Abdul Rouff NBP Report 2012

National Bank of Pakistan
C H A P T E R NO: 01
Introduction of Report
1.1 Introduction of Report:
It is the requirement of the Master of Commerce of University of Azad Jammu and Kashmir Muzaffarabad to do an internship that all students of Master of Commerce have to spend six weeks in any organization to get practical exposure and to get familiarized with the ways to live in the organizational environment which is dramatically different from the educational environment. That two months period called Internship Period , if spent properly and sincerely, enables the students to be more confident, more knowledgeable, more responsible and above all, more committed to their work in the practical field. I have also been assigned to do internship of Six weeks period in National Bank of Pakistan Main Branch Hajira. It has enabled me to understand the practical scenario and sharpen my decision making power and utilizing the resources in an effective and efficient manner, so that our resources generate maximum output. In preparing this report, I have put all of my best efforts and tried my level best to gain maximum knowledge about practical work of bank. Despite of my all the coherent efforts, I do believe that there will always be a room for improvement in the efforts of learner like me.
1.2
Purpose of the Study:

Purpose of the study was two pronged.
1.2.1 General Purpose: To get acquaintance to the banking operations.
Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad
National Bank of Pakistan To see the application of our Professional studies especially.
1.2.2
Specific Purpose: Specific purpose of the study includes. A partial fulfillment as a requirement for the completion of M.Com To objectively observe the operations of National Bank of Pakistan in
(Accounts ) general and the operations of National Bank of Pakistan Hajira branch A.J.K in specific. To make recommendations or implementation plans for the
improvement of the operations of National Bank of Pakistan Hajira branch A.J.K in the light of our professional studies.
1.3
Nature of the Study:

The study was conducted to investigate critically into the operations of
National Bank of Pakistan and it also explains that how National Bank of Pakistan provides facility of online banking to its customers. The annual reports or the consolidation data of the Bank has not been focused in specific because it does not reflect on the operational performance of branches. However, they have been referred to as when and where required.
1.4
Scope of the Study:

The study covers two areas with its variables, which affects the operations of
the branch directly, or indirectly. These two areas of variables are: Branch specific variable.
National Bank of Pakistan Bank specific variable.
The branch specific variables are the variables under the control of the branch management and directly affect its operations e.g. Layout of the branch. Customers relations. Departments in the branch ATM Online banking.
The bank specific variables are those variables, which are not in control of the branch management e.g. History of National Bank of Pakistan Services provided by National Bank of Pakistan Role of National Bank of Pakistan Functions of National Bank of Pakistan
1.5
Limitations of the study:

The Study was subject to the following limitations, the absence of which could
have made this report more accurate, systematic and factual: Lake of published financial data. Lack of ATMs back hand information with staff. Access to data. The non cooperative behavior of some managers and staff members. My weak financial position.
Introduction to National Bank of Pakistan

2.1 Introduction of National Bank of Pakistan:
National Bank of Pakistan is the largest commercial bank operating in Pakistan. It is 76% owned by the government of Pakistan. It was awarded the best bank of Pakistan in 2001, 2002, 2004 and 2005. In 2010 it is awarded the Bank of the year award. It has redefined its role and has moved from a public sector organization 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 State Bank of Pakistan. 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.
2.2
Establishment of NBP:
The National Bank of Pakistan was established as a semi-commercial Bank on
November 21st, 1949 under the National Bank of Pakistan ordinance No.XIX of 1949. Its Head Office is situated at I.I.Chundrigar Road, Karachi. The National Bank of Pakistan is engaged in providing Commercial Banking and related Services in Pakistan. In 1952, the Bank also authorized to act as an agent of the State Bank of Pakistan and operate treasury functions in those areas where State Bank of Pakistan does not have its own branches. In 1974, like other commercial banks, National Bank of Pakistan was also nationalized. The National Bank of Pakistan deserves a Prudent
National Bank of Pakistan and Intellectual management with clear destination and direction. The National Bank of Pakistans achievements has noticed on the global Banking front and it was declared Number one in Asia and 8th in the world. Vision of NBP: To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility. Mission of NBP: 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. Goal of NBP: To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products. Core values: Highest standards of Integrity. Institutionalizing team work and performance culture. Excellence in service. Advancement of skills for tomorrows challenges. Awareness of social and community responsibility. Value creation for all stakeholders.
2.3
Features of National Bank of Pakistan:

The salient features of National Bank of Pakistan are as following;
Issued Capital: The National Bank of Pakistan was setup with an issued capital of Rs.1.5
million. ii Authorized Capital: Authorized capital of National Bank of Pakistan in 2000 was Rs.2.5 Billion. ii Issued, Subscribed, and Paid-up Capital: Issued, subscribed and paid-up capital in year 2000 was Rs.1.46 Billion. iv Capitals Structure: The total Assets of National Bank of Pakistan on March 31, 2007 are $9.3 billion and deposits over $7.8 billion. v Number of accounts holders: The total numbers of accounts holders are over 10 million and the borrowers exceed one million customers. vii Corporate banking: It is one of the top institutions in corporate and investment banking market of the country. It has a favorable standing in lending to corporate sector. vii Retail banking:
National Bank of Pakistan National Bank of Pakistan has the largest customer based in the country. It is, therefore, mobilizing deposits by providing quality services to its customers which now exceed 10 million. viii SME lending: The National Bank of Pakistan is actively engaging it self in Small Medium enterprise lending. The borrowers of the banks are over 10 lakh now. ix NBP Credit card: The borrowers of the banks are over 10 lakh now. Under its one cash card is providing ATM and debit card services in its main branches. Cash can be drawn up to Rs. Twenty thousand per day. x Profit: The profit of National Bank of Pakistan rose to Rs. 18,212 million in 2009. xi No of employees: In 2009 NBP was having 16,248 employees with total assets of 944,233 million.
2.4
Branches of NBP:
National bank of Pakistan carries on its business through a wide network of
branches. These branches perform their functions under the supervision of local principal offices and head office in Karachi. The bank has 1250 branches in Pakistan and 18 overseas branches.
2.5 Objectives of National Bank of Pakistan:

National Bank of Pakistans primary objectives are;
National Bank of Pakistan To earn the profit. To develop the economy. To provide the latest banking facilities to its customers. To improve customer service. To offer specialized services to major corporate. To reduce the size of non performing loans (NPLs).
2.6
Functions performed by National Bank of Pakistan:

To fulfill the basic objectives of socio-economic nature the bank perform
following important functions: Accepting of deposits: This function is performed by the bank by opening of the different type of accounts, which are as follows: Saving Accounts, Current Accounts, Fixed Deposits and NIDA accounts. Advancing of loans:
Different types of loans are granted to different type of people and industries these include: Running Finance. Agriculture Finance. Demand Finance Gold. Payment of cheques:
National Bank of Pakistan Cheques drawn against various deposits are honored and paid in cash. Payment of pensions: This function is performed by National Bank of Pakistan. As a govt treasurer all the pensions of federal Govt., provincial Government and semi Government employees is paid by National Bank of Pakistan. Salary management of different governmental institutions:
salary of govt. and semi govt. employees is first credited to the account of National Bank of Pakistan and is then credited to their personal accounts Issuing of travelers cheques: The travelers cheques are issued by National Bank of Pakistan for secure transfer of money from one place to another, without charging any commission. Collection and sale of prize bonds: The national prize bonds are purchased and sold at the branches of the National Bank of Pakistan according to the rules formulated by the State Bank of Pakistan. Collection of fees and money from people proceeding on Hajj pilgrimage: National Bank of Pakistan collects the fee from the people proceeding for hajj and act as their agent. Transfer of funds:
National Bank of Pakistan Money is transferred from one place to another by different means like Bank Draft, Mail Transfer, Telegraphic or Telephonic Transfer and Travelers Cheques Collection of Chalans: Various Govt. revenues are collected by National Bank of Pakistan in the form of chalans: Issue Guarantee and Indemnity. Collection of Negotiable Instruments. Act as an Income Tax Advisor. Act as an Agent or Representative to his Customers.
C H A P T E R NO: 03 Management and Organization of N B P

3.1 Management of National Bank of Pakistan:
The management of National Bank of Pakistan is given below; 3.1.1 Board of Directors: In the management of the National Bank of Pakistan, the board of directors is at the top of the controlling bodies. Since there is no private shareholder, so there is no general meeting of shareholders and no directors aracted. The board consists of a nominated president, a secretary and 6 other members. After nationalization in 1974 most of the powers have been transferred to the executive board. 3.1.2 Executive Board:
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National Bank of Pakistan It is also called the management committee. The general direction and supervision of the affairs of the bank lies in their respective executive boards. The president, secretary and 6 other members of the board are appointed by the federal govt. The president being the chief executive controls the affairs of the bank. 3.1.3 Chief Executive: The president is the administrative head of the bank. He manages and controls the affairs of the bank. The president holds the office at the pleasure of the federal government. 3.1.4 Regional chiefs: In order to improve the performance of the banking system, the bank has appointed regional chiefs also. The regional chief has the powers of sanctioning finance and other credit facilities. There are 7 regional head quarters of the regional chiefs of the National Bank of Pakistan., 1 is in the N.W.F.P., 1 is in Balochistan, 3 are in Punjab, and 2 are situated in Sindh. 3.1.5 Zonal Cheifs: Each region is divided into number of zones. They hold the post of VP or AVP and administer these zones. N.B.P. has 37 zonal offices in Pakistan. 3.1.6 Branch Managers: Each zone is then sub divided into a number of branches. The control and supervision of each branch is mostly entrusted to AVP or officers of grade I. Branch manager operates the branch by workforce of two second officers, two assistants, two cashiers, to messengers and two armed guards.
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National Bank of Pakistan 3.1.7 Operation Managers: Operation managers assist the branch manager or to perform and looking after the activities in absence of branch manager. Operation Managers mostly woks in main branches.
3.2
Training and Management Development Wing:

National bank of Pakistan has its national development centers and 4 staff colleges at: 1. 2. 3. 4. Karachi Lahore Peshawar Islamabad
In these centers and staff colleges, the banking training is provided to the officers, managers, and to potential managers. It arranges courses and seminars for middle and higher management in all. Each year almost 1500 persons receive training in these training centers.
3.3
Branch Hierarchy of National Bank of Pakistan:
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Manager Manager
Manager Manager Operation Operation
General General Banking Banking
Computer Computer Department Department
Credit Credit Department Department
Retail Retail Banking Banking
Account Account Department Department
Bills, Remittance Bills, Remittance & Clearing & Clearing Department. Department.
Cash Cash Department Department
Cashier Cashier
Assist-Cashier Assist-Cashier
Security Guards Security Guards
Peon Peon
Driver Driver
(Fig: 01)
3.4
Management from Top to Bottom:
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CHAIRMAN Board of Directors Executive Committee President Regional Chiefs Zonal Chiefs Zones Branch Manager
Banking Department
Admin & HR Dept
Finance Department
Officer
Officer Officer
Officer
Officer
(Fig: 02)
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C H A P T E R NO: 04 Products and Services of NBP

The National Bank of Pakistan provides the following products to its customers.
4.1Products of NBP
4.1.1 NBP Saibaan: National Bank or Pakistan has recently launched NBP Saibaan Scheme in order to facilitate its customers. Under this scheme finances available for; Home purchase. Home construction. Home improvement.
Important Features: o o o o 4.1.2 Period of repayment ranges between 3-20 years. Loans available up to a maximum of Rs.10 million. Mark-up choices available. Mark-up rate ranges between 7.5% to 15.50%. Minimum approval and disbursement timing. Advance Salary: NBP Advance Salary is a convenient finance facility, 20 months salary in advance to Government employees repayable in maximum 60 months equal installments. The main highlight of this finance is that it requires no personal guarantee, no Insurance premium, Containing a shortest documentation and procedure
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National Bank of Pakistan easy and fast disbursement. National Bank of Pakistan, advance salary facility is available for permanent employees of:
Federal and Provincial Governments. Local Bodies, Government Corporations and other corporation and organizations approved by National Bank of Pakistan.
Important Features: 4.1.3 Five years of service age. Salary account at national bank of Pakistan. 20 month salaries in advance (Certain condition apply). Minimum documentation required. Affordable installment from 1-60 months. No processing charges: no collaterals, no guarantees. No Insurance, no hidden cost. Mark-up charged at 11% per annum on reducing balance Method.
NBP Cash and Gold: Finance facility against Gold for needy person on lowest markup rate for one
year, having no maximum limit of cash, easy and fast disbursement of finance. National Bank of Pakistan offers its customer NBP Cash in Gold scheme to avail the facility of loan against their gold items. With NBPs Cash in Gold, you can meet your need for ready cash against your idle gold jewelry. Important Features: Lowest mark-up in the market at only 11%
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National Bank of Pakistan 4.1.4 Facility of Rs.5000 against each 10 grams of gold. No maximum limit of cash. Repayable after one year. Roll over facility. Only gold ornaments acceptable. Weight and quality of gold to be determined by NBP No penalty for early repayment.
NBP Kisan Dost: Agriculture is one of the dominant sectors of Pakistans economy. Almost all
the banks of Pakistan provide financial assistance to the Agriculture. National Bank of Pakistan also serves farmers through NBP Kisaan Dost Scheme. Under this scheme loans available for the farmers for; Production. Development Purpose. Purchase of Tractors. Installation of Tube Wells. Purchase of Agriculture Implementation. Go down Construction. Construction of fish Pond. Live stock forming. Milk Processing. Cold Storage. Bio-Gas Plants etc.
Important Features:
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National Bank of Pakistan Agricultural experts to guide farmers. Loans available at the farmers door steps. Mark-up 11% per annum. Loans available against agricultural pass books. Ornaments and paper security.
Production and marketing purposes. 4.1.5 NBP Karsaz (SME): Discover the easy way to grow your Small or Medium Business at National
Bank of Pakistan. Finance facility to improve and develop the Businesses and Factories on SME basis. Industry is one of the essential sectors of Pakistans economy. Most of the Banks of Pakistan provide financial assistance to the industries. National Bank of Pakistan also serves the industries through NBP Karsaz. Under this scheme loans available for the farmers for; Organize the Small Industries. Development Small Business. Purchase of material for Factories. Installation of factory machinery. And many other purposes related to factories.
Important Features: Investment Opportunity to common people. Loans available on easy process. Mark-up 11% per annum. Loans available against stocks. Development in the country. High growth in Medium & Small Industries.
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National Bank of Pakistan Boost up over all industrialization in the country.
4.1.6
NBP Premium Sever: Recently National Bank of Pakistan launched its new product known as the
NBP Premium Sever to its customers. The NBP Premium Sever can be benefited by every individual having PLS/ Saving account in the National Bank of Pakistan. Important Features: o Minimum saving balance of Rs. 20,001 and a maximum balance of Rs. 300,000. o Free NBP Cash card (ATM & Debit Card). o Two debit withdrawals allowed in a month and no limit on number of o Profit calculated monthly and paid half yearly basis. o Earn up to 11% per annum.
4.1.7
NBP Premium Aamdani: NBP Premium Aamdani is a monthly Income scheme which is offered to the
public. Important Features o o o o o Amount of investment required from 20,000/ to 5,000,000. Investment period is five years. Free Demand Draft, Pay Order and Online Aasan Banking. Free Cheque book and cash card. Financing facility available up to 90% of the deposit value.
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National Bank of Pakistan o o Premature encashment will attract penalties. Earn 11% per annum.
4.1.8 NBP Protection Shield: Recently the National Bank of Pakistan introduces the NBP Protection Shield. It is a personal accident insurance scheme. PLS account holders of 18 or above can avail this facility. Product Information: Insurance coverage in case of accidental death including death due to Riots Strikes. Civil Commotions. Acts of terrorism. Natural calamities like flood, earthquake and cyclones.
Important Features: o Coverage of Rs. 200000/- for Rs. 20/- per month. o Choice of deactivation. o Fixed Auto Premium deduction facility (after customer consent). o No documentation. o No medical required.
4.2 Other Facilities:

Gold finance. Running Finance.
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National Bank of Pakistan Demand Finance. Agriculture Finance.
4.3
Services of National Bank of Pakistan:

National Bank of Pakistan offers many kinds of services to their customers. The
most important services provided by National Bank of Pakistan are as under; 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Cash link. NBP Credit Card. National Discounting Services Limited (NDSL). Traveler Check. Local Currency Bond. Capital Market Operation. Corporate Branches. Foreign Currency Financing. National Income Daily Account. Money Transfer Services. Collection of Electricity Bills. Collection of Passport Fee. Government Receipt and Payments. Letter of Credit.
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National Bank of Pakistan 15. Bill purchased and discounted.
4.3.1 Cash Link:

Automatic Teller Machine (ATM): Recently ATM is launched by National Bank of Pakistan. ATM is the machine for people and customer that provide link to the bank 24 hours a day .Through an ATM one can operates his bank account at any time and he can draw money from online same bank in Pakistan.
ATM Card:
An ATM Card is the plastic card issued by the bank to the customer for the
purpose of accessing the account after the bank finish round the clock.
4.3.2
NBP Credit Card:

National Bank of Pakistan offers the largest and most comprehensive range in
credit cards. All of these cards and visa cards open doors on unlimited privileges at home and abroad. NBP credit cards also provides accident insurance cover up to 10, 00, 000/-
4.3.3 NDSL:
NDSL Stand for National Discounting Services Ltd. National Bank of Pakistan Serves different sector and units of national economy from mega Corporation to private individuals through their discount house a wholly owned subsidiary of National Bank of Pakistan. The National Bank of Pakistan provides financing through discounting of:
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National Bank of Pakistan Trade bills. Government Securities. Semi Government and Corporate securities. Letter of credit receivable. Shares of listed companies.
4.3.4 Traveler Cheque:

National Bank of Pakistan provides the services of traveler cheque for their customers. The main advantage of a Traveler Check is that it saves your money from theft during traveling. Traveler Check is a symbol of convenience and safety. 4.3.5
Local Currency Bond:

National Bank of Pakistan also playing very effective role to develop the
corporate bond market in the country .The local currency bond will provide by the bank with a large amount. 4.3.6 Capital Market Operation: The National bank of Pakistan has started the investment banking and corporate finances. The National Bank of Pakistan has invested in the shares of reputable corporate with high potential capital gains. At present buying and selling activities of shares and being carried out through a selected group of established brokerage houses. The bank also increasing their efforts developed in house expertise in equity, research information processing, and transaction completion a settlement. 4.3.7 Corporate Branches: National Bank of Pakistan also established corporate branches in order to provide advisory assistant to their corporate Customers. What ever your banking and
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National Bank of Pakistan other business related problems are, NBP is present there to assist you in a congenial professional environment.
4.3.8
Foreign Currency Financing: The National Bank of Pakistan also provides the facility of foreign currency
financing to their Customers. For this purpose a specified sum of money will allocated every year for the benefits of customers at main branches of the bank. 4.3.9 National income Daily Account ( N.I.D.A) National Bank of Pakistan has also provided the facility of National Income Daily Account to facilitate their customers. NIDA is a perfect match for people who want the freedom of a checking account .The bank will give daily profit on NIDA. 4.3.10 Money Transfer Services: The National Bank of Pakistan performs the services of money transfer to their customers in easy terms and conditions. The National Bank of Pakistan has introduced a western Union Money Transfer facility for the customer. 4.3.11 Collection of Utility Bills: National Bank of Pakistan also collects electricity and water bills from the people on behalf of the concerned department. The bank will charge Rs.2 per bills as commission from the concerned department. After the bank time has been closed the bank will prepare cash scroll and send it to the concerned department.
4.3.12
Collection of Passport Fee:
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National Bank of Pakistan The National Bank of Pakistan also collects the passport from the people on behalf of the passport department of the Interior Ministry. The bank will charge Rs.10 per passport as bank charges remit the remaining amount to the passport department. 4.3.13 Government Receipts and Payments: The National Bank of Pakistan also received the government receipts in the shape of tax, token and Chelan etc. The National Bank of Pakistan provides the facilities to the retied government servant in the form of the payment of pension. 4.3.14 Letter of Credit: National Bank of Pakistan is committed to offering its business customers the widest range of options in the form of money transfer. If you are a commercial enterprise then NBP Letter of Credit is the best way to do your business transactions with comparative rates, security, and ease of transactions. 4.3.15 Bills Discounted and Purchased: By discounting bills of exchange, bank makes a payment to the holder of this negotiable instrument before the date of its maturity. Banks deducts an amount called discount for making early payments. This discount constitutes the income of the bank. The holder of the instrument can get finance (cash) from the bank. He does not have to wait until the maturity of bill. Banks can also advance loans by purchasing bills. Bank deducted the commission while making payment against the bill. The commission constitutes the earnings of bank. The holder of the bill gets cash before the maturity of the bill and he can use this money to meet his finance requirements. The bank by purchasing the bills becomes temporary holder of the bill. The bills are only purchased from trustworthy approved clients. Normally two types of bills are used for such transaction. This includes clean bill and documentary bill.
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National Bank of Pakistan When related documents such as bill of lading, airway notes etc, are attached with the bill, it is called documentary bill. When no such documents are attached then it is called clean bill.
National Bank of Pakistan Main Branch Hajira
5.1 Introduction to NBP Hajira Branch:
National Bank of Pakistan Hajira Branch is located near SCO office at bank road Hajira. It was launched in 1965. It consists of 6 members of staff .This branch is working under supervision of Branch Manager. The manager Operation also performs his duties under the control of Branch Manager. A compliance officer regulates and monitors the activities of the branch employees and their dealing with the public. The branch has capable and professionally trained staff. The National Bank of Pakistan Main Branch Hajira has following departments; Account Department. Clearing Department. Remittance Department. Foreign Exchange Department. Cash Department. Finance/ Credit Department. Admin Department. Computer Department.
Now I explain these departments separately and describe activities performed by me at these departments;
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Activities accomplished by me at Bank.
5.2
Account Department: Deposits are important to the bank as a backbone is to the body of a man.
They are the lifeblood of the bank. National Bank of Pakistan and all other commercial banks perform the function of deposit accepting from the general public by offering suitable rates of interest on them, or on simply a promise to repay on demand. Current Account is a daily routine account in which transactions are carried out with out restriction. No interest is given to the current account holders. 5.2.1 Opening of account by an individual: After entering into bank premises the person goes through the following steps for opening an account in the bank and for becoming a bank customer. i An Introduction:
The first important step to take place in bank is to get satisfactory introduction of the person, who wants to become banks customer. This introduction is made from the person /party who are respectable and honorable and have an account with the bank. In NBP Hajira Branch the branch manager takes great care of this step and gets introduced with the person himself. His main intention is to determine the prospective customers integrity, respectability, occupation, and nature of business he is doing at the time of opening an account.
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National Bank of Pakistan The person who wants to open account in NBP, first of all submitted copy of national identity card because the bank verify the data of his clients from National Data Base and Registration Authority (NADRA). For this purpose NBP operates the software of NADRA. ii Account Opening Form and Specimen Signature Card:
Now the person is provided with an application form known as Account Opening Form. This form contains; i. ii. iii. iv. v. vi. vii. viii. Title of account. Address. Computerized Identity National Card No. Telephone No. (Office and Residence) Introductory reference (all mentioned particulars of introducing him) Signatures of the applicant. Amount deposited. Check book series No.
The customer attaches a copy of his National Identity Card, also copy of two guarantors who already have their accounts in the same branch, with the account opening form. iii Specimen Signature Card:
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National Bank of Pakistan Specimen of signatures will be obtained from depositors at the time of opening his account. A specially designed card is used for this purpose; the card must be counter signed by an official of the bank not below the rank of an officer. iv Account Opening Register:
Now the name of the customer will be recorded in account opening register and from here the account no of the customer will be written on (top most corners) account opening form and on specimen signature card. v Issuance of Cheque Book:
The cheque book will ordinarily be issued to all customers desiring to have chequing facility. Cheque book consists of 10, 25, 50, or 100 leaves depending upon customer requirement. Customer can withdraw money by signing a cheque and writing the amount he wants to withdraw from his account. A special cheque book register is kept to enter the name of the person having cheque book.
vi
Issuance of Pass Book:
Pass Book is another important type of book handed over to the customer as he opens the account with the bank. The withdrawal and deposit of money is recorded date wise in this book. The pass Book is provided only to Fixed Account holders. vii Recording into General Ledger:
The concerned officer records the name and amount deposited with the bank into general ledger. Separate ledgers are maintained for different types of accounts e.g. Current Account Ledger Saving Account Ledger
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National Bank of Pakistan Fixed Deposit Account Ledger
As and when customer will deposit the money, amount will be credited in general ledger and the withdrawal will be followed by a debit entry in the ledger.
5.3 Types of accounts maintained by NBP Hajira Branch:

National Bank of Pakistan maintain following types of accounts; i) ii) iii) iv) 5.3.1 Current Accounts. Saving/ Profit and loss sharing Account. Fixed deposit Account. N.I.D.A. Account
Current Account: This account is also known as running balance account. Simply we can say
A bank account which may be used to lodge payments or to withdraw money on demand. Its main purpose is to serve the businessman. Form number F-53 is provided to the person to open the account. It is a statutory requirement to maintain current account.
Features:
current account. Minimum amount for opening this account is Rs.500. Any person can open the account with the bank. According to banks agreement interest is not paid on
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National Bank of Pakistan by bank. 5.3.2 Saving/ Profit and Loss Sharing Account: In general it is also called saving account .To provide interest free banking facilities in Pakistan, this type of account was introduced in January 1982 after the Islamization of banking. National Bank of Pakistan provides the facility of Saving/ Profit & Loss sharing account. Bank act as custodian of money. Over draft facility is provided to the customers. Customer can withdraw money through cheque supplied
Features:
Instead of having fixed return in the form of interest the deposited money will be shared in profit and loss of the bank. One can open the account by depositing minimum Rs.1000. Withdrawal is allowed 8 times in the month total not exceeding Rs.15000. To withdraw a large amount, a notice is given to the bank before 7 days. 5.3.3 Rate of profit is declared at the close of each half-year. Fixed Deposit Account: This account is the major source of funds for the banks. This account is best for people who have surplus money and dont need such funds in nearer future. The money is deposited for a fixed period of time.
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Features:
profit. deposit receipt. surrendering Period of deposit can vary from 3 months to 5 years. The amount can be withdrawn before maturity after interest. A pass book is issued to the account holder for A receipt is used for the amount deposited called fixed Fixed amount is deposited for fixed period. This account can be open with the amount of 10000. It is restricted to withdraw the money before the time. Amount of profit can be obtained after each six months. Higher will be the time period, higher will be the rate of
withdrawn of money and there is no need of cheque book for the depositors.
5.3.4
N.I.D.A. Account: The NIDA Account can be opened in National Bank of Pakistan. N.I.D.A.
stands for National Income Daily Account. The features of this account are same to the features of the saving or PLS account except the following ones;
Features:
acquire the benefits is 5.0 million. pay interest When the above condition is fulfilled, then the bank will on daily basis, which is that if the deposit is minimum In this account the minimum balance required to of this account is Rs 2 million, and the maximum limit
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National Bank of Pakistan of 2 million than the mark up rate is 5.2% p/a. and if it is at
maximum that is 5.0 million than the rate is 7.00 % p/a. products are which is Rs 2 In this account the daily balance of account is taken, calculated and the interest is calculated on that balance. If the balance on any day comes below the lower limit, million then interest will not be given.
5.4
5.4.1
Clearing Department
Clearing means: We can define clearing as the transfer of funds from one branch of bank to
the other branch of the same bank or the other bank on which the instrument is drawn, with out involving cash through state banks Clearing house, or we can say in other way that cheques which can not be cashed at the counter of the bank. Clearing House: It is one of the services provided by central bank State Bank of Pakistan to the other commercial banks acts as a clearing house. Different banks are the members of the clearing house. A representative of each bank represents his bank in the clearing house. A clearing house is an association of commercial banks set up in a given locality for the purpose of interchange and settlement of credit Claim. The SBP maintains the accounts of the NBP like other scheduled banks and debits the account of the drawee bank and credits the presented bank which is NBP in that case. 5.4.2 Types of Clearing: Clearing department deals with the two type of the clearance. These are stated below; i) Inward Clearance.
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National Bank of Pakistan ii) i Out ward Clearance. Inward Clearance:
Cheque drawn on NBP and presented to the other banks on handed over to NBP agent in clearing house. That is inward clearance for NBP. So inward clearing results in outflow of funds to collecting banks reducing the balance in the clearing account.
ii
Outward Clearance:
Similarly cheque, which is drawn on other, bank and presented to NBP are known as out ward Clearance for NBP. So outward clearing results in inflow of funds from paying bank into the clearing account maintained with the clearing house, increasing the balance in the clearing account. Out ward clearing thus may be. 5.4.3 Local Clearing. Outstation Clearing.
Types of Cheque. Some specific types of Cheque are being entertained in the clearing
department of NBP. These types of Cheque are; i. Local Cheque. ii. Out Station Cheque. iii. In house Cheque.
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National Bank of Pakistan i
Local Cheque:
By local Cheque we mean collection of cheques from the banks which are the members of the clearing house and which are located within the city.
ii
Out Station Cheque:
Out Station cheque we mean Collection of cheque from the banks which are situated outside the city. It means that presenting bank and the bank on which the cheque is drawn are not situated in the same city.
iii
In House Cheque:
In house cheque are drawn on one branch of NBP and presented to another branch of NBP such cheques are marked with transfer stamp. 5.4.4 Possible Instruments at clearing Department: Following instruments can be presented at the clearing department; 1. 2. 3. 5.4.5 Cheques. Demand Draft. Pay order.
Collection of Cheques: The Pay-in-slip is checked and entered in the Inward Bills for Collection or
out ward bills for Collection a) Inward Bill for Collection (IBC):
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National Bank of Pakistan Inward collection means the cheque received and drawn on NBP for Payment. Inward bills for collection means cheque received from another branch for clearing. These cheques first cleared and then transferred to the account of Branch. Account cheque deposited in Karachi branch for HBL, Lahore branch, will receive in Lahore branch at first then issued for clearing in HBL. b) Outward Bill for Collection (OBC): Out ward collection means the cheque of other banks. Outward bills for collection are the reciprocal of IBC that is drawn on bank and deposited in other bank. For example a person who is in Islamabad now he deposited the slip in his bank and his bank is UBL. United Bank Limited Islamabad prepares a draft and send to Hajira Branch. Main Branch debits his account and credit clearing. This branch will be then transferred back to Islamabad through clearing where credit will be given to customer and debit to clearing house. 5.4.6 Forms of Clearing: Following are the two forms of clearing; i) ii) Local Clearing. Collection.
Now I explain these two types of clearing separately; i Local Clearing: By local clearing we mean collection of cheques from the banks, which are members of clearing house within the city. Banks take this responsibility by endorsing these cheques. Sort out these cheques bank wise; prepare the settlement sheet bearing the name of the bank and number of cheques with total amounts.
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National Bank of Pakistan There is a time for clearing the cheques in clearing house. If before that time cheques are not sent to clearing house. Then they will be delayed for next day. On the specific time gate of clearing house has been closed and nobody can enter into it. So next day bank presents cheques in clearing house. Cheques sent to clearing department must be debited to SBP and credited to customer account, and when bank receive back these cheques then debits customer and credits SBP.A simple example for understanding the entries made, is that, when cheque comes to clearing house from Citibank (e.g. any customer of NBP has made Payment to a person who is customer of Citibank) then SBP will credit the city bank and debit the NBP account because cheque is of NBP. ii Collection: In Case if any bank or branch of bank is not the member of the clearing house then bank present or receives cheques through collection. 5.4.7 Items to be checked on clearing Cheques: Following items necessary to be checked immediately; 5.4.8 Cross Stamp. Clearing Stamp. Date. Endorsement Stamp on backside. Amount in figures and words should be matched.
Cheque Returned: There may be a case when the bank returns cheque when it is received from
clearing. There may be any one or more than one reasons. These reasons are written on the slip.
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National Bank of Pakistan This slip is called cheque returned slip and contains following items; Cheque no. Amount of Cheque. Name of person who has drawn it. Date. This cheque returned slip contains the list of following reasons. Refer to drawer. Not arranged for. Payment stopped by drawer. Exceed arrangement. Amount in words and figures differs. Drawers signature incomplete. Cheque is out of date. Alteration in date. Payees endorsement required. Endorsement requires Banks guarantee. Clearing banks endorsement required.
5.5
Remittance Department:
5.5.1 Remittance Meaning: Money or some thing equivalent to money sent by any person to another on another station, either in cash, money order, postal order, bill of exchange, cheque, bank draft etc is known as a Remittance. The National Bank of Pakistan, now-a-days provides this facility to its customers and to the general public in general in the following modes;
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National Bank of Pakistan i ii iii iv v Bank Drafts. Mail Transfer. Telegraphic Transfer. Travelers cheques. Preparation of Balance Certificates.
Now I will explain the procedure and importance of each type of remittance. 5.5.2 Bank Draft: (DD): Bank draft can be defined as; An un-conditional instrument in writing drawn by a bank in favor of any person on a branch of its own bank or any other bank to pay a certain sum of money to his order, for value received. From the definition it is clear that the draft is payable to the beneficiary himself or to his order. The beneficiary or payee has to prove his identification at the paying office of the bank, which sometimes causes inconvenience to the public. Draft is the most popular and common form of remitting funds from one place to another. Any person who may or may not happen to be the banks customer against payment of bank charges can purchase drafts. It is considered to be a source of income for the bank. Procedure: In National Bank of Pakistan, the drafts are issued on submission of application form (always printed) filled in and signed by the purchaser with his full name and address. The following particulars are generally required in the application form;
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National Bank of Pakistan Date. The Name of the office on which it is drawn. The name of the beneficiary. Amount in words and figures. Bank exchange rates. The signature and address of the applicant.
The draft is issued after the applicant tenders the money. Two authorized signatories of the bank always sign draft. A separate book Draft issued register is kept to record the particulars of the draft issued. The drawing branch of the bank will give credit to the drawee branch on the same date when the draft is issued; through their account for settling inter branch transactions. Usually all the banks insert special code number known as CHECK SIGNAL on the relative draft advices for all the drafts for more than Rs.5000/-. National bank of Pakistan does not pay the drafts before the receipt of relative advice. On receipt of relative advice the drawee branch will credit the amount into their draft payable account and each time a draft is paid this account will be debited with the amount of the draft paid. In case the draft advice is not received, the draft will be paid ex advice duly entered in the "ex-advice register and the entry in the said register will be marked off on receipt of the relative advice. Issue of Duplicate Draft:
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National Bank of Pakistan In case a draft is lost or destroyed by mistake, its duplicate can be issued at the request of the purchaser after obtaining indemnity bond on stamped paper of appropriate value. This is done to cover the risk of double payment by mistake. Drafts of most banks in Pakistan are valid for a period of six months only. After the expiry of this period the draft will have to be revalidated from the issuing branch of the bank. 5.5.3 Mail Transfer: (MT) The same application form is used for drafts and mail transfers generally in National Bank of Pakistan. The mail transfer instrument is not delivered to the purchaser but instead the issuing office to the beneficiarys branch on its own risk and responsibility sends it. This type of remittance facility is provided only when the beneficiary happens to be the customer of the bank. The amount is directly credited to the beneficiarys account and as such loss of mail transfer has no concern with the applicant. A bank customer can very conveniently remit the funds from one place to another regularly if he desires by giving standing instructions to his bank. Also the credit balance of a customers account is transferred from one branch to another branch with the help of this instrument in case the customer desire so. The applicant desiring to remit the funds by way of mail transfer can either deposit cash or he may ask the bank to debit his account with the cost of mail transfer including bank charges. An exchange memo is issued to the applicant in case he desires to have some sort of receipt from the bank for his office record.
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National Bank of Pakistan The participants of mail transfer are recorded in the mail transfer issue register just like drafts while at the paying branch the instrument is treated as branch voucher for credit into the beneficiarys account. 5.5.4 Telegraphic Transfer (TT): The money sent by mail has been described as mail transfer which takes three to four days, or more depending upon the distance between the two branches. When the applicant wants to save the time wasted in transit of the instrument, he can request for transfer of funds by means of a telegraphic transfer. In this case he will have to bear the telegram charges in addition to usual bank exchange. The amount so remitted will reach its destination within 24 hours. Business community generally avails of this facility in order to save time in their business dealings. The funds so remitted are either credited directly into the account of the beneficiary or paid by means of pay order in case he is not keeping his account at the paying office of the bank. It should be noted that such remittances are affected between two stations having telegraph office. The remitting office sends the message by telegram in code language instructing check signal number at both ends of the message for security purpose. As check signal books are supplied to all the branches of the bank in order to verify the genuineness of the message. All banks have their separate check signal apparatuses. The entries at issuing office are recorded in the telegraphic transfer issued register while at the other end it is entered in the T.T. Payable register. The papers pertaining to such transfer are properly kept in separate files telegraphic transfer issued and paid files and kept in the custody of an officer (Accountant/Manager). In case check signal number turns out to be incorrect at the paying office, the message is got repeated till such time it is found correct. It is therefore, necessary to be vigilant at the time of calculating the special numbers
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National Bank of Pakistan otherwise the very purpose of urgency is defeated and the bank will be responsible for the delay. 5.5.5 Travelers Cheques (TC): When a traveler proceeds from one place to another he needs money at different places. The remittances explained so far will be available to the beneficiary only at a particular place, and that too all in one time; where as the requirement of a traveler may be otherwise. National Bank of Pakistan has designed its own travelers cheques to be used in Pakistan only. For different denominations their colors are different. The denominations of travelers cheques provided by National Bank of Pakistan are: -Rs.5, 000/-Rs.10, 000/-Rs.50, 000/-Rs.100, 000/-. The face of Traveler Cheque consists of: -Signature of the purchaser, Name of the purchaser, Name of issuing office and the date of issue. On the back of the cheque this can preferably be done by means of small rubber stamp. Application for the purchase of the cheque application forms is taken. The original remains with the issuing office as voucher and the duplicate is passed to the main branch of the bank where account of bank is kept. Recording: The issuance of cheque is recorded in the travelers cheque issue register .The total amount of T.C. sold is credited to the main branch of the bank and the exchange charged credited to the branch exchange account. Delivery: The travelers cheques are delivered to the purchaser in thick cardboard cover for their safety.
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National Bank of Pakistan 5.5.6 Preparation of Balance Certificates: It is also duties of remittance department to prepare the balance certificates of their clients .These certificates are prepared on monthly basis. These certificates show the balance of the clients in their account, and can also be prepared on the request of the client when he needs it as early as possible. These certificates of balance are then sent to the clients on the address of their offices or on residence address.
5.6
Foreign Exchange department:

This Foreign Exchange Department performs the following functions; i ii iii iv v Spot Sell. Spot purchase. Forward Sell. Forward Purchase. Clearing.
Now I explain these functions of Foreign Exchange Department; i Spot Sell:
Sale of dollars on daily basis is called a spot sell. ii Spot Purchase:
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National Bank of Pakistan When dollars are purchase for fulfilling the daily needs of the payment, this process is called a spot purchase. iii Forward Sell:
If the payment is received in advance then these dollars will be sold at current rate, this is called forward sell. iv Forward Purchase:
When dollars are required in future then these are purchase at current rate for future purpose. This is called a forward purchase.
Clearing:
Foreign exchange department also performs this function. We can define clearing that transfer of funds from one branch of bank to the other branch of same bank or the other bank on which the instrument is drawn without involving cash, through the State Bank of Pakistan clearing house. Whenever there is need of sale or purchase of dollars in import, export, credit, cash, or remittance department they are reported under foreign exchange department. Its commission is given to the credit department. Banks are not allowed to keep dollars with them but sell them .So purchase the dollars only, when they are needed. Head office is responsible for sale or purchase of currencies, in the market at market rate. 5.6.1 Foreign Remittance: Foreign remittance Department deals with remittance out side the country, but in foreign currency. This section of foreign remittance is divided into two parts.
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National Bank of Pakistan 1. 2. Out going F.C Remittance. Incoming F.C Remittance.
These terms out going & incoming remittance means sale and purchase of foreign exchange in the form of foreign currencies.
5.7
Cash Department:
Cash department of National Bank of Pakistan is given the complete
responsibility of handling all receipts and disbursement of cash as a result of transactions in both local and foreign currencies or near cash items such as traveler cheque etc. As a consequence, it is also responsible for the book-keeping of those transactions and the safe custody of cash and near cash securities. 5.7.1 Functions of Cash Department 1) 2) Cash Receipt. Encashment of Cheque.
1)
Cash Receipt.
The depositor uses cheque deposit slip for depositing the amount. There are
two types of cash deposit slip One for current account holders. Other for saving account holders.
Both are in different colures for clear identification. There are two parts of cash deposit slips.
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National Bank of Pakistan Counter foil. Adjacent credit voucher.
Procedure:
The cashier first verifies all the requirements of the cash deposit slip that whether these are fulfilled or not and verifies the amount written in words and figures. After that he enters the detail of the receipt in the Inward Cash Register. The deposit slip is stamped, cash is received and counter foil is given to the depositor. The adjacent credit voucher is used for recording and posting purpose.
2)
Encashment of Cheque:
Cheque encashment includes the following steps; i ii iii iv Accepting of Cheques. Affirmation of Signatures. Computer terminal process. Payment of Cash.
Accepting of Cheque: The cash is paid against the cheque of the client. The following points are kept
in mind while receiving the cheque from the client. Cheque should be drawn on NBP. It should not be post dated. It should be a bearer cheque so the word bearer should not be crossed. Payment is not stopped by the drawer. Amount in words and figure should be same.
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National Bank of Pakistan The drawers full signature on the cheque. If signatures are not the same then it is returned back other wise forwarded to computer terminal.
ii
Affirmation of Signature: After receiving the cheque the office verifies the signature of S.S Card of the
account holder with the signature on the cheque .If signature are not matched it is returned back otherwise forwarded to computer terminal. iii Computer Terminal Process: The cheque is received in computer terminal, where the computer operator checks the balance of the account holder. The operator also sees whether the stop payment instructions are received from account holder or not .After considering these two points computer operator posts the cheque in account holders ledger and returns the cheque back to the officer. iv Payment of Cash: The cheque is cancelled after posting is returned to cashier. The cashier enters the cheque in Cash Paid register. Pays against the second signature of the receiver on the back of the check. Nearly every week in the evening time, cash comes from the state Bank of Pakistan in the bank branch. This cash is required by the bank to meet the current needs of cash. 5.7.2 Requirements to Encashment of a Cheque: No Stop Payments Instructions. Instrument in writing. Cheque must be crossed.
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National Bank of Pakistan 5.7.3 The amount of money must be certain. Drawers Signatures.
Stop Payments Instructions: If a customer lost his cheque book and he would make stop payment
instructions to cash department of NBP. Stop payment instructions can be made in two ways; Verbal. Written.
The customer could inform the cash department on telephone or face to face meeting to stop payment, but later a written instruction must be made on a prescribed form. If customer make stop payment instructions to the bank and bank make payment to some on else after lodgment of stop payment instructions in the computer, bank would be liable for fault.
5.8
Finance/ Credit Department:

National bank of Pakistan Hajira branch maintains a separate finance section.
Its purpose is to grant loans to the needy people, small and large business concerns and to industries. Advances in the form of money are the most remunerative use of bank resources. The management of the bank will be very careful while granting the loans. The person/proprietor of the business will go through a long process of application, documentation and securitization etc. while requesting for loan. After proper satisfaction from the party concerned, the bank will grant loan to the party. Under the Islamic modes of financing from 1982 onwards, National bank of Pakistan
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National Bank of Pakistan gives loans on the basis of Mark-up instead of interest. Mark-up rate is different depending upon the type loan. 5.8.1 Procedure for Granting of Loans: The following procedure is maintained by National Bank of Pakistan Hajira branch while granting loan to any person; i Loan Application Form & Specimen Signature Card: The bank provides a prescribed application form to the borrower. The borrower will fill the form. In that form the borrower will tell about; Type of the loan. Amount of the loan he needs. Period of time.
Applicant will also be provided a specimen signature card, to be filed by him. ii Declaration of Properties Form: This form will provide the information about the business he is involved and also provide the information about his properties in Pakistan. Investigation: Now the bank after analyzing his application, investigate about the applicants credit worthiness, and also the information that he provided about his properties. In case of business owners request for loan, investigation will be made on following ways for different businesses; Sole Proprietorship / Partnership Business:
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National Bank of Pakistan This Investigation will be about; Personal reputation of the borrower. Nature of the business. Types of properties (shop, houses, and land) their locations with their present market value. Cash, jewelry, shares, security, bonds etc. Stock in trade. Their liabilities. Partnership Firm. Name and addresses of the partners. Partnership deed. Branches if they exist. Amount invested in the firm. Purpose of the loan. List of assets and liabilities. Import export registration.
Private and Public Ltd. Companies: Name of the company. Addresses with telephone numbers. Whether private or public. Date of incorporation. Nature of the business. Branches if any. Authorized capital.
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National Bank of Pakistan security offered to other banks under each head and charges created against fixed assets. 5.8.2 Granting of Loan: After detailed investigation and documentation if the finance section finds the party well satisfactory and feasible then they sanction the finance to the concerned party and the amount is transferred in his personal account. 5.8.3 Types of Securities: The word security means any thing given to protect or safeguard the repayment of an advance and to justify this term the thing so given should itself be safe; otherwise the object for which it is given is defeated. The National Bank of Pakistan usually has three ways in which securities can be made available in the bank against finances. These types are; i) ii) Pledge. Hypothecation. Certificate copy of memorandum of association. Copies of certificates of incorporation. Certificate of commencement of business. Auditors certificate regarding paid-up capital. Paid-up capital. Financial highlights of the company.Details of
iii) Mortgage. In each case the bank does not become the owner of the property but the bank has only the right over the property until the borrower makes payment of his debt.
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National Bank of Pakistan i Pledge: In a pledge, the possession of the property but not the ownership passes to the creditor. The pledgee is entitled to the exclusive possession of the property until the debt is repaid but the ownership remains in the pledgor subject to the pledgees right. ii Hypothecation: In case of hypothecation, the property in goods is charged as security for a loan from the bank. But the ownership and possession is left with the borrower. In case of hypothecation, neither the property in goods and nor the possession of property pass to bank, but only the security is granted in a form of letter of hypothecation, which usually gives the bankers charge on the hypothecated goods. iii Mortgage: In a mortgage, the property in the thing mortgage is conveyed to the mortgagee conditionally. The possession, until default in repaying the loan, generally, remains in the original owner subject to the mortgagees rights.
5.9
Types of Loans:
National Bank of Pakistan Hajira branch provides various types of loans
depending upon the requirement of the borrowers. Some of the important types of loans are; 5.9.1 Demand Finance: Under a demand loan arrangement, a fresh demand loan account is opened through the borrower may be having other deposit accounts with the banks. The amount of loan has to be drawn by the borrower in lump sum and is to be repaid in
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National Bank of Pakistan installments or as agreed upon. The borrower can not operate a demand loan account by depositing and withdrawing amounts periodically. The demand finance may be short, medium and long term. Demand Finance Gold: Characteristics: Security Recording: Loan type: Rate of markup: Gold is used as a security. Single debit entry is recorded at the time of granting loan. Short, medium & long term loan. 15.50%
Required Documents: Note: Application form. Introductory reference sanction advice. Valuation certificate by gold smith. Insurance letter. IB-12 (Promissory Note). IB-26 (Letter of Pledge). IB-6A (Agreement Form). Delivery letter (f.205).
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National Bank of Pakistan Only National Bank of Pakistan Performs the function of advancing of loan against pledging gold. No other bank advance gold pledged loan. 5.9.2 Running Finance: Running finance is very similar to over draft. A huge amount is granted through running finance scheme. Running finance scheme of National Bank of Pakistan is classified into following categories; i ii i Clean Running Finance. Secured Running Finance. Clean Running Finance:
Under the clean running finance, loan is granted mostly to the employees of the bank without demanding any type of security from them. Characteristics: Type of loan: Number of transactions: Rate of markup: Repayment: Payment of balance: Required Documents: Account Opening Form. Specimen Signature Card. Short Term loan. frequent transactions are made. 7.0%. Monthly installments. It will be made in lump sum.
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National Bank of Pakistan ii IB-12. IB-6. IB31 (sale and buy back agreement). Copy of pay slip of employees.
Secured Running Finance: Secured running finance is the type of running finance in which loan is
provided to some person on the guarantee or security may be obtained from the borrower.
Characteristics: Type of loan: Rate of Mark up: Payment: Security: Short term loan. 15.50%. In installment or lump sum as mentioned in conditions. Individuals Guarantee.
5.9.3 Agriculture Finance: Agricultural finance is of great importance in Pakistan, as 65% of the population of the country engage in the profession of agriculture. The agriculture finance is granted for the agricultural purposes which include the development and production purposes. Agriculture finance is categories into three types; 1. Short Term loan. 2. Medium Term Loan.
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National Bank of Pakistan 3. Long Term Loan. 1 Short Term Loan: The short term loan is taken at the most for one crop period and is fully recoverable from the proceeds of the same crop after its harvest. This loan is needed for seeds, fertilizers, pesticides and wages of hired labors which are meant for input for a particular crop. 2 Medium Term Loan: The medium term loan is usually taken for the period of three years and is taken for the purchase of tractors, tube wells, cattle,, livestock and dairy and poultry farming etc. 3 Long Term Loan: The long term loan is generally taken for a period above three years and the amount is used for buying land, construction embankments, improvement of land of for arranging drainage etc.
Required Documents: Application form. Introductory references sanction advice. IB-12 (Promissory Note). IB-26 (Letter of Pledge). IB-6A (Agreement Form). CNIC copy of two witnesses.
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National Bank of Pakistan Characteristics: Type of loan: Number of transactions: Rate of markup: Repayment: Payment of balance: Securities: 5.9.4 Cash Finances: Under this type of credit National Bank of Pakistan grant loan to its customers. Under the cash credit arrangement, a customer is granted an advance up to certain limit, which he can draw time to time as required by him. In this case, a new cash credit account is opened in the name of customers. This is a long term loan and has following securities; 1. 2. 3. 5.9.5 Hypothecation of stock. Mortgage of properties. Personal guarantees of all the partners of directors. Formula to calculate the mark up rate: Total financed amount financed days 36500 Short, Medium and Long Term loan. frequent transactions are made. 15.50% per annum. Monthly installments. It will be made in lump sum. Two personal securities or Defense Saving Certificates.
5.10 Admin Department:
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National Bank of Pakistan The admin department is considered the backbone of any organization because any organization cannot performs its functions and duties without the assistance of Admin Department. The National bank of Pakistan Hajira branch also has its Admin Department which performs the following functions and duties; 5.10.1 Duties of Admin Department: Keep track of lists of staff in register and assign their duties in different
departments. Procurement of office supplies. Provides security clearance when cash is send to the other local branch or Manage the Vehicle for staff and holds its Log Book and Check its repair
cash receive from the State Bank. and maintenance. Check daily attendance of the staff. Employee Leave record and calculating leaves encashment. To keep the record of office stationary and maintain the minimum stock Make the Inventory of the equipment of the Office. Update office inventory and submit to Head Quarter on monthly basis. Prepare monthly summary sheet for all expenses. To ensure that all office equipments are working properly and effectively. Maintain the cash book, bank books & reconciliation of accounts. Control & safeguard the cash & cash disbursement. Record financial data in Electronic Banking System (EBS). Asst other departments to verify the accuracy of allocability of all financial
level for each stationary items
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National Bank of Pakistan transactions (Expenses, advances ,transfers etc) for recording into the computerized accounting system Examine vouchers and invoices for legality and completion, and prepare Paper work for payments to staff, and vendors. Create database /spreadsheet to track office telephone bills and other office expenses. Issues the transfer letters to the staffs who are transferred to the local branches as directed by the Regional Head Quarter (RHQ) or Heed Office. Look after the security guards and provide security to local branches when they requested. Receive orders from the RHO for the staff training and implement upon these instructions.
5.11
Computer Department: National Bank of Pakistan Hajira
Branch has its own computer department which is responsible to store the record of all bank transactions. This department performs the following duties; 5.11.1 Duties of Computer Department: All the cheques, receipts and deposit slips are posted in the computer is the key responsibility and duty of this department. This department is also responsible to look after the networking system of all the computers and server. This department carried out the duties of installing software and maintenance of all computers and printers. This department is prints the Daily Day Book (Journal/ ledger) on daily basis and Bank Book (Bank reconciliation Statement) when accounts holders required and demanded.
5.12
NBP Hajira Branch Hierarchy and Departments.
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Manager Manager
Manager Manager Operation Operation
General General Banking Banking
Computer Computer Department Department
Credit Credit Department Department
Admin Admin Department Department
Account Account Department Department
Clearing, Remittance & Clearing, Remittance & Foreign Exchange Foreign Exchange Department. Department.
Cashier Cashier
Assist-Cashier Assist-Cashier
C H A P Security T EGuards R NO: Peon 06 Security Guards Peon
Driver Driver
FINANCIAL STATEMENT ANALYSIS OF NBP.

6.1 National Bank of Pakistan Balance Sheet As on December 31, 2011
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6.2
Profit and loss Account For the Year ended December 31, 2011
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SWOT Analysis of NBP Main Branch Hajira

7.1 What is SWOT Analysis?
The SWOT analysis is done by the organization for the environmental scanning. SWOT analysis is useful for the internal and external assessment of any organization. SWOT analysis includes the Strengths and Weaknesses which are internally and it depends on the organization how it performs these forces. Opportunities and Threats are faced by any organization externally and are uncontrollable by a firm. Now I describe the SWOT analysis of National Bank of Pakistan Hajira Branch.
7.2
Strengths of NBP Hajira:

National Banks 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. The National Bank of Pakistan Hajira Branch has the following Strengths; i Security to depositors:
It is said that the money lying in private bank is not safe. National Bank provided much needed security to depositors. It is a merit of branch. ii Large Network: Strength of NBP Hajira Branch is that it is the main branch in Hajira which cover the most difficult ruler areas such as Chaffarr and Mehmood Gali which is edge upon competitors. Because these branches mobilize saving of people.
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iii Team Work: Strength of NBP Hajira Branch is its team work. All the members are cooperative and positive due to this, achieving high targets easily and timely. iv Good Reputation: The reputation of the bank is very positive .Therefore, customers are willing to enjoy with this branch. v Computerized Networking: One of the biggest strength of NBP Hajira is that it has fully computerized banking system. The computer system not only helps them in providing the customer better and efficient services, but also reduces the manual work required by the staff.
7.3
Weaknesses of NBP Hajira:

National Bank of Pakistan created its own weakness by downsizing and
transferring the potential employees. 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. National Bank of Pakistan Hajira branch has following Weaknesses; i Heavy Rush: Due to heavy rush, the employees of the bank can not work efficiently and effectively. ii Communication Gap:
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National Bank of Pakistan There is a communication gap between manager and other staff due to the heavy pressure of customers on Manager. iii Credit Cards: Major weakness of the NBP Hajira branch is that it is not offering credit cards, which creates dissatisfaction. Because it is a big branch it should offer credit card facility in the area. iv Shortage of Staff: Now a day due to incident of 8th Oct 2005, the banking functions of NBP Hajira increases in this area. But NBP Hajira branch faces the staff shortage problem which disturbs the efficiency of the employees and overall productivity of the branch. v ATM: ATM is an amazing facility provided to the customers but the Hajira Branch does not have this facility. So it is the weakness of NBP Hajira branch vi Non Co-operative staff: Lack of co-operation from the lower employees towards students on internship and to the customers. vii Lack of Communication: Lack of communication among employees. It creates great problem for employees and effect branch productivity.
viii
Central Management:
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National Bank of Pakistan The employees have not direct access to higher authorities and in this way the employees fail in solving their problem. ix Less Pay Scale: Pay scale of the National Bank of Pakistan is less than other banks which is an indication of discouragement among employees. 7.4
Opportunities of NBP Hajira:

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. National Bank of Pakistan Hajira branch has the following Opportunities;
Customer Protection:
As heavy default in banking sector money holder are looking those bank which give them protection. So National banks do this job easily and effectively. ii Rate of conservation: An other opportunity of NBP Hajira is that the rate of conservation with existing customers can be increased for new customers. iii Good will: Main opportunity of this branch is that it is older branch than other branches in the area. So people trust upon this than others.
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7.5
Threats of NBP Hajira:

If there is a threat to the whole economy, it will pose a threat for National
Bank. National bank does not consider a small bank. So a threat to NBP is a threat to its existence because the NBP accommodates large customers, these small banks cannot do so. The Threats faced by National Bank of Pakistan Hajira Branch are given below; i Competitors: Major threat of this bank is entry of new banks in this area which offer homogeneous products, services and facilities such as HBL, UBL, ABL, MCB & The Bank of Azad Jammu & Kashmir. ii Increase in interest rate: Due to increase in interest rate, profit of the bank is likely go high. People automatically divert to other banks which is another threat. iii Lack of target Most employees of this branch are not target oriented. They are not able to meet their targets in time.
7.6
Suggestions and Recommendations for
improvement
I propose the following suggestions and recommendations for the better improvement of National Bank of Pakistan Hajira branch.
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National Bank of Pakistan i Create Better Environment: There should be a wonderful and better environment within the branch so that people feel comfort during dealing in bank. ii Linked with other Branches: This branch should be linked and communicates with other sub-branches through Fax, internet and telephone. iii Properly Advertisement: The National Bank of Pakistan Hajira Branch should properly advertise and communicate to the public about the products and service provided by it so that more customer will be attracted in this regard. iv Training of Employees: Employees should be train in order to make them efficient and effective because trained people work efficiently in changing environment. Every year some people should be sent for training to the training institutions. v Reward and Punishment: In Hajira branch reward and punishment system should be introduced. Energetic, target oriented staff should be rewarded and appreciated. And lazy, lethargic, and inactive staff should be warned and punished. vi ATM:
In Hajira city, the National Bank of Pakistan should start cash counter for ladies and as well as ATM facilities to improve his efficiency and good will.
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7.7
Conclusions:
My internship at National Bank of Pakistan Hajira Branch helped me not only applying knowledge but give a unique experience of working in high level organization. All the staff members of the branch cooperate me and give me suitable guidance but in some cases I also have to face problems and difficulties. They gave me a number of opportunities to perform various tasks independently. The National Bank of Pakistan has proved that it is The Nations Bank, which is its motto. Millions of people trust on it. This is the National Bank of Pakistan which has millions of account holders and customers and it is the honor of this bank in the banking sector in Pakistan and across the country where it functions. I impressed very much by the friendly attitude of the all branch members. I may wind up by saying that my internship has benefited me in bridging the gap between the knowledge at the university. I further pray for its success, effectiveness, efficiency and stability in present and in future.
70

Abdul Rouff NBP Report 2012

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National Bank of Pakistan

Purpose of the Study:

1.2.1 General Purpose: To get acquaintance to the banking operations.

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Nature of the Study:

Scope of the Study:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan Bank specific variable.

Limitations of the study:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan

Introduction to National Bank of Pakistan

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan

Features of National Bank of Pakistan:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

2.5 Objectives of National Bank of Pakistan:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Functions performed by National Bank of Pakistan:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

C H A P T E R NO: 03 Management and Organization of N B P

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Training and Management Development Wing:

Branch Hierarchy of National Bank of Pakistan:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan

Manager Manager Operation Operation

General General Banking Banking

Computer Computer Department Department

Credit Credit Department Department

Retail Retail Banking Banking

Account Account Department Department

Cash Cash Department Department

Management from Top to Bottom:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan

Admin & HR Dept

Cash Cash Department Department

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan

C H A P T E R NO: 04 Products and Services of NBP

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan Boost up over all industrialization in the country.

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

4.2 Other Facilities:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan Demand Finance. Agriculture Finance.

Services of National Bank of Pakistan:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

National Bank of Pakistan 15. Bill purchased and discounted.

4.3.1 Cash Link:

NBP Credit Card:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

4.3.4 Traveler Cheque:

Local Currency Bond:

Department of Commerce University of Azad Jammu and Kashmir Muzaffarabad

Collection of Passport Fee: