National Bank Report

8/3/2019 National Bank Report

1/70

NBPInternship Report National Bank of Pakistan

CHAPTER NO 1:

INTRODUCTION

1.1) BACK GROUND OF STUDY

The study s about the internship in National Bank of Pakistan. Internship is anintegral part of all management courses at HUMS the student requires spending aspecific time period in an organization in order to get first hand knowledge of reallife situation.

The study has been conducted in National Bank of Pakistan; G.T Road Branch(0517) Peshawar.NBP is a highly profitable organization, having a hugenetworking within and outside the country. To know about the organization and

its function it is important to work there. This internship is about six weekshelped me to write some useful information about National Bank of Pakistan G.TRoad Branch (0517) Peshawar.

The soico- economic growth of any country depends mainly on the health of itsfunctional institutions. The banking sector is one which plays an important rolein the development of the economy. Its involvement in the industrial sector,trade and commerce of the country makes it an integral and important tool forthe over all development of the country. With the advent of modern technologyincreased competition, banks are undergoing major changes, thus making thisfield a challenging one. Banking sector, no doubt, has a pivotal role development0of our national economy. Moreover, the role of Bank in NWFP is a significantimportance due to huge amount of home remittances from abroad. Homeremittances contribute not only to this province, but also to the nationaleconomy.

National Bank of Pakistan is one of the leading and first government recognizedbank in Pakistan. NBP was established in Nov 9, 1949 and it started functioningfrom Nov 20, 1949.

There are certain characteristics, which sets NBP apart from other nationalizedcommercial bank. These characteristic are the reasons of the development of NBPThe most important characteristic of NBP is that, it work, as an agent to the State

Bank, Where a State Bank, does not have a branch of its own. The NBP is also actas a trustee to the National Investment Trust (NIT), which is the

Department of Management sciences- 1 -


2/70


one of the premier financial institutions of the country. It is charged theresponsibility of the mobilizing small savings. The establishment of NBP thus

Singled the achievement of another milestone in the development of the banking

industry in Pakistan.

PURPOSE OF THE STUDY;The purpose or the objective of the report is to define and describe different

functions and products offered by the bank to its valued customers. To identifysome weaknesses related to the management of the Bank. To analyze theperformance of the Bank and finally to give some necessary recommendation tothe management of the Bank. This can help the management of the NBP in theimproving the performance of the Bank. As NBP is one of the oldest and wellestablished bank in the public sector, so NBP preferred in order to get more

knowledge of the organization. Also it is a degree requirement and a source ofpractical knowledge. Internship in NBP had certain objectives such as;

Observe the work in different departments of NBP.

Development the relationship to get more information.

Apply managerial skills in real work place.

Getting confidence while interviewing the heads of the different departments.

Develop analytical skills for organizational analysis and financial analysis

1.1 SCOP OF STUDY;

The time duration of the two months was quite adequate for the completion of

study and observation of the bank. NBP is one of the oldest and well

established bank of Pakistan; efforts were made to study the existing setup and

function of the Bank. Some of problems faced by the Bank have been identified

and remedies have been suggested to these problems. During internship at NBP,

G.T Road Branch (0517) Peshawar, the following departments were observed.

Deposit Department,

Remittances Department,

Establishment and advances Department,



3/70


Foreign Exchange Department,

Public Relation Department,

While working in these department problems were identified and

recommendations were given to overcome those problems. Also comparative

analysis of the three year financial statement and SOWT analysis of NBP G.T

Road Branch (0517) Peshawar was done. An overview of the five year performance

of the overall NBP is also included.

1.4 LIMITATION OF THE STUDYThe vast scope of the operation of a bank is difficult to be analyzed in a limited

time of two months. The lack of information (secrecy of bank role) is anotherlimitation of the study.

METHODOLOGY OF THE STUDY;

During the internship at NBP G.T Road Branch (0517) Peshawar the mostimportant task was to collect as much quality information about the organizationas possible.1.5(a), Primary Data

The first hand data, i.e. the data collected for first time is call primary data.

Unstructured interviews with bank employees.

Personal observation.

Questioner.1.5(b) Secondary Data,

The data which is collected from other sources and already processed through

mathematical and statistical techniques are called the secondary Data.

The Sources of the Secondary Data;

Annual Reports.

Manuals of departments of the bank,

Relevant books.

Brochures and circulars of the bank.

Internet.



4/70


CHAPTER NO 2;

HISTORY OF BANKING;

2.1) WHAT IS BANK?

There is no consensus on the origin of the bank. According to some authorities, the

word Bank itself is derived from the word bancus or banque, means a bench

the early bankers, the Jews in Lombardy, who are thought to be the forefathers of

Banking used to transact their business on benches in the market places. The word



5/70


bankrupt is also comes from there. However, the Oxford Dictionarys Millennium

Issue gives a precise meaning of the word bank defined as Bank is an

establishment of depositing, with drawling and borrowing money

Although banking has developed too much than deposit with drawling and

borrowing of the money, yet the basic function of the bank remains as described

above.

BRIEF STUDY OF BANK;

Banking is thought to begin some were in early 2000 BC when Babylonians

development a banking system. The origin of the modern banking can be found in

the modern dealers in Florence, who received money on deposit, and were lenders

of money in the 14th century, and name of the Bardi, Acciajuoli, Peruzzi, Pity and

Medici soon became famous throughout Europe as Bankers. The Structure and

modern form of banking started taking shape when many of the

Lombardy merchants came to England in the 14th century

And settled in the part of the city of London now Lombard Street. They were so

resourceful that even the kings had depended on them for loans. The goldsmiths at

that time also started issuing receipts to their depositors in respect to the cash or

gold articles left with them. These were called goldsmith Notes. An important step

in the evolution of banking was taken when these goldsmiths, started lending at

interest and issues cheque books. Some of the goldsmiths, after they were refused

payments by,



6/70


Charles II, formed themselves into the corporation in 1965, Known as the Bank of

England.

This proved to be a turning point in banking history and paved the way for modern

banking through different Legislatures by the British Government

2.3 BANKING IN INDO-PAKITAN SUBCONTINENT;

Ever since money becomes the medium of exchange in our society, banks existed

in one from or the other. In those days their function was mainly to lend money to

the people and the kings.

The Vedic epics clearly mentioned about giving and taking of credit and also

contracts of debts at dicing later on, Manu in his samurai clearly mentioned these

transactions bysaying, a sensible man should deposit his money with a person of

good family, of good conduct, well acquainted with the law, veracious, having

many relatives wealthy and

Honorable Manu has also prescribed the rules to govern the policy of loans and

rates of interest.

During the fifth century people were accustomed to use bundies as a credit

instrument. The land revenue was collect generally in kind, while the service were

paid mostly in cash. Therefore bankers were assistance in these and other financial

matters of state was very much necessary. The bankers enjoyed very good

reputation, and the people deposit their jewelry and cash holding with them for

custody.



7/70


Loans were given to the people against personal and others securities such as

ornaments, goods, and immovable properties and the banker and the customer

had very cordial relation.

The Muslim rule provided substantial encouragement to the farmers by giving

them interest free loan and grand cash or kind

This agricultural finance resulted in bumper food production. This had a great

surplus after consumption at home. Therefore it was being exported against pure

gold.

Industrial development was not ignored at all. State loans were also given for

increase in production. These factories thus produced enough for local

consumption and left substantial for exports. Textile, calico- printing and dyeing,

pottery, china-ware, indigo, opium, metal work, paper, leather, and sugar etc.

were being extorted to foreign countries like china, East Indies and pacific Islands

against pure gold. Thus the port towns of

sutra and coal(Gujarat), Calices and Cochin (Malabar coast); Masulipatam

and Negapatam (Coromandal coast) became the centers of the world trade,

where foreign buyer come to used to come for purchase of Indian commodities.

Muslim historians of the 12th century have also mention some, bankers known as

Multani and Sheriffs They used to act as government to collect revenue. Such a

prosperous society did need a well-regulated financial administration and

monetary system. Muhammad tughlaq was the king to have introduced token

currency in India. Akbar established all over the country under a well conceived



8/70


plan so that they could function as the offices of Central Bank of that time, they

also worked as the drawing and disbursing offices to the Government.

Through the Muslim rules did not establish Bank as such, yet they revolutionized

the entire financial and monetary structure in India and the old

Sahokar and Mahajins were eliminated. Government introduced reforms were

so effective that these classical-bankers were pushed into the past. Due to the

prosperity of India society of that time, the Royal mints and Treasuries did act as

agencies for transfer of money as well as for custody of valuables.

2.4 BANKING IN PAKISTAN;

At the time of independence, the area, which known constitute Pakistan, were

producing only food grain and agriculture raw material for Indo-Pakistan

Subcontinent. There were practically no industries, and whatever raw material was

produced was being exported from Pakistan. However, commercial Banking

facilities were provided fairly well here.

Before partition of sub-continent, the entire banking system was almost in the

hand of the Muslim. When Hindus capitalists became sure of division of sub-

continent, they transferred there fund to safe place in India. Pakistan was

declaring an independent state. In mass scale migration of the Non-Muslim from

Pakistan to India cause the reduction in the bank deposits. The number of

scheduled Bank branches was educed from 619 to 213 and the number of the none



9/70


scheduled bank reduced from 411 to 106. The independent state of Pakistan did

not have a central bank of its own at the time of independence.

As a new country without resources it was very difficult for Pakistan to run its own

banking system immediately. Therefore, in accordance with the provision of India

independence Act of 1947, an Export committee was appointed to study the Issue.

The committee recommended that the Reserve Bank of India should continue the

function in Pakistan until 30th September 1948, so that problem of time and

demand liability, coinage, currencies, exchange etc. is settled between India and

Pakistan. It was also stipulated that Pakistan would take over the management of

the public debt and exchange control from Reserve Bank of India

On 1st April, 1948, and that India Notes would continue to be legal tender in

Pakistan till 30th September 1948. Following the announcement of independence

plan June 1947, the Hindu residing in the territories now comprising Pakistan

started transferring their assets to India.

The first important date was establishment of the Habib Bank Limited, on August

251941 at Bombay. This was the first bank in the India sub-continent, which was

operated by Muslims. Habib Bank Limited transferred its Registered Head Office

to Karachi on August 07, 1947. It played a great role in the Pakistans Economic

Development.



10/70


The second important date in the history of the Banking in Pakistan is

establishment of Australasia Bank limited, at Lahore on December 03, 1942. Its

name was changed to Allied Bank of Pakistan limited, on July 01, 1942. After

nationalization of the banking Industry on January 01, 1974, three other banks

were merged in to it.

The other important date is July 09, 1947; When the Muslim Commercial Bank

Limited was registered and incorporated at Calcutta. Its registered Head Office

was transferred to Dacca on August 17, 1948. Subsequently its registered Head

Office moved to Karachi on August 23, 1956.

The most date is July 01, 1948 when State Bank of Pakistan was established at

Karachi as the Central Bank of country. Central bank addressed itself with an

urgent task of creating a national banking system. In order to attain this goal it

provided every help and encouragement to Habib Bank to expend its networking

of branches, and also recommended to Government the establishment of the

new bank which could serve as an agent of the state Bank. As a result, the National

Bank of Pakistan came into being on November 09, 1949, and by 1952 it

became strong enough to take over the agency function from Imperial Bank of

India. This was the first commercial bank in the public sector. By December 1973

there were 14 scheduled banks with 3024 branches all over the country.

1) National Bank of Pakistan,

2) Habib Bank of Pakistan,



11/70


3) United Bank Limited,

4) Muslim Commercial Bank Limited,

5) Pak Bank Limited,

6) Standard Bank Limited,

7) Commercial Bank Limited,

8) Australia Bank Limited,

9) Bank of Bahawalpur Limited,

10) Premier Bank Limited,

11) Sarhad Bank Limited,

12) Lahore cooperative Bank Limited,

13) Punjab provincial cooperation Bank Limited,

At the end of June 1999, the number of scheduled Bank in Pakistan was 52 with

7,874 branches Out of these; there are 25 Pakistan banks with 7,779branches and

27 foreign banks with 95 branches.

2.5) HISTORY OF NATIONAL BANK OF PAKISTAN;

With the establishment of the central bank, the country has ushered in a new area

in the development of banking. Soon the industry was faced with another problem

of considerable magnitude. This happened in late in 1949. The British Government

devalued its currency in September 1949 both Indian and Pakistan currencies were

pegged on fixed exchange rate basis with the pound sterling.



12/70


Inline the British Government s decision, the Indian Government al so devalued its

rupee to maintain parity with the pound sterling. Pakistan, however did not

devalued its currency. India did not view the Pakistan decision in the right spirit

and Pakistan refused to bring its currency at par

With that India with that of India led to a crisis in trading between the two

countries. India refusal to leave the Pakistani jute, as reprisal resulted in a

financial crisis for the jute growers, who could not be paid. Only commercial bank

in public sector could have offered payment, in lieu, to magnitude the financial

sufferings of jute growers.

The Government responded to the situation quickly and decisively, on the

November 9 1949, an order was promulgate by the Governor General bringing in

being in the National Bank of Pakistan which start function November 20, 1949.In

the course of its department the National bank of Pakistan, in addition to being a

commercial bank in the public sector at a time when all other commercial bank

were in the private sector also came to acquire certain characteristics. The most

important of these characteristics is that the National bank act as an agent on the

central bank where the state bank does the National bank also acts as a trustee to

the National investment Trust (NIT), one of the premier financial institution of the

country, charged with the responsibility of mobilizing small saving.

The establishment of the National Bank thus singled the achievement of an other

milestone in the development of the banking industry in Pakistan.



13/70


2.6) THE HISTORY OF NBP (1996-2002 &ONWARDS)

Like all business in Pakistan, NBP also endured a great pressure in this period.

When the biggest bank of the country was faced with losses, Government of

Pakistan made some reforms. Pakistan banking council was established and all

banks were put under independent board of the governors. Default of the loans is

the big issue since that time. In 1996-1997 the Government of the Pakistan

pressurized all the institutions of the country to down size of their staff so as to cut

down the expenses. This was the demand of IMF. As a result

GOLDEN HANDSHAKE Scheme was offered to the employees and a large number

of employees opted to leave. This decision was very costly and amortized. In the

second phase of the cost reduction program, the number of branches including the

branches that were running in losses was reduced by a figure of 100.

The decision of May 28, 1998 nuclear test followed by political decision of freezing

of foreign currency accounts gave hard time of NBP. But still, NBP perform very

well and succeeded in increasing the deposits. NBP was also successful in

collecting reasonable amount of money from the defaulters. After some time the

situation was made by economic crises of East Asian countries.

National Bank of Pakistan performed well in this region and maintained its

credibility.

National bank of Pakistan as per its tradition, forwarded funds for revival of

almost sixty sick units with Rs.3.5 billion in1998. NBP also participated in self



14/70


employment scheme with Rs.1.9billion. NBP also introduced ATM card system and

became a member of SWIFT in New York as well. In November 2001,

10%share of NBPs shares were offered to general public and listed on all domestic

stock exchanges. It has also prepared a plan for electronic banking and E-

commerce.

By analyzing these improvements we can say that the Officials and Directors of the

bank are fully aware and alert for the challenges of globalization and

modernization.

2.7) ACTIVITIES PERFORMED BY NBP

NBP is providing all types of banking services of mercantile and commercial

banking permitted in the country, which include

Handing of treasury transaction for the Government of Pakistan as an agent to

the State Bank of Pakistan.

Providing services under a Trust Deed as a Trustee of the National

investment ,Trust (NIT), including safe custody of he securities on behalf of

NIT.

Accepting of depositing of money against current, saving, term deposit, profit

and loss sharing account.

Borrowing money and arranging finances from other banks.

Advancing and lending money to its clients.



15/70


Financing of project, including technical assistance, project appraisal through

long-term/short term loans, Term finance and Musharika certificates, etc.

Buying, Selling, dealing, including entering into forward contrasts of foreign

exchange.

Financing of bonds scripts and valuables for safe custody.

Carrying on agency business of any description other than being agent on

behalf of clients including Government and local authorities.

Generating, undertaking, promoting and issuing of shares and bonds, etc.

Transaction guarantee and indemnity business.

Sale and encashment of prize bonds through its 266 authorities.

Joint venture with foreign dealers, agents and companies for its representation

abort.

1 Participating in world bank and Asian Development bank line of credit.

Providing personalized Hajj services to intending Hajjis.

2.8) ROLE OF NBP IN ECONOMIC DEVELOPMENT.

Bank play significant role in promoting the economic activities and economic

development of a country. Industry, Agriculture, Trade Commerce and many

others economic activities are highly dependant on the banks. Bank help in

mobilization of money. They also help in promoting the growth of internal

resources for development by attracting deposits into productive loans and



16/70


investments. Banks not collect only the saving of the people but also give loans for

the development of industry, trade and commerce.

NBP playing a major role in financing and developmental activities in Pakistan. It

helps in the growth of economy in all spheres of our national life. It has

contributed significantly to economic growth of the country and has served to

trade and industry in a wide sphere of operation.

The NBP was to introducing scheme of credit of small borrowers like farmers etc,

for the promotion of agriculture. The bank advances liberal credit for rural and

agricultural development. Small short term loans are

Given the farmers free of interest. These advances can be in the shape of fertilizers,

seeds and agricultural implements.

The NBP is able to attract large amount of deposits through its large number of

branches all over the country and thus its able to provide large amount of loans to

different sectors.

The NBP is also providing finances to the small scale industries for the period up

to five year; it introduced the peoples credit facilities to the common man at the

large and more liberal scale than before. The main object of this scheme is to make

a contribution toward building up of a developing nation. The NBP also help to

promote the establishment of the new companies by underwriting their share

The bank also contributes towards the earning of foreign exchange through its

foreign exchange business in Pakistan and abroad.



17/70


OBJECTIVE OF THE NATIONAL BANK OF PAKISTAN;MISION:

NBP well aspire to the values that make NBP truly

The Nations Bank, by:

Institutionalizing a merit and performed culture.

Creating a distinctive brand identity by providing the highest standards of

services.

Adopting the best international management practices.

Maximizing the stake holders value.

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

countries where we operate.

GOALS:

To enhance profitability and maximization of NBP share through increasing

leverage of existing customer base and diversified range of products.

VISION:

To be recognized as a leader and the brand synonymous with trust, highest

standard of service quality, international best practices and social responsibility.

CORE VALUES:

Highest standards of integrity.

Institutionalizing term work and performance culture.



18/70


Excellence in service.

Advancement of skills for tomorrows challenges.

Awareness of the social and community responsibility.

Value creation for all stakeholders.

CHAPTER NO 3;

ORGANIZATIONAL STRUCTURE;


HEAD

OFFICE


19/70


ORGANIZATIONAL STRUCTURE;


BOARD OFDIRECTORS

EXECUTIVEITTE

EDIVISIONAL

CHIEFS

PROVISIONALCHIEF

SREGIONS OF

NBP

CORPORATEBRANCHESNBP,GT Road Branch

H


20/70


Organizational structure is the frame work that defines the boundaries of the

formal organization and with which the organization operates. A suitable

organizational structure for the nature of the organization leads to better

performance.

The organizational structure of the bank constitutes a board of directors and an

executive committee as the governing bodies.

The NBP has 1199 branches all over the country and 16 branches overseas. The

head office is operationally in charge of central affairs including the delegation of

power and authority to the regional headquarters all over the country. These

regional headquarters direct the function of the 12 corporate branches. The NBP

has 29 regions in four provinces as given below;

3.1 HEAD OFFICE;


Provincial Headquarters Number of Regions

Sindh 6

Baluchistan 2

Punjab 14

NWFP 5

Azad Kashmir 2


21/70


The NBP has its own organizational structure and its Head office is situated at

Karachi. All the branches, regional offices and corporate branches work according

to the rules and regulation issued by the Head Office from time to time. The Head

Office of National Bank of Pakistan, which is primarily responsible for making

policies and execution of policy decision include,

a) Board of Directors

b) Executive committee

c) Divisional head offices and provincial headquarters

The Head Office has nine divisions, which are further divided into different wings.

It is operationally in charge of central affairs including the delegation of powers

and authority to the 29 Regional Headquarters all over the country. These

Regional Headquarters direct the functions of the twelve corporate branches.

3.2 BOARD OF DIRECTORS

The Board of Directors nominates the executive committee, which nominates

divisional heads. It consists of one president, six directors working under president



22/70


and one secretary. President is the Governing body and other six director and one

secretary working with him in a systematic way.

The Board of Directors of the National Bank of Pakistan has one president and six

members as given below;

President of the Bank

S E V Ps of the Bank

Representative of the PBC

Representative of the government

Outsiders

1

3

1

1

1

Total 7

3.3) EXECUTIVE COMITEE;

Executive committee consists of one president and nine members and among these

nine members, one member performs functions of both member and secretary

Board of directors nominates executive committee and executive committee

nominates the divisional heads. NBP has an executive committee with president as

its chairman; five SEVPs are its members and presidents as an

Observer. This body monitors the day-to-day affairs of the entire bank and has

sanctioning authority for financial and business proposals.

Executive committee of National Bank of Pakistan has one president and Nine

members as given below;



23/70


3.4 DIVISIONAL CHIEFS;

In order to improve the management and operation of the bank, it has been splitup into a number of divisions. Each division of the bank is placed under thesupervision and control of Division Chief or Senior Executive Vice President(SEVP) or Executive Vice President (EVP). The Head Office management controlsall the division. The nine division of the NBP are as follows:a) Management Support Divisionb) Audit and Inspection Division.c) Treasury Management Division.d) Credit Policy Management Division.e) Marketing and Development Division.

f) Overseas Banking Division.g) Special Assets Management Division.h) Bank secretary Division.

3.5)PROVINCIAL CHIEFS;

In order to improve the performance of the banking system, each bank hasProvincial chief who has the power for sanctioning finance and other credit

facilities. The head quarters of the chiefs are situated in Lahore, Karachi, andQuetta. The NBP has 29 regions in the four provinces and Azad Kashmir.

3.6) REGIONOF NBPOn May 13,2002 a circular was issued in which zones were abolished and the

whole country and Azad Kashmir was divided into 29 regions. The changeoverprocess started from 1st August 2002 and was completed by 31st August 2002. thenew setup was made fully functional by 15th September.


President of the Bank

Secretary

S E V Ps of the Bank

Representative of the PBC

Representative of the government

Outsiders

1

1

5

1

1

1Total 10


24/70


Regional Management Committee;

A regional management committee controls all regions. Regional management

consists of

i. Regional Business Chief.ii. Regional Operational Chief.

iii. Risk Management Chief.iv. Compliance Chief.

The Name f the Regions are:



25/70



1 Karachi South

16 Karachi Central

2 Federal Capital 17 Karachi West

3 Rawalponidi 18 Lahore East

4 Faisalabad 19 Gujranwala

5 Peshawar 20 Mirpur A.K.

6 Multan 21 Gujrat

7 Sialkot 22 Hyderabad

8 Abbotabad 23 Sargodha

9 Mardan 24 Jhelum

10 Quetta 25 Sahiwaal

11 Bahawalpur 26 Dera Ghazi khan

12 D.I Khan 27 Jhang

13 Muzaffarabad 28 Sakkar

14 larkana 29 Gawadar

15 Gilgit 30


26/70


3.7) CORPORATE BRANHES;

Corporate branches play an important role in the setup of National Bank ofPakistan, to serve the businessmen and the corporate sector of Pakistan. There are

twelve corporate branches, present in the following cities.

3.8) NBPG.T, Road Branch Peshawar

NBP G.T. Road Branch Peshawar is started its operation in Peshawar in 1999. Thisbranch is situated on G.T Road Peshawar .it is a suitable place for banking. Thereare about 21 staff members. All the member of this Bank is very intelligent and wellexperienced. There is a good and horizontal communication system. Record isproperly kept.

Set up


City No of the corporateBranches

Karachi 3

Lahore 3

Islamabad 1

Rawalpindi 1

Quetta 1

Peshawar 1

Mirpur(AJK) 1

Faisalabad 1

Total 12


27/70


Keeping in view the size of the branch operation manager will take directresponsibilities for some of the operation function depending on thenature of activities in the branch.

The operation area would comprise of cash counter services and

customers services

The branch manager with the relationship officers, if required will

concentrate and fully devote to credit marketing and business /deposit

development.

Operation manager will report directly to the regional manager to the

regional chief operation with dotted line reporting to the branch manager.

A compliance officer is also present in this branch. He responsible of thechecking of the all the work done in the bank whenever an inspector cameto the bank. He provides him all documents which he require forinspection.

3.10) HUMAN RESOURCE MANAGEMENT;

HRM is that part of the organization, which is concerned with the people.Every organization is comprised of people. It acquires their services, develop thereskills, motivates them to high level of performance and ensures that they continueto maintain their commitment to the organization. Getting and retaining good andcompetent people (employees) is critical to the success of every organizationregardless of its types. NBP also place a great importance on the qualification,caliber and competence of the staff. There are three main steps at NBP for staffingand administration.

Recruitment of the staff

Development of the staff

Motivating staff

Recruitment of the staffIt is the discovery of the potential skills, of the employees to fulfill organizationalneeds or we can say that it is the linking activity for bringing together employees

with skills to the full vacancies. There recruitment procedure has following steps:

I. Short-listing of the Application,



28/70


In this step, thousands of candidates apply for limited posts available. Thecandidates are scrutinized and the test calls are sent to them. The calls are sent bythe Head Office to only those candidates who fulfill the requirement of the jobadvertised.

ii. Tests,

NBP under the supervision of the Pakistan Banking council conducts test. After thetest the applicants are further short-listed.

iii. Interview,

For the interview only those candidates are called who qualify the written test.

Different types of question are asked from the candidates by the interviewing

board.

Interviewing questions include,a) Question about the personal background, extra circular activities during

education and about personal contact.b) Question about the role of banking in current situation of economy.c) Question about the role of foreign enterprise in public economy etc.

A part from these questions, the candidates personal interests are also discussedand an effort is made to have an understanding of the individuals personality.After these questions, an evaluation is made about whether the candidates willprove himself as valuable assets to the organization or not.

Iv. Merit List,After the final result, the successful candidates are sent the appointment letter andthey are also asked to sign the agreement with the bank.

b) Developing the skills of employeesOnce the employees are recruited, it is very important to develop their skills.There are two ways to develop their skills.

Initial Training/Pre Service Training On the job Training

i) Initial Training/Pre Service Training



29/70


All the newly recruited personnel are provided with training facilities.During this training, an employee is rotated through different sections of thebranch so that he may learn by practically doing the work. The minimumprobation period is six months.

ii) On the job TrainingOn the job training programmes can be arranged at any time when the need arise sfor training. These training courses are of short time duration, mostly for two tofour weeks. These training courses are arranged at home station. In case ofoutstation, the transportation and the boarding charges are paid by NBP.NBP hasits own training institution and this training institution arranges seminars/coursesfor the NBP employees.

c) Motivating staff

People who are motivated extra greater efforts to perform the assigned taskseffectively and efficiently than those who are not motivated. Various measures areused in NBP for motivation the employees and for appraising their performance.The techniques used are as follows.

i) Audit ReportThese reports are prepared by auditors and are send to he head Office for the

performance appraisal.ii) Salaries Wages

The Government of Pakistan finance division sets salary. Presently, Presidentput suggestion to the board of directors and gets approval from the board forincreasing salaries.iii) Provident Fund7.5% of every employees salary is detected as provident fund and the bankcontributes the sameiv) Medical AllowancesThe bank also compensates the cost of medical advice and medicines, claimed bythe employees for themselves and their dependents.

CHAPTER NO 4;

DEPARTMENTATION;



30/70


Departmentation is arranging the activities into meaningful groups. It distributesthe work load and increases efficiency and effectiveness, Deparmentation for thecustomers, by function or by location.

National Bank of Pakistan G.T. Road branch consists of five departments based onits different functions. So it can say that the bases for departmentation at NBP arepurely functional.

DEPARTMENTATION OF NBP G.T. Road Branch Peshawar1) Deposits Department2) Remittances Department.3) Advance Department.4) Cash Department.

1) Deposits DepartmentThe department is responsible for the accounts opening, closing and answeringcustomers queries regarding their accounts, checkbooks issuance etc. lockersare also under the supervision of this department. In this department there areflowing deposit accounts,Current Accounts.PLS Saving Accounts.Term Deposits Accounts.Short term Deposit Accounts.Special Notice Deposit.Call Deposits Receipts.National Income daily Accounts.NBP Cash Card.

The Current Account is one of the two primary components of thebalance ofpayments, the other being the capital account. It is the sum of thebalance of trade(exports minus imports of goods and services), net factor income (such as interestand dividends) and net transfer payments (such as foreign aid).Current of a country's foreign trade (the other being the net capital outflow). Acurrent account = balance of trade + net factor income from abroad + netunilateral transfers from abroad The current account balance is one of two majormeasures of the nature account surplus increases a country's net foreign assets bythe corresponding amount, and a current account deficit does the reverse. Both

government and private payments are included in the calculation. It is called thecurrent account because goods and services are generally consumed in the currentperiod.

http://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/Capital_accounthttp://en.wikipedia.org/wiki/Balance_of_tradehttp://en.wikipedia.org/wiki/Factor_incomehttp://en.wikipedia.org/wiki/Transfer_paymentshttp://en.wikipedia.org/wiki/Net_capital_outflowhttp://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/Capital_accounthttp://en.wikipedia.org/wiki/Balance_of_tradehttp://en.wikipedia.org/wiki/Factor_incomehttp://en.wikipedia.org/wiki/Transfer_paymentshttp://en.wikipedia.org/wiki/Net_capital_outflow


31/70


In the traditional accounting of balance of payments, the current account equalsthe change in net foreign assets. A current account deficit implies a paralleledreduction of the net foreign assets.Current account = changes in net foreign assets

A deposit held at a financial institution that has a fixed term. These are generallyshort-term with maturities ranging anywhere from a month to a few years. When aterm deposit is purchased, the lender (the customer) understands that the moneycan only be withdrawn after the term has ended or by giving a predeterminednumber of days notice

Term deposits are an extremely safe investment and are therefore very appealingto conservative, low-risk investors. By having the money tied up you'll generallyget a higher rate with a term deposit compared with a demand deposit

Call Deposit An investmentaccount offered through banks which allows investors

instantaccess to their accounts.Withdrawals and deposits can be made at anytime.Rulesandbenefitsdiffer depending upon thebankoffering the account

NBP Cash Card

NBP issues Cash Card to its account holders. Account holders can request Cash

Card by filling up the Application form at their respective branch.

2) Remittances Department;


ATM + Debit Card

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

PIN Change facilities (only at NBPATM) from of identity like passportform will be submitted in branch bycash card

.
http://en.wikipedia.org/wiki/Net_foreign_assetshttp://www.investorwords.com/2599/investment.htmlhttp://www.investorwords.com/42/account.htmlhttp://www.investorwords.com/2630/investor.htmlhttp://www.businessdictionary.com/definition/access.htmlhttp://www.businessdictionary.com/definition/access.htmlhttp://www.investorwords.com/5858/withdrawal.htmlhttp://www.investorwords.com/1411/deposit.htmlhttp://www.businessdictionary.com/definition/rule.htmlhttp://www.businessdictionary.com/definition/rule.htmlhttp://www.businessdictionary.com/definition/rule.htmlhttp://www.investorwords.com/461/benefit.htmlhttp://www.investorwords.com/461/benefit.htmlhttp://www.investorwords.com/401/bank.htmlhttp://www.investorwords.com/401/bank.htmlhttp://www.investorwords.com/3390/offering.htmlhttp://en.wikipedia.org/wiki/Net_foreign_assetshttp://www.investorwords.com/2599/investment.htmlhttp://www.investorwords.com/42/account.htmlhttp://www.investorwords.com/2630/investor.htmlhttp://www.businessdictionary.com/definition/access.htmlhttp://www.investorwords.com/5858/withdrawal.htmlhttp://www.investorwords.com/1411/deposit.htmlhttp://www.businessdictionary.com/definition/rule.htmlhttp://www.investorwords.com/461/benefit.htmlhttp://www.investorwords.com/401/bank.htmlhttp://www.investorwords.com/3390/offering.html


32/70


This department is responsible for Inward and Outward remittances throughdemand draft (DD), telegraphic transfer (TT), cheque collection. It also providesaccount statements to the customers and answering their queries regarding theiraccounts, or all drafts, mail transfer advice, letter of credit and payment order

forms and all forms of authority to encash cheques will be kept in the custody ofthe joint custodian of cash or an officer authorized by the manager, who will satisfyhimself daily that every from issued by him has been accounted for.

a) Demand Draft; b) Telegraphic Transfer

c) Mail Transfer d) Cheque Collection

e) Payment Order f) Check books issuances

g) Letter of credit h) Call Deposit

I) Fix Deposit j) Current Deposit

These are the activities of the Remittance Department.

3) Advances Department;

The main function is to make to correspondence with Head Office RegionalOffices and other Offices and to advance consumer loan. It checks the credibility ofthe consumer and maintains loans till maturity.

4) Cash Department;

The Head of this department is an accountant. All the cash is given fixed amount inthe morning, from which they can make the payments. At the cash counter, localcurrency is receipts and payments handled. Cheques are received and presentedfor transfer or collection. All the money is kept in the room where no body isallowed to enter that room except the accountant. Cash handling is very risky job,therefore only authorized person is allowed to enter cash department.

4.2) INSTRUMENTS USED BY THE BANK;

There is certain instruments use in the National Bank of Pakistan, for differentpurpose. These instruments are explained below;



33/70


a)Signature Card (F-65);

This instrument is used to keep a record of customers. The customers fill this cardat the time of account opening. It consist of the customers name, account number,

amount, and specimen of signature. All the signature cards are kept in the

stationary in the order of account numbers, so whenever the card is needed

for any purpose, it can easily be found. The number of this instrument is F-65.

b) Vouchers;

Vouchers are used in every Bank. Every bank has its own printed vouchers.Vouchers shows the details about the amount received and paid by the bank. Asbank use a double entry system i.e. debt and credit system, therefore vouchers aretwo types.

1) Debit Voucher (F-50 );

To differentiate these types, for the convenience of the officers, debit vouchers areprinted in white color. Whenever bank incurs some expense, entries are made indebit vouchers.



34/70


Voucher is printed in green color. They are used to enter the credit transaction.Any income or amounts received by the bank are entered in the credit voucher. All

the sections of the bank use vouchers because they are documentary proofs thatthe transaction has take place. Each section of the bank collects its vouchers andtallies with deposit department at the end of the day for removing any discrepancy

.

3) Transfer Voucher/Cash voucher (F-86);

This is the voucher which is used for the customers deposits .when the customerscome to bank and the customer deposits some money, and paid the installment feeof some things in that case that transfer voucher (F-87) are used. In this voucher

the date, account number amount, name of the customer signature of the


2)Credit Voucher(F-51)


35/70


customer, signature of the bank officer and the most important is the stamp of theBank. It is blue in color.

4) Withdrawal voucher/Cheque voucher (F-87);

It is that type of the voucher which is used for the withdrawal of the money formthe bank. When customer want to with draw some amount from the bank in thatcase the bank use this voucher. It is light pink in color, like the transfer voucher thefilling of this voucher is same.

CHAPTER NO 5;

DEPOSITS DEPARTMENT;

The principle source of funds of any commercial bank is the deposit account i.e.demands saving and time deposits. From banking point of view, the term depositmeans the currency chequesor draft given to a financial institution for creditingto a customers account.

Like all commercial banks, the primary function of the National Bank of Pakistanis to accept and receive surplus money from the people. In order to attach money itoffers different types of facilities to its customers.

The deposit department of the National Bank of Pakistan, G.T Road branchPeshawar mainly performs the function of,

Opening of Accounts,

Closing of Account,

Issuance of Cheque book,



36/70


NBP G T Road branch Peshawar offers local currency accounts. Local currencyaccounts are discussed as follows.

5.1) TYPE OF LOCAL CURRENCY ACCOUNTS;

a) Current Account,

b) PLS Saving Account,

c) Term deposit Account,

d) Finance facility,

a) Current Account;

A current account is a running account, which is continuously in operation. NBPcurrent account allows customers to deposit and withdraw cash at their ownconvenience. The customer can withdraw the current deposit anytime, without anyof previous notice to the bank. The bank has to honor the cheque to the extent ofcredit balance in the account. No profit/interest is paid to the customer on thesedeposits, but the customer is required for opening of such an account is, Rs. 1000.

The current account is opened and operated by traders companies, public servicebodies, and industrialists.

b) PLS Saving Account;

In Pakistan PLS Saving (profit &loss sharing saving account) was introduced inJanuary 1982. PLS Saving accounts are those those account on which a bank offersa relative lower rate of profit/interest. The main rule of the PLS saving account isas under,

The PLS saving account can be opened a sum of not less than Rs. 100.

The bank has full right to make investment of credit balance, deposit in PLSsaving account.

Withdraw the PLS saving account are allowed often than 8th

time a calendarmonth and for the total amount exceeding Rs.15000. in month. For withdrawalof a large amount seven days notice in writing is required to be given.

Withdrawal can only be made by mean of cheques issued by bank.

This accounts may be opened in the name of individual or jointly in thename of two or more persons, credible Institution, Companies, Associations,Societies, Education institution firms etc. may opened these accounts.



37/70


Minors and illiterate customer also eligible for opening PLS saving accounts.

From these accounts the bank determined the rate of profit or loss on PLSsaving accounts.

c) Term Deposit Account;

These are the deposits that can be withdrawn after a certain specified periodof time. The period of time varies from three months to five years. On thesedeposits return/interest varies with the duration for which the amount is kept withthe bank. The rate of interest /return on the term deposit is higher than that of asaving deposit. Its interest/return is unaffected for the duration of the depositirrespective of market fluctuations.

Term deposit is best suited for short-term investment. Individuals as well asjoint account an be opened by, sole proprietorships, partnerships, joint stock

Companies, limited companies, clubs/associations/trusts, administration,executors, etc. profit is paid at the maturity of the deposit. On these deposit

premature wit Withdrawal is permitted but against a reduced rate of interest asagreed at the time of deposit.

d) Finance Facility;

Bank also extends finance facility to clients against and fixed term deposits oncomparatively low markup rate. The deposit is kept under lien however thecustomer may withdraw the profit amount credit to his account.

5.2) OPENING OF AN ACCOUNT WITH THE BANK;

Account opening has the following requirements;

a) Formal Request.b) Obtaining Introduction.c) Specimen Signature.d) Minimum Initial Deposit.e) Operating an Account



38/70


a) Formal Request,

The person desirous of opening an account is required to fill an Accountopening form. It is the formal request by the customer to the bank to allow him to

open and operate the account. There are following requirement for the accountopening,

i. First of all to check the (NCIC) is not expired,ii. Checked the (CNIC) number, name of the candidate, and father name of the

candidate.iii. Nature of the Account, individual account, single or joint account etc.iv. Next of kin, its mean person who is his/her relative, sister brother etc. This is

only that case when only single account open (individually)v. While in joint account it is not necessary.

vi. Those candidates who have illiterate and the signed in Urdu or show finger

prints the bank in that case require two post port size picture.vii. While the educated people who sign in English it is not necessary to attachedpictures.

viii. For the joint account all the informations of all the customers who wish toopen the joint account must be collected by the bank.

ix. All these things are write down on the firm.

x Then entered this information in the record book and give the account numberwhich is allocated to the candidate which is must necessary

b) Obtaining Introduction;

Before opening an account the bank obtain introduction of the customer from anold customer.

c) Specimen of signature;

The bank takes specimen signature of the customer on the signature book or on acard. Signature card is used for the verification of drawers signature on thecheques.

d) Minimum Initial Deposit;

The current account can be opened with minimum Rs. 100 and PLS SavingAccount with minimum of Rs, 500.



39/70


e) Operating the Account;

Bank provides Pay-in-slip book, chequebook and pass book to the customer foroperating the account.

5.3) ACCOUNTS TERMS AND CONDITIONS;

Against the submission of the banks prescribed application from, duly introducedin the manner provided and supply of documents required, the account is madefully functional under certain conditions. In case of account on PLS basis, bankinvest the amount in any manner it considers under PLS system.

a) Depositsb) Withdrawals.

a) Deposits;

All the money to be deposited to the credit of an account is accompanied by pay-in-slip showing the name and number of account to be credited. Putting Banksstamp under the signatures of the two bank officers on the pay-in-slip thenauthenticates the entry.

b) Withdrawals;

Withdrawals from the account can be made only by means of cheques suppliedby the bank. Cheques should be signed according to the specimen signature. Thedrawer under his full signature must authenticate any alter in the instrument.

5.4) STATEMENT OF ACCOUNT;

Account statement is provided to the customer by the bank. In these statementsthe bank assures that all debit entries are correct. In case of error, the bank passesan adjusting entry to rectify the error.

5.5) CLOSURE OF ACCOUNT;

While closing the account, the account hold returns the used cheques andpassbook to the bank. The customer also withdraws the credit balance of theaccount (if any).

5.6) ISSUANCE OF CHEQUEBOOK;



40/70


Before issuing a new chequebook the bank required to give a requisition slip tothe customer, the customer put his signature on the requisition slip. After verifyingthe signature, the cost of the chequebook is charged. The account number of thecustomer is written on the chequebook as well as in a chequebook register.

|

This is the requisition slip, which is filled by the customer when he/she required a

chequebook.



41/70


CHAPTER NO 6;

6.1) REMITTANCE S DEPARTMENT;

The word Remittance means to send money by mail or any other method. Itmay also be defined as payments send by mail to a center for processingNational Bank of Pakistan also provides the facility of funds from one bank to another bank, from one place to another place. The transfer of funds is mainly theresponsibility of the remittances department. Remittances are divided mainly intotwo categories.

6.2) OUTWARD REMITTANCES;

When the bank sends a telegram etc. to an other bank (concerned branch) forpayment to the customer, it is called outward remittance. The sender is required to

apply through a firm in which he will give all the necessary details about the senderand the beneficiary. The signature of the customers is verified. The detailsregarding documents attached and exchange control regulations are scrutinized.Telexes option and transactions number is recorded on the source document. Thissource document is then forwarded for verification. No instrument is given to thecustomers. Customers can receive the TT receipt at the end of the day anddocument is credited to the beneficiary account.



42/70


6.3) INWARD REMITTANCES;

When TT through telexes etc is drawn on NBP Branch, it is called inwardremittance. Message is received from the Telex Department. The concerned office

duly checks authentication and purpose of remittance it is received from abroad.In NBP remittance takes place in the following ways.

1) Telegraphic Transfer (TT).2) Mail Transfer (M.T).3) Demand Draft (D.D)/ Payment Order.4) Cheques Collection.5) Clearing of Cheques.

6.4) TELEGRAPHIC TRANSFER;

It is the fastest mode of transfer of money. Sometime when the remitter urgentlydesires the remittance, he may request to issue to telegraphic transfer.

TT may be issued to general public on their written request and against the valuereceived. The customers fill the forms and deposits cash. The official of theNational Bank of Pakistan send instruction regarding payment to the draweebranch telephonically in the coded language and under confidential number

known as TEST NUMBERS. Or telephone call is making to the said branch themake payment to customers. Vouchers are sending by ordinary mail to keep therecord. Telephone charges are also taken from the customers. No excise duty istaken on TT.

6.5) MAIL TRANSFER;

It is the mode of transfer of transferring money from one branch to anotherbranch, either within the same city or in cities through out country. M.T advicesdispatched by mail. MTs may be issued for transferring funds in one account toanother account branch or to any person not requiring urgent remittance or draft.

Customers fill some application and deposit the cash in the same way. NationalBank of Pakistan official record the transaction voucher and advices are made andsent to responding branch. National Bank of Pakistan takes Rs. 50 as mail chargesfrom application. No excise duty is charged on MT. This slip is used for mailtransfer, and it is also called (F-117) it is light green in colour



43/70


6.6) DEMAND DRAFT (DD);

A bank draft is an order drawn by one branch of the bank to another of thesame bank to pay a certain sum of money on demand or to the person named thereon .

DD is another mode of transfer. It is just like a cheque. The application form isfilled in the beneficiary name, account number and senders name is written. Thecustomer deposits the amount of DD in the branch concerned. Then DD is madeand given to the customers. National Bank of Pakistan official not the transactionin issuance registers on the page of that branch of National Bank of Pakistan inwhich the DD will draw. They also send advice to the branch to which the DD issent. An OPEN DD is one in which direct payment is made. A CROSS DD is one inwhich payment is through account.



44/70


PAYMENT ORDER;

Pay Order is made for the local transfer of money. National Bank of Pakistantakes fix connection of Rs. 60 on pay order. Pay order also comes from clearingfrom SBP. NBP official checks with register and debts the entry in register.

CHAPTER NO 7

ADVANCES DEPARTMENT;

Bank is the profit seeking institution. It attacks surplus balance from thecustomers at low rate of profit and makes advances/finances to individual andbusiness firms at higher rate of mark-up.

Advances and financing in banking business refers to provision (supply) of moneyon credit and it is the most important function of a bank. The bank tries to

channelize the funds into profitable ventures to make profit. Advancing loans isthe most risky process as well and bank exercise custom care while advancingloans to its customer.

7.1) RUNNING FINANCE;



45/70


Running finance is usually provided on working capital. The running financefacility given by NBP to its customers is only for short period. Interest/markup ischarged yearly. At the and of the year, the customer is required to renew the limit.These are secured loans and are provided against personal security and against

hypothecation or collateral mortgage. These securities reduces the risk of loss,therefore it is a safe investment.

7.2) DEMAND FINANCE;

It is the facility in which it is obligatory on customer to withdraw the entireamount. In demand finance, full amount of loan is advanced to the customer onthe day the loan is sanctioned. When this type of advance is given to the borrower,the bank gives grace period after charging installments and markup. However, thecustomer pays installments monthly.

7.3) PERSONAL LOAN;

Customers whose salary account is maintained by bank are eligible for thistype of loan. It is up to three basic salaries of employees of governmentorganization. The objective of this type of loan is not improve the life syle ofcustomer.

7.4) STAFF LOAN;

Thus type of loans includes house loans, car loan, etc. They are long-term loans.Amount is deducted from the salary of employee every month.

7.5) ELIGIBLITY FOR FINANCE FACILITY;

At NBP advance is given after hundred percent backup guarantees. The type ofsecurities, which are accepted by the bank, are;

1) Government Bonds and saving certificate.

2) Cash deposit at the same time.

3) Pledge of stock.

7.6) ADVANCE SALARY ACCOUNT;



46/70


Advance salary account was introduced by NBP, one important mode offinancing was the project financing in which there a great was dealt of riskinvolved for the non-performing of loans. (The risk of un-collection was notdiversified). While at the same time the salaried class was ignored too. As a result

the advance salary introduced by NBP in mid 2002 with a wide range purpose andall branches were granted with adequate discretionary powers.

Advance salary is a modified form of running finance. It initially offered threemonths advance salary to salaried class any customers of the govt. non govt. or aregistered firm with 13% markup rate. Advance salary account is receiving ahandsome response from existing and potential customers because of its simpleprocedure and feasible nature.

Keeping in view the demand of advance salary the number of month has now beenincreased to 15 months.

A potential customer of advance salary account has to bring and attach infollowing documents with specified application from.

1) Three updated crossed cheques.

2) Last salary slip.

3) Photocopy of service card.

4) Two copies of CNIC.

5) Undertaking from the salary distribution authority.

These are the documents which are necessary for the advance salary, and everybank must required these document from every customer who take this type ofloan.

7.7) STUDENT LOAN SCHEME;

NBP also provides an interest free loan scheme for the student in order toenhance the capability of the student. This is just like social welfare for the generalpublic of Pakistani student.

7.8) GOLD LOAN/GOLD FINANCE



47/70


NBP also provided against gold to meet the domestic needs of general public. Goldloan is provided against two personal guarantees. The loan sanction limit is up toRs. 700per gram. The bank keeps 25% margin as safety with itself. The loan is tobe paid in lump sum within one year time period.

I deal a lot of cases during my internship in NBP G.T. Road Peshawar.

CHAPTER NO 8;

CASH DEPARTMENT;

It is that department of the bank where the cash are managed .bank being thecentripetal force for the wheel of the economy, which plays an important role inthe economic development of the country. Banking transactions are an account(transfer) as well as cash transactions. The foremost concern of the bank manageris to make sure that the bank has enough ready cash to pay its depositors, whenthere are deposit outflows, that is when depositors make withdrawals and demand

for cash payment which meet their liquidity requirements and cash need.

NBP cash department is a clearly demarcated exclusive function reporting to theoperations. Due to the currency chest and Government accounts, the cashdepartment plays a pivotal role in overall organizational effectiveness. in cashdispensing, function the department provides services to other banks regardingtheir cash replenishment and disposal of surplus cash, where SBP, BSC Branch is



48/70


not functioning. This department such as deals with millions of currency/banknotes daily on an average.

8.1) CASHIER:

A bankcashieris a person who handles money and customer transactions for abank. The bank cashier can also be referred to as a teller. The job description for acashier typically includes collecting money, disbursing money, and handlingcustomer concerns and issues. Depending on the bank where the cashier isemployed, the cashier's actual duties may vary.

In a bank the cash officer, is called Cashier/Teller the one who handle thecash. He receives and dispenses cash from and to his customers on account of banktransaction. The business of the banking is financial intermediation, dealing ofmoney, accepting deposits withdraw-able by cheque order or otherwise, making

loans and providing and settlement mechanism through various mode ofremittances. In this purpose the movement of cash occupies a pivotal role

8.2) ROLE OF THE CASHIER:

The primary role of a bank cashier, in most cases, involves handling money. Theteller is responsible for helping banking customers, who utilize the bank as ameans of controlling their money.

These customers may have savings accounts, checking accounts, or businessaccounts depending on their needs. Many banks have both the in-person cashierstands and drive-through windows to meet the needs of their banking customers.

While dealing with money may seem like an easy task, cashier careers are a bitmore complex than just counting currency. The cashier will often be trained toaccount for deposits, establish new accounts, and work with other, various formsof currency. These may include cashiers checks, money orders, and travelerschecks.

The bank cashier will also be responsible for the drawer from which theirmonetary transactions are made. Some banks require cashiers to count the drawerbefore the start of a work shift and again at the end. The total amount of money inthe drawer should be the same at both times, though the currency may changefrom cash to checks or money orders for a portion of the total amount.

In addition to handling money, the cashier job description could include dutiesother than personal customer service. For instance, the automatic teller machine

http://www.wisegeek.com/what-is-a-cashier.htmhttp://www.wisegeek.com/what-is-a-cashier.htmhttp://www.wisegeek.com/what-is-a-cashier.htmhttp://www.wisegeek.com/what-is-a-checking-account.htmhttp://www.wisegeek.com/what-are-the-different-types-of-cashier-careers.htmhttp://www.wisegeek.com/what-is-a-money-order.htmhttp://www.wisegeek.com/what-is-a-cashier.htmhttp://www.wisegeek.com/what-is-a-checking-account.htmhttp://www.wisegeek.com/what-are-the-different-types-of-cashier-careers.htmhttp://www.wisegeek.com/what-is-a-money-order.htm


49/70


(ATM) is generally maintained by the bank cashier. This frequent maintenancemay include collecting deposits made to the machine and refilling the machinewith money.

Cashier skills relevant to todays financial market often include understanding andlearning about individual retirement accounts (IRAs), certificates of deposit, anddebit cards. The needs of the bank may also require learning about money marketaccounts and loan applications, if the cashier job description includes workingwith these types of accounts.

Working with money may be the primary role of the teller, but the customer willoften be handling that money as well. The bank cashier is generally the first personthe banking customer will work with to meet their financial needs. For this reason,the customer service aspect of thebank tellerjob can be considered one of themost important for having a successful career as a cashier.

The cashier in a bank is a major contact point with most of its customers. In cashsociety the people replenish their cash needs frequently from their bank accounts.They include house holds, ladies, senior citizens, corporate managers, high officialsand score of other categories of society.

The importance of cash services on bank image can be realized from the fact thatevery cash- transacting customer interacts with the cashier. This interactionconveys an everlasting message of decency or rogue ness, cooperation or

conflict, politeness or arrogance, prudence and consequently an observingtarnishing bank image.

http://www.wisegeek.com/what-is-a-bank-teller.htmhttp://www.wisegeek.com/what-is-a-bank-teller.htmhttp://www.wisegeek.com/what-is-a-bank-teller.htmhttp://www.wisegeek.com/what-is-a-bank-teller.htm


50/70


CHAPTER NO 9;DIFFERENT SERVICES PROVIDED BY THE NBP,G.T Road PESHAWAR;

9.1) DEMAND DRAFT;

If you are looking for a safe, speedy and reliable way of transfer money, youcan now purchase NBPs Demand draft at very reasonable rates. Any personwhether an account holder of the bank or not can purchase a draft from a bankbranch.

9.2) TRAVELERS CHEQUE;Negotiability: Pak Rupees Travelers cheques are negotiable instrument,Validity: There is no restriction on the period of validity.

Availability: At 700 branches of NBP all over the country.

Encashment: At all 400 branches of NBP.Limitation: No limitation on purchase.Safety: NBP Travelers cheques is the safest way to carry out the

Money

9.3) PAY ORDER;NBP provides another source of transferring the money using banks facilities

it pay orders are a secure and easy way to improve your money from one place toanother place. And, as usual, banks charged for this services are extremelycompetitive,

a) Issuance of pay order1. For NBP account holder Rs. 502. For NBP Non account holder Rs 1003. Rs. 25from students for payment of fee favoring educational institutional.

b) Issuance of duplicate pay order;1. For NBP account holder Rs 1002. For NBP Non account holder Rs 150

9.4) SHORT TERM INVESTMENTS:NBP now offers excellent rate of profit on all its short term investment

accounts. Whether you are looking to invest for 3 months or 1 year, NBP, rates ofprofit are extremely attractive, along with the security service only NBP can



51/70


9.6) TRADE FINANCE;a) AGRICULTURE FINANCE;

NBP provides Agriculture finance to solidify faith, commitment and pride of

farmers provides some of the best Agriculture products in the world.

b) AGRICULTURE FINANCE SERVICES;I Feed the World program, a new product, is introduced by NBP with the

aim to help farmers maximize the per acre production with minimum of requiredinput. Select farmers will be role models for other farmers and farmers to follow,thus helping farmers across Pakistan to increased production

c) AGRICULTURE CREDIT;

The agricultural financing strategy of NBP is aimed at three main objectives:

1) Providing reliable infrastructure for agriculture customers.2) Help farmers utilize funds efficiency to further develop and achieve betterProduction

3) Provide farmers as integrated package of credit with supplies of essentialinputs, technical knowledge, and supervision of farming.

AGRICULTURE CREDIT (Medium Town);

Production and development.

Water course improvement.

Wells.

Farm power.

Development loans for tea plantation. Fencing.

Solar energy.

Equipment for sprinklers.

Farm Credit;NBP also provides the following subsidized with the range of 3 months to 1 year

on a renewal basis.

9.7) NBP KISTAN DOST;

Loans available for the farmers production, development purposes, for

purchases of tractors, for installation of tube wells, for purchase of agriculturalImplements, micro loans, for goods own construction, for construction of fish

pond, for live stock farming, for milk processing for cold storage, bio-gas plantsetc.



52/70


Mark-up11% per annum.

Loans available at the farmers door step.

Agriculture experts to guide farmers.

Loans available against agricultural passbooks, gold ornaments and papersecurity.

9.8) NBP CASH n GOLD

Facility of Rs. 1000 against each 10 grams of net gold weight of goldOrnaments.

Mark-up 15.5% per annum.

No maximum limit of cash.

Repayment after one year.

Roll over facility.

No penalty for early repayment

9.9) NBP ADVANCE SALARY

Take upto 20 times your take home salary.

Easy installments of 1 to 60 months, at your choice.

No minimum income requirement.

Quick processing and fastest disbursements

No processing charges; no collaterals, no guarantees, no insurance.

Mark-up charges at SBP Discount Rate+5%.

9.10) NBP SAIBAAN;

Home Financing.



53/70


Home purchase.

Home constriction

Balance Transfer Facility (BTF)

Home renovation.

Purchase of Land + Construction

Period of repayment ranges between 3-20 years

Loans available upto a maximum rate of Rs, 35 million

Mark-up SBP Discount Rate +2 %( Without Life Insurance)

Mark-up SBP Discount Rate +4 %( Without Life Insurance)

Minimum approval and disbursement timing.

Limits to areas where there is no documentation, fee, resale and foreclosurerelated issues, so to protect the banks interest.

9.11) NBP KAROBAR;

Minimum down payment: 10% of assets price (5%for PCO& Tele Center).

Tenure: 1 to 5 years (for PCO 2 years).

Grace period: 3 months. Maximum loan amount: Rs,200,000/-

Age 18-45 years.

Mark-up; 1 year KIBOR + 2.00/-per annum.

Life & disability insurance paid by GOP



54/70


CHAPTER NO 10;

FINANCIAL ANALYSIS;

10.1) LIQUIDITY RATIO;

Liquidity ratios are used to judge a firms ability to meet short term obligations. It

shows the cash solvency of a firm and its ability to remain solvent in the event of

adversities.

a) CURRENT RATIO;

This ratio shows the firms ability to cover its short-term liabilities through

short-term assets.

Three year comparison of NBP is given below;

CURRENT RATIO

Years Current Assets/CurrentLiabilities

Current Ratio

2006 365588/332090 1.10

2007 382889/348165 1.102008 279983543/417558742 0.67

INTERPERTATION:The current ratio for the financial year 2007 is just in line with the financial year

2006. It remained for the same for both the years. It tells that for every rupee 1

current liability it has 1.10rupees, which covers through current assets. However in

2008, it decreased to 0.67, as its mostly receivable are not collected.b) ACID

QUICKRATIO;

A more conservative measure of liquidity is the acid quick ratio. This ratio is

same as current ratio except it excludes inventories and prepayments presumably

the least liquid portion of current assets. The ratio concentrates primarily on the



55/70


more liquid current assets, cash, marketable security, receivable and advances.

ACID QUICK RATIO

Years Current Assets-prepayments/Current Liabilities

ACID QUICK RATIO

2006 365588-18091/332090 1.05

2007382889-12746/348165

1.06

2008 279983543-10254/41755742 0.67

INTERPRETATION;The acid quick ratio for the financial year 2007 has slightly improved from

1.05to 1.06 in the year 2007. The ratio in 2006 is lesser because of the excessive

prepayments. The reason for the improvement of the ratio in the next year is the

less prepayment.

c) CASH RATIO;

Sometimes it needs to view the liquidity of the firm from an extremely

conservative point of view, for example the company may have pledged its

receivables and inventories. In such type of situations, the best indicator of the

firm

of short-term liquidity may be the best cash ratio.


CASH RATIO

Years Cash/Current Liability CASH RATIO2006 84593/332090 0.25

2007 63525/348165 0.18

2008 59420502/4175587420.14


56/70


INTERPRETATION;

The three year comparison shows the smaller cash ratio in 2007. It is clear that

probably NBP carried less cash in 2002 as compared to 2001.

d) OPERATING CASH FLOWS TO CURRENT LIABILITIES RATIO:

Operating cash flow to current liability ratio compares cash flow to current

liabilities of a firm and indicates the funds flow per unit of current liability.

CURRENT RATIO

Years Operating cash flow/Current

Liabilities

CURRENT RATIO

2006 6799/332090 0.2

2007 42661 / 348165 0.12

2008 14633962 / 417558742 0.035

INTERPRETATION;NBP has improved its operating cash flows, to current liability ratio. The

increase is attributed to the operating cash flows, which has increased more then 6

times.

10.2) ACTIVITY RATIOS;

Activities Ratios are also know as efficiency or turnover ratio it measures how

effectively the firm is using its assets.

a) RECEIVABLES TURNOVER / ADVANCES TURNOVER;

Receivables turnover or Advances turnover provides insight into the quality of

the firm receivables or advances and how successful the firm is in its collection.

RECEIVABLE TURNOVER RATIO



57/70


Years zMark-up Earned / Interest orAdvances

Receivable Turnover

2006 31290584 / 140547374 0.22

2007 27126839 / 140547374 0.19

2008 19452317/ 160990265 0.12

INTERPRETATION;

The bank has better advances turnover ratio in the year 2007 compared to the

year 2006, and better in 2008 as well.

b) DEPOSITS TURNOVER RATIO;that the bank pays on deposits to the d

INTERPRETATION;

The deposit turnover ratio for the year 2007 has declined. It is0.04 and 0.05 for

the year 2007 and 2006 respectively. It shows that for each rupee deposit buy the

customer it pays 0.06 as interest expense. In 2008 which show the lower interest.



58/70


c) TOTAL ASSETS TURNOVER RATIO;

Generally the total assets turnover measures the activity of the assets and the

ability of the firm to generate sale through the use of assets.

INTERPRETATION;

The Assets efficiency of the NBP has reduced for the current year 2007 to 1.13%

compared to 2006 which has 1.78 %. In other words we can say that each dollar

investment in total assets produces 6 % as markup. The decline in ratio is mainly

because of decrease in total markup /interest earned amount in 2007 lower the

efficiency in 2008.

d) FIXED ASSETS TURNOVER;

Sometimes it is needed to find the efficiency of fixed assets to generate interest

revenue or sales. Fixed assets turnover is a tool to find how efficiency one the

firms fixed assets to produced Markup / Interest revenue.


TOTAL ASSETS TURNOVER RATIO

YearMarkup Earned / Interest on

Total AssetsTotal Assets Turnover

2006 31290584 /17510437 1.78

2007 27126839 / 23936263 1.13

2008 19452317 / 27584014 0.705


59/70


INTERPRETATION;The three year comparison of the fixed assets turnover for NBP shows that the

ratio has increased for the year 2007. the decrease in total amount of Markup /

Interest Earned and increase in fixed assets has brought this ratio down. However

it decreases in 2008; increase in fixed assets and markup cause this.

These ratios indicate the firms overall effectiveness of the operations.

a) NET PROFIT MARGINS;

This is the conservative method of sales profitability. This ratio gives a

measure of Net Income in dollars generated by each dollar of sales.

NET PROFIT MARGIN RATIO

Years Net Income / Markup or InterestEarned

Net Profit Margin

2006 752226 / 17510437 0.04

2007 3404593 / 23936263 0.14

2008 5897163 / 27584014 0.213

INTREPRETATION;

The bank has considerably the Net profit Margin. It is now earning 10 %dollar

markup while previous year 2006 comparisons show 4 % dollar markup or return.

And a 7 % increase in 2008.

b) GROSS PROFIT MARGIN;



60/70


This ratio shows the profit of the firm relative to the sales. It is a measure of

efficiency of the firms operations as well as an indication of how product or

services of the firm are provided.

INTERPRETATION:

NBP has a better Gross Profit Margin for the year 2006 compared to the year

2007. it shows that NBP has become more effective in producing the services

reasonably above cost and charging for them while in 2008 it again decreases

thats shows its good sign.

c) RETURN ON INVESTMENT;

The return on the investment measures the firms ability to utilize its assets to

create profits by comparing profits with the assets that generate the profit from Du

pont approach.

GROSS PROFIT MARGIN RATIO

Years Net Profit Margin Total Assets TurnoverReturn OnInvestment

2006 0.64 1.78 1.139


Years Net Markup /

Documents

National Bank Report