B

By: Hafsa Amjad

BBA (Hons.)
Islamia University
of Bahawalpur
Date of Submission:
17th Ausgust,2018

Customer
Services

Internship Report of NBP Satellite Town Branch BWP

BWP
 ACKNOWLEDGMENT
I am highly grateful to Almighty Allah who gave me the power to complete this report. I am also highly
thankful to my honorable teachers for their guidance. I am indebted to all the employees of National Bank of
Pakistan Satellite Town Branch Bahawalpur and Special thanks to “Mr. Barkaat Ahmed” Manager of
National Bank of Pakistan Satellite Town Branch BWP and all other employees of the branch for their
cooperation.

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 OBJECTIVES OF STUDYNG THE ORGANIZATION

The primary purpose of this study is to fulfillment of the requirements for the degree of BBA.For this
connection each student of this particular course is required to undertake training in a relevant organization
selected by them, for a period of 6-8 weeks. The secondary purpose of this internship is to understand how
the theoretical knowledge can be applied to the practical situations and examine an organization’s financial
issues and identify its opportunities/ problems and also suggest corrective measures. This internship is also
very necessary to gain confidence and become aware of the mechanism of an organization. As an internee I
wanted to achieve following objectives during my internship and organization study:

 To familiarize with a business organization.

 To familiarize with the different departments in the organization and their functioning.
 To enable myself to understand how the key business process are carried out in organization.
 To understand how information is used in an organization for decision making at various levels.
 To relate theory with practice.
 I was also keen to gain professional experience in an actual testing environment.
 I want to develop my skills in the application of theory to practical work situations.
 To develop my attitude conducive to effective interpersonal relationships.
 To acquire good work habits and sense of responsibility.
 To enhance my learning experience by application of fundamental concepts previously learned.
 To observe, analyze and interpret the relevant data competently and in a useful manner.
 To develop my interpersonal communication.
 I want to enhance my knowledge of the discipline of banking administration.

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 EXECUTIVE SUMMARY

This report highlights the operations and functions of National Bank of Pakistan. NBP act as financial agent
to its customers in return it gets reward for its services in the shape of profit. Being a Government owned
institution, it plays an important role in development of society as well as in development and growth of the
economy. National Bank of Pakistan is one of the leading banks in Pakistan. According to international
standards of banking system it is one of the best banks in South Asian region as well as the bank of the year
2008. This report explains how different functions of NBP works and what are their services. Moreover,
financial analysis for the last three years and corporate social responsibility of NBP is also discussed in this
report.

The report is based on my eight-week internship program in National Bank of Pakistan Satellite Town
branch, BWP. The methodology reported for collection of data is primary as well as secondary data. The
biggest source of information is my personal experience, observation while working with staff and having
discussion with them. The annual report 2017 also helped me in thisregard.

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 TABLE OF CONTENTS
CONTENTS Page no.
OBJECTIVES OF STUDYNG THE ORGANIZATION ............................................................................................ 3
EXECUTIVE SUMMARY............................................................................................................................................. 4
CHAPTER 01: HISTORY OF BANKING SECTOR ................................................................................................. 9
1.1: Importance of Banking: ...................................................................................................................................... 9
1.2: Commercial Banking in Pakistan: ..................................................................................................................... 9
1.2.1: Phases of Banking in Pakistan:.................................................................................................................... 9
CHAPTER 2: INTRODUCTION OF NBP ................................................................................................................ 15
2.1: Establishment: ................................................................................................................................................... 15
National Bank of Pakistan........................................................................................................................................ 15
2.2: Special function: ................................................................................................................................................ 15
2.3: Ownership: ......................................................................................................................................................... 15
2.4: Vision: ................................................................................................................................................................. 15
2.5: Mission:............................................................................................................................................................... 15
2.6: Management: ..................................................................................................................................................... 15
2.7: Goals: .................................................................................................................................................................. 15
2.8: Core Values: ....................................................................................................................................................... 16
2.9: NBP Branch Network: ...................................................................................................................................... 16
2.10: Number of Employees: .................................................................................................................................... 18
2.11: Objectives: ........................................................................................................................................................ 18
CHP 3: ORGANIZATIONAL STRUCTURE OF NBP ............................................................................................ 21
3.1: Board of Directors: ............................................................................................................................................ 22
3.1.1: Chairman & President: .............................................................................................................................. 23
3.1.2: Directors: ..................................................................................................................................................... 23
3.1.3: Secretary Board of Directors: .................................................................................................................... 23
3.2: Senior Management: ......................................................................................................................................... 23
CHP 4:PRODUCT AND CUSTOMER SERVICES OF NBP .................................................................................. 27
4.1: Deposits: ............................................................................................................................................................. 28
4.1.1: Current Deposits:........................................................................................................................................ 28
4.1.2: PLS Saving Deposits: .................................................................................................................................. 29
4.1.3: Fixed Deposit Account: .............................................................................................................................. 30
4.1.4: Foreign Currency Account: ....................................................................................................................... 30
4.2: NBP Premium Amdani: .................................................................................................................................... 31
4.3: NBP Premium Saver: ........................................................................................................................................ 31

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 4.4: NBP Saiban: ....................................................................................................................................................... 31
4.5: NBP Advance Salary: ........................................................................................................................................ 32
4.6: NBP Cash and Gold: ......................................................................................................................................... 32
4.7: Student Loan Scheme:....................................................................................................................................... 33
4.8: Corporate Advances: ......................................................................................................................................... 33
4.8.1: Cash Finance: .............................................................................................................................................. 33
4.8.2: Running Finance/Overdraft: ..................................................................................................................... 33
4.8.3: Demand Finance: ........................................................................................................................................ 33
4.9: Remittance: ........................................................................................................................................................ 34
4.9.1: Demand Drafts: ........................................................................................................................................... 34
4.9.2: SWIFT System: ........................................................................................................................................... 34
4.9.3: Mail Transfer: ............................................................................................................................................. 34
4.9.4: Telegraphic Transfer: ................................................................................................................................ 35
4.9.5: Pay Order: ................................................................................................................................................... 35
4.10: Miscellaneous: .................................................................................................................................................. 35
4.10.1: Lockers: ..................................................................................................................................................... 35
4.10.2: NBP Cash Card: ....................................................................................................................................... 35
4.10.3: International Banking: ............................................................................................................................. 36
4.10.4: Agricultural Loans: .................................................................................................................................. 36
4.10.5: Import/Export Business/ trade finance ................................................................................................... 36
CHP 5: DEPARTMENTS OF SATELLITE TOWN BRANCH NBP ..................................................................... 38
5.1 Clearing Department: ......................................................................................................................................... 38
5.2 Remittance Department: .................................................................................................................................... 41
5.3: Account Opening Department: ........................................................................................................................ 42
5.4: Cash Department:.............................................................................................................................................. 43
5.5: Deposit Department: ......................................................................................................................................... 44
5.6: Advances Department: ...................................................................................................................................... 44
5.7: Pension Disbursement Department: ................................................................................................................ 45
5.8 Accounts Department: ........................................................................................................................................ 46
CHP 6: MY LEARNING AS A TRAINEE................................................................................................................. 49
6.1: Account Opening Department: ........................................................................................................................ 49
6.2: Remittance Department: ................................................................................................................................... 50
6.3: Clearing Department: ....................................................................................................................................... 50
6.4: Cheque encashment ........................................................................................................................................... 51
CHP 7: FINANCIAL ANALYSIS ............................................................................................................................... 53
7.2: Techniques of analysis:...................................................................................................................................... 53
7.2.1: Ratio Analysis: ............................................................................................................................................ 53

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 7.2.2: Vertical analysis: ......................................................................................................................................... 56
7.2.3: Horizontal Analysis: ................................................................................................................................... 59
7.2.4: Dupont Analysis: ......................................................................................................................................... 61
CHP 8: SWOT ANALYSIS OF NBP .......................................................................................................................... 63
CHP 9: CORPORATE SOCIAL RESPONSIBILITY OF NBP ............................................................................... 67
9.1: Education ............................................................................................................................................................ 67
9.2: Health Care ........................................................................................................................................................ 68
9.3: People with Special Needs ................................................................................................................................. 69
9.4: Women and Child Welfare ............................................................................................................................... 70
9.5: Cultural Promotion ........................................................................................................................................... 70
9.6: Sports .................................................................................................................................................................. 71
CHP 10: CONCLUSION AND RECOMMENDATIONS ........................................................................................ 74
Conclusion: ................................................................................................................................................................ 74
Recommendations: .................................................................................................................................................... 74

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CHAPTER 1:

HISTORYOF BANKING SECTOR

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 CHAPTER 01:HISTORY OF BANKING SECTOR
1.1: Importance of Banking:
We can take bank just like a heart in the economicstructure and capital provided by it is like blood in it
Banks play very important role in the economic life of a nation. The growth of theeconomy is dependent
uponthe soundness of its banking system. Although banks do not create new wealth but borrow, exchange
and consume. Thesemake generation of wealth. In this way they become most effectivepartners in the
development of that country.To encourage the habit of saving and to mobilize these savings is itsbasic
purpose. Banks deposit surplus from the public and thenadvances these surpluses in the form of loans to the
industrialists,agriculturists, businessmen and unemployed people under differentschemes so that they set up
their own business. Thus, banks help incapital formation.

If there are no banks, then there would be concentration of wealth infew hands and great portion of wealth of
a country would be idle. Inthe fewer developing countries rate of saving is very low and due tothis, rate of
investment and rate of growth is also very low. We cantake bank just like a heart in the economic structure
and capitalprovided by it is like blood in it. As long as the blood is in circulation,the organs will remain
sound and healthy. If the blood is not providedis not provided to any organ then the organ would become
useless. So,if the finance is not provided to agriculture sector or to industrialsector, it will be destroyed.

Loan facility provided by bank works as an incentive to the producer toincrease production. Banks provide
transfer of payment facility, whichis cheaper, quicker and safe. Many difficulties in the internationalpayment
have been overcome and volume of transactions has beenincreased. These facilities are very much helpful
for the developmentof trade and commerce.

1.2: Commercial Banking in Pakistan:

It was very difficult for Pakistan to build up its own Banking systemimmediately after independence without
sufficient resources. Followingthe announcement of the partition plan in June 1947 there was a
hastemovement on the parts of banks to transfer their funds and accountsacross the borders. The banks
having their registered offices inPakistan were transferred to India. In an effort to bring about thecollapse of
the new state by the persecuting an international policy of withdrawal, the Indian bank offices closed
quickly. Those banks, whichstayed, were considering the winding up of their business. By 30 thJune1948 the
number of schedule banks in Pakistan declined from mere scratch.

1.2.1:Phases of Banking in Pakistan:

Broadly speaking we can divide the development of commercialbanking into four phases

PHASE-11947-1974 Establishment of commercial banking system

PHASE-21974-1979 Nationalization of banks

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PHASE-31979-1991 Islamisation process

PHASE-41991-2000 Privatization process.

FIRST PHASE (1947-74)

Set up of Commercial Banking System:

This was the first phase of development of Pakistan’s commercialbanking system, which consist of the
circumstances under which thedevelopment of banking was started in the country.

Initial system of Banking in Pakistan:

There were 19 non-Indian foreign banks in Pakistan at the time of independence with the status of small
branch network, whose policiesand operations were controlled by their head offices abroad. Thesebanks
were engaged solely in export of corps from Pakistan. There were only two Pakistani banks, the Habib bank,
which had transfer credits head office from Bombay to Karachi after the announcement of thepartition plan,
and Australian bank which has been working inPakistani territories prior to June 1947. The government of
Pakistantried hard to eliminate the banking crises. Banking CompaniesOrdinance 1947 was promulgated to
safe guard the interest of boththe bankers and the company’s customers. The situation howevershowed no
significant improvements. The imperial bank of Indiaclosed down most of its offices in Pakistan, which had
been working asthe agent of the reserve bank of India was not willing to purchaseeven token amounts of the
government of Pakistan. Securities on theplea that these securities were not marketable. The reserve bank of
India was hardly of any help. It refused to help government of Pakistan with advance argument adhoc
securities to enable them tomake essential disbursements such as salaries and other obligations to add to
difficulties.

The Indian government withheld Pakistan’s share of Rs. 75 crores incash balances held by her at the time of
independence. The foregoingdevelopments clearly brought home the urgency of assuming controland
currency in Pakistan and brought to the fore the need to setup acentral banking institution to take the place
of reserve bank of India.

Therefore, it was agreed between the government of India and Pakistanto authority of Pakistan from
30thSeptember 1947 to 30thJune 1948In order to make necessary arrangements of the establishment of the
central bank of Pakistan a committee was appointed to recommend the necessary steps. Consequently, the
Governor General of Pakistan and father of the nation Quaid-e-Azam Muhammad Ali Jinnah Inaugurated
the State Bank of Pakistan on 1stJuly 1948. After the State Bank order was promulgated on 12thMay
1948.When it assumed full control of banking and currency in Pakistan the first important task before the

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SBP was to issue of currency notes andwithdrawal of reserve bank of India, which had been in circulating
inPakistan so far.

SECOND PHASE (1974-79)

Nationalization of Banks:

The banking reforms turned out to be a transitional and temporary step and hardly after 18 months had the
government nationalized the banking system. Thus, through the Nationalization Bank Act 1974, SBPand all
commercial banks incorporated in Pakistan and carrying on business in or outside the country were brought
under the government ownership with effect from January 1974. The ownership and management of all
Pakistan banks stood transferred and rested in the federal government. The shareholders were provided
compensation in the form of federal government bonds redeemable at par any time within a period of fifteen
years. The amount of compensation was equal to the breakup value of the shares in case of commercial
banks. For the State Bank shares the amount of compensation was estimated on the basis of average of the
clearing quotations during the six working days preceding nationalization. The chairman, director and chief
executives of various banks were removed from their offices other than those appointed by the federal
government and the state bank. The central board of banks, managing committees and similar other bodies
were dissolved. A Pakistani banking counsel was established for nationalized commercial banks to co-
ordinate their activities.

As a result of merger of banks, the following five major bankingcompanies were formed:

 National Bank of Pakistan

 Habib Bank Limited
 United Bank Limited
 Muslim Commercial Bank Limited
 Allied Bank Limited

THIRD PHASE (1979-91)

Introduction of Islamic Banking:

In 1977 the Bhutto government was toppled. The martial law government planned to reform the banking
sector in a novel way. The overall policy was to Islamize the economy and the banking system, being based
on interest was an important target of the new policy. The most preferred form of Islamic bank financing
profit and loss sharing would require banks to receive deposit without guaranteeing any return.

The Islamic bank has to acquire a high degree of confidence of the saver to make him deposit his money
with them. Not even the return of the principle amount if guaranteed. The Islamic bank cannot finance the

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project of an investor merely on the furnishing of collateral. The bank will have to be a partner in the
project. This will require to careful security of the project and the assessment of risk involvedbecause profits
are the function of the amount of risk in the project.Honesty and trust form both sides of the market are more
important to the system of Islamic Banking.

FOURTH PHASE (1991-2000)

Privatization and Deregulation:

The government headed by Prime Minister Nawaz Sharif was not fully satisfied with the performance of
nationalized. The areas, which were severely criticized, were the falling standard of banking services
andcommon red-tapism. There were complaints about the services asdelay in home remittances, dispatch of
cheques, drafts, inefficientcounter services, bad debts of the banks etc. were on the rise. The government
decided to privatize these banks. In order to implementprivatization policy a privatization commission was
established on 22ndJanuary 1991. The commission has transferred two banks MCB andABL to the private
sector. Application for privatization of other banks namely UBL and HBL were also invited but the bidding
response wasquite poor. The privatization of these banks is under consideration. Legislation was enacted to
permit the establishment of new banks andthe government approved 10 application from the private sector
forthe grant of commercial bank licenses by SBP, out of these 9 newbanks have since been incorporated.
Till March 1994 there were 20domestic scheduled banks with 9825 branches and 21 foreign bankswith 66
branches in operation in the country. Overall investment of thescheduled banks in the current year rose to
76.7%. at present thereare 24 domestic scheduled with 8137 branches and 19 foreign bankswith 71 branches
are in operation in the country. Total assets of domestic scheduled banks amounting to Rs. 1563.73 billion
on 30thMarch 1996. Overall investment of the domestic scheduled banks in the current year declined by 80%
over the same period last year.

 Bank of Commerce Al Habib Ltd.

 Soneri Bank Ltd
 Union Bank Ltd.
 Indus Banks Ltd.
 Mehran Bank Ltd.
 Prime Commercial Bank Ltd.
 Askari Commercial Bank Ltd.
 Bolan Bank Ltd.

Now Mehran bank has been absorbed byNational Bank Ltd,due to itspoor performance and ultimate failure.
Now the ABN Amro Bank hasalso been included in the list of foreign scheduled banks.

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Recent trends in banking sector

 Increased Merger & Acquisition activity in the banking sector with local private banks having made
several domestic acquisitions.
 Large expansion of branch network and deposits by private and some foreign banks.
 Rationalization of branches by nationalized banks.
 Increased focus towards consumer finance.
 Increased focus on attracting local rupee deposits.
 Increased emphasis towards automation and customer service.
 Reduction in the increase in non-performing loans as a result of better governance of banks and
greater accountability process initiated by the government.

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CHAPTER 2:

INTRODUCTION OF NBP

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 CHAPTER 2: INTRODUCTION OF NBP
2.1: Establishment:National Bank of Pakistan was established under the National Bank of Pakistan
ordinance 1949 and it came into existence on November 20, 1949.

National Bank of Pakistannow is the largest commercial bank operating in Pakistan. Its balance sheet
size surpasses that of any of the other banks functioning locally. It has redefined its role and has moved from
a public sector organization into a modern commercial bank. The Bank's services are available to
individuals, corporate entities and government.

2.2:Special function:NBP occupies a unique position in the financial sector of Pakistan. It acts as an agent
of the Central Bank wherever the State Bank does not have its own Branch. It also undertakes Government
Treasury operations.

2.3: Ownership:NBP is 100% owned by the Government of Pakistan (GOP).

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

2.5:Mission:NBP will aspire to the values that make NBP truly the nation’s bank

 Institutionalizing a merit and performance culture

 Creating a distinctive brand identity by providing the highest standards of service
 Adopting the best international management practices
 Maximizing stakeholder’s value
 Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we
cooperate.

2.6: Management:Management is a distinct process consisting of activities of planning, organizing,

actuating and controlling performed to determine and accomplish stated objectives with the use of human
being and other resources.8 The management has two types.

 Centralized.
 Decentralized.

NBP have a centralized type of management because all the decisions are taken by the top management.

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

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2.8: Core Values:
1-Highest standards of Integrity

 Care about relationships.

 Practice integrity, honesty and hard work.We believe that these are measures of true success.

2-Institutionalizing team work and performance culture

 To realize the employees the importance of team work.

 An innovative, creative and dynamic institution responding to the changing needs of the internal and
external environment

3-Excellence in service

 Meet expectations through Market-based solutions and products.

 Lead through the strength of our commitment and willingness to excel.
 Create value for all stakeholders.

4-Advancement of skills for tomorrow’s challenges

 To be leaders in our industry

 To be an organization maintaining the trust of stakeholders.

5-Awareness of social and community responsibility

 To play a leading role in betterment of social environment

 Feel the social and community problems as the duty and function of bank

6-Value creation for all stakeholders

 To be an organization maintaining the trust of stakeholders

2.9: NBP Branch Network:

With the geographical development of its branches, the National Bank of Pakistan has been ableto extend its
services to a much larger number of Pakistanis all over the country. Today the Bank has more than 8.8
million accounts & Bank maintains its presence in all the major financialcenters of the world through its 22
(2008) overseas branches and 5 representative offices. Of these, three representative offices have recently
been set up at Tashkent (Uzbekistan), Baku(Azerbaijan) and Almaty (Kazakhstan) to take advantage of the
emerging opportunities in CIScountries. Bank’s role Apart from having a vast branch network, Bank is at
the forefront in theacquisition and application of new technologies in every aspect of its banking facilities. It

16
hasacquired leased telephone lines for on-line banking. The Bank has 12 Regional Computer Centers to
cover various on-line and batch system requirements of branches and controlling offices.

Presently the National Bank of Pakistan is divided into various Groups headed by SEVPs/EVPs.Its field
operations are controlled by 29 regions reporting to as many Regionalchiefs, who control 40 zones and 15
single Branch zones headed by Zonal Chiefs; 12 corporate branches and 1249 domestic branches headed by
Branch Managers. The bank has 12 SWIFTlocal centers.Apart from having a vast branch network, Bank is
at the forefront in the acquisition andapplication of new technologies in every aspect of its banking facilities.
It has acquired leasedtelephone lines for on-line banking. Bank has also a presence on the internet. The
National Bank of Pakistan has 156 online branches throughout the country. It has modernized its services
byinstalling Automated Teller Machines (ATMs) called “CASH LINK” at selected branches.

The Bank's organizational structure reflects the three levels at which it operates: International, National and
Local. The Head Office formulates and implements the strategic, management andoperational policies.

The Bank's geographical organization consists of branches located in the regional capitals and insome
provincial capitals. The branches' activities relate to the State treasury service, paymentsystem services,
currency circulation, banking and financial supervision, and the analysis of economic and financial
developments at the local level.

The Bank has representative offices abroad, in London, New York and Tokyo; a number of officers are
seconded as financial experts to Italian embassies and consulates. The Bank hasrepresentative offices in
Beijing, Tashkent, Chicago and Toronto. It has agency arrangementswith more than 3000 correspondent
banks worldwide. Its subsidiaries are Taurus Securities Ltd, NBP Exchange Company Ltd, NBP Capital Ltd,
NBP Modaraba Management Company Ltd,and CJSC Bank, Almaty, Kazakhstan. The Bank's joint ventures
are, United National Bank(UK), First Investment Bank and NAFA, an Asset Management Company (a joint
venture with NIB Bank & Fullerton Fund Management of Singapore)

The Branch network of National Bank of Pakistan is divided into following categories

 ATM network
 Domestic network
 Islamic network
 Online network
 Overseas network
 Swift network
 Customer Facilitation Centers
 Agriculture branches

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 Source: 2017 Annual Report of NBP

2.10: Number of Employees:

Year 2017 2016 2015 2014

Number of Employees 15616 15793 15548 16190

Source: 2017 Annual Report of NBP

2.11:Objectives:Objectives of NBP National bank of Pakistan is also a commercial organization and its
main objective is profit maximization.

This is achieved in two ways:

 By increasing deposits.
 By charging interest on loans provided to the private sector and business community.

1- Increase in deposits: Competition in banking is intense and every bank whether it is Pakistani, foreign,
private or nationalized tries to increase its deposits by providing better facilities to its customers. By
increasing its deposits, a bank can extend greater amount of loan and hence achieves higher profit. NBP is
also improving its facilities and services to attract customers with higher volume

of deposits. There are two main factors involved in increasing the deposits. These factors are improving the
services and courtesy. NBP is continuously working on these two factors to increase its deposits.

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2 -Extension of loans: The profitability of a bank largely depends on the amount given to people as loan
and the type of people to whom credit is given i.e. the credit worthiness of the borrowers. This strategy has
worked quite well for NBP. Deposits are collected from the people and invested in different projects. NBP
prefers to give loans to financially sound and reliable parties, after securing the collators. NBP has an
extremely well-organized section. The staff is adequately trained, and educated and competent. They carry
out extensive financial analysis before deciding on the loan. Interest charged on the loans potentially
contributes to higher profits.

Some of the other objectives are:

 Improve customer services.

 Quick disposal of credit cases.
 Efficient operation of the branches.
 Better Public Relations.

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CHAPTER 3:

ORGANIZATIONAL STRUCTURE OF NBP

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 CHP 3: ORGANIZATIONAL STRUCTURE OF NBP
A well-developed and properly coordinate structure is an important requirement for the success of any
organization. It provides the basic framework within whichfunctions and procedures are performed. Any
organization needs a structure, which provides a framework for successful operations. The operation of an
organizationinvolves a number of activities, which are related to decision making, andcommunication of
these decisions. These activities must be well coordinated so thatthe goals of the organization are achieved
successfully.The Organization Structure (Annexed I) shows the internal operations and reportinglines of the
National Bank of Pakistan. The bank has clearly defined organizationalstructure, which supports clear lines
of communications and reporting relationships.There exists a properly defined financial and administrative
power of variouscommittees and key management personnel, which supports delegations of authority and
accountability.The internal operations of the Bank are organized into 15 main departments anddivisions
headed by senior management of the bank and are report directly to theBoard of Directors. The
organizational structure of National Bank of Pakistan iscentralized because all the decisions of the bank are
taken by the top Management.

The National Bank of Pakistan’s Departmental key roles and functions are as follows:

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3.1: Board of Directors:Pursuant to Section 11 of The Banks’ (Nationalization) Act, 1974, the number of
Directors of the Bank shall not be less than 5 and not more than 7, excluding the President. The Federal
Government may, if deems necessary, appoint a Chairman of the Board in respect of the Bank. At present
National Bank of Pakistan’s Board of Directors consist of 6 Directors and a President who is the Chief
Executive of the Bank and presides over the meetings of the Board. The responsibilities of Directors include
the followings:

 The Board of Directors shall assume its role independent of the influence of the Management and
should know its responsibilities and powers in clear terms. it should be ensured that the Board of
Directors focus on policy making and general direction, oversight and supervision of the affairs and
business of the Bank and does not play any role in the day-to-day operations, as that is the role of the
Management.
 The Board shall approve and monitor the objectives, strategies and overall business plans of the
institution and shall oversee that the affairs of the institution are carried out prudently within the
framework of existing laws &regulations and high business ethics.
 All the members of the Board should undertake and fulfill their duties &responsibilities keeping in
view their legal obligations under all the applicable laws and regulations.
 The Board shall clearly define the authorities and key responsibilities of both the Directors and the
Senior Management without delegating its policy-making powers to the Management and shall
ensure that the Management is in the hands of qualified personnel.
 The Board shall approve and ensure implementation of policies, including but not limited to, in areas
of Risk Management, Credit, Treasury & Investment, Internal Control System and Audit, IT
Security, Human Resource, Expenditure, Accounting & Disclosure, and any other operational area
which the Board may deem appropriate from time to time. The Board shall also be responsible to
review and update policies periodically and whenever circumstances justify.
 As regards Internal Audit or Internal Control, a separate department shall be created which shall be
manned preferably by professionals responsible to conduct audit of the Bank, Various Divisions,
Offices, and Units Branches etc. The Head of this department will report directly to the BOD or
Board Committee on Internal Audit.
 The business conditions and markets are ever changing and so are their requirements. The Board,
therefore, is required to ensure existence of an effective ‘Management Information system’ to remain
fully informed of the activities, operating performance and financial condition of the institution, the
environment in which it operates, the various risks it is exposed to and to evaluate performance of
the Management at regular intervals.

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  The Board should meet frequently (preferably on monthly basis, but in any event, not less than once
every quarter) and the individual directors of an institution should attend at least half of the meetings
held in a financial year. The Board should ensure that it receives sufficient information from
Management on the agenda items well in advance of each meeting to enable it to effectively
participate in and contribute to each meeting.
 The Board should carry out its responsibilities in such a way that the external auditors and
supervisors can see and form judgment on the quality of Board’s work and its contributions through
proper and detailed minutes of the deliberations held and decisions taken during the Board meetings.
 To share the load of activities, the Board may form specialized committees with well-defined
objectives, authorities and tenure. These committees, preferably comprising of ‘Non- Executive’
Board members, shall oversee areas like audit, risk management, credit, recruitment, compensation
etc. these committees of the Board should neither indulge in day-to-day affairs/operations of the
bank and enjoy any credit approval authority for transaction/limits. These committees should apprise
the Board of their activities and achievements on regular basis.
 The Board should ensure that it receives management letter from the external auditors without delay.
It should also be ensured that appropriate action is taken in consultation with the Audit Committee of
the Board to deal with control or other weaknesses identified in the management letter. A copy of
that letter should be submitted to the State Bank of Pakistan so that it can monitor follow-up actions.

Following are the names & designation of Board of Directors of National Bank of Pakistan:

3.1.1: Chairman & President: Mr. Saeed Ahmad

3.1.2: Directors:
 Mr. Farid Malik
 Mr. Muhammad Imran Malik
 Mr. Asad Munir
 Mr. Muhammad Naeem
 Mr. A. Akbar Sharifzada

3.1.3:Secretary Board of Directors:

 Mr. Syed Muhammad Ali Zamin

3.2: Senior Management: The senior management of National Bank of Pakistan is consists of Group
chiefs, who report directly to the Directors of Bank. The whole functions of National Bank of Pakistan are
performed under these Groups. The National Bank of Pakistan has following groups and divisions:

 Corporate and investment Banking Group

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 Operations Group
 Credit Management Group
 Audit & Inspection Group
 Compliance Group
 HRM & Administration Group
 Commercial & Retail Banking Group
 Treasury Management Group
 Special Assets Management Group
 Employees benefit & Disbursements Group
 Core Banking Application, PMO
 Financial Control Division
 Information Technology Group Corporate & Investment Banking Group
 Credit Management Group
 Compliance Group Audit & Inspection Group
 HRM & Administration Group
 Operation Group
 Treasury Management Group
 Commercial & Retail Banking Group
 Special Assets Management Group
 I.T. Group Overseas Management Group

NAME DESIGNATION

Tariq Jamali: SEVP & Group Chief, Assets Recovery Group

Sultana Naheed: SEVP & Group Chief, Commercial Retail Banking Group

Faisal Ahmad Topra: SEVP & Group Chief, HRM Group/ Member President’s task force

Aamir Sattar: SEVP & Group Chief, Audit and Inspection Group

Muhammad Faraz Haider: SEVP & Group Chief, Compliance Group

Shahid Saeed: SEVP & CIO, IT Group

Syed Jamal Baqaur: SEVP & Group Chief, Corporate Banking Group

24
 Rehmat Ali Husnie: SEVP & Group Chief, Investment Banking Group

Abdul Wahid Sethi: SEVP & CFO, Financial Control Group

Fouad Farrukh: SEVP & Group Chief, Aitemad Islamic Banking Group

Usman Shahid : SEVP & Group Chief, Credit Management group

Lubna Azam Tiwana: SEVP & Group Chief, Risk Management Group

Mirza Babur Baig: EVP & Coordinator & Member President’s Task Group

Shaukat Mehmood: EVP & Group Head, Service Quality Group

Tariq Zafar Iqbal: EVP & Group Head, Operations Group

Karim Akram Khan: EVP & Group Head, Logistic Support Group

Nasir Hussain: EVP & Group Head (Acting) International Banking Group

Muhammad Ismail Yousuf: EVP & Group Head (Acting) Treasury and Capital Markets Group

Muhammad Farooq: EVP & Group Head (Acting) Payment Services & Digital Banking Group

Aamir Zareef Khan: EVP & Divisional Head, Legal Division

Saeed Habib: EVP & Divisional Head, Compliance Group

Ansar Raza Goraha: EVP & Divisional Head, Learning & Management Development Division

Iqbal Wahid: SVP& Principal Staff Officer (PSO) to the President

3.3 Auditors
NAME DESIGNATION

Deloitte Yosuf Adil Chartered Accountant

Grant Thorton Anjum Rehman Chartered Accountant

3.4 Legal advisorsMandviwalla and Zafar

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CHAPTER 4:

PRODUCTSAND CUSTOMER SERVICES

26
 CHP 4:PRODUCT AND CUSTOMER SERVICES OF NBP
The most precise definition of product is anything capable of satisfying needs, including tangible items,
services and ideas. In marketing, a product is anything that can be offered to a market that might satisfy a
want or need.Since 1575, the word "product" has referred to anything produced. Since 1695, the word has
referred to "thing or things produced”. The economic or commercial meaning of product was first used by
political economist Adam Smith.

In general usage, product may refer to a single item or unit, a group of equivalent products, a grouping of
goods or services, or an industrial classification for the goods or services. The consumer banking products
include personal accounts, credit cards, loans, investment products, treasury products and many more. The
National Bank of Pakistan offering for sale several related products individually, which is commonly known
as product lining. A product line is defined as “A group of products that are closely related because they
function in a similar manner, are sold to the same customer groups, are marketed through same types of
outlets, or fall within the given price ranges”.

NBP empowering field for superior customer service: The President National Bank of Pakistan (NBP)
Saeed Ahmed has emphasized the importance of customer service to gain competitive edge. He expressed
these views in his address to a gathering of more than 100 NBP regional management and Head office staff,
from across Pakistan, said a statement here Saturday.

The theme of the address was ‘Happy Customers- Our Success’. He said that he will consider his job
incomplete if even a single customer of NBP is unhappy and not satisfied with the institution’s service level.

Superior customer service is the key to success, ultimately translating into higher business volumes and
resulting growth in profitability.

He said that the banking environment is dynamic and stressed upon the need to have appropriate controls in
place to curtail misappropriation leading to reputational risk and resulting dent on the bank’s profitability.

He said that NBP has zero tolerance for frauds and malpractice and reminded that personnel involved will be
taken to task. During the conference, the proposal for re-organization and empowerment of the regional
setup were also discussed.

He said that the basic premise for strengthening of the regional setup is to provide better customer service,
greater authority to the field offices, more accountability, and inclusion of branch / region personnel in
decision making.

He emphasized on providing conducive environment to the field functionaries to promote business growth.

27
Concerns raised by regional management team during the discussion were satisfactorily addressed by Faisal
Ahmed (Member- President Task Force), respective group heads and the President. Elaborating on the
proposal he said that the long-standing complaints in terms of increase turnaround time for credit proposals
will be addressed through establishment of dedicated service centers for commercial and SME sector.

He said that areas and processes that are not aligned with the system will be revisited and addressed on
priority basis.

The President emphasized that ‘digital banking’ is the future and we need to upgrade our I.T. platform on
war footing to enable us in introducing new products.

The need to focus on Islamic Banking business was also emphasized during the address, Khawaja Amin-ul-
Azam (Head Islamic Banking Group) stressed upon the need for better co-ordination between the
conventional and Islamic banking to promote business growth.

He said that NBP has witnessed growth in Islamic banking branches during the last 3 years. However, a lot
needs to be done for improving the share of Islamic banking business in the overall business portfolio.

President NBP reiterated that efforts need to be put in for sizable increase in the Islamic Banking portfolio
thereby re-aligning it with the State Bank of Pakistan vision pertaining to Islamic Banking in Pakistan.

The following are the main consumer banking products of NBP:

4.1: Deposits:The National Bank of Pakistan offers to their clients a variety of Deposit Schemes with
personalized services at competitive rates of interest. Any Pakistani citizen can open his/her account for any
deposit scheme at any of its Branches strategically located throughout Pakistan.The Bank with its huge
network of 1243 branches garners savings from both the rich and the poor in urban as well as rural areas.
Even a poor farmer in a remote village, with his meager annual income, feels secure to safe keep his
minuscule savings in National Bank of Pakistan,Because National Bank of Pakistan has a long heritage of
trust and professional commitment.

4.1.1: Current Deposits:These are payable to the customer whenever they are demanded. When a banker
accepts a demand deposit, he incurs the obligation of paying all cheques etc., drawn against him to theextent
of the balance in the account. Because of their nature, these deposits are treated as current liabilities by the
banks. Bankers in Pakistan do not allow nay profit on these deposits, and customers are required to maintain
a minimum balance, failing which incidental charges are deducted from such accounts. This is because
Current Deposits may be withdrawn by the depositors at any time, and as such the bank is not entirely free
to employ such deposits.

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Current Accounts/ Basic Banking accounts are opened, on proper introduction and submission of required
documents along with initial deposit prescribed from time to time. Basic banking accounts are opened for an
individual’s (single or joint) only whereas current accounts are opened for individuals (single or joint)
Charitable institution, provident and other funds of benevolent nature of local bodies, autonomous
corporations, companies, associations, educational institutions, firms etc. and in all other cases where the
accounts are too opened under the order of a competent court of law. No profit is paid on the balances of
current/basic banking accounts. The bank is authorized to deduct service charges (incidental charges) on
current accounts levied through its half yearly schedule of charges, in case the average balance falls below
the minimumbalance as prescribed by the bank. No balance maintenance condition is applied on basic
bankingaccount.

4.1.2: PLS Saving Deposits:In Pakistan a Savings Deposits Account can be opened with a very small
amount of money, andthe depositor is issued a cheque book for withdrawals. Profit is paid at a flexible rate
calculatedon six monthly bases under the Interest Free Banking System. There is no restriction on
thewithdrawals from the deposit accounts but the amount of money withdraw is deleted from theamount to
be taken for calculation of products for assessment of profit to be paid to the accountholder. It discourages
unnecessary withdrawals from the deposits. In order to popularize thescheme, the SBP has allowed the
Savings Scheme for school and college students and industriallabour also. The purpose of these accounts is
to inculcate the habit of savings in the constituents.As such, the initial deposits required for opening these
accounts are very nominal.

NBP chargeRs.500 for opening of PLS Savings deposits.The silent features of profit and loss sharing and
saving accounts of NBP are as follows

 These accounts can be opened by individuals in their own single or joint name. The PLS savings
account can also be opened for provident fund or other benevolent funds of companies, firms,
organizations, NGO’s and educational institutions.
 PLS saving account can be opened with a minimum amount of Rs.500/- only
 To share in the profit a minimum balance of Rs.500/- must be maintained in the account.The
minimum balance on sixth and last of month will qualify for the profits. The profitswill be calculated
on the basis of monthly minimum balance for the periods of six monthsi.e. from January to June and
July to December
 The head office of NBP determines the profit or loss on PLS saving deposits and adviceits branches
the rate and time of distribution of these profits.
 There shall be no restrictions on maintaining the maximum balance in PLS saving account.

29
  On the first day of Ramzan each year the Zakat at the rate of 2.5% will be deducted fromthese
deposits on the balance of that day. But if depositors affix an affidavit of Zakatdeduction along with
account opening form or he is a non-Muslim, no Zakat will bededucted from his account.

4.1.3: Fixed Deposit Account:Thedeposits that can be withdrawn after a specified period of time are
referred to as Fixed or Term Deposits. The period for which these deposits are kept by the bank ordinarily
varies fromthree months to five years in accordance with the agreement made between the customer and the
banker. Profit/Return is paid to the depositors on all fixed or Time deposits, and the rate of profit/Return
varies with the duration for which the amount is kept with the banker. By lendingout or investing these
funds, the bank earns more than the Profit/Return that it has to pay on themto the depositors.

By giving an advance notice to the bank the deposit can be withdraw fromthe bank before the expiry of the
period. Fixed deposit accounts have higher rate of interest ascompare to other accounts. The rate of interest
rises with the length of period and the amount of deposit. The bank grants to the depositor a fix deposit
(FDR) which is not transferable to anyother person. The silent features of fixed deposit account of NBP are
as follows:

 The PLS term deposit are opened for individuals in their own single or joint names, companies’
firms and other organizations.
 The PLS term deposit receipt are issued for any amount. There is minimum or maximumlimit or
deposits in a single term deposit account.
 PLS term depositors may be allowed some facilities against the security of these receiptcredits, after
making “Lien” on the relevant receipt and subject to recovery of servicecharges.
 Under term deposit scheme the depositors not cease to earn the profit immediately, after the
respective maturity date.

4.1.4: Foreign Currency Account:Government of Pakistan has introduced many important reforms in
Foreign Exchange Control inthe country since February, 1990, for the purpose of strengthening the Foreign
ExchangeReserves. One of these reforms relates to foreign currency accounts, which can be opened
inUnited States Dollars, Pound Sterling, Euro and Japanese Yen in any of the authorized branchesof
commercial banks throughout the country.

Foreign currency accounts are opened, on proper introduction and submission of required documents along
with an initial deposit prescribed fromtime to time. Rates of return on foreign currency deposits are subject
to fluctuation as determinedin accordance with State Bank of Pakistan directives and will be paid on six
monthly baseswhereas the return on term deposit/SNTD will be paid on maturity or as prescribed by SBP.
The bank shall have no responsibility for or liability to the account holders for any diminution due totaxes

30
imposed or depreciation in the value of funds credited to the account whether due todevaluation or
fluctuation in the exchange rate or otherwise.

4.2: NBP Premium Amdani:NBP Premium aamdani is a retail product of the bank. Following are the
features of this product:

 Earn up to 7.50% per annum

 Minimum deposit of Rs. 20,000/- with maximum balance of Rs. 10 Million for 5 years
 Free demand draft, pay order and cheque book
 Convenience of NBP online Aasan Banking (for online banking customers)
 Free NBP Cash Card (ATM + Debit)
 Running finance facility up to 90%
 Profit paid every month as follows:

YEAR PROFIT RATES (%)

1st 6.65%

2nd 7.15%

3rd 7.30%

4th 7.40%

5th 8.85%

4.3: NBP Premium Saver:NBP premium saver is a retail product of the bank. Features are:

 Earn up to 5% p.a
 Maximum balance of Rs. 1 Million
 Free NBP cash card (ATM + Debit)
 Convenience of NBP online banking (for online banking customers)
 Profit calculated monthly and paid half yearly basis

4.4: NBP Saiban:The NBP Saibaan is retail product of the bank. It has different product items which are
home purchase, home construction, home renovation and purchase of land plus construction. If anyonehas a
Home Finance Facility outstanding with another bank he can have it transferred to NBPthrough a hassle-free
process. A brief description of these products is as follows:

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 Type of Advance Financing Amount Financing Period Debt to Equity ratio

Home Purchase Upto 35 Million 3-20 years 70:30

Home Construction Up to 35 Million 3-20 years 70:30

Home Renovation Up to 35 Million 3-20 years 70:30

Purchase of land plus Up to 35 Million 3-20 years 70:30

construction

4.5: NBP Advance Salary:The NBP Advance salary has been the flag-ship product for NBP.NBP
Advance Salary, theleading personal loan product of the country, is maintaining its inimitability ever since it
waslaunched. This was only possible due to its swift growth and remarkable loan disbursement of over 118
billion.You can avail up to 20 net take home salaries with easy repaymentinstallments. Its hassle-free
acquisition with no prior formalities and easy availability in a shortturnaround time is attributed as the most
distinguishing features of the product. The product isoffered countrywide. The terms and conditions of NBP
Advance salary are following:

 Avail financing up to Rs.2 Million against your salary

 Lowest markup rate
 Easy installments of up to 60 months at your choice
 Quick processing and fast disbursements
 No minimum income, collateral and insurance charges required
 For permanent employees of government, semi- government and autonomous bodies receiving
salaries through NBP

4.6: NBP Cash and Gold:With NBP’s Cash & Gold, the customers meet their need for ready cash against
their idle gold jewelry. The rate of markup is 13.5 % p.a. This product has following features:

 Facility of Rs. 35,000 against each 10 grams of net contents of gold

 No maximum limits of cash
 Repayment after one year
 Only gold ornaments acceptable
 Weight and quality of gold to be determined by NBP's appointed shroffs
 No penalty for early repayment
 For education, marriage and other consumer needs

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4.7: Student Loan Scheme:Pursuant to the announcement made by the Federal Finance Minister in his
2001-2002 budgetspeech, a Student Loan Scheme (SLS) for Education was launched by the Government of
Pakistan in collaboration with major commercial banks of Pakistan (NBP, HBL, UBL, MCB andABL).
Under the Scheme, financial assistance is provided by way of Interest Free Loans to themeritorious students
who have financial constraints for pursuing their studies in Scientific,Technical and Professional education
within Pakistan.

The Scheme is being administered by ahigh-powered committee comprising Deputy Governor, State Bank
of Pakistan, Presidents of thecommercial banks and representative of Ministry of Finance, Government of
Pakistan.

4.8: Corporate Advances:

4.8.1: Cash Finance:This is a very common form of borrowing by commercial and industrial concerns and
is madeavailable either against pledge or hypothecation of goods, produce or merchandise. In cashfinance, a
borrower is allowed to borrow money from the banker up to a certain limit, either atonce or as and when
required. The borrower prefers this form of lending due to the facility of paying markup/services charges
only on the amount he actually utilizes.

If the borrower does notutilize the full limit, the banker has to lose return on the un-utilized amount. In order
to offsetthis loss, the banker may provide for a suitable clause in the cash finance agreement, accordingto
which the borrower has to pay markup/service charges on at least on self or one quarter of theamount of
cash finance limit allowed to him even when he does not utilize that amount.

4.8.2: Running Finance/Overdraft:This is the most common form of bank lending. When a borrower
requires temporaryaccommodation, his banker allows withdrawals on his account in excess of the balance
which the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is
generallyallowed against collateral securities. When it is against collateral securities it is called
“SecuredOverdraft” and when the borrowing customer cannot offer any collateral security except his
personal security, the accommodation is called a “Clean Overdraft”. The borrowing customer isin an
advantageous position in an overdraft, because he has to pay service charges only on the balance outstanding
against him. The main difference between a cash finance and overdraft liesin the fact that cash finance is a
bank finance used for long term by commercial and industrialconcern on regular basis, while an overdraft is
a temporary accommodation occasionally resortedto.

4.8.3: Demand Finance:When a customer borrows from a banker a fixed amount repayable either in
periodic installmentsor in lump sum at a fixed future time, it is called a “loan”. When bankers allow loans to
theircustomers against collateral securities they are called “secured loans” and when no collateralsecurity is

33
taken they are called “clean loans”. The amount of loan is placed at the borrower’s disposal in lump sum for
the period agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus, the
borrower gets affixed amount of money for his use, while the banker feels satisfied in lending money in
fixed amounts for definite short periods against a satisfactory security.

4.9: Remittance:
4.9.1:Demand Drafts:Drafts drawn by one branch on another branch or on the Head Office of same bank or
vice versa, are not cheques or bills, as these have no distinct drawer and drawee. Section 85-A reads:
“Where any draft, that is, an order to pay money, drawn by one office of bank upon another office of the
same bank for a sum of money payable to order on demand, purports to be issued byor on behalf of the
payee, the bank is discharged by payment in due course”. Banker’s drafts payable to order on demand are
within the protection of Sections 10 and 131-Aof the Negotiable Instruments Act. However, if a demand
draft drawn on a bank by its own branch bears a forged endorsement, the person in possession of it cannot
compel that bank to pay it. As far as possible the banker’s draft should be crossed and it should never be
drawn payable to bearer. When a person requires a draft, he should be asked to complete the prescribed
application form in which he should state the amount of the draft, the name of the payee, and the place of
payment. This application form should be signed by the purchaser or by those persons who have been duly
authorized to act on his behalf. When a customer requests his banker to provide him with abanker’s draft,
the amount of which is to be debited to his account, he should enclose with hiswritten request a cheque
covering the amount of the required draft and other charges etc. payableto banker.

4.9.2: SWIFT System:The SWIFT system (Society for Worldwide Interbank Financial
Telecommunication) has been introduced for speedy services in the area of home remittances. The system
has built-in features of computerized test keys, which eliminates the manual application of tests that often
cause delay in the payment of home remittances. The SWIFT Center is operational at National Bank
ofPakistan with a universal access number NBP-PKKA. All NBP overseas branches and overseas
correspondents (over 450) are drawing remittances through SWIFT. Using the NBP network of branches, we
can safely and speedily transfer money for our business and personal needs.

4.9.3: Mail Transfer:A Mail Transfer is a form of remittance in which the amount remitted by a customer
or a non-customer is directly credited to the account of the beneficiary with another branch.Move your
money safely and quickly using NBP Mail Transfer service. And NBP also offer the most competitive rates
in the market. They charge Rs 50/- exchange rate and RS 75/- postage charges on issuing mail
transfer.When the money is not required immediately, the remittances can also be made by mail transfer
(MT). Here the selling office of the bank sends instructions in writing by mail to the paying bank for the
payment of a specified amount of money. Debiting to the buyer’s account at the selling office and crediting

34
to the recipient’s account at the paying bank make the payment under this transfer. NBP taxes mail charges
from the applicant where no excise duty is charged. Postage charges on mail transfer are actual minimum
Rs. 40/- if sent by registered post locally Rs.40/- if sent by registered post inland on party’s request.

4.9.4: Telegraphic Transfer:Telegraphic Transfer is a form of remittance, which is advised by telegram,

telex or faxmachines. The fundamental principles of such transfer are otherwise identical with the
MailTransfer. It is the message, which is sent from one branch to another on the order of payer to payee
through wire. It is one of the quickest means to transfer fund through the use of telex/fax/internet or cable.
Payment to the beneficiary is affected directly by the drawee officeupon identification or through credit into
beneficiary’s bank account. As such remitting office isnot required to issue any instrument payment to the
remitter for delivery to the beneficiary.

4.9.5:Pay Order:NBP provides another reason to transfer your money using our facilities. NBP pay orders
are asecure and easy way to move your money from one place to another. And, as usual,NBP charges for
this service are extremely competitive. The charges of NBP are very low all over thePakistan. It charges Rs
50/- for NBP account holders on issuing one payment order, and chargesRs 100/- for NBP non-account
holders on issuing one payment order. It charges Rs 25/- forstudents on payment of fees of educational
institutions. If someone want a duplicate of paymentorder they charges Rs 100/- for NBP account holders
and Rs 150/- for non-account holders.

4.10: Miscellaneous:
4.10.1: Lockers:National of Pakistan also provides lockers facility in the country. The lockers issued only to
thedepositors. No lockers are issued to any unknown person. The dual control system is used for lockers.
The officer has master key to apply on the locker but he cannot open the locker of any person. The locker
holder provides the bank has specimen signature. Whenever the locker holders come to open the locker, his
signatures are verified by the officer and then will be able toopen his locker. If the key of the locker is lost
company providing these lockers breaks the locker and new lock is fitted in its locker and lock is destroyed
in the presence of the locker holder and bank charges RS 1200 for that. In case the locker holder dies, the
court opens his locker in the presence of his heir as mentioned in his will or and his belongings are given to
them and thelocker is closed.

4.10.2:NBP Cash Card:NBP Cash Card is a 24-hour direct access ATM/Debit card to your bank account,
which lets you pay directly from your account as an alternative payment method to cash. The transaction is
authorized and processed by entering PIN. The NBP Cash Card holders are able to transact at any of the
4000 + Merchants where Orix logo is displayed and can withdraw cash from NBP, 1-Link & M-NET
ATM’s across the country. The followings are the main features of this product:

 You won't need to carry a lot of cash with you every time you go out.

35
  Secure and Safe transaction.
 Account Information on tips (like: Mini Statement, Balance Inquiry, Utility Bill Paymentetc.)
 Enable to Withdraw Cash From 1-Link ATMs / MNET ATMs.
 Enable to Make Purchases from Around 4000 POS (Merchants) Countrywide including2500+ POS
in Karachi.
 No Card Issuance Fee for first 12 Months

4.10.3: International Banking:National Bank of Pakistan is at the forefront of international banking in

Pakistan which is proven by the fact that NBP has its branches in all of the major financial capitals of the
world. Additionally, the Bank has recently set up the Financial Institution Wing, which is placed under the
Risk Management Group. The role of the Financial Institution Wing is:

 To effectively manage NBP's exposure to foreign and domestic correspondence

 Manage the monetary aspect of NBP's relationship with the correspondents to supporttrade, treasury
and other key business areas, thereby contributing to the bank's profitability
 Generation of incremental trade-finance business and revenues

4.10.4: Agricultural Loans:Loans to the farmers with holding up to 25 acres for meetingtheir short term,
medium and long-term agriculturalproduction requirements, such as:

 Agricultural inputs
 Tube Wells
 Live Stock Framing
 Land improvements

4.10.5: Import/Export Business/ trade financeNBP Provides highly efficient trade finance services
forimport/export business for our clients/customers throughlarge number of authorized branches where
trained andmotivated staff is available to handle the business on behalf of customer.

36
CHAPTER 5:

DEPARTMENTS OF THE BRANCH

WHERE I WORKED AS INTERNEE

37
 CHP 5: DEPARTMENTS OF SATELLITE TOWN BRANCH NBP
Banking procedures are divided between various departments. Different departments do their jobs in
occurrence with the bank policies. In National Bank of Pakistan each branch is divided into various
departments depending on their size and volume of business. Head of department manages each department
& officials of the branch follow procedures. The departments working within National Bank of Pakistan
Satellite town branch BWP are as under:

 Clearing House Department

 Remittance Department
 Deposits Department
 Advances Department
 Account Opening Department
 Cash Department
 Pension Disbursement Department
 Accounts Department

5.1 Clearing Department:As part of their daily business activity, banks receive cheques and other
financial instruments from their customers drawn on other banks, to be collected and credited to their
accounts. Similarly, banks receive cheques/instruments from other banks, deposited by customers of the
banks drawn on the customers of the drawee banks. Therefore, the banks act as Collecting Banks when they
send cheques/instruments for collection and as paying Banks, when they receivecheques/instruments for
collection from other banks. Since each bank receive and sendscheques/instruments for collection to and
from an number of banks, the process of settlementwould clearly be very cumbersome and time consuming
if every cheques/instrument had to besent by the collection bank to each of the drawee banks or branch upon
which different collectionitems are drawn and to individually pay the proceeds to each of the bank sending
cheques/instrument in for collection. Therefore, the banks have evolved what is called the “Bankers Clearing
arrangement.” The Clearing System enables cheques to be paid or cleared centrally and settlement made for
receivables and payables between the banks. The SBP co-ordinates clearing activity through itsoffices,
called the Clearing Houses, set up in big cities and towns. Where SBP does not maintain its own office,
some other bank, usually National Bank of Pakistan (NBP) performs thisfunction. But the clearing house
facility is available only for cheques/instruments drawn on banks situated within the same city/clearing
house area.

Working of Clearing Process:Under the clearing arrangements, the State Bank of Pakistan (SBP) offers a
Clearing House or a centralized exchange facility, which works on the following general lines: All the banks
operating in a city who are members of the Clearing House maintain an account with the SBP’s Clearing

38
House. Every day representatives of all the banks in every city meet the Clearing House, first meeting in the
morning, at an appointed time, for the purpose of depositing their own customers, cheques/instruments to be
collected from other banks and receiving cheques/instrument drawnon their account holders from the others
banks. At the Clearing House accounts of all the banks are debited by the total amount of
cheques/instruments drawn on their customer’s accounts and credited with the amount of their customer’s
cheques/instruments drawn on other banks, as per the list of cheques submitted byeach bank.

The cheques/instruments received, also called Inward Clearing, and are taking back by each bank to its
bank/branch. The amounts of each cheques/instrument is debited or recovered from eachdrawee customers’
account and credited to the Clearing House account. Similarly, against theamount credited by the Clearing
House as Outward Clearing, the appropriate customers’ accounts are credited and clearing House account is
debited.Any cheques/instruments received by a bank that cannot be paid, due to insufficient balance inits
customer’s account or for any other reason, are returned back to the Clearing House and acredit is claimed
and obtained there against.

Rules and Regulations of Clearing House:

 Timing:(Monday to Saturday)i.e. 1st Clearing at 10:00 a.m.ii.2nd Clearing at 2.30 p.m.

 Each bank will send competent representative to exchange the cheques.
 Each bank is required to ensure that all cheques and other negotiable instruments are properly
stamped and suitably discharged.
 An objection memo must accompany each and every cheque when return unpaid dulyinitialed.
 Each bank is required to maintain sufficient funds in the principal account with SBP tomeet the
payment obligations.
 The State Bank of Pakistan debit the account of each member of the clearinghouse withthe
proportionate working expenses incurred on the operation of clearing house. Theseexpenses are very
nominal.

Outward Clearing at the Branch:

The following points are to be taken into consideration while an instrument is accepted at thecounter to be
presented in outward clearing:

 The name of the branch appears on its face where it is drawn

 It should not stale or postdated or without date.
 Amount in words and figures does not differ.
 Signature of the drawer appears on the face of the instrument.
 Instrument is not mutilated.

39
  There should be no material alteration, if so, it should be properly authenticated.
 If order instrument suitably indorsed and the last endorsee’s account being credited.
 Endorsement is in accordance with the crossing if any.
 The amount of the instrument is same as mentioned on the paying-in-slip andcounterfoil.
 The title of the account on the paying-in-slip is that of payee or endorsee (with theexception of
bearer cheque).
 If an instrument received other than National Bank of Pakistan then special crossingstamp is affixed
across the face of the instrument. Clearing stamp is affixed on theface of the instruments, paying-in-
slip and counterfoil (The stamp is affixed in such amanner that half appears on counterfoil and
paying-in-slip). The instrument is suitably discharged, where a bearer cheque does not require any
discharge and also an instrument in favor a bank not need be discharged.

The instrument along with pay-in-slip is retained while the counterfoil is given to the customer duly signed.
Then the following steps are to be taken:

 The particulars of the instrument and the pay-in-slip or credit voucher are entered in the outward
clearing register.
 Serial no is given to each voucher.
 The register is balanced; the credit vouchers are balanced from the instruments and are released to
the respective departments against acknowledgement in the register.
 The instruments are arranged bank wise.
 The schedules are prepared in triplicate, two copies which are attached with the relevant instrument
and the third is kept as office copy.
 The house page is prepared from schedules in triplicate.
 The schedules and house pages are signed by the house in charge with branch stamp.
 The grand total of the house page is taken and agreed with that of the outward clearing register.
 The instrument along with duplicate schedule and house page are sent to the main office.
 The entry of the instrument returned unpaid is made in Cheques returned Register. If the instrument
is not to be presented again in clearing then a covering memo is prepared. The covering memo along
with returned instrument and objection memo is sent to the customer who sent the same to his
account.

Inward Clearing at the branch:

 The particulars of the instruments are compared with the list.

 The instruments are detached and sort out department wise.

40
  The entry is made in the inward clearing register (serial no. Instrument no. Account No)
 The instruments are sent to the respective departments
 The instruments are scrutinized in each respect before honoring the same.

Special Clearing:In addition to the normal clearing function at Clearing house it is mutually agreed to hold
anextra clearing at the clearing house on the particular day and time which is known as “specialclearing” it
is arranged due to the rush of work arising out of say, more Holidays declared by theCentral Govt. at a time,
but normally special clearing is held on last working day of half yearlyand yearly closing i.e. 30th June and
31st Dec. every year.

5.2 Remittance Department:The Remittance department deals with the transfer of money from one
place to another. Funds transfer facility or remittance of funds is one of the key functions of the banks all
over the world. Remittances through banking channels save time, costs less and eliminate the risks involved
in physical transportation of money from one place to another. National Bank of Pakistan transfers money in
the following ways:

 Pay Order
 Demand Draft
 Mail Transfer
 Telegraphic Transfer
 Pay Slip
 Call Deposit Receipt
 Letter of Credit

The Job responsibilities & requirements of remittance department include:

 Responsible for money transfers, issuance of pay-orders & drafts, collection items, maintenance of
cheque books & ATM cards and all other counter specific products and services
 Ensure highest level of customer service in a professional and competent manner
 Must ensure that the activities are carried out strictly in accordance with the laid down
procedures/processes, and SBP/Compliance guidelines
 Responsible for Cash, Clearing, Inland remittances including Demand Drafts and Pay Orders
 Ensure high standards of customer services within the assigned turnaround time
 Ensure compliance with SBP's regulations and internal controls
 handling cash, clearing, local remittances, and other related activities at branch level

Parties involved in remittance:Four parties are involved in Remittance

41
  Remitter
 Remittee
 Paying Bank
 Issuing Bank

Remitter:One who initiates, or requests for a remittance. The remitter comes to the issuing or originating
branch, asks for a remittance to be made, and deposits the money to be remitted. The bank charges him a
commission for this service. He may or may not be the branch’s customer.

Remittee:A Remittee is also called the beneficiary, or the payee. The person in whose name the remittanceis
made. A Remittee is also the one who receive the payment.

Issuing Bank:The bank that sends or affects the remittance through demand drafts, telegraphic transfers,
Mail Transfers, Pay order etc

Paying Bank:Paying Bank also knows as the drawee branch, the branch on which the instrument is drawn.
Ithas to make the payment (usually located in a different city or country).

Kinds of Remittance:

 Transfer within the branch

 Transfer from one branch to another
 Transfer from one bank to another bank in the same city
 Transfers from one bank to another bank in two cities

5.3: Account Opening Department:The opening of an account is the establishment of banker-customer

relationship. This department performs the duty of opening accounts for customers. It also issues
checkbooks to customers. A person who wishes to open an account with the bank has to fill an account
opening formobtained from any branch of National Bank of Pakistan. The bank officer tactfully
obtainsinformation about character, integrity, responsibility, occupation and the nature of business of the
perspective customer. Any individual, who has attained the age of majority and is of soundmind can open
and maintain his/her account. Two or more individuals may open an account jointly. Similarly, business
organizations such as sole proprietary concerns, partnership firms,and limited liability companies as well as
non-profit organizations like clubs, trusts, societies,associations and NGO’s may open their accounts.The
following requirements are necessary for opening an account:

 Identification of the new customer.

 Ascertaining the genuineness of the stated occupation business of the customer.
 Determining the correct residential and permanent address.

42
  Completion of all relevant columns of the Account opening form.
 Proper completion of documentation.

Functions of an account opening department:

 Providing account opening form according to the customer's requirements

 Guide the customer about the requirements of the account opening and form filling
 Check the forms whether they are correctly completed or not
 Preparing checklist
 Stamping on the form
 Maintaining account opening register
 Pasting of forms in register after release from general banking in charge
 Issuance of cheque books
 Issuance of accounts maintenance certificate
 Closure of account
 Verification of signature in case of cheque presented before releasing of account opening from SS
card is not yet scanned

5.4: Cash Department:All physical movement of cash in the bank is made through the cash department.
As bank is borrowing and lending institution, therefore cash is the top most priority of Bank. Another
aspectis that cash department is for the security purpose, security in a sense that there should be
noembezzlement of funds or in money leaded to bank by any party or person. The efficiency of bank is also
related to this department the more efficient the bank is the stronger and busy is thecash department. Cash
department perform following functions:

 Collection of funds
 Acceptance of deposits
 Collection of utility bills
 Payment of checks
 Remittances
 Act according to any standing instructions
 Transfer of funds from one account to another
 Verification of signatures
 Posting
 Handling of Prize bond

The two main activities of cash department are as follows:

43
Deposit cash in Customer’s account:When the customer wants to deposit amount in his account at opening
of account or after that thenhe has to fill a deposit slip that shows the amount and the account in which the
cash will bedeposited. Then teller will receive amount and credit the customer’s account that shows
increasein customer’s bank account.

Make payment from customer’s account:When the customer draws a cheque on the bank to pay a certain
amount then BBO Operator willdebit the customer’s account that shows reduction in his account balance.

5.5: Deposit Department:The primary function of National Bank of Pakistan is to accept and receive
surplus money fromthe people, which they willingly deposit with the Bank. Like all other Banks, National
Bank of Pakistan also take incitation to attract as much depositor’s as it can. The deposit
departmentaccepts/collects deposit from accountholders.The National Bank of Pakistan offer different
deposit schemes to its customers, which includesthe following:

 Current Deposits
 PLS Saving Deposit
 Fixed Deposit Account (Time Deposits)
 Foreign Currency Account
 NBP Premium Aamdani
 Foreign Currency Account
 National Income Daily Account (NIDA)

5.6: Advances Department:The bank is profit seeking institution. It attracts surplus balance from the
customer at low rate of interest and makes advances at a higher rate of interest to the individuals and
business firms.Credit extensions are the most important activity of all the financial institutions, because it is
themain source of earnings. Advances department is one of the most sensitive and importantdepartment of
the bank. The major portion of the profit is usually earned through thisdepartment. The job of this
department is to make proposals about the loans; the creditmanagement division of head office directly
controls all the advances.The advances Department receive application from intending borrowers. After
receivingapplication, the advance department processes it further. After analyzing and detailedinvestigation,
they decide whether to approve the loan or not. Some loan approvals are made bythe Manager of the branch
within his powers as prescribed by the bank’s higher authorities,while some loan applications are submitted
to higher authorities for their approval. Some advancesare of the following nature:

 Loan against Gold

 Agriculture advance to farmers
 Medium term advance for working capital

44
  Long term advance for setting industry
 Short term advance to businessman

The National Bank of Pakistan offer following products (Advances) to its customers:

 NBP Saibaan
 NBP Advance Salary
 NBP Cash & Gold
 Students Loan Scheme
 NBP Karobar

The Advances department deals in following transactions:

 Preparation and submission of proposals of Running finance, Cash finance, Demand finance, Export
finance, Staff finance, Finance against imported merchandise etc. for sanction of finance limit from
the hire authority.
 Preparation and posting of vouchering of all type of finance.
 Accruals & recovering of Markup on finances on periodical basis.
 Approval of transfer of funds through DD-TT, PO, MT, IBCO etc. to various branches by debiting
the limits.
 Preparation of weekly, monthly, quarterly, and annually statement to the hire authority.
 Transfer of funds from one account to another account of the party taking the authorityletter.
 Preparation of advances record.
 Timely submission of returns/reports, daily, weekly, monthly & quarterly.
 Checking of computer outputs of the department on daily basis.
 Balancing of all financing heads

5.7: Pension Disbursement Department:The National Bank of Pakistan was Pakistan’s leading
institution which performs the function of pension payments or disbursements to pensioners. The pension
disbursement department is responsible for making pension payments to Government Pensioners. The
person who wants toreceive his/her pension from National Bank of Pakistan can open an account with any
branch of National Bank of Pakistan. The bank performs this function through Demand Draft Purchase or
simply called DD Purchase. This department performs following functions:

 Making Pension Payments

 Opening of Account of Pensioner
 Entry of amount paid to pensioner in Government Pensioners Register

45
  Verifications of Signatures of Pensioners
 Making Demand Draft Purchase Register

5.8 Accounts Department:AccountsDepartment of the bank can be considered the most important
department. Thisdepartment is basically concerned with processes and activities of recovering,
sorting,summarizing and reporting data resulting from the whole day transactions of all the
departments.Actually, the process of this activity starts from the preparation of all the required vouchers
bydifferent related departments. When these vouchers are prepared, these are posted into respectivecomputer
terminals by the relevant departments. Before merging, a batch list is printed out byComputer Department
and duly checked by the respective departments. After this, merging stagecomes, after which a proof list is
printed out. This is the stage, where Accounts Departmentstarts performing its function. Proof list is checked
by the Accounts Department. The accountdepartment prepare following vouchers and reports:

 Monthly Profit & Loss account- F48

 General Ledger
 General Ledger- Abstract
 Check Book Issue Register
 Western Union payments Register
 Demand Notices
 Miscellaneous Book
 Bank Transfer scroll
 Posting NBP Advance Salary
 Daily Statement- F21
 General Ledger- Head wise
 Hash Value Register
 End of Day register
 Posting National Income Daily Account (NIDA)
 Monthly return register
 Charges A/c register
 P-L-S Profit list
 Weekly Telegram
 Mail Transfer Register
 Government Scroll
 Provident file
 Government Scroll Debit & Credit

46
 Transfer Responding Advice Dispatched Register-F15
 Cash Remittance IN
 Cash Remittance OUT
 NBP General Account
 Utilities register
 Statement of affairs
 Closing entries
 Daily activity checking
 Minor expense recording

47
CHAPTER 6:

MY LEARNING AS A TRAINEE

48
 CHP 6: MY LEARNING AS A TRAINEE
After joining the bank for internship initially it was so difficult for me to get the attention of the employees,
everybody was terribly engaged in their regular branch work and responsibilities. But very soon with the
permissionand cooperation of branch manager when I moved from one counter to another I succeeded in
developing good relationship with the staff members. This was my first step towards the completion of my
task and with the passage of time they realized that they can also utilize my efforts in a productive way to
minimize their burden which eventually helped me learning a lot. Everything I learned during internship has
played a very crucial role in my life and will stay with me forever as this was first step of my professional
life.

During the internship session I got the chance to perform on different departments (each department 2
weeks) which are listed below and short explanation is also given:

6.1: Account Opening Department:The first task assigned to me was account opening department. First
of all, I asked the customer to give his/her ID card. I checked the expiry date of ID card. If expiry date of the
ID card is correct, it has not been expired then I took interview of the customer so that I can know which
type of account customer wants to open PLS saving or current account and what his/her source of income
for which he/she wants to open his account. The customer told me that he wants to open saving account. I
told the minimum and maximum amount that he can deposit in that account and that the zakat will be
deducted and profit will be added. He said ok I will deposit Rs. 500 in the account. After this I asked the
customer to bring some necessary documents to open the account which are:

 Photocopy of customer’s CNIC

 Photocopy of next of kin CNIC
 Photocopy of your mother’s CNIC
 Photocopy of your home electricity bill
 3 photos of he/she if she is illiterate and sign in urdu

After taking the documents I filled Customer Information Folio (CIF) and in CIF I asked the customer to
whom he want to make his next of kin. He told me the next of kin, what’s his relation with him/her,
photocopy of his/her CNIC and his mobile number. After filling this information, I took a verification of
his/her CNIC from NADRA from the operation manager so I can know is this correct CNIC. After all these
things I opened the account of customer. After this I took print of all the forms and then I took the signature
card and took the signature of that person whose account I opened and I used the branch stamp on signature
card. After this I took the sign of the designation authority means my supervisor and I also used the stamp of
attested on the photocopy of CNIC. After this, I filled he deposit slip with that amount from which he wants

49
to open his account that is Rs. 500 and asked him to pay the money to the cash counter and then you account
will be opened. When he came back to pay the amount then I gave his all the forms and asked him that a
letter of thanks will be reached your home address by post. I told him you will have to sign on letter of
thanks and post it. Then I told him when the bank will receive this letter of thanks then the bank will issue
you the cheque book. At the last, I asked the customer now you are free and you can go now. In this way, I
opened the account of a person completely and I accomplished my task.

The same procedure I used for opening the current account. But the minimum amount in this type of account
is changed as compare to saving account and this account is not profit oriented and no zakat deduction is
made in this account and this account is for businessman and companies etc.

6.2: Remittance Department:Second task that was assigned to me was regarding Remittances. In
remittance department, I learnt about how the pay order, demand draft and call deposit at receipts are made.
My supervisor asked me to make pay order of the customer. First of all, I asked the customer that either he is
the account holder of NBP or not? He told me that I am account holder of NBP. I asked this question
because the charges for account holder and non-account holder are different. He asked me to make the pay
order. Then I asked the customer gave me the photocopy of your CNIC. He gave me photocopy of his CNIC
and told me his account number. After this I took the pay order book and filled it with his name, account
number, amount in figures and words and the name of the bank. After writing these things, I applied two
stamps at the front of the pay orderthat are branch stamp and stamp of the date. After this my supervisor
signed the pay order. After signed I gave the pay order to the customer. In this way, I made the complete pay
order of the customer.

The same procedure I used for making demand draft and call deposit at receipt (CDR), but the charges rates
for making demand draft and call deposit at receipt are also different for account holders and non- account
holders. During making demand draft, I used the same stamps like branch stamp and stamp of the date. I was
charging different rate to the account holder and non-account holder and I used the demand draft book for
making DD. And I used the call deposits at receipts book for making CDR. In this way, I made all these
things that are pay order, demand draft and call deposit at receipts. Hence, I completed my whole in good
manner.

6.3: Clearing Department:The third task assigned to me was the clearing which means the clearance of
payments and cheques within city or with different cities. In clearing, I learnt about the inward clearing and
outward clearing, intercity clearing and local clearing. My supervisor told me that the clearing we receive is
inward clearing and that we sent to other is outward clearing. After that my supervisor gave me some
intercity and local cheques and asked me to clear them. First of all, I went to the clearance counter and
applied the CROSSING STAMP at the front of all the cheques. After that I separated all the cheques of

50
Lahore. And all the cheques of other cities like Islamabad, Gujranwala and Faisalabad etc. After this I
applied the CLEARING STAMP with the same date of all the cheques of Lahore and the CLEARING
STAMP with the next day date of other cities cheque. After that I used the INTERCITY CLEARING
STAMP of all the intercity cheques. After that I used Govt. Account credited stamp for all the govt. cheques
and Payees Account Credited stamp for account holders. After that I used the Collecting Bank Endorsement
Confirmed stamp for other bank cheques which are made collection from our branch and Our Branch
Endorsement Confirmed stamp for those cheques if any branch from outside said to our bank to collect
money. After completing these stamps, I took the registers of local clearing and intercity clearing. In the
register of local clearing, I entered all the local cheques and in intercity register I total all amount of entered
cheques and confirm that total with total amount of cheques. After completing this work, I made one list for
local cheques and other list for intercity cheques and entered the amount of all the cheques and made total of
it. After this, I put them in envelop and then put stamp of the bank on it. In this way, I completed my whole
work.

6.4: Cheque encashment:

Receiving of Cheque:The cash is paid against the cheques of the client. The following points are important

 Cheque is drawn on same branch

 Cheque is not postdated.
 Amount in words and figure are same.
 It should be bearer cheques so the word bearer should not cross.

 In case there is thumb print in place of sign than the photocopy of ID card of customer should be
attached.

Verification of signature:After receiving the cheques, the operation manager verifies the signature of
theaccount holder and the signature on the cheques. If the signature is not same it is returned back otherwise
forward to BBO Operator for posting.

Computer Terminal Process:The cheque is received in computer terminal, where BBO operator checks the
balance of theaccount holder. The BBO operator also sees the stop payment instructions, whether
receivedfrom account holder or not. After considering these points BBO Operator post the cheque inBBO
(Branch back office system) and forward to operation manager.

Payment of cash:After posting the cheque the operation manager cancelled the cheque and returned back
tocashier. The cashier enters the cheque in cash paid registered and pays against the secondsignature of
receiver on the back of the cheque.

51
CHAPTER 7:

FINANCIAL ANALYSIS OF NBP

52
 CHP 7: FINANCIAL ANALYSIS
7.1 Introduction Financial statement analysis is the process of identifying financial strengths and
weaknesses of the firm by properly establishing relationship between the items of profit and loss account
and balance sheet.

It is valuable tool used by investors and creditors, financial analyst, and others in decision making process
related to stocks, bonds and other financial instruments. The goal of analyzing financial statements is to
assess past performance and current financial position and to make predictions about future performance of
company. Investors who buy stock are primarily interested in company’s profitability and their prospects for
earning a return on their investment by receiving dividends or increasing the market value of their stock
holdings. Creditors and investors who buy debt securities such as bonds are more interested in solvency and
liquidity i.e. companies short and long-term ability to pay its debts. Financial Analyst who frequently
specialize in following certain industries, routinely asses the profitability, liquidity and solvency of
companies in order to make recommendations about the purchase or sale of securities such as purchase or
sale of stocks and bonds. The analysis of financial statement refers to the examination of the statements for
the purpose of acquiring additional activities of the business. The users of the financial information often
find analysis desirable for the interpretation of the firm’s activities.

7.2: Techniques of analysis:I will use following techniques for the analysis of NBP:

 Ratio Analysis
 Horizontal Analysis
 Vertical Analysis
 Dupont Analysis

7.2.1: Ratio Analysis:In financial ratio analysis, ratio is used as a bench mark for evaluating the financial
position and performance of the firm. Ratio analysis enables the analyst to compare items on single financial
statement or to examine the relationship between items on two financial statements. After calculating ratios
for each year financial data, the analyst then can examine trends for the company across years. Since ratios
adjust for the size, using this analytical tool facilitates intercompany as well as intracompany comparisons.

Liquidity Ratios:Following are the liquidity ratios:

Ratio 2017 2016 2015 2014

Net loans to total Assets 31.22 33.78 33.87 40.61

53
(%)

Net loans to total deposits 42.83 40.27 40.38 50.81

(%)

Net loans to total deposits 35.44 39.21 39.77 49.31

and borrowings (%)

Source: 2017 Annual report of NBP

Analysis:Trends of liquidity are shown in above graph. The Net loans to assets ratio has decreased over the
years. Net loans to total deposits ratio has increased in year 2017 which shows that bank has taken more
liabilities as compared to deposits which ultimately deceased the profits of NBP.

Market Ratios:Market value ratios are used to evaluate the current share price of a publicly-held company's
stock. These ratios are employed by current and potential investors to determine whether a company's shares
are over-priced or underpriced. Following are the market ratios:

Ratio Formula 2017 2016 2015 2014

EarningsPer Share Earnings available for

(PKR) common shareholders
10.82 10.69 9.03 7.06
/No of common shares
outstanding

Price Earnings Ratio Market Price Per share/

(%) Earning Per Share
4.49 7.01 5.98 9.84

54
Dividend Per Share Dividend paid in year/
(PKR) No of common shares
- 7.5 7.5 5.5
outstanding

Market Value Per Market value of the

share (PKR) business/ Total no of
48.56 74.89 54.04 69.46
shares outstanding

Source: 2017 Annual Report of NBP

Analysis: The graph shows that market price of the share of NBP had decreased in year 2017 which causes
the decrease in earning per share as well.

Profitability Ratios:The continued viability of any bank depends on its ability to earn an appropriate return
on itsassets and capital. Good earnings performance enables a bank to fund its operations,
remaincompetitive in the market and increase or decrease in market funds. Profitability ratios relate profit to
sales and investments. These ratios indicate the firm’s overall effectiveness of operations and give us idea
how well firm utilized its resources in generating profit andshareholder value. Following are the profitability
Ratio:

Ratio 2017 2016 2015 2014

Return on average assets- Pre-tax (%) 1.64 2.02 2.04 1.51

Return on average equity- Pre-Tax (%) 28.98 31.47 29.35 20.83

55
Operating profit to Average assets (%) 1.69 2.04 2.86 2.37

Gross Income to Average assets (%) 3.93 4.61 5.46 5.24

Non-interest Income to Average income (%) 36.41 35.34 39.44 39.87

Operating expenses to Gross income (%) 56.88 55.73 47.57 54.74

Operating expenses to Average assets (%) 2.23 2.57 2.60 2.87

Source: 2017 Annual Report of NBP

Analysis:The above table shows that the profitability of NBP had decreased in year 2017 which is because
of following reasons:

 Expenses had increased in year 2017.

 As liabilities had increased and so does the interest.

7.2.2: Vertical analysis:When using vertical analysis, the analyst calculates each item on a single
financialstatement as a percentage of a total. The term vertical analysis applies because eachyear's figures
are listed vertically on a financial statement. The total used by theanalyst on the income statement is net
sales revenue, while on the balance sheet it istotal assets. This approach to financial statement analysis, also
known as component percentages, produces common-size financial statements. Common-size balancesheets
and income statements can be more easily compared, whether across the yearsfor a single company or across
different companies.Vertical analysis is a technique for identifying relationship between items in the
samefinancial statement by expressing all amounts as the percentage of the total amounttaken as 100. In a
balance sheet, for example, cash and other assets are shown as a percentage of the total assets and, in an
income statement, each expense is shown as a percentage of the sales revenue.

56
In Vertical analysis, various components of the financial statements are standardized by expressing them as
a percentage of some bases.Examples of common-sized statements include:

 Components of the balance sheet expressed as a percentage of total assets

 Components of the income statement expressed as a percentage of sales or revenue

57
Vertical Analysis of Balance Sheet:

Source: 2017 Annual report of NBP

Analysis:The vertical analysis of balance sheet shows that in year 2017,93% of assets comprises of
liabilities i.e 93% of the assets had been bought by borrowings which is much more than the previous years.

58
Moreover, interest income has also been decreased in year 2017 while interest expense had increased which
results in decrease in profits of NBP for year 2017.

7.2.3: Horizontal Analysis:This technique is also known as comparative analysis. It is conducted by setting
consecutive balance sheet, income statement or statement of cash flow side-by-side and reviewing changes
in individual categories on a year-to-year or multiyear basis. The most important item revealed by
comparative financial statement analysis is trend. A comparison of statements over several years reveals
direction, speed and extent of a trend(s). The horizontal financial statements analysis is done by restating
amount of each item or group of items as a percentage. Such percentages are calculated by selecting a base
year and assign a weight of 100 to the amount of each item in the base year statement. Thereafter, the
amounts of similar items or groups of items in prior or subsequent financial statements are expressed as a
percentage of the base year amount. The resulting figures are called index numbers or trend ratios.

Formula = Current Year amount / Base Year amount * 100

Horizontal analysis, whilst simple to execute and useful to a certain extent, has its limitations. These
limitations include:

 Being highly dependent on the selection of base year and the period under examination in the
financial model.
 Horizontal analysis provides little insight into why the trend occurred in a financial model.
 Horizontal analysis does not provide insight into whether the trend in the financial model results was
superior/inferior to some benchmark

59
Horizontal Analysis of Balance Sheet:

Source: 2017 Annual Report of NBP

60
Analysis:The horizontal analysis shows that borrowing percentage of bank in year 2017 had increased as
compared to previous years. NBP has increased assets by increasing its liabilities as a result of which profits
on income had decreased as compared to previous years.

7.2.4: Dupont Analysis:According to DuPont analysis, there are three major financial metrics drive return
on equity (ROE): operating efficiency, asset use efficiency and financial leverage. Operating efficiency is
represented by net profit margin or net income divided by average shareholders' equity. Asset use efficiency
is measured by total asset turnover or the asset turnover ratio. Finally, financial leverage is analyzed through
observation of changes in the equity multiplier. The Dupont Analysis of NBP is as follows:

Source: 2017 Annual Report of NBP

Analysis:

 Net operating margins of the Bank have improved from 2016. Improvement in the net operating
margins is mainly attributed to higher non-mark-up income.
 Asset Utilization in terms of Total Income has dropped to 3.9% in 2017 from 4.6% in 2016. This
was mainly due to increased cost of deposits.
 Equity multiplier has recorded growth since 2012.

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CHAPTER 8:

SWOT ANALYSIS OF NBP

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 CHP 8: SWOT ANALYSIS OF NBP
8.1 Strengths:

 Oldest Institution: NBP in one of the oldest banks of Pakistan and first nationalized bank Hence its
customer base is strength from this plus point as customers have more confidence in the bank. The
additional value services as the privilege for the bank.
 Alternate Duties in SBP Absence: The NBP performs additional services for its customers as well
as the other bank customer in the absence of SBP.
 More Deposits than Other Bank: NBP has the relative competence in having more deposits than
the other bank. This is because of the confidence the customer has in the bank. The bank being the
privileged and oldest bank in banking sector of Pakistan enjoys this edge over all others, lacking it.
 Employee Benefits: The employers at NBP are offered reasonable monetary benefit. Normally two
bonuses are given Eid-Ul-Fitar& Eid-Ul-Azha. This serves as an additional benefit and competency
for the bank and a source of motivation for the employees.
 Broad Network: The bank has another competency i.e. it has broad-basses’ network of branches
throughout the country also more than one branch in high productive cities. The customers are
provided services at their nearest possible place to confirm customer satisfied.
 Strictly Followed Rules &Regulation: The employees at NBP are strict followers of rule &
regulation imposed by bank. The disciplined environment at NBP bolsters its image and also
enhances the overalloutput of the organization.
 Professional Competence: The employees at NBP here have a good hold on their descriptions, as
they are highly skilled Professionals with back ground in business administration, banking,
economics etc. These professional competencies enable the employees to understand and perform the
function and operation in better way.
 Healthy Environment: The working condition in the NBP branch here is very conductive and
favorable for better output. The informal environment affects the performance of the employees in a
positive way.
 Relation Between Staff and Other Employees: The bank enjoys a good plus point when it comes
to the employee manager relationship the hearing as removing of discrepancies if any, between the
employees, and between the manager and employees.
 SWIFT
 Internet access through www.NBP.com.pk

8.2 Weaknesses:

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  Lack of Marketing Effort:The bank does not promote its corporate image, services, etc on a
competitive way. Hence lacks far behind in marketing effort.A need for aggressive marketing in
there in the era marketing in now becoming a part of every organization.
 NBP under Political Pressure:The strong political hold of some parties and government and their
dominance is affecting the bank in a negative way. They sometime have to provide loan under the
pressure, which leads to uneven and adjusted feeling in the bank employees.
 Lack of Financial Product:The bank falls far behind when the innovative and new schemes are
considered. It has not been involved in the tug of war between the competitors to the accounts and
strengthens the existing customer base. This stands out to be the major incompetence and weakness
of the banks.
 Inefficient Counter Services In The Rush Hours:During the rush hours, the bank is founded out to
be a total flop to handle the mob of people peaking from windows and doors. The bank has
deficiency to operate in the stages of rush hours where the people find them services entangled in a
situation of nowhere because they are not well served.
 Lack of Computerized Network:The bank lacks the strength of being powered by the network of
computers, which have saved time, energy and would have lessened the mental stress, the employees
have currently. This would add to the strength if it were powered by network of computers.
 Lack of Modern Equipment:The bank lacks the modern Equipment that is note counting machine
computers. Even if there is any equipment they lack to fall in the criteria of being rearmed as update
and upgraded
 Uneven Work Distribution: The workload in NBP is not evenly distributed and the workload tends
to be more on some employees while others abscond away from their responsibilities, which serves
as a demotivation factor for employees performing above average work.

8.3 Opportunities:

 Electronic Banking: The world today has become a global village because of advancement in the
technologies, especially in communication sector. More emphasis is now given to avail the modern
technologies to better the performances. NBP can utilize the electronic banking opportunity to ensure
on line banking 24 hours a day. This would give a competitive edge over others.
 Micro Financing:Because of the need for micro financing in the market, there are lot of
opportunities in this regard. Other banks have already initiated, now the time has arrived when the
NBP must realize it and take on step to cater an ongoing demand.

8.4 Threats:

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 Emergence of New Competitors:The bank is facing threats with the emergence of new competitors
especially in terms of foreign banks. These foreign banks are equipped with heavy financial power
with excellent and innovative ways of promoting and performing their services. The bank has to
take initiative in this regard or will find itself far back in competition.
 Political Pressure by Elected Government:The ongoing shift in power in political arena in the
country effects the performance of the bank has to forward loans to politically powerful persons
which create a sense of insecurity and demoralization in the customer as well as employees.
 Downsizing:The bank is currently acting upon the policy of downsizing which threaten the
environment of the bank Employees feel insecurity in doing their jobs and work, hence affecting the
overall performance of employees negatively.
 Customers Complaints:There exists no regular and specific system of the removal of customer
complaints. Now a day a need for total customer satisfaction is emerging and in their demanding
consequences customer's complaints are ignored.
 Establishment of new private financial institutions & expansion
 Govt. sponsored schemes
 New products form private Pakistani & foreign banks
 High Interest Rates:N.B.P receive high interest rate when other banks offer lower interest rates.
Interest rates offered by N.B.P like interest on loan, extra higher service charges

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CHAPTER 9:

CORPORATE SOCIAL RESPONSIBILITY OF NBP

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 CHP 9: CORPORATE SOCIAL RESPONSIBILITY OF NBP
Corporate Social Responsibility (CSR) is an integral part of NBP's corporate policy. As a leading financial
institution in the country, NBP has taken various initiatives that demonstrate its resolve towards the
community at large. The Bank is running a full-fledged CSR Programme to bring positive changes in society
by improving the life quality of the underprivileged masses in the Country. In addition to its demarcated and
pre-defined areas of Education, Health, Special Persons, Women & Children, the Bank is always there for
the relief of affected people in case of any natural disaster or calamity that the country faces.

We believe that looking after underprivileged communities is synonymous to serving the nation. NBP has a
well-funded Corporate Social Responsibility Programme focusing on Education, Healthcare, Infrastructure
Development, Water Resource Development and enhancing Livelihood Generation skills. During the year,
NBP spent around Rs. 58 million on CSR activities.

To ensure progress, quality of work and transparency in utilization of funds under CSR schemes, NBP
regularly monitors project activities. The Bank has initiated a wide range of projects, including provision of
free primary healthcare, hospitals, mobile dispensaries, scholarships for local students, infrastructure
development and upgradation of academic institutions.

9.1: Education:At NBP, we believe that education plays a vital role in economic development and poverty
alleviation in society. With this perspective in mind, the Bank is performing its social duty of uplifting
educational standards in the country by financially supporting various educational institutions on a yearly
basis. NBP also extends support through educational programmes and other skills to financially constrained
students. Key scholarship and adoption carried out by NBP includes:
Scholarships:

 NBP adopted TCF School for a lifetime in Nawab shah.

 Scholarships to numerous students through Professional Education Foundation Karachi.
 Scholarships for Sargodha Spirit Trust.
 Scholarships for IBA Sukkur. _ NBP paid annual educational expenses of students of WISE College
Lahore.
 Scholarships for Students of Namal College, Mianwali.
 Scholarship for Sindh Madrassatul Islam University, Karachi.
 Supported High School Tehsil Pazza, Baluchistan.
 NBP adopted a class of 25 underprivileged students of Centre for Development of Social Services
(CDSS).
 Supported 88 orphan students at Roshni Homes Trust, Lahore.

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Upgradation, Equipment and Educational events:

 Supported Development & Research at Habib University, Karachi.

 Sponsored 1st National Conference on Business Dynamics, Allama Iqbal Open University,
Islamabad.
 Constructed waiting area in Women University, Swabi.
 Motivational Volunteer Empowerment Programme, Lahore by Family Educational Services
Foundation.
 Supported Celebration of 7th National Book Day.
 Workshop for the young minds at LUMS, Lahore.
 Sponsored Workshop, “Hope Model United Nations” in Bahria University, Karachi.
 Carried out Teacher Support Programme at Minerva Education System, Karachi.
 Supplied Garbage Loader to clean the locality for school-going children to IMKAAN Welfare
Organization, Machar Colony, Karachi.

9.2: Health Care:Realizing the importance of providing better health services, NBP, in collaboration with
various NGOs and institutions, organize various medical, eye and fistula camps in remote areas all over
Pakistan. NBP also upgrades and assists in upgrading the infrastructure by providing financial and in-kind
support to many hospitals and organizations. Some of these initiatives include:
Medical Group and Facilities:

 3-day Medical Camp in Pishin, Baluchistan.

 Adopted a Female Patient Ward in Marie Adelaide Leprosy Centre, Karachi.
 Supported Al-Madad Welfare Society (for purchase of medicines) at Saman Goth, Karachi.
 Support to SIUT for Karachi and Sukkur hospitals.
 Dialysis of underprivileged kidney patients, Pak Kidney Institute, Islamabad.
 Healthcare Equipment to Ghulab Devi Chest Hospital, Lahore.
 Medical Equipment to Al Mustafa Trust Medical Centre, Lahore.
 Financial support to Fatimid Foundation Kidney Centre, Quetta.
 Financial support to “Struggle Against Disability International Association, Murree”.
 Infrastructure support to The Aga Khan University Hospital, Karachi.

Upgradation, equipment, Healthcare and Educational Events:

 Installation of water purification plant at Koshki Village, Ziarat.

 Medical Camp at Firdous Colony, Karachi.
 Supplied food to 100 deserving patients for 11 months at Koohi Goth Hospital, Suburb Karachi.

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  Provided bed sheets, pillow covers and curtains to NICVD, Karachi.
 Supplied wheelchairs & stretchers to Abbas Institute of Medical Sciences, Azad Kashmir.
 Donated Ambulance to Aman Foundation and Lifesaving Kits for emergency patients.
 Donated an Ambulance to Red Crescent Society Islamabad and Non-Food Item Survival Kits for
any disaster and calamity.
 Sponsored treatment for Tuberculosis for 6 months, District Tuberculosis Association, Peshawar.
 Sponsored 8 Medical Camps at various locations in KPK.
 Sponsored Medical Camp in Mitthi&Nagarparkar in collaboration with Al Madad Welfare Society.
 Sponsored Patient Safety & Wellbeing Program, Basic Needs Pakistan.

9.3: People with Special Needs:For many years, the organizations that represent people with disabilities
have regarded Corporate Social Responsibility and Sustainability as suitable and appropriate arenas to
spread awareness about disability. NBP provided independent opportunities, confidence and fitness to the
handicapped, which encourages them to take part and become active members of society. Some of the
initiatives include:
Infrastructure and Equipment:

 Donated 20 Motorcycle Rickshaws to Pakistan Hindu Council in Interior Sindh.

 Scholarship for Deaf Students studying in Deaf Reach School by FESF, Karachi.
 Supplied hearing aids for Deaf Children at multiple locations.
 5Children adopted at Ida Rieu Welfare Association for the Blind, Karachi.
 Financial support and equipment were given to Pakistan Association of the Blind, Karachi.
 Financial support to Department of Special Education, Government College of Home Economics,
Lahore.
 Sponsored Aaghosh Special Talent Awards for special kids.

Wheelchair, tricycle and White cane:

 Pakistan Disabled Foundation, Karachi.

 Tricycle to Karachi Independent Living Centre.
 MACH Development Foundation, Ghotki.
 Tricycles and wheelchairs to Gulistan-e-Mazooreen, Mirpurkhas.
 Financial and equipment support to Disabled Welfare Association, Karachi.
 Financial Assistance for Association for the Rehabilitation of Physically Disabled.
 Donated 500 white canes to Pakistan Association of the Blind.

Sports activity of special person:

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  Organized NBP Wheelchair Users Cricket Tournament, Islamabad.
 Organized NBP T-20 Blind Cricket Tournament at Bahawalpur and Quetta.
 Organized Punjab Disabled People Power Lifting Championship, Lahore.
 Sponsored Cricket Tournament, organized by Pakistan Disabled Cricket Association.

9.4: Women and Child Welfare:We believe women empowerment in developing countries is essential
for poverty reduction and literacy enhancement. In Pakistan, where women lack opportunities for growth
and development, it is essential that special facilitation is made available for women to grow and prosper.
Economic Inclusion of women can play an important role in the social and economic well-being of the
society. Many women and infants in remote, small towns and villages face difficult economic conditions.
NBP has actively supported such needs and provided opportunities to women for their social uplifting and
respectable living. NBP has taken various initiatives like organizing vocational trainings, women sports
events and supplying equipment etc.

Women Vocational Programme:Vocational Training Sessions were organized in Abbottabad, Bhukkar,

Sheikhupura, Gilgit Baltistan, Multan, Quetta and Skardu, where each Training Session was for two weeks,
enrolling 25 women participants. Participants were provided training on stitching, sewing, embroidery, etc.
Upon completion of training, all the participants were given embroidery and sewing machines for a regular
income stream.

Events Sponsored Include:

 Supporting 20 orphanage students at Minerva Education System, Karachi.

 Supported Meena Bazar by Behbud Association of Pakistan, Islamabad.
 Sponsored British Women Association Charity Bazaar, Karachi.
 Organised Women & Child Medical Camp in Lemo Goth, Karachi.
 Sponsored quilts for destitute families in Rasham Village, Chitral (KPK)
 Sponsored Fundraising Event in Rawalpindi by Behbud Association of Pakistan.
 Donated CTG Machine to Lady Aitchison Hospital, Lahore.
 Sponsored Pakistani women in 29th Asian Dodge Ball Women Championship held in Mala

9.5: Cultural Promotion:NBP is also playing a vital role in establishing and promoting the national and
regional cultural norms and activities. In this area, we supported and sponsored various events like:

 Sponsored Conference on “Safety of Journalists and Combating Impunity”, Karachi.

 Sponsored KONPAL Child Abuse Prevention Society Charity Drama, Karachi.
 Renovation of National Police Bureau Library, Islamabad.

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  Financially supported construction of Hall/Theatre at Jamshaid Memorial Hall, Karachi.
 Sponsored Theatrical Play by Make Believe Production, Karachi.
 Sponsored International Anticorruption Day Seminar & Awareness Walk by NAB, Sukkur.
 Supported Human Rights Society of Pakistan (HRSP) “Lifetime Award”.
 Supported Louis Braille Talent Award Organisation by “Special Children Monthly”.
 Organised Quaid-e-Azam Gold Cup Cycle Race, Karachi.
 Organised 3rd NBP Traffic Rules Awareness Walk in collaboration with Sindh Traffic Police.
 Supported Seminar & Lectures on Anti-Smoking and Addiction.
 Financially supported in upgrading the outlook of Heritage Building NAPA.
 Sponsored Safari Desert Jeep Rally at Skardu by Govt. of Gilgit Baltistan.

9.6: Sports:NBP has always supported sport activities at all levels in Pakistan. Not only does it sponsor
sports events & players, it has been helping clubs and teams to improve their infrastructure. Some of NBP’s
achievements in sports are as follows
Hockey:

 Junior Hockey Team – Winner of National Hockey Championship 2017

 Senior Hockey Team – Winner of National Hockey Championship 2017
 Senior Hockey Team – Got 3rd Place at 9-A Side Hockey Tournament 2017.

Football:Won NBP Inter-Departmental Football Championship.

Chess:Mehak Gul, Chess player (Qualified for World Chess Olympiad 2017)

Snooker:Won NBP Ranking Snooker Championship - 2017. Besides that, our players secured 1st or 2nd
position in many other National & International Ranking tournaments in the year 2017.

Badminton:

 Won Ladies Singles & Doubles Event “PNSC Pakistan National Ranking Tournament in Lahore”,
2017.
 Won Men Singles, Ladies Doubles Event and Runners up in Ladies singles and Mixed Doubles in
“Pakistan National Badminton Championship in Lahore”, 2017-2018.
 Won Men’s Singles & Doubles Event in “International Badminton Tournament”, Islamabad.
 NBP’s Men Team event Runner-up 54th Future National Badminton Championship-2017.
 NBP Women Team Event Runner-up 54th Future National Badminton Championship-2017.
 Won 2nd Shuhada-e-Army Ranking Tournament-2017.

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NBP will continue its CSR activities with further zeal and fervor and by spreading across a wider range of
areas within Education, Health, Special Persons, Women & Child Wellbeing, Sports and Culture. NBP is
passionate about conducting these activities across Pakistan and will continue to play its due role in
improving the lives of the people of Pakistan. We are grateful to each and every person who has supported
our mission and values.

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CHAPTER 10:

CONCLUSION AND RECOMMENDATIONS

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 CHP 10: CONCLUSION AND RECOMMENDATIONS
Conclusion:
 The National Bank of Pakistan plays a key role in the strategic national development. The bank has
historically been the financial arm of the government and has enjoyed the blessings of state support in the
form of huge public sector funds and deposits.
 In contrast to other banks populating the FSI sector, NBP is mandated to uphold public interest. It is critical
too as all other banks and NBFIs in public sector have been closed down or merged with NBP.
 In contrast to other banks populating the FSI sector, NBP is mandated to uphold public interest. It is critical
too as all other banks and NBFIs in public sector have been closed down or merged with NBP.
 The current management of National Bank of Pakistan was hired purely for their international experience,
business orientation to turn around a purely public institution into a sustainable and commercially viable bank
serving public interest along the lines of a large modern commercial bank.
 The National Bank of Pakistan has effective budgeting system in place. Annual budget of the bank is
approved by the Board and monthly comparisons of actual results with the budget are prepared and reviewed
by the senior management.
 The National Bank of Pakistan has a comprehensive framework of written policies and procedures on all
major areas of operations such as Credit, Treasury Operations, Finance, Internal audit and Compliance
approved by the Board.
 The National Bank of Pakistan provides sustainable financing for growth of industries of critical national
importance such as energy, education, healthcare, transport, shipping, Research & development.

Recommendations:
To overcome weaknesses and to maintain its position as “Asian Tiger” following recommendations are
made:

 Staff strength should be enhanced and professional qualified persons should be recruited
 It is recommended that proper training be provided to the staff members that will ultimately increase
the performance of bank overall
 It is suggested that promotions be given to the staff in due time and on the basis of performance to
provide job satisfaction
 NBP can enhance the volume of advanced especially retail loans
 The bank should spend more on renovation of the branches to improve environment and atmosphere
to attract the customers
 E-commerce (online savings, investment banking, branchless, mobile banking)
 The bank should introduce the computers software to cope the heavy load of work and better control
 Online system of bank should be faster

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 Extra counters should be established in order to facilitate during the busy days the difficulties faced
by the bank staff as well as customers
 All the departments should be established separately in every branch
 The bank should increase profit rate on deposits and saving schemes especially for pensioners and
old age citizens
 ATM machine problems should be solved
 The bank should use broad casting media for promotion of its products and services and to further
expand its area through more aggressive marketing. Customer services must be better to improve the
efficiency of branch which results in quality work and causes the customer attraction that will create
ultradurable activities.

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