ACKNOWLEDGEMENT

I have great sense of gratitude for the most

Beneficent and Merciful Allah who has
always helped me in all matters of life .I tried but He
rewarded me more than the
tried.
I have deep feelings for whole of my family, in
general, All of my successes are due to my family.
I am thankful to all of my teachers and my class
fellows and friends whom
cheerfulness and guidance is an asset for me .I am
especially thankful to the bank

staff.
 DEDICATION
I dedicate whole of my education along with my life to
my beloved parents and respected teachers, who
were always kind to me.
May God Bless Them (Aamin).

Table of contents

2
Executive summary 04

introduction 05

history 05

Mission statement 06

Core values 06

Vision statement 07

Branch network 08

Regional structure 09

Board of directors 10

Department functioning 11

Financial position 12

Financial reporting 13

Products and services 14

SWOT analysis 15

Performance analysis 16

Learning as an internee 17

Problems faced by the branch 22

Recommendations 23

New knowledge acquired 23

Problems encountered 23

conclusion 24

Executive Summary

3
This report is based on internship in National Bank of Pakistan branch name. It is a
famous and reputed bank of Pakistan. National Bank of Pakistan maintains first position
in banking sector in Pakistan. This report is based on the activities which are performed
in this bank. This report contains marketing analysis, competitive analysis, SWOT
analysis, bank tariffs and exchange rates of National Bank of Pakistan. There are also
stated the activities which I performed during my internship in the branch. In this report
also discuss the industry analysis of banking system in Pakistan. There are also
mentioned the way of investment, rates of investment, all types of financing and loans
facilities the National Bank of Pakistan provides. The problems in this branch are also
discussed. This report also intimates about the daily reserves which are required by the
branch to meet the need of its daily transactions.

Introduction:
National Bank of Pakistan is the largest commercial bank operating in Pakistan . Its
balance sheet size surpasses that of any of the other banks functioning locally. It has
redefined its role and has moved from a public sector organisation into a modern
commercial bank. The Bank's services are available to individuals, corporate entities and
government. While it continues to act as trustee of public funds and as the agent to the

4
State Bank of Pakistan (in places where SBP does not have a presence) it has diversified
its business portfolio and is today a major lead player in the debt equity market, corporate
investment banking, retail and consumer banking, agricultural financing, treasury
services and is showing growing interest in promoting and developing the country's small
and medium enterprises and at the same time fulfilling its social responsibilities, as a
corporate citizen.In today's competitive business environment, NBP needed to redefine
its role and shed the public sector bank image, for a modern commercial bank. It has
offloaded 23.2 percent share in the stock market, and while it has not been completely
privatized like the other three public sector banks, partial privatization has taken place. It
is now listed on the Karachi Stock Exchange.

History:
NBP was established under the National Bank of Pakistan Ordinance 1949 in Pakistan.
NBP occupies a unique position in the financial sector of Pakistan. It acts as an agent of
the Central Bank wherever the State Bank does not have its own Branch. It also
undertakes Government Treasury operations. The National Bank of Pakistan is a
Commercial Bank and transacts all types of Banking Business. The National Bank of
Pakistan was established on November 29, 1949 as a semi public commercial bank. The
Bank has the distinction of acting agent of the State Bank of Pakistan and operates
treasuries where the State Bank of Pakistan does not have any office.
The Head Office of the Bank is at Karachi. Ever since its establishment in 1949 it has
been leading Commercial Bank of the nation, sole agent of the This is only helping
material. Please solve by yourself to clear your concepts. www.weblyceum.com is not
responsible for any mistake or any incompleteness. Page4 Government of Pakistan‟s
batter trade with countries and of State Bank of Pakistan for the Government Treasury. In
Pakistan, the bank provides complete bank facilities to the people at over 1436 Branches
operating even at the far lug Northern Areas. National Bank of Pakistan is the first bank
in the country to introduce and implement supervised Ruler Credit Programmed help
small farmer to obtain loans at his doorsteps on easy terms and conditions. It has also
played a pioneering role in introduction of profit and loss sharing System (PLS) as a
major towards Islamization of economy. NBP is 100% owned by the Government of
Pakistan (GoP).

Mission Statement:
To be recognized in the market place by Institutionalizing a
merit & performance culture, Creating a powerful & distinctive
brand identity, Achieving top-tier financial performance, and
Adopting & living out our core values.

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Core Values:
• Growth through creation of sustainable relationships with our
customers.
• Prudence to guide our business conduct.
• A national presence with a history of contribution to our
communities
• Meet expectations through Market-based solutions and products.
• Reward entrepreneurial efforts.
• Create value for all stakeholders.
• Care about relationships.
• Lead through the strength of our commitment and willingness to
excel.
• Practice integrity, honesty and hard work. We believe that these
are measures of true success.
• Leaders in our industry.
• An organization maintaining the trust of stakeholders.
• An innovative, creative and dynamic institution responding to the
changing needs of the internal and external environment

Vision:
To be the pre-eminent financial institution in Pakistan and
achieve market recognition both in the quality and delivery of
service as well as the range of product offering.

Branch Network:
NBP has an extensive domestic branch network of over 1500 branches located all over
Pakistan. The Bank also has a presence in 24 international locations including the USA,
United Kingdom, Europe and the Far East. The Head Office of the Bank is at Karachi. Ever
since its establishment in 1949 it has been leading Commercial Bank of the nation, sole agent
of the Government of Pakistan‟s batter trade with countries and of State Bank of Pakistan for
the Government Treasury. In Pakistan, the bank provides complete bank facilities to the
people at over 1436 Branches operating even at the far lug Northern Areas. National Bank of
Pakistan is the first bank in the country to introduce and implement supervised Ruler Credit
Programmed help small farmer to obtain loans at his doorsteps on easy terms and conditions.

6
It has also played a pioneering role in introduction of profit and loss sharing System (PLS) as
a major towards Islamization of economy.

Domestic branch network:

Foreign branch network:

REGIONAL STRUCTURE

REGIONAL
CHIEF
EXECUTIVE

7
GENERAL GENERAL GENERAL
MANAGER MANAGER MANAGER
Advances, Legal Planning, Business Administrative
and Recovery Wing Development Wing
Customer Services
and Implementation
of Audit

Board of Directors

8
Department functioning
Syed Ali Raza
Chairman & President
Syed Ali Raza is the Chairman and President of National Bank
of Pakistan (NBP), the largest commercial bank of the country.

Mr. Tariq Kirmani

Director
Soon after completing his Masters in Business Administration
(MBA) Mr. Kirmani embarked upon a rewarding career.

Mrs. Haniya Shahid Naseem

Director
Mrs. Haniya Shahid Naseem is an MBA with more than fifteen
years experience of working in the education, social, industrial
textile and agriculture sectors of Pakistan.

Ms. Nazrat Bashir

Director
Ms. Nazrat Bashir belongs to District Management Group of
Civil Services of Pakistan.

Mr. Ekhlaq Ahmed

Secretary Board of Directors
Mr. Ekhlaq Ahmed, EVP is the Company Secretary of the Bank
and also the Secretary of Credit & Operations Committees.

underN.B.P Departments in NBP:

• Account Opening Department

9
 • Deposit Section

• Bills Remittance Department

• Clearing Department

• Cash Department

Financial position:
Different facts and figures of opening balances of the year 2007 about National bank of
Pakistan which show the financial position are as under:

Capital structure:

National bank of Pakistan was incorporated with an issued capital of Rs. 15 million.

Authorized capital:
The bank has now the Authorized Capital of Rs. 25 billion.
Subscribed and paid-up capital:
The Subscribed and Paid-up Capital is Rs. 1.46 billion.
Total deposits:
National bank of Pakistan is the largest commercial bank of the country and has Total
Deposits of Rs. 362.87 billion.
Advances:
The total Advances stood at Rs. 140.55 billion made by NBP in the form of money at
call and short notices, cash credit, loans for short and long periods.

Investments:
The total Investment rose to Rs. 143.53 billion. This total Investment includes PTC,
TFC, and securities of Provincial of Federal Government.
Pre-tax profit:
The pre-tax profits of NBP have gone up to Rs. 6.05 billion.

10
Pro-tax profit;
The after-tax profits of NBP have been Rs. 2.26 billion.
Total assets:
The Total Assets of NBP are Rs. 432.81 billion which is a great achievement.
Total expenditures:
The Total Assets of NBP are Rs. 26.30 billion which are very less as compared to
previous years’ expenditures.

Corporate and financial reporting

framework
(Code of Corporate Governance)
The board is fully aware of its responsibilities established by the Code of Corporate
Governance issued by the Securities & Exchange Commission of Pakistan (SECP). They
are pleased to give the following declarations/statements to comply with the requirements
of the Code.

1. The financial statements (Balance sheet, Profit and Loss Account, Cash
Flow Statement, Statement of Changes in Equity and notes forming part
thereof), prepared by the management of the bank give the information
required by the Companies Ordinance, 1984 in the manner so required and
respectively give a true and fair view of the state of the bank's affairs as at
December 31, 2009 and of the results of its operations, changes in equity
and its cash flows for the year then ended.

2. Proper books of accounts have been maintained.

3. Appropriate accounting policies have been consistently applied in the

preparation of the financial statements and accounting estimates are based
on the reasonable and prudent judgment.

4. Approved Accounting Standards have been followed in preparation of

the financial statements and there is no departure from the said standards.

5. The system of internal control is sound in design and has been

effectively implemented and monitored throughout the year. The Board is
responsible for establishing and maintaining the system of internal control
in the bank and for its ongoing monitoring. However, such a system is
designed to manage rather than eliminate the risk of failure to achieve

11
 objectives, and provide reasonable but not absolute assurance against
material misstatements or loss.

The process used by the Board to review the efficiency and effectiveness of the system of
internal control includes, the following:

• The Board has formed an audit committee comprising of three non

executive directors. The audit committee has written terms of reference in
the form of a charter, which has been approved by the Board of Directors.
The committee is responsible for the oversight of the internal audit
function and reviews its approach and methodology from time to time. It
also receives and reviews the internal and external audit reports relating to
the internal control, accounts and related matters. The committee on a
continuous basis reviews the material control weaknesses and areas of
concern and actions to be taken by the executive management to address
these issues.

• Internal audit department of the bank conducts the audit of all branches,
regions and groups at head office level on ongoing basis to evaluate the
efficiency and effectiveness of internal control system and proper follow
up of irregularities and control weaknesses is carried out.

• The Board receives confirmations/representations from all group and

regional heads on annual basis confirming effectiveness of the internal
control system established and maintained by them within their function.

The principal features of the bank's control framework include:

• The bank has clearly defined organizational structure which supports

clear lines of communications and reporting relationships.

• There exists a properly defined financial and administrative power of

various committees and key management personnel, which supports
delegation of authority and accountability.

• The bank has effective budgeting system in place. Annual budget of the
bank is approved by the Board and monthly comparisons of actual results
with the budget are prepared and reviewed by the senior management.

The bank has a comprehensive framework of written policies and procedures on all major
areas of operations such as Credit, Treasury Operations, Finance, Internal audit and
Compliance approved by the Board.

• There are no significant doubts about the bank's ability to continue as a

going concern.

12
 • There has been no material! Departure from the best practices of the
corporate governance as detailed in the listing regulations.

• Key operating and financial data is available in the annual report.

Products and Services:

Services:
• demand drafts
• letter of credit
• travelers cheque
• pay order
• mail transfers

13
 • foreign remittances
• short term investment
• equity investment
• commercial finance
• trade finance and other business loans
• international banking
• exchange rates

Products:
• Premium Aamdani Home Page
• Premium Saver Home Page
• Karobar Home Page
• Saibaan Home Page
• Advance Salary Home Page
• Cash Card Home Page
• Investor Advantage Home Page
• Cash and Gold Home Page
• Kisan Taqat Home Page
• Kisan Dost Home Page

SWOT Analysis:
Strengths:

• Western union facility

• ATM finder
• Government’s bank
• Customer satisfaction
• Online banking
• Employee’s loyalty

Weakness:

14
 • Lack of communication between employees
• Punishment is not very strong for employees
• Public dealing is not very effective
• Staff shortage
• Lack of respect of seniors

Opportunities:

• Growing banking system

• NBP have government back
• Increase in economic activities

Threats:

• Increase in no. of banks

• Modern type of banking
• Highly skilled people and management required
• The whole structure change to online

Performance Analysis:
Financial Performance:
In 2002, NBP increased its pre-tax profit to Rs. 6,045 million from Rs. 3,016 million in
2001, an increase of over 100%. The improved profitability was achieved due to a
combination of higher interest revenue, enhanced fee income and run off of the
amortization of the 1997 Golden Handshake Scheme. Prudent addition to loan loss
reserves was made which continues to improve the cash coverage for non-performing
loans.All key financial and operating ratios demonstrated improvement. Cost/ income
ratio was 0.44 (excluding one off provision of Rs. 832 million for benevolent fund and
Rs. 513 million for charge for special separation package) as against 0.52 of the last year.
Pre-tax return on equity was 45.27% as compared to 25.85% of the current year and is
impressive by any yardstick. Pre-tax return on assets improved to 1.43% as against 0.77%
of last year. Capital adequacy ratio of the bank is 14.5%, which is 38% higher as

15
compared to 10.52% of last year.Deposits of the bank increased by Rs. 12 billion. While
there was increase in private sector loans due to adjustment / repayment of loans by large
public sector entities and substantially lower commodity operations borrowings, advances
decreased by Rs. 30 billion.

Industry analysis:
Banking is one of the most sensitive businesses all over the world. Banks play very
important role in the economy of a country and Pakistan is no exemption. Banks are
custodian to the assets of the general masses. The banking sector plays a significant role
in a contemporary world of money and economy. It influences and facilitates many
different but integrated economic activities like resources mobilization, poverty
elimination, production and distribution of public finance. It is purchase of car or
building of a home banks are always they’re to serve you better. It is play ground or any
educational or healthy societal activities the money of banks nurtures them. It is an
industrial project or agricultural development of the country the sponsor-ship of banks is
very much involved. Banks play very positive and important role in the overall economic
development of the country. Pakistan has a well-developed banking system, which
consists of a wide variety of institutions ranging from a central bank to commercial banks
and to specialized agencies to cater for special requirements of specific sectors. The
country started without any worthwhile banking network in 1947 but witnessed
phenomenal growth in the first two decades. By 1970, it had acquired a flourishing
banking sector.

Learning as a student intern:

Week wise duties performed as an intern:
There are following learning points for me in the bank.

First week:

In my first week in NBP, they assign me worked in pension department. I learned lot of
things in this department. They give the pension to retired Govt. employees. There are
three types of pensions given,

• Provincial
• Central

16
 • Defence

These are different according to their PPO numbers.

I am full trained now in this particular job and I serve 1000 people in this week. How to
fill farm? How to enter in ledgers and balance account and what are file and book and all
other things relating to pension department.

Second week:

In second week I perform following tasks relating to the banking system.

In second week I worked on opening of account. In this week I repeatedly performed this
activity.

Third week:

In third week they assign me with operation manager Mr. Numan sagheer He handled the
activities relating to the branch; check all the work in the branch. He gave me official
computer. In this week I type and print so many letters for example;

• Statement of account

• Letter of tax verification

• Letter of issuance of clearing certificate

• 4 letters for cheques clearing

• Letters of relieved of transfer employees from this branch to another

branch

• Joining letters of new employee come from other branch through

transfer

I also print and type the data of advances department and foreign exchange departments.
Cheques clearing daily sheet is also made by me in this week and I am assisted by the
other officers. I also learn about the reserve of the branch and daily finances need by the
bank and also get some raw information about the opening new accounts.

Fourth week:

In fourth week I assign the same task and learn some more complex and major
operations. I learn about accounts in which the branch deal with the main and other
branches, these are as follows;

17
 • General Account
• Suspense Account
• Commission Account
• Exchange Account

In general account the branch debt or credit the other branches of the NBP. Usually they
debit or credit the main branch which transfers the cheques on this. In suspense account
branch expenses are made and at the end of six months period inform and show the
balance to main branch. In commission account bank charges commission against its
services. In exchange account they also earn, so from last two accounts branch receives
earnings from main branch against its services.

Secondly in this week I also learn hoe to open an account in the branch, it is a procedure
and after it bank open an account.

On computer I type and print so many letters like,

• Reconciliation letter
• Relieved letter
• Joining letter
• Medial recovery letter

And at the end I also scroll the challan of Government and pass vouchers.

Fifth week:

In first three days of fifth week there are busiest days of pension department so I help the
again pension manager. So first three days serve in this particular task.

In this week I do same job again and print letters, reports, statements and daily clearing
statement of cheques. I learn about opening an account, payment order and demand draft.
Payment order is made to send payment with in city and draft is made for payment
outside the city but inside the country.

S C is that when cheques are coming from outside city for cash and those cheques which
come from branches inside city are sent to clearing house, so I made the statement to
clearing house for clearing cheques.

Sixth week:

In sixth week I performed following activities:

18
Monday:

On this day I perform the duty on the seat of bills where following work is being done,

• Opening an account
• Issue new cheques books
• Make a payment order
• Making the draft
• Cheques send for clearing

Along with this task I also enter the daily post letters in the letter register. This is very
busy task is bank. I help the officer in this seat.

Issuance of the cheque book:

First time issuance of the check book:

After the account is opened, the customer requires a cheque book to
conduct operation in his account. In order to have a cheque book the
account holder signs an application to issue a personalized or blank
cheque book.

Personalized cheque book:

A cheque book having the account title and account number printed on it
is called as Personalized Cheque Book. This assures the safety of the
cheques to be used. This is only helping material. Please solve by yourself to clear your
concepts. www.weblyceum.com is not responsible for any mistake or any incompleteness.

Blank cheque book:

It is the simple cheque book with no account title or account number on it.

Reissuance of the cheque book:

When two or three leaves are left in the cheque book, the account holder
can demand for a new cheque book, so customer fills “requisition slip”
which is attached in cheque book and gives to banker and receives a new
cheque book for continuing the account. An account holder can also any
other person to receive the new cheque book by giving the authority in

19
the requisition slip. The authorized person should bring the copy of CNIC
to receive the cheque book.

Charges for the issuance of new cheque book:

The cheque book can be issued of 10, 25 or 50 leaves as per the
requirements of the customer. The charges are Rs.5 per leaf where the
excise duty is also charged. These charges are paid by the customer in
cash when the cheque book is issued at first. While at the second issue
and so on the charges are deducted from the account.

Loss of the cheque book:

In case the cheque book is lost by the customer then first step the
customer should take is to stop the payment of all the cheques. The
charges for stopping the payment are Rs.200/- per cheque or Rs.500/- for
the whole cheque book. The report the cheque numbers of the remaining
cheques at the time of the lost. The officer of the NBP will enter these
numbers in the system as stopped. Now no body can cash these cheques
all over the Pakistan at any branch. This is only helping material. Please solve by
yourself to clear your concepts. www.weblyceum.com is not responsible for any mistake or
any incompleteness. Page68

Second move is to issue a new cheque book in lieu of the old one. For this
the customer signs a ‘Form B’ as a request of the loss and requisitions of
the cheque book. The charges of the Form-B are Rs.100/- . It is one of the
security documents of the bank. The Form-B requires a guarantor to sign
on it. Along with the For-B the customer also signs an indemnity form to
indemnify the bank from any liability claim or loss that may arise by the
misplacement of the cheque book.

Tuesday:

On this day I join the duty with passing cheques of PLS A/C. There are fifty three books
of signatures cards of A/C holders. So I find the A/C in these books and then gave to the
executive officer to verify. In this whole day I perform this particular task.

Wednesday:

The day is also as above routine to sit in front of computer, scroll following files,

• Income tax
• Sales tax
• Withholding tax
• Provincial
• Central

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 • Property traffic

So I also make up these files separately, scroll them sequence and filed these files. Along
with this task type and print the letters, reports and work sheets.

Thursday:

I was assigned the task to rearrange lockers list and set them in a sequence and print them
on pages. Particular are these,

• Name
• Address
• Amount of rent
• Security
• Expiry date
• Locker no
• Key no
• Folio no

All the day is served in doing this particular task.

Friday:

On Friday the accounts of holders of expired lockers are checked. Some have balance in
their account but most of them have non in this branch. Rent from those holders how
balances have has been deducted from their accounts through vouchers and to remaining
holders reminding letters have been sent. This is the end of Friday.

Problems faced by branch:

I have done my internship in National Bank of Pakistan; during the course of my
internship I observed some deficiencies in the banking operations. Some dilemmas
faces by bank are as follows:
• NBP still following the old methods and techniques which are not up to the mark.
Most of the work done manually which is not reliable in future. Computer facility
is not available.
• All branches of national bank of Pakistan are not online, which badly affect the
operations of bank branches.
• There is lot of burden of work on bank staff. One person handles many things,
which affect the efficiency of that person.
• Overall timings of entrance into the office for the employees are very strict but
there is no time for them to leave the office and no over time is paid to them
which may be a significant reason of dissatisfaction for their jobs.

21
• During my internship I realize that bank needs young and experienced new staff
to meet technology and global challenges.
• Many of National bank customers are illiterate and retired servants so bank
officers face much difficulty in handling them.
• No proper customer services department is available in the branch. There is no
information counter in the bank, so customer also faces difficulty regarding
financial matters.
• Deficiency in adopting new standards of marketing to strive in this competitive
era.
• Job rotation is very important for sound environment and communication
purposes but there is lack of job rotation in the bank.
• I also observed some social problems with women workers in the bank.
• I also observed some social problems with women workers in the bank.
• Internship program of National Bank Of Pakistan is not satisfactory.
• The behavior of staff towards internee is not well. They do not tell enough to the
internees about typical banking operations.
• Staff working in the bank is not properly trained according to the modern banking
requirements. They are usually old age and working from longer period of time.
• There is no satisfactory training system of existing employees.
• Recruitment policies of the bank are very tough which does not motivate young
and fresh graduates to serve bank.

Recommendations:
• The research cell should be formulated and it should continuously try to gather
information about the present actions of its competitors and the expected future
actions. So in this way more effective strategies can be formulated.
• Different training programs should be arranged for On the Job employees so that
they can work according to the global requirements of modern banking.
• All the branches of NBP should be Online so that there is no delay of services to
the customers.
• Bank should take reasonable steps to improve consumer banking.
• The world has become now a global village. So NBP must chalk out its global
customers and their needs. Bank policy should be designed to satisfy not only
local customers but also helpful for outsiders.
• Managers and other top level employees should adopt proper strategy to minimize
communication gap among staff members.
• Bank should formulate an attractive internship program to motivate new
generation.

22
 • In order to increase the performance of employees management should evaluate
employee’s performance and give extra incentives to them

New knowledge acquired:

During the internship there is practical knowledge acquired about the banking sector.
What activities are performed by banks and how to deal with public? Also commitment
about work and operations of banks. Financing and credits and other public services are
performed by the banks. What are implementations of banking rules in banking sector?
And much learn about the various executive’s experiences and their skills. What is role of
higher authority (manager) in decision making and how to solve the problems? How
much money or reserves are used to meet the requirements in the branch. What are the
duties of operation manager and how to pay cheques and all procedure relating to
opening account in the banks?

Problem encountered:
During my internship in this bank, the problem which I faced that was proper training.
They do not provide the proper training to the internees. They assign the intern only few
seats in the bank. There is no proper sitting arrangement for the internees as there is very
less space available in the branch. There is no proper time table being followed by most
of the employees as the manager himself came late most of the times.

Conclusion:
After going through SWOT analysis of NBP I have come to the conclusion that although
NBP has major market share and one of the most specialized bank yet it needs to improve
its efficiency in various dimentions.NBP has an exorbitant amount of funds at its disposal
even then its infrastructure is relatively poor as compared to its competitors.This
infrastructural deficiency is one of the main reasons of failure of attracting more
customers.There is strong need to invest in this direction. It is not considered by the
customers as best provider of banking services as itdoes not spend handsomely on
advertisement budget.There are neither any brouchers nor any other form of publicity so
major portion of target customers are ignorant of its activities. Customers feel hesitant
while dealimg with NBP as customers have to surpass a lengthy and cumbersome
procedure to avail any facility there is beureacratic structure found in NBP so employees
are not concerned about their performance so there is need to replace this structure with
that of based on merit system. There are not found satisfactory Quality Service Standards
as opposed to its competitors (other commercial banks) which have emphasis on
customer focus like post of CRO (Customer Representative Officer) on the other hand
NBP has no such post to guide their customers.Thus it is strongly recommended to
appoint a CRO at each branch.

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