Bilal NBP Report

Certificate of Approval
It is to certify that I have read the National Bank of Pakistan (NBP) Internship report
by M. Bilal Akhtar, Roll No BBA.F13.09 and that in my opinion this work meets the
criteria for approving the internship report submitted in a partial fulfillment of the
requirement for BBA at Department of Business Administration, University of the
Punjab, Jhelum Campus.
Internship coordinator
Lecturer,
Department of Business Administration
University of the Punjab
Jhelum campus, Jhelum
Dr. Mohammad Mudasar Ghafoor

Administrator
University of the Punjab
Jhelum campus, Jhelum
i
Internship Report on NBP, Muhammadi Bazar Branch Jhelum Cantt
ii
LETTER OF TRANSMITTAL
24/04/2017
Mr. Amaad Nadeem
Lecturer, Business Administration
University of the Punjab, Jhelum Campus
Subject: Submission of internship Report
Respected Sir,
This letter is regarding the submission of my internship report, which is a mandatory

for my degree, entitled NATIONAL BANK OF PAKISTAN . I was in NBP bank
Muhammadi Bazar Branch Jhelum Cantt branch four weeks. The staff of NBP bank has
been very cooperative with me in providing information regarding the procedures and
processes in practice. Due to certain constraints and legal formalities, I have not been
able to gather all the facts and figures about the organization. Yet the report is a
comprehensive one, containing a lot of information of the NBP bank Muhammadi
Bazar Jhelum branch. The practical work during the internship period has been a
reworking and enlightening experience. I work in general banking (clearing,
remittances and account opening department).
Yours sincerely,
M. Bilal Akhtar
BBA (Hons), Session 2013-2017
ID: BBA-F13-09
iii
DEDICATION
I dedicate this internship report to my parents and teachers who are the source of
motivation and inspiration throughout my studies. It is also dedicated to my mother
who taught me that even the largest task can be accomplished if it is done one step at a
time.
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Acknowledgement
In the name of Allah the most merciful and beneficent. I thank Allah Almighty for His
blessings and kindness that I am able to accomplish the internship report effectively
and enthusiastically.
I am very thankful to staff members of National Bank of Pakistan, Muhammadi Bazar

Branch Jhelum Cantt, for guidance and providing me valuable information regarding
my report completion.
For the completion of my report I am indebted to plenty of people for their very sincere
cooperation that they extended to me at various stages. First and foremost problem that
every student faces is the completion of a report is gathering of data while it is very
difficult to learn & rotate in different department of the bank especially in National
Bank of Pakistan where work burden is quite higher compare with other banks. On the
other hand there is too much short time of our internship, furthermore staffs of the bank
are too busy in their work so that we cannot be able to learn and do according to our
report requirement.
Muhammad Bilal Akhtar
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Executive summery
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 bank in South Asian
region as well as the bank of the year 2008. This report explains how different functions
of NBP work and what are their services.
The main purpose of the internship is to gather relevant information to compile

internship report on National Bank of Pakistan Main Branch Islamabad.
Another purpose of this Internship program is to enable the students to use the
management techniques acquired during their courses, and find out the possible
solution of management problems faced by the organization
The report is based on my six week internship program in National Bank of Pakistan.
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 2015 also helped
me in this regard.
vi
Contents
Part 1 .......................................................................................................................................... 1
Introduction and background of NBP ........................................................................................ 2
Vision.......................................................................................................................................... 3
Mission ....................................................................................................................................... 3
Objectives .................................................................................................................................. 3
Core values................................................................................................................................. 3
Goals .......................................................................................................................................... 4
Strategic Management .............................................................................................................. 4
Divisional Level Strategy ........................................................................................................ 4
PART 2 ........................................................................................................................................ 5
Organizational structure ............................................................................................................ 6
Administrative/Management Styles .......................................................................................... 7
Administrative hierarchy ....................................................................................................... 7
Management and Organization of Bank .................................................................................... 8
Board of Directors .................................................................................................................. 8
Executive Board ..................................................................................................................... 8
Chief Executive ....................................................................................................................... 8
Regional chiefs ....................................................................................................................... 8
Zonal Chiefs ............................................................................................................................ 9
Branch managers ................................................................................................................... 9
Branch Hierarchy ................................................................................................................... 9
Departmentalization .............................................................................................................. 9
Organizational structure ........................................................................................................ 9
Centralized decision making ................................................................................................ 10
Downward Communication ................................................................................................. 10
Chain of Command .............................................................................................................. 11
Authority and Responsibility ................................................................................................ 11
Delegation of power: ........................................................................................................... 11
SWOT Analysis ......................................................................................................................... 11
STRENGTH ............................................................................................................................ 12
WEAKNESSES........................................................................................................................ 14
OPPORTUNITIES ................................................................................................................... 15
THREATS ............................................................................................................................... 16
vii
Boston Consultant Group Matrix (BCG) Model ....................................................................... 17
PART 3 ...................................................................................................................................... 18
Functions Performed By National Bank of Pakistan ................................................................ 19
Accepting of deposits........................................................................................................... 19
Advancing of loans ............................................................................................................... 19
Payment of cheques ............................................................................................................ 19
Payment of pensions............................................................................................................ 19
Salary management of different governmental institutions ............................................... 19
Issuing of travelers cheques................................................................................................ 19
Collection and sale of prize bonds ....................................................................................... 19
Collection of fees and money from people proceeding on Hajj pilgrimage ........................ 20
Transfer of funds from one place to another ...................................................................... 20
Collection of challans ........................................................................................................... 20
Issue Guarantee and Indemnity ........................................................................................... 20
Collection of Negotiable Instruments .................................................................................. 20
Act As Income Tax Advisor ................................................................................................... 20
Act as an agent or representative of his customer .............................................................. 20
Products and Services .............................................................................................................. 20
Bottlenecks in organization ..................................................................................................... 21
Difference between theory and practice ............................................................................. 21
Bank duty to maintain secrecy............................................................................................. 21
Excessive paper work ........................................................................................................... 21
More accounts fewer deposits ............................................................................................ 21
Delegation of authority ........................................................................................................ 22
PART 4 ...................................................................................................................................... 23
NBP Marketing Mix .................................................................................................................. 24
Product Lines........................................................................................................................ 24
Current Deposits .............................................................................................................. 25
PLS Saving Deposits.......................................................................................................... 26
Fixed Deposit Account (Time Deposits) ........................................................................... 27
Foreign Currency Account................................................................................................ 27
NBP Premium Aamdani.................................................................................................... 28
National Income Daily Account (NIDA) ............................................................................ 28
Advances .......................................................................................................................... 29
viii
NBP Saibaan ..................................................................................................................... 29
NBP Advance Salary ......................................................................................................... 30
NBP Cash & Gold .............................................................................................................. 31
Students Loan Scheme ..................................................................................................... 31
NBP Karobar- Presidents Rozgar Scheme ....................................................................... 31
NBP Karobar Utility Store................................................................................................. 32
NBP KAROBAR Utility Store (Shop) .................................................................................. 32
NBP Karobar Mobile General Store (without USC Franchise).......................................... 33
NBP Karobar Transport .................................................................................................... 33
NBP Karobar Tele-center ................................................................................................. 33
Corporate Advances............................................................................................................. 33
Cash Finance .................................................................................................................... 33
Running Finance/ Overdraft ............................................................................................ 34
Demand Finance .............................................................................................................. 34
Remittances ......................................................................................................................... 35
Demand Drafts ................................................................................................................. 35
Travelers Cheques ............................................................................................................ 35
Letter Of Credit ................................................................................................................ 36
Foreign Remittances ........................................................................................................ 36
Swift System ..................................................................................................................... 37
Mail Transfer .................................................................................................................... 37
Telegraphic Transfer ........................................................................................................ 38
Pay Order ......................................................................................................................... 38
Miscellaneous ...................................................................................................................... 38
Lockers ............................................................................................................................. 38
NBP Cash Card.................................................................................................................. 39
International Banking........................................................................................................... 39
Price ..................................................................................................................................... 39
Bank charges .................................................................................................................... 40
Place ..................................................................................................................................... 43
Promotion ............................................................................................................................ 43
3c Analysis Of National Bank Pakistan ..................................................................................... 44
Corporate ......................................................................................................................... 44
Customer.......................................................................................................................... 44
ix
Competitor ....................................................................................................................... 44
Porters five forces model .................................................................................................... 44
Rivalry among competitive firms: .................................................................................... 44
Potential entry of new competitors:................................................................................ 45
Bargaining Power of Suppliers: ........................................................................................ 45
Bargaining Power of Consumers: ..................................................................................... 45
Human Resource Management ............................................................................................... 46
Human resource policies ..................................................................................................... 46
Entry level requirements ................................................................................................. 46
Change Management Program: ....................................................................................... 46
Training of new staff: ....................................................................................................... 46
MTO Program....................................................................................................................... 47
Eligibility Criteria .............................................................................................................. 48
Operation officer batch: .................................................................................................. 48
Training programs: ........................................................................................................... 48
Career ladder ....................................................................................................................... 49
Performance appraisal ..................................................................................................... 50
Time period: ..................................................................................................................... 50
Performance appraisal methods:..................................................................................... 50
Finance and Accounting System .............................................................................................. 50
Functions of the Finance Department ................................................................................. 50
Accounting system of the organization ............................................................................... 50
Finance system of the organization ..................................................................................... 50
Use of electronic data in decision-making ........................................................................... 51
Mobilization of funds. .......................................................................................................... 51
Generation of funds ............................................................................................................. 51
Sources of funds................................................................................................................... 51
Allocation of funds ............................................................................................................... 51
Critical Analysis of Financial Statement ............................................................................... 51
Ratio Analysis: ...................................................................................................................... 51
Current Ratio:................................................................................................................... 52
Debt Ratio: ....................................................................................................................... 53
Equity Ratio: ..................................................................................................................... 55
Debt to equity: ................................................................................................................. 57
x
Net profit margin: ............................................................................................................ 58
Return on Assets: ............................................................................................................. 59
Operating income: ........................................................................................................... 59
Returns on assets: ............................................................................................................ 61
Vertical & Horizontal Analysis .............................................................................................. 62
Vertical Analysis: .............................................................................................................. 62
Horizontal Analysis........................................................................................................... 63
Part 5 ........................................................................................................................................ 64
Conclusion and problems: ....................................................................................................... 65
Recommendations and suggestions ........................................................................................ 66
PART 6 ...................................................................................................................................... 74
Work done by me .................................................................................................................... 75
First week ............................................................................................................................. 75
Second Week ....................................................................................................................... 75
Third Week ........................................................................................................................... 75
Fourth Week ........................................................................................................................ 76
Fifth Week ............................................................................................................................ 76
Sixth Week: .......................................................................................................................... 77
Bibliography: ............................................................................................................................ 78
xi
Part 1
1
Introduction and background of NBP
The NBP was established vide NBP Ordinance No. XIX of November 9. 1949. British
Govt. devalued its currency in September 1949, India devalued its rupees but Pakistan
did not. It led to a crisis in trading between the two countries and India refused to lift
the Pakistan Jute. To solve this problem i.e. to export jute NBP was established through
an Ordinance of GOP. National Bank of Pakistan maintains its position as Pakistan's
premier bank determined to set higher standards of achievements. It is the major
business partner for the Government of Pakistan with special emphasis on fostering
Pakistan's economic growth through aggressive and balanced lending policies,
technologically oriented products and services offered through its large network of
branches locally, internationally and representative offices.
National Bank of Pakistan is the largest commercial bank operating in Pakistan. Its
balance sheet size surpasses that of any of the other banks functioning locally. It has
redefined its role and has moved from a public sector organization into a modern
commercial bank. The Bank's services are available to individuals, corporate entities
and government. While it continues to act as trustee of public funds and as the agent to
the State Bank of Pakistan (in places where SBP does not have a presence) it has
diversified its business portfolio and is today a major lead player in the debt equity
market, corporate investment banking, retail and consumer banking, agricultural
financing, treasury services and is showing growing interest in promoting and
developing the country's small and medium enterprises and at the same time fulfilling
its social responsibilities, as a corporate citizen.
National Bank of Pakistan has built an extensive branch network with 1250 branches
in Pakistan and operates in major business center abroad. The Bank has representative
offices in Beijing, Tashkent, Chicago and Toronto. It has agency arrangements with
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).
2
The Bank's financial performance has been remarkable. In 2006, total assets are
estimated at Rs635 billion, while deposits have grown to nearly Rs502 billion. Pre-tax
profit rose to Rs26 billion. Earnings per share have jumped to Rs24.01 in 2006. The
increase in profit was achieved through strong growth in core banking income. Interest
income increased by Rs10 billion through growth in the loan portfolio as well as
increase in spreads. Advances increased by Rs48 billion to Rs316 billion. The Bank
maintains a sound loan portfolio diversified in nature to counter the risk of credit
concentration. It ranges from providing credit to the un-banked market segment under
NBP Karobar, to small and medium enterprises, to agricultural loans, to large corporate
customers.
Vision
To be a leading bank for partnering in financial growth through innovation and
service.
Mission
To be a catalyst for economic growth, serving the nation through diversified product
offering, innovation, superior service quality, universal banking capabilities, multiple
delivery channels, investment in people and processes and work towards sustainable
higher returns for stakeholders.
Objectives
To earn the profit
To develop the economy
To provide the latest banking facilities to its customers
To improve customer service
To offer specialized services to major corporate
To reduce the size of non-performing loans (NPLS)
Core values
Highest standards of Integrity
Institutionalizing team work and performance culture
Excellence in service
3
Advancement of skills for tomorrows challenges
Awareness of social and community responsibility
Value creation for all stakeholders
Goals
To enhance profitability and maximization of NBP share through increasing
leverage of existing customer base and diversified range of products.
Strategic Management
Divisional Level Strategy
Following are the main divisional level strategy fallowed by JS
To establish sound relationships with top industrial groups and various
multinationals
To make the bank customer focused
To increase the no of online branches
To increase the ATM network to further improve the bank market shares.
To implement the performance appraisal process to provide motivation and
merit oriented culture in the bank.
To improve extensive tanning to the employees in the process, products,
marketing and selling skills.
Upgrading skills level of employees.
4
PART 2
5
Organizational structure
6
Administrative/Management Styles
Administrative hierarchy
Top to bottom
Chairman
Board of Directors
Executive Committee
Regional Headquarter
Zonal Chiefs
Branch Managers
Finance Deptt.
Officer
Cash Deptt.
Officer
Admn. Deptt.
Officer
Banking Deptt.
Officer
7
Management and Organization of Bank
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.
Board of Directors
In the management of the bank the board of directors is at the top of the controlling
bodies. Since there are no private shareholders, so there is no general meeting of
shareholders and no directors are elected. The board consists of a nominated president,
a secretary and 6 other members.
After nationalization in 1974 most of the powers have been transferred to the executive
board.
Executive Board
It is also called the management committee. The general direction and supervision of
the affairs of the bank lies in their respective executive boards. The president, secretary
and 6 other members of the board are appointed by the federal govt.
The president being the chief executive controls the affairs of the bank.
Chief Executive
The president is the administrative head of the bank. He manages and controls the
affairs of the bank. The president holds the office at the pleasure of the federal
government.
Regional chiefs
In order to improve the performance of the banking system, the bank has appointed
regional chiefs also. The regional chief has the powers of sanctioning finance and other
credit facilities.
There are 7 regional headquarters of the regional chiefs of the N.B.P., 1 is in the
N.W.F.P., 1 is in Balochistan, 3 are in Punjab, and 2 are situated in Sindh.
8
Zonal Chiefs
Each region is divided into number of zones. they hold the post of VP or AVP and
administer these zones.
N.B.P. has 37 zonal offices in Pakistan.
Branch managers
Each zone is then sub divided into a no. of branches. The control and supervision of
each branch is mostly entrusted to AVP or officer of grade II.
Branch Hierarchy
Branch Manager
2 Second Officers
2 Assistants
2 Cashiers
2 Messengers
3-Armed Guards
Departmentalization
Dividing an organization into different parts according to the functions is called
departmentalization. So NBP can be divided into the following main departments.
Cash department
Clearing department
Advances department
Remittance department
Human resource management
Foreign exchange department
Computer department
Organizational structure
A well-developed and properly coordinate structure is an important requirement for the

success of any organization. It provides the basic framework within which functions
and procedures are performed. Any organization needs a structure, which provides a
framework for successful operations. The operation of an organization involves a
number of activities, which are related to decision making, and communication of these
9
decisions. These activities must be well coordinated so that the goals of the organization
are achieved successfully.
The organization chart & Organogram of National Bank of Pakistan Muhammadi Bazar
Branch is shown on Annexed IV & Annexed V at the end of this report. This chart
defines the line of authority in the branch and its departments. It is a sort of visual
presentation of the organizational structure. It specifies the duties and responsibilities
of the personnel or staff of the branch. The purpose of an organizational structure is to
help in creating an environment for human performance. Although the structure must
define the task to be done, the rules so established must also be designed in the light of
abilities and motivation of the human recourse available. By analyzing the organization
structure of the branch following elements can be found in the structure.
Centralized decision making

The Branch Manager of National Bank of Pakistan is responsible for all the affairs of
the Bank. All the decisions relating to Branch are made by him and the subordinates
have to obey these decisions. All the employees of the Bank are report directly to the
Branch Manager. The branch has two operation Managers. Operation Manager I
controls Clearing house & Remittance Department and Operation Manager II controls
Deposits, Advance & Branch
Downward Communication
Communication is the process by which information is exchanged and understood by
two or more people, usually with the interest to motivate or influence the behavior of
others in the organization. Downward communication is the message and information
sent from top management to subordinates in a downward direction. Managers can
communicate downward to the employees through speeches, massages in NBP
publications, information leaflets, tucked into pay envelops material on bulletin boards,
policy and procedure mandates. The same pattern is followed at NBP. No doubt its a
very traditional approach but it can create problems because it ignores the receiver of
the communication because the issuer of policies and procedures does not ensure
communication. In reality may the messages communicated downward are not
understood perfectly.
10
Chain of Command
The chain of command is an unbroken line of authority that links all persons in an
organization and shows who reports to whom. By analyzing the organizational
structure, it can be found that there is a scalar principle followed with in the Bank
because each and every person knows to whom one can report.
The authority and responsibility for different tasks and duties are different, as well as
everyone knows the successive levels of management all the way to the top.
Authority and Responsibility

The chain of command illustrates the authority structure of NBP. Authority is the
formal and legitimate right of the manger to make decisions, issues orders and allocates
resources to achieve organizational desired outcomes. By analyzing the chain of
command of NBP, one can come to the conclusion that, as there is scalar pattern
followed at the organizational setup of NBP therefore it is implied that everyone in his
position knows that what is ones authority and what is the responsibility and the
authority it allocated.
Delegation of power:
Delegation is the process, which managers use to transfer the authority and
responsibility to position below in the hierarchy. Most organizations today encourage
managers to delegate authority to the lowest possible level to provide maximum
flexibility to meet customer needs and adapts to the environment. But at NBP no such
system prevails the managers try to keep as much of the authority as they can and if
some authority is delegated it is sure that it will be misused
SWOT Analysis
This section of report constitutes the SWOT Analysis of NBP.
SWOT analysis is one of the most important steps in formulating strategy using the
organization mission as a context; managers assess internal strengths distinctive
competencies and weakness and external opportunities and threats.
The goal is to then develop good strategies and exploit opportunities and strengths
neutralize threats and avoid weaknesses with an overall organizational goal is to
increase the wealth and value of the organization.
11
STRENGTH
Oldest Institution
NBP is one of the oldest bank 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 Deposit than the 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 Benefit
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 overall output
of the organization.
12
Professionals Competence
The employees at NBP here have a good hold on their descriptions, as they are highly
skilled Professionals with background 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.
Relationship between Staff and Employee
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.
NBP Advance Salary
The product of the year 2008,2009. the product was developed by NBP Credit Group,
their basic target is salaried Govt Employees. This has increased NBPs Credit portfolio
with a major boost. With minimum default ratio, its been the success story of NBP. Still
its a good product than their competitors personal loans. The interest rate charged to
this loan is SBP Discount Rate + 5%.
No penalty on late payment or Early Settlement of Loans
NBP is one of those banks, who do not impose any penalty to their customers regarding
late payment of instalments or mark-up and early settlement of loans or balloon
payments in case of credits.
In case a customer wants to make balloon, payments will not be charged to any penalty
in any advances case of NBP. Its a strength of NBP against its competitors.
Agent of state bank of Pakistan
National Bank of Pakistan also works as an agent of State bank of Pakistan in those cities where
SBP branches are not working.
13
WEAKNESSES
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 must provide loan under the
pressure, which leads to uneven and adjusted feeling in the bank employees.
Favoritism and nepotism
The promotions and bonuses etc. in the bank are often powered by seniors favouritism
or depend upon their wills and decision. This adds to the negative factors, which
denominate the employees thus resulting in affecting their performance negatively.
Lack of financial product
The bank falls far behind when the innovative and new schemes are considering. 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 Computerize Network:
The bank lack 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.
14
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 NEVEN.
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 demonization factor for employees performing above average work.
OLD employee awareness
Computer awareness to old Staff of NBP is a weakness. They should develop employee
development & training program to effectively update their employees regarding
computer applications & upcoming core banking software of bank.
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.
CAR Financing
This is the major area where NBP has not competed with private banks. As per repute
of NBP they must enter in personal & car financing products.
15
Core Banking System
Implementation of the CORE BANKING SYSTEM is still an opportunity, as till now

none of the banks operating in Pakistan is using this most updated & famous banking
application. It will lead NBP to smooth sailing environment as a leading bank in
technology as well as competing between other banks. This will upgrade NBP from
paper & ledger era to the smooth & sophisticated computer application.
THREATS
Emergence of New Competitor
The bank is facing threats with the emergence of new competitor 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
must 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 must 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.
16
Boston Consultant Group Matrix (BCG) Model
MARKET SHARE
HIGH LOW
STAR QUESTION MARK
Loan on Gold Islamic banking

Home financing ATM
Online Fund transfer
HIGH
GROWTH RATE
CASH COW DOG
Deposit Rupee traveler cheques

Investment
LOW
Credit cards
Star
In the star, we have Loan on Gold, Home finance, Online banking which show the high
growth rate and high market share
Cash Cow
In cash cow, we have deposits investment credit cards which shows the low growth rate
and high market share.
Question Mark
In question mark we have Islamic banking ATM Debit cards which shows the high growth
rate and low market share
Dog
In dog, we have rupee traveller cheque which shows the low market share and low growth
rate.
17
PART 3
18
Functions Performed By National Bank of Pakistan
To fulfill the basic objectives of socio-economic nature the bank perform following
important functions:
Accepting of deposits
This function is performed by the bank by opening of the different type of accounts,
which are as follows:
Saving Account, Current Account, Fixed Deposits, N.I.D.A. account.
Advancing of loans
Different types of loans are granted to different type of people and industries these
include:
Running Finance
Over Draft
Demand Finance Gold
Payment of cheques
Cheques drawn against various deposits are honored and paid in cash.
Payment of pensions
This function is performed by N.B.P. as a govt. treasurer all the pensions of federal
govt. provincial Govt: and semi Govt: employees is paid by NBP
Salary management of different governmental institutions

The salary of govt. and semi govt. employees is first credited to the account of NBP
and is then credited to their personel accounts
Issuing of travelers cheques

The travelers cheques are issued by NBP for secure transfer of money from one place
to another, without charging any commission.
Collection and sale of prize bonds

The national prize bonds are purchased and sold at the branches of the NBP according
to the rules formulated by the SBP.
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Collection of fees and money from people proceeding on Hajj
pilgrimage
National Bank collects the fee from the people proceeding for hajj and act as there
agent.
Transfer of funds from one place to another

Money is transferred from one place to another by different means like
Bank Draft Mail Transfer Telegraphic or Telephonic Transfer Travelers Cheques
Collection of challans
Various Govt. revenues are collected by NBP in the form of chalans
Issue Guarantee and Indemnity

Collection of Negotiable Instruments
Act As Income Tax Advisor
Act as an agent or representative of his customer
Products and Services

Services are outputs of the firm/organization, which are in intangible form & which are
the backbones of any organization to earn profit. NBP offers the following services to
the people.
Traditional bank accounts

Demand drafts
Short / long term investments
Agriculture finance
Corporate finance
Cash management service
Cash and gold finance
Advance salary load
Student loan scheme
Pension payments
Telegraphic transfer
Swift system
Letters of credit
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Traveler's cheques
Pay order
Mail transfers
Foreign remittances
Business loans
Agency services
Utility bill collections
Hajj arrangements
Safe deposit lockers
Bottlenecks in organization
Difference between theory and practice
A vast difference exists between theory and practice and NBP has written procedure
but practical work done by employees is a bit different from written procedures.
Bank duty to maintain secrecy.

They dont care about maintaining secrecy, especially during the rush hours. They
speak loudly about the account position and while getting clearance of cheque the
person can easily get the whole information from the ledge. The deposit clerk must be
careful while passing any cheque. In this regard another shortfall is in giving the
information about the balance on telephone.
Excessive paper work

It is notified that due to the lengthy procedure of paper work the bank employee are
over burdened. They are unable to give proper attention to the clients and face
difficulties in getting their job done. One reason for lengthy procedure and excessive
paper work in the bank is the lack of computerized technology.
More accounts fewer deposits

Efficient banking is one, which does not emphasize on number of accounts but on
greater amount of deposits. NBP is more interested in increasing its number of account
irrespective to its deposit. The main reason behind it is that bank does not provide
personalize service to all the account holders and does not improve its quality and
services
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Delegation of authority
Manager has very limited authority; he has to take the approval from his management
authority i-e. In case of advance he has to take the approval of general and regional
manager. The other problem is created, when the manager is not present in his office,
the customer having to wait for hours. This discourages both customer and officers
because they have to suffer a lot
22
PART 4
23
NBP Marketing Mix
Now, we discuss the marketing mix of National Bank of Pakistan. Marketing mix is the
set of controllable, tactical marketing tools product, price, place and promotions that
work together to achieve company's objectives.
Product is one of the important P of the marketing mix. It is defined as:

Anything that can be offered to a market for attention acquisition, use or consumption
that might satisfy a want or need.
OR
A tangible object or an intangible service that is mass produced or manufactured on a
large scale with a specific volume of units. Intangible products are often service based.
Due to trend setting, NBP presents a range of quality products with revolutionary perks
and convenience. NBP provides a wide range of quality products/services to its
customers, which can be compared with any foreign bank in terms of quality and
reliability.
Product Lines
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. The followings are the main consumer banking
products of NBP.
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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.
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 the extent 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. 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
individuals (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 to 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 minimum balance as prescribed by the bank. No
balance maintenance condition is applied on basic banking account.
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PLS Saving Deposits
In Pakistan a Savings Deposits Account can be opened with a very small amount of
money, and the depositor is issued a cheque book for withdrawals. Profit is paid at a
flexible rate calculated on six monthly basis under the Interest Free Banking System.
There is no restriction on the withdrawals from the deposit accounts but the amount of
money withdraw is deleted from the amount to be taken for calculation of products for
assessment of profit to be paid to the account holder. It discourages unnecessary
withdrawals from the deposits. In order to popularize the scheme the SBP has allowed
the Savings Scheme for school and college students and industrial labour 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
charge Rs.500 for opening of PLS Savings deposits.
The silent features of profit and loss sharing and saving accounts of NBP are as fallows
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, NGOs 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 profits will be calculated on the basis of monthly minimum balance
for the periods of six months i.e. from January to June and July to December
The head office of NBP determines the profit or loss on PLS saving deposits
and advice its branches the rate and time of distribution of these profits.
There shall be no restrictions on maintaining the maximum balance in PLS
saving account.
On the first day of Ramzan each year the Zakat at the rate of 2.5% will be
deducted from these deposits on the balance of that day. But if depositors affix
an affidavit of Zakat deduction along with account opening form or he is a non-
Muslim, no Zakat will be deducted from his account.
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Fixed Deposit Account (Time Deposits)
The deposits 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 from three 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 lending out or investing these funds, the
bank earns more than the Profit/Return that it has to pay on them to the depositors. By
giving an advance notice to the bank the deposit can be withdraw from the bank before
the expiry of the period. Fixed deposit accounts have higher rate of interest as compare
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 any other person. The silent features of fixed deposit account of NBP are as fallows
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
maximum limit or deposits in a single term deposit account.
PLS term depositors may be allowed some facilities against the security of these
receipt credits, after making Lien on the relevant receipt and subject to
recovery of service charges.
Under term deposit scheme the depositors not cease to earn the profit
immediately, after the respective maturity date.
Foreign Currency Account

Government of Pakistan has introduced many important reforms in Foreign Exchange
Control in the country since February, 1990, for the purpose of strengthening the
Foreign Exchange Reserves. One of these reforms relates to foreign currency accounts,
which can be opened in United States Dollars, Pound Sterling, Euro and Japanese Yen
in any of the authorized branches of commercial banks throughout the country. Foreign
currency accounts are opened, on proper introduction and submission of required
documents along with an initial deposit prescribed from time to time. Rates of return
on foreign currency deposits are subject to fluctuation as determined in accordance with
State Bank of Pakistan directives and will be paid on six monthly basis whereas the
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Period Profit Rates
1st year 7.50%

2nd years 8.50%
3rd years 9.50%
4th years 10.50%
5th years 11%
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 to taxes imposed or depreciation in the value of funds credited to the
account whether due to devaluation or fluctuation in the exchange rate or otherwise.
NBP Premium Aamdani

NBP Premium aamdani is a retail product of the bank. The amount of investment
required for this account is Rs. 20,000/-to Rs. 5,000,000.The investment period is 5
years. Zakat and withholding tax will be deducted as per rules. In NBP premium
aamdani, the account holders have benefit of free demand draft, pay order; free cheque
book and NBP cash card (ATM+Debit). The Financing facility is available up to 90%
of the deposit value. Profit paid every period as follows:
NBP Premium Saver
NBP Premium saver is a retail product of the bank. The minimum saving balance of Rs.
20,001 and a maximum balance of Rs. 300,000 are required for opening a premium
saver account. Two debit withdrawals allowed in a month and no limit on number of
deposit transactions. The profit is calculated monthly and Paid on half yearly basis. Free
NBP Cash Card (ATM + Debit) facility is available to account holder.
National Income Daily Account (NIDA)

The scheme of National income daily account was launched in December 1995 to
attract corporate customers. It is a current account scheme and is part of the profit and
loss system of accounts in operation throughout the country. Deposits in the NIDA
accepted on the condition that the depositor shall always maintain a minimum balance
as prescribed by the bank in his account. In the event however, that any depositor wishes
to withdraw the amount and the balance in his account is less than the required amount,
the account will be converted to the ordinary PLS SB account for the purpose of
28
calculating profit. An example of how the NIDA accounts are maintained is shown on
the next page.
Rates on National income daily account
From Rs 2/- million to Rs 50/- the rate is 1.4%.

From Rs50/- million but less than Rs 500/-million, the rate is 1.5%.
From Rs 500/- million but below Rs 1000/- the rate is 1.6%.
From Rs 1000/- and above the rate is 1.75%.
Salient Features
Rs 2-million is required to open an account and there is no maximum limit.

Profit is paid on half yearly basis on monthly balances.
The rates of profit vary according to the slabs of deposit. On Deposits of Rs.2
million to 2,000 million, the rate fluctuates from 1.4 to 1.75
It is a checking account and there is no limit of withdrawals.
Advances
National Bank of Pakistan plays a pivotal role in translating the government's
development plans in terms of growth in industrial, commercial and agricultural sectors
in Pakistan. Accordingly the Bank has formulated its Credit Policy under the guidelines
of SBP-the Central Bank of Pakistan.
NBP Saibaan
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 anyone has a Home Finance Facility outstanding with another bank he
can have it transferred to NBP through a hassle-free process. A brief description of
these products is as fallows
TYPE OF Financing Financing Debt to equity

ADVANCE Amount Period Ratio
Home Purchase (House or Rs. 35 Million 3 to 20 years 85:15 (maximum)
Apartment)
Home Rs. 35 Million 3 to 20 years 85:15 (maximum)
Construction
Home Rs. 15 Million 3 to 15 years 80:20 (maximum)
Renovation
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NBP Advance Salary
The NBP Advance salary has been the flag-ship product for NBP. NBP Advance Salary,
the leading personal loan product of the country, is maintaining its inimitability ever
since it was launched. 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 repayment installments. The product is offered countrywide. The terms and
conditions of NBP Advance salary is shown on next page:
Terms & Conditions

Eligibility Permanent Employees of Govt., Semi-Govt.,
Autonomous, Semi Autonomous, Local & other bodies
who are maintaining their Salary A/Cs at NBP.
Repayment Direct deduction from Salary A/C
Maximum Loan Rs. 490,000/-
Amount
Security Employer will provide undertaking that borrowers
Salary and end of service benefits will route through
his/her Salary A/C maintained at NBP during the tenure
of the loan and his/her end of service benefits are at least
equal to the amount of Advance Salary required.
Hypothecation of Consumer durables owned by the

borrower.
Three (3) Undated Cheques

Max. Repayment 5 years (60 months)
Period
Advance in terms of # Up to 20 net take home salaries
of net take home
salaries
Markup Rate 15 %
(Based on diminishing balance method)
Processing Fee 1% of Loan Amount
Verification Charges Rs 500/-
Life Insurance No Insurance of any kind.
Documentation at actual
Charges
Contact Your Salary disbursing NBP Branch.
Remaining Service At the time of approval and disbursement the applicants
Age remaining service age should be 6 months after maturity
of the loan
Debt Burden 50%
Minimum net take no minimum take home requirement
home salary
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NBP Cash & Gold
With NBPs Cash & Gold, the customers meet their need for ready cash against their
idle gold jewelry. The rate of markup is 13% p.a. This product has following features
Facility of Rs. 7,000 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 schroffs
No penalty for early repayment
Students Loan Scheme
Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002
budget speech, 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 and ABL). Under the Scheme, financial assistance is provided
by way of Interest Free Loans to the meritorious students who have financial constraints
for pursuing their studies in Scientific, Technical and Professional education within
Pakistan. The Scheme is being administered by a high powered committee comprising
Deputy Governor, State Bank of Pakistan, Presidents of the commercial banks and
representative of Ministry of Finance, Government of Pakistan.
NBP Karobar- Presidents Rozgar Scheme

The solution of Pakistans major socio-economic problems primarily lies in the
development and growth of small & micro businesses. These will not only provide
employment opportunities to ever-growing population demand but will also become
the catalyst for breaking the vicious circle of poverty. In this regard, NBP has developed
a full range of Products under the Presidents Rozgar Scheme with a brand name of
NBP KAROBAR. The scheme will be offered to eligible young and literate citizens
of Pakistan, falling within an age group of 18-40 years having a minimum qualification
of Matriculation (except for females in the PCO/Tele-center product). The eligible
borrowers will be required to make a down payment of 15%. Asset and Life &
31
Disability insurances will be mandatory under this scheme. The 15% down payment
will include 1st years asset insurance premium. However, the cost of life and disability
insurance will be borne by GOP. The mark-up rate for the 1st year will be 12% and for
the subsequent years it will be 1 year KIBOR + 2%. Fifty percent (50%) of this rate
will be paid by the customer i.e. 6% and the balance of 6% will be borne by GOP.
Additionally, first 10% of the losses under the scheme will be taken-up by GOP.
Initially, under the Presidents Rozgar scheme, NBP will offer following products:
NBP Karobar Utility Store (under a Franchise with Utility Stores Corporation)
NBP Karobar Mobile General Store (without USC Franchise)
NBP Karobar Transport
NBP Karobar PCO
NBP Karobar Tele-center
NBP Karobar Utility Store

The product has been designed in collaboration with UTILITY STORES
CORPORATION OF PAKISTAN (USC) to provide financing facility of an average
amount of Rs.100, 000/- for a maximum period of five years with grace period of three
months. This is available to all eligible citizens of Pakistan for setting-up small-scale
Retail Outlet or Mobile Utility Store. The USC will give its franchise to qualifying
Pakistani citizens. Following two financing options are available under this product:
NBP KAROBAR Utility Store (Shop)

The Financing facility is available to set-up a small scale Retail Outlet (Utility Store in
a shop) for purchase of furniture & fixtures. This is also applicable on payment of
security deposit / advance rent under franchise from the USC. However, stocks will be
purchased by the customer.
NBP KAROBAR Mobile Utility Store
Financing facility available to purchase a 2/3 wheeler, 4 stroke Petrol/CNG/LPG

Vehicle (Auto Scooter / Motorcycle Rickshaw) with attached Loader body (Thehla
type) under franchise from the USC to carry utility goods for retail sale ideally in areas
where accessibility to conventional utility stores is difficult.
32
NBP Karobar Mobile General Store (without USC Franchise)
This financing program has been designed on the similar pattern of Mobile Utility
Store. The only difference is that the borrower will have the liberty of procuring
stock/supplies/grocery items from open market. Under this product the average loan
size of Rs.100, 000/- will be given for a maximum period of five years with a grace
period of three months.
NBP Karobar Transport

The NBP Karobar Transport is designed to finance 2/3 wheeler, 4 stroke
Petrol/CNG/LPG Vehicle (Auto Scooter / Motorcycle Rickshaw) to the eligible citizens
of Pakistan for providing less expensive environment friendly transport facility. Under
this product average loan size of Rs.100, 000/- will be provided for a maximum period
of five years with a grace period of three months.
NBP Karobar Tele-center

This product is specially designed to finance setting-up a Tele-center. NBP will be
providing financing for the purchase of Mobile/Wireless Telephone Set with
connection, Computer, Printer and Fax machine cum Photocopier etc. to establish tele-
center on a rented shop or owned premises. The average amount of financing under this
product will be Rs.50, 000/- for a maximum period of two years with a grace period of
three months.
Corporate Advances
Cash Finance
This is a very common form of borrowing by commercial and industrial concerns and
is made available either against pledge or hypothecation of goods, produce or
merchandise. In cash finance, a borrower is allowed to borrow money from the banker
up to a certain limit, either at once 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 not utilize the full limit, the banker has
to lose return on the un-utilized amount. In order to offset this loss, the banker may
provide for a suitable clause in the cash finance agreement, according to which the
33
borrower has to pay markup/service charges on at least on self or one quarter of the
amount of cash finance limit allowed to him even when he does not utilize that amount.
Running Finance/ Overdraft

This is the most common form of bank lending. When a borrower requires temporary
accommodation 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 generally allowed against collateral securities. When it is against
collateral securities it is called Secured Overdraft and when the borrowing customer
cannot offer any collateral security except his personal security, the accommodation is
called a Clean Overdraft. The borrowing customer is in 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 lies in the fact
that cash finance is a bank finance used for long term by commercial and industrial
concern on regular basis, while an overdraft is a temporary accommodation
occasionally resorted to.
Demand Finance
When a customer borrows from a banker a fixed amount repayable either in periodic
installments or in lump sum at a fixed future time, it is called a loan. When bankers
allow loans to their customers against collateral securities they are called secured
loans and when no collateral security is taken they are called clean loans.
The amount of loan is placed at the borrowers 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 a fixed 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.
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Remittances
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 by or on behalf of the payee, the bank is discharged by payment
in due course.
Bankers drafts payable to order on demand are within the protection of Sections 10
and 131-A of 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 bankers 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 a bankers draft, the amount of which is to be
debited to his account, he should enclose with his written request a cheque covering the
amount of the required draft and other charges etc. payable to banker.
The National Bank of Pakistan provides demand drafts at very reasonable rates with
safety, speedy and reliable way to transfer money. Any person whether an account
holder of the bank or not, can purchase a Demand Draft form a bank.
Travelers Cheques
They are generally issued for the convenience of person travelling abroad, but some
Pakistani banks issue them in Pakistan currency also for use within the country as well.
Before issuing, the bankers receive an amount equal to the face value of the cheques,
and also charge a small commission. The travelers cheques are for fixed amount and
are treated as Order cheques payable only to the purchaser whose specimen signature
35
appears on each travelers cheque itself. Foreign currency travelers cheques are issued
and encashed in accordance with the provisions of the Exchange Control Regulation
Act, 1947. While making payment, the paying banker must insist that the holder signs
in his presence.
The National Bank of Pakistan provides their services for travelers cheque at very
reasonable and competitive rates. It has following features
Negotiability Pak Rupees Travelers Cheques are a negotiable

instrument
Validity There is no restriction on the period of validity
Availability At 700 branches of NBP all over the country
Encashment At all 400 branches of NBP
Limitation No limit on purchase

Safety NBP Travelers Cheques are the safest way to carry our money
Letter Of Credit
Letters of credit are very useful instruments in facilitating commercial relations
between businessmen at various places. Letter of credit state the limit of the credit and
the time during which it is held at the disposal of the grantee, but they are neither
negotiable nor transferable. Letter of credit may be revocable. There are many kinds of
letter of credit such as Revolving credit, Back to Back credit, Clause credit etc. NBP
is committed to offering its business customers the widest range of options in the area
of money transfer. If you are a commercial enterprise then our Letter of Credit service
is just what you are looking for. With competitive rates, security, and ease of
transaction, NBP Letters of Credit are the best way to do your business transactions.
Foreign Remittances
To facilitate its customers in the area of Home Remittances, National Bank of Pakistan
has taken a number of measures to:
Increase home remittances through the banking system.

Meet the SBP directives/instructions for timely and prompt delivery of
remittances to the beneficiaries.
The new features of NBP foreign remittances include:
36
The existing system of home remittances has been revised/significantly
improved and well-trained field functionaries are posted to provide efficient and
reliable home remittance services to nonresident Pakistanis at 15 overseas
branches of the Bank besides United National Bank (the joint venture between
NBP and UBL in UK)., and Bank Al-Jazira, Saudi Arabia.
Zero Tariffs: NBP is providing home remittance services without any charges.
Strict monitoring of the system is done to ensure the highest possible security.
Special courier services are hired for expeditious delivery of home remittances
to the beneficiaries.
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 of Pakistan 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.
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 charges 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 buyers account at the
selling office and crediting to the recipients 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 partys request.
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Telegraphic Transfer
Telegraphic Transfer is a form of remittance, which is advised by telegram, telex or fax
machines. The fundamental principles of such transfer are otherwise identical with the
Mail Transfer. 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 office upon identification or through credit into beneficiarys bank account.
As such remitting office is not required to issue any instrument payment to the remitter
for delivery to the beneficiary.
Pay Order
NBP provides another reason to transfer your money using our facilities. NBP pay
orders are a secure 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 the Pakistan. It charges Rs 50/- for NBP account holders on issuing
one payment order, and charges Rs 100/- for NBP non-account holders on issuing one
payment order. It charges Rs 25/- for students on payment of fees of educational
institutions. If some one want a duplicate of payment order they charges Rs 100/- for
NBP account holders and Rs 150/- for non account holders.
Miscellaneous
Lockers
National of Pakistan also provides lockers facility in the country. The lockers issued
only to the depositors. 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 to open 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 the
locker is closed.
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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 ATMs 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.
Secure and Safe transaction.
Account Information on tips (like: Mini Statement, Balance Inquiry, Utility Bill
Payment etc.)
Enable To Withdraw Cash From 1-Link ATMs / MNET ATMs.
Enable to Make Purchases from Around 4000 POS (Merchants) Countrywide
including 2500+ POS in Karachi.
No Card Issuance Fee for first 12 Months
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
support trade, treasury and other key business areas, thereby contributing to the
bank's profitability
Generation of incremental trade-finance business and revenues
Price
The amount of money charged for a product or service, or the sum of the values that
consumers exchange for the benefits of having or using the product or service
39
The second major and important marketing mix tool is PRICE. Prices are the easiest
marketing mix element to adjust; product features, channels and even promotion take
more time, price also communicates to meet the companys intended value positioning
at its product or brand. Although non-price factors have become more important in
recent decades. Price still remains one of the most important elements in delivery
marketing share and profitability.
Bank charges
Collections Charges
Clean Cheques/Drafts/FTCs Rs.100/- per Collection

(Flat)
Documentary (on which bank do not earn any Rs.200/- per Collection
exchange difference) (Flat)
Remittances
Outward Charges
Foreign Traveller Cheques 1% of the amount of

Traveller Cheques
sold Min. Rs.200/-
Remittance abroad through Foreign Currency Account Commission @ US$

1.00 per US$ 1,000/-
or part
40
Inward Collection received (relating to F.C Account) US$ 3.00 per US$
from abroad or local banks/branches and where the 1,000/- or part thereof
payment is demanded in Foreign Currency Minimum
US$ 3.00 Maximum

US$ 6.00
Inward cheques expressed in foreign Currency drawn Commission @ Paisas

on foreign currency A/cs received from 15 per Rs. 100/-
local/upcountry banks branches for payment in Pak Minimum Rs.200/-
Rupees after conversion at authorized dealers buying
T.T clean rates
Inward Charges
Home Remittance No Charges (Zero Tariff)
Others Nil, if proceeds are credited to

an account with the drawee
bank. In other case a flat
charges of Rs.10/-
Encashment (Purchase) of Traveller Cheques Rs.100/-(Flat)
Service Charges on payment of Inward Foreign

Drafts/Foreign Mail Transfers where payment
@ Paisas 15 per Rs.100 /-
is made to beneficiaries after payment cover is
Minimum Rs.200/-
received to our
Foreign Currency Account. These charges are

to be recovered only when T.T buying rate is
applied.
41
Commission/Handling Charges on Deposits of Nil, if no remittance effected
Currency notes for the credit of Foreign within 10 days of the date of
Currency Accounts. deposit, otherwise remittance
charges
Collection of Foreign Currency Accounts US$ 5.00 for collection upto

US$ 1,000/-, US$ 15.00 for
collection above US$ 1,000/-.
Miscellaneous
Documentary Bills 0.40% Minimum Rs.50/- plus postage

/courier charges.
Clean (including cheques/dividend 0.20% Minimum Rs.50/- plus

warrants/bank drafts etc) postage/courier charges as mentioned
above.
For NBP own cheques/DD/PO 0.15% Minimum Rs.50/- plus applicable
Postage/courier.
Purchase of bills, cheques etc.
Documentary Bills other than those 0.25% Minimum Rs.50/- plus applicable
drawn against Letters of Credit Postage/courier charges.
0.40% Minimum Rs.25/- plus applicable

Clean Bills (trade cheques, bank draft Postage/courier charges.
etc.)
42
Place
Place includes the various activities the company undertakes to make the product
accessible and available to the customer". NBP also have a banking network of more
than 1500 branches. If you want financial advice, walk into any of their branches. Head
office and Main office is on the in Karachi, which is the center of business activity.
Locations of NBP Bank depend on the locality around and how much business it
supports. The services provided to customers too depend on the location of the branch
and its total deposits.
NBP bank ltd. About the future development union bank is looking forward to open its
more branches in the various cities of Pakistan. This will create more flexibility and
also give the diversification to the bank.
Promotion
"Promotion includes all activities that an organization undertakes to communicate and
promote the products to customers. Promotion programs consist of advertising, sales
promotion and public relations." At NBP Bank it is appreciated if staff member
introduces new customers but usually it is based on personal relations. Advertising is
done in form of Neon signs and signboards. They publish their brochures and pamphlets
so that the information is communicated to a large number of people. They distribute
calendars, diaries and key chains to their officers and customers. No doubt NBP bank
is doing promotion activities very strongly. The marketing department knows the
competitive environment very well. And the department 67 is working very well in this
context. Promotion managers are using every media to advertise their products as others
banks are doing. It also conducted the daily HODs.
43
3c Analysis Of National Bank Pakistan
Corporate
Customer
Competitor
Corporate
NBP bank is a renowned name in the banking sector which is offering its services for
more than 60 years now. NBP bank is considered as one of the major Bank in Pakistan
with the wide network of more than 1500 branches in the whole country. It is offering
many products to its customers.
Customer
NBP bank has millions of customers in all over the country and they are loyal to it
because of its different and profitable products and services. It also has a network of
Islamic branches which targets that customers which have interest related issues.
Competitor
Banking sector of Pakistan is now very huge and there are many small and large banks
are there in the market NBP bank has major competitor HBL which is also a big name
in the banking sector. Besides of Major competitors NBP bank also has many other
competitors in the market which are UBL, Allied bank, Alfalah bank, and these banks
are offering many innovative products and services to capture the market.
Porters five forces model

This approach is widely used for competitive analysis. It is because of the high intensity
of competition among companies there five main competitive forces.
Rivalry among competitive firms:

It is a very powerful force among the competitive forces the strategies pursued by one
firm can be successful only to extent that they provide competitive advantages over the
competitor. These competitive strategies may be lowering prices, best quality series.
The NBP offering very low charges an demand draft, telegraphy transfer, mail transfer
and give other additional services to the customers and to the Nation. Because NBP is
a Nations Bank.
44
Potential entry of new competitors:
Whenever new firms ca easily enters a particular industry, the competition increases.
The gout restriction, tariffs, patents etc can stop new firm to enter into the business as
per Banking industry is concerned this market is already very situated in Pakistan and
there are banks with quality services and low charges. So there is no threat to NBP from
potential entry and NBP is also a public sector bank because of that no other new bank
not takes over it.
Potential Development of substitute products:
This is the third factor affecting the competitions. There may be some other product can
be substitute the product of that industry. For example banks offering sawing schemes
in Pakistan and these schemes are also offered by GPOs in Pakistan so they must
compete them in this field. If they offer low rates than GPOs so people will go to deposit
in GPOs. People concentration high rates so thats why sawing PLS accounts are more
than current accounts.
The next examples will ATM, which substitute presenting cheques at counter and
encash it. The NBP is lacking in this field. It must improve in this field to compete the
competitors.
Bargaining Power of Suppliers:

The bargaining power of supplier affects the intensity of competition, especially when
there are a large number of suppliers. In case of banks the suppliers are customers they
supply the money to banks. Now they must offer good services, quality, and safety.
Low charges etc to customers. In this field NBP is very good. B/C at offers good quality
services to customers. They charge low charges on remittances. So thats it is a
competition to other banks.
Bargaining Power of Consumers:

When customers are concentrated or large, or buy in volume, their bargaining power
represents a major force affecting intensity of competition. Now the number customers
in Pakistan for banks are very high. Banks offering variety of products and services to
their customers. NBP have a large number of customs. Now it must offer good services
and products to their customers to attract them to come to NBP.
45
Human Resource Management
Human resource policies
Development of the professional skills and knowledge of the employees is essential for
the efficient functioning of the organization. At Bank appropriate design policies and
practices have been instituted to achieve strategic objective. HR policies made by the
Executive-in-charge of human resource division. These policies are as follows:
HR Development
Type of Human Development
Type of loans provided to staff member
Setting the career path of the employees
Staff training programs
Promotion of the staff members according to the performance
Policies about the staff bonuses and staff benefits schemes
Human resource
For NBP the dedicated, hardworking staff is one of the key strengths of the bank. NBP
has been investing in developing this valuable resource through need based training and
career growth development. Our HR objective is to become an employer of choice and
to maintain complete industrial harmony within the institution.
Entry level requirements

NBP offers unlimited opportunities to its employees for continuous personal and
professional growth:
Change Management Program:

NBP has started an ambitious Change Management Program to further train its
employees to meet the challenges of present day requirements.
Training of new staff:

Training and development are the core issues of HR, which will ultimately improve our
customer service and help us, attain the standard of a progressive bank.
46
Benefits:
Besides a competitive financial package, we offer excellent working conditions, job

satisfaction, superior leadership, and a conducive environment for growth.
The jobs at National Bank of Pakistan are open to all graduates applicants from a wide
variety of degree subjects. However, for specialist roles numerate degree disciplines
may be preferred. These include:
Mathematics
Finance
Business Studies
Economics
Law
Accounting
Apart from an excellent academic record, candidates will need to show evidence of the
following:
Team players with excellent interpersonal skills

Knowledge and use of information technology
Strong analytical and problem solving skills
Excellent written and verbal communication skills in English
MTO Program
Our new hiring of top class MBAs as Management Trainee Officers (MTOs) and search
for talent within the bank has helped in preparing second and third tier leadership lines
which will shape our succession planning process and at the same time will ensure that
with the passage of time our employee refinement and skill enrichment program
continues. NBP also have started new Employee Communication Program' and
internal organizational magazine to improve the interaction of top and middle level
management with the lower management. Female employees are being encouraged
through female empowerment program under which they are given responsible and
challenging assignments. Currently over 60 females are employed as branch manager
all over country and some females hold senior management positions
47
National Bank management trainee program is a dynamic path to launch fast track
banking career. The program provides high quality training and development of the
bank across Pakistan.
Eligibility Criteria
MBA or Masters Degree with 3.0o/4.oo 0r 3.70/5.00 GPA or higher from an HEC
recognized institution or a 4-year foreign/local Bachelors Degree, excellent
communication skills and an age limit of 25 years.
Operation officer batch:

Joining the National Bank operation officer Batch is a sure way to get involved in
various day to day consumer-banking activities of the bank such .as: Account opening,
remittances, collection, clearing, government securities, lockers, etc. This position
includes an intense 4-week training program designed to teach officers how to manage
the above mention areas.
Eligibility Criteria: Graduate/Post Graduate Degree with 1st or 2nd Division from an
HEC recognized institution, excellent communication skills, and age limit of 24 years.
Training programs:
NBPs management believes in developing the potential of the banks employees to the
fullest extent. Training & development Centre of the Bank are housed in state of the art
facilities at Lahore, Karachi, and Islamabad. The centres are responsible for providing
multi-level high quality training programmes to all staff members in the following
areas:
Customer service skills

Consumer Banking Operations
Credit Marketing & Credit proposals
Administration/Documentation
Marketing and selling skills
Leadership and Management skills
It is obligatory for each staff member of the bank to attend at least two days of training
in a calendar year in order to cope up with new methods and procedures. Whenever the
48
Training Department is unable to provide focused training for certain group of staff,
reputable external training providers are invited to fill the gap.
Management trainees are able to progress rapidly to senior management positions, often
via a fast track route where they can expect a managerial appointment at the end of
the successful training. Some management trainees will choose to move to another
NBPs branch where they may manage a particular business area, such as personal
loans. Other may prefer corporate banking or a more specialized role, such as:
Human resources
Marketing
Credit and Risk analysis
Card services
Operational management
Investment analysis
Career ladder
Career Advancement is usually linked to high levels of performance, especially by
meeting sales/customer targets. It is also important to prove potential management
ability by, for example, providing evidence of having efficiently executed
responsibilities in specific areas of the bank. NBP is committed to the personal welfare
and professional development of all its employees. The management realizes that
proper career development is essential, not only for a more productive and satisfied
workforce but also for a excellent corporate culture.
Career planning is very important aspect for development of the employees. By career
planning employees career goals are set and to achieve them. The bank feels the
responsibility to develop the careers of their employees so that they would be able to
get themselves high and high in corporate hierarchy. Then the principle aim of career
development programs is to help employees, analyze their
abilities and interests to better match personal needs for growth and development with
the needs of the organization.
49
Performance appraisal
Performance appraisal is the process of reviewing the individual performance. First of
all bank set some standards for different level of employees and direct to their
employees to do work according to these standards and evaluation their performance.
Time period:
In NBP performance appraisals are usually prepared after every six months,
performances of every employee are to be reviewed and on the basis of these
performances compensations and benefits are determined.
Performance appraisal methods:

Performance appraisal methods which are being used in bank are :
Essay about employee performance description
Work standard
Finance and Accounting System

Functions of the Finance Department
Finance Department performs following functions.
Borrowing from State Bank of Pakistan.
Lending to Commercial Banks.
Lending to Investors.
Lending to General Public for multi-business
Accounting system of the organization

Accounting system of the bank especially where I done internship is very bad due to
non-availability of Information Technology trained staff which is most requirement of
the bank. Bank use manually accounting system during its operational activities.
Finance system of the organization

Financial system of the bank where I done my internship is mixed and complicated
because being government bank, bank deals with all kind of lending and investing
activities and also hold down the cash position of others financial institutions i.e. banks
like MCB, UBL, ABL etc.
50
Use of electronic data in decision-making
There is lack of use of electronic data in decision making being a operational branch of
the bank all the decisions make by higher offices i.e. Regional Office or Head Office
and this branch only act upon on the order received from high command.
Mobilization of funds.
The branch where I have got training, is mobilizing his fund through lending or
receiving only. Branch provides various kind of lending facilities all kind of as stated
above in product line.
Generation of funds
Fund generation of the branch is depositing, receiving interest on lending money to
various sectors, advances from other financial institutions.
Sources of funds
Fund generation of t0he branch is depositing, receiving interest on lending money to
various sectors, advances from other financial institutions.
Allocation of funds
Bank allocates funds according to the instructions of the high command.
Critical Analysis of Financial Statement

Financial statement analysis is a process of analyzing the relationship among the
financial statements and their items. It is a valuable tool used by the investors and
creditors, financial analyst and other in their decision-making processes related to
stocks, bonds and other financial institutions. The goal is to assess past performance
and current financial position and to make predictions about the future performance of
the company.
Ratio Analysis:
Ratio is the relationship between two items of same statement or relationship between
items of different statements. Ratio analysis tells us about the health of the business.
Financial ratios are usually expressed in percentage or in times. All the figures used in
analysis are in Rupees.
51
Current Ratio:
Current Assets
Description 2014 2015 2016
Cash and balance 98247 151191 160086
Balance with other banks 12544 20639 14396
Lending to financial institution 111794 7695 121709
Investments 561768 829191 896281
Advances 630230 580324 668884
Deferred tax assets 9884 9672 5172
Other assets 91839 80092 80830
Total Current assets 1516306 1678803 1947359
Current ratio shows firms ability to cover its short-term liabilities. It is the ratio of
current assets to current liabilities. Higher the ratio greater will be the ability of
organization to pay current liabilities.
Formula: Current Ratio= Current Assets / Current Liabilities
Current Liabilities:
Bills payable 11012 9172 10187
Borrowings 38206 22385 44864
Deposits and other accounts 1234405 1431535 1657132
Deferred tax liability 2 91 83
Other liabilities 89439 77036 83011
Total Current liabilities 1367066 1540219 1801278
52
Formula:
Current Ratio= Current Assets / Current Liabilities
2014 2015 2016
= 1516306 /1367066 = 1678803 / 1540219 = 1947359/ 1801278
= 1.10 = 1.08 = 1.08
Interpretation:
Current ratio measures the business ability to pay its short-term liabilities. Short term
creditors have interest in current ratio. Standard for current ratio is 2:1. NBPs Current
for 2016 is 1.08. It means current assets are slightly more than current liabilities. It is
not a good ratio. Last year current ratio was also 1.08. In 2014, it was 1.10. There is a
very slight change in the ratios. Reason is that if the assets increased in 2014 and 2015,
liabilities also increased. Due to this the ratio remains same in 2015 and 2016 but it is
more than the 2014.
Debt Ratio:
Debt ratio is the ratio of the total debt to total assets. It tells what the ratio of debt in
total assets is.
Formula:
Debt ratio= (Total debt / Total assets) *100
53
Total debt
Bills payable 11012 9172 10187
Borrowings 38206 22385 44864
Deposits and other accounts 1234405 1431535 1657132
Liabilities against assets subject to finance 2 91 83
Deferred tax liability - - -
Other liabilities 89439 77036 83011
Total Debt 1367066 1540219 1801278
Total Assets
Cash and balance 98247 151191 160086
Lending to financial 111794 7695 121709

institution
561768 829191 896281
Investments
630230 580324 668884
Advances
9884 9672 5172
Deferred tax
33354 33071 34058
Operating fixed assets
91839 80092 80830
Other assets
Total assets 1549660 1711894 1981471
54
Debt ratio:
Formula:
Debt ratio= (Total debt / Total assets) *100
2014 2015 2016
= (1367066 / = (1540219/ 1711894) = (1801278/ 1981471)

1549660) *100 *100 *100
=88% =89% =90%
Interpretation:
Debt ratio shows leverage in the company. High percentage means company has high
leverage. Low means low leverage. NBP has very high leverage. NBP has high debt
ratio that shows that high rate of funds is obtained from the creditors. It means it has
high risk of default. Investors do not like to invest in high risk companies. NBP should
try to lessen his amount of debt.
Equity Ratio:
Equity ratio is the ratio of the total equity to the total debt.
Formula: Equity ratio= (Total equity / total assets) *100
55
Total Equity
Share capital 21,275 21,275 21,275
Reserves 32996 45202 46031
Unappropriated profit 59752 52725 55795
Surplus on revaluation of 67853 51731 56299

assets
Total Equity 181,876 170,933 179400
Total Assets
Cash and balance 98247 151191 160086
Lending to financial 111794 7695 121709

institution
561768 829191 896281
Investments
630230 580324 668884
Advances
9884 9672 5172
Deferred tax
33354 33071 34058
Operating fixed assets
91839 80092 80830
Other assets
Total assets 1549660 1711894 1981471
56
Equity ratio:
2014 2015 2016
Total equity= Rs. 81876 Total equity= Rs. 170933 Total equity= Rs. 179400
Total assets= Rs. 549660 Total assets= Rs. 1711894 Total assets= Rs. 1981471
= (181876/ 1549660) = (170933/1711894) = (179400/1981471)

*100 *100 *100
=11.73% =9.98% =9.05%
Interpretation:
It means how much portion is financed by the equity. It is cushioning for investors
against their investment. They prefer high ratio. NBP has very low ratio. It will lessen
the interest of the investors. NBP should try to increase its equity. Equity position in
2015 is slightly better than the equity position in 2014. Low equity ratio indicates high
use of debt.
Debt to equity:
Ratio of borrowed capital to shareholders funds is called debt to equity ratio.
Formula: = Debt / equity
2014 2015 2016
Total equity= 181,876 Total equity= 170,933 Total equity= 179400
Total Debt= 1367066 Total debt= 1540219 Total debt= 1801278
= 1367066/ 181,876 = 1540219/ 170,933 = 11801278/ 179400
= 7.5 = 9.0 = 11
57
Interpretation:
This ratio measures ratio of debt to equity. It is also called external internal funds ratio.
It helps in assessing the soundness of long term policies of the company. Investors like
this ratio low. But NBP has very high ratio. Debts are 11 times more than equity. Now
NBP debt to equity is better because in 2014 it was 7.5 times more than equity.
Net profit margin:

Formula:
Net profit margin= (Net profit / Revenue) *100
2014 2015 2016
Net profit= 15028 Net profit= 19219 Net profit= 22752
Revenue/sales= 114174 Revenue/sales= 113662 Revenue/sales= 114403
= (15028/ 114174) = (19219/ 113662) = (22752/ 114403)

*100 *100 *100
= 13.16% = 16.9% = 19.8%
Interpretation:
This is the ratio of net profit after taxes to net sales. This is used to measure the overall
profitability of the company and is very useful to proprietors. The profit margin tells
you how much profit a company makes for every Rupee 1 it generates in revenue. The
ratio is very useful as if the net profit is not sufficient, the firm shall not be able to
achieve a satisfactory return on its investment. This ratio also indicates the firms
capacity to face adverse economic conditions such as price competition, low
demanding. Higher the ratio the better is the profitability. This ratio is very important.
NBP has 19.8%, 16.9% net profit margin ratio in 2015 and 2016 which is good. In 2014,
it decreased to 13.16%. Which is not good. Reason of decrease in ratio is increase in
the operating expenses.
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Return on Assets:
Formula: ROA = (Net profit / Total assets) *100
2014 2015 2016
Net profit= Rs. 15028 Net profit= Rs. 19219 Net profit= 22752
Total Assets= Rs. Total Assets= 1981471

1711894
Total Assets= 1549660 = (22752/1981471)
= (19219/ 1711894) *100 *100
= (15028/ 1549660)
*100 = 1.14%
= 0.96% = 1.12%
Interpretation:
ROA tells about the utilization of the assets. It tells about efficiency of the assets
whether assets are utilizing in efficient way or not. NBP has very low ROA in both
years. It means assets are not being utilized in the proper way. It needs to change
strategy so that ROA can be increased. Decrease in ratio is due to increase in assets but
the profit is decreasing due to increase in expenses.
Operating income:
Formula: = (Operating income / Sales) *100
2014 2015 2016
OP = 22001 OP = 33216 OP = Rs. 37141
Revenue/sales = 114174 Revenue/sales = 113662 Revenue/sales = 114403
= (22001/ 114174) *100 = (33216/ 113662) *100 = (37141/114403) *100
= 19.2% = 29.22% = 32.4%
59
Interpretation:
The ratio is the relationship of operating income of the company divided by total
revenue of the company. It is a ratio used to measure a company's pricing strategy and
operating efficiency. Operating margin is a measurement of what proportion of a
company's revenue is left over after paying for variable costs of production such as
wages, raw materials, etc. A healthy operating margin is required for a company to be
able to pay for its fixed costs, such as interest on debt. NBP has 7.14% OPM in 2013
which is not good, as compared to last two years because in 2011 and 2012 this ratio
was 27.3% and 23.8% respectively,
Return on Equity:
Formula: = (net profit / equity) *100
2014 2015 2016
Net profit = 15028 Net profit = 19219 Net profit = 22752
Equity = 181,876 Equity = 170,933 Equity = 179400
= (15028/ 181,876) *100 = (19219/ 170,933) *100 = (22752/ 179400) *100
= 8.26% = 11.2% = 12.6%
Interpretation:
This is the measurement of the return which shareholders are obtaining on their
investments. The ratio is the relationship of net income and total equity of the
shareholders. Every business has the basic principal to serve the investor at most the
higher the profit the higher the return and more will get by the shareholders of the
company. This is a primary tool to measure the soundness of the business. But NBPs
current position is very poor as compared to last two year because its decreasing yearly.
60
Returns on assets:
The ratio is the relationship of the net income, sales and total assets of the company and
measures the return on equity (ROE). DuPont Return on Assets is an approach that
determines the impact of asset turnover and profit margin on the profitability of the
company. Both the company's profitability (as measured in terms of profit margin) and
efficiency (as measured in terms of asset turnover) determine its ROA. Du Pont method
breaks out these two components from the return on assets ratio in order to determine
the impact of each on the profitability. This ratio helps in identifying the impact of
changes in the asset turnover and the profit margin.
Formula:
Returns on assets= (net income / revenues) *(revenues / assets) *100
2013 2012 2011
Net income= 15028 Net income= 19219 Net income= 22752
Revenues= 114174 Revenues= 113662 Revenues= 114403
Assets= 1549660 Assets= 1711894 Assets= 1981471
= (15028/ 114174) * = (19219/ 113662) * = (22752/ 114403) *
(114174/ 1549660) *100 (113662/ 1711894) *100 (114403/ 1981471) *100
= 0.40% = 1.28% = 1.53%
Interpretation:
The ratio is the relationship of the net income, sales and total assets of the company and
measures the return on equity (ROE). A for-profit business exists to create wealth for
its owner(s). ROE is, therefore, perhaps the most important of the key ratios; since it
indicates the rate at which owner wealth is increasing the ratio provides measures in
three of the key areas of analysis, in first portion the ratio calculate the income earned
by the company against sale and in second portion the calculation of sales to total assets
is measured.
61
Vertical & Horizontal Analysis
Vertical Analysis:
Total assets growth rate is 140% this is because of Cash and Balances with treasury
banks grow by 60% which caused by increase 21% in 2014 and 12% in 2015,
Advances-net grow by 40.5% in current year increase by 21% as compare to 8% in
2014. Operating fixed assets growth rate 80.5% but current year Operating fixed
decrease by 7% Other assets also show a greater increase from 14% to 44% in current
62
year and its growth rate approximately 29%,while lending to financial institution shows
declining trend since last few years over all declining 13% and Balance with other
banks declining at rate of 3%. Liabilities growing by 14% Other liabilities increase from
16% to 28% with growth rate 22%, Borrowing and Liabilities against subject to finance
lease show greater increase with growth rate of 133% and 64% respectively, and Bill
payable & deposit in other banks also increasing with growth rate of 6%-12%
respectively.
Horizontal Analysis
Cash & balance with treasury Banks is increase in current year from 12% to 13% of
total assets portion of balance with other banks shows decreasing trend in current year
4.7% of total assets as compare to 4.9% and 6.4% in 2014 and 2013 respectively,
lending to financial institution decreasing other assets portion is increasing in current
year which is 5.4% of total assets as compare to 4.06% and 4.3% in 2014 and 2013
respectively.
Total liabilities show increasing trend in current year which is 87.5% of total assets as
compare to 84.7% and 87.1% in 2013 and 2014, this increase is because to greater
increase in bill payable, borrowing and other portion of liabilities. Net assets portion is
decreasing this decrease because of increase in liabilities which means in NBPs debts
increase, equity portion also increasing as compare to previous year of equity portion
this increase because of increasing in reserves, the increase in equity show that the
NBPs dependence on equity financing increasing while the dependence on debt
financing decreasing.
63
Part 5
64
Conclusion and problems:
During my internship period at National Bank of Pakistan .I found out certain problems,
which are written below along with their solutions, which need proper attention of the
top management
These are given below:
Information technology.
Staff Shortage
Frequent Transfers
Promotion
Locker Services
Information technology:
This age is the age of information technology. Today the world has become a global
village and the fastest mediums of communication are adopted all over the world. And
it is a fact that more the latest technology and methods of work are adopted more will
be the productivity.
In the National Bank of Pakistan (Khana Dak Branch) there is only one computer
available for carrying on the business of the bank.
I suggest that the computer should be on every counter of the bank and they should be
interlinked together (Networking) so that various services provided by the bank can be
provided in a more efficient and fast way.
Staff shortage
I discussed with bank personnel and they gave their views about staff shortage. They
told me that staff is very short and all the staff is overloaded with work. Thats why the
staff posted in the branch has to face many problems to finish its daily work.
I suggest that number of staff in the branch should be increased so that they can meet
their customers requirements quickly and efficiently.
Transfers:
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I observed that staff members of the Bank are frequently transferred not only from one
branch to another but from one city to another and sometimes from one province to
another.
I suggest that no one is to be transferred to another city or province without the consent
and will of the employee and if transferred, the facilities like residence etc should be
provided to them.
Promotion
I observed those employees; particularly officers are not satisfied with promotion
policies. There is no clear-cut promotion policy of National Bank.
I suggest that there should be a clear-cut policy about the promotion of employees,
particularly for the officers and they must aware of it that is polices must be
communicated. When policies are communicated to the employees then they can
perform their task more efficiently and will utilize their full efforts.
Locker services:
The area of khana Dak branch is full of business activities. The businessmen also have
some important documents, papers and valuable things to deposit for safe custody. In
order to provide these facilities, locker services must be provided in this Branch.
Recommendations and suggestions

NBP is an effectively operating and profit making organization and carrying out its
activities under a specified system of procedure. The main regulatory body is State
Bank of Pakistan, which provides policy guidelines and ensures that the money market
operates on sound professional basis. While the head office specifies the whole
procedure of function and operations. This procedure has been modernized with the
passage of time with a view to streamline the approach and underlying procedure for
effective overhauling of its own capabilities so as to bring them at par with international
practices.
Here I am giving some suggestions, which in my view can add some input for efficiency
and better performance of NBP as an organization in general and as a main branch in
particular.
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The recommendations are as follows:
Professional training
NBP staff lacks professionalism. They lack the necessary training to do the job
efficiently and properly. Although staff colleges in all major cities but they are not
performing well. For this purpose these staff colleges should be reorganized and their
syllabus should be made in such a way to help the employee understand the ever-
changing global economic scenario.
Banking council of Pakistan should also initiate some programs to equip the staff with
much needed professional training.
Delegation of authority
Employees of the bank should be given a task and authority and they should be asked
for their responsibility. Gives proper attention to every work and concern bodies are
responsible to delegate the authority to whom they think that will perform batter.
Performance Appraisal
The manager should strictly monitor the performance of every staff member especially
operation manager of the branch. All of them should be awarded according to their
performance and result in the shape of bonuses to motivated and incite them to work
more efficiently.
To Over Come Problem of Space and Furniture
In the critical analysis this, problem is discussed. To overcome this problem it is

suggested that a special section should be made inside the branch. Which should only
handle the treasury function, salaries and pensions of federal personnel or the bank
should do these functions in the evening time. Also management should purchase more
furniture and arrange them in such a way which provides maximum space and
convenient especially in deposit department and there should also be convenient sitting
place for customers.
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Transfer
Transfer is not properly carried out. Some of the employees are continually serving at
the same post. They are simply rotated at the same branch. Therefore it is recommended
that evenly rotation of every employee should take place after every three years in
different braches of the bank.
Changes in Policies
There should not be any abrupt policies change by the upper management, as this
practice hurts the customer confidences in the bank. Government should make long-
term policies
Need Qualified Staff
Required, qualified staff should be provided to branch in order to improve the

functioning of the branch. Especially a telephone operator should be appointed.
Utility Bill Charges
Bank gets Rs. 2 to 3 to processes a utility bill, and it is very tire, tough and hard job
despite this working resulting in a loss to then Rs 3 to5 per transaction. These charges
should be increased to RS 10 per bill to enable the branch to cover their handling costs
and make some profit.
Link with the Head Quarter
100 major branches of NBP should established a direct link with the, head quarter in
Karachi, through Internet or Intranet. This will make the functions and decision making
of the management easier and convenient. But still NBP main Branch Mansehra did not
have online facilities.
Credit Card
National bank of Pakistan should start its operation in credit card. These cards are very
helpful for the ordinary customer in general and the business people in particular. To
make it mores secure and to eliminate the misuse of it, the management is required to
keep proper security against the card.
Installing Validator and ATM
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Validator machine is used to count the currency notes and its installation will help to
eliminate to counting errors and will save time. This will also help in saving time result
is work completed on time
This branch is situated in the City, which is supported to be the hub of business
activates. In this area an automated teller machine (ATM) is the need of the hour
businessmen can easily check their balance in the bank and also with draw their money
conveniently.
Interest on Overdraft:
Overdraft is a short-term credit facility provided by the bank to its trustworthy

customers free of interest. Only bank commission is charge small amount of mark-up
on the overdraft, which will help the bank to improve its revenue position.
Clean Loans
Clean loan or clean overdraft is the credit facility extended to the customers to the
customers without any security. These types of small term loans should not be extended
to anybody, because sometime these loans are provided to blue-eyed people of the
management and they become a part of bad debts.
Cash Financing
In this mode of financing the amount of credit not utilized by the borrower is remained
tax-free. It is recommended that a small amount of interest should be charge on this
amount as well because the bank gas kept-aside the amount for that borrower and can
not advance it anywhere.
Decreasing Administrative Expenses
Bank should their administrative expenses. This was Rs 8 billion in the year 2000. That
can be done by lying off the surplus pool of employee with golden handshakes scheme.
The branches that are not much used could also be closed. Employee can also be how
to control the bank expenses. That will give positive results in the future.
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Needs to be Flexible in credit Policy
As mentioned earlier, NBP is very conservative in advances and loans policy. It reduces
the investment opportunities. Also loans should be given to the small businessmen and
the agriculture sector at the low markup rate. It should adopt flexible credit policy while
giving credit to the agriculture sector.
Technological Advancement
I would like to suggest that at least all the main branches of NBP should be fully
computerized in order to expedite the dealing process among bankers and their
customers. Every department should be provided a computer with adequate training
(especially Advances, Deposits and Foreign Exchange departments) Daily records
should be entered directly into these computers, (instead entering the overall daily
transactions after the banking hours). It will not only reduce transaction time, will
increase accuracy but will also be efficient as well.
Staff Relationship
Good relationship among staff member leads to the peak performances in any
organization. I observed that the staff relationship was normal other wise but some time
I noticed that there existed a little conformity among the staff members. Another
syndrome from which the staff suffered was that all of them considered themselves
more important than others. Some of the officers used to say that if I am absent for a
day the bank would stop working. So this sort of attitude is not good because it mars
bank image and juniors willingness learn and work hard and in the end will hurt the
whole team.
Improper Distribution of Work
Proper distribution work leads to success in every organization. Proper distribution of

work prevents the employee from over and under work situation. So for a smooth
running of an organization proper distribution of work is the hint to be followed. During
my internship I observed that there was no proper distribution of work in the bank. I
saw that some of the employee worked like ants other sat idle starting here and there.
So this created a lot of over work situation for while relaxation for other.
Favoritism and nepotism
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In the during my internship in Main Branch Mansehra I saw that when some of the
employees are transfer to other places, due to their relation with influential people and
with top management they can cancel their transfer in few weeks, when they are
unsatisfied at that place. Not in one branch of NBP but as a whole. This process will
also be apply in recruitment and selection process. Deserving candidate will fails to
qualify.
So I suggest that in the organization there should be no favoritism, nepotism and politics
and their transfer and promotion should be made on merit and according to the rules
and regulations of the bank and provided favorable environment to the employee to
show their performances.
Skilled and Highly educated staff
National bank of Pakistan requires skilled and highly educated staff. Nowadays, there
is a large number of M.B.As who is unemployed. These young people have the
knowledge and skill to compete in this competitive and dynamic environment of
banking. National bank of Pakistan should recruit new young professional.
Inter Departmental Transfer
I watched during my internship that, there is number of employee who have worked on
one seat for many a year. It can have negative effects motivation of employee who is
hard working and intelligent. Take the example of advances section. In advance section
if the employee is transfer after sixth month or seven month, how can he be able to
show his performances and how can he be able to know the bank customer in a short
period of time.
Marketing Policy
The branch should adopt various marketing strategy and promotion strategy to promote
the bank and its product. But being a nations bank it did not makes so much marketing
policies.
The most important in my opinion is personal marketing; it is the most effective of all
when you think in term of branch level. But on the whole organization level, they should
arrange the seminar with in the bank and outside the bank. They should introduce
various prizing schemes just like Habit Bank. Mahana Scheme, Bank Al-Falah
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(monthly income earning scheme) and various others. They should do more advertising
through newspaper and media and through channel of personal contacts.
Complaints of Customer
There should be an information desk to provide the information and to receive the
complaints of the customer in the bank. There is no complaint box available in the
branch and not any person appointed to hear the complaints.
Every person cannot go to the manager for the complaint because most of the people
are hesitant. So I suggest management to install a compliant box in the branch, and
recruit a special person for that guidance of the customer when they are unable to
manage some difficulties in banking matters.
Analysis of the Business:
Proper analysis of the business reports should be conducted before extending any type
of loan. For this purpose professional training of the stuff member is required.
Organizational Commitment
It is suggested that employees working on daily wages basis should be given some
benefits, which the other employees are getting. Their salaries must increase according
to efficiency, performance and service.
Managerial Leadership
In the analysis, we have discussed the difficulties of the assistant in taking any
initiative; therefore it is recommended that the assistants should he given special
training to make them ready for the leadership.
Credit Monitoring
The credit department of the bank should carries out vigilant credit monitoring. They
should ensure the proper payment of installments and the mark-up by the borrower.
The staff members who have done all the paper work of the loan extension should
perform the monitoring, as he/she will be having more information about the borrower.
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Housing and House Hold Goods loans
Bank should initiate these loans because most of banks customers are middle class and
they cannot afford to buy house or household goods at once by their own. For this
purpose bank should set lowest markup to its to attract customers.
Avoiding Bad Debts
Special care should be taking while extending the loan. Loans should be awarded
against reasonable securities, where market value should be equal to the loan granted.
Policies should be crafted in a way to ensure that no loan is extended on political

pressure. SBP regulation for loan approval should be strictly followed. According to
which the current ration of borrowers business must be 1:1 and the debt to equity ratio
should be 60:40, means the liquidity position of business should be healthy.
Car Financing Scheme
Car financing scheme with the name of MY CAR FINANCING SCHEME should
be initiated This finance scheme will help the general public to buy the car of their
choice in easy quarterly installments The bank monitors will do strict monitoring and
the car will be hypothecated with the bank against the car loan.
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PART 6
74
Work done by me
First week
Duties
First week in the bank of Punjab which I started on 14th of July 2016 they assigned me
the work in the deposit department also known as Cash and Account department under
the supervision of Mr. Sajid Saeed. They both trained me very well. They taught me
how to tackle and survive in a formal working environment. I have learned from him
about the following:
Receipts and Payments.
How to receipt cash and how to enter it in computer?
How to sort the Vouchers
How to fill the voucher for issuing of the Cheque Book for the first time
How to fill the requisition slip for the second time issuance
Remittances
How to enter the record in file to issue cheque book
Second Week
Duties
In my second week of internship started from 21th July 2016. I also performed work in
the same deposit department. Voucher sorting, cheque book issuance, Company
internal transfer of information in their system. Learn how to deal with leaseing.
But rather than learning and observation I by myself performed all these duties
mentioned above and the remarks of both my assistants were that I performed well in
this period of 2 weeks.
Third Week
Duties:
In my third week in NBP started from 28th July 2016, they assigned me to work in
remittances department along with customer dealing under the supervision of Mr.
Aizaz Asif.
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How to deal with foreign remittances
Money transfer companies names and their codes.
Customer satisfaction
In my third week of training I was able to handle remittance department and know about
the documentation require for remittances
Fourth Week
Duties
In my fourth week of internship I also did the duties in the accounting opening
department, Form filling for individual and joint account, loan and interest. During
fourth week I also learn about clearing system and my tasks are as follows in clearing
section.
I assist in separating the fanfold and NIFT (National Institutional Facilitation
Technologies).
I stamped the cheques for outward intercity clearing.
I prepared some memos.
I recorded intercity clearing entries in required register.
I learned how to make bundle of outward clearing cheques.
I learned those cheques which have been returned due to some reason must be
checked again.
In this department, I again prepared debit and credit vouchers.
Fifth Week
Duties
In my fifth week of internship started, I assigned work in the marketing department
under the supervision of Mr. Aizaz Asif Ahmad. He taught me about how to deal with
the customer when they step in the bank to get information about the banks services. In
what ways you can build the strong positive image of the bank in the customers mind.
And inform me about the marketing strategies the bank is currently used for marketing
purposes.
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Sixth Week:
Duties:
In my 6th week of internship I assign the work in remittance and also problems related
to ID card under the supervision of Mr. Aizaz Asif. Here in this department I have
learned how to deal with remittance received from various sources like Express money,
NBP Easy Pay, Western Union.demand draft is for payment outside of city and pay
order for local payment. It is a secure source of payment. There are no charges for Pay
order while other banks charge for this service so it is an advantage going to NBP bank
to attract customers.
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Bibliography:
1. The first important thing is the discussions with the staff of the bank especially with
the manager of the branch.
2. The Bank Book of Instructions for the National Bank of Pakistan called the B.B.I.
3. Surfing the website of the National Bank of Pakistan (www.nbp.com.pk)
4. Reading the annual reports of the bank.
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Certificate of Approval

Dr. Mohammad Mudasar Ghafoor

Mr. Amaad Nadeem

Lecturer, Business Administration

University of the Punjab, Jhelum Campus

Subject: Submission of internship Report

This letter is regarding the submission of my internship report, which is a mandatory

BBA (Hons), Session 2013-2017

motivation and inspiration throughout my studies. It is also dedicated to my mother

I am very thankful to staff members of National Bank of Pakistan, Muhammadi Bazar

Muhammad Bilal Akhtar

National Bank of Pakistan is one of the leading banks in Pakistan. According to

The main purpose of the internship is to gather relevant information to compile

N.B.P. has 37 zonal offices in Pakistan.

A well-developed and properly coordinate structure is an important requirement for the

Centralized decision making

Authority and Responsibility

Alternate Duties in SBP Absence

More Deposit than the other bank

Strictly followed rules & regulation

Relationship between Staff and Employee

NBP Advance Salary

No penalty on late payment or Early Settlement of Loans

Agent of state bank of Pakistan

NBP under political pressure

Favoritism and nepotism

Lack of financial product

Inefficient counter services in the rush hours

Lack of Computerize Network:

Uneven work Distribution NEVEN.

OLD employee awareness

Implementation of the CORE BANKING SYSTEM is still an opportunity, as till now

Political Pressure by Elected Government

STAR QUESTION MARK

Loan on Gold Islamic banking

CASH COW DOG

Deposit Rupee traveler cheques

Saving Account, Current Account, Fixed Deposits, N.I.D.A. account.

Salary management of different governmental institutions

Issuing of travelers cheques

Collection and sale of prize bonds

Transfer of funds from one place to another

Bank Draft Mail Transfer Telegraphic or Telephonic Transfer Travelers Cheques

Issue Guarantee and Indemnity

Products and Services

Traditional bank accounts

Bank duty to maintain secrecy.

Excessive paper work

More accounts fewer deposits

Product is one of the important P of the marketing mix. It is defined as:

Foreign Currency Account

1st year 7.50%

NBP Premium Aamdani

NBP Premium Saver

National Income Daily Account (NIDA)

Rates on National income daily account

From Rs 2/- million to Rs 50/- the rate is 1.4%.

Rs 2-million is required to open an account and there is no maximum limit.

TYPE OF Financing Financing Debt to equity

Terms & Conditions

Hypothecation of Consumer durables owned by the

Three (3) Undated Cheques

Facility of Rs. 7,000 against each 10 grams of net contents of gold

Students Loan Scheme