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    INTERNSHIP REPORT

    NATIONAL BANK OF PAKISTAN

    SUBMITTED BY

    SAQIB RIAZ

    01-220102-044

    MBA

    DEPARTMENT OF THE MANAGEMENT SCIENCES (GS)

    BAHRIA INSTITUTE OF MANAGEMENT AND COMPUTER SCIENCES

    BAHRIA UNIVERSITY ISLAMABAD

    2013.

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    Table of Content

    Chapters Explanation Page #

    I Executive Summary 3-4

    1 Introduction 5

    1.1 Banking Era In Pakistan 6

    1.2 History 8

    2 Company Analysis 13

    2.1 Operational Analysis 13

    3 Financial analysis 24

    4 Human Resource Assessment 30

    5 Environmental Analysis 33

    5.1 Industry and market analysis 33

    5.2 Competitor Analysis 34

    5.3 Technology Analysis 34

    6 Internship Experience 37

    7 Findings, Recommendations & Conclusion 44

    7.1 Findings 44

    7.2 Recommendations 44

    7.3 Conclusion 45

    References 46

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    EXECUTIVE SUMMARY

    National bank of Pakistan since its formation in 1949 is working as a commercial bank and also

    providing expert services to the government and State Bank of Pakistan. The bank was

    nationalized with other main banks in early seventies and since then being a government owned

    organization it has not been able to give an incredible performance. Further, the privatization of

    other banks has also created an inflexible environment in the banking industry. This report

    highlights the operations and functions of National Bank of Pakistan. NBP act as financial agent

    to its customers in return it gets reward for its services in the shape of profit. Being a

    Government owned institution it plays an important role in development of society as well as in

    development and growth of the economy. National Bank of Pakistan is one of the leading banks

    in Pakistan. According to international standards of banking system it is one of the best banks in

    South Asian region. This report explains how different functions of NBP work and what are their

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

    internship report on National Bank of Pakistan Main Branch AIOU (Islamabad). Another

    purpose of this Internship program is to enable the students to use the management techniques

    acquired during their courses, and find out the possible solution of management problems faced

    by the organization. The report is based on my six week internship program in National Bank of

    Pakistan. The methodology reported for collection of data is primary as well as secondary data.

    The biggest source of information is my personal experience, observation while working with

    staff and having discussion with them.. It has its head office in Karachi. Its over 1265 branches

    in Pakistan and 22 abroad. It is a part of State Bank of Pakistan and it is its major strength. It is

    providing different facilities to its customers. Inside the bank, in branch banking it has Clearing

    and Collection Department, Government Receipts processing Department, Account Opening

    Department, Remittance Department, Customer Service Department, Cash Department, Deposit

    Department, Advance and Credit Department. There are the most common departments exist

    almost each branch. It is offering different deposit choices, Advances, Credit and Securities etc.

    for its customers. The finance is its major strength. The other strength of this it is acting as an

    agent of State Bank of Pakistan, providing Agency Arrangements for different government

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    organizations include WAPDA and PIA, profitability and a vide coverage throughout Pakistan

    through its corporate branches. And also it has comprehensive range of products it is offering in

    market. There is large opportunity for this bank to give coverage to consumer banking because it

    has not yet covered this area comprehensively. Opportunities in Advisory services, investment

    banking also exist for National Bank of Pakistan.

    National Bank of Pakistan maintains its position as Pakistans premier bank determined to set

    higher standards of achievements. It is major business partner for the Government of Pakistan

    with special emphasis on fostering Pakistans economic growth through aggressive and balanced

    lending policies, technologically oriented products and services offered through its large network

    of branches locally, internationally and representative offices. The National Bank of Pakistan

    offers a wide range of services to its customers & recognizes the importance of efficient businessdelivery & providing timely solutions. Their competitor are United Bank, MCB Bank, Askari

    Bank, Faysal Bank, Punjab Bank, Allied Bank etc. The essence of Business philosophy is cater

    to the banking requirements of small & medium sized entrepreneurs, providing them qualitative

    & competitive services with emphasis on encouraging exports. Nearly forty percent of our credit

    portfolio is related to export financing and credit decisions are taken within 48 hours. Its product

    are pay order, mail transfer, Foreign Remittance, Foreign currency Accounts, Short term

    Investment, NIDA *(National Income Daily Accounts), Equity Investment, Commercial Finance

    etc. 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. I personally very much gain from this internship.

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    5

    CHAPTER NO # 1

    INTRODUCTION

    There are different opinions that how the word Bank originated. Some of the authors opinion

    that this word is derived from the word Bancus or Banque, which means a bench. The

    explanation of this origin is attributed to the fact that the Jews in Lombard transacted the

    business of money exchange on benches in the market place; and when the business failed, the

    people destroyed the bench. Incidentally the word Bankrupts said to have evolved from this

    practice. Some of the authors are of opinion that the word Bank is derived from the German

    word back, which means joint stock fund. Later on when the German occupied major part of

    the Italy the word Back was italicized into Back.

    In fact human left the need of bank when it begins to realize the importance of money as a

    medium of exchange. Perhaps it where the Babylonian who developed banking system as early

    as 2000 B.C. At that time temples were used as banks because of their prevalent respect. During

    the rule of king Hamurabi (1788 1686 BC) the founder of Babylonians Empire, loans were

    started being granted for interest. The borrower has to provide guarantee or he had to pledge his

    goods or valuables. King Hamurabi drew up a code wherein he laid down standards rules for

    procedures for banking operations by temples and great landowners. Also in Greece, the temples

    were used as banks, where the people deposited their money and other valuables for safe custody

    and security. In Europe with the revival of civilization (Renaissance) in the middle of twelve

    century, trade and commerce started expanding and this development compelled the business

    community to borrow the money from the Hebrew moneylenders on high rates of interest and

    usury. Seeing the great demand, these moneylenders started organizing themselves and bank

    started up at the principle seaports of southern Europe. Soon Venice and Geneva became the

    most important money markets of the time and banking though different from its present form,

    flourished. What we know as modern banking originated in the 14th

    century in Barcelona.

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    1.1 BANKING ERA IN PAKISTAN

    The first phase in evolution of banking in Pakistan sees very hard days for the whole banking

    sector. Starting virtually from scratch in 1947, the country today possesses a full range of

    banking and financial institutions to cope with various needs of the economy. The area now

    constituting Pakistan was, relatively speaking, fairly well provided with banking facilities in

    undivided India, in March 1947 there were 3496 offices of Indian scheduled banks out of which

    as many as 487 were situated in territories now constituting Pakistan.

    The Reserve bank of India was the central banking authority in India. At the time of partition it

    was decided that in the interest of smooth transition it should continue to function in newly

    emerging state of Pakistan, until 30th

    Sep.1948. In 1947 due to uncertainty and unsuitability the

    banking sector suffer heavy losses. This resulted in a negative effect on baking service in

    Pakistan. The banks, which had their registered offices in Pakistan, transferred them to India. In

    an effort to bring about the collapse of the new state by pushing a deliberate policy of

    withdrawals the Indian bank offices closed quickly. Those banks, which stayed, operated only in

    name pending the winding up of their business. The number of scheduled banks thus declined

    from 487 branches before independence to only 195 branches by 30th

    June1948.In this tense

    situation, a committee was immediately setup to formulate a scheme of central banking

    legislation for Pakistan. Many specialists were of the opinion that in view of the acute shortage

    of trained staff, any idea of establishing a central bank was I impractical and the best that could

    be attempted was the setting up of a currency board until such times as sufficient staff could be

    organize to operate a central bank.

    The questions as to whether the institution should be only a currency board or a full-fledged

    central bank had exercised the mind of the Pakistan government since independence. Through, it

    was realized that the shortage of trained personal to run the central bank would present serious

    difficulty in view of the tangible advantages that a central bank enjoyed over currency board, the

    government ultimately decided to take the bold step of setting up a full fledged central banking

    authority. Among other factors, which led to this decision, there was the fact the banking

    facilities in the country had been totally disrupted and there was an urgent need for their

    rehabilitation, which a central bank alone could meet. As there was hardly any time to pass as

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    Act, an order was drafted, known as the state bank of Pakistan order, which was promulgated by

    the government of Pakistan on 12th

    may 1948. The state bank declared open on July 1,1948 by

    the father of the nation. One of the first tasks of the state bank was to arrange for the replacement

    of the Reserve bank of India notes, which had continued to circulate in Pakistan during the

    transitional period, by Pakistan currency.

    The first Pakistan notes were issued in October 1948 in the denominations of Rs. 5, 10 & 100.An

    equally urgent task, which the new central bank had to address itself, was the creation of a

    national banking system. To this end, while extending every help and encouragement to Habib

    Bank to expand its organization, the state bank recommended the setting up of a new banking

    institution to serve both as an agent to the state bank recommended the setting up of a new

    banking institution to serve both as an agent of the state bank as well as the spearhead of itscredit policies. Accordingly the NATIONAL BANK OF PAKITSN was setup under an

    ordinance in November 1949. It started with six offices in the former East Pakistan. In view of

    the special role assigned to the new institution, contrary to traditional practices the Governor of

    the state bank was appointed to head its Board of Director in 1950. Under the fostering care of

    the state bank and the support of the government, the new institution developed rapidly. By using

    its special powers, the state bank made liberal advances to the new bank to help it expand credit

    facilities in the country. By 1952, the National bank of India shortly, afterwards, in November

    1952, the governor of the state bank ceased to function as the president of National bank of

    Pakistan.

    1.2 BANKING REFORMS 1972

    After the assumption of office by a new government in 1971, may 1972 different reforms were

    introduced to make the banks more responsive to the requirements of economics growth with

    social justice. The reforms aimed at bringing about a more purposeful and equitable distribution

    of bank credit, improving the soundness and efficiency of the banks, and securing greater social

    accountability of the banking system as a whole.

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    The role of the banking system had been truly spectacular in mobilizing savings of the

    community and meeting the credit needs of the economy. But at the same time, the banks had

    generally neglected their role in promoting social justice and had failed to play an effective role

    in ensuring a wider and more equitable dispersal of the benefits of economic growth. In

    particular the inter locking of ownership with commercial and industrial interests had led to the

    misuse of bank resources. There was a heavy concentration of credit in big accounts and in urban

    area. Credit facilities for agriculture, small business, newly emerging exports and housing had

    remained obviously inadequate while the banks indulged in capital financing in few selected

    business sectors and issued guarantees on behalf of favored clients, term clients, term financing

    facilities for industry were wholly absent.

    1.3 HISTORY

    The partition plan was announced on June 3, 1947 and August 15, 1949 was fixed as the date on

    which independence was to take effect. It was decided that the Reserve bank of India should

    continue to function in the dominion of Pakistan until September 30, 1948 due to administrative

    and technical difficulties involved in immediately establishing and operating a Central Bank. At

    the time of partition, total number of banks in Pakistan were 38 out of these the commercialbanks in Pakistan were 2, which were Habib Bank Limited and Australia Bank of India. The total

    deposits in Pakistani banks stood at Rs.880 million whereas the advances were Rs.198 million.

    The Governor General of Pakistan, Muhammad Ali Jinnah issued the order for the establishment

    of State Bank of Pakistan on 1st of July 1948.

    In 1949, National Bankof Pakistan was established. It started with six offices in former East

    Pakistan. There were 14 Pakistani scheduled commercial banks operating in the country on

    December 1973.

    Through the Nationalization of Bank Act 1974, the State Bank of Pakistan, all the commercial

    banks incorporated in Pakistan and carrying on business in or outside the country were brought

    under the government ownership with effect from Jan. 1, 1974. The ownership, management,

    and control of all banks in Pakistan stood transferred to and vested in the Federal Government.

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    The Finance Minister announced plans to start Islamic Banking system in Pakistan in the budget

    speech on June 26, 1980. The bank believes that Islamic Banking offers good potential for

    growth. The bank has opened eight (8) branches since 2007, of which three were opened in 2009.

    During the last two years its asset size has grown significantly with offering of market-driven

    products like Murabaha and Ijarah. Islamic Banking is making its mark by catering to the Banks

    already existing large customer-base as well as exploring new and untapped markets including

    SME, Commercial and Corporate. Islamic Banking is developing policies for new products like

    Diminishing Musharikah, Salam and Istisna to meet customers needs. The overall operations

    showed loss as a result of higher startup cost of three new branches opened this year.

    1.4 HISTORY OF NBP:

    The NBP was established vide NBP Ordinance No. XIX of November 9. 1949. British Govt.

    devalued its currency in September 1949, India devalued its rupees but Pakistan did not. It led to

    a crisis in trading between the two countries and India refused to lift the Pakistan Jute. To solve

    this problem i.e. to export jute NBP was established through an Ordinance of GOP. National

    Bank of Pakistan maintains its position as Pakistan's premier bank determined to set higher

    standards of achievements. It is the major business partner for the Government of Pakistan with

    special emphasis on fostering Pakistan's economic growth through aggressive and balanced

    lending policies, technologically oriented products and services offered through its large network

    of branches locally, internationally and representative offices. The Bank in 1950 had one

    subsidiary The Bank of Bahawalpur on December4, 1947 by the former Bahawalpur State.

    NBP was undertaking Treasury Operations and Managing Currency Chests or Sub Chests at 57

    of its offices where the turnover of the business under the head amounted to Rs.2460 million.

    Deposits held by NBP constituted about 3.1% of total deposits of all Pakistani Banks in 1949,

    which rose to 38% in 1952. Growth in Deposits was accompanied by increase in Bank portfolio

    in advances. NBP lent out to Textile, Yarn, Iron and Steel and played a pioneer role in supportof agriculture and commerce. NBP advances reached Rs.554.4 million by December 1959, which

    was one third of the; total schedule bank credit.

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    1.5 Vision:

    To be recognized as a leader and a brand synonymous with trust, highest standards of service

    quality, international best practices and social responsibility.

    1.6 Mission:

    NBP will aspire to the values that make NBP truly

    The Nations Bank, by:

    Institutionalizing a merit and performance culture

    Creating a distinctive brand identity by providing the highest standards of services

    Adopting the best international management practices

    Maximizing stakeholders value

    Discharging our responsibility as a good corporate citizen of Pakistan and in countries where

    we operate

    1.7 BOARD OF DIRECTORS

    NAME DISIGNATION

    Ali Raza Chairman & President

    Qamar Hussain President

    Mr. Tariq Kirmani Director

    Mrs. Haniya Shahid Naseem Director

    Ms. Nazrat Bashir Director

    Syed Muhammad Ali Zamin SEVP & Sectorary to BD

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    1.8 MANAGEMENT

    Management is a distinct process consisting of activities of planning, organizing, actuating and

    controlling performed to determine and accomplish stated objectives with the use of human

    being and other resources.The management has two types.

    1.9 SENIOR MANAGEMENT OF NBP.

    Qamar Hussain President

    Dr. Asif A. Brohi SEVP & Group Chief, Commercial & Retail

    Banking Group

    Shahid Anwar Khan SEVP & Group Chief, Credit Management Group

    , Overseas Banking Group

    Ziaullah Khan SEVP & Group Chief Assets Recovery Groupand

    Divisional Head, Islamic Banking Division

    Dr. Mirza Abrar BaigSEVP & Group Chief, Training & Organization

    Development Group

    Nausherwan Adil SEVP & Group Chief, Operations Group

    Tariq Jamali SEVP & Group Chief, Compliance Group

    Nadeem A. Ilyas SEVP & Group Chief, Corporate & Investment

    Banking Group & PSO to President

    Muhammad Nusrat Vohra SEVP & Group Chief, Treasury Management

    Group

    Khalid Bin Shaheen SEVP & Group Chief, Global Home Remittance

    Management Group

    Imam Bakhsh Baloch SEVP & Group Chief, Audit & Inspection Group

    M. Rafiq Bengali SEVP & Group Chief, Overseas Banking Group

    and RCE Americas Region

    Zubair AhmedSEVP & Group Chief, Logistics & Engineering

    Group

    http://www.nbp.com.pk/AboutUs/SMGT-Profiles.aspx#aabhttp://www.nbp.com.pk/AboutUs/SMGT-Profiles.aspx#aab
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    1.10 BRANCH HIERARCHY AIOU ISLAMABAD

    MANAGER

    Baktawar Naqvi

    OPERATION MANAGER

    Mr.Zafar

    CLEARING

    DEPARTMENT

    Madam Bushra

    DEPOSIT

    DEPARTMENT

    Muhammad Noman

    CREDIT

    DEPARTMENT

    MuhammadNoman

    IT INCHARGE

    M. Ijaz

    Cash INCHARGE

    Mr. Habib

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    CHAPTER NO # 2

    COMPANY ANALYSIS

    2-1 BANK SERVICES & FUNCTIONS(OPERATIONAL ANALYSIS)

    The National Bank of Pakistan a commercial bank generally makes advances for period not

    exceeding one year, except in case of small and medium industries for which advance may be

    made for a maximum period of five years. The bank makes not only against the security of

    stocks and goods hypothecated or pledged to the bank, but also against documents of goods and

    properly, shares are various joint stock companies. Government securities. Insurance policies

    deposits receipts, etc. The margin and rate of interest are determined by several factors including

    the type of security the size of loan and the integrity of the party (Http: //www.nbp.com.pk).

    The Bank is authorized to carry on kinds of banking business and is empowered to make loans. It

    has also undertaken special financing operations connected with Government prices support

    scheme. The bank also gives advances loans, especially for agricultural products, such as cotton

    etc. It also safeguards the valuable articles of people. It also arranges training programs for Bank

    officials. It caters to the needs of the trade, industry & agriculture, both in private &.public

    sectors. It participates in procurement of seasonal crops e.g. -wheat, rice, cotton, sugar cane, etc.

    It also provides credit facilities to small industrial units agriculture sectors as per credit

    mandatory targets fixed by the State bank of Pakistan

    2.1.1 Services:

    Services are outputs of the firm, which are in intangible form. Which are the backbones of any

    organization to earn profit? NBP offers the following services to the people.NBP offers

    unlimited opportunities to its employees for continuous personal and professional growth.

    Change Management Program: NBP has started an ambitious Change Management Program to

    further train its employees to meet the challenges of present day requirements. Training of new

    staff: Training and development are the core issues of HR, which will ultimately improve our

    customer service and help us, attain the standard of a progressive bank. Benefits: Besides a

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    competitive financial package, we offer excellent working conditions, job satisfaction, superior

    leadership, and a conducive environment for growth.

    2.2.1 DEMAND DRAFTS

    If you are looking for a safe, speedy and reliable way to transfer money, you can now purchase

    NBPs Demand Drafts at very reasonable rates. Any person whether an account holder of the

    bank or not, can purchase a Demand Draft from a bank branch.

    2.3.1 LETTERS OF CREDIT

    NBP is committed to offering its business customers the widest range of options in the area of

    money transfer. If you are a commercial enterprise then our Letter of Credit service is just what

    you are looking for. With competitive rates, security, and ease of transaction, NBP Letters of

    Credit are the best way to do your business transactions.

    2.4.1 TRAVELERSCHEQUES

    Travelers cheques are negotiable instruments, and there is no restriction on the period of

    validity of the cheques. Rupee travelers cheque is available at all 700 branches of NBP. This can

    be encashed in all 400 branches of NBP. There is no limit on purchase of this cheque. It is one of

    the safest ways for carrying money.

    2.5.1 PAY ORDER

    NBP provides another reason to transfer your money using our facilities. NBP pay orders are a

    secure and easy way to move your money from one place to another. And, as usual, NBP

    charges for this service are extremely competitive. The charges of NBP are very low all over the

    Pakistan. It charges Rs 50/- for NBP account holders on issuing one payment order. And charges

    Rs 100/- for NBP non-account holders on issuing one payment order. It charges Rs 25/- for

    students on payment of fees of educational institutions. If someone want a duplicate of payment

    order they charges Rs 100/- for NBP account holders and Rs 150/- for non account holders.

    2.6.1 FOREIGN REMITTANCES

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    To facilitate its customers in the area of Home Remittances, National Bank of Pakistan has taken

    a number of measures to:

    Increase home remittances through the banking system

    Meet the SBP directives/instructions for timely and prompt delivery of remittances to the

    beneficiaries

    2.7.1 NEW FEATURES

    The existing system of home remittances has been revised/significantly improved and well-

    trained field functionaries are posted to provide efficient and reliable home remittance services to

    nonresident Pakistanis at 15 overseas branches of the Bank besides Pakistan International Bank

    (UK) Ltd., and Bank Al-Jazira, Saudi Arabia.

    Zero Tariffs: NBP is providing home remittance services without any charges.

    Strict monitoring of the system is done to ensure the highest possible security.

    Special courier services are hired for expeditious delivery of home remittances to the

    beneficiaries.

    2.8.1 SHORT TERM INVESTMENTS

    NBP now offers excellent rates of profit on all its short-term investment accounts. Whether you

    are looking to invest for 3 months or 1 year, NBPs rates of profit are extremely attractive, along

    with the security and service only NBP can provide.

    2.9.1 NATIONAL INCOME DAILY ACCOUNT (NIDA)

    The scheme was launched in December 1995 to attract corporate customers. It is a current

    account scheme and is part of the profit and loss system of accounts in operation throughout the

    country.

    2.9.2 SALIENT FEATURES:

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

    Profit is paid on half yearly basis on monthly balances.

    The rates of profit vary according to the slabs of deposit. On Deposits of Rs.2 million to2,000 million, the rate fluctuates from 1.4 to 1.75

    It is a checking account and there is no limit of withdrawals.

    2.10.1 EQUITY INVESTMENTS

    NBP has accelerated its activities in the stock market to improve its economic base and restore

    investor confidence. The bank is now regarded as the most active and dominant player in the

    development of the stock market.

    NBP is involved in the following:

    Investment into the capital market

    Introduction of capital market accounts (under process)

    NBPs involvement in capital markets is expected to increase its earnings, which would result in

    better returns offered to account holders

    2.11.1 COMMERCIAL FINANCE

    NBP dedicated team of professionals truly understands the needs of professionals, agriculturists,

    large and small business and other segments of the economy. They are the customers best

    resource in making NBPs products and services work for them.

    NBP DEPARTMENTS

    2.17 CASH DEPARTMENT

    Cash department performs the following functions

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    2.18 RECEIPT

    The money, which either comes or goes out from the bank, its record should be kept. Cash

    department performs this function. The deposits of all customers of the bank are controlled by

    means of ledger accounts. Every customer has its own ledger account and has separate ledger

    cards.

    2.19 PAYMENTS

    It is a bankers primary contract to repay money received for this customers account usually by

    honoring his cheques.

    2.20 CHEQUES AND THEIR PAYMENT

    The Negotiable Instruments. Act, 1881

    Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable

    otherwise than on demand.Since a Cheque has been declared to be a bill of exchange, it must

    have all its characteristics as mentioned in Section 5 of the Negotiable Instruments Act, 1881.

    2.21 THE REQUISITES OF CHEQUE

    There is no prescribed form of words or design of a Cheque, but in order to fulfill the

    requirements mentioned in Section 6 above the Cheque must have the following.

    1. It should be in writing

    2. The unconditional order

    3. Drawn on specific banker only

    4.

    Payment on Demand

    5. Sum Certain in money

    6. Payable to a specific person

    7. Signed by the drawer

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    2.21.1 PARTIES TO CHEQUE

    The normal Cheque is one in which there is a drawer, a drawee banker and a payee, or no payee

    but bearer.

    1. The Drawer

    2. The Drawee

    3. The Payee

    2.21.2 TYPES OF CHEQUES

    Bankers in Pakistan deal with three types of cheques

    1. BEARER CHEQUES

    Bearer cheques are cashable at the counter of the bank. These can also be collected through

    clearing.

    2.

    ORDER CHEQUE

    These types of cheques are also cashable on the counter but its holder must satisfy the banker

    that he is the proper man to collect the payment of the cheque and he has to show his

    identification. It can also be collected through clearing.

    3. CROSSED CHEQUE

    These cheques are not payable in cash at the counters of a banker. It can only be credited to the

    payees account. If there are two persons having accounts at the same bank, one of the account

    holder issues a cross-cheque in favour of the other account holder. Then the cheque will be

    credited to the account of the person to whom the cheque was issued and debited from the

    account of the person who has actually issued the cheque.

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    2.22 CLEARANCE DEPARTMENT

    A clearinghouse is an association of commercial banks set up in given locality for the purpose of

    interchange and settlement of credit claims. The function of clearinghouse is performed by the

    central bank of a country by tradition or by law. In Pakistan, the clearing system is operated by

    the SBP. If SBP has no office at a place, then NBP, as a representative of SBP act as a

    clearinghouse. After the World War II, a rapid growth in banking institutions has taken place.

    The use of cheques in making payments has also widely increased. The collection as settlement

    of mutual obligations in the form of cheques is now a big task for all the commercial bank. When

    Cheque is drawn on one bank and the holder (payee) deposits the same in his account at the bank

    of the drawer, the mutual obligation are settled by the internal bank administration and there

    arises no interbank debits from the use of cheques. The total assets and total liabilities of thebank remain unchanged.

    In practice, the person receiving a Cheque as rarely a depositor of the cheque at the same bank as

    the drawer. He deposits the cheque with his bank other than of payer for the collection of the

    amount. Now the bank in which the cheque has been deposited becomes a creditor of the

    drawers bank. The depositor bank will pay his amount of the cheque by transferring it from cash

    reserves if there are no offsetting transactions. The banks on which the cheques are drawn

    become in debt to the bank in which the cheques are deposited. At the same time, the creditors

    banks receive large amounts of cheques drawn on other banks giving claims of payment by

    them.The easy, safe and most efficient way is to offset the reciprocal claims against the other and

    receive only the net amount owned by them. This facility of net interbank payment is provided

    by the clearinghouse. The representatives of the local commercial banks meet at a fixed time on

    all the business days of the week. The meeting is held in the office of the bank that officially

    performs the duties of clearinghouse. The representatives of the commercial banks deliver the

    cheques payable at other local banks and receive the cheques drawn on their bank. A summary

    sheet is prepared which shows the names of the banks, the total number of cheques delivered and

    received by them. Totals are also made of all the cheques presented by or to each bank. The

    difference between the total represents the amount to be paid by a particular bank and the amount

    to be received by it. Each bank then receives the net amount due to it or pays the net amount

    owed by it.

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    2.23 ADVANCES DEPARTMENT

    Advances department is one of the most sensitive and important departments of the bank. The

    major portion of the profit is earned through this department. The job of this department is to

    make proposals about the loans. The Credit Management Division of Head Office directly

    controls all the advances. As we known bank is a profit seeking institution. It attracts surplus

    balances from the customers at low rate of interest and makes advances at a higher rate of

    interest to the individuals and business firms. Credit extensions are the most important activity of

    all financial institutions, because it is the main source of earning. However, at the same time, it is

    a very risky task and the risk cannot be completely eliminated but could be minimized largely

    with certain techniques. Any individual or company, who wants loan from NBP, first of all has

    to undergo the filling of a prescribed form, which provides the following information to thebanker.

    2.23.1 NAME & ADDRESS OF THE BORROWER.

    1. Existing financial position of a borrower at a particular branch.

    2. Accounts details of other banks (if any).

    3. Security against loan.

    4. Exiting financial position of the company. (Balance Sheet & Income Statement).

    5. Signing a promissory note is also a requirement of lending, through this note borrower

    promise that he will be responsible to pay the certain amount of money with interest.

    2.24 FORMS OF LOANS

    In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the form of

    cash finance, overdrafts and loans. NBP provides advances to different people in different ways

    as the case demand.

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    2.24.1 CASH FINANCE

    This is a very common form of borrowing by commercial and industrial concerns and is made

    available either against pledge or hypothecation of goods, produce or merchandise. In cash

    finance a borrower is allowed to borrow money from the banker up to a certain limit, either at

    once or as and when required. The borrower prefers this form of lending due to the facility of

    paying markup/services charges only on the amount he actually utilizes.If the borrower does not

    utilize the full limit, the banker has to lose return on the un-utilized amount. In order to offset

    this loss, the banker may provide for a suitable clause in the cash finance agreement, according

    to which the borrower has to pay markup/service charges on at least on self or one quarter of the

    amount of cash finance limit allowed to him even when he does not utilize that amount.

    2.24.2 OVERDRAFT/RUNNING FINANCE

    This is the most common form of bank lending. When a borrower requires temporary

    accommodation his banker allows withdrawals on his account in excess of the balance, which the

    borrowing customer has in credit, and an overdraft thus occurs. This accommodation is generally

    allowed against collateral securities. When it is against collateral securities it is called Secured

    Overdraft and when the borrowing customer cannot offer any collateral security except his

    personal security, the accommodation is called a Clean Overdraft. The borrowing customer is

    in an advantageous position in an overdraft, because he has to pay service charges only on the

    balance outstanding against him. The main difference between a cash finance and overdraft lies

    in the fact that cash finance is a bank finance used for long term by commercial and industrial

    concern on regular basis, while an overdraft is a temporary accommodation occasionally resorted

    to.

    2.24.3 DEMAND FINANCING/LOANS

    When a customer borrows from a banker a fixed amount repayable either in periodic installments

    or in lump sum at a fixed future time, it is called a loan. When bankers allow loans to their

    customers against collateral securities they are called secured loans and when no coll ateral

    security is taken they are called clean loans.

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    The amount of loan is placed at the borrowers disposal in lump sum for the period agreed upon,

    and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a

    fixed amount of money for his use, while the banker feels satisfied in lending money in fixed

    amounts for definite short periods against a satisfactory security

    2.25 REMITTANCE DEPARTMENT

    Remittance means a sum of money sent in payment for something. This department deals with

    either the transfer of money from one bank to other bank or from one branch to another branch

    for their customers. NBP offers the following forms of remittances.

    1. Demand Draft

    2.

    Telegraphic Transfer

    3. Pay Order

    4. Mail Transfer

    2.25.1 DEMAND DRAFT

    Demand draft is a popular mode of transfer. The customer fills the application form. Application

    form includes the beneficiary name, account number and a senders name. The customer deposits

    the amount of DD in the branch. After the payment the DD is prepared and given to the

    customer. NBP officials note the transaction in issuance register on the page of that branch of

    NBP on which DD is drawn and will prepare the advice to send to that branch. The account of

    the customer is credited when the DD advice from originating branch comes to the responding

    branch and the account is debited when DD comes for clearance. DD are of two types.

    1. Open DD: Where direct payment is made.

    2. Cross DD: Where payment is made though account.

    NBP CHARGES FOR DD

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    1. Up to Rs. 50,000/- is Rs 50/- only

    2. Over Rs. 50,000/- is 0.1%

    2.25.2 PAY ORDER

    Pay order is made for local transfer of money. Pay order is the most convenient, simple and

    secure way of transfer of money. NBP takes fixed commission of Rs. 25 per pay order from the

    account holder and Rs. 100 from a non-account holder.

    2.25.3 TELEGRAPHIC TRANSFER

    Telegraphic transfer or cable transfer is the quickest method of making remittances. Telegraphic

    transfer is an order by telegram to a bank to pay a specified sum of money to the specified

    person. The customer for requesting TT fills an application form. Vouchers are prepared and sent

    by ordinary mail to keep the record. TT charges are taken from the customer. No excise duty is

    charged on TT. The TT charges are:

    Telegram/ Fax Charges on TT = Actual-minimum Rs.125.

    Cable telegram transfer costs more as compared to other title of money. In cable transfer the

    bank uses a secret system of private code, which is known to the person concerned with this

    department and branch manager.

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    CHAPTER NO # 3

    ANALYSIS

    3.1 FINANCIAL ACCOUNT:

    Different facts and figures of opening balances of the year 2011 about National bank of Pakistan

    which show the financial position are as under:

    TOTAL DEPOSITS Rs. 726,465 Million

    ADVANCES Rs. 475,243 Million

    INVESTMENTS Rs. 217,643 Million

    AFTER-TAX PROFIT Rs.18,212 Million

    TOTAL ASSETS Rs. 945,903.3 Million

    TOTAL EXPENDITURES Rs. 26.30 Billion

    NO OF BRANCHES 1287

    PROFIT Rs. 148,212

    NO. OF EMPLOYEES 16,248

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    3.2 NATIONAL BANK OF PAKISTAN BALANCE SHEET

    As at December 31, 2011

    ASSETS 2010

    (Rs.in million)

    2011

    (Rs.in million)

    Cash and Equivalents 140,477.0 138,631.3

    Trading Asset Securities 1,009.2 2,381.3

    TOTAL CASH AND SHORT TERM

    INVESTMENTS

    156,995.0 160,951.5

    Other Receivables 2,105.7 13,566.9

    TOTAL RECEIVABLES 2,105.7 13,566.9

    Restricted Cash 5,792.1 6,823.6

    Other Current Assets 16,276.2 21,070.2

    TOTAL CURRENT ASSETS 195,166.9 218,341.3

    Gross Property Plant and Equipment 28,214.4 29,982.1

    Accumulated Depreciation -3,962.7 -4,810.5

    NET PROPERTY PLANT AND EQUIPMENT 24,251.7 25,171.6

    Deferred Tax Assets, Long Term 3,203.6 3,064.5

    Other Intangibles 20.3 29.3

    Other Long-Term Assets 34,280.7 32,238.3

    TOTAL ASSETS 820,077.2 945,903.3

    LIABILITIES & EQUITY

    Accrued Expenses 15,204.6 18,247.5

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    Current Portion of Long-Term Debt/Capital Lease 5,117.9 2,921.1

    Current Portion of Capital Lease Obligations 15.2 19.0

    Other Current Liabilities, Total 10,242.6 10,654.7

    TOTAL CURRENT LIABILITIES 687,806.3 792,041.4

    Long-Term Debt 3,049.6 8,220.9

    Capital Leases 10.0 23.6

    Minority Interest 112.7 110.9

    Unearned Revenue, Non-Current 133.3 218.0

    Pension & Other Post-Retirement Benefits 3,052.8 3,531.0

    Deferred Tax Liability Non-Current -- --

    Other Non-Current Liabilities 21,573.9 20,425.7

    TOTAL LIABILITIES 715,738.7 824,571.6

    Common Stock 8,969.8 10,763.7

    Retained Earnings 67,612.0 78,212.5

    Comprehensive Income and Other 27,756.7 32,355.4

    TOTAL COMMON EQUITY 104,338.5 121,331.6

    TOTAL EQUITY 104,338.5 121,331.6

    TOTAL LIABILITIES & EQUITY 820,077.2 945,903.3

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    3.3 Profit and loss Account

    For the year ended on December 31, 2011

    2010

    (Rs.in million)

    2011

    (Rs.in million)

    TOTAL REVENUES/SALES 41,957.1 45,980.5

    Cost of Goods Sold 261.8 330.3

    GROSS PROFIT 41,695.3 45,650.3

    Selling General & Admin Expenses, Total 18,101.5 22,486.4

    EBT, EXCLUDING UNUSUAL ITEMS 22,261.3 22,198.8

    Other Unusual Items, Total 988.0 --

    Other Unusual Items 988.0 --

    EBT, INCLUDING UNUSUAL ITEMS 23,249.3 22,198.8

    Income Tax Expense 7,565.2 4,099.8

    Minority Interest in Earnings -3.0 1.8

    Earnings from Continuing Operations 15,681.1 18,100.8

    NET INCOME 15,681.1 18,100.8

    NET INCOME TO COMMON

    INCLUDING EXTRA ITEMS

    15,681.1 18,100.8

    NET INCOME TO COMMON

    EXCLUDING EXTRA ITEMS

    15,681.1 18,100.8

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    SWOT ANALYSIS

    The SWOT analysis is done by the organization for the environmental scanning. The strength

    and weaknesses and opportunities and threats are analyzed by organization from the external

    environment. NBP SWOT analysis is given below:

    3.4 STRENGTH

    A National Bank brand image is its major strength. It has always been considered as the pillar of

    the country's economic scenario asset wise or balance sheet wise. Its image, work force, network

    and reputation have created a sentimental and emotional attachment of the people with the bank.

    Complete computerized networking in strength of the bank. Now the bank has the ability to

    compete with any multinational bank as to keep pace with the changing and fast growing world

    of today computer have become necessities. The reserve funds indicate positive sign as they have

    increased as compared to the previous years. Another competitive edge that the bank has on the

    rest of the competitors is its expanding business worldwide catering for a large and vast group of

    customer and maintaining standards of excellence globally and other strength of NBP.

    3.5 WEAKNESSES

    National Bank created its own weakness by downsizing. Due to downsizing various experienced

    and devoted employees were either forced or given the option to leave. Only those people were

    left who had no organization better to join. Due to right sizing a lot of confusions have taken

    place as well. For example higher-level management has come from institution or others

    organizations where everything is computerized. Whereas have by ten staff members (over

    staffing) hence, the higher management finds it difficult to get work done. From 1995 onward

    bank exhibits a downward trend indicating its low performance-showing decline in total assets.

    Total deposits, saving deposits advances investment and total income. This downward trend can

    caused a great threat to the bank as its competitors are talking its market share, which can cause

    ruining the image and reputation of the bank thus posing danger in the long run. The graph

    depicts a decline in the performance of the bank. NBP's major weaknesses are given below:

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    3.6 OPPORTUNITIES

    National Bank has very bright prospects for the future. They plan to region their lost glory not

    only in terms of profitability but also include latest technology and competent work force.

    Furthermore, NBP is the only bank which is providing facility of bills collecting from 9 AM. to 5

    PM. NBP is considering setting up an exclusive utility bank in collaboration with a private firm,

    which would provide this service for 12 hours. This is the best opportunity available to all banks

    and NBP as well, to sponsor the IT and computer based projects because the coming century is

    the century of information technology as new days all the business community is diverting its

    attention towards this field. NBP's major function is the project financing and it is doing it with

    full efforts. Fortunately industrial sector is now-a-days is Pakistan is again growing thus

    increasing the business opportunities of NBP. Especially the textile sector is one again improving

    even the sick projects has resumed their operations.

    3.7 THREATS

    If there is a threat to the whole economy, it will pose a threat for National Bank. National bank

    does not consider small bank a threat to its existence because the way national bank can

    accommodation large customer, these small banks cannot. Sanctions imposed against Pakistan

    will affect exchange. Business whereas the freezing of accounts by State Bank of Pakistan have

    also caused problems for National Bank. MCB and HBL are causing threats to the bank in the

    long run thus snatching away the market share by attracting a large number of customer due to

    their rising standards giving quality service and value added products. This is the major threat for

    any business organization in Pakistan because the political officials influence NBP in financing

    those projects which are not viable or write off those loans which are still able to pay, this

    political influence cause many problems in daily business thus profitability of NBP. Political

    industrial is even a threat for NBP in the sense that once the policies and procedures areapproved by government. NBP's sick projects are increasing day by day due to economic

    downfall. As our economy is weakening day by day the no of side projects are becoming sick

    increasingly thus influencing the profitability even survival of NBP. NBP is following fifty years

    old style of banking, in the computers of NBP symphony word processor is still used.

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    CHAPTER NO # 4

    HUMAN RESOURCE IN BANKING SECTOR

    4.1 HUMAN RESOURCE MANAGEMENT

    Human Resource plays a vital role in the success of every service organization. They interact

    between man and machine. Their attitude can win or loose the customer. The positive attitude

    could only be created in a conducive environment, which can make the staff dedicated towards

    the organization and its objectives. In reality the man is more important than machine as it is the

    human which could get maximum out of machine to keep a happy customer. However, most

    organizations give little importance to this very important asset.

    Various aspects related to human resource of National Bank of Pakistan are critically examined

    in the following text:

    4.2 SELECTION & RECRUITMENT

    Although the Bank believes in merit but in practice the selection of employees is not done on

    merit. Most of the employees are low educated. This shows that candidates with some strong

    family background or political pressure are given preference in recruitment and qualified

    candidates are sometimes left behind.

    The Team Members of the bank has interpersonal skills and have abilities to handle if any

    misunderstanding is creating and also know the new knowledge and use of information

    technology in their own online Softwares The Bank Members have also Strong analytical and

    problem solving skills they have excellent written and verbal communication skills in English.

    4.2.1 JOB FOR LIFE

    Like the employee of public sector organizations in Pakistan, the employees of NBP also enjoy

    their job for life. Since there is no risk of early retirement or redundancy in rank, they do not

    perform with their full potentials. This is one redundancy in rank, they do not perform with their

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    full potentials, and this is one of the reasons responsible for the low productivity of the

    employees of the Bank.

    5.3 PERFORMANCE APPRAISAL

    The performance of employees of the Bank are appraised though their annual confidential

    reports at the end of each year. This has become an outdated method of performance appraisal

    and no longer used due to the following reasons:

    1. The performance of employees is evaluated after quite a long time.

    2. Element of subjectivity is involved in this method.

    3.

    Employees participation is not ensured in the process of evaluation.

    4. Objectives of employees are not quantified.

    4.4 INTER PERSONAL RELATIONSHIP

    Modern management acknowledges human resources as one of the most important assets of an

    organization. But by their very nature, human beings are also the most unpredictable. Where a

    number of persons work together, interactions among them, of necessity, will lead to conflictsand NBP is no exception. Most interpersonal conflicts in NBP can be traced back to the

    following major heads.

    4.4.1 LACK OF COMMUNICATION

    Lack of communication is for the biggest reason for conflicts. Not only it is due to the failure to

    send a massage but to an interpretation given to the massage by the receiver is different from that

    intended.

    4.5 DIVERSITY IN VALUES

    Diversity in values, perceptions, cultural background and life-style is another reason responsible

    for inter personal conflicts in NBP. Different values and perceptions about the same issue, event

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    or personality hinder understanding. When things come to such a pavement, therefore,

    interpersonal conflicts are generated.

    The dominant trend in all modern industrial societies of the world is merit and expertise, which

    helps promote cohesion and reduce conflicts. But the feudalistic mindset is still very strong in

    our set up and there is no tradition of tolerance for differing viewpoints. Hence, interpersonal

    conflicts are generated.

    4.6 CORRUPTION

    Our social acceptance of corruption gives rise to corruption at every level of social and

    organizational set up. Corruption involves financial embezzlement, favoritism, nepotism and

    other number of such practices. All these cause resentment that keep building up and lead to

    conflict sooner or later. In the past few years, some cases of frauds have happened in different

    branches. The reasons can be linked with the employee dissatisfaction of NBP.

    4.7 DISCIPLINE & AUTHORITY

    Maintaining discipline and implementation of authority (tables) in letter and spirit is the key to

    success of any organization. In NBP, The authority tables are not strictly maintained. Line

    managers are not fully equipped with the authority with no vertical or horizontal interference.

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    CHAPTER NO # 5

    ENVIRONMENT ANALYSIS

    INDUSTERY AND MARKET ANALYSIS:

    Banking sector is always a very important sector for every economy. Same is the case with

    Pakistan. Banks perform various duties which are dissimilar in nature. The primary and most

    important duty is to provide a safeguard for national assets. Other functions include profit

    making from the public funds (on interest rates) and lending of money to the borrowers. The

    whole of the economy and financial transactions are carried out through banking institutions

    these days. Banking system in Pakistan is one of the sectors, which have developed a lot in the

    past few years. Pakistan today has an very good banking network in all over the Pakistan

    comprising of a State Bank , which is a federal entity and has a central role in the banking sector

    of Pakistan. State bank has a very wide range of various private and national commercial and

    other banks that deal in specific areas such as consumer finance, agriculture and other financial

    institutions. State bank also regulate banking sector through its policies and physical inspection.

    However Banking System of Pakistan has adopted rough and tough policies.

    Pakistan on the time of its creation i.e. in 1947 did not have an good banking system in it.

    Pakistani banking sector portrayed a marvelous performance in first two decades and got a good

    banking system. State Bank of Pakistan was constituted on 1st July 1948. The role of central

    bank is to regulate , observe and monitor and control the activities and all operations of all the

    commercial banks in Pakistan. State bank of Pakistan has many a set of regulations which are to

    be followed by all other banks in the country these regulations are called Prudential

    Regulations. Prudential Regulations are updated time to time to ensure the implementation of

    the current scenario.

    Other important banking decisions such as discount rates and minimum reserves which must be

    maintained by every bank are also made by the state bank of Pakistan. State bank also hold the

    federal reserve of the county and also lends money to the government and other commercial

    banks in the country. One of the bad patches in the history of Pakistani banking industry was the

    zulifqar Ali Bhuttos era. He decided to nationalize all the private banks. After nationalization of

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    banks their efficiency was severely affected. They became the victims of political interference

    and pressures. This became a reason of the lowering nations currency of Pakistan and due to the

    devaluation in the currency balance of payments was severely hurt.

    Now Pakistani banks are prospering and providing very good customer services to its customers

    like online banking and mobile banking etc. ATM cards and debit and credit cards have entirely

    changed the banking experience in the country. Now there are more private banks than

    government banks and they all are working well. Pakistan has the one of worlds strongest

    banking system which has a sound stand from the recent world crisis of banking system in

    America and other European countries.

    COMPETITIRS ANALYSIS:

    1. Allied Bank Limited

    2. Askari Bank Limited

    3. Bank AlFalah Limited Pakistan

    4. Bank AL-Habib Limited Pakistan

    5. Bank Of the Khyber

    6. B.O.Punjab limited

    7. Habib Bank Limited

    8. Muslim Commercial Bank Pakistan Ltd

    9.

    Standard Chart Bank limited

    10.United Bank of the Pakistan

    Technological analysis:

    The developments taking place in information and communication technology are increasing

    competition in financial institutions worldwide. Thus, the deployment of advanced technologies

    is essential to achieve a competitive advantage. In the world of banking, the development of E-

    Banking has an enormous effect on development of more flexible payment methods and more

    user friendly banking services. Recently, the banking industry was highly affected by the

    technology evolution that transformed the way banks deliver their services, using technologies

    such as automated teller machines, phones, the Internet, credit cards, and electronic cash. In line

    with global trends, electronic banking in Pakistan has been undergoing many changes. Electronic

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    banking is a term for the process by which a customer may perform banking transactions

    electronically without visiting the bank itself. E-Banking refers to systems that enable bank

    customers to access accounts and general information on bank products and services through a

    personal computer (PC) or other device. There are many benefits of e-banking as it provides easy

    way to monitor an account, we can shop, pay bills, buy item, take part in auction e.g.

    Amazon.com and E-Bay, and transfer money from anywhere at any time, it reduces costs, it

    saves time, and vice versa . This study focuses on growth and awareness of electronic banking in

    Pakistan.

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    CHAPTER NO # 6

    INTERNSHIP EXPERIENCE

    In National bank, I really learn a lot during internship and I wish to be employee of

    Organization. For the sake of practical knowledge HR manager assigned me six weeks to get the

    experience with the initial stages of work and learn of what kind of assistance branches need to

    handle the day to day business operation. I feel highly indebted to work in NBP AIOU branch.

    As internee I had to help different employees in the branch work. So my duties and

    responsibilities changed time to time.

    6.1 WEEK 1

    CUSTOMER SERVICE DEPARTMENT

    In customer service department I had learn the procedure of issuing cheque book and ATM cards

    as well. I was also exposed to customer dealing procedure for handling their queries and

    referring them to appropriate personnel.

    WORKING AS INTERNEE

    In the first week of the internship Assisting customer in taking token from machine if customer

    has personal account in the bank and Assist customer in dealing with ATM and online request

    for bank statement, pay order, bank certificates and stop payment. The customer providing the

    bank statement and the other account related information if they want to open the new account.

    Once the new customer account is opening also tells the information to customer about the

    different services and what the charges of these different services.

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    WEEK 2

    6.2.1 CLEARING DEPATMENT

    Clearing is a transfer of fund from one bank to another bank through NIFT (NATIONAL

    INSTITUTE OF FACILITATION TECHNOLOGY) and STATE BANK OF PAKISTAN.

    Clearing is a vital service provider by the commercial bank to their customers.

    The word clearing is derived from the word clear and is defined as a system by which banks

    exchange cheques and other negotiable instruments drawn on each other with in by specified

    area and thereby secured payments by clients.

    WORKING AS INETRNEE

    In the second week of the internship firstly separate inward and outward cheques and separate

    the intercity cheque with the city cheque and Endorse of cheques with relevant stamps. In

    intercity cheques there is also additional stamp of the intercity can be paste .After stamping the

    next step is Fulfilling the perform of an advice and taking signature from assistant vice manager

    and Making entries on registers and separately enter the city and intercity cheque with their

    separate registers after that it can be record on the excel sheet. These details can be checked on

    daily basis.

    6.3 WEEK 3

    6.3.1 ACCOUNT OPENING DEPARTMENT

    Account opening is a contract in which customer offers his money and bank accept his funds,

    therefore the relation between a banker and customer is of contractual nature.

    6.3.2 HOW TO OPEN AN ACCOUNT

    By opening of an account a person becomes a customer of bank. At the time of account bank

    take all information related to customer by filling detailed form in order to avoid inconvenience.

    6.3.3 WORKING AS INTERENEE

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    In the third week of the internship asking to the customer which type of account he want to open

    which benefits they can get. I am giving them all necessary information related to the benefits.

    Also informing him to bring all necessary documents e.g. CNIC, source of income, proof of

    profession. Also helping the customer to fill the form and if any problem is accord I m guide to

    that customer also helping the customer to fill application form for ATM card. I am also Present

    the cheque of customer to branch on his behalf.

    6.4 WEEK 4

    CREDIT DEPARTMENT

    This is the busiest area of bank and also most confidential .the information which I was able to

    get, is narrated here under

    KIBOR; Karachi inter bank offer rate

    Spread: banks profit

    FAFB: post shipment

    FAPC: pre shipment

    TYPES OF CREDIT INSTRUMENTS

    There are various types of credit instruments

    Bills of exchange

    Cheque

    Drafts

    Promissory note

    Letter of credit

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    WORKING AS AN INTERNEE

    In the Fourth week of the internship through study about letter of credit .the customer fill

    carefully then checking necessary documents and their photocopies and attaching the documents

    in specified register of letter of guarantee. In this credit department all shipments details and

    charges can be recorded in their ledger register.

    6.5 WEEK 5

    FOREIGN EXCHANGE DEPARTMENT

    Basically , we do coding of triplicate copy of E-FORM (export form).it is done to report the state

    bank of PAKISTAN .SBP has instructed all the commercial banks to report the triplicate copy

    of export form. State bank collects this information from all commercial banks in PAKISTAN.

    This information is provided to federal bureau of statistics. Federal bureau of statistics through

    this information finds out the figure of total export of Pakistan in particular year.

    FOREIGN BILLS OF COLLECTION (FBC)

    A cheque received from a foreign customer of a foreign bank (where as the cheque is deposited

    to receive payment from the bank drawn on).the bank would send the cheque to foreign bank

    branch and TREASURY branch of National Bank would receive payment.

    PARTIAL PAYMENT

    In this type of payment, the exporter receives the payment after shipment in parts .it is agreed in

    contract that payment would be made in parts within agreed time period.

    ADVANCE PAYMENT

    A mode of payment in which payment is received in advance means before the shipment of

    exporter.

    It is done in this case of very trustable party. The relationship between parties is very long.

    Payment is received in advance and is credited in to the account of the exporter. It should be

    noted that all the remittances are reported to the STATE BANK OF PAKISTAN.

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    6.6 WEEK 6

    ACCOUNTS DEPARTMENTS

    Accounts department is a department is a department which deals and checks entire activities of

    the departments. It also deals in expression of finance of bank. Salary payment is also its

    function.

    Checking banks daily activities

    Payments of salaries

    Preparation of statement

    The account department prepares various statements and sends it to head office these statements

    are statements of liabilities, expenditure, sundry creditor, sundry debtor, outstanding debtors and

    creditors, miscellaneous expenditure account, salary and petty cash.

    Maintenance of ledger

    Although all working of account department is computerized but the incharge of account

    department maintains some ledger on manual basis .These are:

    Level record registers

    Pension Details

    Challan form registers

    Computer registers

    Renovation registers

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    6.7 WORKING AS INTERNEE

    It was last week of my internship and I have learn following work

    Sorting of vouchers: it is a very tough job. All the accounts are maintained in a sequence .andvoucher, which comes in to the accounts department, are at random. So we arrange the voucher

    in a sequence in accordance with accounts and this is called Sorting .vouchers may come

    document wise .and we will have to consider following things.

    Head of voucher ,it means whether it belongs to PLS saving ,evergreen, cheque deposit,

    cheque presented for cash ,online cheque and travelers cheque etc.

    What would be its effect on assets , liabilities and revenue as well as on expense

    We will have to arrange all the instruments according to their occurrence .It is a logical

    sequence, which helps a lot at time of audit .It creates ease.

    All the accounts are maintained in a sequence.

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    CHAPTER NO # 7

    FINDINGS, RECOMENEDATIONS & CONCLUSION

    7.1 FINDINGS:

    1. The standard of service is very good and customers are satisfied with customer services.

    2. The bank is very innovative in its product development strategies. Soon some new products

    will be launched.

    3. The bank has a huge network of branches. The online banking facility gives the customer

    flexibility to operate his/her account from any National bank branch in the country.4. National BANK has a shared ATM network all over Pakistan.

    5. It is a pioneer in Internet Banking.

    6. Customers are also provided with Bank Statement and Balance Enquiry facilities. Because

    of these services, the customer need not physically come to the bank and do the transactions.

    Hence, it can be said that National BANK is a bank that provides banking services 24 hours

    a day, 7 days a week and 365 days a year.

    7.2 RECOMMENDATIONS

    Following are the recommendations that I would like to give to National BANK:

    Sifarish culture should be removed and employees should be recruited on merit. There should be

    increase in basic salary of employees and overtime pay should be given to those employees who

    work for long hours after office timings.

    Smoking should not be allowed in bank premises, not even in the kitchen near accounts

    department and lunch break.

    Domestic network should be increased and more branches should be built in rural having

    ATMs.

    Policies should be aggressive.

    The organizational politics should be removed.

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    The coordination among employees of different departments should be increased.

    The parking problem should be resolved and separate parking slot should be given to

    employees of National BANK and public should not be allowed to use that slot.

    National BANK should offer paid internships, as the work done by internees is almost equalto that of an employee. Do not give them pay equal to that of an employee but some amount

    should be given.

    7.3 CONCLUSION

    National Bank of Pakistan was established as a semi public commercial bank on November 8,

    1949. The primary objective of the setting of the bank was to purchase jute form the growers in

    the former East Pakistan in the country. The bank provides all types of banking services to the

    government and private sectors. The overseas branches under a trust deed the bank also provides

    services as trustee to national investment trust including sage custody of securities on behalf of

    nit in consideration for annual service charge and commission.

    National Bank of Pakistan is placing high priority on automation and it development. The bank is

    shifting its focus from routine personnel administration to human resources development, with

    due emphasis being placed on the optional utilization of existing human resources. Motivating

    pay structures and performance based on incentives were also introduced enhance the

    productivity of employees. Additionally, objective appraisal system is being instituted to

    facilities transparent ratings / promotion. National Bank of Pakistan is working on the

    restructuring programmed to make the bank more attractive with the eventual aim of

    privatization as the largest bank in the country with a customer bade of 8.5 million. The key

    components of the restructuring programmers are reduction-operating cost; increased in

    earnings, decrease in non-performing loans, and effective use of information technology.

    National Bank of Pakistan brought a great revolution on our banking system by introducing newproducts, adopting all his new methods and technologies requited for an international bank.

    National Bank of Pakistan is desired to play a vital role in the development of Pakistan in the 21st

    century. Its management and workers must accept the competition and challenge of the new

    millennium through innovative policies products and untiring application.

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    References:

    Manger: Bakhtawar Naqvi

    Operation Manager: M.Zafar

    http://www.nbp.com.pk/careers/index.aspx

    http://www.nbp.com.pk/AboutUs/Vision.aspx

    http://www.nbp.com.pk/AboutUs/CoreValues.aspx

    http://www.nbp.com.pk/AboutUs/Mission.aspx

    http://en.wikipedia.org/wiki/National_Bank_of_Pakistan

    Bank Nationalization act 1974

    Sir Paged john. The law of banking. Mcgraw hill publication: page 51-58

    Eric Garner.Recruitment and Selection: Page 10-20

    Zorlu Senyucel. Managing the Human Resource: page 7-15

    http://en.wikipedia.org/wiki/National_Bank_of_Pakistanhttp://en.wikipedia.org/wiki/National_Bank_of_Pakistan
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