Internship Report

National Bank of Pakistan
In The Name Of Allah, The Most Beneficial,

The Most Merciful.
All praise Is For Allah, The Lord Of The Universe.
The Most Beneficial, The Most Merciful.
The Master Of The Day Of Judgment.
( al-Fatiha; verse:1-4 )
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PREFACE
Two months internship is an important part of BBA Honrs. (Marketing), this
enables the student to work in the practical environment. It is also important in
other way as it carries three credit hours and 100 marks towards the final result.
I underwent my training at NBP Bank Street Branch, Bahawal Nagar (0709). I am
thankful to my branch manager Abdul Sattar Sahab and branch staff to cooperate
with me a lot during my internship period. During my two months internship
period they give me every opportunity to learn and to get best out of me. I am
highly thankful to all of them for all the favor they give me.
AFIFA MUSHTAQ.
B.B.A Honrs. (Marketing)
Roll. No. BBD-09-24
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ACKNOWLEDGEMANT
All praise for Almighty ALLAH whos uniqueness, oneness and wholeness,
who gave me enough courage, knowledge and ability to accomplish the report and
enabled me to complete this report in a very limited time. All respect is for the
HOLLY PROPHIT HAZRAT MOHAMMAD (PBUH)

Who enables us to recognize oneness of our creator.
I am very thankful to my honorable DIRECTOR
PROF. RAJWANA
And honorable TEACHERS
SIR AHSAN JAMIL & MADAM FARWA JABEEN

Of B.Z.U Multan Sub Campus, D.G Khan. Their constantly encouragement made
the successful accomplishment of this internship report.
I would like to thanks to my all helpers and staff of the national bank of Pakistan. I
am especially thankful to the Branch Manager
ABDUL SATTAR SAHAB

For his valuable guidance and cooperation throughout my internship.
I also thanks to my Parents and Siblings who provide me the favorable
circumstances to complete my education as was required and its all by their
prayers, love and all which helps me to accomplish the report and make my future
secure.
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Table Of Content
Executive Summary.......................................................................................................8
Role of Commercial Bank............................................................................................11
Types of Banks.............................................................................................................13
Central Bank.............................................................................................................13
Commercial Banks...................................................................................................13
Exchange Banks.......................................................................................................13
Saving Banks............................................................................................................13
Agricultural Banks...................................................................................................14
Industrial Banks.......................................................................................................14
History of National BANK of Pakistan.......................................................................15
Official setup................................................................................................................17
Management Hierarchy................................................................................................18
General information about NBP...................................................................................19
Main branch structure...................................................................................................20
Total staff of NBP.........................................................................................................21
Vision Statement..........................................................................................................22
Mission Statement........................................................................................................22
NBP Definition of Customer........................................................................................23
Deposits Department....................................................................................................23
Current / Demand Account.......................................................................................24
PLS Account.............................................................................................................24
PLS Term Deposit Account......................................................................................25
PLS Term Deposit (MIS) Account...........................................................................25
National Income Daily Account (NIDA).................................................................25
Closing of account:..................................................................................................27
Cheque..........................................................................................................................28
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Payment of cheque at counter:.................................................................................29
Processing of cheque:...............................................................................................30
Payment of cheque in transfer:.................................................................................30
Returning of the cheque...........................................................................................32
Stop payment of cheque...........................................................................................33
Remittances department...............................................................................................33
Functions of remittance department.........................................................................33
Demand DRAFTS (dd)............................................................................................34
Procedure for issuing a DD......................................................................................34
Mail transfer (mt).....................................................................................................35
Procedure for issuing MT.........................................................................................35
Telegraphic transfer (tt)............................................................................................36
Procedure for making tt............................................................................................36
Payment order (po)...................................................................................................37
Procedure for issuing po...........................................................................................37
Payment of DD, MT, GD.........................................................................................38
Clearing Department....................................................................................................38
Outward Clearing.....................................................................................................38
Inward Clearing........................................................................................................40
COLLECTION OF CHEQUE.....................................................................................42
OUTWARD COLLECTION....................................................................................42
COLLECTION OF CHEQUES INWARDS.........................................................44
Foreign Exchange Department.....................................................................................44
Foreign Currency Deposits..........................................................................................46
Types of Foreign Currency Account........................................................................46
FOREIGN REMITTANCES........................................................................................48
Inward Remittances..................................................................................................48
Outward Remittances...............................................................................................50
S.W.I.F.T...................................................................................................................51
FOREIGN BILLS FOR COLLECTION.................................................................51
Local Bill for Collection..........................................................................................52
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Import Section..............................................................................................................53
Letter Of Credit........................................................................................................53
Types Of LC.............................................................................................................54
Export Regulations.......................................................................................................56
Import Regulations.......................................................................................................59
DOCUMENTS FOR IMPORT LC..........................................................................59
MINISTRY INVOLVED IN IMPORT....................................................................60
PAYMENT TO BANK.............................................................................................60
NATURE OF PAYMENT........................................................................................60
PROCEDURE OF OPENING LC...........................................................................61
PAYMENT OF THE LC..........................................................................................61
FOREIGN CURRENCY TRAVELERS CHEQUES...............................................62
ADVANCES DEPARTMENT.....................................................................................65
Rules for Loans........................................................................................................66
Principles of Lending...............................................................................................66
safety........................................................................................................................67
Purpose of advance...................................................................................................68
Productivity..............................................................................................................68
Security of advances.................................................................................................68
Repayment of advances............................................................................................69
Remuneration...........................................................................................................69
Expiry Date Of Limit...............................................................................................69
Final Adjustment Date..............................................................................................70
TYPES OF ADVANCES.............................................................................................70
DEMAND FINACE.................................................................................................70
CASH FINANCE.....................................................................................................71
RUNNING FINANCE.............................................................................................71
AGRI. CREDIT/FINANCE.....................................................................................71
PACKING FINANCE..............................................................................................72
IDA, OPEC, IBRD LOANS.....................................................................................73
Transport loan...........................................................................................................73
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CREDIT REPORT.......................................................................................................73
NET WORTH OF BORROWER.............................................................................75
Borrowers credit worthiness...................................................................................77
Sources of information on borrowers.......................................................................78
SECURITIES AGAINST ADVANCES...................................................................79
TYPES OF SECURITIES........................................................................................82
ADVANCES PROCEDURAL MECHANISM........................................................84
DETERMINATION OF DRAWING POWER OF THE BORROWER..................86
Banch network of NBP................................................................................................89
Distribution of profit on pls deposits for the half year ended June, 30, 2012..........90
Ratio analysis...........................................................................................................91
Financial analysis.....................................................................................................92
National bank of Pakistan...................................................93

Income......................................................................................................................93
SWOT Analysis of NBP...........................................................................................98
PEST Analysis of NBP...........................................................................................100
Suggestions and recommendations............................................................................101
References..............................................................................................................103
Annexes..................................................................................................................104
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Executive Summary
National bank of Pakistan since its establishment in 1949 is working as a
commercial bank and also providing specialized services to the government and
State Bank of Pakistan. The bank was nationalized with other major banks in early
seventies and since then being a government owned organization it has not been
able to give a remarkable performance. Further, the privatization of other banks has
also created a stiff environment in the banking industry.
National Bank of Pakistan, besides providing the general banking services is also
acting as an agent to State Bank of Pakistan, in areas where State Bank of Pakistan
does not has its own branches. National bank of Pakistan is working with the State
Bank of Pakistan in effective implementation of the credit policies that have been
formulated from time to time by the government and State Bank of Pakistan to
control and monitor the fiscal and monetary situation in the country.
National Bank of Pakistan currently has a wide network of branches inside the
country and in all commercial centers of the world as well. Through this huge
network of branches the Bank is providing all sorts of services that have become
part of the modern banking. New innovations and new products, which are rapidly
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adding up in the product mix of banking industry, all are successfully adopted by
Nation Bank of Pakistan.
The Bank is providing deposits facilities to more than five hundred thousand
customers in the country and which is increasing by the time. The bank has been
providing a service to the government of making salary payments to all
government employees on behalf of the government. These payments are sent to
the bank for distribution from the provincial divisions of all concerning
departments.
In the deposits area the bank is providing special accounts such as PLS Term
Deposit (Monthly Income account), which provides a monthly withdraw able
return on the account. And there is a National Income Daily account, carrying
hybrid characteristics of saving and current accounts, distributes all profits on daily
product basis to the account holders. The bank is trying to revolutionize the
services that are provided over the counter and is working for an early change in all
the branches of the bank.
In the advances side the bank has been successful in deploying its resources in the
best way in all commercial, industrial and agricultural sectors of the country. These
advances have been increasing with the increasing trade and commerce, and bank
has been able to meet the requirements up to the maximum extent.
The introduction of a new set of services in shape of foreign currency accounts has
further given a sharp rise in the banking field. This has made easy for the
foreigners residing in Pakistan to be encouraged and make the inflow of foreign
exchange in the country more stable. This new service, though shaken its
importance after undue freezing of all accounts in 1998 have spread a situation of
non-confidence among the masses, still these accounts are increasing in number.
The financing process of all international trade, which modern banking made less
complicated and more secure, have increased with the global-village concept in the
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world. For banks it is an opportunity to grasp the maximum share as possible

through being more efficient to reach the customer. National Bank of Pakistan has
been providing these financing services with great esteem and devotion to public
and private enterprises. Nation Bank of Pakistan up till 1995 has shown good
performance in the banking field with earning good profits and financing bigger
projects. But after that year with the privatization of three nationalized commercial
banks, the bank has not been able to sustain its good ranking in the industry.
Further due to being under the political influence the bank has been forced to make
unprofitable commitments too.
The management is considering the fact and doing planning for the sake of getting
it through these unjustified pressures but still not been able to implement them in
good manner. This is further disturbed by the demotivated and unqualified staff
that is working with the bank.
To be able to regain the level of performance and profitability the bank has to take
serious measures to escape from the political influence, build a competent and
qualified pool of employees, make all possible efforts to introduce the modern
technology that is serving the banks in the world and to enhance the confidence of
the customer, are necessary steps be taken by the bank.
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Role of Commercial Bank

Banks play an important role in the economic development of a country. If the
banking system is unorganized and inefficient, it creates mal-adjustments and
impediments in the process of development. In Pakistan, the banking system is
organized in a well manner. The State Bank of Pakistan since July 1, 1948 stands at
the apex and is responsible of the operation of the banking system. The other
banks, which form the banking structure in Pakistan, are playing role in the
economic development of the country.
The role of the commercial bank in the growth and development of the economy
on sound and steady footings is discussed briefly as follows:
Mobilization of resources:
The commercial banks are the most efficient organizations of the economy in the
mobilization the resources and making a profitable pool of these resources. Taking
then money from the savers and lending it to the investors is the most prominent
job of the bank.
Financing development projects:
The banks and other financial institutions advance loans for the development
projects that enhance the pace of overall development of the country. These
advances are made in both public and private sectors for the purpose of achieving a
good and strong economic field to carry on the other activities of trade and
business.
Creating climate for capital formation:
Capital formation is done by the act of accepting peoples money and putting into
profitable ventures. They money so accumulated make possible the availability of
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the needed capital by the investors. The investors on the other hand are able to get
the needed funds that shortfall their requirements.
Assisting in planned development:

With the help of well-organized banking sector the government is able to make
good implementation of its economic planning and ca execute the developmental
activities for the welfare of the society.
Promotion of saving habit:

There are persons who have money but cannot put them in profitable use. The
banks attract these persons by offering a variety of accounts. They provide them
not on the safety of the funds but also higher returns on them. The banks, in this
way, promote the habit of thrift among the people.
Effective implementation of monetary policy:

With the help of a good banking system in the country the government and the
central bank regulate the monetary supply and demand of the money. A good
system helps in the implementation of the policies that are formulated by the
government. Through these banks credit expansion and contraction is made by
using different techniques of credit control.
Narrowing regional disparity:

The banks help in bridging the regional disparities in the country. The surplus fund
of one region is sent to the centers of deficit. The less developed areas acquire
funds, put them into productive channels and increase production. The banks this
help in a balanced growth the economy.
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Types of Banks
The banks can be classified into different types based on the modes and purposes
activities they perform. The main kinds of banks are:
C
ENTRAL BANK:
A bank that is given the responsibility to monitor and control the financial activities and
to maintain the steady flow of money within the country. The main objective of this bank
is to assist the government in the planning and implementation of fiscal and monetary
policies in a country. The bank does not involve in any type customer services rather it is
at the top of all the other banks that are operating in the country.
C
OMMERCIAL BANKS:
The most widely spread banks in any country with an objective to mobilize
the saving of the people and providing finance to the investors. These banks
are in the ground for profit earning motive and are in competition with each
other. These banks are providing the basic services to the customers in the
form of deposits, advances, remittances and other.
E
XCHANGE BANKS:
These banks mainly deal with the international trade and commerce. These
banks take the responsibility of settlement of foreign exchange and arrange
the foreign business. The purpose is to provide services to the importers and
exporters in the conduct of cross the border trade.
S
AVING BANKS:
Saving banks are those banks that collect and kept the small saving of the
people. Their objective is to promote thrift among the people and to use their
idle money in a better way by making it available to the investors through
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these banks. To induce people to have deposits with the bank, some
incentive is also provided.
A
GRICULTURAL BANKS:
These banks are set up to provide financial assistance to the agricultural
sector. The agricultural banks provide short and long-term credit to farmers
for different type of farming activities. Short term loans are to fulfill the
need of working capital for the procurement of seeds, fertilizers, or
pesticides. Whereas log-term loans are for capital expenditure that involve
huge funds such as purchase of agri. machinery and equipment. The
Agricultural Development Bank of Pakistan was set up for the development
of the agri-sector in 1981, by providing the financial aid to the farmers.
I
NDUSTRIAL BANKS:
Industrial sector requires huge funds for the establishment and smooth
running of all industries and firms. These banks are given responsibility to
extend a helping hand to the industrialists. In 1961 Industrial Development
of Pakistan was established with this motive. The other institutions engaged
in this type of financing are PICIC, NDFE, and ICP.
National Bank of Pakistan can be called a consolidated bank that is providing
functions of all the banks discussed above. It is helping SBP for the planning and
implementation of policies. Also working as an agent of SBP where SBP does not
has its own branches. Has been providing the services of commercial banks,
assisting in the across the border trade by providing services of settlement of
obligation between the international traders. And last but not least is helping the
economic sectors as well by providing loans to the industrialists and growers.
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History of National Bank of Pakistan

National bank of Pakistan was established on November 8, 1949 through passing
of a special ordinance in the National Assembly. The need for the establishment
came due to the reason when at that time newly born country was facing economic
crises. To get rid the intervention form the Reserve Bank of India, a self owned and
operated central bank by the name of State Bank of Pakistan was formed in July
1948 to carry on the responsibilities of issuing the currency and most importantly
controlling the flow of money inside the country.
When British decided to devalue its currency in 1949, India followed a suit against
it, but Pakistan did not, a decision, which attracted some criticism at that time, but
was, certainly justified itself in the way it facilitated the industrialization in of the
country. The arrangement have been made that the currencies of the countries were
to be at par with each other and neither could alter the par value of its currency
without consulting the other. India promptly challenged Pakistans decision as a
contravention of the agreement. Pakistan pointed out that it had not made any
change at all in the par value of its rupee while India had taken a unilateral
decision to follow Sterling, as required under the agreement. After some
correspondence between the two Governments, India agreed to recognize the par
value of the Pakistani rupee and a date was decided on which both central banks
would announce the par value of their currencies. Before the agreed date the
government of India went back on the agreement on the agreement on the plea that
since the master currency of the Sterling Area, namely Pound Sterling, had been
devalued, a resulted in complete confusion for both countries. The officer had
discussion with the Indian Ministry of Finance at the highest level but his mission
not fruitful.
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As a result of the exchange rate controversy, regular trade and payments between
the two countries came to standstill. India froze the surplus earned by Pakistan
from a favorable balance of trade, and one more financial dispute, which is still
alive, was added to the unsettled list. One of the immediate consequences of this
situation was the withdrawal of Marwari Merchants of the Indian finance, which
used to be employed annually for the movement of Pakistans jute crop. A crisis of
the first magnitude threatened because the jute crop was already in the markets
and, as there was no money to move so prices began to fall precipitously. At that
time, there was no jute industry in Pakistan, not a single just loom or a spindle and
no possibility, therefore, of utilizing any of the crops with in the country. As jute
prices collapsed, foreign merchants and foreign banks stood aside to watch the
process and the seriousness of the situation threatened to promote agrarian unrest.
It was now very evident that the government of Pakistan could not afford to
continue that the special mission to Delhi had failed, Government of Pakistan
moved quickly. Two ordinances were passed immediately, one setting up the Jute
board and other National Bank of Pakistan. National Bank of Pakistan was
established to provide finance to suitable parties.
Thus it came about that National Bank of Pakistan stood behind the jute trade and
State Bank of Pakistan behind the National Bank, and government stood behind the
State Bank. It was all organized so rapidly (six branches came into being at once)
that any doubt that might have lurked in the minds of outsiders about Pakistans
ability to tackle the situation was dispelled once and for all.
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.
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Official setup
Head office
Management
Credit Processing
SpecialDivision
Assets Management
Inspection
Division
Audit
Treasury
Division
Management Division
Support Division
Regional Headquarter
Management
Credit Processing
SpecialDivision
Assets Management
Inspection
Division
Audit
Treasury
Division
Management Division
Support division
Zonal Head Office
Management
Credit Processing
SpecialDivision
Assets Management
Inspection
Division
Audit
Treasury
Division
Management Division
Support division
Branch
Management
Credit Processing
SpecialDivision
Assets Management
Inspection
Division
Audit
Treasury
Division
Management Division
Support division
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Management Hierarchy
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General information about NBP

In January 1964, the bank started its well-known peoples credit scheme. The
scheme was designed to provide financial assistance to the smaller businessmen on
easy and liberal terms. It was welcomed all over the country and has been of
considerable service ever since. Its major objective was to build a strong
middleclass, which is a powerful guarantee of social stability in an otherwise
uncertain world.
Along with the social activities as an agent of State Bank of Pakistan, National
Bank of Pakistan has also been a good banking institution to be compared with
other commercial banks. It is providing the modern unmatched banking facilities
such as:
Deposit banking.
Financing and credit.
Remittance facilities.
Govt. treasury business and chest transactions.
Govt. receipts and payments.
Sales and purchase of govt. securities.
Foreign exchange business.
Safe custody and safe deposits.
Collection.
Utility bills.
Investment advices and other related services.
National Bank of Pakistan with its Head Office in Karachi operates through 9
regional Headquarters.
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Main branch structure

Manager AVP
OG I Rem.
OGII Admn.
OG I
Advances
OG II
Agnecy Services
OG III
OG III
Assistant Godawn Keeper
Assistant
OG II
Head Cashier
OG I
Forex
OG III
Assistant
OG II
Clearing
Head Messenger
Messenger
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Total staff of NBP

Staff
AVP Manager
Officer grade I
Officer grade II
Officer grade III
Clerical Staff
Non-Clerical Staff
Total Staff
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Number
1
4
7
19
21
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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.
Mission Statement
NBP will aspire to the values that make NBP truly the Nations Bank
by:
Creating a distinctive brand identity by giving the highest
principles of services
Institutionalizing a merit and performance culture
Adopting the best international management practices
Discharging our responsibility as a good corporate citizen of
Pakistan and in countries where we operate.
Maximizing stake holders value
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NBP Definition of Customer

A customer is the most important person in the bank, whether he comes, writes
or makes telephone call.
A customer is not dependent upon us we are dependent on him for our living.
A customer is not an interruption to our work he is the purpose of it, he is
doing us a favor by giving us the opportunity serve him.
A customer is not someone who argues with or match wits with no-one ever
wins an argument with a customer.
A customer is a person who comes to us because he need a certain goods or
services. It is our job to provide them in a way that is profitable both to him and
ourselves. That is why we are in business.
A customer is not a cold statistic he is flesh and blood with emotions and
prejudices just like our own.
Without the customer there is no business.
Deposits Department
National Bank of Pakistan offers the following types of accounts to its customers.
Current/Demand Account
PLS1 Account
PLS Term Deposit Account
PLS Term Deposit (MIS) Account
National Income Daily Account
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CURRENT / DEMAND ACCOUNT

This account is most frequently operated account, which is normally kept by
business people who have many transactions on daily basis. The account is not
entitled to receive any profit on this account. The bank also does not take any
service charges for operating this account. The minimum amount required for
opening of a current account is Rs.100. if the balance declines from the minimum
amount then the bank charges Rs.25 as incidental charges.
PLS ACCOUNT:
This type of account is the most significant and most widely opened in any bank.
This type of account is entitled to share the profit and losses with the bank based
on the rates that are declared every six months. The amount of profit is credited to
the account after six months. The profit is calculated on the minimum average
monthly balance in the account. National Bank of Pakistan Main Branch currently
has more than twelve thousand accounts under this head. The minimum balance
required by the bank to make an account eligible to share the profits is Rs.5000
monthly. The balances below this amount shall not be entitled to receive any profit
at all and the bank may deduct incidental and service charges on the account.
Profit calculation
o = Amount * days * rate / 365 _ W.H.Tax (10%) of total profit.
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PLS TERM DEPOSIT ACCOUNT:

This account is said as a non-operational account. This account has only two
transactions, one at the opening of the account with a credit and second at the close
of account with a debit. In this type of account the amount is deposited for a
specified period of time. The minimum period can be for three months and
maximum for five years. This type of account is for those people who have funds
that shall not be in use for an estimated longer time period. If account holder with
draw money before maturity then the profit is paid at the rate of 4.1% on the
average minimum balance. This rate is declared by SBP.
PLS TERM DEPOSIT (MIS) ACCOUNT:

This account is opened for five years and the minimum amount required is
Rs.10,000 to open an account. There is no maximum limit for the amount to be
deposited in the account unless the balance remains in multiples of 10,000. The
depositor gets the profit earned on the account monthly, credited to his account.
NATIONAL INCOME DAILY ACCOUNT (NIDA):

This account can be said a hybrid account. It is a new innovation in the deposit
category that allows the account holder to earn profit on the account on daily
product basis. In the view of present competitive environment in the banking
industry and the modes of payment of profits on daily basis introduced by other
Pakistani and foreign banks, NBP introduced a new scheme called NIDA, which is
bracketed in savings account but contains the characteristics of current account.
National Bank of Pakistan first introduced this account on Dec 28, 1995.
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The Main Features of the Accounts are as Follows:

The min Balance required for NIDA account is Rs.250000 whereas there is no
limit for the maximum balance.
Profit is calculated on daily product basis but paid half yearly.
A separate ledger is maintained for the account.
Eligible to share the profits at the rate declared by the bank for different
brackets of balances.
If the account balance is brought down from Rs.250,000 then the account is
converted into ordinary PLS account and shall be entitled to get profit at the
rate of PLS account.
Further these accounts may be opened as:
Individual or Joint account
Public Limited Company account
Private Limited and Partnership account
All these accounts require different types of application forms to be filled in by the
interested client. The requirement for the account openers is also different and
requires different set of documents to be attached with the form and submitted to
the Bank.
Requirement for opening of individual or joint account:

The requirements are simple that is applicable to all the individuals opening a
single account of a joint account. The applicant has to fill the form and attach a
photocopy of the NID card. An introducer and copy of his NID card is required. In
response, the officers in charge affix some stamps on that form and give to the
applicant a signature card.
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Requirements for opening of Private limited and Partnership

Account:
Account that is opened by Private ltd. Companies and firms. The account is open
with the title of the name of the firm. The account operatives have to be mentioned
in the account opening form. The operation conditions and any other instruction to
be followed are also mentioned in the account opening form.
The documents required for opening of this account are as follows:
Attested photocopy of partnership deed.
The list of all the partners signed and attested.
The NIDs of all the operatives of the accounts.
Registration certificates.
Photographs of the operatives (in case of illiterate).
All these accounts can come under any forms of accounts mentioned earlier. The
operational conditions may also differ based on interest of the account holders.
Closing Of Account
There are many reasons for closing of account. It is not a good omen for the
business of the Bank. The Bank cant bound any one to close the account. The
main reason may become cause of closing of an account is as follows:
Account holder himself wants to close the account.
The account holder has died or become insane.
Balance in the account has become nil.
Closing of account due to bad demeanor of the account holder.
Account becomes bank corrupt.
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An account is closed at the request of account holder is done by writing an

application for the closing of account to the manager. In case the account is closed
as a result of improper conduct of the account holder the manager is authorized to
close the account and sent the notice to the account holder.
On the death of the account holder the procedure is somewhat complicated and
lengthy one. The balance in the account is returned to the legal hires of the
deceased after all necessary documentation has been done.
Case where account balance falls to nil the account holder is sent a notice to make
the additional payment in the account. If there is no response from the account
holder within a period of one month the account is closed and final letter is sent to
the account holder.
The bank through legal jurisdiction retains where any account holder falls bank
corrupt his account is ceased and balance in the account.
Cheque
A cheque is an unconditional order in writing drawn on a specified banker
signed by the drawer, requiring the banker to pay on demand a certain sum
of 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.
According to the Negotiable Instrument Act 1881, cheque is a bill of exchange
drawn on a specified banker and not expressed to be payable otherwise than on
demand.
In Pakistan, banks deal with two types of cheques.
Open cheque-they are payable in cash at counters.
Crossed cheque- they are not payable in cash at counter.
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PAYMENT OF CHEQUE AT COUNTER:

When cheque is presented at cash counter for payment, the token clerk examines
the cheque before issuing a token. The following is looked into:
When cheque is presented at cash counter for payment, the token clerk examines
the cheque before issuing token. The following is looked into:
The cheque is drawn on the same branch of the bank.
The cheque is not crossed that it is open cheque.
It is not stale or post dated.
The drawer has signed the cheque.
The amount written in words and figure is same.
The drawer of the cheque duly signs all alteration or cancellation.
The presenter has signed at the back of the cheque.
The cheque is not payable to the limited company.
All alteration or cancellation is dully signed by the drawer of the cheque.
When cheque is found in order, the token clerk affixes TOKEN STAMP on the
backside of the cheque, writes the token no. it and puts his initial there. Then the
entry about it is made in the Token Issue Register. Following information is
entered:
Date.
Token number.
Account number.
Cheque number.
Amount.
Initial of the clerk.
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After this, the token is given to the presenter and cheque is handed over to the
accountant/authorized officer for further processing.
PROCESSING OF CHEQUE:
The accountant/authorized officer examines the cheque for the above mention
things. When cheque is found acceptable in all aspect, the signature of the drawer
compared with his signature on the Specimen Signature Card. When it is found
similar to specimen signature, he affixes SIGNATURE VERIFIED stamp, near the
drawer signature in the cheque and sign it. Then he checks the balance in the
account, if the account has the sufficient balance, the cheque is posted. The cheque
is than handed over to the cashier.
The cashier calls the presenter and takes his token and compares the token number
with the number written at the back of the cheque. He takes out the cash to be
handed over to the presenter and writes its denomination at the back of the cheque.
Thereafter, he gets signature of the presenter at the back of the cheque and hands
over cash to him and affixes CASH PAID stamp on cheque.
PAYMENT OF CHEQUE IN TRANSFER:

The customer of the branch deposits cheque drawn on the same branch, for
payment to the credited into his account, attached with pay in slip. The officer
accepts it after looking into the following:
The person depositing the instrument for collection is the customer of branch.
The correct pay in slip (current/saving) is attached with the cheque.
The depositor signature is presented on the slip.
The account number of the depositor is written on both the side of the slip.
The word and figure of the amount tally with each other.
The cheque is neither post dated nor stale.
The drawer signature is present on the cheque.
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The alteration on the cheque is signed by the drawer.

The cheque In name of the company, firm etc is not going into the account of
any person.
The cheque with PAYEE ACCOUNT ONLY crossing is not being deposited
into the account of any other person other than the person mention on the
cheque.
When everything is found in order, TRANSFER stamp is affixed on cheque and
both parts of the pay in slip. Banks special crossing stamp is affixed on the
cheque. PAYEE ACCOUNT CREDITED stamp is affixed at the back of the
cheque.
If the cheque is an open cheque the PAYEE ACCOUNT CREDITED is not affixed.
The authorized office puts his signature on both the portions of the slip and back of
the cheque. One portion of the pay in slip is returned to the depositor. Cheque is
handed over to the authorized person for further processing.
The signature of the drawer is compared with the signature of the Specimen
Signature Card. When signature is found similar to specimen signature, the officer
affixes SIGNATURE VARIFIED stamp, near the drawer signature, and signs it.
Then he checks the balance in the account if the account has sufficient balance, he
passes the cheque and the account is debited by the mention amount and account of
the depositor of the cheque is credited by the same amount. The cheque is treated
as debit voucher and pay in slip as credit voucher. The information about the both
is mention in Transfer Voucher Sheet.
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RETURNING OF THE CHEQUE:

Cheque can be returned back to presenter due to various reasons. When a cheque is
returned Cheque Returned Memo is attached to it. In the memo following
information is mentioned:
The name of the branch.
Date.
Cheque number.
Reason for returning the cheque.
The authorized officer signs the memo and Branch Stamp is place near his
signature. When the cheque (along with memo) is returned to the presenter, the
token is taken back from him and token number written at the back of the cheque
and Token Issued Register is crossed. Some of the reasons for returning the cheque
are:
Stop payment from the drawer.
Insufficient funds in the account.
Signature differs from specimen signature.
Necessary stamps found missing.
Account has a joint operation where as the cheque has single signature.
Effects not cleared, may be presented again.
Amount in words and figure differ.
Cheque crossed.
Any other.
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STOP PAYMENT OF CHEQUE:

The stop payment of cheque is done on the request of the drawer and no other
party can call for stop payment of cheque. A written request from the accountholder is taken for stop payment. Stop payment is usually done when the account
holder losses his cheque-book or one of the cheque.
The instruction for stop payment us usually not accepted on telephone. If the
account holder cannot send written instruction quickly, he is asked to send the fax
message and later on submit the original request.
When the request is received, his signature is verified with the specimen signature
and signed by the authorized officer. Then the application is sent to the concerned
people who flag marks the account. And enters the information about stop
payment. Later the request of the account holder is filed in Stop Payment File.
Remittances Department
The need for remittance is indispensable in case of the modern exchange of goods
and services. Banks in this regard provide the facility of transfer of money from
one place to another. This transfer of money is a source of profit for Bank.
FUNCTIONS OF REMITTANCE DEPARTMENT:

At National Bank of Pakistan remittance department perform the following
functions:
To issue Demand Drafts
To issue Govt. Drafts
To issue Mail Transfers
To issue telegraphic Transfers
To issue Payment Orders
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DEMAND DRAFTS (DD):

It is an instrument of credit on which the issuing bank orders another bank to make
payment to the beneficiary of the instrument and reimburse the payment thereon
from the issuing bank. It is also called as bank cheque. The holder of DD is has to
deposit It in his account with the bank he is dealing and that bank collects the
payment on behalf that customer.
PROCEDURE FOR ISSUING A DD:

The applicant is asked to fill in a voucher that requires to fill in the name of the
payee and his account number , name of the responding bank, date, and amount
to be sent.
The applicant is asked to deposit the money at the cash counter, if he is making
DD on cash, or to attach the cheque with the completed voucher, if he has an
account in the bank.
The rate of exchange is calculated based on the rates that have been set by the
bank on different amounts.
A DD leaf is filled with the information provided on the voucher and is sent to
the officer for signature and authentication.
All these are recorded in two registers (DD issuing and DD advice), which are
maintained for the purpose by the assistant in charge.
The DD is handed over to the applicant at the end.
Bank sends FANFOLF and ADVICE to the responding bank that a DD is being
issued in favor of the customer of your bank to authenticate that the process is
all genuine.
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If the applicant want to sent DD by post, then bank charge RS.30 as POSTAGE
CHARGES.
The applicant shall send this DD to the beneficiary by means of any common
carrier on which that person will become eligible to get the payment from his bank.
The charges are subject to change from time to time based on the decisions made
by the banks management.
MAIL TRANSFER (MT):

Mail transfer is mode of remittance that is used for transfer of money in case the
responding branch is of the same bank, which is issuing the MT. Simply to say, all
inter-branch transfers are done through MTs. An MT does not need an advice to be
sent because the amount of MT is directly credited to the account of the payee. So
it is an easy mean to transfer the amount from one account to the other account
with in the same bank but different branches. Its advantage is that applicant can get
payment at next day.
PROCEDURE FOR ISSUING MT:

A voucher is filled with the information about the receiver, his account number,
responding branch of the bank, date, and amount.
The amount to be sent is deposited in cash or a cheque is attached with the
voucher.
Based on the information provided the MT leaf is filled.
It is recorded in the concerned registers.
Sent to the officer for signature and authentication.
A signature is taken on the counter folio of MT from the customer.
The MT drawn is sent to the concerned branch with a FANFOLD by the bank
itself.
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TELEGRAPHIC TRANSFER (TT):

It is said to be the fastest mean of transfer of funds from one place to the other. In
this method a Telex massage is used to make an order of payment to the
responding branch. For issue of TT request has to be made to the manager who
gives the permission. It is a costly mean and the charges are comparatively higher
than other means.
PROCEDURE FOR MAKING TT:

After a request has been granted for permission, the applicant is asked to
deposit the amount and the charges of the transmission.
The manager on the basis of the amount desired for sending makes a TT
massage that gives information about payee.
The amount is written and is made conditioned with help of codes that are
allotted to the manager.
On receipt of the message the officer of the responding branch will put his
codes to confirm the message.
The amount is credited to the account of the payee.
Bank charges on remittances:

Exchange rate based on the amount (commission)
Withholding tax 3%
P&T (postage) charges RS.30
In case of TT telex charges of RS.100 are collected.
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PAYMENT ORDER (PO):

Payment order is the written order issued by the branch drawn upon and payable
by itself, to pay a specified sum of money to the payee against presentation of the
instrument. It is used to make payments to the parties whose services have been
used for local transfer of money.
PROCEDURE FOR ISSUING PO:

Payment order may have different type procedure depending on the amount of
charges and nature of the expenditure. Every officer and manager has power to
grant permission of PO up to certain sum of money.
Where the limit exceeds the power it is refer to high authority. And upon the
permission a payment order is prepared. After the permission is granted the
following process is involved.
A voucher is prepared o the total amount of expense specifying the head of
account to which that amount is to be charged.
A payment order leaf is prepared, signed and authenticated by the officer in
charge.
A signature is taken on the counter leaf from the customer to keep evidence of
receipt of PO.
The PO order is handed over to the customer.
That customer will present that leaf for the payment or may deposit it in his
account, as he wishes, and shall get the payment due.
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PAYMENT OF DD, MT, GD:

When remittances are offered for payment it is responsibility of the bank to make
payments. The officer in charge checks required stamps, signature etc.
When remittances come at clearing department these are presented to the officer.
He enters them in DRAFT PAYABLE REGISTRE. Then he makes an advice to
send it in the other branch, to let them know that your instruments have been paid.
On these remittances some stamps are affixed such as BANK TRANSFER,
SIGNATURE, DATER.
Then other officer enters it OFFICER CASH SCROLL , he sends it to the cashier
for payment. The person thereon enters it in PAYMENT BOOK and makes
payment.
Clearing Department
The process of getting payment of cheque, Demand Draft, Pay order, Telegraphic
Transfer, Mail Transfer or Dividend Warrants, deposited by the customer of the
branch from other banks and other branch of same bank within the city through
clearing house is called Clearing of Cheque.
State Bank of Pakistan in that city acts as clearing house.
OUTWARD CLEARING:
The customer of the branch deposits cheque or other instrument for collection
attached with pay in slip. The officer accepts it after looking into the following:
The person depositing the instrument for collection is the customer of the
branch
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The correct pay in slip is attached with the cheque

The depositor signature is present on the pay in slip
The account number is written on both the side of the slip
The word and figure of the amount tally with each other
The cheque is neither post dated nor stale
The drawer signature is present on the cheque
The alteration on the cheque are signed by the drawer
The endorsement on the cheque is not restricting the bank to accept the cheque
The cheque in the name of company, firm etc is not going into the account of
any person
The cheque with PAYEE ACCOUNT ONLY crossing is not deposited into the
account of any other person other than the person mention on the cheque.
These things are checked so as to be certain that collection of cheque is valid and
acceptable. When everything is found in other, CLEARING stamp is placed on the
cheque and both portions of pay in slip. Banks special crossing stamp is affixed on
the cheque and PAYEE ACCOUNT CREDITED Stamp is affixed at the back of the
cheque.
Payee Account Credited stamp is not affixed on the open cheque. If the Demand
Draft is deposited by the valued customer then DISBURSEMENT GUARANTEE
PAYEE ACCOUNT CREDITED is affixed on the back of Demand Draft.
On the cheque with endorsement, 1ST PAYEES ENDORSEMNT CONFIRMED
2ND PAYEES ACCOUNT CREDIT stamp is affixed. Then entry is made in
Clearing Received Sheet and handed over to the authorized Officer for his
signature on the slip, back of the cheque and sheet. Once the officer has signed the
sheet, both portions of slip & back of the cheque, the counter foil of pay in slip is
given back to the depositor.
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At the end of the banking hours, all cheques are gathered and separated form pay
in slips. Cheques are scrutinized to see that all the required stamps are affixed over
it and no wrong stamp had been affixed. Then the grand total is done of all cheques
received for outward clearing. Similarly the total of the amount mentioned in pay
in slips is done. The total amount, both of cheques and slips, should be same.
All the cheques/instruments received for clearing are packed in the bundle of 50
cheques each. If number of cheques in a bundle exceeds 50, penalty is charged by
SBP. Bundles are then packed in a bag and the bag is sealed. Later in the evening,
the employee of the SBP comes to collect the bag.
The pay in slip is treated as a party credit voucher and next day the depositors
account is credited with amount mentioned in pay in slip but they are not allowed
to withdraw that amount from the account. If the cheque sent for collection, is
received back after one day, party debit voucher is prepared/passed and the
customers account is debited by that amount. Same is also entered into the
Clearing Received sheet.
Besides debiting the account with the amount, cheque returned charges are also
deducted from the customers account.
The information about returned cheques is written down in Cheque Returned
Register and when the customer comes cheque is handed over to him and his
signature is taken on the Cheque Returned Register.
INWARD CLEARING:
Every morning before the start of the banking hours the SBP representative
delivers the cheques/instruments drawn on the branch by their customer and
deposited with other banks for collection of payment of those instruments.
When these are received by the branch, the in charge-officer immediately start
processing those because within few couple of hours, SBPs defective due to any
40 | P a g e
reason. The information about these cheques is entered into Clearing Voucher
sheet. The cheques/instruments are scrutinized and endorsement examined, if those
are found in order further processing is done.
The signature of the drawer, on cheque, is tallied with his specimen signature and
then post into the computer and drawers account is debited by amount mention in
the cheque.
Cheque/instruments that are not in order due to any reason or if drawer does not
have enough funds in the account, then those cheques are returned with memo
(S-15) attached with them. In the memo, reasoning for returning the
cheque/instrument is mentioned and is signed by the authorized officer. After
couple of our SBPs representative comes and takes away those cheques.
A debit voucher of total amount, which is returned in clearing, is prepared, passed
and entered into the sheet.
In the morning along with the inward clearing, two vouchers are also sent by SBP
on behalf of Head Office.
1. One is a credit or debit voucher about clearing. In the clearing sent by the
branch is larger than clearing received by the branch, then it is a credit voucher,
which is in favor of the branch.
If the amount of inward clearing is larger than outward clearing, then HO sends
debit voucher.
2. Second voucher pertains to the clearing returns. If the total amount of returns by
the branch is higher than the amount of return against the branch than credit
voucher is sent
41 | P a g e
COLLECTION OF CHEQUE
OUTWARD COLLECTION:
The process of getting payment of Cheque, Demand Draft, Pay order deposited by
the customer of the branch from other banks and other branch of same bank from
other cities is called collection of outstation cheques. When the customer, along
with pay in slip, deposits the cheque, it is properly scrutinized and branchs special
crossing stamp and CHEQUE FOR COLLECTION (CC) stamp is affixed on the
cheque and pay in slip. At the back of the cheque PAYEE ACCOUNT WILL BE
CREDITED ON REALIZATION stamp is affixed. A portion of the pay in slip is
returned to the deposited after getting it sign by the authorized officer.
Then at the end of the banking hours, the outstation cheques are taken out and
sorted out center wise. There after entries about the cheque is made in the Cheque
Collection Register in serial order. The serial number, along with prefix of the
number of years of Bank establishment, is written down on the specific place in the
affixed CC stamp on the cheque and pay in slip.
Now, liability voucher are prepared, debiting customer liability and crediting bills
for collection, for the total amount of outstation cheque being sent.
A collection schedule (F-275) is filled and attached to the cheque. The authorized
officer signs it and copy of both documents is made.
Thereafter, it is sent to the Drawee bank along with the cheque through courier
service. The copy of the F-275 and cheque is attached with the pay in slip and
filed.
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If the cheque is drawn on the branch of NBP, then the cheque is directly sent to that
branch for collection of payment but if the cheque is drawn on another bank than
the cheque is sent to main branch of NBP in that city. The main branch than
launches the cheque in clearing. When it gets the payment, a credit advice is sent to
the originating branch.
When a credit advice is received from the drawee bank, test is checked and
signatures of the authorized officers on the advice are verified.
The information about date of payment, amount received and charges received is
written down in Short Credit Register against the respective SC number.
The pay in slip of the customer (which is treated as credit voucher) is taken out
along with the copy of F-275. And customer account is credited, when the credit
voucher is passed. Date of payment is also written down on the copy of the advice
and it is filed in separate SC received file. A reserve entry will be passed about
Customer Liability and Bills for Collection.
Bills for Collection
Debit
Customer Liability
Credit
Then commission on SC & postage charges is received from the customer account,
as per bank tariff. The entry is
Customer Account
Debit
Commission on Bills
Credit
Postage
Credit
The weekly balancing of Customer Liability and Bills for Collection is done, from
Outstation Cheque Register, to have an idea about unrealized outstation cheque.
43 | P a g e
INWARDS COLLECTION:
The inward collection cheque is received through courier/mail. When it is received
the receipt date stamp is affixed on the Covering Schedule. It is than handed over
to the concerned officer who examines the cheque and Covering Schedule. It is
seen that the endorsements are correct and SC no. On cheque and schedule is the
same.
If the cheque is drawn on another bank/branch in the city it is lodged in clearing
and if it is drawn on the same branch then it is lodged in Transfer.
When payment is received, a credit advice is prepared in the favor of the
originating bank. Test is applied on the advice, when the amount is above
Rs.5000/-. The credit advice is then signed by the two authorized Officers with
their IBS. The advice is later dispatched to the originating branch through courier
or mail. For this service, branch deducts no charges.
Foreign Exchange Department

To promote flow of foreign exchange in the country, the Government of Pakistan
started a new scheme of opening of bank accounts in foreign currency. These
accounts were entitled to receive profit percentage in shape of the currency in
which the account was kept (Dollar account shall be paid profit in dollars). This
has increased the flow of foreign currency especially from the Pakistani foreign
residents, who used to send money to their families at home.
The State Bank of Pakistan was given special rights to control and monitor the
performance of the Authorized Dealers in foreign exchange accounts.
44 | P a g e
Authorized Dealer is a person or an institution, which can deal with the foreign
exchange. The authority is given by SBP to all those scheduled Banks who have
adequate trained staff and facilities. These scheduled banks are given license to
deal in foreign currency transactions.
The license is of two types.
Limited License: Authority to deal in certain foreign currencies/transactions

General License: Authority to deal in all currencies and transactions
The freezing of foreign currency accounts on May 28, 1998 have shaken the
confidence of the people and it has also put a bad effect on the flow of the foreign
exchange as well.
How a cheque is cashed in foreign exchange currencies.
When the account holder present the cheque, the officer there on check the
signature of account holder, the date, and see whether it is crossed or not. Then he
made a credit voucher and write the amount in Pak. Rupees and attached it with
cheque. The cheque is cashed on that days rate. Then he affixes some stamps such
as Bank Transfer, Signature Verified, and Main Branch. After that he made
payment to the account holder.
Functions of Foreign Exchange Department:

Foreign exchange department is controlled by OG-I. Different functions are
performed by this department such as:
Foreign Currency Deposits.
Imports.
Exports.
Foreign Remittance.
45 | P a g e
Previously another function was also performed by foreign exchanged department

as Export Finance Part-I and Part-II but due to some restrictions by SBP that
function is not performed now.
Foreign Currency Deposits

To earn foreign exchange NBP offers different types of account such as:
TYPES OF FOREIGN CURRENCY ACCOUNT:

The National Bank of Pakistan is currently providing foreign currency accounts
services in four currencies:
US Dollars
Pound Sterling
Dutch Mark
Japanese Yen
Foreign currency accounts can be operated by Pakistani residents abroad and
residents at home, plus foreign nationals who are residents in Pakistan.
The opening of foreign currency goes through the same kind of process that is used
for opening of an ordinary deposit account. A prescribed form has to be filled as an
application for opening of account. Personal identification card and introducer is
required who can be an old account holder with the Bank or an officer of the Bank.
Foreign Currency accounts can be opened in following three types.
Foreign Currency Current Account:

Foreign currency current account can be opened with a minimum balance of $500.
This account is not entitled to any profit.
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Foreign Currency PLS Account:

Foreign currency PLS account require $100 for opening and this account is eligible
to share the profits and losses at the rate that is prescribed by the Head office from
time to time.
Fixed Deposit Account:

In this type of account the deposits are accepted for a period of minimum 3 months
and maximum up to 3 years.
The profits are credited to the accounts after every six months on a rate that is
ascertained by the Treasury Division of the National Bank of Pakistan Head Office
Karachi. The profit is provided on daily product basis, which means that profit is
credited based on the balance in the account and the number of days it has
remained in the account.
The profit on foreign currency accounts is paid only on the US Dollar account and
Pound Sterling account. The other two currencies are not entitled to receive profit
on the balances. The profit for the half-year ended June 30, 2001 has been declared
at the following rates:
New Account
Old Account
US Dollars
@1.25%
@2.35%
Pound Sterling
@1.175%
@1.878%
The Bank maintains separate ledgers for every type of currency account. The most
significant accounts with the Bank, in number and frequency of transactions, are
US Dollar and Pound Sterling. That is the reason these accounts are made eligible
to share the profits.
47 | P a g e
FOREIGN REMITTANCES
Remittance is transfer of funds from one place to the other by way of using an
intermediate dealer. These dealers are authorized agents who provide these services
on commission. Foreign remittances are the most significant type of transaction
that is carried on in case of a foreign currency accounts. The remittance can
primarily of two types.
1) Inward Remittances:
Funds coming into the country on account
2) Outward Remittances:
Funds going out of the country on account
INWARD REMITTANCES:
The inward remittances are coming through either Telegraphic Transfer (T.T) or in
form of Demand Draft (D.D). Further these remittances are coming in either in
foreign currency or are in Pak Rupees. The remittances coming into NBP Main
Branch, Bahawal Nagar can be classified into the following types.
Case 1:
Remittances where the beneficiary or the payee is an account holder in the Main
Branch.
Case 2:
Remittances where the beneficiary or the payee is an account holder of any NBP
branch other than Main branch Bahawal Nagar.
Case 3:
Remittances where the beneficiary or the payee is an account holder in a Bank
other than NBP,
48 | P a g e
All the above mentioned types of remittances are handled differently and the
reimbursement of the amount is done through separate recordings in the books.
The instruments of inward remittances carry instructions for the proper
reimbursement of the amount to be credited to the account holder on realization.
The reimbursement on TTs is available as follows:
For Pak Rupee:
Reimbursement is made from Nadir House Branch
Karachi
For Foreign Currency:
Reimbursement is made from NBP Head Office
Karachi
All TTs received from foreign bank are initially put on a test to verify the
genuineness of the massage received. This test confirms the amount, the
beneficiary, the case and the sending branch of a bank. There are special codes that
are used for testing the instrument. Once the message is confirmed then its payees
status is checked.
Case 1:
If the payee is an account holder of the Main Branch then it is recorded as
following:
Dr.
Account at Nadir House Br. Karachi (if remittance is in Pak Rupees)
OR
Dr.
Account at NBP Head Office, Karachi (if remittance is in foreign
currency)
Cr. Payees account
49 | P a g e
The responding branch is sent a debit advice along with copy of the message
received.
Case 2:
The case where T.T is addressed to another branch of NBP and has to be credited
to the account of the payee this requires the Main Br. personnel, after the
conformity of the message, make a Mail Transfer (M.T) to that very branch. NBP
Main Br. provide the service of T.T for its other branches, which do not have the
facility of Telex or Fax.
Case 3:
T.T that is addressing a branch other than of NBP, then the payment mode selected
is T.T Payment Order, which is sort of an instrument that is sent to the
responding branch ordering it to pay the beneficiary the sum mentioned on it. The
same is presented for reimbursement through the clearing process from the
clearing-house.
OUTWARD REMITTANCES:
Sending amount outside the country is an outward remittance. Again this
remittance can be made by T.T or demand draft. The condition for these
remittances requires the sender to be the account holder of the Branch. That
account holder has to submit a written cheque along with the payees particulars
and responding bank. This procedure has charges that are higher in case of T.T and
comparatively lesser for demand draft. These charges can be deposited in cash or
can be debited from the account of the sender as the case may be.
50 | P a g e
S.W.I.F.T
The increasing pace of technology has made the communication processes more
easy, faster, and reliable. In case of transfer of funds the introduction of S.W.I.F.T.,
an acronym for Society for Worldwide Inter-bank Financial Transactions, has
made remittances faster and secure. The system works like Internet communication
processes. All the banks in the world are registered for the service, which have the
facility of online computers. The headquarter of S.W.I.F.T. is in Belgium. The
message sent through this way do not require any code tests to confirm its
authenticity. NBP Main Br. Multan has this service that has special access rights
with only one officer who is responsible to check the lists of the sent transfer
messages. The sending process is more secure where two officers make the
transmission of the message, one types the content with his code word and the
other executes it with his password.
There are different types of codes that are used for the messages interchanged on
the basis of the type of the transaction. For example:
19909for the message that is simply send for T.T
18808for message that relates with the L.C. functionality
FOREIGN BILLS FOR COLLECTION

Demand draft is an instrument for claim of money from any party, in this case is
the issuing bank. These drafts are for collection of foreign currency. When a
customer comes in and presents a Demand Draft (D.D) for collection from a
foreign bank, the entry in the books of accounts is made as following:
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Debit.
DDP Account
Credit.
Payees Account
(Demand Draft Purchased)
For collection of the international DDs, NBP has maintained agency relations with
following Banks:
American Express for Americas, Europe and Asia
Bank Al-Jazeera for Saudi Arabia
National Exchange Corp. for Emirates
These collections can be in form either Pak Rupees or in foreign currency. For
collection from abroad the cheque/draft is sent to American Express Karachi. On
realization of the amounts the Bank receives a credit advice from the agent bank
and the Bank makes a new entry.
Debit.
Account at Nadir House Br. Karachi (if remittance is in Pak rupees)

OR
Debit.
Account at NBP Head Office, Karachi (if remittance is in foreign
currency)
Credit.
DDP Account
This collection process requires some charges that have to be born by the
customer who deposits the cheque/draft for collection.
LOCAL BILL FOR COLLECTION:

Local drafts are also handled in this department. When these drafts comes
from different banks for payments the bank made them advance payment
and charges certain commission and postage charges, then NBP sends these
drafts to main branch Karachi for collection. In main branch these drafts are
52 | P a g e
credited to NBP account and debit that banks account from where these
drafts are issued.
IMPORT SECTION:
Import is the basic function of the foreign exchange department and NBP
earn money from imports. In order to import the goods abroad the party has
to open a letter of credit in favor of beneficiary (seller of goods).
LETTER OF CREDIT:
As a credit instrument and as a mean of making security of the payment, the
documentary credit is essential these days for conducting safe and sound
foreign trade. A documentary credit represents a commitment of a Banks to
value honor cheques and other means of obligation against his customer to
the amount of value of goods traded, on the presentation of the documents
evidencing the bonafide conduct.
One mode of payment is Letter of Credit (LC). It is a conditional
undertaking by the Bank to make payment to the exporter if he fulfills the
terms of credit by presenting the required documents to the bank in his
country. In fact LC is a legal document on behalf on which the payment
made by the importers bank to the exporters bank.
National Bank of Pakistan is providing this service to its customers who
have an account with the branch and other businessmen too. This facility has
been recognized as a modern banking activity of all commercial banks that
are included in the list of 6000 Banks internationally.
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INFORMATION IN LC DOCUMENT:
The name of the local company, which is importing the goods
The name of foreign company, which is exporting the goods
The details of the goods to be transacted including the amount, quality, mode
of packing etc.
The total amount of the LC
The number of days for which the LC is valid
The name of the banks, who are regulating all these dealings
The name of the carrier which will be used for the shipment of the goods to
the importer
The bill of shipment number
PARTIES INVOLVED IN A LETTER OF CREDIT:

There are normally six parties involved in a letter of credit:
Buyer (known as the importer, account party or consignee)
Buyers Bank (known as opening, or paying bank)
Seller (known as the exporter, shipper, or beneficiary)
Sellers bank (known as advising, confirming, negotiating bank)
Carrier (known as the shipping company)
Insurance Company
TYPES OF LCS:
Irrevocable LC:
An irrevocable LC is one that is a definite undertaking by the issuing Bank
that it cannot be cancelled or amended without the consent of all the parties
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to the credit. This means that all the provisions for the payment, acceptance
or negotiation contained in the credit shall be fulfilled if the documents and
drafts/cheques are presented that comply with the terms and conditions of
the credit. This type of LC is the most commonly used LC for the
international trade purposes. The exporter feels himself safe and assured that
his payment will be met in time without delay.
Revocable LC:
This type of credit is one that can be cancelled at any time by the issuing
bank giving any reason to the negotiating bank, meaning that the importers
bank shall not honor any cheques/drafts presented for payment. This type of
LC is not so commonly used by the importers as most of the time there are
instructions by the exporters to open and irrevocable LCs in their favor.
Red Clause LC:

A special type of LC in which the issuing bank authorizes the exporters
bank to make an advance payment to the exporter up to the limit said
therein. This type is used in case of import of some goods for which exporter
demands an advance payment before the shipment is made.
Revolving LC:
This type of LC is opened in case the importer is indulging in import of
many goods frequently and to avoid himself of opening a new LC for every
transaction, he opens a revolving LC. The main function of a revolving LC
is that it is not binding to one transaction, rather it is made useful for
different amount that are to paid to the exporters. The maximum amount is
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said on the LC and the bank accepts the responsibility to honor all
cheques/drafts with in this limit.
Requirement before opening LC:

According to the international trade policy of the GOP it is prescribed that no
person or a company can import or export until it gets itself registered with the
Export Promotion Bureau (EPB) and gets a valid certificate of registration. On
being granted the certificate he is eligible to import or export from the country.
For an importer to open a LC for the first time, has to make an application to the
State Bank of Pakistan, through a scheduled commercial bank for grant of the
permission to open a LC. This importer on getting of the permission is also not
bound to open the LC from the same bank. He is free to go to any bank that suits
him for the purpose.
All imports must be done under observance of all rules and regulations that are
prescribed by SBP and Government, which are subject to change from time to
time.
EXPORT REGULATIONS
National Bank of Pakistan is an authorized dealer with respect to dealing in the
foreign currency affairs that are related with the export, import and foreign
currency accounts. The LC can be opened and negotiated through only from the list
of 6000 banks internationally. For export L.C. negotiations the bank has to follow
prescribed rules and regulations levied by SBP. For negotiation the Bank has to
give in writing that it shall bear the responsibility to honor all bill and cheques on
behalf of the importer that shall be presented for the payment by the foreign
exporter.
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For this purpose the Banks has to make sure that it has acquired the duly required
documents from the exporter that include the following:
E Form (which describes the detail of the goods to be exported, the importers
particulars, the amount of foreign currency payment and the details of the
importer as well .
Original Invoices of the transaction for sale.
Bills of Exchange drawn on the importer by the exporter
Bills of Lading from the shipping company along with the details
Insurance documents
Along with these documents the Bank certifies that:
Exporter is known to the Bank and is a bonafide businessman and customer in
Pakistan. He has made arrangements with realization of the export proceeds,
which must be made within 120 days from the date of the shipment of the
goods;
The Bank shall receive export proceeds against shipment on firm contract
within the prescribed period by the State Bank. Failure to make the receipts, the
Bank shall inform the State Bank the circumstances and reasons shall comply
with it;
In case of non-realization of export proceed within the prescribed period Bank
obtain from the exporter the circumstances and the reasons.
Banks certifies those firms for which:
Arrangements have been made for realizations of export proceeds
Bonafide of importer/consignee abroad and credentials have been checked and
verified
Arrangements have been made for the receipt of export proceeds
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Genuineness of the charter party where shipment is to be made against charter

party bill of lading has verified.
After submission of all the related documents to the negotiating Bank, seller is
bound to receive payment. The Bank on its part is also bound to make payment
however it is only reasonable to allow the banks sufficient time to scrutinize the
documents that exporter has submitted.
After these documents have been verified and found correct the bank makes the
payment to the exporter, in addition confirming it from the issuing bank. All the
documents of the export transaction are received by the exporter and then
submitted to the Bank for negotiation. These documents are sent to the foreign
bank for authentication. When the confirmation is received then a security sheet is
prepared to check the amount of the LC as well as the amount of Bill of Exchange.
Form-E is certified by the advising bank after checking the invoice, LC and the
contract attached with the Form-E. After certification from the banks the exporter
then goes to the custom authorities and makes the shipment to the importer.
Functional Utility of E-form:

Exports from Pakistan, subject Exchange Control Requirements, are required to be
declared on E Form that is in set of four copies each. Exporter shall submit all
copies after been completed and signed by the exporter or representative of the
exporter to the Bank. Completed form is submitted to custom authorities at the
time of shipment along with shipping bill. Custom authorities will detach the
original copy and after filling their part will submit to the State Bank. Three copies
are returned to the exporter of which one copy is kept by the exporter and two are
sent to the Bank within 14 days from the shipment. Bank sends one copy to the
State Bank along with the monthly return in which realization of the export
proceeds are reported.
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Bank shall check for the compliance of all documents related with the exports and
shall compare the bills or documents with relative to export form and satisfy that
they conform in all respect to declarations on the relative export form and related
to the amount of bill and invoices.
IMPORT REGULATIONS
For the control of foreign exchange SBP and GOP discourage import of the goods
to the most important ones. Still most of our daily needs are being fulfilled by
imported products. The import procedure is also complicated that involves many
dimensions to be looked for. The Banks role in this regard is again indispensable
for the importer and the exporter.
DOCUMENTS FOR IMPORT LC:

The party which is going to import has to submit the following documents to the
bank:
Annexure A (request for opening LC)
Invoice Performa ( by beneficiary)
Limit sanction certificate.
Valid import license (not necessary)
NID Card of the importer.
Insurance Certificate
Bill of Exchange
Bill of Lading
LC opening charges:
When an LC is opened, the bank collects certain charges from importer these are:
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Commission
Postage charges
MINISTRY INVOLVED IN IMPORT

Ministry of commerce is for commodity movement whereas ministry of finance is
responsible for monetary transactions. These ministries have to be informed about
all the international transaction carried on by any businessman.
PAYMENT TO BANK:
The requirement by the Banks is that the consignor must submit 30% of the total
L/C value on opening of the L/C and 70% is made after receiving the original
documents. The importer also pays any commission or mark-up changes. The
charges are all possible to change without any prior notice at the discretion of the
bank.
NATURE OF PAYMENT:
The nature of payment can be of three types:
Sight:where the payment is made on the presentation of the documents
Usance: where payment is made after 30, 60, or 120 days of presentation of the
documents
At Collection: here high commission is charge and payment is made after 150 &
180 days.
The issue authority (in this case the bank) has to be confirmed about the bonafide
of the customer the same way as in case of export LC negotiations.
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PROCEDURE OF OPENING LC:

When the importer fulfill all the documentary requirement the bank verifies the
validity of these documents open LC. Two registers are maintained for LC opening
records.
LC opening register.
Liability account register.
From LC open register the bank allow LC no. now for getting approval from
manager the officer fills three forms on behalf of importer.
Sanction slip.
Offering sheet for LC opening.
LC open form.
Now importers account is checked for the balance that has to be retained as
margin. Previously import license was also required but now it is not necessary
required to open LC. The allowable rate for shipment is TWO WEEKS. But
amendments can be made up till three weeks. For that the exporter has to inform
the bank and the importer. If importer accepts it then bank allow these amendments
otherwise the bank sends the document back to the beneficiary.
PAYMENT OF THE LC:

The negotiating bank after receiving the documents from the exporter verifies for
the genuineness and confirms the conditions set in the LC makes payment to the
exporter (if it is a sight transaction). If the transaction is U sance then the bank
makes the payment after number of days mentioned in the LC document from the
date of presentation of the documents. These documents when checked are sent to
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the issuing bank bank once again checks and confirms the genuineness and sends
the amount to the negotiating bank through remittance instrument.
FOREIGN CURRENCY TRAVELERS

CHEQUES
Travelers Cheque is a credit instrument that is used for safe and easy mode of
carrying money. It is innovation of modern banking that has replaced carrying cash
and being at the risk of theft or robbery. Travelers cheque is piece of paper that
gives the holder the right to claim from the issuing bank to make payment up to the
amount written on it. These cheque have become widely used in all business trade
transactions. NBP dont sell Dollars by hand but they issue traveler cheques.
TRAVEL QUOTAS:
Travel quotas are issued to the foreign travelers who are going abroad for visit, or
for Umrah and Haj. These expatriates require some amount of foreign
currency that they must carry along with them for the expenses. These quotas are
not issued in form of foreign currency but in shape of Travelers Cheque on
which payment can be received from any bank interested in purchase.
The State Bank of Pakistan has placed some restrictions on the amount of which
TCs can be issued. And these restrictions are subject to changes from time to time
through circulars sent by the SBP. The first circular was sent in 1982 and with the
passage of time many changes have been made through other circulars. The last
circular in effect is number 23 dated June 24, 1996.
The quotas for personal travel purposes are prescribed by the SBP are as follows:
The quotas shall be issued in form of Travelers Cheque only.
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There is restriction (subject to change) on the amount, which is US $2,100 or

US $50 per day whichever is less that can be issued in form of TCs in one
calendar year to one expatriate. The need for over this amount can be negotiated
and permission can be achieved from SBP.
Only US $100 can be issued in shape of hard cash that is to facilitate the most
urgent need of the traveler.
ISSUANCE OF TRAVELERS CHEQUE:

The documents required for issue of T.Cs includes:
A travel ticket issued by a registered travel agent;
A copy of passport that has a visa stamped and is still valid;
A copy of the national identity card of the applicant;
The Bank must also assure that the traveler has a confirmed flight at minimum 14
days from the application for the T.Cs. A copy of all the documents must be sent to
SBP along with T-I Form (form on which the application for T.C is recorded)
Business Quotas:
Quotas that are issued to the people going out for business purposes have to follow
different type of procedure and require submitting different types of documents.
The main features in this regard are as follows:
The traveler is allowed US $200 per day or US $6,000, whichever is less that
can be issued in form of TCs in one calendar year to one expatriate.
The need for over this amount can be negotiated and a permission can be
achieved from SBP.
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Medical Quota:
Quota that is issued for expatriates going abroad require special treatment and have
to go through special set of regulations that are set by SBP in this regard. This
requires a special permission from the SBP for going abroad. On the permission
acquired the expatriated has to submit an application to the bank for the concerned
travel. The amount of the total expenses on the medical treatment is paid based on
the invoices being presented by the medical center abroad to the issuing bank.
Education Quotas:
For students going abroad there is a special set of rules that have to be followed for
issuance of the quota. The maximum amount is based on the fee requirements of
the foreign institution and the methodology they use for the payment. These
payments may be for one semester or for two semesters, can be in advance or after
completion as the case may be.
FOREIGN CURRENCY
BEARERCERTIFICATE (FCBC)
FCBCs are the tool for the SBP to Increase foreign exchange reserve in order to
make balance of payment favorable for the countrys economy. FCBCs are floated
at the order of the President of Pakistan. When these are issued they are recorded in
the cheque book register and in the register of cheque book for collection.
Important characteristics of FCBCs
The profit on FCBCs is 14.5& annually
No tax or Zakat is deducted on these certificates
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These are considered as white money

Maturity period is 6 years
PROCEDURE FOR ISSUANCE OF FCBC:

Following are the requirements for the issuance of FCBC, which are imposed by
SBP to be followed by the banks, and are subject to change from time to time.
Covering letter of sale of FCBC to the H.Q. National Bank of Pakistan and C.C
to
Chief manager SBP Public Debt Office Karachi
Secretary SBP, Karachi
The SVP investment Division H.O. Karachi
Proceed realization/encashment certificate to senior deputy director SBP
Statement showing the sale of FCBC as on date of sale to the above mentioned
three persons
Copy of the I.D card of the Buyer of FCBC
Credit is send to SBP after three days of the issuance of FCBCs.
ADVANCES DEPARTMENT
One of the primary functions of the Bank that generates the profit for the bank is
making advances. These advances are made through the deposits that are kept by
the bank of its customers. The Bank pays profit on the deposited amounts and
receives mark-up on the advances made of different amounts. National Bank of
Pakistan introduced the mark-up based advancing in Jan 1, 1985 when the
Isalamization of the economy was in influence. Under this system of advancing the
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Bank is entitled to receive a constant sum of money on the amount that is

outstanding on the account of the party.
Earlier the interest system used to generate interest on interest based profits to the
Bank, which is considered to be Haraam(unjustified) under the rules of Islam.
There are six types of Financing under the non-interest system.
a) Purchase of goods by the Bank and sale to the client at appropriate mark-up in
price on deferred payment basis. In case of default, it will not be permissible to
banks to recover mark-up on mark-up;
b) Leasing
c) Hire Purchase
d) Financing for the development of property on the basis of development charges.
e) Purchase of trade bills
f) Purchase of movable and immovable property by the banks from their client
with buy back agreement or otherwise on mark-up or hire purchase.
RULES FOR LOANS:

Loaning is the principal economic function of banks. A major portion is their fund
is used for this purpose. This is also the major source of Banks income. However,
lending is a risky business and banks take proper precautions for the safety of their
funds. The State Bank of Pakistan controls credit through Bank Rate Policy very
effectively. The commercial banks cannot violate Prudential Regulations of the
State Bank of Pakistan.
PRINCIPLES OF LENDING:
Once a customer decides to get a loan, his interview with Banks lending officer is
necessary, because this gives the customer the opportunity to explain his credit
needs. The Bank officer can make a guess to assess the customers character.
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When a request for loan is received it has to be ascertained that the borrower has
the legal capacity to borrow. The Banker must inquire the purpose of the advance,
its duration, source of repayment, and against the security to be offered by the
customer. Based on these information bank prepares a credit report.
The purpose of compilation of credit report of the borrower is to assess their net
worth. It must contain information about borrowers means, character, integrity,
assets, liabilities, business and experience. Besides, borrowers own investment,
book debt, details of properties, with verification of encumbrance, must be
obtained. The borrower may be asked to give written clarification of their existing
liabilities.
In the case of Limited Companies, their borrowing powers to be verified from their
Memorandum & Articles of Association. Their certification of incorporation to be
examined, exiting borrowings, prior charge on their fixed assets, paid-up capital,
reserves, profit and loss position, detailed particulars of their directors and
complete analysis of balance sheet must be incorporated in the credit report.
Independent inquiries about the borrowers and opinions from their previous
bankers must be made. As such a comprehensive credit report is compiled which
serves as a constant guide to the banker about his borrower. The following points
are considered with importance by the banker.
SAFETY:
Character, capacity, capital and collateral are the three basic credit factors of the
borrower to discharge his obligation in accordance with the term of the loan
agreement. Integrity is considered of vital importance. Careful observation of
business will assist in evaluating the integrity factor. Assessment of the character is
very important. A banker must have an ability to judge the character and credit
worthiness of the borrower.
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PURPOSE OF ADVANCE:
It self evident that one needs to know the purpose for which banks money is used
i.e. for increasing fixed assets, current assets or for decreasing liabilities. The
banker needs to examine each of them. It is for branch manager to compile a
complete credit proposal the purpose must be one, which is satisfactory for the
banker. The amount is likely to be sufficient for the given purpose. A banker must
ascertain the nature of borrowers business so as to assess if he is competent person
to repay the loan in this case of companies it is necessary to check that the purpose
is not outside the objective mentioned in the Memorandum of association.
PRODUCTIVITY:
As a matter of fact advances must be granted to such trade and industries, which
are capable of meeting the economic objectives of the country. Increasing gross
domestic/national product, encouraging growth of agriculture, cottage industry,
small business, local technology and talent to create more employment
opportunities. The credit report should also depict that the proposal will be
remunerative from bankers profit point of view.
SECURITY OF ADVANCES:
Bankers lend against repayment ability of the borrowers and not merely against
security. A proposal in which repayment is not reasonably demonstrated is not
satisfactory proposal. The security must be easy to evaluate and readily realizable.
The banker accepts securities and keeps sufficient margin to secure the advances.
Securities can be the goods, stocks and shares.
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REPAYMENT OF ADVANCES:
Source of repayment of the borrower is required to be inquired to be inquired. A
banker must see at the time of lending that the loan will be liquidated with in time
and also without restoring to a legal action against the borrowers assets. A banker
is to see that his funds are not stuck and this is why he carefully investigates the
borrowers assets. After the completion of investigation a decision can be made for
approving or declining a loan application.
REMUNERATION:
The banker must see that the advances would prove highly remunerative. He must
know that the mark up on advances is the main source of banks earning and he
must ensure that the rate of markup is carefully maintained, recoveries are made
from the borrowers along with incidental charges as well as credited to banks
account.
EXPIRY DATE OF LIMIT:

Two transactions namely, purchase of good by the bank from the client and
simultaneous resale thereof to the client on mark-up are made
No withdrawals are allowed after this date.
Mark-up will be calculated and applied to account on this date.
The client is advised to pay resale value, which is marked-up amount on or
before the date of final adjustment.
Further decided by the NBP all limits should be sanctioned/renewed in such a way
that expiry date of all accounts fall either on June 30 or December 31 each year.
The bankers are required to calculate the mark-up on June 30 or December 31 each
year for the purpose of distribution among the depositors.
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FINAL ADJUSTMENT DATE:

The client is expected to pay to the bank after he has sold the commodity
purchased from the bank. The period estimated to be taken by the process is very
important for the purpose of payment of the amount due to the bank. If period is
short, the client may force to dishonor the payment. This is a loss to the bank
because the bank is not going to be compensated for this period of delay. If the
period is too long the client may be forced to keep the cash in hand and use it for
some other venture and on the due date fails to make the payment.
So the bank has to be very careful in determining the date of final adjustment of
the limit. It has been decided by the NBP that the date for final adjustment of the
limit in respect of working capital for trade and industry should be 30 days after
the expiry date. If the resale value and mark-up amount is not paid by this date the
branchs claim against the client will have to be lodged with the Banking Tribunal.
Branches should invariably indicate in the sanction advice a definite date by which
limit would be fully adjusted which should be either June 30, or December 31 of
any year.
Types Of Advances
DEMAND FINACE:
One time disbursement of the whole amount sanctioned, as the limit for the credit
allows. This mode of financing can be achieved by any person, individual, group,
company, firm and all others. The mark-up or interest is calculated on the total
amount disbursed and requires to be paid before the on the nature of the case in
review. The 4Cs attributes may be providing evaluation criteria for the sanction
and the funds available as well.
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CASH FINANCE:
In this mode of financing the borrower is allowed to make withdrawals of funds as
he requires, but the total amount outstanding cannot exceed the limit sanctioned.
The mark-up/interest is calculated on the amount outstanding on his account. The
calculation of mark-up/interest is based on the number of days a specific amount is
withdrawn. This finance if normally borrowed by small traders or individuals for
their petty matters involving cash transactions up to rupees three hundred thousand
maximum.
RUNNING FINANCE:
To assist a large-scale business operator to carry on his day to day requirements of
liquid funds, this account is opened is made operation in his favor. Of course, all
disbursements are made under proper consideration of the securities and the 4Cs of
the borrower. Running finance is provided where the amount goes beyond rupees
three hundred thousand. The mark-up/interest is calculated the same way as in case
of cash finance. Securities against running finance are those which are easily
convertible in to cash and bank kept 25% margin with it.
AGRI. CREDIT/FINANCE:
For the development and expansion of the most participative sector of our
economic prosperity, the National Bank of Pakistan has been providing loans and
finances to the agricultural sector since its establishment. Agri credit/finance is of
two types. One is called as short term loan, finance that is provided to carry on the
operational requirements of the agri-business such as purchase of seeds, fertilizers,
pesticides, and other seasonal requirements of the farmers till the final activities to
make the product reach to the market. This credit/finance is provided to cover a
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period of less than one year. The other type is long term, which is provided for the
purchase of agri-machinery and other heavy equipment that are used for the
reclamation of the agri-land.
PACKING FINANCE:
This finance facility, also known as Export Re-financing or simply pre-shipment
finance, is for the promotion of the exports. This finance is provided to the
exporters to assist them in the export of merchandise. The State Bank of Pakistan is
the provider of this loan that is disbursed through designated banks in Pakistan.
National Bank of Pakistan is also one of the key players in providing this loan
facility. The exporter has made his product and is willing to export the , but the
shortage of funds put restrain on the way. Packing finance is provided for the
export preparation of the products. The mark-up on this finance is @ 8% perannum that is paid to the State Bank of Pakistan. This lower rate of mark-up is put
to encourage the exporters towards the trade and commerce. Packing Finance is of
short-term nature that is provided to fulfill the working capital needs of the
exporters. The exporter is supposed to repay the finance after the proceeds from the
sale have been realized. If in case the borrower fails to make the payment then a
Forced Cash Finance account is opened by the Bank. The mark-up has to be paid to
State Bank of Pakistan by the Bank when it falls due and the payment has to be
received from the borrower. When forced cash finance account has been opened,
the borrower has to pay the mark-up rate that is charged on the ordinary finances.
Packing Finance I is the usual type for re-finance purpose, but Packing Finance II
is paid base on some previously build credit positions and business scale. The
accounting ratios are in this case made as auxiliary criteria for the disbursement of
the finance.
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IDA, OPEC, IBRD LOANS:

The international organization such as IDA, OPEC, IBRD and others provide loans
to the countries of the third world to develop their indigenous economic sectors.
These loans are disbursed under the proper instructions of the State Bank of
Pakistan and the Government of Pakistan. These loans are provided in percentages
of the total funds to be distributed among the sectors of the economy, which have
most significant needs. All these loans are interest-based loans. The rate of interest
is determined by the issuing organization.
TRANSPORT LOAN
NBP also gives transport loans for the purchase of vehicles. The person who are
not able to pay all the amount of vehicles, the bank give him loan on markup basis.
Then he pay to bank on monthly basis. Example of such loan is Yellow Cap
Scheme. And if he fail to pay bank the bank made auction of that vehicle. Bank
also give long term loan for local manufacturing machinery (LMM).
Credit Reports
A credit report is an assessment of borrowers character and capacity from a
bankers point of view. Credit reports on borrowers called Status Reports, financial
reports, bankers opinion or confidential reports. All these terms carry more or less
the same meanings. The study of a borrower is a study of his character, capacity
and capital, and collateral often known as the 4Cs to consider his credit worthiness
and eligibility for the bank advance.
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CHARACTER:
Sometimes the word respectability or business mortality is used for character.
Respectability does not mean that the borrower should be a title-holder, or the head
of an institution. These points certainly deserve consideration but respectability is
more akin to integrity and honesty in business dealings.
CAPACITY:
Capacity means the ability to employ the funds profitably and repay the advance
according to the terms and conditions of sanction. The capacity of the borrower has
to be determined and for this purpose inquiries will be necessary to find out his
qualifications and experience in the line in which he is working.
CAPITAL:
The bank would like to know the amount of the borrowers own capital. The
capital of the borrower will show his own interest in the business he is carrying. If
he has sufficient capital of his own to invest in the business besides the advance
applied for, he will be considered a more suitable borrower than one working
entirely with borrowed money. The risk of default at will be higher if the borrower
does not have his own interest in the business.
COLLATERAL:
The collateral security may consist of stocks and marketable bonds, bills of
exchange bill of lading, warehouse receipts, trust receipts, etc. the banker while
making decision to grant credit examines fully the available collateral to secure the
repayment of advance in case of default by the borrower.
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NET WORTH OF BORROWER

Individuals:
Net of the individuals worth is the total investment or equity of the
sponsors/borrowers in the company through which they are asking for credit and in
the other sister concerns.
Firms:
Total investment in Business + Properties liabilities
Companies:
Paid-up-capital + Reserves + Profits (Losses)
THE INVESTIGATION PROCESS:

1. Knowing the market place
2. Risks inherent in lending
Management risk
Market risk
Earnings fluctuations risk
Default risk
Marketability risk
Major areas requiring focused attention of the analyst are:

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Sales growth and profitability:

Which is reflected in the trends of:
Net sales
Gross sales
Operating profits
Net profits (at least for the last 3 years)
Structural Liquidity:
Which refers to the extent of liquidity usually available in the business, or which is
the routine requirement of the borrower based on the nature of his periodically
maturing liabilities.
Liquidity or Cash Management:

Which will indicate the sources/activities/options from which borrowers business
generates cash and the uses it is put into. This involves cash flow analysis, which is
the heart of the financial analysis process.
Debt Equity Management:

Analysis indicates the thinking of the management as far as its long-term growth is
concerned. Excessive reliance on debt, rather than plough back of profits or
injection of fresh equity, to maintain a healthy combination of debt and equity is
thought with danger because ultimately the debt servicing requirements place a
heavy burden on its liquidity thereby its survival.
Asset Management:
Asset management involves the analysis of how productively the assets of the
company are being used. Sales and profitability should be commensurate with the
76 | P a g e
level if the assets employed in the business. The cost of acquiring the assets must
be adequately recovered through sales and the profits generated by its operations,
that are the assets turnover, should be consistent with the purpose and mode of the
business and comparable to other operations of the business that are carried on.
Debt Servicing Ability:

Debt Servicing Ability is also crucial indicator since its shown the fast track of the
extent to which the borrower is able to repay his maturing liabilities. This involves
determining the maximum borrowings (expenses paid in cash) undertaken during
the period under review, in addition to the liabilities carried forward from the
previous period, as compared to the liabilities which are outstanding at the end of
the period under review. This will show the extent to which the total borrowings
undertaken during a period were repaid during the same period.
BORROWERS CREDIT WORTHINESS:

In order to get a complete picture of the borrowers credit worthiness, inquiries will
have to be made about:
His business.
Trade experience.
Assets and liabilities.
His account with bank or other banks.
His financial statements and income tax returns.
An interview with him will be necessary to elucidate or supplement the
information that may have been collected.
There are hardly any credit agencies in Pakistan, which assist banks by giving
reports on parties. Even a report on borrower obtained through banks in Pakistan is
usually brief and does not give sufficient information, that could be of practical
77 | P a g e
use. It would appear that banks could be in better position to serve the business
community and themselves, if they evolve a system by which detailed credit
reports on customers are communicated to each other.
SOURCES OF INFORMATION ON BORROWERS:

Banks get information on borrowers through various sources as ahead as follows:
Loan application / credit proposal / personal investigation.
Bazaar reports through friends or rivals mostly from the borrowers trade or
business line.
Borrowers account with the bank or statement of accounts with other banks.
Statement of assets and liabilities. In the case of companies, their balance sheets
and profits and loss accounts for say three years, records of the Registrar of
Joint Stock Companies.
Income tax statements.
Wealth tax statements.
Sales tax statements.
Trade and other reports in the press.
Reports about actions and decrees in Govt. Gazettes.
Registration, revenue, and/ or municipal records.
Other bankers and branches of the bank.
Operations by a customer on his safe custody account or locker
SBP credit information Bureau.
Personal Contacts including personal interviews.
Chamber of commerce / Trade Bodies.
78 | P a g e
SECURITIES AGAINST ADVANCES

Major Stock in Trade of the bank is money and that is the reason the bank can be
called as a Financial Departmental Store. It is not only the custodian of Public
deposits but its effective utilization also.
So the main fort of the bank is the Management of Funds without which it cannot
survive in the long run. As banker it deals with other persons money. Until and
unless there is a positive matching between the inflow and outflow of cash or the
cash in must exceed the cash out, it will jeopardize the very existence of the bank.
The shift in and shift out of the money are two pillars of the bank but shift out
needs debt handling and skillful management of the funds.
Major functions of the banker are:
Accepting of Deposits, which are payables on demand or as per terms, laid
down.
Lending or investment, contributing to the socio-economic development of the
country.
Basic relationship of the banker with his customers is that of debtor and creditor.
The amount received has to be returned as per terms agreed and stipulated
according to the prescribed rules and regulations of all regulatory bodies. The
credit worthiness of the debtor depends on his ability and capability to liquidate the
debt.
It is therefore of paramount importance that the banker should hake such measures
so that his liquidity is above the mark meeting any eventuality.
In the perspective of liquidity the bankers, besides other documents, obtain a letter
of agreement by which they acquire the right to revoke the credit at any time, even
if it was allowed for a longer period of time.
79 | P a g e
In case the borrower is not in a position to meet his obligations, there must be
something else to call back upon. For such an eventuality, bankers take securities
to have a resource to them to guard liquidity, that is, security is an insurance
against calamities.
The types of securities may vary from a piece of land or building to commercial
papers or ornaments. Further, security has its own importance, not only as
constituting the ultimate source of recovery in the event of failure of the borrower
or his enterprise, but as providing a measure to the borrowers own stake in the
enterprise and also placing the limitation on his future borrowings. Thus, even if a
loan proposal passes the test of purpose, a bankers appraisal is not complete
without a careful examination of its security aspect.
However, though security serves as a cushion to fall bank upon in case of need, but
its adequacy alone should not form the sole consideration for judging the
suitability of the loan. So the choice of security is not made in isolation, but
keeping into consideration the customer and security offered together.
The security is the personal representation of the borrower. It should be such that in
case of default the banker could have resource to it and convert it into cash. A
banker will apply all the canons of lending while selecting a borrower, so that at
any stage he is put to embarrassment, legal or otherwise.
List of Securities Normally Accepted by The Bank for

Finances:
Against third party guarantee
Banks Term Deposit Receipt (TDR)
National Defense Saving Certificates (NDSC)
National Investment Trust Units (NIT)
80 | P a g e
Mortgage of Immovable Property

Life Assurance Policy
Shares of Joint Stock Company at Banks approved list
Participation Term Certificates (PTC)
Gold Ornaments
Vehicles
Hypothecation of goods or produce
Pledge of goods or produce
Against Inland Bills
Government or other Authorized Securities, Trade Bills, Prize Bonds
Government Supply Bills
Documents to Title to goods
Wapda Bonds
Prize Bonds
Bearer Certificate
Post office saving certificate
Attributes of Good Tangible Securities Criteria for

Selection:
Marketability
Easy Ascertainment of value
Stability Storability
Cost and labor of supervision
Transferability
Durability
Easy transfer of title
81 | P a g e
Ascertainment of title
Absence of contingent liability
Yield
TYPES OF SECURITIES
Pledge of Stock:
Under this type of security the goods and title to the goods are kept by the
bank under the lock and key. Normally, finished stock or raw material is
accepted as security against pledge. Under pledge the borrower cannot sell
the items without the permission of the bank. The Bank has appointed go
down keepers and inspectors whose job is to monitor and control the stock
that is kept as pledge. The borrower can buy this stock from the bank and
then resell it to its customers.
Hypothecation:
This type of security neither gives the bank the title to the goods nor the
possession thereon. This security has its advantage that it allows the stock
that is provided as a security to be used by the borrower and the bank only
gets to know of the daily activities of the borrower. Normally this type of
security is accepted from customer of good character, capacity and capital of
the borrower.
Mortgage:
Immovable properties such as land, buildings are mostly accepted as
security and considered under mortgage. The property kept under this mode
82 | P a g e
is normally done by holding of the documents of title by the bank in its

custody.
Lien:
Lien is right of one person to retain the goods or securities belonging to
another person until a debt or obligation is not cleared by the later. This type
of security is accepted in case of advances against gold, bonds, shares,
insurance policies, fixed deposit receipts etc. Normally, these advances are
for short-term.
ADVANCES PROCEDURAL
MECHANISM
The payment of advance moves through series of steps that involve lots of
documentation and authentication. The financing process starts from the borrower
who comes with a request for credit. Then starts a whole bunch of activities. The
main are listed below:
Interview with the applicant:

This is the starting point to get know of the customer about his character, intentions
and needs that are being looked ahead to be fulfilled by the finance. The banker at
this stage has to make a clear vision about the customers integrity and honesty.
83 | P a g e
Preparation of Credit Proposal:

This is a detail case history that has to be prepared to get the approval for the
advance and to find out the capital strengths of the borrower. A credit proposal
normally includes the following things:
The applicant name, business and other particulars
The purpose of the advance
Nature of the business
Structure of the organization
The efficiency and effectiveness of the business by giving details of net sales,
profits and business expansion
Details of all firms companies associated with the business
Detail of the capital formation (Debt-Equity Ratio)
Name of proprietors (in case of firm) the directors in the board of management
(in case of company).
Accurate and up-to-date Balance sheet and profit and loss account of the firm or
company
Market repute of the borrower with in the business field
Credit report from other financial institutions with which the borrower has been
dealing
The report of Credit Investigation Bureau (CIB)
The detail of the existing limit (if any) or the new limit
Memorandum and Articles of Association
Audited Balance sheet and income statement of last three years
The net worth of directors of the company
Particulars of the business given to the bank by the borrower in the shape of
foreign exchange deposits or Pak rupees
84 | P a g e
The frequency of use of the funds lastly sanctioned, have they reached to the
last point
Type of securities been offered by the borrower
Bankers point of view about the borrower
Sanction of the Advance:

Every officer, manager and other higher staff has have powers for the sanction of
advances up to a certain limit. Whenever the application passed that limit the case
is sent one level higher.
All the mangers and officers have powers to sanction loans in two ways:
Funded: Power for making loans in actual money.

Non Funded:
Power for making advances through guarantees and persona
assurance.
Determination Of The Drawing Power Of

The Borrower
The advance is sanctioned on the basis of the value of the securities offered by the
borrower. The Drawing Power is the maximum amount of the advance which
borrower can withdraw.
This is determined by:
Value of the Securities Bank safety margin = Total Drawing Power
(Current Margin of NBP is 10% of the value)
85 | P a g e
CALCULATION OF MARK-UP ON ADVANCES:

Under the new system of advances that is known as the Non-Interest mode of
financing, the advance is presented in a way that the borrower request the bank that
he is need of some capital for business. The bank makes the purchase of that asset
or stock and resell it to the borrower where the amount of sale price is payable
after a period of time. Mark-up is the differential amount of purchase price and the
sale price that is offered by the bank to the borrower. It is the earning of the bank
on the advance it has provided to the borrower. The calculation of mark-up
involves some rules to be observed as stated by the advances division of the
National Bank of Pakistan.
Every month, at the end, the amount of mark-up payable by cash account is
calculated on the basis of the mark-up rate, which is stated as paisa per thousand
per day. That is .43862 paisa/thousands/day.
No entry is passed, only it is noted on the ledger folio or the account sheet and
shown in the statement of profit and loss account as accrued income on account of
mark-up.
1. The purchase price paid by the bank to the client is determined as follows:
The daily products of all debit balances up to the expiry date are updated
The total is figured out this amount shows the purchase price bank has paid
to the client.
2. The profit of the Bank of the resale transaction is determined in the following
way:
If there is debit balance outstanding on the expiry date, the daily products of
the said debit balance for 210 days is calculated and added up with the
purchase price (as calculated in 1).
86 | P a g e
On the total figure arrived mark-up is calculated based on the rate of markup per thousand per day. This markup is the total profit of the bank on the
resale transaction.
If there is a credit balance outstanding on the expiry date, mark-up at the
prescribed rate is calculated on the purchase price. That will be the profit of
the bank on the resale transaction. (In this case a rebate is given to the client
by using rebated rate of mark-up on the purchase price).
3. The above calculations will determine the amount payable or receivable by the
client.
Accounting entry at the end of year:

At the end of year but before the expiry date the following accounting entry is
made in the books of account:
Debit:
mark-up receivable account (amount calculated at the end of
year on the basis of rate of mark-up)
Credit:
PLS income account
Accounting entry on the expiry date:

In order to apply mark-up the following entry would be passed:
Debit:
clients account (amount of mark-up payable by the client as
determined above)
Credit:
PLS income account (amount of mark-up to be calculated at the
rebated rate on the purchase price)
Credit:
amounts)
87 | P a g e
mark-up reserve account (amount of difference in the aforesaid two
88 | P a g e
Branch Network of NBP

Name of Country
London
New York
Hong Kong
Paris
Frankfurt
Washington D.C
Chicago
Tokyo
Osaka
Seoul
Bahrain
Dhaka
Cairo
KEPZ Offshore Banking
Ashgabat
Manchester
Glasgow
Bradford
Sheffield
Birminghan
Bishkek
89 | P a g e
No. Of Braches
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
DISTRIBUTION OF PROFIT ON PLS DEPOSITS

FOR THE HALF YEAR ENDED JUNE,
2012
Nature of Account
Time Period
PLS
Special
Notice 7 to 29 days Notice
Account
30 days & over Notice
PLS savings
On monthly min balance
Three months
Six months
One year
PLS Term Deposits
Two years
Account
Three years
Four years
Five years & above
90 | P a g e
Rates of Profits
4.00%
5.00%
4.10%
6.50%
7.50%
8.00%
8.50%
9.00%
9.20%
9.50%
30,
RATIO ANALYSIS
Ratios
2008
2009
Debt Ratio
83.88%
84.23%
Return on Asset
Return on
10.59%
10.09%
Investment
33.51%
38.66%
Return on Equity
3.46%
3.48%
Financial Analysis
91 | P a g e
Five-Year Performance at Glance:

(Rs. In millions)
Particulars:
Total Assets
2005
320,179.
2006
274,117.
2007
2008
310,599.0 325,931.
2009
349,932.
Deposits
9
208,283.
0
235,932.
0
254,862.9 271,391.
6
294,754.
Advances
0
81,528.0
4
85,854.5
0
105,597.5 109,524.
5
122,293.
108,204.
0
109,485.0 102,969.
9
91,277.6
Investments
95,648.5
Income
24,239.3
Expenditure
21,157.8
Pr-tax Prof. & 3,081.5
5
28,195.7 34,183.9
29,455.5 33,188.2
(1,259.8) 995.7
0
34,504.8
32,369.4
2,135.4
35,291.1
34,979.6
311.5
Loss
S. H. Equity
7,841.8
No. Of Branches 1,537
No.
Of. 21,549
7,046.5
1,555
23,730
9,978.2
1,434
15,785
10,149.5
1,430
15,541
Employees
92 | P a g e
9,203.0
1,445
18,096
National bank of Pakistan

Bank street branch Bahawal Nagar.
Profit and loss statement for the period

30-06-2012
INCOME
Interest earned on
Small loans
Bank statutory deposits
PLS income earned on
Demand finance
Cash finance
Small finance
Running finance
Packing finance
Surplus provision on PLS
deposits
Income on foreign business
Other PLS incomes
Commission on letter of credit
Commission
on
Govt.
transactions
Commission on others
Exchange account
Provision for telegrams
Total income
93 | P a g e
1,46,103
3,88,23,648
3,89,69,751
11,51,184
96,88,911
35,346
1,67,833
10,52,064
27,85,595
3,82,581
2946
1,52,66,510
8,02,155
83,41,200
12,43,960
30,56,086
11,205
6,76,90,867
6,76,90,867
Expenditures
Interest paid/payable on:
Foreign
currency
fixed
deposits account
Foreign currency saving bank
account
Provident fund balance
NBP general account
Others (HO, IDA)
PLS Income paid on:
PLS term deposits
Monthly income scheme
account
PLS saving bank account
National income daily account
Others
Total PLS income paid
Manpower cost and benefit:
Basic pay
House rent allowance
Conveyance allowance
Education allowance
Medical allowance paid with
10,50,000
52,00,000
38,203
7,11,05,140
1,82,814
3,84,685
3,55,652
19,84,486
37,69,361
6,61,558
71,55,742
35,24,511
13,72,991.60
4,65,687.50
82,600
salary
Other allowance paid with
2,58,700
salary
Staff benevolent fund
Group insurance
Bonus paid to clerical staff
Bonus paid to non-clerical
12,85,614.20
20,200
46,763.64
9,100
staff
Medical
(officers/executives)
94 | P a g e
7,75,76,157
5,657
expenses
2,25,811
Medical
staff)
Medical
expenses
(clerical
1,29,316
expenses
(non-
clerical staff)
Livenes
Honorium to staff and staff
60,261
38,700
welfare
Total staff cost
44,200
84,20,152
Other expenses:
Rent paid on office premises
Taxes-rates-offices
Lighting and power offices
Telephone offices
General insurance
Legal fee and charges
Postages and stamps
Depreciation
on
office
furniture
Depreciation
65,600
on
residence
furniture
Depreciation on office electric
installation
Depreciation
4,319
1,500
3,48,446
2,26,487
17,742
66,931
18,196
200
78,200
on
electric installation
Depreciation
residence
17,000
on
equipments/machines
Depreciation on cars/vehicles
Depreciation on building
2,000
3,090
freehand land
Repairs on bank promises
Repairs
on
office
8,84,000
15,000
equipment/machine
Stationary and printing
Entertainment
outside
14,186
1,02,645
7,388
95 | P a g e
chamber
Traveling
inland
computer
charges
Local conveyance
Books and newspapers
Motor car fuel
Motor car taxes and insurance
Motor cars repairs and
1,84,448
160
22,275
68,279
23,275
maintenance
Pay of police guards
Cartages and freight
Sundries
Cash carry
Other expenses
Total expenses
33,738
5,01,934
4,070
1,52,354
1,46,002
30,16,665
9,61,68,716
Net loss of the branch
SWOT ANALYSIS
96 | P a g e
(2,84,77,849)
Strengths
Weaknesses
Public confidence
Sound financial strength
services in branches which
Highest profitability
are not online

Outdated system &
Vast operational network
Role in economic development
Utility bills collections
procedure
Lack of good delegation
Inadequate, poorly placed
Corporate branches
Efficient home remittance
network technology
Poor MIS
Deep rooted bureaucratic
Recognition of hard work of
approval
Poor maintenance &
implementation
Lack of long term & short
term plans
Less share in import &
export business
Poor resource utilization
Need better service policy
Frequent changes in senior
staff
SWIFT
Internet access
(www.nbp.com.pk)
Pension & salaries payments
Poor quality counter
management
97 | P a g e
Opportunities
Threats
New style management
Introduction of new
private financial institutions
products and services
& expansion
Introduction of new
Govt. sponsored schemes
technology & electric
Political pressure
banking
Reducing branch network
Capital management &
New products from private
equity financing
98 | P a g e
Establishment of new
Pakistani & foreign banks
Secondary market
Non-banking institutions
operations
Inability to change
New deposit scheme
Closing of some branches
Leasing
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.
Technical:
Inadequate communication infrastructure.

Inadequate computer facilities.
Inadequate IT training.
PEST analysis of NPB
99 | P a g e
Suggestions and recommendations

Based on the SWOT and PEST analysis of the National Bank of Pakistan, it is
observed that the Bank like the other public sector industries has not been showing
up to mark performance. There is a long list of weaknesses that is given on the
previous page. Most of them are going along since long time and that all efforts
made to remove them have not succeeded. On the basis of SWOT analysis of the
Bank the following suggestions and recommendations are given.
Bank should try to get rid of the political influence to be able to compete in the
industry with prudent and strong policies.
The undue reliance on the public sector be minimized and ventures of private
sectors should be taken as well.
Redefining of rules, regulations and policies should be made implemented at all
costs.
Efforts of great importance to be made for the over the counter services of
general banking making it more simple and faster to get a better response of the
customers.
The behavior of the employees, especially on the counter has to be strictly
monitored and checked.
The still existed bureaucratic approval system has to be demolished.
All advances should be made by getting the maximum security and should
focus on productive work.
100 | P a g e
Better and comprehensive long-term and short-term planning should be made to

forecast the future needs.
There is a possibility of establishing a task force to ascertain the effectiveness
of the policies being implemented.
There is a still a vast pool of incompetent employees that has to right sized.
There is a lack of promotional element in the planning and budgetary decisions
of the Bank that has to thought seriously.
Efforts should be continued to keep the powers of employees union to the
minimum, like the current situation.
Promotions must not be delayed and should be made on time to further increase
the commitment and efficiency of the employees.
These and many others that can make a good set of recommendations, which have
to be made possible to escape from the threats and weaknesses and the risks in
environment that surrounds the Bank. The management do considers the policy
matter that is not helping the Bank, but are still in practice due the absence of
prudentially regulated system to protect them and the Bank.
Efforts have been made with serious concern to give NBP a status that it has to
maintain by having practices of:
Right sizing of the employees.
By closing unprofitable branches.
By introducing a merit based selection criteria.
Promotions made conditional with qualifications.
101 | P a g e
References
Branch Manager Abdul Sattar

Manager assistant Zeeshan-ul-Haq
National bank web site www.nbp.com.pk
Orientation books of NBP
www.scribd.com
www.wikipedia.com
BZU course books
Financial Management
Organizational development
And customers of NBP
102 | P a g e
Annexes
103 | P a g e
104 | P a g e
105 | P a g e
106 | P a g e
107 | P a g e
108 | P a g e
109 | P a g e
110 | P a g e
111 | P a g e
Commission Charge Of ATM

A/
c
Sr. No.
1
2
3
4
5
6
7
TOTAL
112 | P a g e
Net
Amou
No nt
0.00
Commiss
ion
50.00
50.00
50.00
50.00
50.00
50.00
50.00
350.00
Posta
Amou
FED
3.00
3.00
3.00
3.00
3.00
3.00
3.00
ge
75.00
75.00
75.00
75.00
75.00
75.00
75.00
Total
128.00
128.00
128.00
128.00
128.00
128.00
128.00
21.
525.0
896.
nt
128.00
128.00
128.00
128.00
128.00
128.00
128.00
0.00
896.0
00
00
113 | P a g e

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National Bank of Pakistan

In The Name Of Allah, The Most Beneficial,

National Bank of Pakistan

National Bank of Pakistan

HOLLY PROPHIT HAZRAT MOHAMMAD (PBUH)

SIR AHSAN JAMIL & MADAM FARWA JABEEN

ABDUL SATTAR SAHAB

National Bank of Pakistan

National Bank of Pakistan

National Bank of Pakistan

National Bank of Pakistan

National bank of Pakistan...................................................93

National Bank of Pakistan

National Bank of Pakistan

National Bank of Pakistan

world. For banks it is an opportunity to grasp the maximum share as possible

National Bank of Pakistan

Role of Commercial Bank

National Bank of Pakistan

Assisting in planned development:

Promotion of saving habit:

Effective implementation of monetary policy:

Narrowing regional disparity:

National Bank of Pakistan

National Bank of Pakistan

National Bank of Pakistan

History of National Bank of Pakistan

National Bank of Pakistan

National Bank of Pakistan

Zonal Head Office

National Bank of Pakistan

National Bank of Pakistan

General information about NBP

National Bank of Pakistan

Main branch structure

National Bank of Pakistan

Total staff of NBP

National Bank of Pakistan

National Bank of Pakistan

NBP Definition of Customer

National Bank of Pakistan

CURRENT / DEMAND ACCOUNT

National Bank of Pakistan

PLS TERM DEPOSIT ACCOUNT:

PLS TERM DEPOSIT (MIS) ACCOUNT:

NATIONAL INCOME DAILY ACCOUNT (NIDA):

National Bank of Pakistan

The Main Features of the Accounts are as Follows:

Requirement for opening of individual or joint account:

National Bank of Pakistan

Requirements for opening of Private limited and Partnership

National Bank of Pakistan

An account is closed at the request of account holder is done by writing an

National Bank of Pakistan

PAYMENT OF CHEQUE AT COUNTER:

National Bank of Pakistan

PAYMENT OF CHEQUE IN TRANSFER:

National Bank of Pakistan

The alteration on the cheque is signed by the drawer.

National Bank of Pakistan

RETURNING OF THE CHEQUE:

National Bank of Pakistan

STOP PAYMENT OF CHEQUE:

FUNCTIONS OF REMITTANCE DEPARTMENT: