Vous êtes sur la page 1sur 60

1.

EXECUTIVE SUMMARY
This report is about my internship that I have undergone at National Bank of
Pakistan, Main Branch Lahore from 5th July 2008 to 19th August 2008. The main
purpose of internship is to learn, by working in practical environment and to apply the
knowledge acquired, during the studies, in a real world scenario in order to tackle the
problems. The objective of this report is to fully describe my internship program and
sharing my practical experience of NBP with my teachers and other students. Efforts
have been made to compile this report in such a way that activates its salient
features not only for students but also for the layman. I have divided this report into
different sections. First section is about introduction of NBP in which I have
discussed golden history of NBP, vision, mission, core values and goals. Second
section is about Business structure in this I have discussed bank senior
management, corporate information, organization chart, structure and departments
of NBP. Third section discusses the business strategy in which SWOT analysis,
competitive strategy and business process analysis is discussed. Fourth section is
about marketing in which we discussed marketing strategies, target Market and
promotional strategies. Fifth section is about the finance in this I have discussed the
ratio analysis and financial analysis of balance sheet and income statement. Sixth
section is about HRM in this I have discussed Hr policies, functions and practices.
Seventh section is about conclusion and recommendations. Eight section is about
what I learn in the internship in this I will discuss my duties, accomplishment, new
knowledge acquired, problem encountered, and last how this experience impact on
my career.

1
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
2. INTRODUCTION AND BACKGROUND OF NBP
a. GOLDEN HISTORY OF NATIONAL BANK OF PAKISTAN
In 1949 (September) U.K. devalued its currency, India followed suit but Pakistan did
not. India said we had contravened the agreement of keeping both currencies at par.
We said we had not done that, India had done it arbitrarily without consulting us. On
October 3, 1949 the two central banks were to announce the new par value of both
currencies but India denied a day earlier. India also froze our trade - balance surplus
that is still an unsettled dispute. India also withdraws the Marwari merchants who
were employed annually for movement of jute crop by financing it. There being no
jute industry, prices fell sharply, foreign banks and foreign merchants stood aside
and an agrarian unrest was threatening.
Two Ordinances were, therefore, issued
1. Jute Board Establishment Ordinance &
2. NBP Ordinance dated 08.11.1949
National Bank of Pakistan was established on November 9, 1949 under the National
Bank of Pakistan Ordinance 1949 in order to cope with the crisis conditions which
were developed after trade deadlock with India and devaluation of Indian Rupee in
1949. Initially the Bank was established with the objective to extend credit to the
agriculture sector. The normal procedure of establishing a banking company under
the Companies Law was set aside and the Bank was established through the
promulgation of an Ordinance due to the crisis situation that had developed with
regard to financing of JUTE trade. The Bank commenced its operations from
November 20, 1949 at six important jute centers in the East Pakistan and directed its
resources in financing of jute crop. The Bank’s Karachi and Lahore offices were
subsequently opened in December 1949. The nature of responsibilities of the Bank
is different and unique from other banks/financial institutions. The Bank act as the
agent to the State Bank of Pakistan for handling Provincial/Federal Government
Receipts and Payments on their behalf.
Mr.Ghulam Farooq was chairman Jute Board and Mr. Mumtaz Hassan was chairman
NBP. Until June, 1950, NBP remained exclusively in jute operations, thereafter-other
commodities were also taken-up. After that Mr. Zahid Hussain, Governor SBP
assumed additional charge also as chairman NBP's Board of Directors, and Mr. M.A
.Mohair became its first M.D.

2
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
In 1952 NBP replaced Imperial Bank of India. This arrangement was negotiated by
Mr. Mumtaz Hassan as Acting Governor of SBP.
In 1962 when Mr. Mumtaz Hassan became MD (He had already served NBP for 10
years as its Chairman of government Director), the number of branches had
increased from 6 to 239 and deposits from Rs.5 crore (50 million) to 106 crore (one
bn & 60 mln), profit from 3 million (3 Lac) to 21 million (2.1. crore) and the staff
increased from 380 to 7091, as compared to 1949-50. In Dec. 1966 its 600th branch
was opened raising the deposits to 2.31 bn. and staff to 14, 963. Up to 1965, the
shareholders had received 225% of their original investment. Now it has more than
21549 employees 1537 branches and Rs.208283 million deposits.
The Bank has also played an important role in financing the country’s growing trade,
which has expended through the years as diversification took place. Today the Bank
finances import/export business to the tune of Rs.62.17billion, whereas in 1960
financing under this head was only Rs.1.54billion.
The field is being de-layered to improve customer services and enable faster
decision making. As a result of this de-layering zones have been eliminated and the
numbers of regions have been increased. Organizational hierarchy at the regional
level has been restructured and operational and business activities have been
completely separated. This separation will improve communication, decision making
and promote teamwork.

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

c. MISSION
NBP will aspire to the values that make NBP truly the Nation’s Bank, by:
 Institutionalizing a merit and performance culture.
 Creating a distinctive brand identity by providing the highest standards of
services.
 Adopting the best international management practices.
 Maximizing stakeholder’s value.

3
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
 Discharging our responsibility as a good corporate citizen of Pakistan and in
countries where we operate.
d. CORE VALUES
 Highest standards of Integrity.
 Institutionalizing 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.
e. GOALS
To enhance profitability and maximization of NBP share through increasing leverage
of existing customer base and diversified range of products.

4
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
3. BUSINESS STRUCTURE

a. NBP SENIOR MANAGEMENT

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


Masood Karim SEVP & Group Chief, Co. & Invstment Banking Group
Ekhlaq Ahmed SEVP & Secretary Board of Directors
Tajammal Hussain SEVP & Group Chief, Special Assets Management Group
Nadeem A. Ilyas EVP & PSO to the President
Amer Siddiqui EVP & Group Chief, Commercial & Retail Banking Group
Imam Baksh Baloch EVP & Group Chief, Audit & Inspection Group
Shahid Anwar Khan EVP & Group Chief, Credit Management Group
M. Nusrat Vohra EVP & Group Chief, Treasury Management Group
Atif Hassan Khan EVP & Group Chief, IT Group
Dr. Abrar Baig SEVP & Group Chief ,HRM & Administration Group

Board of Directors
Chairman & President Syed Ali Raza
Muhammed Ayub Khan Tarin
Sikandar Hayat Jamali
Azam Faruque
Mian Kausar Hameed
Ibrar A. Mumtaz
Tariq Kirmani
Muhammed Arshad Chaudhry

Audit Committee
Chairman Azam Faruque
Ibrar A. Mumtaz
Mian Kausar Hameed

5
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Auditors
Ford Rhodes Sidat Hyder & Co.
Chartered Accountants
M. Yousaf Adil Saleem & Co.
Chartered Accountants

Legal Advisors
Advocates & Legal Consultants Mandviwala & Zafar

Registered &Head Office


NBP Building
I.I.Chundrigar Road, Karachi,
Pakistan

Registrars & Share Registration Office


THK Associates (Pvt.) Limited
Shares Department, Ground Floor,
Modern Motors House,
Beaumont Road,
Karachi, Pakistan

Website www.nbp.com.pk

6
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
b. ORGANIZATION CHART OF NATIONAL BANK OF PAKISTAN

DESIGNATIONS FOR HIGHER LEVEL OFFICERS

PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT


GRADE 22

EXECUTIVE VICE PRESIDENT


GRADE 21

VICE PRESIDENT
GRADE 20

ASSISTANT VICE PRESIDENT


GRADE 19

GRADE I OFFICER
GRADE 18

GRADE II OFFICER
GRADE 17

GRADE III OFFICER


(GRADE 16)

7
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
c. ORGANIZATION STRUCTURE OF NBP
The structure of National Bank of Pakistan is shown in the organizational chart. As
the chart shows the top governing body of National Bank of Pakistan is the board of
directors. The board of directors elects a president who then heads the executive
board of directors, which comprises of provincial chiefs and division heads etc.
BOARD OF DIRECTORS
The board of directors is the supreme governing body of National Bank of Pakistan.
It comprises of a government representative, Pakistan Banking Council Nominee,
Nominee of corporate sector and three directors from National Bank of Pakistan.
EXECUTIVE BOARD OF DIRECTORS
The Executive Board of Directors comprises of the four provincial chiefs, the three
directors from Board of Directors, and the division heads. These people run the
organization. They are answerable to the president and the president is answerable
to the Board of Directors.
STRUCTURE OF A PROVINCIAL HEAD OFFICE
A provincial head office is headed by a provincial chief. As the organizational chart
shows that under a provincial head office there are regional offices. In Punjab there
are about nine regional offices. Under each regional office there are two or three
zonal offices and under each office there are fifteen to twenty branches.

TYPES OF BRANCHES
There are a lot of different branches of National Bank of Pakistan. We explain them
one by one.
 There are main branches in every city. In one city there is only one main
branch, it is directly under the zonal office.
 Then there are commercial branches. These are the ordinary branches and
are in the commercial areas such as the Mall Road Branch.
 The Industrial Branches are exclusively in industrial zones.
 There are also Residential Branches. These are exclusively in residential
colonies.
 Another type is the Mixed Branch such as civil secretariat branch. Every kind
of work is done.

8
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
 There are also Project Branches created for specific purposes i-e the project
and are at the site.
 Another unique type is the Model Branch. No other bank in Pakistan has
these. In these branches all the work is done by the officers. Even the officers
sit on the counters. Model Branches are in Karachi, Lahore and Islamabad.
 There is one special type known as Drive in Branch. There is one in Karachi
known as Kahkashan branch. People go to the bank in the car, hand over the
check and get the money sitting in the car.

DIVISIONS OF NATIONAL BANK OF PAKISTAN


In order to perform all the functions, the National Bank of Pakistan has made some
divisions, which perform some specific functions. Following are the divisions:
 CREDIT DIVISION
The main function of this division is to make the credit policies, and also to do credit
ceiling which means the maximum amount of credit that can be given to a certain
client. This division also looks for the agricultural and small loans. It also considers
the cases of right off i.e. bad debts.
 CORPORATE CREDIT DIVISION
The major function of this division is to handle the big loans and industrial financing,
I.B.R.D. It also does the evaluation of credit ceiling policy devised by the credit
division.
 INTERNATIONAL DIVISION
This division has to look after the administration of National Bank of Pakistan outside
Pakistan. It takes care of all the affairs about the advances given outside, the
management of the branches of the bank outside Pakistan, the posting of employees
outside Pakistan etc.
 RECOVERY AND LITIGATION DIVISION
This division comes into operation when recovery of advances given becomes
difficult or impossible. It is the job of this division to decide whether to go court
against the client or not.
 AUDIT AND INSPECTION DIVISION
The major function of this division is to carry out the inspection of rules and policies.
It also inspects the books of accounts, whether they are kept rightly or not.

9
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
 ADMINISTRATION DIVISION
This division consists of two wings the personnel wing and establishment wing.
The personnel wing concerns with employee welfare and administration. It looks
after things like rules relating to the administration of employees, the medical bills
etc. There
is also a disciplinary cell, which is for punishments if an employee does something
wrong. The establishment wing has a main function of controlling the debt stock i.e.
furniture, transport facility, stationary, sports portfolio, security arrangements, and
staff welfare.
 RESEARCH CORPORATE PLANNING AND HUMAN RESOURCE
DEVELOPMENT DIVISION
Their main job is to do human resource management. For this purpose there are
staff collages in Pakistan. There are four of them. They give training to employees
outside organization and also outside the country. In 1998 National Bank of Pakistan
staff collages have trained about 7992 employees out of which 321 were executives
5553 officers and 1878 other staff. Outside National Bank of Pakistan they trained
128 executives, 113 officers and 2 other staff. They have their own staff and also
engage faculty from Punjab University and LUMS.
 ENGINEERING AND MAINTENANCE DIVISION
The job of this division is maintenance of buildings, construction of projects, project
designing. The head of this division is an engineer who has designation of executive
vice president.
 FINANCE AND INVESTMENT DIVISION
It looks after the accounts, investment in resources and decides where to allocate
the surplus funds.
 CUSTOMER SERVICES DIVISION
The main job of this division is to manage the opening and closing of branches,
Islamization policy, then there is a complaint cell where the customer makes the
complaints if they are not treated well. This division also accepts Hajj applications.
This division is very important as it directly concern the customers who are the ones
to make the deposits, which the bank invests.
 BUSINESS PROMOTION AND MARKETING DIVISION

10
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
It concerns the marketing and selling of the policies and interest rates of National
Bank of Pakistan through advertisements on television or in the papers etc.
 LAW DIVISION
This division consists of an executives committee and an evaluation committee.
Their job is documents evaluation and they give legal opinion to recovery and
litigation division also.
 COMPUTER DIVISION
This division does data processing through computers and develops control
systems. All these divisions perform their functions through the branches and they
are located at the head office in Karachi.
 TREASURY DIVISION
NBP boosts the banking sector’s largest treasury operation by virtue of being the
principal bank for handling the exchequer’s business. Facing the current competitive
interest rate environment, the bank has felt the need to enhance its asset yield
through the use of derivative products. The bank recently executed a Quanta Interest
Rate Swap aimed at providing cross currency interest rate hedge for one of its prime
clients. This is a watershed, being the first such transaction to have been
successfully launched in Pakistan and will serve as the foundation stone for the
promotion of derivative products.
 INFORMATION TECHNOLOGY
NBP has undergone a paradigm shift by synchronizing the adoption of technology
with product development as they view it as a tool for optimizing customer
satisfaction. Round the clock payment of utility bills in important cities is now in place
and branches covering 85% of the bank’s business will be fully automated on a real
time basis. While the “One-Link” ATM switch sharing arrangement will serve to
enhance the 24 hour banking facility available to our customers, NBP is expanding
its owned ATM base as well.

NBP is also inviting local and international software solution providers for the supply,
implementation and maintenance of the Core Banking Application software for its
domestic and overseas branch banking operations. In addition to the Core Banking
Application it is essential to understand the role of NBP as a major collection agent
for the Government of Pakistan with over 34 different types of receipts and
disbursements done through 1189plus branches of the bank. On an average the

11
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
bank has approximately 1.5 million transactions per day for approximately ten million
customer accounts across Pakistan. The Project includes computerization of Trade
Finance, Retail, General Ledger / Finance, Investment Banking, Corporate Banking,
National Investment Trust System, Litigation Monitoring, Credit and Risk
Management System and Card Services.
 COMPLIANCE DIVISION
NBP continually strive to adopt the best corporate governance practices to safeguard
the interests of our depositors, customers and shareholders. They have substantially
intensified the scope as well as frequency of our internal audit operation while
employees are encouraged and rewarded for compliance with the high ethical
standards that are been set.

BRANCHES NETWORK

USA Wall Street New York, UN Plaza New York Washington D.C. and
Chicago.
Egypt Cairo
Bahrain Manama
Bangladesh Dhaka
U.K. London Manchester, Glasgow, Bradford, Edinburgh, Sheffield,
Birmingham & Knightsbridge (London).
France Paris
China Beijing (Rep. Office)
Uzbekistan Tashkent
Saudi Arabia Bank Al-Jazeerah Branches.
Germany Frankfurt
Hong Kong Hong Kong & Kowloon
Japan Tokyo & Osaka
Korea Seoul

12
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
BRANCH NETWORK GROWTH OF NBP

Year Total Branches

1950 17
1951 29
1952 40
1953 52
1954 65
1955 67
1956 73
1957 85
1958 105
1959 129
1960 156
1961 194
1962 239
1963 330
1964 450
1965 519
1966 618
1991 1421
1995 1537
1997 1468
1998 1434
1999 1434
2000 1375
2001 1245
2002 – 2006 more than 1400

13
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
d. DEPARTMENTS OF NBP

General banking is one of the major departments of National Bank of Pakistan. It


consists of sections, which are following.
1. Account opening section.
2. Deposit section.
3. Clearing section.
4. Remittance section.

I. ACCOUNT OPENING SECTION

HOW TO OPEN AN ACCOUNT


There are certain formalities which are to be observed for opening of a current or
saving account with a Bank. These formalities in brief are as under
FORMAL APPLICATION
The customer is to filling "Account Opening Form 11 It is a formal request by a
customer to the bank to allow him to have and operate the current or saving account.
OBTAINING INTRODUCTION
The bank before opening, and account obtains introduction of the customer from old
customer, responsible person etc.
SPECIMEN SIGNATURE
When the Banker is satisfied about the integrity of the customer, he agrees to open
the account. The Banker obtains the specimen signatures of the customer on the
signature book or on card.

MINIMUM INITIAL DEPOSIT


In Pakistan the current account can be opened with a minimum of Rs. 500/- and PLS
Saving Account with a minimum of Rs 100/- These amounts are also the minimum
balances to be maintained by the account holders with the Bank.
OPERATING THE ACCOUNT
When an account is opened in a Bank, the Banker gives to the customer.
i. Pay in slip book.
ii. Cheque Book and pass book with a view to operate it.

14
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
PRECAUTIONS IN PREPARING THE PASS BOOK
The Banker should be careful in preparing the pass book However, the customer
himself should.
i. Send the pass book for making entries and also periodically check up them.
ii. He should also see that the entries are initialed by the accountant.
iii. The customer should verify the entries with own books of account.
iv. In order to safe guard the secrecy of the account; the customer should receive
the pass book in closed cover.
WITH-DRAWL
Withdrawal is made on cheques supplied by the Bank. A new cheque book is issued
only on receipts of the requisition slip attached to the cheque book issued previously
and this presented along with the depositor pass book for entire against cheque
book challan. Cheque book is issued on discretion of the branch manager.
INTEREST
The current rate of interest allowed on deposit in saving Bank account is ascertained
at the Bank. This rate is subject to change. The amount of interest is calculated for
each calendar month on the lowest balance at credit of an account between the
close of the sixth day of a month and the end of the month and only on every
complete sum of ten rupees.
Every account is made up half yearly to 30th June 31st December, and the interest
calculated as above is added to the balance of each account as on these dates.
TRANSFER OF AN ACCOUNT
Account can be transferred to any other branches of N.B.P. free of charge. If a
depositor wants to transfer his account, he presents his pass book personally or
sends it to Bank and writes an application for the transfer of an account.
CLOSING OF AN ACCOUNT
A depositor willing to do, his account must present his pass book in order that with
drawls and the amount of interest due on the account is entered therein and final
balance stuck. This balance is then paid to the depositor and his receipt is taken, the
pass book is canceled, unused cheque forms on hand are also surrendered at the
same time.
SECRECY

15
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
The secrecy of depositor’s account is the. Responsibility of every official engaged in
the Bank service.
MONEY DEPOSITED OR DRAWN BY POST
When money is sent by post for deposit, the pass book and a letter starting the
amount of the deposit and the number of the account accompany it.
When a depositor wishes to withdraw money by post he must forwards his pass
book with a letter starting the number of his account, the amount to be drawn and
either the money is to be remitted by money-order or in currency notes registered.

TYPES OF BANK ACCOUNT


Saving Account
Saving Account is that account in which customer puts his surplus money which he
saves from his daily expenditure.

The account can be operated by depositing a minimum cash of Rs. 5/-. Small
percentage of interest is allowed on the balance of this account.

Current Account:
The current account is that one which the customer draws his daily cheques and is
normally operated by the Business-men. It can be operated by minimum amount of
Rs. 500/- Any number of cheque amounting undue minimum balance limit can be
issued by the account holder for withdrawal or for payment. No interest is allowed on
this account.
Join Account
A joint account occurs when two or more than two customers have one account. The
parties to a joint account are considered in law as they are one person.
Profit and Loss Sharing Account
This can be operated by a person, firm or organization by depositing Rs. 100/- or
above. The holder of this account will get profit of his amount, or he will bear the loss
as the case may be. So an individual is equally participant in profit and loss.
The holder of account can withdraw up to Rs. 15,000/- per month is eight
withdrawals, in case of higher withdrawal, seven day prior notice is necessary. This
account is operated under interest free system.
Fixed Deposit Account

16
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
In this account an amount is deposited into the Bank for a fixed period of time. The
fixed period may be three months, six months, one year, two years, five years and
more. The Bank allows a higher rate of interest for larger period

At the time of operating on account the Bank issues deposit certificates for the period
and amount. The account holder can not withdraw his amount before the specified
period, but the same Bank will allow loan against that certificate. Bank is liable to
give interest on this account on maturity date.

II. DEPOSITS SECTION


There are two types of deposits i.e. current and saving. There are different forms
present in the section of or deposits.
1. Current account form.
ii Saving account form.
iii Private or individual form
iv Private firm account form
In the above mentioned forms, the bank makes an agreement with his customers.

III. CLEARING SECTION


Every Bank performs the paying and receiving functions. Cheques are collected
which are drawn up to Banks for customers. Similarly the cheques drawn on different
Banks and deposited by Banks own customers for collection within the city is know
as clearing The functions of receiving and paying is mostly done through the clearing
house. A clearing house can be defined as "AA place where that representatives of
all Bank get together to settle the receipts and payment of cheques drawn on each
other" Clearing House provides the facility which can hardly be dispensed with
especially, in case of crossed cheques.
There are two main types of clearing.
i Outward clearing
ii Inward clearing.
OUTWARD CLEARING:

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

17
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
A delivery message from the local main branch comes to every branch at a fixed
time to pick its outward clearing or outward returns as the case maybe.
Outward Clearing at Branch
a. Account number of payee/endorsee is written on the back side of the
cheques.
b. The instrument and the paying in slips are separated.
c. The instruments are sorted I Bank-wise and branch wise.
d. Schedules are prepared.
e. Jotting of all the schedules are taken in the clearing House statement. Amount
of the cheques in written in the "Delivered" and to pay column.
f. After balancing the outward clearing, the pay in slips are released to C.D.
department.
g. After balancing, a transfer debit voucher is prepared.
h. The instrument, schedule. etc. are delivered to the messenger from the main
branch
INWARD CLEARING
The cheques drawn are called inward clearing. drawn on National Bank through its
representatives on the Bank presented by other Banks for payment It includes those
cheques and other instruments of Pakistan branches which other Banks present at
the clearing house.

Inward Clearing At the Drawn Branch


a. Numbers of instruments noted in the schedules are verified immediately on
receipt.
b. The amount's of all the instruments are jotted down and totaled. If should be
equal to the amount mentioned in schedule from the local main branch.
c. The amounts are debarred to the relevant accounts if otherwise in order.
d. The IBCO is prepared crediting the amount of the main branch.
e. If there is any return, that is deducted from the total and IBCO prepared for
the remaining amount.

18
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
TYPES OF CHEQUES COLLECTED BY CLEARING SECTION
TRANSFER CHEQUES.
These are the cheques which are collected and paid by same branch of N.B.P. For
example Mr. Ali is a customer of N.B.P. of CITY branch and draws a cheque in favor
of Mr. Hussain who is also the customer of the same branch.
TRANSFER DELIVERY CHEQUES.
The cheques which are collected and paid by two different branches of a Bank
situated in the same city. For example a person draws a cheque on N.B.P. main
branch, Lahore in favor of another person who maintains an account with N.B.P.
model town branch, Lahore .
CLEARING CHEQUES
When the payee/endorse and the drawer of cheque maintains account with different
Banks, the collection Bank in any one of the following methods:-

 It can collect cash by sending its representative with the cheques to each of
the paying Banks. It is not so much appropriate.
 The Bank maintains an account with the paying Bank.
 The cheques can be exchanged by representative of the various Banks who
meet at a fixed time and at a fixed place. This is the most efficient method of
collection and paying cheques.

FUNCTIONS OF CLEARING SECTION IN A BRANCH


a. To accept transfer, transfer delivery and clearing cheques from the customer
of the branch a~ d to arrange for their collection.
b. To arrange payment of cheques drawn on the branch and gives for collection
to any other branch of N.B.P. or any other member or such member of local
clearing house.
c. To collect amounts of cheques drawn on members of the local clearing house
sent for collection by N.B.P. branches not represented at the local clearing
house.
PROCEDURE FOR CLEARANCE OF CHEQUE

19
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
The customers are provided with the copes of pay4n-slip, whenever the customer
wants to deposit any cheque, he fills in the pay in slip himself and hands it over the
counter along with the instrument.

IV. REMITTANCE SECTION


Remittance means transfer of money from one place to another place. It is of two
kinds.
I. Inland remittance.
II. Home remittance.
INLAND REMITTANCE
An inland remittance means a transfer of money payable at a certain place within the
country. Inland remittances can be classified as under

A. Within locality.
B. Out side locality.

WITHIN LOCALITY
When a branch situated in Lahore is required to send drafts to any other branch
situated in the same city the process is know as within locality. For example N.B.P.
Main Branch, Lahore sends any draft to N.B.P. Moon market Lahore.
OUTSIDE LOCALITY
Outside locality is an important type of inland remittances, which means the transfer
of money payable outside the city. For example, N.B.P. Main Branch Lahore sends
any draft to a Branch situated at Lahore.
It is commonly done through the following three means:-
i. Telegraphic transfer (T.T)
ii Mail Transfer (M.T)
iii Demand Draft (D. D)

TELEGRAPHIC TRANSFER
In telegraphic transfer, the Bank takes commission and telegram charges from the
sender. A receipt is issued to the sender for the value received.

20
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
The Bank itself transfer the funds to the drawee branch though a coded message in
telegram, confirmatory of which is also sent through routine dak mentioning all
details. All bank Branches have been provided with their code books name Bank
Keys Code Book where from the coded message is agreed by the drawee branch.
T.T. can be sent open, which may be paid in cash in drawee branch, or may be direct
y creditable to relevant account.
MAIL TRANSFER (M.T.)
The Money can be remitted through this means also. In this case the payable
amount at the drawee branch can only be transferred to an account; amount can not
be paid in cash. Other procedure is same as T. deposit of money at sending branch.
Difference is only of postage and. telegram charges. The M.T. which in its self is an
advice also is sent by registered post, while T.T. is sent through telegram.
DEMAND DRAFT (D.D)
Demand draft is a written order by a branch of a specified Bank, drawn on another
branch of the same Bank to pay a certain sum of money only to or to the order of the
Payee. Demand drafts are purchased by the clients and after receipt of money Bank
issues and delivers the D.D. to the purchaser, who himself sends it to the payee. In
D.D. the Banks do not recover postal charges as it is payable by the purchaser. The
Bank, after deliver of D.D. to the purchaser also sends its own advice called IBCO
(Inter Branch Credit Order) to the drawee branch mentioning therein all details of
issued draft.

21
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
4. BUSINESS STRATEGY
a. SWOT ANALYSIS
STRENGTHS
 National Bank the Nation’s Bank
State Bank of Pakistan is government owned bank that is why Pakistani nation has a
trust on the bank that their deposits are secured. Due to this reason the deposits of
the banks are increasing with the passage of time
 Agent of State Bank of Pakistan
National Bank of Pakistan also works as an agent of State bank of Pakistan in those
cities where SBP branches are not working.
 Agency Arrangements
National Bank of Pakistan is enjoying with deposit of different Govt. organization like
Pakistan Railways, PIA, WAPDA, Sui-gas due to agency arrangements.
 Deposits
National bank of Pakistan is the largest commercial bank of the country and has
Total Deposits of Rs. 362.87 billion and becomes the first bank to cross the deposit
of Rs. 350 billion.
 Profitability
The pre-tax profits of NBP have gone up to Rs. 6.05 billion.
 Corporate Branches
National Bank of Pakistan is now the biggest financial institution with assets totaling
over Rs.310 billion with 1428 local and 23 foreign branches. The bank is the
higher financer in agriculture and commodity operation sector.
 Collection of Cash from Shrines
Cash collected from different shrines is also deposited in National Bank of Pakistan.
 Comprehensive Range of Financial Products
In order to facilitate the customers, NBP is offering the comprehensive range of
financial products which are as follows:

22
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
 Credit Cards
 Foreign Exchange Bearer Certificates
 National Bank Daily Accounts
 Travelers Cheques etc.

 Investing in Capital Market


NBP has decided to diversify the fund base by investing in capital markets not only in
Pakistan but also in the foreign countries.

WEAKNESSES
 Lack of Implementation of Rules and Regulations
Because NBP is a govt. owned organization so there is a lack of implementation of
rules and regulations.
 Poor Working Conditions
Despite, cultural change program the working condition of the NBP is not up to
standard.
 Recruitment Policy
In NBP, employees are recruited on the basis of favoritism or through other tools of
corruption.
 Incompetent Staff
Due to wrong recruitment policy staff of NBP is not proficient in their work.
 Irregularities in Promotion
In NBP there is no smooth and continuous promotion system. Unfair means are used
in order to get the promotion especially the promotion of the managers.

 Individual Difference
In NBP the individual difference have strong impact on the organization’s
performance due to the wrong criteria of selection of the employee. So with the
passage of time individual differences are increasing which are undermining the
good will of the organization.
 No Major Use of Computer

23
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
In NBP there is no major use of computer for maintaining the records of branches as
compared to other banks of the country.
 Strong Union
Union has strong impact on performance of NBP. So the top management is unable
to punish the violators and shrieks.

 Organizational Structure
In this organizational the organizational structure is bureaucratic which a barrier in
rapid and effective decision making is.

OPPRTUNITIES
 Consumer Banking
The basis need of the consumer such as housing, transportation and other durable
goods are not adequately financed by the banks. So by initiating these services, the
bank can enjoy with more funds.
 Investing in the Foreign Capital Market
NBP can enjoy handsome return its funding base by investing in capital markets in
the foreign countries.
 Investment Banking
Until recently the bank perceived as purely commercial banking entity so in order to
expand its business the bank may start investment banking by investing in the
portfolio of handsome return.
 New Branches
NBP by establishing new branches in foreign countries can expand its business and
can enjoy with the profit.
 Issuance of Bonds
To enjoy with large amount, NBP can introduce a comprehensive range of bonds.

 Night Banking
Despite of poor customer service of NBP, people still come to NBP because of its
Govt. ownership as they feel it secure therefore bank improve its deposit by giving
facility of night banking and also can compete its competitors with positive steps.

24
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
 Advisory Services
It can establish advisory services in order to facilitate the customers in investing in
the securities.
THREATS
 Competition
The no. of banks in Pakistan is increasing with the passage of time. So due to poor
working condition and poor customer service it may be possible NBP will lose its
market share in future.
 Inflation
In our country, the rate of inflation is increasing along with the unemployment. So
due to the increase in price of the products, the savings of the nation is decreasing
with the passage of time. So it is the threat for the banking sector. In the future, the
deposits of the bank will decrease.
 Government Policy
On NBP Govt. policies have strong impact. A slight change in Govt. policies may
affect the performance of the bank. The bank has to work with in the regulation frame
work.

b. COMPETITIVE STRATEGY

Banking industry in Pakistan is progressing in leaps and bounds and with this drastic

increase in number is raising the bar of competition amongst the banking sector. Last

year the better half of the foreign direct investment was in the banking sector. To stay

in this incredible amount of pressure of competition and delivering the goods on the

deadlines to obtain customer satisfaction and loyalty is the need of the hour and

National bank has always proved itself in distant times by providing the cheapest

interest rates on loans given to the corporate world, employees of government

institutions in terms of Advance Salaries and to farmers made the bank to stand tall

in the competition and contributed a lot to the competitive strategy of the bank. They

are mainly using the Market Penetration Strategy to attract customers.

25
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
c. BUSINESS PROCESS ANALYSIS
After working in that environment of National Bank of Pakistan I found following
points in analyzing Business Process of the Organization.
Well-defined tasks and duties
The tasks and duties are defined in such a way that it becomes very easier for the
employees to perform their assigned tasks. Due to the implementation of modern
techniques the efficiency and accuracy of the work force has been greatly increased.

Proper supervision
There is a proper supervision system to check and evaluate the performance of each
employee. It is the duty of Operations Manager to make sure that every employee is
giving the desired performance.
Caring environment for the customer
The environment of the bank is caring for the customers and every customer is dealt
with proper care and attention. All the employees have very professional attitude and
know the worth of the customer for the business.
Cooperative and Supportive Staff
The behavior of the staff with the customers is very cooperative and supportive and
every employee is ready to facilitate the customer on his best in order to increase the
customers’ satisfaction level.
Lack of customer relationship desk
It was observed that there was no customer relationship officer in the branch to
guide the customer to solve their problems and to tell them that what should they do
and where should they go for the solution of their problems. As a result the
customers keep on disturbing all the employees in order to get their problem solved.
This results in the decrease in the employees’ concentration on their jobs.
Difficulty in Handling of illiterate customers
As the branch is located in such an area where main business is of spare parts and
steel manufacturing, the majority of the customers is illiterate. Thus it is not very
easy for the Employees to handle these customers.
Increased workload

26
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Due to the new regulations of the state bank to deduct 0.1 % tax on every check
amounting to more than Rs. 25000, the customers started issuing too many checks
to avoid this tax. As a result the overall work load on employees has been
significantly increased.
Employee’s motivation level
It was observed that at present the motivation level of the employees is not very
much high because of the currently announced salary increments, which is not up to
the employees’ expectation level and because of some other reasons such as,
increased workload etc.

5. MARKETING STRATEGIES
National Bank strongly believes in “winning the customer by winning his heart”
through complete satisfaction of his/her needs. National bank’s marketing strategies
are more towards making their existing customers loyal because they believe that it
is their customers who provide them with new customers. The Bank uses KYC
(Know your customer forms) to have complete association with their new customers.

a. DEPOSITS
Target Market
Personal Bankers target markets include businessmen, salaried individuals,
housewives, retired individuals and anyone who has the potential of providing legal
deposits to the bank.
Promotional Strategies
Promotional marketing has various types; from what I can recall there is direct
marketing and indirect marketing. Direct marketing is a discipline within marketing
that involves the planned recording, analysis and tracking of individual customers’
response and transactions for the purpose of developing and prolonging mutually
profitable customer relationship.
Direct marketing is a form of marketing that attempts to send its messages directly to
consumers using “addressable” media, such as mail and (increasingly email),
telephone and personal meeting with customers. Therefore, direct marketing differs
from regular advertising in that it does not place its messages in a third party
medium, or in the public market, such as billboard to a radio commercial would.

27
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Instead, the marketing of the service or commodity is addressed directly to the target
customer
On the other hand indirect marketing includes such types of advertising tools like
billboards, TV commercials where no immediate response can be seen neither can
be measured. No matter what the promotional strategy, as Mr. Kashif, Team
Manager of Credit Cards Department in Consumer Banking said

“A successful product or service means nothing unless the benefit of


such a service can be communicated clearly to the target market”

National Banks promotional strategies consist of

Public Relations
National Bank strongly aims to develop positive relationship with public. The bank
has promoted healthy sports activities as NBP has built a state of art sports complex
at Karachi.

Direct Mail

There has been a massive growth in direct mail campaigns over the last few years.
National Bank has complete databases, which contain names and addresses of
potential customers. Direct mail allows NBP to use their resources more effectively
by allowing them to send publicity material to a named person within their target
segment. By personalizing advertising, response rates increase thus increasing the
chance of improving business.

Internet Promotion
Owning a website is a now a crucial ingredient to the marketing mix strategy of any
organization. National Bank’s customers can now obtain instant information on
products or services to aid them in their crucial decision. Further NBP also facilitates
its customers through I-Banking. Customer can register on the web site and can
enjoy a host of services.
Personal Selling (Push Strategy)
The foremost Promotional Strategy of NBP is Personal Selling i.e. Selling a products
one to one.

28
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Direct Marketing
Personal Bankers at NBP, whose primary job is to bring more and more deposits to
the bank, make use of Direct Marketing techniques. First of all these PBs identify
their sources from the reference groups and track down their likely to be customers.
According to a PB Mr. Rab Nawaz at NBP,

“It is all a matter of keeping your eyes and ears open.


While meeting with a potential customer, it is most
likely that you can get a new reference for a new
customer”
Once they get a reference from their existing customer or relative or colleague, they
try to get as much information as possible about their potential customer. Then they
give a call to the customer and try to convince him/her over the phone. Customers
with greater potential are asked for appointments for a face-to-face meeting.
Customers who provide the bank with heavy deposits are given special treatment. It
is common for the Branch Manager to give formal meals in restaurants to such
customers.
Product Strategies
Augmented Product
With every new account opened, National Bank provides a free cheque book and a
free debit/shopping card. Other than that, if a customer maintains an average
balance of one hundred thousand he/she has the facility of making two DDs free of
any charge.

Augmented Personalized Services


Personal bankers are dedicated to provide with the best possible attention, advice
and services to their customers aside from regular.

b. CASH CARD
Push Promotional Strategy
NBP makes use of push promotional strategy to promote the cash cards business.
Through this promotional strategy, Bank makes use of its sales force and trade
promotion activities to create consumer demand for cash cards.

29
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Positioning
The Cash Card meets the everyday usage needs of financially responsible
consumers who desire the flexibility offered by the cash cards. It provides the high
level of quality customer service.
Target Market
The Cash Cards are targeted towards customers who are financially responsible,
middle and upper income consumers who seek greater financial flexibility, a mix of
local and global services and support and demand a high level of quality and service
Approved Cities
Karachi
Lahore
Islamabad
Others (All Cities where NBP Branches exist along with Collection and
Verification infrastructure)

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

30
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
7. FINANCIAL ANALYSIS
Financial analysis involves the assessment of firms past, present and anticipated
future financial condition. The objective of this analysis is to identify any weakness in
the firm financial health that could lead to future problems and to determine any
strength that the firm might capitalized upon.

Financial analysis is used in the evaluation of the financial condition and profitability
of a company. The ratios are calculated from the financial information provided in the
balance sheet and income statements. Every firm has two basic financial objectives:
• To be financially sound
• To earn an adequate rate of return on invested capital

Basically following analysis can be done:


• Horizontal Analysis
• Vertical Analysis
• Ratio Analysis
All the three- mentioned analysis is performed on the profit & loss account and
balance sheet of National Bank of Pak

a. RATIOS ANALYSIS
Liquidity Ratio
The liquidity of a firm is measured by its ability to satisfy its short-term obligation as
they come due. Liquidity refers to the solvency of the firms over all financial position.

31
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Because a common precursor to financial distress and bank ruptey is low and
declining liquidity. These ratios are viewed as good leading indicators of cash flow
problems. The two basic measures of liquidity are the current ratio and the working
capital ratio.
Current Ratio
Current ratio is a measure of liquidity calculated by dividing the firms current assets
by its current liability. It is expressed as follow:

Current ratio = Current assets


Current liabilities

2007 = 30994.97 = 1.00


30869.15

2006 = 27113.70 = 1.02


26596.30
Interpretation
This shows a good sign that bank has 1.00 assets for their current liabilities but it
was slightly decreasing from the previous year which is not showing a good trend.

Working Capital
It can be measured by subtracting the current liabilities from current assets.

Working capital = current assets – current liability


2007 = 30994.97 - 30869.15
= 125.82 million
2006 = 27113.70 - 26596.30
= 517.4 million
Interpretation
Working capital increased which shows that there is an increase in current assets,
which is good indication. But as we see that the WIC has decreased from the
previous year this is because there is an increase in CL more then in CA.

32
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Advances to Total Deposits Ratio :( An important ratio for a bank…)
It can be calculated by dividing the firm advances by its total deposits.
Advances to total deposits = advances
Total deposits
2007 = 340677.10
591907
= 0.58
2006 = 316110.41
501872
= 0.63

Interpretation
As deposits show an increase, the advances also increased. Bank has provided the
advances and loans to more customers as compared to this year. This shows an
increase in area of deposits of bank as compare to the advances.

Activity ratio
Activity ratio measures the speed with which various accounts are converted into
sales or cash, inflows or outflows.
Total Asset turnover
The total asset turnover indicates the efficiency with which the firm uses its assets to
generate sales. Total asset turnover is calculated as follows:

Total asset turnover = total income


Total assets

2007 =64114.33
762193.59
= 0.084

2006 = 55951.52
635132.71

33
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
= 0.08
Interpretation
The ratio indicates the efficiency with the company uses its assets to generate sales.
This means the bank has turn over its assets 0.084 times a year which is less as
compare to the last year which means that the company has not managed its assets
efficiently as compared to the last year.

Profitability Ratio
There are many measures to profit ability. These measures enable the analyst to
evaluate the firm’s profit with respect to given level of assets or the owner
investment. Without profit, a firm could not attract outside capital. Owner, creditors,
and management pay close attention to boosting profits because of the great
importance placed on earning in the market place

Return on Total Assets


It is often called the return on investment, it measure the overall effectiveness of
management in generating profit with its available assets. The higher the firms return
on total assets, the better.
Return on total assets = net profit x100
Total assets

2007 = 19033.77 x100


762193.59
= 2.5
2006 = 17022.35 x100
635132.71
= 2.68

Interpretation
The return on assts is quite good that the investor is getting 2.5 for its investment
but when we compare it with the previous year it is not showing a good sign to the
investor as it is decreased from the previous year.

Return on Equity

34
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
It measures the return on the common stock holder’s investment in the firm.
Generally, the higher this return, the better of is the owners.

Return on equity = Net profit x 100


Total equity

2007 = 19033.77 x100


101190.46

= 18.81%

2006 = 17022.35 x 100


76586.02
= 22.22%

Interpretation
The above given ratios suggest that the profitability of the bank has decreased very
sharply in the year 2007indicating less profitable operations of the bank.

Earning per Share


EPS is generally of interest to present or prospective stockholder and management.
EPS represents the no of dollars amount earn on behave of each share not the
amount of earning actually distributed to share holder.

Earning per share = Net profit


No Of shares

2007 = 23.34
2006 = 20.88
Interpretation
Earning per share has also increased. This increase will affect the price of share
positively. It also shows that bank is achieving the goal of maximum benefit to its
shareholders. Profit has increased more rapidly.

35
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Return on Deposits
It is calculated by dividing the net profit by its total deposits.

Return on deposits = Net profit x100


Total deposits

2007 = 19033.77 x100


591907.44
= 32.15%

2006 = 17022.35 x100


501872.24
= 3.39%

Interpretation
As return on deposits is increasing it is favorable trend. This shows that the profit
margin on deposits is increasing with increase in deposits the profit also increase but
with greater proportion.

Margin of Profit
It is calculated by dividing the net profit by total income.

Margin of profit = Net profit x 100


Total Income
2007 = = 19033.77 x 100
64114.33
= 29.69%
2006 = 17022.35 x 100
55951.52
= 30.42%
Interpretation

36
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Profit is increasing with increase in total revenue, which shows that the profitability of
bank is increasing, which is good sign. Share of profit in total revenue is increasing,
showing the favorable trend.

Solvency Ratio
The magnification of risk and return introduce through the use of fixed cost financing,
such as debt and preferred stock. In general, the more debt a firm uses and relation
to its total assets, the greater its financial leverage.

Debt Ratio
The debt ratio measures the proportion of total assets financed by the firm’s
creditors. The higher this ratio, the greater the amount of other people’s money being
used to generate profit. The ratio is calculated as follow:
Debt ratio = Total Liability
Total assets

2007 = 645855.94
762193.59
= 0.85

2006 = 553178.59
635132.71
= 0.87
Interpretation
The decrease debt ratio shows the increased share of debt in total assets as
compared to owner’s equity. More the share of the debt more will be the risky
financial position. But here it is normal trend.

Time Interest Earned ratio


It is some time called the interest-covering ratio, measures the firm ability to make
contractual interest payments. The higher its value, the better able the firm is to fulfill
its interest obligation. It can be calculated as follow:
Time interest earned ratio = Earning before interest and taxes
Interest Expense

37
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
2005 = 424515.80
143910.79
= 2.95
2006 = 399450.62
136344.85
= 2.93
Interpretation
It shows whether the bank is earning enough profit before mark up charges to be
paid to the financiers and the taxation obligations due to the government in order to
remain solvent.
The above figure shows the more capacity on the part of the bank to cover its
interest payments. It has increased as compared with the last year. This is showing a
good sign for the bank that it is providing more to the investors. In view of the long
run financial perspective, this ratio is good for the bank.

Performance Ratio

Share Holder Equity to Total Liability


It can be calculated by dividing the shareholder equity by its total liabilities.

Share holder equity to total liability = share holder equity


Total liabilities

2007 = 69271.0
645855.94
= 0.107

2006 = 53045
553178.59
= 0.096
Interpretation
Stockholder’s equity to total liabilities increased a little bit. This also shows the
stockholders share in financing the business

38
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
b. INTERPRETATION OF BALANCE SHEET
First of all we will discuss balance sheet. The balance sheet has shown that Cash
and balances with treasury banks have increased to 12.44% from 12.38% of total
assets. The Balances with other banks has decreased to 4.91% from 6.4% which
also show a good sign that they have received their cash back from other banks
effectively. Lending to financial institutions also decreases to 2.81% from 3.62% of
total assets. The investments are increased in this year to 27.65% from 22.03% of
the total assets, which shows the bank is investing more and more. The advances
are decreased to 44.69% from 49.77%.operating fixed assets were also increased
.other assets are also decreased as compared to last year ratio from total assets.
Now the liabilities and equity section will be discussed. The bills payable will be
decreased to .93% from 1.67% of total liabilities and equity, which shows a good
sign. The borrowings will be decreased as compared with the previous year it falls
down from 1.84% to 1.43%, which is not a big difference but a good sign. Deposits
and other accounts will be decreased to 77.65% from 79.02%, which is not a good
sign that people are not depositing their money in the banks. Liabilities against
assets subject to finance lease are increased from .38% to .67% but other liabilities
decreased as compared to previous year. Other liabilities this year are 4.05% and
previous year are 4.19%.the total liabilities are decreased as compared to previous
year, which is a good sign for bank. Total liabilities this year are 84.73% and previous
years are 87.09% of total liabilities and equity. The net assets are increased from
12.90% to 15.26% which show that liabilities this year are decreased. The share
capital is slightly down from the previous year with the difference of .47% but the
reserves are decreased and it will fall down from 2.185% to 2.069%.inappropriate
profit is also increased from 5.05% to 5.95%.surplus on revaluation of assets is
slightly increased from 4.55% to 6.175%.

c. INTERPRETATION OF INCOME STATEMENT


In this we will take revenue as 100 and then we can calculate all the statement with
reference to revenue. Markup / return / interest earned is increased from 110.40% to
119.12%.Markup / return / interest expensed is increased, it rose up from 34.91% to
39.90%.so the net markup / interest income also increased from 75.48% to

39
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
79.21%.provisions against non-performing loans and advances increased from
7.69% to 11.13%.the main difference is due to provisions against non-performing
loans and advances which are higher as compared to last year. Bad debts written off
directly are increased from .01% to .09%.but the net mark up / interest income after
provisions are decreased due to increased in provisions. Fee, commission and
brokerage income increased as compare to last year. This year it is 15.98% which is
slightly more as compared to 15.38%.the dividend income is increased from 7.24%
to 7.69%.income from dealing in foreign currencies also decreased from 3.34% to
2.46%.gain on sale and redemption of securities is increased from 2.93% to
5.51%.unrealized loss on revaluation of investments classified as held for trading is
decreased from -0.01% to -0.07%.other income also decreases from 34.13% to
33.89%.the administrative expense are also decreased from 33.65% to
33.46%.other provisions are increased from -0.04% to 0.39%.charges are decreased
from .52% to .04%.the total non markup / interest expenses is slightly lower than the
previous one. It is 33.89% as compared to last year 34.13%.profit before taxation is
slightly greater than last year from 65.86% to 66.10%.the taxation is lower as
compared to last year of 23.25% to 21.26%.so after deducting tax the profit after tax
is 44.83% from previous year 42.61%.now unappropriated profit brought forward is
greater as compared to last year which is 75.55% and of previous year is
48.48%.basic earning per share is increased from 20.88% to 23.34%

d. FINANCIAL REVIEW
NBP continued its journey of success based on our strategy of serving clients better
a company agile enough to take advantage of its unique domestic and international
footprint, capitalizing on the largest balance sheet and customer base in Pakistan
with high cross sell potential. Our standalone AAA rating(the highest in the industry),
our RoE , which is amongst the highest in the Asian banking industry, and our
comfortable capital adequacy ratios, position us well in front of our competitors for
future growth. Year 2007 has been an outstanding year with the bank recording the
highest profit in its history. Our wide range of product offering, large branch network
and committed workforce are some of our fundamental strengths that enabled us to
achieve exceptional results in a very competitive market. The pre-tax profit increased
to Rs. 28.06 billion, an increase of 6.6% over last year. Earning per share jumped by

40
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
over 11.7% from Rs.20.88 in 2006 to Rs. 23.34 in 2007. Pre- tax return on equity
stood at
45.9%, whereas pre-tax return on assets stands at 4.1% and cost to income ratio of
0.30 remained one of the highest in the sector. These results were possible despite
the fact that NBP had to make additional provision of over Rs.3 billion as a result of
withdrawal of Forced Sales Value (FSV).This year NBP also availed the offer to
redeem up to 10% of its holding in NIT Units held by the bank under Letter of
Comfort (LoC) arrangement, this sell off resulted in a Capital gain of Rs. 1.8
billion.Increase in pre-tax profit was achieved through strong growth in core banking
income. Net Interest income increased by Rs. 3.5 billion (11.5%) due to better yields
and volume driven growth spurred by increase in consumer loan portfolio. Dividend
income and Capital Gains also made a healthy contribution as it increased by Rs.
371 million and Rs. 1,145 million over 2006 respectively mainly owing to higher
dividends from NIT Units as well as Capital gains recorded on sell of 10% NIT Units.
Advances increased by Rs. 25 billion due to impressive contribution by all business
units. Deposits increased by a healthy Rs. 90 billion or 18% over last year. The
banks NPL provision coverage ratio also stands at an impressive 84%.
CORPORATE BANKING
The Corporate Banking Group achieved excellent results in 2007 with a number of
land mark transactions in cement, energy, communication and fertilizer sectors. In
addition to the funded income our corporate and investment banking has
substantially increased its fee base income this year by being the lead advisor in a
number of transactions in the Corporate world of Pakistan. The challenges to
corporate business in year 2007 were manifold, including reduction in private credit
investment as a result of slowing down of economy as well as rising interest rates.
The increasing pressure on the textile industry reduced the lending to this sector. In
addition the bank’s corporate loans yields also faced pressure as substitute form of
funding sources are available in the market in form of Islamic financing, mutual
funds, issuance of debt instruments like TFCs and Bonds and the Capital markets.
Despite these threats and challenges at NBP our corporate team not only increased
the volume as well as the yield of the loans they also maintained a strong franchise
with the leading Pakistani corporate so as to ensure that NBP not only maintains its
market share but is in a position to meet any challenges in future. NBP during the
year also participated in a number of TFC issues and mutual funds subscriptions

41
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
thereby increasing the overall yield on investment portfolio. NBP has the largest
equity portfolio in the banking sector primarily due to 27% holding in NIT units, the
largest mutual fund in Pakistan. During the year the bank redeemed 10% of its NIT
holding covered under LoC , which resulted in capital gain of Rs. 1.8 billion.
RETAIL BANKING
NBP Karobar’ under the “President’s Rozgar Scheme” recorded excellent growth
after its full launch in April 2007. This is a unique product launched to tap into the un-
banked and actually the so far unbankable poor people of Pakistan and targeted
towards the unemployed youths aged between 18 to 45 years. This product not only
serves the bank’s commercial strategy but is also an effort toward poverty alleviation
in the country. It is a unique Public – Private partnership where debt servicing is
shared by the government, as well as providing free life and disability insurance. The
portfolio at year end was over Rs.2 billion. The target is almost 1.8 million customers
in the next five years. There are exciting new incomes generating products in the
pipelines to achieve the targets of NBP. The income generation targeted is in excess
of ten thousand rupees net per month for each customer. The bank plans on
disbursing almost Rs 100 billion which will touch the lives of almost thirty million
citizens The flagship NBP ‘Advance Salary’ product continued to grow in 2007 and
maintained its position as the single largest product in the country with its
accumulated disbursement crossing Rs.115 billion. The number of organizations
whose employees are entitled to avail this scheme is gradually being increased
ensuring continued growth. The latest addition is the Pakistan Army and the target is
almost half a million new customers in the next three years in addition to the existing
base of one million satisfied customers approximately. Our retail banking is
expanding its reach to its diversified customer base by offering new
Services and products through new delivery channels so as to minimize counter
traffic, increase product offering and reduce administrative costs. NBP Saibaan is a
home equity loan product that was introduced in August 2003. Loans are available to
Pakistani residents to finance the purchase, construction or renovation of a home, as
well as for the purchase of land and the subsequent construction of a home thereon.
We are the only bank in Pakistan to offer home equity loans throughout the country.
NBP Saibaan has witnessed growth of 77% in 2007, one of the highest in the sector.
The development of alternate delivery channels, use of I.T., and leveraging large
customer base for cross selling potential are the key strategies of NBP for increasing

42
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
its retail business. NBP holds 16% market share in the consumer loan business and
we aim to increase it gradually without compromising on the quality of portfolio. Our
call center is a value addition in the customer services and provides overall support
to our retail products. It is a unique technology as it is not service provider specific
and free calls can be made to the NBP ‘Help Line” on 0800 800 80 from any land or
cell phone in the country
SME
Small and Medium Enterprises (SMEs) remain the main area of focus for NBP and
are considered the future growth driver. The growth of SME is important as they
generate higher yields and are expected to be a high growth sector in the near- term.
The services available to SMEs are similar to those provided to our Corporate /
Commercial customers, including, but not limited to working capital finance, term
lending, trade finance, letter of credits and guarantees. Our growth strategy for
SMEs revolves around developing a better understanding of the SME market,
increasing market penetration through our existing products and newly tailored ones,
and increasing our capacity to provide SME-specific services to our clients. The bank
is engaged with Shore Bank International (SBI) in a technology as well as Technical
Assistance agreement. The objective of which is to establish more effective SME
lending at a select number of NBP
Branches. These techniques (including cash-flow based assessment) are
institutionalized through an extensive staff training process. The pilot phase of the
project (confined to selected Regions of Punjab) culminated in December 2007 and
overachieved most of the pre-defined targets. More than PKR 1.6 billion in loans has
been disbursed to over 811 undocumented businesses while maintaining an NPL
rate
of less than 2%. After the success of the pilot project, NBP has decided to engage
the services of SBI to roll out the Technical Assistance on a national scale, covering
200 branches in Sindh, Punjab and Balochistan in the next two years.
COMMERCIAL BANKING
We plan to establish commercial centers across the country looking at the business
potential in the area, size of the branch and its capabilities to deliver the desired
service in order to attract quality customers. The objective is to target the untapped
sectors and provide them professional quality service, through one window

43
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
operations and Relationship Managers stationed at those centers. We expect and
hope to reduce
the turnaround time and become more competitive and market oriented. Further this
customer friendly and dedicated set up at convenient locations would help in
improving the image of the Bank as well. These Centers would work in conjunction
with the existing set–up of Commercial Lending done throughout the NBP branch
network. The main purpose of these centers is to generate ancillary business in
addition to funded and non funded facilities, with quick turnaround time in decisions
for customer satisfaction.
AGRICULTURE
NBP remains the largest agriculture lender in the banking sector in Agriculture with
approximately 300,000 borrowers and gross disbursement of Rs. 32 Billion during
the financial Year 2006-2007. Our vast domestic branch network having 45%
branches in rural areas and unique Product offering under the banner of “Kissan
Dost” provides us competitive edge over our peer banks. Our specialized Agriculture,
Filed Officers, being Agriculture graduates are trained to understand the needs and
limitations of our borrowing farmers as well as versed with the latest trends in
Agriculture production technology providing technical guidance and specialized
services to our customers.
DEPOSITS
NBP is the largest bank in terms of deposit. Our large clientele and confidence of our
depositors belonging to all walks of life is a major strength. We have shown
appreciable growth of 18% in deposits on YoY basis which is significant from the
view point that with the consolidation in the banking sector competition for deposits is
ever increasing. We are branding our liability products and will continue to develop
new liability side products for continuing our leadership position in this business. This
year we introduced three new liability products; NBP Premium Saver account, NBP
Premium Mahana Amdani account and NBP Enhanced Saver account. These
schemes have received excellent response from the customers and we expect
healthy growth in future under these and new products that the bank is going to
launch on the liability side. Given the large base and competition in the banking
sector, the bank’s performance is commendable in increasing its deposits by Rs. 90
billion especially low cost deposits.

44
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
8. HUMAN RESOURCE MANAGEMENT
a. HRM practices at National Bank of Pakistan
As we know that among all the resources of any organization, human resource is the
most valuable asset. The factors shaping human resource development in science
and technical fields are essential for formulating effective strategic plans at the
national, regional, and global levels. Employees are the most valuable resources of
an organization in the service sector (software, banking, management consultancy,
etc.). Like all other resources of a company, the human resources are more valuable
because of their value addition with the passage of time.
In the Bank, there is a separate department for Human Resource Development
(HRD).

Human Resource Policies:


Human Resource policy is to ensure implementation of clearly defined performance
management system, effective career development process, comprehensive
succession plans and alignment of meritocracy in order to maintain the same
standards of banking services
National Bank supports the rights of the individual as expressed in the 1948 United
Nations Universal Declaration of Human Rights (UDHR). The UDHR contains a
number of fundamental rights, which it aims to uphold in all circumstances, including:
 The right to life
 The right to legal recognition as a person Freedom of thought, conscience
and religion
 Freedom of opinion and expression

45
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
 Freedom from torture
 Freedom from cruel, inhumane or degrading treatment
 Freedom from slavery and servitude
 Freedom from retroactive penal legislation
National Bank meets all relevant international legal obligations and all relevant local
legal obligations in the countries in which it operates.

b. Functions HR Department:
As this department is managing the most important asset of the company so its
functions are also important. So this department meets up on monthly basis and
performs the following functions:
 Ensures proper grading and analysis of job recruitment for the purpose of
operational efficiency.
 Develops an effective training program should suit the Bank’s requirement.
 Keeping in view the future requirements oversees career path
development for all staff members.
 Formulates a reasonable transfer/posting policy, which adequately suits
the bank.
 Introduces effective mechanism for evaluating staff performance.
 Prepares promotion/incentive criteria based on performance thereby
providing motivation to the staff working in the bank.
 Accords Staff House Building Loans.

HR PRACTICES

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

This would help the HRM, to determine:

a) Job Description

46
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
b) Job Specification

 Recruitment

 Selection

 Developing compensation package

 Training & development

 Skills development programs

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

c. RECRUITMENT & SELECTION PROCESS


The Bank has been recruiting the best in class individuals from the industry. As part
of our strategy to mix youth with experience, we have started inducting Management
Trainee Officers (MTOs) from leading business schools from across the country. The
process of recruitment in National Bank of Pakistan consists of following steps:
1. Advertisement (Electronic and Print media)
2. Inspection of application
3. Short listing
4. Issuance of call letter
5. Test
6. Listing on the basis of test
7. Call letters for interviews
8. Interviews-Panel Interviews
9. Final short listing
10. Offer letter
11. Joining
12. Training
13. Posting

d. TRAINING & DEVELOPMENT


It provides a vehicle to keep abreast its work force with latest techniques in all
operational areas and knowledge developments with a view to enabling them to
remain progressive and capable of taking of changing environment and trends. It is

47
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
based upon planning for providing training in emerging market trends by judging the
skills and knowledge deficiency areas from performance evaluations and need
analysis. It focuses on preparing individuals for present as well as for future
responsibilities.

Human Resource Development Areas:


 Management skills
 Marketing & Sales skills
 Customer care skills
 Performance appraisal skills
 Banking operations & regulatory compliance
 Credit marketing and credit proposals
 Credit administration/documentation
 Trade finance operations
 Risk management
 Audit compliance

e. COMPENSATION & BENEFITS


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

 Pension Scheme
 Post retirement medical benefits
 Benevolent Scheme
 Gratuity Scheme
 Employee compensated absences

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

 To attract qualified employees

48
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
 To retain qualified employees

 To motivate employees by rewarding sustained performance

 To support management in the realization of Bank’s objective

Annual Pay increases are based on performance evaluation of the year, comparison
of each employee and the resources available for granting the increase in
accordance with the contribution of each employee to the organization’s goals.

9. CONCLUSION
If I have to express my experience of internship in National Bank Main Branch
Lahore I would briefly say:
National Bank is a good Organization in the way that anybody can join it for his/ her
long-term career. Overall working environment is comfortable. Management of
branch cares a lot of its employees and considers them as the Asset of bank.
Behavior of senior executive of bank is very polite and they are caring about the
individual’s career and their growth.
However management is very demanding about the targets but good reward at the
achievement of assigned targets is awarded.
Employees at Bank are quite efficient. As the branch is renovated and new
employees are hired, its employees have to bring their bank among the list of good
banks. Therefore, they work more than their working hours and it is all according to
their will. It also shows their loyalty, commitment to organization.
Employees are given the benefits like bonus, gratuity funds, loans, increments, and
medical.
All the customers are entertained individually. Same kind of behavior and attention is
given to all the customers. Getting ideas for improvement from customer side is a
new idea and that is working very well in National Bank. All the customers are asked
to fill a suggestion form and the standards of the bank are improved through them.
Prioritizing its product portfolio in line with its corporate and consumer needs and
wants the bank is committed to develop products that give more value to its
customers in both the sectors.

49
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
In bank, the work is done on computers as well as manually. All the entries are made
in computer. Balance is fed into the computer. This increases efficiency of the bank.
During my internship training I gathered information regarding how a successful bank
operational aspect decorticated with the practical.
I found my internship training at National Bank Main Branch Lahore to be a very
rewarding experience. The training was beneficial because it helpful me to aware a
real life working environment.
So far my learning is concerned; all the employees at branch were quite cooperative.
They helped me to understand the activities of a bank to possible extent. Their good
attitude gave me more confidence to learn more and to ask if I have any query in my
mind. Besides their ever going activities they never get irritant by my questioning. I
had made an honest efferent to present the working & operation at Branch in
simplest way.

I feel pleasure that I have really gained a lot during 6 weeks & enjoyed working with
experienced cooperative & intelligent staff.

10. RECOMMENDATIONS AND SUGGESTIONS


Performance of general banking departments

General Banking Department, particularly the Account Opening section is not


performing well. The people who are working in the Account Opening sections are
not properly trained in public dealings. Their behaviors with the clients were not
appreciable.

Suggestion
All departments should be careful about their performance. Branch should be
inspected by inspecting parties. They should especially examine the public dealings
of the employees.
Lack of proper training
There is not proper training system among the staff. Training is necessary to show
good performance and efficiency.

Suggestion

50
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
I suggest that an arrangement of refresher courses and in service training must be
made to increase the knowledge and skills of the employees. This will help enabling
them to meet modern Banking requirement and to fill the efficient staff qualities.
Interference of union
The elected unions are headache for management now days, they interfere in
administrative matters. So there is heavy pressure of union on management, due to
which they remain under stress and pressure. If management wants to take
disciplinary action against an employee, it can not be taken due to the pressure of
union.

Suggestion
Bank should not influence by union. Rules and regulations should be followed
strictly. Management would be diplomatic towards the union.

Delegation of authority

There is no proper delegation of authority

Suggestion
Executive at all level should be given sufficient power and authority to make quick
decisions. This will increase the effectiveness and efficiency of the organization.
Distribution of work
There is no proper distribution of work.
Suggestion
All work must be distributed properly among the employees.
In adequacy of staff
In my observation, I felt that the strength of the present staff is insufficient. The staff
is affecting badly due to burden of over work.
Suggestion
The shortage of staff must be fulfilled immediately, In this way, the staff will be able to
perform its duties appropriately.
Inadequate building
The building hired by the Bank is not only a good one 'Jut also is insufficient for
proper functioning of the staff.

51
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Suggestion
I suggest that it should be either changed or widened.
Non-installation of computer
This is an era of science and computer. Most of the Banks functioning in Pakistan
have adopted computer system. This branch is deprived of this facility yet.
Suggestion
I suggest that Bank must be computerized. In this way, it will be easy to keep up to
date records, of all accounts. So the Bank must gain benefit from this modern
electronics.

Lack of library
The library is an essential requirement for the Bank. But this Bank has no library yet.
Suggestion
The Bank must establish a library having all kinds of books, particularly about the
Banking, economic and Accounts.

52
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
11. LEARNING AS AN INTERN
I joined National Bank of Pakistan, Main Branch Lahore on 5th July, 2008. First day,
the manager introduced me about the functioning of the branch and the staff. During
the six weeks of my internship, I worked in different sections of the branch and did
the maximum practice of banking system.
a. DUTIES AND NEW KNOWLEDGE ACQUIRED
During my internship period at National Bank, initially I was assigned no particular
duties. It was completely up to me how much I could dig out according to my
strength and capabilities. But still there were some regular duties that I was needed
to accomplish efficiently and with great responsibility as follows
GENERAL BANKING
First of all, I was asked to work in different sections of general banking. I was
attached to Counter with Mr. Mumtaz who has good command on this section. Here
we dealt with new customer who wanted to get information and to deal with the
branch. This is a very interesting department because here we met people of
different types and deal with them accordingly. In this section, I observed the
following functions:
CHEQUE AT COUNTER
A cheque to withdraw the amount is presented on the counter with the following
requisites:
 Name of the Account Holder
 Current or previous date
 Amount in figures

53
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
 Amount in wording
 One signature of the account holder in the right bottom corner of the cheque
and two signature of the bearer on the back
 Branch Stamp in front of the cheque
 If the Account Holder uses thumb instead of signature then the Pass Book is
necessary with the cheque
Operation’s officer checks and verifies all these requisites. If it fulfills all the
requisites, it is forwarded for payment after a certain procedure.
CHEQUE PAYMENT PROCEDURE
After all the requisites are verified and then the excessive balance is checked and
prescribed amount is deducted narrated on the cheque, then SIGNATURE VERIFIED
stamp (in case of signature only) on the signature and a PAY CASH stamp are fixed
and a Token is given to the cheque bearer after writing Token No. on the specified
cheque. Then the Officer G-II verified the cheque and forwarded it to the cashier
where the cheque bearer receives the amount from the account.
ISSUANCE OF DEMAND DRAFT
A Demand Draft is provided to the client in whom he has to specify that bank it is
drawn. The amount both in words and figures is written on Demand Draft.
BILLS COLLECTIONS DEPARTMENT
I spent second week of my training in bills collection department. Mr. Afzal is the in
charge of this section. Here we collected utility bills like electricity bills, gas bills, and
telephone bills.
BILL REMITTANCE DEPARTMENT
This is very important and interesting department. This section deals with the
transfer of money from one branch to another branch. Nearly four drafts are issued
daily from this department. Here I know how the amount is transferred and what the
procedure is. This department also deals with TT transfer of money. I worked nearly
two weeks in this department.
DEPOSIT DEPARTMENT
Deposit department deals with Current, Savings, and Fixed Accounts. In current
account the bank does not give any interest and you can deposit the whole amount
in lump sum in business hours. However in PLS savings account we can only

54
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
withdraw up to Rs.25000/- without any notice otherwise a prior notification of a weak
is required to the bank if the amount to be withdrawn is more than Rs.25000/-
Old ages are interested in Fixed Account usually. The rate of interest is higher more
than that of in Current and PLS savings Account but the amount cannot be
withdrawn before a specific time fixed by the client. To open the account customer
have to fulfill an application form and submit to the concerning authority. In Current
and PLS saving Account, a Cheque Book is issued to the client and he becomes the
Account Holder of NBP. I worked in this department for one and a half week.

b. ACCOMPLISHMENTS
New knowledge Acquired
The core of my internship was the knowledge I acquired. Before internship I was
entirely ignorant of a bank’s business processes. But this internship program has
made me aware of most of bank’s business processes and hence it has built in me,
immense confidence to step into bank and carry out the routine banking tasks.
New Exposure
My internship experience has given me a completely new industry exposure in the
banking sector, which includes both the consumer banking and branch banking.. I
can say that for me the best thing about BBA was this social and professional
exposure that I longed to have.
People Diversity:
Being an introvert personality, I never had the precious experience in people
diversity. During this internship period, I interacted with so many people both
customers and employees with diverse personalities and behaviors, different age
groups, some far too senior and experienced that it has given me confidence to
interact efficiently with people.
Tactful communication; a MUST
From this internship program, I have realized that the skill to communicate tactfully is
the thing we should learn and polish, especially in dealing with customers. It is not
the most important if you don’t have the required skills at this moment. Rather, being
creative in problem solving and being a quick learner are the keys to success in the
fast growing banking sector.

55
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Another important thing regarding communication that I have learnt is; no matter
how far we go in adopting English language; practically and within organizations,
staff prefer to communicate in their mother language i.e. Urdu, because their priority
is to efficiently complete the work to attain the corporate goal of the organization in
minimum time and they simply do not let formalities come in their way because
actions speak louder than words.
Working towards corporation goal
During my internship, in the last weeks, I started to feel part of that organization. I
actually felt working for that organization though I was merely an intern. Techniques
like how to work towards the corporation goal, tackle a problem, are not something
that can be taught in classrooms and this internship has definitely trained me in it.
Larger social circle
I have come to know and be respected by a number of professionals who are
lending their services to the banking sector for more than a decade. I feel honored
that I have worked with such seasoned professionals and have experienced broader
social awareness.
Self-discoveries
During my internship period, I self discovered that I could interact well with difficult
people and that I have the tendency of being liked by other people, who is because I
believe that to earn respect, one should give respect. Moreover people find me their
secret holder and trust me and that is perhaps because of my simple rule, which is
“no backbiting”.
Career Awareness
This program was a career awareness program as well in the sense that it helped
me in identifying my interests. What I have identified is that I want to do some thing
dynamic and not an assembly line kind of job. Moreover, I have found that in
Pakistan, it doesn’t matter what is your field of education meaning that as long as
you have the slightest idea of job in hand and you are an active learner, you can
work wonders.
Opening up new Horizons
I must admit that such interaction in that respectable professional community will
help me in seeking out job opportunities. All this experience has transformed me into
a mature person with multiple perspectives and has put me one step forward to a
better career, and also broadened my horizon.

56
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Confidence Building
One thing I lacked and strived for was the lack of confidence in interacting in a
professional environment. Allied Bank’s supportive culture made me feel comfortable
talking to my superiors regarding problems encountered at work. I learnt to always
be responsible and have the sense of ownership when problems appear. This all has
definitely helped me build up confidence and had made me well equipped for my
career.

c. PROBLEMS ENCOUNTERED
Difficult time in getting used to new Environment
Initially I had difficult time in mixing with organization members and felt
uncomfortable in that new place with new people. However, after some time, I
became a part of it just like everyone else and felt completely comfortable.

Uses of Terminology
The other major problem was the hectic routine of the bank. It made me uneasy at
first but with the passage of time I became used it. I had to face a great difficulty in
understanding bank’s terminology by the knowledgeable guidance of the staff I was
able to overcome the problem to a satisfactory level.

Practical Applications Differ from Books


The real problem I faced in the bank was the difference between what I had learnt
from the books and what was being practiced. Practical application of the theories
learnt during academic sessions was a great challenge, which I overcame by the
cooperation of the staff.

d. HOW EXPERIENCE IMPACTS MY CAREER


My internship experience has given me a realistic preview of my field of education.
Now I feel that I am better prepared to enter the world of professional work. I have
come to know and been appreciated by a number of professionals who are lending
their services to the banking sector for more than a decade. I feel honored that I
have worked with such experienced professionals. I must admit that such interaction
in this respectable professional community will help me in seeking out job
opportunities in the near future.

57
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
Each task I performed was a different experience in itself. By the end of it, I must say
I realize my potentials, I have realized that earning money is not so easy after all, it
takes a lot of hard work and devotion, and not to forget time. And I now know that if I
want I can make things possible, and I also know how good it feels to having
accomplished something and being appreciated for it. I definitely have learnt things,
which will impact my career and my character.

The overall experience of my internship was very good; I have learnt the sense of
responsibility in its literal meaning. I am now capable of dealing with different sort of
customers, and how to be patient while doing so. Besides this I also gained
knowledge about banking which I previously lacked and many more products being
offered by the bank. So in a nutshell, this internship gave me the experience, which
would no doubt boost my confidence to work in future.

58
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
12. BIBLIOGRAPHY
 www.nbp.com.pk
 www.nbpusa.com
 www.google.com
 Mr. Bashir Ahmed (Vice President) NBP
 Mr. Imtiaz Bhatti (Assistant vice president) NBP
 Mr. Maqsood Mughal (Manager) NBP Main Branch Mall Road
 Mr. Jamshed (OG-2) NBP Main Branch Mall Road
 Mr. Bilal Bokhari (OG-3) NBP Main Branch Mall Road
 Mr. Mahmood (OG- 3) NBP Main Branch Mall Road

59
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE
13. GLOSSARY
NBP: National Bank of Pakistan
A/C: Account

DD: Demand Draft

TT: Telegraphic Transfer

Liquidity: “The bank’s ability not only to meet possible deposit withdrawals but also
to provide for the legitimate needs of the economy as well”.
Finance: “The science and art of managing resources especially money”.
Remittance: Remittance is transfer of funds from one place to another or from one
person to another.”
Remitter: - One who initiates, or requests for a remittance
Remittee: - A remittee is the one who receive the payment.
Issuing Bank:-The
Bank:- bank that sends or affects the remittance, through demand
drafts, telegraphic transfers, or Mail Transfers.
Paying Bank:-Paying Bank also knows as the drawee branch. The branch on which
the instrument is drawn. It has to make the payment (usually located in a different
city country).
Bank Statement: A statement that contains past transactions carried out on an
account in a specific time period.

60
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY, JINNAH CAMPUS, LAHORE