NBP Report

EXECUTIVE SUMMARY
National Bank of Pakistan is the largest commercial bank operating in

Pakistan . Its balance sheet size surpasses that of any of the other
banks functioning locally. It has redefined its role and has moved from a
public sector organisation into a modern commercial bank. The Bank's
services are available to individuals, corporate entities and government.
While it continues to act as trustee of public funds and as the agent to
the State Bank of Pakistan (in places where SBP does not have a
presence) it has diversified its business portfolio and is today a major
lead player in the debt equity market, corporate investment banking,
retail and consumer banking, agricultural financing, treasury services
and is showing growing interest in promoting and developing the
country's small and medium enterprises and at the same time fulfilling
its social responsibilities, as a corporate citizen In today's competitive
business environment, NBP needed to redefine its role and shed the
public sector bank image, for a modern commercial bank. It has
offloaded 23.2 percent share in the stock market, and while it has not
been completely privatized like the other three public sector banks,
partial privatization has taken place. It is now listed on the Karachi
Stock Exchange. National Bank of Pakistan is today a progressive,
efficient, and customer focused institution. It has developed a wide
range of consumer products, to enhance business and cater to the
different segments of society. Some schemes have been specifically
designed for the low to middle income segments of the population.
These include NBP Karobar, NBP Advance Salary, NBP Saiban, NBP
Kisan Dost, NBP Cash n Gold. It has implemented special credit
schemes like small finance for agriculture, business and industries,
administrator to Qarz-e-Hasna loans to students, self employment
Hailey college of commerce
scheme for unemployed persons, public transport scheme. The Bank

has expanded its range of products and services to include Shariah
Compliant Islamic Banking products. For the promotion of literature,
NBP recently initiated the Annual Awards for Excellence in Literature .
NBP will confer annual awards to the best books in Urdu and in all
prominent regional languages published during the defined period.
Patronage from NBP would help creative work in the field of literature.
The Bank is also the largest sponsor of sports in Pakistan . It has
provided generously to philanthropic causes whenever the need arose.
It has taken various measures to facilitate overseas Pakistanis to send
their remittances in a convenient and efficient manner. In 2002 the Bank
signed an agreement with Western Union for expanding the base for
documented remittances. More recently it has started Electronic Home
Remittances Project. This project introduces technology based system
to handle inward remittances efficiently, by ensuring that the Bank's
branches keep a track of the remittance received from abroad till its final
receipt. This report is based on internship in National Bank of Pakistan
Civil Lines Branch Gujranwala. It is a famous and reputed bank of
Pakistan. National Bank of Pakistan maintains first position in banking
sector in Pakistan. This report is based on the activities which are
performed in this bank. This report contains functions of Bills and
Clearing department, Account Opening, Government section, Credit
Department, SWOT analysis, bank tariffs and exchange rates of
National Bank of Pakistan. There are also stated the activities which I
performed during my internship in the branch. There are also mentioned
the way of investment, rates of investment, all types of financing and
loans facilities the National Bank of Pakistan provides. The problems in
this branch are also discussed.
HISTORY OF THE N.B.P

The history of the N.B.P. is part of Pakistan struggle for economic
independence. In 1947 at the time of partition the economy of the country was
main controlled by non-Pakistanis, most of them were Hindus. This partition of
the Sub-Continent brought wide spread disturbance and bloodshed on both
side of the border. This resulted in the mass migration of population from. one
country to another. In this situation the economy of the country influenced
badly.
At the time of independence it had been arranged between India and Pakistan
that Reserve Bank of India should act as the common monetary authority for
both countries upto end of September, 1948. But the arrangement did not
prove satisfactory. In August, 1947, Pakistan had been given a first installment
of twenty crore of rupees, out of its shares of cash balance of undivided India
to meet immediate requirements. The balance amounting to fifty crore rupees
was to be paid later, But when Pakistan demanded that amount, they refused
to hand over the money unless Pakistan agreed to give up interest in Kashmir
and thus the Government of Pakistan could not agree. This situation occurred,
when Reserve Bank of India was functioning as the Central Bank of Pakistan.
As a result of this experience, Pakistan felt it could not place any reliance on
the Reserve Bank of India. It was clear that its own central Bank was an
indispensable necessity and it was opened by the Quaid-e-Azam on the first
of July, 1948. When state Bank came into existence, it claimed its share of the
assets of the Reserve Bank of India against the Indian currency, retired from
Pakistan territory. But again dispute arose. The dispute is still unsettled and
these assets have not been delivered to Pakistan.
Many other disputes occurred between the two countries. As a result of ratio
controversy, the regular trade and payments between the two countries came
to stand still. One of the immediate consequences of this situation was the
withdrawal by Marwari merchants of the India Finance which used to be
employed annually for the movement of Pakistan's Jute Crop. A crisis of the
first magnitude threatened, because the Jute Crop was already in the market
and so their was no money to move it, prices begin to fall precipitously. At that
time there was no JUTE in Pakistan, not a single jute loom or spindle and no
posibi1ity of utilizing any of the crop within the country. As jute prices
collapsed, foreign merchants and foreign Banks to promote agrarian nearest.
It was very evident that the Government of Pakistan could not afford to
continue as a spectator of these developments.
So two ordinance were passed immediately, one setting up the Jute. Board,
and the other the decision of establishing of National Bank of Pakistan. The
object of the Jute Board was to re-organize and rehabilitate the Jute trade by
helping parties to handle it and to stabilize the market. The National Bank was
established to provide finance to suitable parties.
Thus it came about that The National Bank stood behind the Jute trade, the
State Bank of Pakistan stood behind the National Bank and the Government
stood behind the State Bank.
OBJECTIVES OF THE BANK

Commercial Banks operate under profit motive and perform various functions
in a modern society.
National Bank of Pakistan is a commercial Bank till with socioeconomic
objectives e.g. to earn profit and at the same time develop the economy of the
country and uplift the socioeconomic status of community. The main
objectives of the Bank are as follows
Maximum Profit
As the name of the Bank indicates that it was established to finance the
nation.As a Business organization its objective is to earn more and more profit
by the least expenditures.
Good Administration
A good administration is an objectives of the Bank. Without proper
administration no organization can run successfully. A good administration
should have the following qualities:a: Quick decision.
b: Correct decision.
Customer Service
The main objective of the Bank is to serve his customers. It serves the
customers on both directly and indirectly. Bank collects money from an
individual, firms, and limited Companies etc. It also gives loan to the people.
Developments
Banks spending large amount of its profit for its own development.Therefore,
the large amount of its profit is spent on opening the new branches of the
bank and increasing the work efficiency of the Bank.
Expenditure Discipline
Bank is trying to minimize its expenditure. So, it keeps strict control over
expenditure and avoids wastage of money at every stage. Branch expenditure
must not increase more then 15% of the last year's budget for
correspondence.
Zonal Inspection
Every branch should be inspected by Zonal inspector at least once a month
as directed by Principal Office under B.D. may verify from time to time.
Maximum Utilization of Staff
The staff requirement of the most branches is sufficient. However, services
should be utilized systematically for effective functioning.
MANAGEMENT AND ORGANIZATION OF A BANK

The management and organizational structure of N.B.P. are described under:Board of Directors
In the management of the Bank, the Board of Directors is at the top of. The
controlling bodies.Since there are no private share holders, so there is no
general meeting of the share holders and are no elected Directors. The Board
consists of a nominated President, a Secretary and 9 other members. After
nationalization of Bank in 1974 most of the powers of Board have been
transferred to Banking Council and executive Board. The Secretary of the
board has limited administrative powers.
Executive Board
The general direction and supervision of the affairs of the Bank lies in their
respective Executive Boards.The President, Secretary and 0 other members
of the Executive Board are appointed by the Federal Government. The
President being the Chief executive of the Board Directors controls and
manages the affairs of the Bank.
Chief Executive
The President is the administrative head of a Bank. He presided over the
meetings of the executive Board, manages and controls the affairs of the
Bank. The President holds office at the pleasure of Federal Government.
Divisional Chiefs
In order to improve the management and operation of a Bank, it has been split
up into a number of divisions. Each division of a Bank is placed under this
supervision and control of Divisional Chief or Senior Executive Vice president

(SEVP) or Executive Vice President (EVP).
Provincial Chiefs
In order to improve the performance of the Banking system, each Bank has a
PROVINCIAL Chief. The Provincial Chief has the powers for sanctioning
finance and other credit facilities. The headquarters of the Chiefs are situated
in each Province i.e. Lahore, Karachi, Peshawar and Quetta.
Circle Executive
Bank has a number of circles. They are placed directly under the supervision
and control of the Chief executive. The chief executive is usually SVP or VP.
Zonal Heads
Each circle is divided into a number of zones. Zonal heads that holds the
posts of VP or AVP administers these zones.
Branch Managers
Each zone is divided into several branches. The control and supervision of
each branch is mostly entrusted to AVP or Officer of Class II. A few big and
financially sound branches are even administered by SVPS and VPS.
It is important to be noted that the head Quarter of NATIONAL Bank Of
Pakistan is located in Karachi
BOARD OF DIRECTORS
S.ALI RAZA
Chief executive/president
DR.WAQAR MASOOD KHAN

Director
KAMRAN Y. MIRZA
Director
RIZWAN A. KEHAR
Director
A. RAZZAK TABBA
Director
SHEIKH HUMAYUN SAYEED

Director
QAZI FAEZ ISA

Director
Organizational Chart of National Bank of Pakistan
CHAIRMAN
CHAIRMAN
BoardofofDirectors
Directors
Board
ProvisionalChief
Chief
Provisional
RegionalChief
Chief
Regional
ZonalChief
Chief
Zonal
VicePresident
President
Vice
GMBuisness
Buisness
GM
BranchManager
Manager
Branch
Operation
Operation
Manager
Manager
Credit
Credit
Officer
Officer
HR
HR
Officer
Officer
10
Overseas
Overseas
Operation
Operation
Group
Group
Operation
Operation
Group
Group
Org
Org
Devel
Devel
&Training
&Training
Dept
Dept
Corporate
Corporate
Invest
Invest
Banking
Banking
Fin
Group
Fin
Group
Special
Special
Assets
Assets
Group
Group
Strategic
Strategic
Plan
&&
Econ
Plan
Econ
Research
Research
Group
Group
Head
Office
Head
Office
Mgt
Mgt
Structure
Structure
HRM
HRM
Dept.
Dept.
L.T
Planning
L.T
Planning
Dept.
&&
Imp
Dept.
Imp
Group
Group
Audit
Audit
&Inspection
&Inspection
Group
Group
Treasury
Treasury
Mgt
Mgt
Group
Group
Comercial
Comercial
&&
Retail
Retail
Banking
Banking
Group
Group
Risk
Risk
Mgt
Mgt
Group
Group
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VISION
To be recognized as a leader and a brand synonymous with trust,

highest standard of service quality, international best practices and
social responsibility.
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MISSION
BP will aspire to the values that make NBP truly the Nations Bank,
by:
Institutionalizing a merit and performance culture.
Creating a distinctive brand identity by providing the highest
standards of services.
Adopting the best international management practices.
Maximizing stakeholders value.
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GOALS
To enhance profitability and maximization of NBP share

through increasing leverage of existing customer base and
diversified range of products.
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CORE VALUES
Highest standards of integrity.

Institutionalizing team work and performance culture.
Excellence in services.
Advancement of skills for tomorrows challenges.
Awareness of social and community responsibility.
Value creation for all stakeholders
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FUNCTIONS OF NATIONAL BANK OF PAKISTAN

National Bank of Pakistan is a commercial bank, so like other commercial
banks it is engaged in financing internal trade and also in other ordinary
banking business of receiving deposits, advancing loans and discounting bills
of exchange. In Pakistan every bank performs functions according to its
memorandum and article of association, so according to it the functions
performed by National Bank of Pakistan are as: -
Accepting Deposits
The most important function is to receive surplus money from the public. They
throw their nets as wide as possible to collect surplus balances of individuals,
firms and public institutions. In order to attract funds they have introduced
various types of deposit schemes that may suit the needs and tastes of a
large body of depositors. The Tijarat Ganj deposits schemes of National Bank
of Pakistan are:
Current account
Saving account
Fixed deposit account.
Advancing Loans
Every bank has learnt by experience that depositors do not draw whole of
their deposits at a time. They only draw a part of it for day to day transactions,
therefore a bank keeps a part of the total deposits as cash reserve to meet
the cash demand of depositors and advances the Tijarat Ganj part of deposits
to businessmen on interest. They always Tijarat Ganj a reasonable ration
between the tow parts to run its business.
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National Bank of Pakistan advances loans to businessmen, traders,

exporters, farmers etc. these loans are made against document of title
to goods, marketable securities, personal security of the borrowers,

mortgages etc.
National Bank of Pakistan gives loans in following ways.
By opening a loan account
By means of overdraft
By discounting bills of exchange
By purchasing bond and securities
Creation of The Medium of Exchange

It is neither safe nor easy to make payment in the form of metallic coin or paper
notes; therefore cheques make payments. Almost 90% of the financial
transactions are made through cheques. National Bank of Pakistan collects and
makes payment of cheques for its customers.
Transfer Money
National Bank of Pakistan provides facility to transfer from one place to another
at very nominal charges. When a person wants to transfer his money from one
place he handover money to the bank and gets a draft at the name of the
particular branch were he needs the money and gets money at that place
safely.
Agency Service
National Bank of Pakistan performs many services as an agent of its clients or
depositors. It makes payment on order cheques receives amount of money on
crossed cheques issued in favor of its clients and deposits the amount tin their
accounts. It receives salaries and dividends of joint stock companies on behalf
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of clients and deposits them in their accounts. It purchases bonds and shares
of joint stock companies for its clients under their consent.
General Utility Services

National Bank of Pakistan provides general utility services to its clients as well.
It keeps their precious documents, gold ornaments, bonds, and shares etc in
safe custody in its locker. National Bank of Pakistan provides the services of
clearing the utility bills i.e. electricity, gas and telephone bills of its customer and
provide evening banking service.It also advice its clients on investment
direction, foreign trade and other business matters.
CHEQUES
A cheque is a bill of exchange drawn on a Banker and payable on demand.
According to Dr. Hard, "A cheque is an unconditional order in writing drawn on
a Banker signed by the drawer, requiring the Banker to pay on demand a
certain sum in money to or to the order of a specified person or to learner."
Cheque is merely an order on a Bank by its clients to pay a sum of money to
himself or to a third party on demand.
There are three parties involve in a cheque:
(i)
The drawer.
(ii)
The drawee and
(iii)
The payee.
The drawer is the person who signs the cheque. The party which is
authorized to pay back the money is called drawer. The person to whom or to
whos or order the money is to be paid is called payee. A cheque in order to
be valid must bear the signature of the drawer. It should be in writing
preferable by means of a pen.
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KINDS OF CHEQUES
There are three kinds of cheques :
i.
Bearer Cheque:
ii.
Order Cheque: and
iii.
Cross Cheque:
Bearer cheque
Bearer cheque is that which can be cashed from a Bank by any person who
possesses the cheque and presents it at the counter.
Order Cheque
If the word bearer is struck off from the cheque, it then becomes an order
cheque. Order cheque is a safe form of payment because it can not be
encashed unless it is ascertained by a Bank that it is paid to the right person.
If cheque is drawn payable to the order of a specified person the Bank will
make the payment only after the identification of the specified person.
Cross Cheque
If the parallel lines are drawn across the face of the cheque and the words "&
Co" are written between them, it becomes a crossed cheque. The payments
made by the crossed cheque are the safest forms of payments because a
cheque can only be deposited in the payee's account or it can be endorsed to
somebody's else account by the payee. The crossed cheque can not be
cashed when it is presented at the counter of the Banker.
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DATE OF THE CHEQUE

Undated cheque
If a cheque does not bear any date, the holder of the cheque can insert the
date and cheque will quite valid.
Post dated cheque

The post dated cheque is, infect, not a cheque because it is not payable on
demand. It is equivalent to a bill of exchange, when the cheque is due for
payment, the cheque will be honored by the Bank. If a Bank makes payment
of post dated cheque before it falls due, the Bank would be liable to the
drawer for the amount.
Stale and Over due cheque

If a cheque is in circulation for an unreasonable period of time, the cheque is
said to be stale or over due. Normally, if the cheque is presented six on seven
months after the date, it is marked as "Stale" or "out of date". The out of date
cheque requires the confirmation of the drawer.
Alterations on a cheque
If the drawer is to make changes in the date or amount or in the name of the
person then full signature must be obtained on all the material alterations
made on the cheque.
Mutilated Cheque
If a cheque is torn in two or more than two-pieces and after pasting the
pieces together is presented to the Bank for payment. the Bank would return
it to the drawer marked, "Multitude Cheque". If the drawer confirms the
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mutilated cheque, the Bank's position is then quite safe.
PAYMENT BY CHEQUE
Conditional payment
A cheque or bill of exchange is not a legal tender money. A debtor, therefore,
can not compel a creditor to accept the cheque or bill of exchange as a
means of payment. When the cheque is honored and payment is made by the
Bank, the date is then effectual discharged.
Cheque through the post

If a cheque or other negotiable instrument is sent by post and is lost in transit
and is presented and paid by the bank, the loss if any rests on the sender.
However, if the creditor requests the debtor to send the cheque by post, than
the risk is to be borne by the creditor.
Cheques as evidence of payment

When the payee receives the amount written on the cheque from the Bank, it
serves prima face as evidence of receipt.
THE PAYING BANKER

The obligation to pay: the paying Banker or the drawer Bank is under
legal to honor his customers cheque provided:a. There is sufficient credit in the account of the customers to cover the
amount written on the face of the cheque :
b. The cheque are properly drawn:
c. Are not stale or over due: and
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d. There is no legal prohibiting the Bank to make payment.
Banker's Authority To Terminate The Payment Of Cheques

Countermand of Payment
The drawer of a cheque can stop the payment of a cheque by informing the
Banker either on telephone or through a special message or in writing. The
Banker will mark on the orders not to pay or payment countermanded by
telegram payment postponed pending confirmation present again: If the
cheque has been presented and cashed before the countermand is received
in time, the Banker will stop the payment of the cheque even if he was about
to pay.
In all such cases, where the payment is stopped well in time, the operative
signatures are cancelled and the cheque is returned with a marked
"Cancelled in error, payment countermand."
Customer's Balance
The Banker can refuse to make the payment of a customer's cheque 1 if his
balance is not sufficient to cover the cheque. However, if the Bank has
allowed the facility of overdraft, the Banker is bound to make the payment
provided the amount is within the limit of the overdraft.
Cheque is not an assignment of funds

A holder of a cheque can not ask the Banker to earmarl credit balance of the
drawer in his favor. If the customer's balance is sufficient to cover the cheque,
the payment will be made. The cheque will be dishonored if the Balance
available for drawing the cheque is not sufficient. The holder of the cheque
can not either have an equitable claim against the drawer Banker.
22
Payment in due Course

The Banker will refuse to make the payment of a cheque if:
i. It is not in accordance with the drawers instructions and
ii. It is also presented after office hours or is not in the ordinary course of
Business.
Advising Fate By Telegram

If cheques are presented direct to the Banker or through the collecting Banker
with a request to wire fate and the paying Banker's answer is in the affirmative
then the Banker has to make the payment even if he receives the
countermand of payment written or oral from the Customer.
Marking Cheques
A drawer may get a particular cheque 'Marked' from his Banker. The Banker
will retain the amount in order to honor the "marked" cheques. If' the other
cheques issued by him are not covering his credit Balance, Bank will dishonor
them for want of funds.
Forgery of the Drawer's signatures

If the Banker is doubtful of the drawer's signature of in the alternation of
amount the Bank can refuse to make the payment.
Notice of Customers Death

The Banker will terminate the payment of a cheque if he receives the notice of
the customer death.
Bankruptcy Petition
If the customer is unable to pay his debt i.e. he is insolvent, then he or his
23
creditors present as petition to the court to take over the debtors, property for
distribution among creditors. If the Bank receives a notice of t he refuse to
honor the cheque forthwith.
Making of a Receiving order

If the customer is satisfied that the customer appears to be insolvent, it will
immediately issue a receiving order. The Bank will refuse to make payment
on the advertisement of receiving order of its customer in the news paper or
on direct intimation from the court.
Trust Funds
If the Banker is satisfied that his customer by breach of trust is crediting the
trust fund to his account, the Banker may refuse to pay the cheques.
Garnishee Order
If the creditor of Banks customer gets a garnishee order from the court, the
customer is not allowed to operate the account by the Bank.
Account Closed
If the drawer has closed his account, the Bank will dishonor the cheque
presented to the Bank.
Mutilated Cheques
If a cheque is mutilated, torn or cancelled, the Bank will refuse to debit the
account of the customer. The payment on the torn cheque can, however, he
made, if it is confirmed from the drawer or from the payees Banker.
Difference in words and Figures

If the amount stated in words differ from the amount expressed in figures, the
24
Bank will refer the cheque to the drawer remarking: amount in words and
figures differs.
Irregular Endorsement
If the endorsement on the cheque is irregular, the Bank will not make the
payment on the cheque presented to it.
Lost or Stolen Cheque

If a cheque is lost or stolen and the drawer informs the Bank well ii. time, the
Bank will refuse to honor the cheque if presented after the receipt of the
notice.
Stop Cheque note

If a customer informs the Bank orally or verbally for stopping the
payment of the particular cheque, the Bank will obey the instructions
and will put "Stop Cheque Notice" in red ink in the account of the
drawer.
Receipt of Notice of Indemnity
If the Bank comes to know that a particular customer has become insane or is
of unsound mind and the Bank is satisfied that hi customer is unable to act
rationally, the authority of the Bank to act as agent will then cease. If the Bank
receives the lunacy order from the court, the cheques will be returned with the
remark "refer to drawer.
Joint Account
If there is a joint account the Banker will get definite instructions as to how the
account is to be operated upon whether all of them shall operate the account
or delegate the authority to one. On the death of any party to a joint account,
the balance rests in the surveyor or surveyors subject to an expressed
authority on the contrary.
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Partnership Account
In case of a partnership firm, every partner can open an account in his name.
But the Banker would not allow until and unless it is signed by all partners,
giving the manner of operation. The death or retirement of a partner dissolves
the partnership then the Bank should not allow any operation on such an
account.
Company Account
If the Company or a corporation wants to open an account with the Bank it
would provide a copy of resolution passed by the Board of Directors
appointing it as a Banker to the Company, naming the person or persons
authorized to operate the account. If any authorized person draws a cheque
on behalf of the company, then it would be dishonored.
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RATIOS ANALYSIS
Earning Ratios
2008
2009
ROA
1.96%
2.07%
ROE
14.13%
16.41%
ROD
2.54%
2.70%
Liquidity ratio
2008
2009
Current ratio
0.28
0.27
Activity ratio
2008
2009
Total asset turnover
0.051
0.048
2008
2009
0.87
0.87
0.99
0.99
Debt Management
Debt
Gross profit
G/P Margin
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RATIO ANALYSIS
INTERPRETATION
As complete information regarding year 2010. I have done the ratio analysis
for the year 2010 in comparison with prior years and now going to declare the
conclusion about the National bank of the Pakistan.NBP ROA is increased by
0.11 (from 1.96% to 2.07%) that means the income of National bank is better
than 2008.As well as ROE is also increased by 2.28 (from14.13 to 16.41 ).
These ratios show that NBP income is being increased year to year. The
performance of bank is going to be improved. The share holders equity in
order to increase its business capital. Similarly I found a continuous
improvement in returns on Capital that reflect that Banks internal growth rate
has started increase.
The NBP Liquidity position is not good than previous year. The more liquidity
of any business is best for its business. The more liquidity shows that
business in good position. The NBP Current ratio is decreased by 0.01 (from
0.28 to 0.27).The ability of the bank to pay its bills as they come due, can be
measured by the current ratio.
The NBP Asset Turnover Ratio also reduced that is not good for bank
because the return on asset has decreased from 0.051 to 0.048 that effects
on asset and income of the bank. Total asset turnover measures the efficiency
with which the bank uses its assets to generate sales.
The more debt a bank uses,the greater its financial leverage which magnifies
both risk and return but the debt remain same in both year.
Gross Profit Margin of National bank of Pakistan has little bit decreased but
the gross profit margin is much better than others banks because its gross
profit margin almost .99%in recent year and prior year that is very good for
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national bank of Pakistan. NBP net income is efficient from other banks thats
why its gross profit margin ratio is almost excellent in every year.
DEPARTMENT IN NATIONAL BANK OF PAKISTAN
DEPARTMENT FUNCTIONING UNDER N.B.P
Account Opening Department

Deposit Section
Bills Remittance Department
Clearing Department
Cash Department
Credit Department
Foreign Exchange Department
ACCOUNT OPENING DEPARTMENT
The account opening is the establishment of Banker Customer relationship.
By opening an account at a bank a person becomes a Customer of the
bank. Number of Accounts and deposit in form of cash are the key indicators
for the success of any Bank. So Account Opening Department is the most
important department in all banks.
This department performs the following functions:
To attract the customers in order to open the account.
Give reliable and complete information about Banks products and
services.
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Give protocol to customers.
To make the position of bank stable.
Increase the deposit of the bank in order to use this deposited money
in future investments
Key Features of account opening department

Account Opening Form
Account Opening Form contains all the necessary information about a person
who want to open an account in the bank. It contains information about the
type of account and nature of account which is going to open, list of
documents which are required for partnership and company accounts and
general rules and regulations of current account, profit and loss sharing
account and foreign currency account.
Introduction
Before opening an account of a customer who is not known to him the banker
should make proper inquires about the applicant. He should obtained
references and introduction from responsible persons about the identity,
integrity, reliability, occupation and nature of business of the proposed
customer.
Specimen Signature Card

While opening an account the customer must give a specimen of his
signatures on a specific card called specimen signature card (SSC). This sign
must appear on all his cheques to express his authority to make payments.
Accounts of illiterate person
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An illiterate person is not disqualified to open an account in the bank. The

extra precautions to be taken in this case.For example banker must obtain
passport size photographs and instead of specimen signature thumb
impressions of both hands is taken on card as well as on account opening
form. An illiterate person must come personally to operate his account.
Closure of Account
If balance in current and profit and loss account remains nil for a continuous
period of six months then account will be closed after expiry of final notice
period, under notification to the account holder.
Dormant & Inoperative Accounts

All accounts which have not been operated upon six months shall classify as
Dormant Account. All accounts which have not been operated upon for one
year shall classify as Inoperative Account.
DEPOSIT SECTION
Deposits are referred to as the LIFE_BLOOD of the bank. The
fundamental function of a commercial bank is the acceptance of deposits.
Banks accepts deposits from those who have surplus money in their
hands but they are unable to make use of it. When a bank receives a
deposit from customer, the relationship of debtor and creditor established
whereby a customer becomes the creditor and the bank becomes debtor.
The amount owned by the bank must be payable to the depositor on
demand or after some time. Deposit Section in a bank deals with the
acceptance of deposits and payment of cheques .
31
FEATURES OF DIFFERENT TYPES OF ACCOUNTS BE

OPERATED BY NATIONAL BANK OF PAKISTAN
The bank accepts the following types of deposits.
1.
Current deposits
2.
PLS Saving deposits
3.
Fixed deposits account (Time Deposit)
4.
Foreign Currency Account
CURRENT DEPOSIT
For current deposits NBP open the account in the name of individual
proprietary firms, partnership firm, private
limited
companies clubs,
association societies and other institutions. The account can be operated by

single or two more persons jointly as the instructions may be given at the time
of opening the account.If the person who wants to open the account is not in
position to sign or signature is not firm or shaky the bank
requires is
photographs and he has to come in the bank at the time of withdrawals of his
deposits.
The initial amount of deposits with which he can open the account usual not
be less then Rs.1000/ But this restriction is not imposed to the accounts of
charitable institutions.
32
PLS SAVING ACCOUNTS

The salient features or profit and loss sharing saving accounts to be opened
in NBP as under.
1. These accounts can be opened by individuals in their own single are

joint name. The PLS saving accounts can also be opened for provident
fund or other benevolent funds of companies, firms, organizations of
welfare and educational institutions.
2. PLS saving account can be opened with an minimum amount of Rs.
500/- only
3. Money can be with drawn form PLS saving account only through
cheque.
4. To share in the profit a minimum balance of Rs.500/- must be
maintained a account. The minimum balanced on sixth and last of
month will qualify for the profits.
5. The profit will be calculated on the basis of monthly minimum balance
for the period of six months i.e. from January to June and July to
December.
6. The head office of NBP determines the profits or loss on PLS saving
deposits and advice its branches the rate and time of distribution of
these profits concerned PLS saving account.
7. The shall be no restrictions on maintaining the maximum balance in
PLS saving account.
8. On the fist of Ramzan every year the Zakat 2.5% will be recovered
from the deposits on the balance of that day. But if depositors give
declaration of Zakat or he is non-mulsim no Zakat will be recovered
from him in the same day Zakat is not recovered from account in which
33
the balance are below upto prescribed limit as declared by the

administrator of Zakat Pakistan Act system of accepting deposits has
been stated in NBP since 01-01-1981.
PLS TERM DEPOSITS RECEIPT (PLS TDRS) OR FIXED

DEPOSIT A/C
1.
The PLS term deposit receipt are issued for any amount. There is
minimum or maximum limit or deposits in a single term deposit
account.
2.
The term deposit can be made by tendering cash only.
In the case of fixed deposit account deposit is made for a fixed period and a
money deposited can be with drawn before the expiry of period
fixed or before giving an advance notice to the Bank. Fixed
deposit caries a higher rate of interest than the other type of bank
account and the rate of interest rises with the length of the period
and the amount of deposit.
One opening a fixed deposit account the bank grants to the depositor a fix
deposit (FDR) which is not transferable to any other person.
When the depositor with drawn the receipt must be handed back
to the bank.
The salient features of profit and loss sharing term deposit excepted by NBP
are given as under.
34
3.
The PLS term deposit are accepted from individual in their own single
or joint names, companies firms and other organization.
4.
Under term deposit scheme the depositors not cease to earn the profit
immediately, after the respective maturity date, but they have been
affording a liberal facility. In case the depositors said to with draw their
terms deposits on maturity their funds will remain temporarily in used
and on profit earned a responsible share would occur to such over due
PLS terms deposits at the rates declared on PLS sharing account.
5.
The head office of the bank determine the profit or loss on PLS terms
deposit at by any one intervals i.e. the end of June and December
each year and payment of profit to or deduction of loss if any from the
PLS terms deposit is to be made the deposits for longer period will
earn a little more profit then those of shorter period deposits.
6.
The total profit upto Rs.950/- is exempted from income tax
7.
In the case of encashment before
maturity but after completion of
months profit will be paid for the entire period for which the deposit
remained with bank at the rates payable for the respective period to
the PLS saving account after deduction of the Zakat if any.
8.
In PLS term deposit expired and the depositors request with in one
month after the expiring date, for investment. The PLS terms deposit
will be reinvested for the desire period from the date immediately
following expiring date.
9.
Zakat or the face value PLS term deposit will be recovered as many
times as the valuation dates (i.e Ist Ramzan) falls between the date of
issue and the date of expiry of the deposit.
35
FOREIGN CURRENCY ACCOUNT

NBP has also introduced foreign currency accounts for Pakistan and foreign
Nation in Pakistan and abroad. This scheme assures its
customers on better profit and superior service.
1.
It offers Pakistani or foreign National to operate a foreign currency A/C

with any one of their authorized branches spread all over the country.
2.
Deposits of this accounts will be acceptable in all convertible currency

but account will be maintained on the customers choice in US Dollar,
pounds German Mark or Japanese Yen.
3.
Deposits may be made in the forms of remittances in foreign

currencies.
Travelers cheque on the bank counter will be accepted.
36
4.
The customer can make with drawls and transfers to any where in the
world.
5.
All the deposits and profits in the customers foreign account are
except from Zakat income or wealth tax.
6.
The customers sources are protected from any scruitny of concerned

authorities.
The NBP has over 1400 branches at home and abroad of these more than
100 branches are authorized and fully equipped to deal with all
kinds of foreign currency transactions.
NBP has worldwide network of branches and it has associated in Arabia
bank, All Jazria (26 branches) and national exchange company in
UAE to facilitate the customers in Pakistan, Saudi Arabia and
UAE.
BILLS REMITTANCE DEPARTMENT

Remittances mean the transfer of money or fund from one place to another
place through bank. It may be inland remittance or Remittance
Inland remittance may be classified as:
1. Within locality.
2. Out side locality.
Within Locality
When a branch situated in multan road is required to send the draft to any
other branch situated in the same locality, the process will say to be within
37
locality. I.e. NBP hall road branch multan road, send any draft to NBP hall
road branch, this is known as within locality.
Pay Order
Pay order is used for payment within the cities; the multan road purpose of
pay order is to make payment in record this payment in the bank as evidence.
Bank charge the commission for its services. The purchaser fill an application
form, which includes the amount of payment or order, the name of the payee
and complete address of purchaser and payee application form is also singed
by the purchaser.
Out Side Locality

Outside locality is an important type of inland remittances. Outside locality
means the transfer of money payable outside the city i.e.NBP Tijarat Ganj
branch D.I.Khan, sent any draft to a branch situated in Peshawar city. It is
commonly done through the following three means.
1. Telegraphic transfer (T.T)

2. Mail transfer (M.T)
3. Bank Draft.
Issuance of Draft
When a person require a bank draft, he should be asked to fill the application
form in which he states the amount/money to be transferred, the name of
payee and place of payment. After depositing cash and relevant fee, bank
issue the bank draft and hand over to the concern person.
38
Bank draft is usually issued is cross demand draft on which the payee
account only is written. The payee will draw the amount by presenting the
draft to the bank.
Lost Draft/Duplicate Draft

Bank issue the duplicate draft when the original draft had been lost, till the
purchaser of draft informed the issuing branch of the bank, that draft has
been lost, the issuing branch of the bank will immediately informed to the
drawer branch about the lost branch. The branch will stop the payment of that
draft. At the end in the place of lost draft the issuing branch of the bank will
issue the duplicate draft.
Cancellation of Lost Draft

If the purchaser of draft to cancel the draft then he is required to submit the
original issued draft. After the cancellation of draft the bank pay the cash or
credit the purchaser account as purchaser desires. The bank charges a
nominal fee for this service or act. Bank also informs the drawer branch about
the cancellation of the draft.
Telegraphic Transfer
Telegraphic transfer is an important mode of remittance. It is the quickest
mean of transferring the funds from one place to another place by the use of
telephone or telegraphic.
Now a day, new technology is used for this purpose i.e. fax, e-mail. The big
traders and businessman use this method of remittance in this method of
remittance the purchaser is not responsible for the dispatch.
HOW ONE CAN APPLY
39
The purchaser fills an application form and which he mentioned the sum of
(T.T) name of payee, accounts number of payee and place of payment etc.
The purchaser signs the application form and the bank charge the
commission for this purpose.
MAIL TRANSFER
Mail transfer draft is one of the bank modes of remittance. Mail transfer is
issued by one branch of bank to another branch of the same bank by
instructing to branch to pay the other branch by issuing mail transfer
receipts.In M.T the purchaser is not responsible for dispatch, but the bank will
be responsible for dispatch.
How To Apply
The purchaser fills application forms, which includes the amount of M.T name
of payee, account number of payee, name of
BANK DRAFT
Bank draft is the most important type of remittance. Draft is an instrument
issued by a bank. Draft is issued by one branch to another branch out of the
city. The difference branches of same bank can issue the bank draft to each
other and it is also called the banker cheques i.e. the Tijarat Ganj Branch of
NBP in D.I.Khan issued the draft to the NBP Peshawar
CLEARING DEPARTMENT
40
All commercial banks are the members of the bankers clearing house which
facilitates the settling of daily balances due between member banks arising
from the cheques and cash transactions throughout the country, whether by
the general public or individual banks.
Clearing can be defined as the transfer of funds from one branch of bank to
the other branch of the same bank or the other bank on which the instrument
is drawn, without involving the cash through state banks clearing house.
Clearing house is the place where both the debtors and creditors are
different commercial banks and they settle their claims.
There are two types of clearing

Inward Clearing
It means cheques which are drawn on our bank but are presented to the
branch of another bank and on our branch but with in the city. These
cheques are handed over to NBP agent in clearing house. Inward clearing
results into outflow of cash.
Outward Clearing
It means the cheques of another bank, which are presented on our branch
by our customers. Outward clearing results into inflow of cash from the
payee bank.
CREDIT DEPARTMENT
41
Lending is one of the most important functions of banks. They collect funds
from the public in the form of various types of deposits, and lend and invest
them for productive and profitable purposes. It is the loan function which
produces the major portion of banks income; and as such it is one of the
major areas of professional bankers concern and attention.
Credit Policy
At present National Bank of Pakistan offer following finances to its reliable
customers:
Cash Finance
Running Finance
Packing Finance
Local Manufacturing Machinery
Agri. Finance
Small Finance
House Building Finance
Demand Finance
Consumer Finance
TYPES OF ADVANCES
1. Demand Finance
2. Running Finance
3. Cash Finance
4. Small Finance
42
5. Agriculture Loans
DEMAND FINANCE
These are those advances which are allowed in lump sum for a fixed period
and are repayable in lump sum or gradually in installments.
RUNNING FINANCE
Running finance are advances, which are gradually given to meet temporary
requirements of the customers. A good customer uses the banks running
finance limit, as a mean of protecting his credit in the market and as a line of
second defense to meet his commitments. There are two types of running
finance:
UN-SECURED
Under this type of overdraft, the bank relies upon the personal security of the
customer or customers account.
SECURED
Under this type of overdraft, the bank allows his customer to withdraw more
than his deposit after giving security against the amount overdrawn. The
securities against which they are given are as under:
1.
Share Certificates
43
2.
Savings Certificates
3.
Deposits
4.
Mortgage Property
5.
Guarantee of a person
CASH FINANCE
These types of loans are given against the following:
1.
Against locally manufactured goods
2.
Cash finance against rice and paddy
3.
Against pledge
4.
Against commodities
5.
Besides advances against the above commodities bank may be
approached by parties for advances against other commodities like tobacco,

oil, etc.
6.
Against Trust Receipts
SMALL LOANS
Loans are allowed to contractors clearing and forwarding agents. These
loans are repayable within a year.
AGRICULTURE LOANS
Agriculture loans are given to the farmers with holding up to 25 acres for
meeting their short medium and long term production requirements such
as:
1.
Agriculture inputs
44
2.
Tractors instruments
3.
Tube wells
4.
Live stock farming
5.
Land Improvements
CASH DEPARTMENT
Cash Department is the most important section in the bank. It performs the
following three main functions:
Bank payments & receipts

Bank payments means cash payments to those persons who represent
cheques and bank receipts includes cash deposits made by account holders.
Government receipts & payments

Government receipts means collection of income tax, property tax, sales tax
and traffic challans. Government payments include salary payments to Govt
employees and Pension payments.
Collection of utility bills

It includes collection of all utility bills which includes electricity , gas and
water bills. It also includes ptcl bills.
FOREIGN EXCHANGE DEPARTMENT
Imports
45
We sell our foreign exchange to the other country which is called such as we
purchase the foreign goods from the others. Import is done through letter of
credit (L/C) by the importer. Letter of Credit is an undertaking given by the
importer bank to the exporters bank.
Export
Export is to sell our goods to the other country and earn foreign exchange.
The bank provide facilities of exporting the commodities to the manufactures
of the goods of the country.
Foreign Remittance
The bank provides the foreign remittance facilities to the student studying
aboard. Bank also provides foreign exchange in the shape of travelers
cheques to the intending visitors.
PRODUCTS
of National Bank Of Pakistan
46
Monthly Income Scheme
Minimum deposit of Rs. 50,000 and a maximum deposit of Rs.

5,000,000 for 5 years
Free Demand Draft, Pay Order and NBP Online Aasan Banking*
Free Cheque Book / NBP Cash Card (ATM + Debit)
It is PLS Saving Account Minimum saving balance of Rs. 20001 &

maximum balance of Rs.300000.
Free NBP cash card(ATM+debit)
Convenience of NBP Online Asan Banking
Two debit withdrawls allow in a month.
47
President's Rozgar Scheme

If you are aged between 18 and 40 years, you could be eligible for easy
financing for self employment in the categories below:
NBP Karobar Utility Store
NBP Karobar Mobile Utility Store NBP Karobar Mobile General Store
NBP Karobar Transport
NBP Karobar PCO/ Tele-Centre
48
Home Purchase (House or Apartment) * - Product Detail

Financing Amount
Upto 35 Million
Financing Period
3 to 20 Years
Debt to Equity
85:15 (Maximum)
Home Construction * - Product Detail

Financing Amount
Financing Period
Upto 35 Million
3 to 20 Years
Debt to Equity
85:15 (Maximum)
Home Renovation * - Product Detail

Financing Amount
Financing Period
Debt to Equity
Upto 15 Million
3 to 15 Years
70:30 (Maximum)
Purchase of Land and for Construction thereon * Product Detail

Financing Amount
Financing Period
Debt to Equity
Upto 35 Million
3 to 20 Years
70:30 (Maximum)
Re-Financing (Balance Transfer Facility (BTF)) - Product

Detail
49
If you have a Home Finance Facility outstanding with another bank you
can have it transferred to NBP through a hassle-free process.
NOTE :
All home financing facilities below Rs. 15 M Debt to Equity Ratio will be
85:15 & for Rs. 15 M and above Debt to Equity Ratio will be 80:20.
*50% of the loan will be disbursed at the time of land purchase and
rest of the 50% for its construction will be disbursed in 4 tranches.
In January-2003, National Bank of Pakistan has launched a unique product,

NBP-Advance Salary. Currently this product is for fixed-income permanent
employees
of
Federal
&
Provincial
Government,
Semi-Government,
Autonomous, Semi-autonomous, local bodies and other Government

organizations. The product is purely cash flow based and offers its holder to
50
avail 20 (twenty) net salaries in one go to be repaid in up to 60 (sixty) months.

With no collateral, insurance or requirements, Advance Salary provides rapid
disbursement in a short turnaround time.
Meet your need for ready cash against your idle gold jewelry
with no minimum limits
Rate of mark-up 12% p.a.
Facility of Rs. 30000 against each 10 gms of net contents of

gold
No maximum limits of cash

Repayment after one year
Only gold ornaments acceptable
Weight and quality of gold to be determined by NBP's

appointed schroffs
No penalty for early repayment
Roll over facility
51
SWOT ANALYSIS
An
analysis
indicating
towards
organization
strengths,
weaknesses,
opportunities and threats is termed as SWOT Analysis. Such an analysis is

very important for the management in retaining the strength, overcoming the
weaknesses, capitalizing over the emerging market opportunities, and craving
52
ways to successful tackle with the threats and ultimately converting them in
the strengths for the organization
During eight weeks of my stay, I have come across the following SWOT
analysis of the bank
STRENGTHS
Strengths are those activities the organization does well or the unique
resources that it has. The strengths of SPCBL are given as follows:
The Keeping Of A Good And Modest Environment During Business

Hours.
The bank has a good team of customer relation managers and customer
relation officers to help the people.
Systematic working operations.
The credit administration department enjoys a staff of very good business

executives who attract and analyze people in a very good manner.
A good dressing of employees and their attitude towards the people
A Good System Of Communication Flow Is There
The Keeping Of A Good And Modest Environment During Business

Hours.
The Commitment Of Employees Towards Secrecy.
WEAKNESSES
The internal issues include certain weaknesses which are discussed

below:
53
There Is Lack Of Proper Advertising.
Higher Charges of Some Services As Compared To Some Other Banks.
All Branches are not On Line
No ATM facility available
Employees turnover is higher.
All Branches are not dealing in foreign exchange.
OPPURTUNITIES
Stronger and deeper relationships with existing and potential customers.
Cross selling of other Union Bank Products.
Committed employees due to payment of higher salaries.
Government patronage
A good job recruitment policy of hiring business graduates.
THREATS
Pakistan Is A Developing Country And Our Debt-Burdened Economy Is A

Major Threat For The Banking Business.
High probability of competitive reaction
Foreign banks may increase marketing support and aggressive sales

drive.
54
Launch of similar products by large nationalizes banks with extensive

distribution network.
Political Condition
The Employee Turnover Can Create A Serious Problem For The Bank.
RECOMMENDATION
55
During my internship of Six Weaks at the Multan Road branch Lahore.

I observed a lot of things and there is always a better way of doing
things. Some of the recommendation suggested for the Multan Road
branch, and National Bank of Pakistan as whole are as follows.
Required staff should be provided to branch in order to improve the
functioning of the branch to reduce the workload on the staff members.
Computer should be introduced in all the branches and department of
the bank. This will reduce administrative cost to great extant. Branch
should be connected through computers with Zonal/regional office and
headquarter. This will help a lot in the operation of the bank computer
knowledge should imparted to the employees. Communication and
coordination problem will be solved to greater extent.
Recruitment in the bank should be made purely on merit basis, and the
human resources development should be fully free from any influence
of higher authority and staff union in conduction of test and in the
selection of candidates.
There should be inter department transfer of employees, so that they

should know about all departments, in this way a proper coordination
could be achieved. They must have some basic information of other
departments. There must be proper job rotation.
The training programme of National Bank of Pakistan is not adequate.

Special marketing training should be given to employees who are
concerned with marketing. The training programme should include
scientific techniques to improve decision making and interpersonal as
well as individual needs of the employees
56
Constant improvement in customers service is needed in today

competitive environment. Personalized banking should be introduced
to attract more customer and more facilities. Equal respect should be
given to all the customers.
Remittance is a basic function and a Tijarat Ganj source of income of
the bank. Unfortunately there is an increasing shift the use of informal
means like Hundi. National Bank of Pakistan has to play a vital role in
mobilizing such remittances. The banks foreign branches have to
become more competitive and service oriented.
The top management should delegate some of the responsibilities to
the lower and middle management. So that to increase the
performance and working efficiency of the bank.
Promotion is a very sensitive and important issue and thus great care
should be observed in the decision of promotion. Personal liking and
disliking and outside pressure should be reduced and fare promotion
policy should be adopted. Promotion should give high preference to
the highly qualified personnel.
No ingle individual should be allowed to influence the decision of the
management. The management should be given free hand to handle
the affairs of the bank.
The bank should send employees for training and seminars arrange be
other banks so that they can compare the procedures adopted by other
bank and adopted whatever better and new.
57
CONCLUSION
National Bank of Pakistan was established as a semi public
commercial bank on November 8,1949. The primary objective of the
setting of the bank was to purchase jute form the growers in the former
East Pakistan in the country.The bank provides all types of banking
services to the government and private sectors. The overseas
branches under a trust deed the bank also provides services as trustee
to national investment trust including sage custody of securities on
behalf of nit in consideration for annual service charge and commission
National Bank of Pakistan is placing high priority on automation and it
development. The bank is shifting its focus from routine personnel
administration to human resources development, with due emphasis
being placed on the optional utilization of existing human resources.
Motivating pay structures and performance based on incentives were
also introduced enhance the productivity of employees.
Additionally, objective appraisal system is being instituted to facilities
transparent ratings / promotion. National Bank of Pakistan is working
on the restructuring programmer to make the bank more attractive with
the eventual aim of privatization as the largest bank in the country with
a customer bade of 8.5 million. The key components of the
restructuring programmers are reduction-operating cost; increased in
earnings, decrease in non-performing loans, effective use of
information technology.
National Bank of Pakistan brought a great revolution on our banking
system by introducing new products, adopting all he new methods and
technologies requited for an international bank. National Bank of
Pakistan is desired to play a vital role in the development of Pakistan in
the 21st century.
58
Balance sheet
Currency in
Millions of
Pakistan
Rupees
Dec 31
2008
Dec 31
2009
PKR
PKR
140,477.0
138,631.3
1,009.2
2,381.3
156,995.0
160,951.5
Other Receivables
2,105.7
13,566.9
TOTAL RECEIVABLES
2,105.7
13,566.9
Restricted Cash
5,792.1
6,823.6
Other Current Assets
16,276.2
21,070.2
TOTAL CURRENT ASSETS
195,166.9
218,341.3
Gross Property Plant and Equipment
28,214.4
29,982.1
Accumulated Depreciation
-3,962.7
-4,810.5
NET PROPERTY PLANT AND

EQUIPMENT
24,251.7
25,171.6
Deferred Tax Assets, Long Term
3,203.6
3,064.5
20.3
29.3
34,280.7
32,238.3
820,077.2
As On 31 December
945,903.3
59
Assets
Cash and Equivalents
Trading Asset Securities
TOTAL CASH AND SHORT TERM
INVESTMENTS
Other Intangibles
Other Long-Term Assets
TOTAL ASSETS
LIABILITIES & EQUITY
2008
2009
Accrued Expenses
15,204.6
18,247.5
Short-Term Borrowings
31,892.0
33,705.1
5,117.9
2,921.1
15.2
19.0
Other Current Liabilities, Total
10,242.6
10,654.7
TOTAL CURRENT LIABILITIES
687,806.3
792,041.4
Long-Term Debt
3,049.6
8,220.9
Capital Leases
10.0
23.6
Minority Interest
112.7
110.9
Unearned Revenue, Non-Current
133.3
218.0
3,052.8
3,531.0
--
--
Other Non-Current Liabilities
21,573.9
20,425.7
TOTAL LIABILITIES
715,738.7
824,571.6
Common Stock
8,969.8
10,763.7
Retained Earnings
67,612.0
78,212.5
Comprehensive Income and Other
27,756.7
32,355.4
TOTAL COMMON EQUITY
104,338.5
121,331.6
TOTAL EQUITY
104,338.5
121,331.6
TOTAL LIABILITIES AND EQUITY
820,077.2
945,903.3
60
Current Portion of Long-Term Debt/Capital

Lease
Current Portion of Capital Lease
Obligations
Pension & Other Post-Retirement Benefits

Deferred Tax Liability Non-Current
Income statement
Millions of Pakistan Rupees
As
of:
Dec 31
2008
Restated
PKR
Dec 31
2009
PKR
TOTAL REVENUES
41,957.1
45,980.5
Cost of Goods Sold
261.8
330.3
GROSS PROFIT
41,695.3
45,650.3
Selling General & Admin Expenses, Total
18,101.5
22,486.4
EBT, EXCLUDING UNUSUAL ITEMS
22,261.3
22,198.8
Other Unusual Items, Total
988.0
--
Other Unusual Items
988.0
--
23,249.3
22,198.8
7,565.2
4,099.8
-3.0
1.8
Earnings from Continuing Operations
15,681.1
18,100.8
NET INCOME
15,681.1
18,100.8
NET INCOME TO COMMON INCLUDING

EXTRA ITEMS
15,681.1
18,100.8
NET INCOME TO COMMON

EXCLUDING EXTRA ITEMS
15,681.1
18,100.8
EBT, INCLUDING UNUSUAL ITEMS

Income Tax Expense
Minority Interest in Earnings
61
Cash flow
Currency in
Currency in
Dec 31
2008
PKR
Dec 31
2009
PKR
15,681.1
18,100.8
761.2
875.8
--
--
761.2
875.8
Amortization of Deferred Charges
4.2
6.0
(Gain) Loss from Sale of Asset
-8.0
-7.9
371.7
651.3
-10,266.1
-7,458.4
-225.6
-1,371.4
10,634.4
11,148.8
-134.8
36.5
Change in Other Working Capital
-47,727.1
-78,285.9
CASH FROM OPERATIONS
-30,909.0
-56,304.5
Capital Expenditure
-1,648.3
-1,776.3
24.9
14.0
Investments in Marketable & Equity

Securities
13,372.0
-40,773.4
CASH FROM INVESTING
14,635.9
-40,638.9
-17.9
-25.9
NET INCOME
Depreciation & Amortization
Amortization of Goodwill and Intangible
Assets
DEPRECIATION & AMORTIZATION,
TOTAL
(Gain) Loss on Sale of Investment

Other Operating Activities
Change in Trading Asset Securities
Provision for Credit Losses
(Income) Loss on Equity Investments
Sale of Property, Plant, and Equipment
Long Term Debt Repaid
As
of
62
TOTAL DEBT REPAID
-17.9
-25.9
Common Dividends Paid
-6,104.9
-5,820.3
TOTAL DIVIDEND PAID
-6,104.9
-5,820.3
CASH FROM FINANCING
27,409.4
95,317.5
Foreign Exchange Rate Adjustments
2,623.1
919.5
NET CHANGE IN CASH
13,759.4
-706.4
63
Quarterly comparison
Comparison between 31 Dec 2009 and 31st march 2010
Cash flow statement
64
Currency in
As
of:
Dec 31
2009
PKR
Mar 31
2010
PKR
7,981.7
4,242.8
Depreciation & Amortization
319.4
253.8
DEPRECIATION & AMORTIZATION,

TOTAL
319.4
253.8
Amortization of Deferred Charges
6.0
--
(Gain) Loss from Sale of Asset
-5.5
-2.3
503.9
-3.1
Other Operating Activities
-5,227.4
1,080.1
Change in Trading Asset Securities
2,306.8
-8,223.1
Provision for Credit Losses
2,517.0
1,942.4
43.0
11.7
Change in Other Working Capital
-51,146.1
-4,111.5
CASH FROM OPERATIONS
-42,701.2
-4,809.2
-432.3
-653.8
11.6
2.3
Investments in Marketable & Equity

Securities
15,196.9
-29,649.4
CASH FROM INVESTING
14,970.6
-30,015.5
Long Term Debt Repaid
--
-5.1
TOTAL DEBT REPAID
-14.2
-5.1
--
--
Common and/or Preferred Dividends

Paid
10.0
--
TOTAL DIVIDEND PAID
10.0
--
72,806.6
-12,768.5
-265.6
-88.3
0.0
--
44,810.4
-47,681.5
NET INCOME
(Gain) Loss on Sale of Investment
(Income) Loss on Equity Investments
Capital Expenditure
Sale of Property, Plant, and
Equipment
Common Dividends Paid
CASH FROM FINANCING

Foreign Exchange Rate Adjustments
Miscellaneous Cash Flow Adjustments
NET CHANGE IN CASH
65
Income statement 31march2010

Currency in
As
of:
Dec 31
2009
PKR
Mar 31
2010
PKR
TOTAL REVENUES
14,565.8
12,200.7
Cost of Goods Sold
330.3
--
GROSS PROFIT
14,235.5
12,200.7
Selling General & Admin Expenses, Total
6,908.0
5,839.9
EBT, EXCLUDING UNUSUAL ITEMS
7,138.7
6,330.1
EBT, INCLUDING UNUSUAL ITEMS
7,138.7
6,330.1
Income Tax Expense
-839.9
2,087.7
3.1
0.3
Earnings from Continuing Operations
7,981.7
4,242.8
NET INCOME
7,981.7
4,242.8
NET INCOME TO COMMON INCLUDING

EXTRA ITEMS
7,981.7
4,242.8
NET INCOME TO COMMON EXCLUDING

EXTRA ITEMS
7,981.7
4,242.8
Minority Interest in Earnings
Ref: Annual report of NBP 2009

www.google.com
Balance sheet
66
Currency in
As
of:
Dec 31
2009
PKR
Mar 31
2010
PKR
138,631.3
98,250.3
2,381.3
--
160,951.5
98,250.3
Other Receivables
13,566.9
--
TOTAL RECEIVABLES
13,566.9
--
6,823.6
--
21,070.2
--
218,341.3
98,250.3
Gross Property Plant and Equipment
29,982.1
--
Accumulated Depreciation
-4,810.5
--
NET PROPERTY PLANT AND

EQUIPMENT
25,171.6
25,773.6
3,064.5
3,586.0
29.3
--
32,238.3
76,764.4
945,903.3
916,677.0
Assets
Cash and Equivalents
Trading Asset Securities
TOTAL CASH AND SHORT TERM
INVESTMENTS
Restricted Cash
Other Current Assets
TOTAL CURRENT ASSETS
Deferred Tax Assets, Long Term

Other Intangibles
Other Long-Term Assets
TOTAL ASSETS
Ref: Annual report of NBP 2009

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67
2009
2009
31Dec
31Dec
PKR
PKR
Accrued Expenses
18,247.5
--
Short-Term Borrowings
33,705.1
--
Current Portion of Long-Term Debt/Capital

Lease
2,921.1
--
19.0
--
Other Current Liabilities, Total
10,654.7
6,504.4
TOTAL CURRENT LIABILITIES
792,041.4
720,254.1
Long-Term Debt
8,220.9
33,574.7
Capital Leases
23.6
61.3
Minority Interest
110.9
262.2
Unearned Revenue, Non-Current
218.0
--
Pension & Other Post-Retirement Benefits
3,531.0
--
Other Non-Current Liabilities
20,425.7
46,239.2
TOTAL LIABILITIES
824,571.6
800,391.4
Common Stock
10,763.7
10,763.7
Retained Earnings
78,212.5
71,720.7
Comprehensive Income and Other
32,355.4
33,801.3
TOTAL COMMON EQUITY
121,331.6
116,285.7
TOTAL EQUITY
121,331.6
116,285.7
TOTAL LIABILITIES AND EQUITY
945,903.3
916,677.0
Currency in
LIABILITIES & EQUITY
Current Portion of Capital Lease

Obligations
68
BIBLIOGRAPHY
Vash Mc. (1993). Money Banking and International Trade 8 th edition,
New York. Willy Eastern ltd.
Siddiqui, Asrar H. (1983). Practice of Law & banking in Pakistan 3 rd
Edition, Karachi Royal Books Company.
National Bank of Pakistan NBP Annual Report 2000 National Institute
of Banking and finance.
Flippo, Edwin B. (1976). Principle of Personnel Management 1 st
edition, Tokyo.
Gardner, Dc. (1991). Banking and Money market 1 st edition, London.
Dc Gardner Group Plc.
Meigs, Walter B. (1986). Financial Accounting 11th edition, New York.
Mc Graw Hill Inc.
National Bank of Pakistan. (1999). National Bank of Pakistan year
book National Institute of Banking and finance.
Tannan, M.L. (1993). Banking law and practice in Pakistan Masroor
Book house.
Miss Hina OG-2 NBP Multan Road Branch
MR Abdur Razzak NBP Multan Road Branch
www.Google.com
www.Script.com
69
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EXECUTIVE SUMMARY

National Bank of Pakistan is the largest commercial bank operating in

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scheme for unemployed persons, public transport scheme. The Bank

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HISTORY OF THE N.B.P

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OBJECTIVES OF THE BANK

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MANAGEMENT AND ORGANIZATION OF A BANK

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supervision and control of Divisional Chief or Senior Executive Vice president

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DR.WAQAR MASOOD KHAN

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SHEIKH HUMAYUN SAYEED

QAZI FAEZ ISA

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Organizational Chart of National Bank of Pakistan

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

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To enhance profitability and maximization of NBP share

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Highest standards of integrity.

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FUNCTIONS OF NATIONAL BANK OF PAKISTAN

Fixed deposit account.

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National Bank of Pakistan advances loans to businessmen, traders,

to goods, marketable securities, personal security of the borrowers,

By opening a loan account

By discounting bills of exchange

By purchasing bond and securities

Creation of The Medium of Exchange

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General Utility Services

The drawee and

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Order Cheque: and

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DATE OF THE CHEQUE

Post dated cheque

Stale and Over due cheque

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mutilated cheque, the Bank's position is then quite safe.

Cheque through the post

Cheques as evidence of payment

THE PAYING BANKER

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d. There is no legal prohibiting the Bank to make payment.

Banker's Authority To Terminate The Payment Of Cheques

Cheque is not an assignment of funds

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Payment in due Course

Advising Fate By Telegram

Forgery of the Drawer's signatures

Notice of Customers Death

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