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ON

INTERNSHIP REPORT 1
Holy Prophet Muhammad (P.B.U.H)
The greatest social reformer

TO My Beloved Mother and Father

Who taught us?


The first word to speak
The first alphabet to write

And
First step to talk……

To
All those from whom I learnt
Who always remains?
In our heart
Through out the whole span of our life and are

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Nearest, dearest and deepest
To us

Contents
Introduction o The Sector…………………………………………………08
History of National Bank of Pakistan…………………………………….10
Vision………………………………………………………………………..12
Mission Statement…………………………………………………………12
Core Values……………………………………………………………….. 12
Goals……………………………………………………………………….. 12
Organizational chart……………………………………………………….13
Account opening department...............................................................14
Deposit department..............................................................................19
Credit & Advances Department............................................................21
NBP Karobar........................................................................................28
Foreign Exchange Department............................................................32
Remittance Department.......................................................................35
Clearing Department............................................................................36
Govt. Department.................................................................................38
Financial Analysis................................................................................39
Ratio Analysis.......................................................................................44
Findings................................................................................................51
Swot Analysis......................................................................................52
Suggestions & Recomendations..........................................................54
Duties...................................................................................................56
Accomplishments.................................................................................57

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How experience impact in my career...................................................58
Refferances..........................................................................................59
Biblography...........................................................................................60

PREFACE

It is the requirement of all the M.B.A programmes of Department of


Management Sciences. COMSATS Institute of Information Technology,
Sahiwal for the students to undergo six to eight weeks internship training in
any renowned organization. It not only helps to get an exposure to the
practical world and to get familiarized with the practices followed by different
organizations while in pursuit of their objectives but also one can learn to face
the professional challenges that are dramatically different from the
educational world. This period called the “Internship Period “, if spent properly
and sincerely, enables the students to be more confident, more
knowledgeable, more responsible and, above all, more committed to their
work. I have done my internship of six weeks period i.e. from 22-06-09 to 03-
08-09……. in National Bank of Pakistan, Main Branch, Multan.
It has enabled me to understand the practical scenario in which the
banking sector operates. Also it has helped me sharpen my decision
making power so as to utilize the resources in an effective manner to
generate maximum profit.

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In preparing this report, I have put all of my best efforts and have tried hard to give
maximum knowledge. Despite of my all the coherent efforts, I do believe that there
will be a room for improvement.

Muhammad Furqan Umar

ACKNOWLEDGEMENT

First of all, I thank Almighty Allah, who has given me the courage to write this
report. I also thank my respectable teacher Miss Fareeha Nisar for her
generous initiation, co-operation and coordination and the way he showed her
concerns from the very beginning till the end. Thank you, Mam; indeed we
owe you a great deal. This internship provided me a golden opportunity to
learn .In this report I’ve tried to relate every thing that I thought was
necessary. Though, it’s a bit difficult to say anything about the perfection of
the effort that I have made but let us hope that it finds its place somewhere to
meet the required and expected criterion.

I am also indebted to the persons under mentioned because without their


help, it would not have been possible for me to achieve this practical
knowledge.

NATIONAL BANK OF PAKISTAN


MAIN BRANCH (0374)
MULTAN
Mr. Sohail Rasool MANAGER OPERATIONS
Mr. Syed Manzar Gillani INCHARGE REMITTANCES
Mr. Syed Sana ullah Kazmi OFFICER (REMITTANCES)

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Mr. Mukhtar Hussian OFFICER (GRADE III)

Muhammad Furqan Umar


1. Executive summary

National Bank of Pakistan is the largest commercial bank operating in


Pakistan. It has redefined its role and has moved from a public sector
organization into a modern commercial bank. The Bank's services are
available to individuals, corporate entities and government. While it continues
to act as trustee of public funds and as the agent to the State Bank of
Pakistan (in places where SBP does not have a presence) it has diversified its
business portfolio and is today a major lead player in the debt equity market,
corporate investment banking, retail and consumer banking, agricultural
financing, treasury services and is showing growing interest in promoting and
developing the country's small and medium enterprises and at the same time
fulfilling its social responsibilities, as a corporate citizen.
National Bank of Pakistan is today a progressive, efficient, and customer
focused institution. It has developed a wide range of consumer products, to
enhance business and cater to the different segments of society. Some
schemes have been specifically designed for the low to middle income
segments of the population. These include NBP Karobar, NBP Advance
Salary, NBP Saiban, NBP Kisan Dost, NBP Cash n Gold
It has implemented special credit schemes like small finance for agriculture,
business and industries, administrator to Qarz-e-Hasna loans to students, self
employment scheme for unemployed persons, public transport scheme. The
Bank has expanded its range of products and services to include Shariah
Compliant Islamic Banking products. The Bank is also the largest sponsor of
sports in Pakistan. It has provided generously to philanthropic causes
whenever the need arose.

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it has taken various measures to facilitate overseas Pakistanis to send their
remittances in a convenient and efficient manner. In 2002 the Bank signed an
agreement with Western Union for expanding the base for documented
remittances. More recently it has started Electronic Home Remittances
Project. This project introduces technology based system to handle inward
remittances efficiently, by ensuring that the Bank's branches keep a track of
the remittance received from abroad till its final receipt.
National Bank of Pakistan has built an extensive branch network with 1250
branches in Pakistan and operates in major business centre abroad. The
Bank has representative offices in Beijing, Tashkent, Chicago and Toronto.
National Bank has earned recognition and numerous awards internationally. It
has been the recipient of The Bank of the Year 2001, 2002, 2004 and 2005
Award by The Banker Magazine, the Best Foreign Exchange Bank ––
Pakistan for 2004, 2005, 2006 and 2007, Global Finance, Best Emerging
Market Bank from Pakistan for the year 2005, Global Finance, Kissan Time
Awards – 2005 for NBP's services in the agriculture field.

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INTRODUCTION OF THE SECOTR

FORMAL DEFINITION OF BANK


“Bank is an institution transacting the business of accepting for the purpose of
money from public, repayable on demand or otherwise and withdrawal by
Cheque, draft, and order includes any post office saving bank.”

Types of bank
These are the following types of banks
 Central Bank
 Commercial Bank
 Exchange Bank
 Saving Bank
 Industrial Bank
 Agriculture Bank

COMMERCIAL BANKS
The most widely spread banks in any country with an objective to mobilize the
saving of the people and providing finance to the investors. These banks are
in the ground for profit earning motive and in competition with each other.
These banks are providing the basic services to the customers in the form of
deposits, advances, remittances and other.

COMMERCIAL BANKS IN THE ECONOMIC DEVELOPMENT OF A


COUNTRY
Banks play an important role in the economic development of a country. If the
banking system is unorganized and inefficient, it creates mal-adjustments and
impediments in the process of development. In Pakistan, the banking system
is organized in a well manner. The State Bank of Pakistan since July 1, 1948
stands at the apex and is responsible of the operation of the banking system.

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The other banks, which form the banking structure in Pakistan, are playing
role in the economic development of the country.
The role of the commercial bank in the growth and development of the
economy on sound and steady footings is discussed briefly as follows:
Mobilization Of Resources
The commercial banks are the most efficient organizations of the economy in
the mobilization the resources and making a profitable pool of these
resources. Taking then money from the savers and lending it to the investors
is the most prominent job of the bank.
Promotion Of Saving Habit
There are persons who have money but cannot put them in profitable use.
The banks attract these persons by offering a variety of accounts. They
provide them not only the safety of the funds but also higher returns on them.
The banks, in this way, promote the habit of thrift among the people.
Effective Implementation Of Monetary Policy
With the help of a good banking system in the country the government and
the Central Bank regulate the monetary supply and demand of the money. A
good system helps in the implementation of the policies that are formulated by
the government. Through these banks using different techniques of credit
control makes credit expansion and contraction.
.

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2. History of National Bank of Pakistan

National bank of Pakistan was established on November 8,1949 through


passing of a special ordinance in the National Assembly. The need for the
establishment came due to the reason when at that time newly born country
was facing economic crises. To get rid the intervention form the Reserve Bank
of India, a self owned and operated Central Bank by the name of State Bank
of Pakistan was formed in July 1948 to carry on the responsibilities of issuing
the currency and most importantly controlling the flow of money inside the
country.
State Bank of Pakistan after its formation demanded from the Indian Reserve
Bank the assets against the Indian currency retired from Pakistan territory.
Government of India refused to hand over the assets worth about five
hundred million rupees. This dispute is still unsettled and these assets are still
not delivered to Pakistan.
When British decided to devalue its currency in 1949, India followed a suit
against it, but Pakistan did not, a decision, which attracted some criticism at
that time, but was, certainly justified itself in the way it facilitated the
industrialization in of the country. The arrangement have been made that the
currencies of the countries were to be at par with each other and neither could
alter the par value of its currency without consulting the other. India promptly
challenged Pakistan’s decision as a contravention of the agreement. After
some correspondence between the two Governments, India agreed to
recognize the par value of the Pakistani rupee and a date was decided on
which both Central Banks would announce the par value of their currencies.
An attempt was made by the Pakistan Government to persuade India to
adhere to their previous agreement and an officer of the Finance Ministry was
sent on a one-man mission to Delhi for this purpose. The officer had
discussion with the Indian Ministry of Finance at the highest level but his
mission not fruitful.

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As a result of the exchange rate controversy, regular trade and payments
between the two countries came to standstill. India froze the surplus earned
by Pakistan from a favorable balance of trade, and one more financial dispute,
which is still alive, was added to the unsettled list. One of the immediate
consequences of this situation was the withdrawal of Mrwari Merchants of the
Indian finance, which used to be employed annually for the movement of
Pakistan’s jute crop. A crisis of the first magnitude threatened because the
jute crop was already in the markets and, as there was no money to move so
prices began to fall precipitously. At that time, there was no jute industry in
Pakistan, not a single jute loom or a spindle and no possibility, therefore, of
utilizing any of the crops with in the country. As jute prices collapsed, foreign
merchants and foreign banks stood aside to watch the process and the
seriousness of the situation threatened to promote agrarian unrest. It was now
very evident that the government of Pakistan could not afford to continue that
the special mission to Delhi had failed, Government of Pakistan moved
quickly. Two ordinances were passed immediately, one setting up the Jute
Board and other National Bank of Pakistan. The objective of the Jute Board
was to re-organize and rehabilitate the jute trade by helping parties to handle
it and to stabilize the market. National Bank of Pakistan was established to
provide finance to suitable parties.
Thus it came about that National Bank of Pakistan stood behind the jute trade
and State Bank of Pakistan behind the National Bank, and government stood
behind the State Bank. It was all organized so rapidly (six branches came into
being at once) that any doubt that might have lurked in the minds of outsiders
about Pakistan’s ability to tackle the situation were dispelled once and or all.
Until June 1950, the Bank was engaged exclusively on jute operation.
Thereafter, it was felt that it could expand its business to include other
commodities as well. Bank took a big stride in 1952, when it replaced the
Imperial Bank of India, as an agent of State Bank of Pakistan. Presently, there
are 24 overseas branches, and 11 regional offices, 1250 Domestic branches
of the National Bank of Pakistan.

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

MISSION 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.

CORE VALUES
 Highest Standard of integrity
 Institutionalizing a team work and performance culture
 Excellence in service
 Advancement of skills for tomorrow’s challenges
 Awareness of social and community responsibility
 Value creation for all stakeholders

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

INTERNSHIP REPORT 12
3. BUSINESS OPERATION

3.1) ORGANIZATIONAL CHART

PRESIDENT
PRESIDENT

MEMBER
MEMBERBOARD
BOARD

SENIOR
SENIOREXECTIVE
EXECTIVEVICE-PRESIDENT
VICE-PRESIDENT

EXECUTIVE
EXECUTIVEVICE
VICEPRESIDENT
PRESIDENT

SENIOR
SENIORVICE
VICEPRESIDENT
PRESIDENT
HIERARCHY
BRANCHHIERARCHY

VICE
VICEPRESIDENT
PRESIDENT
BRANCH

ASSISTANT
ASSISTANTVICE
VICEPRESIDENT
PRESIDENT

OFFICER
OFFICERGRADE
GRADE II

OFFICER
OFFICERGRADE
GRADE 22

OFFICER
OFFICERGRADE
GRADE 33

MESSENGER
MESSENGER

PEON
PEON

INTERNSHIP REPORT 13 SWEEPER


SWEEPER
National Bank of Pakistan’s Facilities

In January 1964, the bank started its well-known people’s credit scheme. The
scheme was designed to provide financial assistance to the smaller
businessmen on easy and liberal terms. It was welcomed all aver the country
and has been of considerable service ever since. It’s major objective was to
build a strong middleclass, which is a powerful guarantee of social stability in
an otherwise uncertain world.
Along with the social activities as an agent of State Bank of Pakistan, National
Bank of Pakistan has also been a good banking institution to be compared
with other commercial banks. It is providing the modern unmatched banking
facilities such as:
 Deposit security; Guaranteed by Government of Pakistan.
 Largest contribution towards Government and Semi-Government
requirements.
 Agent of the State Bank of Pakistan for handling Treasury Functions
receipts of Taxes and other Revenues.
 Handling of salaries and pensions of country’s federal/ provincial
government employees and defense personnel.
 Utility Bills collection.
 Evening banking at selected branches.
 Corporate Branches with premium banking facilities for corporate
clients.
 Efficient home remittance services.
 ATMs providing round the clock access to accounts.
 SWIFT offers quick service in the areas of remittances and trade
finances.

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 Rupee Travelers cheques

National Bank of Pakistan with its Head Office in Karachi operates through 9 regional
Headquarters. A Board of Directors, appointed by the Federal Government, manages
the Bank. The Regional Headquarters are headed by Regional Chief Executives
(RCEs). Next controlling unit is Zonal Chief Office, which comprises group of
branches working under his jurisdiction.

3.2) DEPARTMENT OF NBP MAIN BRANCH MULTAN

I worked in the following departments during my internship:

 Account Opening
 Deposits
 Credit and Advances
 Foreign exchange
 Remittances
 Government

3.2.1) ACCOUNT OPENING DEPARTMENT

Borrowing funds from different sources has become an essential feature of


today’s business enterprises. But in the case of a bank borrowing funds from
outside parties is all more vital because the entire banking system is based on
it. The borrowed capital of a bank is much greater their own capital. Banks
borrowing is mostly in the form of deposits. These deposits are lent out to
different parties. Such deposit creation is done through opening an account in
the bank.

TYPES OF ACCOUNTS
In NBP, there are the following types of accounts:

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 Current Account.
 Saving Account.
 Term Deposit.

Current account
In current account there is no interest on it. It is for only transaction purposes.
They are paid on demand. When a banker accepts a demand deposit, he
incurs the obligation of the paying all cheques drawn against him to the extent
of the balance in the account. As there is no profit paid on this account it is
also called checking account because cheques can be drawn on it. Current
account is mostly opened for business. The minimum amount for opening the
account is Rs.1000/-.

Saving account
The purpose of this account is to induce the habit of saving individuals in the
neighborhood. The profit on PLS saving Accounts in NBP is checking
accounts paid on the basis of profit and loss calculated after six month. The
minimum deposit for opening the account is Rs.1000/-.
Term deposits
A term deposit is a deposit that is made for a certain periods of time (not more
than 5 years). At the end of the specific period, the customer is allowed to with
draw the principle amount.
The term deposit account rate varies after six month and rate is depend upon
the period of term deposits, as period is increased the rate is also increased
and the minimum balance requirement is Rs.1000/- but no maximum limit.
Prior A/C is not required for term deposits.
The amount of profit is given to deposits in three ways:

 By cash.

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 By sending a bank draft to depositor’s home address or office or
whichever is specified as mailing address.
 The amount is credited in any one of the checking accounts of the
depositor.

LETTER OF THANKS
At the end, after opening the account, NBP issues letter of thanks to “Account
opener” and “Account introducer” for the trust they have on NBP at the same
day. The purpose of this letter is to check the address of both the parties for
future contact.

Another responsibility and function of account opening


department

Receiving inward checks


Another responsibility and function of account opening department is to
receive inward cheques for collection from other banks as well as of NBP.
Then these cheques are sent to clearing official who clears these checks at
SBP from other banks.

Cheque-book issuing
Check books are issued only for checking account such as current account,
saving account. They are not issued for other fixed and term deposits
because of their long-term account’s nature.
When an account is opened, chequebook is usually issued the next day,
however they too are issued on the same day of opening the account keeping
in view the energy requirements the account holder.
Chequebook leaves vary with the nature of the account. For example, 50
leaves and 100 leaves chequebook are issued for current accounts
depending upon the energy of the account holder. Where as 10 or 25 leaves
chequebook are for saving accounts. 10 leaves chequebook are handed over
to “easily individual’s account, holder”.

INTERNSHIP REPORT 17
Issuing Procedure

 Signatures on chequebook requisition are verified by matching with


signatures on SS Cards.
 Chequebook leaves number, account number, account holders’ name are
mentioned in the chequebook issue register and take the signature of the
account holder.
 The name of A/C holder and date of chequebook issuance is written on
chequebook requisition and the account opening officer puts his initials on
requisition leave.
 A/C number is stamped over the leaves of cheque-book and finally
authorized person affix his signature over the debit voucher of the excise
duty and he voucher is attached from the cheque-book and is handed over
to the customer.

Everyday posting
At the end of each day, posting of Cheque-books is performed, the account
department makes credit vouchers of excise duty on Cheque-book leaves,
and posts it in the company.

LOCKERRS
Locker services are provided by the banks in order to provide the customer a
safe place where they can keep their precious documents, things, like jewelry
which can be dangerous for robbery and theft to keep in the house. Against
these locker service the bank take certain charges. NBP also has a great
number of lockers in most of its branches.
NBP has three main types of lockers.
 Small Size Lockers.
 Medium Size Lockers.
 Large Size Lockers.
Locker charges vary with the size of the lockers. Locker charges are half for
the employees of the National Bank to the normal charges charged to the
customers. Recently locker charges have been reduced by 25% as previous.

INTERNSHIP REPORT 18
3.2.2) DEPOSIT DEPARTMENT

Cash department is very sensitive and risky part of the bank. Very cautious
and competent personnel are needed for the job. NBP has really such a
diligent staff with appreciable competencies and will to do work.
Main function of deposit department is to deal with cash payment and cash
receipts.

CASH DEPOSIT
There are two types of deposit slips; Red slip is for Cheque deposit, where
Green slip is for cash deposit. If a customer comes to deposit cash in his
account the procedure is as followed in this case:

CASH PAYMENT
When a customer comes to withdraw a certain amount from his account, he
brings a Cheque along with him. In this case the following steps are taken.

Procedure

 The cashier receives the Cheque and checks it whether it is posted or


predated. Cheque can be cashed within six months. A repeated
Cheque cannot be cashed.
 He takes two signatures at the back of the Cheque from the bearer.
 He gives the Cheque for 'posting “at the computer. The computer
checks out whether there is balance in the account or not. Other
instructions are also received e.g. blocked, frozen, etc. The posting is
done in the computer and the Cheque is stamped “posted" with the
serial number and date and the token is issued to bearer.
 The cashier counts the cash and makes the detail at the back of the
Cheque.
 The cash is paid to the person and the Cheque is stamped “Cash Paid"
immediately.

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 The entry is made in the Paying Cash book and the Serial number is
written on the Cheque.

Types of Cheques
In Pakistan, banks deal with two types of cheques:
 Open Cheque—they are payable in cash at counters.
 Crossed Cheque—they are not payable in cash at counter.

Open Cheque
The Branch has online computer system, hence firstly he check the balance in
his account by giving the account number and check the title of account as
well, and debit the account by the mentioned amount. When Cheque is found
in order, the token clerk affixes “Token Stamp” on the Cheque, writes the
token number on it and puts his initial there and after this token is given to the
presenter and Cheque is handed over to the authorized officer for further
processing.

Crossed Cheque
The customer of the branch deposits the Cheque drawn on same branch, for
payment to be credited into his account, attached with pay slip. Signs it. Then
he checks the balance in the account if the account has sufficient balance, he
passes the Cheque and the account is debited by the mention amount and
account of the depositor of Cheque is credited by the same amount. The
Cheque is treated as debit voucher and pay slip, credit voucher. The
information about the both is mention is Transfer Voucher Sheet.

INTERNSHIP REPORT 20
3.2.3) CREDIT AND ADVANCES DEPARTMENT

The earning of a commercial bank are chiefly derived from interest charges on
loans and discounts it. Now loans are recognized as advances or finances.
The advances are made through the deposits that are kept in the bank by the
customers. The bank pays profit on the deposited amount and receives mark
up on the advances made of different amounts.

CREDIT PRINCIPLE
The following principles are to be adopted for lending authority, approval,
monitoring and control on a basis consistent with NBP’s operational objectives
and business stages.
Objectives

• Providing suitable credit services and products.


• Not compromising NBP’s standards in extending credit.
• Transactions, which don’t apparently exhibit adequate commercial
consideration, will not be undertaken accept when authorized by the credit
committee/president
Structure
The authority structure should enable effective adoption to changes in the
economical, technological regulatory and competitive environment.
Performance
The education and admission of the loan portfolio should conclude with in
defined and acceptable risk limitation toward attaining satisfactory return on
the bank’s capital. Credit advancement shall focus on the development and
enhancement of customer relationship and are measured on the basis of the
net yield for each customer relationship where individual transaction should
also be profitable

INTERNSHIP REPORT 21
Credit report
The report is prepared by bank of the intending borrower with a view to
considering his Credit Worthiness and Eligibility for the Bank Finance.
Besides other things it contains the net worth of the borrower.

TYPES OF FINANCES
Finances can be classified into two categories:
 Clean Finances.
 Secured Finances.

Clean Finances
Clean Finances are those finances, which are allowed to govt. employees,
against their salaries. The limits of the Clean Finances are up to 20 basic pay,
and are required to repay within 5 year.
Legal Documentation

• Formal request for grant facility.


• Authentic proof from the concerned department about his salary.
• N.I.C.
• Undertaking from the employee that the salary for the applicant shall
be remitted to the branch and in case of clients inability to repay the
finance the same would be adjusted from his dues.
• Sanctioning of the loan.

SECURED FINANCES
Secured finances are those finances against which security has been
pledged. Security can be the property, stocks, deposits, prize bonds,
hypothecation charges, shares, mortgages on tangible readily reliable
unencumbered assets, and govt. securities.

INTERNSHIP REPORT 22
Secured finances are of the following categories:
 Running Finance.
 Agri. Finance.
 Demand Finance (Gold Finance).
 Cash Finance.
 Small Finance.
These are also known as the short-term finances.

Running Finance
Running Finance is a short-term finance, one year of payment, to assist a
large-scale business operator to carry on his day-to-day requirements of liquid
funds. This account is opened to made operations in his favor or course all
disbursements are made under proper consideration of the securities and 4
C’s of the borrower. Bank retain 25% margin on the Running Finance, means
that if security has a value of Rs.100000 then against it Rs.75000 has been
financed by the bank. The mark up rate on the Running Finance is Rs.0.4384
paisa/1000/day.

Security
Running Finance can be against the following securities:
 Bank’s Deposits.
 National Defense Saving Certificate.
 National Investment Trust Units.
 Life Insurance Policy.
 Shares of Joint Stock Companies on Bank’s approved list.
 Prize Bond.

Agri. Finance
Now a day Agri. Finance has been included under the category of the
Running Finance. Basically there are two types of Agri. Finances:
 Agri. Finances for Crop.
 Agri. Finances for Development.

INTERNSHIP REPORT 23
For the development and expansion of the most participative sector of our
economic prosperity, the National Bank of Pakistan has been providing loans
and finances to the agricultural sector since its establishment. Agri. Finances
for crop is called as short term finance that is provided to carry on the
operational requirements of the Agri-business such as purchase of seeds,
fertilizers, pesticides, and other seasonal requirements of the farmers till the
final activities to make the product reach to the market. This finance is
provided to cover a period of less then one year.
The other type is long term, which is provided, or the purchase of Agri-
machinery and other heavy equipment (tractor, harvester) that are used for
the reclamation of the Agri-land. But these equipments have registration joint
with the bank. This finance is provided more than one year.

Security
 Personal guarantee (personal identity).
 Third party guarantee.
 Against third party guarantee.
 Mortgage of immovable property.
 Against Agri. Pass Book.

Documentation
 Formal request
 Term deposit Receipt duly discharged by the client.
 Letter of undertaking.
 Mark Lien by the Patwari and verified.
 Property Valuation Certificate issued by the Bank Engineer.
 Copy of extracts of form City Survey or maturation record.
 Certificate of Title Clearance issued by the Bank’s law Officer.
 Non-Encumbrance Certificate.
 Search Certificate issued by the Registrar Joint Stock Companies.
 Insurance Policy Premium paid with Bank Mortgage Clause.

INTERNSHIP REPORT 24
 Original sale deed.
 On Objection Certificate issued by form co-operative Society to the
effect that the borrower is not indebted to the society.
Short term Agri. Loans has different financing limit and depend of the nature
of the crop and area covered by the crop. In case if some crop is destroyed by
rain or some other reason then the payment of the loan may post pone and
the repayment may be extended by the concerned authority. Or in some
special case the loan may be forgiven to the farmer.

Demand Finance (Gold Finance)


The Demand Finance is a one transaction finance, means that once he
withdraw the amount and after when submit the amount then he can never be
withdraw again. Demand Finance has 9 – 15 month duration. The mark-up or
interest is calculated on the total amount disbursed and requires to be paid
before the date of final adjustment.

Security
Demand Finance are given against Gold ornaments. Bank make their self
secure by taking 50% margin, because of mark-up (18%), default risk,
impurities, and in case of auction sale of the gold sales tax (18%).

Operation
 Request for the loan.
 Assessment.
 Sanction of the loan.

Documentation

 Letter of introduction
 Gold loan insurance letter.
 Delivery letter for Gold ornaments cum evaluation certificate (F – 205).

INTERNSHIP REPORT 25
 Gold smith’s weight (net weight) quantity and quality
valuation certificate.

Cash Finance
This finance is normally used by small businesses or individuals for their petty
matters involving cash transactions, up to a maximum of rupees three
hundred thousand. These are normally for the seasonal business like cotton,
which have 6-8 month business. The mark-up / interest is calculated on the
amount outstanding on his account. The calculation of mark-up / interest is
based on the number of days a specific amount is withdrawn.

Security
 Pledge of stock.
 Third party guarantee and Hypothecation of stock.
 Pledge of stock & collaterally secured by third party’s guarantee.

Documentation
 Formal request for the facility.
 Insurance policy.
 Letter handling over physical possession of the Godown by the
borrower.
 F – 218 Letter acknowledging Bank’s Lien in the stock stored (taken
from Godown owners).
 Letter from client authorizing the Bank to Debit salaries of Godown staff
to his account.
 Resolution to be obtained from the limited co. covering operations on
an account.
 Resolution to be obtained from the limited co. covering authority to
Directors to execute documents.
 Certified copy of Memorandum and Articles of Association.
 Certificate of Incorporation.
 Certificate of Commencement of business (in case of public limited).

INTERNSHIP REPORT 26
 Resolution passed by the board of Directors for the grant of Cash
Finance facility.
 Balance sheet (audited).

Small Finance
Small Finance is normally for the expansion of the business. In Small Finance
Hypothecation is in the custody of the owner. Where as if the security is
pledge then it will in the custody of bank.

Security
 Hypothecation.
 Pledge.
 Stock.
 Mortgage.
 Vehicles.

Documentation

 Formal request for the facility.


 F – 53 along with partnership letter.
 Partnership deed.
 Letterform client authorizing the bank to debit salaries of Godown staff
to his account.
 Letter signed by the client authorizing the bank to debit his for the
payment made in respect of insurance premium.
 Insurance policy in favor of bank.
 Registration in the Joint names of the bank and the borrower.

INTERNSHIP REPORT 27
Along with NBP the Government of Pakistan (GOP) supports:
1. Life and disability insurance paid by GOP with no medical examination
required.
2. 6% mark-up paid by customer, rest paid by GOP.

* Subject to availability of subsidy/confirmation from GOP.


Note: The mark-up rate will be revised on annual basis.

FINANCING TERMS & CONDITIONS

Minimum Down Payment


10% of asset price (5 % for PCO and Tele center)

Mark-up Rate Variable


1 year KIBOR + 2% (For the first year mark-up will be 12%) The customer will
pay markup @ 6%p.a as long as GOP provides the balance markup to NBP
on a monthly basis)

Tenure
1 to 5 Years (for PCO 2 years)

INTERNSHIP REPORT 28
Grace Period
Initial 3 months

Maximum Loan Amount


Rs. 200,000/-

NBP KARPBAR UTILITY STORE

(Under a Franchise with Utility Store Corporation)

Financing will be provided to set-up a Utility Store under franchise of Utility


Store Corporation through
• Set-up of a Utility Store in an owned/rented shop
• A 'Mobile' Utility Store: 4 stroke Petrol/CNG/LPG Vehicle (Rickshaw)
Eligibility Criteria
• Must be Pakistani national bearing a Computerized NIC
• Age between 18 to 45 years
• Must be residing in the same city / district for the last 2 years
• Must have a franchise from Utility Stores Corporation of Pakistan
• Must have a valid rickshaw driving license (for mobile utility store)
• Availability of 2 references & 1 guarantor (USC shop setup
• No default or rescheduling history of the applicant
• References and guarantor must be residing in the same city / district
where the applicant is residing

Security
In case of Utility Store shop set ups:
• Hypothecation charge over the present and future assets in store (except
stock).
• One guarantor, having minimum net income of Rs. 10,000/-p.m.(subject
to NBP verification) or must be property owners
• Personal guarantee of the applicant
• 4 cross cheques
In case of Mobile Utility Stores:
• A lien would be marked under hire purchase/hypo agreement on the

INTERNSHIP REPORT 29
vehicle
• Personal guarantee of the applicant
• 4 cross cheques

NBP KAROBAR MOBILE GENERAL STORE

Financing will be provided to purchase 4 stroke Petrol/CNG/LPG Vehicle


(Rickshaw) with attached loader body (Thehla type) to set up Mobile General
Store without USC Franchise.

Eligibility Criteria
• Must be a Pakistani national bearing Computerized NIC
• Age between 18 to 45 years
• Must be residing in the same city/ district for the last 2 years
• Availability of 2 references
• No default or rescheduling history of the applicant
• References must be residing in the same city / district where the applicant is
residing

Security
• A lien would be marked under hire purchase/hypo agreement on the vehicle
• Personal guarantee of the applicant
• 4 cross cheques

NBP KAROBAR TRANSPORT

Financing will be provided to purchase a 4 stroke Petrol/CNG/LPG Vehicle


(Rickshaw)
Eligibility Criteria
• Must be a Pakistani national bearing Computerized NIC
• Age between 18 to 45 years
• Must be residing in the same city / district for the last 2 years
• Availability of 2 references having landline telephone numbers

INTERNSHIP REPORT 30
• No default or rescheduling history of the applicant
• References must be residing in the same city / district where the applicant is
residing

Security
• A lien would be marked under hire purchase/hypo agreement on the vehicle
• Personal guarantee of the applicant
• 4 cross cheques

Women and Poverty

Women of today is not the women of yesterday she is more knowledgeable


more confident and more dynamic. To salute the women of Pakistan, NBP
introduces loan products for the women of Pakistan to bring them out from the
hardships of poverty, through the following self-employed schemes of NBP
Karobar.

NBP KAROBAR PCO

Finance will be provided to purchase Wireless/ Mobile/Desktop telephone


set(s) with prepaid connection and credit balance(s) to establish a PCO setup

Eligibility Criteria
• Must be Pakistani national bearing a Computerized NIC
• Age between 18 to 45 years
• Must be residing in the same city/ district for the last 2 years
• Availability of 2 references & 1 guarantor
numbers
• No default or rescheduling history of the applicant
• References must be residing in the same city / district where the applicant is
residing

Security
• Hypothecation charge over the present and future assets of the business

INTERNSHIP REPORT 31
• One guarantor, having minimum net income of Rs. 10,000/- p.m. each
(Subject to NBP verification) or must be a property owner for single telephone
set minimum income requirement for guarantor is Rs. 5,000/- per month and
for multiple sets Rs. 10, 000/- per month.
• Personal guarantee of the applicant
• 4 cross cheques

How to Apply For NBP Karobar

• Customer to visit any NBP branch to obtain loan application form and
scheme details. Application form could also be downloaded from the
NBP web site. Photo copy of the form will also be accepted. Each form
will cost Rs. 5. In case of photocopy or down-loaded form, form fees
will be charged at the time of application submission

• Branch to provide details of the scheme along with the required


documents to be submitted with the application form

• Customer to submit the application form along with all the required
documents as well as the verification and the processing fees

• The application form and all the relevant papers of the customer will be
checked by the Branch staff and if found complete, application
processing will commence

• If the case is approved then the customer will be informed accordingly


and will be advised to deposit the Down payment and fulfill all the other
product specific formalities

• Upon fulfillment of all the details and approval of the loan by the
competent authority, Purchase Order in favor of vendor will be issued
and a copy of the same will be given to the customer

• Delivery of the financed asset will be made directly to the customer by


the NBP selected vender

3.2.4) Foreign Exchange Department


INTERNSHIP REPORT 32
T
o promote flow of foreign exchange in the country, the Government of
Pakistan started a new scheme of opening of bank accounts in
foreign currency. These accounts were entitled to receive profit
percentage in shape of the currency in which the account was kept (Dollar
account shall be paid profit in dollars). This has increased the flow of foreign
currency especially from the Pakistani foreign residents, who used to send
money to their families at home.

Functions of Foreign Exchange Department


Foreign exchange department is controlled by OG-III. This department
performs different functions such as:

 Foreign Currency Deposits.

 Imports.
 Exports.
 Foreign Remittance.

FOREIGN CURRENCY DEPOSITS


To earn foreign exchange NBP offers different types of account such as:

Types of Foreign Currency Account


The National Bank of Pakistan is currently providing foreign currency
accounts services in four currencies:

 US Dollars
 Pound Sterling
 Dutch Mark
 Japanese Yen

Foreign currency accounts can be operated by Pakistani residents abroad as


well by residents at home, plus foreign nationals who are residing in Pakistan.

INTERNSHIP REPORT 33
The opening of foreign currency goes through the same kind of process that is
used for opening of an ordinary deposit account. A prescribed form has to be
filled as an application for opening of account. Personal identification card and
introducer is required who can be an old account holder with the Bank or an
officer of the Bank. Foreign Currency accounts can be opened in following
three types.

 Foreign Currency Current Account


 Foreign Currency PLS Account
 Foreign Currency Fixed Deposit Account
Foreign Currency Current Account
Foreign currency current account can be opened with a minimum balance of
$500. This account is not entitled to any profit.
Foreign Currency PLS Account
Foreign currency PLS account require $100 for opening and this account is
eligible to share the profits and losses at the rate that is prescribed by the
Head office from time to time.
Foreign Currency Fixed Deposit Account
In this type of account the deposits are accepted for a period of minimum 3
months and maximum up to 3 years. The profits are credited to the accounts
after every six months on a rate that is ascertained by the Treasury Division of
the National Bank of Pakistan Head Office Karachi. The profit is provided on
daily product basis, which means that profit is credited based on the balance
in the account and the number of days it has remained in the account.
Profit On Foreign Currency Accounts
The profit on foreign currency accounts is paid only on the US Dollar account
and Pound Sterling account. The other two currencies are not entitled to
receive profit on the balances. The profit for the half-year ended June 30,
2001 has been declared at the following rates:

INTERNSHIP REPORT 34
Currency name New Account Old Account

US Dollar @ 1.250% @ 2.2350%

Pound Sterling @ 1.175% @ 1.878%

The Bank maintains separate ledgers for every type of currency account. The
most significant accounts with the Bank, in number and frequency of
transactions, are US Dollar and Pound Sterling. That is the reason these
accounts are made eligible to share the profits.

3.2.5) REMITTANCE DEPARTMENT

Remittance department provides services to the customer of the bank. The main
function of this department is transfer of funds.

INSTRUMENTS OF BILLS AND REMITTANCE DEPARTMENT


The instruments that are handled in the Remittance department are as follow:
 Demand Draft.
 Mail transfer.
 Telegraphic transfer.
 Pay order.

DEMAND DRAFT
A demand draft is an instrument, which is drawn by one bank upon another
bank for a specific sum of money payable on demand. It is made by the bank
and given to the purchaser against cash or Cheque. If two banks are involved,
then one banks sends a DD to anther bank. But in customer – Bank case the
customer sends his DD to the receiver.

INTERNSHIP REPORT 35
MAIL TRANSFER
A Mail Transfer is mode of remittance that is used for transfer of money in
case the responding branch is of the same bank, which is issuing the MT.
Simply to say, all inter-branch transfer are done through MTs. A MT does not
need an advice to be sent because the amount of MT is directly credited to
the account of the payee. So it is an easy mean to transfer the amount from
one account to the other account with in the same bank but different
branches.

TELEGRAPHIC TRANSFER
It is said to be the fastest mean of transfer of funds from one place to the
other. In this method a Telex message is used to make an order of payment
of the responding branch. It is a costly mean and the charges are
comparatively higher than other means.

PAY ORDER
It is a cheque drawn by a bank on itself. Pay order is an instrument in which
three parties are involved, the purchaser, the bank and the receiver. Any
customer can purchase it. It is usually made by govt. Bodies. A single bank is
involved in this case.

OTHER FUNCTIONS

BALANCING THE REGISTER


At the end of the day, all the registers are balanced with the computer
balances. The heads are as follows.
 DD payable.
 TT payable.
 MT payable
If the payables are not cleared for a lot of days, a reminder is sent to the
respective branches.

3.2.6) Clearing Department

INTERNSHIP REPORT 36
There is no legal obligation on a banker to collect cheques drawn upon other
banks for a customer. However it is function of almost every modern bank of
the collection of cheques and bills on behalf of the customer.
Clearing department services are provided in order to make arrangements for
the economic collection of the cheques, DD and other negotiable instruments.
A large part of this work is carried on through the clearinghouse.

ROLE OF THE CLEARING DEPARTMENT


Suppose X is an account holder of NBP, and he has to pay Rs.2, 000/- to Y
who is an account holder of MCB. X draws a cheque in favor of Y and gives it
to Y. Now Y instead of coming to NBP for payment, deposit the cheque at
MCB. The MCB clearing members will bring those cheques to the
clearinghouse and gives it to NBP clearing members. The NBP clearing
members brings it back to the bank and checks the validity of the cheques
and in the second clearing the MCB members told that his cheque has been
cleared.

Book keeping
There are three registers in this department:
 Clearing summary register.
 Inward clearing register.
 Outward clearing register.

Clearing Summary Register


In this register the clearing summary balance is made. The received cheques
and the delivered cheques are written in the respective columns.
Inward Clearing Register
The inward clearing register used to write the details of the inward cheques
cleared. Inward cheques are those cheques, which have been recovered from
the different banks. The amount of these will be credited SBP Account, so
these cheques are against us and have a negative effect.

INTERNSHIP REPORT 37
Outward Clearing Register
The outward clearing register is used to write down the detail of the outward
cheques. Outward cheques are those cheques, which have been delivered to
different banks. The amount of these cheques will be debited to SBP account
so these cheques are in favor of us and have a positive effect.
Different instruction is dealt in he clearing department. All negotiable
instruments e.g.
 Cheques
 Pay slips
 Pay orders
 Term deposits
In order to make arrangements for the speedy and economic collection of
cheques, bills and other documents payable or deliverable at offices of
clearing house. State Bank of Pakistan provides clearing services in all the big
cities. Where State Bank of Pakistan has no office then NBP act the role of
clearing house.

3.2.7) GOVT. DEPARTMENT


Govt. Section is situated in the basement of the regional headquarter of NBP.
It is supervised by Mr. Ali. A young energetic and dedicated person.

THE MAIN FUNCTIONS OF THE GOVT. SECTION ARE:


Collection of utility bills i.e. telephone, electricity and sui gas Collection of
Government Taxes i.e. excise duty, traffic challan, Passport Collection Fee,
sales tax, income tax, withholding tax, property tax Payment of salaries
Payment of Zakat Disbursement of pension

INTERNSHIP REPORT 38
FINANCIAL ANALYSIS

INTERNSHIP REPORT 39
BALANCE SHEET

Assets 2006 2005


Rupees in
000
Cass and balance
with treasury banks 78625227 71196956
Balances with other banks 40641679 31019330
Lending to Financial Institutions 23012732
16282942
Investments 139946995
156985378
Advances 316110406
268838779
Operating fix assets 9681974 9454365
Other assets 27113698 23941056

Total Assets 635132711


577718806
Liabilities
Bills payable 10605663 1741156
Borrowings 11704079 8756847
Deposits and other accounts 501872243
463426602

Liabilities against assets


subject to finance lease 13235
16629

Deferred tax liabilities 2387073 4462718


Other liabilities 26596300 23496910

INTERNSHIP REPORT 40
Total Liabilities 553178593 75817944
Net Assets 81954118 75818944
Share capital 7090712 5908927
Reserves 13879260 12354256
Unappropriated profits 32074677 19372523

53044649 37635704
Surplus on revaluation
of assets 28909479 38182238

Total equity 81954118 75817944

Total Liabilities and equity 635132711


577718806

INTERNSHIP REPORT 41
PROFIT AND LOSS STATEMENT

Rs in thousand 2006 2005


Markup/return/interest 43788628 33692665
earned
Markup/return/interest 13634912 10321768
exp
Net Markup/return/interest 30153716 23370897
earned income
Provision against non- 3075723 2446739
performing loans and advances
Provision for impairment -709461 -245881
in the value of investments
Bad debts written off directly 5284 23069
2371546 2223927
Net markup/interest income 27782170 21146970
after provisions
Non-markup/interest
income
Fee, commission and 6144628 4926604
brokerage income
Dividend income 2891755 1718478
Income from dealing 1333840 1205638
in foreign currencies
Gain on sale of securities-net 1179515 1365771
invest classified held -4464 -1979
for trading
Other income 627618 170839
Total non-markup/ 12162892 9392351
interest income
39945062 30539321
Non-markup/ interest
expenses
Administrative expenses 13443441 11221789
Other provisions/write offs -17283 198298
Other charges 208327 63206
Total non-markup/interest 13634485 11483293
expenses
Profit before taxation

INTERNSHIP REPORT 42
Taxation 9288231 6346584
Profit after taxation 17022346 12709444
Inappropriate 19372523 10885184
profit brought forward
Profit available for appropriation 36394869 23594628
Basic earning per share 24.01 17.92
Diluted earning per share 24.01 17.92

INTERNSHIP REPORT 43
FINANCIAL RATIOS

INTERNSHIP REPORT 44
1. LIQUIDITY RATIOS:
(a) Net Working Capital=current assets- current liabilities

2006 = 433218792 – 518336004 =-85117212

2005 = 411289063- 497421515 =-86132452

(b) Quick ratio = Cash + Cash


equivalents
Current liabilities
2006
= 78625227 =.15
518336004
2005
= 71196956 =.14
497421515
(c) Current ratio = Current assets
Current liabilities
2006
= 433218792 =.84
518336004
2005
= 411289063 =.82
497421515

Bank’s net working capital has been decreased this year from the previous
year that shows that their current liabilities are more than the current assets.
We can say that their working capital is
Negative. It is a good for the bank as it shows the increase in interest of
customers on bank. But it will also increase the risk, as it will decrease
liquidity.

INTERNSHIP REPORT 45
Bank’s quick ratio that tells that the bank can pay its short-term obligations
within 3 months has been increased this year from the previous year. It is also
good for the bank.

Current ratio indicates bank’s ability to meet short obligations. Current ratio
has improved as compared to last year. This increase is due to increase in
loans to financial institutions. This positive increase is good for the company.

2. Activity Ratios:
(a) Total Assets Turnover= mark up earned
Average total assets
2006
= 43788628 =6.89%
635132711
2005
= 33692665 =5.83%
577718806
Total assets turnover indicates the efficiency with which the bank uses its total
assets to generate mark up. a specified period of time has been increased
this year to 6.89%that shows that the bank had generated more this year by
using the assets of the bank.

3. Leverage Ratios:

(a) Debt ratio = Total Debt


Total Assets
2006
= 553178593 =87%
635135711
2005
= 501900862 =87%

INTERNSHIP REPORT 46
577718806

(b) Debt Equity ratio = Total Liabilities


Common Equity
2006
= 553178593 =674%
81954118
2005
= 501900862 =761%
75817944

(c) Times Interest Earned Ratio


= Earning before Interest & Taxes
Interest Expense
2006
= 26310577 =1.93
13634912
2005
= 19056028 =1.85
10321768

Leverage ratio or debt ratio tells the degree of indebt ness of the entity. This
means against liability of 0.87 rupee, bank has 1 rupee of assets to satisfy it
and this is a good sign.
Debt equity ratio decreased as compared to previous year, which indicates
that less equity is used to finance the total assets as compared to last year

Times interest earned ratio tells the relationship between EBIT and the
interest paid of specific time period. This year this ratio has been increased
that shows that they are paying more portion of interest relating to the
previous year.

4. Profitability Ratios:

INTERNSHIP REPORT 47
(a) Gross profit margin = Gross Profit
Total net sales
2006
= 30153716 =68.86%
43788628
2005
= 23370897 =69%
33692665

Gross Profit ratio measures the percentage of each rupee earned from
revenues remaining after the cost of goods has been paid. A decrease in this
ratio is observed as compared to last year.

(b) Profit margin = Net Profit


Total revenue
2006
= 17022346 =38.87%
43788628
2005
= 12709444 =37.72%
33692665
Net profit ratio shows the earning available for distribution
among the shareholders. The ratio has slightly increased

(c) Return on assets = Net Income


Average Total Assets
2006
= 17022346 =2.68%
635132711
2005
= 12709444 =2.19%

INTERNSHIP REPORT 48
1577718806
Return on assets that tells the profit the bank earned on the use of the assets
has
decreased this year relating to the previous year.

(d) Return on common stock equity = Net Income


Common Equity
2006
= 17022346 =20.7%
81954118
2005
= 12709444 =16.76%
75817944
Return on equity that tells the profit generated through use of common equity
has been increased relating to the ratio of the previous year.

(e) Return on deposit = NPAT


Deposits
2006
= 17022346 =3.39%
501872243
2005
= 12709444 =2.74%
463426602
Net profit after taxes to deposit ratio is increased which
shows the worthiness of bank among the customers.
5. Marketability ratios:
6.
(a) Earning per share = Net Income-Preferred dividend
Common Stock Outstanding
2006
= 1722346 = 24.01

INTERNSHIP REPORT 49
709071
2005
= 12709444 = 17.92
5908927
Earning per share ratio tells the earning by one share of common equity. This
ratio has increased related to the previous year indicating that each share is
generating more profit than the last year.

(b) Book value per share


= stockholders equity- preferred stock
Common Stock Outstanding
2006
= 81954118 =11.5
7090712
2005
= 75817944 =12.83
5908927
Book value per share tells the value of the share on some specific period of
time. Book value per share has decreased this year relating to the previous
year.

INTERNSHIP REPORT 50
FINDINGS
 The increase in Current Ratio from 0.82 to .84 is showing that the bank
is increasing capacity of meeting its short-term obligations. As per the
regulations of SBP, this Ratio must not be lower than 1:1.
 The bank’s debts are 6.74 times its Equity. Bank is getting sufficient
return on its assets i.e. 2.68% as well as on its equity i.e. 20%.
 The Income Statement is showing an upward trend as compared to the
previous year. The Net Profit has comparatively increased by 33%
 The Operating Cash Flows of the company were negative in 2005but in
2006 they are positive. It is mainly because of management’s control
over expanses and profits earned and retained.
 Cash Flows from Investment activities are negative and those from
financing activities are negative too. It means that bank1 has made
Capital investments, on the other hand, has paid its liabilities.
 Net Cash Flow for the current year are negative which means that
outflows are greater than Inflows but it is good because company has
generated from Operating Activities and has made investments and
paid its Liabilities.

INTERNSHIP REPORT 51
3.3) SWOT ANALYSIS

STRENGTHS

 Public confidence
 Sound financial strength
 Highest profitability
 Vast operational network
 Role in economic development
 Utility bills collections
 Corporate branches
 Evening banking
 Efficient home remittance
 Recognition of hard work of staff
 SWIFT
 Internet access (www.NBP.com.pk)
 Pension & salaries payments
 Online city branch
 Pension & salaries payments
 Online city branch

WEAKNESS

 Poor quality counter services in branches which are not online


 Outdated system & procedure
 Lack of good delegation
 Inadequate, poorly placed network technology
 Poor MIS
 Deep rooted bureaucratic approval
 Poor maintenance & implementation

INTERNSHIP REPORT 52
 Lack of long term & short term plans
 Less share in import & export business
 Poor resource utilization
 Need better service policy
 Frequent change in senior management
Opportunities
 New style management
 Introduction of new products and services
 Introduction of new technology & electric banking
 Capital management & equity financing
 Secondary market operations
 New deposit scheme
 Leasing
Threats
 Establishment of new private financial institutions & expansion
 Govt. sponsored schemes
 Political pressure
 Reducing branch network
 New products form private Pakistan Establishment of new private
financial institutions & expansion
 Non-banking institutions
 Inability to change

INTERNSHIP REPORT 53
SUGGESTIONS & RECOMMENDATIONS

Based on the SWOT analysis of the National Bank of Pakistan. There is a


long list of weaknesses that is given on the previous page. Most of them are
going along since long time and that all efforts made to remove them have not
succeeded. On the basis of SWOT analysis of the Bank the following
suggestions and recommendations are given.

 Bank should try to get rid of the political influence to be able to


compete in the industry with prudent and strong policies.

 Redefining of rules, regulations and policies should be made


implemented at all costs.

 Efforts of great importance to be made for the over the counter


services of general banking making it more simple and faster to get a
better response of the customers.

 The behavior of the employees, especially on the counter has to be


strictly monitored and checked.

 The still existed bureaucratic approval system has to be demolished.


 All advances should be made by getting the maximum security and
should focus on productive work.

 Better and comprehensive long-term and short-term planning should


be made to forecast the future needs.

 There is a possibility of establishing a task force to ascertain the


effectiveness of the policies being implemented.

 The Bank should develop a comprehensive recruitment policy to make


only the competent ones to be on the job.

INTERNSHIP REPORT 54
 There is a still a vast pool of incompetent employees that has to right
sized.

 There is a lack of promotional element in the planning and budgetary


decisions of the Bank that has to think seriously.

 All branches of the Bank should be computerized for increasing the


effectiveness and efficiency of its employees.

 Efforts should be continued to keep the powers of employees union to


the minimum, like the current situation.

 Promotions must not be delayed and should be made on time to further


increase the commitment and efficiency of the employees.

These and many others that can make a good set of recommendations, which
have to be made possible to escape from the threats and weaknesses and
the risks in environment that surrounds the Bank. The management do
considers the policy matters that are not helping the Bank, but are still in
practice due the absence of prudentially regulated system to protect them and
the Bank.
Efforts have been made with serious concern to give NBP a status that it has
to maintain by having practices of:

 By using computers and technology more efficiently..


 By closing unprofitable branches.
 By introducing a merit based selection criteria.
 Promotions made conditional with qualifications.

INTERNSHIP REPORT 55
4) LEARNING AS A STUDENT INTERN

4.1) DUTIES

i) MY ACTIVITIES IN ACCOUNT OPENING DEPARTMENT


During my internship in this department I was assigned different duties such
as to guide and help the customers to open accounts, to tell them about
different types of accounts with their benefits also about the procedure and
documentation required. I filled the vouchers, application farms, requisitions
for new Cheque books and affixed the stamps on vouchers there.

MY ACTIVITIES IN FOREIGN EXCHANGE DEPARTMENT


Here in that department I learned from Mr. Aziz Baig and Mr. Usman how to
fill the vouchers, the account opening forms, about the procedure of opening
an L.C and about its documentation and processing. Also the procedure for
dealing with inward and outward remittances.

MY ACTIVITIES IN REMITTANCE DEPARTMENT


I was given the tasks such as to guide the customer about the procedure, to
fill the vouchers for the amount and charges, asked the customer for
necessary documents such as I.D card and after payment of these vouchers
by customer make the specific instrument of DD, MT, PO, TT , TC , record it
in their respective ledgers.

MY ACTIVITIES IN GOVT. DEPARTMENT

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In Govt. section I was concerned to make scrolls of pension distribution,
passport fee, traffic challans, and utility bills and at the end of the day total
them and check them with counter ledger. And at the end of the day making
debit and credit voucher for government's payment (pension) and revenue
collection. These vouchers are sent to the IT section of the bank where the
corresponding accounts are updated by the amounts of the vouchers. Also to
make entries in the pension ledgers and in the book of the pensioners.

4.3) ACCOMPLISHMENTS

IMPLEMENTATION OF CLASS ROOM LEARNING

The first thing which I noticed is that ground realities are different as
compared to with the theories or some factors which increase this difference
like management practices, economic conditions, political scenario and other
external factors. But still we can’t deny the importance of class room theories
because they help us in great way in understanding the operations of the
bank. The courses of “Management” and “HRM” enable me that how bank
should be reactive toward changes like economic, cultural, and technological
and deals with the issues relating staff. I saw the practical implementation of
“Marketing Management” being followed in retail banking e.g. in new product
development and communicating its features to target audience. The subjects
of International finance and Analysis of financial statements helped me lot
while I was working in the foreign exchange department and while preparing
this report. Also the subject of Accounting and Financial management helps
me while I was working in credit department. The financing process of all
international trade which modern banking made less complicated and more
secure have increased with the global-village concept in the world. For banks
it is an opportunity to grasp the maximum share as possible through being
more efficient to reach the customer.

4.4) NEW KNOWLEDGE ACQUIRED

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WHAT I LEARNT IN THE ORGANIZATION

In the organization, my knowledge was very much enhanced. I learnt a lot,


few of which are as: I got the practical experience about how to work in a
professional environment; it gives me the opportunity to shape my behavior,
attitude and my thoughts. I learnt the professional attitude of the people. I also
observed that one must have to be dedicated towards his/her job. I saw, how
much it is necessary to do the job in a friendly environment. What are the
working relationships and responsibilities of supervisors and their
subordinates I observed that how to deal with the customers, what are their
needs and what do they expect from the service provider.
It also helped me to understand the importance of working in different types of
environment and conditions. Overall, I can say that it was my very good
experience of doing my internship in NBP Main Branch Multan.

4.5) HOW EXPERINCE IMPACTS MY CAREER


I learnt a lot, few of which are as: I got the practical experience about how to
work in a professional environment. I can say that it was my very good
experience of doing my internship in NBP Main Branch Multan
This experience is add in my c.v and if I want to apply in banking sector then
this experience is very helpful in my interviews and also have much impact in
my practical life to be professional.

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REFERENCES
NAME AND DESIGNATION
Rana Meher Hussain (Assistant Vice President )
Syed Manzar Ali Gillani (Incharge Remittance)
Syed Sana ullah Kazmi (Officer Remittance)
Muhktar Hussain (P.A to Chief Manager)
Muhammad Ali (Govt. Section)
Abdur Raheem Bhutta (Remittance Section)
Mr. Mirza Aziz Baig (Foreign Exchange)
Mr.Syed Ameer Muslim Gardezi (C.F.A)

NAME OF INTERNEE

Muhammad Furqan Umar -------------------------------------------0333-6171345


0302-6171345

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BIBLOGRAPHY

1. www.nbp.com.pk
2. Annual report of National Bank
3. Old Internship report 2001

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