A project OF Management ofNATIONAL BANK OF PAKISTAN

Submitted by:

Kashif Mehmood (09-ARID-910)

University Institute of Information Technology( U A A R )

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Internship/Employment Report

(2013)

Internship ReportBachelor of Business Administration Program

Name:Kashif MehmoodReg. No.: 09-Arid-910

Specialization: HRTelephone: 0334-5403469

E-Mail: kashipppp@yahoo.comUniversity Institute of Management SciencesUniversity of Arid Agriculture Rawalpindi

Company Name: National Bank of Pakistan Industrial area Branch Islamabad (1531)Main Telephone Number(s):051-9258672-73

Fax Number: 9258671Postal Address: National Bank of Pakistan Industrial area branch Islamabad

Supervisor Name: Khalid Mahmood Abbasi(Manager Operation)Supervisor Telephone Number:0308-5163787

Start Date for Internship: 10 july 2012End Date for Internship: 17 august 2012

Report Date: 21 feb 2013

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Evaluation

KASHIF MEHMOOD

completed internship at

<National Bank of Pakistan industrial area Branch Islamabad>

Internship report submitted for the Final Evaluation in Partial Fulfillment of the requirements for the Degree of

<Bachelors in Business Administration>

It is certified that, the Internship report and the work contained in it conforms to all the standards set by the Institute for the evaluation of any such work.

University Institute of Management Sciences

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1.

2.

3.

< Signature >

< Ali Haider >

< Signature >

< Hafiz Hafeez >

< Signature >

< Irfan-ullah Munir >

D E C L A R A T I O N

I, student of University of Arid Agriculture Rawalpindi solemnly declare that the work

presented in this report is my original work and no portion of it has been submitted for any other

degree of qualification to this or any other university of learning.

A C K N O W L E D G E M E N T

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All praise is to ALLAH ALMIGHTY, for giving us knowledge, insight, devotion and strength

to accomplish this task. we immensely thankful to all the teachers and friends who helped me to

complete the project. I am grateful to the staff of NBP as well, who supported me lot during this

project and provided comprehensive knowledge of their products and services and banking

practices. Specially Syed Hammad Raza Naqvi, Branch Incharge CAD, NBP Civil Lines Branch

Jhelum & Syed Muhammad Fakhir Hassan Naqvi, Compliance Officer, NBP Civil Lines Branch

Jhleum. Their guidelines have lead us to display a picture of NBP’s Management in this report.

In the end I would like to thank all of my friends and family members for their support and

encouragement.

PREFACE

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Banking sector pivotal importance in the economy of any country through its

vibrant functions. Moreover, the practice and familiarity learned during this

tenure would also attest very helpful and alleviating in the awaiting proficient

life.

This report is an upshot of my six weeks internship in NBP. NBP possess

an imperative and historical importance in the banking sector of Pakistan. It

always remains the center of hustles in business activities. It always endows

with great covenant of really round in terms of funds and services at all epochs

of its dynamism.

Although, a derisory period of six weeks is not enough to learn the

complex operations of NBP yet I made industrious efforts to converse them

comprehensively in this report. Particularly, I have remunerated more accents on

study of distinguishing features and services of NBP. I have made maximum

venture to elaborate this report with the material read, listed and observed.

Dear readers, I hope you will appreciate my report and sense that reading my

report is not like to waste the time in any respect because of the four principal

reasons as under:

I have made 100% realistic attempt to provide you the exact information

about NBP.

All the terms have been explained carefully in a simple and

comprehensive way.

This report is wholly up to date, equipping the information about currently

prevailing functioning and services of the banking system of NBP.

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EXECUTIVE SUMMARY

The banking system in Pakistan has witnesses some evolutionary changes

during the recent years and has made long-strides towards its goal of becoming a

financially viable as well as firm arm of the economy which in turn would

promote not only growth but also prosperity not only of the banking sector but

of the economy as a whole. As vibrant and dynamic banking sector is vital for

the strong and prosperous economy. Therefore, on realizing the inherent

weakness of the financial structure that emerged after nationalization,

government of Pakistan initiated a broad based program of reforms in the

financial sector. In this way Government’s commitment to banking reforms has

made Pakistan’s financial sector stronger in the last four to five. The banking

sector has shown remarkable performance in a number of areas which has helped

in further strengthening of the whole process.

Banking industry is presently facing a hyper turbulent situation where

banks have to operate in increasingly competitive and complex local and global

markets. The ability to compete in the fast paced global environment is of

paramount importance – survival of the fittest being the name of the game. The

competition has even become ever tough and challenging with the entry of many

foreign world-class banks and other financial institutions.

In this report i have explained the evolution of banking sector, the

industry background which leads to different reforms. Then i have explained the

background of NBP its different products and services. After doing all this We

have explained the products and services. Based on the data taken, i have done

financial analysis, competitive analysis, ratio analysis, HR analysis. In the last I

have explained the different problems at NBP AOC industrial area Branch and

than suggestion.

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CHAPTER # 1

HISTORY OF NBP

1. INTRODUCTION

The NBP was established vide NBP Ordinance No. XIX of November

9 t h , 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.

The Bank in 1950 had one subsidiary ‘The Bank of Bahawalpur’ on

December4, 1947 by the former Bahawalpur State.

NBP was undertaking Treasury Operations and Managing Currency

Chests or Sub Chests at 57 of its offices where the turnover of the

business under the head amounted to Rs.2460 million.

i) Deposits held by NBP constituted about 3.1% of total deposits

of all Pakistani Banks in 1949, which rose to 38% in 1952.

ii) Growth in Deposits was accompanied by increase in Bank

portfolio in advances. NBP lent out to Textile, Yarn, Iron and

Steel and played a pioneer role in support of agriculture and

commerce.

iii) NBP advances reached Rs.554.4 million by December 1959,

which was one third of the total schedule bank credit.

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1.1 MISSION STATEMENT

“To make the Bank complete and competitive with all international

Standard in performing, quality of, operations, staff, financial strength

and products and services To develop a culture of excellence in every

spare of activity of the bank ”

1.2 GOALS AND OBJICTIVES

“An organizational objective is the intended goal that prescribes definite

scope and suggests direction to the panning efforts of an organization”

1.3 GOALS AND OBJICTIVES NBP

“To be the pre-eminent financial institution in Pakistan and achieve

market recognition both in the quality and delivery of service as well as

the range of product offerings.”

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1.4 BOARD OF DIRECTORS

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

designation.

Table 1

NAME DISIGNATION

Ali Raza Chairman & President

Dr Waqar Masood Director

Ifthikhar Ali Malik Director

Sikandar Hayat Jamali Director

Azam Faruque Director

Ibrar A. Mumtaz Director

Mian Kausar Hameed Director

1.5 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 . The management has two types.

i) Centralized.

ii) Decentralized.

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Centralized Management tends to concentrate decision making at

the top of the organization.

Decentralized disperses decision-making and authority throughout

and further down the organizational hierarchy.

NBP have a centralized type of management because the top management

takes all the decisions.

1.6 SENIOR MANAGEMENT OF NBP

Senior Management of NBP consists of following member and their

respective designation.

Table 2

Masood Karim SheikhSEVP & Group Chief , Corporate & Investment

Banking Group and Chief Financial Off icer

Shahid Anwar Khan SEVP & Group chief , credi t management group.

Dr. Asif A. Brohi SEVP & Group Chief , Operat ion Group.

Imam Bakhsh Baloch SEVP & Group Chief , audi t and inspect ion group.

Ziaul lah Khan SEVP & Group Chief , Complaince Group.

Aamir SidiqueEVP & Group Chief , commercial and reta i l

banking Group.

Muhammad Nusrat VohraSEVP & Group Chief , Treasury Management

Group.

Eklaq Ahmad EVP & secretary board of director .

Tajammal hussain

Bokhari

EVP & Group Chief , Special asset Management

Group.

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Mrs. Khurshid Maqsood

Ali

EVP & Divis ional Head, employees benefi ts ,

Disbursement & Trustees Divis ion

Amim Akhtar EVP & PSO to the President

Dr. Mirza Abrar BaigSEVP & Group chief , human resource management

& adminis t ra t ion group.

Tahir YaqoobEVP & Group Chief ,  Overseas coordinat ion &

management Group.

Anwar Ahmad Meenai EVP & Divis ional Head, Is lamic Banking Divis ion

Aamir Sat tarFinancial control ler & Divis ional Head, Financial

control Divis ion

Asif Hussain Khan Group Chief (A), IT Group

(Source www.nbp.com.pk )

1.7 Net Work of Branches:

NBP have wide range of branches inside the country and outside the

country.

In Pakistan it has 28 regional offices, 1285Branches and 4 Subsidiaries.

In overseas it has 24 overseas branches, 6 other offices.

1.8 Functions of NBP

Since NBP is a commercial bank, it performs a variety of functions.Like

other commercial banks, NBP is engaged in financing international trade.

Its other major functions include receiving deposits, advancing loans and

discounting of exchange. The functions performed by NBP are:

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1.9.1 Accepting Deposits

This function is important because banks largely depend on the

funds deposited with them by its customers. Deposits are of many

types:

1.9.2Current deposits

Current deposits are also called demand liability on current deposits. NBP pays

practically no interest on current deposits. Businessmen usually open current

accounts. In NBP current account can be opened with a minimum amount of

Rs.500/-

i) PLS saving deposit

Profit and loss sharing deposits (PLS) are also called

checking accounts. One can deposit and draw money easily.

Profit on PLS is calculated every month but paid after six

months. PLS account can be opened with a minimum amount

of Rs.500/-

ii) PLS term deposits

Fixed term deposits are deposits with the bank for certain

fixed period before the expiry of which they cannot be

withdrawn unless giving due notice. In this case the rates of

profit will be different depending upon the time period

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Chapter# 2

PRODUCTS AND SERVICES

2.1 Major product lines market segmentation

Services are outputs of the firm, which are in intangible form. Which are

the backbones of any organization to earn profit? NBP offers the

following services to the people.

2.2 DEMAND DRAFTS

If you are looking for a safe, speedy and reliable way to transfer money,

you can now purchase NBP’s Demand Drafts at very reasonable rates. Any

person whether an account holder of the bank or not, can purchase a

Demand Draft from a bank branch.

2.3 SWIFT SYSTEM

The SWIFT system (Society for Worldwide Interbank Financial

Telecommunication) has been introduced for speedy services in the areas

of home remittances.   The system has built-in features of computerized

test keys, which eliminates the manual application of tests that often

cause delay in the payment of home remittances.   The SWIFT Center is

operational at National Bank of Pakistan with a universal access number

NBP-APKKA .   All NBP overseas branches and overseas correspondents

(over 450) are drawing remittances through SWIFT.

Using the NBP network of branches, you can safely and speedily transfer

money for our business and personal needs.

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2.4 LETTERS OF CREDIT

NBP is committed to offering its business customers the widest range of

options in the area of money transfer.   If you are a commercial enterprise

then our Letter of Credit service is just what

You are looking for. With competitive rates, security, and ease of

transaction, NBP Letters of Credit are the best way to do your business

transactions.

2.5 TRAVELER'S CHEQUES

Traveler’s cheques are negotiable instruments, and there is no restriction

on the period of validity of the cheques. Rupee traveler’s cheque is

available at all 700 branches of NBP. This can be cashed in all 400

branches of NBP. There is no limit on purchase of this cheque. It is one of

the safest ways for carrying money.

2.6 PAY ORDER

NBP provides another reason to transfer your money using our facilities.  

NBP pay orders are a secure and easy way to move your money from one

place to another.   And, as usual, NBP charges for this service are

extremely competitive. The charges of NBP are very low all over the

Pakistan. It charges Rs 50/- for NBP account holders on issuing one

payment order. And charges Rs 100/- for NBP non-account holders on

issuing one payment order. It charges Rs 25/- for students on payment of

fees of educational institutions. If someone want a duplicate of payment

order they charges Rs 100/- for NBP account holders and Rs 150/- for

non-account holders.

2.7 MAILTRANSFERS

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Move your money safely and quickly using NBP Mail Transfer service.  

And NBP also offers the most competitive rates in the market. They

charges Rs 50/- exchange rate and RS 75/- postage charges on issuing mail

transfer.

2.8 FOREIGN REMITTANCES:

To facilitate its customers in the area of Home Remittances, National

Bank of Pakistan has taken a number of measures to Increase home

remittances through the banking system Meet the SBP

directives/instructions for timely and prompt delivery of remittances to

the beneficiaries.

2.9 SHORT TERM INVESTMENTS

NBP now offers excellent rates of profit on all its short-term investment

accounts.   Whether you are looking to invest for 3 months or 1 year,

NBP’s rates of profit are extremely attractive, along with the security and

service only NBP can provide.

2.10 National Income Daily Account (NIDA)

The scheme was launched in December 1995 to attract corporate

customers.   It is a current account scheme and is part of the profit and loss

system of accounts in operation throughout the country.  

2.11 QUITY INVESTMENTS

NBP has accelerated its activities in the stock market to improve its

economic base and restore investor confidence.   The bank is now regarded

as the most active and dominant player in the development of the stock

market.

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2.12 COMMERCIAL FINANCE

NBP dedicated team of professionals truly understands the needs of

professionals, agriculturists, large and small business and other segments

of the economy.   They are the customer’s best resource in making NBP’s

products and services work for them.

2.13 TRADE FINANCE OTHER BUSINESS LOANS

There are two types of trade finance.

2.13.1 Agricultural Credit:

The agricultural financing strategy of NBP is aimed at

three main objectives:-

Providing reliable infrastructure for agricultural customers

Help farmers utilize funds efficiently to further develop

and achieve better production

Provide farmers an integrated package of credit with

supplies of essential inputs, technical knowledge, and

supervision of farming.

2.13.2 CORPORATE FINANCE

NBP specializes in providing Project Finance – Export

Refinance to exporters – Pre-shipment and Post-shipment

financing to exporters – Running finance – Cash Finance –

Small Finance – Discounting & Bills Purchased – Export Bills

Purchased / Pre-shipment / Post Shipment Agricultural

Production Loans

NBP provides financing for its clients’ capital expenditure

and other long-term investment needs.   By sharing the risk

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associated with such long-term investments, NBP expedites

clients’ attempt to upgrade and expand their operation thereby

making possible the fulfillment of our clients’ vision.   This

type of long term financing proves the bank’s belief in its

client 's capabilities, and its commitment to the country.

2.14 NATIONAL BANK OF PAKISTAN OFFERS:

The lowest rates on exports and other international banking

products

Access to different local commercial banks in international

banking

2.14.1 Cash and Gold Finance.

Cash and Gold finance means that loan is given against the

gold. The gold is mortgaged with the bank and loan is taken.

It is the area of consumer finance. And borrower can take

loan for common use.

2.14.2 Advance salary loan

This loan is given to those people who are Govt servants.

They can get a loan up to the salary of fifteen months.

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CHAPTER# 3

BUSINESS OPERATIONS AND DEPARTMENTS OF NBP

Dividing an organization into different parts according to the functions is

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

departments.

3.1 DEPARTMENTS OF NBP

3.1.1 CASH DEPARTMENT

Cash department performs the following functions

3.1.2 Receipt

The money, which either comes or goes out from the bank, its record

should be kept. Cash department performs this function. The deposits

of all customers of the bank are controlled by means of ledger

accounts. Every customer has its own ledger account and has separate

ledger cards.

3.1.3 Payments

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

customer’s account usually by honoring his cheques.

3.1.4 Cheques and their Payment

The Negotiable Instruments Act, 1881

“Cheque is a bill of exchange drawn on a specified banker and not

expressed to be payable otherwise than on demand”.

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3.1.5 Types of Cheques

3.1.5(i) Bearer Cheques

Bearer cheques are cashable at the counter of the bank. These

can also be collected through clearing .

3.1.5(ii) Order Cheque

These types of cheques are also cashable on the counter but

its holder must satisfy the banker that he is the proper man to

collect the payment of the cheque and he has to show his

identification. It can also be collected through clearing.

3.1.5(iii) Crossed Cheque

These cheques are not payable in cash at the counters of a

banker. It can only be credited to the payee’s account. If

there are two persons having accounts at the same bank, one

of the account holder issues a cross-cheque in favour of the

other account holder. Then the cheque will be credited to the

account of the person to whom the cheque was issued and

debited from the account of the person who has actually

issued the cheque.

3.1.6 Payment of Cheques

It is a banker’s primary contract to repay money received for his

customer’s account usually by honouring his cheques. It is a contractual

obligation of a banker to honor his customer’s cheques if the following

essentials are fulfilled.

a) Cheques should be in a proper form:

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b) Cheque should not be crossed:

c) Cheque should be drawn on the particular bank:

d) Cheque should not mutilated:

e) Funds must be sufficient and available:

f) The Cheque should not be postdated or stale:

g) Cheque should be presented during banking hours

3.2 CLEARANCE DEPARTMENT

A clearinghouse is an association of commercial banks set up in given

locality for the purpose of interchange and settlement of credit claims.

The function of clearinghouse is performed by the central bank of a

country by tradition or by law. In Pakistan, the clearing system is

operated by the SBP. If SBP has no office at a place, then NBP, as a

representative of SBP act as a clearinghouse.

In practice the person receiving a Cheque as rarely a depositor of the

cheque at the same bank as the drawer. He deposits the cheque with his

bank other than of payer for the collection of the amount. Now the bank in

which the cheque has been deposited becomes a creditor of the drawer’s

bank. The depositor bank will pay his amount of the cheque by

transferring it from cash reserves if there are no offsetting transactions.

The banks on which the cheques are drawn become in debt to the bank in

which the cheques are deposited. At the same time, the creditors’ banks

receive large amounts of cheques drawn on other banks giving claims of

payment by them.

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The easy, safe and most efficient way is to offset the reciprocal claims

against the other and receive only the net amount owned by them. This

facility of net interbank payment is provided by the clearinghouse.

3.2.1 in-Word Clearing Books

The bank uses this book for the purpose of recording all the

cheques that are being received by the bank in the first clearing.

All details of the cheques are recorded in this book.

3.2.2 Out-Word Clearing Book:

The bank uses outward clearing register for the purpose of

recording all the details of the cheques that the bank has

delivered to other banks.

3.3 ADVANCES DEPARTMENT

Advances department is one of the most sensitive and important

departments of the bank. The major portion of the profit is earned through

this department. The job of this department is to make proposals about the

loans. The Credit Management Division of Head Office directly controls

all the advances. As we known bank is a profit seeking institution. It

attracts surplus balances from the customers at low rate of interest and

makes advances at a higher rate of interest to the individuals and business

firms. Credit extensions are the most important activity of all financial

institutions, because it is the main source of earning. However, at the

same time, it is a very risky task and the risk cannot be completely

eliminated but could be minimized largely with certain techniques.

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Any individual or company, who wants loan from NBP, first of all has

to undergo the filling of a prescribed form, which provides the

following information to the banker.

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

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

c) Name & address of the borrower

d) Security against loan.

e) Exiting financial position of the company. (Balance Sheet & Income

Statement).

f) Signing a promissory note is also a requirement of lending, through

this note borrower promise that he will be responsible to pay the

certain amount of money with interest.

3.4 REMITTANCE DEPARTMENT

Remittance means a sum of money sent in payment for something. This

department deals with either the transfer of money from one bank to other

bank or from one branch to another branch for their customers. NBP offers

the following forms of remittances.

a) Demand Draft

b) Telegraphic Transfer

c) Pay Order

d) Mail Transfer

A) Demand Draft

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Demand draft is a popular mode of transfer. The customer fills the

application form. Application form includes the beneficiary name,

account number and a sender’s name. The customer deposits the

amount of DD in the branch. After the payment the DD is prepared

and given to the customer. NBP officials note the transaction in

issuance register on the page of that branch of NBP on which DD is

drawn and will prepare the advice to send to that branch. The

account of the customer is credited when the DD advice from

originating branch comes to the responding branch and the account

is debited when DD comes for clearance. DD are of two types.

a) Open DD: Where direct payment is made.

b) Cross DD: Where payment is made though account.

B) Pay Order

Pay order is made for local transfer of money. Pay order is the most

convenient, simple and secure way of transfer of money. NBP takes

fixed commission of Rs. 25 per pay order from the account holder

and Rs. 100 from a non-account holder.

C) Telegraphic Transfer

Telegraphic transfer or cable transfer is the quickest method of

making remittances. Telegraphic transfer is an order by telegram to

a bank to pay a specified sum of money to the specified person. The

customer for requesting TT fills an application form. Vouchers are

prepared and sent by ordinary mail to keep the record. TT charges

are taken from the customer. No excise duty is charged on TT. The

TT charges are:

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Telegram/ Fax Charges on TT = Actual-minimum Rs.125.

D) Mail Transfer

When the money is not required immediately, the remittances can

also be made by mail transfer (MT). Here the selling office of the

bank sends instructions in writing by mail to the paying bank for the

payment of a specified amount of money. Debiting to the buyer’s

account at the selling office and crediting to the recipient’s account

at the paying bank make the payment under this transfer. NBP taxes

mail charges from the applicant where no excise duty is charged.

Postage charges on mail transfer are actual minimum Rs. 40/- if sent

by registered post locally Rs.40/- if sent by registered post inland

on party’s request.

3.5 HUMAN RESOURCE DEPARTMENT

Human Resource plays a vital role in the success of every service

organization. They interact between man and machine. Their attitude can

win or lose the customer. The positive attitude could only be created in a

conductive environment, which can make the staff dedicated towards the

organizational objectives

Main objectives of my study were to see following areas

1. Working Environment of NBP

 2. HR Department of NBP . Functions of HR Department .

MAJOR FUNCTIONSFollowing are the functions of HR Management and Administration department, National Bank of Pakistan.

1. Human Resource PlanningHuman Resource Planning is conducted by the HR department. They assess the existing number and nature of staff and then place / post them

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at needy branches according to the requirement of that branch. For example, if  the load on cash counter is increasing, one new cashier will be posted at the Branch.

2. Recruitment of Staff  

Another important function of HR department is recruitment of staff as per availability of vacancies. At NBP, recruitment of permanent staff is centralized and all recruitments are made by their Head Officer Karachi. However, in near past limited authority has been given to regional offices to hire the services of outsourced staff i .e staff provided by the employment companies. This type of recruitment is being made in following areas: a.Security Guardsb.Janitorial  Services c.Sale & Marketing staff  for retail  products.3. Transfer of Employee The regional office controls fifty five (55) branches. All transfer and posting of employees among these branches is made by HR departmentkeeping in view the staff requirement at different branches.

4. Job RotationFunction of Job rotation is also performed by regional office. Normally when an employee completes three years at a particular seat, he rotates to another seat. This rotation is very important for internal control, to prevent fraud and forgery and to enhance the employee’s skills for different duties.

5. Human Resource Development & TrainingH.R Department analyzes the day to day requirement of SBP regulation for different Banking activities, and plans for training and development of staff .This training may also  be based upon introduction of  new Banking produces and competition with rival Banks.

6. Performance AppraisalH.R Department also performs the function of performance appraisal  of employees on yearly basis .At the close of every year annual confidential report (ACR) of each and every employee is written by HR department. This ACR contains subjective and objective evaluation as well as personal traits of an employee.

7. Promotion of employeesNBP HR department performs the function of promotion. Normally NBP promotes its employees after every three yours on the basis of their past performance,  availability  of vacancies in each grade/cadre and quota approved by the Ministry of  Finance, for each grade/cadre.

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 8. Lay Off   Lay off function is also performed by HR department. NBP is a govt. owned organization and its employees retire at the attainment of age of 60 years. However, in 1998 and 2002 the NBP announced the Golden Hand Shakeschemes and almost 5000 and 3500 employees separated from Bank services in these respective years.9. Health & SafetyH R department arranges for medical facilities to its employees. There are several hospitals on Banks panel and employees can avail medical facilities from these hospitals. Hospitals bills are being paid by HR department after  proper verification. NBP extend medical facility to employees, their spouse (wife) and children as well as parents of the employee. Brother or sister or any other relation is not entitled for this medical facility.10. Disciplinary Cases

HR department  deals with all  disciplinary cases of employees.  These disciplinary cases include: -a. afraid & Forgery b. Unauthorized leavesc. Insubordinationd. Misconduct  of financese. Violation of procedure & policy

11. Retirement BenefitsHR department also manages pensions and group life insurance. Pension is allowed to all employees after retirement and when the employee dies and his widow can avail this facility till death. Even if the widow dies, the and daughter/son of employee can avail pension till she/he attain the age of majority i .e. 18years or she/he married, whichever is  happened earlier.

12. Personnel Information SystemHR department is responsible to keep and maintain complete data of Each and every employees this data includes his personal data as well as professional data and being used to place right person for the right job.

13. Equal Employment ChanceNBP provides equal employment chance to men & women. HR department is responsible to implement this policy, too.

14. Salary & Loan Administration

HR department  performs the function of disbursement  of Salary and

administration of Staff Loans. Salary is being disbursed in last week of

the month. NBP allows house building loan, Motor car loan and computer

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loan toits employees. Period of house building loan is 20 years, Car loan

is 10 years and computer loan is 5 years. Mark up on HBL is 3% and

car/computerloanis4%.

HR department  pays salaries to employees after deduction of monthly

installments of loans, already availed by  them.

3.6. DEPOSIT DEPARTMENT

It controls the following activities:

3.6.1 Account opening

The opening of an account is the establishment of banker customer

relationship. Before a banker opens a new account, the banker

should determine the prospective customer’s integrity,

respectability, occupation and the nature of business by the

introductory references given at the time of account opening.

Preliminary investigation is necessary because of the following

reasons.

i . Avoiding frauds

ii. Safe guard against unintended over draft.

iii . Negligence.

iv. Inquiries about clients.

There are certain formalities, which are to be observed for opening

an account with a bank.

Formal Application

Introduction

Specimen Signature

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Minimum Initial Deposit

Operating the Account

3.6.2 Types of Accounts

Following are the main types of accounts

1) Individual Account

2) Joint Account

3) Basic Banking Accounts

4) Profit support Accounts

5) Pensioner Accounts

6) Accounts of Special Types

Partnership account

Joint stock company account

Accounts of clubs, societies and associations

Agents account

Trust account

Executors and administrators accounts

Pak rupee non-resident accounts

Foreign currency accounts

3.6.3 Issuing of cheque book:

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This department issue cheque books to account holders.

Requirements for issuing cheque book

a) The account holder must sign the requisition slip

b) Entry should be made in the cheque book-issuing book

c) Three rupees per cheque should be recovered from a/c

holder if not then debit his/her account.

3.6.4 Current account

These are payable to the customer whenever they are demanded.

When a banker accepts a demand deposit, he incurs the obligation of

paying all cheques etc. drawn against him to the extent of the

balance in the account. Because of their nature, these deposits are

treated as current liabilities by the banks.

3.6.5 Saving account

Savings Deposits account can be opened with very small amount of

money, and the depositor is issued a cheque book for withdrawals.

Profit is paid at a flexible rate calculated on six-month basis under

the Interest-Free Banking System. There is no restriction on the

withdrawals from the deposit accounts but the amount of money

withdrawn is deleted from the amount to be taken for calculation of

products for assessment of., profit to be paid to the account holder.

3.6.6 Cheque cancellation:

This department can cancel a cheque on the basis of;

a) Post dated cheque

b) Stale cheque

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c) Warn out cheque

d) Wrong sign etc

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CHAPTER # 4

COMPANY ANALYSIS

4.1 SWOT ANALYSIS

To carryout the SWOT and Financial Analysis of NBP through the help of

calculating necessary ratios in this section.

SWOT analysis is an acronym that stands for strengths, weakness,

opportunities, and threats SWOT analysis is careful evaluation of an

organization’s internal strengths and weakness as well as its environment

opportunities and threats.

“SWOT analysis is a situational which includes strengths, weaknesses,

opportunities and threats that affect organizational performance.”

“The overall evaluation of a company strengths, weaknesses,

opportunities and threats is called SWOT analysis.”

In SWOT analysis the best strategies accomplish an organization’s

mission by:

a) Exploiting an organizations opportunities and strength.

b) Neutralizing it threats.

c) Avoiding or correcting its weakness.

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

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exploit opportunities and strengths neutralize threats and avoid

weaknesses.

4.1.1 STRENGTH

(i) OLDEST INSTITUTION:

NBP is one of the oldest bank of Pakistan and first nationalized bank Hence

its customer base is strength from this plus point as customers have more

confidence in the bank. The additional value services as the privilege for the

bank.

(ii) ALTERNATE DUTIES IN SBP ABSENCE

The NBP performs additional services for its customers as well

as the other bank customer in the absence of SBP.

(iii) MORE DEPOSITS THAN OTHER BANKS

NBP has the relative competence in having more deposits than the other bank.

This is because of the confidence the customer have in the bank. The bank

being the privileged and oldest bank in banking sector of Pakistan enjoys this

edge over all others, lacking it.

(iv) EMPLOYEE BENEFITS

The employers at NBP are offered reasonable monetary benefit. Normally two

bonuses are given Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional

benefit and competency for the bank and a source of motivation for the

employees.

(v) BROAD NETWORK

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The bank has another competency i.e. it has broad-basses

network of branches throughout the country also more than one

branch in high productive cities. The customers are provided

services at their nearest possible place to confirm customer

satisfied.

(vi) STRICTLY FOLLOWED RULES & REGULATION :

The employees at NBP are strict followers of rule & regulation imposed by

bank. The disciplined environment at NBP bolsters its image and also

enhances the over all out put of the organization.

(vii) PROFESSIONAL COMPETENCE

The employees at NBP here have a good hold on their descriptions, as they

are highly skilled Professionals with background in business administration,

banking, economics etc. These professional competencies enable the

employees to understand and perform the function and operation in better

way.

(viii) HEALTHY ENVIROMNMENT

The working condition in the NBP branch here is very

conductive and favorable for better output. The informal

environment affects the performance of the employees in a

positive way.

(ix)RELATION BETWEEN STAFF AND OTHER

EMPLOYEES

The bank enjoys a good plus point when it comes to the

employee manager relationship the hearing as removing of

discrepancies if any, between the employees, and between the

manager and employees.

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(x) NBP ADVANCE SALARY

The product of the year 2008,2009. the product was developed by

NBP Credit Group, their basic target is salaried Govt Employees.

This has increased NBP’s Credit portfolio with a major boost.

With minimum default ratio, its been the success story of NBP.

Still i ts a good product than their competitors personal loans.

The interest rate charged to this loan is SBP Discount Rate + 5%.

(xi) NO panelty on Late Payment or Early Settlement of

Loans

NBP is one of those banks, who donot impose any panelty to

their customers regarding late payment of installments or markup

and early settlement of laons or balloon payments in case of

credits.

In case a customer wants to make balloon payments will not b

charged to any panelty in any advances case of NBP. It’s a

strength of NBP against its competitors.

(xii) NBP Premium Aaamdani

This is the only product of any commercial bank in the country

which is competing with the NATIONAL SAVINGS CENTER’s

products. NBP is offering rates to the customers who deposits

money in multiples of Rs 50,000/- with them till five years.

At first year 7.5%

At second year 8.5%

At third year 9.5%

At fourth year 10.5%

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At fifth year 11.5%

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4.2 WEAKNESSES

a) LACK OF MARKETING EFFORT:

The bank does not promote its corporate image, services etc on a

competitive way. Hence lacks far behind in marketing effort .A

need for aggressive marketing in there in the era marketing in

now becoming a part of every organization.

b) NBP UNDER POLITICAL PRESSURE

The strong political hold of some parties and government and

their dominance is affecting the bank in a negative way. They

sometime have to provide loan under the pressure, which leads to

uneven and adjusted feeling in the bank employees.4.3.3

c) FAVORITISM AND NEPOTIS

The promotions and bonuses etc in the bank are often powered

by senior’s favoritism or depend upon their wills and decision.

This adds to the negative factors, which denominate the

employees thus resulting in affecting their performance

negatively.

d) LACK OF FINACIAL PRODUCT

The bank falls far behind when the innovative and new schemes

are consider. It has not been involved in the tug of war between

the competitors to the accounts and strengthens the existing

customer base. This stands out to be the major incompetence and

weakness of the banks.

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e) INEFFICIENT COUNTER SERVICES IN THE RUSH

HOURS

During the rush hours, the bank is founded out to be a total flop

to handle the mob of people peaking from windows and doors.

The bank has deficiency to operate in the stages of rush hours

where the people find them services entangled in a situation of

nowhere because they are not well served.

f) LACK OF COMPUTERIZED NETWORK

The bank lack the strength of being powered by the network of

computers, which have saved time, energy and would have

lessened the mental stress, the employees have currently. This

would add to the strength if it were powered by network of

computers.

g) LACK OF MODERN EQUIPMENT

The bank lacks the modern Equipment that is note counting

machine computers. Even if there is any equipment they lack to

fall in the criteria of being rearmed as update and upgraded.

h) UNEVEN WORK DISTIBUTION.

The workload in NBP is not evenly distributed and the workload

tends to be more on some employees while others abscond away

from their responsibilities, which server as a demonization factor

for employees performing above average work.

i) OLD employee awareness

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Computer awareness to old Staff of NBP is a weakness. They

should develop employee development & training programme to

effectively update their employees regarding computer

applications & upcoming CORE BANKING SOFTWARE of bank.

4.3 OPPORTUNITIES

a) ELECTRONIC BANKING

The world today has become a global village because of

advancement in the technologies, especially in communication

sector. More emphasis is now given to avail the modern

technologies to better the performances. NBP can utilize the

electronic banking opportunity to ensure on line banking 24

hours a day. This would give a competitive edge over others.

b) MICRO FINANCING

Because of the need for micro financing in the market, there are

lot of opportunities in this regard. Other banks have already

initiated, now the time has arrived when the NBP must realize it

and take on step to cater an ongoing demand.

c) CAR FINANCING

This is the major area where NBP has not competed with private

banks. As per repute of NBP they must enter in personal & car

financing products.

d) CORE BANKING SYSTEM

Implementation of the CORE BANKING SYSTEM is still an

opportunity, as till now none of the banks operating in Pakistan

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is using this most updated & famous banking application. It will

lead NBP to smooth sailing environment as a leading bank in

technology as well as competing between other banks. This will

upgrade NBP from paper & ledger era to the smooth &

sophisticated computer application.

4.4 THREATS

a) EMERGENCE OF NEW COMPETITORS

The bank is facing threats with the emergence of new competitor

especially in terms of foreign banks. These foreign banks are

equipped with heavy financial power with excellent and

innovative ways of promoting and performing their services. The

bank has to take initiative in this regard or will find itself far

back in competition.

b) POLITICAL PRESSURE BY ELECTED GOVERNMENT

The ongoing shift in power in political arena in the country

effects the performance of the bank has to forward loans to

politically powerful persons which create a sense of insecurity

and demoralization in the customer as well as employees.

c) DOWNSIZING

The bank is currently acting upon the policy of downsizing

which threaten the environment of the bank Employees feel

insecurity in doing their jobs and work, hence affecting the over

all performance of employees negatively.

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d) CUSTOMERS COMPLAINTS

There exists no regular and specific system of the removal of

customer complaints. Now a day a need for total customer

satisfaction is emerging and in their demanding consequences

customer's complaints are ignored.

CHAPTER # 5

ANYLASIS

After proper analysis of the organization I divided it into in four parts.

This analysis is mainly based on practical experience of NBP Staff,

analysis is as under: -

Problems at the branch.

Function analysis.

Administrative analysis.

Personal management’s analysis.

5.1 PROBLEMS AT THE BRANCH

Customer Satisfaction

Poor record management and filing system

Unequal distribution of work

Marketing visits

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5.2 FUNCTIONAL ANALYSIS

Formal Organization

Difference between theory and practice

Bank duty to maintain secrecy.

Excessive paper work

More accounts fewer deposits.

Delegation of authority

5.3 ADMINISTRATIVE ANALYSIS

Job analysis is not effective

Carelessness in opening of account

Lack of specialized training

Low Profit Rates

Poor job rotation.

Delays in Loan Advancement

Lack of appreciation

5.4 PERSONAL MANAGEMENT ANALYSIS

Need for better training program

Developing Managerial Leadership

Recruitment policy

Promotions

Transfer

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Marketing at desk

Lack of business communication

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CHAPTER # 6

CONCLUSION

INTRODUCTION

NBP is an effectively operating and profit making organization and

carrying out its activities under a specified system of procedure. The main

regulatory body is State Bank of Pakistan, which provides policy

guidelines and ensures that the money market operates on sound

professional basis while the head office specifies the whole procedure of

function and operations.

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

for efficiency and better performance of NBP as an organization in

general and City branch in particular.

The recommendations are as follows:

6.1 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.

Banking council of Pakistan should also initiate some

programs to equip the staff with much needed professional

training.

6.2 Delegation of Authority

Employees of the bank should be given a task and authority

and they should be asked for their responsibility.

6.3 Performance Appraisal

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The manager should strictly monitor the performance of every

staff member. All of them should be awarded according to

their performance and result in the shape of bonuses to

motivated and incite them to work more efficiently.

6.4 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.

6.5 Utility Bill Charges

Bank gets Rs. 5 to 8 to processes a utility bill , and it is very

tire, tough and hard job despite this working resulting in a

loss to then Rs 5 to 8 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.

6.6 Link with the Head Quarter

160 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.

6.7 Credit Card

National bank of Pakistan should start its operation in credit

card. These cards were 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. But as NBP is a GOVT bank so most of the customer

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gets defaulted and do not want to repay the CREDIT CARDS

amounts. Effective involvement of Collection officers for the

repayment of credited amount rather than treating and

provisioning them as NPL.

6.8 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.

6.9 Decreasing Administrative Expenses

Bank should their administrative expenses. This was Rs 8

billion in the year 2009. 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.

6.10 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.

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Not only it will be economical but will also reduce the extra

burden of work of the bank. It will also help in reducing the

use of excessive paper work.

6.11 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.

6.12 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.

6.13 Complaints of Customer

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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.

6.14 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.

6.15 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.

6.16 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.

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6.17 SOME MORE Solutions / Improvements suggested

After the completion of my internship in the NBP I am able to

give some suggestions for the betterment of the organization.

During the internship we had discussions with different

persons like manager, operational manager different officers

employees and customers. In the light of these discussions we

are able to give some suggestions which are given below.

Use of modern technology .

Training and Development of Employees

Frequent Communication

Promotion on the basis of Ability

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A REFERENCES

NBP annual report (2010)

NBP annual report (2011)

NBP annual report (2012)

ONLINE RESOURCES

www.dawn.com.pk

www.sbp.org.pk

www.nbp.com.pk

www.onlinewbc.gov/docs/finance/fs.ratio

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