all eligible citizens of Pakistan for setting-up small-scale Retail Outlet or

Page | 36
Mobile Utility Store. The USC will give its franchise to qualifying Pakistani citizens.
Following two financing options are available under this product:

1. NBP KAROBAR Utility Store (Shop):

The Financing facility is available to set-up a small scale Retail Outlet (Utility Store in
a shop) for purchase of furniture & fixtures. This is also applicable on payment of
security deposit / advance rent under franchise from the USC. However, stocks will be
purchased by the customer.

2. NBP KAROBAR Mobile Utility Store:

Financing facility available to purchase a 2/3 wheeler, 4 stroke Petrol/CNG/LPG

Vehicle (Auto Scooter / Motorcycle Rickshaw) with attached Loader body (Thehla
type) under franchise from the USC to carry utility goods for retail sale ideally in areas
where accessibility to conventional utility stores is difficult.

b) NBP Karobar Mobile General Store (without USC Franchise):

This financing program has been designed on the similar pattern of Mobile Utility
Store. The only difference is that the borrower will have the liberty of procuring
stock/supplies/grocery items from open market. Under this product the average loan
size of Rs.100, 000/- will be given for a maximum period of five years with a grace
period of three months.

c) NBP Karobar Transport:

The NBP Karobar Transport is designed to finance 2/3 wheeler, 4 stroke

Petrol/CNG/LPG Vehicle (Auto Scooter / Motorcycle Rickshaw) to the eligible citizens

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of Pakistan for providing less expensive environment friendly transport facility. Under
this product average loan size of Rs.100, 000/- will be provided for a maximum period
of five years with a grace period of three months.

d) NBP Karobar PCO:

This product is designed to finance setting-up a PCO. NBP will be providing financing
for the purchase of Mobile/Wireless Telephone Set with connection, Credit Balance.
The average amount of financing under this product will be Rs.5, 000/- for a maximum
period of two years with a grace period of three months.

e) NBP Karobar Tele-center:

This product is specially designed to finance setting-up a Tele-center. NBP will be

providing financing for the purchase of Mobile/Wireless Telephone Set with
connection, Computer, Printer and Fax machine cum Photocopier etc. to establish tele-
center on a rented shop or owned premises. The average amount of financing under this
product will be Rs.50, 000/- for a maximum period of two years with a grace period of
three months.

3.3. Corporate Advances:

a) Cash Finance:

This is a very common form of borrowing by commercial and industrial concerns and
is made available either against pledge or hypothecation of goods, produce or
merchandise. In cash finance, a borrower is allowed to borrow money from the banker
up to a certain limit, either at once or as and when required. The borrower prefers this

Page | 38
form of lending due to the facility of paying markup/services charges only on the
amount he actually utilizes. If the borrower does not utilize the full limit, the banker has
to lose return on the un-utilized amount. In order to offset this loss, the banker may
provide for a suitable clause in the cash finance agreement, according to which the
borrower has to pay markup/service charges on at least on self or one quarter of the
amount of cash finance limit allowed to him even when he does not utilize that amount.

b) Running Finance/ Overdraft:

This is the most common form of bank lending. When a borrower requires temporary
accommodation his banker allows withdrawals on his account in excess of the balance
which the borrowing customer has in credit, and an overdraft thus occurs. This
accommodation is generally allowed against collateral securities. When it is against
collateral securities it is called “Secured

Overdraft” and when the borrowing customer cannot offer any collateral security
except his personal security, the accommodation is called a “Clean Overdraft”. The
borrowing customer is in an advantageous position in an overdraft, because he has to
pay service charges only on the balance outstanding against him. The main difference
between a cash finance and overdraft lies in the fact that cash finance is a bank finance
used for long term by commercial and industrial concern on regular basis, while an
overdraft is a temporary accommodation occasionally resorted to.

c) Demand Finance:

When a customer borrows from a banker a fixed amount repayable either in periodic
installments or in lump sum at a fixed future time, it is called a “loan”. When bankers
allow loans to their customers against collateral securities they are called “secured
loans” and when no collateral security is taken they are called “clean loans”.

The amount of loan is placed at the borrower‟s disposal in lump sum for the period
agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus
the borrower gets a fixed amount of money for his use, while the banker feels satisfied

Page | 39
in lending money in fixed amounts for definite short periods against a satisfactory
security.

3.4 Departments of The Branch:

3.5 Account Opening and Closing Department:

Basically function of A/c opening & closing in NBP is performed under

Accounts department but I am discussing it with separate heading for better
understanding.

Firstly all types of Accounts which can be opened in NBP has been described:

3.6 Types Of Accounts

I) Current account

II) Saving account

Brief explanation of these accounts is as follows:

Current Accounts:

Current A/c is basically used to meet the daily transactions. Current account
provides safety to the customer‟s money, gives the advantage for paying debts by
the convenient and safe means of sending cheques through the post thus avoiding the
trouble and loss that units in PKR, Us$ GBP and DM.

Saving Accounts:

Page | 40
In case of saving accounts, account holder gets profit. There is a time limit for drawing
cash; customer cannot draw money before a certain time.

In NBP saving a/c is used as current a/c & there is no main difference between current
& saving account except profit.

This account can be opened by limited company, partnership company ,club societies &
associations, joint & sole proprietorship.

Terms and conditions:

Account opening requires two things
1) National ID card of the customer and introducer
2) Introducer

Customer:

Customer is the person who comes with the purpose of opening the account

Introducer:
Introducer is a person having the account in same branch and gives guarantee about the
customer. If the introducer is not proper than state bank charges RS 5000/- per head
from that employee of the bank who has opened the account of the customer on the
request of the introducer.

3.7 Procedure of Account Opening:

First of all, the customer is required to fill an application form. Then he attaches the
photocopy of his identity card and fills the signatory cards. Then he is allotted an
account number by entering in the account opening register. Now he fills the pay-in slip
and deposits money on the counter. Following things are needed for opening of
account:

Page | 41
1. Account opening form

2. Signature card

3. Letter of kinship

4. Letter of thanks

5. Issuances of cheque book

Account opening form:

Account opening form consist of
a. Category of account

b. Currency

c. Title of account

d. Account number

e. Customer information

f. Initial deposit

g. Authorized person in case of customer death

Signature card:
The signature card included the name and specimen signature of the customer.
Letter of kindship:

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 In the letter of kindship the customer authorized the bank to pay the proceedings of
his/her PLS/Current foreign currency account to the related person by describing the
relationship of the person with the customer after the death of the customer.

Letter of thanks:
Letter of thanks is the latter issued by the bank to the customer for two purposes
Issuance of cheque book:
Cheque book is issued to the customer after sending the letter of thanks when the
customer comes with the letter of thanks and requests for the issuance of the cheque
book. A cheque book (usually having 25 leaves) is issued to the customer.

Closing of Account:
The customer can close the account. The customer is required to submit an application
for closing the account. The account is closed out and his balance is paid to him after
deducting the closing charges.

There are many reasons for closing of account

1. Account holder Owen request

2. Death of account holder

3. Closing of account due to the bad manners of account holder

Cash Department:

Cash department performs the following functions:

Receipt :

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 The money, which either comes or goes out from the bank, its record should be
kept. Cash department performs this function. The deposits of all customers of the bank
are controlled by means of ledger accounts. Every customer has its own ledger account
and has separate ledger cards.

Payments :

It is a banker‟s primary contract to repay money received for this customer‟s

account usually by honoring his cheques.

The requisites of cheque :

There is no prescribed form of words or design of a Cheque, but in order to

fulfill the requirements Cheque must have the following.

▪ It should be in writing

▪ The unconditional order

▪ Drawn on specific banker only

▪ Payment on Demand

▪ Sum Certain in money

▪ Payable to a specific person

▪ Signed by the drawer

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 3.8 Types of cheques :

Bankers in Pakistan deal with three types of cheques

a) Bearer Cheques :

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

b) Order Cheque :

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

c) Crossed Cheque :

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

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Credit Department:

The earning of a commercial bank are chiefly derived from interest charges on
loans and discounts it. Now loans are recognized as advances or finances. The advances
are made through the deposits that are kept in the bank by the customers. The bank pays
profit on the deposited amount and receives mark up on the advances made of different
amounts. NBP introduced the mark up based advancing in Jan1, 1985 when the
Islamization of the economy was influence under this system of advancing the bank is
entitled to receive a constant sum of money on the amount that is outstanding on the
account of the party.

Remittance Department:

Remittance department provides services to the customer of the bank. The

main function of this department is transfer of funds.

The instruments that are handled in the Remittance department are as follow:

Demand Draft :

A demand draft, also known as a remotely created check is created by a seller

with a buyer's checking account number on it, but without the buyer‟s signature.
Instead and in place of the signature, the check has verbiage such as "authorized by
depositor (the buyer), lack of endorsement guaranteed by NBP. The seller deposits the
check into his or her bank account, and the check then clears out of the buyer's account.
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.

Page | 46
Mail transfer :

Move your money safely and quickly using NBP Mail Transfer service. And NBP
also offer the most competitive rates in the market. They charges Rs 50/- exchange
rate and RS 75/- postage charges on issuing mail transfer.

Telegraphic transfer :

Telegraphic transfer or cable transfer is the quickest method of making remittances.

Telegraphic transfer is an order by telegram to a bank to pay a specified sum of money
to the specified person. The customer for requesting TT fills an application form.
Vouchers are prepared and sent by ordinary mail to keep the record. TT charges are
taken from the customer. No excise duty is charged on TT. The TT charges are:

Cable telegram transfer costs more as compared to other title of money. In cable
transfer the bank uses a secret system of private code, which is known to the person
concerned with this department and branch manager.

Pay order :

NBP provides another reason to transfer customer‟s money using their facilities. Their
pay orders are a secure and easy way to move customer‟s money from one place to
another. And, as usual, their charges for this service are extremely competitive.
It is an instrument, which is payable in demand and only presentable in city. Pay order
is also called the banker‟s cheque drawn upon the issuing bank itself. It is not
negotiable and therefore, bankers tend to cross the instrument “Payee‟s account only”
to avoid the possibility of dealing with instruments with forged endorsement. The
pay order is issued favoring individuals, commercial concerns, and government

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departments. On the presentation of pay order, the bank is liable to pay the amount to
the customer. Bank charges excise duty of Rs. 4 and service charges of Rs. 100.

Clearing Department:

A clearing house is the place where representatives of all the banks get together
for the purpose of off setting the interbank indebtedness arising from the transfer of
deposits by a customer of a particular bank to another bank.

3.9 Types of Clearing:

There are two main types of clearing.

i Outward clearing

ii Inward clearing.

Outward Clearing (within city):

It includes those cheques and other instruments which are sent by the Bank to the
Banks for payment on behalf of its own clients. Cheques are sent to clearing house
thorough local main branch.

A delivery message from the local main branch comes to every branch at a fixed time
to pick its outward clearing or outward returns as the case maybe.

Outward Clearing at Branch :

a. Account number of payee/endorsee is written on the back side of the cheques.

b. The instrument and the paying in slips are separated.
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c. The instruments are sorted I Bank-wise and branch wise.

d. Schedules are prepared.

e. Jotting of all the schedules are taken in the clearing House statement. Amount
of the cheques in written in the "Delivered" and to pay column.

f. After balancing the outward clearing, the pay in slips are released to C.D.
department.

g. After balancing, a transfer debit voucher is prepared.

h. The instrument, schedule. etc. are delivered to the messenger from the main
branch.

Inward Clearing (within bank):

The cheques drawn are called inward clearing. drawn on National Bank through its
representatives

on the Bank presented by other Banks for payment It includes those cheques and other
instruments

of Pakistan branches which other Banks present at the clearing house.

Inward Clearing At the Drawn Branch :

a. Numbers of instruments noted in the schedules are verified immediately on

receipt.
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b. The amount's of all the instruments are jotted down and totaled. If should be
equal to the amount mentioned in schedule from the local main branch.
c. The amounts are debarred to the relevant accounts if otherwise in order.

d. The IBCO is prepared crediting the amount of the main branch.

e. If there is any return, that is deducted from the total and IBCO prepared for the

remaining amount when the cheque is crossed.

Foreign Exchange and Advance Loans Department:

In modern banking system Foreign Exchange department plays very important

role from every aspect. It is parallel to the general banking with additional functions of
imports and exports business. Foreign exchange is controlled by State Bank of
Pakistan. Rules and regulations are framed by SBP.

NBP also carries the international banking through its Foreign

ExchangeDepartment. All the transactions are carried out at the rate which is authorized
by the State Bank of Pakistan (SBP). For this purpose US dollar has been fixed by SBP
and the rate of other currencies are calculated in accordance with the formula approved
by SBP and as published daily by Foreign Exchange Rate Committee in Karachi. NBP
Head Office ensures that the branches receive the rates published by Foreign exchange
rate Committee on the same day. The Foreign Exchange Department provides the
following services;

• Foreign Currency Accounts.

• Foreign Exchange Remittance Facility.

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 • Import Advances to Importer.

• Export Advances to Exporters.

National central banks play an important role in the foreign exchange markets.
They try to control the money supply, inflation, and/or interest rates and often have
official or unofficial target rates for their currencies. They can use their often
substantial foreign exchange reserves to stabilize the market.

The use of foreign exchange arises because different nations have different
monetary units, and the currency of one country cannot be used for making payments in
another country. Because of trade, travel, and other transactions between individuals
and business enterprises of different countries, it becomes necessary to convert money
into the currency of other countries in order to pay for goods or services in those
countries. The transfer of money values from one country to another and the
determination of the price at which the currency of one country will be surrendered for
that of another constitute the main problems of foreign exchange.

Government Department (Pension):

Here two types of pensions are given to the pensioners.

• Pension to the retired Government servants.

• Employee old age benefit pension.

The pension is paid to the pensioners on every date of the month. Every pensioner
have his own copy of pension in which all the details of the pension are

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 listed.including the date of receipt, the amount of money and also any increase if
sanctioned by the govt.

Part 4:

4.1 Company Marketing Mix:

Now, we discuss the marketing mix of National Bank of Pakistan:

Marketing mix is the set of controllable, tactical marketing tools product, price, place
and promotion that work together to achieve company's objectives.
Product:
Product is one of the important „P‟ of the marketing mix. It is defined as:
“Anything that can be offered to a market for attention acquisition, use or consumption
that might satisfy a want or need”.

. The products of National Banks of Pakistan are its various banking services which are
following Current Account, PLS & Non PLS Account (Profit loss saving accounts and
non-profit loss saving accounts)

• ATM Cards

• VISA Cards

• Credit Extension

Price:

The second major and important marketing mix tool is “PRICE”.

Prices are the easiest marketing mix element to adjust; product features, channels and even
promotion take.
Price still remains one of the most important elements in delivery marketing share and
profitability.

Pricing of products means the commission to be paid by the customer in return of

services provided by the bank. The commission paid for the services mainly includes:

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 • Markup/interest

• Bank charges

• Fees and bank commission etc.

These charges and commissions are prescribed on schedule of bank charges (SOC)
that keeps on changing time-to-time, and issued by bank periodically (generally after
six months). There has been a lot of controversy regarding the price of banking
companies. Some scholars argue that the markup received by bank is rent for capital
that is used by others. On the contrary, some call it purely Riba. This however is a
very controversial and sensitive issue.
Place:

Placement includes the activities that make the product available to target customers.

Distribution
Network :

A set of interdependent organizations that help make a product or service available for
use or consumption by the consumer or business use.

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 It is also known as marketing channel. Company‟s channel decision affects every other
marketing mix decision. Marketing channels or distribution channels that look forward
toward the customer. Downstream marketing channel partners such as wholesalers and
retailers, from a vital connection between the firm and its customers.

Pricing :
Depends on whether the company works with national discount chains, uses
high quality specialty stores or sells directly to consumers over the web.
Promotion and communication :
Decision depends on how much persuasion, training, motivation and support its
channel partners need.

Acquiring or Developing New product :

depends upon how well these products fit the capabilities of its channel members.

NBP Branch Network :

NBP branch networks include:

• ATM Network

• Domestic Network

• Islamic Network

• Online Network

• Overseas Network

• Swift Network

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 • Customer Facilitation Centres

• Agriculture Branches

Promotion:

“Promotion means activities that communicate the merits of the product and persuade target
customers to buy it”

Building good customer relationships calls for more that just developing a good
product, pricing it attractively and making it available to target customers. Companies
must also communicate their value proposition to customers and what they
communicate should not be left to chance. All of their communications must be
planned and blended into carefully integrated marketing communications programs.
Just as good communication is important in building and maintaining any kind of
relationship, it is a crucial element in a company‟s efforts to build profitable
relationships.

4.2 Promotion tools:

Competitive Analysis of NBP :

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 The company‟s competitive analysis begins by focusing the overall industry in which a firm
competes before market segment or sector level issues are considered. For the competitive
analysis of NBP I have chosen the famous porter‟s five forces analysis.

4.3 Porter’s Five Forces Model :

Competitive Rivalry :
It is very commanding force amongst the company and its competitors. A strategy followed by a
company is successful to an extent it gives to its competitive advantage to its opponents. The
strategy could be providing best service, or reducing the price against its competitor‟s price as
far as NBP is concerned it is charging very low fee on DDs, transfer by telegraphy, and by post
transfer it is also giving many added facilities to the clients and to the country as it states it is a
nation‟s Bank

Threat from new entrants :

When new businesses can simply come in the particular market the number of competitor
increases and so is the competition. As far as banking is concerned this industry is previously
very much located in Pakistan. There are many banks that provide high quality service at a
very low fee. So there isn‟t any risk to National Bank of Pakistan from possible new entrance.
NBP as well a community sector bank and there is no chance of being taken over by any new
bank.

Threat from substitutes :

The substitute threat is the 3rd factor that can affect the competitions. It means there
could be some other services that can be an alternative of the product/ service of the
company. In banking sector for example they offer saving schemes, but the general post
offices in Pakistan are also providing this service so there is an alternative of the
service. The banks should beat their offer of saving in order to take control of the
market.

Another example could be the Automated Teller Machines (ATMs) which are a
substitute of presenting cheques at the cash counters in banks. ATM saves the time but
NBP is lacking in this ground. It should look up in this field to compete its rival.

Bargaining Power of Suppliers:

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 The strength of competition is affected by the bargaining influence of the suppliers
particularly when you have a great number of contractors. If you are a bank your suppliers are
your customers who supply you money. So as a bank you should offer them quality services,
peace of mind, gain their trust at an affordable fee. B/C offer superior services to the
customers. B/C charges less on transfer of funds. As a result there is a competition between
B/Cs and banks.

Bargaining Power of Consumers :

When clients are strong or in big numbers, or the buy in huge quantity, their purchase
influence signifies a key force affecting strength of opposition. Keeping that fact in
mind we see that banks have a large number of customers in Pakistan and banks are
offering different products to their customers. NBP as well have a big number of
clients. So it should offer superior services and good products to its clients to draw their
attention to NBP.

Marketing is the process of converting prospective buyers into actual customers by

communicating complete information of the product or services to the customer. The
key elements which are the secret to a successful marketing practice are thorough
market survey and research, framing a competitive strategy, designing a realistic
marketing plan and implementing different tactics to execute the plan.

4.4 HR SYSTEM:

During the period of my internship I learn how to deal with different people‟s in different
situations, how to do work well etc.
In HRM I study that without proper planning we cannot do anything right.

As I am Doing Specialization in HRM, & in this subject I study how to deal with
people‟s, what type of planning needs to handle this type of situations, what type of
behaviour need at this situations & how to remove conflict in this situation, so it is easy
to me to handle them effectively without any problem.

I made proper planning with cash department for doing work effectively before the dates of
pensions & because of proper planning I was able to complete this task. I also work in deposit,
credit, clearing section, foreign exchange there I also deal with people effectively.

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 According to the bank staff, there is too much difficult in work govt.
Department because there we meet all types of people & difficult to handle them in rush
but because of doing specialization in HRM, I run this department effectively.

And in this way my internship is related to the knowledge of my area of specialization.

4.5 Structure of the HRM Department:

Department hierarchy:

1) Manager Total compensation

2) Manager people & Organizational development

3) Manager Labour relations

Human Resource Management :

a) HRM Practices at National Bank of Pakistan:

As we know that among all the resources of any organization, human resource is the
most valuable asset. The factors shaping human resource development in science and
technical fields are essential for formulating effective strategic plans at the national,
regional, and global levels. Employees are the most valuable resources of an
organization in the service sector (software, banking, management consultancy, etc.).
Like all other resources of a company, the human resources are more valuable because
of their value addition with the passage of time.

In the Bank, there is a separate department for Human Resource Development (HRD).

Human Resource Policies:

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Human Resource policy is to ensure implementation of clearly defined performance
management system, effective career development process, comprehensive succession
plans and alignment of meritocracy in order to maintain the same standards of banking
services

National Bank supports the rights of the individual as expressed in the 1948 United
Nations Universal Declaration of Human Rights (UDHR). The UDHR contains a
number of fundamental rights, which it aims to uphold in all circumstances, including:

• The right to life

• The right to legal recognition as a person Freedom of thought, conscience and

religion

• Freedom of opinion and expression

• Freedom from torture

• Freedom from cruel, inhumane or degrading treatment

• Freedom from slavery and servitude

• Freedom from retroactive penal legislation

National Bank meets all relevant international legal obligations and all relevant local
legal obligations in the countries in which it operates.

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 b) Functions of HR Department:

As this department is managing the most important asset of the company so its functions are
also important. So this department meets up on monthly basis and performs the following
functions:

• Ensures proper grading and analysis of job recruitment for

the purpose of operational efficiency.
• Develops an effective training program should suit the
Bank‟s requirement.

• Keeping in view the future requirements oversees career

path development for all staff members.
• Formulates a reasonable transfer/posting policy, which
adequately suits the bank.

• Introduces effective mechanism for evaluating staff

performance.

• Prepares promotion/incentive criteria based on performance

thereby providing motivation to the staff working in the bank.
• Accords Staff House Building Loans.

4.6 HR Practices :

Job Analysis:

It is the primary function in HR, which you undertake. It is the analysis of the tasks
activities involved, time taken to perform the tasks, importance of the tasks,
responsibility associated with the task, conditions under which it is performed,
expertise required, equipments to be used, etc.

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 This would help the HRM, to determine:

✓ Job Description

✓ Job Specification

✓ Recruitment

✓ Selection

✓ Developing compensation package

✓ Training & development

✓ Skills development programs

So Job Analysis is a fundamental for an effective HRM Programs.

c) Recruitment & Selection Process:

The Bank has been recruiting the best in class individuals from the industry. As part of
our strategy to mix youth with experience, we have started inducting Management
Trainee Officers (MTOs) from leading business schools from across the country.

National Bank of Pakistan :

• Advertisement (Electronic and Print media)

• Inspection of application

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• Short listing

• Issuance of call letter

• Test

• Listing on the basis of test

• Call letters for interviews

• Interviews-Panel Interviews

• Final short listing

• Offer letter

• Joining

• Training

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• Posting

d) Training & Development:

It provides a vehicle to keep abreast its work force with latest techniques in all
operational areas and knowledge developments with a view to enabling them to remain
progressive and capable of taking of changing environment and trends. It is based upon
planning for providing training in emerging market trends by judging the skills and
knowledge deficiency areas from performance evaluations and need analysis. It focuses
on preparing individuals for present as well as for future responsibilities.

Human Resource Development Areas:

o Management skills

o Marketing & Sales skills

o Customer care skills

o Performance appraisal skills

o Banking operations & regulatory compliance

o Credit marketing and credit proposals

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 o Credit administration/documentation

o Trade finance operations

o Risk management

o Audit compliance

d) Compensation & Benefits:

The Bank‟s compensation & benefits philosophy is to pay employees in a manner. The
compensation & Benefits policy establishes, maintains, and administers a compensation
plan for employees of the Bank. It includes the following:

o Pension Scheme

o Post retirement medical benefits

o Benevolent Scheme

o Gratuity Scheme

o Employee compensated absences

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 The compensation and benefits plan aims to achieve, as a minimum, the following
goals:

o To attract qualified employees

o To retain qualified employees

o To motivate employees by rewarding sustained performance

o To support management in the realization of Bank‟s objective

Annual Pay increases are based on performance evaluation of the year,

comparison of each employee and the resources available for granting the increase in
accordance with the contribution of each employee to the organization‟s goals.

f). Labour management relations :

In NBP there is very good relation between labour and management. They cooperate with each
other. HR department take care of their unions opinion.

4.7 Financial Analysis :

Vertical Analysis:

Vertical analysis is a method of financial statement analysis in which each line item is listed as
a percentage of a base figure within the statement.

Vertical analysis compares each amount with a base amount selected from the same
year.

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Simply, we compare the items of balance sheet or income statement vertically by taking
one

item as 100%. For profit and loss account taking Mark-up/return/

interest earned as a base for calculation.
Vertical analysis of the bank‟s Financial Position depicts a higher
concentration levels of investments and advances in the asset base of the Bank.
Historically, the advances of the Bank have posted modest growth during 2013
- 2016 and have sharply increased over the last two years. The concentration
level of advances in the total assets stands improved from 41% in 2014 to 32%
in 2019. The IDRs of the banking industry registered a huge spike in the year
2013 -2015 on account of higher yielding longer term bonds being o ered.
However, based on the call that interest rate cycle has bottomed out, a gradual
shift to shorter term securities with increased focus on credit was observed.

Vertically, income-mix of the Bank has maintained its pattern throughout the
period with NII and NFI contributing approximately two-third and one-third
of the total income, respectively. Markup expense has increased over the last
6 years, based on regulatory revisions enacted over the period and growth
registered in the deposit base.

Concentration of
Non markup income in total income has increased significantly over the years
due to innovative solutions o ered to our customers, new products launched,
and gain on sale of securities.

4.8 Horizontal Analysis:

Horizontal analysis (also known as trend analysis) is a financial statement analysis

technique that shows changes in the amounts of corresponding financial statement
items over a period of time. It is a useful tool to evaluate the trend situations. The
statements for two or more periods are used in horizontal analysis. The earliest

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 period is usually used as the base period and the items on the statements for all later
periods are compared with items on the statements of the base period. The changes
are generally shown both in dollars and percentage. This year the bank achieved yet
another milestone of PKR 3 Trillion figure in terms of balance sheet size. Over the
past 6 years‟ period, the bank‟s asset base has increased manifold depicting 15.15%
CAGR. The PKR 3.1 Trillion of total assets, represent approximately 14% of the
total industry and NBP the largest bank in the Country. In recent years the bank has
achieved a coherent growth in assets-mix e ciently managing its assets- liability
maturity profile. Highest YoY increase in the asset basewas observed in 2017 when
total assets of the bank increased by 25%. That year investment and advances
increased by 44% YoY, and 11% YoY, respectively. Another high growth area was
lending to FIs that increased by 29% over the past 6 years.
Deposits remain the primary source of funding for the bank. In line with the total asset
base,deposits of the Bank have also increased significantly over the last six years
growing from PKR 1,233.5 billion in 2014 to PKR 2,198.05 billion in 2019. This
translates into a massive 78%
growth with a CAGR of 12.26%. Smooth growth was observed throughout these years, with
highest YoY increase of 16% being reported in 2018.
Deposits accounted for 70.4% of our total assets as of the end of December 2019.
Despite the short-term maturity profile of its deposit base, it has historically proved to
be sticky and a stable funding source.
Reflecting our prudent & conservative capital management strategy, net assets of
the bank have also posted healthy increase on the back of higher profitability and
profit retention. Net assets, that amounted to PKR 178.33 billion in 2014, stand
increased to PKR 232.61 billion at the end of 2019. This translates into a 5.50%
CAGR over the past six years. During this period no further share capital was raised
through new / right issues.

On to Profit & Loss Account, gross markup / interest earned has posted an compounded
average increase of 15.97% over the span of last six years. While growth was low during the
initial three years, a sharp increase was achieved during 2017- 19 on the back of higher
discount rate and volumetric growth in earning assets, particularly the advances and
investment. Corresponding to the shift in asset mix, contribution from income on investments
has

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 increased constantly over the years.

Given the growth in deposits base and a hike in policy rate in recent years, total markup
expense has increased by 5% over the six years period under coverage. The increase in
markup expense on deposits reflect both the impact of volumetric growth in deposits
and borrowings coupled with the impact of revision in profit rates in line with the
policy rate increase from time to time. Responding to the increasing discount rate, the
bank has been particularly active in mobilising low cost CASA deposits. Satisfactory
results have delivered in this regard by both conventional as well as Islamic banking
operations.

With a 3.57% growth over past six years, the bank‟s Non- Markup / interest income
“NFI” has also shown a satisfactory performance over most of the years. During these
years, NFI has maintained a trend of contributing approximately one-third of the total
income. However, due to a lackluster performance of the stock market, lower dividend
payout and depressed trade business, NFI for 2019 remained almost similar to that of
2018.

Total operating expenses in 2019 amounted to PKR 65.70 billion against

PKR 55.69 billion for the year 2018. This amount includes a total of PKR 7.3
billion related to extraordinary items. Thus, the growth in operating expenses
was only 5.0% and YoY growth in profit (PBT) excluding extraordinary
items and before provisions improved to 21%.
NBP has historically exhibited the highest NPLs (14% of gross loans), partly due
to its role in developmental mandate.
Reflecting the trend of asset quality deterioration observed across the
industry, in 2019 the Bank experienced a 11.5% increase in the non-
performing loans (NPLs) which stood at
PKR 148.8 billion from PKR 133.4 billion as of December 31, 2018. With the
increase in NPLs, Net specific and general provision charge for the year 2019
amounted to PKR 6.65 billion and PKR 1.77 billion, respectively. As of
December 31, 2019, Specific provision stood at PKR 134.17 billion (2018: PKR
126.27 billion) which shows provisioning to NPL coverage at 90.2% as of
December 31, 2019.

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Page | 69
 4.9 Ratio Analysis:

Ratio is the relationship between two items of same statement or relationship between items of
different statements. Ratio analysis tells us about the health of the business. Financial ratios are
usually expressed in percentage or in times. All the figures used in analysis are in Rupees.

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 Current Ratio:

Current ratio shows firm‟s ability to cover its short-term liabilities. It is the ratio of current
assets to current liabilities. Higher the ratio greater will be the ability of organization to pay
current liabilities.

Formula:
Current Ratio= Current Assets / Current Liabilities

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 Year 2020 Year 2019

Current Ratio = 1.08 Current Ratio = 1.07

Debt to equity:

Ratio of borrowed capital to shareholders‟ funds is called debt to equity ratio.

Formula: = Debt / equity

This ratio measures ratio of debt to equity. It is also called external internal funds ratio.
It helps in assessing the soundness of long term policies of the company. Investors like
this ratio low.

But NBP has very high ratio.

Net profit margin:

Formula:

Net profit margin= (Net profit / Revenue) *100

Return on Assets:

Formula: = (Net profit / Total assets) *100

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 Return on Equity:

Formula: = (net profit / equity) *100

Returns on assets:

The ratio is the relationship of the net income, sales and total assets of the company and
measures the return on equity (ROE). DuPont Return on Assets is an approach that determines
the impact of asset turnover and profit margin on the profitability of the company. Both the
company's profitability (as measured in terms of profit margin) and efficiency (as measured in
terms of asset turnover) determine its ROA. Du Pont method breaks out these two components
from the return on assets ratio to determine the impact of each on the profitability. This ratio
helps in identifying the impact of changes in the asset turnover and the profit margin.
Formula:

Returns on assets= (net income / revenues) *(revenues / assets) *100

Part 5:

5.1 Conclusion:

As I have written in my executive summary, this report has done over the National bank of
Pakistan at Jhelum. The main reason behind this report is to the fulfilment of the Punjab
University Degree requirement; hence I have done my internship at NBP. This report aim is to
analyze the current NBP banking position, it's banking function as I have written in the critical
analysis.

Secondly, the report was presented in order to dig out the overall condition of the
NBP regarding Banking provocative, management, HRM perspective. As I have
written in my training program, I worked in the different departments and have
learned a lot of work, activities in professional manners. I have observed some true
facts regarding National bank of Pakistan while writing my report. These are under
below.

1. NBP have lower customer satisfaction

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 2. NBP has a poor record management and filing system

3. There is an injustice distribution of work in NBP

4. According to my finding, NBP have poor marketing system

5. Practical work is very different from the theory at NBP. Rules, procedures .

6. NBP have more accounts in terms of number of accounts but have fewer deposits

7. My findings highlight that manager has the very limited authority he or she has to
take approval from the upper management for every new decision.

8.NBP staff lacks in specialized training and highly professional education.

5.2 Recommendations:

1. NBP major fault is that wasn‟t keeping its pace with ongoing changing in banking
industry unlike other bank. Now this bank combining all it power and trying to
approach other banks.

2. Latest reorganizing efforts are necessary to make it cost effective also making its
facility accordingly to modern banking. These must continue.

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 3. 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.

4. To attract the customer in the future NBP have to make extensive effort to give
facilities of retail and consumer banking. Plus the technology in the banking which
will be necessary for future banking is another week area need to be stressed.

5. The outlook and interior lay out of the branches is another thing which needs to be
improved.

6. The procedure of taking services from the bank must be made easier and straight
forward not involving long difficult procedure for simple task.

To remain in the market bank need to be vigilant in the eyes of customer.

One way is through promotion efforts, so that people aware about he services of the
banking and any addition which the bank as made in the portfolio of its services.

Part 6:

Internship Branch Introduction:

I started my internship at the Civil Line JH Branch (whose code is (0344)) from 05-06-2021 to
31-07-2021. It‟s the main Branch of National Bank of Pakistan that is situated in Jhelum. The
duration of my internship program was 8 weeks.

Names of Department where I worked:

I have worked in the following departments during my internship at National

Bank of Pakistan.

Account Opening & Closing Department

Remittance Department

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 Clearing Department

Government Department (Pension)

6.1 Training Program :

In order to be able to cope with the changing environment it is necessary to have some
practical experience. As the students of Business Administration we have to pass through a
series of various managerial techniques. During this practical course we are provided with an
opportunity to learn that how the theoretical knowledge can be implemented in practical
grounds. I was selected to do my internship in National Bank of Pakistan chest Branch Jhelum.

I worked there for eight weeks & it gave me a greater practical knowledge about the
operations of a bank. In this section I have narrated my experience, observations & all
the working activities which I observed during my eight weeks internship at National
Bank of Pakistan Civil Line Branch Jhelum.

Work done by me at NBP Civil Lines Branch Jhelum:

6.2 Departments:
Account Opening Department:
Filling the forms and guiding the customers who were unable to fill their forms was my
task, I used to check all the requirements and document attachments, and send to Ms.
Samia who would sign all the documents and then sign from all the concerned
personnel was taken and new account opening was initiated, normally new account
opening takes 3 to 4 days. Here I observed Account opening process. I also learnt about
the basic requirements for opening up an account in NBP. Opening an account means
that customer establishes a relationship between the bank and himself.

Just like other Banks, NBP also makes sure that the Applicant applying for the account
is a intended customer or not. After verifying this, Applicant‟s occupation, integrity

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 and nature of business are determined via references. The margin of error at this time is
very less, a little mistake can lead to greater problems.

To keep the process of account opening concrete and in-order, the Federal Overseer of the
Banks of Pakistan has obligated all the Banks to keep all the details and performas of the
process of account opening along with all the details of the person who introduced the
customer to the Bank. It is because of this Obligation Branch Managers need to get all the
records and Credentials of the Applicant and the Introducer.

During my work span in the Account Opening section I was directed by my seniors to
keep in mind a few points which are the main requirements for an applicant to open up
an account. They are as follows:

1) Applicant must be introduced or referenced by another existing customer of

the Bank.

2) Signatures of the account holder are taken on the account opening forms
and are verified by the Bank Officer.
3) Bank requires copy of the NIC‟s as well.

4) Bank keeps the right to reject the application of the customer without any
reason.

5) A unique account number is allotted to the applicant.

6) Nature of the account determines the amount deposited at the time of

opening an account.

Remittance Department:

I worked in this department for two weeks. In this department internees are advised only to
observe the working of transfer of money from one place to another place of the country by the
above modes of transferring money. During my stay in this department I observed that how
demands draft be issued. The procedure is as follows.

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 First the bank receives a written request from the customer to issue a bank draft.
The written request is either in banks standard form or separate paper signed by the
applicant enclosed with cash or cheques covering the amount of the draft and other
charges of the bank.

While issuing a bank draft it is necessary that the draft should be free from
alternations. All the details must be written clearly in ink. After issuance a demand
draft it is handed over to the applicant and its advice containing the particulars of the
draft is sent to drawer branch with its necessary information and payment of the draft
is make on its presentation.

Government Department:

In this department, I have spent two weeks and I have worked practically under the
supervisory of Raza ul Haq. There are two section of the government department

• Government payments

• Government receipts

Central government pension is provided to the retired employees of army, rangers,

Nadra, FBR etc. the provisional government pension is provided to the retired
employees of the provisional government like teachers, police, health department
etc. and the pensions is provided to the private institutions employees Procedure of
payments of pension:

Government’s cheques:

In government payment section in government department of NBP also cashed to the

government cheques like
✓
District cheques from district government
✓
Punjab cheques from Punjab government
✓
Central cheques like CMA (control military accounts

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 ✓
GPO cheques from Pakistan post office

Closing of government department :

We made all the voucher of debit and credit vouchers F-110 A and F-110B and create a
summary of governments payments and receipts.

Clearing Department:

In this department, I have worked for two weeks. Main branch receives the cheques
from all its branches and makes the lots of these cheques again. Main branch sends
these cheques to the state bank of Pakistan where a clearinghouse exits. In this
clearinghouse, the representatives receive their cheques and go back to their bank's
main branch. Then the main branch sends these cheques to their relevant branches
where the validity of these cheques is verified and the accounts of the relevant
clients are affected.

The statement of clearing was submitted before 1.00 P.M. daily. The whole procedure
of clearing is completed within two days.

6.3 References :

1. The official website of National Bank of Pakistan

http://www.nbp.com.pk/index.htm

2. National Bank, Annual Reports

3. State Bank of Pakistan, Website, http://www.sbp.gov.pk

4. http://www.nbp.com.pk/nbp/NBP_Treasury.jsp

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