NBP Internship Report Sample

Introduction
INTERNSHIP REPORT
ON
NATIONAL BANK OF PAKISTAN LIMITED
(Circular road Branch D.I. Khan)
Submitted by: Ali Raza

MBA (Banking & Finance)
Class Roll No: A-1
Exam Roll No: 462
Sessino: ( 2009-2011)
Date Of Submission: September 16, 2010
Department of Business Administration Gomal University Page | 1

Khyber.Pakhton.Khwa (Dera Ismail Khan) Pakistan
Introduction
Virtual University Of Pakistan
DEDICATION
I DEDICATE THIS REPORT

To Holy prophet Hazrat Muhammad (P.B.U.H), to my parents who
financially sport me, with out their help I will not be able to complete my
BS (BA) Finance as well as my internship report.

Introduction
ACKNOWLEDGEMENTS
I express my deepest sense of gratitude to Almighty ALLAH who enabled

me to complete my BS (BA) Finance.
I would also like to express my thanks and cordial passion to my Mr.

Muhammad Younis Raza, Internship Supervisor for his utmost help,
valuable suggestions and timely reviewing of my Internship Report.
Acknowledgements are made with special thanks to Muhammad Bashir

Shah OGII, Abdul Ghaffar Fawad OGII, and Hassan Ali Hashmat OGIII
who sincerely helped me during the completion of my BS (BA) as well as
internship report.
I am extremely thankful to my parents and sibling, who remembered me
in their prayers.
Ali Raza
BC040400206

Introduction
Executive Summary
Every student of Bachelor of Science in Business Administration
(Finance) at Virtual University Of Pakistan has an essential requirement
to do Eight-week internship in any of the well-reputed organization. The
purpose of this program is to acquaint the students with practical
applications of theoretical concepts taught to them during conduct of their
BS (BA) Finance program.
My internship was arranged at NBP, circular Road Branch, and D.I. Khan.
Really, it this opportunity provided me a chance to have a close
comparison of theoretical concept in practical field, involving the use of
primary and secondary data. All the efforts on the way are summarized in
shape of this Internship Report. This Report may depict deficiencies on
my part but still it is an output of students’ efforts, for which I beg pardon.
The output of my analysis is summarized in a shape of Internship Report,
the contents of the report shows the detail of sequence of these. The report
is concluded with problem and suggestions.
I have no wards to express my gratitude to my advisors for their
intellectual guidance without which it could have been rather difficult for
me to complete this report.
February 04,2010 Ali Raza
Roll No. BC040400206

Introduction

Introduction

Introduction
Table of Contents:
Chapter 1:
 Introduction Page 8
Chapter 2:
 Management and Organization of the Bank
Page 18
Chapter 3:
 Banking Operations
Page 26
Chapter 4
 General Operations Page 32
Chapter 5
Practical Experience Page 52
Chapter 6
 Performance Analysis Of NBP Page 58
Chapter 7
 SWOT Analysis Page 69
 BIBLIOGRAPHY Page 86

Introduction
CHAPTER NO I
INTRODUCTION

Introduction
1.1 Brief Introduction of the Organizational Business sector
Commercial Banks operate under profit motive and perform various

functions in a modern society.
National Bank of Pakistan is a commercial Bank till with socioeconomic

objectives e.g. to earn profit and at the same time develop the
economy of the country and uplift the socioeconomic status of
community. The main objectives of the Bank are as follows
1. MAXIMUM PROFIT
As the name of the Bank indicates that it was established to finance the
nation. As a Business organization its objective is to earn more and more
profit by the least expenditures.
2. GOOD Administrations.
A good administration is an objective of the Bank. Without proper

administration no organization can run successfully. A good
administration should have the following qualities:-
A: Quick decision.
B: Correct decision.

Introduction
3. CUSTOMER SERVICE.
The main objective of the Bank is to serve his customers. It serves the
customers on both directly and indirectly. Bank collects money from an
individual, firms, and limited Companies etc. It also gives loan to the
people.
4. DEVELOPMENTS.
Banks spending large amount of its profit for its own development.
Therefore, the large amount of its profit is spent on opening the new
branches of the bank and increasing the work efficiency of the Bank.
5. EXPENDITURE DISCIPLINE.
Bank is trying to minimize its expenditure. So, it keeps strict control over
expenditure and avoids wastage of money at every stage. Branch
expenditure must not increase more then 15% of the last year's budget for
correspondence.
6. REGIONAL INSPECTION.
Every branch should be inspected by Regional inspector at least once a

month as directed by Principal Office under B.D. may verify from time to
time.
7. MAXIMUM UTILIZATION OF STAFF.

Introduction
The staff requirement of the most branches is sufficient. However,

services should be utilized systematically for effective functioning.
1.2 Overview Of The Organization

Introduction
HISTORY OF THE N.B.P.
National Bank of Pakistan was established on November 9, 1949 under

the National Bank of Pakistan Ordinance No. XIX of 1949 in order to
cope with the crisis conditions, which were developed after trade deadlock
with India and devaluation of Indian Rupee in 1949. Initially the bank was
established with the objective to extend credit to the agriculture sector.
The normal procedure of establishing a banking company under the
companies Law was set aside and the Bank was established through the
promulgation of an ordinance due to the crisis situation that had
developed with regard to financing of jute trade. The Bank commenced its
operations from November 20th
The history of the N.B.P. is part of Pakistan struggle for economic
independence.
In 1947 at the time of partition the economy of the country was mainly
controlled by non-Pakistanis, most of them were Hindus. This partition of
the Sub-Continent brought wide spread disturbance and bloodshed on
both side of the border. This resulted in the mass migration of population
from one country to another. In this situation the economy of the country
influenced badly.
At the time of independence it had been arranged between India and

Pakistan that Reserve Bank of India should act as the common monetary
authority for both countries up to end of September, 1948. But the
arrangement did not prove satisfactory. In August 1947, Pakistan had
been given a first installment of twenty corer of rupees, out of its shares of

Introduction
cash balance of undivided India to meet immediate requirements. The

balance amounting to fifty corer rupees was to be paid later, But when
Pakistan demanded that amount, they refused to hand over the money
unless Pakistan agreed to give up interest in Kashmir and thus the
Government of Pakistan could not agree. This situation occurred, when
Reserve Bank of India was functioning as the Central Bank of Pakistan.
As a result of this experience, Pakistan felt it could not place any reliance
on the Reserve Bank of India. It was clear that its own central Bank was
an indispensable necessity and it was opened by the Quaid-e-Azam on the
first of July 1948.
When state Bank came into existence, it claimed its share of the assets of
the Reserve Bank of India against the Indian currency, retired from
Pakistan territory
But again dispute arose. The dispute is still unsettled and these assets have
not been delivered to Pakistan.
Many other disputes occurred between the two countries. As a result of
ratio controversy, the regular trade and payments between the two
countries came to stand still. One of the immediate consequences of this
situation was the withdrawal by Marwari merchants of the India Finance,
which used to be employed annually for the movement of Pakistan's Jute
Crop. A crisis of the first magnitude threatened, because the Jute Crop
was already in the market and so there was no money to move it, prices
begin to fall precipitously. At that time there was no JUTE in Pakistan,
not a single jute loom or spindle and no posibi1ity of utilizing any of the
crop within the country. As jute prices collapsed, foreign merchants and
foreign Banks to promote agrarian nearest, it was very evident that the

Introduction
Government of Pakistan could not afford to continue as a spectator of

these developments.
So two ordinance were passed immediately, one setting up the Jute Board,
and the other the decision of establishing of National Bank of Pakistan.
The object of the Jute Board was to re-organize and rehabilitate the Jute
trade by helping parties to handle it and to stabilize the market. The
National Bank was established to provide finance to suitable parties
Thus it came about that The National Bank stood behind the Jute trade,
the State Bank of Pakistan stood behind the National Bank and the
Government stood behind the State Bank.

Introduction
ROLE OF BANK IN ECONOMIC DEVELOPMENT
Banks are the instruments of economic development. In the mobilization

of money, the banking sector can greatly help the country. It can promote
the growth of internal resources for development by attracting deposits
from the public to the maximum possible extent and channeling these
deposits into productive loans and investments.
The Bank has been playing major role in financing developmental

activities in Pakistan. National Bank of Pakistan has helped in the growth
of economy in all spheres of our National life. It has contributed
significantly to economic growth of the country and has served trade and
industry, generally in wide sphere of operations.
For the agricultural growth, N.B.P was the first Bank to introduce scheme
of credit to small borrowers, farmers, craftsman, and small traders etc.
The Bank advances liberal credit for rural and agricultural development
and has taken the Banking services literally to the farmer's doors, small,
short run loans given farmers are free of interest. It helps the farmers
giving advances without interest in shape of fertilizers, seeds and other
agricultural instruments so that the country may become self sufficient in
wheat and other crops.
The National Bank of Pakistan has been playing a major role in industrial
development. The Pakistan Government has encouraged private
enterprises by giving fiscal and monetary concessions and has tried to
create a favorable climate for foreign investment in specified industries.
The National Bank of Pakistan has continued to serve industrial needs in

Introduction
its sphere all along. It provides usually short-term and in some cases
medium term finances. The N.B.P has a predominant share in the total
advances to the industry in country.
This has been possible mainly because of the large resource at the
disposal. The large number of branches all over the country which help
them to attract large deposits, and the comparatively low rate of interest at
which bank is able to make advance to the industry.
National Bank of Pakistan has assisted to accelerate industrial growth in

the country. Now Bank also provides finances to small-scale industries up
to a period of five years. National Bank of Pakistan has introduced the
people's credit facilities to the common man on a large and more liberal
scale than before. The main objective of this scheme is to make a
contribution towards building up of a strong middle class, which is
essential for ensuring strengthened stability to a developing economy.
Bank also helps to promote the establishment of new companies by
underwriting their shares. Bank is making an ever-increasing contribution
to the industrialization of the country. Through their foreign exchange
business in Pakistan and operation abroad the Bank makes a contribution
towards the earning of foreign exchange.
The Bank has also introduced various saving schemes and a

perpetual income plan on attractive term to encourage saving and promote
social security.

Introduction
The National Bank of Pakistan is working as an agent of State Bank of

Pakistan. But it does not mean that the Bank has monopoly on
Government Business. It also faces the keenest possible competition from
other banks. The Bank has been able to maintain its position in the
Banking System of the county and to make a substantial contribution to
the development of economy. Efforts had been made, by its officers and
staff particularly the senior officers to improve the working efficiency of
the Bank, to secure more business and to build up sound working
traditions.
As regard the future, the task of the Bank is plain enough, it has been an
instrument of National policy in the past, and so it shall continue in the
years to come. Its doors have been opened for anybody, from anywhere in
Pakistan. They will keep open as before.
National Bank of Pakistan is trying to improve the work efficiency of
their Bank and they want that their Bank and they want that their Bank
should serve the people so the Bank is serving the nation by different
ways and it is playing a major role in economic development of the
country. It will continue to perform these tasks with the same enthusiasm
and vigor. I trust and believe, it will always be said that the National Bank
of Pakistan truly exists in the service of the National.

Introduction
CHAPTER NO II
MANAGEMENT AND ORGANIZATION OF A BANK.

Introduction
2.1 Organizational Structure

The management and organizational structure of N.B.P. are described as
under: -
1. BOARD OF DIRECTORS
In the management of the Bank, the Board of Directors is at the top of the
controlling bodies. Since there are no private shareholders, so there is no
general meeting of the shareholders and are no elected Directors. The
Board consists of a nominated President, a Secretary and 9 other
members. After nationalization of Bank in 1974 most of the powers of
Board have been transferred to Banking Council and executive Board.
The Secretary of the board has limited administrative powers.
2. EXECUTIVE BOARD
The general direction and supervision of the' affairs of the Bank lies in
their respective Executive Boards. The President, Secretary and 0 other
members of the Executive Board are appointed by the Federal
Government. The President being the Chief executive of the Board
directors controls and manages the affairs of the Bank.
3. CHIEF EXECUTIVE.
The President is the administrative head of a Bank. He presided over
the meetings of the executive Board, manages and controls the affairs
of the Bank. The President holds office at the pleasure of Federal
Government.

Introduction
4. GROUP CHIEFS.
In order to improve the management and operation of a Bank, it has been
split up into a number of Groups. Each Groups of a Bank is placed under
this supervision and control of Group Chief or Senior Executive Vice
president (SEVP) or Executive Vice President (EVP).
5. REGIONAL CHEIFS.
Each Group has a Regional Chief. Regional Chief that holds the posts of
VP or SVP administers these Regions.
8. BRANCH MANAGERS.
Each Region is divided into several branches. The control and supervision
of each branch is mostly entrusted to AVP or Officer of Grade I or II. A
few big and financially sound branches are even administered by SVPS
and VPS.
It is important to be noted that the head Quarter of National Bank of

Pakistan is located in Karachi

Introduction
Organizational Hierarchy Chart of National Bank of Pakistan
CHAIRMAN
CHAIRMAN
BoardofofDirectors
Board Directors
ExecutiveCommittee
Executive Committee
President
President
GroupChief
Group Chief
RegionalManager
Regional Manager
Regions
Regions
BranchManagers
Branch Managers
CashDeptt.
Cash Deptt. Admen.Deptt.
Admen. Deptt. Banking Deptt. .
BankingDeptt FinanceDeptt.
Finance Deptt.
Officer
Officer Officer
Officer Officer
Officer Officer
Officer

Introduction
Operation
Operation Corporate
Overseas Corporate
Overseas Group
Group Invest
Operation Invest
Operation Banking
Group Banking
Group Fin Group
Fin Group
Org
Org
Develop
Develop Special
Special
&Training
&Training Assets
Assets
Dept
Dept Group
Group
Strategic
Strategic
Head
HeadOffice
Office Plan &&
Plan Econ
Econ
HRM
HRM Mgt
Mgt Research
Research
Dept.
Dept. Structure
Structure Group
Group
L.T
L.T Treasury
Treasury
Planning
Planning Mgt
Mgt
Dept.
Dept.&&Imp
Imp Group
Group
Group
Group
Audit
Audit Risk
Risk
&Inspection Commercial
Commercial Mgt
&Inspection -19- Mgt
Group
Group -19- Group
Group
&Retail
&Retail
Banking
Banking
Group
Group

Introduction
International Net Work

Introduction
2.2 Plan Of Intern Ship Program
Introduction Of The Branch.

The branch where I did the internship is National of Pakistan Circular
Road Branch D.I.Khan (Code 1433). It is situated at East Circular road
D.I.Khan in a in a very good Commercial area of the city.
Duration Of My Intern Ship Program.

I started my internship from very beginning of the month of May 2009
and completed on the end of June 2009.
From 01.05.2009 to 30.06.2009
Ares Of Training.
General Banking Section e.g. Remittances etc: 2 weeks
Finance Department Section (Loans): 2 weeks
Govt. Section (Pension etc): 1 week
Computer Section: 2 weeks
Cash Section: 1 week

Introduction
CHAPTER NO III
BANKING OPERATION

Introduction
3.1 BANKING OPERATION
The Bank provides a wide range of facilities for transacting money in and
outside the country. Being' custodian of the money, it manages the assets
in such a way that the Bank remain solve and liquid to a high degree so
that it is able to meet the demand of the customers for cash payments. In
the operation of a Bank, there is a close relation between the Banker and
the customer.
BANK AND CUSTOMER
Banker is a person, whether corporate or not who carries on the business

of the banking. The customer is a person who has some sort of account
either current or fixed o~ some similar relation with a banker.
BANKER AND CUSTOMER RELATION
The relationship between Banker and customer is primarily that of debtor

and creditor with the rules reserved where the customers are relying on a
loan from the banker.

Introduction
DUTIES OF A BANKER.
1. To honor customer’s cheques.
The Banker's duty is to honor the cheques of the customers.
i. They are properly drawn.
ii. The customer has balances to his credit.
iii. The loan contract has been signed.
iv. There is no legal bar attaching to the customers funds.
2. Standing orders: -
The Bank abides by the standing orders of the customers in making

periodical payments on his behalf such as club, library and insurance
perineum etc.
3. Secrecy of the customers. Account: -
The Bank owes a contractual duty not to disclose the customer’s financial
position with out his consent.
4. Valuables for safe custody:-
The Bank takes care of the property deposited with it by the customers
with or without charge. When a Bank does not charge, the Banker is
called gratuitous bailey and when a specific charge is made, the Banker is
then a paid bailey.

Introduction
ACCOUNTS OF CUSTOMERS.
A Bank should not open an account for a customer unless a responsible

person known to the Bank duly authenticates his integrity and
responsibility. By opening of an account, the Banker usually gets the
specimen signatures on cards.
a. Authorities to sign an Account.
If a customer desires that his agent also operate on his Account, the Bank
should get a precise written mandate from his customer. The person to
whom the authority has been delegated will continue operating the
account till the authority is revoked in writing.
b. Mental patients:
If the Bank comes to know of a customer’s lunacy, the Bank will

immediately suspend the OPERATIONS on the account until the court
gives order or the Bank has full proof that his customer has fully
recovered. When the customers are mentally unsound, the court appoints a
receiver who operates the accounts under the direction of Master in
Lunacy.
c. Husband and wife account:
If husband and wife both open an account the Bank will consider it an
ordinary joint account. At the death of the husband, the widow is fully
authorized to withdraw the balance.

Introduction
d. Infants: -
An infant can open an account with a Bank, but he is not allowed to

overdraw the account. If the infant customer wishes to have an over draft,
an adult should draw and sign on indemnity contract.
e. Partners: -
When the partner opens an account they are to sign a mandate authorizing
any or their entire member to make with drawls. The partners are jointly
responsible for all the loans and other obligation incurred by the firm.
f. Societies, Clubs etc: -
If an incorporate body opens an account in a Bank, the committee of

management deputes certain of lice bearers to operate on the account. The
bank obtains a copy of the resolution of the society or clubs appointing
certain members to administrative funds. If there is any change in the
committee of management, it is notified to the Bank immediately. The
members of the society who are operating the account or not liable for any
draft.

Introduction
g. Death of customers: -
If a Bank receives the notice of a customer’s death, all operations on the

account are suspended until the executors or administrators produce the
probate. The executor or administrator places all credits received after the
notice of the death of customer in a new account for disposal later.

Introduction
CHAPTER NO IV
GENERAL BANKING OPERATIONS

GENERAL BANKING DEPARTMENT
This department consists of the following sections:-
1. Account opening section.
2. Deposit section.
3. Clearing section.
4. Remittance section.
5. Accounts section.
1. ACCOUNT OPENING SECTION:
A. HOW TO OPEN AN ACCOUNT
There are certain formalities, which are to be observed for opening of a

current or saving account with a Bank. These formalities in brief are as
under
I. FORMAL APPLICATION:
The customer is to filling "Account Opening Form 11 It is a formal request

by a customer to the bank to allow him to have and operate the current or
saving account.

II. SPECIMEN SIGNATURE
When the Banker is satisfied about the integrity of the customer, he
agrees to open the account. The Banker obtains the specimen signatures of
the customer on the signature book or on card.
III. MINIMUM INITIAL DEPOSIT:-
In Pakistan the current account can be opened with a minimum of Rs.

500/- and PLS Saving Account with a minimum of Rs 100/- These amounts
are also the minimum balances to be maintained by the account holders with
the Bank.
IV. OPERATING THE ACCOUNT.
When an account is opened in a Bank, the Banker gives to the

customer.
i. Pay in slip book.
ii. Cheque Book and passbook with a view to operate it.

V. PRECAUTIONS IN PREPARING THE PASS BOOK: -
The Banker should be careful in preparing the passbook however, the

customer himself should.
i. Send the passbook for making entries and also periodically check up
them.
ii. He should also see that the accountant initials the entries.
iii. The customer should verify the entries with own books of account.
iv. In order to safe guard the secrecy of the account, the customer should
receive the passbook in closed cover.
B. WITH-DRAWL.
Withdrawal is made on cheques supplied by the Bank. A new chequebook is

issued only on receipts of the requisition slip attached to the chequebook
issued previously and this presented along with the depositor passbook for
entire against chequebook challan. Chequebook is issued on discretion of the
branch manager.

C. INTEREST.
The current rate of interest allowed on deposit in saving Bank account is

ascertained at the Bank. This rate is subject to change. The amount of interest
is calculated for each calendar month on the lowest balance at credit of an
account between the close of the sixth day of a month and the end of the
month and only on every complete sum of ten rupees.
Every account is made up half yearly to 30th June 31st December, and the
interest calculated as above is added to the balance of each account as on
these dates. Interest rates on different types of deposits on 31.12.2010 were
as under.
Profit for the half year ended December 31, 2009, on Profit & Loss sharing
Deposits and Other Deposits shall be distributed at the following rates: -
Nature of Accounts Rates of Profit
From
Title of Accounts (01-07-2009
to 31 -1 2-2009)
1 . S pe c i a l N o t i c e
D e p o s i t ’s
a). 7 to 29 days Notice 5.00% p.a.
b). Over 30 days Notice 5.00% p.a.
2. Saving g Account’s
a). Up to Rs.20, 000 5.00% p.a.
b). Above Rs.20, 000 5.00% p.a.
3. Term Deposit’s
a). Three months 5.30% p.a.
b). Six months 5.60% p.a.
c). One year 5.80% p.a.
d). Two years 6.10% p.a.
e). Three years 6.40% p.a.
f). Four years 6.70% p.a.
g). Five years 7.10% p.a.
h). Above five years 7.80% p.a.
NBP PREMIUM AAMDANI CERTIFICATE:

Rates
Monthly Income Scheme (01-07-2009
Period to 31 -1 2-2009)
1st Year (from 1 to 12th months) 10.50% p.a.
2n d Year (from 13 to 24th months) 10.75% p.a.
3rd Year (from 25 to 36th months) 11.00% p.a.
4t h Year (from 37 to 48th months) 11.25% p.a.
5t h Year (from 49 to 60th months) 11.50% p.a.
Rates of “NBP – PREMIUM AAMDANI CERTIFICATE SCHEME” are

effective from July 01, 2009 on a l fresh deposits along with following
previous conditions. But deposits accepted by Regions from July 01, 2009
to August 13, 2009 on existing declared rates w i l l be honored for profit
payment t i l l August 13, 2009. Instructions have been issued by CRBG.
A. Corporation’s Public / Private Limited Companies not allowed to

invest in Premium Aamdani Scheme.
Previously Corporations and Public / Private Limited Companies

were allowed to participate in the scheme. Now the Competent
Authorities, has decided that the restriction on target customer to be
reinstated.
B. Capping on Maximum amount of investment to be reinstated.
Originally in the scheme the maximum amount of investment allowed

was Rs.5.00 Million, which was removed in July 2008. Now the
Competent Authorities has decided to reinstate the upper ceiling of
maximum amount of Rs.5.00 Million on deposits in the scheme.

NBP PLUS TERM DEPOSIT CERTIFICATE:
Rates (01-07-2009 to 31-12-2009)

Rs.1 to Over
Rs.0.500- Rs.101- Rs.501-
Period Rs. Rs.1000
100 M 500 M 1000 M
499,999 M
1 Year 10.00% 11.00% 11.50% 12.00% 12.50%
2 Years 10.25% 11.50% 12.00% 12.50% 13.00%
3 Years 10.50% 12.00% 12.50% 13.00% 13.50%
4 Years 10.75% 12.50% 13.00% 13.50% 14.00%
5 Years 11.00% 13.00% 13.25% 13.75% 14.50%
6 Years 11.50% 13.50% 13.50% 14.00% 15.00%
7 Years 12.00% 14.00% 14.00% 14.50% 15.25%
8 Years 12.50% 14.25% 14.50% 15.00% 15.50%
9 Years 13.00% 14.50% 15.00% 15.50% 15.75%
10 Years 13.50% 15.00% 15.50% 15.75% 16.00%
Profit Rates will be applicable on new issuance only and will remain the
same till the holding period of the certificate. Profit Rates, however, would
be announced six monthly or as desired by the competent authorities and
would be applicable on fresh issuance.
CALCULATION AND PAYMENT OF PROFIT:

Profit will be paid at maturity along with principal amount on non-
cumulative basis. For Example:
If a certificate of Rs.500, 000/- is issued for three years will generate a
profit of Rs. 172,500/- as per the following calculations.
Year Rate Calculation Profit Amount
1. 11.00% 500,000 X 11.00% 55,000/-
2. 11.50% 500,000 X 11.50% 57,500/-
3. 12.00% 500,000 X 12.00% 60,000/-
A total profit of Rs. 172,500/- and at maturity the customer will get Rs.672,
500/-, less Zakat and withholding tax where applicable as per rules and
regulations.
ACCOUNT ENTRIES:

All accounting entries pertaining to issuance of TDR, Profit Payment,
Premature Encashment, Zakat and Withholding Tax Deduction will remain
the same.
NATIONAL INCOME DAILY ACCOUNT (NIDA):

Rates
SLAB (01-07-2009
to 31 -1 2-2009)
Rs.2 Million & above 5.00% p.a.
NBP PREMIUM SAVER ACCOUNT:

Rates (01-07-2009
to 31-12-2009)
Sr. Current Parameters Parameters (Effective
# From 1 s t July, 2009)
1. Profit Rate: Profit Rate:
8.50% p.a. 8.50% p.a.
2. Minimum Monthly Balance:
Rs.20, 000/-
Maximum Monthly Balance: Remain Same / No.

Balance up to Rs.1.00 (Million) will earn Change
Maximum profit of u p to 8.50%, balance of
Rs.1.001 (Million) and above will earn regular
savin g rate.
D. TRANSFER OF AN ACCOUNT.
Account can be transferred to any other branches of N.B.P. free of charge. If

a depositor wants to transfer his account, he presents his passbook personally
or sends it to Bank and writes an application for the transfer of an account.
E. CLOSING OF AN ACCOUNT:

A depositor willing to do, his account must present his passbook in order that
with drawls and the amount of interest due on the account is entered therein
and final balance stuck. This balance is then paid to the depositor and his
receipt is taken, the passbook is canceled, unused cheque forms on hand are
also surrendered at the same time.
F. SECRECY:
The secrecy of depositor’s account is the. Responsibility of every official

engaged in the Bank service.
G. MONEY DEPOSITED OR DRAWN BY POST:
When money is sent by post for deposit, the passbook and a letter starting the
amount of the deposit and the number of the account accompany it.
When a depositor wishes to withdraw money by post he must forwards his

pass book with a letter starting the number of his account, the amount to be
drawn and either the money is to be remitted by money-order or in currency
notes registered.
H. TYPES OF BANK ACCOUNT.

i. Saving account
Saving Account is that account in which customer puts his surplus money
which he saves from his daily expenditure.
Depositing a minimum cash of Rs. 5/- can operate the account. Small
percentage of interest is allowed on the balance of this account.
ii. CURRENT ACCOUNT:
The current account is that one which the customer draws his daily cheques
and is normally operated by the Businessmen. It can be operated by
minimum amount of Rs. 500/- any number of cheques amounting undue
minimum balance limit can be issued by the account holder for withdrawal or
for payment. No interest is allowed on this account.
iii JOINT ACCOUNT
A joint account occurs when two or more than two customers have one
account. The parties to a joint account are considered in law as they are one
person.
iv. PROFIT AND LOSS SHARING ACCOUNT.

This can be operated by ~ person, firm or organization by depositing Rs.
100/- or above. The holder of this account will get profit of his amount, or he
will bear the loss as the case may be. So an individual is equally participant
in profit and loss.
The holder of account can withdraw up to Rs. 15,000/- per month is eight
withdrawals, in case of higher withdrawal, seven day prior notice is
necessary. This account is operated under interest free system.
v. FIXED DEPOSIT ACCOUNT.
In this account an amount is deposited into the Bank for a fixed period of
time. The fixed period may be three months, six months, one year, two years,
five years and more. The Bank allows a higher rate of interest for larger
period.
At the time of operating on account the Bank issues deposit certificates for
the period and amount. The account holder cannot withdraw his amount
before the specified period, but the same Bank will allow loan against that
certificate. Bank is liable to give interest on this account on maturity date.
2. DEPOSITS SECTION:
There are two types of deposits i.e. current and saving there are different
forms present in the section of or deposits.
1. Current account form.

2. Saving account form.
3. Private or individual form
4. Private firm account form
In he above-mentioned forms, the bank makes an agreement with his

customers.
3. CLEARING SECTION.
Every Bank performs the paying and receiving functions. Cheques are
collected which are drawn up to Banks for customers. Similarly the cheques
drawn on different Banks and deposited by Banks own customers for
collection within the city is know as clearing The functions of receiving and
paying is mostly done through the clearing house. A clearing house can be
defined as "AA place where that representatives of all Bank get together to
settle the receipts and payment of cheques drawn on each other" Clearing
House provides the facility which can hardly be dispensed with especially, in
case of crossed cheques.
There are two main types of clearing.
i Outward clearing
ii Inward clearing.
i. OUTWARD CLEARING:

It includes those cheques and other instruments, which are sent by the Bank
to the Banks for payment on behalf of its own clients. Cheques are sent to
clearing house thorough local main branch.
A delivery message from the local main branch comes to every branch at a
fixed time to pick its outward clearing or outward returns as the case maybe.
Outward Clearing at Branch

a. Account number of payee/endorsee is written on the backside of the
cheques.
b. The instrument and the paying in slips are separated.
c. The instruments are sorted I Bank-wise and branch wise.
d. Schedules are prepared.
e. Jotting of all the schedules are taken in the clearing House statement.
Amount of the cheques in written in the "Delivered" and to pay
column.
f. After balancing the outward clearing, the pay in slips are released to
C.D. department.
g. After balancing, a transfer debit voucher is prepared.
h. The instrument, schedule. etc. are delivered to the messenger from the
main branch.
ii. INWARD CLEARING.
The cheques drawn are called inward clearing. Drawn on National Bank
through its representatives on the Bank presented by other Banks for

payment It includes those cheques and other instruments of Pakistan
branches which other Banks present at the clearing house.
Inward Clearing At The Drawn Branch
a. Number of instruments noted in the schedules is verified immediately.

On receipt.
b. The amount's of all the instruments are jotted down and totaled. If
should be equal to the amount mentioned in schedule from the local
main branch.
c. The amounts are debarred to the relevant accounts if otherwise in
order.
d. The IBCO is prepared crediting the amount of the main branch.
e. If there is any return, that is deducted from the total and IBCO
prepared for the remaining amount.
TYPES OF CHEQUES COLLECTED BY CLEARING SECTION.
1. TRANSFER CHEQUES.
These are the cheques which are collected and paid by same branch of N.B.P.
For example Mr. Ali is a customer of N.B.P. of Khaplu branch and draws a
cheque in favor of Mr. Hussain who is also the customer of the same branch.
2. TRANSFER DELIVERY CHEQUES.

The cheques, which are collected and paid by two different branches of a
Bank situated in the same city. for example a person draws a cheque on
N.B.P. main branch, D.I. Khan in favor of another person who maintains an
account with N.B.P. Rakh Mandra branch, D.I. Khan.
3. CLEARING CHEQUES.
When the payee/endorse and the drawer of cheque maintains account with
different Banks, the collection Bank in any one of the following methods:-
a. It can collect cash by sending its representative with the cheques to
each of the paying Banks. It is not so much appropriate.
b. The Bank maintains an account with the paying Bank.
c. The cheques can be exchanged by representative of the various Banks
who meet at a fixed time and at a fixed place. This is the most efficient
method of collection and paying cheques.
FUNCTIONS OF CLEARING SECTION IN A BRANCH.
a. To accept transfer, transfer delivery and clearing cheques from the

customer of the branch a~ d to arrange for their collection.
b. To arrange payment of cheques drawn on the branch and gives for
collection to any other branch of N.B.P. or any other member or such
member of local clearing house.
c. To collect amounts of cheques drawn on members of the local
clearinghouse sent for collection by N.B.P. branches not represented at
the local clearinghouse.
PROCEDURE FOR CLEARANCE OF CHEQUE.

The customers are provided with the copes of pay4n-slip, whenever the
customer wants to deposit any cheque, he fills in the pay in slip himself and
hands it over the counter along with the instrument.
4. REMITTANCE SECTION
Remittance means transfer of money from one place to another place. It is of

two kinds.
I. Inland remittance.
II. Home remittance.
1. INLAND REMITTANCE.
An inland remittance means a transfer of money payable at a certain

place within the country. Inland remittances can be classified as under:-
a. Within locality.
b. Out side locality.
a. WITHIN LOCALITY
When a branch situated in D.I. khan is required to send drafts to any other
branch situated in the same city the process is know as within locality. For
example N.B.P. Main Branch, D.I. Khan sends any draft to N.B.P. Rakh
Mandhra branch, D.I. Khan.

b. OUTSIDE LOCALITY.
Outside locality is an important type of inland remittances, which means the

transfer of money payable outside the city. For example, N.B.P. Main Branch
D.I. khan sends any draft to a Branch situated at D.I.Khan.
It is commonly done through the following three means:-
i. Telegraphic transfer (T.T)

ii Mail Transfer (M.T)
iii Demand Draft (D. D)
i. TELEGRAPHIC TRANSFER
In telegraphic transfer, the Bank takes commission and telegram charges

from the sender. A receipt is issued to the sender for the value received.
The Bank itself transfer the funds to the drawee branch though a coded
message in telegram, confirmatory of which is also sent through routine dak
mentioning all details. All bank Branches have been provided with their code
books name Bank Keys Code Book where from the coded message is agreed
by the drawee branch. T.T. can be sent open, which may be paid in cash in
drawee branch, or may be direct y creditable to relevant account.
ii MAIL TRANSFER (M.T.)

The Money can be remitted through this means also. In this case the payable
amount at the drawee branch can only be transferred to an account, amount
cannot be paid in cash. Other procedure is same as T. deposit of money at
sending branch. Difference is only of postage and. telegram charges. The
M.T. that in its self is an advice also is sent by registered post, while T.T. is
sent through telegram.
iii DEMAND DRAFT (D.D)
Demand draft is a written order by a branch of a specified Bank, drawn on

another branch of the same Bank to pay a certain sum of money only to or to
the order of the Payee. Demand drafts are purchased by the clients and after
receipt of money Bank issues and delivers the D.D. to the purchaser, who
himself sends it to the payee. In D.D. the Banks do not recover postal
charges as it is payable by the purchaser. The Bank, after deliver of D.D. to
the purchaser also sends its own advice called IBCO (Inter Branch Credit
Order) to the drawee branch mentioning therein all details of issued draft.
5. ACCOUNT SECTION.
Every Business organization deals in money matters. Bank also deals in

money and more over since the money belong to the depositors therefore, it
is of utmost importance to keep systematic and correct record.

Further-more, the Banks are commercial institutions and its main objective is
to earn profit, therefore, then record of all incomes and expenditures are kept
correct an (t systematically.
In N.B.P. the responsibility for maintaining necessary accounting data and to

keep up to date records in a systematic manner has been assigned to the
Accounts Department.
The Branches of Bank Pt perform their daily routine work and deal in money
that belongs k) deposii6rs. Here account department hold great importance
in banking, because it keeps all the accounting records properly.
ACCOUNTS TERMS.
The account department maintains all the accounting records properly there
are certain accounting terms, which are defined into the following
1. ACCOUNT
A summary of all debit and credit transaction pertaining to a similar nature or

to an individual or body of persons is called an account.
2. VOUCHERS
Written evidence recorded on a price of paper in respect of a money

transaction is called voucher.

3. GENERAL LEDGER.
Main ledger is a book, where various accounts of different type are kept.
Generally this book is in banded form containing several sheets for several
accounts.
4. SUBSIDIARY LEDGER.
Where a main head has got different sub-head of it: subsidiary leader are
maintained. These subsidiary ledgers are maintained from the main ledger.

Chapter NO V
PRACTICAL EXPERIENCE

5.1 PRACTICAL EXPERIENCE IN NATIONAL BANK OF
PAKISTAN
During my internship, I learned how to open an account and so many other
works. As we know there are many types of accounts. For example current
account, saving account, fixed account etc. Before opening an account
following are the requirements, which must be fulfilled by the customer.
• Two photo copies of computerized national identity card

• The photo copy of service card is provided.(if a person have
job)
• Introducer signature and account number.(introducer is a
person who have account holder of that bank)
• Three photos are provided, if a person is illiterate.
• Minimum rupees one thousand to open account and no limit
for maximum.

5.2 CREDIT SLIP:
Credit slip is used when customer deposits cash into the bank. On credit slip
customer name, account number, amounts in words and figures is written.
Two authorized officer sign on credit slip and cash receipt stamp punch on
the credit slip. One-slip issues to the customer and other slip used as a bank
record.
5.3 CLEARING of CHEQUE:
During my internship, I learned how to prepare clearing of customer cheque
and draft with other banks. When a customer receives cheque of other bank
and he / she want to deposit this cheque in his / her account. On credit slip
cheque serial number, bank name amount in words and figure is written.
The bank uses the services of NIFT (National Institutional Facilitation
Technology). The bank officer record customer name account number
bank /branch name on which cheque is drawn and amount is written in
NIFT register .All the cheques of customers provides to the representative
of the NIFT.

After internal procedure of NIFT, the next day NIFT provides IBCO (Inter
branch credit order) to the bank. After receiving IBCO the bank match the
amount of IBCO with NIFT register. And after matching the balance bank
credit the customer account and debit the bank/branch where the cheque is
drawn.
5.4 VOUCHERS:
• Party Debit Voucher:
Party debit voucher is used when bank issue the chequebook and charged
the commission on draft and traveler’s cheque. Party debit voucher to
record the expense of the customer and the amount is deducted on customer
account. On party debit voucher bank record the customer name, account
number, amount and summary.
• Party Credit Voucher:
When bank provide premium to the customer on saving account or fixed
account. The bank record the amount of premium on party credit vouchers
and write the customer name and account number and date.

• Simple Credit Voucher:
Simple credit voucher is used when bank generate income in the shape of
commission on traveler cheque / bank draft or issue of chequebook .The
bank record his income on simple credit voucher.
• Simple Debit Voucher:
Simple debit voucher is used when bank provide cash for stationery and
bank maintenance are recorded on simple debit voucher, stamp of shop
keeper where the goods are purchased are necessary staple with simple debit
voucher.
5.5 REGISTERS:
• Cash Receipts Register:
When bank received cash from the customer are recorded on the cash
receipt register.

• Cash Payment Register:
Cash payment register is used when bank provide cash to the customer
against the issue of cheque or provide cash for any other purposes. The
cashier records all the payments on cash payment register.
• Transfer Register:
Transfer register is used when customer deposit cheque of any other branch,
the amount of simple debit, simple credit, party debit and party credit
vouchers with customers account number. All of these are recorded on
transfer register. In the transfer register all the transaction are recorded with
out cash transaction

CHAPTER NO VI
PERFORMANCE ANALYSIS OF NBP

Balance Sheet as on 31.09.2009
(Un-audited) (Audited)
Sept 30, Dec 31,
2009 2008
Note in '000) -----------------------------
ASSETS -------------------------------
Cash and balances with treasury banks 72,976,246 106,503,756
Balances with other banks 26,527,558 38,344,608
Lendings to financial institutions-net 5,098,642 17,128,032
Investments-net 6 240,518,170 170,822,491
Advances-net 7 435,504,840 412,986,865
Operating fixed assets 24,876,923 24,217,655
Deferred tax assets-net 8 3,021,712 3,204,572
Other assets 56,613,570 44,550,347
865,137,661 817,758,326
LIABILITIES
Bills payable 7,397,468 10,219,061
Borrowings 50,587,500 40,458,926
Deposits and other accounts 9 653,518,020 624,939,016
Sub-ordinated loans - -
Liabilities against assets subject to finance lease 24,660 25,274
Deferred tax liabilities - -
Other liabilities 37,951,220 39,656,831
749,478,868 715,299,108
NET ASSETS 115,658,793 102,459,218
REPRESENTED BY
Share capital 10,763,701 8,969,751
Reserves 21,673,557 19,941,047
Unappropriated profit 53,970,735 52,456,204
86,407,993 81,367,002
Surplus on revaluation of assets - net 10 29,250,800 21,092,216

115,658,793 102,459,218
CONTINGENCIES AND COMMITMENTS 11

ANALYSIS OF SIX YEARS PERFORMANCE OF NATIONAL BANK
OF PAKISTAN
The performance of National bank of Pakistan can be examined by analyzing
its different heads.(All the following amounts are Rupees in million)
Fig .1 Six-Year Performance at a Glance
2003 2004 2005 2006 2007 2008
Total Assets 468,972 553,231 577,719 635,133 762,194 817 .7 58

Deposits (Rs. In Million) 395,492 465,572 463,427 501,872 591,907 624,939
Advances (Rs. In Million) 161,266 220,794 268,839 316,110 340,677 412,987
Investments 166,196 149,350 156,986 139,947 210,788 170,822
Shareholders’ Equity 18,134 24,900 37,636 53,045 69,271 81,367
Pre-Tax Profit (Rs. In Million) 9,009 11,978 19,056 26,311 28,061 23,001
After-Tax Profit (Rs. In Million) 4,198 6,195 12,709 17,022 19,034 15,459
Earning Per Share (Rs.) 5 7 14 19 21 17
2% 2.40% 3.40% 4.30% 4% 3.00%

Return on Assets
(Pre-Tax Profit)
Number of Branches 1,199 1,226 1,242 1,250 1,261 1,276

Number of Employees 13,272 13,745 13,824 14,019 14,079 15,204
6.1.1 Assets
If we analyze total assets, there is a consistent increase in total assets each
year. In year 2001, total assets were 415,089. In 2005, its assets were
577,719. During these years, there was maximum increase in the assets. The
increase was 162,630. Then from 2005 to 2006 increase was 57,414, which
was also good. This increase shows that the assets increases in the six years,
which is, batten for the organization.

1.2 Deposits
Deposits of the National Bank of Pakistan increased during these sex years.
In 2001 total deposits were 349,617 while after six years the sum of total
deposits was 501,872. This shows the consistency of growth in National
Bank of Pakistan. The year, which shows the maximum change, was from
2003 to 2004. In this year the increase in deposits was 70,080. The year,
which shows minimum increase in deposits is from 2001 to 2002.

Fig 6.2
6.1.3 Advances
Advances of National Bank of Pakistan have increased from 170,319 to

316,110. The best year for the advances was from 2004 to 2005. In this year
increase in advances was of 48,045. From 2001 to 2002, instead of
increasing, the advances fell down from 170,319 to 140,547. But in very next
year it has again increased.

Fig 6.3
6.1.4 Investment
National Bank of Pakistan has increased its investment up to 2001. Although
this increase was not consistent. From 2001 to 2002, its investment increased
from 71,759 to 143,522 which show an increase of 71,763. Then again in the
next year they increased investment from 143,522 to 166,196. But in the
2004 the investment fell down up to 149,350. After 2004 National Bank
started to cut back its investment. Now in 2006 the Investment downs to the
investment was 139,947.
Fig 6.4

6.1.5 Share Holders’ Equity
Almost every year, there is an increase in shareholders’ equity. From 2001 to
2006, it goes to 11,959 from 53,045. The maximum increase in the Share
Holders’ equity was during 2005 to 2005. Shareholders’ equity increased
from 37,636 to 53,045.
Fig 6.5

6.1.6 Pre-Tax Profit
Change in the Pre-Tax profit was consistent. From year 2001 to 2006, the
Pre-Tax profit increased from 3,016 to 26,311. So, there was consistent
change in Pre-Tax profit of National Bank of Pakistan.
Fig 6.7
6.1.7 After-Tax Profit
Change in the After-Tax Profit was also consistent. From year 2001 to 2006,
the Pre-Tax profit increased from 1,149 to 17,022. it is clear from the figure
that there is consistent change in the after tax profit.
Fig 6.9

6.1.8 Earnings Per Share
From year 2001 to 2006, the EPS increased from 3.08 to 24.01, which shows
the consistency. Which have positive impact for the owner's. The major
change appeared from 2001 to 2006 is 20.93.
Fig 6.10

6.1.9 Return on Assets (Pre- Tax Profit)
Change in the Return on Assets (Pre-Tax profit) was consistent. From year
2001 to 2006, the Return on Assets (Pre-Tax profit) increased from 0.8 % to
4.3%. From 2001 to 2006 there is no downfall seen.
Fig 6.11
Fig 6.12
Number of Branches
1260 1245 1250

1242
1240 1226
1220 1204 1199
1200
1180
1160
2003 2004 2005 2006 2007 2008
6.1.10 Number of Branches

National Bank of Pakistan reduced its operation from 2001 to 2003 by
closing branches up to 2003. There is a decrease in number of branches
during this period. But after 2003, it started to increase its branches. In 2001,

total number of branches is 1245. This number was decreased to 1199 in
1996. But now the total number of Branches is 1250.
Fig 6.13 Number of Employees
15,204
15,500
14,019 14,079
15,000 13,745 13,824
14,500 13,272
14,000
13,500
13,000
12,500
12,000
2003 2004 2005 2006 2007 2008
6.1.11 Number of Employees
The number of employees of National Bank of Pakistan has decreased during

2001 to 2002 from 15136 to 12195. Then in the next year it increases to
13272. In the next year it again increase to 130745. In 2005 this number
again raised to 13824. And now in 2006 the total number of Employees of
National Bank of Pakistan is 14019.

CHAPTER NO VII
SWOT ANALYSIS BASED ON OBSERVATION:

SWOT ANALYSIS BASED ON OBSERVATION:
SWOT Analysis is the most important part of the report, because it depends
on my personal observation. Only a good, keen and comprehensive analysis
leads to good recommendations for the improvement of the existing
conditions. Therefore in NBP I have observed many things and I have
analyzed them to the best of my efforts & knowledge. Through the technique
of “SWOT” one can analyze the present performance conditions of a given
organization and its weaknesses. Also the opportunities it can grab in the
external environment and the threats it faces. This technique serves as a base
for sound conclusion and recommendations.
STRENGTHS
Following are the main Strengths of NBP:
1. Serving as an Agent:
National Bank of Pakistan Circular Road Branch serves as an agent of State
Bank of Pakistan. No other bank is allowed to do the Clearing task but NBP
act on the behalf of SBP the clearing task.
2 No of Branches:
Strength of NBP is that there are 1183 branches in Pakistan and 16 branches
in overseas of NBP. So NBP staff members are scattered on the land of
Pakistan and World to provide benefits and serve the people.

3 Skillful Employees
The staff members of NBP Circular Road Branch are an experience, though
they are not qualified people but yet they have enough experience to carry on
the work of bank. It is said, “Knowledge is power and experience is wisdom
but experience cannot be defeated by knowledge”.
4 Modernization:
National Bank of Pakistan is the first bank, which has started a Foreign
Exchange Company in order to regularize the inflows of foreign money and
control the undesirable blackmailing of private foreign exchange companies
in the country.
It is the only domestic bank of the country, which has been awarded “The
Best Domestic Bank” consecutively in 2001 and 2002.
WEAKNESSES
Following are the main weaknesses of NBP:
1. Delegation of Authority:
National Bank of Pakistan to great extent is a centralized bank. The manager
of the Circular Road Branch has very limited authority, especially in case of
advances. Lack of delegation of authority creates problems and when the
manager is not present in his office and customers have to wait for many
hours. There is top to bottom flow of authority and lower level of employees
cannot participate in the decision making process. The top level of the
organization takes all the decision. This completely centralized decision-
making decreases the interest and also reduces efficiency of the bank.

2. Seniority Based Promotions:
Promotion in NBP is purely on seniority basis rather than on performance.
This really de-motivates the employees because they know that it doesn’t
matter whether they perform well or bad.
3. Job Rotation:
Most of the employees work in a particular department and they specialize
only in one department. In case of absence of one employee, any other
employee cannot perform this work. In this way bank not only loses the
business but also results in dissatisfaction of the customer.
4. Lack of Theoretical Knowledge of Employees:

There is a lack of theoretical knowledge of the employees of National Bank
of Pakistan. Although their work is mostly routine and practical but
sometimes low background education can disturb the routine work. They
have to consult the Regional Manager Office or General Manager Office.
This factor affects their efficiency.
5. Discouragement of Small Depositors:

The staff members give proper attention and respect to those customers who
have deposited huge amount of money while the small depositors mostly; the
salaried people are discouraged to open an account within the branch. In this
way they discourage saving habits in the general public.
6. Lack of Discipline:

During my training in National Bank of Pakistan, Circular Road Branch I
observed lack of discipline in the way that some of the employees do not care
about the office timings. They usually come late in the morning. Similarly
employees take long leaves without any valid reasons.
7. Excessive Paper Work:

There is excessive paper work in NBP, which takes more time and reduces
the effective banking performance.
8. Lengthy Process of Loan:

To meet the immediate requirements of the business, customers require quick
financing but due to centralization of decision-making there are unnecessary
delays in sanctioning of loans, resulting in dissatisfaction of the customers.
9. Inadequate Fringe Benefits:

The main purpose of fringe benefits is to retain the employees in the
organization on long-term basis. It has been analyzed that the package of
fringe benefits offered by NBP is not much attractive as compared to other
organizations. Recently NBP has furthermore reduced the fringe benefits of
the employees that may result in de-motivation & reduction the performance
of existing employees.
10.Low Rate of Return:

Due to low rate of return, the depositors are drawing their money from the
banks and depositing in the saving centers, which are offering a good rate of
return as compared to the banks.

11.Limited Application of Electronic Media:
NBP is not utilizing the electronic media for its promotional campaign. There
is lack of awareness among the customers and general public about the
schemes offered by NBP.
12.Improper Working Conditions:

Most of the branches of NBP are facing the problem of shortage of space like
NBP, Circular Road Branch. The frequent movement of the staff in the
manager’s office discourages the customers and it is also risky from security
point of view. The arrangement of foreign exchange department in Circular
Road Branch is even worse. There is lack of furniture and inappropriate
arrangements of the seating for the customers.
13.Limited Application of Technology in Bank:

NBP branches are not fully computerized, which is very important to provide
the quick and quality services.
14.Political Interference:
Banks are not free from political influences. Due to political pressures on the
management for sanctioning the loans in favor of their political persons
resulted in huge amount of bad debts because in this way the bank is unable
to recover the loan very difficult, and these loans are not used for productive
purposes.

OPPORTUNITIES
Following are the main weaknesses of NBP:
1. Financing
Now a day’s people have enough savings and they want some luxurious
type’s products such as Car, House and Business etc. So the opportunity for

NBP is to start car financing scheme to be beneficial for the organization
(Bank).
2. Modernization:
Another opportunity for NBP is to modernize itself because all other banks
have best methodologies to compete others and market there products. As I
know that NBP have not enough modernize system to be compatible with
other banks.
3. Strong Competition:
As we know that today’s era is the era of competition. In all the banks are
involved in struck competition so; it is an opportunity for NBP to develop a
strong marketing policies and campaign to further develop itself.
THREATS:
Followings are the major threats for NBP:
1. Other Banks
The major threat for NBP is other banks that have started function in such as
Bank Alfalah, MCB, HBL, UBL, ABL, PICIC, Khyber Bank etc. These are

the banks that NBP face competition with them. These banks provides a vide
variety of services as compared to NBP.
2. Political Interference:
Banks are not free from political influences. Due to political pressures on the
management for sanctioning the loans in favor of their political persons
resulted in huge amount of bad debts because in this way the bank is unable
to recover the loan very difficult, and these loans are not used for productive
purposes.

FINANCIAL ANALYSIS
The scope and purpose of financial analysis:

Financial analysis is an evaluation of both a bank’s past financial
performance and its prospects for the future. Typically, it involves an
analysis of the bank’s financial statements and its flow of funds. Financial
statement analysis involves the horizontal, vertical and various ratios
analysis. It is used by such interested parties as creditors, investors and
managers to determine the bank’s financial position relative to that of other.
The way in which bank’s financial position and operating results are viewed
by investors and creditors will have an impact on the firm’s reputation.
ANALYSIS OF FINANCIAL STATEMENT
Data presented in financial statement is of significance to analyst.

They develop the relation among the various items of balance sheet and
income statement and interpret their results in theoretical perspective. For
this analysis they adopt various tool and techniques.

TOOL OF ANALYSIS
1. Comparative Statement.
2. Absolute increase/Decrease.
3. Absolute Increase/Decrease in % ages
4. Trend percentages
5. Common size percentages
6. Ratio analysis
1. COMPARATIVE STATEMENT
In this statement two or more than two years data is presented for
comparison.
2. ABSOLUTE INCREASE/DECREASE
It is a type of Horizontal analysis. It gives changes in absolute data intern of
Rupees amount. It enables the analyst to point out the direction of business.
3. TREND PERCENTAGES
This is the second type of horizontal analysis. It is adopted to know the
tendencies of business position. In it one year is chosen as base year and item
of financial statement of base year related with other years relevant items.

4. COMMON SIZE PERCENTAGES
This method is for vertical analysis. It represents the change in percentages
in relation to total assets, total liabilities and owner equity. In this method we
take total assets, liabilities and owner equity and sales individually 100% and
develop relationship with their relevant components.
5. RATIO ANALYSIS
Ratio is mathematical relationship of one item to other items. For analysis
these ratios are compared with other years relevant ratios or with the ratios of
other companies of the same nature are industrial averages. Ratios are really
adopted to know the liquidity, stability and profitability position of the
company.
ACCOUNT SECTION:
Like other business organization banks also deals in money matters, as the
bank is custodian of deposited money, therefore, it is of utmost importance to
keep a chronological record, further more, the banks are commercial
institutions therefore, the records of all incomes and expenditure are kept
correctly and systematically.
In Bank of Khyber, the responsibility for maintaining necessary accounting
data and to keep up to date record in a systematic manner has been assigned
to tin; account department. Hundreds of banks branches perform their daily
routine work and deal in money that belongs to depositor. Here account

section holder great importance in banking, because it keeps all the
accounting records properly.
ACCOUNTING SYSTEM:
In NBP under the companies Act 1913 accounts arc-maintained
according to British System, According to this system every monetary
transactions has got two fold effects, termed as debit and credit.
National Bank Of Pakistan also follows the same procedure. Accounting

Terms:
1. Account:
A summary of all the debit and credit transaction pertaining to a similar
nature or to an individual or group of persons called account.
2. Voucher:
Written evidence recorded on a piece of paper in respect of monetary
transaction called a voucher.
3. Main Ledger:
Main ledger is a Book where various accounts of different types are kepi.
Generally this book is in banded form containing several sheets for several
accounts.
4. Subsidiary Ledger:
Where a main head has got different sub heads of it, subsidiary ledgers for
each sub head are also maintained. Thus subsidiary ledgers are maintained a
part from the main ledger.

Book and Stationary used by NBP
In account section the following books and stationary are used.
1. Cash Book.
2. General ledger.
3. Abstract book.
4. Income and Expenditure Ledger.
5. Vouchers Register
6. Transfer Book.
7. Receiving Cashier book
8. Paying Cashier Book.
9. Supplementary.
10.Different Vouchers.
FUNCTIONS OF ACCOUNT SECTION:
The main functions of the account department of a branch are as following:
1. Balancing and Maintenance of Book.
2. Preparation of Statements.
During the course of daily business of branch a number of cheques arc
presented by customers for cash payment, through transfer delivery, clearing
and also a number of new accounts are opened and cash is deposited by the
customers A number of new vouchers are recorded by debiting the account
and crediting another account in branch.
So in order to ensure that during the day all the transactions have properly
been recorded, are completed in all respect and are posted in proper books by

the branch. This recording is done on daily basis maintained by account
section.

BALANCING AND MAINTENANCE OF BOOKS:
Balancing the cashbook means that all these transactions (cash, clearing and
transfer) have property been recorded and there is no mistake in any voucher.
a. Arrangements of voucher
b. Preparation of supplementaries.
c. Preparation of summery.
d. Equating the total summary with the total of transfer books.
PREPARATION OF STATEMENT:
To Judge the performance of branches, the Head Office requires periodical
statements from banks through these statements the top management control
performance of the branches and provides necessary guidance. The top
management decisions depend upon these statements. The following are (lie
important statement prepared by the account section,
1. Balance Sheet.
2. Pak Account Extract.
3. Provisional Income and expenditure Statement.
1. BALANCE SHEET:
Balance sheet or statement of affairs is prepared on bank printed proof or ma
with the help of figure contained in the cashbook and general ledger. This
statement is prepared on daily basis in the Branch.
PAK ACCOUNT EXTRACT:

Apart from account section, there is central accounts department functioning
at Head Office. Each branch is required to submit its daily statement known
as Pak Account Extract. According to prevailing procedure each branch
prepares two separate statements. The extract is used for "original entries and
other is used for Responding Entries".

Reference And Sources:
1. Hasan, Mumtaz (1998). The story of NBP. Karachi.
2. Harold, Koontz and Heiz Weihrich (1984). Management. McGraw
hill 8th edition.

3. Nasir, M Saeed (2004). Banking, currency and finance. Faisalabad:
Kitab markaz.
4. Nasir, M Saeed (2000). Economic theory. Faisalabad: Ilmi kitab
khana.
5. NBP (2002). Annual report of NBP. Karachi.
6. NBP (2004). Bankbook instruction of NBP. Karachi.
7. NBP (2005). Economic bulletin of NBP. Karachi. Sekaran,
Uma.Research Methods For Business 4th Edition

8. Sekaran, Uma.Research Methods For Business 4th Edition
9. Shah Ali, Gohar, AVP, presentation on NBP.D.I. Khan

10.Shah, Ali, Gohar report on NBP Recruitment & Selection
11. www.nbp.com.pk
12. www.sbp.org.


NBP Internship Report Sample

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

NBP Internship Report Sample

Uploaded by

Copyright:

Available Formats

Introduction

Submitted by: Ali Raza

Date Of Submission: September 16, 2010

Department of Business Administration Gomal University Page | 1

Virtual University Of Pakistan

I DEDICATE THIS REPORT

Department of Business Administration Gomal University Page | 2

I express my deepest sense of gratitude to Almighty ALLAH who enabled

I would also like to express my thanks and cordial passion to my Mr.

Acknowledgements are made with special thanks to Muhammad Bashir

Department of Business Administration Gomal University Page | 3

February 04,2010 Ali Raza

Roll No. BC040400206

Department of Business Administration Gomal University Page | 4

Department of Business Administration Gomal University Page | 5

Department of Business Administration Gomal University Page | 6

Department of Business Administration Gomal University Page | 7

Department of Business Administration Gomal University Page | 8

1.1 Brief Introduction of the Organizational Business sector

Commercial Banks operate under profit motive and perform various

National Bank of Pakistan is a commercial Bank till with socioeconomic

A good administration is an objective of the Bank. Without proper

Department of Business Administration Gomal University Page | 9

Every branch should be inspected by Regional inspector at least once a

7. MAXIMUM UTILIZATION OF STAFF.

Department of Business Administration Gomal University Page | 10

The staff requirement of the most branches is sufficient. However,

1.2 Overview Of The Organization

Department of Business Administration Gomal University Page | 11

HISTORY OF THE N.B.P.

National Bank of Pakistan was established on November 9, 1949 under

At the time of independence it had been arranged between India and

Department of Business Administration Gomal University Page | 12

cash balance of undivided India to meet immediate requirements. The

Department of Business Administration Gomal University Page | 13

Government of Pakistan could not afford to continue as a spectator of

Department of Business Administration Gomal University Page | 14

ROLE OF BANK IN ECONOMIC DEVELOPMENT

Banks are the instruments of economic development. In the mobilization

The Bank has been playing major role in financing developmental

Department of Business Administration Gomal University Page | 15

National Bank of Pakistan has assisted to accelerate industrial growth in

The Bank has also introduced various saving schemes and a

Department of Business Administration Gomal University Page | 16

The National Bank of Pakistan is working as an agent of State Bank of

Department of Business Administration Gomal University Page | 17

MANAGEMENT AND ORGANIZATION OF A BANK.

Department of Business Administration Gomal University Page | 18

2.1 Organizational Structure

Department of Business Administration Gomal University Page | 19

It is important to be noted that the head Quarter of National Bank of

Department of Business Administration Gomal University Page | 20

Organizational Hierarchy Chart of National Bank of Pakistan

Department of Business Administration Gomal University Page | 21

Department of Business Administration Gomal University Page | 22

International Net Work

Department of Business Administration Gomal University Page | 23

2.2 Plan Of Intern Ship Program

Introduction Of The Branch.

Duration Of My Intern Ship Program.

Department of Business Administration Gomal University Page | 24

Department of Business Administration Gomal University Page | 25

3.1 BANKING OPERATION

BANK AND CUSTOMER