INTERNSHIP REPORT ON National Bank of Pakistan Circular Roads Branch, Gujrat M

BY Maqsood Akram Butt MBA 09021920-099 Session: 2009-2011

DEPATMENT OF MANAGEMENT SCIENCES

UNIVERSITY OF GUJRAT December, 2011

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INTERNSHIP REPORT ON National Bank of Pakistan Circular Road Branch, Gujrat

Internship Report submitted to the Department of Administrative Sciences In Partial Fulfillment of the Requirements for the Degree of Master of Business Administration December, 2011

BY:

Name Roll No

Maqsooda Akram Butt 09021920-099

MBA (HR) 2011 UNIVERSIYT OF GUJRAT

Date of Submission

Name of Internship assessor Signature of Internship Assessor..

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Maqsooda Akram Butt

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Executive Summary

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It is the requirement of the university for the Master in Business Administration degree to complete a six week internship program. After completion of the internship, the students have to submit a written report to department. The purpose of this is to get experience of real marketing practices and to bridge the gap between theoretical and practical approaches and to gather the knowledge of this vast field of Profession. Besides, this report also aims to inculcate amongst the students the methods of collecting the relevant information and material and shaping it in the form of formal report writing. The report provides information about the main functions and operations of National Bank of Pakistan. All the information is gathered in the period of internship in NBP. During my internship program I mainly worked on Opening a new account, Customer dealing, Utilities bills collection, Bills Remittance Departments, Deposit department, Distribution of pension, and Western union.

Table of Contents
Chapter one: Introduction

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Background of Study .. 08 Purpose ............ 08 Scope ... 08

Objectives 09 Methodology 09 Organization . 09 Summary .. 09

Chapter Two: Organization

Introduction . Overall respective sector in Pakistan . Role of the Organization in Pakistan .. Overall organization and its functions in Pakistan . 10 10 11 12

Organization office in which you are working . 15 Summary 15

Chapter Three: Organization

Introduction . 16 Brief history of organization .. 16 Actual and prescribed functions 17 Relationship of head office to the offices 18 No. of departments . 18 Offices or field offices .. 25 Current staff 26 Current staff of branch .. Training received by no. of employees Workload .... Salary structure .. Promotion system Incentive & motivation .. 26 27 27 27 28 28

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Responsibilities / duties performed ... Communication system Moral of staff Physical facilities Performance .. Latest budget review .. Summary

29 29 30 30 30 31 31

Chapter Four : Policies & Strategies

Policies Strategies Success . Summary 32 32 33 35

Chapter Five: Application of Methods

SWOT analysis PEST analysis .. Summary 36 37 39

Chapter Six: Recommendations List of abbreviations Reference

40 41 42

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CHAPTER # 1
INTRODUCTION

INTRODUCTION

This chapter is regarding to the introduction of report. It is the requirement of MBA degree to complete the six week internship. In this chapter the things which are discuss are background, purpose, scope, objectives and methodology of the study, introduction of organization and summary.

1.0 BACKGROUND OF THE STUDY Internship training program during Master in Business administration Program is necessary for the partial fulfillment of the completion of Degree. It is important for me to complete six week training in any listed organization whether, it is manufacturing or services related organization. So, I select the banking sector for the completion of this task. 1.1 PURPOSE The purpose of this report is to explain what I did and learned during my internship period with the NBP Circular Road Branch. The report focuses on the assignments handled, working environment, successes and weaknesses that the internee encountered when handling various tasks assigned by his supervisor. 1.2 SCOPE The scope of this study is that students know about the practical work. They meet different people and get experience. It is the platform to match the bookish knowledge in the practical field.

1.3 OBJECTIVES I worked as an internee in NBP Circular Road Branch, Gujrat. The main objectives to study in NBP were: To get some experience in working with well reputed organization.

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To gain knowledge about the professional environment of the bank. To know about the technology utilized in the banks. To deal and manage with the situation of stress.

1.4 METHODOLOGY There are mainly two methods that are used for the collection of data. Primary data

Observation of functions of Branch operations during internship. Observation of different processes of Branch during internship.

Secondary data Internet is very helpful for me to study more about banking sector of Pakistan. Different type of booklets of the Bank. Annual reports Employees of organization

1.5 ORGANIZAION NBP maintains its position as Pakistans premier bank. It is the major business partner of government of Pakistan. It also handles treasury transactions of government of Pakistan as an agent to State Bank of Pakistan. NBP has a network of over 1500 branches locally and 15 overseas Branches. Non interest based income shows impressive increase about 3.7 billion PKR. NBP has assets of 350 billion PKR. It has Rs.208283 million deposits 1.6 SUMMARY This is the first chapter of the report containing the detail introduction of the report. Internship training program during Master in Business administration Program is necessary for the partial fulfillment of the completion of Degree. Internship will enable interns to integrate and use my knowledge and skills from the classroom. This study will facilitate the students regarding the working of banking sector of Pakistan.

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For achieving my purposes, objectives and for the preparation of the internship report I required some kind of data, I used both methods of data collection that are primary sources and secondary sources for that purpose.

CHAPTER # 2 ROLE OF SECTOR AND ORGANIZATION

2.0 INTRODUCTION This chapter will summarize that whats the current situation of the banking sector in Pakistan. What elaborate the importance of NBP in the banking sector of Pakistan? This chapter will explore the role of NBP in the economic & social development of Pakistan. Moreover this will also tells you about the functions thats the organization is performing and about the internship office. 2.1 OVERALL RESPECTIVE SECTOR IN PAKISTAN Banking is one of the most sensitive businesses all over the world. Banks play very important role in the economy of a country and Pakistan is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance. The banking sector in Pakistan consists of Commercial Banks and Specialized Banking instructions. During the Quarter-1 of financial year 2008 as per SBP Quarterly report there has been robust growth in deposit mobilization and credit off take with a rise of PKR 23.1 billion in net credit to private sector. The banking sector in Pakistan is highly regulated. As the Central Bank of country, the State Bank of Pakistan regulates the banking sector with full autonomy. In general, State Bank of Pakistan is responsible for licensing, directing, supervising, controlling and impacting banks, and for exercising
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various monetary control policy measures. In addition, the Securities and Exchange Commission of Pakistan also monitors the operations of listed Banks in so far as they relate to public shareholding matters.

2.2 ROLE OF THE ORGANIZATION IN PAKISTAN NBP is formerly known as National Bank of Pakistan. National Bank of Pakistan was incorporated in Pakistan under the ordinance, 1949 and is listed on all the stock exchanges of Pakistan. It is registered and head office is at I.I. Chundrigar Road Karachi. The bank is engaged in providing commercial banking and related services in Pakistan and overseas. The bank also handles the treasury transactions of government of Pakistan as an agent to the State Bank of Pakistan. The back has over 1500 local branches and 15 overseas branches. Under a trust deed, the bank also provides the services as a trustee to the National Investment Trust (NIT), including safe custody of securities on behalf of NIT. National Bank of Pakistan maintains its position as Pakistans premier bank determined to set higher standards of achievements. It is the major business partner of Government of Pakistan with special emphasis on fostering Pakistans economic growth through aggressive and balanced lending policies, technological oriented products and services through its large network of branches locally, internationally and representative offices. The bank is providing all the banking services of mercantile and commercial banking permissible in the country, which include, Borrowing money and arranging finance from other banks.

Advancing and lending money to its clients. Financing of projects, including technical assistance, project appraisal through long term short-term loans, term finance and musharika certificates, etc.

Buying, selling, dealing, including entering into forward contracts of foreign exchange. Financing of seasonal crops like cotton, wheat, rice, sugar cane, tobacco, etc.

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Receiving of bonds, scrips, valuables, etc. for safe custody. Carrying on agency business of any description other than managing agent, on behalf of clients including Government and local authorities.

Generating, undertaking, promoting, etc. of issue of shares and, bonds, etc. Transacting guarantee and indemnity business. Undertaking and executing trusts. Joint venturing with foreign dealers, agents and companies for its representation abroad. Participating in "World Bank" and "Asian Development Bank's" lines of credit. Providing personalized Hajj services to intending Hajjis.

2.3 OVERALL ORGANIZATION AND FUNCTIONS OF ORG IN PAKISTAN Values Integrity We are the trustees of public funds and give out our community with integrity. We believe in being the best at always doing the right thing. We deliver on our responsibilities and commitments to our customers as well as our colleagues. Respect We respect our customers values, beliefs, culture and history. We value the equality of gender and diversity of experience and education that our employees bring with them. We create an environment where each individual is enabled to succeed. Excellence We take personal responsibility for our role as leaders in the pursuit of excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward.

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 Customer Centricity Our customers are at the heart of everything we do. We thrive on the challenge of understanding their needs and aspirations, both realized and unrealized. We make every effort to exceed customer expectations through superior services and solutions. Innovation We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. Our teams work together for the smooth and efficient implementation of ideas and initiatives. FUNCTIONS Since NBP is a commercial bank, it performs a variety of functions. Like other commercial banks, NBP is engaged in financing international trade. Its other major functions include receiving deposits, advancing loans, and discounting of exchange. The functions perform by NBP are, Accepting Deposits This function is important because banks largely depend on the funds deposited with them by its customers. Deposits are of many types: Current Deposits Current deposits are also called demand liability on current deposits.NBP pays practically no interest on current deposits. In NBP current account can be opened with a minimum amount of Rs.500/-.

PLS Saving Deposit

Profit and loss sharing deposits are also called checking accounts. One can deposit and draw money easily. be opened with minimum amount of Rs.500/-. Profit on PLS is calculated every month but paid after six months. PLS account can

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DISCOUNTING BILLS OF EXCHANGE Discounting of bills is practically speaking lending from exchange at

their market rate i.e. it pays to holder of the bill an amount equal to the face amount after deducting the interest at current market rate for the period. This bill has to mature. This the common way used for keeping the part of assets of bank in liquid form. Fixed Term Deposits A deposit held at a financial institution that has a fixed term. These are generally short-term with maturities ranging anywhere from a month to a few years. AGENCY SERVICES NBP also provide best and unique services to its valued customers. NBP provide the following agency service to its customers: Collection of Dividends As NBP deals with the sales and purchase different types of securities, therefore NBP also provide dividend or interest earned on share or bonds on invested money. Collection of Cheques In the collection and payments of cheques, bills and promissory notes etc National Bank of Pakistan acts as an agent for its customers. General Utility Services Utilities provided by National Bank of Pakistan are clearance of utility bills, lockers facility, acts as referees and supply of information. Foreign Exchange Business NBP transacts foreign exchange business by discounting foreign bills of exchange and thus provides facilities for financing the foreign trade. 2.4 ORGANIZATION OFFICE IN WHICH YOU ARE WORKING I have completed internship in NBP Circular road branch (1077), Gujrat. Although it is a small branch in this area, but they are facilitating their customers by providing quality services. They provided different services to

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their customer. To fully satisfy their customer, and for efficient working, they assign different services to different departments. Few of these given below: Cash Department Deposit Department Advance & Credit Department Remittance Department Foreign Exchange Department 2.5 SUMMARY We discussed in this chapter the evaluation of banking in Pakistan. More in this chapter we have discussed the overall banking sector in Pakistan, role of NBP in Pakistan and functions of NBP in Pakistan.

CHAPTER # 3 ORGANIZATION

HISTORY

OF

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INTRODUCTION Chapter three is about the introduction to the NBP. In this chapter the overall working of NBP is described. This chapter contains information about the brief history of the organization. When the bank was established and who starts it. Banks have a proper communication system through which the head office communicate to the branch offices. The details of communication system followed by head office are included in chapter three. 3.1 BRIEF HISTORY OF THE ORGANIZATION The normal procedure of establishing a banking company under the Companies Law was set aside and the Bank was established through the promulgation of an Ordinance due to the crisis situation that had developed with regard to financing of jute Trade. The Bank commenced its operations from November 20, 1949 at six important jute centers in the then East Pakistan and directed its resources in financing of jute crop. The Banks Karachi and Lahore offices were subsequently opened in December 1949.

State bank of Pakistan after its formation demanded from the Indian Reserve Bank the assets against the Indian currency retired from Pakistan territory. Government of India refused to hand over the assets worth about five hundred million rupees. The dispute is still unsettled and these assets are still not delivered to Pakistan. Until June 1950, the Bank was engaged exclusively on jute operation. Thereafter, it was felt that it could expand its business to include other commodities as well.

With the passage of time its functioning diversified as they take over the function of different institution with the passage of time like in past they took over the function of Imperial bank of India and now of NDFC (national development Finance Corporation)

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It is working as the agent of the state bank of Pakistan and performs its functions wherever state bank of Pakistan is not present.

3.1.1 ACTUAL AND PRESCRIBED FUNCTIONS

Mission Statement To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility. Vision Statement To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility. Objective Strong emphasis has been laid upon training of branch officers to better equip them for marketing of retail banking products. Initiatives on similar lines are being launched for the SME sector. In future NBP is going to introduce modern banking services to keep pace with the competition and more important our customer needs. These are as follows: Debit cards Internet banking Call centers Mobile banking

MILESTONES

Best Emerging Market Bank from Pakistan for the year 2005 Global Finance USA, May 2005 NBP is one of the Top 100 Banks of Asia Euro money UK, March 2005 Bank of the year 2001, 2003&2004 for Pakistan The Banker financial times Group UK. Best Foreign Exchange Bank in Pakistan global Finance USA, March 2004

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3.1.2 RELATIONSHIP OF HEAD OFFICE TO THE BRANCH OFFICES

Relationship of head office with branch is linked through regional head quarter. If branch face any difficulty or require any thing which it needed they communicate to regional head quarter and then regional head quarter communicates with head office. 3.1.3 MAIN DEPARTMENTS AND THEIR JOBS The Departments functioning at NBP as briefed by its concerned officers during the internship are:

Cash Department Clearance Department. Remittance Department. Advances Department.

CASH DEPARTMENT Cash department performs the following functions Receipt The money, which either comes or goes out from the bank, its record should be kept. Cash department performs this function. The deposits of all customers of the bank are controlled by means of ledger accounts. Every customer has its own ledger account and has separate ledger cards.

Payments It is a bankers primary contract to repay money received for this customers account usually by honoring his cheques. Cheques and their Payment
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Negotiable Instruments Act, 1881 Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. Since a Cheque has been declared to be a bill of exchange, it must have all its characteristics as mentioned in Section 5 of the Negotiable Instruments Act, 1881. Therefore, one can say that a Cheque can be defined as an: An unconditional order in writing drawn on a specified banker, signed by the drawer, requiring the banker to pay on demand a sum certain in money to, or to the order of, a specified person or to the bearer, and which does not order any act to be done in addition to the payment of money. CLEARANCE DEPARTMENT A clearinghouse is an association of commercial banks set up in given locality for the purpose of interchange and settlement of credit claims. The function of clearinghouse is performed by the central bank of a country by tradition or by law. In Pakistan, the clearing system is operated by the SBP. If SBP has no office at a place, then NBP, as a representative of SBP act as a clearinghouse. After the World War II, a rapid growth in banking institutions has taken place. The use of cheques in making payments has also widely increased. The collection as settlement of mutual obligations in the form of cheques is now a big task for all the commercial bank. When Cheque is drawn on one bank and the holder (payee) deposits the same in his account at the bank of the drawer, the mutual obligation are settled by the internal bank administration and there arises no interbank debits from the use of cheques. The total assets and total liabilities of the bank remain unchanged. In practice, the person receiving a Cheque as rarely a depositor of the cheque at the same bank as the drawer. He deposits the cheque with his bank other than of payer for the collection of the amount. Now the bank in which the cheque has been deposited becomes a creditor of the drawers bank. The depositor bank will pay his amount of the cheque by transferring it from cash reserves if there are no offsetting transactions. The banks on which the

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cheques are drawn become in debt to the bank in which the cheques are deposited. At the same time, the creditors banks receive large amounts of cheques drawn on other banks giving claims of payment by them. The easy, safe and most efficient way is to offset the reciprocal claims against the other and receive only the net amount owned by them. This facility of net interbank payment is provided by the clearinghouse. The representatives of the local commercial banks meet at a fixed time on all the business days of the week. The meeting is held in the office of the bank that officially performs the duties of clearinghouse. The representatives of the commercial banks deliver the cheques payable at other local banks and receive the cheques drawn on their bank. The cheques are then sorted according to the bank on which they are drawn. A summary sheet is prepared which shows the names of the banks, the total number of cheques delivered and received by them. Totals are also made of all the cheques presented by or to each bank. The difference between the total represents the amount to be paid by a particular bank and the amount to be received by it. Each bank then receives the net amount due to it or pays the net amount owed by it. In-Word Clearing Books The bank uses this book for the purpose of recording all the cheques that are being received by the bank in the first clearing. All details of the cheques are recorded in this book. Out-Word Clearing Book: The bank uses outward clearing register for the purpose of recording all the details of the cheques that the bank has delivered to other banks. ADVANCES DEPARTMENT Advances department is one of the most sensitive and important departments of the bank. The major portion of the profit is earned through this department. The job of this department is to make proposals about the loans. The Credit Management Division of Head Office directly controls all the advances. As we

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known bank is a profit seeking institution. It attracts surplus balances from the customers at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms. Credit extensions are the most

important activity of all financial institutions, because it is the main source of earning. However, at the same time, it is a very risky task and the risk cannot be completely eliminated but could be minimized largely with certain techniques. Any individual or company, who wants loan from NBP, first of all has to undergo the filling of a prescribed form, which provides the following information to the banker.

3.1.3 OFFICES OR FIELD OFFICES Offices means the Head office which is situated in MCB House located at Sharea Ghous-ul-Azam, commonly known as Jail Road. Field offices mean the Branches. MCB has the f Principles of Advances There are five principles, which must be duly observed while advancing money to the borrowers. a. b. c. d. e. Safety Liquidity Dispersal Remuneration Suitability

Forms of Loans In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the form of cash finance, overdrafts and loans. NBP provides advances to different people in different ways as the case demand. a) Cash Finance

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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 unutilized amount. In order to offset this loss, the banker may provide for a suitable clause in the cash finance agreement, according to which the 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. b) Overdraft/Running Finance 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. c) Demand Financing/Loans 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.

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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. REMITTANCE DEPARTMENT Remittance means a sum of money sent in payment for something. This department deals with either the transfer of money from one bank to other bank or from one branch to another branch for their customers. NBP offers the following forms of remittances. a) b) c) Demand Draft Pay Order Mail Transfer

Demand Draft Demand draft is a popular mode of transfer. The customer fills the application form. Application form includes the beneficiary name, account number and a senders name. The customer deposits the amount of DD in the branch. After the payment the DD is prepared and given to the customer. NBP officials note the transaction in issuance register on the page of that branch of NBP on which DD is drawn and will prepare the advice to send to that branch. The account of the customer is credited when the DD advice from originating branch comes to the responding branch and the account is debited when DD comes for clearance. DD are of two types.
a) b)

Open DD: Cross DD:

Where direct payment is made. Where payment is made though account.

NBP CHARGES FOR DD I. Up to Rs. 50,000/- is Rs 50/- only

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II.

Over Rs. 50,000/- is 0.1%

Pay Order Pay order is made for local transfer of money. Pay order is the most convenient, simple and secure way of transfer of money. NBP takes fixed commission of Rs. 25 per pay order from the account holder and Rs. 100 from a non-account holder. 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.

3.1.4 OFFICES OR FIELD OFFICES

NBP Circular Road Branch is a small branch working under regional office. There is no any branch working under NBP. NBP facilitating their customers through offering different services like hajj application, advancing loans at lower rate of returns etc.

Branch Network of National Bank of Pakistan

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With the geographical development of its branches, the National Bank of Pakistan has been able to extend its services to a much larger number of Pakistanis all over the country. Today the Bank has more than 8.8 million accounts & Bank maintains its presence in all the major financial centers of the world through its 22 (2008) overseas branches and 5 representative offices. Banks role Apart from having a vast branch network, Bank is at the forefront in the acquisition and application of new technologies in every aspect of its banking facilities. It has acquired leased telephone lines for on-line banking. The Bank has 12 Regional Computer Centers to cover various on-line and batch system requirements of branches and controlling offices. Presently the National Bank of Pakistan is divided into various Groups headed by SEVPs/EVPs. Its field operations are controlled by 29 regions ( Annexed II) reporting to as many Regional chiefs, who control 40 zones and 15 single Branch zones headed by Zonal Chiefs; 12 corporate branches and 1249 domestic branches headed by Branch Managers. The bank has 12 SWIFT local centers. Apart from having a vast branch network, Bank is at the forefront in the acquisition and application of new technologies in every aspect of its banking facilities. It has acquired leased telephone lines for on-line banking. Bank has also a presence on the internet. The National Bank of Pakistan has 156 online branches throughout the country. It has modernized its services by installing Automated Teller Machines (ATMs) called CASH LINK at selected branches. The Head Office formulates and implements the strategic, management and operational policies. The Branch network of National Bank of Pakistan is divided into following categories: ATM network ( Total ATMs 101 & Total ATMs machines 104) Domestic network ( 1249 Branches) Islamic network ( 5 Branches) Online network ( 156 Branches) Overseas network ( 29 Branches)
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Swift network ( 12 Branches) Customer Facilitation Centers (6 Customer Facilitation Centers) Agriculture branches ( 825 Branches)

3.2.1 CURRENT STAFF

The branch staff is consisting of 6 members. Which include branch manager, operational manager, foreign remittance manager, two cashier, and one security guard. Staff of bank is too much cooperative with each other as well as with customers. They try their best to provide best services to their customers according to customers requirements. Current staff of branch according to qualification and experience Current staff of the branch is not well educated but they have no. of years experience which helps them to achieve their targets effectively and efficiently. Manager qualification is B.Sc in Math, Stats, and Economics with experience of 14 years. Operational manager qualification is MBA with 12 years experience. Cashier qualification is B.A with 10 years experience. And in guards qualification is metric. 3.2.2 TRAINING RECEIVED BY NO. EMPLOYEES National bank of Pakistan has its national and development centers and 4 staff collages at: 1. Karachi 2. Lahore 3. Peshawar 4. Islamabad

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In these centers and staff colleges, the banking training is provided to the officers, managers, and to potential managers. It arranges courses and seminars for middle and higher management in all. Each year almost 1500 persons receive training over there. Each employee of NBP before starting its work practically in bank and after selection as employee in bank get training and then come on job properly.

3.2.3 WORKLOAD Workloads means how many hours they work in bank or facilitate the customers on daily basis .Here as we are concerned with National bank of Pakistan, they facilitate their customers 9am to 1.30pm and done their work 7hours according to official requirement which includes done post pone work, closings and adjusting balances etc.

3.2.4 SALARY STRUCTURE Salary structure includes performance bonuses, incentives and basic salary. The salary structure of NBP is based on seniority plus performance base. Employees get their fixed salary plus additional bonuses and incentives according to their performance.

3.2.5 PROMOTION SYSTEM NBP promotion system based is on performance and experience of employees. Manager promoted by his/her performance and through increase in sales. While lower management promotion system differs than higher management. Promotion system of NBP varies with the designations or level of employees jobs. As in Circular Road Branch if the manager perform well on continuous basis that is terms of sales and deposits then he will be promoted. But when we talk about the promotion of lower level staff then they promoted on their

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deposits plus operational performance, that how well they manage their daily operational activities.

3.2.6 INCENTIVES & MOTIVATION If the employees take deposit for the bank, they will be given incentives in the percentage of amount taken as deposit. For instance, if Saving Officers or any other employees bring deposit, they are given incentives of some % of the total amount which is given to them with monthly income; these are the motivational factors for the employees as well as incentive. If loan officers perform well their duties means that screening of clients in well and efficient manner, they are appreciated by the Branch Manager and by completion of screening, every incentive is added in their monthly salary, so these are also the motivational factors for the employees working in NBP.

3.2.7 RESPONSIBILITIES Manager operational is responsible for all affairs of branch. He is answerable for all assign tasks and he is totally answerable as internal controller of the branch. He is responsible to take duty from all employees any lapses, causes is negligence.

3.2.8 CRITICAL ANALYSIS OF THE BRANCH NBP Circular Road Branch It is true that bank is trying to adopting computerized system but their most of staff is unable to use computerized system or not familiar with computer. There are no proper facilities in bank for customer. No proper facilities for old age people, they face so many problems in bank. There is no any shop for bank staff so that they can bring something for themselves or their guests in break time. Their all system is manual so much time waste in different process. There is also an electricity problem in

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this bank. There is reduction of staff in some departments, so they complete almost their work from internees. There is reduction of law & order, so sometimes branch faces so many problems especially in the dates of pensions. All types of pensioners are treated same day thats why this creates problems.

3.3.1 COMMUNICATION Communication system between branch employees is very good and admiring. They easily communicate their problems with each other. The employees of NBP Circular Road Branch are all linked with each other from top to lower management. So when any problem arises in branch they just discuss with each and solve it in few minutes. We can say that there is open and simple communication system within branch. But there is one flaw that there is high communication gap between head office and branches, because it takes a lot time to reach in head office and in take approval.

3.3.2 MORALE OF STAFF There is a good morale in staff of the whole branch, the staff covenant with one another in a good way and there is no concept of jealousy and leg pulling among staff. They behave with each other and also with me in a good way during the period of my internship and there is just like a family atmosphere.

3.3.3 PHYSICAL FACILITIES The NBP branch of Circular Road Branch is not well established, no air conditioning facility is available in the whole branch but there are separate rooms for officers. Cash officers do not have Computer system on their tables, there is also shortage of office equipment on their tables, he has just calculator as helping material for huge amount of calculations.

3.4 PERFORMANCES

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There are two types of performance measurement one of them is customer satisfaction and other is in terms of sales (number of account averagely open in a month). In term of quality First I am going to focusing on customer satisfaction, in NBP Circular Road Branch all employees were very experienced people so, they always deal the customer politely and in very impressive way. Thats why they can easily attracting and retaining the customer in this competitive environment. Only due to customer satisfaction and trust on bank products NBP Circular Road Branch achieve very best performance with respect to its operational time or activation time. In term of quality Secondly sales or no. of Accounts is based on the how much a banker can satisfy and attract the customer. In NBP in which I done my internship its age am 2 years but its customer volume spreads to 1300, which is remarkable according to budget point of view. Bank not just achieved its budgeted target fixed by higher management but also extend them up to 65% of fixed earning targets.

3.5 LATEST BUDGET REVIEW Deposit target has been increase up to 63% of the base (last financial year date) & advances target has been fixed 45% of the base. Earning target has been increase fixed up to 35% of the base.

3.6 SUMMARY During my stay in National Bank of Pakistan, I found it as among one of the best banks in Pakistan. As an internee, I enjoy working there. NBP has a very cooperative staff .I worked there in very congenial and supportive environment.
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CHAPTER # 04 NBP POLICIESS AND STRATEGIES

INTRODUCTION This chapter includes polices and strategies of NBP, that how they work and what are the basic rules for the accounting record assigned by SBP. The last part of the chapter consisted on success of NBP through its policies and strategies.

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4.1 POLICIES Policy is a projected program consisting of desired objectives and the means to achieve them. Following are some policies implemented by NBP. Provide job satisfaction to their employees. Allow the employees to participate in the decisions that affect them. Good performance reward is also in the form of hajj and umrah package. Use goals and feedback. Developing a benefit package. HR policies are in the form of circulars and instruction forms. Organizing 6 weeks internship for the students. NBP has no gender bias.

4.2 STRATEGIES Five year plan approved by BOD is hollow and does not address any serious thinking on: 1. Development required for serving major sectors of the economy 2. Productivity improvement and benchmarking with the competition

3. Bringing the institution on international banking landscape in the coming five years, not to speak of the seven years which the current management has already served. 4. Inducting and leveraging specialized human capital

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5. Infrastructure to support planned growth and vision

4.3 SUCCESSES After effectively implementing the policies and strategies NBP had achieve its goals efficiently and effectively in previous year performance. In below there are number of successes which has been achieve by NBP.

"Best Foreign Exchange Bank 2008 awarded by world's leading financial journal Global Finance." Stable AAA/A-1+(Triple A/A-One Plus) rating (Standalone Basis) by JCR-VIS (July 2007) Best Return on Capital for 2006 amongst all Banks in Asia . - Banker Magazine in July 2007 World's leading financial journal, Global Finance has named NBP as the Best Emerging Market Bank from Pakistan for the year 2006 . "Best Foreign Exchange Bank Pakistan award for the year 2006 by world's leading financial journal Global Finance . Due to consistent improvement in NBP's Core Profitability , Asset Quality and Economic Capitalization in recent years ,Moody's Investors Service upgraded the Financial Strength Rating (FSR) rom E+ to D-, in November 2005 .

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 Best Foreign Exchange Bank Pakistan award for the year 2005 by world's leading financial journal Global Finance . Best Bank - Pakistan award for the year 2005 by world's leading financial journal Global Finance . The Asian Banker, a reputable financial journal, has published the report of its research project on the ranking of 300 of Asia 's Strongest Banks based on a 11-Dimensional Dynamic Scoring Criteria has adjudged National Bank of Pakistan as the Strongest Bank in Pakistan . On the basis of overall financial performance during 2004, NBP has been listed Amongst top 1000 banks in the world and Number 1 Bank in Pakistan by the prestigious Banker Magazine in its issue of July 2005 . The Banker Magazine in July 2005 recognized NBP as the 10th Best Bank in terms of Profit on Capital' in the world . Bank of the Year awarded for the year 2005 by the world renowned The Banker magazine owned by the Financial Times Group, London. On an all Pakistan basis National Bank of Pakistan was awarded the Kissan Times Award for the year 2005 by the Prime Minister , Mr. Shaukat Aziz, for its services in the Agriculture Sector .World's leading financial journal, Global Bank of the Year award for the year 2004 by the world renowned The Banker magazine owned by the Financial Times Group , London . Euromoney Magazine, a leading and prestigious journal, published from London , UK , in its issue of March 2005 has published Moody's Investors Service rankings in which NBP is the only Pakistani bank which has been ranked among the Top 100 banks of Asia for it performance in the fiscal year 2003

4.4 SUMMARY

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As NBP is enjoying the highest rating of AAA in the industry assigned by M/s JCR-VIS Credit Rating Company Limited on a standalone basis i.e. without the benefit of the 75% government ownership. In addition to the highest credit rating in the banking sector NBP has received several awards from both local and foreign institutions of repute during 2008 including Bank of the Year award given by the The Banker magazine and the Best Foreign Exchange Bank in Pakistan awarded by Global Finance. NBP has a strong commitment towards the betterment of society and is fully aware of its social obligations and responsibilities. NBP has always shown great generosity in times when a natural calamity strikes like the 2008 devastating earthquake in Balochistan or when it comes to rural development, children education and promotion of Sports. In 2008 NBP inaugurated its own built Sports club at Clifton

CHAPTER METHODS
INTRODUCTION

FIVE:

APPLICATION

OF

This chapter consisted on different analysis of NBP. In this chapter I will analyze NBP through different perspectives; I will conduct different analysis to realize the actual financial position of NBP. SWOT ANALYSIS

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Strength Oldest Institution Alternative Duties in SBP Absence More Deposits than Other Banks Employee Benefits Broad Network Strictly Followed Rules and Regulations Professional Competence Healthy Environment Oldest Institution Alternative Duties in SBP Absence More Deposits than Other Banks Employee Benefits Broad Network Strictly Followed Rules and Regulations Professional Competence Healthy Environment Relations between Staff and Other Employees

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WEAKNESSES

Lack of Marketing Efforts Unionism Favoritism Lack of Financial Product Inefficient Counter Services in the Rush Hours Lack of Computerized Network

Lack of Modern Equipment Uneven Work Distribution

OPPORTUNITIES

Electronic Banking Micro Financing

THREATS Emergence of New Competitors Political Pressure by Elected Government

4.2 PEST ANALYSIS It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up of: 1. The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc.

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2. The micro-environment e.g. our external customers, agents and distributors, suppliers, our competitors, etc. 3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors.

Political:

Privatization policy and deregulation. Impact of subsidized credit affecting and NCBs. Employment practices, Unions, Associations. Political Interference and harassment. Incidents of high taxation on banking industry.

Economical:

Constraints in mobilization of public savings because of inflation. Staff cost. Operating cost. Bad debts

Social & Cultural:

Inadequate human resources. Cultural strain to savings. Defaulters lobby. Declining education and work ethics. Inadequate accountability. Adequate empowerment.

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Technological:

Inadequate communication infrastructure. Inadequate computer facilities. Inadequate IT training

5.4 SUMMARY The summary of is SWOT Analysis, PEST Analysis and ratios Analysis of NBP. To know how NBP can compete well and how to maintain its position in the market as a best services organization. In conclusion we can say that the global economic environment has changed, creating challenges and opportunities for the worlds policy makers. The privatization drive has emerged as a strong tool of transformation, which is being recognized as an essential ingredient for the economic wellbeing. Now there is a greater awareness that in an interdependent world all countries gain individually, these countries should be a positive contributor to world economic growth as whole. Banks are playing very important role in the economic growth of the countries. N.B.P no doubts a positive contributor in this respect but I think there are certain points by adopting which can serve more effectively and efficiently. Those points are discussed in next chapter.

CHAPTER

#6

RECOMMENDATIONS AND SUGGESTIONS

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INTRODUCTION 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 City branch in particular.

Recommendations
Following are the recommendations that can be adopted by National Bank of Pakistan in order to grow and meet future challenges in the banking sector. First of all bank should indulge in online banking system very quickly because this is the requirement of the present age. The bank should also provide more and more computers to all the branches in large cities as well as town branches. The staff of the bank should also be trained to use these computers because if staff will not be aware of computer knowledge it will create problems. Behavior of employees should also be changed, because in this age of the world customers want the staff of the bank with good behaviors, otherwise they switch off to other banks. HR department of the bank should be made efficient, so that it can provide competent employees.

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Working conditions for employees should also be made better so that they will be motivated and enhance the performance of the bank.

Political interference in bank matters should also be eliminated to improve the performance of employees.

LIST OF ABBREVATIONS
NBP MBA IT SBP UK DD USA PLS DM DF IBC OBC SME A/C TT MT FDD ACR MCB HBL ABL ROA ROE ROD SWOT ATM National Bank Of Pakistan Master of Business Administration Information Technology State Bank of Pakistan United Kingdom Demand Draft United State of America Profit And Loss Saving Account Deutsche Mark Demand Finance Inward Bills for Collection Outward Bills for Collection Small Medium Enterprises Account Telegraphic Transfer Mail Transfer Foreign Demand Draft Annual Confidential Report Muslim Commercial Bank Habib Bank Limited Allied Bank Limited Return on Assets Return on Equity Return on Deposit Strength, Weakness, Opportunities, Threats Automated Teller Machine

REFERENCES
I collect this information from: National Bank, Annual Reports

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Economic Reviews for Banks and their activities. State Bank of Pakistan, Website, http://www.sbp.gov.pk National Bank website, http://www.nbp.com I also visit & complete I also visit & complete 6 weeks internship in national bank of Pakistan Circular Road Branch for collecting data. http://www.sbp.gov.pk8 www.nbp.com.pk http://www.scribd.com/doc/13314549/Internship-Report-of-NBP http://www.scribd.com/doc/19161491/NBP-Internship-Report http://www.nbp.com.pk/aboutus/index.aspx http://www.docstoc.com/docs/1007562/national-bank-of-pakistan-ahollow-dream/ http://www.nbp.com.pk/aboutus/dreport2.aspx

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