internship-report-national-bank-of-pakistan

Acknowledgement

For the completion of my report I am indebted to plenty of people for their very sincere

cooperation that they extended to me at various stages. First and foremost problem that

every student faces is the completion of a report is gathering of data while it is very

difficult to learn & rotate in different department of the bank especially in National Bank

of Pakistan where work burden is quite higher compare with other banks. On the other

hand there is too much short time of our internship (six weeks), furthermore staffs of the

bank are too busy in their work so that we cannot be able to learn and do according to our

report requirement.

I am very thankful to staff members of National Bank of Pakistan, Main Branch

Islamabad, for guidance and providing me valuable information regarding my report

completion.

Finally I am thankful to the most merciful and Almighty Allah who gives me the strength

that I fulfill my task efficiently.

Muhammad Umar

1 Internship Report on NBP, Main Branch Islamabad.

EXECUTIVE SUMMARY

This report highlights the operations and functions of National Bank of Pakistan. NBP act

as financial agent to its customers in return it gets reward for its services in the shape of

profit. Being a Government owned institution it plays an important role in development

of society as well as in development and growth of the economy.

National Bank of Pakistan is one of the leading banks in Pakistan. According to

international standards of banking system it is one of the best bank in South Asian region

as well as the bank of the year 2008. This report explains how different functions of NBP

work and what are their services.

The main purpose of the internship is to gather relevant information to compile internship

report on National Bank of Pakistan Main Branch Islamabad.

Another purpose of this Internship program is to enable the students to use the

management techniques acquired during their courses, and find out the possible solution

of management problems faced by the organization

The report is based on my six week internship program in National Bank of Pakistan. The

methodology reported for collection of data is primary as well as secondary data. The

biggest source of information is my personal experience, observation while working with

staff and having discussion with them. The annual report 2008 also helped me in this

regard.

CHAPTER # 1


COMPANY BACKGROUND

The NBP was established vide NBP Ordinance No. XIX of November 9. 1949. British

Govt. devalued its currency in September 1949, India devalued its rupees but Pakistan

did not. It led to a crisis in trading between the two countries and India refused to lift the

Pakistan Jute. To solve this problem i.e. to export jute NBP was established through an

Ordinance of GOP. National Bank of Pakistan maintains its position as Pakistan's

premier bank determined to set higher standards of achievements. It is the major business

partner for the Government of Pakistan with special emphasis on fostering Pakistan's

economic growth through aggressive and balanced lending policies, technologically

oriented products and services offered through its large network of branches locally,

internationally and representative offices.

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

balance sheet size surpasses that of any of the other banks functioning locally. It has

redefined its role and has moved from a public sector organization into a modern

commercial bank. The Bank's services are available to individuals, corporate entities and

government. While it continues to act as trustee of public funds and as the agent to the

State Bank of Pakistan (in places where SBP does not have a presence) it has diversified

its business portfolio and is today a major lead player in the debt equity market, corporate

investment banking, retail and consumer banking, agricultural financing, treasury

services and is showing growing interest in promoting and developing the country's small

and medium enterprises and at the same time fulfilling its social responsibilities, as a

corporate citizen.

National Bank of Pakistan has built an extensive branch network with 1250 branches in

Pakistan and operates in major business centre abroad. The Bank has representative

offices in Beijing , Tashkent , Chicago and Toronto . It has agency arrangements with

more than 3000 correspondent banks worldwide. Its subsidiaries are Taurus Securities

Ltd, NBP Exchange Company Ltd, NBP Capital Ltd, NBP Modaraba Management


Company Ltd, and CJSC Bank, Almaty , Kazakhstan . The Bank's joint ventures are,

United National Bank (UK), First Investment Bank and NAFA, an Asset Management

Company (a joint venture with NIB Bank & Fullerton Fund Management of Singapore).

The Bank's financial performance has been remarkable. In 2006, total assets are estimated

at Rs635 billion, while deposits have grown to nearly Rs502 billion. Pre-tax profit rose to

Rs26 billion. Earnings per share have jumped to Rs24.01 in 2006. The increase in profit

was achieved through strong growth in core banking income. Interest income increased

by Rs10 billion through growth in the loan portfolio as well as increase in spreads.

Advances increased by Rs48 billion to Rs316 billion. The Bank maintains a sound loan

portfolio diversified in nature to counter the risk of credit concentration. It ranges from

providing credit to the un-banked market segment under NBP Karobar, to small and

medium enterprises, to agricultural loans, to large corporate customers.

MISSION

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

• Institutionalizing a merit and performance culture

• Creating a distinctive brand identity by providing the

highest standards of services

• Adopting the best international management practices

• Maximizing stakeholders value

• Discharging our responsibility as a good corporate citizen of Pakistan and in countries

where we operate.

VISION

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

CHAPTER # 2


BOARD OF DIRECTORS AND TOP MANAGEMENT

Board of Directors

President

Mr. S. Ali Raza is the Chairman, President and Chief Executive Officer of National Bank

of Pakistan, the largest Commercial Bank of the country. Mr. Raza is a graduate of the

London School of Economics and M.Sc. in Adm. Sciences. Before joining the National

Bank of Pakistan in July 2000 as the Bank's President, he held a key management

position as Regional Manager, Pakistan, Middle East and North Africa at the Bank of

America (BOA).

Director

Mian Kausar Hameed, is an MBA from IBA, Karachi. His experience includes

Manufacturing, Retailing, Marketing, Management, HR, Training and Teaching at

various levels in various organizations for 38 years after his education. He has worked

with reputed national and international organizations as Regional Manager, Managing

Director/CEO, Management Consultant, Resident Director, Member and Chief Operating

Officer. He addressed international conferences on Sugar and Ethanol and was speaker in

workshops and seminars on CDM and Carbon Finance. He has written several papers on

CDM, Ethanol, Agriculture in Pakistan, Trends in Management and HR Development.

Director

Mr. Ibrar A. Mumtaz is a Businessman. He was born in 1947 and comes from a

prominent business family of Lahore. He was educated at Aitchison College, Lahore,

F.C. College, Lahore and the Institute of Business Administration, (I.B.A) University of

Karachi. After completing his education he joined his family business in 1968, namely

the Fazal Din’s Group of Companies comprising of Fazal Din & Sons (Pvt) Ltd., Lahore


Chemical & Pharmaceutical Works (Pvt) Ltd., Medipharm (Pvt) Ltd., Fazal Din’s

Pharma Plus (Pvt) Ltd. and Medequips.

Director

M-Tariq Kirmani after completing his Masters in Business Administration (MBA) Mr.

Kirmani embarked upon a rewarding career, starting with a multi-national Oil Company

(Caltex later Chevron Pakistan) in 1969 and worked for seven years in the United States

of America, United Arab Emirates and Australia in different senior management

positions in Marketing Operations and Finance. In 1991, Mr. Kirmani became the first

Pakistani to be elected as a Company Director of the mentioned multi-national company.

Director

Mr. Mohammad Ayub Khan Tarin is a government official. He is an MBA from Western

Michigan University, USA. At present, he is working as Additional Finance Secretary

(Budget), Ministry of Finance. He possesses 31 years experience in the fields of Financial

Management, Budgeting, Accounting, Auditing including Performance Auditing &

Public Administration.

Director

Mrs. Haniya Shahid Naseem is an MBA with more than fifteen years experience of

working in the education, social, industrial and agriculture sectors of Pakistan. She has

served for 5 years on the Board of a textile company, having a turnover of more than one

Billion Rupees. Presently she is actively involved in the administration of Pakistan Public

School Multan. She is a progressive agriculturist and actively participates in the

management of her family’s agricultural farms. She is a member of the Multan Chamber

of Commerce and Industry, and is also on the guest faculty of IBA, Multan.

Secretary Board of Directors


Mr. Ekhlaq Ahmed, EVP is the Company Secretary of the Bank and also the Secretary of

Credit & Operations Committees. He is M.A. (Economics) from Rajshahi University,

Bangladesh (former East Pakistan). He is a Diplomaed Associate Institute of Bankers,

Pakistan (DAIBP) and secured overall 1 st position in order of merit and won Muslim

Commercial Bank Prize in the subject of “Foreign Trade & Foreign Exchange”. He is an

Associate of Institute of Corporate Secretaries of Pakistan (ACIS). He is also a “Certified

Director” on the panel of Pakistan Institute of Corporate Governance (PICG) since

November, 2007. Mr. Ekhlaq Ahmed is the first senior executive of the Bank who has

achieved the status of “Certified Director”.

MANAGEMENT

Management is a distinct process consisting of activities of planning, organizing,

actuating and controlling performed to determine and accomplish stated objectives with

the use of human being and other resources.

NBP have a centralized type of management because the top management takes all the

decisions.

SENIOR MANAGEMENT OF NBP

Senior Management of NBP comprises of the following member and their respective

designation.

Name Designation

Masood Karim Sheikh SEVP & Group Chief, Corporate & Investment Banking Group and Chief Financial Officer

Mr. Ekhlaq Ahmed EVP & Secretary Board of Directors

Derick Cyprian SEVP & Group Chief, Special Assets & Remedial Management Group


Imam Bakhsh Baloch SEVP & Group Chief, Audit & inspection

Shahid Anwar Khan SEVP & Group Chief, Commercial & Retail Banking Group

Nadeem A. Dogar EVP & Group Chief, Information Technology Group

Muhammad Sardar Khawaja

EVP & Group Chief, Audit & Inspection Group

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

Javed Mehmood EVP & Group Chief, Risk Management Group

Muhammad Nusrat Vohra SEVP & Group Chief, Treasury Management Group

Nadeem Ilyas EVP & PSO to the President

Dr. Mirza Abrar Baig SEVP/Group Chief Human Resource Management & Admin.

CHAPTER # 3


INFORMATION AND DEPARTMENTALIZATION OF NBP

INTRODUCTION

This chapter presents the services and departmentalization of NBP. Services are outputs

of the firm/organization, which are in intangible form & which are the backbones of any

organization to earn profit? NBP offers the following services to the people.

TRADITIONAL BANK ACCOUNTS

DEMAND DRAFTS

SHORT / LONG TERM INVESTMENTS

AGRICULTURE FINANCE

CORPORATE FINANCE

CASH MANGMENT SERVICE

CASH AND GOLD FINANCE

ADVANCE SALARY LOAD

STUDENT LOAN SCHEME

PENSION PAYMENTS

TELEGRAPHIC TRANSFER

SWIFT SYSTEM

LETTERS OF CREDIT

TRAVELER'S CHEQUES

PAY ORDER

MAIL TRANSFERS

FOREIGN REMITTANCES BUSINEES LOANS


AGENCY SERVICES UTILITY BILL COLLECTIONS HAJJ ARRANGEMENTS SAFE DEPOSIT LOCKERS

DEPARTMENTALIZATION

Dividing an organization into different parts according to the functions is called

departmentation. So NBP can be divided into the following main departments.

CASH DEPARTMENT

CLEARING DEPARTMENT

ADVANCES DEPARTMENT

REMITTANCE DEPARTMENT

HUMAN RESOURCE MANAGEMENT

FOREIGN EXCHANGE DEPARTMENT

CMPUTER DEPARTMENT

CHAPTER # 4

SWOT ANALYSIS

This section of report constitutes the SWOT Analysis of NBP.


SWOT analysis is one of the most important steps in formulating strategy using the organization

mission as a context; managers assess internal strengths distinctive competencies and weakness

and external opportunities and threats.

The goal is to then develop good strategies and exploit opportunities and strengths neutralize

threats and avoid weaknesses with an overall organizational goal is to increase the wealth and

value of the organization.

STRENGTHS

OLDEST INSTITUTION

ALTERNATE DUTIES IN SBP ABSENCE

MORE DEPOSITS THAN OTHER BANKS

EMPLOYEE BENEFITS

BROAD NETWORK

STRICTLY FOLLOWED RULES & REGULATION

PROFESSIONAL COMPETENCE

HEALTHY ENVIROMNMENT

RELATION BETWEEN STAFF AND OTHER EMPLOYESS

STABILITY IN POLICIES RESULT BATTER EFFICIENCY

EXPERIENCED AND EFFICIENT MANAGEMENT

NEW CONCEPT OF MANAGEMENT TRAINEES (MTOs)

WEAKNESSES


LACK OF MARKETING EFFORT

NBP UNDER POLITICAL PRESSURE

FAVORITISM AND NEPOTISM

LACK OF FINACIAL PRODUCT

INEFFICIENT COUNTER SERVICES IN THE RUSH HOURS

LACK OF COMPUTERIZED NETWORKLACK OF MODERN EQUIPMENT

UNEVEN WORK DISTIBUTION.

OPPORTUNITIES

ELECTRONIC BANKING

MICRO FINANCING

GROWING BUSINESS AND BUSINESS POLICIES

TECHNOLOGICAL ADVANCEMENT

OPPORTUNITY TO EXPAND FOREIGN OPERATIONS

CONTINUEING THE PROCESS OF MANAGEMENT TRAINESS

THREATS

EMERGENCE OF NEW COMPETITORS

POLITICAL PRESSURE BY ELECTED GOVERNMENT

DOWNSIZING

CUSTOMERS COMPLAINTS

GROWING GLOBAL TECHNOLOGICAL ADVANCEMENT

INCONSISTENCY IN GOVERNMENT POLICIES


COMPETITIVE ANALYSIS

Porter’s five forces model:

This approach is widely used for competitive analysis. It is because of the high intensity

of competition among companies there five main competitive forces.

Rivalry among competitive firms:

It is a very powerful force among the competitive forces the strategies pursued by

one firm can be successful only to extent that they provide competitive advantages

over the competitor. These competitive strategies may be lowering prices, best quality

series. The NBP offering very low charges an demand draft, telegraphy transfer, mail

transfer and give other additional services to the customers and to the Nation.

Because NBP is a “Nation’s Bank.

Potential entry of new competitors:

Whenever new firms ca easily enters a particular industry, the competition increases.

The gout restriction, tariffs, patents etc can stop new firm to enter into the business as

per Banking industry is concerned this market is already very situated in Pakistan and

there are banks with quality services and low charges. So there is no threat to NBP

from potential entry and NBP is also a public sector bank because of that no other

new bank not takes over it.

Potential Development of substitute products:

This is the third factor affecting the competitions. There may be some other product

can be substitute the product of that industry. For example banks offering sawing

schemes in Pakistan and these schemes are also offered by GPOs in Pakistan so they

must compete them in this field. If they offer low rates than GPOs so people will go


to deposit in GPOs. People concentration high rates so that’s why sawing PLS

accounts are more then current accounts.

The next examples will ATM, which substitute presenting cheques at counter and

encash it. The NBP is lacking in this field. It must improve in this field to compete

the competitors.

Bargaining Power of Suppliers:

The bargaining power of supplier affects the intensity of competition, especially when

there are a large number of suppliers. In case of banks the suppliers are customers

they supply the money to banks. Now they must offer good services, quality, and

safety. Low charges etc to customers. In this field NBP is very good. B/C at offers

good quality services to customers. They charge low charges on remittances. So that’s

it is a competition to other banks.

Bargaining Power of Consumers:

When customers are concentrated or large, or buy in volume, their bargaining power

represents a major force affecting intensity of competition. Now the number

customers in Pakistan for banks are very high. Banks offering variety of products and

services to their customers. NBP have a large number of customs. Now it must offer

good services and products to their customers to attract them to come to NBP.

WEEKLY LEARNING


There are following learning points for me in the bank.

Duties

In my 1st and 2nd week in NBP I workd under the assistance of Mr.Muhammad

Nasir (Operation Manager) from him I learn about activities related to Deposit Dept:

and performed such activities like:

Opening an account

Issue new cheques books

Sorting out cheques

Difference between cheques of current, saving and royal account

And I also scrolld the challan of Government and pass vouchers.

In my 3rd and 4th week in NBP, they assigned me work related to pension department.

The staff guided me very nicely and I learned lot of things pension related activities.

They give the pension to retired Govt. employees. There are three types of pensions

given,

Provincial

Central

Defense

These are different according to their PPO numbers

For example:

Provincial PPO 123456

Central PPO 12345/pak


Defense PPO da/dg1/gh/4 etc.

I am full trained now in this particular job and I served lot of people in that week. How to

fill farm? How to enter in ledgers and balance account and what are file and book and all

other things concerning to pension department.

In 5th week I worked under the assistance of Mr.Muhammad Irfan Khan (Chief

Manager) from him I learn about remittance activities:

Demand Draft

Telegraphic Transfer

Pay Order

Mail Transfer

In 6th week I learnt the swift operations. How swift system works and managed and how

to transfer money through swift system.

Relationship of MY INTERNSHIP WITH MY BBA

KNOWLEDGE


This internship gave me a chance to apply

FINDING AND OFFER CONCLUSION


INTRODUCTION

The findings are the facts that we discover from the analysis of an organization and in the

light of those findings we give the suggestion, which are realistic and adoptable for the

organization. After critically analyzing both the operations and financial data of National

Bank, let me summarize the findings of the report.

Here, few finding and implementation plans are given to overcome the problems

mentioned in the previous chapter. These analysis are mainly based on my practical

working & experience at the NBP during internship.

I have divided this section in four parts which are as under.

Problems at the branch.

Function analysis.

Administrative analysis.

Personal management’s analysis.

PROBLEMS AT THE BRANCH

Customer Satisfaction

In NBP customer dealing is will, but during rush hour the customer has to wait for a long

time for their turn. It’s quite hard for a new customer or potential customer to get the

required information.

Poor record management and filing system

During my internship I observed that filing system of branch is not good. When certain

record is needed the staff has to struggle to find it out and a lot of time is wasted both by

the staff and customer as well also old filing and registering system are being used yet.


Unequal distribution of work

Work is not equally distributed. On one hand some employee have to work all day

without relaxing while some others have nothing to do at all. This not only creates

confusion among employees but also hurting and disturbing for overall setup of the bank.

And above all it results in dissatisfaction among customers as well.

Marketing efforts

A useful mode of contact is through personal marketing visits or efforts. Such visits are

important in informing and perusing the existing and potential customers about the

products and creating a sense of belongingness with them. By this way a branch manager

increases their deposits and creat more advances. The ultimate result is increase in the

bank’s deposits as well as supreme motive that is profitability.

Less staff

Staff of the branch is less and workload is too much on the existing staff. Due to which

they are unable to give proper time to their customers. Sometimes due to this shortage of

time they lose their good customers also from this shortage of staff they are unable to

give proper time to recording and other functions of the bank.

FUNCTIONAL ANALYSIS

Formal Organization

Formal organization includes the activities of two or more person, which are cautiously

determined groups and coordinated towards a given objective. It provides base when

people are able to communicate with other, when they have common purpose and they

are willing to work.


In NBP, we find a formal organization. Bernard referred to an organization as a formal

when the activities of two or more persons are coordinated towards a given objective.

The formal organization comes into being when people are able to communicate with one

another or willing to act and share a purpose.

In this formal organization of NBP the activities are carried out in a more formal way. In

theoretical terms it provides basis for communication with one another but in practice it is

not exercised because an employee at high level cannot get straight away to manager or

SVP and ask him about of his problem faced by him, because first he has to talk to his

immediate superior and follow a proper channel of communication.

Difference between theory and practice

A vast difference exists between theory and practice and NBP has written procedure but

practical work done by employees is a bit different from written procedures.

Bank duty to maintain secrecy.

They don’t care about maintaining secrecy, especially during the rush hours. They speak

loudly about the account position and while getting clearance of cheque the person can

easily get the whole information from the ledge. The deposit clerk must be careful while

passing any cheque. In this regard another shortfall is in giving the information about the

balance on telephone.

Excessive paper work

It is notified that due to the lengthy procedure of paper work the bank employee are over

burdened. They are unable to give proper attention to the clients and face difficulties in

getting their job done. One reason for lengthy procedure and excessive paper work in the

bank is the lack of computerized technology.

More accounts fewer deposits.


Efficient banking is one, which does not emphasize on number of accounts but on greater

amount of deposits. NBP is more interested in increasing its number of account

irrespective to its deposit. The main reason behind it is that bank does not provide

personalize service to all the account holders and does not improve its quality and

services

Delegation of authority

Manager has very limited authority; he has to take the approval from his management

authority i-e. In case of advance he has to take the approval of general and regional

manager. The other problem is created, when the manager is not present in his office, the

customer having to wait for hours. This discourages both customer and officers because

they have to suffer a lot

ADMINISTRATIVE ANALYSIS

Job analysis is not effective

Only on the basis of job analysis it can be decided how a right person can be hired,

trained, compensated or promoted. It is very important for an organization that nature of

the job is described and job specifications are mentioned. Most of the employees are

simple graduate and do not have proper background about their job. This creates

problems both for organization and for the employees. In NBP salaries are given

according to the seniority and grades. People with simple or complex responsibility are

getting the same salary and facilities. This creates dissatisfaction among employees.

Carelessness in opening of account

When customer comes to open an account, the staff does not bother to check his/her place

phone number and permanent address. It is important because in case of overdraft by

mistake or anything which places his accounts in debit it will be difficult to trace him.


On the other hand he may be involved in any fraudulent activities against the bank. In

this case the bank will be in awkward position.

Lack of specialized training

NBP does not provide adequate facility of specialized training to their staff. Training is

generalized rather than specialized. As the worker finishes his training, he is inducted

into a specific field without having great deal of knowledge about the field.

In the Hayatabad branch the newly recruited employee training was not imparted, they all

learned things on the job.

Low Profit Rates

Most of the customers shifted their account to the National Saving Center because of the

low rates of saving deposit discourages the customers. Bank should increase their profit

rates to attract customers.

Poor job rotation.

There is absence of job rotation in NBP Hayatabad branch. A person placed in one-

department remains their forever. It reduces career opportunities as well boredom and in

the end results in career plaguing. Job rotation is very important for employee especially

for those who are newly recruited. The newly recruit should be rated in all department of

the banking in order to get familiar with working of different departments so that when

they get a responsible position they have know how of the whole system.

Delays in Loan Advancement

It has been observed that there is much delays in sanctioning of cases from the head

office, which results in customer dissatisfaction.

Lack of appreciation


Another very important thing which is ignored in the bank is appreciation if the employee

on their good performance. If hard work and performance of employees is not recognized

and appreciated they become dishearten which results in decline in performance.

PERSONAL MANAGEMENT ANALYSIS

Need for better training program

Need of training is greatly emphasized all around the world. Training of the personnel is

part of human resource management. It has been noticed that the training program of

NBP is not adequate.

Once the candidate is selected and placed on the respective job. It becomes essential to

train him adequately for the task. They should learn new methods for motivating

customers. The training programmed of the bank should include scientific techniques to

improve the decision-making and interpersonal as will individual needs of the employee

both specialized to fresh as well as on job to maintain the high standards of service.

Developing Managerial Leadership

Leadership is a practical term of visible, clear on objective and communicating better

control on financial and administrative matters. Manager is not only responsible for their

own units in business, but also in people terms i.e. training, recruiting, grievance handling

and taking immediate initiative in crisis situation to take major decision affection the

future of the bank and banking community.

Recruitment policy

Human resources are the lifeblood of the organization. If the personnel are recruited

carefully they can become asset to the organization in the case of carelessness a liability

on the organization. Bank is not following its recruitment policy properly due to

favoritism, nepotism and political pressure. Both the top authority and staff union tries


their best recruit their favorites, indulgence of political pressure add salt to the wounds.

The persons selected through these channels are infantile and do not work for the

betterment for the bank.

Promotions

Promotion in NBP is purely on the basis of seniority, so the new young person having

high qualification remains behind for quite a lot of time. Top management and staff union

put pressure for the promotion of their favorites, which gives a sense of deprivation to the

deserving employee and their efficiency is affected. As the concept of promotion is

attached with better in terms of greater responsibility, more prestige, greater skills and

increased rate of salary. Thus a better and impartial policy of promotion needs to be

followed.

Transfer

Transfer means when a person is shifted from one place to another place. It is done either

that person is needed more on the other branch or for improving his skill variety. It is the

policy of the Bank to transfer each employee 3 to 4 years.

Marketing at desk

Bank employee come in daily contact with many people who happen to deal with the

casual remittance, travelers cheques, safe custody, pensioners, depositing license fee and

variety of other functions and variety of other people with whom the Bank has no account

or regular business relationship. The Bank employees are doing very little on their own to

explore the possibilities of selling banking services to them as a marketing contributor.

The entire Bank community should make a conscious effort in addition to their normal

work to explore the possibilities of selling banking services to them. The market

opportunities are hidden in every dealing a banker handles; the question is that if he has

the art and urge to seize such opportunities.


Lack of business communication

There is no proper way to give information to their customer. To avoid this minor

dissatisfaction and tension in the mind of customer, and deficiency of the service, it is

recommended that the bank should provide brochures etc containing information in

details.

Some general information should be placed in information notice board on the entrance

where customer can see it easily or it should be self-attractive.

RECOMMENDATIONS & SUGGESTIONS


NBP is an effectively operating and profit making organization and carrying out its

activities under a specified system of procedure. The main regulatory body is State Bank

of Pakistan, which provides policy guidelines and ensures that the money market operates

on sound professional basis. While the head office specifies the whole procedure of

function and operations. This procedure has been modernized with the passage of time

with a view to streamline the approach and underlying procedure for effective

overhauling of its own capabilities so as to bring them at par with international practices.

Here I am giving some suggestions, which in my view can add some input for efficiency

and better performance of NBP as an organization in general and as a main branch in

particular.

The recommendations are as follows:

Professional training

NBP staff lacks professionalism. They lack the necessary training to do the job efficiently

and properly. Although staff colleges in all major cities but they are not performing well.

For this purpose these staff colleges should be reorganized and their syllabus should be

made in such a way to help the employee understand the ever-changing global economic

scenario.

Banking council of Pakistan should also initiate some programs to equip the staff with

much needed professional training.

Delegation of authority

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

their responsibility. Gives proper attention to every work and concern bodies are

responsible to delegate the authority to whom they think that will perform batter.

Performance Appraisal


The manager should strictly monitor the performance of every staff member especially

operation manager of the branch. All of them should be awarded according to their

performance and result in the shape of bonuses to motivated and incite them to work

more efficiently.

To Over Come Problem of Space and Furniture

In the critical analysis this, problem is discussed. To overcome this problem it is

suggested that a special section should be made inside the branch. Which should only

handle the treasury function, salaries and pensions of federal personnel or the bank

should do these functions in the evening time. Also management should purchase more

furniture and arrange them in such a way which provides maximum space and convenient

especially in deposit department and there should also be convenient sitting place for

customers.

Transfer

Transfer is not properly carried out. Some of the employees are continually serving at the

same post. They are simply rotated at the same branch. Therefore it is recommended that

evenly rotation of every employee should take place after every three years in different

braches of the bank.

Changes in Policies

There should not be any abrupt policies change by the upper management, as this practice

hurts the customer confidences in the bank. Government should make long-term policies

Need Qualified Staff

Required, qualified staff should be provided to branch in order to improve the functioning

of the branch. Especially a telephone operator should be appointed.


Utility Bill Charges

Bank gets Rs. 2 to 3 to processes a utility bill, and it is very tire, tough and hard job

despite this working resulting in a loss to then Rs 3 to5 per transaction. These charges

should be increased to RS 10 per bill to enable the branch to cover their handling costs

and make some profit.

Link with the Head Quarter

100 major branches of NBP should established a direct link with the, head quarter in

Karachi, through Internet or Intranet. This will make the functions and decision making

of the management easier and convenient. But still NBP main Branch Mansehra did not

have online facilities.

Credit Card

National bank of Pakistan should start its operation in credit card. These cards are very

helpful for the ordinary customer in general and the business people in particular. To

make it mores secure and to eliminate the misuse of it, the management is required to

keep proper security against the card.

Installing Validator and ATM

Validator machine is used to count the currency notes and its installation will help to

eliminate to counting errors and will save time. This will also help in saving time result is

work completed on time

This branch is situated in the City, which is supported to be the hub of business activates.

In this area an automated teller machine (ATM) is the need of the hour businessmen can

easily check their balance in the bank and also with draw their money conveniently.

Interest on Overdraft:


Overdraft is a short-term credit facility provided by the bank to its trustworthy customers

free of interest. Only bank commission is charge small amount of mark-up on the

overdraft, which will help the bank to improve its revenue position.

Clean Loans

Clean loan or clean overdraft is the credit facility extended to the customers to the

customers without any security. These types of small term loans should not be extended

to anybody, because sometime these loans are provided to blue-eyed people of the

management and they become a part of bad debts.

Cash Financing

In this mode of financing the amount of credit not utilized by the borrower is remained

tax-free. It is recommended that a small amount of interest should be charge on this

amount as well because the bank gas kept-aside the amount for that borrower and can not

advance it anywhere.

Decreasing Administrative Expenses

Bank should their administrative expenses. This was Rs 8 billion in the year 2000. That

can be done by lying off the surplus pool of employee with golden handshakes scheme.

The branches that are not much used could also be closed. Employee can also be how to

control the bank expenses. That will give positive results in the future.

Needs to be Flexible in credit Policy

As mentioned earlier, NBP is very conservative in advances and loans policy. It reduces

the investment opportunities. Also loans should be given to the small businessmen and

the agriculture sector at the low markup rate. It should adopt flexible credit policy while

giving credit to the agriculture sector.

Technological Advancement


I would like to suggest that at least all the main branches of NBP should be fully

computerized in order to expedite the dealing process among bankers and their

customers. Every department should be provided a computer with adequate training

(especially Advances, Deposits and Foreign Exchange departments) Daily records should

be entered directly into these computers, (instead entering the overall daily transactions

after the banking hours). It will not only reduce transaction time, will increase accuracy

but will also be efficient as well.

Staff Relationship

Good relationship among staff member leads to the peak performances in any

organization. I observed that the staff relationship was normal other wise but some time I

noticed that there existed a little conformity among the staff members. Another syndrome

from which the staff suffered was that all of them considered themselves more important

than others. Some of the officers used to say that if I am absent for a day the bank would

stop working. So this sort of attitude is not good because it mars bank image and juniors’

willingness learn and work hard and in the end will hurt the whole team.

Improper Distribution of Work

Proper distribution work leads to success in every organization. Proper distribution of

work prevents the employee from over and under work situation. So for a smooth running

of an organization proper distribution of work is the hint to be followed. During my

internship I observed that there was no proper distribution of work in the bank. I saw that

some of the employee worked like ants other sat idle starting here and there. So this

created a lot of over work situation for while relaxation for other.

Favoritism and nepotism

In the during my internship in Main Branch Mansehra I saw that when some of the

employees are transfer to other places, due to their relation with influential people and

with top management they can cancel their transfer in few weeks, when they are


unsatisfied at that place. Not in one branch of NBP but as a whole. This process will also

be apply in recruitment and selection process. Deserving candidate will fails to qualify.

So I suggest that in the organization there should be no favoritism, nepotism and politics

and their transfer and promotion should be made on merit and according to the rules and

regulations of the bank and provided favorable environment to the employee to show

their performances.

Skilled and Highly educated staff

National bank of Pakistan requires skilled and highly educated staff. Nowadays, there is a

large number of M.B.As who is unemployed. These young people have the knowledge

and skill to compete in this competitive and dynamic environment of banking. National

bank of Pakistan should recruit new young professional.

Inter Departmental Transfer

I watched during my internship that, there is number of employee who have worked on

one seat for many a year. It can have negative effects motivation of employee who is hard

working and intelligent. Take the example of advances section. In advance section if the

employee is transfer after sixth month or seven month, how can he be able to show his

performances and how can he be able to know the bank customer in a short period of

time.

Marketing Policy

The branch should adopt various marketing strategy and promotion strategy to promote

the bank and its product. But being a nation’s bank it did not makes so much marketing

policies.

The most important in my opinion is personal marketing; it is the most effective of all

when you think in term of branch level. But on the whole organization level, they should


arrange the seminar with in the bank and outside the bank. They should introduce various

prizing schemes just like Habit Bank. Mahana Scheme, Bank Al-Falah (monthly income

earning scheme) and various others. They should do more advertising through newspaper

and media and through channel of personal contacts.

Complaints of Customer

There should be an information desk to provide the information and to receive the

complaints of the customer in the bank. There is no complaint box available in the branch

and not any person appointed to hear the complaints.

Every person cannot go to the manager for the complaint because most of the people are

hesitant. So I suggest management to install a compliant box in the branch, and recruit a

special person for that guidance of the customer when they are unable to manage some

difficulties in banking matters.

Analysis of the Business:

Proper analysis of the business reports should be conducted before extending any type of

loan. For this purpose professional training of the stuff member is required.

Organizational Commitment

It is suggested that employees working on daily wages basis should be given some

benefits, which the other employees are getting. Their salaries must increase according to

efficiency, performance and service.

Managerial Leadership

In the analysis, we have discussed the difficulties of the assistant in taking any initiative;

therefore it is recommended that the assistants should he given special training to make

them ready for the leadership.


Credit Monitoring

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

should ensure the proper payment of installments and the mark-up by the borrower.

The staff members who have done all the paper work of the loan extension should

perform the monitoring, as he/she will be having more information about the borrower.

Housing and House Hold Goods loans

Bank should initiate these loans because most of bank’s customers are middle class and

they cannot afford to buy house or household goods at once by their own. For this

purpose bank should set lowest markup to its to attract customers.

Avoiding Bad Debts

Special care should be taking while extending the loan. Loans should be awarded against

reasonable securities, where market value should be equal to the loan granted.

Policies should be crafted in a way to ensure that no loan is extended on political

pressure. SBP regulation for loan approval should be strictly followed. According to

which the current ration of borrower’s business must be 1:1 and the debt to equity ratio

should be 60:40, means the liquidity position of business should be healthy.

Car Financing Scheme

Car financing scheme with the name of “ MY CAR FINANCING SCHEME” should be

initiated This finance scheme will help the general public to buy the car of their choice in

easy quarterly installments The bank monitors will do strict monitoring and the car will

be hypothecated with the bank against the car loan.

Avoid Political interference


Political interference is the second big problem for National Bank of Pakistan. So, it is

very important to avoid political interference in banking operations. In order to avoid this

first suggestion is the denationalization of the bank

Bibligraphy

Israr, Siddiqi H. (1998Banking law and Financial Services. Karachi: Decent Print

Enterprises. Page 35, 36, 40.


Sir Paged John. The law of Banking. The Law of Banking. McGraw Hill Publication:

page 51-58

Dr.Aftab Ahmad Khan (Macro Economics and Financial Sector of Pakistan.)

www.nbp.com.pk

Bank Nationalization act 1974.

President Office, June 21, 2006, Circular No. 13, 2002. Head Office National Bank of

Pakistan Karachi.

Standard procedure Manual of National Bank of Pakistan.

Instruction Circulars of 2008

Http// www.nbp.com.pk.

National Bank of Pakistan Yearly Report 2008.


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