CHAPTER NO 1

INTRODUCTION TO REPORT

1.1 OBJECTIVES OF STUDY

• To apply knowledge in practically.

• Banking is important industry in the world, so my objective to draw its sketch
with focus on NBP.
• To know the policies of the Organization.
• To study the organizational Management structure.
• To solve the organizational problems.
• To study the work environment of the organizations.
• To judge the behavior of different employees.
• To study the status of organization in the industry.
• To suggests and recommend feasible steps needed to improve its
organizational performance.

1.2 SCOPE OF THE STUDY

Banking has a wide scope but the study is restricted to an overview of basic
banking operations carried at NBP TIP branch Haripur. So the report does not include
detailed description of all of the NBP operations, and include only those one which
were carried at NBP TIP branch Haripur. However, the financial statements analysis
and SWOT analyses have been carried out for NBP as a whole.

1.3 LIMITATION OF THE STUDY

During the study I tried to include only relevant material and avoid from
irrelevant material. No matter how efficiently a study is conducted, it cannot be
perfect in all respects. This study was conducted in accordance with the objectives of
the study. The study may not include broad explanations of facts and figures due to
the nature of the study.
Secondly, the limitation which affects the study is the restriction on
mentioning every fact of the bank due to the problem of secrecy of the bank. Also the
availability of required data was a problem as all the documents and files are kept
strictly under lock and key due to their confidential nature. Thirdly, the problem of
short time period also makes the analysis restricted as one cannot properly understand
and thus analyze all the operations of a bank just in eight weeks.

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 1.4 MERITS OF THE STUDY

The study done will benefit the finance students in particular and banking
students in general because the financial analysis section of this report
comprehensively encompasses all respects of financial analysis. Furthermore, NBP
TIP branch Haripur may also be able to take the benefit from the recommendations
made at the end of the report.

1.5 METHODOLOGY OF THE STUDY

There are two types of data collected for analysis and review (i.e. primary and
secondary data). The methods used for collecting primary and secondary data are as
follows:

Primary Data: - The information collected for the specific purpose at hand or data
collected for first time is called Primary Data. Following methods of primary data is
used;

• Interviews with employees

• Interviews with customers
• Personal observation during work
Secondary Data: - Information that already exists somewhere or data collected
earlier by someone else and which has gone through mathematical and statistical
techniques after its collection, is called secondary data. Methods used to collect
secondary data include:

• NBP Annual Report 2006

• NBP Broachers
• Newspapers
• Books
• Internet.

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 Chapter No 2

INTRODUCTION TO BANK

2.1) WHAT IS BANK?

Before going to start we must know that what is bank? Like many other
subjects and social sciences no any precise definition can be given for the study of
banking also. Different authors have defined and described this subject, keeping in
view the particular functions of banking.
Mr. Paget says “No one and no body corporate can be a banker who does not open:

a) Current Account
b) Pays cheques drawn upon him
c) Collects cheques for the customers

Mr. Kinly says “Bank is an institution which receives deposits and advances
loans”.
The definition laid down in the Banking Companies Act 1962 is “Bankers means a
person, transacting the business of accepting for the purpose of lending or investment,
of deposits of money from public, repayable on demand or otherwise and withdraw
able by cheques, drafts or orders or otherwise and includes any Post Office Saving
Bank.”
In view of the above definitions, in simple words a bank can be defined as an
institution dealing in money, accepting deposits and advancing loans.

2.2) ORIGIN?

There are different opinions about the origin of the word “Bank”. According
to some authors the word bank is derived from Latin word “Bancus” or “Banque”
which means a bench. The explanation of this origin is attributed to the fact that the
Jews in Lombardy transected the business of money exchange on benches in the
market place. When the business failed, the people destroy the bench. Incidentally the
word bankrupt is said to have been evolved from this practice.
The opponents of this opinion argue that if it was so, then how is it that the
Italian moneychangers were never called Bunchier in the middle ages. Other
authorities hold the opinion that Bank is derived from German word back which mean
joint stock fund. Later on, when the German occupied major part of Italy, the Back
was italicized into Bank.

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2.3) EARLY GROWTH AND DEVELOPMENT OF MODERN
BANKING:

Despite the classical origin, banking in its modern form and structure started
in Brittan when many of the Lombardy merchants came to England in the fourteen
century and settled in the part of the London now called Lombard Street. They were
so resourceful that even the kings had to depend on them for loans despite the fact that
the church was firmly against usury. They dealt with not only keeping the money in
safe custody but also changed money for the travelers or merchants engaged in
foreign trade.
By the year 1700, the Bank of England was not only issuing Notes but also
conducting accounts for customers. Being a joint stock bank by charter, its directors
were conducting the business like that of limited companies. The Bank of England
was the only joint stock company which was given the monopoly of issuing the Bank
Notes. In 1708 the privilege to issue Notes in England was withdrawn from joint
stock banks and confined to the private banks with not more then 6 partners. Up to
1813 or there about in England, the main profit of banks was derived from the
circulation of notes and for many years after that, deposits were treated as very minor
matters.
In subcontinent Indo Pak, foundations of modern banking were laid in
eighteenth century in Calcutta when with the help of Europeans bankers’ first bank
“Bank of India” was established. After that, Government of India founded “Bank of
Bengal” also new opening at Madras and Bombay. Imperial Bank of India” was
founded in 1921, whereas “Reserve Bank of India” was established in 1935 with all
the powers as the central bank.

2.4) DEVELOPMENT OF BANKING IN PAKISTAN: -

Like many other institutions, at the time of freedom of Pakistan in 1947, it

inherited a poor and weak system of banking. It was due to the fact, that most of the
important sectors of the economy including Banking were controlled by Hindus
nation. At the time of partitions, these non-Muslim bankers transferred the bank
resource to India. Bank staff, mainly consists of non-Muslim also migrated to India.
At the time of independence, there were only tow Pakistani bank, that is, Habib Bank
Limited and Australasia Bank. At this stage, Pakistan had 631 branches of scheduled
bank and 411 offices of non-scheduled banks.
It was not possible to set up the central bank immediately after independence;
hence it was agreed to act Reserve Bank of India as Central Bank of Pakistan till 30th
September, 1948. But it failed to safeguard the interest of Pakistan’s banking affairs.
It was now felt that establishment of the country’s own central bank is the only
solution for the removal of financial difficulties and for sound development of
banking system in the country. As a result of this, State Bank of Pakistan, being the
Central Bank of the Country was established in 1st July, 1948, inaugurated by the

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 Quaid-i-Azam Muhammad Ali Jinnah, the first Governor General of Pakistan and
father of the nation, and its Head Office in Karachi.
State Bank of Pakistan, in addition to its normal duties as Central Bank,
played a very important role in the development, controlling and modernizing the
banking system of the country. With the development, new commercial banks with
country wide branches were established. Sooner they extended their branches to
foreign countries. Moreover, specialized financial institutions like IDBP, ADBP (now
ZTB), PICIC, NDFC, HBFC were also created to help and finance the particular
sectors of the economy like industry, agriculture and housing.
All the commercial banks, incorporated in Pakistan and carrying on the bank
business in the country or abroad, including State Bank of Pakistan were nationalized
from 1st January, 1974.
After 1990, the banks are in the process of privatization like other units of
economy as a mater of policy of the ruling govt. This step is taken in view of poor
performance and other weakness in the banking services. A privatization commission
was set up in January, 1991. Two banks namely Muslim Commercial Bank and Allied
Bank Limited are privatized and transferred to private sector. And now United Bank
and Habib Bank are also privatized. In addition to this policy Government has
allowed the establishment of new private bank in August, 1991 as a result of which
many new banks like Indus Bank, Mehran Bank, Soneri Bank, Khyber Bank, The
Bank of Punjab etc are established having their branches almost in all important cities
of the country with largest banking facilities and efficient administrations.

2.5) Types of banks:

The important categories of banks are as follows

 Central banks
 Commercial banks
 Saving banks
 Mortgage banks
 Consumer banks
 Investment banks
 Agriculture banks
 Industrial banks etc.

2.6) BRIEF INDUSTRY PROFILE

The Pakistan financial sector includes banking and non-banking financial
institutes (NBFIs). Banking in Pakistan falls with in three segments, which are as
follows

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 2.6.1) SCHEDULED COMMERCIAL BANKS:
These include National Bank of Pakistan, and Habib Bank Ltd which are
possible sector Banks, where as MCB and ABL were privatized in 1992 and UBL in
2004.These banks have significant market share due to large number of branches.

2.6.2) PRIVATE SECTOR BANKS:

Banks from this category are relatively new to the industry. As a result of the
liberalization policies of GOP (government of pakistan) in 1991, Faisal Bank Ltd,
Soneri Bank, Union Bank, Bank Al-Habib, Bolan Bank, Metropolitan bank, Platinum
Bank, Askari Commercial Bank was given permission by State Bank of Pakistan to
Commerce operations. All these banks are operating on a smaller scale than Public
Sector banks and are targeting selective markets such as trade finance despite low
marketed presence, they account for considerable market share of total profitability of
Pakistani Banking sector.

2.6.3) FOREIGN BANKS:

There are about 16 foreign Banks operating in the country. They cater mostly
to high profile corporate cleanest. The regulatory bodies that monitor the banking
sector of finance and the regional Board.
The following are the main foreign banks;

• Bank Alfalah,
• City Bank,
• Standard Charter Bank,
• Pak Saudi Bank,
• Fasil Bank,
• Metropolitan Bank,
• ABN Amro Bank etc.
• Meezan Bank Ltd.
• Pak Aman bank Ltd.
• Alburaka islamia bank.

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Chapter No 3
NATIONAL BANK OF PAKISTAN

3.1) HISTORY OF NATIONAL BANK OF PAKISTAN

NAIONAL BANK OF PAKISTAN was established under the National Bank

of Pakistan Ordinance, 1948. The bank provides all sorts of banking services to the
Government and private sectors. It acts as an agent of central Bank wherever the SBP
(state bank of Pakistan) does not have its own branched. The bank is scheduled
commercial Bank and is principally engaged in the business of banking as defined in
the banking companies’ ordinance 1962.
National bank of Pakistan was basically established for reducing the
difficulties of East Pakistan farmers engaged in Jute and Patson after mass migration
of community from East and West Pakistan to India.
National Bank of Pakistan has a network of 1242 domestic branch 4 subsidiary
(Overseas) all over the world. The local branches are controlled through 29 Regional
Offices and overseas are managed through 4 overseas Regional Offices and 18
overseas branches.
In the year 2002, to improve its customer focus, reduced decision making
layers restructured its entire command and control system in business and operational
spheres Zones and Audit Offices, eliminated and total number of regions enhanced
from 9 to 29 across the country. A new matrix structure has been introduced with the
objective, to separate the front office and back offices, to improve the good
governance and enhance the internal control.
NBP also put in place the rationalization program by staff reduction and Branch
closures to ensure optimum efficiency in staff levels whiles balancing the benefits of
technology with the branch restructured network.
National Bank of Pakistan is the premier commercial institution of Pakistan cater
the large diversified customer base of 9.009 million the biggest figure in the country
and conduct the agency function of State Bank of Pakistan in addition to provision of
other financial and allied services, these includes;
 Deposit Banking
• Advances
• Financing and credit
• Remittance facilities
• Collection
• Government Receipts and Payment
• Sale and Purchase of Government Securities, Bonds and Other certificates
• Foreign Exchange business
• Safe Custody, Safe Deposits Services and Safe Deposit Lockers

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• Hajj facilities
• Utility bills
• Investment advice and other services
• Special deposits products/ schemes
• Pak rupee Travelers chouse
• New Product.

3.2) VISION AND MISION STATEMENTS

VISION STATEMENT: -
Our vision is that we want to be the pre-eminent financial
institution in Pakistan and achieve market recognition both in
quality and delivery of service as well as the range of product
offering.

MISION STATEMENT: -

Our mission to be recognized in the market place by

institutionalizing a merit and performance culture, creating a
powerful and distinctive brand identity, achieving top-tier
financial performance, and adopting and living out our core
values.

3.3) VALUES THAT BANK WANTS TO DELIVER TO CUSTOMERS: -

We aim to be an organization that is founded on:

● Growth through creation of sustainable relation with our customers

● Prudence to guide our business conduct
● A national presence with a history of contribution to our communities

We shall work to:

● Meet expectations through market-based solutions and products

● Reward entrepreneurial efforts
● Create value for all our stakeholders

We aim to be peopling who:

● Care about relationships

● Lead through the strength
● Practice integrity, honesty and hard work

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● We believe that these are measures of true success

We have confidence that tomorrow we will be:

● Leaders in our industry

● An organization maintaining the trust of our stakeholders
● An innovative, creative and dynamic institution responding to changing needs of
the internal and external environment
●After all, we are The Nation’s Bank

3.4) BANK PROFILE

National Bank of Pakistan has a network of 1242 domestic branch 4

subsidiaries,18 Overseas branches,4 Representative offices, one Joint Venture and one
Subsidiary(Overseas) all over the world. The local branches are controlled through 29
Regional Offices and overseas are managed through 4 overseas regional offices.
NATIONAL Bank of Pakistan was established under the NBP Ordinance 1948 in
Pakistan. It also undertakes Government treasury operations. It is the largest
contributory agent of Government and semi Government requirements. NBP provides
wide range of services, including collection of taxes and deliveries of salaries, pension
to public sector employees. It has lowest rates on exports and other borrowings. NBP
not only occupies a unique position in the banking sector of Pakistan but also in the
global banking and finance sector. NBP has been included in the top ten giant Banks
of the world internationally. It is the only domestic bank of the country, which has
been awarded
“The Best Domestic Bank” consecutively in 2003, and 2004 by the
renowned journal “The Banker UK”. It is also the only bank of the country which has
been compared and concluded by prestigious journal, “The Asia Week” with other
banks in the region. NBP is also the first bank in the country, which has completed its
operational arrangements with Western union, which has setup 244 centers in 113
cities/towns to replace the “Hundi” money transfer system with e-remittance in the
far-flung areas of the country. NBP is also the first bank which has started a, “Foreign
Exchange Co” in order to facilitate the general masses, regularize the inflow of
foreign money and control the undesirables blackmailing of private exchange
companies in the country.
According to Directors’ Report 2004; In the year 2004, 2005, 2006 NBP continue its
journey of remarkable growth and performance as the bank once again posted the
highest ever profit in the Pakistan’s financial sector history, this performance is a
reflection of the strategic business and with the consistent and effective economic
policies of the government leading to impressive growth in al the sectors of the
economy.

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 For the year 2006 the bank earned a pre-tax profit of Rs.26,311 million as
compare to 19056 million in 2005 shows 38% increase. The performance is based on
growth in all the key performance indicators. Pre-tax return on equity stood at
increase at rate of 40.9%, pre-tax return on assets further improved to 9.94% from
2.4% of the last year. Earning per share jumped to Rs.24,01 from Rs. 17.92 of last
year, one of the highest in the banking sector. All the above-mentioned ratios are in
the top tier by global standards.
It is also important to note that the increase in profit of Rs. 4.313 billion was
achieved through strong growth in core banking income by Rs. 4 billion over last
year.
Total assets at the year end stood at Rs. 635133 million an increase of Rs.
57414 million. Deposits increased by Rs. 38445 million to Rs. 501872 million. The
bank remains well capitalized and its capital adequacy ratio is well above the banking
industry average.
With the focus on upgrading existing and developing new distribution channels,
creating new and more competitive products, year 2006 was an excellent year for
retail banking. During the year, the bank significantly grew its customer footings,
continued to expand its delivery channels and further improve its process efficiencies,
thus re-enforcing its leadership position in the market and enhancing its share of
income contribution to the bank. This business segment posted excellent results with
strong revenue growth.
The momentum picked up by NBP in 2003 further accelerated in 2006. “NBP
Advance Salary” product alone showed exceptional growth both in terms of portfolio
and number of borrowers, which swelled to over 500,000 customers. Similarly “NBP
SME Karsaz”, a SME financing product has been disbursed to more then 18,000
customers. NBP is also the market leader in agriculture and commodity financing
with approximately 300,000 customers.
There are new products also launch, for example “NBP Kisan Dost”, a
programmed based lending product for dairy farmers and debit cards branded as
“NBP cash card”. E-banking products are set to enhance NBP few based income
considerably. The main objectives are to remain the market leader with effective MIS
ensuring proper tracking and monitoring, to increase fee based revenue, and to
provide best customer satisfaction as well as loyalty through top class branded
products.
Progress was made in improving the overall risk architecture. A
comprehensive risk management manual was put in place in line with Central Bank
guidelines. The bank has initiated a well defined risk rating system. The bank is well
aware of the challenges posed by risk management guidelines and Basel II accord and
is continuously improving the posture to cope up with the challenges.
The bank firmly believes that a highly motivated and well trained workforce is
the key factor to success. Heavy emphasis is being placed on institutionalizing a merit
culture through performance based rewards and career development. The bank
remains committed to improve the quality and banking skills of its human resource, to
ensure its position as the market leader. The regular hiring of 70-80 MBA’s annually
since 2002 will further improve the quality of the workforce.

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 The bank is about to install 70 new top of the line ATMs, set up a national cal
centre, introduce on-line banking facilities and automates government business. NBP
is also on track for acquisition of a new core banking application to improve
operational efficiency and enhance customer service.
NBP branches are being upgraded with standardized premises and signage
under the new brand. To cater to the needs for Islamic banking, the opening of the
first Islamic banking branch is in the final stages. This initiative is expected to attract
new customers besides increasing revenue.
The JCR-VIC Credit Rating Agency an affiliate of Japan’s Credit Rating
Agency has awarded Credit Rating “AAA rating on September 20, 2005 which is
more than stable in whole banking industry of Pakistan.
NBP was listed on KSE in 2004. It paid up capital, as on 31.12.2005 was Rs. 7910
million. The Bank’s Rs. 10 share roes to 29.35 and fell to Rs. 24.01in 2006. The Bank
is currently active in the areas of:

1. Corporate & Merchant Banking

2. Consumer & Marketing Banking
3. Investment Banking
4. Treasury
5. Sale & Purchase of Govt. Securities
6. Discounting of Bills
7. Foreign Trade/International Banking
8. Retail Banking
9. Electronic Banking
10. Trustee (NIT)

3.5) HEAD OFFICE NATIONAL BANK OF PAKISTAN.

Head Office is situated at I.I Chundigar Road Karachi.
3.6) PRESIDENT AND BOARD OF DIRECTORS
Board of Directors
The board of directors nominates the members of executive committee and executive
committee nominates group chiefs. Board of directors consists of chairman and
President, six directors and one secretary. President is also the chief executive and
chairman of the board of directors.
Chairman and President

Member Member
Member Member Member Member
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Secretary
NBP, Board of Directors list consist the following members and their designation.

NAME DISIGNATION

Ali Raza Chairman & President

Dr Waqar Masood khan Director

Ifthikhar Ali Malik Director

Syed Shafqat Ali Shah Jamote Director

M Zubair Motiwala Director

Sikandar Hayat Jamali Director

M. Khalid Malik Director

Azam Faruque Director

(Source:Annual Report 2006)

3.7) MANAGEMENT OF NBP

Senior Management of NBP consists of following member and their respective designation.

SEVP & Group Chief, Corporate & Investment

Masood Karim Sheikh
Banking Group.

SEVP &Group Chief,Commercial Banking

Shahid Anwar Khan
Group.

Dr.Asif A.Brohi SEVP & Group Chief, Operation Group.

SEVP & Group Chief, Audit & Inspection

Imam Bakhsh Baloch
Group

Ziaullah Khan SEVP & Group Chief, Compliance Group.

SEVP & Group Chief, HRM & Administration

Dr. Mirza Abrar Baig
Group.

Amer Siddiqui SEVP & Group Chief, Retail Banking Group.

Syed Farhan Ahmed EVP & Chief Financial Officer.

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 EVP & Group Chief (A), Risk Management
Tahira Raza
Group

SEVP & Group Chief, Treasury Management

Muhammad Nusrat Vohra
Group

Amim Akhtar EVP & PSO to the President

Ekhlaq Ahmed EVP and Secretary Board of Director

Uzma Bashir Group Chief, Organization D&T Group

EVP and Divisional Head,Employees

Mrs.Khurshid Masood Ali
Benefits,Disbursments and Trustee Division.

EVP and Divisional Head,Special Assets

Nadeem Anwar Ilyas
Management Division.

EVP & Group Chief, Overseas Coordination

Tahir Yaqoob
and Management Group.

Atif Hassan Khan Group Chief (A), IT Group

(Source:Annual Report 2006)

3.8) EXECUTIVE COMMITTEE

Executive committee consists of one president and nine members from whom
one member also performs function of both as a member and secretary. Board of
directors nominates executive committee and executive committee group chiefs.

President

Secretary member
Member Member

Member
Member Member

Member
Member Member
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 3.9) OBJECTIVE AND VALUES OF NATIONAL BANK OF .

PAKISTAN

 Translating the spirit of Sharia into modern financial products and services.
 Maintain a high of procedure in the financial community.
 Growth through creation of sustainable relationship with our customers.
Prudence to guide our business conduct.
 A national presence with a history of contribution to our communities.
 Create value for all our stakeholders.
 Care about relationships.
 Developing our operational infrastructure, system architecture and business
strategies focused to customer needs, with which it endeavors to share our
success.
 Focusing on quality training and management development programmers and
equal opportunity employer.
 Reflecting high standards of integrity, prosperity, goodwill and teamwork in
conduct, with in the organization and the market place.
 Late but not the least an innovative, creative and dynamic institution
responding to the changing needs of internal, environment.

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3.10) NATIONAL BANK TIP BRANCH HARIPUR

To provide the banking facility to peoples of Haripur. National bank TIP

branch Haripur was established in 1st September 1971A.D TIP Haripur. Khalid
Pervaiz was the first manager of branch. TIP branch started its operations smoothly
and profitable and with the passage of time management improved its efficiency and
reputation.

Organizational Chart

Manager

Manager
Operations

Foreign Ex Advances Accounts/Depo Establishment

Incharge Incharge sits Inchrage Incharge

Remittances Pls Savings Current A/C’s Cash

Incharge A/C’s Incharge Incharge Incharge

Computer/IT
Dispatch Gov trans Incharge
Incharge Incharge

3.10.1) BRANCH MANAGER

Mr.RAZWAN AHMED

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 The branch manager shall look after the branch internal working in coordination with
operation manager and other line functional officers/staff in addition to duties
delegated by the HO(head office) vide instruction circular no, pertaining to advances,
grievances and complaint handlings of staff/ customers in the best interest of this
institution.

3.10.2) OPERATION MANAGER

Mr. MUHAMMAD RAFIQUE
Joint custodian of security stationary by the OPERATION MANAGER along
with checking and counter signing of DTRS, Abstract, clean cash etc. and other
administrative functions till sufficient staff is deputed at the branch.

3.10.3) (I/C DEPOSIT) Mr.IQBAL

• Passing officer of current account seat after verification of specimen signature
• Safe custody of all the specimen signature cards and keeping them under lock
ad key overnight
• Acting as 2nd signatory of saving bank accounts referring all cheques
exceeding Rs.100000 to Operational Manager
• Supervision of current account counter and problem solving of Cashier seat .
• Timely remittance of Govt. funds , B.I.S.E, PTCL, Hazara University and
funds of utility companies as per arrangements
• Maintaining of complete record of inoperative accounts, unclaimed deposit
accounts including recovery of service charges as prescribed
• Maintaining of sundry deposit register ensuring that all the entries must be
adjusted
• Preparation of State Bank Pakistan annual returns statements of unclaimed
deposit account
• Checking of DTR on daily basis and monitoring and reconciliation of DTRS
of computer centre Peshawar with the branch general ledger on weekly basis.

3.10.4) Subordinate 2 I/C Deposit Mr. WAQAZ (Assistant)

• Not a passing officer

• Authorized to issuer tokens to all account holder and bank statements
• To post cheques in computer ledger initial scroll, affix
• To receive cheque deposited in accounts and issue receipt under the signature
of any of the officer working in the branch
• To write down the hazara university receipts scrolls of utility bills received in
transfer
• To prepare fan folds against cheques received in collections enter it in RBV
register and send it for signature of authorized officers

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 • To issue balance certificate as and when required by the client

3.10.5) (Sub to I/C Deposit) Mr.SAFEER

• To issue tokens against the cheques ,drafts , etc whenever required to pay in
cash to all CA/SB accounts indiscriminately and maintain token register as well
• To attend balance enquiry after satisfaction of being account holders
evidencing through cheque books and the authorized person after getting verification
of signature and by order of a senior bank officer. While attending balance enquiry
the last two digest should be omitted. The balance of account and cheque series must
not be disclosed to any person on telephone in any case
• To issue bank statements to the account holders as and when required and only
the authorized person
• Authorized to post and pass cheques in accounts in the computer and marking
significantly current and pls cheques assisting in identification for the signature
verifying officer of current and saving accounts putting pay cash stamp scroll ,scroll
number, initial and toll signature and adhere service standards.
• To prepare FAN FOLDS of cheques as and when receive in DAK, enter in
RBV register sign and pass under his joint signature
• To transfer and remit the Govt. funds timely as per standing instruction
• To issue balance certificate to various organizations as per existing
arrangements after charging due commissions as given in tariff
• Balancing of Weekly and monthly balance books as and when allotted

3.10.6) I/C Credit Mr. AZAM

• Processing of short/medium and long term financings and also passing officer
of all cheques of credit/advance
• Monitoring of finances from proposal to sanction recovery and adjustment of
all type of financings.
• Recording / passing of financing entries in books of accounts
• Equation of proper legal documents and keeping of their record in safe
custody
• Recovery of loan installments from the defaulters and
weekly/monthly/quarterly
• Preparation of weekly/monthly/quarterly/annual statements relating to
advances including SBP returns of classified advances

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 • Issuance cancellation, revocation and proper follow-up of Bank Guarantees,
keep up to date record of commission in the books of accounts
• Necessary correspondence relating to advances
• Checking of daily DTRs relating to advances and reconciling it with DTRs
received from the computer centre Peshawar
• Any other duty assigned by br/op manager

3.10.7) Mr.MUHAMMAD RAFIQUE

• Processing of NBP Advance salary cases from sanction, disbursement to final
adjustment and also a passing officer of advance cheques
• Execution of legal documentation and safe custody of all the legal documents
of NBP salary advance
• Recovery and monitoring of all the NBP advance salary cases
• Preparation of NBP advance salary statements daily, monthly, half year,
yearly basis
• Updating of record of NBP advance salary as desired by RO/ HO

3.10.8) I/C Foreign Exchange Mr. AZAM

• Opening of foreign currency accounts and issuance of FC cheque books
• Issuance of Token and cash payments of foreign currency notes/pak rupees to
the account holder
• Dispatch of foreign currency accounts statements to the a/c holders and
recovery of service charges on monthly basis
• Balancing of manual ledgers of FC deposits on monthly basis
• Revaluation of foreign currency and posting thereof in FC ledgers
• Issuance of foreign demand drafts, PO, MTS and TTS and realization of the
same whenever received from abroad
• Collection of FC cheques drafts in SC/LSC and cancellation
• Handling of import exports transactions and timely delivery to concerned
quarters
• Preparation of statements and timely delivery to the concerned quarters
• Timely disposal of FC notes whenever exceeding FC Insurance limits and
timely arrangements of FC notes to meet the FC customers demands
• To attend western union customers and release payments as per banks
procedure
Any other duty assigned by manager/OP manager

3.10.9) I/C Remittance Mr. SHOKAT

• To issue DD,PO,MT and Govt.DDs as and when demanded by the customers
and adherence of HO

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• Passing officer all the DD advices
• To respond all the DD advices, after due verification of signature and test from
joint custodians
• Passing of SBP cheques and marking of date of payment at the advice and
keep a copy of SBP DD and advice in record file
• Payments of drafts, GDD,PO and responding of MTs after getting verified
signature and test
• Maintaining of Ex-Advice register ensuring that no entry is outstanding in Ex-
Advice register

3.10.10) I/C Government Section Mr.M.MAJEED

• Passing officer of all Govt. cheques receipts, payments including statements
• Receipt and marking of DAO advices central Govt. etc
• Noting and recording of all the cheques series in relevant register and keeping
an up to date record of the same
• Proper maintaining of Govt. contra register and reconciliation of the same on
monthly basis, statements duly verified and signed by the DAO on monthly basis
• Preparation of error free F-110A/B Govt. memo and provincial register and
files in proper order
• Preparation of accounts statements.
• Supervising , monitoring and controlling and assisting the jobs being
performed by the subordinates working under his span of control
• Responsible for keeping and arranging old and current record whenever kept
in proper manner
•
3.10.11) Daftri Mr.PERVAIZ
• To perform duties in Govt. Section.
• Cleaning , dusting of all the officers chairs and takes
• To stitch branch daily cheques separately and facilitating proper checking by
the concerned officers
• To maintain and look after branch old and current record in safe custody and
regulate the same through branch Ex custody register
• To arrange old record in proper form arranging on year wise basis
• Arrange and segregate the audit vouchers and sundry deposit vouchers and
keep an up to date record of the same
• To deliver Govt. vouchers along with contra register daily to DAO at 9-30
• To maintain branch stationary ,office stationary , forms and books in sufficient
quantity and arrange well before they are completely exhausted
•
3.10.12) SR. Assistance Mr. WAQAZ
• Opening of current and saving bank accounts and completion of accounts

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• KYC-Know your customer .To send F-528 and F-529 to the account holders
and the introducer and to keep a record of the same attaching to the opening form as
per requirement of the audit
• To realize LSC and SC deposited by the account holder from local and out
station as required by the bank and SBP
• To arrange to send Govt. and Dist Accounts officer and get the existing
procedure
• Any other duty assigned by the manager or operational manager

3.10.13) I/C Computer Mr. IQBAL

• Clean cash writer, posting s of all current saving accounts cash etc
• Printing of all the necessary day books subsidiary day books and maintaining
of record thereof
• Deduction of service charges on monthly basis from all current and savings
accounts inoperative and unclaimed accounts as per bank instructions and keeping
record thereof as designed by HO
• Weekly scheduled telegram and its timely transmission to Ro/Ho and
payments of western union in case I/C FC absence
• Preparation of computerized F-47/48 and other statement in new computer
format
• Preparation of CA/SB diskettes on daily weekly basis and timely transmission
to regional computer section
• To keep backup of computerized data on regular basis
• To reconcile accounts data with the data stored in main computer centre
Peshawar on regular basis
• To attend balance enquiry and issue accounts statements to the accounts
holder as and when required

3.11) FUNCTIONS OF NBP TIP BRANCH HARIPUR

 Deposits Management
 Advances
 Foreign Exchange
 Remittance
 Clearing House Management
 Cash Management
 Government Business

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 Other Miscellanies

3.12) DEPOSITS DEPARTMENT: -

Deposits are the life bloods of every commercial bank. At TIP branch these
are subdivided into further three sections i.e. PLS saving bank deposits, current
deposits and foreign currency deposits. This branch is rich in deposits portfolio
owing to its particular nature of business.

3.13) TYPES OF DEPOSITS: -

Like any other bank NBP TIP Branch also accepts deposits from public. The
following types of deposits/accounts are offered by bank.

3.13.1) Current Account: -

A current account is a running account which is continuously in operation. It is
used by a customer to transfer money to withdraw deposits on demand. The current
accounts of the customer are maintained in a Current Account Ledger by the bank.
The customer can withdraw the current deposits without pervious notice to the bank.
The bank has to honors the cheque provided they are within the limits of account.
A minimum requirement of opening a current account is Rs. 500/-. No profit is
paid by bank on these accounts, there is no restriction on withdraw of funds on the
account. Any person can draw any amount at any time. If balance in this reached to
less then Rs. 5,000/- then bank charge commission of Rs. 50/- per month. These
accounts are becoming very popular with the commercial banks in recent years. For
drawing of money from these accounts the cheque book is provided to the customer.

3.13.2) PLS Saving Account: -

These accounts are in as a step to Islamisation of banking in Pakistan in
January, 1982. These accounts are opened on the basis of profit and loss sharing
between two parties, with a minimum amount of rupees one hundred.
These accounts are generally opened by the persons of fixed incomes and of
low savings. Profit on these accounts is usually paid after 6 months. And the amount
of profit is varying, and depends upon the actual amount remaining in account.

3.13.3) Time Deposit Account: -

Fixed accounts or time deposits are those deposits which are repayable after a
certain period of time, which may vary from 3 months to 10 years. People with

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 sufficient fund and also wish to have a safe investment, deposit their savings in this
account.
The rate of interest on fixed deposits is higher than the other accounts. The
longer the duration for which the amount is kept, the higher is the rate of interest and
vice versa.
The bank on receipt of funds for time deposits issues a fixed deposit receipt (FDR) on
a specially printed form.

3.13.4) NIDA Account: -

NIDA account can be opened with Rs. 20 lack. The process of opening of this
account is same to other accounts. Profit is calculated on daily product basis. There is
no restriction on withdraw of money.
This account is best for businessmen. If balance in this account is less then Rs.
20 lack then profit is provided on saving rate.

3.14) DEPOSIT SYSTEM

The process for the cash deposit/other instruments of the branch is as follow
Cash deposit counter

• The cash is received at the cash counter with the particular instrument
• The cash is sorted
• It is recorded in the relevant record books
• For the recording purpose two book are used at the cash counter for deposits
• Transfer book (for cheques etc)
• Cash receiving book (the most liquid cash)
• Checking process is conducted

3.14.1) ISSUNCE OF RECEIPT

The receipt is issued to the customer

3.14.2) CHECKING AND VERIFICATION

• Needed vouchers are prepared
• The transaction is checked and verified
• The verification limit for verification officer is limited to Rs.5000
• Transaction greater than 5000 is verified by the operation manager.
• A transaction will become a complete transaction when it checked and
verified.
3.15) WITHDRAWAL SYSTEM THROUGH CHEQUE
• The cheque is presented on the counter
• Then the cheque is passed through a verification process of its contents

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 • The payment is made of verified cheque

3.15.1) WHY THE CHEQUE PRESENTED IS NOT PAID

The cheque will remain unpaid when it contain any of the following reasons.
• The signature is different of the drawer of the cheque from the specimen
• Cheque is post dated
• Cheque is out of dated
• There is difference between figures and amount in words
• There is any alteration without verified signature
• Cheque is damaged
• Account has not sufficient balance to meet the requirement of the cheque
• Difference of account number and tile of account
• Any other reason may exist

3.16) FINANCE/ADVANCES DEPARTMENT

TIP branch Haripur is dealing in both types of loans i.e. Short term loans and
long term loans. Bank is charging 13% Markup on their credits. Bank is promoting
through different schemes time to time to attract their customers to expand their
business. National bank also provides facility to small and medium business for
expansion through credit and financial support.

3.17) PRODUCTS OFFERED BY BANK:-

Following are the products offered by the National Bank of Pakistan.
3.17.1) NBP ADVANCE SALARY
A Personal Financing Scheme for permanent employees of Provincial/ Central
Government Autonomous, Semi Autonomous bodies Organization, Banks and
Financial institutions,

• Loans Up to Rs: 500,000/=

• Loan equal to 15 months take Home salary.
• Repayment period upto 60 months.
• Low rate of mark up 13% PA on reducing balance.
• Short processing time, sanction at branch level
• Minimum loan requirements.
• No processing fee, noncolaterals no guarantee, no insurance.
• Hastle free documentation.

3.17.2) AUTO ROLL OVER FACILITIES.

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• If you are paying your Installments regularly then you can avail Auto Roll
over facility.
• Original loan amount can be increased due to promotion/increment.
• No early payment surcharge.

3.17.3) NBP cash n gold

Meet your needs for ready cash against your idle Gold & Jewelry.
• Facility @ of Rs: 7,000/= per 10 gram of Gold.
• Period of repayment 9-15 months.
• Rate of mark up 12% P.A based on actual utilization (value).
• Quick processing at Branch level.
• Roll over on expiry subject to regular debt servicing.
• Minimum documentation.
• No penalty for early payment.
• No maximum limit.

3.17.4) NBP SME karsaz

Best suited for shopkeepers, retailers whole sellers, Traders, Small & medium
Business men an manufacturer etc.

• Maximum Financing limits upto Rs: 75 million.

• Repayment period 1-3 years.
• Rate of mark up 10%-13% P. based on actual utilization,(Fixed &floating
rates options available).
• Easy monthly/Quarterly Installments.
• Quick processing.
• Low processing fee.
• Minimum conditions for taking exposures.
• House/ constructed property acceptable as Collateral security situated in
Municipal/ Cantonments limits in addition to business Assets...

3.17.5) NBP running finance

In order to met personal needs of salaried class, business class, the Bank offers
loan facility against pledge of SSC/DSC of NSC & Post officer, Prize Bonds, NIT
Units, Insurance Policy, TDRS, Lien on PLS, CA, Foreign currency deposits and
mortgage of residential and commercial property situated within municipal and/ or
Cantonment limits.

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o No maximum limit of financing (in case of SC/DSC per party limit of financing Rs:
20 million)
o Financing upto 90% of encashment value of security.
o Repayment period 12-15 months.
o Market based Mark up rates upto 13% P.A.(fixed & floating
 rate options based on kibor available.)
o Quick Processing.
o No hidden cost.
o NO penalty for early adjustment.
o Roll over facility available (subject to regular payment of
o markup)

3.17.6) NBP kisan dost

Agricultural loans are available to farmers for; Production purpose, Livestock
farming, Development purpose, Milk processing, Purchase of Tractors, Cold storage,
Installation of tubewels, Bio-gas plants, Purchase of agriculture, Nurseries,
Implements, Forestry, Fishing, Poultry etc.
• Loans are available against Pass Book upto 80%, SSC/DSC upto 75% of
encashment value, rural commercial and residential property upto 60%, gold &
jewelry @
• Rs: 7,000/= per 10 gram.
• Rate of markup upto 12% on actual utilization
• Revolving Credit Scheme available for 3 years.
• No penalty for early payment.
• Quick processing.
• Easy installments.

3.17.7) NBP PREMIUM AAMDANI

Unprecedented safety-Unprecedented Return
Monthly income scheme
•Minimum deposit of Rs. 50,000 and maximum deposit of Rs. 5000,000 for 5 years
• Free demand draft, Pay order and NBP online Aasan banking
•Free check book/ NBP cash card (ATM+DEBIT)
•Profit paid every month from 7.5% to 11% per annum from one year to five year

3.17.8) NBP PREMIUM SAVER (PLS SAVING ACCOUNTS)

• Minimum saving balance of Rs. 20,001 and a maximum balance of Rs. 300,000
• Free NBP cash card (ATM+debit)

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•Two debit withdrawals allowed in a month and no limit on number of deposit
transactions
•Profit calculated monthly and paid on half yearly basis
• Earning rate of interest is 7.25% per annum

3.17.9) NBP student loan scheme

Under the scheme the students are eligible to apply for loans provided:
He/she has obtained admission on merit in the approved universities/ colleges of the
public sector mentioned hereunder.
He/she falls at the time of admission within the age bracket of:-
• For Graduation not exceeding 20 years
• For post-Graduation not exceeding 30 years
• For PhD not exceeding 35 years
3. He/she has secured 70% marks in the last public examination
He/she has undertaken the study of the subject given below
He/she is unable to pursue studies due to financial constraints.
REPAYMENT
The maximum period of repayment of loan is 10-Years from the date of disbursement
of first installment .The borrower shall repay the loan in monthly installment after six
months from the date of first employment or one year from the date of completion of
studies, which ever is earlier.

3.17.10) NBP Karobar (self employment opportunities for un-employed)

• Minimum down payment 10% of asset price and 5% for PCO & Tele center
•Tenure: 1 to 5 years (for PCO 2 years)
•Grace period : 3 months
• Age 18 to 45 years
•Mark-up (variable): for the first year mark up will be 12%
•Life and disability insurance paid by government of Pakistan

3.17.11) NBP Saibaan

NBP has introduced an affordable, flexible & convenient House Financing
scheme for all, equally suitable for salaried, self employed & professionals. Loan is

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 provided for; Purchase of House, Construction of House, Renovation/ Home
improvement and/ or refinance.

• Minimum net tae home salary Rs: 5,000/=per month.

• Maximum loan amount upto Rs. 35 million (Renovation and House
improvement Rs.15 million).
• Period of repayment 3-20 years.
• Lowest mark up rates ranging 9% to 12.85% P.A
• Affordable monthly installments.
• Quick Processing.
• Minimum debt/ equity ration permissible 85:15.
• Low processing fee.
• Full Credit life/ Disability Insurance (Optional).
3.17.12) Margin finance facility
• Comfortable and secure environment for trading
• Easy terms requiring minimum documentation
•Minimum turnaround time
•No security requirement from the customer except for the customer’s equity
•Customer’s equity freely available for investment
• Equity acceptable in cash or approved shares

3.17.13) NBP Cash Card

NBP cash card as your Debit card.

• Actual purchase payment is deducted while using NBP cash Card.
• Convenient, secure, quick & easy payment options.
• Nation wide acceptability at various merchant outlets

NBP cash card as your ATM Card.

• Offers facilities for cash with drawls, funds transfer, balance enquiry, mini
statements, and cheque book request.
• Acceptable at al 1-link & NBP ATMS across the country.
• Only Rs: 15/- charged if ATM of other than NBP is used.
• Round the clock 24 hour’s facility available.

3.18) INTERNATIONAL BANKING DEPATMENT: -

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 This is the most significant and vital department which deals in international banking
i.e. issued/ paid of
Letter of credits (LC’s),
Foreign Telegraph Transfer (FTT),
Letter of guarantee (LG’s),
Foreign Demand Draft (FDD)
Western Union Money Transfer (WUMT)
And foreign currency remittances.
Foreign currency deposits accounts are maintained in all the key / hard currencies i.e.

U.S $,
U.K Pound,
And EURO.

A foreign exchange FE account will be opened with minimum US $1000 or

equivalent. If amount/ balance in the account is less than $1000 or equivalent then
bank deduct service charges $03 P.M. or equivalent.
If a person withdraw amount in Pak Rupees than buying rate will be apply. And if a
person withdraw amount in US$ or other foreign currency then updating rate will be
apply. At 7 day (now last day) of the every month bank apply updating rate
(Revaluation) given by H.O.(HEAD OFFICE) Due to the fluctuations in foreign
currency every month bank pays exchange risk covering fee for F.C A/Cs to Treasury
Management Group H.O. Karachi.

3.19) WESTERN UNION MONEY TRANSFER (WUMT)

Western Union Money Transfer is the fastest way to receive money world
wide. NBP TIP Branch Haripur, also act as (paid only) agent of WUMT.

3.20) Main features of WUMT are;

RELIABLE: -
For nearly 150 years, millions of people have trusted western Union to support
family back home, rescue travelers in emergencies and keep business operating
smoothly. Each transfer is protected by and advanced world wide security system and
can be verified with a unique Money Transfer control Number as well as an original
password you chose. With Western Union, your money will be paid out quickly,
giving you peace of mind.

FAST: -

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 Money is revived minutes after it is sent. Western Union uses advanced
electronic technology and a worldwide computer network for fast payout in more
than 189 countries and territories.

CONVENIENT: -
Western Union agents are located where you need them: in banks, post offices,
pharmacies, retail stores, jewelers, supermarkets, railway stations, airports and other
places. Most agent locations offer convenient hours and service even on weekends.
More than 130,000 agent locations make Western Union one of the world’s largest
money transfer networks.

Process of WUMT.
1) A person who wants to send money (e.g in other country) will go to the agent of
WUMT and fill a proper form give money + commission to agent, agent will give him
10 digits specific code and enter the form in WUMT ONLINE SYSTEM.
2) Then sender informs the receiver about 10 digits code and amount of money send.
3) Now receiver can receive money form any where in the world through WUMT
agent by providing specific information (i.e. sender name, receiver name, amount of
money, code and some times secret question and answer) these information is given
on specific form.

HOW TO RECIVE MONEY: -

• Fill out the form of “To Receive Money”.
• Give form and ID to the agent.
• Agent gives you the money and a receipt.

3.21) REMATENCE DEPARTMENT: -

Remittance is the way through which we transfer money from one place to
another. Remittance facilitates the customer and is a source of bank’s earning as well.
The TIP branch always aims at customer satisfaction and facilitation. Remittance is
further classified as in land remittance and origin remittance. This is very sensitive
and critical portfolio into the present day domestic / international banking scenario of
“Money laundering”

REMITTANCES
The National Bank of Pakistan provides the facility of safe transfer of money
from one place to another. In the respect the following facilities are available.
• IBTS

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• Local currency demand draft (DD)
• Foreign currency demand draft (FDD)
• Pay order
• Local fund transfer (TT)
• Foreign fund transfer (FTT)

3.21.1) IBTS (INTERNAL TRANSFER)

In internal transfer the important thing is that both the branches of the bank
should be involved in online banking system through this the transfer is immediate
and fast the process consist on manual system land mail system.

3.21.2) TRANSFER THROUGH DEMAND DRAFTS (DD)

There are two type of DD depending on their denomination. When the DD is
issued the recording of the transaction is as:

DR CR
Cash ----
*Pak a/c of relevant branch ----
(*at which the DD is drawn)

Then an Ibo is issued to the relevant branch when that branch receives the Ibo, they
record the transfer as:
Pak A/C ----
DD payable ----

When the customer present the DD for payment then it is recorded as follows:
DD payable ----
Customer A/C (cash) ----

The net effect of these transactions is:

Cash ----
Customer A/C ----

The processes of recording other bill payable are the same like DD
When the cash is received from the customer it is recorded as:
Cash ----7
Customer A/C ----

When the cash is paid to the customer it is recorded as:

Customer A/C ----

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 Cash ----

Through all these processes the element of security is uncompromised.

3.22) CLEARING DEPARTMENT: -

A clearing house is a place where the representatives of commercial banks
meet to exchange cheques drawn on each other and then settle the difference owed to
each other. It may be defined as an association of banks to facilitate the exchange,
off-set and settlement of credit claims among them and to serve their mutual interest.
The clearing system of function of State Bank of Pakistan. If the State Bank has no
office at a place, then National Bank of Pakistan, as a representative of the State
Bank of Pakistan, acts as a clearing house.
As every commercial bank keeps a certain percentage of the cash deposits
with the central bank (or NBP as representative of SBP), the settlement of inter-banks
obligations becomes easy by simple process of book entries.
With the help of clearing house, the payments and receipts of large amounts become
convenient and secure without involving any cash at once. The advantages of this
system is not only that large payments are made without risk, loss of time and use of
precious metal, but this facility also enables the central bank to carry on the Monetary
policy of the country more effective.

3.22.1) PROCESS OF CLEARNING:

In the Clearing house of NBP Main Branch, daily the representatives of
different commercial banks meet and clear their cheques. These representatives
represent their branches all over the Pakistan. These banks include Muslim
Commercial Bank, Habib Bank, Allied Bank, United Bank, Askari Bank, Bank Al-
falah, Khyber Bank Ltd etc.

1) Clearing entry: -
Every day the representative of different banks meet in clearing house twice.
First clearing 9:30am
Second clearing 1:30pm
They present their cheques drawn upon each other to clearing incharge. He makes the
entry, add or subtract the amount from reserves and clear the cheques.

2) Endorsement: -

In this step bank crossing stamp is marked on the back of cheque, and bank
become the owner of cheque, the entry will be;
Dr Cr
Our Branch Endorsement ----
Payee A/C ----

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 3) Bank Transfer Scroll: -

After the endorsement we write the entry in Bank Transfer Scroll, in which
Dr are written in/under A/C No. ----
Cr are written in/under F-15 (for recovery)
The Balance of Transfer scroll and clearing register must be equal.

3.23) CASH DEPARTMENT: -

Cash department deals with the cash transactions i.e. Payments to the clients and
deposits are made trough cash department.
In early 10 days of month bank deals cash transaction of about Rs. 50 lack. And in
normal days it transacts about 20 lacks to 50 lacks.
Cash department has 3 subsections;

• Cash Receipts
• Cash Payment
• Government section

3.23.1) CASH RECEIPTS; -

All the cash received by the bank is collect through cash receipts department.
For this first a person who wants to deposits his amount filled the deposit slip. In
deposit slip he writes the name his name and the A/C No in which we want to deposit
money. He also writes the amount of money in words and figures and signed the slip,
then he hand over that slip with cash to cashier.
Cashier received the slip, count the cash and register it in a book. On the back
side of slip he writes the denomination of money. And one part of slip returned to
customer with “Received stamp” and signature.

3.23.2) CASH PAYMENT: -

Any client who wants to withdraw amount from his account, he presents the
cheque to the reception desk which give him token and send the cheque for
verification to the officer and client will wait until the cheque reached to the cashier.
Then cashier announces the token no and then client get the required amount from the
cashier.

3.23.3) GOVERNMENT SECTION: -

Government cash section deals all the amount of Govt. revenues and payments. So it
also has two subsections;
1) Government Receipts: - All the Government revenues are transfer through this
head of account. Simply, all the cash received by the Government goes in this head of
account.

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2) Government Payment: - All the amount of cash paid by the Government is paid
through this section. Usually in the early days of month the work in this section is
more as compared to other days.
Cash transactions are closed at 1:30 pm daily, and after this all the staff members of
cash department balance the daily receipts and payments.

3.24) GOVERNMENT DEPARTMENT: -

Government department is most important department of the TIP branch as
there is no State bank so this branch act as State bank of Pakistan Collect Fees for all
types licenses, pensions and all utility bills and collection of B.I.S.E, PTCL,
WAPDA, PESCO, Sales Taxes etc.

3.24.1) BILLING SECTION:

Bills for collection amount for a handsome amount of commission / profit for
commercial banks. The main branch has efficient and effective bills Section, which
discharge its responsibilities in a decent manner.

3.24.2) PENSION SECTION:

These sections of the Government department facilitate the pensioners by
keeping the pensioner’s record and pay pensions to them after proper verification of
the person.

3.24.3) LICENSE RENEWAL SECTION

This section of the bank deals with Government licenses. License holders
renew their licenses as they expired with the passage of time.

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CHAPTER 4
FINANCIAL ANALYSIS

4.1) PERCENTAGE ANALYSIS OF BALANCE SHEET

NATIONAL BANK OF PAKISTAN
BALANCE SHEET
As at 31st December 2006

ASSETS 2005 2006 (%)

(Rs.In“ooo) (Rs. In“ooo”) Analysis

Cash and balances with treasury banks 71,196,956 78,625,227 10.012

Balances with other banks 31,019,330 40,641,679 31.02

Lending to financial institution 16,282,942 23,012,732 41.33

Investment 156,985,378 139,946,995 -11.16

Advances 268,838,779 316,110,406 17.58

Other assets 23,941,056 27,113,698 13.25

Operating fixed assets 9,454,365 9,681,7,974 24.06

Deferred tax assets ---- ----

Total assets 577718806 635138511 9.93

LIABILITIES

Bills payable 1,741,156 10,605,663 609.11

Borrowings from financial institutions 8,756,847 11,704,079 33.65

Deposits in other accounts 463,426,602 501,872,243 8.3

Sub-ordinated loans --- ---

Liabilities against assets subject to 16,629 13,235 -25.64

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 finance lease

Other liabilities 23,496,910 26,596,300 13.13

Deferred tax liabilities 4,462,718 2,387,073 -56.51

Total liabilities 1079619668 553178593 -48.76

SHARE HOLDER EQUITIES

Share capital 5,908,927 7,090,712 19.99

Reserves 12,354256 13,879,260 12.34

Unappropriated profit 19,372,253 32,074,677 65.57

Surplus on revaluation 38,182,238 28,909,469 75.71

Total shareholder equities 75,817,674 81,954,118 8.01

Total shareholder equities & Total liabilities 1,237391460 635,132,711 - 48.67

Through percent analysis of above balance sheet we know that cash and balance with treasury banks
increase 10.012% while balances with other banks increase 31.01%. Lending to financial institutions
increase 44.13% and investment is decrease 11.16%. Share capital increase 19.99 % and reserve
increase 12.34 %. In the same way all the data is calculated.

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 4.2) PERCENT ANALYSIS OF PROFIT AND LOSS ACCOUNT
NATIONAL BANK OF PAKISTAN
PROFIT AND LOSS ACCOUNT
For the year ended 31st December 2006

PARTICULAR 2005 2006 Percent

Analysis
(Rs. In “ooo”) (Rs. In“ooo”)

Markup return/interest earned 33,692,665 437,88,628 29.96

Markup/return/interest expense 10,321,768 13,634,912 32.1

Net markup interest income 23,370,897 30,153,716 62.06

Provision against non performing advances 2,446,739 3,075,723 25.71

Provision for diminution in the value of (245,881) (709,461) 188.5

investment

Bad debts written off directly 23,069 5,284 0.229

2,223,927 2,371,546

Net markup/ interest income after provision 21,146,970 27,782,170

Non markup/interest income

Fee concession and brokerage income 4,926,604 6,144,628 24.7

Dividend income 1,718,478 2,891,755 68.27

Income from dealing in foreign currencies 1,205,638 1,333,840 10.633

Other income 177,839 627,618 252.91

Total non markup/interest income 8,028,559 10,997,841 36.9

29,175,529 38,780,011 32.9

Non markup interest expenses

Administrative expenses 11,221,789 13,443,441 19.8

Other provision write off 198,298 (17,283) 8.72

Other charges 63,206 208,327 229.6

Total non markup/interest expenses 11,483,293 13,634,485 18.73

19,056,028 11,977,601 62.85

Profit before tax 19,056,028 26,310,577 38

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Taxation-current 7,154,002 8,695,598 21.54

- Prior years (1,098,709) 530,652 -48.3

- Deferred 291,291 61,981 -21.27

6,346,584 9,288,231 46.35

Profit after tax 12,709,444 17,022,346 33.93

Inappropriate profit brought forward 10,885,184 19,372,523 77.79

Profit available for appropriation 23594628 36,394,869 54.25

Basic earning per share (Rs.) 17.92 24.1 34.5

Diluted earning pet share (Rs) 17.92 24.1 34.5

Through percent analysis we know that interest earned increase 29.96% while the interest expenses
increase 32.1%. Net mark up increases 62.06%. Total markup interest income increase 36.9%. Profit
before tax increase 38%. While profit available for appropriation increase 54.25 that shows sound
financial position of the NBP the main reason of its strong position is that its expenses are low and its
income is more.

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4.3) VERTICAL ANAYSIS OF BALANCE SHEET 2006
NATIONAL BANK OF PAKISTAN
BALANCE SHEET
As at 31st December 2006

ASSETS 2005 2006 Vertical

Analysis
(Rs.In“ooo) (Rs. In“ooo”)
2006

Cash and balances with treasury banks 71,196,956 78,625,227 12.4%

Balances with other banks 31,019,330 40,641,679 6.34

Lending to financial institution 16,282,942 23,012,732 3.63

Investment 156,985,378 139,946,995 22.034

Advances 268,838,779 316,110,406 49.77

Other assets 23,941,056 27,113,698 4.26

Operating fixed assets 9,454,365 96,817,974 15.24

Deferred tax assets ---- ----

Total assets 577718806 635,138,511 100

LIABILITIES

Bills payable 1,741,156 10,605,663 1.67

Borrowings from financial institutions 8,756,847 11,704,079 1.84

Deposits in other accounts 463,426,602 501,872,243 79.2

Sub-ordinated loans --- ---

Liabilities against assets subject to finance 16,629 13,235 0.0021

lease

Other liabilities 23,496,910 26,596,300 4.19

Deferred tax liabilities 4,462,718 2,387,073 0..376

Total liabilities 1079619668 553178593 87.01

SHARE HOLDER EQUITIES

Share capital 5,908,927 7,090,712 1.12

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 Reserves 12,354256 13,879,260 2.185

Unappropriated profit 19,372,253 32,074,677 5.005

Surplus on revaluation 38,182,238 28,909,469 4.55

Total shareholder equities 75,817,674 81,954,118 12.903

Total shareholder equities & Total liabilities 1,237391460 635,138,511 100

Vertical analysis compares each amount with a base amount selected from the same year. As clear from
above that cash and balance with other bank are 12.4% of total Assets. While balances with other bank
are 6.34% of total asset. Deposits in other account are 79.2% of Assets. Other data is also calculated in
the same way.

4.4) VERTICAL ANALYSIS OF PROFIT AND LOSS ACCOUNT

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NATIONAL BANK OF PAKISTAN
PROFIT AND LOSS ACCOUNT
For the year ended 31st December 2006

PARTICULAR 2005 2006 Vertical

Analysis
(Rs. In “ooo”) (Rs. In“ooo”)
2005

Markup return/interest earned 33,692,665 437,88,628 100%

Markup/return/interest expense 10,321,768 13,634,912 31.13

Net markup interest income 23,370,897 30,153,716 68.86

Provision against non performing advances 2,446,739 3,075,723 7.024

Provision for diminution in the value of (245,881) (709,461) -.0162

investment

Bad debts written off directly 23,069 5,284 .00012

2,223,927 2,371,546 0.054

Net markup/ interest income after provision 21,146,970 27,782,170 6.35

Non markup/interest income

Fee concession and brokerage income 4,926,604 6,144,628 10.93

Dividend income 1,718,478 2,891,755 6.604

Income from dealing in foreign currencies 1,205,638 1,333,840 3.046

Other income 177,839 627,618 1.433

Total non markup/interest income 8,028,559 10,997,841 2.51

29,175,529 38,780,011 88.56

Non markup interest expenses

Administrative expenses 11,221,789 13,443,441 30.7

Other provision write off 198,298 (17,283) -.0039

Other charges 63,206 208,327 .0048

Total non markup/interest expenses 11,483,293 13,634,485 31.13

19,056,028 11,977,601 27.35

Profit before tax 19,056,028 26,310,577 60.08

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Taxation-current 7,154,002 8,695,598 19.86

- Prior years (1,098,709) 530,652 1.211

- Deferred 291,291 61,981 .0014

6,346,584 9,288,231 21.21

Profit after tax 12,709,444 17,022,346 38.87

Inappropriate profit brought forward 10,885,184 19,372,523 44.24

Profit available for appropriation 23594628 36,394,869 83.11

Through vertical analysis of above profit and loss statement we know interest earned is 100% while
interest expenses are 31.13% of interest earned. Provision against non performing advances is 2.51%
and total non-markup income is 88.56% while total non-markup interest expenses are 31.13%. Profit
before tax is 60.08%. While profit after tax is 21.21%. Profit carried forward is 44.24%. Financial
position of NBP is strong in 2006 as compare to 2005 because its profit is more in 2006.

4.5) HORIZONTAL ANALYSIS OF BALANCE SHEET

NATIONAL BANK OF PAKISTAN

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BALANCE SHEET
As at 31st December 2006

ASSETS 2005 2006 Horizental

(Rs.In“ooo) (Rs. In“ooo”) Analysis

Cash and balances with treasury banks 71,196,956 78,625,227 110.43%

Balances with other banks 31,019,330 40,641,679 131.02

Lending to financial institution 16,282,942 23,012,732 141.33

Investment 156,985,378 139,946,995 89.15

Advances 268,838,779 316,110,406 117.58

Other assets 23,941,056 27,113,698 113.53

Operating fixed assets 9,454,365 96,817,974 1024

Deferred tax assets ---- ----

Total assets 577718806 635,138,511 108.21

LIABILITIES

Bills payable 1,741,156 10,605,663 609.12

Borrowings from financial institutions 8,756,847 11,704,079 133.66

Deposits in other accounts 463,426,602 501,872,243 108.29

Sub-ordinated loans --- ---

Liabilities against assets subject to finance 16,629 13,235 79.59

lease

Other liabilities 23,496,910 26,596,300 113.19

Deferred tax liabilities 4,462,718 2,387,073 53.49

Total liabilities 501900862 553178593 110.22

SHARE HOLDER EQUITIES

Share capital 5,908,927 7,090,712 119.99

Reserves 12,354256 13,879,260 112.34

Unappropriated profit 19,372,253 32,074,677 165.57

Surplus on revaluation 38,182,238 28,909,469 75.71

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Total shareholder equities 75,817,674 81,954,118 108.1

Total shareholder equities & Total liabilities 577,718,536 635,138,511 109.93

Horizontal Analysis compares each amount with a base amount for a selected base year. Cash and
balances with treasury banks increase 110.43% of the 2005 level in 2006. Balances with other banks
increase 131.02% in 2006. In the same way other data analyze.

4.6) HORIZENTAL ANALYSIS OF PROFIT AND LOSS

NATIONAL BANK OF PAKISTAN
PROFIT AND LOSS ACCOUNT
For the year ended 31st December 2006

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PARTICULAR 2005 2006 Horizental
(Rs. In “ooo”) (Rs. In“ooo”) Analysis

- 44 -
Markup return/interest earned 33,692,665 437,88,628 129.96 %

Markup/return/interest expense 10,321,768 13,634,912 132.1

Net markup interest income 23,370,897 30,153,716 129.02

Provision against non performing advances 2,446,739 3,075,723 125.71

Provision for diminution in the value of (245,881) (709,461) 288.53

investment

Bad debts written off directly 23,069 5,284 22.9

2,223,927 2,371,546 106.64

Net markup/ interest income after provision 21,146,970 27,782,170 131.38

Non markup/interest income

Fee concession and brokerage income 4,926,604 6,144,628 124.72

Dividend income 1,718,478 2,891,755 168.27

Income from dealing in foreign currencies 1,205,638 1,333,840 110.63

Other income 177,839 627,618 652.91

Total non markup/interest income 8,028,559 10,997,841 136.98

29,175,529 38,780,011 132.92

Non markup interest expenses

Administrative expenses 11,221,789 13,443,441 119.8

Other provision write off 198,298 (17,283) 8.72

Other charges 63,206 208,327 329.6

Total non markup/interest expenses 11,483,293 13,634,485 118.73

19,056,028 11,977,601 62.85

Profit before tax 19,056,028 26,310,577 138.07

Taxation-current 7,154,002 8,695,598 121.55

- Prior years (1,098,709) 530,652 207.05

- Deferred 291,291 61,981 21.28

6,346,584 9,288,231 146.35

Profit after tax 12,709,444 17,022,346 1339.35

Inappropriate profit brought forward 10,885,184 19,372,523 177.97

Profit available for appropriation 23594628 36,394,869 154.25

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 Basic earning per share (Rs.) 17.92 24.1 134.48

Diluted earning pet share (Rs) 17.92 24.1 134.48

Horizontal analysis of profit and loss show interest earned increase 129.96% of the 2005 level in 2006.
Interest expenses increase 132.1% in 2006.provision against non-performing advances increase 125.71
%.

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CHAPTER 5
RATIO ANAYSIS

PARTICULAR 2005 2006

5.1)Current ratio= current assets 118,499,228/10,498,003 142279638/12309742

/current liability =11.287 =11.56

5.2)Net profit ratio = net profit 12,709,444/33,633,735 17022346/43788628*1

*100/income 100%=38.87%
0.3778*100 = 37.78%

5.3)Debt to equity ratio = debt/ equity 503,378,402/74,340,712 553178593/819*54118

=6.74
=6.771

5.4)Total assets turnover ratio = net 33,633,735/577,719,114 43788628/635132711

revenue (sale) /total asset = 0.0582 Times =0.0689 Times

5.5)Fixed assets turnover ratio = net 33,633,735/459,219,886 43788628/492853073

revenue (sale) /fixed asset = 0.0732 Times = 0.0889 Times

5.6)Debt to total assets ratio = total 503,378,402/577,719,114 553178593/635132711= .

debt/total assets 87 or 87.1%
= 0.871 or 8.71%

5.7) COMMENTS ON EACH RATIO

For every one rupees of current liability the NBP have 11.287and 8.456 rupees current assets. It has
strong financial position in 2006 as compare to 2005 to pay short-term obligation. Because it’s current
assets are more than in 2006.
Net profit of 2006 is more preferable due to more revenue and less expenses.
In 2006 this ratio 6.771 while in 2005 this ratio is 6.74.
NBP’s strong financial position in 2006 because it generate more revenue through the use of more
fixed assets. As compare to 2005.
NBP have sound financial position in 2006 because it generates more revenue through the use of assets.
As compare to 2005.
2006 ratio is more preferable because its return on assets is more than as compare to 2005.

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CHAPTER 6

SWOT ANALYSIS

On the basis of "SWOT" analysis, one can analyze the present status and
performance of an organization and can make conclusions and recommendations.
The "SWOT" analysis consists of four words that are S, W, 0 & T, which stand for
Strengths, Weaknesses, Opportunities and Threats respectively.

6.1) Major Strengths

National bank TIP branch Haripur is only public sector bank in the area of TIP.

●Nationalized Bank:
Being a nationalized bank the Govt. support to NBP, is the major strength of
NBP.

●Largest Branch net work:

The network of the branches of NBP is largest then any other bank inside the
Pakistan. i.e. 1242.

●Strongest capital structure:

The capital structure of NBP is very strong it is very easy to conduct
operations with large capital.

●Monopolistic hold:
The NBP have monopolistic hold by capturing the govt. accounts and
maintaining the confidence of the individuals by Govt. support.

●Greater Public confidence:

Being considered to be a Govt. bank the public have much confidence on NBP
then any other national or multinational bank.

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 ●Others strengths:
Something an organization is good at doing is termed as its strength. NBP's other
strengths are:
 Handling thousand of customer per month

 Collect about hundreds of thousand of electricity bills per month

 National bank TIP branch is authorized for collection on the behalf of B.I.S.E,
Abbottabad board, Hazara university, PTCL, WAPDA, SNGPL Etc.
 Easy transferring of money round the world through SWIFT and western
union.

6.2) Major Weaknesses

The following are some critical issues which must
seriously take under consideration for the betterment of the NBP TIP branch Haripur.

●Shortage of Staff:
In National bank TIP branch thousand of customers per
month which is quite difficult to manage but shortage of staff is problem in the
branch.

●No Proper Utilization of Technology:

National bank is one of the top most banks in Pakistan and only bank in public
sector. National bank main branch is lacking the proper use of latest technology as
other private banks are doing to make customers fully satisfied by providing them
additional facilities.

●De Motivation:
De motivation in employees is one of the main problems in NBP TIP branch
Haripur. Employees don’t have there keen interest in their jobs because of contract
base job.

●Lack of Responsibility Taking:

Employees of the bank hesitate to take responsibility on their shoulders they try
to shift their responsibilities to one another.

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●Lack Of idea Generation:
For the success of any organization the main thing is idea, the organizations
who concentrate on idea generation activities are most successful. National bank TIP
branch is lacking in idea generation because employee are not trained and don’t have
sufficient knowledge to give suggestion and new ideas to expand the business for the
bank.

●Lack of Interest in Training and Development.

“Nothing is permanent except change in this world” this is universal truth no
one can deny this fact .To keep yourself updated with the constantly changing
environment you must required to participate in different seminars, trainings and new
courses.
Staff of the TIP branch is not in possession of the facts to improve their skills through
training and no interest in their career development.

6.3) OPPORTUNITIES:
An external situation, which an organization can benefit from, is called
opportunity for that organization. NBP can grab the following opportunities:

●Network in foreign countries:

NBP starts opening branches in foreign countries and it has opportunities to
develop them very strongly, like it open a branch in Kabul, which prove to be very
beneficial.

●Gain economies of scale:

Being the bank with largest branch network and capital structure in Pakistan.
NBP can avail economies/of scale by increasing monopolistic hold.

●Conduct large workshops for training and development:

Due to its strong financial position the bank can conduct workshops for the
development of its staff effectively and can bear all the costs easily.

●Support of SBP:
The SBP is providing complete Support to the NBP by its different policies
and other supporting activities.

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●Better competitive position:
Having monopolistic hold on the economy the NBP gain competitive edge
over other banks, the bank maintain better financial as well as physical and other non
physical advantages.

●Market Recognition
For the second consecutive year, NBP was recognized as the best bank in
Pakistan by the prestigious periodical, “The Banker" UK (a subsidiary of Financial
Times Group).

6.4) THREATS:
An external situation posed to harm organization's interests is regarded as
threat to that organization. NBP worries about the following;

●Globalization:
In the era of globalization the bank is now going to face tuff competition with
multinational banks, which are interested in opening their branches in Pakistan.

●Increase in competition:
The increasing competition in local as well as national and multinational level
also lower down the profitability of the bank and compelling the bank to use a large
amount of funds to meet out competition.

● Privatization:
Privatization policy of the Govt. also create tuff times for the bank because of
this reason the bank is going away and away from the Govt. support during hard
times.

●Political instability in the country:

The changing governments and their changing policies also prove a poison for
the banking industry especially for nationalized banks. The political loans and their
remission also badly effect the nationalized banks specially NBP.

●Lack of Transparency in Govt. Policies:

Lack of consistency in Government's polices regarding business and economic
sector leads to threat for NBP.

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 The SWOT analysis is a mirror to the bank of its present condition. From this
analysis, we can conclude that the bank has done some professional changes in its
banking system. But still there are chances for improvement. The management can
develop elaborate strategic plans for capitalizing the available opportunities. One area
where the bank has done some work is the improvement in customer services. But to
get the desired results, the bank should develop long-term objectives and prepare
appropriate courses in order to achieve them.
The bank should maintain principle of professional management and adhere to the
sound and sophisticated banking rules and regulations to build confidence of the
people in the institution.

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CHAPTER 7
SUGGESTIONS AND RECOMMENDATIONS

National bank TIP branch Haripur has many

opportunities available in local market. Main thing is how the efficiency and
profitability of bank can be improved. For that purpose I suggest the following
recommendation to the management of the bank.

7.1) Employee’s T raining:

To increase the efficiency and profitability of the bank management should
arrange time to time training sessions for their employee’s to create awareness about
the importance of customers and work well in team as well as well individually.

7.2) Technology:
By the use latest technology and software’s, bank can satisfy their customers
more efficiently and effectively. Bank can offer their services online as private
banks.

7.3) Help Desk:

To improve the services and performance of the bank their must be help desk in
the branch, which support the customer for help them to direct to the concern
department.

7.4) Coordination:
National bank TIP branch Haripur is lacking coordination among the employee’s
that create many conflicts. They must provide the environment in which they can
discuss their problems and give suggestions to solve particular problem.

7.5) Idea Generation cell:

New ideas are very important for businesses to retain their customers. As
customer needs, wants and demands are rapidly changing with the passage of time.
For that purpose employees are provided such environment so that they can give new
ideas in order to expand the business and increase profitability of the bank.

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7.6) Feed back System:

To keep track of the employee’s behavior with the customer their must be
efficient and effective feed back system through which customer can give feed back
about the employee’s behavior ,bank services and products of the bank. This system
help’s management to take corrective decisions to overcome particular problems and
can monitor the over all performance of the employee’s and the bank.

7.7) Classification of Departments:

There are many departments in the TIP branch Haripur, but these departments
are not classified and distinguished through which customer can easily find the exact
department concern.

7.8) Clear Responsibilities:

The employee’s of the bank is not clear about their duties, roles and
responsibilities due to which they can not perform well. To over come this problem
each and every employee must be assigned clear instructions about their job.

7.9) Organization Environment:

In order to motivate bank’s employee’s and for attracting more and more
customers bank should maintain such a attractive and workable environment so that
employee’s feel comfortable while working in the bank and this will ultimately
increase the efficiency of the bank.

7.10) Motivation:
Human need appreciation in every aspect of their life. Employee’s must be
motivated and appreciated by the management to boost their moral time to time. This
will result in loyalty and improve the performance of the staff.

- 54 -
 BIBLIOGRAPHY

 Banking Currency & Finance by Prof, M. Saeed Nasir

 Financial Statement Analysis by Charles H. Gibson (7th edition)
 Management Internship Manual by Ziauddin (2nd edition)
 NBP Annual Report 2006
 www.nbp.com.pk
 www.sbp.org.pk
 Bank Nationalization act 1974

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