Submitted To Submitted By: Internship Report ON

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com/forum
INTERNSHIP REPORT
ON
PABBI, BRANCH
Submitted To
SIR HAJI GUL NAWAZ
Submitted By
AAMIR KHAN
MBA (Finance)
Roll # 369
Session 2006 – 2008
DEPARTMENT OF BUSINESS ADMINISTRATION

GOMAL UNIVERSITY
D.I.KHAN
Gomal University D.I.Khan 1

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IN THE NAME OF
Allah
The most Merciful
&
Compassionat
e
The Gracious &

Beneficent
Whose Help &

Guidance
we always
solicited

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at every
step
at every
movement
Dedicate
d
To
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My Dear
Parents,
Respected
Teachers
&
Lovely Friends.
Specialy Waqas Ahmad Khattak
TABLE OF CONTENTS
CHAPTER NO CHAPTERS NAME PAGE NO
 PREFACE 05
 ACKNOWLEDGMENT 06
01 INTRODUCTION 07 – 09
02 HISTORY OF THE NBP 10 – 17

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03 OBJECTIVE OF THE NBP 18 – 22
04 BANKING OPERATIONS 23 – 32
05 DEPARTMENTS IN NBP 33 – 36
06 PRINCIPAL OF ADVANCING MONEY 37 – 41
07 DEPOSIT MANAGEMENT 42 - 51
08 REMITTANCES 52 - 55
09 CRITICAL ANALYSIS OF NBP 56 - 60
 RECOMENDATIONS 61 - 62
 CONCLUSION 63
 BIBLIOGRAPHY 64
PREFACE
Internship is considered to be a compulsory practical training for
the MBA students. Its duration is two months and has proved to be golden
chance of training for the students in the concerned organization.
The main purpose of such training is to make students able to

apply theoretical knowledge in practical environment. Students come to
know about the knowledge like organization planning, policies,
management structure, activities and objectives.
My internship was arranged in the year 2007 started from July 01,
2007 to August 31, 2007. In to this respect, the department sends me to
National Bank of Pakistan Pabbi branch. As I am specializing in Finance,
therefore this reputable organization suited me up to the best of my
satisfaction. I did my internship training there very successfully where
the Bank staff welcomed me in a very positive manner, provided me a lot

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of information about NBP, its working and objectives and policies. The
staff also cooperated with me in practical work.
At present I am going to present all work of NBP there in shape of

this report according to instruction given by our internship incharge
Prof. Muhammad Saeed Ahmad. I am hopeful of the positive outcome of
such training in the upcoming days.
AAMIR KHAN
MBA (Finance)
Roll # 369
Session 2006-08
ACKNOWLEDGMENT
All praise is for ALLAH, the most merciful and his prophet
Muhammad for every torch of guidance and knowledge for
humanity. I offer humblest and sincerest words of thanks to GOD
Almighty WHO blessed me with potential and ability to make
material contribution to already existing ocean of knowledge.
I am humbly grateful to my honorable and respected teacher Sir Haji

Gul Nawaz, who furnished me with the opportunity to complete this
Research Report, and thereby consolidating my concepts, enriching
my knowledge, establishing my skills and strengthening my

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confidence, especially his lectures.
AAMIR KHAN
Roll # 369
Session 2006-08

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CHAPTER # 1
INTRODUCTION
Chapter # 1
INTRODUCTION
BACKGROUND OF THE STUDY

All the students of M.B.A (Banking & Finance) are required to do their six
week internship in financial institutions/commercial banks. Being employee of
the NBP my internship was arranged by IBP at Pabbi Branch, Nowshera for 2
months. The purpose of this internship is to acquaint the student with the
practical knowledge and to provide an opportunity to understand the
differences of theory and practices.
National Bank of Pakistan was established on November 9, 1949 under the

National Bank of Pakistan Ordinance No.XIX of 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

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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 20th 1949 at six
important jute centers in the then East Pakistan and directed its resources in
financing of jute crop. Bank’s Karachi and Lahore offices were subsequently
opened in December 1949.
1.1 PURPOSE OF THE STUDY

The purpose of my study is to functioning of branch to analyze the overall
performance of National bank of Pakistan in the finance and banking sector of
Pakistan. The purpose of this study is to analyze the theoretical application of
different fields of studies i.e. Management, Finance etc. in practical field of
banking with reference to National bank of Pakistan. I have tried my best to
cover each and every aspect of the branch.
1.2 LIMITATIONS OF STUDY

The following are most common hurdles which I internee felt:
• Secrecy of the bank.
• Non-availability of information
• Lack of Appropriate data
• Fidelity bond holder
1.3 METHODOLOGY OF DATA COLLECTION

The following three sources are used to collect and present the data:
• Primary data
• Secondary data
• Field Experience
For primary data collection, I have used interview and observation method. I
have interviewed different persons in the branch which include the branch
manager and other staff members and also the customers of the branch. I have
also interviewed the OG III and Assistant Vice President because he remains
compliance officer in the branch. I have also used Observation method for the
primary data collection. I observed the condition of the branch, the working
environment, its staff, records and other operations of the bank.
For secondary data collection, I have consulted different published material. I

studied different circulars of National bank of Pakistan. I have also studied the
annual report of the National bank of Pakistan, some books on banking and
also the financial statements of the bank.

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Chapter # 2
HISTORY OF THE N.B.P

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Chapter # 2
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

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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
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. Zonal Inspection.
Every branch should be inspected by Zonal inspector at least once a month as

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directed by Principal Office under B.D. may verify from time to time.
7. Maximum Utilization of Staff.

The staff requirement of the most branches is sufficient. However, services
should be utilized systematically for effective functioning.
ROLE OF BANK IN ECONOMIC DEVELOPMENT

Banks are the instruments of economic development. In the mobilization of
money, the banking sector can greatly help the country. It can promote the
growth of internal resources for development by attracting deposits from the
public to the maximum possible extent and channeling these deposits into
productive loans and investments. The Bank has been playing major role in
financing developmental activities in Pakistan. National Bank of Pakistan has
helped in the growth of economy in all spheres of our National life. It has
contributed significantly to economic growth of the country and has served
trade and industry, generally in wide sphere of operations.
For the agricultural growth, N.B.P was the first Bank to introduce scheme of
credit to small borrowers, farmers, craftsman, and small traders etc. The Bank
advances liberal credit for rural and agricultural development and has taken
the Banking services literally to the farmer's doors, small, short run loans
given farmers are free of interest. It helps the farmers giving advances without
interest in shape of fertilizers, seeds and other agricultural instruments so that
the country may become self sufficient in wheat and other crops.
The National Bank of Pakistan has been playing a major role in industrial
development. The Pakistan Government has encouraged private enterprises by
giving fiscal and monetary concessions and has tried to create a favorable
climate for foreign investment in specified industries. The National Bank of
Pakistan has continued to serve industrial needs in its sphere all along. It
provides usually short-term and in some cases medium term finances. The
N.B.P has a predominant share in the total advances to the industry in country.
This has been possible mainly because of the large resource at the disposal.
The large number of branches all over the country which help them to attract
large deposits, and the comparatively low rate of interest at which bank is able
to make advance to the industry.
National Bank of Pakistan has assisted to accelerate industrial growth in the

country. Now Bank also provide finances to small scale industries upto a
period of five years. National Bank of Pakistan has introduced the people's
credit facilities to the common man on a large and more liberal scale than
before. The main objective of this scheme is to make a contribution towards
building up of a strong middle class which is essential for ensuring
strengthened stability to a developing economy. Bank also helps to promote
the establishment of new companies by underwriting their shares. Bank is
making an ever increasing contribution to the industrialization of the country.
Through their foreign exchange business in Pakistan and operation abroad the
Bank makes a contribution towards the earning of foreign exchange.

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The Bank has also introduced various saving schemes and a perpetual income
plan on attractive term to encourage saving and promote social security.
The NATIONAL Bank of Pakistan is working as an agent of State Bank of

Pakistan. But it does not mean that the Bank has monopoly on Government
Business. It also faces the keenest possible competition from other banks. The
Bank has been able to main its position in the Banking System of the county
and to make a substantial contribution to the development of economy. Efforts
had been made, by its officers and staff particularly the senior officers to
improve the working efficiency of the Bank, to secure more business and to
build up sound working traditions.
As regard the future, the task of the Bank is plain enough, it has been an
instrument of NATIONAL policy in the past, so it shall continue in the years
to come. Its doors have been opened for anybody, from anywhere in Pakistan.
They will keep open as before.
NATIONAL Bank of Pakistan is trying to improve the work efficiency of

their Bank and they want that their Bank and they want that their Bank should
serve the people so the Bank is serving the nation by different ways and it is
playing a major role in economic development of the country. It will continue
to perform these tasks with the same enthusiasm and vigor. I trust and believe,
it will always be said that the National Bank of Pakistan truly exists in the
service of the National.
MANAGEMENT AND ORGANIZATION OF A BANK

The management and organizational structure of N.B.P. are described as
under:-
1. 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.
2. 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.
3. Chief Executive.

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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.
4. 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).
5. 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.
6. 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.
7. Zonal Heads.
Each circle is divided into a number of zones. Zonal heads that holds the posts
of VP or AVP administers these zones.
8. 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

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Organizational Chart of National Bank of Pakistan
CHAIRMAN
CHAIRMAN
BoardofofDirectors
Board Directors
ExecutiveCommittee
Executive Committee
President
President
RegionalHeadquarter
Regional Headquarter
RegionalManager
Regional Manager
Regions
Regions
Deptt. .
BankingDeptt
Banking
Branch Managers Officer
Branch Managers Officer
CashDeptt.
Cash Deptt. Admn.Deptt.
Admn. Deptt. FinanceDeptt.
Finance Deptt.
Officer
Officer Officer
Officer Officer
Officer

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Operation
Operation Corporate
Overseas Corporate
Overseas Group
Group Invest
Operation Invest
Operation Banking
Group Banking
Group Fin Group
Fin Group
Org
Org
Devel
Devel Special
Special
&Training
&Training Assets
Assets
Dept
Dept Group
Group
Strategic
Strategic
Head
HeadOffice
Office Plan &&
Plan Econ
Econ
HRM
HRM Mgt
Mgt Research
Research
Dept.
Dept. Structure
Structure Group
Group
L.T
L.T Treasury
Treasury
Planning
Planning Mgt
Mgt
Dept.
Dept.&&Imp
Imp Group
Group
Group
Group
Audit
Audit Risk
Risk
&Inspection
&Inspection Comercial Mgt
Mgt
Comercial
Group
Group &&Retail Group
Group
Retail
Banking
Banking
Group
Group

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CHAPTER NO # 3
OBJECTIVE OF NATIONAL BANK OF PAKISTAN

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Chapter # 3
OBJECTIVE OF NATIONAL BANK OF PAKISTAN

All the organization whether public or private which are involved in
business carries the objective of profit earning and profit maximization.
The objectives of an organization are the results it wants to achieve. It is
important that the leaders of an organization clearly establish its objective
and that the members of the organization agree upon these as desirable
ends to achieved. In democratically oriented organizations the members
are expected to help shape the objectives. National Bank of Pakistan is
also a business organization and its Tijarat Ganj objectives are profit
maximization. National Bank of Pakistan it profits in two ways.
• To increase its deposits.
• To charge mark up on loans provided to the people.
Increased Deposits
Now a day tough competition is faced in every field, and banking is
not exempted form this category whether the bank is Pakistani or
foreign, private are nationalized the competition is there. In this
competition each and every bank tries to achieve the greatest possible
amount of deposits. The tool used by the banks in order to increase
their deposits, is to provide the bank mean and hence earning interest
for them. In simple terms holding greater deposits result in greater
income of the bank, and thus profit maximization occurs accounts the
banks do not have to pay any interest to the customer hence the banks
can save some money although some facilities are provided to the
customer.
Extension of Loans
The profitability of the banks depends upon the amount of loan
sanctioned or given to the people. The credits occurred depends
greatly on one factor and that is the credit along with the interest
payable should be secure, and that in turn depends, upon the people
the bank is sanctioning loan. In the banking history we can observe a
number of incidences where people were offered huge loans and they
wrote off their loans by means of political influences. It is very

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important for every bank to secure then loans and the interest as well.
Now a day National Bank of Pakistan is very selective in sanctioning
loans to the people. National Bank of Pakistan prefers to give loans of

all types to reliable, reputed and secured parties. Mostly the loans
provided by the banks constituted the major portions of the profit of
the bank. The staff is trained and competent they carry out complete
financial analysis of the companies for credit and for the purpose.
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 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,

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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.

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Chapter # 4
BANKING OPERATIONS

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Chapter # 4
BANKING OPERATIONS
The Bank provides a wide range of facilities for transacting money in and outside
the country. Being' custodian of the money, it manages the assets in such a way
that the Bank Tijarat Ganj solve and liquid to a high degree so that it is able to
meet the demand of the customers for cash payments. In the operation of a Bank,
there is a close relation between the Banker and the customer.
Bank and Customer

Banker is a person, whether corporate or not who carries on the business of the
banking. The customer is a person who has some sort of account either current or
fixed or some similar relation with a banker.
Banker and Customer Relation

The relationship between Banker and customer is primarily that of debtor and
creditor with the rules reserved where the customers are relying on a loan from
the banker.
Duties of A Banker
1. To honor a customers cheques.
The Banker's duty is to honor the cheques of the customers.
i. They are properly drawn.
ii. The customers has balances to his credit.
iii. The loan contract has been signed.
iv. There is no legal bar attaching to the customers funds.
2. Standing orders:-
The Bank abides by the standing orders of the customers in making periodical
payments on his behalf such as club, library and insurance perineum etc.
3. Secrecy of the customers. Account: -

The Bank owes a contractual duty not to disclose the customers financial position
with out his consent.
4. Valuables for safe custody:-

The Bank takes care of the property deposited with it by the customers with or
without charge. When a Bank does not charge, the Banker is called gratuitous
bailey and when a specific charge is made, the Banker is then a paid bailey.
Accounts of Customers
A Bank should not open an account for a customer unless his integrity and
responsibility is duly authenticated by a responsible person known to the Bank.

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By opening of an account, the Banker usually gets the specimen signatures on
cards.
a. Authorities to sign an Account.

If a customer desires that his agent also operate on his Account, the Bank
should get a precise written mandate from his customer. The person to
whom the authority has been delegated will continue operating the account
till the authority is revoked in writing.
b. Mental patients:
If the Bank comes to know of a customers lunacy, the Bank will
immediately suspend the OPERATIONS on the account until the court
gives order or the Bank has full proof that his customer has fully
recovered. When the customers is mentally unsound, the court appoints a
receiver who operates the accounts under the direction of Master in
Lunacy.
c. Husband and wide account:

If husband and wife both open an account it will be considered an ordinary
joint account by the Bank. At the death of the husband, the widow is fully
authorized to withdraw the balance.
d. Infants:-
An infant can open an account with a Bank, but he is not allowed to
overdraw the account. If the infant customer wishes to have an over draft,
an adult should draw and sign on indemnity contract.
e. Partners:-
When an account is opened by the partner they are to sign a mandate
authorizing any or all of their member to make with drawls. The partners
are jointly responsible for all the loans and other obligation incurred by the
firm.
f. Societies, Clubs etc:-

If an incorporate body opens an account in a Bank, the committee of
management deputes certain of lice bearers to operate on the account. The
bank obtains a copy of the resolution of the society or clubs appointing
certain members to administrative funds. If there is any change in the
committee of management, it is notified to the Bank immediately. The
members of the society who are operating the account or not liable for any
draft.
g. Death of a customers:-
If a Bank receives the notice of a customers death, all operations on the
account are suspended until the executors or administrators produce the

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probate. All credits received after the notice of the death of customer are
placed in a new account for disposal by the executor or administrator later.
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 who’s 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.
KINDS OF CHEQUES
There are three kinds of cheques :
i. Bearer Cheque:
ii. Order Cheque: and
iii. Cross Cheque:
(i) 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.
(ii) 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.
(iii) 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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(I) DATE OF THE CHEQUE:
(i) Undated cheque:
If a cheque does not bear any date, the holder of the cheque can insert the
date and cheque will quite valid.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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 mutilated cheque, the Bank's position is then quite safe.
2. PAYMENT BY CHEQUE:
(i) 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.
(ii) 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.
(iii) 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:

1. The obligation to pay: the paying Banker or the drawer Bank is under
legal to honor his customer’s cheque provided:-
a. There is sufficient credit in the account of the customers to

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cover the amount written on the face of the cheque :
b. The cheque are properly drawn:
c. Are not stale or over due: and
d. There is no legal prohibiting the Bank to make payment.
2. Time Allowed for Payment :

When a cheque is presented over the counter, the following rules are usually
observed:
a. If a cheque is properly drawn and is complete in every
respect it must ordinarily be said or dishonored at once.
b. If a cheque is presented through a clearing House, then the
rules of the Clearance House regarding time are to be observed.
c. If the cheque of a customer is sent by another commercial
Bank is to send the notification of payment or dishonor within 24
hours of the receipt of the cheque to the presenting Bank.
d. If the holder of a cheque presents it through the post to the
paying Banker the usual practice for drawer Bank is to send back
the cheque instructing the holder to either present the cheque in
person or the collection should be made through another Bank.
3. Payment in Due Course:
If a cheque is drawn in proper form and is paid by the paying Banker in good faith
the Bank does not incur any liability.
4. Protection of paying Banker:
If the paying Banker makes payment of a cheque drawn on him with forged
signature of the drawer, He will not be held responsible provided:

a. The payment is made in good faith.
b. The payment is made in the ordinary course of Business.
Similarly, in case of crossed cheque, the drawer Bank is protected of the forged
document only if
a. The payment is made in good faith:
b. In the ordinary course of Business:
c. Without the negligence of the Banker and
d. According to directions contained in crossing.
5. Fraudulent Alteration of Amount:
If a drawer draws the cheque in such a manner that it makes room for alternation
of the amount, or hi signs a Blank cheque, and the Bank pays in good faith the
amount which is fraudulently increased, the Bank will not be held responsible for
the customers loss.
Banker's Authority To Terminate The Payment Of Cheques:

1. Countermand of Payment: -
The drawer of a cheque can stop the payment of a cheque by informing the

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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."
2. Customer's Balance:-
The Banker can refuse to make the payment of a customer's cheque1 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. Forgery of the Drawer's signatures:-

If the Banker is doubtful of the drawer's signature of in the alternation of

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amount the Bank can refuse to make the payment.
8. Notice of Customers Death:-

The Banker will terminate the payment of a cheque if he receives the
notice of the customer death.
9. Bankruptcy Petition:-
If the customer is unable to pay his debt i.e. he is insolvent, then he or his
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.
10. 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.
11. 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.
12. 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.
13. Account Closed:-

If the drawer has closed his account, the Bank will dishonor the cheque
presented to the Bank.
14. 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.
15. Difference in words and Figures:-

If the amount stated in words differ from the amount expressed in figures,
the Bank will refer the cheque to the drawer remarking: amount in words
and figures differs.
16. Irregular Endorsement:-

If the endorsement on the cheque is irregular, the Bank will not make the
payment on the cheque presented to it.

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17. 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.
18. 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.
19. 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.
20. 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.
21. 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.
22. 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.
ENDORSEMENT:
A cheque or a bill is endorsed when the transfer puts his signature on the back or
an along of a cheque and a bill as a part of its negotiation. If the cheque is bearer,
it needs no endorsement. However, in our country, the Banker insists on getting

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the endorsement (signature) on the back of the cheque. If the holder of the cheque
does not agree to put his signature, then he shall have to give a properly stamped
receipt for the amount paid to him. If the cheque or bill is drawn payable to order,
it requires the endorsement of the transferor, so that the payment is made in due
course.
REQUIREMENTS OF VALID ENDORSEMENT:

The Tijarat Ganj requirements of endorsement to be effective are as follows;
1. The endorsement must be on the back or on an along of the cheque

or bill. If the endorser simply put down his signature on the back of the
cheque, the endorsement is valid.
2. Endorsement may be made in ink, print, pencil or with a rubber
stamp. The Bank prefers the endorsement to be wholly in ink as it is not
liable to obliteration as well as alteration.
3. The endorsement must be of the entire value of the Cheque and
bill. Partial endorsement which may be in the name of one endorsee or
more than one endorsees separately is not legally valid.
4. If the number of endorsees or payees is more than one on the bill
then all the payees are the endorse unless one endorsee has the authority to
endorse on behalf of other payees as it is generally in partnership.
5. Another important requisite of valid endorsement is that the
endorsement must correspond with that of the drawing. For instance, if the
name of the endorsee is misspells. The payee should also endorser the bill
in the misspells version. However, the endorsee can at the proper
signature, if he
so desires. If the names of the payees are two or more than two, the endorsement
should also be in the same order, which is penned down on the back of the bill.
CLASSIFICATION OF ENDORSEMENT
The main classification of endorsement are as follows:
1. Conditional Endorsement:
If the endorsement makes the payment of a bill subject to the fulfillment
of a condition or conditions, the endorsement is called conditional
endorsement. The Bank or the payer can disregard the conditions and
make the payment to the endorsee and the payment will be considered
valid.
2. Blank Endorsement:
It the endorser signs his name on the bill but does not give the name of any
other person to whom he wishes to transfer the cheque, the endorsement is
called blank. When there is no endorsee specified on the bill, it becomes
payable to bearer even though it may be originally drawn to order.

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3. Special Endorsement:
An endorsement which specifies the name of the transferor for the
payment of the bill is called special endorsement. Special endorsement is
payable to order.
4. Restrictive Endorsement: -
A restrictive endorsement is one which restricts or prohibits the further
negotiation of the bill. For instance, pay to Hamid only signed by Rafique.
5. Partial Endorsement:-
If the bill purports to be endorsed for a part of the amount payable, the
endorsement is called partial endorsement is legally in effective.

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Chapter # 5
DEPARTMENTS IN NATIONAL BANK OF

PAKISTAN

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Chapter # 5
DEPARTMENT IN NATIONAL BANK OF PAKISTAN
DEPOSITS DEPARTMENT
Deposit department is one of the most important and Tijarat Ganj department of
the bank. It performs the vital function in the bank because it deals with the
supply of money to the bank. Deposits are the inputs of a bank. Deposits
department is just like a heat, as it function other department also run, otherwise
the whole system paralysis.
Each and every bank tries its best to increase their deposits. Deposits depict the
financial strength of a bank. National Bank of Pakistan is a unique and crucial
institution, which is able to increase credit in the country.
• Current account.
• Saving account
• Fixed account
REMITTANCES DEPARTMENT
This department helps in the transfer of money from one place to another place
and receives money of the people through these instruments and helps them in the
clearance and verification and transfer of money from foreign or local banks. The
bank charges a certain rate of commission on these instruments.
• Demand draft.
• Mail transfer.
• Telephone transfer.
CLEARING DEPARTMENT
National Bank of Pakistan performs the function of paying and collection of
cheques drawn on other bank by the customer of the bank with out charging fees.
They perform this clearance function for the customers or others bank in their
area because National Bank of Pakistan acts on the behalf of the State Bank of
Pakistan.

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Functions of the clearing dept in branch are:

• To arrange the payment of cheque drawn on the branch and give cheque for
collection to any other branch have ABL or any other commercial banks.
• To collect amounts of cheques drawn on member of local clearinghouse sent for
collection by National Bank of Pakistan branches.
ADVANCES DEPARTMENT
The primary purpose of this department is to encourage small business to take loans
and help them in their business. The bank earns from the advancement of loan to the
people or organization and charges a certain percentage of interest on it and bank
earns profits.
FOREIGN EXCHANGE DEPARTMENT

This department deals with foreign currency & accounts. This department does
currency rats & exchange of money from foreign currency to local currency and vise
versa.
FOREIGN CURRENCY ACCOUNTS

Foreign currency account in NBP can be open in 4 major currencies of the world i.e.
US dollars $, Japanese yen, German mark DM & UK pound sterling. Only authorized
branches of NBP can deal in foreign currency account. To open a foreign currency
account of foreigners they have to submit a copy of their passport. When the
customer will withdraw the money he will receive the profit in the same of foreign
currency.
SELECTED PRODUCTS & PROCEDURES OF NBP

The management of NBP has launched certain products and services not only
beneficial for the customers but also help a lot in promoting the good will and
reputation of the Bank which are given below.
NBP CREDIT CARD

National Bank of Pakistan offers this facility to customer to use card money in place
of cash money. NBP credit card is issued only to those customers who Have account
with issuing branch or good business relation with NBP.
NBP offer six types of credit card.

NBP VISA & MASTER CARD
It is valid only in Pakistan. It is accepted at more than 2000 outlets all over
Pakistan. Hotels, restaurants, resort travel agents, shopping malls, retailer petrol
pumps, hospitals & many more.

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NBP GOLD/SILVER INTERNATIONAL

It offers all the benefits of Visa / Master card. Emergency replacement in case the
card is being stolen; it can be replaced quickly & efficiently. The NBP Card bills
you in US dollar for expense incurred abroad. NBP offer credit card facility in
collaboration with bank of America. Over 12 million merchant’s globally in 170
countries accepts it.
How NBP Card Is Used
NBP has assigned credit card acceptance authority to domestic & international
merchants. The merchants usually paste a sticker on the Tijarat Ganj entrance of
their shop etc. on which it is written that NBP credit card is accepted here. So the
customers make shopping & then show their credit card to merchants. He puts the
card in a machine, which is linked with credit card division. Through this machine
they check the limit of card. When the cardholder has made shopping he sing
credit sales draft given by the merchant. It has four copies:
• To merchants
• For Cardholders
• Bank
• Headquarters
Commission charge is 20% NBP credit card is valid only for 1 year; renewal is
made after observing performance of cardholder. NBP charges Rs. 1250 annually
for domestic use of Rs. 15000/- for the international.
NBP LOCAL TRAVELER CHEQUES

These are used only in Pakistan. NBP LTC are accepted at major shops, travel
agents, hotels business establishment and NBP braches, one does not have to be
an NBP account holder to buy the local travels cheques. Anybody can purchase
them.
These traveler cheques are available in Rs. 5000, 10000, 50000 and 10000.

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Chapter # 6
PRINCIPLES OF ADVANCING MONEY

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Chapter # 6
PRINCIPLES OF ADVANCING MONEY
Basically there are five principles which must be duly observed while advancing
money to the borrowers
i. Safety.
ii. Liquidity.
iii. Disposal.
iv. Remuneration.
v. Suitability.
1. Safety
Banker's fund comprises Tijarat Ganjly of money borrowed from numerous

customers on various accounts, such as current Account, Saving Bank Account,
Call Deposit Account Special Notice Account and Term Deposit Account. It
indicates whatever money the Bankers holds is that of his customers who have
entrusted the Banner with it only because they have full confidence in the expert
handling of money by their Banker. Therefore, the Baker must be very careful and
ensure that his depositor's money is advanced to safe hands where the risk of loss
does not exist.
The elements of safety i.e. character, capacity and capital can help a Banker in
arriving at a conclusion regarding the safety of advances allowed by him.
a. Character
It is the most important factor in determining the safety of advance, as
there is no substitute character. A Borrowers character can indicate his
intention to repay the advance. Since his honesty and integrity is of
primary importance.
If the post record of the borrower shows that his integrity has been
questionable, the Banker should avoid him, especially when these
securities offered by him are inadequate in covering the full amount of
advance.
The sobriety, the promptness of payment, good habits, personality, the

ability and willingness to carryout a project through from beginning to
end, and the reputation of the people with whom he deals, will go to make
the character of a customer.

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b. CAPACITY
A businessman may not have vast financial resources, but with sound
management abilities including the insight into a specific business, he may
make his business very profitable.
On the other hand if a person has no insight into the particular business for
which he wants to borrow funds from the Banker, there are more chances
of loss to the Banker.
c. CAPITAL
This is monetary base, because the money invested by the proprietors
represent their faith in the business and its future. The role of commercial
Bank is to provide short term capital for commerce and industry.
11. LIQUIDITY
Liquidity means the possibilities of recovering the advance in emergency, because
all the money borrowed by the customer is repayable in lump sum on demand.
Generally, the borrowers repay their loans steadily and thus released funds can be
used to allow fresh loans to other borrowers.
Nevertheless, the banker must ensure that the money lending is not blocked for an
undue long time and that the borrowers are in such financial position so as to pay
back all the amount outstanding against them on a short notice. In such a
situation, it is very important for a banker to study the borrowers assets for
liquidity. because he would prefer to lend only for a short period in order to meet
the short falls in the working capital.
iii. DISPOSAL
As a principle, the disposal of the amount of advances should be broadly based so
that a large number of borrowing customers may be benefited from the Banker's
funds. The Banker must ensure that his funds are not invested in specific sector
like textile industry, heavy engineering or agriculture etc.
The Banker must give advances to a wide range of sectors like commerce,
industry, farming agriculture concerns, small business, housing projects and
various financial concerns in order of priorities. Disposal of advance is very
necessary from point of security because it reduces the risk of non-recovery when
some thing goes wrong in one particular sector or in one field.
iv. REMUNERATION
The Banker needs sufficient earnings to see the followings:
a. Profit payable to the money deposited with him.
b. Salaries and fringe benefits payable to the staff members.
c. Overhead expense and depreciation and main of the fixed assets of the
bank.

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d. Adequate sum to meet possible losses.
e. Provisions for a reserve fund to meet unforeseen contingencies.
f. Payments of dividends to the shareholders.
A major portion of the bankers, earnings comes from the mark up charged on the
money borrowers by the customers. The fixation of the rate of markup to be
charged for advances of various classes depends on the type of security offered to
him and also on the duration for which the advance is allowed. When the security
offered is sound and easily encashable, the Banker may charge a lower rate of
markup on an advance for a fixed period as compared to that of fluctuating over
draft.
In order to meet his above mentioned expenses the Banker runs a great risk and he
has to think twice that the money advance should not become bad or doubtful He
should not lend his funds to a borrower with when remuneration may be much bit
also equally risky. On the other hand Banker should prefer a borrower who is
willing to offer a higher rate of markup on a comparatively lesser risk.
v. SUITABILITY
Here the word "Suitability" is not to be taken in its usual literary sense. It is used
broader sense, which means that advance should be allowed not only to the
suitable borrowers, but also in keeping with the overall national development
plans chalk out by the authorized concerned.
Before accommodating a borrower, a Banker should ensure that the lending is for
the purpose in conformity with the current national credit policy laid down by the
Central Bank of the country. Since the Bankers mainly provide short term
working capital to commerce and industry. They should see that their lending
solve borrowers financial problems. In doing so the Bankers should retain his
primary status as commercial lender only.
PROCEDURE OF ADVANCE
Bank after allows the advances to its valuable customers against registered
mortgage of immovable properties such as Factories Mills, etc. In such cases the
advances are allowed on a long term basis and are meant to cover all types of
Banking facilities outstanding against the part. Such mortgages are so draw tip
that, irrespective of partial or total adjustment, so large as the limit remain
enforced, the mortgage security continues for Bank benefits.
ADVANCES AGAINST REGISTERED MORTGAGE
TYPE OF MORTGAGES

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There are two types of mortgages.
i. Legal mortgage.
ii Equitable mortgage.
1. LEGAL MORTGAGE
a. Legal mortgage is obtained where the borrower is mortgaging his
own property.
b. Legal mortgage is obtained where a third party is mortgaging his
property for advance to borrower.
c. Legal mortgage is obtaining form a limited company whether
private or public.
EXECUTION OF LEGAL MORTGAGE
The deed of mortgage is signed by all owners of the property where the property belongs
to a partnership firm, the mortgage deed is signed by all the partners of the firm. Where
the property belongs to a limited company, the common seal of the company is affixed on
the mortgage deed and one of two directors also sign the same.
ii Equitable Mortgage.
Equitable mortgage is created by title deeds and so an equitable mortgage
can not be created by a person who does not possess title deeds to his
property. Before accepting equitable mortgage special care is taken to
ensure that all title deeds of the property are obtained and kept with he
Bank.
A memorandum of deposit is obtained form the mortgager. In obtaining

this memorandum the special care must be taken the following points.
a. The memoranda states “I have already deposited” use of

past tense here is of utmost importance, otherwise the
memorandum will require to be stamped and registered without
which it will be invalid. By using the past tense, the memorandum
will not require either to be stamped or registered.
b. The equitable mortgage only be created at district head
quarter towns. It is, therefore, important that the memorandum of
deposit is addressed either to the Head Office or the Zonal Office.
c. The memorandum, due to deposit, must be signed in

accordance with the above instructions. For signing legal
mortgages, it is, however, not necessary that memorandum of
deposit be witnessed by witnesses.

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Chapter # 7
DEPOSIT MANAGEMENT

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Chapter # 7
DEPOSIT MANAGEMENT
The opening of account is the establishment of banker customer relationship. By
opening an account at a bank a person become the customer’s of the bank.
Following are the procedure of opening the accounts.
PROCEDURE:
Opening of Account
1. Separate Account opening form is used.
2. All formalities of opening saving bank to observe.
3. In case of joint accounts. Unless provided to the contrary, it is
presumed that account will be operated jointed, and accordingly all the
account holders must sign the withdrawals form and present themselves at
counts or counters.
4. All precaution for opening accounts of illiterate or semi-illiterate
persons should be taken.
Pass Book
1. At the time of opening of the accounts, every account holders is
provided with a special passbook, containing Rules and Regulation
governing the operation of the accounts.
2. Under no circumstances, operation in the account is to be allowed
with out production of the passbook.
3. Serial number of the passbook is issued is to be noted and
authenticated both on the AOF and the ledger in the case provided for the
serial number of chequebooks.
4. All the entries in the passbook are to be recorded in ink.
5. Entries in the passbook and the balance must be supervised by the
officer Incharge the officer should also sign in full against the balance
stuck in the column provided for the purpose in the passbook. And should
invariably mention his power of attorney number after confirmation that
the balance shown in the ledger and passbook are identical.
6. A-requisition slip provided at the end of the passbook is to use for

the issue of a new passbook on the completion of the previous one.
7. This passbook, “being security stationary” is serially numbered for
issue a passbook is issued. Register is to be Tijarat Ganjtained with
following columns.
(i) Date
(ii) Passbook number.
(iii) Name of the Account holder.

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(iv) Account number.

(v) Previous passbook number.
(vi) Initials.
ISSUE OF FRESH OR DUPLICATE PASSBOOK

1. Fresh passbook is issued after the requisition slip, from the old
passbook is filled in all available page in the old passbook have been fully
utilized.
2. Before a using a fresh book officer should mark in the old
passbook with rubber stamp, fresh passbook number issued on the first
and the last page of the old passbook and such book number issued on the
first and the last page of the old passbook and such stamp should be
signed. In fully by the using officer.
3. The last balance is took carry forward in the fresh passbook
authenticated by the officer Incharge after verify the balance brought
forward is identical with the balance as shown in the ledger in the old pass
book.
4. If a passbook is lost, the account holder is to be asked to inform by
writing to the branch and a new passbook will be issued only after usual
identity form number, which has been completed and signed by the
account holder, and join identities.
5. If a passbook is lost or spoiled, a charge of not less than Rs. 5 shall
made on account of issued of new passbook.
6. In case of loss of a passbook, instruction should immediately the
noted on the ledger, so that necessary precautions may be taken against
possible presentation of the old passes book. The procedure is the as for
“stop payment” of check No. Transaction is allowed till such time that all
the formalities of the issue duplicate passbook are complete. The lost
passbook is recovered is the case may be.
7. In order to confirm all the transaction previous to the loss of the
passbook. The balance is to be got confirmed by obtaining a balance.
Confirmation from the account holder at the time of issue of a duplicate
passbook.
8. In case the original passbook is found later by the account holder
and is presented to the bank, the same is to be closed and marked by
rubber.
Stamp
“Duplicate passbook no … issued”
Such stamp should be signed in full by the officer Incharge and the passbook
retained by the branch duly cancelled.

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With Drawls
1. With drawls are allowed by means of with drawls forms and at the
time of with drawls account holder must himself present at the counter
along with the passbook.
2. The officer should see that with drawls and figures, signature of
the account holder according to the specimen, before, the payment is
made.
3. In order to verify that the account holder himself is present at the
counter, his signature on the with drawls form should be obtained, by the
officer, and his presence.
4. Signature of the account holder is to be verified and cancelled as
done in case of cheques.
5. It is necessary to verify that the balance in the passbook and the
ledger account tallies and that the interest has been made simultaneously
in the ledger in passbook.
6. The balance in the passbook is to be authenticated by the officer
after satisfying himself as to the above requirement by writing his power
of attorney number below his signature on the passbook in the columns
provide.
7. The withdrawls form and the passbook duly completed has given
to the cashier who will check the entries and hand over passbook to the
account holder at the time of payment.
8. With drawls as in saving account, are allowed twice a weak and

four a total amount not exceeding Rs. 6,000/- weak. Fro large amounts,
prior notice of 10 days is to be obtained as a special case with drawls my
be allowed without prior notice the return / Profit for the notice is to be
recorded.
INTRODUCTION AND PRELIMINARY INVESTIGATION

Before a banker opens a new account he should ascertain whether or not the
person desirous of opening the account is a desirable customer. The banker should
determine the prospective customer’s integrity, respectability, occupation and the
nature of business by the introductory references given at the time of account
opening. Negligence in this informal preliminary investigation my result in
serious consequences not only for the banker concerned directly but also for other
bankers and the general public who may be affected indirectly.
In order to further strengthen and streamline this process, the Federal Ombudsman
of Pakistan, vide his ruling on complaint No. 11/31/5186 has directed the banks to
retain with the account opening form a Photostat copy each of the National

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identity cards of the person desiring to open an account as well as that of the
introducer.
As per these directions, the concerned Branch managers are required to obtain the
original National identity cards along with their Photostat copies and then return
the original after attesting the authenticity of the retained copy. This preliminary
investigation is helpful because of the following reasons.
(i) Avoid Fraud

If a banker does not make the necessary inquires mentioned above he may
enable dishonest persons possess chequebooks for fraudulent purposes. If
any such person happens to be an undercharge bankrupt. The banker might
be placed in an awkward position for having allowed such a person to
open and operate a bank account.
(ii) Safeguard Against Unintended Overdraft

Some time due to a mistake an account may be given an overdraft. For
instance, the ledger-keeper, misreading the balance of the account honors
a cheque for an amount larger than the balance. Similarly a credit entry
belonging to a customer may be made a mistake in another customer’s
account in such situation the excess amount withdrawn by the customer
can only be realized if the customer is a respectable person.
(iii) Negligence
When a banker does not make the necessary investigation, he may be
deprived of the statutory protection provided to a clearing banker under
section 131 of the negotiable instruments act. 1881. This is because in
such a case the banker will be deemed to a have acted negligently.
(iv)Inquires About Clients

A banker has a business obligation to respond to inquiries from other bank
etc. about his customer’s financial position. Though the banker give only a
general ideal about the financial standing of his customer’s he should
nevertheless have the necessary information available with him.
SPECIMEN OF SIGNATURE
When an account is opened with a banker the customer gives the banker a
specimen of the form of signature, which would appear on all this checks to
express his authority for the payment of cheques drawn on his banker. This
specimen is taken generally on a card specially designed for the purpose and rules
for the customers. Full name and account number are entered on it.

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If the banker has reasons to doubt the genuineness of a signature, he should either
get it confirmed for his satisfaction or return the cheque with the remarks. If the
signature of the customers forged the banker cannot escape his liability because
he has not on his customer’s mandate.
Signature Other Than English

If a customer sings in a language other than English or Urdu, he is requested to
fill a Vernacular Form. This type of indemnity whereby the customer relives the
signatures by the bank and the cheque are paid. The Vernacular Form is obtained
because the bank officer are not used to verification of signature other than
English or Urdu. Hence there is likelihood of mis-verfication.
VARIOUS ACCOUNTS MAINTAINED BY THE NATIONAL BANK

OF PAKISTAN
In modern time, very few business enterprises are carried out solely with the
capital of the owners. Borrowing funds from different sources has become and
essential feature of today’s business enterprises. But in the case of a bank,
borrowing funds from the outside parties is all the more vital because the entire
banking system is based on it. The borrowed capital of bank is much greater than
theirs own capital. Bank’s borrowing is mostly in the form of deposits. These
deposits are lent out to different parties. The larger the difference between the rate
at which these deposits are borrowed and the rate at which they are lent out the
greater will be the profit margin of the bank Furthermore. The larger the deposits
the larger will be funds available for the employment; larger the funds lent out the
greater will be the return earned on them; and greater the amount of return the
greater will be the profits of the bank. It is because of this interrelated relationship
that deposits are referred to as the “life blood” of the bank.
To receive deposits is a basic function of all commercial banks. Commercial

banks do not receive these deposits for safekeeping purpose only. But they accept
deposits as debts. When a bank receives a deposit from a customer, the
relationship of a debtor and a creditor is established whereby the customer
becomes the creditors, and the bank a debtor. When the bank receives the amount
of deposit as a debtor, it becomes the owner of it. It may therefore, use it. But
there is an agreement that the amount owned would be paid back by the bank to
the depositor on demand or after a specified time.
There Are Four Types of Deposit

There are four types of deposits that are
1. Current deposits.
2. Saving deposits.

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3. Term deposits (old name fixed deposits)
4. PLS saving account.
1. Current deposits.
These are payable to the customer whenever they are demanded. When a
banker accepts a demand deposit, he incurs the obligation of all cheques
etc. drawn against him to the extent of the balance in the account. Because
of their nature, these deposits are treated as current liabilities of the bank.
Bankers in Pakistan do not allow any profit on these deposit, and the
customer are required to Tijarat Ganjtain a minimum balance, failing

which incidental charges are deducted from such accounts. This because
the depositor may with draw current deposit at any time and a bank is not
entirely free to employ such deposit.
A few years bank, the proportion of currency deposit in relation to fixed

deposit was very small. In recent years, however, the position changed
remarkably. Now the current deposit has become very important; but still
the proportion of current deposit and fixed deposits varies from bank to
bank, branch to branch and from time to time.
2. Term Deposit (Old Name Of Fixed Deposit)

The deposits that can be withdrawn after a specified period of time are
referred to a term or fixed deposit. The period for which these deposit are
kept by the bank ordinarily varies from bank three months to five years
accordance with the agreement made between the customer and the banker
interest / return varies with the duration fro which the amount is kept with
the banker. Ti was held that the banker continues to be a debtor even after
expiry of the fixed time. Many depositors keep their money in term
deposit with the bank as an investment because of the interest / return paid
on them.
Since term deposit Tijarat Ganj with the bank for a specified period, they
can be profitably employed. By lending out or investing these funds, the
bank earns more than the interest / return that it has to pay on them to the
depositors.
PAYMENT OF TERM DEPOSITS BEFORE MATURITY
Some times depositor with draws the amount before the maturity. In such
situation the customers forego the interest / return accrued on the deposit or
borrows the required money again against the security of his fixed / term deposit
at a rate of interest / service charge which is generally 2 percent higher than the
rate allowed on the deposit.
Term or Fixed Deposits In Joint Names

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Terms or fixed deposits may be in the names of two or more than two persons.
The money deposit in the joint account is not paid to any individual unless the
Tijarat Ganj partners authorize the person.
3. Saving Deposit
Saving bank accounts generally opened in the name of individual illiterate person,
Pardanasheen ladies, minor, worker and students. These accounts are not
intendment for quick operation. If it’s found that any S.B. account is being
operated on too frequently the parties may be asked to open current for their
transactions.
In Pakistan a saving account can be opened with a very small amount of money.
And the depositor is issued a checkbook for withdrawals. Profit is paid at a
flexible rate calculated on six monthly bases under the interest free banking
system. There is no restriction on the withdrawals from the deposit accounts but
the amount of money withdrawn is deleted form the amount to be taken for
calculation products for assessment of profit to be paid to the account holder. It
discourages unnecessary withdrawals from the deposits.
In order to popularize this scheme the state bank of Pakistan has allowed the
saving scheme for school and college students and industrial labor also. The
purpose of this account is to inculcate the habit of saving in the constituents. As
such the initial deposits required for opening these accounts is very nominal.
4. PLS Saving Account

These accounts are more or less similar to saving accounts except that the
depositor are entitled to share the profit earned on such accounts instead of any
fixed interest rate allowed is saving accounts. Beside individual person, PLS
Saving accounts are also opened in the name of provident funds, benevolent funds
of the companies and welfare organization.
A minimum balance of Rs. 100/- must be Tijarat Ganj tained in PLS Saving
Accounts
CHEQUES
A cheque is a type of order which a depositor issue to draw some money from bank.
It is used for both purpose, deposit and also for drawn.
A cheque is an unconditional order in writing, drawn by customer on his bank,

requesting to pay on demand a certain some of money, to a person named in the
cheque, or to the bearer or to the order of a stated person. There are various types of
cheque, but some of them are most important which are the following:-

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 Bearer Cheque
This type of cheque is that which can easily be chased with out any
identification. A bearer cheque is one which the phrase “or bearer” is
written after the name of the payee. It is payable to the bearer, holder or
possessor i.e. any one who may present it at the bank. The bank is under
no ascertain that the payment is made to the right person.
 Order Cheque
Order cheques is a cheque made payable to a certain person or order. It is
a cheque on which the phase “or order” is written after the name of the
payee. If cheques are made payable to a certain person without the
addition of the word “Bearer” or “order” there to, it is regarded as an order
cheque. It can be transferred only by endorsement and delivery. In this
type of cheque the word order is written instead of bearer.
 Crossed Cheque
In this two parallel lines are drawn on one end of the cheque. The word
“and company” is written in this way “ & CO”. No one can draw money in
shape of cash but first it is deposited in the account of that person or in the
account of any other one and later on the cash is drawn by cheque. There
are two types of cross cheque.
 Crossed Cheque
“Where a cheque bears across its face and addition of the word’s and
company or any abbreviation there of between two parallel transverse
lines simply. Either with or without the word “ not negotiable” that
addition shall be deemed to be crossing, and the cheque shall be deemed to
be crossed generally” according to this definition the essentials of general
crossing are:
i. Two parallel transverse lines, drawn across the face of the

cheque either with or without the words “ & CO” or any
abbreviation is written between two parallel lines.
ii. Two parallel transverse lines drawn across the face of the
cheque either with or without the words (not negotiable) written in
between them.
 Special Crossing
Special crossing has been defined as “where a cheque bears across its face
an addition of the name of banker either with or without the words “Not
Negotiable” that addition shall be deemed a special crossing, and the
cheque shall be deemed crossed specially and to be crossed to that
banker.” It is evident from this definition that:

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i. In case of a special the two parallel transverse lines are not
essential.
ii. The name of the banker the return across the face of the
cheque is sufficient to constitute a special crossing.
iii. After the cheque has been “crossed specially”, the holder
cannot receive payment except through the banker name on the
cheques
.
iv. If a cross is lost or stolen, there is no risk of wrong
payment.
 A Post Dated Cheque

A post-dated cheque is a cheque, which bears the future date. A cheque
writing in May but the date is written of June. It can be paid in June on
date before, that date is a bill of exchange and not a cheque.
 Antedated Cheques
An antedated cheque is one, which bears the date of past time. A cheque
written in May, but the may be stated of April. The amount of cheque can
be claimed within six month starting from April.
 Stale Cheque
A stale cheque is that which was issued, six months back. The commercial
bank honors the cheque with in six months from the date of issue. After
the expiry of said period, the cheque is treated as stale. The drawer can
claim the payment after its renewal.
 Stolen Cheque
The drawer issues a stolen cheque, but it is lost. The cheque holder is not
the actual payee, so it is treated as stolen cheque. The cheque can claim
the amount of the banker is not informed in time.
 Travelers Cheque
The bank issues travelers cheque for the convenience of the traveler’s and
charges a nominal commission.
 A blank cheque is merely singed by drawer but the amount column

is left blank. The payee is allowed to write the amount himself at his
own will.

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Chapter # 8
REMITTANCES

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Chapter # 8
REMITTANCES
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.
1. Within Locality
When a branch situated in D.I.Khan is required to send the draft to any
other branch situated in the same locality, the process will say to be within
locality. I.e. NBP Tijarat Ganj branch D.I.Khan, send any draft to NBP
Tijarat Ganj branch, this is known as within locality.
(i) Pay Order

Pay order is used for payment within the cities; the Tijarat Ganj
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.
2. 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.
(i) Telegraphic transfer (T.T)

(ii) Mail transfer (M.T)
(iii) 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.

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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.
1. 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

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.
2. 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

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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.
(i) How To Apply

The purchaser fills application forms, which includes the amount
of M.T name of payee, account number of payee, name of the bank
branch. Place of payment and signature of purchaser. Bank charges
the commission for this service.
3. 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.

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Chapter # 9
CRITICAL ANALYSIS OF NBP

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Chapter # 9
CRITICAL ANALYSIS OF NBP
During my Six Months internship at the National Bank of Pakistan Tijarat Ganj
Branch D.I.Khan, my observation and interviewing the staff members and the
manager of the branch the information that I got is not sufficient as of such a big
organization. I have pointed out some of the shortcomings, which I observed
during my internship. Now the government is serious to bring some reforms in the
NBPs for privatization. And National Bank of Pakistan management is working
on the restructuring program. The shortcomings, which are present in the Tijarat
Ganj branch of, D.I.Khan, may or may not present in the other branches.
Problem at the Branch Level
Communication Problem
Bank staff uses peon and the clerical staff to communicate with each other. It
automatically creates a lot of problem and disturbance in the branch. The flow of
communication is very slow and creates gap between various counters and branch
departments. And the peon does verification of any sign or balance, which is not a
skilled person and time consuming.
Limited Staff
In the branch the staff is limited and the customers wait for a long time National
Bank of Pakistan also deals with most of the government affairs, federal and
provincial pensions salaries and taxes. Handling these people are very difficult
and at the beginning of the month large no of customer wait for their turn. But the
staff is low to handle such large no of customers.
Non-Availability of Computer Expert

In the modern era of computer the usefulness of computer is ignored it increases
the efficiency and all the work is done manually. There is lack of properly trained
staff to operate the computer properly.
No Ladies Section
There is no ladies section in the bank, as a banking facility for ladies, catering to
hijab needs of the ladies customers.

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Customers Satisfaction
In National Bank of Pakistan customer dealing is not so much good during the
hours of rush the customers have to wait for their turn. The staff is not able to
handle large no of customers. This creates a lot of tension and dissatisfaction in

the mind of the customer and the staff and there is a chance of error, which might
be very harmful. The bank should provide more satisfaction to its customer.
Proper Record Management

The record which are kept for the future use of the bank is not properly managed
the record of the bank is not kept properly in any kind of order chronological or
serial etc. if any record is needed the staff has to struggle to find the record and
waste a lot of time.
Unequal Distribution of Workload

Distribution of workload is not properly managed. Some of the employees are
setting ideal all the day without having work and on the other hand some don’t
find time to relax for a, moment. So this creates a lot of over work situation for
some while relaxation for others.
FUNCTIONAL ANALYSIS
Difference Between Theory and Practice

A vast difference exists between theory and practice in the National Bank of
Pakistan the written procedure is somewhat different from the practice that is
done by employees
Excessive Paper Work

It is notified that due to lengthy procedure of paper work at bank employees are
over burdened. They are unable to give proper attention to the clients and face
difficulty in getting the work done one of the reasons for lengthy procedures an
excessive paper work in the bank is the lack of computerization and lack of
skilled and educated staff.
More Accounts Deposits

Efficient banking is one in which emphasis is not on number of accounts but on
greater amounts of deposits National Bank of Pakistan is more interested in
increasing its number of accounts irrespective of deposits. It is difficult to main
and provide personalized services to the entire accounts holder.

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Delegation of Authority
Manger has a very limited authority. He has to take the approval from his senior
authorities in cased of advances he has to take the approval of general manger and
regional manager.
ADMINISTRATIVE ANALYSIS
Job Analysis Is Not Effective

Only on the basis of job analysis it can be decided how a right person could be
hired. Trained, compensated or promoted. It is very important for an organization
in which nature of the job is described and job specification is mentioned. Most of
the employees are simple graduates and don’t have proper know how about their
hob. This creates problems both of organization and for employees. Persons
performing simple or complex responsibility are getting the same salary and
facilities. This creates dissatisfaction among the employees.
CARELESSNESS IN OPENING OF ACCOUNT

When customers come to open an account, the staff does not bother to check
his/her phone number or address. Phone number and permanent address is very
necessary because any thing can happen. They should be careful in this respect.
Lack of Specialized Training

National Bank of Pakistan does not provided adequate facility of specialized
training to its staff. Training is provided on the basis of generalization rather than
specialization. As the worker finishes his training he is inducted into a specified
field. Since he does not have knowledge about the specified job assigned to him
thus he feels difficulty in perform his job.
Poor Job Rotation

There is absence of job rotation in Tijarat Ganj branch. A person places in one
department remain there forever. It reduces the career opportunities to the workers
as well as results in boredom and will not take interest in work. Job rotation is
very important for employees especially for those how re newly recruited. The
newly recruited should be rated in all the department of the bank in order to get
familiar with working of different department. So that when the gets a responsible
position he should have know how of the whole system.
Delays in Loan Advancement

It has been observed that there are delays in sanctioning of cases from the head
office that result in to customer dissatisfaction.
Lack of Appreciation
Another very important thing, which is ignored in the bank, is appreciation of the
employees in their good performance of staff members is not recognized and

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appreciated, it makes the person dishearten and he losses his interest in work
which result in poor efficiency.
Heavy Workload
The workload on the employees of National Bank of Pakistan is very heavy. It is
usual practice for the employees to stay beyond the official working hours.
PERSONAL MANAGEMENT ANALYSIS
Need For Better Training Programme

The need of training is felt all over the world. Training of the personnel is a part
of human resource management. It has been noticed that the training programme
of National Bank of Pakistan is not adequate. Once a candidate has been selected
and placed on the respective job, it becomes essential to train him adequately for
the task. They should lean new methods for motivation customer. The training
programme of the bank should include scientific techniques to improve the
decision-making and inter personal as well as individual need of the employees.
Developing Managerial Leadership

Leadership is a practical term of visible, clear on objectives and communicating
better control on financial and administrative matter, so the manger is not only
responsible for their own units in business, but also in people terms i.e. training
recruiting, grievance handling taking a immediate initiative in crisis situation have
to take major decision affecting the future of the bank and banking community.
Recruitment Policy
Human resources are the lifeblood organization. If the person is recruited
carefully they can become assets to the organization and in the case of
carelessness the personnel can become a liability. As National Bank of Pakistan is
government bank they don’t follow the recruitment policy political interruption is
very high and unsuitable candidates are selected.
Promotion
Promotion in the National Bank of Pakistan is purely on the seniority, so the new
young person having high qualification are not having any chance to promotion.
The promotion process is very slow time the top management or the staff union
put pressure for the promotion of their favorites, which give a sense of
deprivation to the deserving employees and their efficiency is affected.

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RECOMMENDATION
 During my internship of Six Months at the Tijarat Ganj branch D.I.Khan. I
observed a lot of things and there is always a better way of doing things. Some of
the recommendation suggested for the Tijarat Ganj branch of D.I.Khan, 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
 Constant improvement in customer’s 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.

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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. This will
lead as a key for the other staff members to improve their qualification and thus
got quick promotions. This will improve the quality of the staff members.
 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.

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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 programme 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. Its management and workers
must accept the competition and challenge of the new millennium through
innovative policies products and untiring application.

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BIBLIOGRAPHY
 Vash Mc. (1993). “Money Banking and International Trade” 8th 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” 1st edition,

Tokyo.
 Gardner, Dc. (1991). “Banking and Money market” 1st 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.

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Session 2006 – 2008

DEPARTMENT OF BUSINESS ADMINISTRATION

Gomal University D.I.Khan 1

The Gracious &

Whose Help &

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CHAPTER NO CHAPTERS NAME PAGE NO

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The main purpose of such training is to make students able to

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At present I am going to present all work of NBP there in shape of

I am humbly grateful to my honorable and respected teacher Sir Haji

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BACKGROUND OF THE STUDY

National Bank of Pakistan was established on November 9, 1949 under the

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1.1 PURPOSE OF THE STUDY

1.2 LIMITATIONS OF STUDY

1.3 METHODOLOGY OF DATA COLLECTION

For secondary data collection, I have consulted different published material. I

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HISTORY OF THE N.B.P

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HISTORY OF THE N.B.P

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OBJECTIVES OF THE BANK

National Bank of Pakistan is a commercial Bank till with socioeconomic

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7. Maximum Utilization of Staff.

ROLE OF BANK IN ECONOMIC DEVELOPMENT

National Bank of Pakistan has assisted to accelerate industrial growth in the

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The NATIONAL Bank of Pakistan is working as an agent of State Bank of

NATIONAL Bank of Pakistan is trying to improve the work efficiency of

MANAGEMENT AND ORGANIZATION OF A BANK

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It is important to be noted that the head Quarter of NATIONAL Bank of

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Organizational Chart of National Bank of Pakistan

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OBJECTIVE OF NATIONAL BANK OF PAKISTAN

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OBJECTIVE OF NATIONAL BANK OF PAKISTAN

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loans to the people. National Bank of Pakistan prefers to give loans of

FUNCTIONS OF NATIONAL BANK OF PAKISTAN

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National Bank of Pakistan advances loans to businessmen, traders,

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

National Bank of Pakistan gives loans in following ways.

Creation of The Medium of Exchange

General Utility Services

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banking service. It also advice its clients on investment direction,

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Bank and Customer

Banker and Customer Relation

3. Secrecy of the customers. Account: -