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Internship Report on National Bank of Pakistan (NBP) 2009 Share

Introduction

Before partition of the subcontinent, the entire banking system was almost in th e hands of Non-Muslims. When Hindu capitalists become sure of the division of th e sub continent, they transferred their fund to India in safe places. There was also a mass scale migration of Non-Muslims from Pakistan to India, which also ca used a reduction in the bank deposits. At the time of independence in 1947 Pakistan s Commercial banking facilities were almost jammed according to a plan. The following lines will give us a fair view of the situations, which were prevailing at that time. INDUSTRIAL SECTOR Pakistan had practically no industries except a few textile mills and only produ ced food grains and agricultural raw materials; most of the industries were situ ated in the areas, which now constitute India. LACK OF BANKING FACILITIES A number of banks closed their branches with the result that only 81 branches re mained open on 30th June 1948 out of 487 in 1947. As their head offices were in India and most of their Hindu staff fled to India. Imperial Bank of India, which

was conducting government, receipts and payments work closed down most of its b ranches thus blocking the funds needed most by the government.

HABIB BANK LIMITED The country being in infancy, needed most of the general commercial banking and credit facilities. And this need was a little bit satisfied with the transferrin g of the head office of the H.B.L. to Karachi on 7th August 1947.this bank playe d a great role in the next many years of the economic development of Pakistan. A s the Habib Bank was also new in the newly born country .It was asked to open mo re branches at new places. Imperial Bank of India, which was conducting government, receipts and payments w ork closed down most of its branches thus blocking the funds needed most by the government. Formation of The State Bank of Pakistan: In view of the above-mentioned circumstances and in order to rehabilitate the ba nking in Pakistan without further delay, on the recommendations of an expert com mittee it was decided to establish as early as possible a Central Bank to contro l the banking and currency in Pakistan. Accordingly State Bank of Pakistan was inaugurated by Quaid-e-Azam Muhammad Ali Jinnah on 1st July 1948.This bank lost no time in meeting the national requireme nt of banking currency and took following remedial measures: Requested Government to start a new bank for nation wide service. Accordingly Na tional Bank of Pakistan was formed in 1949, which opened numerous branches. It a lso took over government agency work from Imperial Bank of India in 1952. With Drawl of the Indian Currency It withdrew Indian currency notes of Rs.125 crore from general circulation and s ent these for recovery to Reserve Bank of India. In order to help the growth of foreign trade foreign exchange department was set up in State Bank of Pakistan. Banking Companies (control) Act 1949 empowering State Bank of Pakistan was passe d. The following banks were also opened: AGRICULTURE DEVELOPMENT BANK Agricultural Development Bank was set up to finance agriculture production in or

der to overcome food shortage.

PICIC Pakistan Industrial Credit and Investment Corporation (PICIC), was acted to fina nce industrial projects. UBL ] United Bank Limited was established to meet the increasing demand for funds cons equent upon the commodity market having become firm. The following banks and oth er financial institutions were also formed with the passage of time. 1. Commerce Bank Limited. 2. Standard Bank Limited. 3. Muslim Commercial Bank Limited. 4. Australasia Bank Limited

NATIONAL BANK OF PAKISTAN LIMITED INTRODUCTION: National Bank of Pakistan maintains its position as Pakistan's premier bank, det ermined to set higher standards of achievements. It is the major business partne r for the Government of Pakistan with special emphasis on fostering Pakistan's e conomic growth through aggressive and balanced lending policies, technologically oriented products and services offered through its nation wide branches. ESTABLISHMENT: National Bank of Pakistan was established under the National Bank of Pakistan or dinance 1949 and it came into existence on November 20; 1949.Its main aim was to provide all types of banking services to the government and private sector. The bank also handles treasury transactions for the Govt. of Pakistan as agent t o State Bank of Pakistan.

SHARE CAPITAL Issued Capital

The bank was setup with an issued capital of Rs.1.5 million. Authorized Capital Authorized capital of National Bank of Pakistan in 2000 was Rs.2.5 Billion. Issued, Subscribed, and Paid-up Capital Issued, subscribed and paid-up capital in year 2000 was Rs.1.46 Billion. MANAGEMENT

Board of Directors: An executive board composed of six senior executives of the bank and the preside nt who is also the chief executive supervises the affairs and business of the ba nk, called the Board of Directors. Management Committee: Also there is a Management Committee consisting of nine senior executives of the bank, called the members and the president who is also the chairman of the comm ittee. Branches: National bank of Pakistan carries on its business through a wide network of bran ches. These branches perform their functions under the supervision of local prin cipal offices and head office in Karachi. The bank has 1428 (1999:1408) branches in Pakistan and 23 (1999:23) overseas bra nches. Training and Management Development Wing: National bank of Pakistan has its national and development centers and 4 staff c ollages at: 1. Karachi 2. Lahore 3. Peshawar 4. Islamabad

In these centers and staff colleges, the banking training is provided to the off icers, managers, and to potential managers. It arranges courses and seminars for middle and higher management in all. Each year almost 1500 persons receive trai ning over there. Objectives of National Bank of Pakistan: National Bank of Pakistan s primary objectives are: To earn the profit To develop the economy To provide the latest banking facilities to its customers To improve customer service To offer specialized services to major corporate To reduce the size of non performing loans (NPL S) FUNCTIONS PERFORMED BY NATIONAL BANK OF PAKISTAN To fulfill the basic objectives of socio-economic nature the bank perform follow ing important functions: Accepting of deposits This function is performed by the bank by opening of the different type of accou nts, which are as follows: Saving Account Current Account Fixed Deposits N.I.D.A. account Advancing of loans Different types of loans are granted to different type of people and industries these include: Running Finance Over Draft Demand Finance Gold Payment of cheques Cheques drawn against various deposits are honored and paid in cash

 Payment of pensions This function is performed by N.B.P. as a govt. treasurer all the pensions of fe deral govt. provincial Govt: and semi Govt: employees is paid by NBP Salary management of different governmental institutions The salary of govt. and semi govt. employees is first credited to the account of NBP and is then credited to there personel accounts Issuing of traveler s cheques The traveler s cheques are issued by NBP for secure transfer of money from one pla ce to another, without charging any commission.

Collection and sale of prize bonds The national prize bonds are purchased and sold at the branches of the NBP accor ding to the rules formulated by the SBP. Collection of fees and money from people proceeding on Hajj pilgrimage National Bank collects the fee from the people proceeding for hajj and act as th ere agent. Transfer of funds from one place to another Money is transferred from one place to another by different means like Bank Draft Mail Transfer Telegraphic or Telephonic Transfer Travelers Cheques Collection of Chalans Various Govt. revenues are collected by NBP in the form of chalans Issue Guarantee And Indemnity Collection Of Negotiable Instruments Act As Income Tax Advisor

 Act As An Agent Or Representative Of His Customer

(Rs.in Billion) ITEMS Year 2000 Year 1999 Year 1998 Year 1997 Year 1996 Income 33.7 35.3 34.5 34.2

28.2 Expenditure 32.7 34.8 32.4 33.2 29.5 Pre-Tax Profit (Loss) 1.03 0.52 2.14 0.995 (1.26) Total Assets 370.7 350.4 325.9 310.6 274.1 Deposits 316.5 294.8 273.4 254.9 235.9 Advances 140.3 122.6 109.5 105.6 85.9 Investments 80.4 91.5 102.9 109.5 108.2 Number Of Branches 1428 1431 1434 1445 1555 Number Of Employees 15351 15541 15785 18096 23730

FROM TOP TO BOTTOM

CHAIRMAN Board of Directors Executive Committee President Regional Headquarter Zonal Chiefs Zones Branch Managers Finance Deptt. Officer Cash Deptt. Officer Admn. Deptt. Officer Banking Deptt. officer

MANAGEMENT AND ORGANIZATION OF BANK

Board of Directors

In the management of the bank the board of directors is at the top of the contro lling bodies. Since there are no private shareholders, so there is no general me eting of shareholders and no directors are elected. The board consists of a nomi nated president, a secretary and 6 other members. After nationalization in 1974 most of the powers have been transferred to the ex ecutive board. Executive Board: It is also called the management committee. The general direction and supervisio n of the affairs of the bank lies in their respective executive boards. The pres ident, secretary and 6 other members of the board are appointed by the federal g ovt. The president being the chief executive controls the affairs of the bank. Chief Executive: The president is the administrative head of the bank. He manages and controls th e affairs of the bank. The president holds the office at the pleasure of the fed eral government.

Regional chiefs: In order to improve the performance of the banking system, the bank has appointe d regional chiefs also. The regional chief has the powers of sanctioning finance and other credit facilities. There are 7 regional head quarters of the regional chiefs of the N.B.P., 1 is in the N.W.F.P., 1 is in Balochistan, 3 are in Punjab, and 2 are situated in Sindh . Zonal Chiefs: Each region is divided into number of zones. they hold the post of VP or AVP and administer these zones. N.B.P. has 37 zonal offices in Pakistan. Branch managers: Each zone is then sub divided into a no. of branches. The control and supervisio

n of each branch is mostly entrusted to AVP or officer of grade II. BRANCH MANAGER 2 SECOND OFFICERS 2 ASISTANTS 2 CASHIERS 2 MESSANGERS 3-ARMED GUARDS

Deposits are important to the bank as a backbone is to the body of a man. They a re the lifeblood of the bank. National Bank of Pakistan and all other commercial banks perform the function of deposit accepting from the general public by offe ring suitable rates of interest on them, or on simply a promise to repay on dema nd. OPENING OF ACCOUNT BY AN INDIVIDUAL: After entering into bank premises the person goes through the following steps fo r opening an account in the bank and for becoming a bank customer. 1. An Introduction: The first important step to take place in bank is to get satisfactory introducti on of the person, who wants to become bank s customer. This introduction is made from the person /party who are respectable and honorab

le and have an account with the bank. In N.B.P (Circular Road Branch) the branch manager takes great care of this step and gets introduced with the person himself. His main intention is to determine the prospective customer s integrity, respectability, occupation, and nature of b usiness he is doing at the time of opening an account.

2.Account Opening Form and Specimen Signature Card: Now the person is provided with an application form known as Account Opening For m.

This form contains: i. Title of account ii. Address iii. I.D. Card number iv. Telephone No. (Office and Residence) v. Introductory reference (all above mentioned particulars of introducing him) vi. Signatures of the applicant vii. Amount deposited viii. Check book series No. The customer will attach a copy of National Identity Card with the form. Specimen Signature Card: Specimen of signatures will be obtained from depositor at the time of opening hi s account. A specially designed card is used for this purpose; the card must be countersigned by an official of the bank not below the rank of an officer. 3.Account Opening Register: Now the name of the customer will be recorded in account opening register, and f rom here the account no. of the customer will be written on (top most corners) a ccount opening form and on specimen signature card.

4.Issuance Of Cheque Book And Pass Book: The cheque book will ordinarily be issued to all customers desiring to have cheq uing facility. Cheque book consists of 10, 25, 50, or 100 leaves depending upon customer requir ement. Customer can withdraw money by signing a cheque and writing the amount he wants to withdraw from his account. A special cheque book register is kept to enter the name of the person having ch eque book. 5. PASSBOOK PASSBOOK is another important type of book handed over to the customer as he ope ns the account with the bank. The withdrawal and deposit of money is recorded da te wise in this book. 6. Recording into General Ledger: The concerned officer records the name and amount deposited with the bank in to general ledger. Separate ledgers are maintained for different types of accounts e.g. Current Account Ledger Saving Account Ledger Fixed Deposit Account Ledger Call Deposit Account Ledger As and when customer will deposit the money, amount will be credited in general ledger and the withdrawal will be followed by a debit entry in the ledger. TYPES OF ACCOUNTS MAINTAINED BY NATIONAL BANK OF PAKISTAN (CIRCULAR ROAD BRANCH) NATIONAL BANK OF PAKISTAN maintain following types of accounts: 1. Current accounts. 2. Profit and loss sharing account. 3. Fixed deposit account. 4. N.I.D.A. Account

CURRENT ACCOUNT This account is also known as running balance account. Simply we can say A bank a ccount which may be used to lodge payments or to withdraw money on demand. Its main purpose is to serve the businessman. Form number F-53 is provided to th e person to open the account. It is a statutory requirement to maintain current account. Its main features are: Minimum amount for opening this account is Rs.500 Any person can open the account with the bank According to inter banks agreement interest is not paid on current account. Bank act as custodian of money Over draft facility is provided to the customers Customer can withdraw money through cheque supplied by bank Number of depositors in current account in National Bank of Pakistan up to 31-82001 were 900 approximately. PROFIT AND LOSS SHARING ACCOUNT In general it is also called saving account .To provide interest free banking fa cilities in Pakistan, this type of account was introduced in January 1982 after the islamization of banking. The main features of this account are: Instead of having fixed return in the form of interest the deposited money will be shared in profit and loss of the bank. One can open the account by depositing minimum Rs.100 Withdrawal is allowed 8 times in the month total not exceeding Rs.15000. To withdraw a large amount a notice of 7 days to the bank is necessary. There is not any kind of interest is provided on money deposited.

Rate of profit is declared at the close of each half-year. Number of depositors in PLS account in National Bank of Pakistan up to 31-8-2001 were 4000 approximately. FIXED DEPOSIT ACCOUNT This account is the major source of funds for the banks. This account is best fo r people who have surplus money and don t need such funds in nearer future. The money is deposited for a fixed period of time. Main features of this account are: Fixed amount is deposited for fixed period. Amount of profit can be obtained after each six months. Higher will be the time period, higher will be the rate of profit, and vice vers a. A receipt is used for the amount deposited called fixed deposit receipt. Period of deposit can vary from 3 months to 5 years. The amount can be withdrawn before maturity after surrendering interest.

N.I.D.A. ACCOUNT The NIDA Account can be opened in N.B.P. N.I.D.A. stands for national income dai ly account the features of this account are same to the features of the saving o r pls account except the following ones: 1. In this account the minimum balance required to acquire the benefits of this account is Rs 2 million, and the maximum limit is 5.0 million. 2. When the above condition is fulfilled, then the bank will pay interest on dai ly basis, which is that if the deposit is minimum of 2 million than the mark up rate is 5.2%p.a.and if it is at maximum that is 5.0 million than the rate is 7.0 0 %p.a. 3. In this account the daily balance of account is taken, products are calculate d and the interest is calculated on that balance. 4. If the balance on any day comes below the lower limit, which is Rs 2 million then interest will not be given.

National bank of Pakistan maintains a separate finance section. Its purpose is t o grant loans to the needy people, small & large business concerns, and to indus tries. Advances in the form of money are the most remunerative use of bank resources. T he management of the bank will be very careful while granting the loans. The person/proprietor of the business will go through a long process of applicat ion, documentation, securitization etc. while requesting for loan. After proper satisfaction from the party concerned the bank will grant loan to the party Under the Islamic modes of financing from 1982 onwards, National bank of Pakista n gives loans on the basis of Mark-up instead of interest. Mark-up rate is different depending upon the type loan. Procedure For Granting Of Loans The following procedure is maintained by National bank while granting loan to an y person: Loan Application Form & Specimen Signature Card The bank provides a prescribed application form to the borrower. The borrower wi ll fill the form. In that form the borrower will tell about: Type of the loan. Amount of the loan he needs. Period of time. Applicant will also be provided a specimen signature card, which he will fill.

Declaration Of Properties Form: This form will provide the information about the business he is involved, and al so provide the information about his properties in Pakistan. INVESTIGATION: Now the bank after analyzing his application, investigate about the applicant s cr edit worthiness, and also the information s he provided about his properties. In case of business owner s request for loan, investigation will be made on follow ing ways for different businesses: Sole Proprietorship: Investigation will be about: Personal reputation of the borrower Nature of the business Types of properties (shop, houses, and land) their locations with their present market value. Cash, jewelry, shares, security, bonds etc. Stock in trade Their liabilities

Partnership Firm Name and addresses of the partners Partnership deed Branches if they exist Nature of the business Amount invested in the firm Purpose of the loan List of assets and liabilities Import export registration

Private and Public Ltd. Companies Name of the company Addresses with telephone numbers Whether private or public Date of incorporation Nature of the business Branches if any Authorized capital Paid-up capital Financial highlights of the company Details of security offered to other banks under each head and charges created a gainst fixed assets. Certificate copy of memorandum of association Copies of certificates of incorporation Certificate of commencement of business Auditor s certificate regarding paid-up capital

Granting Of Loan: After detailed investigation, and documentation if the finance section finds the party well satisfactory and feasible then they sanction the finance to the part y concerned. TYPES OF SECURITIES The word security means any thing given to protect or safeguard the repayment of an advance and to justify this term the thing so given should itself be safe; o therwise the object for which it is given is defeated. The National Bank of Pakistan usually has three ways in which securities can be made available in the bank against finances. These types are: Pledge

Hypothecation Mortgage In each case the bank does not become the owner of the, property but the bank ha s only the right over the property until the borrower makes payment of his debt. Pledge In a pledge, the possession of the property but not the ownership passes to the creditor. The pledgee is entitled to the exclusive possession of the property un til the debt is repaid but the ownership remains in the pledgor subject to the p ledgee s right.

Hypothecation: In case of hypothecation, the property in goods is charged as security for a loa n from the bank. But the ownership and possession is left with the borrower. In case of hypothecation, neither the property in goods and nor the possession o f property pass to bank, but only the security is granted in a form of letter of hypothecation, which usually gives the banker' charge on the hypothecated goods. Mortgage: In a mortgage, the property in the thing mortgage is conveyed to the mortgagee c onditionally. The possession, until default in repaying the loan, generally, rem ains in the original owner subject to the mortgagee s rights. TYPES OF LOANS National Bank of Pakistan provides various types of loans depending upon the req uirement of the borrowers. Some of the important types of loans are: Demand Finance Under a demand loan arrangement, a fresh demand loan account is opened through t he borrower may be having other deposit accounts with the banks. The amount of l oan has to be drawn by the borrower in lump sum and is to be repaid in installme nts or as agreed upon. The borrower can not operate a demand loan account by dep ositing and withdrawing amounts periodically.

Demand Finance Gold: Characteristics: Security Gold is used as a security. Recording Single debit entry is recorded at the time of granting loan. Loan type Short-term loan. Rate of markup 43.84 pptdr (paisa per thousand on daily product) Required Documents: Application form Introductory reference sanction advice Valuation certificate by gold smith Insurance letter IB-12 (Promissory Note) IB-26 (Letter of Pledge) IB-6A (Agreement Form) Delivery letter(f.205) NOTE: Only N.B.P. performs the function of advancing of loan against pledging gold. No other bank advance gold pledged loan. Running Finance: Clean Running Finance Secured Running Finance Clean Running Finance: Loan is granted mostly to the employees of the bank without demanding any type o f security from them.

TYPE OF LOAN Short Term loan Characteristics: Number of transactions Frequent transactions are made. Rate of markup 43.84 PPTDR Repayment Monthly installments Payment of balance It will be made in lump sum. Documents: Account Opening Form Specimen Signature Card IB-12 IB-6 IB31 (sale and buy back agreement) SECURED RUNNING FINANCE: Secured running finance is the type of loan in which some guarantee or security may be obtained from the borrower. Characteristics: Rate of return: 43.84 PPTDR Type of loan Short term loan. Payment In installment or lump sum as mentioned in conditions. 3.Cash Finances:

Under this type of credit N.B.P grant loan to its customers in cash. Under the c ash credit arrangement a customer is granted an advance up to certain limit, whi ch he can draw time to time as required by him. In this case, a new cash credit account is opened in the name of customers. These are long term loans. Securities: Hypothecation of stock Mortgage of properties Personel guarantees of all the partners of directors.

Money or some thing equivalent to money sent by any person to another on another station, either in cash, money order, postal order, bill of exchange, cheque, b ank draft, etc is known as a REMITTANCE. The National Bank of Pakistan, now-a-da ys provides this facility to its customers and to the general public in general in the following modes: Bank drafts.Mail transfer. Telegraphic transfer.Traveler s cheques. Now I will explain the procedure and importance of each type of remittance. Bank Draft: Bank draft can be defined as: An un-conditional instrument in writing drawn by a bank in favor of any person on a branch of its own bank or any other bank to pay a certain sum of money to his order, for value received. From the definition it is clear that the draft is paya ble to the beneficiary himself or to his order. The beneficiary or payee has to prove his identification at the paying office of the bank, which sometimes cause s inconvenience to the public.Draft is the most popular and common form of remit ting funds from one place to another.Any person who may or may not happen to be the bank s customer against payment of bank charges can purchase drafts. It is con sidered to be a source of income for the bank. Procedure: In National Bank of Pakistan the drafts are issued on submission of application

form (always printed) filled in and signed by the purchaser with his full name a nd address.The following particulars are generally required in the application f orm: 1 Date 2 The Name of the Office on Which It Is Drawn 3 The name of the beneficiary 4 Amount in words and figures 5 Bank exchange rates 6 The signature and address of the applicant The draft is issued after the applicant tenders the money. Two authorized signat ories of the bank always sign draft.A separate book Draft issued register is kept to record the particulars of the draft issued. The drawing branch of the bank wi ll give credit to the drawee branch on the same date the draft is issued; throug h their account for settling inter branch transactions.Usually all the banks ins ert special code number known as CHECK SIGNAL on the relative draft advices for all the drafts for more than Rs.5000/-. National bank of Pakistan does not pay the drafts before the receipt of relative advice. On receipt of relative advice the drawee branch will credit the amount into thei r draft payable account and each time a draft is paid this account will be debited with the amount of the draft paid. In case the draft advice is not received, the draft will be paid ex advice duly en tered in the "ex-advice register and the entry in the said register will be marke d off on receipt of the relative advice. Issue of Duplicate Draft: In case a draft is lost or destroyed by mistake, its duplicate can be issued at the request of the purchaser after obtaining indemnity bond on stamped paper of ap propriate value. This is done to cover the risk of double payment by mistake. Drafts of most banks in Pakistan are valid for a period of six months only. Afte r the expiry of this period the draft will have to be revalidated from the issui ng branch of the bank. Mail Transfer: The same application form is used for drafts and mail transfers generally in Nat ional Bank of Pakistan. The mail transfer instrument is not delivered to the pur chaser but instead the issuing office to the beneficiary s branch on its own risk and responsibility sends it. This type of remittance facility is provided only when the beneficiary happens t o be the customer of the bank. The amount is directly credited to the beneficiary s account and as such loss of m ail transfer has no concern with the applicant. A bank customer can very conveni

ently remit the funds from one place to another regularly if he so desires by gi ving standing instructions to his bank. Also the credit balance of a customer s account is transferred from one branch to another branch with the help of this instrument in case the customer so desire.T he applicant desiring to remit the funds by way of mail transfer can either depo sit cash or he may ask the bank to debit his account with the cost of mail trans fer including bank charges. An exchange memo is issued to the applicant in case he desires to have some sort of receipt from the bank for his office record. The participants of mail transfer are recorded in the mail transfer issue regist er just like drafts while at the paying branch the instrument is treated as bran ch voucher for credit into the beneficiary s account. Telegraphic Transfer: The money sent by mail has been described as mail transfer which takes three to fo ur days, or more depending upon the distance between the two branches. When the applicant wants to save the time wasted in transit of the instrument, h e can request for transfer of funds by means of a telegraphic transfer. In this case he will have to bear the telegram charges in addition to usual bank exchange.The amount so remitted will reach its destination within 24 hours. Business community generally avails of this facility in order to save time in th eir business dealings. The funds so remitted are either credited directly into t he account of the beneficiary or paid by means of pay order in case he is not ke eping his account at the paying office of the bank. It should be noted that such remittances are affected between two stations havin g telegraph office. The remitting office sends the message by telegram in code language instructing c heck signal number at both ends of the message for security purpose. As check sig nal books are supplied to all the branches of the bank in order to verify the ge nuineness of the message. All banks have their separate check signal apparatuses. The entries at issuing office are recorded in the telegraphic transfer issued re gister while at the other end it is entered in the T.T. Payable register. The papers pertaining to such transfer are properly kept in separate files telegr aphic transfer issued and paid files and kept in the custody of an officer (Accou ntant/Manager). In case check signal number turns out to be incorrect at the payin g office, the message is got repeated till such time it is found correct. It is therefore, necessary to be vigilant at the time of calculating the special number s otherwise the very purpose of urgency is defeated and the bank will be responsi ble for the delay. Travelers Cheques: When a traveler proceeds from one place to another he needs money at different p laces. The remittances explained so far will be available to the beneficiary onl y at a particular place, and that too all in one time; where as the requirement of a traveler may be otherwise. National Bank of Pakistan has designed its own traveler s cheques to be used in Pa

kistan only. For different denominations their colors are different. The denominations of travelers cheques provided by National Bank of Pakistan are : -Rs.5, 000/-Rs.10, 000/-Rs.50, 000/-Rs.100, 000/-The face of Traveler Cheque c onsists of: -Signature of the purchaserName of the purchaserName of issuing offi ce and the date of issue On the back of the cheque this can preferably be done by means of small rubber s tamp.Application for the purchase of the cheque application forms is taken. The original remains with the issuing office as voucher and the duplicate is passed to the main branch of the bank where account of bank is kept. Recording: The issuance of cheque is recorded in the travelers cheque issue register .The t otal amount of T.C. sold is credited to the main branch of the bank and the exch ange charged credited to the branch exchange account. Delivery: The traveler s cheques are delivered to the purchaser in thick cardboard cover for their safety.

SWOT ANALYSIS The SWOT analysis is done by the organization for the environmental scanning. Th e strength and weaknesses and opportunities and threats are analyzed by organiza tion from the external environment. NBP SWOT analysis is given below:

STRENGTH A National Bank brand image is its major strength. It has always been considered as the pillar of the country's economic scenario asset wise or balance sheet wi se. Its image, work force, network and reputation have created a sentimental and emotional attachment of the people with the bank. Complete computerized networking in another strength of the bank. Now the bank h as the ability to compete with any multinational bank as to keep pace with the c hanging and fast growing world of today computer have become necessities. The re serve funds indicate positive sign as they have increased as compared to the pre vious years. Another competitive edge that the bank has on the rest of the competitors is its expanding business worldwide catering for a large and vast group of customer an d maintaining standards of excellence globally and other strength of NBP. ORGANIZATION CULTURE

NBP's organization culture was very friendly and interesting. Employees has crea ted a very cooperative environment among each other. They have created loyalty t oward the organization by deviating their future efforts and energies. The emplo yees take the organizational problem personals and try their best for the prospe rity of the organization. STRATEGIC TOP MANAGEMENT

Fortunately NBP has got from time to time best top management. Currently the NBP Chairman and as well as President S. Ali Raza Sahid he is the person who has sa ved the life of the organization and contributed a lot. INDUSTRIAL POLICIES

NBP helps the government on the implementation of its industrial policies with r espect to economic growth of the country. BEST RESEARCH APPRAISAL TEAM

Before the project financing NBP has the research appraisal team that justifies the economic and financial feasibility of not project in the future. That is the strength is the scare that it helps the organization from any loss that is to o ver in the future in case of failure of the project. LENIENT POLICY WITH THE CLIENTS

This is one of the best policies of NBP that it does not kept rude behavior with this client if they make late in their repayment of loan. But it has adopts len ient way in dealing with them, it helps its customers in the repayment making re scheduling and restructuring of their loans. YOUNG BLOOD

NBP has young generation aged 27 to 30 graduates that would be helpful to mainta in the quality of their service by hiring new graduates but also would be helpfu l changing the overall culture of the organization.

WEAKNESSES National Bank created its own weakness by downsizing. Due to downsizing various experienced and devoted employees were either forced or given the option to leav e. Only those people were left who had no organization better to join. Due to right sizing a lot of confusions have taken place as well. For example hi gher-level management have come from institution or others organizations where e verything is computerized. Whereas have by ten staff members (over staffing) hen ce, the higher management finds it difficult to get work done. From 1995 onward bank exhibits a downward trend indicating its low performance-showing decline in total assets. Total deposits, saving deposits advances investment and total inc ome. This downward trend can caused a great threat to the bank as its competitor s are talking its market share, which can cause ruining the image and reputation of the bank thus posing danger in the long run. The graph depicts a decline in the performance of the bank. NBP's major weaknesses are given below: LESS ATTENTION TO THE RURAL DEVELOPMENT NBP's portfolio shows that it has made project financing only in the major citie s of Pakistan. But a reasonable attention is needed in the project financing of the rural based industrial project of the country. POOR ADVERTISEMENT

I keenly observe this that as compared to other banks. NBP is very poor in adver tising itself and institution, which works a lot in the development of the count ry, but unfortunately in the business community most of the people are in award of it. POOR NETWORK

NBP has only 1500 branches all over the Pakistan and in major cities of Pakistan in which other competitors has their branches NBP don't have: - The formalities involved in getting loans are time concerning and complicated enough. - It is observed that most of the loans, which have been granted on political ba sis, are either default or their loans are forcefully written off. - It is seemed that the recovery system of NBP is not effective that's why numbe r of defaulters are increasing at the growing age. - Political interference in the recruitment system. - Uncertainly among the employees due to threat of downsizing.

OPPORTUNITIES National Bank has very bright prospects for the future. They plan to region thei r lost glory not only in terms of profitability but also include latest technolo gy and competent work force. Furthermore, NBP is the only bank which is providin g facility of bills collecting from 9 AM. to 5 PM. NBP is considering setting up an exclusive utility bank in collaboration with a private firm, which would pro vide this service for 12 hours. SPONSOR THE IT BASED PROJECTS

This is the best opportunity available to all banks and NBP as well, to sponsor the IT and computer based projects because the coming century is the century of information technology as new a days all the business community is diverting its attention towards this field. GOODWILL AND BETTER IMAGE

NBP has advantage of generating more deposits and attracting valuable customers due to its better image in the business community. NBP has also advantage of inc reasing credit lines. This is only due to good dealing and better image that NBP has directly acquired those lines of credit from abroad that are only acquired by it, this better image can help further NBP in explanation of its activities. GROWTH IN THE INDUSTRIAL SECTOR

NBP's major function is the project financing and it is doing it with full effor ts. Fortunately industrial sector is now-a-days is Pakistan is again growing thu s increasing the business opportunities of NBP. Especially the textile sector is one again improving even the sick projects has resumed their operations.

THREATS If there is a threat to the whole economy, it will pose a threat for National Ba nk. National bank does not consider small bank a threat to its existence because the way national bank can accommodation large customer, these small banks canno t. sanctions imposed against Pakistan will affect exchange. Business whereas the freezing of accounts by State Bank of Pakistan have also caused problems for Na tional Bank. But the recent facts and figures indicate that the banks major riva ls lime MCB and HBL are causing threats to the bank in the long run thus snatchi ng away the market share by attracting a large number of customer due to the the ir rising standards giving quality service and value added products and other ma jor threats are as under: POLITICAL INFLUENCE AND INSTABILITY

This is the major threat for any business organization in Pakistan because the p olitical officials influence NBP in financing those projects which are not viabl e or write off those loans which are still able to pay, this political influence cause many problems in daily business thus profitability of NBP. Political indu strial is even a threat for NBP in the sense that once the policies and procedur es are approved by government. SICK PROJECTS

NBP's sick projects are increasing day by day due to economic downfall. As our e conomy is weakening day by day the no of side projects are becoming sick increas ingly thus influencing the profitability even survival of NBP. LACK OF MODERN BANKING TECHNIQUES NBP is following fifty years old style of banking, in the computers of NBP symph ony word processor is still used. Which is the oldest word processor due to this the deposits are looking to be corded, because of the provision of credit cards and other such services by its competitors both local and foreign banks is prov ing to be limiting factor in the deposit mobilization efforts of the corporation .

During my internship period at National Bank of Pakistan .I found out certain pr oblems, which are written below along with their solutions, which need proper at tention of the top management: These are given below: Information technology. Evening Banking Services Staff Shortage Dealing With Women Frequent Transfers Promotion Locker Services Standard Of Education

1. INFORMATION TECHNOLOGY This age is the age of information technology. Today the world has become a glob al village and the fastest mediums of communication are adopted all over the wor ld. And it is a fact that more the latest technology and methods of work are ado pted more will be the productivity.

In the National Bank of Pakistan (circular road branch) there is only one comput er available for carrying on the business of the bank. I suggest that the computer should be on every counter of the bank and they shou ld be interlinked together (NETWORKING) so that various services provided by the bank can be provided in a more efficient and fast way. 2. EVENING BANKING I observed that the bank is closed for public dealing in after 12:30PM and then

the staff do their own banking jobs. I suggest that at least one counter should be specified for the customer service s till evening. In this way, the people having jobs in other offices can get ben efit from this counter. 3. STAFF SHORTAGE: I discussed with bank personnel and they gave their views about staff shortage. They told me that staff is very short and all the staff is overloaded with work. That s why the staff posted in the branch has to face many problems to finish its daily work. I suggest that number of staff in the branch should be increased so that they ca n meet their customers requirements quickly and efficiently. 4. COUNTER FOR FEMALES The women in D.I.KHAN are very reserve in nature and are also pardah observing t hat s why they hesitate to come in the bank and those who come hesitate to talk wi th male staff. I suggest that in order to deal with women there should be a Lady Officer or Lad y Clerk in the bank and there should be a separate cabin for them.

5. TRANSFERS: I observed that staff members of the Bank are frequently transferred not only fr om one branch to another but from one city to another and sometimes from one pro vince to another. I suggest that no one is to be transferred to another city or province without t he consent and will of the employee and if transferred, the facilities like resi dence etc should be provided to them. 6. PROMOTION: I observed those employees; particularly officers are not satisfied with promoti on policies. There is no clear-cut promotion policy of National Bank. I suggest that there should be a clear-cut policy about the promotion of employe es, particularly for the officers and they must aware of it that is polices must be communicated. When policies are communicated to the employees then they can perform their task more efficiently and will utilize their full efforts.

7. LOCKER SERVICES: The area of circular road branch is full of business activities. The businessmen also have some important documents, papers and valuable things to deposit for s afe custody. In order to provide these facilities, locker services must be provided in this B ranch.

8. STANDARD OF EDUCATION: The standard of education for recruitment of clerical staff should at least be g raduation. Because in this way efficiency of work will increase and their dealin g with public will be better.

BIBLIOGRAPHY

1. The first important thing is the discussions with the staff of the bank espec ially with the manager of the branch. 2. The Bank Book of Instructions for the National Bank of Pakistan called the B. B.I. 3. Surfing the website of the National Bank of Pakistan (www.nbp.com.pk) 4. Reading the annual reports of the bank. 5. Reading the economic bulletin of the bank, which is published by the economic , and business research wing of the bank.

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